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

Blog Posting # 807; Copyright 23 August 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable factory-built housing (a.k.a. one type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry, and SWAN SONG, – a history of land lease communities & official record of annual MH production totals since 1955. And my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as prolific nonfiction author and freelance consultant.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, and MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran and retired lieutenant colonel of U.S. Marines, and author/editor of 30 books & chapbooks on MH, communities, business management, prayer & figures of speech.

Is This on the NCC Division Agenda?

Recent ‘Concord Monitor’ (newspaper) headline: ‘It’s Borderline Criminal’ – ‘Manufactured housing was an affordable homeownership option. Now, Investor-owned parks are pricing residents out’ This is such a sad story, one that casts our land lease community real estate asset class in the most negative light, for consumers and prospective homebuyers/site lessees alike!

Read the story yourself at https://www.concordmonitor.com/Belmont-manufactured-housing-park-rent-increases-56287780

What you just read has been frequently-shared email fare among, as one portfolio owner/operator describes them, ‘community owners who provide a strong value proposition for homeowners’,  and who are offended by ‘people who take advantage of the land and homeownership structure characteristic of this land use’. MHI was alerted to this travesty (on 11 August), in the hope of seeing this serious matter placed on the agenda of the National Communities Council at MHI’s upcoming annual meeting, with an eye to resolute corrective action!

Will this happen? On one hand, I sure hope so. However, given the council’s characteristic quietude on controversial matters to date, I doubt we’ll hear/read much of anything from that quarter. No, it appears someone else, somewhere along the history line of land lease community advocacy will have to step forward and take appropriate action. Might that be the rapidly growing influencer, the national SECO Conference for small to mid-sized community owners/operators? Next one is scheduled for 16-19 September in Atlanta, GA. Or, as I’ve heard  of late, via the industry’s scuttlebutt (‘rumors’), other parties are studying the pre-history (i.e. 1993-1996) of the NCC, as described in the late Bruce Savage’s book, ‘The First 20 Years’ – available for purchase via www.educatemhc.com Do not be complacent! As a realty asset class, thanks to greedy predatory landlords new to land lease communities, we are on the dangerous cusp of increased site rent regulation at multiple levels via landlord-tenant legislation. Your thoughts on this timely matter? Reach me best via gfa7156@aol.com

You Too Can Attend a Manufactured Housing Consensus Committee (‘MHCC’) Meeting!

That’s right, this MHCC Meeting will occur on 11-12 September, in Elkhart, IN., to discuss proposed updates to the HUD-Code. To make comments at this meeting, register on or before Wednesday, September 4, 2024, by contacting Home Innovation Research Labs: Attention, Kevin Kauffman at 400 Prince Georges Blvd., Upper Marlboro, MD. 20774, or email him via mhcc@homeinnovation.com, or phone (888) 602-4663. Written comments encouraged. There will also be an opportunity for public comment ono specific matters before the MHCC.

Have you attended a previous MHCC meeting? I have, during the Louisville MHShow ‘years ago’. And it was a worthwhile educational experience from start to finish. I may attend this one.

George Allen

Blog Posting # 806; Copyright 16 August 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable factory-built housing (a.k.a. one type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry, and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. And my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as prolific nonfiction author and freelance consultant.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MH’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, and MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran and retired lieutenant colonel of U.S. Marines, and author/editor of 30 books & chapbooks on MH, communities, business management, prayer & figures of speech.

Seven Land Lease Community Historic Perspectives

Eight land lease community historic perspectives were initially identified and published during year 2020, as part of an introduction to the Manufactured Housing Manager (‘MHM’) professional property management certification program administered by EducateMHC. That number has been reduced to seven perspectives by combining two previously separate views.

What makes these seven unique historic perspectives worthy of revisiting here, is how each has changed, even during the short span of five or so years. Read, ponder and apply these pithy perspectives to your land lease communities and operation thereof.

Evolving terminology. From the ‘mobile home park’ of the 1970s to manufactured home community of 1980s & 90s, to land lease community since the turn of the century. Why the most recent evolution? Because today we count at least a half dozen different shelter types as increasingly commonplace throughout this income-producing property type: new and resale HUD-Code homes of various configurations, Park Model RVs, larger recreational vehicles used as homes, stick-built homes looking like MHs (only in FL after hurricanes), accessory dwelling units (‘ADUs’) like Tiny Homes, even modular homes. For that matter, terminology wise, think of how lots, pads, spaces and stalls as increasingly referred to as rental homesites; and, tenants thought more of as residents or homeowners/site lessees.

