George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

Blog Posting # 752, Copyright 28 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.comn, to order

Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and a 40+ year business career in MH and community ownership/management.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute (‘MHI’), RV/MH Hall of Fame enshrine, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books re MH, communities, business & management wisdom, & prayer.

FALL MEETINGS OVERLOAD

Have you noticed yet? If you’re a manufactured housing aficionado and or land lease community owner/operator, and want to patronize industry and realty asset class meetings this fall, you’ll likely be over-networked and financially-strained during the two weeks between 10-13 September and 2-4 October. And that does not even include the Illinois Manufactured Housing Association’s annual meeting in East Peoria, IL. on 6 & 7 September – where you’ll find me.

Yes, the most significant meeting occurring during what’s known among meeting planners, as the ‘shoulder season’, is the 12^th annual SECO conference, A.K.A. National Conference of Community Owners. This occurs 10-13 September at the Renaissance Atlanta Waverly Hotel and Conference Center, in Atlanta, GA. And yes, I’ll be there too. Who doesn’t want to attend the major industry gathering where there’re be well-informed presenters on hand and a plethora of new HUD-Code homes to visit and purchase? For more information visit secoconference.com

Then there’s the ‘new kid on the block’; what’s advertised as ‘the inaugural edition of IMN’s Manufactured Housing Forum’, scheduled for 28 & 29 September at the Four Seasons Hotel in Nashville, TN. IMN spokesperson predicts 400 attendees this time around. Interestingly, IMN advertises no fewer than 49 speakers. On that list there’re executives from REITs UMH Properties and Sun Communities, as well as Yale Realty & Capital Advisors, and Cavco Industries. But know what? Among the 49 speakers, I recognized only six individuals who enjoy national reputations in our industry and among land lease community owners/operators. Want more information; contact Elizabeth Ramdeo of the Information Management Network (‘IMN’) in New York City via imn.org

Know why I won’t be in Nashville for the IMN soiree? Because I’ll likely be in Knoxville, TN., on 27 & 28 September at the Knoxville Convention Center, attending the annual Shed Builder Expo 2023. Huh? Yep these are the folk who design and build the sheds everyone uses from time to time. What’s my interest? Well, from their trade publication (magazine) and shows I’ve attended, I predict some form of sophisticated shed emerging as a new type of affordable housing! Seriously. As you know, I’m already researching and writing about ‘recreational vehicles as affordable housing’ (And, by the way, Thanks to those of you who sent me examples of this emerging RV trend!). Now you can’t say I didn’t alert you to yet another eventuality. Visit shedbulderexpo.com

Tired of meetings yet? Well there’s one more. The Manufactured Housing Institute’s (‘MHI’) annual business meeting will be 2-4 October, in Palm Springs, CA. I’ll miss this one too, as it’s a high-priced meeting location that, as a retiree, I can no longer afford. Also know this is when the National Communities Council (‘NCC’) division of MHI also meets. Only problem there (in that division) is they don’t accept proxy votes when voting for officers, severely limiting, in my opinion, leadership options in what should be a ‘mover & shaker’ advocate where land lease communities are concerned. Want to attend? Visit manufacturedhousing.org

More Achilles’ Heels!

Here’s what one blog flogger (i.e. ‘reader’) penned on this timely subject. “On the Achilles’ Heel discussion, I agree with all you said. I believe there are other ‘heels’ you didn’t mention that deserve discussion. Our D&R deliveries – that’s short for Drop & Go (Industry slang that’s been around for more than five decades!). D&R leaves critically important features up to the homeowner – who generally does not complete the tasks. Can’t tell you how many homes in communities or on private property have NO STEPS, or only temporary front ones. What site-built home doesn’t have safe steps at all exits? Or steps down into a basement, forcing the new homeowner to use a ladder to get there.” (Partly paraphrased. GFA)

National Rental Homesite Rent Rate

Last week we suggested national rental homesite rent rate among land lease communities pencils in around $572.00 (Based on YARI Matrix data for conventional apartments nationwide). Well, JLT studies peg this figure higher, @ $656, given a range of $624 for all-age properties and $717 for those catering to the 55+ demographic. Any guesses as to the reason ‘why’ for this difference? I’ll hazard the guess that the $624, $656, & $717 averages are for institutional grade land lease communities, while the $572 average is for properties across the board, size wise. What do you think?

