Archive for April, 2013

MH & LLLCommunities = archetype for affordable housing

Sunday, April 28th, 2013

Blog # 244 Copyright 2013 28 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

I.

Manufactured Homes & Land Lease Lifestyle Communities,
the Archetype For All Affordable Housing

II.

Others Benefit from This; Why Not Your Firm???

III.

And the Talk Goes On, but That’s ‘All it is’ So Far…

IV.

Soft Underbelly (vulnerability) of Social Media!

V.

Did You Realize? 2013 is 20th Anniversary of….

I.

Manufactured Homes & Land Lease Lifestyle Communities,
The Archetype of Affordable Housing

Allowing for differences in business practices and ‘barriers to affordable housing’, among local markets, HUD – Code manufactured homes in land lease lifestyle communities (a.k.a. manufactured home communities), charging site rent in sync with other forms of multifamily rental housing (e.g. Usually 1/3rd the amount of monthly rent charged for a 3BR2B conventional apartment), continues to be the Sole Archetype (prototype) for Truly Affordable Housing in the United States today!

FOR EXAMPLE. Anyone earning the recent national Annual Median Income, or AMI, of $51,000, can afford a small new or modest resale manufactured home, given favorable loan terms, and modest site rent in most all age LLLCommunities! The Key to Success, is NOT to exceed the commonly – accepted 30% of AMI Housing Expense Factor, wherein household utility expenses, but not telecom charges, are included, along with PITI within said HEF. SPECIFICLLY: $51,000 AMI X .3 HEF = $15,300 available for housing payment & household expenses; X .75 (75%) to separate out ‘available for’ PITI payment amount alone, = $11,475; divided by 12 months = $956.24/month, less $300/month for site rent = $656.25 available for monthly house payment or PITI (principal, interest, taxes, insurance). This calculation in accords with the ‘Ah Ha! & Uh Oh! Worksheet’, available FREE by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Where else can one go in the U.S. today, to buy a home, which will likely appreciate in value over time – if well cared for and sited in a good location; and pay site rent to live in a multifamily community professionally managed – not having to be subsidized by the government and one’s fellow citizens? Nowhere!

II.

Others Benefit from This; Why Not Your Firm???

Following passages are excerpted from a recent briefing effected for the board of directors of a manufactured housing and land lease lifestyle community – related firm. As you read thru these informative excerpts, ask yourself, ‘Would this material be of interest and helpful to officers, senior executives, even board of directors of our firm? If so, give me a call at the MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764 to schedule a briefing.

‘So, what’s with this ‘land lease lifestyle community’ lingo anyway? Well, it’s tacit and timely industry cum public recognition this unique, income – producing property type, heretofore known as ‘manufactured home communities’, now routinely site six or more different housing types on the rental homesites contained therein….’

‘There are an estimated 50,000+/- LLLCommunities nationwide, with 85% of that number containing fewer than 100 rental homesites apiece. And that 85% drops to 78% in Sunbelt states like Florida and California. Unfortunately, we’ll not firm up those inventory number percentages anytime soon, for several reasons….’

‘In 1987, the real estate consulting firm Deloitte Haskins + Sells, in their newsletter, Roulac’s Strategic Real Estate, identified the ’25 Largest Mobile Home Park Owners (by spaces owned). A year later, Roulac’s list ceased publication, and the first ALLEN REPORT (a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’) debuted, immediately bumping the number of ‘portfolio firms’ from 25 to 100! Why the fourfold increase in number of ‘players’ nationwide? Three reasons: The first wave of consolidation was well underway, characterized by limited partnership syndicators, taking advantage of a major tax break that had lasted until 1986….’

‘From early to late 1990s, consolidation continued, and for awhile, it appeared ‘everyone’ would become a real estate investment trust or REIT. That did not happen. Only six were ever formed, three survive today. What happened? Too high expectations by WS analysts, who erroneously viewed LLLCommunities as ‘growth stocks’, insisting dividends grow quarter after quarter after quarter. NOT. And increased regulation….’

‘Since year 2000? NO more lasting REITs (e.g. loss of ARC – twice now, & American Land Lease); NO more chattel capital, to speak of, from independent, third party chattel lenders – but that’s not the whole story. Equity partner ownership takes center stage, first with Hometown America, then Green Courte Partners (Anyone know the single unique commonality among the firms ELS, Inc. (the REIT), Hometown America, Green Courte Partners & American Land Lease? Answer: _______________)’

‘According to the 24th annual ALLEN REPORT, 500+/- LLLCommunity portfolio owners/operators today, own an average of 22 properties apiece (With ELS, Inc., at the top, with 382 properties and an average property size of 369 rental homesites, with 60+/-% of those being for RVs).’

