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

Blog # 428 Copyright 2017 COBA7 @ 8 January 2017; community-investor.com

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

This blog posting is the sole national advocate voice, official ombudsman & historian, research report & online communication media for North American LLCommunities!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but to transform & improve MHBusiness model performance!’
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INTRODUCTION:

Part I. COBA7 to represent LLCommunities at FHFA’s DTS Listening Session(s)!

Part II. Canadian national advocacy landscape alters as MHICanada & CMHI regroup in council fashion, with CHBA. Maybe a similar path for MHARR & MHI with NAHB?

Part III. Three expose’s in three months? Yes, and likely more to come during 2017!

Part IV. Guess who’s contemplating acquiring The Journal from Jim Visser?

I.

COBA7, as National Advocate for Land-lease Communities, to Attend & Speak, During
‘Duty to Serve Listening Session(s)’

Community Owners (7 Part) Business Alliance, or COBA7, has accepted an invitation from the Federal Housing Finance Agency (‘FHFA’), to attend and comment, at one or more ‘Duty to Serve Listening Sessions’ planned during the next few months.

This is another way COBA7 represents the business interests of land-lease community owners/operators, large & small, from throughout the U.S! During the past few months, COBA7 has participated in public meetings hosted by FHFA, DOE, and other governmental agencies. A report describing the ‘Duty to Serve Listening Session(s)’, in which COBA7 participates, will be published in a future issue of the Allen Letter professional journal.

NOTE. The Allen Letter professional journal and the Allen CONFIDENTIAL! business newsletter are the last two remaining print publications serving the HUD-Code manufactured housing industry and land-lease community realty asset class. If you are not yet reading either or both trade papers, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to affiliate with COBA7 today, at the Option I, II, or III level.

Why is COBA7 affiliation important to YOU? Simply put; in most federal agency meetings attended to date, the only businessperson in the room (i.e. Someone who ‘makes payroll’ week after week) has been there representing COBA7! Seriously. Everyone else in the room is usually an agency bureaucrat, corporate attorney, or association staffer. So, if YOU want continued ‘business representation’, you’ll support COBA7 as your national advocate!

II.

Canadian Manufactured Housing Industry Reorganizes – Suggesting Possible Pattern for U.S.?

This is ‘breaking news’ with details to follow.

MHICanada & CMHI (‘Canadian Manufactured Housing Institute’) have regrouped in council fashion, under the Canadian Home Builders Association (‘CHBA’). This occurring in a fashion similar to the present day Building Systems Council (‘BSC’), operating in council fashion, under the auspices of the National Association of Homebuilders (‘NAHB’), here in the U.S.

Stop and read that paragraph again! Then ponder this present and possible future state of U.S. manufactured housing affairs:

MHI, while not regrouping, does claim via its’ recently revamped website (manufacturedhousing.org), to be REPRESENTING THE FACTORY-BUILT HOUSING INDUSTRY. This an attempt to parlay its’ 10% national factory-built housing share (i.e. 5% @ HUD-Code housing & 5% modular housing), by arbitrarily including panelizers’ 50% market share, and production site builders’ 39%, to achieve 100% market coverage? Not a bad strategy, if they can pull it off – convincing panelizers & production site builders to depart NAHB’s BSC and become direct, dues-paying members of the institute. Otherwise, it’s simply, in this industry observer’s opinion, a national advocacy overreach pipedream

Well, since MHI is already thinking ‘outside the box’ relative to national representation, maybe there’s a parallel option – though some might call it heretical*1:

In the spirit of the opening paragraph of Part II, and given similar perennial antipathy*2 between U.S. manufactured housing’s two oldest national advocates, MHARR & MHI; is ‘regrouping together in BSC council fashion’, under NAHB auspices*3 – or some ‘new’ organization, that much of a stretch in today’s world where we ship but 80,000+/- new HUD-Code homes during all of 2016 – compared to 372,843 shipped during 1998? Think about it.

(I have, and that’s why I’ve made this bold suggestion. Now, is it a good idea? I don’t know. On one hand, it’d be Great to have manufactured housing finally viewed as an integral part of the overall national housing scene! However, if ‘counciling together’ with BSC & NAHB occurs at the cost of autonomy (‘independence’…think Federally preemptive building code), then doing so could mark the demise of manufactured housing altogether. What do you think?)

With that said (penned), how much longer are we going to wait, as a divided ‘large vs. small company’ industry, to take – if need be – radical steps, to regain the robust factory-built housing market share of 18 years past? After all, HUD-Code Community Series Homes, when sited within professionally managed land-lease communities, charging market sensitive & homeowner/site lessee ‘fair value proposition’ rental homesite rates, is by far the most competitive type affordable housing/lifestyle combination available anywhere in the U.S. today! And yet, as the ‘Tipping Point’ WHITE PAPER Expose’ clearly pointed out, we’re letting that market advantage slip away!

Furthermore, claiming inflated factory-built national housing market share simply ‘does not make it so’; rather, time is a-passing, if not already past, for us to brainstorm, plan and effect our collective destiny, the sooner the better!

Is anyone at MHI & MHARR really listening? How ’bout proving you are, by uniting and getting this affordable housing/lifestyle ball a-rolling once again!

Land-lease community owners/operators, via COBA7, stand ready to assist!

End Notes:
1. heretical = “one who olds an unorthodox opinion.” Webster dictionary
2. antipathy = ”dislike” Webster dictionary
3. auspices = “favoring influence, protection or patronage” Webster

III.

Watch for Next Expose’ in Allen Letter!

Yes, you read that right. Two months ago it was the widespread distribution of the ‘Tipping Point’ WHITE PAPER Expose’, warning HUD-Code housing producers and land-lease community owners/operators what occurs when:

‘reasonable rental homesite rates & affordable housing values’ are supplanted by ‘higher rental homesite rates & smaller PITI payment’, oft times resulting in

1. Diminished Buying Power for Purchase of New HUD-Code Housing
2. Reduction in Existing Housing Value, &
3. Fewer New Homes Shipped Nationwide

If you did not receive, see, or read this four page expose’, but would like to do so, simply phone COBA7 via (317) 346-7156 and ask for a FREE copy!

Next expose’?

MHI’s website overreach, claiming to be REPRESENTING THE FACTORY-BUILT HOUSING INDUSTRY in toto! Reread Part II of this blog posting for details….also blog postings # 426 & 427 at community-investor.com website. Just left click on blog icon and scroll back thru the archives.

And NOW this one: ‘Freelance Land-lease Community Consultants’, Be Careful Who You Trust & Hire!

This was a challenge dealt with around the turn of the 21st Century, when many portfolio property management (‘PM’) executives lost their jobs. All has been relatively quiet for awhile, but during the past six or so months, there’s been a spate of displeasure directed towards mostly noncredentialied (i.e. ‘not certified’), inexperienced freelance PM consultants, promising much but delivering little.

The Good News is, there’re practical ways to protect oneself from these charlatans. Read the expose’ featured in the February 2017 issue of the Allen Letter professional journal. If not a COBA7 affiliate yet, phone (317) 346-7156 to do so.
***

George Allen, CPM, MHM
COBA7
Box # 47024
Indianapolis, IN. 46247

Blog # 427 Copyright 2017 COBA7 @ 1 January 2017; community-investor.com

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

This blog posting is the sole national advocate voice, official ombudsman & historian, research report & online communication media for North American LLCommunities!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE serve U! Goal of its’ print/online media = to ‘Not only inform & opine, but to transform & improve MHBusiness model performance!’
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INTRODUCTION: Start 2017 off right! How?

1. With your copy of 28th annual ALLEN REPORT in hand;

2. Five pithy NEW YEAR RESOLUTIONS in mind for corporate implementation;

3. All three national advocates (i.e. MHARR, MHI, & COBA7) admonished to ‘double down’ on lobbying & regulatory reform in behalf of the manufactured housing industry and land-lease communities, large & small, nationwide!

I.

28th annual ALLEN REPORT
a.k.a.
‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’

Do you know? COBA7 prints more than 1,000 copies of the seminal ALLEN REPORT each year for three reasons:

• It’s, by far, the most comprehensive, fact-filled retrospective, statistical compendium, and trend tracker published annually, describing what goes on among 50,000+/- land-lease communities, and 500+/- portfolio owners/operators nationwide and throughout Canada! Therefore, it is always in high demand.

• To satisfy the need, by Community Owners (7 Part) Business Alliance affiliates (Option II & III levels), for this first of a dozen+ updated Signature Series Resource Documents (‘SSRDs’) they’ll receive monthly throughout the year.

• Pristine copies of the ALLEN REPORT are routinely ordered by university & business libraries throughout North America, in addition to the RV/M Hall of Fame library in Elkhart, IN., Library of Congress & National Building Museum libraries in Washington, DC., to name a few repositories of research source data.

What’s contained in the 28th annual ALLEN REPORT? Here’re just ten highlights:

• Year 2016 historical MH retrospective available nowhere else at any price!
• Contemporary statistical primer for land-lease communities in North America.
• Identification of the Top Ten property portfolios in the U.S. & Canada
• State presence, occupancy rates & OERs among 122 LLCommunity portfolios
• This year’s ‘Pride of Young Lions’ identified. Be prepared to be surprised!
• Two DATACOMP references: market rent surveys & # LLCommunities per state
• Exclusive ’40 Year History of HUD & MHIndustry Partnership’. Nowhere else!
• REIT History (1994 – 2016) in terms of total rental homesite count, year by year
• 122 land-lease community portfolio firms ranked per total rental homesite counts
• Major $ Sponsors of 25th anniversary Networking Roundtable, September 2016.

To order your copy of the 28th ALLEN REPORT, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Price? COBA7 Option II @ $544.95/year.

II.

FIVE NEW YEAR RESOLUTIONS FOR THE MANUFACTURED HOUSING INDUSTRY

These New Year (2017) Resolutions were featured in the January 2017 issue of the Allen CONFIDENTIAL! business newsletter:

• Support the new President of the United States of America!

• HUD-Code housing manufacturers to redouble efforts marketing and selling new homes into land-lease communities, large and small, coast-to-coast! (This is the sole focus of a 9AM-Noon $95. seminar, for HUD-Code home manufacturers, on 17 January at the Crowne Plaza Hotel in Louisville, KY…the day before the Louisville MHShow begins. For information & to register: (317) 346-7156.

