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

Blog Posting # 778, Copyright 2 February 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRD’) component of MH! Educate MHC is the online advocate, historian, trend tracker, and text resource for these two related business models. Research EducateMHC via (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 MH-focused professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH and community ownership/management, and life an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is the only emeritus member of the Manufactured Housing Institute (‘MHI’)¸a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, Vietnam veteran & retired lieutenant colonel of U.S. Marines, as well  as author/editor of 20 books & chapbooks re MH, communities, business management & prayer.

Year 2023. A Lousy Year for You too?

By the time you read this blog posting Friday or Saturday (2 or 3 February 2024), the Institute for Building Technology & Safety (‘IBTS’) – HUD’s scorekeeper for manufactured housing production, will have reported the MH production level for December 2023. At that point I’ll add their data point to the year to date (‘YTD’) figure MHI, MHARR & EducateMHC already know, then let YOU know, via our monthly MH production & stock market report, just where we wound up for year 2023. My guess today is we’ll be roughly 22 percent below where we were this time last year, likely around 95,000 new MHs. That’s DOWN from 112,886 new HUD-Code homes produced during year 2022. A lousy year for MH!

How will our MH total compare with our sister industry, recreational vehicles? Well, the RV industry, this past week, announced their year 2023 production total of RVs to be at 313,000 units, DOWN 36.5 percent from where they were the year before. So MH is not the only industry in a free fall right now. A lousy year for RVs!

Yes, discouraging year end results for both industries! Prospects for improvement during year 2024? As a perennial optimist I’d like to think so; but as a realist, I think not. Why? This is a presidential election year, and given the present uncertain state of our national economy, I think both industries will be exceedingly fortunate if they can match their respective year end totals in 2024 with those in 2023; no better, no worse. Next week’s blog posting will contain the year end MH production total for year 2023.

Anecdotally, there’s an urban legend from years past (i.e. post 1972 when RV/MH Hall of Fame was founded), that the two pairs of letters, ‘MH’ & ‘RV’, would be featured in a sequence indicating which industry was enjoying the most production success at the time, e.g. MH/RV Hall of Fame or RV/MH Hall of Fame. However, as I research and pen the history of the RV/MH Hall of Fame, I’ve been able to document that fable. Hmm. But it does cause one to wonder: Perhaps it should it be the MH/RV Hall of Fame for a while’

READ ‘VISIONS IN LEISURE & BUSINESS’

Well the online edition of ‘Visions in Leisure & Business’ is available for you to read! Simply visit https://scholarworks.bgsu.edu/visions/vol25/idd2/ There you’ll find a whole series of articles focused on various aspects of recreational vehicles. As you likely know, from past blog postings during 2023 I researched and wrote ‘RVs as Affordable Housing’ for this academic journal. And Al Hesselbart, retired historian of the RV/MH Hall of Fame penned a brief history of the RV industry. For those with business interest in recreational vehicles, I’m confident you’ll find this to be an informative and helpful tour of our sister industry.

5Barriers for Entry-level MHomeownership

Were you part of the buzz last week when Harvard’s Joint Center for Housing Studies (‘JCHS’) published their new study titled ‘Five Barriers to Greater Use of Manufactured Housing for entry-level Homeownership’? It was hard to miss, as everyone was talking about its’ content and possible influence on HUD-Code manufactured housing and land lease community development. Here’s a brief summary of the content (For more, go to jchs@harvard.edu

Introductory paragraph. “The sharp rise in home prices and interest rates over the last few years has pushed homeownership out of reach for millions of renters, as documented in our ‘State of the Nation’s Housing 2023 Report.’ Under these conditions, it is more important than ever that affordable homes are available for entry-level homeownership. Manufactured housing offers just that, thanks to lower production costs; indeed, the construction cost of a basic single-section manufactured home is roughly 35 percent that of a comparable site-built home. While the savings for larger homes is smaller, it is still significant, with a double-section home costing 60 percent, and a CrossMod home (which most closely resembles site-built housing) costing 73 percent of comparable site-built homes.”

