Archive for February, 2019

FOREMOST Insurance Rides Again! & Preparatory/Predatory Sins

Thursday, February 28th, 2019

Blog # 522 @ 24 February; Copyright 2019; www.educatemhc.com
Perspective. ‘Land leases communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Motto: ‘U Support US & WE Serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: Have you missed studying the periodic Foremost Insurance market research report, profiling manufactured housing’s homeowners? Well, after a six years hiatus it’s back!

I view the widespread lack of preparatory new home sales training, for land lease community owners/operators, as a Sin of Omission, slowing the increase in annual shipment volume!

And I view the widespread reality of predatory rental homesite rate increases as a Sin of Commission, often preventing homebuyer/site lessees from buying the home of their choice!

I.

‘FOREMOST Insurance Rides (researches) Again!’

If you’re new to the manufactured housing industry, and or land lease community real estate asset class, you’re excused for not understanding the point of that headline.

You see, Foremost Market Research, since 1979, and for more than three decades following – through 2012, published, every several years, detailed statistical reports containing actionable insights regarding manufactured housing, the firm could use to advance their marketing and product development efforts. And that information also proved highly valuable to HUD-Code housing manufacturers and owners/operators of land lease communities.

Well, for reasons of their own, Foremost stopped doing this research and reporting six or so years ago, without telling anyone. When I picked up on the omission during 2017, I approached my contact within the firm and coaxed them to reengage. They did so, during 12-26 June 2018, and what follows here is a titillating taste of what will be covered in detail in the March issue of the Allen Letter.

In the meantime, here’re Key Findings from this latest Foremost Insurance Group study of the manufactured housing industry:

• 32% of respondents bought their manufactured home NEW

• 48% of manufactured homes from the survey were of the single wide (sic) variety

• 51% of manufactured homes from the survey were located outside of a traditional subdivision, park or co-op setting (& 41% of homes located in land lease communities)

• 72% of manufactured home owners reported annual household income less than $50K

• 46% reside in a home that was manufactured within the last 22 years

• 54% of responses came from manufactured home residents age 50 or older

• 47% of respondents estimated the value of their manufactured home below $30K

• 32% of mobile home (sic) households also own a recreational vehicle

• 26% have a graduate or post graduate degree

Yes, there’s much more interesting and helpful information in this study. Read the rest of the report in the March 2019 issue of the Allen Letter. To subscribe, visit www.educatemhc.com

II.

Preparatory & Predatory

Sins of Omission & Commission Plague the Land Lease Community Business Model from Coast to Coast!

If you own or operate a land lease community (a.k.a. manufactured home community), do you know HOW to calculate manufactured housing price points that’ll sell in your local housing market; HOW to ‘spec’ (select features) and order a home from your factory of choice; HOW to secure wholesale (i.e. floor plan) financing; HOW to properly install that home on-site; HOW to sell said home; and when need be, HOW to seller-finance or rent the home?

If NOT, then you have been, and continue to be, a victim of the manufactured housing industry’s ‘failure to prepare’ YOU to navigate those six pivotal HOW TOs required in today’s vastly different market environment from the last five ‘go-go’ years of the 20th Century! Some say, this is the manufactured housing industry’s Sin of Omission!

A timely and practical ANSWER to this major education omission? Start doing, nationwide, what the IMHA/RVIC (Indiana) state association has been doing since 2016. Identify the nearest concentration of manufactured housing plants, engage meeting space nearby, then plan Two Days of Plant Tours & Home Sales Seminars, covering HOW TO areas per price points, features selection, product ordering procedures, floorplan financing resources, installation basics, ‘How to Sell – or Rent Effectively’, and what chattel capital funding sources are available.

The way this works, is to offer free plant tours to seminar attendees, on a day different from the seminars, or intermingled in a fashion where attendees ‘pick & choose’ what they prefer to do, from hour to hour. Sure it takes much planning to do this successfully, but here are key points to ensure a successful program:

• Selected presenters must be knowledgeable and experienced relative to their chosen or assigned topic, and highly motivated to share this knowledge and experience! Require each presenter to prepare and distribute a handout covering their topic. Consider binding handouts into a takeaway resource.

• Reserve extra meeting space at the host facility and arrange to have sponsors on hand to support the learning experience and display their products and services. Sponsor fees help underwrite expenses associated with the two day event.

If you’d like to learn more about meeting planning details for this much-needed educational event, contact Ron Breymier via (317) 247-6258 x 11.

The preceding paragraphs cover only half the story needing telling here!

While the manufactured housing industry, including state and national advocates, has been dilatory preparing land lease community owners/operators to fill vacant rental homesites with new home sales and or rental units, (i.e. Sin of Omission), many in the realty asset class itself have been, in this observer’s opinion, guilty of a Sin of Commission.

That’s right. In a word, this is the practice of levying ‘predatory’ rent rates on rental homesites in land lease communities. And let’s be clear, this is NOT a blanket indictment of all land lease communities! But it’s become commonplace enough to spawn this sort of headline in more than one newspaper: “U.S. ‘mobile homes’ affordability slips as corporates move in.”*1

So, what makes for predatory rent rates, and where and why do they occur in some-to-many of today’s local housing markets across the U.S.?

Let’s begin with one land lease community in one local housing market. As a due diligence task pursuant to ‘closing’ a real estate transaction, particularly an income-producing property, it behooves the due diligence team to conduct one or more local housing market surveys, usually including all forms of multifamily rental properties, especially other land lease communities. Not only should the due diligence team demonstrate, for the buying investor, how the subject property’s rental homesite rate compares to other like properties in the local housing market, but how those rent rates relate to other types of multifamily rental housing as well.

