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

Blog Posting # 650 @ 6 August 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WWE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. #1 source of affordable attainable housing! Attend MHM class!

INTRODUCTIOND: When will the manufactured housing industry FINALLY get together and meet face-to-face? Weill the very first such opportunity occurs 12 August 2021. Read about…

WHAT YOU’RE ABOUT TO MISS…

If not present at the final Networking Roundtable & Retirement Celebration on 12 August 2021 at the downtown Hilton Hotel in Nashville, TN.

From 10AM until 1PM, there’ll be a dozen or more vendors of products and services of interest to land lease community owners/operators, displaying their wares and explaining their unique offerings. When was the last time you got to do that? At the Louisville MHShow during January of 2020, more than 1 ½ years ago! This opportunity is well worth the trip to Nashville!

When the Networking Roundtable begins at 1PM, I’ll be Welcoming everyone to the 30th anniversary of this manufactured housing and communities event! Part of the Welcome is the Pledge of Allegiance to the American Flag. Why? Several reasons, but mainly it’s been a tradition, started when the 9/11 Roundtable was postponed in 2001, and has become our industry’s way of showing patriotic support of our great nation! Then, everyone in the main seminar room gets an opportunity to introduce themselves to the large audience – what a great way to begin one’s interpersonal networking at this event! And, in the Directory you receive while checking-in, mark the names of individuals you want to meet as they introduce themselves.

During the next hour I’ll be sharing what’s widely known as my take on the ‘State of the Manufactured Housing Industry & Land Lease Community Real Estate Asset Class’. Two things: this is a unique presentation, as it covers both major segments of our industry, home manufacturing statistics and trends, as well as community statistics and trends. No one else does this today! Second; this year’s presentation will be unlike any other I’ve delivered to date. How? What I decided to do was identify and expound on eight highly significant improvements, trends, and happenstances (‘fortuitous circumstances’) that have occurred during the past 50 years. And these are? Well, you need to be in the roundtable audience to learn them firsthand!

The keynote address will be Scott Roberts sharing his experiences and Lessons Learned while developing raw land into land lease (&RV) communities throughout the U.S.. Unlike others who ‘talk about land development’ on podcasts, etc., these days, Scott is hands-on and actually putting pipes in the ground and filling vacant rental homesites with new manufactured homes! If land development is in your future as a business venture, then you need to be present to hear this knowledge firsthand.

It’s no big secret, the International Networking Roundtable phenomenon Carolyn and I launched way back in the early 1990s, is – with this event in Nashville, TN. – coming to an end. So, I’ve written a ’30 Year Networking Roundtable Legacy’ history that’ll be distributed to all attendees when they arrive on the 12th. Plus, there’s an additional surprise gift for everyone in attendance. Care to guess what it is?

Next on the agenda is a Fireside Chat type audience participation conversation and discussion of any topic(s) desired. During recent networking roundtables this time of open expression has proven to be very popular and productive. No topic is off limits. Everyone knows our industry and asset class has at least a dozen Evergreen (i.e. ‘always present’) issues ready for debate and brainstorming. This ‘hour or so’ is your opportunity to so engage!

When we clear the seminar room at 5PM (to ready it for the evening banquet), we’ll attempt the usual annual photograph of everyone present. Then enjoy an hour or so of cocktails together. At the banquet that evening, it’s been requested all RV/MH Hall of Fame members present (know of at least six registered so far), wear their bright green RV/MH Hall of Fame blazers – to show support of the sole entity entrusted with the perpetuation of our industry and asset class legacies! Sometime during the evening I’ll share some parting thoughts on my pending retirement; titled, ‘It’s Been A Very Good Run’.

Friday morning(8/13) at 8AM, another roundtable tradition (also started post 9/11), an informal prayer meeting will be held in a private meeting room. Usually, a dozen or more folk participate in this opportunity to pray for the leaders of our nation and our military at home and abroad. Everyone is welcome to attend and participate.

So, that’s ‘What You’re About to Miss’ if not at the final Networking Roundtable & Retirement Celebration on 12 August at the downtown Hilton Hotel in Nashville, TN. Still not too late to register; visit www.educatemhc.com or phone Erin Smith, MHM via (317) 738-3434.

George Allen, CPM, MHM
EducateMHC

Blog Posting # 649 @ 30 July 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. #1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: OK, hold onto your seats. This will be a whirlwind trip through today’s ‘community owners’ lament’; possible consequence of CONSOLIDATION; some findings from the JCHS @ Harvard; and finally, a reminder to register to attend the final Networking Roundtable & Retirement Celebration.

I.

The Community Owner’s Lament

“20 – 25 percent price increases in one year; delivery dates a year out; price increases between order and delivery; and two plus months wait to address warranty issues. It isn’t fun being in the manufactured housing sales business anymore!”

It pains me to read email messages like this. They’re generally from land lease community owner/operator friends who only got into the manufactured housing sales business because so many independent (street) MHRetailers were going out of business due to lack of easy access to chattel capital.

So, where do we go from here? That’s a pretty complicated question. So many considerations. Pricing and availability of lumber, and other OEM products. Whether large property portfolio owners/operators have more purchase power with HUD-Code housing manufacturers, than small one or two property owners. Availability, or not, of personal property finance, a.k.a. home-only loans or chattel capital. Lack of meaningful support from the FHFA and two GSEs, Fannie Mae & Freddie Mac.

And, you know what else is complicating this entire Evergreen Issue (i.e. ever present)? Read Part II following here….

II.

CONSOLIDATION CONTINUES…

Do you know, or have you read the following news headline this past week?

‘CAVCO INDUSTRIES ANNOUNCES PLANNED ACQUISITION OF MANUFACTURED AND MODULAR HOME BUILDER, THE COMMODORE CORPORAATION’

Well, that’s all fine and good. Two well known, longtime ‘players’ in the HUD-Code manufactured housing business merging.

BUT, did you pick up on this statement within the first paragraph of the Press Release?

“Commodore is the largest independent builder of manufactured and modular housing in the United States.”

Whoa! Did I just read that the ‘largest independent builder of manufactured housing’ is going out of business (i.e. being absorbed by CAVCO)? Yes, I sure did. And what does that mean?

To begin with, it means the 70+ market share commanded by the Big Three C firms: Clayton Homes, Cavco Industries, and Champion Home Builders grows LARGER while the market share of independent builders grows SMALLER!

So, where does CONSOLIDATION end? When the Big Three C firms command 90 – 95 percent of the national manufactured housing production market?

Here’s the pithy question for you. Do you see the day to day pricing, delivery, and warranty issues cited in Part I above, ameliorating or getting worse?

Know what? A similar case can be made about the CONSOLIDATION of thousands of sole proprietor developed and owned land lease communities being absorbed by the 500+/- known portfolio owners/operators present today.

III.

MAJOR FINDINGS IN THE 2021 STATE OF THE NATION’S HOUSING REPORT

The following information was published recently by the Joint Center for Housing Studies at Harvard University. And what were those major finding?

1. Inventories of Homes for Sale Fell to a Record Low in Early 2021

2. With Inventories at Record Lows, High Homebuyer Demand is Pushing Up Home Prices Rapidly.

3. Rents in Several High-Cost Markets Were Down Substantially as of Early 2021

4. Households of Color and Renters Are More Likely to Have Fallen Behind on Monthly Housing Payments.

5. The Number of People Experiencing Unsheltered Homelessness Climbed Again in 2021

I offered this information without comment, to let you reflect on your own. The key question, in my opinion, is how do one or more of these observations affect manufactured housing shipments and land lease community operations?

IV.

