A Brief History of the Mobile Home Park

April 9th, 2021

Blog Posting # 633 @ 9 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: How ‘bout something different for a change? If you read MHInsider magazine – and you should, you know my Allen Legacy column covers a variety of manufactured housing-related topics from an historical perspective. Well, that’s what follows here today. Specifically, how ‘mobile home parks’ were described by practitioners in 1970 – that’s 51 years ago – well before many of us were even involved in the realty asset class (I started in 1978) we know as land lease communities today! Expect to be entertained.

Had no intention of adding a Part II this week. However, given ‘breaking news’ from MHI and other sources, YOU need to know what’s going on, on the national scene, that could very well affect your business decisions and actions during the months and years ahead.

I.
A Brief History of the Mobile Home Park

What follows here, and in next week’s blog posting, are thumbnail sketches of the history and nature of land lease communities (a.k.a. manufactured home communities, and before that’ mobile home parks’) 51 years ago, described in Spencer Heath MacCallum’s 1970 book, The Art of Community. Next week, we’ll quote “…from the transcript of a talk given by a pioneer park manager at a trade meeting in 1960….”

“The mobile home park represents the first substantial use of ground lease for single-family homes. Its history commenced in the late 1940s, when a few automobile travel trailers began to be manufactured large enough for permanent living. The resulting mobile home was the first successful factory-constructed house. Because it resembled a trailer more than a house, however, and was unfashionable, the significance of this technological accomplishment was overlooked.

From the beginning, mobile homes were distinguished from (travel) trailers by their greater size. The majority of trailers today measure eight feet wide by 20 to 29 feet long, which approaches the maximum load that can be towed behind the family car. Three-fifths of the (housing) units manufactured in 1969 were over 60 feet long, and virtually all were 12 or 14 feet wide.

The trailer and mobile home each gave rise to a distinctive form of proprietary community. Trailering parks trace descent from the early automobile campgrounds, especially in California, of the 1920s.

The mobile home park…is ‘a parcel of land under single ownership which has been planned and improved for placement of mobile homes for non-transient use’. The fact that it (mobile home) is relocatable apparently has psychological appeal. For an increasingly mobile population, it is attractive to think of moving across the country by sending the house ahead and having it ready to step into and prepare a meal on arrival.

In 1969, more than a third of the single-family housing starts in the United States were mobile homes.

Today’s new mobile home parks feature such tangible amenities as sodded and landscaped sites with two-car, off-street parking, underground utilities with central TV antenna system; neighborhood laundry, car wash, and recreational areas; community clubhouse with meeting rooms, dining rooms, exercise and sauna rooms, heated swimming pool, and golf course. A few parks even boast ‘equestrian centers’ and ocean-view lots. But unquestionably, the single major determinant of the quality of life in a park is an intangible, namely, management.” Pp28-30

And this. “Mobile home parks in the United States are estimated at more than 16,000, of which less than 12,000 in 1970 met the minimum standards for listing by Woodall’s, the established directory service in the mobile home park field. The fact that the number of Woodall’s listings has declined by an average of four per cent each year since 1962, despite the construction of new parks, reflects the rapid upgrading of standards required to keep abreast of the changing industry. Only 3,000 parks in 1970 were rated ‘three stars’ or better, the classification which Woodall’s considers to be truly in the housing field and competitive with new parks being built.”*1 P.32 Commentary. That’s 12,000 in 1970 (assuming author’s accuracy), compared to several times that many by 1990 – by dint of the ‘park building boom’ pre-1976, prior to debut of the HUD-Code. And by 1976, the Woodall directory of mobile home parks had ceased publication.*2

End Notes.

1. Text footnote # 31. The Mobile Homes Manufacturers’ Association in 1968 counted 22,000 sanitary district permits for mobile home parks nationwide. However, this figure is known to contain many uses which are not properly parks. Woodall’s Directory of Mobile Home Parks in 1962 contained 16,179 listings.” P.108
2. For a more complete and very interesting history of the Woodall Directory, read George Goldman’s autobiography The Road Less Traveled. Available for purchase via amazon.com
II.
Be Careful What You Wish For…

Manufactured housing’s perennial WISH: Elimination of exclusionary zoning and harmful land use policies nationwide.

WISHFULFILLMENT. “President Biden’s ‘American Jobs Plan’, a $2 trillion spending package….” Specifically, in part, “Eliminate exclusionary zoning and harmful land use policies by establishing a new competitive grant program to award funding to jurisdictions that ‘take concrete steps to eliminate such needless barriers to producing affordable housing’.”*1 In other words, ‘throw money at the problem.’

Unintended Consequence(s). Those akin to what has occurred on college and university campuses across the country; those who routinely accept various forms of federal government fiscal incentives, and those who don’t. In my opinion; in the first instance, we see institutions of heretofore ‘higher learning’ denigrated into campuses where freedom of speech and sharing of ideas are limited to radicals espousing views that oft are, at their best, anti-American. On campuses where this ‘pay-off‘ does not happen, e.g. Hillsdale College in MI. and Liberty University in VA., for starters, where freedom of speech and sharing of ideas is encouraged.

Unintended Consequence for Manufactured Housing? Only the future will tell, if this national debt-growing $2 trillion spending package becomes law. Perhaps land lease communities will be outlawed altogether! And new subdivided parcels of raw land developed into high density communities featuring low price singlesection manufactured homes. That might please some in the industry, but not all. Or perhaps, newly developed land lease communities approved only with rent control provisions, to protect homeowners/site lessees and limit profitability! I can think of other additional aberrations (e.g. plethora of business limiting rules and regulations) resulting from financial incentive boondoggles to local planning and zoning authorities.

Your thoughts on the subject? Send them to gfa7156@aol.com

End Note.
1. Quoted from MHI’s HOUSING ALERT dated 1 April 2021.

III.
NEXT WEEK…
We’ll likely return to the popular subject of ‘Where There’s Smoke There’s Fire & Ire’!

‘Where There’s Smoke There’s Fire’ – & Now, for Part II

April 2nd, 2021

Blog Posting # 632 @ 2 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 7 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: Few of the more than 600 blogs I’ve penned during the past dozen years have elicited as much reader response as #632, ‘Where There’s Smoke There’s Fire’. Had no idea so many manufactured housing and land lease community businessmen and women had so much pent-up emotion, angst, and opinions about matters such as CONSOLIDATION and consequences thereof…GFA

‘Where There’s Smoke There’s Fire’ –

& Now, for Part II:

‘Where There’s Fire There’s Ire!’

Last week’s blog posting (#631) identified manufactured housing smoke, described plenty of fire, and elicited long-suppressed ire from businesspersons active in the industry and among land lease communities nationwide. Let’s begin with a sample lament from both sides of the manufactured housing coin.