• Land-lease community owners/operators to NOT heed the siren call to ‘double one’s rental homesite rates’ during 2017! But rather, assure fair & affordable housing propositions to homebuyer/site lessees, keeping combined monthly PITI mortgage & site rent payments total, at or below the National Average Affordable Housing Market Rent of $849.00/unit – including household expenses (i.e. utilities) where possible. This will not work in some high-priced local housing markets. For more info on this pithy topic, phone (317) 346-7156 & request a FREE copy of the ‘Tipping Point’ WHITE PAPER Expose’. It tells all!

• Emphasize importance of – and provide for, opportunities to receive professional property management (‘PM’) training and certification among all land-lease community managers and owners! Everyone to be a Certified Property Manager (‘CPM’), Accredited Community Manager (‘ACM’), or Manufactured Housing Manager. An MHM training & certification opportunity occurs at Crowne Plaza Hotel, on 17 January, in Louisville, KY. Cost? $250.00/MHM candidate. No tests. And again, on 11 April in Albany, NY. Interested? Phone (317) 346-7156 ASAP.

• Support one or more national advocacy entities, e.g. MHARR, MHI, & COBA7, that best represents ones’ business interests as housing manufacturer, land-lease community owner/operator, or other post-production segment of the industry. For MHARR, phone (202) 783-4087; for MHI, phone (703)558-0400; and for COBA7, (317) 346-7156. Decide WHO will lobby for YOU during 2017!

Yes, year 2017 will have its’ array of challenges and opportunities, not to mention threats and rough patches; but let’s pull together on all five of these New Year Resolutions, enabling our industry and realty asset class to return to financial prosperity and improved public image – as this nation’s primary provider of truly affordable housing & lifestyle!

III.

FROM PRETENDER TO SUPERHERO?

‘What the Manufactured Housing Institute (‘MHI’) must do if it’s truly
“REPRESENTING THE FACTORY-BUILT HOUSING INDUSTRY’
per the bold and sweeping website (manufacturedhousing.org) claim.’

(If you haven’t read last week’s blog posting #426, on this highly controversial topic, stop here & do so, by scrolling back through the blog archive at community-investor.com)

For starters, reach out and bring the Building Systems Council (‘BSC’) of the National Association of Homebuilders (‘NAHB’) into MHI’s Factory-built Housing fold. Reach them in Washington, DC., via www.nahb.org Why? Because that’s where panelizers (50% national factory-built housing market share) and production site builders (39% market share) presently call home! Once that’s accomplished, contact…

Modular Homebuilder’s Association (‘MHBA’) located in Charlottesville, VA. (www.modularhousing.com) and invite their residential factory-built housing manufacturers to ‘come on board’ the MHI train.

And finally, to be truly inclusive, solicit the cooperation of the Modular Building Institute, also (same address) in Charlottesville, VA. This entity is an associate member of aforementioned BSC/NAHB, and counts as members, “…companies in manufacturing and distribution of non-residential commercial, factory-built structures”…with a few members also fabricating residential structures, e.g. Clayton Homes.

Plus, there are other trade groups ‘out there’ who claim the same new national advocacy territory as MHI, e.g. the National Association of Factory-built Home Builders. Interestingly, in addition to the four types of factory-built housing already identified (i.e. panelizers (50% market share), production site builders (39%), manufactured housing (5%) & modular housing (5%), the NAFHB adds pre-cut homes (e.g. kit, log & dome homes) to the mix. We’ll stop here and not even go down the road to pre-fab or prefabricated homes….

Now, in case you didn’t realize it, MHI does have a longstanding, albeit very small one, presence representing modular housing (i.e. 5+/-% of the national factory-built housing market share), labeled as the National Modular Housing Council (‘NMHC’) of MHI.

This NMHC presence, along with MHI’s 5+/-% HUD-Code manufactured housing national market share, combined, accounts for the 10 percent national market share MHI presently enjoys among factory-built housing fabricators.

Unanswered questions going a-begging: 1) ‘Where and how will panelizers & production site builders fit into the MHI membership milieu?’ And 2) ‘Why does MHI even want to take on this tenfold expansion of its’ national advocacy role, when there’s so much yet to be accomplished (e.g. Return of easy access to chattel capital for new home financing on-site in LLCommunities) in behalf of its’ present membership?’ Answers anyone?

Once these ‘membership-recruiting steps and representation questions’ have been accomplished and answered, MHI will be on its’ way to the presumed goal of REPRESENTING THE FACTORY-BUILT HOUSING INDUSTRY.

Know what’d be simpler, and certainly more helpful to present MHI members? If MHI would narrow its’ focus and concentrate on lobbying and promoting regulatory reform in behalf of the manufactured housing industry! Nothing more, nothing less!

Blog # 426 Copyright 2016 COBA7 @ 25 December 2016; community-investor.com

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

This blog posting is the sole national advocate voice, official ombudsman & historian, research report & online communication media for North American LLCommunities.’

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but to transform & improve MHBusiness model performance!’

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INTRODUCTION: Have you noticed? Ever since COBA7 was founded in early 2014, MHI has redoubled its’ membership recruiting efforts (That’s a good thing); hired more staff (To what end? Little to no change in services); and now lays fallacious claim to more housing representation than warranted. Why? Maybe out of fear of losing ground to the other two national advocates for manufactured housing in general, land-lease communities in particular.

Why not be content with being primary LOBBYIST for HUD-Code home manufacturers, already controlling more than 85 percent of manufactured housing national market share? Encourage MHARR to continue to OPPOSE INCREASED REGULATION of smaller, regional home manufacturers! And, leave COBA7 to focus on PRODUCTS & SERVICES, such as statistical research & reporting, information sharing, print & online communication, interpersonal networking & realty deal-making, as well as professional property management training & certification of LLCommunity owners/operators throughout North America?

Perhaps year 2017 will come to be viewed as the ‘shakeup year’, when national advocate identities are established, foci identified and prioritized, to the greater good of the industry and its associated realty asset class!

Here’re additional details…

I.

What’s Going On With MHI?

This, directly from the Manufactured Housing Institute’s (‘MHI’) rejuvenated website:www.manufacturedhousing.org

“MHI – REPRESENTING THE FACTORY-BUILT HOUSING INDUSTRY”

When one accesses the ‘Who We Are’ prompt, there’s this misleading message: “The factory built housing industry produces about 70,000 homes a year and contributes about $2.6 billion to the U.S. economy.” NOT. That’s just the number, and production value, of new HUD-Code homes shipped annually (i.e. 70,544 during year 2015) – and not inclusive of three other types of factory-built housing; all four of which are described here:

• Panelizers. Command 50 percent of national (new housing) market share. These builders use factory-fabricated ‘sheathed external & open interior’ wall panels when building new homes on-site

• Production site builders. Garner 39 percent of national market share. These are the site builders who routinely use factory-built components (e.g. pre-hung windows & doors; floor & ceiling trusses, & more) when building new homes.

• HUD-Code manufactured housing accounts for roughly five percent of national market share, where this type factory-built housing is concerned. And…

• Modular housing accounts for another five percent of national market share where this unique type factory-built housing (i.e. using modules) is concerned.

This is bold overreach on the part of MHI, claiming it represents ALL factory-built housing; when in reality, it might claim just 10 percent of the national (new housing) market share; 10 percent comprised near equally of HUD-Code and modular homes.

Perhaps this of overly broad boast is indicative of an emerging, albeit unfortunate, self-centered mindset at the institute. How so? As you read Part II (following here), listing the plethora of recent Press Releases, blog postings, and commentaries describing ‘FHFA’s DTS Rulemaking & GSEs’, pay close attention to quoted content from MHI’s HOUSING ALERT, dated 19 December 2016. It’ll likely surprise, if not shock, you.

II.

More on FHFA/s DTS Rulemaking & GSEs

In just seven days, including one weekend, no fewer than eight public pronouncements!

12/13 = MHI’s Press Release, couched as a HOUSING ALERT, on this timely topic.

12/14 = MHARR’s Press Release. In our opinion, an apt counterpoint to MHI’s alert.

12/14 = Six pre-Webinar Questions posed to FHFA by Ken Rishel of Rishel Consulting

12/16 = FMHA Memorandum summarizing DTS Rulemaking information to date…

12/18 = Blog Posting # 425 @ community-investor.com, summarizing and comparing published views of three national manufactured housing advocates: MHI, MHARR, & COBA7.

12/19 = FHFA receives business model summary from a land-lease community portfolio owner/operator, describing 60 new HUD-Code homes financed within four properties, during the past decade, with only four defaults. Secret to Success? “Every one of (the) buyers/borrowers was qualified, based on their 10-15% down payment, rental history, and strict adherence to minimum front and back end debt-to-income ratios.”

12/19 = MHI’s HOUSING ALERT. Summarizes its’ earlier Press Release of 12/13, and from all appearances, takes full credit for the recent DTS rulemaking progress – wholly ignoring contributions by other manufactured housing national advocates attending same FHFA’s public meeting, and their respective submissions of comment letters. Lest you think we exaggerate:

• “The final rule is the culmination of a multi-year effort by MHI to educate Fannie Mae, Freddie Mac, and FHFA on the fundamentals of the manufactured housing finance market….” No one else advised FHFA on these matters? Several did!

• MHI efforts included the following: “Extensive discussions with consumer groups initially hostile to manufactured housing loans…but in press reports are now being referred to as ‘advocates’ for chattel lending.” How ’bout MHARR’s meetings with consumer group leaders? And COBA7’s affiliate ROCs*1?

• MHI again, “Participating in working groups with the GSEs, to educate them about chattel loan operations issues….” MHARR & COBA7 also participated.

• MHI and again, “Submitting an extensive comment letter that rebutted concerns about the risk of chattel loans…&…made an aggressive argument for a stronger duty to serve rule.” One among more than a thousand such comment letters…..

12/19 = Web Conference re Duty to Serve. More than 120 individuals participated in this hour long conference. Rulemaking, as it applied to the three underserved markets (i.e. manufactured housing, affordable housing, rural housing) was presented at length. This webinar to be followed by three Listening Programs, sponsored by FHFA; in Chicago on 25 January; Washington, DC., on 8 February, and in San Francisco, CA. For more information and to register, visit www.fhfa.gov/dts

Yes, it’s truly been a hectic and exciting week, since the FHFA (that’s short for Federal Housing Finance Agency) announced, 13 December 2016, that ‘GSEs Will Receive Duty to Serve Credit for Manufactured Housing Chattel Loans’. And yes, there’s much work to be done, as GSEs now select and assemble the ‘nuts & bolts’ of the chattel capital programs to serve manufactured housing in land-lease communities throughout the U.S.

