JUST LIKE SHOOTING FISH IN A BARRELL

June 24th, 2021

Blog Posting # 644 @ 25 June 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!; Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. #1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: OK, ‘hang onto your hats’, so to speak. We lead off with a continuation of last week’s semi-expose’ of predatory property management practices; this week we take it a step further. And parts II & III contain timely and important networking opportunities for all! GFA

I.

JUST LIKE SHOOTING FISH IN A BARRELL

The Sorry State of Landlord -Tenant Relations in Some Land Lease Communities Today

A 2021 update to the year 2000 expose’, ‘UPSIDE DOWN IN A MOBILE HOME PARK!’

You last read of the ‘young couple George & Carolyn, buying their first home’ in year 2000 – that’s 21 years ago! Remember? They were “…both employed, no children or pets, and (owned) two older cars. And there was H. ‘Itch’ Balle, the retail sales center salesman/manager.” What caught this young couple’s attention was the L(.)(.)K-headlined advertising for new manufactured homes ‘for sale’, featuring a $4,000 move-in incentive offer!”

To make this long story shorter here, George & Carolyn wound up buying an $80,000 multisection HUD-Code home, already sited but not landscaped. And the $4,000 incentive covered all but $500 of their deposit, with the balance used to landscape their rental homesite. Financing was a steal! Mr. Balle got them ‘10% over 30 years’ terms, with a variable rate of 9% over 30 years, reducing their monthly loan payment from $733.13 to $672.12/month. Oh, and $285/month site rent was waived for first year – a welcome windfall of $3,420 in that 12 month period.

Yes, that’s how things were back in year 2000. And all was OK until the variable rate mortgage jumped payment to $800/month, plus $300/month site rent (at end of grace period and including a rent increase). Bottom line? George & Carolyn were now in a ‘family way’, with a new car loan payments, and clearly ‘upside down in their mobile home park’ (i.e. old outgo of $672.23/month vs. new out go of $1,100/month).

Somehow George & Carolyn survived – barely. And today, 21 years later, the kids gone, and recently retired, they still live in their not-yet-paid-off $80,000 manufactured home.

Now comes the ‘just like shooting fish in a barrel’ metaphor! But first; to set the scene.

Up until six months ago, George & Carolyn’s monthly site rent had been $400/month (i.e. up from $300/month in year 2000, or an average increase of $9.00 per year). However, a new land lease community portfolio firm acquired the property six months ago and immediately raised the monthly rental homesite rate from $300 to $365/month. Not only that, previously master-metered water was now individually metered, introducing a new monthly expense of between $20 & $40. And a couple months later, an $18/month trash fee was added, besides an $8.00/month admin fee/school tax. So, all told, George & Carolyn’s monthly payment to the property owner, in six or so short months, jumped from $300/month to at least $411/month, or an annual increase of $1,332 for rent, water, trash and admin/school tax charges.*1

Next; what it’s like to be a captive audience, the proverbial fish swimming around in a barrel.

George & Carolyn are within nine years of paying off their 2000 model multisection manufactured home, sited in a land lease community they’ve called ‘home’ these past 11 or so years. And now that they’re retired, their set income, from social security and maybe a small pension or two, only stretches so far. How can they make up this $1,332 annual increase in their housing expense (not including PITI for the home proper)? They can’t unless they ‘unretired’ to get a job! And moving their home elsewhere is little more than wishful thinking. Why? To move a multisection (which one should never dissemble even under good conditions…as the two sides rarely remate as weatherproof as the initial installation) manufactured home, just across town, costs $5,000 – 10,000 to ready the home for transport, transport it, and reassemble it at the new location – If a new location (i.e. land lease community) can be found that will accept a 21 year old home.

Consequence? Deal with the consequences the best way one can do so.

How to maybe ameliorate these serious personal financial challenges in the future? That’s hard to say. But if, way back when, the new manufactured home is purchased and land lease community selected, one used the ‘Ah Ha! & Uh Oh! Worksheet to ‘estimate maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately-owned homes of any type…on leased land’, one would buy what one can truly afford, based on a 30 percent Housing Expense Factor and other factors. For a FREE copy of this very handy formula worksheet (i.e. based on Area Median Income or Annual Gross Incomes of $36,000 and $51,229), email your request to gfa7156@aol.com Be sure to include a postal mailing address.

Have no doubt about this. We are living and working, during year 2021, in the hottest land lease community sales market ever; and at the same time, seeing homeowners/site lessees, in some – if not increasing, instances, suffering from one or another type and degree of predatory property management. So, take this message to heart, and ask yourself: ‘Am I guilty of any or all these practices?’ If not – Great! If so, however, correct course now before it’s too late to save our real estate asset class from unwanted landlord-tenant legislation at state and or national levels.

End Note.

1. The dollar figures cited here are based on information published in MHAction’s DISPLACEMENT, INC. report.

George Allen, CPM, MHM
EducateMHC

II.

INDIANA GOVERNOR TO KEYNOTE RV/MH HALL OF FAME BANQUET

Just learned today, 22 June, Indiana Governor Eric Holcomb will be a special speaker at this year’s induction ceremony, 16 August 2021, at the RV/MH Hall of Fame in Elkhart, IN. Sure hope I get to see you there! 20 of our manufactured housing & land lease community colleagues will be inducted into the Hall of Fame that evening. For more information and to purchase tickets, phone (574)293-3455. This is a remarkable opportunity to showcase our industry to the highest public officer in the state of Indiana, and honor friends in the business!

III.

FINAL NETWORKING ROUNDTABLE & RETIREMENT CELEBRATION

Now is time to register for this unique ‘once in a lifetime’ event! Once in a lifetime? Have you ever been invited to a national interpersonal networking opportunity including retirees you’ll not likely get to see again in this lifetime? Visit www.educatemhc.com See you in Nashville, TN., on 20 August 2021!

***

AN HISTORIC DISPLACEMENT

June 18th, 2021

Blog Posting # 643 @ 18 June 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aaol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: Not what I planned to talk about today. But when MHAction’s DISPLACEMENT, INC. report hit my desk, and I read through it twice, I knew the core issue of landlord-tenant relations had to be taken public ASAP for all of you to know.

A REQUEST. If you’re reading this blog and are involved, or have recently been involved, in developing raw land into a new land lease community, please contact me via gfa7156@aol.com

I.

AN HISTORIC DISPLACEMENT

As you read the following subtitle to MHAction’s 34 pages DISPLACEMENT, INC., report, keep in mind this is the first time in manufactured housing and land lease community history, where and when LANDLORD-TENANT ISSUES have taken center stage on the national publicity scene:

‘How Havenpark Capital and Enterprise Community Partners are eroding affordable housing and how residents are fighting back.’ Subtitle to MHAction’s DISPLACEMENT, INC. report.

What follows here are select, out of context quotations from the subject report. Read and ponder them. Then, from your own perspective, whether a land lease community owner or operator, take steps to ensure you don’t implement predatory property management practices within your property or properties,. And talk to MHI’s National Communities Council division about how you can help ameliorate and mitigate these troublesome issues going forward.

