92,902 New HUD Code Homes Shipped in 2017 & Time for New Tactics & Improved Strategy

February 16th, 2018

Blog # 476; Copyright @ 11 February 2018; community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report & online communication media for all North American LLCommunities

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or gee-4764

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
______________________________________________________________________

INTRODUCTION. Never before have we lived and worked in such exciting times!

Manufactured housing shipment volume continues to rise – albeit slowly. More and more new HUD-Code homes are being sold, and often seller-financed, within land lease communities nationwide! Beyond the exciting developments described in the following paragraphs, what we need now as an industry is to, STOP WORRYING about what we call ourselves, and what outsiders call us, and concentrate on WORKING TOGETHER to Sell, Ship, & Seller-finance More HUD-Code Manufactured Homes! In just Four Words, we are 1) HOUSING, & 2) LAND LEASE COMMUNITIES! Nuff said!

&

Here’s ‘the Question of the Month! ‘Which large U.S.- based portfolio owner/operator of land lease communities purchased ten such properties, in Canada, from their Canadian owner – and is keeping the acquisition Very Quiet? Answer? When the identity is made known, you’ll likely read about it First in the Allen CONFIDENTIAL! business newsletter or the Allen Letter professional journal. To ‘subscribe’, affiliate with the Community Owners (7 Part) Business Alliance, or COBA7. See masthead information above…

I.

92,902 New HUD-Code Homes were Shipped During 2018, with an Estimated Production Value of $4,000,000,000.00 (Yes, that’s ‘billions’ of dollars!). Now the Big Question Emerges: When Will the Manufactured Housing Industry Likely Reach Its’ 200,000 Homes ‘Sweet Spot’? Think about that….

Yes, you read that right! HUD’s contractor, the Institute of Building Technology & Safety (‘IBTS’), provided monthly new manufactured housing shipment totals throughout 2018 – unadulterated by ‘minus & plus’ shenanigans with DESTINATION PENDING units each month. Then HUD, MHARR, & COBA7 totaled said monthly shipment totals to realize the 92,902 annual total for year 2018! And that’s the 2017 annual MH shipment total that’ll be written into the industry’s official archives.

Furthermore, using MHI contractor Dr. Stephen C. Cooke’s ‘production value’ of $43,126 per housing unit – based on year 2013 ‘shipment # & $ data’ – it pencils out that those 92,902 new HUD-Code homes are valued at approximately $4,000,000,000.00!

Here again is that timely question: At the current rate of new manufactured housing shipments, from year 2009 thru 2017, when will the manufactured housing industry likely hit its’ ‘sweet’ spot’ of 200,000 units? Answer? That’s the headline story in the March 2018 issue of the Allen Letter professional journal – as well as a key news bite in the same monthly issue of the Allen CONFIDENTIAL! (‘TAC!’) business newsletter. Seriously. We have this figured out. Sure it’s not ‘carved in stone’, but makes perfect sense when one researches the numbers and trends. You don’t want to miss this story!

Again, if not already receiving the Allen Letter or TAC!, but would like to do so, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or email me via gfa7156@aol.com.

II.

‘A Call for New Tactics & Improved Strategy’

…to restore reasonable access to chattel capital for on-site financing of new HUD-Code home sales transactions within land lease communities; and, increase the number of new HUD-Code homes shipped monthly – especially into this unique, income-producing property type, i.e. 24% in 2009; 40% in 2015; & 75% by 2020!

This CALL initially went out during January, beginning with the historic meeting among dozens of land lease community owners, at the Louisville MHShow, on 17 January 2018. If you didn’t receive a copy of this ‘Call for New Tactics & Improved Strategy’ – you should want one. Simply, again, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or email me via gfa7156@aol.com.

Among the six recommended ‘Further Action’ recommendations, listed therein, were these two:

• “Land lease community owners come together to create and use a hybrid form of HUD-Code housing chattel finance, using time-tested parameters of existing loan programs, to create a WIN, WIN, WIN situation for lenders, homeowners/site lessees, and land lease community owners seller-financing homes on-site.”

• “Land lease community owners, if need be, to retain services of a Washington, DC., manufactured housing consultant, ensuring these chattel finance concerns are front-and-center at all FHFA & GSE meetings.”

Well, the first one materialized at the aforesaid 17 January meeting in KY. A second meeting will occur during the Tunica MHShow! Want to attend? If you seller-finance new and or resale manufactured housing on-site in one or more land lease communities, You Need to be Present! To do so, email genevieve@roane.com and request your name and contact information be placed on the rapidly growing Hybrid Loan Information & Invite List.

The second bullet point? We’ve identified a Washington, DC – based freelance consultant who ‘knows’ the manufactured housing industry well, and is available to represent land lease community owners/operators in matters legislative and regulatory. So, pretty impressive progress during the past month or so.

Back to the first bullet point.

Today’s status of a new hybrid loan program? In very general terms:

At least one independent chattel capital source (firm) has stepped forward and expressed strong interest in partnering with (small to mid-sized) land lease community owners to this end!

An other lender is very interested in marketing and selling seasoned chattel loans in behalf of land lease community ‘lenders’, freeing up capital to fund more new home purchases.

But there’s still a lot of work to be done re: funding issues, underwriting standards, nature of guarantees, GSE-preferred leases and community standards, and much much more.

Well, that’s all for now. If this timely and strategic topic interest you, plan to be at the Tunica MHShow, 20-22 March 2018. Ensure your name is on the Hybrid Loan Information & Invite List; then attend the special land lease community owner luncheon!

***

A postscript of sorts. Have you reserved the dates 5-7 September on your planning calendar for 2018? Please do so, as that’s when at least 200 land lease community owners/operators, and their preferred lenders ‘of all types’ will convene for the 27th annual International Networking Roundtable. Making the location decision this week.

***

George Allen, CPM, MHM
COBA7
Box # 47024,
Indianapolis, IN. 46247
(317) 346-7156

Five Options;Making History; MHInsider & More!

January 31st, 2018

Blog # 475; Copyright @ 24 January 2018; community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report & online communication media for all North American LLCommunities

To input this blog &/or affiliate with Community Owners (7 part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U! Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
____________________________________________________________________

INTRODUCTION. Whew! Here’s what you’re about to read in this blog posting:

1. COBA7 moves center stage, as my decades long membership in MHI lapses. After 40 years, I no longer own/manage a land lease community & hence, am ineligible to continue participation in the NCC division I helped found more than 20 years ago!. Now I’m focused on serving your information, resources, communication, networking, deal-making, & PM training/certification needs.

2. Spencer Roane, MHM, & I stepped forward, on 1/17/2018, to lead the effort to craft & launch a hybrid chattel capital loan program to promote the seller-financing new HUD-Code homes within land lease communities!

3. MHInsider, our industry/asset class new print trade magazine took Louisville MHShow by storm. It is one impressive publication. Want a copy, phone (887) 853-0298 & ask for Darren Krolewski. And there will be no second new MH publication this Spring as once hinted at occurring. More about that later.

4. Four handouts you absolutely want to have in your possession going forward!

Sorry ’bout the length of this blog posting, but every single part is breaking news!

Five Options Update; Making History, MHInsider, & More!

Everything following is about our future, seller-financing new homes in land lease communities; a new, better & free way to get industry/asset class news; and, why you work in the most exciting business model in the U.S. today!

So, Where Do the Five COBA7 Alternatives Stand Today?

1. No change to COBA7. Investigating not for profit status procedure and have interviewed a manufactured housing capable, experienced, motivated representative in Washington, DC., to possibly represent land lease community interests across the board: legislative, regulatory, & housing supportive.

2. Meld COBA7 into the rumored new independent national advocacy entity planning to represent and serve all non-manufacturing segments of the industry. This isn’t going to happen if COBA7 is expected to be the lead entity; though, would be open to supporting all other segments in this fashion if it materializes.

3. Partner COBA7 with MHI, broadening the focus of its’ NCC division, to better serve information and statistical reporting needs of land lease communities nationwide! A second conversation has occurred, but no firm plans to date. There is a way to make this happen, but only if in the best interests of the asset class!

4. Have COBA7 quit MHI and proceed alone. Why? MHI, despite repeated invitations, remains unaffiliated with COBA7. Having sold my last land lease community, I’m ineligible to continue as a member, despite having helped found the NCC division, & am a perennial board member. I have not renewed membership & do not plan to do so unless irritants like ‘no proxy voting’, change.

5. Dissolve COBA7 during year 2018. Too early in the year for that alternative. Main concern? Unlike the way things are today (i.e. research, good resources, communication, networking & deal-making, & PM training/certification), land lease community owners/operators would again, as during the late 1970s – when I entered this business, operate in an information, training, & advocacy vacuum

Well, there you have it. Some progress since the first of the year (2018). And once again, if you have input re suggestions, etc., on this important matter – to those who own/operate land lease communities, of all sizes, nationwide, let us know via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or gfa7156@aol.com. Thanks!

Land Lease Community Owners on Threshold of Making Manufactured Housing History, Financing New Homes On-site

Three dozen owners of land lease communities gathered for an impromptu, unofficial, likely historic meeting at 11AM, Wednesday, 17 January, during the Louisville MHShow. Why?

(*) Following recent release (circa 5 January) of “…final ‘Duty To Serve’ Underserved Markets plans…by Fannie Mae & Freddie Mac…approved by…the FHFA….” serving (an estimated) only “…4,000 purchasers, or a mere 1.85% of the (new) manufactured housing market through (year) 2020” – land lease community owners now realize the only practical solution to their need for ongoing chattel capital to fund HUD-Code housing transactions on-site, lies with them – likely in partnership with one or another supportive lender.

