Archive for June 1st, 2014

More Protection/Pricing & Market Share re RVs

Sunday, June 1st, 2014

COBA7® via community-investor.com Blog # 300 @ 5/25/2014 Copyright 2014

Perspective. Land-lease-lifestyle communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufacture housing.’

This blog posting ‘is a national advocacy voice, ombudsman press*, statistical research reporter, & online communications resource for all LLLCommunities in North America!’

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

*ombudsman press. ‘Manufactured housing’s ronin; fielding inquiries, complaints, etc..

Introduction to this week’s COBA7® blog posting at community-investor.com

Do you have any idea what a six year tall pile of hard copy blogs looks like? How ‘bout a stack of paper 12+ inches tall! But that’s what National Building Institute library wants.

‘Protection/pricing’ & ‘Protecting MH Market Share vs. More RVs On-site’ continue to confound. Evidently no paladin in the first instance, & ‘Let’s not talk about second one.’

How does one fit 2 ½ pounds of valued business sustenance into a 1 ¼ pound bag? Well, on 9 June 2014, in Indianapolis, IN., at the NCC meeting, we’ll see if it can be done!

How’d you like to see your income cut by 300%, and at the same time, your expenses increased by 250%? That’s what HUD-Code manufacturers faced & face again soon.

I.

Celebrating Six Years of Blogging For the
Manufactured Housing Industry &
Land-lease-lifestyle Community Asset Class

II.

Third Week in a Row for Protection/Pricing!

III.

‘Protect MH Market Share or Fill More Sites with RVs?’

IV.

National Communities Council division meeting, 9 June 2014

V.

Pending HUD Rulemaking Increase of Manufactured Housing Certification Label Fee, from $39.00 to Between $95.00 & $105.00 Trounces Prospective Homebuyers

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I.

Celebrating Six Years of Blogging For the
Manufactured Housing Industry &
Land-lease-lifestyle Community Asset Class

This week you’re reading the 300th consecutive blog posting; begun at the Manufactured Home Merchandiser magazine, & continued, to this day, at the community-investor.com website.

A recent congratulatory email message from a land-lease-lifestyle community owner just outside Chicago – at this time – makes me feel all the effort has been worthwhile; but unfortunately, is far from being over….

“George, just wanted to say ‘thanks’ for your leadership and the passion you display for our industry. You have been a leader for a long time, and from what I see, retirement is going to be a long time away.” JZ

And then this questioning letter from an Ohio LLLCommunity owner, affiliated with COBA7, that provides opportunity to describe, from my perspective, the nature and scope of activities of three national ‘players’ on the HUD-Code manufactured housing and LLLCommunity asset class scene.

“George; I have been following your blog and the Allen Letter. If I have understood properly, the asset class is represented on the national level by MHI, MHARR, and COBA7. MHI, the very big boys (REITs, and a few non-REIT biggies, (home) manufacturers, retailers, and communities). MHARR, the manufacturers. COBA7, the communities. Thus, if I understand the picture, each one, except COBA7, has serious conflicts (This of course will be denied) in their agendas, from time to time. My question: Will the Community Owners (7 Part) Business Alliance remain pure; that is to say, represent only the smaller community owners? If so, what will be the cut off in size. Will all others be permitted to affiliate as associate members only? Just curious.” GS

MY REPLY. “You pretty much have things right as you’ve penned them. And what you bring up at the end is worthy of thought and discussion, but won’t get much for awhile – and in a few minutes, I’ll explain why.

MHI represents all segments of the HUD-Code manufactured housing industry. In terms of $ dues collected and internal political influence; in my opinion, the institute is dominated by the Big 3-C home manufacturers (i.e. Clayton, Champion, Cavco). All told, according to their web site, they have slightly more than 300 dues-paying members, including Certified Representatives from member state MHAssociations. And of the total membership, 88+/- are aligned with the National Communities Council division.

MHARR represents only HUD-Code home manufacturers. Most are smaller, regional players, though a few, if not most, of the largest MHI manufacturer members are also members of MHARR. Member count? Fewer than 100 firms.

COBA7 is ‘the new kid on the block’, and NOT a not for profit national advocacy body like MHI & MHARR. It is simply an alliance of businessmen and women, like thee and me, with an affinity for LLLCommunities. The unexpected surprise has been, however, since the first of the year (2014), when this NEW ERA dawned for LLLCommunities, individuals and companies from every segment of the MHIndustry have paid to affiliate with COBA7! And to date, nary a one has expressed any interest in ‘taking over anything’. They simply expect COBA7 to live up to its’ symbiotic slogan:

‘U support US & WE serve U!’

via Seven Function Areas, being: ongoing statistical research; resource updating & distribution; print & online communication; superb peer networking; deal-making opportunities; professional property management training & certification; and, national advocacy when need be, e.g. official ombudsman (press) to the MHIndustry.