“MHAction hears from residents daily about displacement due to rent and fee increases, health issues caused by community neglect, and stress-inducing harassment.” (p.4)

“Their goal is not to make homes and communities more stable, accessible, or affordable. Their goal is to extract easy profit from low-income residents.” (p.7)

“Havenpark has dramatically increased lot rent (the rent residents pay for the land beneath their homes) and other fees, has invested minimally in community maintenance, and has adopted arbitrary and punitive rules.” (p.7)

”Residents are calling on Havenpark, Enterprise Community Partners, state and federal elected officials, the Federal Housing finance Agency (‘FHFA’), and (GSEs) Fannie Mae and Freddie Mac to all take action to:

• Keep our homes affordable with gradual, justified rent and fee increases and COVD-related rent relief

• Keep us in our homes with good cause eviction requirements and COVID eviction protections

• Make our communities safe and healthy with community maintenance

• Treat residents decently and fairly

• Save our communities from predatory investors by supporting community ownership by residents, mission-driven nonprofits, and public entities.” (p.8)

“Havenpark and Enterprise Community Partners have claimed that Havenpark’s purchase of manufactured home communities is a strategy to preserve them as affordable housing.” (p.11)

“…Pine Ridge Mobile Homes in Linden, Michigan reports (sic) Havenpark raised the rent from $384 to $420 when they bought…community in 2019, and (sic) added an $18 trash fee, $5 admin fee, $3 school tax, and new water charges through separate meters that cost around $40-$50/month.” (p.12)

“Havenpark claims (sic) the large rent and fee increases are justified by significant investments in community improvements.” However, “Residents report (sic), despite promises of big improvements they have only seen regular maintenance or surface changes by Havenpark, such as repaved roads, landscaping, emergency repairs, and swing sets.” (p.15)

“Residents reported that, rather than investing in community infrastructure, Havenpark has focused on bringing in new homes (sic) they can sell or rent at a higher price.” (p.17)

“Fannie Mae and Freddie Mac…have provided billions of dollars in GSE-backed multifamily loans for manufactured home community portfolio acquisitions, like the Havenpark ($100 million) purchases financed through Bellwether Enterprise, which have made manufactured home communities unaffordable for long-time residents.” (p.28) As related asides, word of this became known to the GSEs during their Listening Session in St. Louis, MO., during late 2019. Since then the FHFA & GSEs have instituted Tenant Site Lease Protections. And, “In November 2020, the FHFA announced new requirements on Fannie Mae and Freddie Mac’s manufactured home community lending, requiring (sic) half of GSE-backed multifamily loans go to affordable housing and (sic), to be considered affordable, manufactured home communities must be resident-owned cooperatives, be non-profit-owned, or commit to the FHAFs’ Tenant Site Lease Protections.” (p.28)

In conclusion, “Residents of Havenpark-owned communities are…calling on decision-makers to stand up to predatory investors and help protect families and seniors who are being pushed out of their homes and communities.” Via

• “Keep Our Home Affordable

• Keep Us In Our Homes

• Make Our Communities Safe and Healthy

• Treat Residents Decently and Fairly

• Save Our Communities From Predatory Investors” (pp.29-31)

Each of these five bullet points are accompanied by three targeted, involved groups: Enterprise Community Partners and Havenpark; State Policymakers; and, Federal policymakers, FHFA, and the GSEs.

So there you have it; how and why the land lease community real estate asset class, as a whole, has been dragged onto the negative national publicity scene, by a small bevy of portfolio ‘players’ (Havenpark is not the only firm named), a national affordable housing advocate, and a financing subsidiary. This is not the national publicity manufactured housing and communities need at this time. In my opinion, it’s time for our national elected and salaried trade entity and advocacy leaders to step forward and address these landlord-tenant issues in our behalf!

George Allen, CPM, MHM
EducateMHC

What It’s Like to Leave…

June 11th, 2021

Blog Posting # 642 @ 11 June 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: To promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: In case you haven’t yet heard, I’m easing towards retirement come the end of year 2021. I’m already semi-retired, having sold off our last land lease community to our daughter and her business partner; and now they handle the publication of our 30+ year newsletter, a dozen resource documents, and books. Bottom line, so to speak? The final Networking Roundtable and Retirement Celebration combined event is scheduled for 12 August 2021 at the downtown Hilton Hotel in Nashville, TN. Invitations will soon be in the mail, but since this somewhat unusual event is open to all my friends and associates in manufactured housing and owning/operating land lease communities, visit www.educatemhc.com for details and registration information. It appears the 12 August event will be the first face-to-face interpersonal networking and educational event for our industry and realty asset class in 1 ½ years! Program? Soon to be announced, but has 100% to do with the most significant and positive emerging trend affecting all of us today! Even if I wasn’t hosting this event, along with Susan McCarty, MHM, and Erin Smith, MHM, I’d make it a high priority to attend.

I.

What It’s Like to Leave…

‘The way I see it, I’m giving up a good thing – my business career, to pursue something even better – opportunities to write what I’ve wanted to for years, and relax while I’m doing so.’ GFA

Five times I’ve left jobs during the past 40 plus years, but this time has been different.

When rotating out of Vietnam, headed home to the land of the ‘big PX’ (i.e. post exchange or mall stores), I said ‘Good-bye’ to no one. While I was company commander, with responsibility for more than 100 Marines, they were all assigned out as helicopter support teams, to USMC ‘grunt’ (i.e. infantry) units scattered throughout I-Corps (i.e. northernmost Vietnam along the DMZ to the north and Ho Chi Minh trail and Laos to the west). I simply packed my gear, climbed aboard a transport chopper, and headed for Da Nang; then, by plane, to Okinawa and on home.

My first civilian job was with Ridge Homes, a division of Evans Products, in Conshohocken, PA. When I left in 1972 to relocate to Franklin, IN., to open a new pre-fab plant, my lumber yard truck loading crew hosted an after-work going-away party for me in the tool room. When asked to make a few parting remarks, I commented on how I was pleased to have been their boss for a year, with no disciplinary issues or worse. It was then I learned, the only other veteran on the crew had spread a tale about me being handy with a knife (i.e. we all carried big jack knives, for cutting ropes when loading flatbed trailers) – having seen me stab and kill an enemy combatant in Vietnam. (Not true) No wonder they didn’t want to cross me! But we parted in good rapport!

A year later, when the early 1970s Arab oil crisis closed the new plant, I started to work for Davidson Industries in Southport, IN., as head of the wall panel, truss, and mill shops. Learned a lot about factory-built housing there, but could not get along with my superior, who viewed me as competing for his COO job. So I left on less than congenial terms. He died a couple years later

Then worked two years as general manager of Tuchman Cleaners in Indianapolis. Soon realized this family firm held limited opportunity for me in the future, so I resigned, to begin work as a property manager trainee at Turtle Creek Management. That’s where I learned the (then) ‘mobile home park’ business. And when that firm sold its’ four communities I went with the acquiring firm for a brief period of time. Why brief? Well, that’s another story in itself; suffice it to say here, GEF Communities ‘bought a pig in a poke’ (i.e. ‘something bought without knowledge of its’ true value’), thanks to erroneous financial due diligence on the buyer’s part.
I was fired, and ten years later, GEF’s owner murdered a dozen attorneys and clients in downtown San Francisco before committing suicide. For full tale, read SWAN SONG or email GFA7156@aol.com and request a copy of ‘An Error to Die For’. Be sure, though, to include a postal mailing address for the reprint. And the book is available via www.educatemhc.com

That was my last job, ending mid-1979. By early 1980, Carolyn and I had founded GFA Management, Inc., and were managing – as she was wont to say: “Anything that didn’t move!” Now, that’s a novel but accurate definition of real estate property management. And it’s from ‘this job’ that I’m retiring, 40 years later. Carolyn too.

What’s it like to leave? Mixed feelings for sure. I don’t miss the daily and weekly pressures of problem-solving at our properties, or those owned by others. But I do miss, already – and in part due to the pandemic, the camaraderie of businessmen and women in manufactured housing and land lease communities. Hopefully the final Networking Roundtable and Retirement Celebration on 12 August 2021 will assuage those sentiments somewhat. Will I see you there? Again, if interested, visit www.educatemhc.com for information and to register.

Has there been Life Lessons Learned, on this latter job, during the past 40 plus years? Yes, for sure! Property management is a great way to ease into ownership of income-producing properties! Investment realty, when bought and managed ‘right’ is a stable and profitable business venture. Management consulting, however, is not as easy as many folk think. I’ve yet to meet the retiree who successfully (and profitably) engaged in the practice for even a year. Me? I long ago committed my ‘lessons learned’ to the final chapter in the Chapbook of Business & Management Wisdom; it’s titled: ‘Scintillatingly Salient-but-Salacious Secrets that Might Lead to Management Consulting Success on the National Level – but don’t count on it!’ This book too is available for purchase via www.educatemhc.com or email me for details.