A HUD-Code Housing Manufacturer’s Lament. ‘Federal government stimulus checks and unemployment supplements have made it far too easy for our employees not to work. In turn these $ handouts have affected saw mills, making them unable to ship cut and ship lumber, forcing housing manufacturing plants to raise unit prices and delay promised deliveries!’

A Land Lease Community Owner’s Lament. “I ordered a new (manufactured) home five months ago and agreed to pay $39,000 for it. There’s been one price increase in the interim, and I learned yesterday it’s ‘on its way’ – with a new (final?) price of $45,800. Ouch! That’s a 36 percent price increase in just five months!”

While these laments likely have more to do with the 2020 pandemic than CONSOLIDATION per se, rest assured the latter’s influence is indeed present. What follows here are observations and remarks from veteran manufactured housing and land lease community businessmen and women, as well as trade association executives.

But first, here’s six encouraging remarks submitted by blog floggers (readers) last week:

‘Nice Piece’. PM

“This is a good read George, and I compliment your attempt to ‘awaken’ those still involved and those whose future is tied to MH’s success in the factory and on the ground. Monopoly is accurate.” NB

‘Good for you for addressing this’. PB

‘Your blog is right on point’. RR

And finally, “That took courage; but it needed to be said, and it needed to be said by a credible person like you!” BB

So, what do these and other folk have to say about our industry and realty asset class today, relative to CONSOLIDATION and related matters? It’s not a pretty picture. All that follows is lightly edited. GFA

“Our previous discussions centered around associations and manufacturers investing ($) in positively marketing and promoting our industry. However, the tide started turning in 2015 as more institutional investors took notice of our industry, especially when they saw how our asset class was not affected in 2020 (by the pandemic), turning that tide into a tidal wave.”

And, “With the growth of REITs, and investors with no skin in the game, community ownership has dramatically changed. I am not saying all the above are lousy owners or poor operators. But, their company structure, lack of personal investment of capital or guarantees, complete lack of knowledge about community management and home sales, has created a monster.*1 State by state we see these companies buy up communities at ridiculous prices due to low mortgage interest rates, then raise the rents and terribly mistreat their residents. They have now brought the wrath of state and national regulatory agencies upon themselves, and other private property owners!”

“The actions of these companies will, in the end, cause greater regulation to take place on our industry. In my opinion, we do not have the political clout and money to get out of this impending disaster.”

“With CONSOLIDATION we have lost so many good individuals (sole proprietors) who were very active both locally and nationally. Look at how the Industry Steering Committee (‘ISC’) began (in 1993) and ultimately became the platform for the National Communities Council division of MHI. How many of the original participants are still active?” Answer? Out of 19, only six.

Summary. “It’s the new pyramid scheme, with institutional investors raping the industry, and (they) will benefit the most financially – initially due to their aggressive tactics. There are two opposing camps: 1) investors like myself who follow the ‘old industry rules’ of give and receive.*2 And, 2) investors who are accountable only to the bottom line, irrespective of the people being affected. (HUD-Code) manufacturers are also part of this problem, as they are salivating from the demand (for housing to fill vacant rental homesites), and are pushing the cost of ‘affordable housing’ closer to traditional housing cost.”*3

Possible solutions. “There are only two ways to solve the current situation. First; the easy way would be by legislation and rent control; which initially looks good to voters (i.e. homeowners/site lessees), but in the long term, stifles investment in communities in which they live – turning them back into ‘trailer parks’. Second; a more difficult path – of getting industry advocates, like you and me – not the institutional investment property lobbyists, together with decision makers (i.e. regulators) to chart out reward and punishment for good and bad actors. Ready to explain if asked.”

We’re still, at this point, merely scratching the ‘smoke, fire & ire’ issues aggravated by COVID-19 in the short run (year 2020) and CONSOLIDATION consequences in the long run (1994-2021).

End Notes.

1. Community Management. New to the industry and asset class? Learn and earn certification in professional property management via the one day Manufactured Housing Manager class offered by EducateMHC (visit www.educatemhc.com) If unable to attend, purchase the MHM textbook: Community Management in the Manufactured Housing Industry; Also available from EducateMHC

2. Home Sales. Best training? Offered periodically by the IMHA/RVIC (Indiana MH association): ‘Two Days of Plant Tours & Home Sales Seminars’ (317) 247-6258

3. New Home Shipments & Stock Market Performance. To stay abreast of these seminal data points, read and study the monthly ‘MHShipment & Stock Market Report’, available only from EducateMHC (visit www.educatemhc.com)

George Allen, CPM, MHM
EducateMHC

‘Where’s There’s Smoke, There’s Fire’

March 24th, 2021

Blog Posting # 631 @ 26 March 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.eduatemhc.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: This has not been a comfortable blog to pen. Anyone who knows me, knows I’ve spent my career promoting and improving HUD-Code manufactured housing (via Community Series Home design in 2009, and monthly MH Shipment & Stock Market Reports) and land lease communities ( via books, newsletters and 32 years of ALLEN REPORTs) in every way possible! It’s long bothered me it takes two national advocates (i.e. MHI & MHARR) to represent big and small housing manufacturers; and, how the National Communities Council (‘NCC’) division of MHI stands idly by – or so it appears, as a few large property portfolio firms, including some from outside the industry, abuse our homeowners/site lessees with impunity. Somewhere along the timeline of manufactured housing, these anomalies must be addressed – by ‘us’ or by ‘someone else’. Which will it be? Read here and decide for yourself….GFA

‘Where’s There’s Smoke, There’s Fire’

This idiom, underscored by a proverb suggesting the “indication of a problem or wrongdoing, such a thing probably occurred or exists.” So what are smoke signals the manufactured housing industry and land lease community real estate asset class are experiencing in early 2021?

• ‘Monopolization of the American Manufactured Home Industry’ MHProNews

• ‘A ‘Hostage’ Strategy for (Mfd) Housing Investment?’ Private Equity Stakeholder Project

• ‘What Happens When Investment Firms Acquire Trailer Parks’, New Yorker magazine

It’s not my intent, in this blog posting, to dig into these three exposes’ appearing this month (March) in three different media; but rather suggest, in the words of Tariq Ramadan*1,

“If there is smoke, there is fire, that is quite true. But one should find what the fire is, and who lit it.”

During 40+ years in and around factory-built housing, and as a long time land lease community owner, I’ve seen ‘smoke come and go’, almost always signaling a significant challenge or issue (as opposed to ‘problem’) within the industry or realty asset class. For example, recall the:

• regulatory mashup upon and since the debut of the HUD-Code during the mid-1970s!

• clamor for effective land lease community national advocacy during the early 1990s, as real estate investment trusts (‘REITs’) formed and property consolidation accelerated!

