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:
- 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:
- 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.
- 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