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

December 27, 2010

New Lions, Old Story, Affordability Conundrum, Social Engineering…

Filed under: Uncategorized — George Allen @ 6:11 am

New Lions, Old Story, Affordability Conundrum, Social Engineering, More


“It’s not the deal. It’s what a man does next that makes him great – or not!” Anonymous. No slight intended toward distaff property owners in the landlease community business, but frankly, there’re precious few of them. Back to the quotation. When I heard it recently, my thoughts turned to a significant ‘changing of the guard’ taking place among male portfolio owners/operators during 2010, and into early 2011.

On one hand, a few have retired, several expired, still others have been or are being forced from leadership roles, and some are moving on to other interests outside manufactured housing and LLCommunity milieus. All have been deal – makers; but few of them, sad to say, leave great personal or corporate legacies to distinguish their tenure. Fortunately however, there’ve been a few significant exceptions.

On the other hand, many have already observed a fresh pride of New Lions on the industry and asset class leadership horizon – not to be confused with the pride of Young Lions identified each year in the ALLEN REPORT. Historically, Young Lions have been the most aggressive of LLCommunity portfolio builders in years past, and without exception, entrepreneur businessmen. This bevy of New Lions however, with but a couple anomalies, are not sole proprietors or general partners, but salaried property management executives saddled with heady leadership responsibility within existing portfolio firms. Identity hint. They’re readily visible within trade bodies such as MHI’s National Communities Council (‘NCC’) division; ULI’s Manufactured Housing Communities Council (‘MHCC’); and involved in at least one initiative to seek out and secure new or renewed sources of chattel (personal property) financing for new and resale home sales transactions effected on – site in LLCommunties.

This is where the ‘greatness’ challenge resurfaces. Sure, portfolio consolidation continues throughout the asset class throughout North America, but with precious few new firms being formed – from scratch, during the past few years. And there may well be ‘a positive bump in the numbers this year’, as REO (bank ‘real estate owned’) properties find new owners. But what will these ‘salaried property management executives’ do to accomplish what most of their entrepreneur predecessors were unable to do? Maybe achieve and maintain greatness! But then, perhaps ‘greatness’ isn’t their challenge at all; but rather, simply protecting that bottom line and little more. Can’t fault that. Guess we’ll have to wait and watch what happens during the next 12 months and longer, to clearly see ‘…what a man does next that makes him great – or not!’


“Forget what people are saying, watch what is happening!” opines Vermont –based MHIndustry consultant Marty Lavin, esquire. This quote graces every email message Marty sends to friends and associates in and outside manufactured housing and landlease community environs.

Got to thinking about it the other day, and know what? He’s right! Without much effort, I can think of a half dozen examples where and how his truism plays out in the manufactured housing and LLCommunity ‘double dual industry’.*1 Here’s just one contemporary example: the flurry of press & association ‘talk’ about The CAMPAIGN! Surely you know what I mean! The proposal, made by ‘the four women from New Jersey’ (i.e., before ULI’s MHCC, our industry’s de facto Think Tank, at it’s Fall meeting in Washington, DC. The CAMPAIGN, is a proposal to plan and effect regional new home displays, supplemented with Infomercial seminars, in partnership with Big Box retail stores! Goal? To ‘sell more HUD Code homes’ by putting our best (design & product) foot forward in a very public way, to counter ‘image issues’ and frankly, Tell Our Story Our Way! There were news stories about this exciting initiative in every print and online trade press publication but one. Action to date? Little that this industry observer has seen or heard, beyond ‘putting some numbers together’, in the event someone has the brass to step forward and ‘try it one time’. And our HUD Code home manufacturers continue to wonder why the home buying public does not beat a path to their door!?

Again, as Marty is wont to say: ‘Forget what people are saying, watch what is happening!” In this case? ‘The rhetoric has ceased and nothing is happening!’ Shame on us as an industry!


Following quotation is from a short article titled, ‘The Affordability Conundrum’, featured in the December 2010 issue of MULTIFAMILY EXECUTIVE magazine. “Ron Terwilliger, former chairman of Dallas – based multifamily builder and owner Trammell Crowe Residential (‘TCR’) and creator of ULI’s J. Ronald Terwilliger Center for Workforce Housing, noted earlier this year that 19 million Americans spend at least 50 percent of their income on housing.” P.36.

Alas; but is that 50 percent factoid the true, whole and accurate story? Without clarification from Mr. Terwilliger there’s no way to know for sure! Here’s why…

First off, the ’50 percent’ reference springs from the well known ‘affordable’ Housing Expense Factor (‘HEF’) concept, whereby a certain percentage – varying among lenders, but usually between 25 & 30 percent – or more, defines the maximum amount of income citizens (should) pay for housing, whether owned or rented. But variable limits is just ‘half the problem’! The other, oft ignored half, is simply and tellingly, ‘What comprises targeted or actual income percentage citizens pay for housing’, owned or rented?

