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

Blog Posting # 753, Copyright 4 August 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and a 40+ year business career in MH and community ownership/management.

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

30^th ANNIVERSARY OF COMMUNITY UNITY?

What were you doing on 31 August 1993? Here’s what forward-looking owners/operators of land lease communities were doing. Quoting from SWAN SONG, a history of land lease communities, the unique income-producing investment property type: “…on 31 August 1993, 19 owners/operators of (then) mobile home parks, convened in Indianapolis, IN., for a strategic planning meeting where the goal was to decide how to work collectively, to represent and advocate for the real estate asset class – knowing a year or so later, several participants would take their companies public as real estate investment trusts (‘REITs’).” The initial organization, dubbed the Industry Steering Committee (‘ISC’), penned a mission statement, collected dues, and sought a national trade body (e.g. NAA, IREM & MHI) to adopt them.

The story of that momentous meeting and 18 months following, changed the course of manufactured housing-related real estate investments, and is well told in the book The First 20 Years, authored by the late Bruce Savage, one time executive with the Manufactured Housing Institute (‘MHI’). Copies are available for purchase via www.educatemhc.com

In retrospect, how did this historic meeting change the course of land lease community history? A couple obvious, and several subtle ways.

• 1 ½ years before the 31 August 1993 meeting, more than 100 community owners/operators, from across the U.S., convened for the very first time – in Clearwater, FL. Every year since then, they continue to gather at various national and regional networking and trade events. This was the impetus for the 8/31/1993 meeting, and continues to be key in creating and sustaining camaraderie among these entrepreneurial businessmen and women.

• 2 ½ years after the initial ISC meeting, on 1 January 1996, MHI launched the National Communities Council (‘NCC’), later named a full-fledged division of the institute. The first MHI executive to lead the NCC was Jim Ayotte, CAE; today, state executive of the Florida Manufactured Housing Association (‘FMHA’). This is when ISC became a part of MHI.

• While the ‘property type’ label changed from ‘mobile home park’ to manufactured home community, upon publication of J. Wiley & Sons’ Development, Marketing, & Operation of Manufactured Home Communities, in 1992, the continued evolution of that trade term took another decade or more, to become land lease community(ies).

• In 1987, the Roulac Real Estate Consulting Group identified only 25 portfolio owners/operators of ‘mobile home parks’ nationwide. By the time the ISC cum NCC was ‘up and running’, that number had swelled to 500+/- firms owning an average of 150 communities apiece. Why the huge jump? The formation of three new REITs (i.e. UMH Properties launched a decade earlier) popularized the property type, making for an eventual seller’s market. And it became common knowledge the operating expense ratios (‘OERs’) for these ‘communities’ were significantly lower than their conventional apartment counterparts.

• Some highly desirable ‘improvements’ to community operations have been proposed, even accepted and tried over the last three decades, but not all achieved sustained momentum. Examples. Professional property management. Of all the commercial real estate investment property types, land lease communities continue to be the least represented by Certified Property Manager (‘CPM’) members of the prestigious Institute of Real Estate Management (‘IREM’)…usually around 100 CPMs among 50,000+/- properties! And neither of the two homegrown PM certification programs, MHI’s Manufactured Housing Educational Institutes’ (‘MHEI’) Accredited Community Manager (‘ACM”), and GFA/PMN’s Manufactured Housing Manager (‘MHM’) certifications have added much (i.e. professional property managers) to the realty asset class.  And at one time it seemed highly desirable to replace the defunct (since 1976) Woodall Star System of quality raking communities. Hence the ABClassification System for Grading Communities. While still used by some, it was a victim of NCC politics, as REIT executives were concerned some of their holdings might be degraded by the new system. And there was also a detailed but high-priced program for recognizing and touting superior communities. But due to cost, it lasted only a short time.

So, where are we today? Depends on who you ask. Fervent supporters of the NCC (i.e. those who faithfully attend MHI’s biannual meetings at expensive venues) will tell you ‘all is well’ – and perhaps from their perspective that is true. However, knowing NCC meetings are rarely attended by more than a dozen or two dues-paying members, and there’s rarely public reporting of plans and actions, one might question the efficacy of the NCC division. Add to this the prohibition of proxy voting for officers at annual meetings – limiting access and amalgamation of new leadership. So yes, there is room for improvement going forward.

And since only five of the original 19 founders of the ISC are still active in land lease community ownership, it’d be interesting to know how they feel about present day community advocacy of the NCC. Speaking of the original founders of the ISC cum NCC division of MHI, they make for an interesting cross-section of owners/operators, large and small, of this unique type income-producing property typr. Following names are quoted, again, from The First 20 Years text authored by Bruce Savage.

Randy Rowe, formerly with MHC, Inc. cum ELS, Inc., a REIT; founder of Hometown America, then Green Courte Partners/American Landlease, and most recently Windward Communities. Randy continues to be active in the realty asset class, from his offices in CO and IL.

Gary McDaniel, founder of ROC Properties cum ROC Communities, Inc., a REIT; co-founder of YES! Communities (now under new ownership); also past chairman of MHI, and an RV/MH Hall of Fame enshrine. Now retired.  

Jim Grange. Similar corporate profile to business partner Gary McDaniel. To the best of my knowledge, also now retired.

Jeff Kellogg. Executive with  REIT Chateau Communities, Inc., until it was merged with ROC Communities, Inc. in 1997, later Hometown America in 2003.  To the best of my knowledge, Jeff is now retired.

Tom Horner, Jr., CPA, of T. Horner & Associates. Former professional football player, creator of the 21^st Century National Manufactured Home Landlease Community Rating System. Deceased.

Martin Newby of Martin Newby Management, now retired. Company still active as fee managers of land lease communities throughout the southeast. Martin brought a distinctly Christian perspective to his company, one that lives on to this day.

Dick Leiter. Formerly with Martin Newby Management. To the best of my knowledge, he’s no longer active in the realty asset class.

Kamal Shouhayib, Choice Properties (president of The Choice Group). While maybe semi-retired, his firm is now operated by his son Rob. Kamal is also a real estate developer in the U.S. and Lebanon.

Bill Williams of CWS Corporation in CA. While a major player during the 1990s, the firm was acquired by Chateau in 2001. To the best of my knowledge Bill is no longer active in the realty asset class.

Lynwood Wellhausen of Rudgate Communities. Lynwood is retired, and Rudgate was acquired years ago.

Bill Geary, CPM; president of Carlsberg Management. After his firm was acquired, he appeared to be no longer active in the real estate asset class.

Martin Lavin, esquire. A chattel capital financier, and head of AJAX Property Management. Now retired. Long an articulate commentator on manufactured housing matters in The Journal.

Eugene Landy, founder of United Mobile Homes cum UMH Properties, a REIT. Still active in the realty asset class, and recent inductee into the prestigious RV/MH Hall of Fame in Elkhart, IN.

Jerry Ellenberg of Ellenberg Capital. While active in the realty asset class at the time (8/31/1993), the firm was acquired and Jerry appears to have pursued other interests.

Scott West. Also with Ellenberg Capital at the time. No information on his current activities.

Brian Fannon, CPM. With Lautrec, Ltd., as well as founder of Strategic Operational Solutions, LLC. Most recently developing & filling a new Zeman MHC land lease community, The Oaks of Rockford, in Rockford, MI. Also an RV/MH Hall of Fame enshrinee.

Ed Zeman of Zeman Realty & Zeman MHC. Still very active in the realty asset class.

Ron Richardson of Ballerina Homes (Named after his first wife’s talent). Deceased.

George Allen, CPM®Emeritus, MHM®Master. Founder of GFA Management, Inc., & PMN Publishing. Also RV/MH Hall of Fame enshrinee, and Emeritus member of MHI. Now retired.

