Blog Posting # 793, Copyright 17 May 2024. EducateMHC
Know this! HUD-Code manufactured housing (“MH’) is federally-regulated, performance-based, affordable-attainable factory-built housing (A.k.a. offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, & via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry, And SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955. And my autobiography, From SmittyAlpha6 to MHMaven! describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as prolific non-fiction author and popular freelance consultant.
George Allen, CPM®Emeritus, MHM®Master, is the only emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, MHInsider magazine columnist & editor at large. He’s a Vietnam combat veteran & retired lieutenant colonel of U.S. Marines. and author/editor of 30 books & chapbooks on MH, communities, business management & prayer.
First, a Review of
67,695+/- New Homes in US @ March 2024
Here’re key stats from the first-ever ‘Whole U.S. Housing Story’ (March 2024), researched by EducateMHC. Did you read it in last week’s blog posting # 792? If not, but interested, request the blog via gfa7156@aol.com. In the meantime, here’re the U.S. new housing statistics:
8447 new HUD-Code manufactured housing units were produced during March 2024.
+1155 Modular & Panelized (i.e. ‘prefab’) housing units estimated produced during March 2024
+343 Park Model recreational vehicle (‘RVs’) were produced during March 2024
=9,945 composite subtotal of the three previous offsite housing production totals listed above.
+57,750 estimated number of single-family site-built housing units started during March 2024
=67,695 estimated total number of new housing starts throughout the U.S. during March 2024
Reminder. This ‘Whole U.S. Housing Story’ is a work in progress. If you have critiques or suggestions, especially relative to data sourcing, let me know via gfa7156@aol.com And understand this; all the above-referenced estimates & sources are footnoted in original blog.
And Then There Was This…
The RV industry’s ‘Move America Economic Impact Study’ provides political savvy $ information that is totally missing from the manufactured housing industry & land lease community real estate asset class scene! Here’s how the RV industry’s pithy Press Release reads:
“The RV Industry Association’s latest Economic Impact Study in 2022 measured the impact the RV economy had on jobs, wages, taxes and spending. The study revealed the RV industry had an overall economic impact to on the U.S. economy of $140 billion, supporting nearly 680,000 jobs, contributing more than $48 billion in wages and paying over $13.6 billion in federal, state and local taxes.” Whew! What an impact that industry has on national decision making! And there’s more:
The study goes on to show what comprises the $140 billion economic impact figures:
$73.7 billion generated by RV manufacturers and suppliers
$35.7 billion generated by RV campgrounds and related travel
$30.5 billion generated from RV sales and service facilities
Now, here’s the ‘future’ Press Release paragraph every MH aficionado should want to read – with the blanks filled in, no longer ‘unknown’ Economic Impact statistics:
“The MH industry associations’ latest Economic Impact Study, in 2023, measured the impact the MH economy had on jobs, wages, taxes and spending. The study revealed the MH industry has an overall economic impact on the US Economy of $_______________billion, supporting nearly _______________jobs, contributing more than $_____________billion in federal, state, and local taxes!”
Will we ever see this happen, after 70+ years of waiting? That’s up to you! If you’re a dues-paying member of either national MH trade advocacy entity, that’s where to begin – with your suggestion for them to get busy and give us tools with which to influence legislators and more.
GOAL. A manufactured housing Economic Impact study for the year 2024!
An MH & RV Industries Conundrum Stated &…
While researching the history of the RV/MH Hall of Fame, in Elkhart, IN., I had this epiphany*:
‘Why, in the MH & RV industries, do realty-based business models, like land lease communities, RV parks, and campgrounds, demonstrate markedly less influence, to the point of being rarely mentioned in trade publications, than their product manufacturing counterparts, e.g. HUD-Code manufactured housing and various types of recreational vehicles?’
Think about it. The Manufactured Housing Association for Regulatory Reform (‘MHARR’), by charter, is 100 percent housing manufacturer focused. The Manufactured Housing Institute (‘MHI’) though boasting representation of all segments of the manufactured housing industry, is dominated by housing manufacturer members, when it comes to statistical performance reporting, federal legislation and regulatory matters. And now that I’m learning more about the RV industry I’m seeing the same emphasis there: manufacturers front and center, realty-based businesses nary a mention.