Improved rent collection, from ‘then to now’. During 1970s, monthly rent due date was often the anniversary date of one’s move onto the property and rental homesite, and said rent was collected in cash on-site. No more. Today, everyone has the same anniversary date, and site rent is paid via check, credit card, debit card, and other electronic means – rarely cash. This means no more money laundering, as was the case ‘back then’ in Chicago suburbs.*1

Published operating performance standards. Prior to the real estate investment trust (‘REIT’) wavelet of 1994, ‘seat of one’s pants’ performance measures were commonplace. Then Wall Street analysts insisted on documentation and standardization of emerging operating expense ratios (‘OERs’), resident and home turnover, and ‘cap rate’ (i.e. income capitalization) measures for community portfolios ‘going public’. This task was accomplished via national research conducted by the industry trade magazine, at the time, Manufactured Home Merchandiser. Results? An Industry Standard Chart of Operating Accounts based on Institute of Real Estate Management (‘IREM’) Experience Exchange annual surveys, and an industry Standard Operating Expense Ratio of 40+/-%, compared to conventional, garden-style apartments at 55%.Why the significant difference? Apartments’ higher turnover and costly ‘make ready’ and greater marketing expenses. *2

National advocacy. Prior to 1993, was effected at the Manufactured Housing Institute (‘MHI’) via a committee of volunteers. Then, during the next three years, the National Communities Council (now a division of MHI) emerged with much enthusiasm and fanfare; not so much today. Manufactured Housing Association for Regulatory Reform continues, since 1985, to be our industry’s Washington Watchdog, in regards to pending legislation and regulatory affairs.

Print & online resources. These range from nearly none during the 1970s to now books, trade publications, standardized forms, even professional property management (‘PM’) training and certification programs (Circa 1980 and on into the 21^st Century). Two case bound texts, on land lease community development and commercial investment were published by J. Wiley & Sons during the early 1990s and are today classics. Trade magazines and newsletters have ‘come & gone’ over the decades, with MHInsider prevailing today. Standardized PM forms continue to be available in Community Management in the Manufactured Housing Industry, available from www.educatemhc.com  Unfortunately, PM training and certification continue to take a backseat in this real estate asset class. Manufactured Housing Educational Institute (‘MHEI’) offers an online Accredited Community manager (‘ACM’) program, and IREM lists slightly more than 100 of its’ Certified Property Manger members as claiming affinity for land lease community management. But that’s all!

Consolidation of HUD-Code housing manufacturers into a few large firms; and heretofore standalone land lease communities into one of more than 500+/- property portfolio firms. Specifically, there were 25 HUD-Code housing manufacturers in 1977; today mainly the Big 3-C firms (i.e. Clayton Homes, Inc., Skyline Champion Corporation, & Cavco Industries), garnering 75+% of national market share. And while only 25 known community portfolio firms in 1987, this number has blossomed to 500+/- such firms today. Attrition, for various reasons, has depleted the ranks of independent (street) MHRetailers and independent chattel capital firms (i.e. home-only lenders) nationwide.

Industry-changing paradigm shift, between year 2000 and now. Some call it a New Era, where new HUD-Code home distribution is spread equally among independent (street) MHRetailers, ‘company stores’, and on-site selling and seller-financing of new homes within land lease communities. In the latter instance, where only 15-20% of new HUD-Code homes were shipped directly into communities at the turn of the Century, that percentage has increased to 40+ percent. How so? First there was the introduction of the Community Series Home (‘CSH’) for placement in communities, then community-focused sales training and seminars where need be, e.g. since 2016, IMHA/RVIC’s annual ‘two days of plant tours & home sales seminars in Elkhart, IN; also the annual SECO event in Atlanta (for 12 years), and now the growing MH2X movement (i.e. goal to increase annual MH production twofold by year end 2025).*3

And there are other perspectives along the way. One in particular has to do with the growing, in size and influence, RV/MH Heritage Foundation in Elkhart, IN. Founded in 1972, the RV/MH Hall of Fame museum, library, and exhibit halls – following a period of financial struggle – have blossomed during the past decade. Today, besides the library and spacious meeting facilities, the facility boasts two large, world class collections of historic manufactured homes and recreational vehicles, open to public view. And to date, nearly 500 industry pioneers and notables have been inducted into the RV/MH Hall of Fame as enshrinees!

End Notes.