WELL SAID (PENNED)

In a recent communique from the Manufactured Housing Association for Regulatory Reform, titled “MHARR Targets Fannie & Freddie Chattel Failure in DTS ‘Listening Session’ Comments”, dated 19 July 2023, the manufactured housing industry’s Washington ‘watchdog’ put forth  two paragraphs, here quoted verbatim (‘in exactly the same words’). In this industry observer’s opinion, they should be read by every industry aficionado and land lease community owner/operator!

“While chattel loans represent (and have consistently represented) nearly 80% of all new manufactured homes financed in the United States – and are specifically authorized by law for inclusion within manufactured housing sector DTS compliance programs – not a single manufactured home personal property loan has been supported by Fannie or Freddie under DTS since its enactment 15 years ago.” Chattel loans, personal property loans, chattel capital loans and home only loans are synonymous manufactured housing lending trade terms.

“As MHARR made clear in its comments, this impasse, which leaves the vast bulk of the manufactured home financing market completely unserved in violation of the DTS mandate, is unacceptable and cannot continue. That is especially the case with the manufactured housing market having entered a severe downturn, beginning with the third quarter of 2022, which has seen the production of new HUD-Code homes plummet year-over-year by a factor of more than 30%.”

In my opinion, the GSEs (government-sponsored enterprises Fannie Mae & Freddie Mac) have been ‘burned badly’ during previous manufactured housing industry downturns. The last one occurred at the turn of this century, when our poor chattel lending practices forced annual MH production to plunge from 392,943 new HUD-Code homes in 1998, to 250,500 two years later, and on down to 48,789 by year 2009. At year end 2022 we were finally back over 100,000 units with 112,886 shipped. However, today GSE’s career executives simply will not risk their livelihoods endorsing what they evidently view as a flier (‘risky or speculative venture’) in behalf of our industry! There’s really no other way to view this sad state of bureaucratic malaise and inaction.

So, what’s to be done? Ideas, suggestions and more are welcome via gfa7156@aol.com

George Allen, CPM®Emeritus, MHM®Master, MHI Emeritus member, & RV/MH Hall of Fame enshrinee.

Blog Posting # 751, Copyright 21 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-gassed, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ year business career in MH and community ownership/management.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute (‘MHI’), RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books about MH, communities, business & management wisdom, and prayer.

RVs as Affordable Housing

I’m asking for some help here. For the past year or so I’ve been researching and preparing an academic article on the subject of ‘RVs as Affordable Housing’. It’s been a fascinating, but at times frustrating, journey. While it’s well-known there’s more than a million ‘fulltime RVers’ in the U.S. today, there’s absolutely no handle, so to speak, on the number of RVs being used as fulltime housing. And that’s where you might come in – as a source of information for me. If you have any experience whatsoever with folk living fulltime in one or another type of RV – as their residence, please write or call and let me know what you can tell me. See introductory paragraph, above, for contact information. And Thanks for helping.

A few more scattered thoughts on this subject. Early in the article I’ll be defining ‘affordability’ in terms of the commonly-accepted 30 percent Housing Expense Factor (‘HEF’); i.e. ‘Housing is affordable when an individual or household’s Annual Gross Income (‘AGE’), or local housing market’s Area Median Income (AMI’) – identified by postal zip code & available online via zipwho.com, can lease a conventional apartment and or buy a home (or RV) in this local housing market, using no more than 30 percent of said AGI or AMI for shelter & its’ related household (utility) expenses.’ E.g. $50,000 AGI/AMI X .3 HEF = $15,000 or $1,250/month available for rent or mortgage and PITI (principal, interest, taxes, insurance) and household expenses. That’s ‘affordability’ defined.