Parenthetically, while I see and kinda understand the industry’s aggressive marketing of CrossMod homes; until we document and publish the actual number of such units produced year-by-year, I think we’re guilty of ‘gaslighting’ prospective home-buyers about the alleged popularity of this line of new homes. *1

OK, here’re the barriers to greater use of MHs for entry-level homeownership:

“Negative Perceptions of Manufactured Home Quality.” Pre-HUD homes (i.e. pre 1974) continue to taint MH public perception, while contemporary new MHs are akin to site-built homes. Edit: How do we, as an industry, escape the grim reality of economically-challenged homebuyers and renters having ‘nowhere else to go & live’, other than to become homeless?

“Restrictive Zoning and Land Use Regulation.”  As an industry we are ‘so used to’ NIMBY, LULU, & BANANA.*2 Even state laws preventing outfight exclusion of manufactured housing are oft burdened with other barriers, e.g. roof pitch, foundation heights, site sizes, setback requirements, and more. Edit. How many in our industry live in manufactured homes?

“Market Conditions.” While ameliorating restrictive zoning & land use regulations is vital, favorable market conditions like lower land costs, lower density development, and lower household incomes are equally important. That’s why the nature of local housing markets is so critical to the development of raw land into land lease communities and scattered site building.

Edit. Is our local housing market amenable to affordable housing of all types, especially MH?

“A Unique & Limited Supply Chain.” Noted by JCHS: “…homebuyers purchase a home from a retailer but are required to find land on their own….” & “Developers…must learn a new set of specialized skills related to getting local approvals, siting homes….” With only 140 factories nationwide, delivery is an issue. Edit. Where to go? Many land lease communities are now full.

“Access to Mortgage Financing.” Conventional real estate financing available only to homes on homeowner-owned sites and MHs permanently affixed thereto. Personal property loans, a.k.a. chattel mortgages, have limited availability for homes sited on leased realty, e.g. in land lease communities. Former feature more attractive terms; latter have higher rates and shorter terms.

Already ‘commentaries’, about this study, have arrived at our offices, suggesting additional barriers to greater use of MHs for entry-level homeownership. These include: lack of land development initiatives on the part of land lease community owners/operators and by factories; lack of national marketing effort by and among the Big Three-C manufacturers *3; and no effort on the part of HUD to promote manufactured housing – the very housing type they regulate, to the home-buying public; and, the list goes on….

So, what do you think? What are other barriers to greater use of manufactured housing for entry-level homeownership? Let me know via gfa7156@aol.com

End Notes:

1. Gaslighting. On line definition = “A colloquialism. Manipulating someone into questioning their own perception of reality.”

• NIMBY = ‘Not In My Back Yard’; LULU = ‘Locally Unwanted Land Use’; & BANANA = Build Absolutely Nothing Anywhere Near Anybody!’ And there is YIMBY = ‘Yes In My Back Yard’ when local regulatory barriers to all forms of affordable housing disappear. Quoted from ‘SWAN SONG’, available from EducateMHC

• The Big Three-C HUD-Code housing manufacturers: CAVCO Industries, Clayton Homes, & Skyline-Champion, who together, enjoy more than 70 percent of the national manufactured housing market share.

George Allen, CPM, MHM

POSTSCRIPT

How does one pen a personal note on a social media platform like this? I don’t really know, even after posting nearly 800 blogs during the past 15 years. Yes, we started blogging round about year 2009. Anyway, I’m going to give it a try in the following paragraphs.

From time to time during last year (2023) and before (Since I retired mid-2021), business friends and acquaintances have come to me personally (Like during the Louisville MHShow last week), via correspondence, and otherwise. All asking me why there isn’t a dedicated forum like this one (i.e. weekly blog via EducateMHC) associated with and hosted by national trade advocates like MHARR or MHI? I have no answer to that question.