Well, there you have a brief history, not so exciting present status, and list of ISC founders from 30 years ago. The big question today, at least for some of us land lease community aficionados, is what will the future hold for this real estate asset class? Today we’re beset by threats of landlord/tenant legislation like we’ve never experienced before. Why? Mostly due to investors from outside the manufactured housing industry, buying up all sizes of communities – and property portfolios, then raise rental homesite rates, often in an exorbitant fashion. And here our nation is in the midst of an affordable housing crisis, but we’re generally unable to secure favorable home-only financing, as well as affordable housing land planning and zoning in most local housing markets! And the troublesome list goes on. Point? If we needed a national advocacy group for land lease community ownership and operations in 1993; we need one even more so today! What will the NCC division of MHI do to reinvigorate itself and take the lead in matters such as those just described?

Tell you what. Spencer Roane, MHM, of Pentagon Properties in GA., and I will be at the RV/MH Hall of Fame all day on 21 August, preparing to attend the Hall of Fame banquet that evening. If you’re ‘in the area’ and would like to sit down and discuss the present and near future of manufactured housing and land lease communities, let me know via gfa7156@aol.com. I’ll make arrangements for meeting location and timing. Hope you decide to participate. If interested in attending the banquet, get your tickets via (574) 293-2344. Even stay overnight and attend the 7^th National MH FacTOURy conference (How to Market & Sell New MHs in Land Lease Communities) on Tuesday and Wednesday. For more information phone the event hosts via (317) 247-6258.

George Allen, CPM, MHM

Blog Posting # 752, Copyright 28 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.comn, to order

Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and a 40+ year business career in MH and community ownership/management.

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

FALL MEETINGS OVERLOAD

Have you noticed yet? If you’re a manufactured housing aficionado and or land lease community owner/operator, and want to patronize industry and realty asset class meetings this fall, you’ll likely be over-networked and financially-strained during the two weeks between 10-13 September and 2-4 October. And that does not even include the Illinois Manufactured Housing Association’s annual meeting in East Peoria, IL. on 6 & 7 September – where you’ll find me.

Yes, the most significant meeting occurring during what’s known among meeting planners, as the ‘shoulder season’, is the 12^th annual SECO conference, A.K.A. National Conference of Community Owners. This occurs 10-13 September at the Renaissance Atlanta Waverly Hotel and Conference Center, in Atlanta, GA. And yes, I’ll be there too. Who doesn’t want to attend the major industry gathering where there’re be well-informed presenters on hand and a plethora of new HUD-Code homes to visit and purchase? For more information visit secoconference.com

Then there’s the ‘new kid on the block’; what’s advertised as ‘the inaugural edition of IMN’s Manufactured Housing Forum’, scheduled for 28 & 29 September at the Four Seasons Hotel in Nashville, TN. IMN spokesperson predicts 400 attendees this time around. Interestingly, IMN advertises no fewer than 49 speakers. On that list there’re executives from REITs UMH Properties and Sun Communities, as well as Yale Realty & Capital Advisors, and Cavco Industries. But know what? Among the 49 speakers, I recognized only six individuals who enjoy national reputations in our industry and among land lease community owners/operators. Want more information; contact Elizabeth Ramdeo of the Information Management Network (‘IMN’) in New York City via imn.org

Know why I won’t be in Nashville for the IMN soiree? Because I’ll likely be in Knoxville, TN., on 27 & 28 September at the Knoxville Convention Center, attending the annual Shed Builder Expo 2023. Huh? Yep these are the folk who design and build the sheds everyone uses from time to time. What’s my interest? Well, from their trade publication (magazine) and shows I’ve attended, I predict some form of sophisticated shed emerging as a new type of affordable housing! Seriously. As you know, I’m already researching and writing about ‘recreational vehicles as affordable housing’ (And, by the way, Thanks to those of you who sent me examples of this emerging RV trend!). Now you can’t say I didn’t alert you to yet another eventuality. Visit shedbulderexpo.com

Tired of meetings yet? Well there’s one more. The Manufactured Housing Institute’s (‘MHI’) annual business meeting will be 2-4 October, in Palm Springs, CA. I’ll miss this one too, as it’s a high-priced meeting location that, as a retiree, I can no longer afford. Also know this is when the National Communities Council (‘NCC’) division of MHI also meets. Only problem there (in that division) is they don’t accept proxy votes when voting for officers, severely limiting, in my opinion, leadership options in what should be a ‘mover & shaker’ advocate where land lease communities are concerned. Want to attend? Visit manufacturedhousing.org

More Achilles’ Heels!

Here’s what one blog flogger (i.e. ‘reader’) penned on this timely subject. “On the Achilles’ Heel discussion, I agree with all you said. I believe there are other ‘heels’ you didn’t mention that deserve discussion. Our D&R deliveries – that’s short for Drop & Go (Industry slang that’s been around for more than five decades!). D&R leaves critically important features up to the homeowner – who generally does not complete the tasks. Can’t tell you how many homes in communities or on private property have NO STEPS, or only temporary front ones. What site-built home doesn’t have safe steps at all exits? Or steps down into a basement, forcing the new homeowner to use a ladder to get there.” (Partly paraphrased. GFA)

National Rental Homesite Rent Rate

Last week we suggested national rental homesite rent rate among land lease communities pencils in around $572.00 (Based on YARI Matrix data for conventional apartments nationwide). Well, JLT studies peg this figure higher, @ $656, given a range of $624 for all-age properties and $717 for those catering to the 55+ demographic. Any guesses as to the reason ‘why’ for this difference? I’ll hazard the guess that the $624, $656, & $717 averages are for institutional grade land lease communities, while the $572 average is for properties across the board, size wise. What do you think?

WELL SAID (PENNED)

In a recent communique from the Manufactured Housing Association for Regulatory Reform, titled “MHARR Targets Fannie & Freddie Chattel Failure in DTS ‘Listening Session’ Comments”, dated 19 July 2023, the manufactured housing industry’s Washington ‘watchdog’ put forth  two paragraphs, here quoted verbatim (‘in exactly the same words’). In this industry observer’s opinion, they should be read by every industry aficionado and land lease community owner/operator!

“While chattel loans represent (and have consistently represented) nearly 80% of all new manufactured homes financed in the United States – and are specifically authorized by law for inclusion within manufactured housing sector DTS compliance programs – not a single manufactured home personal property loan has been supported by Fannie or Freddie under DTS since its enactment 15 years ago.” Chattel loans, personal property loans, chattel capital loans and home only loans are synonymous manufactured housing lending trade terms.

“As MHARR made clear in its comments, this impasse, which leaves the vast bulk of the manufactured home financing market completely unserved in violation of the DTS mandate, is unacceptable and cannot continue. That is especially the case with the manufactured housing market having entered a severe downturn, beginning with the third quarter of 2022, which has seen the production of new HUD-Code homes plummet year-over-year by a factor of more than 30%.”

In my opinion, the GSEs (government-sponsored enterprises Fannie Mae & Freddie Mac) have been ‘burned badly’ during previous manufactured housing industry downturns. The last one occurred at the turn of this century, when our poor chattel lending practices forced annual MH production to plunge from 392,943 new HUD-Code homes in 1998, to 250,500 two years later, and on down to 48,789 by year 2009. At year end 2022 we were finally back over 100,000 units with 112,886 shipped. However, today GSE’s career executives simply will not risk their livelihoods endorsing what they evidently view as a flier (‘risky or speculative venture’) in behalf of our industry! There’s really no other way to view this sad state of bureaucratic malaise and inaction.