• misguided attempt to compete with site-builders during the late 1990s*2 – resulting in the loss of easy access to chattel capital for home-only loans, and disappearance of 10,000+/- independent (street) MHRetailers, for 20 years; 2000-2020!*3 & 4

• Increasingly obvious downsides of two sector corporate consolidations, relative to small business owners (i.e. housing manufacturers & land lease community owners/operators*5), as well as severe reduction in the number of small business owner members supporting state manufactured housing associations nationwide!

There, I’ve said (& penned) it; CONSOLIDATION, the ‘bugaboo or crown jewel’ of manufactured housing and land lease communities nationwide!

To ‘out’ these latest two smoke storms affecting our industry and realty asset class is risky business for me. Why? Because I’ve pretty much ‘made my living’ since the late 1990s, 1) by identifying who the community consolidating portfolio firms were and are*6, and 2) tracking stock market performance of all nine public companies (i.e. four HUD-Code housing manufacturers and five land lease community portfolios).*7 Yes, CONSOLIDATION has made this dual task easier, to be sure, but I’ve also seen the ongoing consequences, pro & con, of these acquisitions and mergers. And that’s what the three named exposes’- all penned by outsiders, named at the beginning of this blog, are doing: identifying the mostly negative, significant consequences of CONSOLIDATION.

Within the HUD-Code housing manufacturer sector of the industry, is it a ‘good or bad’ thing for the three largest consolidated firms to garner 75+/- of national market share of new manufactured homes shipped nationwide? And what effect does it have, if any, that these Big 3-C firms belong to, and are major financial supporters of, the largest national industry advocacy institute? And the questions continue…

Within the land lease community sector of the industry, is it a ‘good or bad’ thing for “The Top Ten firms…comprised of three REITs…and seven privately-owned firms (during year 2020)…to own and fee-manage 559,216 rental homesites in 1,820 land lease communities…”? This compared to 926,828 rental homesites in 4,989 land lease communities reported by 92 of 500+/- known portfolio ‘players’ domiciled throughout North America? Yes, that’s how lopsided the rental homesites/property counts have become since CONSOLIDATION ‘took off’ during the mid-1990s.*8

So, where does all this leave us today? Hard to really say, without exaggerating.

Within the aforementioned HUD-Code housing manufacturer sector of the industry, the terms monopoly and fair trade are increasingly being thrown around, to account for how the largest firms better absorb changing and increased regulatory measures (costs) foisted on the industry by its’ regulators.*9

Within the aforementioned land lease community sector of the industry, the collective term ‘predatory landlord practices’ (e.g. exorbitant site rent increases, new ancillary charges, home sales and seller-financing) are increasingly cited by homeowner/site lessees, as significant impediments to their otherwise affordable attainabale lifestyle.

Once again, in the history of the manufactured housing industry – and land lease community realty asset class, we approach that proverbial fork in the road, offering us opportunity to self- police and address our CONSOLIDATION-related challenges in both industry sectors; or, as has been our sad practice in the past, sit on our hands and wait for someone else (e.g. tenant activists and government regulators) to come along and regulate us even further! What will be our choice?

End Notes.
1. Swiss Muslim academic and philosopher
2. Era of ‘big box = big bucks’ Development Series manufactured homes
3. 10,000+/- per MHI; (and) Two decade long paradigm shift, from year 2000 thru 2020
4. Independent (street) MHRetailers. A term coined by William Carr, freelance consultant to the manufactured housing industry
5. Owners/operators. A term coined by David Helfand when CEO of ELS, Inc.
6. 25 portfolio owners/operators in 1987; today, more than 500, per 32nd ALLEN REPORT.
7. 25 housing manufacturers in 1977; today, far fewer, beyond the Big 3-C Companies: Clayton Homes, CAVCO Industries, & Skyline-Champion. Performance tracked monthly in the EducateMHC: ‘MHShipment volume & Stock Market Report’. See www.educatemhc.com
8. Ibid., 32nd ALLEN REPORT
9. E.g. HUD & DOE, for starters

***
George Allen, CPM, MHM @ EducateMHC

Very Special Announcement! Monday, 29 March, is National Vietnam Veterans Day. If you know a Vietnam Vet, please reach out and Welcome him or her home. Seriously. There were no public ‘Welcome Home’ greetings and accolades during the 1960s and early 1970s. Semper Fi!

Walker & Dunlop’s ‘A Tale of Two Cities’

March 19th, 2021

Blog Posting # 630 @ 19 March 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 7 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: This should be an interesting and informative ‘read’ for you. In it we share some late-breaking housing stats with you, followed by a critique of a 17 page report of questionable origin, and ending with some addtional helpful housing insights. Enjoy!

I.

Walker & Dunlop’s ‘A Tale of Two Cities’

The winter 2020 Quarterly Report in MULTIFAMILY OUTLOOK, contained a few thought-provoking gems worth repeating here.

“While unemployment rates dropped quickly from 14.7 percent in April (2020) to 8.4 percent in August, a more detailed look shows widening inequality …yet to be resolved. For those with a bachelor’s degree or higher, unemployment peaked at only 8.4 percent in April and has since fallen to 5.3 percent – a rate …once thought to be near the point of equilibrium for the economy. Unemployment rates for those with less than a high school education peaked at 71.2 percent and for those with a high school education, at 17.7 percent. More than one in ten people of the 42 million people in these segments of the labor force still remain unemployed as of August.”

“…the economy is far from being back to ‘normal’. The Federal Reserve’s balance sheet increased to nearly $3 trillion this year, as subsidies such as those provided by the CARES act backstopped businesses, individuals, and farmers. That’s almost triple the subsidies provide in 2008 which have yet to be paid back, igniting a debate about whether the economy can grow out of its increasing debt burden, print money, or continue in a low interest rate environment to pay back the debt.”

II.

Monopolization of the American Manufactured Home Industry

Here’s how the publisher of MHPro News introduced this controversial topic. “Samuel Strommen of the Knudson School of Law (a.k.a. USD Law) provided…(a) copy of his research paper that focused on Warren Buffett-led Berkshire Hathaway, Clayton Homes, their related lending, other Manufactured Housing Institute (‘MHI’) members, MHI itself, and the industry’s Real Estate Investment Trust (‘REITs’) sector.” Who is Samuel Strommen?

Precise title of this typescript? ‘The Monopolization of the American Manufactured Home Industry and the Formation of REITs: a Rube Goldberg Machine of Human Suffering.’

Now, don’t go and get all excited about this 17 page report with its’ ballyhooed 131 footnotes – if you can even find it online. An interesting ‘read’ sure, but not, in my opinion, of academic quality or much use to our industry and realty asset class.

First off, no record of Samuel Strommen being at the Knudson School of Law (a.k.a. USD Law), past or present. So, no idea as to what, if any, academic or manufactured housing credentials this individual possesses. I was thinking professor; now thinking law student, if that.