I also realize RVs are not built to any of the housing codes (including HUD-Code), since they are intended to be temporary shelter as one travels, vacations, and otherwise. It’s the ‘otherwise’ I’m attempting to build this affordable housing case upon. How so? Well, for decades I’ve experienced itinerant construction workers living in RVs on rental homesites within land lease communities; same with homeowners/site lessees who own and live in a manufactured home in northern climates during spring, summer and fall, but relocate to their parked RV ‘down south’ along the Rio Grande in Texas, throughout Florida, and other Sunbelt regions. Can you provide additional examples of real or quasi-residency in recreational vehicles? Sure would appreciate your input!

Manufactured Housing’s Achilles’ Heels!

Do you know the story of Achilles’ Heel? In Greek mythology, Achilles’ mother Thetis, to make her newborn son immortal, submerged him while holding him by one heel. Later in life, Achilles was killed by Paris’ arrow striking that unprotected part of Achilles’ body. Since then, the weak point of a person or object is referred to as its’ Achilles’ Heel. For example; with nuclear power, the Achilles’ Heel is the difficulty in getting rid of radioactive waste.

With that said; as I perused Harvard Joint Center for Housing Studies’ (‘HJCHS’) recent study:

‘Comparing the Costs of manufactured and Site-Built Housing’, I came across a street view (labeled as Figure 1) of a CrossMod Home, with this comment: “…currently only comprising a small percentage of total manufactured homes sold annually….” And, once again, asked myself ‘Why is this so?’

Went back and looked at the photo closely. Know what? There are no gutters and downspouts shown on this particular CrossMod Home. This is important because the study goes on to state: “CrossMod’s enhanced appeal is a function of a set of specific design standards intended to make the homes less distinguishable from site-built homes.” Well there it is! CrossMod’s Achilles’ Heel! No gutters and downspouts! When was the last time you saw a brand new, ready-to-move-into site-built home without gutters and downspouts? Never. YES, this is indeed a small, a minor point – and not ‘the first time around’.

What do I mean by that? Ever since there’s been conventional stick-built housing on scattered building sites conveyed fee simple and in subdivisions, there’ve been private contractors advertising ‘roofing, siding, and gutter’ services. Early on, ‘mobile homes’ needed none of those services, as they featured metal roofing, metal siding, and no gutters – or in a word, three Achilles’ Heels! Well, we first replaced metal with aesthetic appealing siding material and addressed the first Achilles’ Heel. Then we replaced metal roofing with shingles, addressing the second Achilles’ Heel. And now we should consider how much better HUD-Code manufactured housing would/will look with gutters and downspouts. That is to say, do away with the third and final Achilles’ Heel of manufactured housing. What do you think?

Think I exaggerate? Here’s yet another example of an Achilles’Heel holding our industry/realty asset class back from widespread social and consumer acceptance. Consider the perennial image-challenges our industry faces where land lease communities are concerned. There are some (maybe many?) fine communities throughout the U.S., but the ones who routinely tarnish our rep are those with visible indicators of marginal to poor property management! Seriously. Capable, experienced, professional property managers make all the difference as to whether a land lease community, in the local housing market, is a patent eyesore or promotes a desirable lifestyle. Professional property management has been and continues to be, in my opinion, the veritable Achilles’ Heel of this unique type investment real estate. Consider this: no other form of commercial real estate has fewer trained and certified property managers at work on-site than among land lease communities nationwide! A first step in the right direction? Purchase a copy of ‘Community Management in the Manufactured Housing Industry’ (via www.educatemhc.com) and commit to implement professional property management at your property or properties! 

So, it’s ‘gutters & downspouts’ for manufactured homes and ‘professional property management’ for land lease communities! It’s time to rid ourselves of all Achilles’ Heels!

ESG Distorts Markets & Drives Up Costs of Insurance & Housing

In a recent MHI newsletter they described Bill Boor’s ((MHI Vice Chairman & Pres/CEO of Cavco Industries) recent testimony before a Housing & Insurance Subcommittee, titled ‘How Mandates Like ESG Distort Markets & Drive Up Costs for Insurance & Housing’.