REMINDER

If you haven’t already registered to attend the upcoming final Networking Roundtable & Retirement Celebration, 12 August 2021, at the downtown Hilton Hotel in Nashville, TN., do so very soon via www.educatemhc.com

Scott Roberts will be sharing proprietary information as to his firm’s ‘development of raw land into land lease communities and the expansion of existing properties’. If you don’t already know this, raw land development in this fashion is the reemerging trend afoot in HUD-Code housing today! Don Westphal, landscape consultant, will be present, as will be real estate-secured mortgage originators active in this business model.

And, thinking back over Parts I, II, & III of this blog posting; ask yourself: ‘Where else can I go in the manufactured housing industry and find receptive ears, and opportunity to communicate, about these and other timely and impactful issues? Answer? There is no other opportunity except for the annual Networking Roundtable. So be there to participate! GFA

George Allen, CPM, MHM EducateMHC

Blog Posting # 648 @ 23 July 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks, comprise the real estate component of manufactured housing.’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. #1 source of affordable attainable housing! Attend MHM Class!

INTRODUCTION: OK, as promised, here’s ‘the rest of the story’ relative to last week’s virtual Listening Session hosted by the FHFA and GSEs. These observations are from my notes, not recordings; so, if any errors, I apologize beforehand – and please let me know! Also, there’s soon to be a new manufactured housing and land lease community-related book available, initially at the upcoming final Networking Roundtable & Retirement Celebration on 12 August in Nashville, TN. PLUS, if you haven’t already done so, plan to be present at the RV/MH Hall of Fame Induction Banquet on 16 August 2021 at the RV/MH Hall of Fame facility in Elkhart, IN.

I.

REST OF THE (LISTENING SESSION) STORY

First a summary of some, but not all, that was presented by participants in the recent virtual Listening Session. Then, in my opinion, the ‘ bottom line’ of the entire experience – from manufactured housing and land lease community $ perspectives.

As I mentioned in last week’s blog posting (#647), Dr. Esther Sullivan of the University of Colorado, and author of Manufactured Insecurity, led off with an impassioned activist plea, among other things, for an end to the predatory (my word, not hers) property management practices of land lease community portfolio firms like Havenpark Capital. Fortunately – and thanks to the revelation of such offenses at the previous Listening Session, GSEs no longer guarantee real estate-secured mortgages for this property type unless tenant lease protections are in place.

Grant Beck of Next Step Network was the first to specifically state that Duty to Serve (‘DTS’) 2022-2024 plans, as they put forth today are woefully inadequate, and encouraged new leadership at FHFA to reverse course and create a better, supportive climate going forward.

Bruce Thelen, head of operations at REIT, Sun Communities, Inc., in my opinion, delivered one of the best statements of the day. He described the lack of new HUD-Code home inventory; lack of new land lease community development; asked for more support for local housing market land use and zoning for affordable housing; and, for more attention to be paid to low income individuals.

Nick Bertino, from Wells Fargo Multifamily Commercial Group, focused on the new lease protections (a.k.a. tenant protections), pointing out practical problems relative to getting lease addendums signed, leases audited. Suggested certified mail as a means of serving notice to homeowners/site lessees about these important matters.

Todd Kopstein, CFO of Cascade Financial was the first to make heartfelt and practical arguments in behalf of getting chattel financing for home-only loans, especially those sited in land lease communities. Also encouraged GSEs to start sharing their research info with finance firms.

Adam Rust of the National Community Reinvestment Coalition, was the first of several speakers to ‘carry coals to New Castle’ relative to encouraging more support for facilitating the purchase and financing of resident-owned communities or ROCs.

Mark Weiss of the Manufactured Housing Association for Regulatory Reform (‘MHARR’) described what his advocacy group views as ‘unfulfilled promises’ to U.S. consumers relative to GSEs Duty to Serve (‘DTS’) plans for 2022-2024. Strongly encouraged the FHFA to reject both GSEs DTS plans as they exist today.

Doug Ryan of Prosperity Now pretty much summarized what had been said before his presentation; that new DTS plans do not go far enough in serving would be homebuyers, and that there’s much more need for home-only (chattel capital) finance.

Paul Baretto of LearnMH encouraged FHFA to stop GSE’s discrimination against single section manufactured homes; commented on manufactured housing valuation, appraisals, and local housing market regulations; and, encouraged GSEs to consult on how to encourage more chattel capital. Paul’s off the cuff remark about a ‘new HUD-Code coming out this week’ stunned everyone. Turns out he was talking about recent HUD-Code updates relative to attached or ‘zero lot line’ manufactured home placement – not a major change to ‘the code’.

Jennifer Hopkins of the New Hampshire Community Loan Fund parroted the need to stop discrimination against singlesection manufactured homes by the GSEs, and described her organizations ongoing support of ROCs. By now, given the widespread vocal support of ROCs, it was surprising that ROC USA was not represented at this Listening Session.

Rachel Siegel, researcher for The Pew Charitable Trusts made some challenging remarks relative to manufactured housing titling (‘should be real estate-secured type & no personal property titling’); need for more home-only loan financing; again, tacit support for ROCs; and, need for even more tenant (lease) protections than exist now.

Dr. Lesli Gooch, Manufactured Housing Institute. While there were chattel capital goals in previous DTS plans, there are no purchases anticipated this time around! The GSEs are headed in wrong direction. GSEs must commit and act in favor of personal property financing, especially relative to creation of a secondary market for chattel capital.

A written statement by Tony Kovach was read by a Listening Session staffer. It cited the affordable housing crisis in the U.S. at this time, and how manufactured housing is the most affordable type shelter available today, and how he considers the CrossMod™ home to be ‘seductive’. At that point he went on a rant (my choice of word) lambasting three of the most well known and respected executives in the manufactured housing industry.

The $ bottom line? In MHARR’s presentation, and at least one other, a May 2021 report by the Consumer Financial Protection Bureau (‘CFPB’) was cited as to how GSEs ‘continuing failure and refusal to serve the manufactured home personal property market – harming – “Hispanic, white, black and African-American, and American Indian and Alaska Native borrowers who make up larger shares of chattel loan borrowers than among site-built loan borrowers.’ This directly conflicts with the fundamental policies of the Biden Administration, as set forth in Executive Order 13985 (January 20, 2021). “Affirmatively advancing equity, civil rights, racial justice and equal opportunity are the responsibility of the whole of government. Because advancing equity requires a systematic approach to embedding fairness in decision-making processes, executive departments and agencies must recognize and work to redress inequities in their policies and programs that serve as barriers to equal opportunity.’ So, at this point in time, the GSE’s DTS plans for 2022-2024 are a failure relative to this administration’s standards!

Is anyone out there in the Biden Administration paying attention to what’s ‘not happening’ in the GSEs 2022-2024 Duty to Serve (‘DTS’) plans being reviewed by the FHFA? If so, what’s next?

II.

‘From SmittyAlpha6 to MHMaven’

This is the title to George Allen’s ‘Adventures of a Lifetime’ autobiography. The book was a major work project during Carolyn and my 400 consecutive days of self-quarantine in our home during 2020.

First, an explanation of the title: ‘SmittyAlpha6’ was my radio call sign while commanding officer of Company C., 3rd Shore Party Battalion, 3rd MARDIV, in Vietnam during 1968 & 69. ‘MHMaven’ is an Allenism abbreviation for Manufactured Housing Maven, coined in 2008.

Quoting the back cover of the book. This “…is the story of how childhood adventures, college years, a 13 month combat tour in RVN as a Marine officer, and working as a business manager for several companies, prepared him for the 40 year career to follow. In 1980, Carolyn and George launched GFA Management, Inc., to fee manage investment real estate for others and themselves. Soon thereafter they self-published George’s first book, followed by a dozen more over the years, and engaged in freelance consulting in the manufactured housing industry and among land lease community owners/operators throughout the U.S. and Canada.”

“Were there unusual and exciting adventures along the way? For sure, mostly military!