So, what’s to be done? Ideas, suggestions and more are welcome via gfa7156@aol.com

George Allen, CPM®Emeritus, MHM®Master, MHI Emeritus member, & RV/MH Hall of Fame enshrinee.

Blog Posting # 751, Copyright 21 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-gassed, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ year business career in MH and community ownership/management.

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

RVs as Affordable Housing

I’m asking for some help here. For the past year or so I’ve been researching and preparing an academic article on the subject of ‘RVs as Affordable Housing’. It’s been a fascinating, but at times frustrating, journey. While it’s well-known there’s more than a million ‘fulltime RVers’ in the U.S. today, there’s absolutely no handle, so to speak, on the number of RVs being used as fulltime housing. And that’s where you might come in – as a source of information for me. If you have any experience whatsoever with folk living fulltime in one or another type of RV – as their residence, please write or call and let me know what you can tell me. See introductory paragraph, above, for contact information. And Thanks for helping.

A few more scattered thoughts on this subject. Early in the article I’ll be defining ‘affordability’ in terms of the commonly-accepted 30 percent Housing Expense Factor (‘HEF’); i.e. ‘Housing is affordable when an individual or household’s Annual Gross Income (‘AGE’), or local housing market’s Area Median Income (AMI’) – identified by postal zip code & available online via zipwho.com, can lease a conventional apartment and or buy a home (or RV) in this local housing market, using no more than 30 percent of said AGI or AMI for shelter & its’ related household (utility) expenses.’ E.g. $50,000 AGI/AMI X .3 HEF = $15,000 or $1,250/month available for rent or mortgage and PITI (principal, interest, taxes, insurance) and household expenses. That’s ‘affordability’ defined.

I also realize RVs are not built to any of the housing codes (including HUD-Code), since they are intended to be temporary shelter as one travels, vacations, and otherwise. It’s the ‘otherwise’ I’m attempting to build this affordable housing case upon. How so? Well, for decades I’ve experienced itinerant construction workers living in RVs on rental homesites within land lease communities; same with homeowners/site lessees who own and live in a manufactured home in northern climates during spring, summer and fall, but relocate to their parked RV ‘down south’ along the Rio Grande in Texas, throughout Florida, and other Sunbelt regions. Can you provide additional examples of real or quasi-residency in recreational vehicles? Sure would appreciate your input!

Manufactured Housing’s Achilles’ Heels!

Do you know the story of Achilles’ Heel? In Greek mythology, Achilles’ mother Thetis, to make her newborn son immortal, submerged him while holding him by one heel. Later in life, Achilles was killed by Paris’ arrow striking that unprotected part of Achilles’ body. Since then, the weak point of a person or object is referred to as its’ Achilles’ Heel. For example; with nuclear power, the Achilles’ Heel is the difficulty in getting rid of radioactive waste.

With that said; as I perused Harvard Joint Center for Housing Studies’ (‘HJCHS’) recent study:

‘Comparing the Costs of manufactured and Site-Built Housing’, I came across a street view (labeled as Figure 1) of a CrossMod Home, with this comment: “…currently only comprising a small percentage of total manufactured homes sold annually….” And, once again, asked myself ‘Why is this so?’

Went back and looked at the photo closely. Know what? There are no gutters and downspouts shown on this particular CrossMod Home. This is important because the study goes on to state: “CrossMod’s enhanced appeal is a function of a set of specific design standards intended to make the homes less distinguishable from site-built homes.” Well there it is! CrossMod’s Achilles’ Heel! No gutters and downspouts! When was the last time you saw a brand new, ready-to-move-into site-built home without gutters and downspouts? Never. YES, this is indeed a small, a minor point – and not ‘the first time around’.

What do I mean by that? Ever since there’s been conventional stick-built housing on scattered building sites conveyed fee simple and in subdivisions, there’ve been private contractors advertising ‘roofing, siding, and gutter’ services. Early on, ‘mobile homes’ needed none of those services, as they featured metal roofing, metal siding, and no gutters – or in a word, three Achilles’ Heels! Well, we first replaced metal with aesthetic appealing siding material and addressed the first Achilles’ Heel. Then we replaced metal roofing with shingles, addressing the second Achilles’ Heel. And now we should consider how much better HUD-Code manufactured housing would/will look with gutters and downspouts. That is to say, do away with the third and final Achilles’ Heel of manufactured housing. What do you think?

Think I exaggerate? Here’s yet another example of an Achilles’Heel holding our industry/realty asset class back from widespread social and consumer acceptance. Consider the perennial image-challenges our industry faces where land lease communities are concerned. There are some (maybe many?) fine communities throughout the U.S., but the ones who routinely tarnish our rep are those with visible indicators of marginal to poor property management! Seriously. Capable, experienced, professional property managers make all the difference as to whether a land lease community, in the local housing market, is a patent eyesore or promotes a desirable lifestyle. Professional property management has been and continues to be, in my opinion, the veritable Achilles’ Heel of this unique type investment real estate. Consider this: no other form of commercial real estate has fewer trained and certified property managers at work on-site than among land lease communities nationwide! A first step in the right direction? Purchase a copy of ‘Community Management in the Manufactured Housing Industry’ (via www.educatemhc.com) and commit to implement professional property management at your property or properties! 

So, it’s ‘gutters & downspouts’ for manufactured homes and ‘professional property management’ for land lease communities! It’s time to rid ourselves of all Achilles’ Heels!

ESG Distorts Markets & Drives Up Costs of Insurance & Housing

In a recent MHI newsletter they described Bill Boor’s ((MHI Vice Chairman & Pres/CEO of Cavco Industries) recent testimony before a Housing & Insurance Subcommittee, titled ‘How Mandates Like ESG Distort Markets & Drive Up Costs for Insurance & Housing’.

What’s ESG? A politically popular effort to stimulate investment in corporations embracing Environmental, Social, and corporate Governance policies and measures, ostensibly addressing the good of society at large. While ESG has been around since 2004, it only recently has become accused of ‘greenwashing’, i.e. green marketing deceptively used to promote products as being environmentally friendly.

In any event, Bill Boor criticized the Department of energy’s (‘DOE’) Energy Conservation Standards for Manufactured Housing “…as an example of a federal agency implement an environmental policy without fully understanding the broader consequences.” Specifically, DOE fumbled its’ effort to address ‘E’ (environmental) at the cost of ‘S’ or social consequences; i.e. higher cost of new HUD-Code manufactured homes.

RV/MH Hall of Fame Draws Nigh…

Where will you be the evening of Monday, 21 August 2023? Hopefully with many of your manufactured housing industry peers at the annual RV/MH Hall of Fame Induction Banquet in Elkhart, IN. I certainly plan to attend, along with a dozen other close friends – so far. Give the matter some thought, then join us for the festivities. For tickets, phone (574) 293-2344.

If you have time to spare – and need firsthand training on marketing and selling new HUD-Code homes on-site in land lease communities, plan to stay over on the 22^nd & 23^rd, to attend IMHA/RVIC’s annual MH FacTOURy tours and seminars at the RV/MH Hall of Fame. For more info, phone (317) 247-6258.

Some of us make it a point to arrive a day early, on Sunday the 20^th, to do some topnotch networking at the Hilton Garden Inn, along the interstate north of Elkhart. Phone (574) 970-4444 for reservations. Then, the next morning, travel the short distance to the Hall of Fame facility to tour the still new Manufactured Housing Exhibit Hall. Well worth the visit. And then, some of us will adjourn to the library upstairs to meet and discuss a variety of topics. This year, I’m bringing a supply of the recently updated booklet, Who Will Preserve Your Legacy? Answer: You! We just completed a mass mailing to dozens of executives around the U.S. who have compelling stories to tell – personally and corporately. Feel free to join us – but let me know ahead of time of your interest, so I’ll have enough copies of the booklet to hand out.