What’s ESG? A politically popular effort to stimulate investment in corporations embracing Environmental, Social, and corporate Governance policies and measures, ostensibly addressing the good of society at large. While ESG has been around since 2004, it only recently has become accused of ‘greenwashing’, i.e. green marketing deceptively used to promote products as being environmentally friendly.

In any event, Bill Boor criticized the Department of energy’s (‘DOE’) Energy Conservation Standards for Manufactured Housing “…as an example of a federal agency implement an environmental policy without fully understanding the broader consequences.” Specifically, DOE fumbled its’ effort to address ‘E’ (environmental) at the cost of ‘S’ or social consequences; i.e. higher cost of new HUD-Code manufactured homes.

RV/MH Hall of Fame Draws Nigh…

Where will you be the evening of Monday, 21 August 2023? Hopefully with many of your manufactured housing industry peers at the annual RV/MH Hall of Fame Induction Banquet in Elkhart, IN. I certainly plan to attend, along with a dozen other close friends – so far. Give the matter some thought, then join us for the festivities. For tickets, phone (574) 293-2344.

If you have time to spare – and need firsthand training on marketing and selling new HUD-Code homes on-site in land lease communities, plan to stay over on the 22^nd & 23^rd, to attend IMHA/RVIC’s annual MH FacTOURy tours and seminars at the RV/MH Hall of Fame. For more info, phone (317) 247-6258.

Some of us make it a point to arrive a day early, on Sunday the 20^th, to do some topnotch networking at the Hilton Garden Inn, along the interstate north of Elkhart. Phone (574) 970-4444 for reservations. Then, the next morning, travel the short distance to the Hall of Fame facility to tour the still new Manufactured Housing Exhibit Hall. Well worth the visit. And then, some of us will adjourn to the library upstairs to meet and discuss a variety of topics. This year, I’m bringing a supply of the recently updated booklet, Who Will Preserve Your Legacy? Answer: You! We just completed a mass mailing to dozens of executives around the U.S. who have compelling stories to tell – personally and corporately. Feel free to join us – but let me know ahead of time of your interest, so I’ll have enough copies of the booklet to hand out.

So, do you get the idea, this is where to be on the 20^th– 23^rd of August 2023? It surely is. Hope to see you there!

Estimated National Rental Homesite Rate?

According to the July/August 2023 issue of ‘Multifamily Executive’ magazine, quoting Yardi Matrix, $1,716 is the average U.S. conventional apartment asking rent rate. Applying the widely-referenced 3:1 Rule, 1/3^rd of $1,716 is approximately $572.00. So ‘maybe’ the estimated national rental homesite rate within investment grade land lease communities is close to $572.

George Allen, CPM, MHM

Blog Posting # 750, Copyright 14 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ year business career in MH and community ownership/management.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member  of the Manufactured housing Institute (‘MHI’), RV/MH Hall of Fame enshrine, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books about MH, communities, business & management wisdom & prayer.

A Potpourri of Solutions to Boost MH Sales!

First off, there is a problem – a challenge! 2023 year-to-date (‘YTD’) manufactured housing production (i.e. sales) is 33.8 percent below what it was a year ago! This is no longer a surprise, as this latest profitability slide has been in place for several months. The QUESTION IS, what can be done to lessen and reverse this disturbing trend? As you expect from me, I’ve read much in our trade literature, received helpful feedback from industry leaders, and now report to YOU what I’ve learned.

In a recent communique from the Manufactured Housing Association for Regulatory Reform (‘MHARR’), Mark Weiss describes three – maybe four factors:

1. Call for forthright and continuing attack on discriminatory and exclusionary zoning laws that target manufactured housing and manufactured housing consumers – to which I’d add, land lease communities and their tens of thousands of homeowners/site lessees! Note. Since MHRR clearly does not include ‘communities’ in this factor; who does? By design, it should be the National Communities Council (‘NCC’) division within the Manufactured Housing Institute (‘MHI’). To learn of MHI efforts to this end, visit MHI.org and ask what they’re doing to this end.