I’m an Emeritus member of MHI, as well as founding board member of their National Communities Council (‘NCC’) division (circa 1996); also a longtime and bona fide friend of Danny & Mark at MHARR. But neither body has ever asked me to write in their behalf. And who knows, perhaps I shouldn’t – even if asked. Since 1980 I’ve enjoyed self-published platforms like the ‘Allen Letter’ & ‘Allen Confidential’, as well as columns in the now defunct ‘Manufactured Homes Merchandiser’ magazine and ‘The Journal’ tabloid.*1 In all these I was careful to pen truths, as a pundit, about our industry and realty asset class, along with my opinions on various matters. Sure wouldn’t want to compromise that freedom unless need be.

As I often do here, ‘What do you think?’ Do our national trade advocates need an alternative to their bland routine messaging to members, words from someone who’s been an entrepreneur businessman, ‘with skin in the game’ in this ‘double dual business environment’ for the past 40 plus years – or leave matters just as they are?*2 I’d like to know your thoughts on this matter, and I’m somewhat sure MHARR and MHI would as well.

OK, now I’ve said it. Will leave it well alone unless and until I hear back from you and or ‘others’.

End Notes.

1. My Allen Legacy column in every issue of ‘MHInsider’ magazine is of a different composition; i.e. MH industry & land lease community matters and individuals from an historical perspective.

• ‘double dual industry’ = manufacture and retailing of HUD-Code housing, and the development & operation of land lease communities of all sizes in all locales.

GFA

Blog Posting # 777, Copyright 26 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models. Reach EducateMHC via (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 property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH and community ownership/management, and as an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is the only emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, Vietnam veteran & retired lieutenant colonel of U.S. Marines, as well as author/editor of 20 books & chapbooks re MH, communities, business management & prayer.

Louisville MHShow Potpourri

Most frigid weather, for me anyway, since I started attending this annual manufactured housing show in 1978. Brrr. And what made the weather even worse was having to arise at 6AM the first two days of the show to be present for the State of the Industry panel Wednesday morning and Manufacturers’ Panel on Thursday. My ‘take’ on these presentations?

• In the first instance, four state MH association execs or officers expressed opinions concerning the State of the Industry today; specifically, what is happening in their Midwestern state. No executive presence or input, however, from Ohio & Wisconsin.

• Manufacturers’ Panel. Salaried (not senior executives) individuals from the Big 3-C firms, plus one, held forth on what their firms are doing for the industry and buying public these days. Some talk about the much vaunted CrossMod manufactured home – but when asked how many had been produced annually to date, no one had an answer.

One of many highlights of the MHShow for me was meeting with ROC-USA founder Paul Bradley, and his team, especially those helping to launch a new subsidiary, Integrity Community Solutions. ICS plans to acquire and operate ‘but for’ land lease communities before reselling them to homeowners/site lessees. ‘But for’ communities include portfolio transactions, and value-to-add properties in local housing markets where new affordable (manufactured) homes are needed. For more information about ICS, contact Jessika via jessicap@icsmhc.com

I was also heartened to learn of and meet with individuals interested in acquiring and relaunching the Manufactured Housing Manager (‘MHM’) land lease community property management training and certification program. I started the MHM curriculum in 2001. By the time I retired in 2021, we’d trained and certified more than 1,000 MHMs! Today the program is dormant, but the textbook, ‘Community Management in the Manufactured Housing Industry’ is in many communities across the U.S. and still marketed via EducateMHC.com

One pleasant surprise at the MHShow was to learn of the Fourth Annual MHInsider (magazine) Industry Awardees. I was honored to be named the INFLUENCER Award winner, along with three friends. Byron Stroud, with Skyline Champion Corporation, who was honored as ADVOCACY Award winner. And longtime friend Debra ‘Dee’ Pizer, MHM, of Zeman Homes, was tapped as LEADERSHIP Award winner. Especially pleased to see Ted Boers, founder of DATACOMP, designated as VISIONARY Award recipient! For more information about these awards and individuals read the January/February 2024 issue of MHInsider magazine.