So, do you get the idea, this is where to be on the 20^th– 23^rd of August 2023? It surely is. Hope to see you there!

Estimated National Rental Homesite Rate?

According to the July/August 2023 issue of ‘Multifamily Executive’ magazine, quoting Yardi Matrix, $1,716 is the average U.S. conventional apartment asking rent rate. Applying the widely-referenced 3:1 Rule, 1/3^rd of $1,716 is approximately $572.00. So ‘maybe’ the estimated national rental homesite rate within investment grade land lease communities is close to $572.

George Allen, CPM, MHM

Blog Posting # 750, Copyright 14 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ year business career in MH and community ownership/management.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member  of the Manufactured housing Institute (‘MHI’), RV/MH Hall of Fame enshrine, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books about MH, communities, business & management wisdom & prayer.

A Potpourri of Solutions to Boost MH Sales!

First off, there is a problem – a challenge! 2023 year-to-date (‘YTD’) manufactured housing production (i.e. sales) is 33.8 percent below what it was a year ago! This is no longer a surprise, as this latest profitability slide has been in place for several months. The QUESTION IS, what can be done to lessen and reverse this disturbing trend? As you expect from me, I’ve read much in our trade literature, received helpful feedback from industry leaders, and now report to YOU what I’ve learned.

In a recent communique from the Manufactured Housing Association for Regulatory Reform (‘MHARR’), Mark Weiss describes three – maybe four factors:

1. Call for forthright and continuing attack on discriminatory and exclusionary zoning laws that target manufactured housing and manufactured housing consumers – to which I’d add, land lease communities and their tens of thousands of homeowners/site lessees! Note. Since MHRR clearly does not include ‘communities’ in this factor; who does? By design, it should be the National Communities Council (‘NCC’) division within the Manufactured Housing Institute (‘MHI’). To learn of MHI efforts to this end, visit MHI.org and ask what they’re doing to this end.

• Ongoing need to improve availability and competition relative to manufactured home personal property (chattel) lending. In this instance, remedial action has to come from Government Sponsored Enterprises (‘GSEs’) Fannie Mae & Freddie Mac, as well as Ginnie Mae’s FHA Title 1 program. To date, little to no implementation of GSEs’ Duty to Serve (‘DTS’) mandates in regards to facilitating manufactured home chattel loans. And Ginnie Mae, to date, has only been making promises of future action. So, as you can see, we’re going nowhere, slowly.

• ‘Scrapping the Devastating DOE Energy Rule’. Here MHARR appears to blame the threat of this new rule for the 33.8 percent collapse in new HUD-Code housing production and sales 2023 year to date. No question this ill-conceived rule would have a devastating effect on new HUD-Code housing manufacture as well as unit pricing, but it is not the whole story. For example; many feel HUD’s ‘on again off again’ very expensive retrofitting of rental homesites in land lease communities contributes to this present day sales shortfall. Solution? IMHO, repopularize and approve the Frost Free Foundation (‘FFF’) system that works perfectly when properly installed.  

• Then there’s the reemerging question about removal of ‘permanent chassis’ wording from the HUD-Code. Genesis of this discussion point is the draft ‘ROAD to Housing Act’ published recently by SC Senator Tim Scott. This subject emerged before, prior to the enactment of the Manufactured Housing Improvement Act of 2000 – 20 years ago! Pros & cons? Depends on who you talk to. Some feel removal of ‘permanent chassis’ requirement would free-up manufactured housing design and likely increase market share. Opponents? Concerned manufactured housing will be changed to the point it would no longer be the truly unique type factory-built housing it is today – and die.

And then there’re suggestions that arrive from all over the industry. In no particular priority:

1. Encourage sale and placement of other forms of ‘affordable’ housing, within ‘communities’ and on scattered building sites conveyed fee simple. According to the International Code Council’s (‘ICCs’) recent Off-site Construction Summit (June 2023) in Washington, DC, this includes ‘tiny houses’, RVs, modular pods, customized shipping containers, panelized systems, and of course, manufactured homes. Interestingly, the recent recreational vehicle trend of using RV units as affordable housing (i.e. by fulltime RVers & would be homeowners) has attracted attention among researchers and academics in search of solutions to this nation’s affordable housing crisis. For an article on this subject, read VISIONS magazine this fall.

• Then there’s the once controversial, but now widely accepted, seller-financing of new manufactured homes via Lease-Option contracts! This trend has been boosted by the realization among ‘community’ owners/operators, of advantages of new home placement instead of resale home rehab, sale, and financing. To this end, the quick sale and installation of new homes, and infilling of ‘communities’, is enhanced by availability of floor plans, warranties, and new home appeal. To learn how all this is done, attend the MH FacTOURy Summit at the RV/MH Hall of Fame facility on 22 & 23 August. Phone (317) 247-6258 for more information and to register, also IMHA/RVIC.org. *1

• And then there’s advertising of our MH brands on a national scale. This concept continues to ‘go begging’ except for Clayton Homes on internet and social media platforms. I can’t visit Facebook without running into attractive photographs of HUD-Code manufactured homes available from Clayton Homes. Why isn’t everyone doing something similar?

And the ‘beat goes on’. Here I’ve just skimmed the surface of measures to consider to rejuvenate manufactured housing production and sales. Surely you must have ideas to this end. If so, please let me know via gfa7156@aol.com

End Note.

1. If you’re going to be in Elkhart for the MH FacTOURy Summit on 22 & 23 August, why not arrive a day earlier and attend the annual RV/MH Hall of Fame Induction Banquet? To purchase tickets, phone (574) 293-2344.

Property Management ‘Gun for Hire’

Are you the owner/operator of a portfolio of land lease communities looking for a new executive property manager to maximize the profitability of your holdings? Well, there happens to be a well-qualified, long experienced professional property manager available to hire. The individual is Institute of Real Estate Management (‘IREM’) certified, during the last two or so decades has well-managed some of the largest land lease community portfolios in the U.S., and knows the manufactured housing industry inside and out, i.e. has established effective on-site new home sales and financing programs at dozens of communities.

If interested, send me an email inquiry via gfa7156@aol.com, asking me to forward your email to the individual described here.

Semi-famous Quotation of the Month

“I believe if you hate police officers, the next time you are in trouble, call a crack-head!” Senator Kennedy (Louisiana)

George Allen

Blog Posting # 749, Copyright 7 July 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and txt resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.eduatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40= years business career in MH and community ownership/management.

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

And the Precipitous Slide Continues!

According to EducateMHC’s ‘MH Shipment Volume @ May 2023 & Stock Market Report @ 4 July 2023’, between May of 2022 and May of 2023, there’s been a 33.8percent decrease ‘year to date’ in the number of new HUD-Code manufactured homes produced! Specifically, comparing months of May 2022 and May of 2023, there were only 2,582 new HUD-Code homes produced this past May!

So, as an industry, we’re still faced with this unsolved conundrum (‘riddle, hard question’):

Why, in the midst of a widely-recognized ‘affordable housing crisis’ throughout the U.S., are we continuing to produce fewer and fewer of the most affordable housing type (i.e. factory-built homes) available to the American home buying consumer? Still no national forums addressing this serious matter. The only tiny light at the end of this tunnel seems to be Clayton Homes using social media (e.g. Facebook) to market their single section HUD-Code housing product. Why aren’t others (e.g. CAVCO, Skyline/Champion)?  Obviously, much more needs to be done – especially where ameliorating (‘making better’) local regulatory barriers to all forms of affordable housing is concerned!