‘And here are the four Current Business Challenges & Trends Sorely Affecting LLLCommunities Nationwide…’

Yes, this briefing content is chock full of historical notes, industry trends, even the challenges and opportunities we face today. So, do you think your management team would benefit from being better informed and made knowledgeable of ‘where we’ve been’, ‘where we are today’, and ‘where we might well be headed’ during the next ten years or so? If so, again give me a call and schedule a presentation. GFA (317) 346-7156

III.

And the Talk Goes On, but That’s ‘All it is’ So Far…

“My comments on exiting HUD were solicited by George (Allen), and were on that point. Do I think we should exit HUD? I am not sure, but do see some wonderful advantages – FREEDOM being the most important. I also see some uglies – POOR STANDARDIZATION being the most prevalent.” NB

What I’ll say at this point in time is, WE SHOULD ALL BE GRATEFUL for the ACTIVE NATIONAL ADVOCACY ROLE the Manufactured Housing Association for Regulatory Reform (MHARR) is playing in keeping several emerging issues ‘front and center’ among businessmen and women deeply concerned about the present and future of their manufactured housing and land lease lifestyle community enterprises. For example:

I continue to be amazed how little public dialogue is taking place regarding provisions of the Uniform Manufactured Housing Act, proposed by the Uniform Law Commission @ July 2012. Nary a word about the matter last week, at the MHCongress in Las Vegas. Isn’t anyone else concerned about probable negative consequences (Maybe higher taxes on the homes) of doing away with the titling of manufactured homes inside and outside LLLCommunities? The excuse I hear, from more than one national leader, is ‘This is a state matter.’ OK, I’ll concede that; but shouldn’t there be information and guidance ‘trickling down’ from our national advocacy body to state MHAssociations? Not saying it isn’t happening; but I’m a dues – paying member of two such trade bodies, and I’m ‘hearing & reading nothing’. By the way; ‘Why the de – titling initiative in the first place/” So certain large national bank(s) can feel more comfortable originating non – chattel mortgages on new and resale manufactured homes.

Then there’s this whole matter of ‘HUD vs. No HUD’ regulatory oversight of manufactured housing, going forward. Reread the direct quote that introduced this portion of this week’s blog posting. NB simply ‘scratches the surface’ of the pros and cons relative to this timely, potentially paradigm shift effect on HUD – Code manufactured housing as we know it today. Tell me; do you really think, if HUD is taken out of the picture, we’ll be left, as an industry, to function (i.e. self – regulate) on our own? Not for a minute! The gist of this ‘capitol move’ has to do with forces outside, but near our industry, wanting to step in and exert their own brand of influence and control over the manner in which we build and site our brand of factory – built housing. And here we are, for the most part, sitting quietly by, while fate appears to take us in a direction over which we’re exerting little to no control. Think I exaggerate? Guess you’ll have to wait and see. Frankly, as I’ve written before here (In ‘Hey HUD! Help Out!’), I’d like to see HUD actively promote HUD – Code manufactured housing as affordable housing.

Earlier I lauded MHARR for keeping grassroots manufactured housing and LLLCommunity businessmen and women, like thee and me, informed. Well, how many of you read MHARR’s announcement, 23 April, to this effect: “The House Financial Services Committee cannot legally accept testimony from Richard Cordray, on the Consumer Financial Protection Bureau’s (CFPB) semi – annual report until he is validly appointed as the bureau’s director”, said Rep. Jeb Hensarling (R-TX), the committee’s chairman. However, the committee will continue to conduct rigorous oversight of the CFPB. Do you catch the drift of the first statement? Hopefully you do. Again; who else is keeping us (YOU) informed about such matters potentially affecting our business interests? Get on MHARR’s online email distribution list by phoning (202) 783-4087.

IV.

Soft Underbelly (vulnerability) of Social Media!

The following two passages are quoted directly from the March/April 2013 edition of Sales & Marketing magazine, and warrant your close attention – and probably action, within your firm!

“Many social media enthusiasts are convincing businesses, governments, and nonprofits, to use social media based on blind faith, supported by soft metrics that, for all intents and purposes, is (simply) old marketing guised as newfound engagement. Just because a business is embracing new technology doesn’t mean it is creating meaningful, productive or measureable experiences.” P.6

– and this –

How so? “A study conducted by Satmetrix in mid – 2012, revealed less than half the companies it surveyed, tracked and followed up on customer feedback in social media. An astonishing 28 percent do NOT track or respond, leaving customers to question their value to the businesses they support. That lack of acknowledgment or engagement leaves the door wide open to competitive courtship….

