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

Blog Posting # 825; Copyright 27 December 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (i.e. a type of offsite construction). Land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) are the commercial real estate (‘CRE’) component of MH; and, along with various types of housing finance (e.g. chattel or ‘home only’ loans & real estate-secured mortgages), comprise the post-production segment of MH.

EducateMHC is the official MH historian, trade term & trend tracker, as well as a perennial information source. Contact EducateMHC vis (317) 881-3815;  email: gfa7156@aol.com, and www.educatemhc.com, to purchase Community Management in the Manufactured Housing Industry (A copy belongs in every land lease community office nationwide!) and SWAN SONG – ahistory 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 freelance consulting, and authoring of 30 nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, as well as Allen Legacy columnist and editor at large for MHInsider magazine.

Responses to the ‘Whole U.S. Housing Story’…

‘Who’d a thought’, that some HUD-Code housing manufacturers are building heretofore Park Model RVs in compliance with the HUD-Code! If indeed true, and I have it on good authority it is, then ‘Park Models’ are no longer just RVs – they’re bona fide housing units, just like single-family houses fabricated as ‘offsite construction’ – or factory-built, then sited on building sites conveyed fee simple, or within land lease communities on rental homesites. Now that’s a mouthful and brain-freeze when you stop and think about it! Hmm. I wonder if the Institute for Building Technology & Safety (‘IBTS’) is aware of this, and knowingly or unknowingly including code-compliant Park Models in their monthly tallies of HUD-Code units? I’ll ask and let you know next time around.

The previous paragraph was drafted from just one of the several apt messages received in response to last week’s blog posting titled: ‘Is it affordable housing or offsite construction?’

And then there’s this: “In (our state) Park Model RVs are not considered housing and are treated as RVs. We know the Park Model RV numbers from Statistical Survey, but truly, almost all (such units) are for recreational purposes, in campgrounds, and can only be inhabited 180 days per year.” And frankly, that’s how the majority of folk in the HUD-Code housing business, it seems, view Park Model RVs. But what if there’s ‘more to this story’ than presently meets the eye? Again, I’ll give the matter some time and let you know what I learn, maybe.

On another matter put forth in last week’s blog posting. “I do agree (that) we should be comparing ourselves against other industrialized housing such as modular, panelized, and whatever next fad is in permanent housing. I have not observed a significant amount of container homes, 3D printed homes, and other marginal home building methods.” Agreed. I think what confuses this matter though, is differentiating between the single-family, site-built housing faithfully reported by the U.S. Census Bureau each month, and the whole milieu of what’s now being referred to as ‘offsite construction’, i.e. virtually every form of factory-built housing just named and more – except HUD-Code housing is not included in the official mix. The twain are simply not reported ‘together’ at this time, and the question – in my mind anyway, is should they be or not? And that’s the conundrum (‘hard question’) I’ve been and am dealing with these days. And your input to date has been helpful!

One more response from a blog flogger (‘reader’). “The line between factory-built and site-built housing seems to be graying.  I (often) see MHRetailers selling upscale multi-section HUD-Code and similar modular homes. It is not unusual for the wholesale cost of the home to be $300,000, plus the cost for preparation of the building site, improvements, and installation of the home at another $150,000.” And this, “In a resort are I patronize, new homes generally cost $2,000/sq.ft. to construct, usually at a minimum of 3,000 square feet. Now I’m seeing modular units becoming part of these homes – mostly pre-fabricated modules trucked to the building site.” (Lightly edited. GFA)

So, if the previous paragraphs touch a responsive chord(s) with you, please take time to write and let me know your thoughts on these and related subjects. And keep this in mind; it’s highly unlikely anyone else in the manufactured housing industry and/or among land lease community owners/operators, is going to take the time and make the effort to sort out what’s ‘going on’ in the overall housing segment, rather than broadening our tunnel vision focus on site-built, single-family monthly ‘starts’ reporting. Reach me via gfa7156@aol.com

Homeowners & Renters Between 2019 & 2023

Following information borrowed from the U.S. Census Bureau’s 2019-2023 American Community Survey, 5-Year Estimates.