Trained as an Atomic Demolition Munitions (‘ADM’) technician to fly alone into North Vietnam
Disarmed a shaped-charge demolition after fuse burned into blasting cap & didn’t detonate
Rigged & helo-lifted two Russian field guns from the Ho Chi Minh Trail, to Dong Ha & the U.S.
Led fully-armed Marine infantry squad into a flooded U.S. city, to restore peace and order
Engaged in many overt and sensitive covert consulting assignments for property owners.”

And there’s more, much more, to this life story and the Lessons Learned while living it.”

The book will not be available for purchase ($39.95 + S&H) until after the final Networking Roundtable and Retirement Celebration, occurring on 12 August 2021, at the downtown Hilton Hotel in Nashville, TN. For more information on that event – and the book, when available for purchase, visit www.educatemhc.com

Need one or more good reasons to attend the seminal event occurring 12 August 2021?

If you agree, ‘the development of raw land into land lease communities’ is the reemerging trend in manufactured housing, then be present to hear Scott Roberts of Roberts Communities describe how his family’s firm has been successfully doing this throughout the U.S.! And, ‘icing on the cake’, so to speak, will be the popular audience interaction ‘Fireside Chat with George Allen’. Why popular (at past Networking Roundtables)? Because this is the ONLY national forum, anywhere in the manufactured housing industry and among land lease community owners/operators, where ‘any topic, issue or matter is fair game’ for the audience and the moderator! Again, for more information and to register, visit www.educatemhc.com

III.

RV/MH Hall of Fame Induction Celebration

Where will you be the evening of Monday, 16 August 2021? Hopefully, at the annual RV/MH Hall of Fame Induction Celebration banquet in Elkhart, IN. I know I plan to be present – for what’s expected to be the largest such gathering in the nearly 50 year history of the RV/MH Heritage Foundation. At this point, at least 650 RV & MH aficionados will be present to honor 20 inductees from the combined classes of years 2020 and 2021.

And plan to arrive early that afternoon, for several good reasons:

• Tour the truly inspiring and well-archived RV history exhibit hall
• Tour the new, huge, manufactured housing exhibit hall being readied for this event!
• Tour the refurbished RV/MH library, and see the George Allen Library Exhibit, recently donated to the RV/MH Hall of Fame
• Shop in the eclectic RV/MH store, awash with clothing, mementoes, and books by many RV/MH authors

Who’re the ten manufactured housing inductees this year? 2020 class followed by 2021 class.

• Ken Anderson, MHRetailer and state association executive in AZ
• Keith Casenhiser, of Bessire & Casenhiser, land lease community owners/operator in CA
• Charles Lott, Fleetwood Homes executive from GA
• Debra (Dee) Pizer, MHM, longtime operations manager with ZemanMHC in IL.
• Alan Spencer, MHRetailer, SD

• Steve Adler, land lease community owner/operator of MUREX, in FL
• Burt Dickman (deceased) land lease community developer/owner in IN. &a veteran
• Ron Dunlap, former MH association executive in VA., & a veteran
• George Porter of Manufactured Housing Resources in DE. & a veteran
• Jerry Ruggirello, long time land lease community owner/operator in MI.

That list reads like a veritable (‘true, genuine’) ‘Who’s Who’ among manufactured housing and land lease community executives and pioneers, from ten different states!

While not intentional, there’s an emphasis on military veterans this year, i.e. at least three of ten inductees are military veterans. And I know Spencer Roane, MHM, a 2017 Hall of Fame inductee & USN veteran; and I (USMC vet), will be sitting with George Porter -inductee and USA veteran, at his table with his family, during this stellar RV/MH event!

Now interested in attending? Phone (574) 293-2344 for more information and to purchase banquet tickets.

***

George Allen, CPM, MHM
EducateMHC

Blog Posting # 647 @ 16 July 2021: EducateMHC
Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U support US & WE Serve U! Goal: to promote HUD-code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM Class!

INTRODUCTION: Have you registered to attend the first face-to-face manufactured housing industry meeting in 1 ½ years? Still room for more to attend. Read Part I for details. Do you enjoy solving conundrums? If so, you’ll want to read Part II, following here. How ‘bout WARNINGS? Let me be the first to tell you – in Part III. And finally, Part IV. A ‘tease’ if you will, relative to the proceedings at yesterdays (7/14) virtual Listening Session. Really quite an event.

I.

FIRST FACE-TO-FACE MFD. HSNG. MEETING IN 1 ½ YEARS!

Final Networking Roundtable & Retirement Celebration will be held 12 August 2021 at the downtown Hilton Hotel in Nashville, TN. Keynote presentation by Scott Roberts: ‘Developing Raw Land into Land Lease (& RV) Communities’! This, in my opinion, is the reemerging trend for our realty asset class! One real estate-secured mortgage loan originator, who will be present at this event, recently arranged for $150,000,000. to develop a half dozen new land lease communities in Southwest U.S.! How can you not want to be present, to learn how to get in on this ‘once in two decades’ investment opportunity? Visit www.educatemhc.com for more information & to register, or phone Erin Smith, MHM, via (317) 783-3434.

There’ll also be a Fireside Chat audience participation discussion with George Allen, CPM, MHM, on any and all manufactured housing and land lease community matters and issues. Plus, everyone present gets to publicly introduce themselves to all participants, receive a Directory that’s widely recognized as the most accurate and comprehensive list of industry and asset class businessmen and women available anywhere! And there’s rumor of a special gift for everyone in attendance, making a $20.00 or more donation to the RV/MH Hall of Fame.

And, at the retirement celebration banquet that evening (12 August), all RV/MH Hall of Fame members present, are requested to wear their distinctive Kelly green blazers!

Speaking of the RV/MH Hall of Fame, are you aware the huge new manufactured housing exhibit hall in Elkhart, IN., is close to completion – and will be toured on 16 August 2021, as part of that day’s annual Banquet hosting the Induction of Classes 2020 & 2021 into the prestigious RV/MH Hall of Fame? For more information and banquet tickets, phone (574) 293-2344. Hope to see you there! 10 of our MH & land lease community friends will be honored that night!

II.

A NEW MH CONUNDRUM

Here’s our industry and realty asset class’ newest, and very serious conundrum (i.e. ‘a riddle, a hard question’):

‘If we build the new land lease communities encouraged in Part I of this week’s blog posting, where and from whom will be get new HUD-Code homes to fill vacant rental homesites?’

Some, if not many, housing plants are already scheduling deliveries six months to a year out into the future. And now along comes this business chilling announcement from one of the largest firms:

“Unfortunately, we cannot take any of your orders at this current time. Along with most of the industry, (our firm) has shifted to an allocation system in regards to our order process(ing). Due to the issues with material shortages and a high backlog of orders, we had to take a look at our entire customer list to see the volume each customer has ordered. With the low number of orders your location has placed, we do not have any allocation spots for you to place an order at this current time. Once the market and process normalizes I will team (sic) back to you so you can resume placing orders.” (Lightly edited) GFA)

Now, I don’t know this for certain, but it seems the ‘low number of orders your location has placed’ remark, might well be directed at the single land lease community owner/operator, as opposed to one or another of the 500+/- portfolio property firms with an average of 20+/- communities apiece. If that’s the case, such an announcement could become a death knell to small business owners active in the industry, including smaller independent (street) MHRetailers and realty asset class today! Sure hope this isn’t true.

Back to the conundrum. Is new home production and delivery (& pricing) in such dire straits so as to handicap our return to optimum shipment levels approaching 100,000 and 150,000 units per annum? Somebody had better figure this out and ‘pass the word’, positive or negative, so we’ll all know better how to plan our business futures!

III.

A WARNING!

