Archive for May, 2019

Best of Times & Worst of Times

Thursday, May 16th, 2019

Blog # 533 @ 14 May 2019; Copyright 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 HOHTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!’ Online media goal? Inform, opine, transform & improve manufactured housing & land lease community lifestyle! Visit

INTRODUCTION: They to run in pairs, questions businessmen & women in manufactured housing & land lease communities ask from time to time. Today, the most frequent ones are:

• What’s with private equity firms overpaying for land lease communities, then greatly jacking rental homesite rates? Will there be a day of reckoning when they realize homeowners/site lessees will no longer put up with greed devaluing of their manufactured homes, and simply ‘walk away’?

• OK, I really like being fully informed about the, in this dual case, ‘industry & realty asset class’ in and with which I – and our firm, are invested and involved. What should I be reading each week, month, and quarter, to stay fully informed?


Best of Times & Worst of Times.

Land Lease Communities (a.k.a. manufactured home communities) in the Spotlight of Investor Interest, Homeowner/site lessee Concern, & Landlord/Tenant Legislation

From coast to coast; starting in the Pacific Northwest, via upper Midwest, and through to New York state, land lease community matters are the focus of much attention these days. How so? Here’s a sampling of contemporary attention-getters:

• It’s a historically extravagant Sellers’ Market among institutional investment grade land lease communities nationwide – with no immediate end in sight!

• When overvalued land lease communities ‘sell’, expect inordinate rental homesite rate increases to soon follow! Likewise, no immediate end in sight to this practice either.

• Unintended consequences, or not, of mostly out-of-state acquisitions of these unique, income-producing properties, plus the continuing and elusive search for chattel capital pursuant to on-site sale of new HUD-Code manufactured housing, have precipitated an uptick in regulatory legislation and the enforcement thereof….

During 40 years as an owner/operator of land lease communities, I’ve not seen a more exaggerated Sellers’ Market than the one playing-out today. Gone, for now anyway, are the days when an ‘average’ (i.e. 10 percent income capitalization rate) 100% occupied land lease community sold for say $14,000 per rental homesite (e.g. New Rule of 72: 200 sites X $200/month rent X 72 = $2,880,000 divided by 200 sites = $14,400/site).*1 Today, expect the same investment property to sell for multiples of the $14,400 per rental homesite! For example: 3 X $14,400 = 43,200/site X 200 sites = $8,640,000.00. Yes, that’s where we are today.

Why? Here’re ’10 Good Reasons to Own a Land Lease Community’. These are quoted from page # 151 of SWAN SONG, the first published history of the realty asset class, & official record of MH shipments from 1955 to the present day.*2

1. Relative scarcity! Due to land use regulations, i.e. NIMBY, LULU, BANANA*3
2. Low annual (home & tenant) turnover @ 5 & 10% respectively!
3. Stable, competitive site rent! (When in 3:1 sync in local housing market.*4
4. Lower operating expense ratio (OER @ 40+/-%) than apartment communities
5. Economy of scale! (100+ sites = institutional investment grade properties)
6. Affordable home ownership & equity, when monthly PITI & site rent align
7. Recession proof! No other more economically-priced housing in U.S. today!
8. More opportunities to ‘add value’ via home sales, rental units, parts & services
9. More versatility! Up to seven types of shelter now sited therein.*5
10. Opportunity to serve society by providing truly affordable housing!

Then, all too often these days, comes the inordinate rental homesite rate increase, especially when the just-acquired land lease community has been charging a ‘below market’ rate before the ‘closing’ of the transaction.

And because the new, often out-of-state, and frequently private equity investor has overvalued said land lease community to motivate seller to sell, a significantly increased income stream, to pay for operating expenses and new debt service, has to come from ‘somewhere’; that somewhere being from homeowners/site lessees already in place. Sometimes the buyer pressures the seller to raise site rents before ‘closing’ occurs, and sometimes the seller refuses, leaving the task for the buyer. In any event, the management and tenant environment changes. Not only that, if on-site salaried management has been in place for a decade or longer, expect an immediate significant $ savings to be made in administrative labor cost, as they are replaced.

It seems attempts to regulate rent rate adjustments and loan financing among land lease communities is all the rage these days, as social activist organizations seek remedies to what they view as injustices foisted on land lease community homeowner/site lessees.

With all that said, what’s the most frequent question I’m asked these days?