But, you know what would HELP a LOT going FORWARD? If the three national manufactured housing advocates, i.e. MHI, MHARR, & COBA7, would ‘work together’ to influence and assist FHFA and GSEs in this timely and important task of converting policy into procedure – instead of grandstanding separately. Will it happen? Only if YOU, as a member of one or more of these entities, suggest – no, insist, they do so for your business benefit and theirs! Your request falls on deaf ears? Then perhaps it’s time to align with another of the national advocates – for the greater good of the manufactured housing industry! Think about it. How many other times will such a challenge and opportunity be presented to us? Let’s not squander this means to positively influence our collective business future!

If you’d like to make your opinions known on this heady topic, i.e. access to chattel capital for manufactured housing sited within land-lease communities, write gfa7156@aol.com and let us know soon! GFA

End Note.

1. ROC = resident-owned communities via ROC USA.

***

George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156

Blog # 425 Copyright 2016 COBA7 @ 18 December 2016; community-investor.com

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

This blog posting is the sole national advocacy voice, official ombudsman & historian, research report & online communication media for North American LLCommunities.’

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but to transform & improve MHBusiness model performance!’

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INTRODUCTION: Today’s blog content?

Exciting NEWS about FHFA, DTS, & GSEs!

Then a bold & smart SUGGESTION for large LLCommunity portfolio owners/operators.

At least five EVENTS to make this year’s Louisville MHShow ‘the best ever’ for YOU!

A minor correction to COBA7’s Official MHShipment ‘#s & $’ Report for October 2016.

I.

FHFA Finalizes Duty to Serve (‘DTS’) Rule

(to provide DTS credit, to Fannie Mae & Freddie Mac, for purchasing chattel capital manufactured housing loans!)

Here’s how the three manufactured housing industry and land-lease community national advocates responded to this historic, and what was intended to be & is, encouraging news:

• “GSEs Will Receive Duty to Serve Credit for Manufactured Housing Chattel Loans” Press Release from the Manufactured Housing Institute (‘MHI’)

• “FHFA Final Duty to Serve Rule Continues to Fail Chattel Borrowers” Press Release from the Manufactured Housing Association for Regulatory Reform (‘MHARR’)

• Federal Housing Finance Agency (‘FHFA’) Issues Guidelines; Government Sponsored Enterprises (‘GSEs’) Fannie Mae & Freddie Mac to Now ID Nuts & Bolts to Make the Program Work!” Press Release from the Community Owners (7 Part) Business Alliance (‘COBA7’)

There’s certainly more to this story than just these salient headlines. Indication of ‘more work to be done’, comes from MHI chairman Tim Williams, president of 21st Mortgage Corporation, when he states, in MHI’s press release, “I am pleased FHFA is including chattel loans in the DTS framework, in order to encourage Fannie Mae & Freddie Mac to open a wider range of opportunities for aspiring manufactured (home) owners. The bottom line: done right, this could make becoming a manufactured home owner more affordable.” (Lightly edited. GFA)

But just how far is this DTS Rule from being ‘shovel ready’ – as a soon to be erstwhile president described federal projects with high expectations but low practicality? At this point we simply don’ t know…

According to MHARR’s press release, The final rule, “…will leave a significant majority of manufactured home purchasers – as they are now – a captive market for the higher-cost loans offered by the finance affiliates of industry’s largest corporate conglomerates. The final DTS rule…offers far less than meets the eye, and should now be addressed and rectified by Congress.” And if that doesn’t arouse your curiosity, this will: “…the final rule represents a ‘bait – and -switch’ scenario. It lists chattel loan support as a permitted activity, but then specifically enables the GSEs to avoid that activity entirely if they wish.” Whoa! Let’s hope ‘that’ does not happen, again.

Where to go from here? Well, fortunately for land-lease community owners/operators, COBA7 has served as a sounding board of sorts, for the FHFA, during 2016. And already they’ve reached out to talk about this matter. So, continue to be updated as to progress, here, and in the Allen Letter professional journal, and the Allen CONFIDENTIAL! And remember, The Journal is no longer being published. But know, MHARR & MHI have been offered white space in the monthly Allen Letter for their views on this and other MHIndustry topics. Will they avail themselves of this public and trade media outlet? Guess we’ll have to wait and see….

In the meantime, and this is a very short fuse opportunity: If YOU want to participate in the FHFA Shareholder Webinar, on Monday, 19 December, at 2PM ET, you need to go, right now, to FHFA.gov/DTS and register! COBA7 affiliates have been informed of this rare and important opportunity to be on the cutting edge of emerging manufactured housing industry finance policy and procedure!

Furthermore, if not already receiving and reading the Allen Letter professional journal each month, do so by contacting COBA7 via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 & affiliate at the Option I level ($134.95/12 months). Also know, the 28th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land-lease Community Portfolio Owner/operators Throughout North America!’, will be enclosed with the January 2017 issue of the Allen Letter going to Option II (%44.95/12 months) & III affiliates.

II.

A Bold Suggestion for Property Portfolio Executives

Let’s begin with what comes across as a MHIndustry trivia question; but in reality, is an indicator of a liaison that worked well ‘for decades several decades ago’, but is a near lost art today. The question:

Ever heard the name of Jim Boyts?

Hmm, let’s see. He was inducted into the prestigious RV/MH Heritage Foundation’s Hall of Fame in 2010, several years after he died. How ’bout Skyine Homes? Sure, you should know that firm well, it’s one of our industry’s venerable pioneers. Think industry icons Art Decio & Terry Decio; and now, Richard Florea.

OK, so what’s the big deal about Jim Boyts and Skyline Homes?

Throughout the 1960s, 70s, 80s, & into the 90s, Jim was the firm’s liaison to more than 30 states. His actual title was Director of Marketing Services. Skyline was a member of every state MH association where the company had active business interests. And they purposed to have Jim Boyts as the firm’s representative to every one of those state MH associations. He was, in effect, the manufactured housing industry’s ‘interstate statesman’ until he retired. Why wasn’t the practice continued? Stop and think of the dates, the dawn of the 21st Century, and all the turmoil and ‘economic downturn’ that came with it.

On a personal note, I knew Jim Boyts well. He was, at times, a mentor, devil’s advocate, supporter, and advisor. In my opinion, there hasn’t been anyone like him since he retired. But even then, he stayed in touch, reading my columns in The Journal, the Manufactured Home Merchandiser magazine, even the Allen Letter professional journal.

Point to this recitation? I think it’d serve property (i.e. land-lease community) portfolio owners/operators, and many state MH associations, well, if they, in early 2017, designated one business savvy executive to be their active liaison with said trade bodies wherever the firm has business interests.

Why? Well, as a ‘player’, i.e. association board member, they are a team member, maybe even leader; and no longer viewed as an outlier by other corporate members of said association. Plus, by being active in other state MH associations, they enable cross-pollination of ideas and concerns among states. And the list goes on…

So, at least the 20 largest property portfolio firms should seriously consider this suggestion, as we go into year 2017.

III.

Where Will You be on 17, 18, 19, 20 January 2017?

17 January @ 7AM – 4PM. Manufactured Housing Manager (‘MHM’) professional property management training & certification program at the Crowne Plaza Hotel on Phillips Lane in Louisville, KY. Only $250.00/MHM candidate. No testing. Taught by Katie Hauck, MHM, & Kathy Taylor, MHM. Call (317) 346-7156

17 January @ 9AM-Noon. Special Presentation for HUD-Code home manufacturers. Two foci: ‘How to ID land-lease communities, owners, operators, in all four property categories’; &, Open Discussion of How to Best Sell New Homes to LLCommunities.
Facilitated by George Allen, CPM & MHM. Only $95/registrant. Call (317) 346-7156

17 January @ 1PM-4PM. Lease-option Methodology for Land-lease Community Owners/operators Selling & Seller-financing New HUD-Code Homes On-site! Cost? Only $95.00/registrant. Contact genevieve@secoconference.com

18 & 19 January. Louisville MHShow at State Fairgrounds: Google Louisville MHShow to get more information and to register in advance. Start off the ‘MHShow experience’ by attending the 8-9AM panel, ‘How to Buy New Homes at the Louisville MHShow!’ The info shared here could save you $ and make this the best MHShow ever for you….

20 January, 9AM. Presentation & Open Discussion of New HUD-Code Home Installation & Foundations in Frost-susceptible Climates. If you’re confused about this timely and complicated topic, you owe it to yourself to be present! Led by Frank Bowman, executive director of the Illinois Manufactured Housing Association. No cost to this opportunity.

IV.

COBA7 MHShipment ‘#s & $’ @ October 2016

Oops! One minor mistake to the subject document. Geesh! I hate when that happens. No excuses – though it’d be nice to be a large enough firm to employ a fact checker to help.

The error? Using Dr. Stephen C. Cooke’s ‘production value’ formula, the 7,154 new HUD-Code homes shipped during October 2016, are valued at $308,523,404. And the 67,043 new HUD-Code homes shipped YTD are ‘production valued’ @ $2,881,000,000.
All the rest of the reported data is correct. Look to see the official COBA7 MHShipment Report to be part of January’s issue of the Allen CONFIDENTIAL! business newsletter.

Again, if not already affiliated with COBA7, one of three national advocacy entities serving land-lease communities and the manufactured housing industry, simply phone the Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764. The longer you wait to do so, the longer it’ll be before you’re tapped into the best source of statistics and information available to everyone in the MHBusiness.

Remember, the 28th ALLEN REPORT will be enclosed in the January 2017 issue of the Allen Letter professional journal, at the Option II or III level of affiliation.

***

George Allen, CPM & MHM

Blog # 424 Copyright 2016 COBA7 @ 11 December 2016; community-investor.com

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

This blog posting is the sole national advocacy voice, official ombudsman & historian, research report & online communication media for North American LLCommunities.’

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & Opine, but to transform & improve MHBusiness model performance!’

_____________________________________________________________________

INTRODUCTION. Yes, businessmen and women respond to just about every weekly blog posting at community-investor.com. Do you? Part I, following, contains recent responses. Part II is, in truth, an historic announcement, as COBA7 announces as new national advocate for land-lease communities in North America, and HUD-Code manufactured housing.

I.

COBA7 Affiliates Respond to New Year Resolutions & ‘Tipping Point’ WHITE PAPER Expose’

“Excellent resolutions. I have one more. The election of Donald Trump presents the industry with a unique opportunity to put pressure on our federal regulator (i.e. HUD) to fully implement the Manufactured Housing Improvement Act of 2000 (a.k.a. ‘MHIA@2000’), and stop the expansion of industry-smothering regulation. We need a unified industry effort to get the federal program heading in the right direction. I am not talking about uniting MHI & MHARR, but I’m advocating for convening a coalition of industry leaders to develop a strategy to specifically deal with HUD. Much the same way it was done in getting MHIA@2000 enacted.” – now 17 years ago! This from one of the most respected association executives in the manufactured housing industry.