Given the ‘blast of cold water’ announcement featured in Part II of this blog posting, the last thing we need is more bad news – but, unfortunately, here it is:

Beware of proposals, from outsiders, perhaps even within the MHCC (‘Manufactured Housing Consensus Committee), for new or modified standards (to the HUD-Code) that are little more than attempts to ‘legislate’ new or additional demands for products or raw materials that they, or their associates, sell – or want to sell, to the industry.

This is a very real threat, beginning with a renewed Department of Energy (‘DOE’) move towards forced energy-related standards not statutorily required to balance cost versus benefits to manufactured housing product and its’ production. Do you remember? The National Association of Home Builders (‘NAHB’) has already gone on record stating, for every $1,000 increase in the retail level cost of a singlesection manufactured home, 348,000 potential home buyers would be lost; and in the case of multisection manufactured homes, 316,000 potential home buyers would be unable to purchase the home of their dreams. This is why we need to be diligent in our fight against the modification of HUD-Code standards that would add unnecessary cost to our affordable housing product!

Part IV.

LISTENING SESSION

Between 1:30 & 4PM on Wednesday, 14 July 2021, as part of the FHFA – hosted Duty to Serve (‘DTS’) Public Listening Session re Manufactured Housing, 17 individuals voiced opinions and concerns relative to the 2022-2024 Underserved Market Plans prepared by the GSEs. During the height of the 2 ½ hour Listening Session, there were 102 individuals listening in on the proceedings. Not enough space here to summarize what was presented – I’ll do that in next week’s blog posting (#648) – so be sure to read it at that time. Let me titillate you a bit though…

Dr. Esther Sullivan, University of Colorado, author of Manufactured Insecurity was the first presenter, also the first to mention predatory practices of Havenpark Capital, and more.

In my opinion, best presentation was by Bruce Thelen of Sun Communities, Inc., the REIT.

In my opinion, worst presentation was a prepared statement by Tony Kovach, read aloud by a Listening Session support staffer. It came across, in part, as a personal vendetta against three of the most well-known businessmen in the manufactured housing industry.

So much more to tell you. Be sure to read next week’s blog posting….

George Allen, CPM, MHM
EducateMHC

Blog Posting # 646 @ 9 July 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U support US & WE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM Class!

I.

RAW LAND DEVELOPMENT & MORE….

Scott Roberts of Roberts Resorts & Communities will be keynote speaker at the upcoming, final Networking Roundtable & Retirement Celebration, 12 August 2021, at the downtown Hilton Hotel in Nashville, TN. For more information and to register, visit www.educatemhc.com

The final Networking Roundtable & Retirement Celebration is the first in-person, national manufactured housing-related group meeting to occur in 1 ½ years since the coronavirus pandemic began. Don’t miss this landmark opportunity! And all RV/MH Hall of Fame inductees in attendance are asked to wear their distinctive Kelly green blazers to the evening banquet.

While I haven’t written much about it of late, I am of the firm conviction that the development of raw land into land lease communities, and expansions thereof, are reemerging trends (Dormant since mid-1990s) throughout much of the U.S. Here’s just an inkling of who’s doing so these days:

Roberts Resorts & Communities in AZ, CA,CO, TX & AL

Zeman MHC, and Community Management Group, both with new communities in MI

Four Leaf Properties in TX, FL, MI, & elsewhere

Tunnell family in Lewes, DE

Spartan-Investors in Seattle, WA.

What else will be unique about this year’s networking roundtable event? As with past roundtables, everyone will have an opportunity to introduce themselves during the opening session. Following Scott Roberts’ presentation, we’ll engage in a Fireside Chat type audience interaction, and discussion of any industry and realty asset class topic desired! Some ‘already requested topics’ include:

COVID related matters, issues, changes to business models. How has this affected you?

Real estate-secured and chattel financing. Proceedings from the 14 July FHFA-hosted Listening Session with the two GSEs, as well as input from other sources.

Predatory property management practices by some rapidly-growing land lease community portfolio owners/operators, and the resulting threat of new landlord/tenant legislation.

Eviction Moratorium and its’ effect on your business operations.

Then there’s the proverbial ‘elephant in the room’; specifically, ‘how & who’ will land lease communities owners/operators rely on for communication, networking, statistics-gathering, resources and more, come the end of this year?

Finally. The Directory of participants everyone receives will, as in the past, be the most comprehensive such resource available anywhere in the manufactured housing industry!

Oh, and at least one special surprise is being planned for everyone present for this first national manufactured housing and land lease community event since the coronavirus pandemic!

II.

96 DONORS & $1,820,690 TO DATE!

The names of the 96 donors to the MH Museum Campaign at the RV/MH Hall of Fame in Elkhart, IN., reads like the ‘Who’s Who Among Manufactured Housing & Land Lease Community Realty Asset Class trade associations, board members, community portfolios, financial firms, foundations, and individuals!

Have YOU donated yet? If not, please do so soon. It will take the full $2,000,000 to finish the long-awaited manufactured housing wing of the RV/MH Heritage Foundation’s Hall of Fame Museum & Library. To do so, simply phone (574) 293-2344 or send your check to RV/MH Hall of Fame c/o 21565 Executive Parkway, Elkhart, IN. 46514.

And to be involved in the perennial ‘icing on the cake’, plan now to attend the two years-combined RV/MH Hall of Fame Induction Banquet on 16 August 2021. Already expecting more than 650 guests that evening. I’ll certainly be present and hope to see YOU there too!

II.

HAVE YOU NOTICED?

People Write, But Do Not Document or Provide a Means for Feedback!

Before it became so easy to write and publish online, writers and editors of commercial print trade publications took special care to be accurate about what they published, and made it easy for readers to inquire and or respond accordingly. In my opinion, this simply isn’t so, anymore. Here’s just one example:

Recently, Andrew Kern of MULTI HOUSING NEWS, and senior research analyst at Yardi Matrix, published a manufactured housing-related piece titled:

‘Selling MHCs to the People Who Call Them Home’. There’s the first problem! Just what is an MHC? Nowhere is this abbreviation explained. But he is here, based on what follows, referring to land lease communities (a.k.a. ‘manufactured home communities’…hence the confusing MHC label).

Next problem. “For manufactured housing investors, however, a new avenue for exit has opened in the form of resident-owned communities.” This is a common and confusing error characteristic of naïve writers from outside the manufactured housing industry. Perhaps Mr. Kern is unaware of the fact that ‘manufactured housing investors’ are different from land lease community investors – or as he’d likely prefer, ‘MHC investors’. How so? Well, in the first instance, a manufactured housing investor buys resale manufactured homes sited on parcels of realty conveyed fee simple, or places said home(s) accordingly, then rents the units out by the week or month. Land lease community investors, on the other hand, are owners/operators of this unique type of income-producing property. Big big difference!

Next problem. “…the average manufactured home park resident is over 55 years old and will live at that park for an average of 14 years.” Pray tell, where does this writer come up with this data? Might be true of homeowners/site lessees in upscale, all-adult land lease communities in Sunbelt regions of the U.S… He probably does not know that the tongue in cheek description of folk who prefer the land lease community lifestyle is, they’re ‘newly wed or nearly dead’ Point? Writers owe it to readers to validate statistical claims like this, and get their story right.

Next problem. And here’s how we always know something like this has been penned by someone with only minimal intellectual and experiential grasp of their subject matter: “Park residents aren’t renters….they are homeowners with a ground lease” This 1960s (‘park’) trade lingo is archaic. Should have read: “Land lease community homeowners are rental homesite lessees.” And it gets worse before it gets better (which does not happen), when he writes of ‘manufactured housing parks’.