When will the next Great Shakeout occur throughout the land lease community realty asset class? I don’t know, but a review of past ‘shakeouts’ provides hints as to a reasonable answer:

• Mid-1970s. Remember 1973, when 579,940+/- new ‘mobile homes’ were shipped nationwide?*6 Well, for good reason(s), the industry became federally regulated via HUD-Code enacted in 1974 and implemented in 1976. Results? Shipments plunged to 221,091+/- new manufactured homes by year 1980! Another immediate consequence? Tens of thousands of new ‘mobile home parks’ were developed during that time frame; but the source of new homes was effectively halved. So, thousands of newly developed, partially-filled mobile home parks went into foreclosure, not fully recovering until the late 1980s and early 1990s, during resolution of the…

• Savings & Loan Crisis of 1980s. Between 1989 & 1995, the Resolution Trust Corporation (‘RTC’) a federal government entity, sold the realty assets of 747 thrifts – including many many mobile home parks cum manufactured home communities. These ‘pennies on the dollar’ acquisitions – often by limited partnerships, followed by a major federal tax law change in 1986, effectively prepared the way for a…

• Mini REIT Wave of 1994, that continues to this day, via ELS, Inc., Sun Communities, Inc., & UMH Properties, Inc. REIT holdings have grown substantially, from 88,450 rental homesites during 1994, to 300,566 sites by year end 2018!*7

• Turn of the Century Shakeout & Paradigm Shift. Began with a short renascence of 372,943 new HUD-Code homes shipped during 1998, followed by industry’s loss of easy access to chattel capital – for on-site loans on new HUD-Code homes installed in land lease communities, plummeting to only 49,789+/- homes shipped during 2009. Results? 300,000+/- repossessed manufactured homes, loss of 10,000+/- independent (street) MHRetailers, & realization that land lease communities, to survive and thrive, must buy new homes (i.e. Community Series Homes & other models) directly from factories, sell, and often seller-finance them on-site.*8 This paradigm shift continues to this day.

So, with all that said, what might we expect to occur going forward into years 2019 & 2020?

Right now, your GUESS is as good as mine. Already I hear sounds (reports) of structural weakness and strain as some hired guns (high salaried, but not PM credentialed executives) struggle with the basics and nuances of new HUD-Code housing installation, marketing & sales, as well as recource-secure seller-financing. So watch and listen carefully going forward!

End Notes.

1. For those unfamiliar with the New Rule of 72; the $2,880,000 capitalized income valuation is the same as one computes using the ‘long hand method’ as follows: 200 sites X $200/month site rent X 12 months X .6 (reciprocal of 40% Allen Model OER for land lease communities), divided by .1 (i.e. 10% cap rate) = $2,880,000.

2. SWAN SONG available for purchase via

3. 3:1 Rule: 3BR2B apartment rent = $900/month? Then LLCommunity = $300+/-month

4. ‘Not in my back yard!’ & ‘Locally Unwanted Land Use!’ & ‘Build Absolutely Nothing Anywhere Near Anyone!’

5. Pre-1976 ‘mobile homes’, post-1976 manufactured homes, modular homes, ‘park model RVs’, RVs for a season, stick-built homes fabricated on site to imitate manufactured homes, & of late, Tiny Houses.

6. ‘+/-‘ notation after most annual MH shipment volume totals. Once again the necessity of having to explain something that should not occur. HUD’s contractor, the Institute for Building Technology & Safety (‘IBTS’) publishes monthly shipment volumes of HUD-Code manufactured homes nationwide. These figures are reported, as published by IBTS, by HUD, MHARR, NAMHCO, & EducateMHC. Only MHI deletes the number of DESTINATION PENDING units one month and adds them back the following month, ‘changing’ the monthly total reported by HUD’s contractor.

7. 30th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Located Throughout North America!’ Available only via

8. Community Series Home (design) agreed upon by HUD-Code manufacturers and land lease community owners/operators on 28 February 2009 during a MHInitiative ‘think tank’ gathering at the RV/MH Hall of Fame in Elkhart, IN. CSH models are generally singlesection, or modest-sized multisection in configuration, have pitched/shingled roof systems, a front end porch, and durability-enhancing features intended to speed and control costs of ‘make ready’ between homeowners and or unit renters.


Eight Key Steps to being Fully Informed!