And on the heady and timely question of increased regulation, less regulation, or deregulation of manufactured housing, this ‘vote’:

“I vote to deregulate completely. We have the manufacturing capability to comply with locals (building codes) and most rural county regs.” Someone from the manufacturing segment of the MHIndustry.

And then there’s this, relative to the ‘Tipping Point’ WHITE PAPER Expose’. “I agree with your White Paper argument. I had the same individual ask me last week: “How do you explain to your residents that rents should be 2X where they are, because low rents are one of the largest issues out industry faces?” I said, “I don’t think it’s one o f the big issues – frankly, a strong value proposition for the consume is a far bigger issue.” Really, an industry that provides a strong value proposition thrives, those that don’t, go extinct. The HUD-Code and land-lease community (industries) are not thriving, in my view. ” This from the owner/operator of one of the largest property portfolios in North America.

As an appropriate aside to this response, know ‘value propositions’ with one’s homeowner/site lessees is a key challenge identified in the 28th annual ALLEN REPORT, scheduled for distribution as a lagniappe in the Allen Letter professional journal during January 2017. So, if you’re not affiliated with the Community Owners (7 Part) Business Alliance, or COBA7 at the Option II or III level, do so NOW, before the New Year. This year’s ALLEN REPORT, a.k.a. ‘Who’s Who Among Land-lease Community Owners/operators Throughout North America!’, is the largest one compiled and published during the past 28 years! To affiliate, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

II.

COBA7® Declares Its National Advocacy Role for Land-lease Communities, Large & Small, Nationwide!

Post production segments of HUD-Code manufactured housing (e.g. suppliers, finance firms, state associations, & LLCommunities) are stepchildren to this type factory-built housing – or so it seems – when one examines the focus of MHARR & foci of MHI.

The Manufactured Housing Association for Regulatory Reform, since 1985, has limited its’ membership, and legislative/regulatory focus, to matters of concern to small and mid-sized regional HUD-Code home manufacturers. 100 percent of MHARR’s income is from member manufacturers. MHARR’s offices are in Washington, DC., and it enjoys the industry wide reputation for being manufactured housing’s ‘watchdog’ in the nation’s capitol.

The Manufactured Housing Institute, or MHI, throughout the history of manufactured housing, has claimed to represent business interests of all segments of the HUD-Code manufactured housing industry, including the largest of HUD-Code home manufacturers (Controlling an estimated 80 percent of national market share); most state MH trade associations; land-lease community owners/operators; personal property & realty finance firms; independent (street) MHRetailers; OEM/after-market suppliers of products and services. The majority of MHI’s income is from member housing manufacturers, by way of floor dues. MHI’s offices are in Arlington, VA.

Given the continuing, and now, 17 year paradigm shift, beginning at the turn of the 21st Century to this present day, the land-lease community post production segment, in particular, can no longer afford stepchild status! Despite MHI’s National Communities Council (‘NCC’) division being in place since January 1996, this unique realty asset class, during the past six years – upon the disappearance of 10,000+/- independent (street) MHRetailers – has ushered in a NEW ERA, one where property owners/operators are openly viewed as the next generation of MHRetailer & lender, and deserve an effective level of national advocacy not heretofore and presently provided.

To this end, the Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, a for profit division of GFA Management, Inc., dba PMN Publishing – eventually to become a not for profit entity, was launched during January 2014, to serve land-lease community owners/operators in seven distinct ways:

• Ongoing statistical research relative to the realty asset class; highlighted annually in the ALLEN REPORT, a.k.a. ‘Who’s Who Among Land-lease Community Portfolio Owners/operators Throughout North America!’

• Updating & distribution of 12+ Statistical Resource Documents, or SSRDs, covering every aspect of LLCommunity operations, e.g. realty & personal property $ finance; 40 freelance consultants of all types; directory of print & online media; official MH lexicon; ‘GSEs, Federal Agencies, & NGOs’; professional property management certification alternatives; an Industry Briefing Sheet; directory of national advocacy entities; directory of all factory-built housing firms; an official paradigm shifts list, dating from 1970s to present day; directory of real estate brokerages serving LLCommunities; and Official State of the MHIndustry Report.

• Preparation & distribution of a weekly blog posting at community-investor.com; and, two subscriber-supported monthly business newsletters, the Allen Letter professional journal, & the Allen CONFIDENTIAL!

• Plan & facilitate superb interpersonal networking and educational offerings, to include deal-making opportunities.

• Instruct & certify professional property management training via the Manufactured Housing Manager®, or MHM® program

• And as need be, function as national advocate for land-lease communities nationwide and in Canada; as well as providing ombudsman and historian services.

Revenue to operate COBA7® comes from a variety of sources that include: registration fees for annual Networking Roundtable; paid affiliation with COBA7® at one of three levels depending on degree of ‘products & services’ land-lease community owners/operators desire from the coalition; MHM® tuition; paid access to exclusive 500+/- name data base of portfolio owners/operators, various consulting assignments, e.g. pre-due diligence inspections, Mystery Shopping, & expert witness work testimony.

Years 2016 & 2017. A presidential election with its’ surprising results, presents business opportunities otherwise not available, let alone envisioned six months ago. So, during this time of expected change, starting as it will be, ‘from the top’, something similar should occur throughout the HUD-Code manufactured housing industry. Why? For the aforementioned NEW ERA to continue and grow, i.e. increased volume of new home shipments going directly into LLCommunities, large & small, throughout the U.S., owners/operators must seize control of their business environments and destinies!

And what might those steps entail?

1. MHARR & MHI to formally accept and recognize COBA7® as a primary national advocate for land-lease communities, large & small, nationwide! For example, MHI charges dues of state MH associations, and others, but has not, to date – despite invitations to do so – affiliated with COBA7, to receive its’ newsletters, Signature Series Resource Documents (e.g. ALLEN REPORT & various directories), and other land-lease community products & services.

2. COBA7® to immediately identify and reach out to all federal agencies and regulators presently affecting land-lease community operations, e.g. DOE, HUD, FHFA & its’ related GSE. Furthermore, COBA7® plans to be present at all future public hearings and meetings of these agencies, especially when LLCommunity matters are on the agenda. For example; in a recent DOE hearing, COBA7 was the sole entrepreneur MH business present.

3. MHARR, MHI, & COBA7® to soon meet, to discuss and brainstorm measures needed to restore manufactured housing to prosperity, likewise among land-lease communities, large & small, nationwide. A possible point of initial focus might be the timely and shocking message conveyed in the ‘Tipping Point’ WHITE PAPER expose’ distributed in a late November blog posting at community-investor.com, and the December issues of the Allen CONFIDENTIAL! and Allen Letter. COBA7 & representatives from SECO (Southeast Community Owners) will be at the Louisville MHShow, 18-20 January 2017. How ’bout MHARR & MHI? Want to meet informally to plan how to grow and perpetuate this NEW ERA of cooperation between manufactured housing producers and land-lease community owners/operators?

As they say, ‘The ball is in your court!’ Now is time for action!

Blog # 423 Copyright 2016 COBA7® 4 December 2016; community-investor.com

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

This blog posing is the sole national advocacy voice, official ombudsman & historian, research report & online communication media for North American LLCommunities!’

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance® a.k.a. COBA7®, use Official MHIndustry HOTLINE: (8777) MFD-HSNG or 633-4764.

COBA7® Motto: ‘U Support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but transform & improve MHBusiness model performance!’

INTRODUCTION. Hang on! This is going to be a three part ride through 1) planning for the year 2017; 2) bracing for the coming ‘continued regulation’ vs. ‘deregulation’ of manufactured housing; and, 3) triple opportunity for specialized personal and professional education in Louisville, KY., on 17 January 2017. Ready? Well, here goes…

I.

What Are Your New Year Resolutions?

Year 2017 is but a few weeks away, making this the ideal time to reflect upon, and articulate, New Year Resolutions to guide one’s thinking and actions during the next 12 months. And year 2017 is poignant (‘biting, painfully acute’), as we move deeper into the ‘17 year paradigm shift’ we’ve endured since year 2000. The difference this year? Since we know we’re well within a NEW ERA for this industry and its real estate asset class, land-lease communities (a.k.a. ‘New Breed of MHRetailer & Lender’), why not reflect the changes, to respective business models to date, in the New Year Resolutions identified and codified? For starters, here’s the way I see them:

• Support the new President of the United States of America!

• HUD-Code housing manufacturers to redouble efforts to market and sell new homes into land-lease communities, large & small, coast-to-coast! Part of this will require manufacturers to teach LLCommunity owners/operators how to specify, order, install, market, sell, affordably price, and seller-finance homes they buy from factories.

• Land-lease community owners/operators to NOT heed the siren call to ‘double one’s rental homesite rates’ during 2017; but rather, offer fair and affordable housing propositions, i.e. Where possible, keeping combined monthly PITI mortgage & site rent payment ‘together’, at or below the National Average Affordable Housing Market Rent of $849/unit – including household expenses where possible. Of course, this will not work in some high-priced local housing markets.

• Emphasize importance of – and provide opportunities to receive, professional property management training & certification, for all on-site land-lease community managers overseeing 75 or more rental homesites. Everyone to be a Certified Property Manager, Accredited Community Manager, or Manufactured Housing Manager.

• Support one or more national advocacy entities who best represent one’s business interests as housing manufacturers or land-lease community owners/operators, within and outside Washington, DC.

• And what other one(s) might be added to this august 2017 list? (317) 346-7156.

II.

Manufactured Housing Faces Another Fork in the Road?!

Last Week You Learned of the Imminent Danger of Manufactured
Housing Going from being Affordable to Non-affordable
&
Now, This Weeks Message, Has to Do with Manufactured Housing, Maybe Going from being Regulated to Non-regulated!

Here goes…Chalk the following paragraph up to being rumor, truth, or mix thereof…

A few Fall seasons ago, HUD realized, as regulator of manufactured housing, it was not receiving enough income from label fees to cover expenses, so they (reportedly) sought relief from manufactured housing regulatory duties altogether. The Government Accounting Office (‘GAO’) interviewed HUD-Code home manufacturers to gauge their reaction(s) to the query, ‘What if HUD went away?’ At that point, ‘the MHIndustry’ stepped in surreptitiously (Did you ever read about that? I didn’t.). Next thing we knew, there was a major increase in HUD inspection fees at all factories. And at that point, the ‘threat’ – or was it an ‘opportunity’, for deregulation, went away. And enhanced federal regulatory oversight began…recall how (2007) new home installation & dispute resolution legislation, moved quickly from back to front burner, during years 2015 & 2016.

