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

March 6, 2023

The ‘Five Ls’ of Housing* Non-affordability

Filed under: Uncategorized — George Allen @ 7:40 am

Blog Posting # 730, Copyright 3 March 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, 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 EducateMHC.com to order Community Management in the Manufactured Housing Industry (sole MH professional property management text available today); SWAN SONG, a history of land lease communities & official record of annual MH production totals since 1955; and, my autobiography, from SmittyAlpha6 to MHMaven – my combat adventures in Vietnam, & business career in MH & communities.

George Allen, CPM®Emeritus, MHM®Master, Emeritus member of MHI, RV/MH Hall of Fame Inductee, and retired lieutenant colonel of U.S. Marines.


The ‘Five Ls’ of Housing* Non-affordability

National Association of Home Builders (‘NAHB’) chief economist Robert Dietz says “…the real estate market is facing a ‘structural deficit’…caused by a shortfall in what he calls the ‘five Ls’: labor, lumber, locks, lending, and legal burdens.” Specifically, 1) a persistent skilled labor shortage, 2) fluctuating raw material costs, 3) increasingly expensive OEM appliances and parts, 4) rising interest rates on housing loans, and 5) large regulatory cost burden.

According to a National Association of Realtors (‘NAR’) spokesperson, (Housing) “supplies have declined to near-record lows, falling below one million units in December 2022….As a result, the U.S. is estimated to face a shortage of 3.8 million to five million homes, and that figure is growing.” Why? According to Senator Sherrod Brown (D-Ohio), “Combined sky-high rents with higher home prices with rising interest rates with too few homes on the market.” How high rents? Rent.com, in December, found the “…median monthly rent increased by 4.77 percent year-over-year to $1,978.” And when we apply the traditional 3:1 Rule of Thumb, for estimating land lease community rental homesite rates in any local housing market (In this case, using the national average), we calculate $690.00/month as a possible reference point.

A final related thought on the subject. “…many of the challenges facing the national real estate market also include the 1) age of housing stock, 2) the pressing need for energy retrofits and 3) residential properties that address seniors’ mobility needs.”

End Note. This material quoted from the 15-21 February 2023 issue of THE EPOCH TIMES, in an article titled ‘Affordability is ‘Greatest Challenge’ in Housing market: Experts’, on page A3.

Are you reading THE EPOCH TIMES ? You should be. Unlike most other secular news media platforms, this weekly newspaper eschews liberal political views espoused elsewhere and simply reports the Big Picture news, with details, ‘thinking readers’ value!


‘National MH Awareness’ Program Update

Eight interested parties met via a Zoom call from 4PM till 5:30PM, the afternoon of 23 February 2023. The group was comprised of four association executives, two freelance consultants, one corporate manager, and one retiree (me).

While we had been instructed beforehand, by ad hoc leader Ken Corbin, to come to this meeting with specific objectives in mind to share with the group – this did not happen. Rather, consensus was that, to date, we have no clear vision as to the nature and direction of a National MH Awareness program, and no present plans on how to arrive at that point.

After much discussion, it was clear the Manufactured Housing Institute (‘MHI’) already has resources in place to help state associations and members improve home marketing, land use planning, and combating local regulatory barriers to affordable housing. Concern was expressed that the work of this group might unnecessarily duplicate and lessen the efficacy of MHI’s efforts.

Two positive opportunities, relative to National MH Awareness, were described. Dr. Lesli Gooch of MHI has been invited to address the National Housing Conference, with emphasis on manufactured housing. And manufacturedhomes.com is working with 15 state associations to enhance their online presence. The unasked question, in my mind, was “Why aren’t all state MH associations on board to improve their representation of manufactured housing and land lease communities nationwide?