One way to do this is to compare the monthly rental rates of 3BR2B-sized apartments with rental homesite rates in the same local housing market. How to do this? Survey all conventional (non-subsidized) apartment communities, targeting 3BR2B or townhouse units – generally closest in size to singlesection or small multisection manufactured homes. Assume the average 3BR2B apartment rent surveys at $900.00/month, plus cost of utilities. A traditional Rule of Thumb, is to divide that amount by three, and arrive at $300.00/month as a target rental homesite rate, in land lease communities, in that local housing market. And this comparison is meant only to be a guide; i.e. is site rent higher or less than $300/month? The answer to that question guides the buyer investor in his/her acquisition decision, and actions after ‘closing’.

But that’s not what has been happening of late – since the turn of the century, when consolidation of communities skyrocketed, e.g. REIT wavelet @ 1994 & 1995, followed by equity plays since then. As property portfolios have grown in size (e.g. REITs alone have exploded from four in 1994 controlling 88,450 rental homesites, to three in 2018, but controlling 300,566 rental homesites! As property portfolios have grown in number (now @ 500+/-) and size*2, profit expectations have increased as well, oft at the behest of Wall Street analysts, and investors from outside the manufactured housing industry ‘wanting in’.

Consequence? Not in all local housing markets, but in many, the traditional 3:1 Rule of Thumb has quietly been supplanted with one akin to 2:1. In other words, local housing market apartment rent average being $900.00/month; now divide by two, not three, and arrive at $450.00/month as a target rental homesite rate for land lease communities in that local housing market. Bottom line consequences of this site rent inflation? Several. Sure, increased profitability for the owner/operator (i.e. mantra: ‘maximize income & minimize expenses’), but also ‘less house purchase capability’ on part of prospective homebuyers/site lessees.

How so? Given an individual or household’s AGI (Annual Gross Income) of $36,000, a 30 percent Housing Expense Factor (‘HEF’), $333/month site rent rate, and 9.5% mortgage rate for 20 years, the homebuyer/site lessee can afford to purchase a $68,000 manufactured home. However if the $333/month site rent rate is increased to $500/month (Keeping in mind the two aforementioned 3:1 & 2:1 ratios), the same homebuyer/site lessee can only afford to purchase a $48,000 manufactured home; i.e. $20,000 ‘less house’ than when rent is/was only $333/month.

And know what? The affordability challenge worsens when one realizes today’s modus operandi is to expect homeowner/site lessees to pay household utility bills in addition to the PITI (principal, interest, taxes, insurance) calculated as being part of the 30 percent HEF – making the transaction ‘risky’. However, when 25 percent of the 30 percent HEF is set aside to pay household utility bills, leaving less residual for paying PITI; well, less house can be bought, but the homebuyer/site lessee is in a far more ‘affordable’ position than before! For example, given same previous ‘givens’, the ‘affordable’ mortgage pencils out this way under the 3:1 & 2:1 ratio scenarios. In the first instance, $36,000 X .3 HEF, then X .75(%) to account for 25% holdback for utility payments, divided by 12 months, deduct $333/month site rent = $342 for mortgage, or $41,000 ‘affordable’ home purchase. Increase site rent to $500/month and end result is a $19,000 manufactured home purchase– less than half the purchase power!

OK, back to the predatory rent rate(s) comment made early in the second half of this ‘Preparatory & Predatory’ treatise. Today, more than ever, we want to see the manufactured housing industry as a whole, and especially the land lease community sector of it, return to say 200,000 new HUD-Code homes shipped annually (We’re at 96,555 year end 2018), and far less than the estimated 250,000 vacant rental homesites nationwide, so must keep home prices and rental homesite rates reasonable and under control! Unfortunately, some, if not all, published regional site rent surveys are skewed, with ‘dollars higher than overall reality’, as market surveyors cherry pick larger, institutional grade land lease communities, characteristically found within the 500+/- property portfolios. The vast majority and numbers of small to mid-sized Mom & Pop communities are rarely included in these surveys. Why? Their site rent rates are generally lower, and they’ve not been consolidated into a property portfolio. Result? Published survey results trend higher and higher year after year, providing cover for properties not worthy of premium site rent rates, but swept up in the supposed prosperity of others, nonetheless.

What to do ‘bout all this? As you can imagine, these are corporate decisions. Either continue to be predatory and enjoy maximum profits in the short term, and let others (future buyers of properties in question) deal with the consequences (i.e. usually increased number of vacant rental homesites) later; OR, be in the business for the long haul, treating present and future homeowners/site lessees as the valuable and valued customers they are!

Preparatory & Predatory. Where do YOU pencil-out relative to these two perspectives? Is someone teaching you the ropes of new home purchase, selling, and seller-finance; or, are you assisting your peers in this area?*3 And how ‘bout the rental homesite rates at your land lease communities? Do they really ‘make sense’, relative to other forms of multifamily rental properties in your local housing market, or are you engaged in predatory practices?

End Notes.

1. Thomson Reuters Foundation, Washington, DC. February 2019.

2. 30th anniversary ALLEN REPORT poll of 100 such portfolios showed an average portfolio size of 43 land lease communities, and average property size of 211 rental homesites. To purchase a copy of this seminal resource document, visit www.educatemhc.com

3. A popular format today involves Four Steps to Selling & Financing New Homes On-site Within Land Lease Communities: Getting Ready! Buying Homes! Selling Homes! Financing Homes! All via the Six Right Ps of Marketing: Right Product, Right Place, Right Price, Right Promotion, Right People, Right Process. If you’d like a FREE 3X5” plastic wallet card featuring these two guidelines, simply request one via gfa7156@aol.com or visit www.educatemhc.com

George Allen, CPM, MHM
EducateMHC
Official MHIndustry HOTLINE: (877) M

Can Of-Site-On-Site Builder Clayton Homes Serve ‘Two & Two’ Markets with ‘Prefabulous’ Homes? – & – Naysayers Beware!