“The number of owner-occupied housing units increased by 8.4%, from 76.4 million in 2014-2018, to 82.9 million in 2019-2023….” & “More people owned homes than rented in 3,070 of the nation’s 3,144 counties and county equivalents between 2019 and 2023.”

“Additionally, home values increased by 21.7% between 2014-2018…and 2019-2023 estimates going from a median of $249,400 to $303,400.”

Here’s something you’ve likely not seen before; a comparison of four housing types and who lives therein:

One-unit building detached from any other building: 83.7 owners & 27.1 renters

One-unit building attached to one or more buildings: 5.3 owners & 7.6 renters

Building with two or more apartments: 4.9 % owners & 61%  renters

Manufactured homes/mobile homes: 6.2% owners & 4.2% renters

Now a little from Harvard University’s ‘Joint Center for Housing Studies’ (‘JCHS’), titled ‘Renters’ Affordability Challenges Worsened Last Year’.

“In 2023, the number of renter households spending more than 30 percent of their incomes on rent and utilities hit an all-time high of 22.6 million. This included a record-high 12.1 million severely burdened household that spent more than half their incomes on housing costs.” Note. “Moderately (severely) cost-burdened households spend 30-50% more of income on rent and utilities.”

George Allen

Blog Posting # 824; Copyright 20 December 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (i.e. a type of offsite construction). Land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH; and, along with various types of housing finance (e.g. chattel or ‘home only’ loans & real estate-secured mortgages), characterize the post-production segment of MH.

EducateMHC is the official MH historian, trade term & trend tracker, as well as perennial information source. Contact EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and www.educatemhc.com, to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – the latter, a history of land lese 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 freelance consulting, and authoring of 30 nonfiction texts.

George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, as well as Allen Legacy columnist and editor at large for MHInsider magazine.

Is it affordable housing or offsite construction?

Regular readers of this weekly blog are aware of my ‘work in progress’, researching, tracking, and publishing the monthly ‘Whole U.S. Housing Story’. During the past couple months I’ve settled on a workable format for this all-inclusive overview of housing ‘starts’ in the U.S… But a need for terminology clarification has arisen, and here I’m soliciting your input. First, however,  just what is the ‘Whole U.S. Housing Story’ per se (‘by itself’)?

Quoting from a previous blog posting: “The Whole U.S. Housing Story is an ongoing monthly collection and summary of ALL types of ‘housing starts’ throughout the U.S. However, since most present-day reports of this nature, via U.S. Census Bureau, cover only ‘single-family site-built housing starts’, the ‘Whole U.S. Housing Story’ offers a bigger picture, one that includes ‘offsite construction’ categories of housing such as HUD-Code manufactured housing, modular & panelized (or ‘prefab’) housing, and Park Model recreational vehicles (‘RVs’).” Blog # 823

Two clarifications: First, HUD-Code manufactured housing, when installed on permanent foundations on building sites conveyed fee simple, are oft identified as ‘single-family site-built housing’. And in time, ‘offsite construction’ might include various types of accessory dwelling units or ADUs, such as Tiny Houses, sophisticated ‘sheds’, customized steel storage containers, ‘capsule houses’, even 3-D printer-produced homes – but not yet.

So, what’s this need for terminology clarification? Some folk within the HUD-Code housing milieu (‘environment’), prefer the ‘Whole U.S. Housing Story’ be reported in terms of 1) single-family site-built housing starts, plus 2) factory-built housing production (i.e. HUD-Code manufactured housing alone). Period. But know what? That’s pretty much the reporting status quo today: 1) single-family site-built housing starts reported by the U.S. Census Bureau, and 2) manufactured housing production reported to HUD by the Institute for Building Technology & Safety (‘IBTS’); with the twain never covered in the same report (or story). However, there is a complication, as IBTS data includes new HUD-Code manufactured homes sited in the 500+/- land lease communities throughout the U.S., but not reported by the U.S. Census Bure! Also missing from U.S. Census Bureau data are outlier housing types (e.g. ADUs such as Tiny Houses, sheds, storage containers, capsule units, and 3-D printer-produced homes) – all of which, at one time or another, might well be sited on scattered building sites conveyed fee simple. No one, to date, seems to want to resolve these disparities. Read on…

Furthermore, MH purists, it seems, don’t want anything to do with ‘offsite construction’. Why? The argument goes, ‘Don’t taint MH by associating it with nebulous (‘indistinct’) forms of housing like modular and panelized, as well as various ADUs and Park Model RVs.’ Right or wrong thinking?