 SHOCKING STATISTICS

Quoting from Harvard University’s Joint Center for Housing Studies report titled, ‘Home Price-to-Income Ration Reaches Record High’. (22 January 2024)

“In 2022, the median sale price for a single-family home in the US was 5.6 times higher than the median household income. As recently as 2019, the national price-to-income ratio was just 4.1”

And a few days earlier, the JCHS (on 19 January 2024) shocked homebuyers and Realtors with this news: “The number of cost-burdened households in the US rose dramatically during the pandemic, and in 2022 reached levels not seen since 2011. In total, 42.0 million households were cost burdened in 2022, paying more than one third of their income for housing. This is an increase of 1.5 million households from 2021, and 4.9 million since 2019.”*1

End Note.

1. “Cost-burdened (severely cost-burdened) households pay more than 30 percent (severely-burdened = more than 50%) of their income on housing.”

George Allen, CPM, MHM

Blog Posting # 776, Copyright 19 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of manufactured housing! EducateMHC is an online advocate, historian, trend tracker, and text resource for these two related business models. Reach EducateMHC via (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 property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH and community ownership/management, and as an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), is an RV/MH Hall of Fame enshrinee, a Vietnam veteran & retired lieutenant colonel of U.S. marines, as well as author/editor of 20 books and chapbooks re MH, communities, business management & prayer.

Tough Love for the Manufactured Housing Industry

In year 2010, as the manufactured housing industry staggered to understand ‘how & why’ they shipped only 48,789+/- new HUD-Code homes during all of 2009, one executive stepped forward and proposed a Five Part Market Share Recovery Plan for the industry and realty asset class. This was Randy Rowe, former executive with REIT ELS, Inc., founder of Hometown America, and present owner/operator of Green Courte Partners. But we’re getting way ahead of the story you need to rehear before delving into a summary his ‘Five Part Market Share Recovery Plan for Manufactured Housing Industry & Land Lease Communities’.

Following paragraphs contain edited passages from an article on this subject, circa year 2010.

“Some of us knew, way back in year 2000, as manufactured housing stepped onto the slippery slope of chattel finance legerdemain (i.e. ‘sleight of hand, conjuring’) -turning our customers upside down financially, but few cared to listen!*1 For that matter, recalling a conversation aboard a private jet flying between Hilton Head and Las Vegas (in 2007), these same folk also saw site-built housing stepping onto its own slippery slope, misusing realty-secured finance cum predatory lending. Then too, no one listened until it was too late! Now folk are listening, sort of. Today’s acid test is whether business is bad enough (in 2024), in the manufactured housing arena for corporate stakeholders to once again take the following measures (i.e. five part market share recovery plan) to bear, and implement necessary changes to affect a factory-built housing market share rebound.”

At this point in history (2008-2010), two meetings occurred as precursors to when the ‘Five Part Market Share Recovery Plan’ would be introduced, albeit implemented. First was a National State of the Asset Class (‘NSAC’) caucus (February 2008), held on-site at the Fountain View community in Tampa, FL., with 100+ owners/operators present. Goal? To identify key industry issues and seize control of their collective business destiny. Later, MHI in a ‘Quick Links’ newsletter to members (May 2010) proposed, “…improving financing for our customers, advocating for implementation of updates to the HUD Code, and protecting preemption of the federal building code.”

So, did these events get the industry on track to restored profitability? No! As a well-known industry pundit (i.e. ‘a learned man’) opined at the time:

“Unless GSEs are dragged kicking and screaming into the mix, the MH industry is doomed. We must have changes in the industry business model (i.e. ‘Stop taking advantage of financially fragile home buyers…’).” And “MH demand has always existed…but after the 1996-2005 MH bond meltdown, every investor knew of the extreme danger of lending on our product. It continues to this day. Can’t or don’t fix that, and the industry is forever severely limited.”*2

That’s the disturbed business background to which Randy Rowe’s ‘Biggest Issues Facing the Industry’ played at the 19^th International Networking Roundtable in Phoenix, AZ., during September 2010. Here’ the five parts to said market recovery plan:

1. Better warranties and better (customer) service. Need 10 year after-market warranties that include a turn-key delivery to customer, addressing installation issues in the process.