1. Read DOUBLE DEAL, by  Michael Corbill, 2003. Mobster Joey Testa at Sterling Estates, IL.
2. Read SWAN SONG, History of Land Lease Communities. Available via educatemhc.com
3. For a FREE package containing the 5X7” plastic wallet card containing ‘Four Steps’ & ‘Six Right Ps of Marketing’ new homes within communities, and the ‘Ah Ha! & Uh Oh! Formulae Worksheet for calculating housing price points, based on AIM & AGI, request it via gfa7156@aol.com Be sure to include your preferred postal mailing address in the request.

George Allen

Blog Posting # 805; Copyright 9 August 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable factory-built housing (a.k.a. offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent, the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry, and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. And my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as prolific nonfiction author and freelance consultant.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI”), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrine, and MHInsider magazine ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran and retired lieutenant colonel of U.S. Marines, and author/editor of 30 books & chapbooks on MH, communities, business management, prayer & figures of speech.

The ‘Whole U.S. Housing Story’ for June 2024!

It’s common knowledge the U.S. needs 2,000,000 new housing starts per year to adequately accommodate its’ citizenry. This month’s estimated total of U.S. housing starts of 123,851+/-

X 12 months = approximately 1,486,212 new homes during 2024, a shortfall of 513,788 units!

Components of the ‘Whole U.S. Housing Story’ include theses categories:

8,509 new HUD-Code manufactured homes produced during June 2024. Source: IBTS

+2,255 modular & panelized 9i.e. ‘prefab’) housing units estimated during June 2024

+337 new Park Model recreational vehicles (‘RVs’) produced during June 2024.

=11,101 subtotal of three above factory-built, offsite construction production totals

+112,750 US Census Bureau’ estimated # of single-family site-built housing starts during June

=123,851+/- estimated Grand Total of offsite & onsite US housing starts during June 2024

What you just read here is the first and only researched and published monthly estimate of the total, or ‘Whole US Housing Starts’ overview for the month of June 2024. If you’d like to know how each of the housing types was researched (e.g. using IBTS, RVIA, US Census Bureau, etc.), request a free copy of the ‘Whole U.S. Housing Story’ from gfa7156@aol.com

More About the 8,509 HUD-Code Homes!

The ‘MHShipment Volume & Stock Market Report’ has been researched and reported monthly since January 2015. Here are a few key stats from the June 2024 edition of the ‘MHShipment volume report & 6 August 2024 Stock Market report’.

June’s 8,509 units are fewer than the 9,408 new homes produced during May, but above the 8,169 homes produced a year ago during June 2023. So the MH production trend continues to fluctuate.

Furthermore; Year to Date (‘YTD’) production totals? As of June 2024, we’ve produced 51,165 new HUD-Code homes, compared to only 43, 388 a year ago during the same time period. Does that mean we’ll eclipse 102,330 units by the end of this year? Let’s hope so!

Economic Impact. Using Dr. Stephen C. Cooke’s decade-old estimated production value of new HUD-Code homes @ $43, 126/unit, suggests June’s new MHs = $366,000. And YTD, the 51,165 new MHs = $2.21 billion value! When will our national salaried and elected leaders see and understand the value of knowing and ballyhooing our entire industry’s (and realty asset class’) economic impact on our national economy? An interested party (e.g. legislators, etc.) await us!

Relative to the Stock Market report for 6 August 2024. Stock prices, among the ten public firms (i.e. ½ housing manufacturers & ½ = portfolio firms), were all up except for one land lease community owner/operator. And the Composite Stock Index (‘CSI’), including all but one of the ten public firms, increased from July 2024!

A TIMELY REMINDER!

Hope to see YOU at the RV/MH Hall of Fame induction banquet the evening of 19 August 2024, in Elkhart, IN. Then and there you will find the crème-de-la-crème, among pioneers and leaders of the manufactured housing & recreational vehicle industries, as well as land lease community owners/operators. I plan to attend. For info & to register visit the RVMHHall of Fame website or phone (574) 293-2344.

George Allen

Blog Posting # 804; Copyright 2 August 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable factory-built housing (a.k.a. offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, official historian, trade term and trend tracker, as well as information resource for both business models, and to a lesser extent, the recreational vehicle (‘RV’) industry. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry, and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. And my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures inVietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as prolific nonfiction author and freelance consultant.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, and MHInsider magazine ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran and retired lieutenant colonel of U.S. Marines, and author/editor of 30 books & chapbooks on MH, communities, business management, prayer & figures of speech.

MH2X Workshop a Success; Onto Next One!