The latter half this article, as one might expect from the title, describes positive aspects of resident-owned communities or ROCs, e.g. “…average annual rent increase of less than one percent. This is considerably less than the 3.5 percent average annual site rent increase as reported by MHI.” And how it costs more than $5,000 to relocate a manufactured home these days. The ROC positive message is questionably underscored by this writer, when he quotes Frank Rolfe, co-owner of MHP Funds, praising the virtue of “…residents of the park own the land their homes sit on.” That’s all true, but how ‘bout the two classes of homeowner/site lessee (not everyone signs-on when converting to an ROC) – those who are investors in the cooperative and those who are not, and the consequences thereof? And professional property management? Are any of these homeowners/site lessees trained and certified as professional property managers, or is everyone volunteer labor? Visit a few of these ROCs; all is not always rosy. And the list goes on…

While this is admittedly a puff piece extolling the desirability of resident-owned communities, it’s a shame, in my opinion, the writer got so many of the finer points (e.g. terminology) of land lease community ownership/operations wrong. And, adding insult to injury, once again, did not provide a direct means for readers to respond.

But that’s long been the industry’s albatross, outsiders not knowing, understanding or appreciating the inner workings of manufactured housing, and its’ realty sector, land lease communities.

George Allen, CPM, MHM
EducateMHC

Gfa7156@aol.com

Blog Posting # 645 @ 2 July 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

Tin put this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: It seems, whichever way we turn these days, we’re fighting battles in behalf of manufactured housing and land lease communities. Part I describes the perennial battle over contemporary (vs. archaic) trade terminology. Part II describes recent attempts to meddle with the HUD-Code, weakening our performance –based building standards as we know them, opening the door to products and raw materials not otherwise needed during fabrication.

I.
MANUFRACTURED HOUSING

The Industry & Realty Asset Class’ Perennial Puzzlement about Terminology

Recently received a MIDYEAR 2021 report, researched and distributed by a major real estate brokerage firm specializing in land lease community marketing. It’s cover price? $1,500.00

Why am I writing about it? Well, while it does contain some helpful and interesting statistics for the property type, it’s awash with both old and contemporary trade terms, making it at times, as confusing as it would otherwise be useful. I’ve been fighting this terminology battle most of my 40+ year career in manufactured housing and as a land lease community owner/operator.

Here’re some of the anomalies found throughout this otherwise seminal report.

Let’s begin with manufactured home community. Following national surveys by the now defunct Manufactured Home Merchandiser magazine in the early 1990s*1, ‘manufactured home community’ was selected as the official term of record describing what had previously been known as ‘mobile home parks’. This was codified in the J. Wiley & Sons published tome, Development, Marketing & Operation of Manufactured Home Communities, in 1992. The only deviant from that term, only on occasion by a few, was ‘manufactured Housing community’. And today, nearly 30 years later, and since 2011 (some say 2012), the contemporary term has become ‘land lease community’, by dint of the seven types of shelter now be found sited on rental homesites in these communiteis.*1 Oh, and within the subject report is found this denigrating term, “…smaller parks….” And so the puzzlement continues into year 2021.

Then there’s the matter of rental homesites (the contemporary trade term). In this report, read just about anything except ‘homesite’. Rather, the terms of choice here include space, lot and unit.

Years, no decades, ago, those of us who served the industry and realty asset class as self-appointed scorekeepers agreed, we were more ‘glass half full’ people rather than ‘glass half empty’. So we opted to refer to Occupancy (e.g. # occupied sites divided by total # of rental homesites), rather than Vacancy (the reciprocal of occupancy), when dealing with this common benchmark statistic. Take a look, you’ll find this is the case in every annual ALLEN REPORT (i.e. 32 to date), J. Wiley & Sons’ How to Find, Buy, Manage & Sell a Manufactured Home Community (1992), and in the MHIndustry Official Lexicon & Glossary – available via www.educatemhc.com However, in this report, it’s all about ‘vacancy’.

‘Rent control proposals’ are decried early on in the subject report. Agreed. However, informed industry and asset class pundits, again – for decades, have used the euphemism (i.e. make a negative term sound and read more positive) ‘landlord-tenant legislation’ in instances like this.

Oops! At one point the drafter of this report digresses and refers to ‘two star parks’, referring to the Woodall Star System of rating the quality of ‘mobile home parks’ before and up to 1976. Today, knowledgeable investors and value appraisers avail themselves of the ABClassification System, in place almost as long as the National Communities Council (‘NCC’) division at MHI has been operating, i.e. since 1996. And, as noted in the first sentence, the report slips back into ‘parks’ lingo.

I found just two, in my opinion – errors in this report. How would you interpret the last half of the following statement? “Some older communities…are being redeveloped into higher-density properties, cutting supply.” In my experience, older communities are oft functionally obsolete communities, and when redeveloped, two adjoining rental homesites are oft combined into one, reducing rental homesite count and density, not increasing it.*2

Second error? First, read this statement: “Lenders…are opening back up with financing available for quality properties.” I contend ‘they never closed or even slowed!’ Read the 23rd annual National Registry of All Lenders (dated March 2021), to learn real estate-secured mortgage originations total, among 24 lenders/brokers working with land lease communities (& RV park combinations), exceeded that of the previous year! Year 2019 = $7,253,000,000 and year 2020 = $9,766,000,000.*3 That’s a 2 ½ billion $ increase between years 2019 & 2020. It doesn’t get much better than that!

Read the following sentence and tell me what’s missing. “…higher (rental) rates are bolstered by strong demand, facility improvements, and a lack of significant supply growth.” In my opinion, a fourth factor is: “…and predatory property management practices on the part of some new owners of land lease communities.” Do you agree?

Bottom line to all this? Simple. Manufactured housing and land lease communities legacy goes back more than 70 years. With all the shipment turmoil we’ve endured over the decades, it should be – but so far hasn’t been, fairly easy to agree on contemporary trade terminology that enhances the image, attractiveness, and public acceptance for and of the industry and realty asset class. Are you on board with this? Use this article and content as your motivator to begin ‘talking the talk as well as walking the walk’!

End Note.

1. Seven types of shelter: pre-HUD ‘mobile homes’, post-HUD ‘manufactured homes’, modular homes, Park Model RVs, RVs for a season, stick-built homes fabricated on-site to look like manufactured homes (only in FL.), and now ADUs or Accessory Dwelling Units such as Tiny Homes.

2. Functionally obsolete communities are often older properties with rental homsites developed to accommodate 10 & 12 wide X 40’ long ‘mobile homes’ back in the 1960s and before.

3. This Resource Document, like the aforementioned ALLEN REPORT, is also available for purchase via www.educatemhc.com

II.

GEMS FROM MHARR

Remember that quote from famous author George Orwell (e.g. Animal Farm & 1984) describing why Americans should respect their combat veterans?

“People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.”

Well, an apt variant of that pithy remark applies to shy manufactured housing professionals (‘you’) should appreciate the regulatory reform work of the Manufactured Housing Association for Regulatory Reform:

‘Manufactured housing businessmen and women enjoy peace of mind only because a watchdog national advocate, like MHARR, stands ready to challenge product statutes and initiatives affecting their industry and livelihood.’

Such was the case recently, when MHARR’s Mark Weiss, in ISSUES & PERSPECTIVES, led with this salient and suggestive headline: ‘INVASION OF THE BUILDING CODE SNATHCERS’. In it, Weiss ‘made the case’ against individuals and organizations seeking changes to HUD-Code standards, based on building codes never intended to apply to manufactured housing.

IN his words: “….there seems to be a growing tendency within the Manufactured Housing Consensus Committee (‘MHCC’) standard development process, for some members – and others – to seek changes to the HUD Code standards based on standards, concepts, or testing mechanisms (or all three) derived either in whole or in part from other general building codes that are not and have not been developed specifically for manufactured housing under the mandatory criteria and requirement of federal manufactured housing law.”

Why is this a key issue? (It’s actually been ‘around’ for a while). Because other building codes “…are not statutorily required (‘like the HUD-Code’) to balance cost versus benefit, (and) are part of the reason the cost of construction for manufactured homes, per square foot, is roughly half that of site-built homes, according to the most recent annual statistics from the U.S. Census Bureau.”