And that was the gist of the meeting hosted and led by George Allen, CPM & Spencer Roane, MHM, veteran land lease community owners/operators in the Midwest, East, and Southeast U.S.

Following background (historical) information from Allen, Roane covered the following points and more…

• During the past two years, the FHFA, Fannie Mae, & Freddie Mac have attended networking roundtables and congresses to learn more about the manufactured housing industry and land lease communities. They’ve also hosted listening sessions around the U.S. and in Washington, DC. Recent results? Reread second paragraph above (See *); plus they made an overt, but sadly unanswered, request for loan performance information from the industry. Ask me ‘Why?’ sometime….

• 1.85% of (MHARR) estimated 216,000 new HUD-Code homes to be shipped during 2018, 2019, & 2020, for a total of only 4,000 units. This barely scratches the surface of how much chattel capital land lease community owners need for on-site transactions during that period of time. So, community owners almost have to come up with an alternative $ source of their own. Where to start?

• Maybe create a hybrid loan made solely to carefully screened, qualified homebuyer/site lessees*1, a loan ensured (i.e.’ guaranteed’) by community owners, on attractive functional, reasonably-priced Community Series Homes (a.k.a. CSH models). And where a similar loan program might already be in effect, emulate the parts best suited for use in the land lease community environment.

• Desirable loan parameters: As low interest rates as possible, depending on lender’s borrowing ability; short term @. 12-15 years max); qualified community (Maybe graded per the ABClassification System*2) per curb appeal, resident relations, maintenance; long term rental homesite leases (longer than loan term) with reasonable escalations; and a community owner motivated by penalty (recourse) and or reward (no defaults).

OK, so where to go from here?

First step is already in play, by growing a list of community owners, and others (lenders, GSEs) desiring to be kept abreast of development of this hybrid loan program. And soon, there’ll be an opportunity to volunteer to be part of an ad hoc task force to actually articulate and proof the lending methodology. If you’re interested in having your email address added to this august list, simply send it to gfa7156@aol.com

End Notes:

1. Have 10% down payment; appropriate & sufficient verified income; securely employed; good rental history; no criminal history; acceptable to lender, debt-to-income (‘DTI’) ratios, front & back; and good credit.

2. For a FREE copy of the ABClassification form used, for decades, by land lease community owners/operators, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

MHInsider = most popular topic of conversation at MHShow!

We lost the Manufactured Home Merchandiser magazine a decade ago; The Journal, this time last year. Now MHInsider debuts to ‘pick up that slack’ with a top quality slick magazine, initially quarterly but prepared to go monthly if demand and support so indicates. You really do need to get your hands on the inaugural copy of MHInsider. Not only is it awash with good and timely trade information about manufactured housing and land lease communities, it’s now a Collector’s Item for placement in your corporate library. To request a copy, follow the instructions in the INTRODUCTION to this blog posting. And hey, Darren is looking for capable, experienced, motivated writers!

Four Part Handout Package Pulls It Together for ‘Housers’

• the mini-white paper: ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’ Hundreds of copies now in circulation within and outside the manufactured housing industry. Read it!

• Official Definition of Affordable Housing. This is a FIRST for the manufactured housing industry and land lease community real estate asset class!

• $ examples of Affordable Housing, by definition, as well as Low Income Housing (‘LIH’), & Very Low Income Housing (VLIH’). New territory for many of us!

• ‘A Call for New Tactics & Improved Strategy’ Watch out! This one page, two sided challenge goes where no one in the MHIndustry has gone before! It’s a MUST READ. if you want to be inspired to take action in the days ahead.

Want FREE copies of one or ALL four documents? Simply phone the Official MHIndustry HOTLINE and request it/them, or via gfa7156@aol.com

***

George Allen, CPM, MHM
COBA7, a division of GFA Management, Inc., dba PMN Publishing.

Five Options Update; Making History; MHInsider; & More!

January 26th, 2018

Blog # 475; Copyright @ 24 January 2018; community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report & online communication media for all North American LLCommunities

To input this blog &/or affiliate with Community Owners (7 part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U! Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
____________________________________________________________________

INTRODUCTION. Whew! Here’s what you’re about to read in this blog posting:

1. COBA7 moves center stage, as my decades long membership in MHI lapses. After 40 years, I no longer own/manage a land lease community & hence, am ineligible to continue participation in the NCC division I helped found more than 20 years ago!. Now I’m focused on serving your information, resources, communication, networking, deal-making, & PM training/certification needs.

2. Spencer Roane, MHM, & I stepped forward, on 1/17/2018, to lead the effort to craft & launch a hybrid chattel capital loan program to promote the seller-financing new HUD-Code homes within land lease communities!

3. MHInsider, our industry/asset class new print trade magazine took Louisville MHShow by storm. It is one impressive publication. Want a copy, phone (887) 853-0298 & ask for Darren Krolewski. And there will be no second new MH publication this Spring as once hinted at occurring. More about that later.

4. Four handouts you absolutely want to have in your possession going forward!

Sorry ’bout the length of this blog posting, but every single part is breaking news!

Five Options Update; Making History, MHInsider, & More!

Everything following is about our future, seller-financing new homes in land lease communities; a new, better & free way to get industry/asset class news; and, why you work in the most exciting business model in the U.S. today!

So, Where Do the Five COBA7 Alternatives Stand Today?

1. No change to COBA7. Investigating not for profit status procedure and have interviewed a manufactured housing capable, experienced, motivated representative in Washington, DC., to possibly represent land lease community interests across the board: legislative, regulatory, & housing supportive.

2. Meld COBA7 into the rumored new independent national advocacy entity planning to represent and serve all non-manufacturing segments of the industry. This isn’t going to happen if COBA7 is expected to be the lead entity; though, would be open to supporting all other segments in this fashion if it materializes.

3. Partner COBA7 with MHI, broadening the focus of its’ NCC division, to better serve information and statistical reporting needs of land lease communities nationwide! A second conversation has occurred, but no firm plans to date. There is a way to make this happen, but only if in the best interests of the asset class!

4. Have COBA7 quit MHI and proceed alone. Why? MHI, despite repeated invitations, remains unaffiliated with COBA7. Having sold my last land lease community, I’m ineligible to continue as a member, despite having helped found the NCC division, & am a perennial board member. I have not renewed membership & do not plan to do so unless irritants like ‘no proxy voting’, change.

5. Dissolve COBA7 during year 2018. Too early in the year for that alternative. Main concern? Unlike the way things are today (i.e. research, good resources, communication, networking & deal-making, & PM training/certification), land lease community owners/operators would again, as during the late 1970s – when I entered this business, operate in an information, training, & advocacy vacuum

Well, there you have it. Some progress since the first of the year (2018). And once again, if you have input re suggestions, etc., on this important matter – to those who own/operate land lease communities, of all sizes, nationwide, let us know via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or gfa7156@aol.com. Thanks!

Land Lease Community Owners on Threshold of Making Manufactured Housing History, Financing New Homes On-site

Three dozen owners of land lease communities gathered for an impromptu, unofficial, likely historic meeting at 11AM, Wednesday, 17 January, during the Louisville MHShow. Why?

(*) Following recent release (circa 5 January) of “…final ‘Duty To Serve’ Underserved Markets plans…by Fannie Mae & Freddie Mac…approved by…the FHFA….” serving (an estimated) only “…4,000 purchasers, or a mere 1.85% of the (new) manufactured housing market through (year) 2020” – land lease community owners now realize the only practical solution to their need for ongoing chattel capital to fund HUD-Code housing transactions on-site, lies with them – likely in partnership with one or another supportive lender.

And that was the gist of the meeting hosted and led by George Allen, CPM & Spencer Roane, MHM, veteran land lease community owners/operators in the Midwest, East, and Southeast U.S.

Following background (historical) information from Allen, Roane covered the following points and more…

• During the past two years, the FHFA, Fannie Mae, & Freddie Mac have attended networking roundtables and congresses to learn more about the manufactured housing industry and land lease communities. They’ve also hosted listening sessions around the U.S. and in Washington, DC. Recent results? Reread second paragraph above (See *); plus they made an overt, but sadly unanswered, request for loan performance information from the industry. Ask me ‘Why?’ sometime….

• 1.85% of (MHARR) estimated 216,000 new HUD-Code homes to be shipped during 2018, 2019, & 2020, for a total of only 4,000 units. This barely scratches the surface of how much chattel capital land lease community owners need for on-site transactions during that period of time. So, community owners almost have to come up with an alternative $ source of their own. Where to start?

• Maybe create a hybrid loan made solely to carefully screened, qualified homebuyer/site lessees*1, a loan ensured (i.e.’ guaranteed’) by community owners, on attractive functional, reasonably-priced Community Series Homes (a.k.a. CSH models). And where a similar loan program might already be in effect, emulate the parts best suited for use in the land lease community environment.

• Desirable loan parameters: As low interest rates as possible, depending on lender’s borrowing ability; short term @. 12-15 years max); qualified community (Maybe graded per the ABClassification System*2) per curb appeal, resident relations, maintenance; long term rental homesite leases (longer than loan term) with reasonable escalations; and a community owner motivated by penalty (recourse) and or reward (no defaults).

OK, so where to go from here?