There’s passing mention of REITs in the report title, plus what you read in the introductory remark above – but no mention, beyond “increasingly consolidating landlords”, (that I read) in the report proper. A near total disconnect! Hint. This awkward wording suggests the identity of the real writer. Otherwise, the phrase would have been better penned as “landlords increasingly consolidating…”

Then there’s this salacious opinion appearing in the four sentences Introduction. “… (manufactured housing) the only form of residence in the United States that carries its’ own pejorative connotation, ‘trailer trash’.” Really? And I (you) should want to read further into this insulting screed?

“The aim of this paper is thus: to expose a number of antitrust violations – both blatant and subtle – in the form of the increasing monopolization of the manufacturing, financing, and the increasingly consolidating landlords, and to call for reforms within this industry.” And that’s pretty much what the writer does, except for NO further mention of, as pointed out earlier, ‘increasingly consolidating landlords’. Wonder why? Though there is mention of “25-30% of all manufactured homes are situated in manufactured home communities (commonly referred to…as ‘trailer parks’).”Called such by whom? Three paragraphs later, the writer refers to this unique, income-producing property type, properly, as a ‘land-lease community’. So, obviously, he has no expertise in the nature and use of manufactured housing trade terminology.

An error? “…production of manufactured homes hit its’ apex (i.e. highest point. GFA) over twenty years ago, with a maximum production of some 375,000 units in 1998.” NOT! That was simply a renascence year for the industry. Its true acme year was 1973 (25 years earlier) when 579,940 new ‘mobile homes’ were shipped nationwide! Perhaps that’s the ‘diff’; ‘mobile homes’ vs. manufactured homes shipped.

Earlier, I made reference to 131 footnotes in this report. Interestingly, the following observation is presented sans documentation: “While claims that Berkshire Hathaway vis-à-vis Clayton Homes have (sic) violated American antitrust law have (sic) not been litigated in court, ample evidence that violations are taking place are myriad.” (‘myriad = 10,000 times’. GFA) What evidence? Where’s ‘the footnote’ when one needs it?

Now here’re some interesting word choices: “What was previously a top ten (manufacturers) has amalgamated (‘consolidated) into a top three. What the industry has presented as apotheosis is closer to apoptosis.” (i.e. from ‘glorified’ to ‘self-destruction’). And this, “In public, Buffett boasted through a rictus (‘gaping grin’) that Clayton and its financing arm were performing a good deed….” These elitist word choices are what lead me to think (maybe) a law student is penning this rough document.

One of the most telling – and to me, helpful, sentences in the entire report, is this: “Clayton Homes (and their affiliated lenders) would suffer a detriment if (the) GSEs were to re-enter the chattel mortgage industry.” Really? And here I believed it was the two GSEs (and FHFA) who were digging in and dragging their heels when it came to implementing aggressive Duty to Serve (‘DTS’) plans and programs in favor of manufactured housing finance. So, which is it?

True or False? “…currently , half of the MHI executive (committee board members) are former employees of Clayton Homes.”

The report ends with the same question I’ve been posing for months. “Why has manufacturing yet to cross the 100,000 unit threshold, much less come anywhere close to its’ most recent 1998 peak?” While I criticize much of the content of the report, I do support this question!

‘A Rube Goldberg of human suffering’ is the subtitle of this research report. Personally, I don’t think the writer, professor, student, or whoever he/she is, addressed this salient point.

III.

Everyone Wants a Piece of Our Action!

When was the last time you read anything in Apartment Management Magazine about manufactured housing and land lease communities? Well, YARDI breeze, a property management software designed for multifamily rental properties recently (February 2021) contributed an article, based on a recent NorthMarq report, to this publication, titled: ‘Five Reasons Manufactured Housing Could Outperform the Market in 2021’. The first reason being high demand for land lease communities as being desirable places to live (especially during the pandemic. GFA). And the next four reasons?

1. Affordable manufactured housing (i.e. article simply put it: ‘MHCS’) can help solve the affordable housing crisis. Nothing new there, except the article is ‘silent’ on the lack of reasonable access to chattel capital for home-only loans on units going directly into land lease communities onto rental homesites.

2. There’s plenty of investment opportunity. (Said out of one side of the writer’s mouth – or pen) Versus mentioning the majority of ‘investment grade’ land lease communities (i.e. 100+ rental homesites in size) are already consolidated into one or another of 500+/- property portfolios throughout North America!); meaning, ‘plenty of investment opportunity’ among the 80+/- percent of the national rental community inventory, those properties containing fewer than 100 rental homesites. For more on this subject, read the 32nd annual ALLEN REPORT (January 2021), available for purchase via www.educatemhc.com

3. Manufactured homes are (un) surprisingly high quality. Best sentence in the article? “If renters are looking for a high-value deal, they need to take a closer look at well-built, competitively priced manufactured housing.” Note that ‘renters’ is used here, as opposed to ‘buyers’, since this is a multifamily rental property association trade publication.

4. Retired baby boomers are a growing demographic. To entice them, according to the article, use “many of the same rental perks used to bring in millennials:” Those being online rent payments, communal spaces, eco-friendly amenities, hosted events and activities, and fitness areas.

And Thanks to Dick Bessire, founder and partner at Bessire & Casenhiser in San Dimas, CA., for sending along this material.

George Allen, CPM, MHM
EducateMHC

Washington’s MH Watchdog Barks!

March 12th, 2021

Blog Posting # 629 @ 12 March 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:

I.

Washington’s MH Watchdog Barks!

Right to the point! The following lightly edited paragraph is quoted from 1 March1, 2021 communique from the Manufactured Housing Association for Regulatory Reform:

“By tying manufactured home chattel loan participation in (Federal Housing Finance Agency’s) Enterprise Housing Goals (‘EHG’), to thus far non-existent support for such loans under Duty to Serve (‘DTS’ plans), FHFA has created a ‘perfect storm’ of malign neglect for the vast majority of lower and moderate-income American families seeking to realize the American Dream of homeownership via inherently affordable manufactured homes – directly contrary to Congress’ objectives for both EHG and DTS.”

So, what to do about this sad, ongoing ‘perfect storm’ of malign neglect on the part of FHFA & GSEs? Another brief paragraph from the same MHARR communique on March 1st, 2021:

“MHARR calls on FHFA to end this baseless charade, and (1) require market-significant purchases of mainstream, affordable manufactured home personal property loans under DTS; and (2) simultaneously restore EHG credit for such purchases, based on the known and well-documented affordability of both mainstream manufactured homes and chattel financing.”

Will this happen? No. Not unless you, as a manufactured housing businessperson or land lease community owner/operator, insist on more political pressure on whichever national advocacy entity that commands your loyalty and receives your dues monies.

Kudos to Mark Weiss at MHARR for speaking out so clearly and forcefully in our behalf in this timely, ongoing, and important matter!

II.

Off to a Too Slow Start in 2021!