Thursday, February 21st, 2019

Blog # 521 @ 19 February; Copyright 2019; www.educatemnc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: Clayton Homes is ‘on fire’ in a good marketing way; good manufactured housing trade press is being supported by the industry & realty asset class; and, here’s a preview of the Fall meeting season, where the 28th annual International Networking Roundtable is concerned! This is a GREAT TIME to be in the manufactured housing business and owning/operating land lease communities – except in the latter instance, if one is being predatory with exorbitant rental homesite rates.

I.

Can Off-Site-On-Site Builder Clayton Homes Serve ‘Two & Two’ Markets With ‘Prefabulous’ Homes?

To fully understand and appreciate the gist of what follows, one should read a recent article in Builder magazine titled: ‘Berkshire Hathaway’s Clayton TV Blitz Takes Aim at Home Buyers (that) Recovery Has Left Behind’ – millennials & baby boomers.

The feature does a yeoman’s job setting the stage for Clayton Homes’ “…striking hard, fast, and with a broad swath of impact, with a marketing, advertising, branding, and sales push aimed to both fuel desire and remove friction from the path of would-be home buyers on both ends of demographics barbell (sic)-shaped spectrum, Millennials & Baby Boomers.”

But therein ‘lies the rub’ for some of us! The first ‘two markets’ being ‘Millennials’ & ‘Baby Boomers’; the next ‘two markets’ being manufactured housing’s traditional markets, ‘land & home’ & ‘land lease communities’? Do you see where we’re going with this?

The New Type, ‘prefabulous’ HUD-Code housing described in the referenced article boasts: 1) purchase prices half that of site-built homes, 2) design and features of same*1, and recent 3) debut of GSE Fannie Mae’s Advantage Mortgage program. Given all this, it’s easy to see how Now Is Time for Clayton – and other ‘Big Three C’ HUD-Code manufacturers (?), to engage in national brand public media promotion for this exciting New Type housing product, and the favorable financing thereof!

Again OK. While that’s fine for ‘Millennials & Baby Boomers’ two markets, what about the other two markets: ‘land & home’ target market inferred in the previous paragraph, AND 50,000+/- ‘land lease communities’ (a.k.a. manufactured home communities’) with their estimated 250,000+/- vacant rental homesites nationwide? No mention of this whatsoever!

Now for a little apropos history. During the industry’s nadir year 2009, when only 48,789 new HUD-Code homes were shipped, 24 percent of these went directly into land lease communities. With the advent, that same year, of Community Series Homes*2, designed to be more community-friendly than the ‘big box = big bucks’ Developer Series Home behemoths of the late 1990s, the volume of new homes going into communities increased to 40 percent by yearend 2015, with estimates today ‘nearing 50 percent’ by year 2020.

Bottom line? Again, ;by year 2020 it might be half the annual shipments of HUD-Code homes, Community Series Homes, will be shipped directly into land lease communities; and the other half, the New Type ‘prefab’ or ‘prefabulous’ homes will be sited on scattered building sites conveyed fee simple, i.e. ‘land & home’ installations. Not a thing wrong with that; just don’t want readers – and HUD-Code housing manufacturers, to lose sight of the reality that land lease communities continue to be an emerging ‘market in need’ for new HUD-Code manufactured homes!

And know there is some CAUTION on the national housing market scene today! The QUESTION: ‘If the national economy is growing, and workforce is employed, WHY is the housing market weakening? Three possible ANSWERS: 1) student debt (Among millennials, according to National Association of Realtors, 46 percent have loan balances of at least $25,000 and are discouraged about buying a home), 2) lack of housing inventory (Experts say we’re 370,000 units shy of what is needed for a robust housing market today), and 3) interest rate uncertainty going into the future. Just saying….

In the meantime, if this New Type manufactured housing focus, pursued by Clayton Homes, results in the firm becoming ‘America’s Number One Home Builder!’, then so be it!

End Note

1. “Available prefab home features…permanent foundation with porch, pen floor plan concept, upgraded all-wood cabinets and farmhouse sink, ecobee3 lite smart thermostat and energy efficient appliances, wide plank flooring and drywall interior.”

2. Community Series Home. Singlesection, or modest-sized multisection, in configuration with a WOW factor or two, as well as an array of durability-enhancing features to ease and control ‘get ready’ costs upon homeowner/site lessee turnover.

II.

NAYSAYERS BEWARE

“WARNING. Don’t be swayed by a perennial naysayer! Patronize (trade) magazines and newsletters with the best interests of the industry at heart, and write that way!” Quoted from introduction to blog posting # 520.

And blog # 520 ended with this reminder. “While we suffer an online interloper these days, let’s work together to ‘get the word out’ accurately, and in a positive and timely fashion! We don’t need naysayers spouting half-truths and information that hurts the progress we’re finally enjoying. So, support good trade journalism and honest, fair commentary, by subscribing to some or all the trade publications just described!”

MHInsider, Manufactured Housing Review, Allen Letter, and the Allen CONFIDENTIAL!

Response to those admonitions? Overwhelmingly positive and numerous! Here’s what one well known manufactured housing executive, from the manufacturing and independent (street) MHRetailer segments of the industry penned: “I love the naysayer comment. Well done!” And for now, ‘Nuff said!’

III.

Preview & Opportunity

28th International Networking Roundtable will occur 8-10 September 2019, in Indianapolis
Yes, you read that right. Moving this popular seminal venue to Sunday, Monday, Tuesday this year, at the Alexander Hotel. And on 11 September there’ll be the day long Manufactured Housing Manager (‘MHM’) training & certification class for land lease community owners & managers.