First step is already in play, by growing a list of community owners, and others (lenders, GSEs) desiring to be kept abreast of development of this hybrid loan program. And soon, there’ll be an opportunity to volunteer to be part of an ad hoc task force to actually articulate and proof the lending methodology. If you’re interested in having your email address added to this august list, simply send it to gfa7156@aol.com

End Notes:

1. Have 10% down payment; appropriate & sufficient verified income; securely employed; good rental history; no criminal history; acceptable to lender, debt-to-income (‘DTI’) ratios, front & back; and good credit.

2. For a FREE copy of the ABClassification form used, for decades, by land lease community owners/operators, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

MHInsider = most popular topic of conversation at MHShow!

We lost the Manufactured Home Merchandiser magazine a decade ago; The Journal, this time last year. Now MHInsider debuts to ‘pick up that slack’ with a top quality slick magazine, initially quarterly but prepared to go monthly if demand and support so indicates. You really do need to get your hands on the inaugural copy of MHInsider. Not only is it awash with good and timely trade information about manufactured housing and land lease communities, it’s now a Collector’s Item for placement in your corporate library. To request a copy, follow the instructions in the INTRODUCTION to this blog posting. And hey, Darren is looking for capable, experienced, motivated writers!

Four Part Handout Package Pulls It Together for ‘Housers’

• the mini-white paper: ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’ Hundreds of copies now in circulation within and outside the manufactured housing industry. Read it!

• Official Definition of Affordable Housing. This is a FIRST for the manufactured housing industry and land lease community real estate asset class!

• $ examples of Affordable Housing, by definition, as well as Low Income Housing (‘LIH’), & Very Low Income Housing (VLIH’). New territory for many of us!

• ‘A Call for New Tactics & Improved Strategy’ Watch out! This one page, two sided challenge goes where no one in the MHIndustry has gone before! It’s a MUST READ. if you want to be inspired to take action in the days ahead.

Want FREE copies of one or ALL four documents? Simply phone the Official MHIndustry HOTLINE and request it/them, or via gfa7156@aol.com

***

George Allen, CPM, MHM
COBA7, a division of GFA Management, Inc., dba PMN Publishing.

What’s Going On?

January 16th, 2018

Blog # 474; Copyright @ 7 January 2018; community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U! Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
_____________________________________________________________________

What’s Going On?

Why the erratic blog postings from COBA7 these past few weeks? I could blame the holidays (i.e. shopping, parties, travel); or, just ‘end of the year blahs’ – for me anyway. The truth of the matter is, I’m trying to sort matters out relative to our personal and corporate past, present, and future, relative to the manufactured housing industry and land lease community real estate asset class. And, as of this moment, New Years Day, I’ve not accomplished that end.

You see, I’m in good health; thoroughly enjoy what I do for you, i.e. collect data & research information, repackaging it in statistical reports, two monthly newsletters, several directories, the occasional mini-white paper – and yes, of late, semi-weekly blog postings. Plus, we provide professional property management training and certification (No one else does!), as well as hosting networking and deal making opportunities. But I feel a pressing need for significant and lasting change, during the weeks and months ahead. What form(s) might that change, or changes, take? As you know from blog posting # 473, we listed merger, partnership, sale or transfer, and liquidation, as four alternatives for COBA7, going forward.

And we requested your input – and many of you provided it. For that, we’re very grateful! As a result we’ve expanded those alternatives, in number, from four to five.

• No change to COBA7. Continue growing as ‘the primary national advocate & information resource’ for land lease communities nationwide & in Canada! This will likely necessitate converting to ‘not for profit’ tax status, & retaining services of a Washington, DC – based consultant as lobbyist.

• Meld COBA7 into the rumored new independent national advocacy entity planning to represent and serve all non-manufacturing segments of the industry! This group has met, is surveying your interest, & will likely proceed accordingly.

• Partner COBA7 with MHI, broadening the focus of its’ NCC division, to far better serve information and statistical reporting needs of land lease communities nationwide! An overture has been made to this end. One conversation to date.

• Have COBA7 quit MHI and proceed alone! Why? For starters, MHI, despite repeated invitations, remains unaffiliated with COBA7; continues reporting MH shipment #s different from IBTS, HUD, MHARR & COBA7; engages in meeting location affluence gerrymandering; &, allows no proxy voting at NCC elections.

• Dissolve COBA7 during year 2018, ending a 40 year career in professional property management, & 35+ years providing information and services to 50,000+/- land lease communities nationwide! This is least desirable alternative, but a practical one, relative to ongoing indecision per preceding bullet points.

That new fifth alternative recommendation, ‘Have COBA7 quit MHI and proceed alone!’ took us by surprise. But you make a good case when suggesting it, in light of more than one state manufactured housing association terminating membership with the institute. And we continue to field frustrations expressed, at being ignored, by other single and small portfolio owners/operators of land lease communities.

In the interest of full disclosure, our past and present MHI membership has been, and continues to be, for the time being, in the name of one or another of our for-profit firms, not COBA7 per se..

Well, there you have it. The gist of our efforts, now with your assistance, to sort things out relative to COBA7’s past, present and future, relative to the manufactured housing industry and the land lease community real estate asset class. The last thing we want to see, as first expressed in blog # 473, is a return to the information, resources, communication, PM training & certification, and networking wasteland of 40 years ago (1978), when I took over my first four (then) ‘mobile home parks’. But that’s where we could be headed….

What would you do? Again; I truly would like to know your input! So, respond either via gfa7156@aol.com, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764; or, via a personal note to GFA c/o Box # 47024, Indianapolis, IN. 46247. And I’m available most afternoons via (317) 346-7156. Many of you have helped get us this far, especially since COBA7s’ founding during early 2014. Thanking you in advance for your latest assistance.

George Allen, CPM, MHM
COBA7, a division of GFA Management, Inc., dba PMN Publishing

What Began in 1978 Comes to Close in 2018 – or Does It?

December 29th, 2017

Blog # 473; Copyright @ 23 December 2017; community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
____________________________________________________________________

INTRODUCTION: You a conscientious manufactured housing executive, savvy land lease community owner/operator, or better than average state MH association executive?

Three topics in this blog post have (in Part I) potentially long-range and serious consequences; (in Part II) unique education offerings not to be repeated anytime soon; and, (Part III…well, just wait to read what you’ll find there….) the MHIndustry is a-changing!

Please pay attention to all three messages. Again, one finds us on the cusp of moving ahead as a realty asset class OR regressing back to the ‘near total lack of resources of the 1970s’. The second simply offers opportunities available from no one else anywhere! And the third? The ‘jury is out’. Will a successor be better or worse for the MHIndustry?

I.

2018

What Began in 1978 Comes to a Close in 2018, or Does It?

Intimates know I started my professional property management career in 1978, with Turtle Creek Management, Inc., managing conventional apartment communities and four (then) mobile home park ‘turnaround challenges’, in Indiana and Kentucky.

In 1980, Carolyn and I founded GFA Management, Inc., overseeing, as she was wont to say at the time: “Anything that didn’t move!” We soon purchased our first (then) manufactured home community – out of foreclosure, selling it two years later for a sixfold return on our investment.

In 1988, via PMN Publishing, self-published my first book, Mobile Home Park Management (Since renamed Land Lease Community Management, 8th edition). Six years later, with co-authors David Alley & Edward Hicks, we published, via J. Wiley & Sons, Development, Marketing, & Operation of Manufactured Home Communities, along with its’ sister text, two years later, How to Find, Buy, Manage & Sell a Manufactured Home Community. Both case bound tomes became now industry classics and used copies continue to be available online.

During the next two plus decades, we launched the annual ALLEN REPORT; Allen Letter professional journal; International Networking Roundtables; the Allen CONFIDENTIAL! business newsletter; Manufactured Housing Manager (‘MHM’) professional property management training program & certification designation; and most recently, the Community Owners (7 Part) Business Alliance, or COBA7

Now, as we close in on our 40th year serving the manufactured housing industry and land lease community real estate asset class, we and business associates find ourselves in the midst of exploring, and soon deciding, which of several organizational alternatives ensures the continuation of the 40 year legacy of COBA7, a division of GFA Management, Inc., dba PMN Publishing.

Those alternatives to date, late December 2017, early 2018?

• Merger. A written proposal, to this end, was delivered via email to the Manufactured Housing Institute in early December. No response to date. No surprise there.

• Partner. Met with advocates for a new national entity representing all post-production segments of the manufactured housing industry. No commitments made, but COBA7’s presence would jump start such an effort.

• Sale or transfer. Intellectual assets of COBA7 offered to a business entity comprised of land lease community owners/operators, and parties, not interested in reverting to the 1970s wasteland of land lease community resources and communication.

• Liquidate intellectual assets of COBA7 over time, as need be….

Nothing particularly new here. MHI made a half-hearted pass at acquiring certain (now COBA7) assets more than five years ago. Post-production folk have been underrepresented for decades, someone is now addressing the matter. A few COBA7 assets are being absorbed by various business interests; though, the sum total is available to a capable communicator, industry experienced, motivated successor. And the least desirable alternative, liquidation, will occur quickly, or over time, depending on circumstances.

Bottom line? If you, as an individual, influential member of one or another national trade entity, and or businessman/woman owner/operator of land lease communities, desire to see COBA7 research (e.g. ALLEN REPORT, etc.); resources (e.g. National Directory of ALL Lenders, etc.); communication (e.g. Allen Letter & TAC!); networking (Networking Roundtable); publishing (‘All MHIndustry & LLCommunity books in print); and, professional property management (‘PM’) training/certification (e.g. the MHM program) continue on into the 21st Century, you’ll explore, and seriously consider supporting one or another of the first three alternatives described.

