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

April 30, 2021

Manufactured Housing to Recover from Black Swan Event?

Filed under: Uncategorized — George Allen @ 1:16 pm

Blog Posting # 636 @ 30 April 2021: EducateMHC

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

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INTRODUCTION: OK blog floggers (‘readers’), we’re well into the new year (2021). Hardly anyone I’ve seen, read, or talked to is willing to describe how they think business consequences and results of the coronavirus pandemic will pan out during the months ahead. So, I’ll go out on a limb here, and share my thoughts on the timely and troubling topic. GFA

Manufactured Housing to Recover from Black Swan Event?

First off; what is a ‘black swan’ event? It’s an unpredictable or unforeseen event, typically with extreme consequences. The coronavirus pandemic of year 2020 certainly fits that two part description, being unexpected and worldwide, then resulting in more than 300,000,000 deaths – that’s only 31 ½ million less than the entire estimated population of the U.S. – at 331,449,281! Reflect on that!

So, where does that leave us today? Personally? Well that’s your perspective based on individual and familial consequences good and bad. In our case, Carolyn and I ended our voluntary self-quarantine at 400 consecutive days, slowly dining out again and mingling with immediate family members and close friends, but not much more – yet. Corporately? For many reading these lines, that’s where the proverbial rubber of decision-making meets the road of ‘where do we go from here’? To some degree or another, every business model, except home repairs and remodeling, has diminished during the past 13 months. What to do today?

Before getting into that (practical plans for the future), this has to be said: the public and political nature of contemporary social discourse are unfortunately lumped together in today’s 24 hours/day new cycle and rabidly partisan civic arena. Know that almost whatever you do or say is going to be evaluated not necessarily ‘how you mean for it to be received’, but rather, through the shifting lenses of race, sexism, and entitlement.

Now, let’s take a look at HUD-Code manufactured housing, land lease communities, and related business sectors.

HUD-Code housing manufacturers. Fewer new HUD-Code homes were shipped during all of 2020 (i.e. 94,390 per IBTS*1) than the previous year @ 94,615.*2 And frankly, 2021, year to date, isn’t looking any better – yet. Why? We await exorbitant lumber prices to ameliorate, federally-incentivized employees to return to work, and reasonable access to chattel capital to return for home-only loans.

Land lease communities. Right now they’re the hottest of all investment (i.e. income-producing) property types, as sub-5 ‘cap rates’ and acquisition overpricing are commonplace, even among smaller, older properties awash with functionally obsolete (i.e. unable to site today’s 16X80 new singlesection homes) rental homesites, crumbling infrastructure and deferred maintenance challenges. Sad to say, but the day will likely come when naïve ‘outside the industry’ investors rue the day they paid near six figures per homesite when they should have paid a modest four figures. In the meantime, there are tens of thousands of vacant rental homsites to fill and not enough reasonably accessible chattel capital to effect home-only loans.*3 Furthermore, land lease community owners/operators continue to weather the storm of federal and state rental assistance and eviction moratoriums.

State manufactured housing trade and advocacy associations. Land lease community consolidation has affected this segment of the manufactured housing industry big time. Membership rolls have diminished year after year, as sole proprietor-owned communities are acquired by one or another of the 500+/- known portfolio ‘players’ throughout North America.*4 A strong membership base, besides providing an operating income base, is (used to be, anyway) necessary for effective legislative lobbying and stopping regulatory overreach. A half dozen land lease communities absorbed into one portfolio does not necessarily result in a half dozen new members; but rather, just one – the corporate headquarters. What to do? Establish the practical worth of the association and aggressively recruit new members!

Independent (street) MHRetailers.*5 Here, present and future profitable performance has everything to do with whether the MHRetialer is indeed an independent ‘player’ (i.e. in search of chattel capital for home-only loans) or a ‘company store’ financially nourished at the teat of one or another public/private corporation. We lost an estimated (by MHI) 10,000 independent (street) MHRetailers shortly after the turn of the century. Some say the number is now, once again, increasing in several local housing markets across the U.S.

The perennial conundrum (‘a hard question’), still in play here, has to do with the proven ability of HUD-Code housing manufacturers to fabricate new, spacious, energy-efficient factory-built housing at half the ‘square foot price’ of traditional site-built housing VERSUS the inability of ‘anyone’ to persuade local land planners and zoning boards to approve tracts of raw land for development into new land lease communities, even subdivisions. Oh sure, this happens from time to time (Rumors are of it increasing a little now), but what is needed is a continuing gusher of affordable, attainable housing!

So, are we, in manufactured housing and land lease communities, the only ones reflecting on recovery from the COVIC 19 Black Swan Event of 2020? No, here’s just one brief reflection on the matter, quoted from ‘Leading in a Black Swan Event’: “Everyone is going to have a pantry with canned goods and a box of masks, a bunch of gloves, and a lot of alcohol wipes.” & “But how does this relate to commercial real estate? There are a lot of guesses, but only time will tell.”*6

Yes, the year 2021 clock is ticking. What will you be doing to restore business and profitability to the manufactured housing industry and land lease communities nationwide? As usual, I’m open to hearing/reading your recommended measures; via

End Notes.
1. Institute for Building Safety & Technology (‘IBTS’) is HUD’s contractor tasked with ‘keeping score’ by way of tracking new home shipments monthly.
2. Stay abreast of monthly and annual new home shipment statistics by reading EducateMHC’s monthly ‘MH Shipment & Public Company Stock Market Report’ as part of The Allen Confidential business newsletter each month. Visit
3. There’s only one book describing the professional property management of land lease communities: Community Management in the Manufactured Housing Industry. Available for purchase, again, via
4. This total is up from 25 known portfolio firms in 1987. For more information, read SWAN SONG and latest (32nd) annual ALLEN REPORT. Both via
5. A trade term coined two decades ago by industry consultant William Carr of Rainmaker.
6. Quoted from GlobeSt. Real Estate Forum Management, March/April 2021, page # 54

George Allen, CPM, MHM

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