No big mystery here. If you’re into manufactured housing & land lease communities as an executive, manager, investor, the first four of the following eight bullet point highlighted trade publications are nothing short of being MUST READS. The fifth bullet point identifies the sole, relatively high-priced media focused on strategic and timely information needs of the top execs throughout the industry and realty asset class. And bullet points # 6, 7, & 8 are the proverbial ‘icing on the cake’ periodic Press Releases and news alerts distributed digitally by the Manufactured Housing Institute (‘MHI’), Manufactured Housing Association for Regulatory Reform (‘MHARR’), and National Association of Manufactured Housing Community Owners (‘NAMHCO’)


• FREE blog posting (the one you’re reading NOW) for anyone in manufactured housing & land lease community ownership/operations. Simply access and request to be put on the distribution list. It’s that simple and accessible to YOU.


• Allen Letter. A digital publication, distributed continually since 1989, is the oldest trade media serving, primarily, land lease community owners/operators throughout the U.S. & Canada. HUD-Code housing manufacturers subscribe to stay abreast of what’s happening within the fastest growing market for their unique, factory-built housing product. Cost? Only $135.95/year for 12 monthly issues. To subscribe, visit


• MHInsider. While the newest national MHIndustry trade publication, already into its’ second year, it has already eclipsed the coverage and presence of the magazine and tabloid it replaced: Manufactured Home Merchandiser and The Journal. Themed to showcase whatever regional or national trade show event is occurring during said quarter, the magazine also contains features by a plethora of writers, along with an Allen Legacy column in each issue. To subscribe, visit

• Manufactured Housing Review. This online e-zine has set a new and higher standard for news coverage online than what existed beforehand! Buttressed by a stable of industry writers, covering specialty topics, the publication has made itself a ‘must read’ experience. To subscribe, visit


• The Allen CONFIDENTIAL! Digital business newsletter has been serving the manufactured housing industry for more than a decade, in large part tracing the unfolding of the ongoing paradigm shift reshaping manufactured housing distribution since the turn of the century. It’s most well-known for the ‘advance news’ it shares confidentially with subscribers, facilitating strategic business decisions that otherwise would have been made with less guidance. To subscribe, visit Cost? $544.95/year for 12 monthly issues


• MHI. Visit

• MHARR. Visit

• NAMHCO. Visit

So, are YOU presently ‘fully informed’, or about to become fully informed, as you take steps to read this blog weekly, the Allen Letter monthly, MHInsider and Manufactured Housing Review quarterly, and Press Releases and news alerts from MHI, MHARR, & NAMHCO? And don’t forget the Allen CONFIDENTIAL! This is the ‘sleeper’ of the eight resources designed to position you successfully as you make key business decisions.


Still Making Up My Mind…

To identify or not, elected leaders (board members) of MHI, MHARR, & NAMHCO.

Recently, Mark Weiss, president of MHARR, in a treatise titled: ‘Lead, Follow…or Get Out of the Way’, told how his board has decided to ‘take the bull by the horns’ to launch a new post-production national advocacy entity to represent interests of these segments of the manufactured housing industry. At the time, I suggested MHARR’s ‘not identifying’ board members by name, was a major flaw in the plan. After-all, who’d you rather follow? The leader(s) you know or ones you don’t know? Well, I’m ‘working’ on the matter, relative to all three bodies: MHI, MHARR, & NAMHCO. So keep reading this blog to ‘stay informed’. Also…

If you’d like to do your own ‘leadership research’, visit to review, for a price, the #990 tax forms, to learn the names of association board of director members.

Your Responses to Blog Posting # 531’s…

Tuesday, May 7th, 2019

7 May 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!’ Online media goal? Inform, opine, transform & improve manufactured housing & land lease community lifestyle! Visit


Your Responses to Blog Posting # 531’s

Rejoinder to MHARR’s ‘Lead, Follow…or Get Out of the Way’

I hardly hit the SEND button, getting blog # 531 on its’ way, before we started receiving responses continuing well into the following week. And the comments have been interesting, thought-provoking, confirming. Here’re three response categories we’ll cover here: blog # 532

• Blog # 531 missed the ‘elephant in the room’! The next change, and potential trend setter, for the manufactured housing industry! Know what it is? Read on…

• Thanks to an industry colleague, I now know who MHARR board members were at year end 2017. Have asked MHARR to confirm contemporary accuracy of list; but to date, no response. Not surprised. Remember; these are the ‘take the bull by the horn’ leaders few people know. I recognized barely half the names on the list I received.

• Actionable Items. One blog reader didn’t feel I went far enough encouraging attendees at MHI’s MHCongress in New Orleans, to force discussion of key, timely industry issues during that venue. Then at MHI’s Washington, DC fly-in on 3 June; and again, at an MHAlive Think Tank gathering on 5 August at the RV/MH Hall of Fame in Elkhart, IN.