You have ideas and suggestions to this end? We’d appreciate hearing them: gfa7156@aol.com

STILL CONFUSED?

You should be – if referring to the unclear and confusing musings put forward in the aforementioned (See blog # 748 last week) ‘Trojan Horse – Looming Impact’ two topic mini- treatise published recently on MHPro News letterhead with mention of MHARR.

Here’s the simplest manner, in the next two paragraphs, by which I can communicate the bewilderment I experienced reading and reading this document:

Is it good or bad, for an industry presently already in a precipitous (housing production) slide, to be able to sell and finance more new manufactured homes with ‘small dollar mortgages’ – or not? Sounds good to me. But constant mention, in said report, of “21^st, VMF & MHI’ as being shills (my term) for Berkshire-Hathaway, does not help resolve this matter at all!

And, ‘removal of the requirement for a permanent chassis’, relative to manufactured housing. Here, one is asked to identify as an industry purist and Luddite (i.e. Make no changes!) OR, be open-minded to the possibility of popularizing manufactured housing (sans permanent chassis) as a new type (factory-built) housing. And, like the previous $ red herring, suggestion that removing permanent chassis is akin to the ‘bait & switch’ “CrossMod fiasco” – without explanation, does not help resolve this matter at all – either.

Yes, this proposed ROAD (‘Renewing Opportunity in the American Dream to Housing Act’) bill, as parsed by these identified writers, is that confusing and non-resolute!

And, if that wasn’t enough confusion to introduce relative to manufactured housing issues, learn now about the International Code Council (‘ICC’), and how it’s allegedly – along with the usual ‘whipping boys’ (i.e. Berkshire Hathaway, Clayton homes, et. al.), promoting widespread use and recognition of ‘off-site construction’ – structures, buildings, homes, and other variants. At a June 2023 conference in Washington, DC., off-site home building was described as “panelized systems, manufactured homes, tiny houses, recreational vehicles, modular pods, and shipping containers.” So, is this good or bad for our ailing industry? The writers of this report put it this way: “legislation…may have outcomes that are potentially harmful for HUD-Code manufactured housing?” To which I reply: ‘How so?’ Reads more like a ‘chicken little’ scenario than the result of reasoned thinking and discussion. So, are we purists and Luddites, or are we willing to risk ‘opening the MH tent’ to unexplored possibilities? That appears to be ‘the question’ afoot these days.

OK, that’s as far as we’re going this week, relative to the ‘Trojan Horse – Looming Impact’ report, a.k.a. ROAD proposed legislation. Your responses, ideas, suggestions? Gfa7156@aol.com

George Allen

Blog Posting # 748, Copyright 30 June 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815, email: gfa7156@aol.com, or visit www.educaatemhc.comn, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ years business career in MH and community ownership/management.

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

IT’S OK TO BE CONFUSED!

Did you see it? Did you read it? Did you understand it? In any event, it’s OK if you’re confused by the world’s longest title (Or was it a headline?) quoted here:

“Trojan Horse-Looming Impact? Troubling Questions, History Raised on Potentially Deceptive ‘Bait and Switch’ Housing Legislation Posed to Harm Manufactured Home Industry? Facts and Analysis.” Yes, that’s ‘whatever it was’ in its entirety. Does it make sense to you? Me neither, even after I read and reread all seven single-spaced typed pages.

So, what’s the genesis of this mysterious document? “A ‘discussion draft’ of housing legislation being circulated by Senator and 2024 Presidential Candidate Tim Scott (SC-R) is raising serious questions and concerns about its intent and potential impact on manufactured housing regulations and the manufactured home market.” So, something to which we should pay attention.

Well initially, the unnamed author or authors*1 offer what is couched as an ostensible expose’ within the manufactured housing industry, but soon winds up an ostentatious (‘pretentious display’) of animus towards the “…Berkshire Hathaway (BRK’) and Clayton Homes, Inc. – affiliated lenders, 21^st Mortgage Corporation and Vanderbilt Mortgage and Finance (‘VMF’).” Specifically, the expose’ writers are concerned this bill would force the Consumer Financial Protection Bureau (‘CFPB’) to rewrite regulations to “allow for salaried originators of residential mortgage loans, that originate small dollar mortgages (i.e. original principal obligation of not more than $70,000), to encourage additional lending for small dollar mortgages.” The downside? Gives the animus targets increased ability to sell more new HUD-Code homes.

And two paragraphs later, “The other significant provision on the proposed ROAD*2 bill would remove the requirement for a ‘permanent chassis’ that is part of the definition of ‘manufactured home’ contained in both federal manufactured housing law and regulations.” Now there’s something to get one’s teeth into, as ‘permanent chassis’ has been part of manufactured housing since 1974-76, and a contentious matter during times past.

So, what do the author/authors of this warning message appear to fear? “While superficially appealing, the potential impacts of these provisions – and particularly the change in the definition of ‘manufactured home’ contained in the industry’s federal regulatory law – could be extremely far-reaching and could include many unintended (or quite possibly intended) negative consequences.”

At this point in the seven page treatise, the writer(s) go down into the weeds of past MH history and internecine squabbles of years past re chattel finance and permanent chassis removal.

That’s as far as I’m going to take you in this week’s blog posting. You should certainly want to read more. To obtain a copy of ‘Trojan Horse-Looming Impact?’ phone MHARR via (202) 783-4087 and request a copies of their cover letter and ‘discussion draft’ of ROAD to Housing Act.

In the meantime, share your feelings about this matter (i.e. expose) and the two issues pursued (i.e. relaxed financial regs relative to chattel capital, and the ‘permanent chassis’ matter. Do so via gfa7156@aol.com

End Notes

1. Author or authors? While the document is published on MHPro News letterhead, and mention of MHARR is made within the instrument, no individual names are listed. But for MH folk, the unique writing style and extreme wordiness, as well as predilection, suggest the sourcing. Your guess?

• ROAD = abbreviation for Renewing Opportunity in the American Dream to Housing Act, which was publicly released to the Senate Banking, Housing and Urban Affairs Committee on 25 April 2023.

Identity Theft Prevention Checklist

While the following six suggestions have been around for a while now (since 2003), they’re worth repeating here:

• Check your credit report annually
• Review your bills and statements on a regular basis
• Guard your mail and trash from theft. Use a shredder.
• Use caution when giving out personal information
• Copy the contents of your wallet or purse
• Report lost or stolen checks or credit cards immediately

George Allen

Blog Posting # 747, Copyright 23 June 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, from SmittyAlpha6 to MHMaven! – describes combat adventures in Vietnam and 40+ years business career in MH and communities.

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

Highlights from ‘State of the Nation’s Housing’ 2023

Following information and statistics are quoted from the Harvard Joint Center for Housing Studies (‘HJCHS’) report titled ‘The State of the Nation’s Housing’, aired on 21 June 2023.

“The sharp interest rate hikes over the past year continue to impact housing markets and affordability for both homeowners and renters across the U.S., according to our new (report) released today.”

“Since the beginning of 2020, asking rents in the professionally managed sector are up by 24 percent, while home prices are up 37.5 percent.” Here, ponder the rental homesite rates we’ve seen skyrocketing in recently-purchased portfolio-sized land lease communities, as well as increases in wholesale and retail sale prices of new HUD-Code manufactured homes. Consequently, where the latter stat is concerned – per EducateMHC’s blog posting # 746 last week, new HUD-Code home production is down a whopping 30 percent from 2022 YTD!

