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

April 12, 2019

MHARR’s Big Three Issues & Everyone Else’s Dozen (+) Do You Feel Abused?

Filed under: Uncategorized — George Allen @ 11:42 am

528 @ 7 April 2019;

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

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INTRODUCTION: For at least the third month in a row, monthly shipment volumes of new HUD-Code homes have slipped from levels that would have allowed the industry to eclipse its’ informal goal of 100,000 new homes per year. And through February of 2019, the pattern continued. What’s the problem or problems? Theories abound. On one hand, economic forecasters predict ‘record demand for affordable housing’ – well answered by HUD-Code housing, But the Sales Simply Are Not There! In my opinion; until the three national advocates, for manufactured housing and land lease communities, take the lead in identifying and resolving key issues, ongoing challenges and pithy questions facing the industry & asset class, we’ll continue to drift along at ‘less than 100,000 new HUD-Code homes shipped annually’! GFA

And you don’t want to miss Part II of this blog posting. Why? Because; if you watched the John Oliver ‘Warning About Mobile Homes’ on Last Week Tonight, you’ll likely want to read ‘my take’ on it. If you didn’t see it – don’t chase it down – just read Part II to understand what’s a-happening in and around manufactured housing & land lease communities these days. Not good!


MHARR to Address ‘Key Issues the Broader Industry Has Failed to Resolve’; ‘? or !’

April 2 issue of MHARR’s NEWS ITEM Press Release promises Bold New Initiatives to this end…

Or does it? MHARR identifies just “three post-production-related matters”:

1. Exclusionary/discriminatory zoning mandates

2. Placement restrictions or exclusions (affecting development of land home communities)

3. Availability of consumer financing

Now, some might argue the first numbered point, relative to zoning mandates, is a pre-production-related matter; perhaps second numbered point as well. In any event, both issues, along with the third numbered point, are important to the revitalization of HUD-Code housing production and shipment volume. So, applaud MHARR for this new commitment to Bold New Initiatives!

But pray tell; why no mention of Evergreen Issues & Evergreen Questions posed, once again, in blog posting # 527, last week? Do these issues & questions not rise to the import of the three numbered bullet points? Many believe they do! In brief, the ISSUES continue to be:

• Full responsibility for proper, safe & secure installation of new HUD-Code homes!

• HUD’s resistance to promote HUD-Code manufactured housing as affordable housing

• Replacement stock of HUD-Code homes not keeping pace with mobile home attrition

• All seven types of shelter, now commonplace in land lease communities, continue to be ineligible for real estate-secured financing vs. paying higher interest on chattel capital

• Manufactured housing industry to use Area Median Income (‘AMI’) & Annual Gross Income (‘AGI’), to ensure homebuyers/site lessees buy the house they can truly afford!

• Improve public image of HUD-Code manufactured housing via branding, ads, and more

• Lack of secondary market for valuing, selling, & financing resale manufactured homes!

• Lack of secondary market for marketing/selling seasoned chattel capital loan portfolios!

• Lack of widespread professional property management training & certification

In brief, the QUESTIONS continue to be:

• When will HUD-Code housing manufacturers eschew industry’s D&R Delivery (‘Drop & Run’) rep, taking full responsibility for proper, safe & secure installation of homes?

• When will lenders include estimated annual household utilities expenses into the standard 30 percent Housing Expense Factor (‘HEF’), rather than force homeowner/site lessees to pay these monthly bills in addition to monthly loan PITI?

• When will HUD & other regulators ‘get out of the way’ of Free Enterprise efforts to provide quality, affordable housing products to the American citizenry?

• When will property owners ensure rental homesite rates are in sync with other forms of multifamily rental housing in same local housing market?

• When will national advocates for manufactured housing and land lease communities finally work together on a regular basis to advance our industry and realty asset class?

Later in the same NEWS ITEM, MHARR takes a swipe at MHI’s emphasis on “… a ‘new class’ of manufactured homes at a price point significantly higher than mainstream manufactured housing.” (claiming) the “…diversion of DTS (Duty to Serve) benefits the industry’s largest (housing manufacturing) entities and higher-cost market-dominant lenders….”

This is a controversial topic among some, if not many, ‘housers’ & practitioners. My view?