Acquisition of customers through social networks is only part of the story. The brilliance of social networks is the opportunity to transform negative experiences into positive outcomes. Conversations inspire opportunities for product refinement, or innovation to create remarkable experiences from the onset.” P.7

For more information on this disturbing subject, read the new J. Wiley & Sons release: ‘What’s the Future of Business? Changing the Way Businesses Create Experiences’ by Brian Solis, 2013.

BOTTOM LINE. Are your employees tracking and responding to customer inquiries? How do YOU know for sure? One way is to engage in Mystery Shopping. Do so in – house, with a corporate staff individual trained to do so – online, via telephone, and best of all, via on – site interview of home sales and site – leasing staffers. Need guidance? Call the aforementioned MHIndustry HOTLINE and request a FREE copy of the Mystery Shopping firm in use throughout the MHIndustry & LLLCommunity environments since the early 1990s – and updated over the years. OR, hire us @ $500.00 per property (plus travel expenses) to perform a complete three part Mystery Shopping audit and written report, with photos, of each of your under – performing land lease lifestyle communities. Use the same MHIndustry HOTLINE.

V.

Did You Realize? 2013 is 20th Anniversary of…

Camaraderie and national advocacy among land lease lifestyle community owners/operators nationwide! Yep; on 31 August 1993, 19 LLLCommunity owners/operators, from throughout the U.S. convened at an airport hotel in Indianapolis, IN., for a daylong Strategic Planning Meeting. This was just before the first portfolio of LLLCommunities started the second REIT wave (First one was in the mid – 1980s…think UMH Properties, Inc.) in 1994. These owners/operators decided to take control of their collective business future, first by ensuring far better National Advocacy in behalf of the real estate asset class, then pursue projects which would lead to better operations, marketing, positioning, even improved image of the unique, income – producing property type.

Yes; an appropriate 20th anniversary celebration is in order, and being planned, to commemorate this important event in the history of LLLCommunities1 It’ll take place 18 – 20 September, during the 22nd annual Networking Roundtable at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. (suburb of Chicago & near the O’Hare airport). All 18 living owners/operators (Ron Richardson died last year) have been invited. Two have formally retired, but there’re about ten who’re still actively involved in their respective MHBusiness interests. Should be a very special time for all. Will YOU be present? To ensure an ‘invite’, again call the aforementioned MHIndustry HOTLINE or email me via gfa7156@aol.com

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indpls, IN. 46247
(317) 346-7156

MHCongress Potpourri & ‘Things to Come’

Sunday, April 21st, 2013

Blog # 243 Copyright 2013 21 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.

I.

A Potpourri of this year’s MHCongress in Las Vegas

II.

LEST WE FORGET (ALREADY)

III.

Preview of ‘Things to Come’ in Next Week’s Posting

***

I.

A Potpourri of this year’s MHCongress in Las Vegas

Attendance was up this time around, MHI Chairman Nathan Smith tells me, by more than 100 registrants. Seemed enthusiasm was ‘up’ as well. Now, all WE need is a significant uptick in the annual new home shipment number of new HUD – Code manufactured homes!

Matt Follett makes historic pitch for INSPIRE Communities (‘Enriching American Lives Through Affordable Housing Communities’) as maybe, within two to three years, the next real estate investment trust (REIT) from the land lease lifestyle community realty asset class!

“Gee George, where were you on Tuesday (@ NCC Forum)? Wanting to learn from you, is the reason I signed – up in the first place! But had to listen to execs from the big firms again.” Those were the two most frequent remarks I heard from folk, as I visited the MHCongress exhibits on Wednesday. The occasional third question? “Were there any bona fide owners of LLLCommunities presenting this year?” Hmm.

Michael L. Glass is now the National Director of Marcus & Millichap’s 21 land lease lifestyle community marketing specialists nationwide. (216) 264-2000. Be sure to attend his firm’s annual Investors’ Symposium, from 4 – 6PM, on Wednesday, 18 September 2013, at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. Phone the MHIndustry’s HOTLINE: (877)MFD-HSNG or 633-4764 for information and to register.

NCC Forum attendees hear promise of more attention to land lease lifestyle community owners/operators’ needs in the future, including an increased emphasis on statistical research.

MHIndustry veterans miss showman Gub Mix as Awards Luncheon emcee!