Affordable housing is in very short supply and site-built housing prices jumped 11 percent during 2020, but new HUD-Code manufactured housing shipments, in January 2021, lagged behind the 8,733 we achieved during January 2020 – before the coronavirus pandemic hit!

That’s right, only 8,476 new HUD-Code housing shipments is the official January 2021 total posted by IBTS and embraced by HUD, MHARR, & EducateMHC; that’s 257 fewer new HUD-Code homes than the aforementioned 8,733 shipped during January 2020. Will we recover this ground during the next 11 months? In my opinion Yes; but ONLY IF manufacturers shorten delivery backlogs and lower unit prices as soon as possible! AND, as one land lease community portfolio owner/operator succinctly put it, after reading this month’s ‘MHShipment & Stock Market Report’,

“These (lower shipment) numbers don’t support the contention by manufacturers (plants) last year, that they were experiencing ‘significant increases in demand for manufactured homes’.”

Does the point of that observation remind you of another quote? Does me. In 1858, in Clinton, IL., Abraham Lincoln said: “You can fool some of the people all of the time and all the people some of the time, but you cannot fool all of the people all of the time.” HUD-Code manufacturers, are you paying attention?

Is the ‘MHShipment & Stock Market Report’ a new media resource to you? Probably. Though researched and penned, but purposely restricted to limited distribution since 2016, it’s become, in just the past several months, a major statistical reference for the industry and realty asset class nationwide!

Once each month, soon after the Institute for Building Technology & Safety (‘IBTS’) posts manufactured housing shipment data, here at EducateMHC we compare said tallies to the previous year, estimate the production value of homes shipped, and identify emerging trends. Also visit the New York Stock Exchange and Toronto Exchange to ascertain that day’s stock prices on all nine public manufactured housing and land lease community real estate investment trusts (four of the former and five of the latter). After posting said prices in the report, we calculate a Composite Stock Index comprised of eight of the entities (not including Berkshire Hathaway, Inc.). The Composite Stock Index on 3 March 2021 was $621.91, compared to $577.00 on (pre-covid) 3 March 2020. The newest feature of this seminal report is the U.S. House Price Index for the most recent month it is available.

Want to view the ‘MHShipment & Stock Market Report’ every month? Visit www.educatemhc.com and download The Allen CONFIDENTIAL: PRIME EDITION – Current Month’s Issue.

‘Murdered By Gods’

March 5th, 2021

Blog Posting # 628 @ 5 March 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, & commu8nication 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: gfra7156@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: Four opportunities coming your way. An exciting mystery novel authored by a land lease community owner. Help finance the new manufactured housing wing at the RV/MH Hall of Fame. Watch to see if CDC overstepped constitutional boundary with its’ eviction moratorium.  And, if a freelance consultant, here’s your opportunity to be included in the 22nd annual ‘Who Ya Gonna Call in 2021?’ directory. No one sends more MHNews your way!

 

I.

 

‘Murdered By Gods’

 

“I looked down at my phone, which seemed to be the source of the sudden heat. I’ve had phones get a little too warm before, especially when exchanging a lot of data…but never at such a temperature as what I was feeling now. It actually felt like it was burning my fingers, which prompted me to drop it with a yelped curse, “Shit. That’s Hot.”

 

As I said it, the buzz of conversation spiked in volume and intensity. Shouts, even shrieks of alarm erupted all around us. Focused as I was, on my defective phone, I did not immediately grasp the significance of this, but over the din, I could just make out a hissing sound – like a pressure valve releasing steam – emanating from the device.

 

…Everywhere I looked, I saw people staring at the floor, staring at mobile phones they had dropped or thrown down in dismay. I grabbed (Diane’s) clutch purse from her hands and flung it away. The purse was still in the air when it, and every other mobile phone in the great hall, erupted in a flash of white-hot flame.” Pp. 307 & 308

 

So goes, Murdered By Gods, a thrilling mystery authored by land lease community owner and real estate broker Charles G. Irion of Phoenix, Arizona.  Interested in reading more? Here goes…

 

“The business end of the submachine pistol was close enough that, had I been so inclined, I could have reached out and touched it.

 

There’s an axiom in self-defense instruction: run away from a knife, charge a gun. The reason is simple. Since you can’t outrun a bullet, you might as well go on the offensive. Additionally, guns are most effective at a distance, where the shooter has time to adjust his aim or lead a moving target.

 

Holding the nearest gunman’s gaze, I slowly raised my hands in what I hoped looked like a signal of surrender.

 

Something else I learned from close-combat instruction is it is physically impossible to pull a trigger while speaking.

 

As the first syllable left his throat, I made my move.”  Pp. 181 & 182

 

If you’d like to learn more about Charles Irion and this 12th exciting book in a series, read the full review I’ve penned, in the April issue of The Allen Confidential newsletter. However, if you want your copy now, order it directly from Chuck via www.charlesirion.com, or amazon.com

 

 

II.

 

Have YOU Donated Yet?

 

‘Fundraising for the New Manufactured Housing Museum Addition is Gaining Momentum’ is how a recent Press Release reads, from the RV/MH Hall of Fame in Elkhart, IN.

 

This is exciting! For many of us in the manufactured housing industry, and among land lease community owners/operators nationwide, we’ve been awaiting this important development for decades; frankly, ever since the RV/MH Federation was birthed in 1972 – that’s one year shy of 50 years ago! Now do you see why this long-promised addition to the Hall of Fame facility is generating so much interest – and donations?

 

Carolyn and I have donated annually, for decades, to support the RV/MH Hall of Fame. Now we all have an opportunity to help it grow, and recognize the manufactured housing industry as it has the recreational vehicle industry all these years. We’ll be making a donation this weekend.

 

“…kick-off donations from Clayton Homes ($300,000), Cavco Industries ($100,000), MHI ($50,000), MMH & RVCA Michigan Association ($50,000), and dealer/developer/dedicated board member Jimi Scoular ($50,000).”  Plus a whole raft of nearly two dozen individuals donating from between $1,000 and $25,000. If Jim Scoular’s name ‘rings a bell’ with you, it’s likely because he, his son, and late father, recently co-authored their family’s history in manufactured housing, titled Leap of Faith. This book available for purchase directly from the RV/MH Hall of Fame (574) 293-2344.

 

How to donate to the RV/MH Hall of Fame? Mail check to RV/MH Heritage Foundation @ 21565 Executive Parkway, Elkhart, IN. 46514. (tongue in cheek) ‘Tell’em, George sent you!’

 

Let’s celebrate the 50th Anniversary, in 2022, of the RV/MH Heritage Foundation, in the new manufactured housing addition!

 

III

 

The CDC

 

U.S. District Court for the Eastern District of Texas recently declared Center for Disease Control (‘CDC’) eviction moratorium a constitutional overstep; specifically, a federal health agency attempting to play the role of an economic regulatory agency. This ruling is being contested. Every land lease community owner/operator should follow this matter through the legal system, in hope for relief from this one-sided coronavirus pandemic measure.