The question begging answering, by all, is: ‘How do you want to see year 2018 end?’ Like it is NOW, awash in products & services, OR, how it was in 1978 when there was no research, few resources, little communication, paltry networking, no publishing, and no PM training! Seriously. That is the compelling question! Your answer?

Want to discuss the matter? Reach GFA via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (31`7) 346-7156 or gfa7156@aol.com or via Box # 47024, Indianapolis, IN. 46247.

II.

Take Control of Your Education In Year 2018!

Are you, like many of our peers in the manufactured housing industry and throughout the land lease community real estate asset class, frustrated with the paucity of quality educational, via seminars and panel offerings during the course of the year? Well, here’s one effective way for you to help salve that frustration during the months ahead.

In a couple weeks, every state and province manufactured housing and community-related trade association, along with many of the property portfolio firms, will receive a letter from COBA7, a division of GFA Management, Inc., dba PMN Publishing, offering no fewer than six pithy and timely topics for presentation to members and employees. Here’s a summary of those offerings:

• ‘Official State of the Manufactured Housing Industry & Land Lease Community Real Estate Asset Class!’ No one else, on the public speaking circuit, presents ‘both sides’ of our industry/property type story to you and others!

• ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’ The mini-White Paper, by the same name, has ‘housers’ in Washington, DC., talking about manufactured housing!

• ‘Four Part Procedure for Selling New (HUD-Code) Homes On-site, Using ‘Six Right Ps of Marketing’ to Get the Job Done!’ This the gist of the first ‘Two Days of Plant Tours & Home Sales Seminars’ in 2016. The handouts are incomparable!

• One day ‘Manufactured Housing Manager professional property management training & certification program’. 1,000+ MHMs own/operate communities throughout U.S. & Canada. The only active national program in the U.S. today!

• ‘Basic MH & LLCommunity Math, Formulae, & Rules of Thumb!’ No one else in the MHIndustry & LLCommunity business will share this sensitive info with you!

• ‘How to Pen & Self-publish Your Career or Firm’s Worthwhile Story!. This program has already spawned two autobiographies and many memoirs. Is your story worth telling? If so, now is the time to learn how to prepare and share it!

One or more of these six topics spike your interest? Then reach out to the state and national trade entities to which you pay dues, and request they explore hosting one or more of these programs for you, and your peers, during 2018. Cost? Minimal! All we ask is for host association or firm to cover travel expenses and offer a modest honorarium. In the case of the MHM program @ $295/student? If 20 or more paid candidates are in the class, expenses are taken from the tuition. No one else in the manufactured housing industry offers a more cost effective educational opportunity!

For questions, and to schedule sessions, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or (317) 346-7156, or GFA 7156@aol.com

III.

Heard on the Street:
‘Danner is reassigned & Starkey is gone!’
Or, words to that effect….

That’s all we have to say on that subject at this time. More as it becomes available.

***

***

Definition of Affordable Housing & We are ‘housers’!

December 6th, 2017

Blog # 472; Copyright @ 3 December 2017; at community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
______________________________________________________________________

INTRODUCTION: Here learn the official definition of ‘affordable housing’; what it means to be a ‘houser’; how two print trade publications, covering manufactured housing and land lease communities, will debut during next six months; and, how to become involved in ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’ at Louisville MHShow on 17 January 2018.

I.

Definition of Affordable Housing*
by
George Allen, CPM Emeritus, MHM Master

“Housing is Affordable when an individual or household’s Annual Gross Income (‘AGI’), or local housing market’s Area Median Income (‘AMI’) – identified by postal zip code & available online at zipwho.com, can lease a conventional apartment and or buy a home in this local housing market, using no more than 30 percent of said AGI, or AMI, for said shelter and its’ related household (utility) expenses. For example. $50,000 AGI/AMI X .3 HEF (i.e. 30 % Housing Expense Factor) = $15,000 (divided by 12 months = $1,250/month) available for rent or mortgage PITI (principal, interest, taxes, insurance) & household expenses.” GFA

Furthermore,

Low Income Housing (LIH), is a subset of affordable housing, and occurs when AGI/AMI is only 80 percent of aforementioned 30 percent HEF. For example. $50,000 AGI/AMI X .3 HEF = $15,000 for rent or mortgage PITI, X .8 LIH factor = only $12,000/year, or $1,000/month available for rent or mortgage PITI & household expenses.

Furthermore,

Very Low Income Housing (‘VLIH’), is yet another subset of affordable housing, and occurs when AGI/AMI is only 50 percent of aforementioned 30 percent HEF. For example. $50,000 AGI/AMI X .3 HEF = $15,000 for rent or mortgage PITI, X .5 LIH factor = only $7,500/year, or $625/month, available for rent or mortgage PITI & household expenses.

* Copyright 2017 by COBA7, a division of GFA Management, Inc., dba PMN Publishing
Box # 47024, Indianapolis, IN. 46247
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Addendum to Definition of Affordable Housing, relative to manufactured housing’s use of chattel capital for new HUD-Code homes sited in land lease communities.

Here are two significant considerations pursuant to the three part definition cited above:

• First, know there must be an adjustment for rental homesite payments in the examples cited above, to fully account for the allocation of said 30 percent HEF. Deducting, for example, $333/month in each instance, the amount remaining for renting a manufactured home and rental homesite together, or rental homesite alone when one owns their home, is as follows:

Affordable: $15,000 (-) $3,996 (i.e. $333/month rent X 12 months) = $11,004 divided by 12 months = $917/month available

LIH: $12,000 (-) $3,996 = $8,004 divided by 12 months = $667/month

VLIH: $7,500 (-) $3,996 = $3,504 divided by 12 months = $292/month

• Second. Know routine manufactured housing finance generally does not include ‘household expenses’ within the 30 percent HEF cited above. By not doing so, homeowner/site lessees pay their 30 percent HEF for rent or mortgage PITI, while their household expenses (i.e. utilities, but not including CATV & phone) effectively increase the target 30 percent HEF to 40 percent and higher. End result? An otherwise ‘affordable’ housing investment turned ‘risky’!

Did that get your attention? Then join the ‘Solving Our Nation’s Affordable Housing Crisis’ movement, by attending the Louisville MHShow on 17 January 2018. Look me up there – I’ll be easy to find – and request a FREE copy of the mini White Paper, ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’ Likely, opportunities for public discussion of the document, and planning how to effect said solution(s) to solve our nation’s affordable housing crisis.

II.

You & I are ‘Housers’!

That’s right. When one attends a Solutions for Affordable Housing program, planned and hosted by the National Housing Conference, one learns anyone who provides housing to American citizenry is a ‘houser’. Seriously. Now you know!

In any event, 220 of us convened at the Ronald Reagan Building & International Trade Center. to participate in as many as eight concurrent conference sessions, plus luncheon and closing plenary sessions. Among the attendees were three COBA7 affiliates, two MHI members, one MHARR executive, & one freelance manufactured housing industry consultant.

Prior to and during this event, three dozen copies of the aforementioned mini-White Paper: ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’ were distributed to presenters, including:

• Dana Wade, General Deputy Assistant Secretary at HUD. Good to know her!

• Jim Gray, Federal Housing Finance Agency (Think Duty to Serve pilot programs)

• David Leopold, VP, Target Affordable Production & Investments at Freddie Mac

• Michael Hernandez, VP, Affordable Housing Initiatives at Fannie Mae

• Neal Rackleff, Assistant Secretary, Community Planning & Development, HUD

In addition to these federal housing-related executives, there were representatives present from major banks and various NGOs (non-government organizations) such as Enterprise Community Partners, Mission First Housing, LeadingAge, Housing Partnership Equity Trust, Prosperity Now (formerly CFED), Mortgage Bankers Association, Urban Institute, National CORE, and many many more.

So, what topics were covered? Duty to Serve rule implementation, New Solutions for Nonprofit Rental Housing, Economic Revival in Challenged Communities; Minority Ownership, Meeting Housing Needs of Older Adults, and Rental Assistance Demonstration – plus the plenary sessions.

Learned a second new word at this NHC event: COLONIA. Know what it is? In the U.S., along the USA-Mexico border, colonias are ‘low-income, unincorporated housing areas inhabited mostly by Mexicans’.

The most exciting aspect of this one day event? How ‘manufactured housing’ was mentioned, as a practical solution to the U.S. ‘affordable housing’ crisis, in all three sessions I attended! The downside? With but a handful of manufactured housing aficionados present, there really wasn’t much we could do to carry the day for our industry and realty asset class! Maybe next time around…

III.

What to Expect During 2018 – Revisited!

As you’ll, recall, blog posting # 471, tee’d you up as to what to expect to occur during year 2018. Remember?

• A ‘new class’ of HUD-Code manufactured home, not likely to be referred to as such, but designed to appeal to underserved housing buyer markets, e.g. millennials. Unique features? 5/12 roof pitch with asphalt shingles, mounted on permanent foundations, have a built-in porch, and likely a garage or carport at one end of the home. Some wags have already taken to refer to this ‘new class’ of home as being Millennial Housing. What do you think it should be called? Tell the folk at MHI: (202) 783-4087. MHI’s Dick Jennison will be ‘holding forth’ on this timely subject @ 8AM on 1/17 at the Louisville MHShow. Be there!

• The affordable housing crowd, including ‘low cost’ & ‘very low cost’ housing folk are discovering HUD-Code manufactured housing and the land lease community lifestyle! This is already a-happening, as evidenced at the recent National Housing Conference program: ‘Solutions for Affordable Housing’ in Washington, D.C. (Frankly, I can’t figure why there were no salaried or elected MHI leaders present – yet the institute is a ‘member’ of the NHCC) Go figure.