And did I mention, Carolyn and I now care for, two days a week, our month old and newest great grandchild, Emerson Junia Meek? Another ‘benie’ of retirement! Does her middle name intrigue you? Then pick up a Bible and read Romans 16:7 to learn about the first female apostle.

Don’t forget! Let’s enjoy a good and educational time together on 12 August in Nashville, TN!

George Allen, CPM, MHM

OK, THE MYSTERY IS (ALMOST) OVER!

June 4th, 2021

Blog Posting # 641 @ 4 June 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communicatio0n media for all land lease communities throughout North America!

To input this blog and/or affiliate with Educate MHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: What will you be doing on Thursday, the 12th of August 2021? Hopefully you’ll be with us in Nashville, TN., participating in the final Networking Roundtable & a Retirement Celebration. Read Part I here following. And some interesting information from the CFPB, gleaned from HMDA research. Part II. And are you one of those Waiting for Distress, where underperforming income-producing properties are concerned? Part III is for you.

I.

OK, THE MYSTERY IS (ALMOST) OVER!

The cover page of last week’s blog posting (#640) announced what will be the FINAL NETWORKING ROUNDTABLE, & a RETIREMENT CELEBRATION. This national manufactured housing and land lease community dual event will occur 12 August 2021 at the downtown Hilton Hotel in Nashville, TN. It will be the 29th and FINAL Networking Roundtable, and a Retirement Celebration to fete roundtable founder and perennial host, George Allen, a.k.a. ‘The Colonel’ – as well as other recent retirees present at this dual event (Cary, Don, Sharon, John, George – are you, and others, paying attention?)

PROGRAM? Still putting details together, but here’s what we do know now. Registration will be during the morning along with vendor booths and opportunities to network and make deals with the who’s who in the MH Industry. Early afternoon, I’ll begin with, as you’ve come to expect, the most comprehensive STATE OF THE MANUFACTURED HOUSING INDUSTRY & LAND LEASE COMMUNITY ASSET CLASS presentation, followed by a ‘fireside chat’ Open Conversation with the audience.

Then we’ll enjoy a KEYNOTE PRESENTATION like nothing you’ve heard and seen in many years! About what? Not telling you yet, but here’s a hint. If all works out as planned, the exciting and timely topic will be the first such major presentation of this sort since the mid to late 1990s!

Here’re a few related points to ponder. 1) Given the planned – timely and trendy focus of the KEYNOTE PRESENTATION; 2) the fact manufactured housing & land lease communities endured a two decades long (years 2000-2020) PARADIGM SHIFT, where new HUD-Code home sales moved from independent (street) MHRetailers onto rental homesites within communities; and 3) our products & services RETIRING from the industry and asset class business scene, this 12 August 2021 final Networking Roundtable will mark the END OF AN ERA and BEGINNING OF OUR NEXT ONE! Do you get my drift? You certainly will by the time this landmark event ends – if you’re present!

What else that day? Superb interpersonal NETWORKING of course, during a cocktail hour and celebratory dinner (Semi formal attire requested). We request all RV/MH Hall of Fame Members, present at the banquet, to wear their bright green RV/MH blazers.

More details to follow. But for the time being, visit www.educatemhc.com and click on the Training & Seminars prompt to learn more and to register.

Hope you sense a major manufactured housing & land lease community event is in the offing!

II.

CFPB SHARES HMDA RESEARCH INFORMATION

The Consumer Financial Protection Bureau (‘CFPB’) recently published (27 May 2021) a report whose content is based on information collected under the Home Mortgage Disclosure Act (‘HMDA’). What follows here is a digest of that information.

“Manufactured housing is a small segment of the overall housing supply, but is one of the most affordable types of housing available to low-income consumers, and makes up 13 percent of the housing stock in small towns and rural America” & “…acquisition costs, however, often come coupled with higher interest rates and limited opportunity to refinance.”

• “…around 42 percent of manufactured home purchase loans are ‘chattel’ loans….” And then there’s this, in my opinion, red herring statement: “Consumers may choose to get chattel loans to avoid putting the underlying land at risk if they default on the loan.” True enough, for the few times when that happens. But nothing is said in this bullet point or the ones to follow, about consumers getting chattel loans for homes sited on rental homesites within land lease communities! It’s a fine point, I know, but ‘telling’ in the omission.

• “Most manufactured home loan applications are denied, and less than 4 percent of chattel originations were for refinances. Homeowners seeking a loan on a site-built home are approved more than 70 percent of the time, but less than 30 percent of manufactured home loan applications are approved.” Now that’s sobering!

• “The top five lenders account for…nearly 75 percent of chattel lending.” The four largest originators are specialty lenders that primarily offer chattel loans to manufactured housing owners. & “Over time…banks have decreased their activity or exited the market altogether.”

• “Hispanic, Black and African American, American Indian and Alaska Native, and elderly borrowers are more likely than other consumers to take out chattel loans….” & “Black and African American borrowers are the only racial group …underrepresented in manufactured housing lending overall, compared to site-built….”

The previous paragraphs were lightly edited to facilitate ease of understanding. GFA

III.

SOME INTERESTING INSIGHTS GLEANED FROM ‘WAITING FOR DISTRESS’

The following quotes are gleaned from a feature article titled ‘Waiting for Distress’, as published in the May 2021 issue of GlobalSt. Real Estate Forum magazine, pp. 35-39

“Stalking horse auctions are a routine part of many Chapter 11 bankruptcies.” What’s a ‘stalking horse’ auction? ‘A false pretense concealing someone’s real intentions.’

“…the pace of distressed assets coming to market has been agonizingly slow for funds that accumulated capital with this goal in mind.” What goal? To acquire distressed retail and hotel assets.

“…the U.S. economy is poised for super-sized growth, and lenders continue, for the most part, to show patience with borrowers.”

“The Global Financial Crisis came about because of poor underwriting and unnecessary risk.” Thinking back to 2007 & 2008.

“Another challenge for distressed investors is the reluctance of many lenders to push properties into foreclosure, coupled with a wave of opportunistic capital targeting troubled borrowers.”

And, as they say, ‘the beat goes on’, prompting one (me) to wonder: ‘When and what will be the fallout among land lease communities acquired and abused by aggressive portfolio builders?” I believe you can push homeowners/site lessees only so far with large inordinate rental homesite $ rate increases, conversion to utility submetering, and new add-ons – all at the same time! In my opinion, the combined rental homesite rent amount and PITI payment on the home proper, taken together, must be 10-20 percent less than either the monthly 3BR2B apartment rent or site-built housing PITI. Why? Simply to remain competitive in the local rental housing market. Think about it.

George Allen, CPM, MHM
EducateMHC.com

A MEMORIAL DAY PENSE’ (‘reflection’)

May 28th, 2021

Blog Posting # 640 @ 28 May 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.eduacatemhc.com

Motto: ‘U Support US & WWE Serve U! Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: On this Memorial Day, celebrate the lives of not only those who served, but especially ‘Those Who Served & Gave All!’ And relative to Parts II, III & IV, here following, let’s together ensure, next Memorial Day, we won’t be mourning the passing of manufactured housing and land lease community business models! And Part V? ‘Ah, the mystery deepens!’

I.

A MEMORIAL DAY PENSE’ (‘reflection’)

This is a Personal Reflection Penned After My First Visit – alone – to the VIETNAM VETERANS MEMORIAL (The Wall) in Washington, DC. on 15 July 1984, 15 years after my return from RVN.

If the coarse language in this poem offends you, reflect on this reminder penned by author George Orwell: ‘People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.’

Damn black wall!
Why do I cry so before you?
I’m alive – ‘Thank God’ for that
But what of these friends I knew?

Many years have passed
But now – “I’m really there again’
With the same strong emotions
And memories flooding back again….