The inaugural MH2X ‘Infill & Upgrade Workshop’ for land lease community owners/operators was an unqualified success! So much so, the hosts have already scheduled a second workshop to occur on Wednesday, 21 August 2024, with a community tour the following day. Both will, again, be in the Atlanta, GA. area. Maximum attendance has been upped to 50, and there’ll be added time during which HUD-Code housing manufacturers present will address attendees. How can you not want to attend this $175.00 event? For more information and to register, visit Alexandra@secoconference.com or phone (706)252-5745.

As you already know, earlier that same week, on 20 & 21 August, but at the RV/MH Hall of Fame in Elkhart, IN., the IMHA/RVIC (Indiana association) will host its’ seventh annual ‘two days of plant tours and sales seminars’ to pretty much the same ends as MH2X: ‘To double new manufactured housing production nationally, during years 2024 & 2025!’

Do you see what’s happening here? We’ve known, as an industry and realty asset class, since the turn of the century – when we lost easy access to chattel capital (a.k.a. personal property and home-only loans) and 10,000 independent (street) MHRetailers exited the business, that community owners/operators would have to fill their own vacant rental homesites and rental homes going forward! And they have been! First there were Community Series Homes, then manufacturers relying on Business Development specialists (i.e. salesmen), and most recently, specialized education teaching community owners/operators HOW TO ‘spec’ new homes, buy them direct from factories, install, market and sell them onsite to prospective homebuyers/site lessees! And that’s where we are today! Now need to have the MH2X concept gain traction in other regions of the U.S. If you’re in one of those regions sans training, and want to know how to go about doing so, contact me directly via gfa7156@aol.com

So, what are the Steps to Selling & Financing New Homes Onsite within Land Lease Communities? Here they are:

1. Getting Ready! Effect max curb appeal, fresh on & offsite signage, appropriate advertising, ensure capable staffing, policies & procedures in place, and have a good handle on one’s homebuyer/site lessee profile, and be sure needed licenses are in place.

• Buying Homes! What size & quality homes needed & wanted in the local housing market? Community Series Homes available? What support is available from nearby factories? Is Frost Free Foundation allowable in one’s local area?

• Selling Homes! (&) Lifestyle! Just selling or is leasing a desirable option? Property & product USP (i.e. Unique Selling Proposition)? Apply the Six Right Ps of Marketing! Go with traditional and or online ads? Ensure community is where folk really want to live!

• Financing Homes! What $ resources in and near the local housing market? – including cash, lease-option & contract sales. Redouble the importance of pre-qualification of would be homebuyers/site lessees, and ensure compliance all along the way!

But all that’s not the whole story! Next, get a good personal and corporate handle on the aforementioned Six Right Ps of Marketing’ New Homes Within Land Lease Communities! Here they are:

Right Product = model, home size & configuration, appearance, floor plan, features & amenities e.g. Community Series Home with durability enhancing features & a WOW factor!

Right Place = or location within the community, and how oriented to the sun & wind, and ensure good drainage, among other factors.

Right Price = per type deal (Is site & housing rent in sync with other forms of affordable housing in the same local housing market?), Use Customer’s Annual Gross Income or AGI; local housing

market’s Annual Median Income or AMI; and, keep in mind the 30% Housing Expense Factor!

Right Promotion = per USPs (i.e. Unique Selling Propositions – of house & property), e g. Energy Star & front porch loaded; using print & online advertising; new signage on and offsite; resident referrals.

Right People = based on anticipated sales volume & # of vacant homes & rental homesites to fill; then capable, experienced, motivated, as well as trained & supervised sales professionals.

Right Process = includes corporate planning & procedures to ID & meet shelter needs/wants of target audience & mix in specific local housing market.

Yes, these are the basic formulae needed to fill vacant rental homsites in land lease communities, as well as rental units (i.e. homes owned by the property per se) therein. If you’d like a FREE plastic 3”X5” wallet card containing the two lists shown above, simply request it via gfa7156@aol.com  And if professional property management of your land lease community (ies) is important to you, be sure to visit www.educatemhc.com and purchase a copy of Community Management in the Manufactured Housing Industry. This is the 8^th edition of the classic HOW TO community management text first published in 1988 and updated every few years since then. The text is 8X11 page size and spiral bound, enabling easy copying of dozens of community-tailored property management forms. Best such text available anywhere!

Know what? Here’s a thought for you. Wouldn’t it signal to the rental housing industry, that ‘manufactured housing has truly arrived’, IF the MH2X Workshop was the training centerpiece at the next Manufactured Housing Congress in Las Vegas? And that the ‘four steps’ and ‘Six Right Ps’ cited above, were taught to land lease community owners/operators from throughout the entire US of A? Think about it, get on board, and suggest this to the salaried leaders of our industry and realty asset class!

George Allen