For example; are the aforementioned 25, 30, or even 50 percentiles ‘fully loaded’ (As they should be, in this writer’s opinion) with loan principal & interest, taxes and insurance (i.e. PITI) and household/utility expenses, but not including telephone expenses; OR, are those very same percentages ‘bareboned’, to include just P&I, leaving the home buyer/renter to still have to pay Taxes & Insurance, and household/utility expenses, but not including telephone expenses, ‘above and beyond’ what’s included in the (latter) stripped – down (.i.e. ‘barebones’) payment factor? Percentile composition makes a big, big difference!

Bottom lines? The Ideal, from an admittedly conservative, ‘affordable housing’ perspective is for said guideline AND applied percentile to be fully loaded 25 or 30 percentiles. Consequence? Probably less house for the buck allocated from one’s monthly or annual income! Reality, however, often finds lip service being paid to the 25 or 30 percentile guidelines, using them to peg just P&I. But when T&I and household/utility expenses, but not including telephone expenses, are added to such a percentile base, it’s easy to see how the ‘total percentage’ mushrooms to the ‘risky housing’ 50 percent or more cited by Mr. Terwilliger.

What’s to be learned from this? Simple. When housing industry spokespersons, like Mr. Terwilliger, set forth the type statement published in the referenced trade publication, they owe it to their listeners and readers to clarify, as in the previous three paragraphs, just what they mean when they describe ‘affordable housing’ using this one, or more, of four commonly recognized measures of housing affordability.*2


Following paragraphs, quoted from ‘The Courage of Marine Corps Leadership on DA,DT’ (‘Don’t Ask, Don’t Tell’), printed in American Thinker magazine, was penned and published prior to the Senate vote repealing DADT on 20 December 2010.

“Despite recent attempts to socially engineer our military, the bulk of the fighting and dying continues to be done, as through the ages, by young men. The bonds of men in combat cannot be replicated in any other activity, though our society likes to think they can. We loosely use the word ‘combat’ on the gridiron or in the courtroom. Those who have served in combat will tell you there is no physical or emotional challenge equivalent to actual combat. Those bonds between warriors, that brotherhood, that philia, cannot be replicated outside combat. Most warriors will tell you that without brotherhood, a unit in combat cannot be effective.”

“In combat, loss of effectiveness can mean failure of the mission. Defeat is anathema to the warrior. Failure increases the risk of death, injury, or capture of both soldiers and non – combatants.”

“Into this ageless formula for military success, the Pentagon and the Congress want to insert Eros, or erotic love, by ending the awkward ‘Don’t Ask, Don’t Tell’ policy for homosexuals serving in the military. These REMFs (pejorative acronym for desk – bound staff officers) have never had to duck and cover as the rounds or RPGs go whistling by. They have followed the lead of a completely inexperienced commander in chief and his Hollywood – raised chairman of the joint Chief of Staff to satisfy a constituency that is unaware and unappreciative of the sacrifices our young men and women make on their behalf.”

Now that you’ve read those sobering paragraphs, and know the DADT policy has been reversed, reflect on the serious, at times fatal, distraction this levels on the young men and women we know and respect, who’ve voluntarily placed their very lives on the line, to serve and protect you and me as American citizens.


Lest you missed it at the end of last week’s blog posting, this is your final reminder that paid Allen Letter professional journal subscribers prior to December 31, 2010, will be the last to receive the annual (22nd) ALLEN REPORT for free! After January 1, 2011, the ‘per copy’ price for the much expanded 22nd annual ALLEN REPORT (now includes appendices & more) will be $450.00 per copy! So, if not already a paid subscriber to the monthly newsletter (@ $134.95/year), consider becoming one this week: 27 – 31 December 2010, by subscribing via this website ( or phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. Leave a message if necessary and we’ll phone you back. This way, you’ll save $315.05. and tap into the LLCommunity asset class singular statistical resource document!

End Notes.

1. I pen ‘double dual industry’ in recognition of the facts that HUD Code manufactured housing, as an industry, is comprised of ‘manufacturing’ and ‘distribution’ elements; while the LLCommunities, as an asset class, encompass raw land ‘development’ and existing income – producing property ‘investment’.

2. 30% Housing Expense Factor (‘HEF’), Housing Opportunity Index (‘HOI’), Housing Wage (‘HW’), & ‘One Who Believes…’ From HOUSING AFFORDOGRAPHY, ‘Study of Affordable Housing Formulae & Measures of Housing Affordability’, George Allen, Realtor®, CPM®Emeritus, MHM, PMN Publishing, Indianapolis, IN., 2008.

George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024 Indianapolis, IN. 46247 (317) 346-7156

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