‘Got, I hate to cry!’
But that’s all I’ve done today
Out of gratitude – grief – and pride
For these my comrades, where’er they lie.

‘Damn black wall!!’ But I’m oh so glad you’re there…..

GFA, Jr.

When you visit The Wall, and you really should someday, kindly look up the names of these two Marine officers, friends of mine, who did not make it back from Vietnam. Each left behind a loving wife and small child.

Lieutenant Mark Fiebelkorn
Lieutenant John White, III

II.

YOUR RESPONSE TO: ‘WHAT WE KNOW IS ALREADY HAPPENING!’

Last week’s ‘outing’ here, of Wall Street-type investment companies , including some private equity firms and investment funds acquiring land lease communities ‘touched a nerve or two’, among blog floggers (readers). Why? Because few manufactured housing professionals support the abhorrent use of predatory measures toward homeowners/site lessees and the exorbitant rental homesite rates they’re expected to pay, as well as absorb new add-on charges.

So the profiteering and related controversy (to embrace ‘rent control’ of not) continues! What I’m waiting to hear and see, is a very public denouncing of predatory practices. By whom? The only viable national advocate for land lease communities nationwide, the Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division! The NCC adjunct to MHI began its’ work on 1 January 1996, after being birthed 2 ½ years earlier as the Industry Steering Committee (‘ISC’). And among the first founding group’s Mission Statement & Objectives is this goal:

“Avoiding and combating rent control and landlord/tenant legislation.”P.97 in SWAN SONG.

So, 30 years later, is there a parallel focus in the contemporary mission of MHI’s NCC division?

In my opinion, it’s time for the leadership of MHI’s NCC division to publicly address this serious matter – one that’s fast becoming the newest ‘evergreen issue’ negatively affecting the entire manufactured housing industry! Perhaps their Code of Ethics is the place to start.

If you’re a member, let them know how you feel!

III.

GSEs Once Again, Bail on MH!

Compare the content of the next two paragraphs. The first is quoted from SWAN SONG (‘History of Land Lease Communities’), describing an FHFA & GSEs national chattel finance roundtable in Indiana in early 2010. The second paragraph is quoted from Manufactured Housing Association for Regulatory Reform’s (‘MHARR’) Press Release dated 18 May 2021.

2010. “This decade began under the worst of business conditions! A Manufactured Housing Finance Roundtable was convened, early in the year, in Elkhart, IN., attended by representatives from the manufactured housing industry and the Federal Housing Finance Agency (‘FHFA’), as well as GSEs (‘Government Sponsored Enterprises) Fannie Mae & Freddie Mac. Purpose of the meeting? To tell the (MH) industry it was, henceforth, ‘on its’ own’ and not to expect any substantive financial assistance from any of them.” P. 51, Chapter # 5. Nor did we receive any GSE assistance for several years.

2021. “The most striking aspect of both proposed (‘DTS’) plans, in relation to federally-regulated manufactured housing, is their complete omission of any programs, initiatives, or activities of any kind, designed to provide or advance either securitization and or secondary market support for the manufactured housing personal property (i.e. chattel loans constitute nearly 80 percent of the HUD-Code manufactured housing consumer lending market for new home purchases). The latest proposed (‘DTS’) plans included…absolutely NO proposed chattel loan purchases, NO chattel loan ‘pilot programs’, NO chattel loan data or information gathering, NO ‘education’, NO ‘engagement’, or any other activity of any kind.” Emphasis added. GFA

2021. And if the previous paragraph messages of serious benign neglect by Fannie Mae & Freddie Mac is not clear to you, read this for effect: “For the 2022-2024 (‘DTS’) Plan cycle, Freddie Mac will devote our resources to supporting the real property manufactured housing market…We will NOT pursue the purchase and securitization of personal property (chattel) loans on MH.” Is it clear to you now? Once again, we are 100 percent ‘on our own’! Emphasis added. GFA

IV.

MHARR CALLS ON HUD TO RECTIFY FOUR MAJOR BARRIERS TO MH!

Short and ‘not so sweet’. MHARR, in correspondence dated 21 May 2021, admonishes HUD Secretary Fudge to take steps now to address and rectify four major barriers to MH:

• Full program reform in accordance with the 2000 law (MH Improvement Act)

• Elimination of discriminatory and exclusionary zoning

• Revitalization of the Federal Housing Administration’s Title I manufactured housing program

• Full implementation of Duty to Serve (‘DTS’) plans

So, here we are, six months into the New Year (2021), and these are our post-pandemic Marching Orders. Question now is, WHO is going to lead us in these worthy endeavors?

Always interested in your feedback – and you’ve certainly been giving it to me of late! Don’t stop now. Communicate with me via gfa7156@aol.com

V.

THAT DATE

Many of you receiving this weekly blog posting have been reading/hearing whispers of an unusual industry and realty asset class gathering later this year. Pencil 12 August 2021 onto your personal planning calendar. Details to follow…for the FINAL NETWORKING ROUNDTABLE.

George Allen, CPM, MHM

HERE IS WHAT WE KNOW IS ALREADY HAPPENING!

May 21st, 2021

Blog Posting # 639 @ 21 May 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aaol.com & visit www.educaatemyhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: Whoa! This blog is jam-packed with interesting, albeit in some cases, controversial information today. So read closely and comment as you feel motivated to do so.

I.

HERE IS WHAT WE KNOW IS ALREADY HAPPENING!

What follows is the Best ‘land lease community predatory practices’ Summary I’ve read to date, here quoting from ‘Wall Street Investors Pricing Americans Out of Last Bastian of Affordable Housing’. This is a report produced by the Howard Center for Investigative Journalism at University of Maryland’s Phillip Morris College of Journalism. February 17, 2021. What follows is lightly edited for clarity.

“Wall Street-type investment companies, including private equity firms and investment funds, expanded into residential real estate in the wake of the 2008 financial crisis, snapping up foreclosed suburban single-family homes at bargain prices and renting them out to middle-class families. The business model has proved so profitable, Wall ‘Street money is now flowing into every segment of the housing market, including mobile home parks and other forms of affordable housing.”

“The trend creates an unusual juxtaposition where some of Wall Street’s largest investment firms, including Apollo Global Management, The Blackstone Groups, and Brookfield Asset Management, are now landlords to some of America’s poorest residents. Smaller private investment firms, including Havenpark, have sprung up in recent years with the sole purpose of acquiring a large number of mobile home communities.”

“The median household income of a family living in a manufactured housing community is about $35,588 annually, compared to $50,056 for conventional renters and $91,342 for conventional homeowners, according to research by professors Noah J. Durst at Michigan State University and Esther Sullivan at the university of Colorado Denver.”

“With affordable housing across the U.S. already in limited supply, housing advocates worry big investors are pushing rents up so far so fast that even mobile home communities – the nation’s single largest source of nongovernment-subsidized affordable housing – could become out of reach for families on fixed incomes. The advocates also charge that the investment firms are quicker to evict tenants, especially those who are elderly and on disability, to make room for residents who can afford to pay higher rents.”

Havenpark now uses the name Havenpark Communities. For more info on this, read Part IV.

A concluding thought, not part of the Best Summary just shared with you.

During the 1970s thru mid-1990s, land lease community owners/operators, sole proprietors and corporations alike, often used a 3:1 Rule to estimate what rental homesite rates should be in a newly developed or acquired property; e.g. 3BR2B apartment @ $600/month? Divide $600 by ‘3’ and set site rent at $200/month (&) consider monthly mortgage payment on said manufactured home. For example; taken together, the site rent & house payment combination should be 10+ percent below 3BR2B apartment rent in the same local housing market Doing so, creates and protects the competitive edge needed by this affordable housing alternative!

