Archive for October 6th, 2017

RV/MH Hall of Fame; LLCommunity & How Many?

Friday, October 6th, 2017

Blog # 467; Copyright, 8 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: (8777) 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.

Part I. Your legacy will be? How ’bout induction into the RV/MH Hall of Fame?

Part II. Time to codify ‘land lease community’ as a manufactured housing trade term. Will MHI’s NCC Leadership Fall Leadership Forum take up the challenge?

Part III. And, just how many land lease communities are there in the U.S.A. today?

I.

RV/MH Hall of Fame Applications Due October 31st,
&
YOU?

YOU a pioneer or leader – elected or salaried – for 25+ years, in the manufactured housing industry and or land lease community real estate asset class? Then YOU should be looking to, and considering, the nature of the legacy you’re crafting among business associates, trade association colleagues, employees, and family members!

For some, this legacy will simply be – as important as it is – financial security. But, IMHO, there’s more to legacy than just that. Consider peer recognition, and honoring one’s contributions, service and memory. Why? It saddens me when I recall many individuals I’ve known during nearly 50 years in this business, who’ve retired, moved-on to other interests, or died – and have been forgotten. But then, maybe that’s the way it should be, when there’s lack of aforethought, regarding and ensuring one’s legacy in those past, sad instances.

How ’bout YOU? Are you head, or a key part of, a housing manufacturing team, an independent (street) MHRetailer, land lease community owner/operator, OEM supplier, association exec, and otherwise – who’s given greatly and significantly to this industry and asset class? Then you, or one of your close associates, should begin NOW to prepare an application, along with three letters of peer recognition, for submission to the RV/MH Hall of Fame during year 2018 – to, hopefully, have you selected for induction that year, as part of the Class of 2019.

The deadline for the Class of 2018 is upon us NOW – 31 October 2017! So, in my opinion, you shouldn’t even try to begin from scratch; there’re already a dozen or more applications ‘in process’ for possible induction during early August 2018. So, if just finishing up an RV/MH Hall of Fame application package, YOU have until 31 October to submit it.

One last thing on this legacy topic. Once selected for induction, among other interesting matters (e.g. portrait photograph, brief bio, etc.),individuals are given an opportunity to purchase a green blazer, with an RV/MH Hall of Fame crest on the left breast pocket. When the time comes, BUY IT! Then, when there’re special occasions, at state and national venues, proudly wear this ‘symbol of honor as a manufactured housing or land lease community pioneer or leader’! And thought is being given now, as to how appropriate identification can be provided female inductees into the RV/MH Hall of Fame. In the meantime, those of you already inducted – it’s not too late to order/buy your blazer. Simply phone Darryl Searer via (574) 293-2344. And tell him ‘George sent me!’

II.

A Challenge to the NCC Fall Leadership Forum

It’s time for Codification; Will NCC Do What’s Right?

You likely know the first part of this story. During the 1940s & 50s our unique form of income-producing property was referred to as trailer courts and camps; then in the 1970s, mobile home parks. All that went relatively unchanged until 1976, when HUD decreed, in support of the new federal building code term ‘manufactured housing’, these properties should be referred to as manufactured housing or home communities. For the most part, that directive was ignored. ‘Mobile home parks’ they were, and likely mobile home parks they’d be today, but for one thing.

In 1992, when Edward Hicks, David Alley, and I began penning what would become the J. Wiley & Sons published, Development, Marketing, & Operation of Manufactured Home Communities tome, we learned there’d have to be a change to, a consensus among practitioners, one set of trade terms, language, lingo. This for book marketing purposes; and industry/asset class unity. So, with the assistance of the now defunct Manufactured Home Merchandiser magazine, we launched a series of reader surveys throughout the industry and asset class, asking, ‘What do we call ourselves today & what should we be calling ourselves going into the future?’

In the end, manufactured housing, manufactured home communities, retailers (vs. dealers), transporters (vs. toters), and residents (vs. tenants) won out. And those terms, blessed by state trade association executives at the time, became part and parcel to the new textbook – the first published on raw land development, in more than 20 years!

But, fast forward to year 2004 and following. You know, when the ‘bottom was falling out’ of manufactured housing shipments due to1) loss of easy access to chattel capital, 2) a tsunami of ‘repo’ homes competing with new home sales, and 3) alarming disappearance of independent (street) MHRetailers. One of the consequences of all this, was the realization by (then) manufactured home community owners/operators, they’d have to buy new homes directly from factories, install and sell them on-site, and often engage in one form or another of seller-financing (e.g. lease option). A corollary to this paradigm change in manufactured housing distribution, was the further realization there was no longer just two types of shelter in these income-producing properties, but oft, as many as six! Those being, 1) pre-HUD ‘mobile homes’, 2) post-HUD manufactured housing, 3) modular homes, 4) ‘park model RVs’, 5) RVs for a season, and in FL,6) stick-built homes constructed on-site to look like HUD-Code manufactured homes.