• Another change ‘in the wind’, involves an active initiative to organize and launch a new independent third party national advocacy entity to serve the lobbying and related needs of post-production segments of the manufactured housing industry. This is not COBA7! – but something altogether new. I’ll put you in touch with the ‘organizers’ if you email me via gfa7156@aol.com

• Land lease communities continue to be the ‘new and growing primary market’ for the distribution of HUD-Code manufactured homes. However, this trend, while obvious among most of the 500+/- portfolio owners/operators of land lease communities, has not taken hold among the estimated 42,500 smaller LLCommunities (i.e. mostly Mom & Pop properties). So, a second year initiative is being planned by the IMHA/RVIC (Indiana) during the Spring of 2018: a second Two Days of Plant Tours & Home Sales Seminars’, at the RV/MH Hall of Fame in Elkhart, IN. Want to attend? Phone (317) 247-6258.

So now we learn there’s a fourth initiative to materialize during year 2018! The launch of not one, but two new print trade publications (i.e. magazines) to serve the information needs of the manufactured housing industry and land lease communities nationwide. As you know, Kurt Kelly’s online ezine, Manufactured Housing Review launched earlier this year. Well, be present at the aforementioned Louisville MHShow to pick up copies of the new pub, rumored to maybe be MHInsider (Sound familiar? It should. That’s how COBA7 affiliates are referred to in each of the Allen CONFIDENTIAL! business newsletters – but there’s no connection with the alliance). And a second new print trade publication will likely debut during the Spring of 2018. No further details available at this time. Well, appears the manufactured housing industry will be back in the communication business!

***

TWO POSTSCRIPTs.

Be aware, this is the absolutely last week (12/4-8/2017) for submission of LLCommunity portfolio statistics to COBA7, for inclusion in the 29th annual ALLEN REPORT, due out as a lagniappe in the January 2018 issue of the Allen Letter professional journal!

And, we’re putting together a one day Manufactured Housing Manager (‘MHM’) professional property management training and certification class on 16 January 2018 (the day before the Louisville MHShow begins) at a hotel near the KY fairgrounds. If interested, phone (317) 346-7156 to secure an invitation. Class limited to 25 @ $295.00 apiece. Remember, more than 1,000 MHMs now own/operate LLCommunities nationwide and throughout Canada. No other PM certification program comes anywhere close to covering this important material.

***

George Allen, CPM & MHM
COBA7, a division of GFA Management, Inc., dba PMN Publishing
Indianapolis, IN. 46247
(317) 346-7156

What to Expect During Year 2018

November 25th, 2017

Blog # 471; Copyright, 26 November 2017; at community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.ka. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
____________________________________________________________________

What to Expect During Year 2018

Watch for Four Major Occurrences to Materialize During 2018

Let’s begin with what likely won’t change during 2018, and for awhile beyond. First and most enduring, is the manufactured housing industry shipment volume shattering paradigm shift, in plat since the turn of the Century – when easy access to chattel capital, via independent, third party personal property finance firms went away and has stayed away for 17 years! Since the MHIndustry’s new home shipment nadir of only 49,789 new homes shipped during 2009, has not yet ‘doubled’ to 100,000 (i.e. only 81,136 during 2016), we have a long way to go to reach the industry’s ‘sweet spot’ of an estimated 200,000 new manufactured homes to be shipped per year.*1

Two somewhat related but different unchanging consolidation trends include:
1) Continuing consolidation of stand alone land lease communities, a.k.a. manufactured home communities, into property portfolios (e.g. only 25 such portfolios in 1977; 500+/-, 40 years later, in 2017). And 2) Continuing consolidation of HUD-Code housing manufacturers into mega firms, i.e. ‘Big Three C’ firms, Clayton, Champion & Cavco, today boast upwards of 70 percent national market share of new HUD-Code homes fabricated and shipped nationwide.

OK, now brief descriptions of four non-prioritized significant and expected occurrences during year 2018.

First. Watch for a ‘new class’ of HUD-Code manufactured home to materialize during the months ahead. First described at the manufacturers’ division session at MHI’s annual meeting in Orlando, FL., during October 2017, the first public description of this ‘new class’ will occur at 8AM, the first morning (16 January 2018) of the Louisville MHShow, when Chris Fisher (Ducker Worldwide) and Richard Jennison (MHI) hold forth on the subject. What to expect? As described in an earlier blog posting (See # 465) here, this ‘new class’ will be built in accords with the existing HUD-Code, feature 5/12 roof pitch with asphalt shingles, mounted on a permanent foundation, have a built-in porch, and likely a garage or carport at one end of the home. It’s doubtful the ‘new class’ will be referred to specifically as a ‘manufactured home’, but a moniker of its’ own, e.g. Millennial Housing, or some other such handle.

Second. Watch for the affordable housing crowd (a.k.a. low cost housing folk) to soon ‘discover’ factory-built housing and land lease communities, as practical,’ affordable housing & lifestyle’ solutions to this nation’s Affordable Housing Crisis (i.e. Majority of renters & homebuyers now pay in excess of 40 percent, sometimes 50 percent, of their annual gross income for housing)! How’s this word getting out? A White Paper has been ‘making the rounds’ and been generally well-received to date: ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities’! Researched, produced and distributed by the Community Owners (7 Part) Business Alliance (‘COBA7’). How to obtain a copy of the White Paper? simply request it via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Third. Watch for a major overt effort to organize, recruit and launch a new, independent, third party national advocacy entity, comprised of businessmen and women from most, if not all, post-production segments of the manufactured housing industry. While this non-manufacturer initiative has been quietly discussed for some time, the question remains as to whether discontent with the status quo is strong enough to spawn a third manufactured housing presence in Washington, DC. – a ‘fourth presence’ when one includes the Community Owners (7 Part) Business Alliance, or COBA7. To be put in touch with those organizing this effort, phone (317) 346-7156 for contact information.

Fourth. HUD-Code housing manufacturers have realized since 2009 (also the year Community Series Home debuted) how land lease communities are the new primary market for new manufactured homes! After all, in 2009, only 24 percent of the 48,789 new homes went directly into land lease communities. However, by year end 2015, that volume jumped to 40 percent of the 70,544 new homes shipped! And it’s likely the percentage now exceeds 50 percent. But there’s a troubling, but potentially rewarding, challenge afoot. While the largest property portfolio ‘players’ have learned, and now routinely effect the ‘new home purchase, sell on-site, & seller-finance the transaction drill’ – well, the vast majority (estimated at 80 percent of 50,00+/- LLCommunities nationwide) of these property owners/operators know they have a growing number of vacant rental homesites, have little to no idea how to ‘solve’ it by buying, selling, and seller-financing new homes on-site! That, in this veteran industry observer’s opinion, remains ‘the challenge’ of 2018, albeit, How to reverse said trend and restore prosperity! Want to address this? Plan to participate in the second Two Days of Plant Tours & Home Sales Seminars, at the RV/MH Hall of Fame, in Elkhart, IN., during May 2018. To get onto the ‘invite list’, phone the IMHA/RVIC in IN. via (317) 247-6258 X 11. Don’t wait.

Well, there you have it. What to watch for during year 2018. The ‘new class’ of manufactured home, our brand of affordable housing & lifestyle to mount the national stage, maybe a new post-production national advocacy entity in Washington, DC., and the education of small to mid-sized land lease community owners/operators nationwide.

End Notes.

1. Relative to manufactured housing annual shipment totals quoted in this blog posting, know they are 12 month totals researched and published by the Institute for Building Technology & Safety (‘IBTS’) at the behest of HUD; then parroted, in unadulterated fashion, by MHARR and COBA7. These are the manufactured housing industry’s official annual new home shipment totals!

***
George Allen , CPM * MHM

What to Expect During Year 2018

November 25th, 2017

Blog # 471; Copyright, 26 November 2017; at community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.ka. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
____________________________________________________________________

What to Expect During Year 2018

Watch for Four Major Occurrences to Materialize During 2018

Let’s begin with what likely won’t change during 2018, and for awhile beyond. First and most enduring, is the manufactured housing industry shipment volume shattering paradigm shift, in plat since the turn of the Century – when easy access to chattel capital, via independent, third party personal property finance firms went away and has stayed away for 17 years! Since the MHIndustry’s new home shipment nadir of only 49,789 new homes shipped during 2009, has not yet ‘doubled’ to 100,000 (i.e. only 81,136 during 2016), we have a long way to go to reach the industry’s ‘sweet spot’ of an estimated 200,000 new manufactured homes to be shipped per year.*1

Two somewhat related but different unchanging consolidation trends include:
1) Continuing consolidation of stand alone land lease communities, a.k.a. manufactured home communities, into property portfolios (e.g. only 25 such portfolios in 1977; 500+/-, 40 years later, in 2017). And 2) Continuing consolidation of HUD-Code housing manufacturers into mega firms, i.e. ‘Big Three C’ firms, Clayton, Champion & Cavco, today boast upwards of 70 percent national market share of new HUD-Code homes fabricated and shipped nationwide.

OK, now brief descriptions of four non-prioritized significant and expected occurrences during year 2018.