Cavco360 Finance Program debuted as means to ‘Recycle Your LLLCommunity Investment’ For info, contact (312) 346-1874 and talk to Stephen Wheeler at HAS-Capital.

An increasing number of firms use the annual MHCongress and International Networking Roundtable, to bring their boards of directors, regional property managers, even investors, together to experience ‘these events’ and meet privately to pursue their own agenda. ROC USA® and a Canadian – based owner of LLLCommunities were just two such firms this time around.

Sure, there’s much more I could share with you, but much of that will find its’ way into print during the next few weeks as we pen and publish the Allen CONFIDENTIAL! and Allen Letter professional journal ‘business newsletters’ during the next couple weeks. Be especially alert to the newly updated (first time since about 1993) Industry Standard Chart of (operating expense) Accounts, along with some new Operating Expense Ratio (OER) percentages provided by ARA MHC Group out of Denver, CO. Copies of the new one pager will be attached as an enclosure to the first publication, and as a lagniappe in the second one. You don’t want to miss updating your OER statistical reference tool! If not already a newsletter subscriber, phone the above – referenced MHIndustry HOTLINE to do so.

II.

LEST WE FORGET (ALREADY)

The following quotes are from the ebook, The New Robber Barons, by Janet M. Tavakoli. Pretty sobering stuff….

From ‘Blame the Victims and Enrich the Perpetrators’, 1/13/2011. “While there were instances of fraud by borrowers, the key drivers of our housing crisis were fraud perpetrated by mortgage lenders and securities fraud – by some of our most revered financial institutions – that provided money to fuel fraudulent mortgage lending.”

“After the largest bank bailout in world history, we have a national epidemic of foreclosure fraud. In cases where foreclosures are being delayed, banks are walking away from abandoned homes and sticking local taxpayers with the bill to clean up the mess they left behind.”

From ‘GSAMP: Garbage Sold at Mythical Prices’. “In 2007, the state of Ohio kicked the California – based New Century mortgage lending carpetbaggers out of the state and barred New Century from doing business after despicable practices. A complaint of alleged fraud on the part of Goldman Sachs detailed its close relationships with Countrywide, New Century, and Fremont. The complaint showed Goldman knew of ‘an accelerating meltdown for subprime lenders such as New Century and Fremont.’ Despite known serious loan problems, Goldman continued to securitize the loans and sell them in packages of residential mortgage backed securities.’

From ‘Countrywide Broke the Law’. “…allegations of suspect practices from mortgage lenders, including Countrywide, now owned by Bank of America, were revealed. According to a former Countrywide employee: ‘approximately 90% of all reduced documentation loans (a.k.a. ‘liars’ loans) sold out of a Chicago office, had inflated incomes, and one of Countrywide’s (mortgage brokerage arms) routinely doubled the amount of the potential borrower’s income…so borrowers could qualify for loans they could not afford.” Illinois Attorney General Lisa Madigan told First Business Morning News: “Countrywide broke the law, homeowners did not.”

“Despite evidence of widespread interconnected mortgage lending, securitization, and foreclosure wrong – doing and fraud, there are no meaningful felony indictments.”

As most of us in the manufactured housing industry, and as owners/operators of land lease lifestyle communities, well know, chattel loan origination has not returned to anywhere near what it was back in our latest heyday, 1998. And only time will truly tell, if and when it ever does. But in the meantime, it’s helpful, albeit painful, to remind ourselves of what happened, not just to HUD – Code manufactured housing, but to our Big Sister industry, the site – built housing business, about which much of the preceding paragraphs describe. It’s no small wonder we suffer the financial regulatory measures rampant today; and it’s no less a mystery as to why our national economy continues to flounder. Is there a solution in sight? Depends on who you ask, and what aspect of housing finance one explores. But for the time being, we have to make do with what we do and don’t have available to work with in our business environs.

III.

Preview of ‘Things to Come’ in Next Week’s Posting

Interested in reading what a board of directors hears, when briefed about the land lease lifestyle community real estate asset class? Well that’ll be spelled out in detail for you next week in this blog posting. We’ll even take a long look back at the August 1988 edition of Roulac’s Strategic Real Estate newsletter’s final ‘Largest Mobile Home Park Owners in 1987’ listing, the precursor to the ALLEN REPORT annually researched and published since then (#22 @ 2013). You’ll find it interesting to learn how many of the 25 firms on said list, continue to exist to this day, 26 years later!