“(Mortgage) Payments on median-priced homes shot up from $2,500 to $3,000 as annual interest rate on 30-year fixed-rate mortgages jumped from 4.2 to 6.5 percent. Result was a 22 percent annual decline in number of mortgages originated to first-time homebuyers in 2022, including a year-over-year drop in the fourth quarter of nearly 40 percent, as over 2.4 million potential homebuyers were priced out of homeownership.” How many blog readers out there remember the early 1980s, when 30-year fixed-rate mortgages were in the neighborhood of 10 percent and higher? So, this could get worse before getting better. But let’s hope not!

“Between 2019 & 2021, the U.S. saw the most significant drop in housing affordability in years. The number of cost-burdened homeowners – defined as those spending more than 30 percent of their income on housing – increased more than any time since the housing boom of 2005-2007.” Also remember; it was at the turn of the century, 1998, that our acme level of production (i.e. 372,943+/- new HUD-Code homes) plummeted as well, by year 2009 when only 48,789+/- new HUD-Code homes were produced.

In conclusion, “As pandemic-era assistance programs wind down, housing remains prohibitively costly for millions of households. More lower-cost housing is clearly needed but expanding development will require zoning reforms to support a broader range of housing types and investments in off-site construction methods that could reduce costs.” Did you catch that? The writers, here, are clearly referring to HUD-Code manufactured housing, maybe even ADUs*1 like ‘tiny houses’*2, recreational vehicles like ‘park models’*3, and more*4. This is also a nod to the need for zoning reforms nationwide.

End Note.

1. ADU = Accessory Dwelling Units, a.k.a. ‘granny flats’. Approved in CA. as secondary dwelling on residential building site.

• Tiny Houses now available for purchase as kits from Home Depot; 21 models ranging in price from $4,000 – $40,000. Also marketed by Lowe’s and on Amazon.com

• Park models; less than 400 sq. ft. In size. And other RV configurations.

• Watch for ‘sheds’ & portable cabins to appear on the affordable housing scene. For more information, read ‘Shed Builder’ magazine, where the Shed Price Index pegs $4,887 as the nationwide average price for a 12 X 16 shed (200+/- sq. ft.).

Learn from Apartment Owners/Operators!

Most land lease community homeowners/site lessees (i.e. ‘your residents’) are already online. But are you actively converting positive resident experiences into online reviews? I doubt it.

Here’s guidance for multifamily rental property owners cited in the May/June 2023 issue of ‘Multifamily Executive’ magazine, pp. 16-18

Respond to all Reviews. How? ‘Respond with gratitude and care’. Why? “…this requires constant monitoring, (as) it is key to not only improving and increasing future review (by residents), but also de-escalating negative sentiments.

Boost More Optimistic Reviews. “A healthy online reputation is further supported by the volume of positive reviews.” Don’t be shy about asking residents to post positive reviews!

Hearing the Negative Feedback. “Unsavory events are heightened when low-star reviews are left for anyone to read.” Validate, resolve and communicate are key actions when handling negative reviews.

View Low-Star Reviews as Opportunity. These are often valuable points and a time for growth and improvement.

Bottom line? “As prospective residents begin their search, it is evident online (positive & negative) reviews can set a property apart.” So, make special effort to keep your property’s online reviews as positive as possible!

Business Card Truism

I have collected many business cards during my career. Especially looked for unique messages on the reverse or verso side of said cards – to the point I identified 50 different type messages (e.g. humor, guarantees, mini calendars, appointment templates, mission statements, quotations, HOW TO instructions, photographs, bilingual, mini maps), and 40 more topics. If you have a copy of my ‘Chapbook of Business & Management Wisdom’, there’s an entire section therein titled: ‘Is Your Business Card a ‘Keeper’?’

Anyway, a land lease community owner and veteran independent (street) MHRetailer friend of mine, close to retirement, gave me his newly minted card recently. On the verso side he states:

“I am fully aware my youth has been spent, my ‘get up and go’ has ‘got up and went’.

But I really don’t mind when I think with a grin, of all the places my ‘get up’ has been.

When I was young it was wine, women & song. Now it’s beer, Medicare & sing along with Welk.”

If you have a unique or creative message on the verso side of your business card, please send me a sample copy via GFA c/o Box # 47024, Indianapolis, IN. 46247.

Did You Know?

The abbreviation, or name STAN, is an emergency plea for assistance! The letters stand for:

SEND THE AUTHORITIES NOW!

Blog Posting # 746, Copyright 16 June 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing1 EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And, SWAN SONG is a history of land lese communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven! – describes combat adventures in Vietnam and 40+ years business career in MH and communities.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute (‘MHI’), RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S> marines, and author/editor of 20 books about MH, communities, business & management wisdom & prayer.

‘Oh No, Here We Go (Down) Again!’

Quoting from the Manufactured Housing Institute’s (‘MHI’) Monthly Economic Report for April 2023: “…the 6,676 new HUD-Code manufactured homes produced during that month is a 13 percent drop from the previous month, and 34 percent drop from April of 2022. And, per year to date (‘YTD’), we’re at 27,850 units, down a whopping 30 percent from 2022 YTD #.

Now here’s what’s really scary about this sinking performance: Multiply the 2022 annual MH shipment total of 112,886 units by .70 (70%) – the reciprocal of the 30 percent just cited, and one calculates a possible 2023 year end production performance of only 79,020 new HUD-Code homes! Know what? If that turns out to be the case, one has to look all the way back to year 2016 to find a greater annual production total, i.e. 81,136. Bottom line, if this happens? As an industry, we’ll have regressed seven years!

As I remarked to a fellow manufactured housing aficionado recently; the sad thing in all this talk about falling MH sales and production, is that there is NO national forum where this sort of challenge is presented, discussed, and resolved among major industry ‘players’ – manufacturers, independent (street) MHRetailers, and community owners/operators alike! To my knowledge this sort of strategic planning does not occur at any of our national trade advocacy bodies, maybe only at the annual SECO Conference in Atlanta, GA. @ (10 & 11 September 2023. If you know or believe differently, please let me know via gfa7156@aol.com

‘Who Will Preserve Your Legacy? Answer: You!’

Five years ago I penned and self-published the booklet titled ‘Who Will Preserve Your Legacy? Answer: You!’ Back then we knew of ten published autobiographies of pioneers and leaders from the manufactured housing industry and land lease community ownership. Well, over the years, the booklet went through several printings, and now four additional autobiographies have appeared on the scene. So, it became time to update and expand the coverage of the original booklet.

How is this second edition different from the first? It contains these four new autobiographies; here’re review summaries from the booklet:

Matthew Jenkins, DVM. During his lifetime, Dr. Jenkins was a U.S. Air Force officer, successful veterinarian, portfolio owner/operator of land lease communities, interim president of Tuskegee University, and generous philanthropist. His autobiography, ‘Positive Possibilities, My Game Plan for Success’ was published shortly before his death in 2017. It’s available for purchase via amazon.com (As an aside, I sold Matthew a community back in the early 1980s)

Jim, Ralph & Jeff Scoular of South Dakota, co-authored ‘Leap of Faith’, the ‘Story of an Industry, a Family & Unmovable Values.’ This three generations of Scoular family history in MH and land lease communities is hallmarked by (late) Ralph’s induction into the RV/MH Hall of Fame in 1998, followed by his son Jim in 2005. The book is available directly from the RV/MH Hall of Fame in Elkhart, IN. (Another aside: Scoular family financed much of the new MH exhibit at the RV/MH Hall of Fame in Elkhart, IN.)