And Mark continues: “….the MHCC must constantly be on guard against proposals for new and modified standards (whether based on other building codes or not), that are little more than an attempt by special interests to ‘legislate’ new or additional demand for products or raw materials they…sell to the industry.” Ah Ha! The movie behind these efforts to change standards!

The Press Release concludes with this summary statement: “…HUD and the MHCC should reject any effort or tendency to infiltrate provisions from other general residential building codes into the HUD standards or enforcement regulations including, most especially (but not limited to) provisions designed to coerce the purchase and utilization of any given supplier – or group of suppliers’ – products.”

So, as stated at the front end of this blog posting, as an industry, we are fortunate to have a ‘watchdog national advocate’ in Washington, DC, supportive of what we do in behalf of
affordable factory-built housing!

George Allen, CPM, MHM
EducateMHC

Blog Posting # 644 @ 25 June 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!; Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. #1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: OK, ‘hang onto your hats’, so to speak. We lead off with a continuation of last week’s semi-expose’ of predatory property management practices; this week we take it a step further. And parts II & III contain timely and important networking opportunities for all! GFA

I.

JUST LIKE SHOOTING FISH IN A BARREL

The Sorry State of Landlord -Tenant Relations in Some Land Lease Communities Today

A 2021 update to the year 2000 expose’, ‘UPSIDE DOWN IN A MOBILE HOME PARK!’

You last read of the ‘young couple George & Carolyn, buying their first home’ in year 2000 – that’s 21 years ago! Remember? They were “…both employed, no children or pets, and (owned) two older cars. And there was H. ‘Itch’ Balle, the retail sales center salesman/manager.” What caught this young couple’s attention was the L(.)(.)K-headlined advertising for new manufactured homes ‘for sale’, featuring a $4,000 move-in incentive offer!”

To make this long story shorter here, George & Carolyn wound up buying an $80,000 multisection HUD-Code home, already sited but not landscaped. And the $4,000 incentive covered all but $500 of their deposit, with the balance used to landscape their rental homesite. Financing was a steal! Mr. Balle got them ‘10% over 30 years’ terms, with a variable rate of 9% over 30 years, reducing their monthly loan payment from $733.13 to $672.12/month. Oh, and $285/month site rent was waived for first year – a welcome windfall of $3,420 in that 12 month period.

Yes, that’s how things were back in year 2000. And all was OK until the variable rate mortgage jumped payment to $800/month, plus $300/month site rent (at end of grace period and including a rent increase). Bottom line? George & Carolyn were now in a ‘family way’, with a new car loan payments, and clearly ‘upside down in their mobile home park’ (i.e. old outgo of $672.23/month vs. new out go of $1,100/month).

Somehow George & Carolyn survived – barely. And today, 21 years later, the kids gone, and recently retired, they still live in their not-yet-paid-off $80,000 manufactured home.

Now comes the ‘just like shooting fish in a barrel’ metaphor! But first; to set the scene.

Up until six months ago, George & Carolyn’s monthly site rent had been $400/month (i.e. up from $300/month in year 2000, or an average increase of $9.00 per year). However, a new land lease community portfolio firm acquired the property six months ago and immediately raised the monthly rental homesite rate from $300 to $365/month. Not only that, previously master-metered water was now individually metered, introducing a new monthly expense of between $20 & $40. And a couple months later, an $18/month trash fee was added, besides an $8.00/month admin fee/school tax. So, all told, George & Carolyn’s monthly payment to the property owner, in six or so short months, jumped from $300/month to at least $411/month, or an annual increase of $1,332 for rent, water, trash and admin/school tax charges.*1

Next; what it’s like to be a captive audience, the proverbial fish swimming around in a barrel.

George & Carolyn are within nine years of paying off their 2000 model multisection manufactured home, sited in a land lease community they’ve called ‘home’ these past 11 or so years. And now that they’re retired, their set income, from social security and maybe a small pension or two, only stretches so far. How can they make up this $1,332 annual increase in their housing expense (not including PITI for the home proper)? They can’t unless they ‘unretired’ to get a job! And moving their home elsewhere is little more than wishful thinking. Why? To move a multisection (which one should never dissemble even under good conditions…as the two sides rarely remate as weatherproof as the initial installation) manufactured home, just across town, costs $5,000 – 10,000 to ready the home for transport, transport it, and reassemble it at the new location – If a new location (i.e. land lease community) can be found that will accept a 21 year old home.

Consequence? Deal with the consequences the best way one can do so.

How to maybe ameliorate these serious personal financial challenges in the future? That’s hard to say. But if, way back when, the new manufactured home is purchased and land lease community selected, one used the ‘Ah Ha! & Uh Oh! Worksheet to ‘estimate maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately-owned homes of any type…on leased land’, one would buy what one can truly afford, based on a 30 percent Housing Expense Factor and other factors. For a FREE copy of this very handy formula worksheet (i.e. based on Area Median Income or Annual Gross Incomes of $36,000 and $51,229), email your request to gfa7156@aol.com Be sure to include a postal mailing address.

Have no doubt about this. We are living and working, during year 2021, in the hottest land lease community sales market ever; and at the same time, seeing homeowners/site lessees, in some – if not increasing, instances, suffering from one or another type and degree of predatory property management. So, take this message to heart, and ask yourself: ‘Am I guilty of any or all these practices?’ If not – Great! If so, however, correct course now before it’s too late to save our real estate asset class from unwanted landlord-tenant legislation at state and or national levels.

End Note.

1. The dollar figures cited here are based on information published in MHAction’s DISPLACEMENT, INC. report.

George Allen, CPM, MHM
EducateMHC

II.

INDIANA GOVERNOR TO KEYNOTE RV/MH HALL OF FAME BANQUET

Just learned today, 22 June, Indiana Governor Eric Holcomb will be a special speaker at this year’s induction ceremony, 16 August 2021, at the RV/MH Hall of Fame in Elkhart, IN. Sure hope I get to see you there! 20 of our manufactured housing & land lease community colleagues will be inducted into the Hall of Fame that evening. For more information and to purchase tickets, phone (574)293-3455. This is a remarkable opportunity to showcase our industry to the highest public officer in the state of Indiana, and honor friends in the business!

III.

FINAL NETWORKING ROUNDTABLE & RETIREMENT CELEBRATION

Now is time to register for this unique ‘once in a lifetime’ event! Once in a lifetime? Have you ever been invited to a national interpersonal networking opportunity including retirees you’ll not likely get to see again in this lifetime? Visit www.educatemhc.com See you in Nashville, TN., on 20 August 2021!

***

Blog Posting # 643 @ 18 June 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aaol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: Not what I planned to talk about today. But when MHAction’s DISPLACEMENT, INC. report hit my desk, and I read through it twice, I knew the core issue of landlord-tenant relations had to be taken public ASAP for all of you to know.

A REQUEST. If you’re reading this blog and are involved, or have recently been involved, in developing raw land into a new land lease community, please contact me via gfa7156@aol.com

I.

AN HISTORIC DISPLACEMENT

As you read the following subtitle to MHAction’s 34 pages DISPLACEMENT, INC., report, keep in mind this is the first time in manufactured housing and land lease community history, where and when LANDLORD-TENANT ISSUES have taken center stage on the national publicity scene:

‘How Havenpark Capital and Enterprise Community Partners are eroding affordable housing and how residents are fighting back.’ Subtitle to MHAction’s DISPLACEMENT, INC. report.

What follows here are select, out of context quotations from the subject report. Read and ponder them. Then, from your own perspective, whether a land lease community owner or operator, take steps to ensure you don’t implement predatory property management practices within your property or properties,. And talk to MHI’s National Communities Council division about how you can help ameliorate and mitigate these troublesome issues going forward.