First. Watch for a ‘new class’ of HUD-Code manufactured home to materialize during the months ahead. First described at the manufacturers’ division session at MHI’s annual meeting in Orlando, FL., during October 2017, the first public description of this ‘new class’ will occur at 8AM, the first morning (16 January 2018) of the Louisville MHShow, when Chris Fisher (Ducker Worldwide) and Richard Jennison (MHI) hold forth on the subject. What to expect? As described in an earlier blog posting (See # 465) here, this ‘new class’ will be built in accords with the existing HUD-Code, feature 5/12 roof pitch with asphalt shingles, mounted on a permanent foundation, have a built-in porch, and likely a garage or carport at one end of the home. It’s doubtful the ‘new class’ will be referred to specifically as a ‘manufactured home’, but a moniker of its’ own, e.g. Millennial Housing, or some other such handle.

Second. Watch for the affordable housing crowd (a.k.a. low cost housing folk) to soon ‘discover’ factory-built housing and land lease communities, as practical,’ affordable housing & lifestyle’ solutions to this nation’s Affordable Housing Crisis (i.e. Majority of renters & homebuyers now pay in excess of 40 percent, sometimes 50 percent, of their annual gross income for housing)! How’s this word getting out? A White Paper has been ‘making the rounds’ and been generally well-received to date: ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities’! Researched, produced and distributed by the Community Owners (7 Part) Business Alliance (‘COBA7’). How to obtain a copy of the White Paper? simply request it via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Third. Watch for a major overt effort to organize, recruit and launch a new, independent, third party national advocacy entity, comprised of businessmen and women from most, if not all, post-production segments of the manufactured housing industry. While this non-manufacturer initiative has been quietly discussed for some time, the question remains as to whether discontent with the status quo is strong enough to spawn a third manufactured housing presence in Washington, DC. – a ‘fourth presence’ when one includes the Community Owners (7 Part) Business Alliance, or COBA7. To be put in touch with those organizing this effort, phone (317) 346-7156 for contact information.

Fourth. HUD-Code housing manufacturers have realized since 2009 (also the year Community Series Home debuted) how land lease communities are the new primary market for new manufactured homes! After all, in 2009, only 24 percent of the 48,789 new homes went directly into land lease communities. However, by year end 2015, that volume jumped to 40 percent of the 70,544 new homes shipped! And it’s likely the percentage now exceeds 50 percent. But there’s a troubling, but potentially rewarding, challenge afoot. While the largest property portfolio ‘players’ have learned, and now routinely effect the ‘new home purchase, sell on-site, & seller-finance the transaction drill’ – well, the vast majority (estimated at 80 percent of 50,00+/- LLCommunities nationwide) of these property owners/operators know they have a growing number of vacant rental homesites, have little to no idea how to ‘solve’ it by buying, selling, and seller-financing new homes on-site! That, in this veteran industry observer’s opinion, remains ‘the challenge’ of 2018, albeit, How to reverse said trend and restore prosperity! Want to address this? Plan to participate in the second Two Days of Plant Tours & Home Sales Seminars, at the RV/MH Hall of Fame, in Elkhart, IN., during May 2018. To get onto the ‘invite list’, phone the IMHA/RVIC in IN. via (317) 247-6258 X 11. Don’t wait.

Well, there you have it. What to watch for during year 2018. The ‘new class’ of manufactured home, our brand of affordable housing & lifestyle to mount the national stage, maybe a new post-production national advocacy entity in Washington, DC., and the education of small to mid-sized land lease community owners/operators nationwide.

End Notes.

1. Relative to manufactured housing annual shipment totals quoted in this blog posting, know they are 12 month totals researched and published by the Institute for Building Technology & Safety (‘IBTS’) at the behest of HUD; then parroted, in unadulterated fashion, by MHARR and COBA7. These are the manufactured housing industry’s official annual new home shipment totals!

***
George Allen , CPM * MHM

Positive Results; SINGLEWIDE; & Key MH Issues!

November 9th, 2017

Blog # 470; Copyright, 12 November 2017; at community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!

INTRODUCTION:

You’re about to read the most exciting array of MHIndustry & LLCommunity news published so far this year! And this is simply the tip of the iceberg. So, after reading Parts I, II, & III, ask yourself:

‘Who else in the MHIndustry & LLCommunity realty asset class, is informing me of this timely and strategic business news? Answer? No one!

With that thought in mind, and if not already an affiliate of COBA7, purpose to do so at the end of this week’s blog posting.

I.

OMG – Positive Results Already!

Did You Read ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’?

Published as a lengthy blog posting (#468), it’ll appear soon, as a stand alone feature in every manufactured housing print, and hopefully online, trade publication!

Here’s one early response, quoted (& edited) in part: “Our local (land lease) communities are gradually losing tenants, and (property) owners are selling the properties. Lack of
(reasonable) access to (chattel) financing, and Dodd/Frank (regulations) have really made business difficult.’ Agreed. But it’s not that dismal everywhere, nor among most of the 500+/- land lease community portfolio owners/operators in the U.S. & Canada. How to reverse ‘that dire situation’ was a goal of the above-referenced White Paper. Another goal? Attract attention of ‘affordable housing’ practitioners! And that’s happening NOW!

Some Community Owners (7 Part) Business Alliance (‘COBA7’) affiliates will soon travel to Washington, DC., to participate in a high level NGO (non-government organization) forum, where factory-built housing in general, manufactured housing in particular, along with land lease communities, will be introduced and postured as 1) practical, affordable solutions to ‘minority homeownership’, 2) meeting the ‘housing needs of older adults’, and more! That’s all we can tell you at this time. So, watch COBA7 weekly blog postings for more information, and eventually results, of this unexpected but timely and welcome opportunity.

In the meantime, know a reprint of the aforementioned blog posting (#468), will be enclosed as a lagniappe, in the November issues of the Allen Letter professional journal, and the Allen CONFIDENTIAL! business newsletter.

II.

SINGLEWIDE

‘Chasing the American Dream in a Rural Trailer Park’
by
Sonya Salamon & Katherine MacTavish

This is, in my opinion, a ‘NEW 272 pages book using OLD data & terminology. I is published by Cornell University Press. How new/old? According to the back cover description of this NEW’ book: “In Singlewide, (the authors) explore the role of the trailer park as a source of affordable housing. America’s trailer parks, most in rural places, shelter an estimated 12,000,000 people, and the authors show how these parks serve as a private solution to a pressing public need.” – for affordable housing. ‘OLD’? 1) Among manufactured housing and land lease community practitioners, when was the last time to this unique type of income-producing property was referred to as being a ‘trailer park’? 2) And apparently, at least one of three ‘field studies’ cited, occurred in Illinois as far back as 1998 – 2001. 3) When was the last time it was required that manufactured homes in land lease communities have license plates affixed to one end? Hmm. Maybe the 1950s?

This pre-review of SINGLEWIDE is based on material in the Introduction to this text, and Chapter # 1. A comprehensive ‘review’ will likely appear in a future issue of the Allen Letter professional journal. Until then know, the ethnographer co-authors, within the first three pages of their work together, seem unable to either differentiate among, or chose which, descriptive term to use in their book; alternatives being:

• trailer-park & trailer park
• mobile home park
• land-lease park
• manufactured home community
• ‘galvanized ghettos’

In my opinion, once again, someone outside the manufactured housing industry and land lease community business models, finds the housing alternative and property type to be convenient whipping boys for preconceived notions of product quality and lifestyle. Sad.

III.

KEY MH ISSUES

Results of Four Input Sessions to Soon be Presented…

Surely you participated in one or more of the four ‘manufactured housing input sessions’ occurring since the first of this (2017) year. When and where did they occur?

• In Chicago, IL. during the Illinois Manufactured Housing annual meeting
• In Elkhart, IN., during an MHAlive! ‘think tank’ session at the RV/MH Hall of Fame
• In Indianapolis, IN., during the 29th annual International Networking Roundtable
• In Marietta, GA., during the 6th annual SECO Conference

Plus, several other venues (e.g. Fannie Mae’s recent Future of Manufactured Housing forum, in Washington, DC.) provided direct input, relative to manufactured housing industry issues, all which will be published soon, as a feature in – likely – the November issue of the Allen Letter professional journal.

So, don’t miss the upcoming features and lagniappes, in the Allen Letter professional journal, relative to ‘Solving Our Nation’s Affordable Housing Crisis’, a review of SINGLEWIDE, and comprehensive listing of key manufactured housing industry-related issues. To affiliate with the Community Owners (7 Part) Business Alliance (‘COBA7’) and receive this valuable trade print publication, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764,

***

George Allen, CPM & MHM
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Solving Our Nation’s Affordable Housing Crisis

November 3rd, 2017

Blog # 468; Copyright, 22 October 2017; at community-investor.com

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

This blog posting is the sole national advocate, voice, official ombudsman, historian, research report, & online communication media for all North American LLCommunities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHBusiness performance!
______________________________________________________________________

INTRODUCTION:

This blog posting recommends ‘Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!’

Took longer than usual to collect, organize, and articulate key data and appropriate thoughts on this important and timely topic. Result? More affordable housing!

Watch for this Solution to be featured in the Allen CONFIDENTIAL! business newsletter, Allen Letter professional journal, and wherever COBA7 can secure media ‘white space’, an online e-zine presence in the Manufactured Housing Review, & distribution of reprints!

This message warrants distribution beyond our immediate circle of manufactured housing and land lease community businessmen and women friends and association executives to state and federal regulators, as well as local land planners, and zoning boards everywhere

You’ve permission to copy & distribute this blog posting! Thank You for doing so! GFA

I.

Solving Our Nation’s (Lack of) Affordable Housing Crisis, with Factory-built Housing & Land Lease Communities!