While we’re well into compiling an exciting agenda of informative and educational topics and presenters (Some hints follow here), we’re also interested in hearing from manufactured housing and land lease community businesspeople who’d like to address this august group.

Three keynote presentations this year. Likely a theme and presenter focus addressing the Affordable Housing Crisis in the U.S. today, and how manufactured housing & land lease communities are a significant part of the answer to solving this challenge! Promises to be the ‘Don’t miss!’ topic and event of all 2019! Very special presenter invited….

Another keynote has to do with the answer to this question: ‘Frustrated with the mixed messages about new HUD-Code housing installation regulations, and enforcement thereof, emanating from Washington, DC. and state regulators?’ How ‘bout a panel presentation, then open group discussion by way of questions and answers?

And this’, a ‘keep em in their seats’ keynote presentation the final day of the Roundtable! Yes, you read that right, and here’s what panelists are preparing to cover; the rehabilitation of manufactured homes on-site! A ground floor presentation and discussion of Lessons Learned in this important, but often overlooked, area of maintenance and marketing expertise!

What else to expect this year at the Roundtable? ‘All you ever wanted to know about property management office automation but didn’t know who to ask!’ And ‘risk management’, for insurance purposes, in the land lease community. And resident relations, as practiced by the firm that brought this property management function to our asset class 40 years ago – and continues to practice same to this day.

Finally; it would not be a Roundtable without the two finance panels; one regarding real estate-secured mortgages for land lease community acquisition and refinance, and one comprised of various approaches to chattel capital loan origination.

And ‘all that’ is only part of the agenda so far.

Now for the opportunity! If YOU believe you have a particular talent or expertise worthy of sharing with a national audience, please reach out to me ASAP via gfa7156@aol.com or MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***
George Allen, CPM, MHM
EducateMHC
(317) 346-7156

Communicating Among Manufactured Housing & Land Lease Community Businesspeople!

Thursday, February 14th, 2019

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: I am more than ‘cautiously optimistic’ about what year 2019 has in store for the manufactured housing industry and land lease community asset class. And the major cheerleader for continued rise in new HUD-Code housing shipment volume, is the rejuvenated trade press! Forget about the one naysayer, and concentrate on what you read in MHInsider, Manufactured Housing Review, the Allen Letter and the Allen CONFIDENTIAL! Let’s work together now, to read here this time next year: We did it! Shipped more than 100,000 new HUD-Code homes with a production value estimated to be more than $4.3 billion!

I.

Communicating Among Manufactured Housing & Land Lease Community Businesspeople!

2019 Begins a New Communication Era for Manufactured Housing & Land Lease Communities Nationwide. Are YOU aware & ready to read & learn?

Last month marked the first publication anniversary of MHInsider magazine, by MHVillage of Grand Rapids, MI. The anniversary issue was distributed, in great number, at the Louisville MHShow, and was chockfull of lively and timely articles describing various aspects of manufactured housing and land lease community investment and management. I felt especially honored, having my own column inside the back cover of the magazine. Labeled as the Allen Legacy, editors have given me free reign to write about upcoming trade shows, giving them an historical flavor. Given that thought, you’ll likely enjoy the Allen Legacy in the Tunica MHShow issue coming out next month. Hint? Be ready to be ‘Moore’ surprised! If not already receiving MHInsider, reach out to Darren@datacomp.com or Patrick@mhvillage.com. And to advertise, Mattm@datacompusa.com

For the better part of a year, we’ve enjoyed Kurt Kelley’s ezine, Manufactured Housing Review. Reading the online pub is almost like reading a hard copy print version. How so? Well, as a page is read, one ‘clicks’ on bottom right corner of the page shown, and it folds over to the left, just like it would if held in hand. The subject material? A mixed bag, given the variety of writers and their respective areas of expertise and opinions on various matters ‘manufactured housing’ & ‘land lease community’. Easy to find; just Google manufacturedhousingreview.com

Now, here’s the biggest trade press change during year 2019. The conversion, from print trade publications to online digital, of all materials distributed heretofore by COBA7, now via EducateMHC. And what is EducateMHC? It’s a new iteration of what you’ve long (i.e. 40 years!) received from GFA Management, Inc., dba PMN Publishing – and since 2014, COBA7. Said transition improves distribution efficiency of in-house trade pubs, scheduling Manufactured Housing Manager professional property management training and certification classes, as well as facilitating of the annual Networking Roundtable. And amidst all this, I get to continue writing to my favorite audience – you, while enduring less day to day stress. Here’re the pubs…

FREE weekly blog posting. Hard to believe I’ve been sending blogs your way for more than a decade! That’s why this blog is labeled as # 520. For many of you, I’m told, this weekly posting is the only trade press you rely on for timely information and informed opinion. Well, you should avail yourself of some or all trade pubs described in following paragraphs. But first; if not receiving this FREE weekly blog posting, but wish to, simply communicate your desire via: gfa7156@aol.com

Know what? There’s an ‘industry news distribution media’ you likely know little about, unless already on the receiving end. In-house, we refer to recipients as being the ‘Influencers & Deep Thinkers’ of manufactured housing & land lease communities! Recipients are subscribers to either or both the Allen Letter and the Allen CONFIDENTIAL! There’s no set distribution schedule for this special online ‘mailing’. Often it’s a spur of the moment declaration of ‘breaking news’ (e.g. 96,555 new HUD-Code homes ‘shipped’ during 2018, with production value estimated to be $4.2 billion) and or insights into important matters (e.g. 30th annual ALLEN REPORT spots new trend: ‘number of new homes used as rental units exceeds number sold on contract’). How to maybe receive? Subscribe to the Allen Letter and or the Allen CONFIDENTIAL! for awhile, then write to me, expressing your desire to be added to this inner circle Influencers & Deep Thinkers’!