• Chattel financing matters. Now need community owners/operators to “provide new and resale home financing on-site in their properties”; loan origination and underwriting must be in accords with federal and state statutes, e.g. S.A.F.E. Act of 2008

• Economic security. Implement long term written leases. Use Area Median Income (‘AMI’) of  local housing markets & annual Gross Income (‘AGI’) of homebuyer to estimate affordable loans

• Multiple listing services. Use the evolving internet to emulate NAR’s Mutilating Service (‘MLS’)*3

• National marketing (image improvement) measures. A proposed national program went nowhere, as manufacturers, during fall 2008, believed ‘dollar assessments on new homes’ would create a pricing advantage among non-participants in said program. MHI’s NCC challenged to address image improvement among communities.*4 Need for a Code of Ethics

So, if you’ve been in the MH and or community business for a decade or longer you know which of these measures have gone forward and which ones died on the vine, so to speak. Today we’re at a new nexus (i.e. ‘a link in time’); Whether to sell fewer new manufactured homes at higher prices, or to sell more new homes at lower prices. More information to follow during the weeks ahead. Tough Love? Sitting manufacturers down and asking them to ‘splain’ to us what they are doing to our industry. Are we no longer interested in being the most affordable housing in the U.S. of A?

End Notes.

1. Read the classic commentary, ‘Upside Down in a Mobile Home Park’ in SWAN SONG. Book available via EducateMHC.com

• GSE. Government-Sponsored Enterprises, e.g. Fannie Mae & Freddie Mac

• NAR = National Association of Realtors; MLS = Multilisting Service

• NCC= National Communities Council division of the Manufactured Housing Institute

KING OF THE TRAILER PARK

Ready for a break in last three weeks of serious writing about present and future business prospects of manufactured housing and land lease communities? Well, here it is; an edited version of an obituary published shortly after the demise of a land lease community homeowner/site lessee, a.k.a. ‘King of the Trailer Park’, during year 2023. No real names or locations, but you’ll probably enjoy the ‘drift’.

Joe, a divorcee, father, grandfather, and proud owner of a few lots in the trailer park had had enough, so up and died on us this fall – to avoid another Presidential stolen-election mishap in the near future.

As a gluttonous eater of fried foods and snack cakes, as well as the occasional chili cheese dog, Joe tried in vain to give up the ghost by clogging his arteries and having a stroke in 2015. His sons had other plans and made him go to the hospital. While waiting in the ER at the hospital, he was heard saying, ‘Let’s make a break for it!’ Overheard by one of the hospital staff, he was forced to go through the appropriate check-out procedure.

On many occasions in life, Joe was seen in is backyard at the trailer park during the early hours of the morning, hammering beers, standing over country-style ribs, and yelling, ‘It’s got a head like a cat on it!’ while nearby neighbors would peek out their windows bearing looks of disgust and amazement, as his party guests were slurring remarks about needing to speed-up his cooking style, ‘We’ve been here since five o’clock’ – ‘I’ve got work in the morning.’

We don’t know if he was married, but he definitely was a lady’s man. There was Jenny, Trudy, Anne, Patsy, Shirley, etc., etc… ‘It’s in the bones’ he told us as he proudly pointed to his skinny, pasty-white legs. ‘Women love a good shin’. We think he might even have some females waiting for him on the other side. Joe loved his family more than anything else in the world…except ice-cold Busch, room-temperature Busch, T-bones, New York strip, prime rib, shrimp, swimming, poker, hatch-back Mustang GTs, tank-tops, Tennessee men’s basketball, and his personal copy of Eddie Murphy’s Raw.

He leaves behind his second-favorite son, in Arizona City, AZ., his favorite son in KY, a younger brother Al, and unofficial daughter Fanny in the trailer park, as well as a pair of old boxers which have ‘Buttweiser the King of Rears’ printed on the design He will be moderately missed. 