Providers of single and multifamily residential housing talk about it, some take steps to ameliorate ‘this crisis’; but few set aside personal & corporate preferences to ideate (‘conceptualize’) what it’ll take to actually ‘ Solve Our Nation’s Lack of Affordable Housing Crisis!’ What follows here, is a foundation for such discussion, then thoughts as to how factory-built (Some say systems-built) housing in general, manufactured housing in particular, and land lease community lifestyle (a.k.a. manufactured home community), are likely the ideal, practical, dual solution to said affordable housing crisis.

Affordable housing, as a descriptive term, is widely known to have been hijacked by the low income housing crowd. But that need not be the case going forward, as we agree on a working, across the board definition of ‘affordable housing’.

Here’s one suggestion. ‘Housing is affordable, when an individual or household’s Annual Gross Income (‘AGI’) , when less than half the local housing market’s Area Median Income (‘AMI’) – defined by postal zip code and researchable online (e.g. zipwho.com), can rent a conventional apartment and or buy a home in this locale, using no more than 30 percent of said AGI, for this shelter & its related household (utility) expenses.’ 30 percent of $36,000 AGI, or local housing market AMI, = $10,800 to rent a nonsubsidized conventional apartment unit and or buy a house. Using the approximate national AMI of $51,229; 30 percent = $15,368 to the same ends*1 Practical examples later…

In the meantime, to better understand the scope and depth of the Affordable Housing Crisis, and how its’ described, one should become familiar with six or more measures generally associated with this aspect of shelter categorization:

• Aforementioned 30 percent Housing Expense Factor, or HEF measure; common in some, if not many/most, of HUD’s, and other related housing programs.

• The Housing Opportunity Index, or HOI measure. Formerly, the National Association of Realtors (‘NAR’), or National Association of Homebuilders’ (‘NAHB’), and ‘Housing Affordability Index’ (‘HAI’) measure; partnerships between NAR or NAHB and a major lender, like Wells Fargo.

• The Housing Wage, or HW measure

• The Workforce Housing, or WFH measure

• The Income to Home Value Ratio, or IHVR measure

• Finally, the ‘One, or Anyone, Who Believes They Live in Affordable Housing’, a patently subjective measure *2

Today, study after study tells us the majority of renters & homebuyers pay in excess of 40 percent, sometimes 50+/- percent, of their AGI for housing that, according to the above measure, is not HEF affordable; or for that matter, by any other measure! Therein lies the Affordable Housing Crisis.

So, where do we go from here?

Introduction to Factory-built Housing and Land Lease Communities.
FACTORY-BUILT HOUSING

Some say 100 percent of new single and multifamily family residential housing is, in large part, even in toto, built with factory-fabricated components or as self-contained units. Many agree there are four types of factory-built housing in the U.S. *3

• Production (site) builders = 50+/- percent of national market share. Construct housing on-site, per local building codes, using factory-built components (e.g. roof & floor trusses, pre-hung windows & doors, etc.). A.k.a. site-builders & stick-builders

• Panelizers = 35+/- percent of national market share. Use two dimensional exterior & interior walls, roof & floor trusses, and furnish ‘packages’ needed to complete the home. Components fabricated in factories per local building codes.

• HUD-Code Manufactured Housing = 10+/- percent of national market share. Six-sided structures, singlesection & multisection, built in factories per the performance-based, federally preemptive (HUD) building code. Uses longitudinal steel chassis as foundation for floor system.

• Modular Housing = five+/- percent of national market share. Six-sided modules & utility cores, built in factories per local, state & regional building codes.

Of the four types of factory-built housing, including component assembly, only the HUD-Code manufactured housing alternative, by dint of

• fabrication occurs indoors under climate-controlled conditions

• assembly lines draw from bulk purchased-building material & appliance inventories

• using local, skilled, but not necessarily journeyman, labor, &

• benefitting from a plethora of production line efficiencies,

routinely ships singlesection & multisection housing units, at half the ‘cost per square foot’ – not including value of underlying realty, of contemporary site-built housing! *4

But therein lies the challenge! How to further Solve Our Nation’s (Lack of) Affordable Housing Crisis, using this type factory-built housing? Following are forward-looking ideas and suggestions to explore to this noble and timely end:

• Refine designs of planned new HUD-Code homes, emphasizing space and energy efficiency (e.g. via more insulation, but avoiding trendy but expensive and as yet, unproven innovations), use of quality materials to enhance the durability of said homes. PRODUCT. As volume of new homes, shipped directly into land lease communities increases, continue to refine the design, features and fabrication of Community Series Homes or CSH Models.

• Understand and satisfy local housing markets into which new HUD-Code homes will be shipped, keeping features in line with needs and preferences of prospective homebuyers/site lessees. PLACE. And, as the industry’s distribution mechanism(s) utilize additional ‘independent (street) MHRetailers’ &/or on-site sale of new homes within land lease communities by owners/operators. In doing so, refine where and how new homes are displayed, e.g. at retail home sales centers, and or on-site in land lease communities as ‘spec’ulation housing opportunities, rental units, and otherwise..

• Research and exercise price point sensitivity keyed to local housing market AMI! PRICE. A caution here: Manufacturers must eschew (‘shun’) temptations to wantonly increase the cost of housing product leaving the factory, blaming ‘whatever is in the news at the time’, e.g. hurricanes; ever increasing fuel costs, NOT; and, new regulations that may or may not be true. And in the case of chattel capital financing of new HUD-Code homes, move – as an industry, away from ‘risky’ to ‘affordable’ price point calculation mechanics. More about this later.

• Build one or more Unique Selling Propositions (‘USP’s’) into new homes, and engage in brand advertising locally, regionally, even nationally. PROMOTION. At the same time, take steps, in print and online marketing, to improve public perception of HUD-Code homes nationwide. A recent suggestion has been to advertise as Tiny Houses. Then, when prospective homebuyers visit, and see just how prohibitively small they are, suggest the larger manufactured home, or Millennial Housing (see paragraph to follow), is the right size for them.

• Provide HUD-Code home sales training, as needed, at all levels and among as many MHRetailers and in-community sales forces as possible. PEOPLE. Monitor home sales performance via data reporting, regular supervision, as well as use of covert and anonymous mystery shopping services.

• Bring the gist of the previous five bullet points together into marketing and operations plans, keyed to local housing markets and manner of distribution. PROCESS. Again, monitor performance and adjust accordingly, to ensure success.

There has been talk of late, to design, fabricate, deliver, and sell, a New Type of (Manufactured) Home, constructed in accords with the HUD-Code, but not referred to as being manufactured housing per se (Some suggest ‘Millennial Housing’), featuring 5/12 roof pitch with asphalt shingles and housing siding, a built-in porch, and possibly a garage at one end of the home. If the price point of this new type factory-built home, and underlying realty cost (including rental homesite rates in land lease communities) can be kept within the new home purchase range of the average American citizen earning the $51,229+/- national average AMI, and or average manufactured housing customer earning $36,000+/- per year, this New Type of (Manufactured) Home could/would go a long long way to Solving Our Nation’s (lack of) Affordable Housing Crisis!

How’s all this to work? Well,

• In the first instance, given an AGI (or AMI) of $51,229 X .30 HEF = $15,368. Following the ‘risky’ route (i.e. sans utility $ in monthly PITI payment & paid separately each month), where 100 percent of $15,368 (before deducting $333/month site rent), leaves $948 to pay the monthly mortgage payment (i.e. based on 9.5 percent interest over 20 years) = $113,000 price point (i.e. max amount of mortgage for house purchase). In the second example, given same AGI or AMI X .30 HEF = $15,368, but following the ‘affordable’ route (i.e. utility $ as part of monthly PITI payment), only 75 percent (Not aforementioned 100 percent) of $15,368, or $11,527 – reduced once again by the $333/month site rent, to where $628. pays the monthly mortgage payment (i.e. same loan terms as above) of $628/month = $75,000 price point. (i.e. max amount of mortgage for house purchase).

• In the second instance,, given a lower AGI (or AMI) of $36,000 X .30 HEF, and respective 100 percent and 75 percent allocations, for ‘risky’ & ‘affordable’ calculations, subject to same $333/month site rent and mortgage terms, the resulting price points for the ‘risky’ transaction is $68,000 while the ‘affordable’ transaction restricts the would be homebuyer/site lessee to a $41,000 purchase.*5

Aha! Isn’t this the metaphorical ‘fly in the otherwise (affordable housing) healing ointment’! Yes, as just demonstrated, and it has to do with the manner in which housing payments have been calculated in the manufactured housing industry decades past and today. Estimated household utility (e.g. heat, electric, water/sewer) expenses have generally not been included within the PITI (Principal, Interest, Taxes, Insurance) mortgage and site rent payments, leading to an otherwise ‘risky’ HEF of more than 30 percent. However, when utility expenses are included in the PITI and rental homesite payments, the ‘risky’ investment becomes ‘affordable’ at 30 percent. This simple change in calculation makes a significant difference in the ‘amount of house’ a prospective homebuyer/site lessee can truly afford, albeit ‘risky’ or ‘affordable’. And yes, the ‘amount of house’ a manufacturer can build, and a housing retailer, sell.

• Again, with an AGI or AMI of $51,229, the ‘risky’ approach allows for a home purchase of $113,000. Whereas, taking the ‘affordable’ approach, the homebuyer/site lessee can really only afford $75,000 worth of house – but will likely be less liable to default and or have financial difficulty paying his/her mortgage, site rent, and utility bills each month.