What’s next for this group? Here’s my thinking on the subject. Disband the group and start over; or, let time pass and see who ‘steps up to the plate’ to inspire and lead the next iteration of a National MH Awareness program. In my opinion, if and when the process begins anew, it should be led by a widely-known and charismatic manufactured housing executive (e.g. from one of the Big Three-C HUD-Code manufacturing firms) – or if they’re not interested, be sensitive to the presence of such an individual on the national scene. Then, restrict group size to a dozen members, with majority being bona fide business owners (e.g. independent-street-MHRetailers & land lease community owners/operators), along with a representative from MHI staff, and a couple state MH associations. Plan four in-person public meetings for this group, 1) at the annual MHCongress in the spring, 2) RV/MH Hall of Fame induction banquet during the summer, 3) SECO conference in the fall, and 4) Louisville MHShow mid-winter. Make this an industry-wide event! Though more difficult to control, it facilitates ‘buy in’ by everyone associated with manufactured housing and its’ sectors.



‘Mobile Home Freedom Program’

There’s a new manufactured housing relocation and placement program in Michigan! The ‘Mobile Home Freedom Program’ is sponsored by Mobile Home Freedom, a non-profit organization, led by Martin Boisture (810) 397-0946.

First off; just penning the above title and opening sentence rubs me wrong. Unless there’s a good reason (Like wording mandated by resource documents – as in this case), I prefer to speak and write about manufactured housing, NOT ‘mobile homes’. So, with that said….

Here’re some select passages from a colorful brochure distributed by Mobile Home Freedom, with this attention-grabbing headline: “IF THE PARK YOU LIVE IN JACKED YOUR RENT UP A CRAZY AMOUNT, FOR NO REASON, MOVE!” And then the sales pitch begins…

“Helping Mobile Home owners to have the FREEDOM to live where they want.”

“…we can bring valued seasoned residents to your (land lease) community to fill your vacant sites and homes.”

“Our (Mobile Home Freedom) program allows homeowners and renters to partner with one of our participating MH communities.”

Options described by Mobile Home Freedom?

1. “When you add up the TOTAL COST of filling one of your vacant sites with a new home in MI, ready to sell or rent, the cost will be at a minimum of $60 per sq. ft.” Would like to see the documentation and calculations that led to this conclusion.

2. “Bringing (in) a pre-owned home, ready to sell or rent, the cost will be approximately $30 per sq. ft.” Hmm. Same editorial comment. Single or multi-section resale home?

3. “The Mobile Home Freedom Program can facilitate the move of an owner-occupied home on to one of your vacant sites, the cost will be approximately $12 per sq. ft.”

“We also facilitate moving residents who are currently renting homes in other communities to your communities. They are great prospects not only to rent your homes, but also to purchase your homes.” This sounds like raiding lessees in one community and sending them to another.

And finally, this caveat couched as exclusivity. “If your community is interested in applying to participate in the MOBILE HOME FREEDOM PROGRAM, please contact us. There will be a limited number of participating communities per each geographic area.” Hmm. Wonder how that exclusive selection will be made?


This is One Pithy Sentence About MH!

In a recent communique from the Manufactured Housing Association for Regulatory Reform (‘MHARR’), dated 23 February 2023, titled: ‘Latest Wake-up Calls for the Industry on consumer Financing & Discriminatory Zoning’, Mark Weiss pens, in part:

“…affordable HUD-Code manufactured housing cannot fulfill its’ statutorily-recognized role as a prime source of affordable homeownership so long as new (land lease) communities cannot be developed and new homes cannot be financed, due to continuing zoning and consumer financing discrimination that is already prohibited by federal law….”

Well put Mark. In my opinion, everyone with personal and corporate interest in manufactured housing and land lease community business models should memorize the above sentence, then make it a point to read the entire communique – available via (202) 783-4087 and MHARR@mharrpublications.com

Remember, as an industry, we only produced and shipped 112,886 new HUD-Code homes during year 2022. This was the highest level since year 2007 or 15 years ago, when we produced and shipped 96,769+/- new MHs. Why the (+/-) notation? To acknowledge MHI calculates annual MH production and shipment totals different than everyone else. Since year 2013 however, annual figures like these have been verified using Institute of Business Technology & Science (‘IBTS’) data paid for by HUD.


GFA


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