Not the sort of guy who’ll make it into the RV/MH Hall of Fame. But know what? Stranger things have happened in the past – and rumor has it we may see a misfit in the not too distant future….

And yes, this is a bona fide obituary that made its’ way into my collection of interesting tales, statistics, and other trivia about MH and communities. Perhaps someday I’ll share a blog tale with you titled, ‘The Bad Boys of Manufactured Housing’ – in which I profile a murderer, bagman, and criminal, all with ‘reps’ in the community business years ago….

George Allen, CPM, MHM

Blog Posting # 775, Copyright 12 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of manufactured housing! EducateMHC is an online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC via (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 property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as an author & consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), is an RV/MH Hall of Fame enshrine, a Vietnam veteran & retired lieutenant colonel of U.S. Marines, as well as author/editor of 20 books re MH, communities, business management & prayer.

‘Thanks for putting into print what no one else will say out loud!’

In a manner of speaking, the ink wasn’t dry on last week’s blog posting before responses arrived on my PC. All commentaries have been in support of the straightforward question directed to HUD-Code housing manufacturers who’ve seen, on the average, production of new homes drop by 22 percent year to date (‘YTD’) 2023, and product pricing rising 77 percent between years 2017 & 2022. Here’s the question:

“Are we, as an industry and affordable housing player, more interested in selling fewer new (manufactured) homes at higher prices, OR selling more new homes at lower, atttainable prices?”

That question prompted the title line of this week’s blog posting: ‘Thanks for putting into print what no one else will say out loud!’ And that wasn’t all that’s been penned to this end.

A veteran state MH association executive shared these observations and frustrations. “You are correct about the prices of new MHs staying stubbornly elevated. Many of our members got burned during Covid as prices (of new HUD-Code homes) skyrocketed! Our independent (street) MHRetailers could not adjust the price quoted to their customers, so they had to suffer  lost revenue in many cases! Now manufacturers and retailers feel they can make just as much money selling fewer homes and that is what they are going to do. Working smarter, not harder! Unfortunately, this is not a good long-term strategy, and it will come back to bite us. Today, as I travel the state extolling the virtues of our industry to municipal leaders and others, saying we are ‘affordable’ is no longer my sales pitch, because it may no longer be true if prices do not dome down.”

And that wasn’t all sent my way. Here’re excerpts from yet a particularly savvy state MH association exec. Responding to my list of five – no, make that six, key reasons why new HUD-Code manufactured housing production is down 22 percent this year, he/she writes:

“…the two biggest obstacles the industry faces which were not mentioned in your blog, in blue states, remain trade unions who are the largest contributors to liberal democrat political candidates at all levels, who want to keep factory-built housing out of competition for labor; and HUD itself. HUD hands out Community Development Block Grants (‘CDBGs’) to pretty much every municipality that applies for one, but does NOT require utilization of HUD-Code housing in any of those municipalities (i.e. ‘promoting zoning discrimination’).”

Furthermore, “…next of my list would be the NIMBYs (‘Not in my backyard!’), university-educated socialist urban planners, and local building officials who refuse to trust third party inspections.”

And “Yet another reason production is down has to do with rental homesites in existing land lease communities. Most vacant sites have been filled by ‘new’ corporate owners, who, in the race to get into the (commercial real estate investment) game, paid too much for those communities in the first place.”- and have jacked site rent rates soon thereafter, causing turmoil.

It’s not too late for you to sound-off with your observations and opinions on this timely, albeit controversial topic: ‘Higher prices and fewer houses’ OR ‘lower prices and more houses’? What say you? Gfa7156@aol.com

As I opined last week, it will be interesting to see and hear IF this timely matter is addressed by the State of the Industry panel scheduled to address attendees at this year’s Louisville MHShow, early morning the 17^th of January. Hope to see you there!  GFA

About the Louisville MHShow. Yes, I’ll be there and will have updated training and marketing materials with me to distribute FREE to those requesting for them. They are:

• A plastic 3X5 wallet card with ‘Four Steps to Selling & Financing New Homes On-site Within Land Lease communities’ on one side, & ‘Six Right Ps of Marketing New Homes Within Land Lease Communities’ on the verso side. Also a similar wallet card is availablae for HUD-Code manufacturers selling homes into land lease communities.

