Archive for April 28th, 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