• Ongoing need to improve availability and competition relative to manufactured home personal property (chattel) lending. In this instance, remedial action has to come from Government Sponsored Enterprises (‘GSEs’) Fannie Mae & Freddie Mac, as well as Ginnie Mae’s FHA Title 1 program. To date, little to no implementation of GSEs’ Duty to Serve (‘DTS’) mandates in regards to facilitating manufactured home chattel loans. And Ginnie Mae, to date, has only been making promises of future action. So, as you can see, we’re going nowhere, slowly.

• ‘Scrapping the Devastating DOE Energy Rule’. Here MHARR appears to blame the threat of this new rule for the 33.8 percent collapse in new HUD-Code housing production and sales 2023 year to date. No question this ill-conceived rule would have a devastating effect on new HUD-Code housing manufacture as well as unit pricing, but it is not the whole story. For example; many feel HUD’s ‘on again off again’ very expensive retrofitting of rental homesites in land lease communities contributes to this present day sales shortfall. Solution? IMHO, repopularize and approve the Frost Free Foundation (‘FFF’) system that works perfectly when properly installed.  

• Then there’s the reemerging question about removal of ‘permanent chassis’ wording from the HUD-Code. Genesis of this discussion point is the draft ‘ROAD to Housing Act’ published recently by SC Senator Tim Scott. This subject emerged before, prior to the enactment of the Manufactured Housing Improvement Act of 2000 – 20 years ago! Pros & cons? Depends on who you talk to. Some feel removal of ‘permanent chassis’ requirement would free-up manufactured housing design and likely increase market share. Opponents? Concerned manufactured housing will be changed to the point it would no longer be the truly unique type factory-built housing it is today – and die.

And then there’re suggestions that arrive from all over the industry. In no particular priority:

1. Encourage sale and placement of other forms of ‘affordable’ housing, within ‘communities’ and on scattered building sites conveyed fee simple. According to the International Code Council’s (‘ICCs’) recent Off-site Construction Summit (June 2023) in Washington, DC, this includes ‘tiny houses’, RVs, modular pods, customized shipping containers, panelized systems, and of course, manufactured homes. Interestingly, the recent recreational vehicle trend of using RV units as affordable housing (i.e. by fulltime RVers & would be homeowners) has attracted attention among researchers and academics in search of solutions to this nation’s affordable housing crisis. For an article on this subject, read VISIONS magazine this fall.

• Then there’s the once controversial, but now widely accepted, seller-financing of new manufactured homes via Lease-Option contracts! This trend has been boosted by the realization among ‘community’ owners/operators, of advantages of new home placement instead of resale home rehab, sale, and financing. To this end, the quick sale and installation of new homes, and infilling of ‘communities’, is enhanced by availability of floor plans, warranties, and new home appeal. To learn how all this is done, attend the MH FacTOURy Summit at the RV/MH Hall of Fame facility on 22 & 23 August. Phone (317) 247-6258 for more information and to register, also IMHA/RVIC.org. *1

• And then there’s advertising of our MH brands on a national scale. This concept continues to ‘go begging’ except for Clayton Homes on internet and social media platforms. I can’t visit Facebook without running into attractive photographs of HUD-Code manufactured homes available from Clayton Homes. Why isn’t everyone doing something similar?

And the ‘beat goes on’. Here I’ve just skimmed the surface of measures to consider to rejuvenate manufactured housing production and sales. Surely you must have ideas to this end. If so, please let me know via gfa7156@aol.com

End Note.

1. If you’re going to be in Elkhart for the MH FacTOURy Summit on 22 & 23 August, why not arrive a day earlier and attend the annual RV/MH Hall of Fame Induction Banquet? To purchase tickets, phone (574) 293-2344.

Property Management ‘Gun for Hire’

Are you the owner/operator of a portfolio of land lease communities looking for a new executive property manager to maximize the profitability of your holdings? Well, there happens to be a well-qualified, long experienced professional property manager available to hire. The individual is Institute of Real Estate Management (‘IREM’) certified, during the last two or so decades has well-managed some of the largest land lease community portfolios in the U.S., and knows the manufactured housing industry inside and out, i.e. has established effective on-site new home sales and financing programs at dozens of communities.