So, let’s begin anew, and in more detail.

The ‘elephant in the room’ = “…imminent departure of Dick Jennison” – MHI’s top salaried executive. Why ‘so described’? Because this is our (meaning ‘thee & me’, if an MHI member) first opportunity in nearly a decade, to persuade-pressure-petition the institute’s board members in general, the selection committee in particular – for the first time ever – to hire a STRATEGIC THINKER for us to follow, leading our industry back to prosperity! Have you read or heard anyone else encouraging such thinking & action on this matter? Neither have I! This industry observer has endured no fewer than six, in my opinion, milquetoast leaders since 1978! NOW we have an opportunity for positive, forthright change! Let’s prepare for it! Let’s experience it! We deserve the BEST available! OR, will we squander the opportunity – again?

More on the elephant. One commentator, relative to this MHJI succession matter, suggests each job applicant ‘…write a paper describing their view of the industry’s future. Let the finalists’ papers, without attribution, be widely circulated, with comments directed back to the selection committee’ – before they make a final decision. Agreed! And said papers could easily be published in MHInsider magazine, Manufactured Housing Review, and the Allen Letter.

MHARR board members. Still researching this, striving to ‘fill in the blanks’, putting corporate identities next to names of 16 board members and Mark Weiss. In my opinion, if MHARR truly believes in a need for improved national advocacy among post-production segments of the manufactured housing industry, they should step forward and clearly identify themselves as leaders of said effort, rather than be publicly identified in some other fashion. Agree?

Actionable Items. Well, MHARR to its’ credit has fired off a worthy ‘first volley’ to this end, given their ‘Call on HUD Secretary to End Discriminatory & Exclusionary Zoning of HUD-regulated Manufactured Homes’ (4/30/2019 Press Release). Hey, correct me if I’m wrong, but wouldn’t’ that headline have been more effective if the word ‘against’ had been used instead of ‘of’ in front of ‘HUD-regulated…’? After all, ‘discriminatory & exclusionary zoning’ are typical, widespread ‘local regulatory barriers to all forms of affordable housing’. And the time has come to set them aside. to increase the supply of affordable housing where needed = everywhere!

There are certainly other actionable items germane to getting the HUD-Coded manufactured housing industry back on its’ 100,000 units/year shipment pace. What steps are YOU taking to this end? The inquiring weekly blog postings at would like to know! Also via


Affordable Housing Battles

Everyone’s heard of the discriminatory & exclusionary zoning abbreviation NIMBY (‘Not In My Back Yard!’), but how ‘bout LULU & BANANA? The former = ‘Locally Unwanted Land Use’), the latter = ‘Build Absolutely Nothing Anywhere Near Anyone!’

Well, guess what, there’s a new anti-discriminatory & exclusionary zoning abbreviation ‘in town’, so to speak. It’s YIMBY, and the letters stand for ‘YES, In My Back Yard!’ it’s OK to build affordable housing! It’s the enlightened mantra land use planners and zoning regulation reformers use to “clear away the regulatory barriers and let developers build more housing”, figuring “the laws of supply and demand will take over…and (housing) prices will go down.” But all is not well with YIMBY these days. According to Land Lines magazine, “zoning changes…only accelerate gentrification and displacement – disproportionately harming low-income families and communities of color.” Where does that leave YIMBY? Guess we’ll just have to watch and see.

Then there’s the contemporary notion, “When it comes to the income of those who deserve a government handout, how high is too high?” Thinking about public safety employees (firemen & police officers) and those in the medical support fields (nurses & technicians) here. Critics of this refocus on affordable housing for the middle (working) class, claim it risks redirecting scarce $ resources away from citizens with little to no income….” And with this, come claims of ‘political showmanship’, where a section of the local population who votes at higher rates, is maybe viewed more sympathetically – and supportively, than those living in poverty or are homeless. Comments in this paragraph edited from the Washington Post.

Do you see how affordable housing is demanding more and more attention these days? Well, if you want to learn more, and become involved in helping resolve this perennial national crisis (i.e. shortage of affordable housing), plan to be present the morning of 9 September, 2019, at The Alexander Hotel in Indianapolis, IN. This is the occasion of the 28th annual Networking Roundtable, planned and hosted by EducateMHC. U.S. Senator Todd Young will be keynote presenter that morning. He heads a nine senator task force on affordable housing, and being from Indiana, is in the midst of a vibrant Midwest manufactured housing industry. For more information, visit or phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.