Archive for June 9th, 2013

Some Things in Life & Business….

Sunday, June 9th, 2013

Blog # 249 Copyright 2013 7 June 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’
&
Purpose. ‘A primary research, resources, & op/ed communication means for owners & operators of LLLCommunities of all sizes nationwide, + national advocacy awareness.’

I.

Some Things in Life & Business
Are Simply Not Meant to Be!
– Or –
Are They; but over Objections?

One man’s opinion why ‘A Comprehensive National Trade Representation Model for Land Lease Lifestyle Communities, of all sizes’, won’t likely evolve within either present day MHAdvocacy organization; OR, maybe so!

It’s a simple & complicated matter at the same time!

In the first instance, one national manufactured housing trade advocacy body, the Manufactured Housing Association for Regulatory Reform, or MHARR, simply does NOT have a membership category for any other segment of the industry other than HUD – Code home manufacturers, and NO plans to create new categories in the near, interim, or even distant future. That’s been their position since 1993, when offered an opportunity to bring (then) manufactured home communities, into their fold. So, NO ‘Comprehensive National Trade Representation Model for Land Lease Lifestyle Communities, of all sizes’, there. However, the MHARR does openly support the creation of a new national, independent, not for profit, post – production trade Advocacy entity, to include and serve every industry segment except home manufacturers!

On the other hand, the national manufactured housing trade advocacy body claiming to represent ALL segments of the HUD – Code manufactured housing industry, the Manufactured Housing Institute or MHI, and its’ National Communities Council division (‘NCC’), have, in the opinion of this industry observer/direct, dues – paying member of the institute, unofficially communicated at least five intrinsic reasons for not increasing services and products available to land lease lifestyle community members:

• The tendency, where the NCC division is concerned, after 17 years of existence, to be “…kinda stuck in first gear, as national Advocate for the real estate asset class.”*1 This singular focus is underscored by the council’s periodic, as opposed to weekly or monthly, online newsletter (There is no print publication) to members; little to no professional property management education; only one mega – networking event each year; and of late (circa 2013), just one general membership meeting per year – when there should be two. Such single – mindedness and lethargy severely limit the efficacy of the division, and its’ ability to attract new, direct, dues – paying members.

• Commonplace for MHI to concentrate on the needs and wants of HUD – Code housing manufacturers. And sure; why not? The lion’s share of dues income (i.e. floor fees), supporting this national advocacy body, comes from this segment of the HUD- Code manufactured housing industry. Note the institute’s foci: national Advocacy, especially where HUD – Code standards and recent financial regulatory compliance are concerned; but also statistics gathering (i.e. tracking home shipment volume each month in various regions of the U.S.); trends in home size and configuration (e.g. Dominance of ‘single wides’ during 1970s, followed by prevalence of ‘double wides’ during 1990s; and now, a near statistical match in home shipment volume between singlesection and multisection homes shipped during 2011 & 2012); and, ‘who our homebuyers are’ in local housing markets. The manufacturing segment of the industry even has its’ own Think Tank of sorts, the Systems Building Research Alliance or SBRA. No other institute division is so well and regularly served! And this manufacturer focus, is in reality, an array of services at the behest of the ‘Big Three C’ firms (Clayton, Cavco & Champion), who together, garner more than 80% of the national market share of HUD – Code home shipments.

• An expanded agenda for the NCC division would be too much work (for the present staff of one)! Agreed! So, to finally move beyond (just) national Advocacy, to include statistical Research, and ongoing Resource servicing (e.g. more print communication, forms & books; professional PM education & certification; quality interpersonal networking – especially for LLLCommunity ‘owners’; even realty deal – making), a healthy mix of subcontracted tasks (Think the Center for Manufactured Housing Studies or CMHS for research) and an increase in the number of staff members – to a total of three, will be necessary. Now, too much operating expense and capital outlay? That’s the next ‘reason’ oft cited.

• Costs too much to fully service LLLCommunity owners/operators, of all size properties, nationwide! So far I’ve not heard or seen anyone at the institute ‘run the $ numbers’, and they certainly haven’t asked for operational expense data from the present ‘for profit’ source of ‘statistical Research & ongoing Resource servicing’, GFA Management, Inc., dba PMN Publishing. The money is there! All but one of the nearly dozen present day (GFA/PMN) profit centers is just that, a profit center: two subscriber – supported business newsletters each month, the annual Networking Roundtable, tuition from the popular MHM® program, sale of the ALLEN REPORT (Actually a loss leader, used to generate paid newsletter subscriptions) and other Signature Series Resource Document or SSRDs, and regular paid access @ $1,000.00 per usage, to the 500+/- name Property Portfolio exclusive and confidential Data Base, for direct mail campaigns. A final point here. Present (6/4/2013) NCC membership numbers only 84+/- direct, dues – paying individuals/firms. Start supplying the above – referenced ‘products & services’, so LLLCommunity owners/operators no longer rely on a ‘for profit’ firm outside the institute, and they (new direct, dues – paying member) will come! Frankly, 500+ new NCC members is achievable, given the 500+/- present day property portfolio owners/operators, and 50,000+/- LLLCommunities nationwide. And, at a minimum membership fee of $500.00 per firm, that’s a jump in $250,000 dues income for MHI/NCC! And that’s not chump change!