If interested, send me an email inquiry via gfa7156@aol.com, asking me to forward your email to the individual described here.

Semi-famous Quotation of the Month

“I believe if you hate police officers, the next time you are in trouble, call a crack-head!” Senator Kennedy (Louisiana)

George Allen

Blog Posting # 749, Copyright 7 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and txt resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.eduatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40= years business career in MH and community ownership/management.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute (‘MHI’), RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books about MH, communities, business & management wisdom & prayer.

And the Precipitous Slide Continues!

According to EducateMHC’s ‘MH Shipment Volume @ May 2023 & Stock Market Report @ 4 July 2023’, between May of 2022 and May of 2023, there’s been a 33.8percent decrease ‘year to date’ in the number of new HUD-Code manufactured homes produced! Specifically, comparing months of May 2022 and May of 2023, there were only 2,582 new HUD-Code homes produced this past May!

So, as an industry, we’re still faced with this unsolved conundrum (‘riddle, hard question’):

Why, in the midst of a widely-recognized ‘affordable housing crisis’ throughout the U.S., are we continuing to produce fewer and fewer of the most affordable housing type (i.e. factory-built homes) available to the American home buying consumer? Still no national forums addressing this serious matter. The only tiny light at the end of this tunnel seems to be Clayton Homes using social media (e.g. Facebook) to market their single section HUD-Code housing product. Why aren’t others (e.g. CAVCO, Skyline/Champion)?  Obviously, much more needs to be done – especially where ameliorating (‘making better’) local regulatory barriers to all forms of affordable housing is concerned!

You have ideas and suggestions to this end? We’d appreciate hearing them: gfa7156@aol.com

STILL CONFUSED?

You should be – if referring to the unclear and confusing musings put forward in the aforementioned (See blog # 748 last week) ‘Trojan Horse – Looming Impact’ two topic mini- treatise published recently on MHPro News letterhead with mention of MHARR.

Here’s the simplest manner, in the next two paragraphs, by which I can communicate the bewilderment I experienced reading and reading this document:

Is it good or bad, for an industry presently already in a precipitous (housing production) slide, to be able to sell and finance more new manufactured homes with ‘small dollar mortgages’ – or not? Sounds good to me. But constant mention, in said report, of “21^st, VMF & MHI’ as being shills (my term) for Berkshire-Hathaway, does not help resolve this matter at all!

And, ‘removal of the requirement for a permanent chassis’, relative to manufactured housing. Here, one is asked to identify as an industry purist and Luddite (i.e. Make no changes!) OR, be open-minded to the possibility of popularizing manufactured housing (sans permanent chassis) as a new type (factory-built) housing. And, like the previous $ red herring, suggestion that removing permanent chassis is akin to the ‘bait & switch’ “CrossMod fiasco” – without explanation, does not help resolve this matter at all – either.

Yes, this proposed ROAD (‘Renewing Opportunity in the American Dream to Housing Act’) bill, as parsed by these identified writers, is that confusing and non-resolute!

And, if that wasn’t enough confusion to introduce relative to manufactured housing issues, learn now about the International Code Council (‘ICC’), and how it’s allegedly – along with the usual ‘whipping boys’ (i.e. Berkshire Hathaway, Clayton homes, et. al.), promoting widespread use and recognition of ‘off-site construction’ – structures, buildings, homes, and other variants. At a June 2023 conference in Washington, DC., off-site home building was described as “panelized systems, manufactured homes, tiny houses, recreational vehicles, modular pods, and shipping containers.” So, is this good or bad for our ailing industry? The writers of this report put it this way: “legislation…may have outcomes that are potentially harmful for HUD-Code manufactured housing?” To which I reply: ‘How so?’ Reads more like a ‘chicken little’ scenario than the result of reasoned thinking and discussion. So, are we purists and Luddites, or are we willing to risk ‘opening the MH tent’ to unexplored possibilities? That appears to be ‘the question’ afoot these days.