Speaking of the Allen Letter. This year (2019) marks the 30th consecutive year this newsletter for land lease community owners/operators has been published and distributed throughout North America! Many, I’m told, believe a subscription to this newsletter is the basic ‘first step’ one takes when buying their first land lease community. And, proud to say, many of the portfolio ‘player’ folk have been loyal subscribers for decades. How ‘bout you? It’s still only $134.95/year. Simply go to www.educatemhc.com to learn more, and begin one’s subscription. It’s always full of interesting and helpful information. FYI. Just finished penning the March 2019 issue. One article describes at least eight major differences between property operations during the 1970s and today.

the Allen CONFIDENTIAL! Is probably the ‘most fun serious’ manuscript I author each month. How so? Unlike magazine articles and newsletter content, where we collect material ahead of time and outline same, in this case, I fly pretty much by the seat of my pants. That means I am always sensitive to what is happening to ‘thee & me’ around & about the MHIndustry & LLCommunity asset class. So, when I sit down to write, I do a ‘brain dump’ of oft sensitive material, letting you know ahead of just about everyone else, what’s happening – and better yet, what’s likely to occur during the days and weeks ahead! Over the years, regulators, housing manufacturers, and major portfolio owners/operators have let me know of plans ‘on the QT’, but expecting me to release said information at just the right time – to you. Guess that’s part of ‘why’ TAC! is so popular. Interested? Again, go to www.educatemhc.com

In closing, it really does seem the manufactured housing industry and land lease community asset class, where it’s print and online press is concerned, is enjoying a renascence of sorts in 2019. And the timing couldn’t be better! Yes, we narrowly missed shipping 100,000 new HUD-Code homes during 2018, but should be able to do so by year end 2019. And know what’ll help to that end? While we suffer an online interloper these days, let’s work together to ‘get the word out’ accurately, and in a positive and timely fashion! We don’t need naysayers spouting half-truths and information that hurts the progress we’re finally enjoying. So, support good trade journalism and honest, fair commentary, by subscribing to some or all the trade publications just described!

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

Once Again: ‘And Now There Are Four, Maybe Five…’

Tuesday, February 12th, 2019

Blog # 519 revised @ 4 February; Copyright 2019; www.educatemhc.com
Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!” And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: This week’s blog posting probably does not need an introduction, as it ‘speaks for itself’, profiling ‘four, no make it five’ national advocates for manufactured housing and land lease communities. Don’t think this has been done before, so is likely a ‘keeper’ for future professional reference where investors, employees, and peers are concerned.

This time around however, I’ve effected a few minor edits to make the blog more readable. So am sending it out for a second time, as so many ‘friends in the business’ asked me to do so. GFA

I.

And Now There Are Four, Maybe Five…

The Increasing Number, Evolving Nature, & Varied Efficacy of National Manufactured Housing Advocacy

In 1975 there was one. By 1985there were two, as a new manufactured housing advocacy entity splintered from the first. Then, between 1993 & 1996, a subgroup of the first entity emerged to ostensibly represent (then) manufactured home communities nationwide. In 2014, a ‘for profit’ alliance ensured ongoing national statistical research, print & online communication, interpersonal networking, and professional property management training & certification for (now) land lease community owners/operators. And during 2018, a new national lobbing group launched out West, to position a dedicated lobbyist, for the realty asset class alone, in Washington, DC.

So, do you think you know who all these folk are? Well, let’s see….

Manufactured Housing Institute (‘MHI’), birthed during 1975, absorbed the National Manufactured Housing Federation – of state associations (‘NMHF’) in 1991. Today, MHI claims to represent all sectors of the factory-built housing industry from its’ offices in Arlington, VA. Majority of its’ income is from HUD-Code housing manufacturer sector members. Visit mhi.org to learn more.

Manufactured Housing Association for Regulatory Reform (‘MHARR’), to better effect regulatory reforms, splintered from MHI during 1985, under the founding leadership of now retired Danny Ghorbani. Its’ membership, to this day, is comprised solely of HUD-Code housing manufacturers, and some state associations. And in the minds of many, MHARR faithfully serves as manufactured housing’s ‘regulatory watchdog’ in “Washington, DC. Visit mharr.org to learn more.

In 1993, just ahead of the manufactured home community REIT wavelet, 19 property portfolio owners/operators met and formed an Industry Steering Committee (‘ISC’) to better represent their business interests on the national scene. Three years later, MHI absorbed the ad hoc group, forming the National Communities Council (‘NCC’) – later to become a division of MHI. Enthusiasm was high, early on. But as time passed, and given the decline of novel programs like the Community Attributes System (‘CAS’), and perennial internal issues, the NCC’s presence, in this observer’s opinion, waned, and attendance at meetings declined. Read an interesting history of the first two decades of the NCC, in Bruce Savage’s The First 20 Years! – available at www.educatemhc.com

Fast forward to 2018. During that year, several western states, frustrated over what they viewed as inadequate national lobbying in behalf of land lease community owners/operators, large and small, nationwide, formed the National Association of Manufactured Housing Communities (‘NAMHCO’). To date, a Washington, DC. based lobbyist has been hired and is ‘making waves’ already, as the group grows in membership and influence.

During most of this time, from year 1980 forward, there was a ‘for profit’ outlier, in Indianapolis, IN., working alongside the not-for-profit trade entities just profiled. Originally, GFA Management, Inc., dba PMN Publishing, a COBA7 division (‘Community Owners – 7 Part – Business Alliance’) materialized in early 2014, to serve land lease community owners/operators statistical research, print & online communication, networking & deal-making, as well as professional property management training & Certification needs. Now, in 2019, all this has undergone major change, transitioning from a print presence to 100% digital platform, under the guidance of EducateMHC. So, for land lease community products and services, via this ‘for profit’ presence as a national manufactured housing advocate, visit www.educatemhc.com

So, there you have an overview of four to five national advocates for manufactured housing in general, three of which focus on land lease communities in particular. Now, let’s take a closer, albeit subjective, look at each entity and how they’re perceived, by some, today….