Fast forward to today. The parties to the decades old MH regulatory brouhaha are:

U. S. Department of Housing & Urban Development or HUD. Relative to manufactured housing, the federal regulatory agency. An agency, until the recent presidential election, appeared hell bent on extending their oversight and enforcement reach into every corner of manufactured housing fabrication and land-lease community installation, including dispute resolution and its’ minimal number of disputes to resolve..

Manufactured Housing Institute or MHI. Self-professed national advocate for all segments of the HUD-Code manufactured housing industry, including land-lease communities nationwide. Enjoys a reputation for being conciliatory, where regulatory matters are concerned. In large part responsible, since the mid-1970s, for turning the ‘lemon’ of HUD-Code housing regs into ‘lemonade’, as the turn of phrase goes, using the federal preemption nature of HUD’s national building code to its advantage. Though some now question whether the industry’s recent avoidance of deregulation might be akin to suffering from Stockholm Syndrome, i.e. empathizing with HUD regulators (‘Its’ captor’), versus seeking ‘freedom from regulation’ altogether.

Manufactured Housing Association for Regulatory Reform or MHARR. Since 1985, the manufactured housing industry’s champion (a.k.a. The Washington watchdog!’) for less federal regulation of the factory-built housing product. Seemingly, a would-be champion of deregulation – unless they too fear the unknown consequences of free market enterprise, where the future of manufactured housing is concerned.

And therein lies the rub…

Will, under a new president with a penchant for less federal regulation of business and otherwise, the manufactured housing industry be faced with wholesale deregulation, similar to what was described – but did not come about, in the opening paragraph of this recitation? The quickest path to deregulation would appear to be: Press for bureaucratic change within HUD’s present day manufactured housing program.

Or, will the manufactured housing industry be better served, by not ‘rocking HUD’s bureaucratic boat’, in a quest for installing less regulatory-minded bureaucrats within HUD’s manufactured housing program? Now there’s a sensitive question begging a wise answer.

Hmm. Sounding like a ‘Damned if you do & damned if you don’t’ scenario with each sequential paragraph…

What do you think? I, for one, would truly like to know. I’m conflicted. And frankly, nothing would please blog readers more, than to have elected leaders within MHI & MHARR, comment as to which course of action is best for the present and future of the manufactured housing industry:

• Unchanged HUD-Code regulation of home fabrication and new home installation

• Scaled back regulation of home fabrication and new home installation

• Complete deregulation of home fabrication and new home installation

What say YOU? Well, we distributed a DRAFT copy of this blog posting to several ‘deep thinkers’ in the MHBusiness. Here’s one of the answers we received:

“Having received some advantages of HUD regulation, over local building codes, my money is continuing under HUD regulation, but with more representation/involvement by all segments of the MH industry – certainly not relying completely on either of the two current national lobbyists.”

Interesting how this comment echoes MHARR’s recent call for better national representation of all post-production segments of the MHIndustry, certainly better than what is evident today. So, one more reason to expect, during the weeks ahead a major announcement from the Community Owners (7 Part) Business Alliance, or COBA7, a division of GFA Management, Inc., dba PMN Publishing.

If you’re not yet affiliated with COBA7, but would like to be, use the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

III.

Pre-Louisville MHShow, Day of Education!

January 17, 2017

Three Seminar Sessions Designed Especially for You!

All day, 17 January 2017, at the Crown Plaza Hotel on Phillips Lane, Louisville, KY., the Manufactured Housing Manager, or MHM, professional property management training & certification program. Taught by Katie Hauck, MHM, & Kathy Taylor, MHM. Cost? Only $250.00 MHM candidate. No testing. Starts at 9AM and ends at 4PM. Tuition pays for copy of Landlease Community Management text, monograph of contemporary writings, as well as MHM certificate & MHM lapel pin. Register via genevieve@roane.com or phone (317) 346-7156.

Morning of 17 January 2017, at the Crown Plaza Hotel on Phillips Lane in Louisville, KY., George Allen, CPM & MHM will lead a three hour seminar (9AM-Noon) designed for HUD-Code home manufacturers who want to learn How to Identify Land-lease Communities in all four major segmentations of the realty asset class. Open discussion relative How to Best Market & Sell New HUD-Code Homes to this Emerging Market.
To register, phone (317) 346-7156. Cost? Only $95.00 per registrant

Afternoon of 17 January 2017, at the Crown Plaza Hotel on Phillips Lane in Louisville, KY., Spencer Roane, MHM, will lead a three plus hour seminar (1PM – 4PM) introducing attendees to the basics and fine points of Lease-option Methodology, relative to seller-financing new and resale manufactured homes within land-lease communities. To register, contact Genevieve@roane.com or phone (317) 346-7156. Cost? Only $95.00 per registrant.

Then, stay over, and attend the Louisville MHShow, 18-20 January 2017.

***

George Allen, CPM & MHM
Box # 470-24, Indianapolis, IN. 46247
(317) 346-7156

Blog # 422 Copyright 2016 COBA7® 27 November 2016; community-investor.com

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

This blog posting is the sole national advocacy voice; official ombudsman & historian, research report & online communication media for North American LLCommunities!’

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

COBA7® Motto: ‘U Support US & We Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but transform & improve MHBusiness model performance!

INTRODUCTION.

This WHITE PAPER cum expose’ has been in the making for two decades. Its genesis going back to the mid-1990s (Read End Note # 9 for details). It’s only been, however, during the past 12 months, the manufactured housing ‘tipping point’ between manufactured housing being ‘affordable’ & ‘no longer affordable’, has become obvious to those who’re watching. And frankly, a real threat to not only the industry’s gradually recovering new home shipment volume, but the future of the manufactured housing industry and its’ land-lease communities going forward. So, as you read now…

Be Aware & Beware (that),

‘The Manufactured Housing Industry
Tipping Point,’

occurs when

‘reasonable rental homesite rates
& affordable housing values’

are supplanted by

‘higher rental homesite rates
& smaller PITI*1 payments’,

oft times resulting in

1) Diminished Buying Power for Purchase of New HUD Code Housing

2) Reduction in Existing Housing Value &

3) Fewer New Homes Shipped Nationwide

***

Stop here and ask yourself: ‘Is diminished buying power for new homes, reduction in existing housing value, and fewer new HUD-Code homes shipped nationwide, what we need or want for today’s recovering manufactured housing industry, its’ land-lease communities with vacant rental homesites to fill, and fewer prospective homebuyer/site lessees nationwide?’ Hopefully, your answer, like mine, is a resounding ‘NO’!

So, why is this even a question in today’s economic, business, and consumer climate?

To well answer that timely, telling, and challenging question, begin with a look at the larger U.S. housing picture, ‘compared with’ what we’re told in a column featured in the last surviving, advertising-supported, manufactured housing trade periodical.

First, this ‘big housing picture’, quoted from Multihousing Professional magazine, page # 38, for September/October 2016:

“More than one in every three people in the U.S. struggles with the high cost of housing – the highest level ever recorded, according to the State of the Nation’s Housing, from the Joint Center for Housing Studies of Harvard University report for 2016. The number of people living in households that pay more than 50 percent of their income for housing has grown to 114 million, according to the study.”

Lessons to be learned? Keep manufactured home monthly ‘PITI mortgage payment & site rent’ below the debilitating 50% threshold! Examples to follow will do so, using the 30% Housing Expense Factor or HEF. But remember this, ‘household expenses’ (e.g. water, sewer, heating, electricity), while they should be included within said 30% & 50% housing expense thresholds, are not generally factored into calculating PITI mortgage payments throughout the manufactured housing industry, and within land-lease communities! Consequence? By the time all household bills (mortgage, rent, & household expenses) are paid each month, households pay well beyond the 30% HEF, oft approaching that debilitating 50% threshold!

Back to our ‘housing picture’, with this manufactured housing and land-lease community related view, quoted from The Journal, page # 14, for October 2016:

“We believe the approximate national average for lot (site) rents in the U.S. is around $275 per month. That’s a ridiculously low number in a U.S. housing market that offers a median single-family option at $170,100 and an average three-bedroom apartment rent of $1,290 per month. We believe lot (site) rents could double and still remain highly affordable.” P.14. Quoted from Frank Rolfe’s COMMUNITY CONSULTANT column. (Emphasis added. GFA) Source of data provided in this paragraph? None provided by the columnist.

Well, let’s see how this view pencils out, using the following data reference points:

National Average Affordable Housing Market Rent = $849/unit*3

National ‘Area Median Income’ or AMI*2 = $52,000+/-*4

Land-lease Community site rent now = $275/month*5

Land-lease Community site rent doubled = $550/month*6

Standard ‘Housing Expense Factor’ or HEF = 30 percent*7

Chattel Capital Mortgage Terms = 9.5% @ 20 years

As we work through the following examples, keep in mind National Average Affordable Housing Market Rent is pegged at $849/unit – whether it be for a conventional garden style apartment unit, or manufactured home on a rental homesite in a land-lease community. In examples to follow, combined ‘home payment (i.e. PITI) and site rent below $849/unit, while certainly ‘affordable’, represents less ‘buying power’ or ‘less home & value’; than when combined PITI & site rent payment are above $859/unit, representing more buying power…

In the first instance, Using $52,000 AMI, a 30% HEF, and ‘low’ site rent of $275/month (See end note # 5), that leaves $1,025 to buy a new manufactured home (Compared to the present day $849/unit average), for around $122,181/month (figuring back in, a 10% down payment). However, ‘doubling’ the site rent to $550/month (See end note # 6), leaves only $750/month to buy a new manufactured home for around $89,400 (figuring back in, a 10% down payment). Clearly, a smaller ‘affordable housing market payment’ capability’ (i.e. PITI & rent), a.k.a. less ‘buying power’; ‘less home’; and, over time possibly, fewer new manufactured housing shipments nationwide.