• NCC expansion potentially reduces influence of, and control by, the home manufacturing segment of the industry. Now that’s almost laughable. But know what? The answer to this objection is simple: ‘So what?’ If filling an estimated 250,000 vacant rental homesites, in 50,000+/- LLLCommunities nationwide is ‘Where the action is today’, then by all means put the unique, income – producing property type center stage! After all, the more new HUD – Code homes LLLCommunity owners/operators sell, and often self – finance on – site, during the months and years ahead, the more new HUD – Code homes get built and shipped – especially when they’re Community Series Homes or CSH Models. What better way to break our five year bondage to ‘ a nadir of only 50,000+/- new homes shipped per year’?

BOTTOM LINE? There needs to be a Major Attitude Adjustment, on the part of elected and salaried leaders at the highest level of the HUD – Code manufactured housing industry, and the sooner the better – lest we hasten its’ demise (Due to too few new home shipments for far too long)!), and eventual diminution of the LLLCommunity real estate asset class as well! Manifestation of said ‘Attitude Adjustment’ must be in terms of the following five (summary) reasons or parameters:

NCC division could and should become ‘all things to all owners/operators of LLCommunities, of all sizes, nationwide’, and no longer function just as an Advocate for the realty asset class; but, in reality, become its’ Three Legged Stool of 1) national Advocacy, 2) statistical Research, & 3) ongoing Resource servicing, via an array of proprietary products and services! After two decades, it’s high time for a major change.

There must be an evening – out of attention paid to other segments of the HUD – Code manufactured housing industry, and less focus on just the ‘Big Three C’ firms; unless of course, we/they agree on this collective focus: ‘What will it take to sell many more new homes?’! This timely focus suggests more than a nod to National Image Improvement via Effective Brand Marketing. Are we there yet? Not by a long shot. And we won’t be until manufacturers stop being more concerned about ‘tag along benefits garnered by non – participating firms’, than tangible results realized from a National Image Improvement (campaign) via Effective Brand Marketing!

NCC will assuredly need more staff and subcontractor support to well serve the Advocacy, Research, & Resources needs of LLLCommunity owners/operators, of all sizes, nationwide. And know what? In addition to the existing NCC staff member, there’s a MHIndustry – experienced, skilled wordsmith; a savvy state MHAssociation executive; and, a LLLCommunity knowledgeable Certified Property Manager® – (No, not me) – waiting to be recruited, to grow this team! What’re we waiting for?

If handled properly, money will not be an issue, where the NCC division is concerned. This change is not like creating new business models to serve new needs and wants; rather, it’s simply the conversion of already successful ‘for profit’ centers into a ‘not for profit’ Advocacy, Research & Resource presence! And know what? If handled properly, there’s likely seed money, akin to venture capital, that might be had to get this whole project up and running.

The two most difficult (attitude) adjustments anticipated, in this scenario and by this industry pundit, will be for 1) the manufactured housing industry segment being willing to work closely with, but not taking a backseat to, promoting new home sales in LLLCommunities nationwide! And 2) the LLLCommunity segment being willing to transform itself, via professional property management training and certification, as well, during 2014. And, while not an Attitude Adjustment per se, the creation of a viable secondary market for HUD – Code manufactured homes is indeed another shortcoming that, somewhere along the line, will have to be addressed and established.

Hmm. These five parameters read something like an election platform don’t they?
Well maybe they should be…

In any event, given the ability to decide, effect major Attitude Adjustment, and exercise fortitude in addressing the Five Reasons just cited and summarized, there’s Strong Possibility for Success, launching ‘A Comprehensive National Trade Representation Model for Land Lease Lifestyle Communities of All Sizes’ within the Manufactured Housing Institute’s NCC division – rather than force the eventual spawning of one outside and beyond the institute’s purview.

So, where do matters go from here? Responsibility rests with elected and salaried leaders presently in control of such matters on the national Advocacy level. But are they listening? Do they believe? And, what, if anything, will they do between now and their meetings this Fall (2013), to bring all this about – or NOT?

As usual, if you’d like to weigh in on this timely and critical topic, please do so via email or call the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

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End Notes.

1. Quoted from blog # 248, posted at community-investor.com

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George Allen, CPM & MHM
(317) 346-7156