George O’Leary’s ‘The O’Learys of Beechwood’, traces O’Leary family history ‘From the Penal Times to the War of Independence and beyond, with memories of my life and career from County Tipperary (Ireland) to Tucson, AZ. This 225 pages family narrative is accompanied by colorful photographs. Available only via George@rinconcountry.com (The aside here? I only recently met George. He’s in his nineties and has ‘seen it all’ in RV & MH environments)

George Allen’s ‘From SmittyAlpha6 to MHMaven’ describes the author’s life from childhood, through college and marriage, to a combat tour in the Republic of Vietnam, then a 40+ year career in MH and land lease communities. Available via www.educatemhc.com (My aside? Sincerely hope this autobiography inspires my peers to begin penning their own stories)

In addition to these review summaries, there are lengthy quotes from each autobiography, making this a comprehensive collection of Lessons Learned by no fewer than 14 industry and realty asset class businessmen (nine of whom are RV/MH Hall of Fame enshrinees).

FYI. I know a couple women entrepreneurs active in MH and communities who’ve started recording their memoirs (i.e. ‘short stories’) and possibly, in time, their autobiographies.

My goal is to put a copy of this HOW TO booklet in the hands of older MH and community practitioners who have a ‘story to tell’, whether it be personal/career oriented, or the story of the business enterprise they founded and nurtured over the years. Cost is $20.00 per booklet (postpaid). Interested? Email me via gfa7156@aol.com – be sure to include your preferred USPS (postal) address. Or mail your check and postal address to GFA c/o Box # 47024, Indpls, IN. 46247.

‘Go Woke, Go Broke’

The phrase ‘go woke, go broke’ has been used a lot of late, to describe effects on an increasing number of firms who’ve decided to prioritize a woke agenda over the sensibilities of their customers. In many cases, this has resulted in significant financial loss.

When queried as to why large firms have been forced to act in what appears to be a self-destructive manner, the answer is oft ‘follow the money’. This, in turn, refers to several dominant investment firms who’ve been leaning on targeted companies to promote progressive values; in particular the ESG agenda (i.e. environmental, social, and corporate governance – or just plain governance). The ESG agenda is intended to be part of a business organization’s strategy to consider needs and ways by which to generate value for all stakeholders – employees and customers alike. Corporate choice? Give in to such demands or suffer severe long-term consequences via their pension funds, directors’ bonuses, and other avenues. To date there are at least 60 large firms who’ve succumbed to this outside pressure.

Watching History Pass…

This time of year (Spring) 30 years ago I was planning the hosting of an historic national gathering of (then) manufactured home community owners/operators. Unbeknownst to the realty asset class in general, several large portfolio firms were quietly preparing to ‘go public’ as real estate investment trusts (‘REITs’) in the near future. But there were two challenges: First; Wall Street analysts were unfamiliar with the workings and profit potential of this unique income-property type; i.e. leasing of rental homesites to manufactured housing homeowners. Second; there was no effective national advocacy for this type commercial real estate investment. The only quasi representation occurred periodically during meetings of a volunteer committee under the auspices of the Manufactured Housing Institute (‘MHI’). That was it!

As it turned out, the historic national gathering of community owners/operators occurred on 31 August 1993. At that time 19 executives met for a daylong strategic planning meeting in Indianapolis, IN. The long-ranging results of that meeting are documented in a book titled: ‘The first 20 Years!’, authored by the late Bruce Savage.*1

As it turns out, the 30^th anniversary of that historic meeting will be celebrated during August of 2023. So, watch for a blog posting, in that timeframe, that will identify who those community pioneers were – and what they’re doing today. For now, however, suffice it to say, this meeting was the precursor to the launching of MHI’s National Communities Council (‘NCC’) division on 1 January 1996 under the leadership of Jim Ayotte, CAE. So, more later….

End Note.

1. This book still available for purchase via www. Educatemhc.com It is also archived in the George Allen Corporate Library Collection as part of the RV/MH Hall of Fame library in Elkhart, IN.

Average National Apartment & Community Rent Rates

According to ‘Multifamily Executive’ magazine, for May/June 2023, $1,706 is the average U.S. apartment asking rent in April; this us $3.00 from March 2023 – per Yardi Matrix. Know what this means? Applying the widely known and used Traditional 3:1 Formula for calculating rental homesite rates in any local housing market; the average national land lease community rental homesite rate during April 2023, was $569.00/month. Specifically: $1,706 divided by ‘3’ = $569.

INFAMOUS QUOTE OF THE WEEK

“What difference does it make?” (re: Benghazi). Hilary Clinton

George Allen

Blog Posting # 745, Copyright 9 June 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities, (a.k.a. manufactured home communities & ‘mobile home parks’0 comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com; or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes combat adventures in Vietnam and 40+ years business career in MH and communities.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of the Manufactured Housing Institute 9’MHI’), RV/MH Hall of Fam enshrine, retired lieutenant colonel of U.S. Marines, and author/editor of 20 books about MH, communities, business & management wisdom  & prayer.

California no longer a state, it’s a hedge fund!

“Things are crazy here in California, with most rental homesite rates in land lease communities averaging more than $1,000.00 per month! However, this has not affected new manufactured home sale prices in communities where they’re selling for $250,000 to $400,000 apiece.” How so? Prospective homebuyers “…are selling their stick-built homes for $750,000 to $1,000,000, then paying cash for new homes in these communities, and putting more than $500,000.00 in the bank – and still living in the area where they’ve resided for decades.”

“And installation costs have recently jumped 25 to 30 percent, to as much as 60 percent of new home cost! Also, we’ve seen an increases in new home cost go from $70 to
$110 per square foot on custom manufactured homes.”

Finally, as you’ve noted in previous blog postings, “despite the current demand for affordable housing, no new land lease communities are being built here in California. There have been fewer than five new communities built during the past 10 years!”  (Lightly edited, with the use of contemporary trade terms homesite and land lease community. GFA)

The previous three paragraphs are quoted from recent correspondence with a land lease community portfolio owner/operator headquartered in southern California.

Know what I miss most about no longer publishing the Allen Letter for community owners/operators? Just this: providing a public platform where businessmen and women across the U.S., can share their experiences, hopes, successes & shortfalls relative to their enterprises. And frankly, this is a big reason why I continue to move forward posting a weekly blog. So, if you’d like to vent or share about anything relative to manufactured housing and or land lease communities, consider this an invitation to do so. Simply email me via gfa72156@aol.com or send correspondence to GFA c/o Box # 47024, Indianapolis, IN. 46247.

‘FFF’ as Antihero of Manufactured Housing Installation

In literary terms, an antihero is a protagonist who conspicuously lacks heroic qualities. From a manufactured housing perspective, Frost Free Foundations are the default antihero of contemporary installation methodology! Meaning, in the minds and experience of veteran home installation specialists, the FFF ‘Alternative Shallow Frost Protected Foundation Design for Manufactured Homes’ – placed on rental homesites within land lease communities, on privately-owned homesites in subdivisions, and scattered building sites, when properly installed are superior to virtually every other type economical installation design.

In today’s world, the life of an FFF installation antihero is oft lonely and misunderstood.

How so? Well, looking back to early 2010, when there was no Frost Free Foundation methodology, a veteran installation consultant experienced a genuine epiphany; realizing water, soil and gravity, when properly controlled pursuant to the installation of a HUD-Code manufactured home, negates all need for extensive excavation, below grade piers, and other expensive measures! Yes, you read that right.

Next steps? Bring Emmanuel Levy of SBRA into the picture,*2 and find a civil engineering firm (Hayman Engineering*3) who’d research and prepare a White Paper describing a shallow frost protected foundation design for manufactured homes. Money was raised from various businessmen in the industry and from community owners/operators to fund this research and foundation design. When the final report was completed and circulated it received widespread attention and approval. HUD-Code manufacturers (e.g. Champion) began writing Installation Manual Addendums featuring the FFF design. HUD even came on board for a while.