During the latter 1990s and going forward, among some of the largest land lease community portfolio owners/operators, the 3:1 Rule morphed to 2:1. So, with apartment rents at the time on the rise, site rent might be pegged at $300/month when apartment rent was $900/month. However, those using the 2:1 Rule inflated site rent to $450/month – resulting in $150/month less ‘buying power’ for homeowners/site lessees.

Where are we today? Figure it out yourself. Survey and average conventional 3BR2B apartment communities monthly rent rates in your local housing market(s), then compare that ‘average’ with what’s being charged, per rental homesite, in large local land lease communities. To complicate matters somewhat, be sure charging for water & sewer, cable TV, and other utilities are handled similarly in both rental housing environments.

II.

‘DON’T HOLD YOUR BREATH!’

Community Reinvestment Act (‘CRI’) update could incentivize loans for home-only manufactured housing finance, improving affordability for low-to-moderate income families.

But don’t count on it! Following quote is from a 12 May 2021 article, on this timely topic, by Nick Bourke and Rachel Siegel, of the Pew Charitable Trusts finance and home financing projects. Again, following paragraphs are lightly edited for clarity.

“Manufactured homes can be difficult to finance for two reasons. First, there is general shortage of small mortgages nationwide – even for qualified buyers –and second, personal property loans are offered by relatively few lenders and at higher interest rates, which undermines affordability. Updates to CRA regulations could improve access to small mortgages nationally for both manufactured and site-built homes. Although manufactured home buyers who own their land could finance with conventional (real estate-secured) mortgages, the CRA update could incentivize banks to increase the supply of both loan options.”

“The FHFA wants to bolster the secondary market for manufactured homes. Accordingly, it has required Fannie Mae and Freddie Mac, the companies it oversees, to purchase mortgages for manufactured housing, which will increase lending. However, personal property loans lack a strong secondary market – a serious obstacle to banks’ ability to offer this financing. As a result, such loans generally must be retained, which keeps banks from replenishing funds and reduces their available dollars to loan out.”

Talk about the (card) deck being stacked against us!

III.

TODAY’S HOUSING SUPPLY LOWEST IN U.S. HISTORY!

“Based on my research, I believe the (housing) supply today, which is down in the one to two months’ range nationwide, is the lowest it’s ever been in the history of the United States.” American Enterprise Housing Institute.” In other words, ‘the worst housing supply ever’!

IV.

DISPLACEMENT, Inc.

Subtitled: ‘How Havenpark Capital and Enterprise Community Partners are eroding affordable housing and how residents are fighting back.’

Well, I listened in on the DISPLACMENT, Inc. telephone webinar Wednesday afternoon, 19 May 2021. Listened to at least ten individuals with ‘similar axes to grind’ relative to Havenpark Communities and other land lease community portfolio owners/operators who, in the opinion of these commentators, are relating to their homeowner/site lessees in a predatory fashion, regarding exorbitant and frequent homesite rent rate increases, submetering of utilities, pet fees, and other add-ons, to increase corporate cash flow.

Here are a few of my takeaway from this half hour webinar:

• MHAction. “A national movement of manufactured home residents” hosted this event.

• Announcement of supposed future release of a “groundbreaking report on how manufactured home residents are being forced from their homes during the pandemic.” Will let you know if/when I obtain a copy, probably from MHAction.

• Dr. Esther Sullivan, an urban sociologist at the University of Colorado Denver. An articulate and passionate presenter. Thought her name was familiar – and it is; as author of Manufactured Insecurity. Mobile Home Parks & Americans Tenuous Right to Place, published in 2018. 264 pages. Her view of ‘us’? “…mobile homes are a primary way we house the poor in the U.S.” True enough, but we’re (land lease communities) so much more than that: popular retirement housing in Sunbelt regions, affordable housing for singles and newlywed couples, and rental housing of choice among middle class workers and citizens.

• At the other end of the spectrum was a participant who spoke out strongly against Havenpark, but is no longer a homeowner/site lessee in any land lease community. And allegedly has a checkered history of evictions, court filings, and other legal challenges.

• Terms used to describe predatory land lease community portfolio owners/operators: raiders, blood suckers, rent gougers, ‘…ruining affordable housing wherever they go.’

• Two state representatives (a congresswoman and a senator) described pending legislation in their respective states, requiring advance notice to residents when property is for sale, a bill of rights for homeowners/site lessees; also renewable leases and right to move one’s manufactured home.

• An overt endorsement of resident-owned communities via services of ROC USA.

• Webinar participants encouraged to contact Enterprise Community Partners to complain of their financial support of Havenpark Communities: (212) 284-7178

George Allen, CPM, MHM
EducateMHC

GSE Recognizes ‘Entry-level’ Single Family Housing Shortage & Does Not Fully Address It!

May 14th, 2021

Blog Posting # 638 @ 14 May 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: Three potentially explosive topics today! How dialed-in are you on these emerging ‘evergreen issues’ relative to manufactured housing & land lease communities?

I.

GSE Recognizes ‘Entry-level’ Single Family Housing Shortage & Does Not Fully Address It!

Did you read MHARR’s May 2021 Issues & Perspectives feature titled ‘Freddie Mac Unwittingly Proves Its’ Own Failure’? If not, you really should! Obtain a copy by phoning (202) 783-4087.*1 Why?

In it, Mark Weiss summarizes an analysis by Freddie Mac Vice President and Chief Economist Sam Khater’, titled ‘The Significant Shortage of Starter Homes’, dated 15 April 2021. Herein he states ‘entry-level’ single-family homes in the U.S. stands FOUR million units below existing demand.’ (American Enterprise Institute estimates double that amount, at EIGHT million)

In any event, “Freddie Mac’s analysis concludes the ‘main driver’ of the entry-level housing supply/demand gap, is a “long-term decline in the….supply of entry-level single-family homes, or ‘starter homes’, “which has dropped from an average of 418,000 units/year during 1970s to 65,000 in year 2020.

The Freddie Mac analysis makes these two points: “…renters can’t buy houses that don’t exist’ & “…we must build more single-family entry-level housing.” MHARR Weiss points out the GSEs “…have not provided the necessary level of consumer financing support for that segment of the market….”

And that’s where the proverbial ‘rubber meets the road’, in this industry observer’s opinion. Though Weiss does a yeoman’s job pointing out the GSEs “…prejudice and bias – a willful ‘blind spot’.” relative to MANUFACTURED HOUSING FINANCED WITH CHATTEL CAPITAL, he does not detail that sorry situation – until later in the analysis. And there he rightly decries GSE’s Duty to Serve Support (‘DTS’) of “…significantly more costly MH Advantage, Choice Home, and so-called ‘Cross-Mod’ homes” that do qualify – (understand this) – for real estate-secured financing!

So, a Two Part Bottom line.

‘Home-only’ or chattel capital financing of manufactured housing mostly destined for siting on rental homesites within land lease communities, continues to be difficult to obtain, resulting in far less than capacity production of ‘entry-level’ single-family homes in the U.S.! Yes, that’s the boogeyman standing in the way of our providing affordable housing when it’s needed most: NOW!

However, real estate-secured financing (i.e. conventional home mortgages) for manufactured housing destined for siting on scattered building sites conveyed fee simple, is far easier to obtain. But production is slowed here by frequent unit price increases, fluctuating and distant delivery dates, as well as labor shortages at factories and among building product suppliers. And this too results in far less than capacity production of ‘entry-level’ single-family homes in the U.S!

There’s even more to read in MHARR’s summary of Freddie Mac’s analysis of the shortage of starter homes in the U.S. today. So, get a copy, read it, and let your thoughts be made known!

How? Via gfa7156@aol.com

End Note.

1. MHARR = Manufactured Housing Association for Regulatory Reform

II.

Well, It’s Happening!

In Vietnam, circa 1968 & 69, many of us, when not afield, lived in underground bunkers constructed of heavy timbers, aluminum matting for roof support, and sand bags all around. These in forward combat bases like Khe Sanh, Dong Ha, Quang Tri, and dozens of other locales. Their protection was comforting, particularly during ‘incoming’ rocket attacks. But there was a problem: Getting everyone to come out into the open to do their jobs, e.g. patrolling, route reconnaissance, admin and mess hall duties, and more. Some folk simply found it difficult to emerge and get back to living and the fighting as was expected of them.