Do YOU realize there’re no fewer than FIVE ‘MHIndustry & LLLCommunity’ – related meetings vying for our participation, during six weeks this Fall (2013)? That’s right; the 22nd annual Networking Roundtable for land lease lifestyle community owners/operators leads off, 16 – 18 September, in the Chicago suburb of Bloomingdale; followed two weeks later by MHI’s annual meeting in San Diego; then the annual SECO (Southeast Community Owners) Symposium in GA; a leadership conference, hosted by MHI’s National Communities Council, in downtown Chicago in mid – October; and finally, the Urban Land Institute’s meeting (of the Manufactured Housing Communities Council) in early November, also in downtown Chicago. Whew? Can anyone out there afford the time and money, to patronize all five events? I sure can’t. Anyway; more details forthcoming, to help you plan your Fall travels.

And I’ve just gotta tell you. The hinted – at 3”X5” plastic cards describing the

• 5 – RPs of Marketing & Selling New Homes INTO a Land Lease Lifestyle Community!

• 5 – RPs for Marketing & Selling New & Resale Homes WITHIN a Land Lease Lifestyle Community!

• 5 – RPs for Marketing& Leasing Rental Homesites WITHIN a Land Lease Lifestyle Community!

Have been manufactured, delivered, and are ready for distribution to participants at this year’s 22nd annual Networking Roundtable, 18 – 20 September, at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. And not only that, we’re making good progress converting the widely used ‘Ah Ha! & Uh Oh! Worksheet’ (for estimating ‘risky’ &’affordable’ Price Points for new & resale homes in and outside LLLCommunities) into a handy, easy to use slide chart. If ready by September, this too will be distributed as a FREE training aid to every Roundtable participant!

***

George Allen, CPM & MHM
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Haney, Beach, BOFUS & more….

Sunday, April 14th, 2013

Blog # 242 Copyright 2013 14 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities
& earlier, ‘mobile home parks’, are the real estate component of manufactured housing.

I.

Neal Haney – IMHO, ‘Gets it Really Right!’

II.

Ned Beach Parses the ‘HUD/no HUD’ Issue

III.

Where to Find BOFUS in Vegas this week

IV.

Next Week: ‘New Era Dawns for LLLCommunity Owners’

***

I.

Neal Haney, IMHO, ‘Gets it Really Right!’

Manufactured Housing Communities of Arizona’s perennial president, Neal T. Haney (land lease lifestyle community fee – management company executive par excellence), writing in the March – April 2013 issue of Today & Tomorrow takes his readers on a reflective ride 12 years back into manufactured housing/land lease lifestyle community history, with a swift return to the changed present, and his hope for our collective future.

“I recently read an article that appeared in this newsletter 12 years ago. There were two main thoughts. One dealt with the changes taking place in our industry. And since that article, changes have indeed taken place. For example, many (home) manufacturers in business 12 years ago are gone. Those who remain have closed many of their facilities and have the lowest production levels in more than 30 years. LLLCommunities that enjoyed occupancy levels over 95% now struggle to keep occupancies at 80%. The government, both federal and state, continue to impose new regulations and additional costs detrimental to the MHIndustry. It’s been a tough 10 years.”

The other thought? “But the good news is things continue to change. LLLCommunities are more conscientious at providing facilities and services specific to their unique client base. By eliminating unneeded or unwanted facilities and services, operating costs are maintained at a lower level. Home manufacturers now recognize the number of vacant rental homesites needing to be filled. And they’re now working with community owners, to provide homes appropriate to smaller sites, and within a price range that allows us to truly refer to them as ‘affordable housing’.”

“At a national meeting five years ago, I heard a speaker sounding the death knell for our industry and asset class. I think instead, we are actually seeing a rebirth of the industry that’ll take us back to days when we were considered ‘a quality lifestyle at affordable prices’.” NH. (Moderately edited. GFA)

Lest you take Neal’s remarks lightly, know he’s been plying this trade for more than 30 years, as a successful entrepreneur businessman; and frankly, he’s one of but a very few of my ‘go to’ MHIndustry/LLLCommunity professionals in Arizona!

***

I.

Ned Beach Parses the ‘HUD/no HUD’ Issue

OK, I’m letting the ‘cat outa the bag a little here’, by introducing you to my long time correspondent, Ned Beach; retired – but – still – knowledgeable & articulate, regarding the HUD – Code manufactured housing industry.