As a related aside; to be competitive, savvy land-lease community owners/operators keep monthly ‘combined PITI & site rent’ payments 15-20% below (a.k.a. Schwep Rule of Thumb) or $50.00 below (a.k.a. Schrader/Smith Rule of Thumb) similarly-sized conventional apartment unit monthly rent rates, in the same local housing market.*8

In the next instance, using a more reasonable $36,000 AMI (Characteristic of the ‘newly wed & nearly dead’ traditional manufactured housing dual market), a 30% HEF, and again, ‘low’ site rent of $275/month, leaves $625/month to buy a new manufactured home (Again, compared to present day $849/unit average), for around $74,500 (figuring back in, a 10% down payment). However, ‘doubling’ the site rent to $550/month, leaves only $350/month to buy a new manufactured home for around $41,720. Here it is even clearer, how low to middle income individuals and households, with an AMI anywhere near $36,000, when faced with escalating rental homesite rents (i.e. ‘doubling’), as proposed in the reference cited in end notes # 5, will be faced with attempting to purchase a new manufactured home, using a monthly combined ‘PITI & rent’ payment well less than the present day National Average Affordable Housing Market Rent rate of $849.00/unit. In fact, it likely takes the prospective homebuyer/site lessee completely out of the new home market, able only to purchase – or rent, maybe, a resale unit in a land-lease community. Hence the result of ‘doubling’ site rent rates.*9

Point to all this? It’s this industry observer’s earnest and considered opinion:

The manufactured housing industry in general, & the land-lease community realty asset class in particular, are already at the ‘tipping point’ between continuance of a 70 year reputation as this nation’s primary source of non-subsidized, affordable housing and lifestyle; but once again (Recalling ‘the turn of the century & departure of easy access to chattel capital) endangering the industry’s gradual return to new home shipment prosperity!

For example:

1998 = 372,843 New HUD-Code homes shipped nationwide!

2000 = 250,550 Shipment slide & 16 year paradigm shift began…

2009 = 49,789 Community Series Homes debuted, & 25% of new home shipments went directly into (then) manufactured home communities nationwide by year end.

2015 = 70,544 Now 40+% of new HUD-Code home shipments go directly into (now) land-lease communities nationwide!

(2020) = Estimated 100,000 new HUD-Code homes to be shipped, with 75% going into LLCommunities! However, if the siren’s call for continued escalation (i.e. ‘doubling of’) rental homesite rates becomes regimen nationwide, expect new home shipment recovery to, once again, slow precipitously.

Is this what we want? Is anyone out there listening? What are you going to do about it?

***
End Notes

1. PITI = Principal, interest, taxes, insurance – but not including household utility payments.

2. AMI = Area Median Income, often pigeonholed by postal zip code, can be same $ amount as AGI or Annual Gross Income for a prospective homebuyer or household

3. U.S. Census Bureau

4. REIS, Inc., 2nd quarter, 2016

5. The Journal, October 2016

6. Ibid, end note # 5 doubled in size

7. George Allen, Book of Formulae, Rules of Thumb, & Helpful Measures, PMN Publishing, Indianapolis, IN., 2012, page # 39

8. Ibid, pages # 11 & 12.

9. There’s yet another ‘take’ on the matter of escalating rental homesite rents. Simply put: Until the REIT wave of 1994-95, (then) MHCommunity owners/operators oft used a 3:1 Ratio to estimate appropriate rental homesite rates in various local housing markets, e.g. Conventional 3BR2B apartment rent = $900/month; then 1/3 of that = $300/month, as starting point for one’s homesite rent. Well, as fledgling REITs struggled to satisfy Wall Street analysts lust for increasing dividends month after month after month (by trimming operating expenses, etc.), they eventually started raising rental homesite rates in a near flagrant fashion. To the point that, today, some – but – not – all large property portfolio firms appear to default to a 2:1 ratio, e.g. Apartments rate @ $900/month? Then land-lease community site rent @ $450/month. And all this would be understandable, and likely acceptable, except for one recent development. Specialty ‘market rent surveys’ describe SMSA (Standard Metropolitan Statistical Area) local housing market rents characteristic generally of ‘institutional investment grade’ land-lease communities (i.e. 200+ rental homesites), not including all the such properties located in and around the subject city. Result? Higher published ‘market rental homesite rates’ than would be the case if/when all LLCommunities were polled and reported. Negative consequence? Artificially high site rental rates published for various SMSA cities, provide ‘cover’ for all property owners to likewise raise their rents to match large property portfolio owners/operators. Remedy? Clearly label rental market surveys as being focused on ‘institutional investment grade LLCommunities’ only.

George Allen, CPM®Emeritus, MHM®Master
COBA7
Box # 47024, Indianapolis, IN. 46247

(317)346-7156

Blog # 421 Copyright 2016 COBA7 @ 20 November 2016; community-investor.com

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

This blog posting is the sole national advocacy voice; official ombudsman & historian, research report & online communication media for North American LLCommunities!’

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTINE: (877) MFD-HSNG or 633-4764

COBA7® Motto: ‘U support US & WE serve U! Goal of its’ print/online media = to
‘Not only inform & opine, but transform & improve MHBusiness model performance!

_____________________________________________________________________

INTRODUCTION: Year 2017 is when the Community Owners (7 Part) Business Alliance®, or COBA7®, grows into the expanded role of national advocate devoted to the research, communication, networking & deal-making, training/certification, and historian needs of land-lease community owners/operators nationwide and in Canada!

The year begins with publication of a WHITE PAPER exposing the ‘tipping point’ manufactured housing & land-lease communities approach, at their peril, between supplying ‘affordable & non-affordable’ housing to prospective homebuyers and present day homeowner/site lessees. No one else is willing to ‘break this story’ to you, so read!

In January, the 28th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land-lease Community Portfolio Owners/operators Throughout North America!’ will be distributed to Option II & III affiliates of COBA7® via the January issue of the Allen Letter professional journal. Not yet an affiliate? Phone (317) 346-7156. This is the gold standard among statistical reports purporting to describe LLCommunities nationwide.

On 17 January 2017, COBA7® hosts the one day MHM® class, as well as two seminars tailored for HUD-Code home manufacturers, and LLCommunity owners desiring to learn more about lease-option methodology. Read Part I following here…

During Spring 2017, plan to participate in the 2nd annual Two Days of Plant Tours & Home Sales Seminars, at the RV/MH Hall of Fame in Elkhart, IN. Designed for LLCommunity owners/operators desiring to sell and seller-finance new HUD-Code homes on-site in their properties. More to follow during the months ahead.

And there’s more, much more, but we’ll stop the INTRODUCTION here, for now…

I.

PRESS RELEASE * PRESS RELEASE * PRESS RELEASE

Dated 20 November 2016

COBA7® Launches Four Major Initiatives to Warn & Help MHBusiness in Year 2017!

FIRST

‘Be aware & Beware’! The Manufactured Housing Industry (is approaching its’) Tipping Point in local housing markets; where and when ‘reasonable rental homesite rates & affordable housing values’ are being supplanted by ‘higher rental homesite rates & smaller PITI mortgage payments’, resulting in:

Diminished Buying Power for Purchase of New HUD-Code Housing

Reduction in Existing Housing Value, &

Fewer New HUD-Code Homes Shipped Nationwide!

Yes, that’s the dire message this December expose’, a White Paper, will be communicating to the manufactured housing industry and land-lease community real estate asset class nationwide, by way of its’ national advocacy entities, trade press, and otherwise. A Press Release will also be sent to the administrator of HUD’s manufactured housing program.

For a FREE reprint copy of this White Paper, after 1 December, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request it!

SECOND = latter three parts of the COBA7®s four part MHInitiative for year 2017.

The threefold Press Release message will see its’ first exposure as part of the pre-Louisville MHShow on 17 January 2017, at the Crown Plaza Hotel near the Kentucky Fairgrounds in Louisville. Here’s what’s planned to date:

Manufactured Housing Manager®, or MHM®, one day professional property management training and certification class, beginning at 8AM & ending at 4PM. No tests. Taught by Katie Hauck, MHM® & Kathy Taylor, MHM®. More than 1,000 MHM®s now own/operate LLCommunities throughout the U.S. & Canada. Only $250/MHM® candidate.

Morning of 17 January. Special three hour seminar program for HUD-Code home manufacturers to include: ‘How to ID land-lease communities among all four major property segmentations’, ‘How to Sell New Homes to LLCommunity Owners/operators’, & open discussion of the ‘tipping point’ warning contained in the Press Release. Only $94.95/registrant. Led by George Allen, CPM®, MHM®

Afternoon of 17 January. Special three hour seminar program for land-lease community owners/operators desiring to learn lease-option methodology as a means of seller-financing new HUD-Code home transactions on-site in their properties. Only $94.95/registrant. Taught by Spencer Roane, MHM®

For information, and to register, for one or more of these three events on 17 January, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Finally, it is hoped the Press Release threefold message will be picked up and scheduled, by meeting planners selecting programs for the annual MHCongress in Las Vegas, 26th International Networking Roundtable, and 7th annual SECO Summit in the South – the manufactured housing industry and LLCommunity asset class four major national/regional trade shows.

This MHInitiative is planned for the 17th of January, to stimulate more participation in the Louisville MHShow that begins, in the same location, on the 18th of January 2017.

***

George Allen, CPM®, MHM®
Box # 47024, Indpls, IN. 36247
(317)346-7156

Blog # 420 Copyright 2016 COBA7® @ 6 November 2016; community-investor.com

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

This blog posting is the sole national advocacy voice; official ombudsman & historian, research report & online communication media for North American LLCommunities!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7® Motto: ‘U support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but transform & improve MHBusiness model performance!

INTRODUCTION

NOTICE to Reader: Read Parts IV & V first, then I, II, & III, for Good Reasons!

Part I. ‘For land-lease community owners by land-lease community owners!’ is the most apt description of the annual SECO Summit in the South manufactured housing trade show. It’s over for this year, but it sure does leave a legacy of success for next year!

Part II. Challenge Coins. Taking a chapter out of the playbook of professional athletes, elite military units, charismatic business firms, and fraternity/sorority groups, design, order & distribute Challenge Coins to your peers, just like COBA7® affiliates.

Part III. Next Big Events for the MHIndustry. 17 January, day before Louisville MHShow begins, participate in the day long MHM® certification class, two hour AM seminar for HUD-Code home manufacturers, or two hour PM seminar regarding lease-option methodology. Then ‘stay over’& attend the Louisville MHShow all day 18, 19, 20

Part IV. Now is the Time to Come Together in Unity! If not, you’ll have only yourself to blame, a year or two from now, when manufactured housing industry shipments return to or below the 2009 level of 49,789 new HUD-Code homes shipped, and LLCommunities will be begging for resale homes to install on vacant rental homesites. The matter soon to be faced the manufactured housing industry & LLCommunities is simply that serious!

Part V. Breaking MH Statistical News! Shipment figures @ September 2017 = Surprise!