Yet another plot twist has to do with factory-built housing, inclusive or manufactured housing, modular and panelized units, ADUs, Park Model RVs. Specifically, would the offsite construction naysayers be satisfied if all homebuilding shifted from offsite construction to factory-built housing? I think not. For one thing, offsite construction has already staked out its’ territory via a website and a slick monthly trade magazine, both sans any mention of manufactured housing.

All this brings us back to ‘why’ I’ve proposed that the ‘Whole U.S. Housing Story’ begin with data compiled and published online by the U.S. Census Bureau each month, then include other forms of housing where data is available from credible sources and by formula. The resulting ‘grand total’ of housing starts in the U.S., month by month, would be more accurate and useful than just publishing housing starts occurring during the onsite building process.

So, what’s your input relative to the aforementioned terminology clarification? Let me know via gfa7156@aol.com or mail your narrative to GFA c/o Box # 47024, Indianapolis, IN. 46247

GREEN BLAZER REMINDER

Mentioned this to you a couple weeks ago, but it’s certainly worth a reminder here!

RV/MH Hall of Fame enshrinees attending the 2025 Louisville MHShow next month, 15-17 January, know that the show organizers/hosts have requested that these folk wear their distinctive green blazer all day on the 15^th and during the evening festivities.

Being inducted into the prestigious RV/MH Hall of Fame is the acme (‘highest’) honor for pioneers and leaders within the recreational vehicle and manufactured housing industries!

To learn more about this honor and the institution preserving RV & MH legacies, visit the website RVMHHallof Fame.com And if you’d like to talk about the RV/MH Hall of Fame selection mechanics in more detail, let’s talk at the 2025 Louisville MHShow.

One More Reason to Leave California…

Quoted and edited, but unverified, from email correspondence from a veteran MH businessman in California to this industry observer:

“…the California courts just denied our (industry’s) request for injunctive relief on a bill”, if passed, will as of 1/1/2025, posit (‘put in place’) “that long term rental agreements are no longer exempt from rent control.”

Now that change would turn the land lease community business model upside down.

Merry Christmas & Happy New Year to You

Ah Ha! Another positive sign the recent presidential election is ‘Making America Great Again’! Everyone, it seems, is extending ‘Merry Christmas’ greetings this year instead of something less meaningful and merry.

George Allen

Blog Posting # 823; Copyright 13 December 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MJH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (a.k.a. another 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! EduateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource. Contact EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and 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. Also 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 freelance consulting, and authoring many nonfiction texts.

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

‘WHOLE U.S. HOUSING STORY’ FOR OCTOBER 2024

While the ‘Whole U.S. Housing Story’ continues to be a work in progress, housing professionals have been expressing increased and continuing interest in its’ truly eclectic content, i.e. statistical data from various housing sources. So, just what is the ‘Whole U.S. Housing Story’?

The Whole U.S. Housing Story is an ongoing monthly collection and summary of ALL types of ‘housing starts’ throughout the U.S. However, since most present-day reports of this nature, via U.S. Census Bureau, only cover ‘single-family site-built housing starts’, the Whole U.S. Housing Story presents a bigger picture, including ‘offsite construction’ categories of housing such as HUD-Code manufactured housing, modular & panelized (or ‘prefab’) housing, and Park Model recreational vehicles (‘RVs’).

HUD-Code manufactured housing, when installed on a permanent foundations on building sites conveyed fee simple, are also oft identified as ‘single-family site-built housing’.

And in time, ‘offsite construction’ might include various types of ADUs (‘accessory dwelling units’), e.g. Tiny Houses, sophisticated ‘sheds’, customized steel storage containers, ‘capsule houses’, even 3-D printer-produced homes.

