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

Blog Posting # 695. Copyright @ 24 June 2022. EducateMHC

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

EducateMHC is the online national advocate, realty asset class historian, trend spotter, education resource & textbook supplier for land lease communities throughout North America

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INTRODUCTION: And it’s time for a transition. In this instance, from a popular blogging site to the Linked In platform. Why? It suits my present situation (i.e. ‘retirement’) better. Let our friends in manufactured housing and land lease communities know where they can continue to ‘read what’s really happening in our industry and realty asset class’. Do you realize we’re five blog postings away from tallying 700 during these past 13 years? I do, every time I pen one. GFA

I.

WORST CASE SCENARIO

One reason I continue to prepare this weekly blog, and pen the Allen Legacy column for MHInsider magazine, is because I have so many friends in the business of manufactured housing and land lease community ownership. If I don’t write in their behalf, as I did in the Allen Letter for 30+ years, who will? Answer. No one! And that’s the reason for this week’s haunting and telling question: What U.S. state is being described in the paragraph here following?

“George, as us old guys know, things are changing and not to the good. Homes that can be built in the factory in 18 days, here in _____now take up to four months and we’re at the top of the waiting list. It’s even worse out of state, where it can take up to a year to get a new home. We are not being told, here in _____, we will only be able to purchase electrical appliances for our homes until 2025. What happens to all our communities with 50 and 100 amp electrical systems An even bigger problem, here in _____, is that come 1/1/2025, even our existing long term leases will not be exempt from local rent control; and to top that off, they (regulators) are trying to pass a law that new manufactured home (rental) sites will not be exempt from rent control. Anyone who’d build another community here in _____ under these pending changes would have to be crazy.” (Lightly edited. GFA)

So, what do you think? Is this your state that’s described here or some other one?
II.

WHAT OTHERS ARE SAYING


I occasionally get to read The Ross Rant, a private newsletter, penned by Joel Ross of Citadel Realty Advisors. He recently wrote about the U.S. housing market in this fashion:

“…the housing market is now tanking quickly, which is bad for the economy. I spoke to a NYC condo broker who said they are already seeing millennials pulling back, because they no longer have the equity, due to the stock market; or they have never seen this type of economic situation in their lifetime, so are not sure what to do. I am certain the housing pullback I have been predicting is here, and will be bad, maybe 10%, but maybe more, as rates will now rise a lot more. 40% of NYC buyers are all cash, and a much higher number of FL buyers are too, so cash buyers may mitigate a tiny bit of the housing downturn. There is no way 6% mortgages, and the inflated prices can go on. Expect a pullback in housing prices to accelerate now.”

At the same time, in the June 19th edition of the New York Times magazine, a full page ad for The Towers read this way: “A beacon of timeless glamour. The Towers of the Waldorf Astoria New York has been home to the world’ most fascinating people. Live atop the internationally famous hotel, an icon which has set the global standard for hospitality and accommodation since 1931. Enjoy the best of the world’ greatest city and call the most distinguished address in New York home. There truly is no place like it. New studio to penthouse condominium residences priced from $1,800,000 defined by unsurpassed amenities, legendary service, and incomparable history.”

Tried to get a handle on how many single-family homes have been purchased during the past decade and turned into rental units. Here’s as close as I could get:

There’re 128 million households, with 62 percent living in owned homes and 38 percent in rental units. And of the 49 million rental units, 35 percent are single-family homes, 62 percent are apartments, and four percent manufactured homes. So, does that mean there’re 17,150,000 single-family homes (not including manufactured homes) today being used as rental units? And during the Harvard Joint Center for Housing Studies briefing (‘State of the Nation’s Housing’) on 22 June, we were told that 16 to 40 percent of all single-family home sales are of this sort, with the national average being 28 percent. Now you kinda know….





III.


LAST WEEK’S BLOG A LIGHTNING ROD

I was hoping it would happen and it did. Received considered responses to the subject matter (about ‘Woke folk’, ‘Innovations in MH’, & ‘MH as Affordable Housing’) from several sources. What follows here are a few of the comments gleaned from those email messages:

“My first solution is resident ownership, George. Has been and always will be. Homeownership to me is about basic economic security and wealth-building. Pretty fundamental.” Here the writer is talking about resident-owned communities, not the traditional land lease ones. However, as suggested in Part III of that blog, let’s also get conventional real estate mortgages into land lease communities where ownership grants leases with terms extending beyond the home mortgage.

“While all your observations are true, there is a deeper level at which manufactured housing has problems.” We have manufactured housing product tunnel vision; which is to say we do little to ensure value retention in the event said homes are repossessed (without the land on which they’re installed) – thanks in large part to chattel financing. And the matter of appropriate installation; even a “…well-financed manufactured home placed in a low spot will result in a major loss to a bank at some point I guess it is one step too far to have manufacturers see this has a big effect on them too – about every ten or so years.”


IV.


HINT OF THINGS TO COME (?)

From several sources of late, there’s been interest expressed in renewing the ALLEN REPORT (‘Who’s Who Among Land Lease Community Portfolio Owners/Operators Throughout North America!’); resuming the Networking Roundtable for Community Owners/operators; and, scheduling one day sessions of the popular Manufactured Housing Manager (‘MHM’) professional property management training and certification program. Too soon to announce specific plans, events, or dates – but it’d be helpful to know how many of you would be interested in one or more of these three resources. Communicate your thoughts and desires via gfa7156@aol.com


George Allen, CPM, MHM. EducateMHC