I.

More on ‘SECO Summit in the South’; the new Tunica MHShow?

One of four HUD-Code housing manufacturers exhibiting Community Series Homes at the Atlanta, GA., event, 25 – 27 October, sold 100 ‘floors’ at the venue, and has leads yet to pursue! So, if you’re reading this blog, and were not at this stellar event, but want to be on the ‘invite list’ for 2017, reach out to Genevieve Katelle via (770) 871-6889, or Genevieve@secoconference.com

And the attendee who opined, ‘SECO Summit in the South is the new Tunica MHShow’, explained: “…everyone is bored with the same old Louisville, Tunica & Vegas shows, where SECO is friendly and unique!” Nuff said.

II.

COBA7® Challenge Coin to be Distributed January 2017!

Have you seen the final design? Well, it’s an attachment to the BEBA (Blast Email Blog Alert) announcing this week’s blog posting. Take a look! It’s daring and colorful!

Why a Challenge Coin? Well, as ‘splained’ in an earlier blog posting at this website, Challenge Coins have been around since WWI, primarily as a pocket or purse means of identifying oneself with a particular (military) unit, or (business) firm, even (fraternity or social) group. Are you proud to identify yourself with the manufactured housing industry and or land-lease community income-producing property type? I am. Hence the Challenge Coin, as a new means of sharing that enthusiasm! We certainly need it!

There’s even an informal protocol at social and business events, involving one person challenging another to produce their unique Challenge Coin. If challenged individual doesn’t, but should have, a Challenge Coin in their possession, they become the host, paying for a round of drinks and or meal. But if they do produce their Challenge Coin, the challenger becomes the host! Not suggesting we go that distance, in the MHIndustry & LLCommunity ‘family’, but WE sure could use this sort of personal and corporate motivation and camaraderie, to show enthusiasm for what we all do for a living – providing attractive, quality, energy efficient, affordable housing for our nation’s citizenry!

So, will you or your firm now consider designing a Challenge Coin that improves the ‘attitude altitude’ in and around your workplace? At least consider the possibility. And when you do, remember, one source of Challenge Coins is Spotlight-Strategies via (317)738-3434. Ask for James or Kathleen.

COBA7® affiliates will receive their Challenge Coins during 2017, when they renew their affiliation with alliance. Some will receive it as a lagniappe in their January 2017 issue of the Allen Letter professional journal. That’s also the issue containing the 28th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’ You don’t want to miss receiving any of these gems in January, so make sure your Option I, II, or III affiliation is current!

IMPORTANT NOTE: If you own and or fee manage five or more LLCommunities, and or 500+ rental homesites, and haven’t completed an ALLEN REPORT questionnaire, facilitating your firm’s inclusion in this year’s (2017) MHIndustry & LLCommunity asset class’ statistical reference compendium, phone (317) 346-7156 to provide portfolio details via telephone! This document is how ‘everyone’ ascertains whether a property portfolio owner/operators is a bona fide ‘player’ in the MHIndustry & LLCommunity realty asset class! Don’t be left out, phone today!

III.

Next Big Events for the MHIndustry & LLCommunities?

17 January 2017.

First told you about this special day, two blog postings past. And as we get closer to the date, plans are being firmed-up. Which one or two, of the three pithy HOW TO choices will you attend?

• Manufactured Housing Manager® professional PM training & certification one day class, 8AM-4PM. Only $250.00/MHM candidate. Taught by Katie Hauck, MHM® & Kathy Taylor, MHM®. So, join more than 1,000 MHM®s already owning and managing land-lease communities nationwide and throughout Canada! For a descriptive brochure and or to sign-up, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 now! Why the rush? Classes almost always max out, so don’t be left out! Location to be announced.

• For HUD-Code home manufacturers: ‘HOW TO Identify Land-lease Communities in all three categories (by portfolio & standalone size), and Sell New HUD-Code Homes to Them for Selling & Seller-financing On-site! This 10AM-Noon session, on the 17th, will be for the first two dozen manufacturers to register; already have ten registered! Here too, phone the Official MHIndustry HOTLINE cited in the previous paragraph, for information and to register. Cost? Only $95.00/registrant, to cover meeting room expense and cost of handout material. Location to be announced – but near entrance to KY fairgrounds.

• Lease-option Methodology. This type seller-financing of new HUD-Code home sales transactions on-site is literally ‘sweeping the nation’. Learn from Mr. L-O himself, Spencer Roane, MHM®, owner of Pentagon Properties, with land-lease communities in GA & TX. Mr. Roane has hundreds of lease-option transactions in effect at his properties, and will share this specialized knowledge with two dozen LLCommunity owners/operators, from 1-3PM or longer, the afternoon of 17 January. Location to be announced – but near entrance to KY fairgrounds.

18-20 January 2017

Again, arrive a day early and stay overnight, to attend the Louisville MHShow at the KY state fairgrounds. Come to inspect and buy new Community Series Homes on display indoors, shop the dozens of vendors exhibiting there, and sit in whatever seminars address your specific and general education needs.

For more information about seminars and panels planned for 18-20 January, go to www..thelouisvilleshow.

IV.

Now is the Time To Come Together in Unity!

Last week, an op/ed piece titled, ‘Deja-vu 1974-76 (as in, ‘We’ve seen it all before!’), but now, in 2017?’, painted a dismal word picture of what appears to be occurring relative to federal regulatory enforcement of ‘below the frost line in freezing climates’ installations of new HUD-Code homes within land-lease communities – likely nationwide!

What follows here first, is a description of yet another ‘Three Strikes & You’re Out!’ scenario that could lead – in the short term, to less affordable housing available from the manufactured housing industry; and in the longer term, the demise of said industry and its’ real estate investment component, land-lease communities! But, another ‘Three Strikes & You’re Out’ scenario? YES – and it’s described in the November 2017 issue of the Allen Letter professional journal, re: rising MH prices & escalating site rent!

(To affiliate with COBA7® & receive November issue, phone (317) 346-7156) today!)

What follows here, is a timely and passionate recommendation as how to combat impending regulatory overreach into the manufactured housing industry and among land-lease communities nationwide.

This version of the ‘Three Strikes & You’re Out!’ scenario involves…

1. Recent overt attempt to discredit frost free foundation designs approved by HUD soon after installation & Dispute Resolution legislation was passed in year 2007. Read the 38 page ‘Manufactured Home Foundations in Freezing Climates’ prepared by SEBA Professional Services at the behest of HUD. When you do, note the absence of ‘date’ and ‘specific authorship attribution’, suggesting there’s more here than meets the eye! Like; is this the prejudiced opinion of one engineer, supplanting the expertise of many other engineers? Sure reads that way!

2. HUD’s manufactured housing program, in this industry observer & reporter’s opinion, appears to be laying groundwork to oversee new manufactured housing installations in land-lease communities nationwide, whether states are compliant or not, with aforementioned federal installation regulations. As pointed out in last week’s blog posting here, if this occurs, it’ll be déjà vu 1974-76 all over again!

3. Probable consequences of ‘strikes one & two’ preceding? First consequence. Many if not most small to mid-sized land-lease communities cannot afford $5,000+/- per rental homesite, HUD-mandated retrofits of perfectly good, existing concrete foundations (i.e. piers & ribbons) in these properties – simply because they don’t extend below the frost line; with new ones that do! Result? Stop selling HUD-Code’s new ‘affordable homes’ into land-lease communities! Second consequence. Property owners reduce the volume of new Community Series Homes bought and sited in their properties (This was 40+/- percent of all shipments during 2015, or 28,200 new homes!), the shipment volume of new HUD-Code homes once again plummets, something this industry can ill afford during this present day ‘recovering period’, i.e. Year 2015 = 70,544 new homes shipped; Year 2016 YTD = more than 50,000 through August 2016, likely 80,000+ by year end! Why does HUD want to do this to the MHIndustry & LLCommunity real estate asset class? A question that deserves an honest answer!

(And YOU should KNOW THIS, before we go any further. The Manufactured Housing Association for Regulatory Reform, or MHARR, has already gone on the offensive where this critical matter is concerned! The Manufactured Housing Institute? As a direct, dues-paying member of MHI, I’ve heard nary a word this week – on this critical matter, even as the institute’s National Communities Council convened their annual Leadership Forum in downtown Chicago.)

NOW, for a timely and passionate call for the MHIndustry & LLCommunity asset class to ‘come together’ in a manner best described by the Five Ws of problem-solving:

WHY? Together plan how to effectively oppose impending regulatory overreach into the manufactured housing industry and land-lease community asset class by HUD!

WHO to organize and ‘sound the call’ for industry unity & action? For starters, the two national advocates for manufactured housing: MHARR & MHI! This call for industry unity & action now, in this industry observer’s opinion (Buttressed by realities of being an MHI member; co-founder of its’ NCC division; and, 35 year owner/operator of land-lease communities throughout the Midwest), needs to come from MHARR & MHI ‘together’ & now!. WHEN? This week, 7-11 November 2016 is not too soon! But will it happen? Let’s watch and see!

And know, the Community Owners (7 Part) Business Alliance® (‘COBA7®’), representing land-lease community owners/operators, and other post-production businesses nationwide, stands ready to support this national call for industry unity & action NOW, as well!

WHAT to do? Immediately form a national, across-the-board representative working group, comprised of businessmen and women from all segments of the industry, whether members and affiliates of MHARR, MHI, or COBA7®, or not, but willing to pay their own way to participate! Particularly include HUD-Code home manufacturers and land-lease community owners, large and small!. WHERE? Meet, perhaps in the Midwest; either Chicago, Indianapolis, or Louisville areas, for a day (or two) long ‘brainstorming session’, deciding how to best confront and ameliorate (‘make more tolerable’) this very present threat to the health, even future of HUD-Code manufactured housing.

Now, if you’re reading this blog posting, and have ‘skin in the game’, so to speak, of manufactured housing and or land-lease community ownership, and agree Unity & Action is called for NOW, reach out to all three national entities to make your view(s) known, especially your willingness to be counted among those wanting to Save Our Industry!

• MHARR. Mark Weiss @ (202) 783-4087 (represents manufacturers)

• MHI. Richard Jennison @ (703) 558-0400 (represents entire MHIndustry)

• COBA7®. George Allen @ (317) 346-7156 (represents LLCommunities)

As is oft said; If you don’t take steps to ‘stand & be counted’ among your peers NOW, in this worthy manner, ‘You’re not part of the solution, just one more part of the problem!’