Consequence of this? Pundits, in time, referred to heretofore manufactured home communities as ‘land lease lifestyle communities’. That occurred during the latter days of year 2004, and remained unchanged until year 2014. At that time, ‘lifestyle’ was dropped from the moniker, ‘leaving land lease community’ (ies). And subsequent to that, in academic and formal writings, ‘real estate asset class’ was added, to differentiate the uniqueness of this type income-producing property among other classes of commercial real estate, e.g. 1) office buildings, 2) shopping centers, 3) multifamily apartments, and 4) land lease communities.

So, now 3 1/2 years into this latest trade terminology ‘cycle’, we come to the NCC Fall Leadership Forum: ‘Success by Design’. This focus is almost providential! How so? It suggests an opportunity for MHI’s 21 year National Communities Council (‘NCC’) division, to take leadership in something significant, even historic; by specifically endorsing the concept and labeling of its’ characteristic income-producing property type as ‘land lease community & communities’!

Will this happen? What do you think? I’ll withhold opinion for now, as I will not be present at this event, due to a schedule conflict. However, some, if not many of you reading this blog posting, will be there. And if YOU agree, ‘the time is right’ to formalize a final shift in trade terminology, to codify what we already know and commonly refer to as land lease communities, you’ll make your views known.

And if this does not happen? No harm done. Land lease community, or communities, will continue as de rigueur among those of us entrusted with describing the business model, as well as enhancing the industry/asset class’ image nationwide!

Plus, several major national and regional educational/networking venues (e.g. annual Networking Roundtable, & SECO Conference) embrace ‘land lease community’ in promotional and event literature. And of late, federal regulators, even GSEs, have taken to using the term as well. So, let’s not be Luddites, but rather Realists where this evolution of trade terminology is concerned.

III.

And Just How Many Are There?

36,873; 38,000; 44-45,000; or 50,000+/-?

Land lease communities, that is. Well, the first part of the answer is simple and straight forward: We will never know! That’s right; to begin with there’s no common interstate definition of how many rental homesites constitutes a land lease community; and, only a relatively few states even keep track, via licensure, of the number and nature of land lease communities in their state. Let’s dig deeper?

The first effort to size the inventory of (then) manufactured home communities, occurred decades ago, roughly in the 1990s, when the article ‘How Many Are There?’ was featured in the now defunct Manufactured Home Merchandiser magazine. In that instance, the figure was 50,000+/-. How determined? Initially by polling ‘property counts’ among the dozen or so states that kept such records (Not much has changed during the interim 20+ years), then performing a simple mathematical extrapolation, e.g. ‘If X number of properties in X number of states; how many such properties in 49 states – since Hawaii did not then, or now, have this type land lease community. Answer? 50,000+/-. This answer was ‘proofed’ using Pareto’s 80/20 law. If you’d like a free reprint of this historic article, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Since that time, 20+ years ago, various trade groups ( MHI’s NCC & COBA7), vendors (DATACOMP/MHVillage) and companies (RV Horizons & others) have offered varying views on this slippery subject. Their estimates?

• DATACOMP/MHVillage = 36,862+/- (From DRAFT copy of ‘2016 National Communities Survey’ for MHI’s NCC), though the sum of 17,720 ‘all age’; 3,789 ‘ages 55+’; & 15,755 ‘unknown status’ communities = 37,264 properties. And on 4 October, number was adjusted to 36,873.

• MHI’s National Communities Council (‘NCC’) suggests there’re 38,000+/- properties – likely referencing DATACOMP/MHVillage statistics

• One or more property portfolio firms suggest the total to be between 44 & 45,000 land lease communities.

• Community Owners (7 Part) Business Associates (‘COBA7’), a division of GFA Management, Inc., dba PMN Publishing, since that article in Manufactured Home Merchandiser, has held fast to the 50,000+/- figure, publishing it in the Signature Series Resource Document (‘SSRD’) ‘Industry Briefing Sheet’, updated quarterly.

So, how does one account for the large difference between 38,000 and 50,000+/- land lease communities? Likely boils down to the indeterminate number of small, ‘under the acquisition radar’ nature of the smallest such properties (i.e. two to 25 rental homesites in size). They don’t enjoy economy of scale, are difficult to locate, and oft passively managed. In some, if not most states, they account for as much as 40 percent, or greater, of all land lease communities – not the eight percent cited in the earlier referenced ‘2016 National Communities Summary’.

So, where does all this leave us? In a word, ‘nowhere’. As was stated at the beginning of Part III of this blog posting, ‘We will never know!’ – due to lack of empirical and consistent definition (i.e. number of rental homesites = a land lease community?), and overall lack of state documentation of land lease communities within their boundaries.
***

George Allen, CPM, MHM
Consultant to the Factory-built Housing Industry,
the Land Lease Lifestyle Community Real Estate Asset Class, &
Community Owners (7 Part) Business Alliance, or COBA7
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156