As most blog floggers (readers) of this weekly posting know, I recently introduced the timely and heady topic: ‘What effect would it have on your business interests, model, etc., if HUD was soon and completely removed from federal regulatory oversight of the manufactured housing industry?’ This is not a casual, pipe – dream question! Frankly, it’s being asked of (home) manufacturing executives, suppliers, etc., across the U.S. by a team of interviewers. And here’s ‘the rub’. This question is being asked – and answered – with little to no aforethought, on the part of those being queried and answering. Indeed; at first blush, the ‘question & probable kneejerk answer’ appear a God – send, i.e. ‘Regulatory freedom after 37 years! Yea!’ BUT, is that really the case? Maybe not.

Remember last week’s blog posting on this topic? In it, a sober and reasoned response to said question was offered by Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform or MHARR. He used the simile of a three – legged stool to make his point(s) there’re at least three interrelated reasons why HUD’s disappearance from its’ regulatory role, where manufactured housing is concerned, would be a very bad day for the industry. If you don’t recall why, suggest you reread the earlier blog posting, here at community-investor.com, to learn and understand the reasons.

In the meantime, Ned Beach, a retired manufactured housing executive, who’s long functioned as an informal sounding board for me; and other MHIndustry folk, recently sat back and gave this ‘HUD/no HUD’ issue some reasoned thought, tempered by long experience ‘in the business’. Here’re Ned’s thoughts on the subject:

“The effect(s) of closing the MH/HUD relationship today would be difficult; but would likely turn the fabrication of housing into something akin to what the NAHB has already accomplished relative to pre – fab, modular, and other (factory – built) specialty products. National codes would become the guidelines, to which manufactured housing would be built. For example, years ago, John Slater, an excellent engineer and working member of our industry, developed housing products meeting the ‘real’ building codes, able to be manufactured in plants, and transported to sites to be installed on pillar foundations. As we found out in the modular business, we didn’t need a national code to be able to meet the needs and requirements of towns, cities, counties, and states, in our chosen markets; we simply complied with them.”

“A downside to local code compliance, is not enjoying any, or at least as much, ‘experimental’ methodology, from which new, better and more economical processes, products and methods would or could be developed. This no different from dealing with the inflexible HUD ‘performance’ requirements. For those of us still in touch with the MHIndustry, we know a lumber shortage crisis is upon us. However, the local codes generally do not allow for much economical substitutes.”

“Could the MHIndustry survive and succeed without HUD oversight? Absolutely! But like many others ‘things’ about the leaders of our industry, ‘We don’t like change!’. So, could land lease lifestyle communities develop 30 year leases, with five year rent rate adjustment points, in order to be attractive to long term home financing? Yes. So can MHRetailers adjust and become builder/contractors, accepting responsibility for a new ‘land and home’ project, and derive income from the project at large? (Yes – but beware of repeating errors experienced at the turn of the century when MHRetailers attempted to compete head – to – head with site – builders). So can factories also learn to build to local building codes, homes that can be installed anywhere, and sized and designed for the need, especially where (functionally obsolete) rental homesites in land lease lifestyle communities are concerned. And the last question: Can we be competitive with other types of housing? Yes, if we work at it. And therein lies the show stopper: Do we want to survive and thrive as an industry; or continue to die on the vine, as we have been doing these past five plus years?” Relate that final question to the HUD/no HUD issue of the day!”

“Good post, George, got the juices a – flowing!” (Moderately edited. GFA)

***

III.

Where to Find BOFUS in Vegas this week

To date, more than a dozen of you have inquired as to how we might connect at the MHCongress in Las Vegas this coming week. While I arrive Tuesday afternoon, to attend no fewer than three corporate receptions and Lou Vela’s state dinner, BOFUS will be on the exhibit hall floor most of the day Wednesday – except for two formal ‘State of the MHIndustry & LLLCommunity Asset Class’ presentations I’ll be making, one mid – morning, and one mid – afternoon. And late Wednesday afternoon, two more gala receptions, and Security Mortgage’s ‘by invitation only ‘ special dinner soiree. Flying home early Thursday morning – with lots to write about in the next blog posting!

When we do hook up, probably mid – day Wednesday, before and after the annual Awards Luncheon, REMEMBER to ASK me FOR your TOAST! You’ll be glad you did.