Since COBA7 is not an organization, no one has any voting rights at this time. And beyond that comment, I will not go, until the time comes when we talk face to face. All the more reason for you, and our peers, to be present at the 23rd annual International Networking Roundtable at the DOLCE Conference Center in Peachtree City, GA., 10-12 September 2014!

Anyone reading this blog posting, wanting to ensure an ‘invite’ to this popular annual event, and/or desiring to affiliate with COBA7, should phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

II.

Third Week in a Row for Protection/Pricing!

If you don’t know about what this headline refers to, it’s strongly suggested you scroll back into the blog archives at this website and read blogs # 298 and 299, for what follows to make sense to you.

I haven’t been surprised, just dismayed, that neither national advocacy body has much (of anything) to say about this rarely publicized, but often endured issue. My ‘take’ on it is, neither august body has ever been able to do anything much about HUD’s unilateral calls for product changes resulting in increased housing cost to home manufacturers and prospective homebuyers.

With that said, I’ll share some thought-provoking commentary from Bob Vahsholtz, of Arroyo Grande, CA., author of DUELING CURVES, ‘The Battle for Housing’, that debuted last month. A full length review of this new addition to manufactured housing literature takes up most of the June 2014 issue of the Allen Letter professional journal. If you haven’t yet purchased a copy of Bob’s book, you should do so. The price is right, at $35.00 per copy and, I believe, $7.00 for shipping. Simply visit Vahsholtz’s website: www.kingmidgetswest.com

Here’s what Bob had to say in recent correspondence, responding to Protection/Pricing:

“George, I (would) not want to be a manufacturer today – or really any other business. Regulation is out of control. HUD probably thinks its’ benevolent oversight has been the prime factor in the improvement of manufactured housing. It has not. The trend has been obvious and continuous, from the earliest days, with notable interruptions. One such was the introduction of the HUD-Code in the midst of market chaos (i.e. Circa early to mid 1970s).”

“Progress is made despite the drag of regulation, and will continue as long as the market thrives – a somewhat tenuous assumption at the moment. But really, the industry has bent over backward to comply with conflicting and sometimes counterproductive regulations. The price increases you mention may happen, but they should not. If we don’t need bigger exit windows, and I suspect we really don’t, the industry – all of us – should work together to illustrate today’s larger citizens (can) make their way out of the already standard exits. If panels in closets threaten life and limb, proof should be demanded. If HUD can make good arguments, they should be acknowledged, and changes phased in over time, giving learning curve a chance to cover the cost. Do our water heaters not have control settings?”

“C’mon now, the government and the rest of us want low cost housing for the citizens. Let’s join together to get it produced!” Bob Vahsholtz

Know what my first – and continuing reaction was/is to Bob’s commentary? That’s why we all worked so hard to effect passage of the Manufactured Housing Improvement Act of 2000, a.k.a. MHIA@2000. And said passage, in part to implement a timely, practical working relationship among disparate government, regulatory, business, and consumer parties, in the form of the Manufactured Housing Consensus Committee or MHCC, which has not met in a long long time.

Bottom line? There is none; just more confusion! Only MHARR has ‘gone public’, since the first of the year, proclaiming its’ primary goal for 2014 is full and complete implementation of MHIA@2000; in effect, repositioning HUD-Code manufactured housing as ‘housing’, and further distancing us from our trailer heritage! But know what?

There’re serious rumblings ‘out there’ in opposite directions! One way is to ‘take us all the way over to housing’, by doing away with vehicle titling, personal property taxation, and moving us away from chattel capital mortgage financing. The other way is to ‘keep us right where we are’, precariously straddling the demarcation between housing and vehicles, relying on the federal preemptive performance-based national building code to protect manufactured housing from incursions by site-built housing, recreational vehicle manufacturers, and others. Which business model path do you prefer?

And there you have the rationale behind one of two National Public Forum topics to be presented and parsed at the 23rd International Networking Roundtable on 11 September 2014 in Peachtree City, GA, to wit: The ‘Future of Manufactured Housing as ‘housing’ or ‘trailers’! The other topic? The ‘Future of Land-lease-lifestyle Communities as ‘lifestyle’ & ‘investment’. How can you not want to be present for this historic (i.e. ‘first time ever’) and precedent-setting National Public Forum discussion of two key industry issues?. Again, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to ensure you receive an ‘invite’ to participate. Already, two of three national ‘players’ have committed to be on hand, along with representatives from government agencies.

III.