 

IV.

 

Calling All Freelance Consultants!

 

Do you provide freelance (i.e. not on someone else’s payroll) consulting services to manufactured housing firms and or land lease community owners/operators nationwide? If so, maybe you should be listed in the annual ‘Who Ya Gonna Call in 2021?’ Directory of Freelance Consultants. The 23rd annual directory will be distributed along with the April issue of The Allen Confidential newsletter.

 

The directory generally contains the names, business profiles, and contact information on 40 or so individuals from throughout the U.S. If you’re been on the list now, or have been before, you know it. If not, and interested, email me (gfa7156@aol.com) your name, a paragraph describing your consultancy specialty (e.g. marketing, advertising, sales training, fee-management, ROC conversions, insurance, infrastructure, home-only finance, land planning & zoning, water leak detection, property valuation, resident screening, home installation, sub metering, and landscape architecture, just to name a few) and contact information (e.g. phone number, email address, and web site.

 

To obtain a copy of the 22nd annual directory, contact Erin Smith, MHM, via EducateMHC@gmail.com or visit www.educatemhc.com

 

 

 

MHShipments During Year 2021

February 26th, 2021

Blog Posting # 627 @26 February 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: So, will ‘manufactured housing shipments’ eclipse 90,000 or 100,000 units during year 2021? Part I hints at an answer to that pithy and timely question. Part II? If you’re a land lease community mortgage originator or broker, and/or make home-only chattel capital loans, you’ll want to read the 23rd National Registry of ALL Lenders! Some stunning info contained therein, and most comprehensive directory of independent third party (personal property loan) lenders ever published! Part III? The question that’s on everyone’s mind: ‘What was the degree of ‘MHAdvantage/Cross-Mod™ implementation’ partnership during year 2020?

I.

MHShipments During Year 2021

Year 2020 MHShipment summary statement tying together years 2006, 2020, and now 2021.

“If we had those 3,000 (lost to coronavirus in April, May & June 2020) homes back (actually 2,775 net), we’d have likely shipped 97,165 new HUD-Code homes during all of 2020, achieving the highest performance level since 117,510+/-, way back in year 2006, or 14 years ago!” Edited quote from blog # 625.

But know what? We, as an industry and realty asset class, have no logical reason to believe 98,000, let alone 100,000 new HUD-Code homes will be shipped during year 2021 as long as we have to deal with:

• Dilatory effect of personal subsistence payments from the federal government, resulting in the under-manning of saw mills producing lumber, and factory-built housing plants producing and shipping new homes

• Unpredictable and substantial invoice price increases occurring after new homes have been ordered

• Continuing backlogging of homes, in large part, due to first bullet point.
• Lack of chattel capital home-only financing for new manufactured homes being sited and sold on-site in land lease communities

• Inaction of the FHFA and GSEs Fannie Mae & Freddie Mac relative to Duty to Serve plans

• Lack of chattel lending statistical transparency and sharing, on the part of one or more independent third party chattel finance firms enjoying market dominance

• Lack of chattel capital home-only financing for new manufactured homes being sited and sold on-site within land lease communities nationwide.

• Inaction of the Federal Housing Finance Agency (‘FHFA’) and GSE’s Fannie Mae & Freddie Mac, relative to their Duty to Serve (‘DTS’) plans for manufactured housing.

And there are additional stumbling blocks we could add to this troublesome list, but you certainly get the idea.

II.

23rd National Registry of ALL Lenders

Well the ‘numbers are in’ (i.e. ‘dollars’, that is), and we now know year 2020, despite the coronavirus pandemic and all that went with it, was a Banner Year for real estate-secured mortgages brokered and originated pursuant to land lease community acquisitions and refinance! The grand total $ amount brokered and lent? Prime subscribers to The Allen Confidential newsletter will learn that stunning amount in the March 2021 issue due out next week – or so. But here’re a couple hints: the 2020 $ lending total exceeds mortgage $ volumes, for land lease communities, in years 2013 through 2019 (That’s as far back as records go), by more than $2 billion dollars! Whew! What a year!

If not already a Prime Subscriber to TAC, visit www.educatemhc.com to do so today.

Furthermore; do YOU realize TAC is our industry and realty asset class’ sole source land lease community news, and these key Resource Documents?

• ALLEN REPORT (a.k.a. ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Located Throughout North America!’)

• Official ‘State of Manufactured Housing Industry & Land Lease Community Asset Class’

• National Registry of ALL Lenders & Brokers Serving MH & LLCommunities

• ‘Who Ya Gonna Call in 2021?’ directory of freelance consultants

• Directory of MH & LLCommunity Print & Online Media, plus state associations

• Official Lexicon & Glossary of MH & LLCommunity Trade Terminology

• Official Directory of GSE & NGO Organizations, plus professional property management training and certification programs

• Only accounting of MH & LLCommunity ‘trending topics’ (a.k.a. Evergreen Issues), plus official definition of affordable housing, low income housing, & very low income housing

• Directory of MH & LLCommunity National Advocacy & related trade organizations

• Directory of HUD-Code Manufactured Housing Manufacturers, plus descriptions of Community Series Homes (circa 2009) & CrossMod™ homes (circa 2016)

• Industry Briefing Sheet (e.g. statistics re MH & LLCommunities), and an abbreviated ‘State of the MHIndustry & LLCommunities’ document

• Statistics Sourcing & Formulae for MH & LLCommuniteis (i.e. ‘Where to get the information needed to better understand our industry & realty asset class’)

And, believe it or not, that list of a dozen plus Resource Documents available from EducateMHC is not comprehensive! For example, every monthly TAC now contains a ‘MHShipment Volume & Stock Market Report’ featuring the official MHShipment volume agreed upon among IBTS, HUD, MHARR & EducateMHC; as well as an accounting (i.e. stock market prices) of the nine public MH firms (includes three REITs) that’s available nowhere else!

III.

WE WANT TO KNOW!

Everyone in manufactured housing, and among land lease community owners/operators, knows year 2019 was DISMAL, where ‘MHAdvantage/CrossMod™ implementation’ was concerned (Like, maybe six transactions in all)!

OK, we’re now three months into year 2021 and still no word from the FHFA and two GSEs (i.e. Fannie Mae & Freddie Mac), as to degree of ‘MHAdvantage/CrossMod™ implementation’ during year 2020. Federal Housing Finance Agency, please supply that information, or instruct the GSE’s to do so, in the near future!

Why? Because, once and for all, we – as an industry and realty asset class, should know whether this much ballyhooed partnership is indeed viable; OR, if we should be looking elsewhere (Is there anywhere else?) for financial support for the HUD-Code manufactured housing industry and home-only loans for in-community home sales transactions.