OK, that’s as far as we’re going this week, relative to the ‘Trojan Horse – Looming Impact’ report, a.k.a. ROAD proposed legislation. Your responses, ideas, suggestions? Gfa7156@aol.com

George Allen

Blog Posting # 748, Copyright 30 June 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educaatemhc.comn, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ years business career in MH and community ownership/management.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute (‘MHI’), RV/MH Hall of Fame enshrine, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books about MH, communities, business & management wisdom & prayer.

IT’S OK TO BE CONFUSED!

Did you see it? Did you read it? Did you understand it? In any event, it’s OK if you’re confused by the world’s longest title (Or was it a headline?) quoted here:

“Trojan Horse-Looming Impact? Troubling Questions, History Raised on Potentially Deceptive ‘Bait and Switch’ Housing Legislation Posed to Harm Manufactured Home Industry? Facts and Analysis.” Yes, that’s ‘whatever it was’ in its entirety. Does it make sense to you? Me neither, even after I read and reread all seven single-spaced typed pages.

So, what’s the genesis of this mysterious document? “A ‘discussion draft’ of housing legislation being circulated by Senator and 2024 Presidential Candidate Tim Scott (SC-R) is raising serious questions and concerns about its intent and potential impact on manufactured housing regulations and the manufactured home market.” So, something to which we should pay attention.

Well initially, the unnamed author or authors*1 offer what is couched as an ostensible expose’ within the manufactured housing industry, but soon winds up an ostentatious (‘pretentious display’) of animus towards the “…Berkshire Hathaway (BRK’) and Clayton Homes, Inc. – affiliated lenders, 21^st Mortgage Corporation and Vanderbilt Mortgage and Finance (‘VMF’).” Specifically, the expose’ writers are concerned this bill would force the Consumer Financial Protection Bureau (‘CFPB’) to rewrite regulations to “allow for salaried originators of residential mortgage loans, that originate small dollar mortgages (i.e. original principal obligation of not more than $70,000), to encourage additional lending for small dollar mortgages.” The downside? Gives the animus targets increased ability to sell more new HUD-Code homes.

And two paragraphs later, “The other significant provision on the proposed ROAD*2 bill would remove the requirement for a ‘permanent chassis’ that is part of the definition of ‘manufactured home’ contained in both federal manufactured housing law and regulations.” Now there’s something to get one’s teeth into, as ‘permanent chassis’ has been part of manufactured housing since 1974-76, and a contentious matter during times past.

So, what do the author/authors of this warning message appear to fear? “While superficially appealing, the potential impacts of these provisions – and particularly the change in the definition of ‘manufactured home’ contained in the industry’s federal regulatory law – could be extremely far-reaching and could include many unintended (or quite possibly intended) negative consequences.”

At this point in the seven page treatise, the writer(s) go down into the weeds of past MH history and internecine squabbles of years past re chattel finance and permanent chassis removal.

That’s as far as I’m going to take you in this week’s blog posting. You should certainly want to read more. To obtain a copy of ‘Trojan Horse-Looming Impact?’ phone MHARR via (202) 783-4087 and request a copies of their cover letter and ‘discussion draft’ of ROAD to Housing Act.

In the meantime, share your feelings about this matter (i.e. expose) and the two issues pursued (i.e. relaxed financial regs relative to chattel capital, and the ‘permanent chassis’ matter. Do so via gfa7156@aol.com

End Notes

1. Author or authors? While the document is published on MHPro News letterhead, and mention of MHARR is made within the instrument, no individual names are listed. But for MH folk, the unique writing style and extreme wordiness, as well as predilection, suggest the sourcing. Your guess?

• ROAD = abbreviation for Renewing Opportunity in the American Dream to Housing Act, which was publicly released to the Senate Banking, Housing and Urban Affairs Committee on 25 April 2023.

Identity Theft Prevention Checklist

While the following six suggestions have been around for a while now (since 2003), they’re worth repeating here:

• Check your credit report annually
• Review your bills and statements on a regular basis
• Guard your mail and trash from theft. Use a shredder.
• Use caution when giving out personal information
• Copy the contents of your wallet or purse
• Report lost or stolen checks or credit cards immediately

George Allen