So, where does monthly housing ‘start’ data originate? The easiest to track is the number of single-family site-built housing starts researched, tallied and published monthly online by the U.S. Census Bureau. Visit census.gov/construction/nrc/pdf/newresconst/pdf. There, visit the Monthly New Residential Construction website, and you’ll see ‘seasonally adjusted annual’ totals. Divide the monthly ‘start’ total (actually, seasonally adjusted annual ‘start’ total) by 12 months to get a clean monthly average ‘start’ figure. Further details to follow.

Researching the offsite construction category of housing production.

The monthly production of HUD-Code manufactured housing is tracked and reported to subscribers by the Institute for Building Technology & Safety (‘IBTS’). While monthly data is what we need for the Whole U.S. Housing Story (e.g. 10,263 MHs @ Oct. 24), annual MH production totals are compiled and reported by the Manufactured Housing Institute (‘MHI’) and the Manufactured Housing Association for Regulatory Reform (‘MHARR’). A published record of annual MH production totals, going back to 1955, is available in the SWAN SONG text, available from www.educatemhc.com

Modular & panelized (‘prefab’) housing monthly production is, at this time, tracked by no one! Why? These offsite construction units are built to local building codes and are next to impossible to research accurately. Some housing professionals suggest this formula: 2% of seasonally-adjusted annual housing starts, per U.S. Census Bureau, then reduced to a monthly average, e.g. 1,311,000 ‘starts’ X .02 & divided by 12 months = 2,185 modular & panelized units during October 2024.

Park Model RV production is tracked monthly and reported by the Recreational Vehicle Industry Association (‘RVIA’) via their online publication RVIA News (e.g. 346 RVs during October 2024). Or simply google Park Model RV production. This category of offsite construction is included because an increasing number of Park Model RVs are used as permanent housing, particularly in Sunbelt regions of the U.S.

Now for the Whole U.S. Housing Story proper.

Format. First, the three categories of offsite construction and a subtotal of same, followed by U.S. Census Bureau estimate of single-family, site-built housing starts during October 2024. Finally, a grand total of all categories, but with the estimated number of modular & panelized units adjusted out, so as not to be counted twice.*1

1. HUD-Code manufactured housing unit production during October 2024                10,263
2. Modular & panelized (‘prefab’) units estimated for October 2024   *2                       2,185
3. Park Model RVs produced during October 2024                                                             346
4. Offsite construction subtotal for October 2024                                                         12,794

• U.S, Census Bureau # of housing ‘starts’ during October 2024 *3                           109,250
• (+) Offsite construction subtotal for October 2024                                                     12,794
• Grand total of all U.S. Housing Starts during October 2024                                     122,044

• (-) 2185 Modular & panelized units in October 2024 =                                            119,659

Bottom Line: ‘Whole U.S. Housing Story’ for October 2024 is 119,859 new homes started. This compares favorably with the five year average of annual new housing starts in the U.S. at 1,448,620 units; which divided by 12 months = 120,718/month, just 1059 units more than the 119,659 houses started during October 2024.

End Notes.

1. Modular & panelized units, though offsite construction, are usually included in the U.S… Census Bureau ‘starts’ reporting.
2. 1,311,000 X .02 & divided by 12 months = 2185
3. 1,311,000 divided by 12 months = 109,250

Mfd. Housing Production Volume @ October 2024

IBTS reports 10,263 new HUD-Code homes produced during October 2024, up from 8814 produced during September 2024, and 8292 MHs produced during October 2023. 16,040 floors

Year to date (‘YTD’) production? As of October 2024, 86,639 new units produced compared to  75,040 units during October 2023.

Production value? Again, based on the decades old ‘per unit’ factor of $43,126/unit, October 2024 production is valued at 442 million; and, YTD at 3.77 billion.