Well, I’m seeing a similar phenomenon unfold as we emerge from quarantine during the coronavirus pandemic. I, for one, am tired of being confined to home – though it’s been fun to be with Carolyn, doing puzzles, reading, and writing. No, I’m ready to travel some, and re-engage with my friends and associates in manufactured housing. But it doesn’t seem ‘everyone’ is of the same mindset – yet. Right now, can you think of more than one or two in person industry events scheduled in your state, nearby, or even nationally? I can’t, really. That was, until this week. Know what I’ve learned?

After the annual RV/MH Hall of Fame induction banquet kicks off the 2021 meeting season on 16 August 2021 – and then another as yet unannounced (national) meeting later that month (26 August),‘there’s really nothing scheduled until September and October; then ‘watch out’!

Ah, but first, more about the upcoming RV/MH banquet. You really do want to attend, for several good reasons. FIRST, it’s our opportunity to emerge as an industry, from this pandemic. SECOND, there’s nearly a dozen manufactured housing celebrities being inducted into the RV/MH Hall of Fame this time around (combining Classes of 2020 & 2021). How many of these distinguished manufactured housing and land lease community folk do you know?
• Ken Anderson
• Keith Casenhiser
• Charles Lott
• Debra Pizer
• Alan Spencer
• Steven Adler
• Burt Dickman (deceased_
• Ron Dunlap
• George Porter
• Jerry Ruggirello
And THIRD. This stellar event attracts hundreds of attendees (400-700). It’s where one gets to meet and network with the pioneers and leaders of our industry and land lease community owners/operators from throughout the U.S. See you there? For tickets, phone ((574) 293-2344.

OK, what’s next? A ‘meeting traffic jam’ in late September! Here’s what I know for sure so far:

• Annual SECO Conference has become a ‘must attend’ event! It was virtual in 2020 and will be virtual again, 27 September – 2 October 1021. Phone Spencer Roane, MHM @ (678) 428-0212

• Supplier Show at the RV/MH Hall of Fame in Elkhart, IN. This is an in person event also during the last week of September. Again, for more information, phone (574) 293-2344

• Shed Builder Expo! Huh? You read it right. The shed-building industry has a large annual in-person show, this year in Grand Rapids, MI, 28-30 September. Some shed builders are trending their structures towards Tiny Houses and ADUs…see May issue of The Allen Confidential for a photograph of one.*1 For more info, phone (616) 575-9998

• Reunion of TBS 2-68, in Quantico, VA., 9/29-10/2/2021. Yes, a ‘red herring’, but this is the USMC officer’s class I was in before heading for Vietnam. First time we’ll be back together in 53 years.

Hey, if you know of more meetings on the horizon, please let me know via gfa7156@aol.com I’ll share that information here.

End Note.
1. ADU = Accessory Dwelling Unit; usually less than 400 square feet in size. Otherwise, ADUs would be subject to the HUD-Code. Increasingly popular in CA as rental units sited in back yards, and they’re ideal for filling functionally obsolete rental homesites in land lease communities.

III.

Financing Is No Longer The Only Challenge…

Here’s the lament of a land lease community owner frustrated with selling new HUD-Code manufactured homes on-site in land lease communities these days.

“You are between a rock and a very hard place. The new home you order today will be 20-25 percent more expensive than the identical home you ordered a year ago! It may get delivered a year from now, but don’t count on it. Between placing the order and actual delivery, the manufacturer will likely increase the price two or three times. Consequently, the homebuyer will need 25-30 percent higher down payment, and 25-30 percent more personal or family income to qualify for home-only financing, whether conventional or seller financed.”

“All this would seem to reduce the pool of prospective homebuyers. And when the government stimulus checks stop, and folks are forced to go back to work, we may see wages drop some, due to an oversupply of labor. If so, the prospective homebuyer pool will become even smaller. Also, if/when interest rates increase, qualification will become more difficult.”

“On the other hand, all housing alternatives are increasing in cost/price, so just maybe, manufactured housing will continue to be a comparatively less expensive, albeit affordable, attainable alternative.”

IV.
U.S. Population now at 331,449,281 According to U.S. Census Bureau

Changing Face of the ALLEN REPORT

May 8th, 2021

Blog Posting # 637 @ 7 May 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: Are you as tuned-in as you think you are, or need to be? Reading Parts I & II here following, will help you answer that curious question. Hints. For the first time in more than three decades, there are major changes ahead for the annual ALLEN REPORT, the longest running statistical compendium in the manufactured housing industry! AND, if you’re not using IBTS’ HUD-Code shipment numbers data, consider improving your accuracy and credibility by doing so. AND, where else can you ‘single source’ the stock prices of all nine public MH & LLCommunity public companies’ stock prices?

I.

Changing Face of the ALLEN REPORT

Land Lease Community Consolidation, a Portfolio to Portfolio Phenomenon

Now, that subtitle about consolidation is not ‘new news’ by any measure. Portfolios have been exchanging land lease communities (and RV parks) for as long as acquisition front men – and women, have been accessing the exclusive ALLEN REPORT contact data base, to effect direct mail solicitation campaigns. Surely by now, you know how that drill works.*1 If not, and seriously interested, email me via gfa7156@aol.com

What is ‘new news’ is the wholesale manner in which the largest property portfolio firms, public and privately-owned, have been acquiring land lease communities, dozens at a time, i.e. 12 – 36 property portfolios. The latest example is RHP Properties acquisition of Elkhart, IN., headquartered Heritage Financial and all 29 land lease communities containing 4,200 rental homesites! This acquisition boots RHPs holdings to 297 such properties nationwide…that property total is up from the 237 cited in the 32nd annual ALLEN REPORT this past January. And know what? There are even bigger portfolio transactions ‘in the making’ at present. That’s why you need to read this blog posting every week.

So, how does this wholesale acquisition of dozens of land lease communities, at a time, affecting the ALLEN REPORT as you’ve known it these past 32 years? For instance, at the very top: Just among the four largest portfolio ‘players’ listed in said report, their total community count, taken together, has jumped from 1,122 land lease communities owned/operated to more than 1,350 or an overall increase of 230+/- properties…which if a portfolio in its’ own right, would likely be ranked as #5, right behind ELS, Inc., Sun, Inc., RHP Properties, and YES! Communities.

So there you have the ‘changing face’ of the ALLEN REPORT – at the top end, among the four largest owners/operators of land lease communities in North America!

Are there other changes afoot? Probably. While I’m not prepared to share specifics, know this much: The annual ALLEN REPORT is exceedingly difficult to prepare and publish each year. How so? We poll all 500+/- portfolio owners/operators in August and September. Know how many usable responses (completed questionnaires) I get by the submission deadline? Usually 50. I get data from the remaining 50 (as listed in the 32nd ALLEN REPORT) by making telephone calls to owners – who admit they don’t send in completed questionnaires because they know I’ll eventually call and we’ll enjoy our annual ‘talk shop’ conversation. Which I do enjoy, by the way. But it sure slows down the research portion of this annual project. And then, ‘writing the report’. While I have past years reports as templates, so much information changes, it takes me every bit of 40 hours to pen what you want to know.

So, where is all this going? Don’t know for sure yet, but am leaning towards discontinuing the annual ALLEN REPORT, due to lack of succession interest on the part of any national real estate investment-related advocacy trade group! It had been my hope, way back in 1993 & 1996, when ‘we’ started the Industry Steering Committee, and then the National Communities Council (now division) of MHI, that they’d ‘step up to the plate’ and continue the products and services Carolyn and I created and nurtured, in the behalf of community owners/operators, for the past 40 years.*2 That simply has not happened, nor do I see it happening. So….
In conclusion, ‘smart money’ will see you visiting www.educatemhc.com to purchase the 32nd annual ALLEN REPORT for present use and future reference. Now you can’t say I didn’t warn you. GFA

End Notes.