On one hand, we should all hope MHI’s New Type (still in search of a working name) manufactured home concept (i.e. pitched roof, porch, attached garage, etc.) succeeds where ‘big box = big bucks’ Developer Series Homes of the mid to late 1990s failed – when independent (street) MHRetailers, as novice ‘contractors’ at best, attempted to compete head-to-head with 4th generation builders in the ‘land & home’ market. This time around, using GSE’s ADVANTAGE & CHOICE programs, let’s get it right, using ‘company stores’ and independent (street) MHRetailers who know what they’re doing!*1

Furthermore, as a land lease community aficionado, I think the GSEs appear to be taking the easy way out, implementing DTS programs focused on real estate-secured financing, and doing little-to-nothing to help fill an estimated 250,000 vacant rental homesites within 50,000+/- land lease communities nationwide, where chattel capital is the norm!

So, is there a middle ground for the latter, albeit continuing trending matter? (Access to chattel capital for on-site financing of new HUD-Code homes) And what are the answers to the aforementioned Evergreen Issues & Evergreen Questions? The only way we’ll ever know – and resolve, is when the three national manufactured housing advocacy entities, once and for all, sit down for a strategic planning meeting and do so!*2

End Notes:

1. An apt subtopic, to this controversial matter, is the confusing pair of ‘similar in housing product but different in name’ loan guarantee programs, i.e. Fannie Mae’s CHOICE, and Freddie Mac’s ADVANTAGE. Why are the GSEs posturing to almost assuredly confuse prospective homebuyers in this fashion? Which to use? CHOICE or ADVANTAGE? For the whole story, read the May issue of the Allen Letter. Available via

2. Ah, but there’s a CAUTION here. While I’m not a conspiracy theory aficionado, I/we cannot ignore whispers about some Grand Conspiracy where manufactured housing and HUD-Code housing chattel finance markets are dominated by one firm; and where one, possibly more mega-portfolio owners/operators of land lease communities, dominates not only the realty asset class, but sadly, hundreds of thousands of homeowner/site lessees as well.


Another Assault on MH & LLCommunities!

What follow here, are parts of a Special Email Message sent to manufactured housing & land lease community ‘insiders’ and influencers on 8 April, soon after John Oliver’s TV faux documentary aired about ‘mobile homes’ & ‘mobile home parks’. In it, he refers to the former as ‘cars you sleep in’; the latter, ‘what you sell your blood for to pay rent’. Seriously.

Many of us are aware the manufactured housing industry & land lease community realty asset class are under assault from several directions these days, ranging from tenant & social activists, to rent control aficionados, to even well-meaning but misguided non-profits running with half the story. So, the answer to the question: ‘What to say or do?’ can be variously answered:

• Nothing. As this too will pass
• Respond to everything that sees light of day online and in the secular press (like this)
• Attempt to work with parties being accused, rightly & wrongly, of various abuses

Don’t know ‘bout you, but I plan to continue addressing these matters, one by one & one on one, with individuals and firms identified in exposes’ like this. No, not John Oliver, as he’s just a script reader, not a bona fide influencer. But Dave Ramsey and Frank Rolfe are worth the time and effort. The former, because he’s wrong: ‘Manufactured homes indeed can appreciate in value when well cared for and sited in professionally managed land lease communities!’ Frankl Rolfe? I doubt anything I say or write will sway his oft stated, albeit abhorred, business model – though I am encouraged about positive changes I’m hearing, relative to property management, by his erstwhile (?) business partner.

Bottom line for me? While I don’t like what I see and read about large private equity firms overpaying for land lease community acquisitions, then jacking site rents to ‘cover’ same, I believe there’ll soon be a shakeout, as they learn the business model is no longer just about leasing rental homesites, but having to buy and seller-finance new homes to grow and maintain occupancy. That’s more work than they counted on when investing in the unique, income-producing property type.

And where Clayton Homes is concerned. Do you find it ’telling’, as I do, the other two of the Big Three HUD-Code housing manufacturers are rarely, if ever, mentioned in the impassioned attacks we’ve endured to date? The omission comes across more as a ‘piling on’, than an otherwise broad or enlightened view of manufactured housing as affordable housing. No, there’s something fishy going on here, I’ve just not been able to put my finger on it as yet. Any insights from you?

George Allen, CPM, MHM c/o EducateMHC: Box # 47024, Indpls, IN. 46247. (317) 346-7156


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