“MHAction hears from residents daily about displacement due to rent and fee increases, health issues caused by community neglect, and stress-inducing harassment.” (p.4)

“Their goal is not to make homes and communities more stable, accessible, or affordable. Their goal is to extract easy profit from low-income residents.” (p.7)

“Havenpark has dramatically increased lot rent (the rent residents pay for the land beneath their homes) and other fees, has invested minimally in community maintenance, and has adopted arbitrary and punitive rules.” (p.7)

”Residents are calling on Havenpark, Enterprise Community Partners, state and federal elected officials, the Federal Housing finance Agency (‘FHFA’), and (GSEs) Fannie Mae and Freddie Mac to all take action to:

• Keep our homes affordable with gradual, justified rent and fee increases and COVD-related rent relief

• Keep us in our homes with good cause eviction requirements and COVID eviction protections

• Make our communities safe and healthy with community maintenance

• Treat residents decently and fairly

• Save our communities from predatory investors by supporting community ownership by residents, mission-driven nonprofits, and public entities.” (p.8)

“Havenpark and Enterprise Community Partners have claimed that Havenpark’s purchase of manufactured home communities is a strategy to preserve them as affordable housing.” (p.11)

“…Pine Ridge Mobile Homes in Linden, Michigan reports (sic) Havenpark raised the rent from $384 to $420 when they bought…community in 2019, and (sic) added an $18 trash fee, $5 admin fee, $3 school tax, and new water charges through separate meters that cost around $40-$50/month.” (p.12)

“Havenpark claims (sic) the large rent and fee increases are justified by significant investments in community improvements.” However, “Residents report (sic), despite promises of big improvements they have only seen regular maintenance or surface changes by Havenpark, such as repaved roads, landscaping, emergency repairs, and swing sets.” (p.15)

“Residents reported that, rather than investing in community infrastructure, Havenpark has focused on bringing in new homes (sic) they can sell or rent at a higher price.” (p.17)

“Fannie Mae and Freddie Mac…have provided billions of dollars in GSE-backed multifamily loans for manufactured home community portfolio acquisitions, like the Havenpark ($100 million) purchases financed through Bellwether Enterprise, which have made manufactured home communities unaffordable for long-time residents.” (p.28) As related asides, word of this became known to the GSEs during their Listening Session in St. Louis, MO., during late 2019. Since then the FHFA & GSEs have instituted Tenant Site Lease Protections. And, “In November 2020, the FHFA announced new requirements on Fannie Mae and Freddie Mac’s manufactured home community lending, requiring (sic) half of GSE-backed multifamily loans go to affordable housing and (sic), to be considered affordable, manufactured home communities must be resident-owned cooperatives, be non-profit-owned, or commit to the FHAFs’ Tenant Site Lease Protections.” (p.28)

In conclusion, “Residents of Havenpark-owned communities are…calling on decision-makers to stand up to predatory investors and help protect families and seniors who are being pushed out of their homes and communities.” Via

• “Keep Our Home Affordable

• Keep Us In Our Homes

• Make Our Communities Safe and Healthy

• Treat Residents Decently and Fairly

• Save Our Communities From Predatory Investors” (pp.29-31)

Each of these five bullet points are accompanied by three targeted, involved groups: Enterprise Community Partners and Havenpark; State Policymakers; and, Federal policymakers, FHFA, and the GSEs.

So there you have it; how and why the land lease community real estate asset class, as a whole, has been dragged onto the negative national publicity scene, by a small bevy of portfolio ‘players’ (Havenpark is not the only firm named), a national affordable housing advocate, and a financing subsidiary. This is not the national publicity manufactured housing and communities need at this time. In my opinion, it’s time for our national elected and salaried trade entity and advocacy leaders to step forward and address these landlord-tenant issues in our behalf!

George Allen, CPM, MHM
EducateMHC

Blog Posting # 642 @ 11 June 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: To promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: In case you haven’t yet heard, I’m easing towards retirement come the end of year 2021. I’m already semi-retired, having sold off our last land lease community to our daughter and her business partner; and now they handle the publication of our 30+ year newsletter, a dozen resource documents, and books. Bottom line, so to speak? The final Networking Roundtable and Retirement Celebration combined event is scheduled for 12 August 2021 at the downtown Hilton Hotel in Nashville, TN. Invitations will soon be in the mail, but since this somewhat unusual event is open to all my friends and associates in manufactured housing and owning/operating land lease communities, visit www.educatemhc.com for details and registration information. It appears the 12 August event will be the first face-to-face interpersonal networking and educational event for our industry and realty asset class in 1 ½ years! Program? Soon to be announced, but has 100% to do with the most significant and positive emerging trend affecting all of us today! Even if I wasn’t hosting this event, along with Susan McCarty, MHM, and Erin Smith, MHM, I’d make it a high priority to attend.

I.

What It’s Like to Leave…

‘The way I see it, I’m giving up a good thing – my business career, to pursue something even better – opportunities to write what I’ve wanted to for years, and relax while I’m doing so.’ GFA

Five times I’ve left jobs during the past 40 plus years, but this time has been different.

When rotating out of Vietnam, headed home to the land of the ‘big PX’ (i.e. post exchange or mall stores), I said ‘Good-bye’ to no one. While I was company commander, with responsibility for more than 100 Marines, they were all assigned out as helicopter support teams, to USMC ‘grunt’ (i.e. infantry) units scattered throughout I-Corps (i.e. northernmost Vietnam along the DMZ to the north and Ho Chi Minh trail and Laos to the west). I simply packed my gear, climbed aboard a transport chopper, and headed for Da Nang; then, by plane, to Okinawa and on home.

My first civilian job was with Ridge Homes, a division of Evans Products, in Conshohocken, PA. When I left in 1972 to relocate to Franklin, IN., to open a new pre-fab plant, my lumber yard truck loading crew hosted an after-work going-away party for me in the tool room. When asked to make a few parting remarks, I commented on how I was pleased to have been their boss for a year, with no disciplinary issues or worse. It was then I learned, the only other veteran on the crew had spread a tale about me being handy with a knife (i.e. we all carried big jack knives, for cutting ropes when loading flatbed trailers) – having seen me stab and kill an enemy combatant in Vietnam. (Not true) No wonder they didn’t want to cross me! But we parted in good rapport!

A year later, when the early 1970s Arab oil crisis closed the new plant, I started to work for Davidson Industries in Southport, IN., as head of the wall panel, truss, and mill shops. Learned a lot about factory-built housing there, but could not get along with my superior, who viewed me as competing for his COO job. So I left on less than congenial terms. He died a couple years later

Then worked two years as general manager of Tuchman Cleaners in Indianapolis. Soon realized this family firm held limited opportunity for me in the future, so I resigned, to begin work as a property manager trainee at Turtle Creek Management. That’s where I learned the (then) ‘mobile home park’ business. And when that firm sold its’ four communities I went with the acquiring firm for a brief period of time. Why brief? Well, that’s another story in itself; suffice it to say here, GEF Communities ‘bought a pig in a poke’ (i.e. ‘something bought without knowledge of its’ true value’), thanks to erroneous financial due diligence on the buyer’s part.
I was fired, and ten years later, GEF’s owner murdered a dozen attorneys and clients in downtown San Francisco before committing suicide. For full tale, read SWAN SONG or email GFA7156@aol.com and request a copy of ‘An Error to Die For’. Be sure, though, to include a postal mailing address for the reprint. And the book is available via www.educatemhc.com

That was my last job, ending mid-1979. By early 1980, Carolyn and I had founded GFA Management, Inc., and were managing – as she was wont to say: “Anything that didn’t move!” Now, that’s a novel but accurate definition of real estate property management. And it’s from ‘this job’ that I’m retiring, 40 years later. Carolyn too.