1. ALLEN REPORT contact data base contains names and addresses of 500+/- land lease community portfolio owners/operators in North America. Addresses are 99% accurate and almost every direct mail piece goes to the major decision-maker in the subject firm. Cost to access? $1,000.00

2. Just what are those products and services? Easy answer is, go to www.educatemhc.com and see. Otherwise, we’re talking about monthly newsletters, books, Resource Documents (at least a dozen, e.g. ‘Annual Registry of ALL Lenders…), networking roundtable, management focus groups, the Manufactured Housing Manager (‘MHM’) professional property management training and certification program, and much more.

II.

Never Before in the History of MH…

Have We Read MH Shipment Stats & Stock Market Prices in a Monthly Report!

Did you know? Shipment volume of HUD-Code housing units jumped from 7,995 in February 2021 to 10,008 during March 2021? That’s an increase of more than 2,000 homes in one month! That is very good news for the MHIndustry!*1

Do you know the ‘production value’ of those 10,008 new homes? Based on research funded by MHI more than a decade ago, the per home value is $43,126; so, that makes the value of March’s 10,008 units $432 million & $1.42 billion YTD

Now turn to stock prices among the nine manufactured housing and land lease community public firms.

Did you know? Stock prices, on 3 May 2021, were DOWN for all HUD-Code housing manufacturers except for Berkshire-Hathaway – whose price was UP. Skyline-Champion, Cavco, and Legacy stock prices were DOWN from April.

Did you know? Stock prices, on 3 May 2021, were UP for all five land lease community portfolio firms, i.e. ELS, Inc., Sun Communities, Inc., UMH Properties, Flagship Communities (rebranded SSK Communities) and Manufactured Housing Properties.

The manufactured housing/land lease community composite stock index, on 3 May 2021, was $648.32, down from $652.72 in early April – primarily because of the slippage among HUD-Code housing manufacturers.

This report recently started publicizing FHFA’s housing price index. It was up 0.9 percent in February; up 12.2 percent from last year.

Won’t promise you’ll always read these unique and hard-to-find stats in this blog. But you can be privy to such helpful data by subscribing to The Allen Confidential newsletter via www.educatemhc.com

End Note.

1. All MH shipment totals cited in EducateMHC’s monthly ‘MHShipment Volume & Stock Market Report’ are as reported by HUD’s contractor, the Institute for Building Technology & Safety (‘IBTS’) reports them to MHARR, HUD & EducateMHC.

George Allen, CPM, MHM

Manufactured Housing to Recover from Black Swan Event?

April 30th, 2021

Blog Posting # 636 @ 30 April 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-Code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: OK blog floggers (‘readers’), we’re well into the new year (2021). Hardly anyone I’ve seen, read, or talked to is willing to describe how they think business consequences and results of the coronavirus pandemic will pan out during the months ahead. So, I’ll go out on a limb here, and share my thoughts on the timely and troubling topic. GFA

Manufactured Housing to Recover from Black Swan Event?

First off; what is a ‘black swan’ event? It’s an unpredictable or unforeseen event, typically with extreme consequences. The coronavirus pandemic of year 2020 certainly fits that two part description, being unexpected and worldwide, then resulting in more than 300,000,000 deaths – that’s only 31 ½ million less than the entire estimated population of the U.S. – at 331,449,281! Reflect on that!

So, where does that leave us today? Personally? Well that’s your perspective based on individual and familial consequences good and bad. In our case, Carolyn and I ended our voluntary self-quarantine at 400 consecutive days, slowly dining out again and mingling with immediate family members and close friends, but not much more – yet. Corporately? For many reading these lines, that’s where the proverbial rubber of decision-making meets the road of ‘where do we go from here’? To some degree or another, every business model, except home repairs and remodeling, has diminished during the past 13 months. What to do today?

Before getting into that (practical plans for the future), this has to be said: the public and political nature of contemporary social discourse are unfortunately lumped together in today’s 24 hours/day new cycle and rabidly partisan civic arena. Know that almost whatever you do or say is going to be evaluated not necessarily ‘how you mean for it to be received’, but rather, through the shifting lenses of race, sexism, and entitlement.

Now, let’s take a look at HUD-Code manufactured housing, land lease communities, and related business sectors.

HUD-Code housing manufacturers. Fewer new HUD-Code homes were shipped during all of 2020 (i.e. 94,390 per IBTS*1) than the previous year @ 94,615.*2 And frankly, 2021, year to date, isn’t looking any better – yet. Why? We await exorbitant lumber prices to ameliorate, federally-incentivized employees to return to work, and reasonable access to chattel capital to return for home-only loans.

Land lease communities. Right now they’re the hottest of all investment (i.e. income-producing) property types, as sub-5 ‘cap rates’ and acquisition overpricing are commonplace, even among smaller, older properties awash with functionally obsolete (i.e. unable to site today’s 16X80 new singlesection homes) rental homesites, crumbling infrastructure and deferred maintenance challenges. Sad to say, but the day will likely come when naïve ‘outside the industry’ investors rue the day they paid near six figures per homesite when they should have paid a modest four figures. In the meantime, there are tens of thousands of vacant rental homsites to fill and not enough reasonably accessible chattel capital to effect home-only loans.*3 Furthermore, land lease community owners/operators continue to weather the storm of federal and state rental assistance and eviction moratoriums.

State manufactured housing trade and advocacy associations. Land lease community consolidation has affected this segment of the manufactured housing industry big time. Membership rolls have diminished year after year, as sole proprietor-owned communities are acquired by one or another of the 500+/- known portfolio ‘players’ throughout North America.*4 A strong membership base, besides providing an operating income base, is (used to be, anyway) necessary for effective legislative lobbying and stopping regulatory overreach. A half dozen land lease communities absorbed into one portfolio does not necessarily result in a half dozen new members; but rather, just one – the corporate headquarters. What to do? Establish the practical worth of the association and aggressively recruit new members!

Independent (street) MHRetailers.*5 Here, present and future profitable performance has everything to do with whether the MHRetialer is indeed an independent ‘player’ (i.e. in search of chattel capital for home-only loans) or a ‘company store’ financially nourished at the teat of one or another public/private corporation. We lost an estimated (by MHI) 10,000 independent (street) MHRetailers shortly after the turn of the century. Some say the number is now, once again, increasing in several local housing markets across the U.S.

The perennial conundrum (‘a hard question’), still in play here, has to do with the proven ability of HUD-Code housing manufacturers to fabricate new, spacious, energy-efficient factory-built housing at half the ‘square foot price’ of traditional site-built housing VERSUS the inability of ‘anyone’ to persuade local land planners and zoning boards to approve tracts of raw land for development into new land lease communities, even subdivisions. Oh sure, this happens from time to time (Rumors are of it increasing a little now), but what is needed is a continuing gusher of affordable, attainable housing!

So, are we, in manufactured housing and land lease communities, the only ones reflecting on recovery from the COVIC 19 Black Swan Event of 2020? No, here’s just one brief reflection on the matter, quoted from ‘Leading in a Black Swan Event’: “Everyone is going to have a pantry with canned goods and a box of masks, a bunch of gloves, and a lot of alcohol wipes.” & “But how does this relate to commercial real estate? There are a lot of guesses, but only time will tell.”*6

Yes, the year 2021 clock is ticking. What will you be doing to restore business and profitability to the manufactured housing industry and land lease communities nationwide? As usual, I’m open to hearing/reading your recommended measures; via gfa7156@aaol.com

End Notes.
1. Institute for Building Safety & Technology (‘IBTS’) is HUD’s contractor tasked with ‘keeping score’ by way of tracking new home shipments monthly.
2. Stay abreast of monthly and annual new home shipment statistics by reading EducateMHC’s monthly ‘MH Shipment & Public Company Stock Market Report’ as part of The Allen Confidential business newsletter each month. Visit www.educatemhc.com
3. There’s only one book describing the professional property management of land lease communities: Community Management in the Manufactured Housing Industry. Available for purchase, again, via www.educatemhc.com
4. This total is up from 25 known portfolio firms in 1987. For more information, read SWAN SONG and latest (32nd) annual ALLEN REPORT. Both via www.educatemhc.com
5. A trade term coined two decades ago by industry consultant William Carr of Rainmaker.
6. Quoted from GlobeSt. Real Estate Forum Management, March/April 2021, page # 54

George Allen, CPM, MHM

A Few (Sales) Oldies But Goodies!