• And the ‘like figures’ for homebuyer/site lessees with a lesser AGI or AMI of $36,000, the ‘risky’ approach allows for a home purchase of $68,000. Whereas, taking the ‘affordable’ approach, the homebuyer/site lessee can really only afford $41,000 worth of house.

So, there you have it! Where will the manufactured housing industry go from here?

Entice the average national AGI customer (or local housing market AMI) of $51,229 to purchase a home ‘affordably’ at max value of $75,000, or in ‘risky’ fashion at max value of $113,000? Furthermore, where the average manufactured housing homebuying/site lessee customer is concerned, with an AGI (or local housing market AMI) of $36,000 will they be encouraged to purchase a home ‘affordably’ at max value of $41,000, or in ‘risky’ fashion at max value of $68,000? *6

Now, there’s something to ponder and decide, going forward…

II.

LAND LEASE COMMUNITY

The trailer courts & camps of the 1950s, mobile home parks of the 1970s, and manufactured home communities of the 1990s, were not and are not, the land lease communities of today and tomorrow! *7

So, what makes land lease communities an integral part of the Solution to Solve
Our Nation’s (lack of) Affordable Housing Crisis? In three words: ‘underlying developed realty’, a.k.a. ‘rental homesites’ right sized and configured for HUD-Code manufactured homes and their homeowners/site lessees!

Prospective homebuyers, with an AGI of $36,000, when offered right price point housing alternatives, when rental homesite rent is @ $333.00/month, or thereabouts, can afford a new factory-built home priced at $41,000. if calculated ‘affordably’; or, $68,000. if calculated as a ‘risky’ investment sans utility bills included in the monthly PITI payment. Where else is someone (or household) earning $36,000/year going to be able to buy a home, and secure (rent) the underlying realty, at either of these price points? Answer? Nowhere!

But land lease communities, like their manufactured housing industry counterparts, also have challenges to resolve – if they’re to Solve Our Nation’s (Lack of) Affordable Housing crisis!

• In this case, the multifamily rental property must be clean and safe, with superb curb appeal and more! Rental homesites must be large enough to accommodate singlesection and multisection homes. Streets and utility infrastructure must be in good repair. PRODUCT. In a word, offer a desirable, sustainable lifestyle to ‘newly wed & nearly dead’, euphemistically speaking. Adopt the land lease community mindset (Think lifestyle!) and leave manufactured home communities and ‘mobile home parks’ far behind!

• The land lease community must be well-located for the market mix of homebuyer/site lessee it serves. Location might indeed be the USP (Unique Selling Proposition) for the land lease community. PLACE. And other USPs might include proximity to desired health services, convenient shopping, quality education; rural versus suburban environment, etc..

• It is important the rental homesite rent be in sync with other forms of multifamily residential properties in the local housing market. One way to ensure this is to survey conventional apartment rents for 3BR2B units, and divide that area dollar average by ‘3’, e.g. $900/month average apartment rent = $300/month site rent. PRICE. And taken together, monthly PITI mortgage payment, utility payments, and site rent, to be within the 30 percent HEF cited earlier. And some say the combined total should be 10+ percent (Schwep Rule), or $50.00/month (Schrader/Smith Rule), below the rent rate for said 3BR2B conventional apartment unit or townhouse in the same local housing market.

• What is being advertised? Property location, features, new homes, etc? Is there off-site and on-site signage present and is it in good condition? PROMOTION. Until maximum physical and economic occupancy is achieved on-site, use every form of advertising: print, broadcast, signage, online, and more. Keep close track on the volume of online and telephone responses, number and nature of on-site visitors, and the ‘conversion rate’ of inquirers to visitors to homebuyers and or lessees of rental homesites or homes.

• Professional property management and successful home sales depends almost entirely on, not just the product, place, price and promotion, but PEOPLE as well! Are they properly screened, hired, trained, rewarded, and supervised? On-site managers should be trained and certified as Manufactured Housing Managers (‘MHM’); regional and executive real estate managers trained and designated Certified Property Manager (‘CPM’) members of the Institute of Real Estate Management (‘IREM’). Better yet, more (Certainly more than the two designees now) land lease community portfolio firms need to earn IREM’s prestigious AMO (Accredited Management Organization) designation.

• Here too, it is important to integrate all ‘Six Right Ps of Marketing’ to support one another in PROCESS. Ensure the overall process dovetails well with the manufactured housing emphasis points.

These have been the Six Right Ps of Marketing: Product, Place, Price, Promotion, People, & Process. Get used to applying them to everything you do relative to housing and community marketing and operations!

So, where do we go from here? What are the challenges that must be faced if land lease communities are to be part of the solution solving our nation’s (lack of) affordable housing?

Well, for starters, we need more land lease communities! How to do that? Take the ‘affordable housing & land lease community message’ to land planners and local zoning officials nationwide!

Again, engage in professional property management at all levels, from on-site to corporate. Of all types commercial real estate, land lease communities have been the least interested in and served by the tenets of professional real estate management. There continues to be a dire need for sales and leasing training and certification nationwide, with results ensured by performance observation, key data reporting, and use of mystery shopping services – a routine practice borrowed from the apartment management playbook.

Rein in rental homesite rents approaching a 2:1 Ratio (Compared to apartment unit rents in the same local housing market, e.g. $900/mnth for a 3BR2B apartment X .50 = $450/month site rent), and commit to effecting the more desirable and affordable 3:1 Ratio cited earlier. Why? For every $100.00 increase in homesite rent, new home buying power of prospective homebuyers is decreased by 18 – 20 percent, depending on whether calculating PITI & site rent on an ‘affordable’ (18%) or ‘risky’ (20%) basis.*8 Bottom line? The value proposition, comprised of home value and rental homesite rates, can be precarious. Only if we protect this value proposition between homeowners/site lessees, and property owners/operators, will we be able, let alone worthy, to be the realty asset class portion of the Solution to Our Nation’s (Lack of) Affordable housing Crisis.

Lest we forget how important reasonable access to chattel capital is for new and resale home sales in land lease communities, it is indeed one of the wildcards deserving continuing attention and action by everyone involved in manufactured housing and land lease community ownership and management. Unfortunately, as an industry and realty asset class we have little to no control over that aspect of our business model. The best we can do is lobby and encourage the Federal Housing Finance Agency (‘FHFA’), and GSEs (Fannie Mae & Freddie Mac) to meet Congress’ challenge to effect Duty to Serve (‘DS’) pilot programs in the manufactured housing industry!

III

SUMMARY.

NOW is the time to enlarge the heretofore niche role (i.e. estimated 10 percent+/- of national market share of new single family residences) manufactured housing has been serving the American homebuying public. ALSO time for land lease community owners/operators, large and small, nationwide, to extol the affordability, desirability, sustainability of the homeownership/site lessee lifestyle they offer. In BOTH cases, no longer will we ‘Wait for the customer’; but rather, take our combined housing and lifestyle message to them every way possible. Needed result? ‘The Solving of Our Nation’s (Lack of) Affordable Housing Crisis with Factory-built Housing & Land Lease Communities!’

Are YOU on board? We surely hope so!*9

***
End Notes.

1. Adapted from a definition put forth in the June 2011 issue of Multihousing Professional magazine, and edited on page 37 of the Book of Formulae, Rules of Thumb, & Helpful Measures…George Allen, COBA7, Indianapolis, IN., 2012.

2. Ibid., p.38

3. Originally identified in Automated Builder Magazine, California

4. Per 2015 data published by the Manufactured Housing Institute, $47.55/sq.ft. (all sizes HUD-Code homes) – or $50.00/sq.ft. when including foundation, compares with $100.65/ssq.ft. for site-built homes. Quoted from Swan Song, George Allen’s History of Manufactured Housing & Land Lease Communities, 1970 – present day’, COBA7, Indianapolis, IN. 2017, page # 113. Limited number of copies available, for $49.95 (postpaid) via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

5. Using methodology described within the ‘Ah Ha! & Uh Oh! Worksheet, COBA7, Indianapolis, IN., 20008 & revised 2016. See Figure # 1

6. Ibid., Reverse side of Figure # 1.

7. Why land lease community? Unlike the manufactured housing-related income-producing properties circa 1950 thru 1990s, where only pre-HUD-Code ‘mobile homes’ were sited in ‘mobile home parks’; then post-HUD-Code ‘manufactured homes (& pre-HUD-Code ‘mobile homes) were sited in manufactured home communities; today’s land lease community features not only these two types of factory-built housing, but modular homes, ‘park model RVs’, ‘RVs for a season’, and site-built homes constructed on-site in land lease communities to imitate HUD-Code homes (only in FL following major hurricanes).

8. Using 1) ‘risky’ & 2) ‘affordable’ price point calculations perspectives at $51,229 AGI/AMI, with site rent increased from $333/month to $433/month, final ‘max house purchases’ are 1) $90,867 (down $22,233 from the $113,000 ‘risky’ perspective), or 20 percent; and, 2) $75,000 (down $15,687 from the $90,867 ‘affordable’ perspective, or 18 percent! Think how much ‘less house’ will be able to be purchased, using $36,000 AGI/AMI and higher site rent at $433/month!

9. Want more information on this timely and important subject and challenge to the manufactured housing industry and land lease communities? Phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also reach COBA7 and the author of this challenge via gfa7156@aol.com

Figure.

1. ‘Ah Ha! & Uh Oh! Worksheet, COBA7, Indianapolis, IN., 2008 & revised 2016.

***

George Allen, CPM & MHM
COBA7, a division of GFA Management, Inc., dba PMN Publishing
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156