‘Protect MH Market Share or Fill More Sites with RVs?’

This perennial topic too has spouted legs, from last week to this, motivating the following reminiscing from a veteran Midwest independent (street) MHRetailer:

“Several years ago, the RV issue was discussed at a _____meeting. I wasn’t totally clear on the issue then, or even now. I do remember several ‘Nanny State’ types who felt they could use the RV request to insert HUD oversight into the RV industry, saying: ‘You now, some people are living in them. We should be regulating them.’ I remember thinking, ‘What did I care if someone owning an RV stayed in a few days longer than what our ‘Nanny State’ mentalities deemed ‘temporary’? I had no interest in extending HUD’s regulatory reach into the RV arena. Just saying that the RV folks need to carefully consider whatever requests they are making.” AB

Well, reality has changed, and is now counterintuitive. How so? First off, this time around the RV industry is not looking for a ‘change’ that would have them brought into the HUD-Code that regulates manufactured housing. NO; this time around, they wish to insert language in the HUD-Code that broadens the definition of RVs to be excluded from said HUD-Code. This is the counterintuitive part. If not only ‘park model RVs’, but now much larger type RVs, are formally excluded from HUD-Code oversight, by definition, it likely makes it easier for these units to be sited on vacant rental homesites in land-lease-lifestyle communities, where they’re not otherwise outlawed by local housing market zoning ordinances. Anyway, that’s my ‘take’ on the matter. Anything you care to add or change?

And here’s what author Bob Vahsholtz adds to the discussion:

“Ah George, the use of RVs as homes is not so much a matter of preferences as it is of needs. Millions of Americans need low cost homes, (and) thousands of LLLCommunities have vacancies they can’t fill with affordable and appropriately-sized HUD homes. The laws of economics urge those spaces to be filled with used RVs that are inexpensive, because those who ‘travel in RVs’ want new stuff”

“Housing regulations in this country strive for a well-ordered nirvana that exists only in academic and government minds. When regulators define the size of Johnny’s bedroom, they’ve gone too far. When MH manufacturers, retailers, and community operators flock to the monstrous high-buck home choice, they join regulators in creating a wondrous void in the market.”

“The RV industry made a reasonable, if arbitrary choice, in limiting ‘park models’ to 400 square feet, and those little rascals are pricey. Still ‘park models’ prove, just as early mobile homes proved, that a home need not be big to be quite livable.”

In any event, it will be interesting to observe whether this ‘Protect MH market Share OR Increase RV Occupancy in LLLCommunities?’ issue makes it onto anyone’s agenda at the upcoming MHI Summer meeting in Indianapolis on 8-10 June. If so, ‘Good!’ If not, ‘Why not?’ An inquiring business public wants to know….

IV

National Communities Council division meeting, 9 June 2014.

And this note from a direct, dues-paying MHI/NCC member and COBA7 affiliate: “What is the purpose of the (6/9) meeting? Is it (to be) a REIT-driven, rubber stamped 1.5 hours?” TT

Guess we’ll have to wait and see. And as loyal blog floggers (readers) know, we publicly suggested here, last week, a Nine Topic Agenda, one of which has to do with ‘Intimidation by Litigation’. Now there’s a new and troubling subject most LLLCommunity owners/operators should want to discuss. But will it be? If so, ‘Good!’ If not, ‘Why not?’ An inquiring business public wants to know….

V.

Pending HUD Rulemaking Increase of Manufactured Housing Certification Label fee, from $39.00 to Between $95.00 & $105.00 Trounces Prospective Homebuyers!

If effected, this would be the first increase in certification label fee since 2002, that’s 12 years ago. BUT, seeing as how HUD-Code manufactured home numbers have plummeted from 168,491 shipped during year 2002, to an average of 53,310 units per year through 2013 – that’s a production DECREASE of 115,181 units or 300%, it certainly does NOT justify an INCREASE in label fee of 250%! What are these people thinking? The information in this paragraph supplied by MHARR.

In other words, how’d you feel if your take home pay was cut from $600.00 per week to just $200.00; and, your household water/sewer bill shot up from only $39.00 to $100.00 per month?

This is why most major business types have a national advocacy trade group headquartered in the Washington, DC., area; to lobby in their behalf and protect members from regulatory incursions and excesses like this. As it stands, however, manufactured housing has not one, but two national advocacy bodies, one domiciled in Washington, DC., and one in Arlington, VA. (Reread Part I of this blog posting). But not everyone is pleased with the arrangement. This from a longtime reader of this blog: “The MHI/MHARR duel is really quite interesting and really a waste of valuable time. They need to get to work on how we get more business – access to relevant financing tools for sure – and work together to win!” NB

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