• ‘George Allen’s Investment Real Estate Number Crunching Card’, featuring the cash-on-cash formula, a loan amortization chart, New Rule of 72 – for estimating value of an average land lease community, real estate asset class operating expense ratios (‘OERs’), and How to Use the 3:1 Formula for estimating rental homesite rate, compared with like-size conventional apartments in any local housing market. A real keeper of a card!

• A handy card describing three texts that should be on-site in every land lease community nationwide: 1) ‘Community Management in the Manufactured Housing Industry’, 2) ‘SWAN SONG’ a history of land lease communities, and my autobiography: 3) ‘From SmittyAlpha6 to MHMaven’. All available via educatemhc.com and archived in the RV/MH Heritage Foundation’s Hall of Fame in Elkhart, IN.

RVs as Affordable Housing

My major business writing project during year 2023, was to research and pen an academic article describing present day and future prospects of recreational vehicles (‘RVs’) as affordable, attainable housing. The finished product, ‘RVs as Affordable Housing’, was submitted to the publisher in October, and I suspect the periodical will be distributed during the first half of year 2024. Once it’s published, I plan to share it in toto with my readership here, and in other RV & MH-related publications, such as ‘Manufactured Housing Review’, our industry’s online trade media.

In the meantime, I continue to read and gather interesting additional material to this end. What I share here is a bona fide observation and prediction about ‘automobile trailers’, from 88 years ago! At that time, neither recreational vehicle (‘RV’) or mobile home (‘MH’) trade terms had  been coined. So here’s the remark from Roger W. Babson’s article ‘We’ll Soon Be Living On Wheels’, quoted from the ‘Los Angeles Times’, in the February 1936 issue of Woodall’s ‘Trailer Travel’ magazine:

“Within 20 years, more than half of the population of the United States will be living in automobile trailers.” Wow! What a prediction! Did it happen? No. But during year 1956, there were 124,300 new mobile homes (oft called ‘trailers’) produced, and an indeterminate number of automobile trailers manufactured for recreational use. But it is interesting to read of the enthusiasm some had, at the time, for this new form of housing. What is sobering, however, as an industry, we haven’t produced that many homes since year 2005 (@ 146,644) and we’re not going to eclipse 100,000 units during all of year 2023! Read carefully: ‘It’s like we’re purposely going backwards and not forward these days!’ Why? Again, that’s the question for which we’re awaiting an answer from our HUD-Code housing manufacturers!

My major business writing project during year 2024? To research and author a comprehensive history of the RV/MH Heritage Foundation Hall of Fame in Elkhart, IN. Part I was penned by the late Dr. Carlton Edwards (a Hall of Fame inductee), covering the period of time between its’ founding in 1972 through 1993. I expect Part II will cover from 1994 on through year 2024. So, if you have information on this historic subject that you’re willing to share with me, let’s start a conversation via email: gfa7156@aol.com

George Allen, CPM, MHM

Blog Posting # 774, Copyright 5 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of manufacture housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815l email: gfa7156@aol.com, or visit www.educawtemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as an author & consultant.

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

MH HEADED TO THE BOTTOM PRODUCTION-WISE? AH, BUT TO THE TOP, PRICE-WISE!