But first, a general and important observation. In the 1980s and early 1990s, when there were two national advocacy bodies, MHI & MHARR, representing HUD-Code manufactured housing – in different ways (e.g. regulatory cooperation versus resistance), federal legislators and regulators were wont to play one entity off against the other, when pressed to legislate or regulate in regards to manufactured housing. So, this contretemps (‘embarrassing situation’), or evergreen issue, is not a new challenge to the industry, but one that continues to this day.

Manufactured Housing Institute. Some pundits say, ‘If there was no MHI there would not be a manufactured housing industry!’ Likely a lot of truth to that, as no other national advocacy entity comes close to representing ALL segments of that specific type factory-built housing. And there’s the first ‘rub’. If one accepts Don Carlson’s (publisher of now defunct Automated Builder magazine) description of factory- built housing, as comprised of 1) production site builders (i.e. stick builders using factory-fabricated components like roof trusses and pre-hung door and window units), 2) panelizers, 3) HUD-Code manufactured housing, and 4) modular homes; well, where does MHI fit into the ‘production site builder’ and ‘panelizer’ representation picture? It doesn’t. MHI also claims to represent the modular housing folk, but to a far smaller degree, than manufactured housing, given a minimal website presence. And there’s the institute’s questionable practice of reporting new home monthly shipment volumes, researched and published by HUD’s contractor, the Institute for Building Technology & Safety (‘IBTS’), differently from HUD itself, MHARR,NAMHCO, COBA7 – and now, EducateMHC.*1

Manufactured Housing Association for Regulatory Reform. Until the manufactured housing industry’s nadir year 2009, when only 49,789+/- new HUD-Code homes were shipped, MHARR’s focus was solely on regulatory matters pertaining to their core membership, mostly regional manufacturers of HUD-Code homes!*2 Since then, the association’s political and industry interest has broadened to include chattel capital sourcing for new HUD-Code homes going into land lease communities; and, the unique, income-producing property type itself. Additionally, MHARR has become known for its’ overt support of the creation of a new national trade body to, in their opinion, better represent post production business enterprises. And while this has yet to occur, some credit said encouragement as a catalyst speeding the emergence of aforementioned NHAMHCO.

National Communities Council division of the Manufactured Housing Institute. There is no separate MHI/NCC web site dedicated to the information needs of land lease communities, large and small. Over the years (1996 – present day), good ideas have come and gone. An attempt to ‘quality grade’ land lease communities was tabled out of fear of stigmatizing properties based on curb appeal, resident relations, rules enforcement, and other measures. And finally, in this asset class observer’s opinion, contemporary professional property management training and certification do not begin to garner the attention sorely needed, for image improvement, throughout the property type nationwide. So, it’s been no surprise to see other attempts at advocacy, education, and representation materialize in recent years.

National Association of Manufactured Housing Communities. Too early to say much about this new arrival on the national advocacy scene. However, some find it confusing to refer to ‘manufactured housing communities’ in the entity name, when manufactured home community has been di rigour since 1994, upon publication of J.Wiley & sons’ texts, Development, Marketing & Operation of Manufactured Home Communities, and How to Find, Buy, Manage & Sell a Manufactured Home Community. And of late, given that as many as six, some say seven, types of shelter can be found on-site in this unique, income-property type, makes for a good case for ‘land lease community’ as trade moniker of choice. *3

Community Owners (7 Part) Business Alliance, as of January 2019, has been absorbed by EducateMHC, a for profit firm, to continue the research, preparation, and distribution, via digital means, of products and services available from GFA Management, Inc., dba PMN Publishing, since 1980. *4

So, where does manufactured housing national advocacy go from here? Hard to tell. While everyone is enjoying the gradually increasing new home shipment volume, land lease community owners/operators have known, for a decade, they must control their own destinies – no longer relying on independent (street) MH Retailers and ‘company stores’ to fill vacant rental home sites! Yes, there’s ongoing need for overall industry representation by MHI, regulatory oversight by MHARR, advocacy by the NCC, lobbying by NAMHCO, and availability of seven categories of products and services available via COBA7 cum EducateMHC. What we don’t need now, frankly, is yet another national trade association.

And I’d be remiss here, if I didn’t make at least passing mention of major, ongoing consequences, resulting from sweeping ‘consolidations’ among HUD-Code housing manufacturers and land lease community owners/operators, where national and state advocacy is concerned! When an industry evolves, from dozens of housing manufacturers, to just ‘Big Three C firms’ controlling 80+/-% of national market share, expect political power ‘among those few’ to be concentrated on at the very top of the national advocacy pyramid. Much the same can be said about consolidation of land lease communities into 500+/- property portfolios. Early on, there were thousands of ‘Mom & Pop’ property owners actively engaged in state legislative affairs, today there are far too few, as major portfolio ‘players’ opt to not encourage on-site property managers to participate in local (state association) matters! Yes, manufacturer presence and power are very evident on the national level, while state and local participation goes begging, suffering benign neglect – until a major issue (e.g. pending landlord-tenant legislation) sounds an alarm and stimulates action.

In this industry observer’s opinion, while manufactured housing and land lease community national advocacy have increased in entity representation, and evolved in purpose and nature, they continue to struggle achieving efficacy in day to day application. Every businessperson involved in this industry and realty asset class today, should actively support their state association, and the national trade body they feel best represents their particular interests!