We’re waiting…..

***

George Allen, CPM, MHM
EducateMHC

There’s An Important Matter Afoot

February 19th, 2021

Blog Posting # 626 @ 19 February 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: Some things that need to be said and resolved….

There’s An Important Matter Afoot
&
I’m Unsure How to Address It, but will try!

Faithful readers of this weekly blog posting are well aware of an important matter hinted at in this headline. We’ve described it in blogs # 622, 623, & 624, during the past several weeks. It’s the ‘community owner’s lament’ (i.e. ‘expression of grief & frustration’), relative to some if not all, HUD-Code housing manufacturers’ backlogging homes to be produced and shipped, and adding significant price increases on units after orders have been placed.

Now the matter has taken on a new dimension; one of scale – one that might, however, have been present all along.

The Question today is: ‘Are large property portfolio (e.g. those with more than 50 land lease communities apiece) owners, compared to smaller (i.e. one or two properties apiece) operators, experiencing similar backlogging of homes ordered, and significant unilateral increases in unit prices after orders have been placed or not?’

Frankly, I wouldn’t be surprised to learn that ‘large portfolios, routinely ordering many new HUD-Code homes to fill vacant rental homesites’ are indeed being given a huss (i.e. in USMC parlance, ‘Help me!’), since manufacturers can expect volume home sales from them. But if true, is this right and fair?

The challenge, in historical perspective, seems similar to what the manufactured housing industry faced in the mid-1980s, when smaller, regional HUD-Code housing manufacturers felt beleaguered by 1) relatively new HUD-Code (i.e. circa 1976) regulations, as well as 2) much larger firms being able to absorb costs of increased regulation better than them.

Result? Formation of the Manufactured Housing Association for Regulatory Reform or MHARR.

Not for a moment am I suggesting smaller land lease community owners/operators run off and charter a new national advocacy entity to represent their business interests. Rather, via the National Communities Council (‘NCC’) division of the Manufactured Housing Institute (‘MHI’), a forum for such discussion of this timely and troubling matter, should be possible! For that matter, next week, MHI/NCC, from 22 thru 24 February, hosts a virtual meeting of members. Why not make ‘community owners’ lament’ a matter of discussion and exploration?

Now, in my opinion, there is a proverbial Achilles Heel to this ‘community owners’ lament’. Specifically, while MHI/NCC boasts a couple hundred members to date, very few attend such meetings, virtually or in person. At the same time, there are hundreds more community owners/operators nationwide, who do not belong to the institute/council – and hence have no voice in addressing this timely and troubling matter. What to do about them?

To that end, the MHARR has been pretty straight-forward and vocal, during the past several years, recommending post-production segments of the manufactured housing industry (including the land lease communities realty asset class) organize a new and completely separate national trade body to this end! How many more years will ‘tail of the dog’ MH business types labor on in search of parity and effective national advocacy?

As one of 19 founders of the Industry Steering Committee (‘ISC’) who met on 31 August 1993, and a founding board member of the NCC on 1 January 1996, I do not believe the council has achieved goals set for it at that time!*1 It is not even the ‘court of last resort’ for matters such as contentious landlord-tenant legislation, use of floor fees to promote brand awareness and image improvement, encouraging certified professional property management at all levels, and – as in this case – researching and arbitrating issues among post-production segments of the manufactured housing industry. If nothing else, after 25 years, it’s time for an NCC ‘reset’!

Someone let me know if ‘community owners’ lament’ is discussed, or not, at the MHI/NCC meeting.

End Note.
1. For a list of the goals agreed upon by the ISC during the fall of 1993, request it from me via email: gfa7156@aol.com

George Allen, CPM, MHM
EducateMHC

MHShipments Falter Once Again & Stock Prices, for the most part, Recover to pre-Covid Levels!

February 12th, 2021

Blog Posting # 625 @ 12 February 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:
• Manufactured Housing Shipments Falter in Year 2020
• Manufactured Housing Stock Prices Recover to Pre-Covid Levels
• Affordable Housing Under Assault Everywhere
• 2020 Election. Here’s What TIME magazine now tells us about it
• Lease Option Home-only Financing Today & Tomorrow

I.

MHShipments Falter Once Again & Stock Prices, for the most part, Recover to pre-Covid Levels!

If this time last year you hoped the annual shipment volume of new HUD-Code homes would eclipse 98,000 units – for the first time since 2006, prepare to be sorely disappointed! We started the year ‘strong’, with monthly shipment totals above what they were during 2019. Then the coronavirus hit! For the next three months (April, May, June), shipments were ‘off’ by 1,000+/- units per month; and, from that point on, seesawed through the remainder of 2020, ending with a dismal total of only 94,390 new HUD-Code homes shipped (Based on Institute of Building Technology & Safety reported unadulterated monthly totals alone!). That’s 225 fewer new homes than were shipped during all of year 2019!

Know what that means? If we had those 3,000 (lost) homes back (actually 2,775 net), we’d have likely shipped 97,165 new HUD-Code homes during 2020, achieving the highest level since 117,510+/-, way back in year 2006, or 14 years ago! Another unintended consequence of the coronavirus pandemic.

Given continued home-only finance uncertainty, in most local housing markets, the fact the manufactured housing industry ‘recovered so well’ by year end 2020, bodes well for hitting or even eclipsing aforementioned goal of 98,000 units by year end 2021. What do you think?

Then there’s the stock market performance of our nine public companies; four HUD-Code housing manufacturers (i.e. BRK-A, SKY, CVCO, & LEGH) and five land lease community portfolio owners/operators (i.e. ELS, SUI, UMH, MHPC, & MHC.U). Between March (coronavirus) and April, all these firms took major hits to their stock prices, with one halved in value! By February 2021 however, all companies returned to, or close to, their March 2019 stock price levels – with the one ‘hit the hardest’, rebounding to an even higher price than during March 2019.

Any of this ‘new news’ to you? If so, subscribe to The Allen Confidential business newsletter; available via www.educatemhc.com Every issue contains a ‘MHShipment Volume & Stock Market Report’ for your edification. There’s nothing like it anywhere else in the MHIndustry!

II.

Affordable Housing Under Assault

‘Homeless Seniors R Us’ is how homeowners/site lessees in some Upper Midwest land lease communities now describe themselves. Why? Because a few private equity giant firms, from outside the manufactured housing industry, have acquired land lease communities for their property portfolios, and then, too aggressively ‘jacked site rents’ and began charging additional for trash removal and water! For example, in one Montana community, site rent increased to $380 per month, and with addition of aforementioned charges, raised a typical resident’s total payout to $500/month.

And then there’s this gem, describing the repurposing of a land lease community in Puyallup, Oregon. Vacant rental homesites are being filled with 313 square feet Tiny Homes selling for $60,000., with 30 year leases. And the monthly HOA (Homeowners Association) fee is $800/month! Anyone see ‘affordable’ anywhere in that description? I sure don’t.