By dint of my personal nature, I am NOT a naysayer (i.e. ‘a person who habitually expresses negative or pessimistic views’ Webster). However, I would not be faithful to my manufactured housing journalist principles if I did not share information in the following paragraphs with you.*1

Between years 2010 and 2021 we saw annual HUD-Code manufactured housing production increase, from just 48,789 units in 2009 to 112,886 during 2022! However, during this year (2023) we’ve seen new MH production decrease, year to date, by 22 percent! We’ll be fortunate, as an industry, to eclipse 90,000 units by year end (2023) when the Institute for building Technology & Safety (‘IBTS’) publishes this data a month from now (i.e. during first week of February 2024). *2

So, why are we languishing this year? Three blog postings ago (i.e. #771 on 15 December 2023) I shared my observations on this very matter – in End Note # 3. Specifically,

“Some say 1) lack of easy access to ‘home only’ loans (a.k.a. personal property or chattel financing) & presently high interest rates, 2) pandemic era high prices on scarce building components & lack of available labor, 3) local regulatory barriers to all forms of affordable housing, 4) too few MH housing sales centers, a.k.a. independent (street) MHRetailers & ‘company stores’, and lately, 5) challenges working with local permitting and engineering authorities, even when land planning and zoning boards approve and desire development of raw land into land lease communities and subdivisions.”

Well, seems I missed an observation (i.e. #6): the increasingly high prices of new HUD-Code manufactured homes; ‘increasing more than site-built homes’! 

Here’s what the Manufactured Housing Institute (‘MHI’) had to say on the matter in a communique to members on 4 January 2024. Remember, as you read, the majority of MHI’s operating funds come from their HUD-Code housing manufacturer members:

“The (Lending Tree) analysis found the average sales price of new manufactured home rose by 77.1% between 2017 & 2022, while the average sales price of new site-built, single-family homes, excluding land, rose by 46.7% over the same period. The average cost for a new manufactured home was $127,300 in 2022 while site-built homes sold for an average of $430,808.”

And here’s MHI’s explanation of that observation. “While many of the media reports focus on the overall difference in the percentage increase between manufactured and site-built homes, in real dollars manufactured homes cost an average of $303,508 less than new single-family homes. Additionally, many of these stories have focused on luxury developments in high-cost-of-living areas that do not represent the average American homebuyer.”

Be that as it may, WHY did the average sales price of new manufactured homes rise by 77.1% between 2017 & 2022? So far I’m not hearing or reading any plausible explanations relative to this question. Have you? We’ve been down this road before, several times. Frankly, it appears, as an industry, we’re clearly pricing ourselves out of our widely acclaimed affordable (i.e. some say ‘attainable’) housing market. Is this due to profiteering, greed, or what? We should remind ourselves of philosopher George Santayana’s famous quote: “Those who cannot remember the past are condemned to repeat it.”*3

In the meantime, we’re well on our way to a trend characterized by production of a marginal volume of new HUD-Code homes, stuck at or slightly below or above 100,000 new MHs per year, – versus 579,940 new ‘mobile homes’ in 1973, & 372,943+/-  new manufactured homes in 1998. At the very same time we’re jacking the average sales price of our new MHs. This puts forth the pithy question: ‘Are we, as an industry and affordable housing player, more interested in selling fewer new homes at higher prices, OR selling more new homes at lower prices?’

Wonder if this timely trend – no, question, will be covered by state MH association execs addressing attendees at the Louisville MHShow the morning of 17 January 2024; specifically, the ‘State of the Manufactured Housing Industry’. Will you be present? I hope to be. Let’s ask for answers to the above question! For more information on this sensitive subject, read the EducateMHC ‘MHShipment Volume @ November 2023 & Stock market Report @ 3 January 2024’. Available for the asking via gfa7156@aol.com

End Notes.

1. Principles of Journalism: Report the facts, check resources, and be understood via plain writing style.

• IBTS = HUD’s MH scorekeeper. It’s where HUD, MHARR, MHI, and EducateMHC subscribe, to receive this MH production data, month by month.

• George Santayana, ‘The Life of Reason’, vol. 1, 1905, p.284

UMH PROPERTIES CONTINUES TO IMPRESS

Simply put, ‘UMH Properties celebrates its 55^th anniversary at the New York Stock Exchange on 10 January 2024. Congrats to Eugene, Sam, and the rest of their land lease community portfolio team!

George Allen, CPM, MHM