So, what else is going on these days? Well, on 24 & 26 April, I’ll be in Chicago finalizing plans for the 22nd International Networking Roundtable at the Hilton/Chicago Indian Hills Resort, 18 – 20 September. Have you marked this on your planning calendar yet? If you’re a land lease lifestyle community owner/operator, you already know this is the single seminal annual event designed solely for your educational, interpersonal networking, deal – making needs! Themes this year? Two. Celebrating our collective legacy as land lease lifestyle community owners/operators, via special presentation by the staff from the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library, in Elkhart, IN., and, 20 years of national advocacy thru the eyes of one of the 8/31/1993 founders and early chairman of the NCC division, Gary McDaniel. Also, in support of ‘selling & self – financing new & resale homes on – site’, we plan to have Community Home Series or CSH model homes on display again this year. IMPORTANT. To ensure YOU receive an ‘invite’ to this ‘by invitation only’ event for LLLCommunity owners/operators, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or email: gfa7156@aol.com Why is this so important? We promote this event three ways: direct mail to all 500+/- portfolio owners/operators of LLLCommunities, to subscribers to the Allen Letter professional journal, and via names of previous year roundtable registrants. So, if you’re not on one or more of those three lists, you likely won’t receive an invitation to attend. So ‘call or write and let us know of your interest!’

29 & 30 April. As many as 20 land lease lifestyle community owners/operators will convene, in Davenport, Iowa, with Bill Carr of Rainmaker Associates, to spend time working together on this common interest: ‘Selling and self – financing new and resale manufactured homes on – site in this unique, income – producing property type’ – with an emphasis on mortgage financing and being in compliance with all state and federal regulations thereto pertaining. Hey; I’ll certainly be participating; how ‘bout YOU? For more information, contact Bill directly via (800) 336-0339.

***

IV.

Next Week: ‘New Era Dawns for LLLCommunity Owners’

Read all about it – if & when the timing is right. Next week? Maybe, maybe not. In any event, I appreciate your continued patience and support!

Interestingly however – and this has been pointed out repeatedly of late, by land lease lifestyle community owner/operator peers; the longer we await the inevitable dawning of a new era for our asset class; obvious clique nepotism and council inactivity effectively sunset the demoralizing ‘business as usual’ catharsis we’ve suffered these past few years.

***

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

MHTrends Past, Present & Future; BOFUS in Vegas!

Sunday, April 7th, 2013

Blog # 240 Copyright 2013 7 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Trends
Past, Present, & the Future of Manufactured Housing

I.

TRENDS PAST

Since shortly after the dawning of the new millennium (2000), annual new manufactured housing shipments plunged to historic lows of 50,000+/- per year, and have remained there for the past five years. Even the fabrication of modular homes (at times called ‘hudulars’) and Park Model RVs, have not moved the industry off this record – setting nadir. Hundreds of housing factories have closed and more than a thousand independent ‘street’ MHRetailers have disappeared from the manufactured housing business scene.

Furthermore, independent, third party chattel capital lenders appear to have also disappeared from the HUD – Code manufactured housing scene; but reality, it’s the paucity of qualified borrowers for those funds that cripples the industry. Just about the only bright spot, among these post cum present trends, has been the now routine selling and self – financing, and sometime leasing, of new and resale homes on – site within land lease lifestyle communities. But not all LLLCommunities; mainly those among the 500 property portfolios domiciled throughout the U.S. and Canada.

The foregoing is what we’re living with today, along with a myriad of additional, albeit other minor trends, like: smaller, less vibrant state manufactured housing associations; weaker, thinly staffed national advocacy bodies; and a near wholesale retreat from professional property management training and certification. Today; seeing a new HUD – Code manufactured home being transported down the highway enroute to its’ point of installation, is about as rare an occasion as seeing the circus come to town.

II.

TRENDS PRESENT

Favoring the Big over the Small (business entity), on one hand predates Past Trends identified in the previous paragraphs, but at the same time has become a heady Present Trend whose consequences have yet to be fully played out on the national scene. The following paragraph was penned by a blog flogger (reader) in response to a recent posting:

”Herein lies the problem – big fish want to get bigger and eat the small ones. Going separate (ways) can allow for good operators to survive, but I doubt the MHIndustry would be what it could be. I shared your, and my, trading of thoughts with a banker friend. Interestingly, he likened it to the BIG banks loving all the regulation, because it hurt us little folk to keep up. You’d think they’d hate it (regulation) as much as we, the little community bank guys, because they do not compete in the small world anyway, and the regs cost a bunch to survive and keep informed. Have you thought to separate out land lease lifestyle communities? Gotta bet the medium and small operators would follow.” NB

More and more, small to mid – sized land lease lifestyle community owners/operators are having to fend for themselves, no longer counting on any particular national entity to do so for them. This is evidenced by national task forces being recently formed to study key issues, e.g. home finance alternatives within the LLLCommunity asset class; and, how to best ensure – going forward – that LLLCommunity owners/operators nationwide continue to benefit from statistical Research and ongoing Resource servicing. And then there’re the regional symposiums, which have grown in popularity, during the past decade, as MHIndustry businessmen and women seek meaty seminar programs featuring useful substance, rather than just sales pitch pabulum and lesser fare.