And frankly, your peers have already started taking action, quoting this response to last week’s blog posting when this heady topic first emerged:

“George, I am in agreement with you 100% the (MH) industry must work together to (bring) HUD back to the reality that individual states can have their own installation programs, approved by HUD and state statute. There is nothing to fix (in our state), and yet I feel our engineered designs, with NO problems, are being threatened!”

V.

Official MH Shipments for September 2017

7,322 new HUD Code homes shipped during September 2017, that’s DOWN from 7,363 during August 2017! No one else is telling you that; everyone else compares September 2017 with September 2016.

Cumulative MH shipment total YTD, through September 2017 = 59,889 new homes!

‘Production value’ of new MHs shipped YTD, using Dr. Stephen C. Cooke’s guideline?
$2,582,773,000.00 (59,889 X year 2013 base value of $43,126/unit)

Top Ten MH Shipment states: TX (no change), LA (moves up), FL (moves down), MI (no change), CA (moves up from #7), MS (moves down), NC (moves up), SC (moves up), AL moves down from # 6), and ‘new’ # 10 = GA! Details, including actual shipment numbers by state, will be published in upcoming issues of the Allen CONFIDENTIAL! and Allen Letter professional journal business newsletters.

Again, to affiliate with COBA7® & receive either or both these news-laden trade publications, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764.

WARNING. Be careful whose MHIndustry statistics you read and believe! All the above data is based on that provided, for a fee, by the Institute for Building Technology & Safety, or IBTS, and then distributed, unadulterated, by HUD, MHARR, and COBA7®.

***

George Allen, CPM®Emeritus, MHM®Master
GFA Management, Inc., dba PMN Publishing
Box # 47024, Indianapolis, IN. 46247
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Blog # 419 Copyright 2016 COBA7 @ 30 October 2016; community-investor.com

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

This blog posting is the sole national advocacy voice; official ombudsman & historian, research report & online communication media for North American LLCommunities!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7® Motto: ‘U support US & WE Serve U!’ Goal of its’ print/online media = to ‘Not only inform & opine, but transform & improve MHBusiness Model Performance!’

INTRODUCTION: This past week, 24 – 28 October has seen the BEST and WORST sides of the manufactured housing industry and its’ real estate component, the land-lease community asset class! How so?

Part I describes the absolutely incredible, incomparable meeting venue planned and hosted by HUD-Code home manufacturers and LLLCommunity owners/operators in the greater Southeast this past week – in Atlanta, GA.

Part II describes the absolutely incredible, incomparable – what some folk are already calling a ‘power grab’, by the Department of Housing & Urban Development’s (‘HUD’) manufactured housing program, relative to ‘changing existing rules’ regarding ‘Manufactured Home Foundations in Freezing Climates’. Read what follows here, and decide if we’re looking at a déjà-vu experience (circa 1974-76), now again in year 2017 & beyond – and let me know your thoughts!

I.

‘SECO Summit in the South’
Now a Major MHIndustry Show!

Some Pundits Calling it the ‘New Tunica MHShow’!

WOW! More than 255 registrants convened in Atlanta from the 25th to 27th of October! And 60 percent of attendees were land-lease community owners/operators from more than two dozen states, some from as far away as California!

SECO (That’s short for Southeast Community Owners) hosts describe their Summit in the South as being “for community owners by community owners’! And it sure is that, from beginning to end. How so?

• Large group tour of local Legacy Homes plant, complete with luncheon

• A special home sales training seminar by freelance consultant Ken Corbin

• Five Community Series Homes, or CSH Models on display throughout the event. Two supplied by Fleetwood Homes, one each by Legacy Housing, River Birch Homes, & Schult Homes. One of these manufacturers walked away from the SECO venue selling 100 floors, and had more leads to call when back in the office!

• Plethora of moderated panel presentations & discussions on pithy topics!

• Stand alone presentations on specific timely topics, e.g. Carl Becker, esquire; holding forth on lease-option methodology as a preferred form of on-site seller-finance of new home sales transactions; along with state MHAssociation execs. Jay Hamilton (GA) & James Ayotte (FL) extolling the benefits of membership and mutual support. Maybe more state execs next year!

• Three dozen vendors displaying unique products and useful services

• And much much more!

An innovation other MHIndustry meeting planners might consider emulating, is SECO’s novel electronic audience ‘pro & con’ scored feedback, via Smartphone, as each session concluded.

The SECO16 planning committee numbered no fewer than 15 businessmen and women with deep personal and corporate roots in the manufactured housing industry and land-lease community asset class. The group is led by Spencer Roane, MHM® of Pentagon Properties; and actual event, managed and coordinated by Genevieve Katelle. For more information, simply contact Genevieve@secoconference.com

Furthermore, the SECO 17 planning committee has already started planning next year’s venue, likely moving to a larger local area hotel, and counting on attendance of 400+/- manufactured housing industry professionals!

II.

‘Deja-vu’(as, ‘We’ve seen it all before’),
but now, in 2017???

HUD’s recent moves to regulate all ‘Manufactured Home Foundations in Freezing Climates’ nationwide, is viewed*1 as being akin (‘similar in nature’) to what was experienced during years 1974-76, when the HUD-Code was foisted on the (then) booming mobile home industry!

At this writing, formal reports have not yet surfaced, describing what occurred last week during the MHCC*2 meeting in Washington, DC. relative to the subject matter of Part II of this blog posting at www.community-investor.com. Going into the meeting however, it appeared the manufactured housing industry’s two national advocacy entities, MHARR & MHI, were nearly, if not clearly, of one mind, relative to ensuring HUD goes through the regulatory process, if planning to use the 38 page ‘Manufactured Home Foundations in Freezing Climates’ study*3 as a new manufactured housing installation enforcement protocol, considering how it…

• Calls for requirements well beyond present day regulations.

• Recommends dispensing with local flexibility within present regulations

• Recommends difficult and costly requirements for existing rental homesites in land-lease communities, e.g. Removal of perfectly good concrete foundations (if not extending below the frost line), to be replaced with new concrete foundations extending below the frost line @ $5,000.00+/- capital cost per rental homesite!

• Relies on just one engineer to author said report. Per an MHI memorandum: “…reliance on one engineer and one specific set of engineering and design methodologies does not allow for other professional engineered designs.”

So, what happens now? Well, most of us ‘in the field’, so to speak, will simply have to Wait & See what comes next from HUD, MHARR, MHI, & COBA7®. Frustrating isn’t it? Especially since we only recently learned this ‘new industry issue’ has been around for months, and we’re only just now learning about it!

Well, it’s not too early for you, as businessmen and women, to start thinking ahead, as to what might be done to blunt or redirect this latter day assault on the HUD-Code manufactured housing industry! For starters, state manufactured housing associations, along with their respective SAAs, are certainly going to feel added financial pressure, if and when these onerous, expensive installation regulations go into effect during 2017 and following.

And just as the HUD (building) Code, when implemented during 1974-76 effectively torpedoed new ‘mobile home’ shipments (i.e. In 1973 = 579,960 shipments; then 1974 = only 338,393l and in 1976 = only 246,120) to an average of but 250,000+/- new ‘manufactured homes’ per year until 1998; when our too short, mini-renaissance, saw 372,843 new homes shipped. Today (year end 2015) we are at 70,544 and climbing!

NOW, imagine what will likely happen to the present day ‘40+ percent of new HUD-Code homes (circa 2015 = 28,000 units) going directly into land-lease communities’, if HUD’s power play goes unchecked! Most LLCommunity owners/operators – talking here of the 85% of 50,000+/- properties nationwide, containing fewer than 100 rental homesites apiece -cannot afford to retrofit perfectly good rental homesite foundations @ $5,000.00+/- apiece! So, given the 42.4% drop in new ‘mobile home’ shipments between years 1973 & 1976, might this mean a similar plummet from today’s 28,000 shipments, to only 11,872 new HUD-Code homes going into LLCommunities? If so, also say ‘Good bye’ to the estimated 75% of 100,000 new homes (or 75,000 new HUD-Code homes) projected, by this industry observer, to go into LLCommunities by year 2020! Probable bottom line? 75,000 units, down to only 31,000 shipped, if that! OUCH!

Is HUD trying to finally kill the manufactured housing industry and its’ land-lease community lifestyle? Is anyone out there paying attention? If so, let me know your thoughts on this timely and critical subject, via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Postscript.

One final, but serious wrap-up thought, on this contentious matter. A scant few years ago, rumor had it, HUD approached Congress about sun-setting the HUD (building) Code relative to manufactured housing, indicating this type factory-built housing, today, is of far better quality than the ‘mobile homes’ of 40 years ago.*4 (For a leading indicator of this reality, observe the minimal number of product and installation complaints making their way thru the Dispute Resolution process since its’ passage in 2007). Also, shipping only 50,000+/- new HUD-Code manufactured homes per year was allegedly, not enriching, let alone balancing, HUD’s $ coffers. Anyway, for shadowy reasons, sun-setting did not occur (Likely having to do with home manufacturers not wanting to lose the code’s ‘federal preemption’ marketing advantage, where their product is concerned), so license fees increased dramatically. But now, federal (Installation & Dispute Resolution) legislation ‘on the books but back-burnered’ since year 2007, has taken a dramatic and potentially expensive 180 degree turn, in effect threatening the continued existence of this nation’s last form of genuine, non-subsidized, high quality, energy efficient, ‘affordable housing’ – when there are far fewer places to site said homes.*5 Among the first to go, will be the aforementioned estimated 85% of 50,000+/- land-lease communities too small (i.e. fewer than 100 rental homesites apiece) to be able to afford the soon to be mandated ‘new concrete installations’ at $5,000+/- apiece! Is this our future?

***

End Notes.

1. ‘in my opinion’, as a veteran MHIndustry observer & reporter

2. MHCC = Manufactured Housing Consensus Committee

3. For detailed treatment of this 38 page document, read Part III of blog # 418, posted 23 October 2016, at www.community-investor.com

4. Again, ‘in my opinion’, as a veteran MHIndustry observer & reporter

5. Definition of ‘affordable housing’ as referenced in this blog posting: “Housing is affordable when individuals or households ‘…earning less than half the Area Median Income or AMI, can afford to rent a conventional apartment and or buy a home in their local housing market’.” Pages 109 & 110. Quoted from Bruce Savage’s The First 20 Years!, PMN Publishing, Indianapolis, IN. 2013 – in turn borrowed from George Allen’s Book of Formulae, Rules of Thumb, & Helpful Measures, PMN Publishing, Indianapolis, IN., 2012.

George Allen, CPM®, MHM®
Box # 47024, Indianapolis, IN. 46247
(317)346-7156