April 22nd, 2021

Blog Posting # 635 @ 23 April 2021: EducateMHC

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

EducateMHC is the online national advocate, asset class historian, data researcher, education resource & communication media for all land lease communities throughout North America!

To input this blog and/or affiliate with EducateMHC, telephone Official MHIndustry HOHTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: to promote HUD-code manufactured housing & land lease communities as U.S. # 1 source of affordable attainable housing! Attend MHM class!

INTRODUCTION: a true potpourri of manufactured housing and land lease community gems, some contemporary statistics, and review of a new historic novel authored by Oliver North.

I.

A Few (Sales) Oldies But Goodies!

You a Luddite or futurist? I suppose I’m more the former than the latter, but I do have occasional moments of inspiration and creativity. And in today’s world, there’s something to be said for ‘looking back’ to see how certain things were done in the past. That’s the gist of what follows here. Simple measures I saw and experienced way back in the 1970s (that’s 50+ years ago!), when I was cherry to the manufactured housing business model and land lease community real estate asset class.

Did you know some state manufactured housing associations created ‘mobile home living’ education packages designed to be taught to ‘home ed’ classes? They did, and in many instances, provided trained instructors to present the material to high school students (i.e. soon to be, would-be homebuyers).

Education packages were often comprised of 5 ½ X 8” booklets on various salient topics. One was titled ‘What you should know about Manufactured Home Safety’. In 15 pages, students were taught how to protect their home against fire, how to safely handle electricity, heat one’s home safely, and protect the home from wind and burglars. Where are those pamphlets today? And we wonder why more folk don’t come our way to buy our homes….

At one time, 8 ½ X 11’ coloring books could be found in sales offices of most ‘mobile home’ dealerships everywhere. The coloring books, featuring various configurations of manufactured homes were popular with children, and kept them occupied while their parents shopped for a home. And there were always copies of various MHIndustry trade publications to read and enjoy.

Did you know it was once commonplace for local community owners/operators to visit independent (street) MHRetailers on a regular basis, leaving behind custom property brochures, business cards, even mounted photographs; all for educating would be homebuyers. Oh, and want to be a real hit with the sales staff? Bring along some fresh-baked cookies!

Today, many of the ‘old ways of doing things’ have passed from the active business scene. As many, if not more, new HUD-Code homes are sold on-site in land lease communities than via independent (street) MHRetail sales outlets and company stores. And as long as the industry doesn’t enjoy ‘easy access to chattel capital’ (per pre year 2000), this paradigm shift will remain intact.

But that doesn’t mean that some, if not all, the measures just described, can’t be applied today. Even more! For instance, rarely in the past, have ‘dealerships’, even communities, been routinely Mystery Shopped, to observe and document on the job performance by home sales and site leasing staffers – on the telephone and in person. This happens all the time within the conventional apartment property type, department stores, fast food stores, and more. Know there’s a (reproduce able) standard property management Mystery Shopping form in the text, Community Management in the Manufactured Housing Industry, Appendix # 15. Available for purchase via www.educatemhc.com

One final oldies tip. Savvy owners/operators of land lease communities have long known it’s a good idea to be a member of the local Chamber of Commerce for at least two good reasons: first, the property gets to display their brochure in the chamber’s literature rack at their office (no ‘nonmember community gets to do this); and, just as important – attending periodic chamber luncheons and events positions the owner and or on-site manager as respectable businesspersons in the local housing market.

II.

SALMAGUNDI

Now, long ago readers of the (now defunct) Allen Letter (rebranded as The Allen Confidential) will recognize the title – SALMAGUNDI, for what it is, the ‘little of this, a little of that’ column that ran for years. But know what? It accurately describes what’s to follow here for at least a few lines: again, ‘a little of this & a little of that’, as gleaned from various news sources of late.

From Residential Update, published by the Appraisal Institute, in early April 2021:

“46 percent of Americans missed at least one mortgage or rent payment since the beginning of the coronavirus pandemic, and 25 percent missed more than one payment, according to survey results released on 11 March by personal finance website GOBankingRates.”

“More than 11 million families are behind on their mortgage or rent payments, and widespread foreclosures and evictions could occur when federal, state and local pandemic protections stop, according to a report released on 1 march by the Consumer Financial Protection Bureau (‘CFPB’).”

A recent Facebook posting claimed knowledge of 103 million votes cast for President Trump and 37 million cast for President Biden.

Something else longtime readers of my writing will recall, is the annual list of abbreviations published in the (also now defunct) Manufactured Housing Merchandiser magazine.

Remember NIMBY, LULU & BANANA? In land planning and rezoning matters, these are ‘Not in my back yard!’, ‘Locally unwanted land use!’, and ‘Build Absolutely Nothing Anywhere Near Anybody!’ Remember now? Well, here’re two more to add to this list: NUTS and YIMBY. The first = ‘Not under this sun!’ And in enlightened circles of late, YIMBY has made its debut: “YES, in my back yard!’ Now you’ve got the whole repertoire of land planning acronyms and abbreviations.

Here are a few relatively new abbreviations I’ve come across and use upon occasion:

Develop one’s creativity by using SCAMPER: ‘substitute, combine, adapt, magnify, put to other use, eliminate, and rearrange!

How ‘bout MMFI: ‘Make me feel important!’ If not, paint yourself as being CRSU: crude, rude, and socially unacceptable! Bottom line? KWITCHYERBELLYAKIN

And finally, for you stock market investment types, you likely know all about EBITDA; which is to say, ‘earnings before interest, taxes, depreciation & amortization’, as a way to measure a firm’s earnings performance.

III.

‘The Rifleman’

Does the name Oliver North ‘ring a bell’ in your memory bank? It likely does. He’s a Vietnam vet (Silver Star, Bronze Star & two Purple Hearts), worked for President Ronald Reagan, and was the 66th president of the NRA. He’s also founder of the Freedom Alliance.

What I didn’t know about Lt.Col. Oliver North, is that he’s the author of new fewer than seven non-fiction books (e.g. American Heroes in Special Operations) and six fictional novels – including the newest, The Rifleman.

I ordered and received the novel, and then read it in two days – it was that riveting for me. How so? Well, the dust cover summarizes the tale this way:

“On 14 June 1775, the Continental Congress appointed George Washington Commander-in-Chief of the Continental Army and granted his request for ‘ten companies of expert Riflemen.’ Daniel Morgan’s Rifle Company was the first to arrive in Boston to confront the British troops.

They wore hunting shirts, linsey-woolsey leggin’s and moccasins. Each had a tomahawk and a scalping knife in their belts and carried ‘long rifles’ in their hands. Every rifleman was a Patriot volunteer, a tracker, and a hunter. And they could kill a Redcoat at 250 yards.

Morgan chooses young Nathanael Newman as his adjutant – forefather of Peter Newman, the protagonist of Oliver north’s other bestselling novels.

Then the action begins. Reading this book was as much a history lesson for me as it was a Revolutionary War adventure. I could easily imagine their long march, from Virginia up to Massachusetts, dealing with all sorts of combat-related issues of food, clothing, health, and weather. There’s even a love story, of sorts, near the end of the book.

Bottom line for me? One very good, educational, adventuresome ‘read’.

George Allen, CPM, MHM