And there’s one more emerging, albeit increasingly major, ‘evergreen’ issue encouraging far better national representation and advocacy. That is, solving the ‘affordable housing’ crisis in the U.S. today! For the first time, during years 2017 & 2018*5, in my 40 years in manufactured housing, ‘housers’ (national housing policymakers) are actively investigating the role manufactured housing, and yes, land lease communities, might play in providing truly affordable, non-subsidized, energy efficient housing throughout this country. What’s amazing, to me, is how little these folk know about factory-built housing and its’ advantages. This is a major challenge right now, and in the immediate future, for all four-to-five national advocates. Are MHI, MHARR, NAMHCO, NCC, and EducateMHC up to the task? We’d better hope so! GFA

End Notes

1. IBTS reports a monthly total of new manufactured housing units shipped, including a varying number of DESTINATION PENDING 9’DP’) homes. MHI deducts the number of DP units from IBTS published total, but adds back in DP units from the previous month – assuming all have been shipped to specific locations. According to IBTS this is not a valid assumption, as there is no follow-up accounting for DP units, and it’s common for such accounting to be resolved only after a plant shutters, and remaining inventory is reported to IBTS.

2. MHARR does not publish a list of its’ member firms.

3. Mobile homes, manufactured homes, modular homes, park model RVs, ’RVs for a season’, stick-built homes fabricated on-site to imitate manufactured homes, and now ADUs (Accessory Dwelling Units) like Tiny houses.

4. Including the 30th anniversary ALLEN REPORT, monthly Allen Letter and the Allen CONFIDENTIAL! Publications, as well as the soon to be released ‘21st annual National Registry of ALL Lenders Serving Manufactured Housing & Land Lease Communities’. To purchase, visit www.educatemhc.com

5. National Housing conferences, in Washington, DC., initially challenged housing aficionados to come up with a workable definition for affordable housing. That’s been done. Today’s challenge is to educate ‘housers’ as to the practicalities of manufactured housing & land lease communities. Are you interested in helping? Contact gfa7156@aol.com

George Allen, CPM Emeritus, MHM Master
EducateMHC
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

***

And Now There Are Four, Maybe Five…

Wednesday, February 6th, 2019

Blog # 519 @ 4 February; Copyright 2019; www.educatemhc.com
Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!” And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: This week’s blog posting probably does not need an introduction, as it ‘speaks for itself’, profiling ‘four, no make it five’ national advocates for manufactured housing and land lease communities. Don’t think this has been done before, so is likely a ‘keeper’ for future professional reference where investors, employees, and peers are concerned.

I.

And Now There Are Four, Maybe Five…

The Increasing Number, Evolving Nature, & Reduced Efficacy of National Manufactured Housing Advocacy

In 1975 there was one. By 11985there were two, as a new manufactured housing entity splintered from the first. Then, between 1993 7& 1996, a subgroup of the first entity emerged to ostensibly represent (then) manufactured home communities nationwide. In 2014, a formalized ‘for profit’ alliance ensured ongoing national research, communication, networking, and professional property management training & certification for (now) land lease community owners/operators. And during 2018, a new national lobbing group launched out West, to position a dedicated lobbyist, for the realty asset class alone, in Washington, DC.

So, do you think you know who all these folk are? Well, let’s see….

Manufactured Housing Institute (‘MHI’), birthed during 1975, absorbed the National Manufactured Housing Federation (‘NMHF’) in 1991, and today claims to represent all sectors of the factory-built housing industry from its’ offices in Arlington, VA. Majority of its’ income is from HUD-Code housing manufacturer sector members. Visit mhi.org to learn more.

Manufactured Housing Association for Regulatory Reform (‘MHARR’), for ideological reasons, splintered from MHI during 1985, under the founding leadership of now retired Danny Ghorbani. Its’ membership, to this day, is comprised solely of HUD-Code housing manufacturers. And in the minds of many, MHARR serves as manufactured housing’s ‘regulatory watchdog’ in “Washington, DC. Visit mharr.org to learn more.

In 1993, just ahead of the manufactured home community REIT wavelet, 19 property portfolio owners/operators formed an Industry Steering Committee (‘ISC’) to better represent their business interests on the national scene. Three years later, MHI absorbed the ad hoc group, forming the National Communities Council (‘NCC’) – later to become a division of MHI. Enthusiasm was high, early on. But as time passed, and given the decline of novel programs like the Community Attributes System (‘CAS’), and perennial internal issues, the NCC’s presence, in this observer’s opinion, waned, and attendance at meetings declined. Read a history of the first two decades of the NCC, in Bruce Savage’s The First 20 Years!, available at www.educatemhc.com

Fast forward to 2018. During that year, several western states, frustrated over what they viewed as inadequate national lobbying in behalf of land lease community owners/operators, large and small, nationwide, formed a National Association of Manufactured Housing Communities (‘NAMHCO’). To date, a Washington, DC. Based lobbyist has been hired, and the group grows in membership and influence.

During most of this time, from year 1980 forward, there was a ‘for profit’ outlier, in Indianapolis, IN., to the not-for-profit trade entities just profiled. Originally, GFA Management, Inc., dba PMN Publishing, a COBA7 division (‘Community Owners – 7 Part – Business Alliance’) materialized in early 2014, to serve land lease community owners/operators statistical research, print & online communication, networking & deal-making, as well as professional property management training & Certification needs. Now, in 2019, all this has undergone further change, from print to a 100% digital platform, under the guidance of EducateMHC. For land lease community products and services available, via this latest evolution to national manufactured housing advocacy, visits www.educatemhc.com

So, there you have an overview of four to five national advocates for manufactured housing in general, and in three instances, land lease communities in particular. Now, let’s take a closer, albeit subjective look at each entity and how they’re perceived today….