So, just what are Frost Free Foundation protocols? First, when buying a manufactured home, obtain manufacturer’s official Installation Manual for that home. Ensure FFF design is a clearly approved method of home installation, sometimes including a Site Procedure Checklist. Then have a local registered engineer prepare a FFF plan tailored to the specific property or building site where home is to be installed. Ensure FFF plan does not violate any local ordinances, etc…

Proceed with home installation per FFF plan, using Site Procedure Checklist, if available, to include, but not be limited to:

• Soil test by a licensed soil tester
• All drainage diverted away from the home
• Homesite not in a flood hazard area
• Footings placed on undisturbed soil or fill compacted to 90% maximum relative density.
• Ground water table during winter season is below the local frost line
• Home has perimeter enclosure (‘skirting’) installed
• Where perimeter support is required (e.g. openings 4 ft. or greater), one of the following required: Option 1 = Installed according to adjustable brace per manufacturer’s instructions; Option 2 = Footing extended below the frost line
• The local authority having jurisdiction has accepted the FFF design for use under home.

The above information summarized from SBRA and Installation Manual Addendum for FFF per Hayman Engineering. This is neither legal nor engineering advice.

So where does FFF appear to stand relative to HUD installation protocols for HUD-Code manufactured homes? It’s a mixed bag. FFF does not occur in HUD-administered states because HUD inspects all home installations. However, in states san HUD-administration, regulation continues to be pretty much in accords with housing manufacturer’s Installation Manual guidance, often including FFF.

Over time, properly emplaced Frost Free Foundations under manufactured homes continue to validate design principles of keeping ground water away from under homes and necessity of properly installed skirting. Proof? How many, if any, complaints from consumers about properly installed FFFs?

Yes, it’s time for HUD to once again evaluate the Frost Free Foundation ‘Alternative Shallow Frost Protected Foundation Design for Manufactured Homes’.  

End Note.

1. Epiphany. ‘A sudden, intuitive perception of or insight into reality or the essential meaning of something, often initiated by some simple commonplace occurrence.’

• SBRA = Small Business Research Alliance, NY, NY. (212) 496-0900X10; affiliated with the Manufactured Housing Institute (‘MHI’) in Arlington, VA.

• Hayman Engineering, Inc., Paul W. Hayman, MS, PE.

George Allen

Blog Posting # 744, Copyright 2 June 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable factory-built housing! And land lease communities, (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC alone is the online advocate, historian, trend tracker, and text resource for these two business models! To input this blog or connect with EducateMHC, telephone (317) 881-3815; email: gfa7156@aol.com; or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional community management text in print today! And, SWAN SONG is a history of land lease communities, and official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven! – describes combat adventures in Vietnam and 40= years business career in MH and communities.

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

Drs. Samuel (‘Sam’) & Laurie Landy

Curry College, located in Milton, Massachusetts, recently bestowed honorary doctorate degrees on Samuel A. Landy, Esq. and his wife Laurie for their respective achievements in the business marketplace and charitable social work.

Sam is well known and respected as CEO of UMH Properties, a REIT that provides workforce housing in the form manufactured housing and land lease communities (a.k.a. manufactured home communities). He founded the not-for-profit Open Space Pace, an organization dedicated to raising awareness about equine and agricultural industries in the state of New Jersey. Sam, a 1982 graduate of Curry College, by dint of his and his wife Laurie’s philanthropic generosity, brought the Landy Family Student Services Area in the college’s Learning Common into existence.

Laurie is a social entrepreneur with a degree in Occupational Therapy. Along with her husband Sam, founded Special Strides, a non-profit organization dedicated to improving the lives of individuals with disabilities through therapy, recreation, and education on a farm. Every week, approximately 130 clients enhance their lives through the partnership of the natural environment and engagement with horses.

Together, Sam and Laurie were honored by Curry College with honorary doctorate degrees.

Do You Have a Sam Zell Tale to Tell?

Last week, in blog # 743, I announced the passing of land lease community portfolio magnate Samuel Zell, founder and chairman of real estate investment trust MHC, Inc., cum ELS, Inc. Also recommended reading his interesting and entertaining autobiography ‘Am I Being Too Subtle?’ Told a personal tale or two relative to visits to Sam’s office in the early 1990s – and how Sam’s support was germane to the forming of an Industry Steering Committee in 1993, for better national advocacy, and consequent founding of the Manufactured Housing Institute’s (‘MHI’) National Communities Council (now division) in 1996. That alone is an historic achievement!

Well, as is oft said, ‘the ink was hardly dry’ on that manuscript when I started receiving notes and tales from readers regarding their experiences and memories of Sam Zell. Here’s one I found to be especially interesting….

“I went to Sam’s office building. He had each floor dedicated to a type of property. One floor had the operations for the manufactured home REIT, another for the office REIT, another for the industrial REIT, etc. In a large outer office, outside Sam’s private office…was a large motorcycle. It was Sam’s, who rides it to the office building, (then up in) a freight elevator…and to this outer office. He sits us in front of his very large desk. Behind this desk, on the wall, is a large picture of a very fierce-looking bald eagle in attack mode. The eyes are large fierce-looking, the beak  open and ready to pounce. Below the picture of the bald eagle is a picture of Sam in the same position of the eagle. In our half hour conversation I could not keep my eyes off the pictures of Sam and the eagle. Sam noticed I kept looking at his picture, then of the eagle. Finally he asked me what I thought his reason for putting the two pictures in that positon. I gulped and said, “Two birds of prey”. He said that was close enough, and thanked me for my honesty and candor.”

A final observation relative to the business wisdom of the late Samuel Zell. Here quoting from his autobiography, “This has always been a fatal flaw in U.S. real estate: the volume of development has been related to the availability of funds, not to demand.” Think about that. In good economic times what gets built? Whatever dream a developer has, whether really needed or not. Like when downtown condominiums are overbuilt – then converting them to apartments as the only way to fill them. Conversely – like today, when our nation is faced with a serious affordable housing crisis (i.e. record high demand), local regulatory barriers to all forms of affordable housing prevent the development of much-needed land lease communities just about anywhere in the U.S. If you haven’t done so already, visit amazon.com and order a copy of ‘Am I Being Too Subtle?’ by Sam Zell, and avail yourself of more of his business wisdom.

National Average Site Rent in 2022

According to a recent Wells Fargo Multifamily Capital press release, “the national average monthly site rent (in land lease communities, a.k.a. manufactured home communities & MHCs) was $613 for all-age communities and $686 for age-restricted (55+) communities. This compares to a national average conventional multifamily (apartment) rent of $1,715. MHCs continue to lead the housing sector in affordability and sustainable rent growth across the majority of U.S. markets.”

So, what’s your reaction to those statistics? Mine? Applying the Traditional 3:1 Rule for estimating rental homesite rates in any local housing market, divide the $1,715 figure by ‘3’. The answer suggests land lease community rental homesite rates nationwide should be in the neighborhood of $572.00 – considerably less than either of the survey totals put forth in the press release. All this confirms the widespread belief that community owners/operators are pricing themselves out of the affordable housing market! Which then raises the question, ‘How can MHCs continue to lead the housing sector in affordability and sustainable rent growth?’*1

End Note.

1. There is one offsetting rejoinder to the statistics cited above. For the most part, these rental homesite rent rates are characteristic of what we generally refer to as being ‘institutional investment grade-sized land lease communities’, i.e. properties containing more than 100 rental homesites apiece. Smaller properties, which actually comprise 75-80 percent of the national inventory of this investment real estate asset class, generally charge lower site rent rates per month than aforementioned ‘institutional investment grade-sized communities’.

Infamous Quote of the Week

“I believe you should be able to prove who you say you are when you vote.” Senator Kennedy from Louisiana.

George Allen