Why is this? To begin with, ‘follow the money’. All MHARR’s income comes from their regional manufacturer membership, and the majority of MHI’s income is contributed by the Big 3-C HUD-Code firms, lesser from real estate-based businesses. And then there’s the nature of the business models. ‘Something’ is always happening where housing (& RV) products are concerned, from design changes to marketing challenges to regulatory matters. Whereas, among land lease communities and RV/campground businesses, rental income and operating expenses are relatively stable, but for seasonality and effects of transiency and other factors.
All this likely ‘splains’ why we see lesser presence of, and publicity about, the realty-based businesses that make up the manufactured housing and recreational vehicle industries – at the national press level, RV/MH Hall of Fame, and elsewhere. The MHARR folk see it this way: “…national post-production representation has failed to hold government agencies – FHFA & HUD accountable….” Why? Because their presence and influence is marginal to non-existent on the national advocacy level. And I don’t see this changing anytime soon. For a brief period of time, roughly from 1993 till the turn of the century, land lease community property portfolio owners/operators, via their newly formed National Communities Council (today a division within MHI) made their presence known, and as long as strong leadership was in place, well-represented. That, in my opinion, is no longer the case; the NCC is a shadow of its’ past.
Conclusion. Realty-based (i.e. commercial real estate) MH & RV-related businesses will always be secondary influencers within national trade entities. The sole exception to this has been how conventional apartment owners formed and grew the National Apartment Association to (‘NAA”) its’ present size and influence in realty matters of national importance.
End Note. 1 Epiphany: ‘a sudden, intuitive perception of or insight into reality or the essential meaning of something, often influenced by some simple, commonplace occurrence.’ From Random House Webster’s College Dictionary.
MHARR Quotes HUD,
Then Tromps ‘attainable’ & ‘off-site’ Lingo
I have long been critical of trade publication articles that lightly use the term ‘affordable housing’ without defining just what they mean by it. Here’s a rare exception, found in a recent communique from MHARR quoting HUD’s Office of Policy Development and Research (‘PD&R’), in an August 2017 article titled ’Defining Housing Affordability’, to wit:
“Housing programs in the United States have long measured housing affordability in terms of percentage of income. Over time, (a) 30 percent threshold…became the standard for owner-occupied housing, and it remains the indicator of affordability for housing in the United States.” Furthermore, “…household (that) spend more than 30 percent of income on housing costs (are) housing cost burdened.”
What this definition does not do, is specify whether the ’30 percent of income’ includes housing costs like PITI and utilities – or not.* This is so important! Including PITI+ quickly and noticeably increases the ’30 percent’ factor, reducing the amount of housing prospective homebuyers can afford; whereas, not including PITI+ means the party can buy far more house – but increases lender risk. By the way, this is the same 30% factor is cited in the widely-circulated ‘Ah Ha & Uh Oh Worksheet’ for estimating how much MH & conventional housing folk can buy and site in land lease and fee-simple ownership environments. For a free sample copy of this versatile form, email gfa7156@aol.com and request it – be sure to include your USPS address.
MHARR, in this same communique, went on to point out “…the average sales price of all new manufactured homes was $127,300. This compares to a $430,808 ‘average’ for a site-built home, excluding the cost of land in both instances. And, according to the U.S. Census Bureau data, “real median household income in the US was $74,580.”
MHARR, furthermore, does not like new trade terms appearing on the homebuilding scene; describing ‘attainable’, in housing matters, as “meaningless linguistic blather” – and extends that criticism to the recently-invented term of ‘off-site’ housing (a.k.a. offsite construction), a synonym for factory-built housing.
Notwithstanding the profound respect I have for the manufactured housing industry’s ‘Washington Watchdog’ (‘MHARR’), the association should not dismissively ignore new ways to address industry matters of interest. Attainable might prove to be a means of putting a sharper edge to the question of Affordability. And offsite construction, at this point, does not seem to include manufactured housing, but it likely will – as manufactured housing, modular & panelized products, components, even Park Model RVs, are all fabricated in factories (i.e. factory-built housing) off and away from building sites. Give both terms a try. They’ll either blossom or die on the proverbial vine of disuse.
What do you think of these new trade terms? I’d like to know, via gfa7156@aol.com
End Note.
- PITI = principal, interest, taxes & insurance (+) utility expenses….
George Allen