Blog Posting # 791, Copyright 3 May 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, trend tracker, and information resource for both business models. Access EducateMHC via (317) 881-3815; email gfa7156@aol.com, & visit www.eucatemhc.com to purchase Community Management in the Manufactured Housing Industry. And SWAN SONG is 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 non-fictio0n author and freelance consultant.
George Allen, CPM®Emeritus, MHM®Master, is the only 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, MHInsider magazine editor at large, & Allen Legacy columnist, Vietnam combat veteran & retired lieutenant colonel of U.S. marines, and author/editor of 30 books & chapbooks on MH, communities, business management & prayer.
AN ‘MH MOVEMENT’ IS A-BREWING!
Not since August 31st, 1993 (31 years ago!) have I sensed this high level of frustration on the part of land lease community owners/operators desiring to fill more vacant rental homesites within their properties, with new HUD-Code manufactured homes!*1 What seems to be the problem? First, a brief historical perspective spanning the first two decades of this century.
As you likely know, thanks to chattel capital (a.k.a. ‘home only loans’) shenanigans at the turn of the century, the MH industry lost easy access to personal property lending – to this day! Consequences? Annual new HUD-Code housing production plummeted from 372,943+/- units in 1998, down to a nadir 48,789+/- by year 2009. Only then, with the advent of Community Series Homes (specially-designed HUD-Code homes for in-community siting), and community owners/operators learning to ‘spec’, install, sell, and seller finance new homes onsite, did we see annual MH production climb to 105,772 units in year 2021.*2 Now we might be on our way back down – or so it appears early in 2024. Why?
Pandemic-related issues like labor shortfalls, raw material and OEM shortages, and now, high interest rates, have combined to lengthen manufacturing lead times, increase wholesale price, and more. Here’s where ‘An MH Movement is a-brewing!’ comes into play.
Community owners/operators have spawned a timely grassroots movement titled MH2X
And here’s what they have to say about it….
INTRODUCING MH2X
Doubling MH production in 2025
Our industry has languished, with annual production at about 100,000 new manufactured homes (‘MHs’) for years. ‘Best Guess’ is there’re 40,000 – 50,000 communities*3 in the U.S., that about 10 percent of the three million related rental homesites are vacant, and upwards of half the remaining homes onsite are old, unattractive, dysfunctional, barely habitable eyesores. MH2X is a SECO-sponsored grassroots initiative to ‘Double annual production of manufactured homes in 2025’, by filling vacant sites and upgrading communities with new manufactured homes!
What will it take to ‘double MH production during 2025’? Many more small and mid-sized community owners buying and selling new MHs to upgrade their communities and fill vacant rental homesites.
What will it take to make this happen?
- Community by community, owners must improve the industry by siting at least one new manufactured home, at a time, within their community.
- Educating community owners on the home buying process: by becoming a retailer, specifying options, features, and pricing ensuring quick sales of MHs to satisfied buyers.
- MH manufacturers going the extra mile to accommodate smaller community operators.
- Secure financing to acquire and mortgage the new manufactured homes
- Promotion and cost-effective conventional and social media marketing
- Sales training
- ‘Financing’ savvy to facilitate sale of new MHs, e.g. conventional ‘home alone’ financing, lease-option, short-term rentals with goal of conversion to conventional financing.
How shall we, as an industry, accomplish all this?
- SECO, a non-profit 501(c)(3) entity, whose annual conferences attract upwards of 600 small and mid-size community owners and other industry personnel, will sponsor 4-6 hour workshops through the end of this year (2024) and into next.
- Speakers at the workshops will be fellow community owners and managers who have ordered, setup, promoted, financed, and sold dozens, if not hundreds, of new MHs to upgrade their communities by filing vacant sites. Many have switched from buying used (resale) MHs to new ones.
- Additional speakers will be from other segments of the industry, including manufacturers, licensed setup firms, financing experts, insurance resources, and promotion/marketing/sales specialists.
- Attendance cost will be minimal, with proceeds used for out-of-pocket meeting costs and speakers’ travel expenses.
- Our objective will be for community owners to leave the workshops with all pieces of the MH buying and selling puzzle in hand, motivated and ready to order new MHs for their properties.
How can you get involved?
- Go to the SECO website: www.SECOConference.com, click on MH2X, enter your contact information and indicate what part you would like to play (e.g. community owners ordering new homes, supplier/vendor of products/services, speaker at one or more workshops, etc.).
- Upload your company’s logo. They will all be promoted by SECO supporting MH2X events
- Await more information from SECO about an initial workshop in Atlanta, GA., probably in about two months. More workshops will be scheduled, based on demand.
- Help spread the word by passing this information onto other community owners, and encourage them to become involved as well.
- Assist organizing other workshops in more locations around the U.S.
- Plan to attend SECO24 in September (See information on SECO website).
Well, this is your industry’s clarion call – to you, to participate in a program aimed to ‘double annual production of manufactured homes during year 2025’! Will you get on board today? If so, visit www.SECOConference.com now, and await further word as to workshops and more!
End Notes.
- Significance of 31 August 1993? Manufactured home community (trade term at the time, replaced ‘mobile home park’) portfolio owners/operators had identifies one another less than a decade earlier. Now some wanted to take their properties public as real estate investment trusts (‘REITs’), but the real estate asset class lacked national credibility and profitability awareness by Wall Street Analysts. So, at a meeting of 19 owners/operators on 8/31/1993, steps were taken to launch a new national advocacy group representing the unique income-producing property type. Three years later, on 1/1/1996, the Manufactured Housing Institute launched the National Communities Council (later a division of MHI) to those ends.
- A little known story about manufactured housing production interacting with in-community placement of new HUD-Code homes goes like this: In 1998 when 372,943+/- new HUD-Code homes were produced, only 15 percent (or 57,441 units) went directly into (then) manufactured home communities. 25 years later, given steep decline in the number of independent (street) MHRetailers, and community owners/operators taking initiative to sell and finance homes onsite, 51 percent (or 57,571 units) of the 112,886 new homes produced in 2023 went directly into communities nationwide. This has been a major paradigm shift, since year 2000+/-, for the manufactured housing industry. GFA
- Communities. Were ‘mobile home parks’ in the 1979s & 80s, ‘manufactured home communities’ during 1990 – 20000. And since the turn of the century, a trade term change to ‘land lease communities’. Read SWAN SONG for more information, as well as the industry’s official annual MH production levels since 1955. Available via www.educatemhc.com