What’s it like to leave? Mixed feelings for sure. I don’t miss the daily and weekly pressures of problem-solving at our properties, or those owned by others. But I do miss, already – and in part due to the pandemic, the camaraderie of businessmen and women in manufactured housing and land lease communities. Hopefully the final Networking Roundtable and Retirement Celebration on 12 August 2021 will assuage those sentiments somewhat. Will I see you there? Again, if interested, visit www.educatemhc.com for information and to register.

Has there been Life Lessons Learned, on this latter job, during the past 40 plus years? Yes, for sure! Property management is a great way to ease into ownership of income-producing properties! Investment realty, when bought and managed ‘right’ is a stable and profitable business venture. Management consulting, however, is not as easy as many folk think. I’ve yet to meet the retiree who successfully (and profitably) engaged in the practice for even a year. Me? I long ago committed my ‘lessons learned’ to the final chapter in the Chapbook of Business & Management Wisdom; it’s titled: ‘Scintillatingly Salient-but-Salacious Secrets that Might Lead to Management Consulting Success on the National Level – but don’t count on it!’ This book too is available for purchase via www.educatemhc.com or email me for details.

And did I mention, Carolyn and I now care for, two days a week, our month old and newest great grandchild, Emerson Junia Meek? Another ‘benie’ of retirement! Does her middle name intrigue you? Then pick up a Bible and read Romans 16:7 to learn about the first female apostle.

Don’t forget! Let’s enjoy a good and educational time together on 12 August in Nashville, TN!

George Allen, CPM, MHM

Blog Posting # 641 @ 4 June 2021: EducateMHC

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communicatio0n media for all land lease communities throughout North America!

To input this blog and/or affiliate with Educate MHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: What will you be doing on Thursday, the 12th of August 2021? Hopefully you’ll be with us in Nashville, TN., participating in the final Networking Roundtable & a Retirement Celebration. Read Part I here following. And some interesting information from the CFPB, gleaned from HMDA research. Part II. And are you one of those Waiting for Distress, where underperforming income-producing properties are concerned? Part III is for you.

I.

OK, THE MYSTERY IS (ALMOST) OVER!

The cover page of last week’s blog posting (#640) announced what will be the FINAL NETWORKING ROUNDTABLE, & a RETIREMENT CELEBRATION. This national manufactured housing and land lease community dual event will occur 12 August 2021 at the downtown Hilton Hotel in Nashville, TN. It will be the 29th and FINAL Networking Roundtable, and a Retirement Celebration to fete roundtable founder and perennial host, George Allen, a.k.a. ‘The Colonel’ – as well as other recent retirees present at this dual event (Cary, Don, Sharon, John, George – are you, and others, paying attention?)

PROGRAM? Still putting details together, but here’s what we do know now. Registration will be during the morning along with vendor booths and opportunities to network and make deals with the who’s who in the MH Industry. Early afternoon, I’ll begin with, as you’ve come to expect, the most comprehensive STATE OF THE MANUFACTURED HOUSING INDUSTRY & LAND LEASE COMMUNITY ASSET CLASS presentation, followed by a ‘fireside chat’ Open Conversation with the audience.

Then we’ll enjoy a KEYNOTE PRESENTATION like nothing you’ve heard and seen in many years! About what? Not telling you yet, but here’s a hint. If all works out as planned, the exciting and timely topic will be the first such major presentation of this sort since the mid to late 1990s!

Here’re a few related points to ponder. 1) Given the planned – timely and trendy focus of the KEYNOTE PRESENTATION; 2) the fact manufactured housing & land lease communities endured a two decades long (years 2000-2020) PARADIGM SHIFT, where new HUD-Code home sales moved from independent (street) MHRetailers onto rental homesites within communities; and 3) our products & services RETIRING from the industry and asset class business scene, this 12 August 2021 final Networking Roundtable will mark the END OF AN ERA and BEGINNING OF OUR NEXT ONE! Do you get my drift? You certainly will by the time this landmark event ends – if you’re present!

What else that day? Superb interpersonal NETWORKING of course, during a cocktail hour and celebratory dinner (Semi formal attire requested). We request all RV/MH Hall of Fame Members, present at the banquet, to wear their bright green RV/MH blazers.

More details to follow. But for the time being, visit www.educatemhc.com and click on the Training & Seminars prompt to learn more and to register.

Hope you sense a major manufactured housing & land lease community event is in the offing!

II.

CFPB SHARES HMDA RESEARCH INFORMATION

The Consumer Financial Protection Bureau (‘CFPB’) recently published (27 May 2021) a report whose content is based on information collected under the Home Mortgage Disclosure Act (‘HMDA’). What follows here is a digest of that information.

“Manufactured housing is a small segment of the overall housing supply, but is one of the most affordable types of housing available to low-income consumers, and makes up 13 percent of the housing stock in small towns and rural America” & “…acquisition costs, however, often come coupled with higher interest rates and limited opportunity to refinance.”

• “…around 42 percent of manufactured home purchase loans are ‘chattel’ loans….” And then there’s this, in my opinion, red herring statement: “Consumers may choose to get chattel loans to avoid putting the underlying land at risk if they default on the loan.” True enough, for the few times when that happens. But nothing is said in this bullet point or the ones to follow, about consumers getting chattel loans for homes sited on rental homesites within land lease communities! It’s a fine point, I know, but ‘telling’ in the omission.

• “Most manufactured home loan applications are denied, and less than 4 percent of chattel originations were for refinances. Homeowners seeking a loan on a site-built home are approved more than 70 percent of the time, but less than 30 percent of manufactured home loan applications are approved.” Now that’s sobering!

• “The top five lenders account for…nearly 75 percent of chattel lending.” The four largest originators are specialty lenders that primarily offer chattel loans to manufactured housing owners. & “Over time…banks have decreased their activity or exited the market altogether.”

• “Hispanic, Black and African American, American Indian and Alaska Native, and elderly borrowers are more likely than other consumers to take out chattel loans….” & “Black and African American borrowers are the only racial group …underrepresented in manufactured housing lending overall, compared to site-built….”

The previous paragraphs were lightly edited to facilitate ease of understanding. GFA

III.

SOME INTERESTING INSIGHTS GLEANED FROM ‘WAITING FOR DISTRESS’

The following quotes are gleaned from a feature article titled ‘Waiting for Distress’, as published in the May 2021 issue of GlobalSt. Real Estate Forum magazine, pp. 35-39

“Stalking horse auctions are a routine part of many Chapter 11 bankruptcies.” What’s a ‘stalking horse’ auction? ‘A false pretense concealing someone’s real intentions.’

“…the pace of distressed assets coming to market has been agonizingly slow for funds that accumulated capital with this goal in mind.” What goal? To acquire distressed retail and hotel assets.

“…the U.S. economy is poised for super-sized growth, and lenders continue, for the most part, to show patience with borrowers.”

“The Global Financial Crisis came about because of poor underwriting and unnecessary risk.” Thinking back to 2007 & 2008.

“Another challenge for distressed investors is the reluctance of many lenders to push properties into foreclosure, coupled with a wave of opportunistic capital targeting troubled borrowers.”

And, as they say, ‘the beat goes on’, prompting one (me) to wonder: ‘When and what will be the fallout among land lease communities acquired and abused by aggressive portfolio builders?” I believe you can push homeowners/site lessees only so far with large inordinate rental homesite $ rate increases, conversion to utility submetering, and new add-ons – all at the same time! In my opinion, the combined rental homesite rent amount and PITI payment on the home proper, taken together, must be 10-20 percent less than either the monthly 3BR2B apartment rent or site-built housing PITI. Why? Simply to remain competitive in the local rental housing market. Think about it.

George Allen, CPM, MHM
EducateMHC.com