Stock Market Report for 5 December 2024

BRK-A              Berkshire Hathaway, Inc. (Clayton Homes)   $706    Up from November

SKY                  Skyline Champion Corporation                      $104.23Up from November

CVCO               Cavco Industries                                             $479.   Up from November

LEGH               Legacy Housing Corporation                          $25.41 Down from November

NOBH              Nobility Homes                                               $33.00 Up from November

ELS, Inc.           Equity Lifestyle                                               $70.50 Up from November

SUI, Inc.           Sun Communities                                           $126.16 Down from November

UMH, Inc.        UMH Properties                                             $19.87 Up from November

Flagship Communities                                                            $16.08  Down from November

MHPC, Inc.      Manufactured Housing Properties                $62      No change from November

Manufactured Housing/ land lease community Composite Stock Index (‘CSI’): 5 December 2024 = $995. Up from $839 in November, and well above the base $790 established in January 2022.

George Allen

 Blog Posting # 822; Copyright 6 December 2024. EducateMHC

Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable –attainable, factory-built housing (a.k.a. another 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 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. Also 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 freelance consulting, and authoring many nonfiction texts.

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

HOUSING COST BURDENS CLIMB, STEADY OR WHAT?

According to Harvard University’s Joint Center for Housing Studies, on 3 December 2024, headlined: HOUSING COST BURDENS CLIMB TO RECORD LEVELS (AGAIN) IN 2023.  Now, that’s a full year ago, not today! The Press Release goes on to announce that: “Housing affordability worsened again last year, as a record number of US households were cost burdened. According to our tabulations of the newly released 2023 American Community Survey data, an all-time high 42.9 million households were cost burdened, meaning they spent more than 30 percent of their income on housing costs.”

“Additionally, 21.5 million households were severely cost burdened, devoting more than 50 percent of their income to housing, marking another all-time high.”

And this:  “Median monthly costs for homeowners increased 6 percent in 2023 to $1,327.00.”

Well, as disturbing as this information is, it does raise questions that go unanswered in the seven pages Press Release.

First off; what’s that ’30 percent’ all about? Well, it’s the commonly accepted and used Housing Expense Factor (‘HEF’) or standard. For more info see *1 below.

Second; just what are the ‘monthly costs of homeowners’? This report does not say! And looking online isn’t much help either. In 2008, when EducateMHC created the ‘Ah Ha! & Uh Oh! Worksheet’ for estimating homebuyer’s reasonable ability to purchase ‘affordable’ & ‘risky’ new & resale homes of any type on realty owned fee simple or leased, we offered this bifurcated description of what’s included in the 30% annual Household Expense Factor or HEF. See *1.

Now here’s just an example of how skewed such ‘official studies’ can be at times. A middle-aged homeowner in the upper Midwest has lived in his home for 50 years and paid off his mortgage long ago. Today his monthly household expenses total $892, fully $439 less than the $1,327 featured in this report.*2

Or, looking at these figures from the Press Release perspective, this homeowner could pay a mortgage (i.e. principal & interest) not exceeding $439/month to remain below the referenced 30% HEF. Any monthly mortgage payment above that amount would put this homeowner into the 42.9 percent of Americans who’re ‘cost burdened’.

If you’re interested in obtaining the above-reference ‘Ah Ha! & Uh Oh! Worksheet’ for your own purposes, purchase a copy of SWAN SONG from wwww.educatemhc.com  It’s located on pages 44 & 45, Appendix H. of the popular text.

End Notes.

1. 30% annual Household Expense Factor (‘HEF’) is either ‘loaded’ with loan principal, interest, taxes & insurance (i.e. PITI) and household utility expenses, not including telephone charges; or is ‘barebones’, allowing only for PI or PITI. The ‘loaded perspective ensures ‘affordability’, as household expenses are included in monthly payments, whereas ‘barebones’ perspective is ‘risky’, since household expenses still must be  paid, but now in addition to monthly amount set aside for PITI.

• What comprises this $892 figure? Monthly natural gas @ $118, electric @ $110, sewer @ $55, water @ $60, insurance @ $340 (household & vehicle), and property taxes @ $206.

‘Whole U.S. Housing Story’ in next blog posting

That’s right, the ‘Whole U.S. Housing Story’ relative to HUD-Code housing production for October 2024, and Stock Market Report for December 2024, is being compiled at this time.

George Allen