But first, a general, important observation. Back in the 1980s and early 1990s, when there were just two national advocacy bodies, MHI & MHARR, representing HUD-Code manufactured housing, legislators and regulators were believed to play one entity off against the other, when pressed to legislate or regulate in regards to one or another aspect of manufactured housing. So, this contretemps (‘embarrassing situation’) is not a new challenge to the industry, but one that continues unabated to this day.

Manufactured Housing Institute. Some pundits say, ‘If there was no MHI there wouldn’t be a manufactured housing industry!’ Probably a lot of truth to that, as no other national advocacy entity comes close to representing ALL segments of that type factory-built housing. And there’s the first ‘rub’. If one accepts Don Carlson’s (of now defunct Automated Builder magazine fame) description of factory- built housing, as being comprised of 1) production site builders (i.e. stick builders using factory-fabricated components like roof trusses and pre-hung door and window units), 2) panelizers, 3) HJUD-Code manufactured housing, and 4) modular homes; well, where does MHI fit into the ‘production site builder’ and panelizer representation picture? It doesn’t. MHI does claim to represent the modular housing folk, but to a far smaller degreed, per website presence, than manufactured housing. And then there’s the institute’s questionable practice of reporting monthly new home shipment volumes, researched and published by IBTS, differently from HUD;, MHAARRA, COBA7 – and now, EducateMHC.*1

Manufactured Housing Association for Regulatory Reform. Until the manufactured housing industry’s nadir year 2009, when only 49,789+/- new HUD-Code homes were shipped, MHARR’s focus was solely on regulatory matters pertaining to their core membership, mostly regional manufacturers of HUD-Code homes!*2 Since then, the association’s political interest has broadened to include chattel capital sourcing for new HUD-Code homes going into land lease communities; and, the unique, income-producing property type itself. Additionally, MHARR has become known for its’ overt support of the creation of a new national ;trade body to, in their opinion, better represent post production business enterprises. And while this has yet to occur, some credit this encouragement as one catalyst behind the emergence of aforementioned NHAMHCO.

National Communities Council division of the Manufactured Housing Institute. There is no separate MHI/NCC web site dedicated to the information needs of land lease communities, large and small, nationwide. Over the years (1996 – present day), good ideas have come and gone. An attempt to quality grade land lease communities was tabled out of fear of categorizing properties based on curb appeal, resident relations, and other measures. And in this observer’s opinion, professional property management training and certification do not begin to garner the attention sorely needed throughout the realty asset class. So, it’s been no surprise to see other attempts at advocacy, education, and representation materialize.

National Association of Manufactured Housing Communities. Too early to say much about this most recent arrival on the national advocacy scene. However, some find it confusing to refer to ‘manufactured housing communities’ in the entity name, when manufactured home community has been di rigour since 1994, with the publication of J.Wiley & sons’ texts, Development, Marketing &* Operation of Manufactured Home Communities, and How to Find, Buy, Manage & Sell a Manufactured Home Community. And of late, given that as many as six, some say seven;, types of shelter can be found on-site in this property class, makes for a good case for land lease community as moniker of choice. *3

Community Owners (7 Part) Business Alliance, as of January 2019, has been absorbed by EducatgeMHC, a for profit firm, to continue the research, preparation, and distribution, via digital means, of products and services available from GFA Management, Inc., dba PMN Publishing, since 1980. *4

So, where does manufactured housing national advocacy go from here? Hard to tell. Everyone enjoys the slow momentum of increased new home shipment volume, and land lease community owners/operators have known for a decade, they must control their own destinies, no longer relying on independent (street) MH Retailers and ‘company stores’ to fill their vacant rental home sites. Yes, there’ ongoing need for overall industry representation by MHI, regulatory oversight by MHARR, advocacy by the NCC, lobbying by NAMHCO, and seven categories of products and services perfected by COBA7 cum EducateMHC. What we don’t need now, is yet another national trade association.

And I’d be remiss if I didn’t make, at least passing, mention of a major consequences of ‘consolidation’ among HUD-Code housing manufacturers and land lease community owners/operators where national and state advocacy is concerned. When an industry evolves from dozens of housing manufacturers to the ‘Big Three C firms’ controlling 80+/-% of national market share, expect political power ‘among those few’ to be concentrated nationally at the top! Much the same can be said about consolidation of land lease community into 500+/- portfolios. Before, when there were thousands of property owners actively engaged in state legislative affairs, today there are far too few, as major portfolio ‘players’ opt to not involve on-site property managers in local matters! So, manufacturer presence and power are evident on the national level, while state level participation goes begging, suffering benign neglect – until there’s a major issue (e.g. landlord-tenant legislation) sounds an alarm and stimulates action.

End Notes

1. IBTS reports a monthly total of new manufactured housing units shipped, including a varying number of DESTINATION PENDING 9’DP’) homes. MHI deducts the number of DP units from IBTS published total, but adds back in DP units from the previous month – assuming all have been shipped to specific locations. According to IBTS this is not a valid assumption, as there is no follow-up accounting for DP units, and it’s common for such accounting to be resolved only after a plant shutters, and remaining inventory is reported to IBTS.
2. MHARR does not publish a list of its’ member firms.
3. Mobile homes, manufactured homes, modular homes, park model RVs, ’RVs for a season’, stick-built homes fabricated on-site to imitate manufactured homes, and now ADUs (Accessory Dwelling Units) like Tiny houses.
4. Including the 30th anniversary ALLEN REPORT, monthly Allen Letter and the Allen CONFIDENTIAL! Publications, as well as the soon to be released ‘21st annual National Registry of ALL Lenders Serving Manufactured Housing & Land Lease Communities’. To purchase, visit www.educatemhc.com