Then there’s the Uniform Manufactured Housing Act, passed during mid – 2012, by the Uniform Law Commission. Some are already equating its’ recommendations to ‘Throwing the (affordable housing) baby out with the bathwater (vehicle titling of manufactured homes). To date, none of the proponents of this model regulatory legislation have bothered to consider the potentially dire consequences of replacing vehicular type titling of manufactured homes with some sort of quasi realty ownership document that large banks find attractive enough to encourage them to start lending on this housing type. Likely long term consequence? ‘Easier access to conventional home loans = loss of manufactured housing affordability through higher taxes!’

And finally, how would YOU answer this question: “What would be the effect on your niche in the manufactured housing business if HUD was/is relieved from regulatory oversight of this industry, for the first time in 37years?” Think about it? Interviewers are traveling the county today, asking that question of home manufacturing and LLLCommunity executives. Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform, or MHARR, puts it this way:

The HUD federal program is a stable three – legged stool, comprised of three essential elements: 1) uniform, performance – based federal standards, 2) federal preemption relative to local building codes, and 3) uniform federal enforcement. Together, they ensure maintaining affordable manufactured housing; meeting the housing needs of lower and moderate – income American families; and ultimately, guide the success of the manufactured housing industry. Without any one of these elements, which only a federally – based program can provide, manufactured housing, as an affordable homeownership option for consumers, would soon die the death of a thousand cuts, as thousands of local housing jurisdictions would pile – on, with their own costly mandates and requirements.

Thus, lose this code and lose all uniformity, federal preemption, even building guidelines based on how a home should perform – all at the likely expense of product credibility, affordability, and universal acceptance! Are we, as an industry, ready for this? I don’t think so; but how many have really taken the time to think through the process and its’ logical consequences? Not many.

III.

TRENDS FUTURE

I’m not sure I’m up to taking on this challenge at this point in time. First off; the annual MHCongress is only a few weeks away, and there, some of us might learn of initiatives and tweaks affecting TRENDS FUTURE. Besides; have you read or heard of anyone else taking on the aforementioned PRESENT TRENDS of 1) adopting or not adopting the Uniform Manufactured Housing Act proposed by the Uniform Law Commission; or, for that matter, 2) even let us – out here amidst the grassroots of the HUD Code manufactured housing industry, know there’s a movement afoot to have HUD removed from regulatory oversight, where our industry is concerned? The answers to those two questions? NO & NO! Why? Ask them, not me.

The only thing I’ll pen about TRENDS FUTURE, has to do with industry and realty asset class representation on the national level. The Good News is MHARR & MHI are working together in three key areas, relative to securing additional private and public chattel capital sources. The not so good news, is institute members at large, some state MHAssociation executives, and small to mid – sized land lease lifestyle community owners/operators are frustrated at what’s perceived to be ‘marginal effectiveness’ in the national advocacy arena; the ill – advised wholesale change recommendations to the institute’s bylaws – and unintended consequences thereof (e.g. less dues revenue to states); and, nothing but ‘promises of action’, for two years now, from and to the LLLCommunity side of the house, even less to other post – manufacturing segments of the industry

Sure, there’s more I’m inclined to share with you on this topic. But the problem is; whenever I speak or write of practical solutions on the near horizon, or better ways to address what isn’t being accomplished now, some very territorial individuals immediately take issue with suggestions there’re better ways to achieve certain ends that the MHIndustry and LLLCommunity asset class have been missing or ignoring to date. No, I don’t feel like getting into an argument or discussion about the matter(s) just now; rather, as I’ve learned time and again, during the past 33 years as a successful entrepreneur businessman, I’ll wait and pick the right time and place to announce these new and rejuvenated opportunities to sell more homes and promote our unique lifestyle.

IV.

Bofus in Vegas!

Bofus can hardly wait to get there! Already we’ve been invited to two private dinners and no fewer than five late afternoon and early evening receptions. And, in my case, since my name and topic (‘How to Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities!’) have been yanked from the MHCongress program schedule, I’ve lined up two ‘paid’ speaking engagements, one for a corporate board of directors and one for a firm’s employees in attendance at this event. So, along with visiting exhibits, attending a couple select seminar offerings, and engaging in that Vegas pastime, ‘people watching’, there’ll be plenty to do on the 16th, 17th, & 18th of April.

When you see me walking around the MHCongress, come up and ask me – or Bofus, for your Toast; you’ll be glad you did so.

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156