III.

TIME Magazine: Saving or Rigging of 2020 Election?
“-…a well-funded cabal of powerful people, ranging across industries and ideologies, working together behind the scenes to influence perceptions, change rules and laws, steer media coverage and control the flood of information. They were not rigging the election; they were fortifying it.” According to Molly Ball, a writer for TIME magazine.

Now, there’re two opposing perspectives, leaking one profound truth! The 2020 election was either RIGGED or FORTIFIED. What’s your opinion? Mine? The former.

IV.

Lease-Option Home-only Financing Today & Tomorrow…

Following two paragraphs are quoted and edited, from email correspondence between two land lease community portfolio owners/operators, discussing home-only chattel financing.

We’ve had very good experience with Country Place Mortgage in Dallas, TX. although they only finance Cavco/Fleetwood Homes. Also had very good experience with American Commerce Bank in Bremen, GA. And, very good experience with private investors who frequently finance our acquisition of homes through self-directed IRA accounts. We are not fans of one top market share chattel lending program, because of fees and interest rates a community owner is responsible for if the buyer/borrower defaults, and lender’s (alleged) refusal to substantiate the amount they claim a community owner is responsible for when a buyer defaults.

A discussion many community owners have had during the past five to 10 years, has been regarding interest in developing a lender who’d provide home-only acquisition financing to land lease community owners/operators selling on-site. Lease-Option programs implemented by community owners are very attractive to said owners, as well as homebuyer/site lessees who don’t qualify for conventional loans, manufacturer programs, and the industry in general; as they are well-secured for the entity advancing funds. The hurdle we invariably encounter is one of scale – lenders able to invest large amounts of capital at attractive interest rates, don’t want to do so at much less than tens of millions of dollars.

Times change, however, and interest rates are still at all-time lows, so perhaps it’s time to revisit this timely topic.

OK blog reader, you interested in being part of such a discussion should it take place, probably virtually, during the next several months? If so, let me know via gfa7156@aol.com

***
George Allen, CPM, MHM EducateMHC

Community Owners Taking Action!

February 5th, 2021

Blog Posting # 624 @ 5 February 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: Unforeseen consequences of the coronavirus pandemic? Delayed deliveries (out to fall 2021 with some factories) and arbitrary increasing of HUD-Code housing base price! Part II shares some Good News, for a change. Major gala event scheduled for 9 August 2021 at the RV/MH Hall of Fame in Elkhart, IN. And if, as a land lease community owner/operator you have homeowners/site lessees who’ve paid off MH loans originated with Greentree ‘many years ago’, and are in search of lien releases; well, read Part III.

I.

Community Owners Taking Action!

Appears the manufactured housing industry now has a ‘baker’s dozen’ Evergreen Issues!

“An Evergreen Issue is content that’s always relevant.” As defined in the 32nd annual ALLEN REPORT (a.k.a. ‘AR’ & ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Located Throughout North America!’). Amidst its’ widely-referenced statistical compendium, the popular AR identified a dozen Evergreen Issues that have dogged the industry and realty asset class, to varying degrees, for the past decade and longer. Now, here’s the 13th Evergreen Issue, or so it seems….

#13. ‘Delayed deliveries and arbitrary jacking of HUD-Code housing base prices are profoundly counterproductive, fostering bad will toward the manufacturer, consumer remorse on the part of homebuyers/site lessees, and perennial problems for community owners/operators.’

But NOW, land lease community owners/operators, in some parts of the U.S., are uniting to make this plight known, and suggesting remedial action in a two-step process:

First, effect an informal agreement between the home supplier and community owner, whereby the latter accepts the arbitrary price increase, but insists manufacturer sign off on a statement, added by the community owner to the product sheet (a.k.a. Sales Order Confirmation), below or near the signature line on said form that reads akin to this:

“We understand manufactured housing prices are rising because of significant increases in the cost of raw materials and building products. However, when the costs of these materials decrease, we expect housing prices to be reduced as well. Agreed!” _________________manufacturer’s representative.

This is the second time land lease community owners/operators have come together to protect their business interests! To date, as before, this initiative is not being encouraged by state and national advocates for manufactured housing! This is somewhat understandable, given most operational funding for these trade entities comes from the manufacturing segment of the industry. But maybe, like last time (i.e. 31 August 1993 – 1 January 1996 = fructification and birth of MHI’s National Communities Council division), we’ll again underscore the truth of Benjamin Franklin’s famous quote: “We must, indeed, hang together, or most assuredly, we shall hang separately.”

So, start adding the above statement to your HUD-Code housing manufacturer’s product sheet or Sales Order Confirmation, and request your manufacturer’s rep sign it!

II.

What’s Going On @ RV/MH Hall of Fame?

Are you, like many others and me, suffering from year-long pent-up desires to travel and engage in interpersonal networking with manufactured housing and land lease community peers? Well, mark your calendar NOW, and plan to attend a truly historic RV/MH Hall of Fame Induction Banquet the evening of 9 August 2021! I’ve already made my hotel reservation for the event; suggest you do likewise, as rooms sometimes sell out for this stellar annual event.

Why will this one be truly ‘historic’? Because, for the first time in a half century, two ‘classes’ (2020 & 2021) will be inducted into the RV/MH Hall of Fame! Know what this also means? Attendance will likely swell to 700 or more businessmen and women! SO, a stellar opportunity to celebrate this honoring of 20 inductees, and opportunity to engage in the Best Networking available anytime, anywhere in the manufactured housing industry! Who’s being inducted? Here’s a near complete list of the MH (only) inductees:

• Steven P. Adler of MUREX Properties in Ft. Myers, FL.
• Ron Dunlap, retired Virginia MHAssociation executive, and military veteran
• George Porter of Manufactured Housing Resources, in DE., and RVN military veteran
• Jerry Ruggirello, land lease community owner/operator
• Ken Anderson, MHI of AZ executive
• Keith Casenhiser, partner at Bessire & Casenhiser in CA.
• Charles Lott of Fleetwood Homes in GA.
• Debra (Dee) Pizer of Zeman Properties in IL.
• Alan Spencer from Dakotaland Homes in SD.

I can’t speak for you, but I’ve known the majority of these individuals for more than 30 years, and count them not only as business associates, but good friends. I’m certain many of you feel the same; so, ‘let’s get together’ and celebrate Monday evening, 9 August 2021. To purchase banquet tickets, phone (574) 293-2344. If you’ve never visited the RV/MH Heritage Foundation’s Hall of Fame, Library, & Museum facility, you are in for a very pleasant surprise!

III.

Greentree Financed & Need a Lien Release?

Contact Shellpoint Mortgage Servicing via Customer Care Line (800) 365-7107

George Allen, CPM, MHM
EducateMHC