Archive for August, 2019

Pass This Blog Onto Land Lease Community Owners/operators Nationwide!

Wednesday, August 21st, 2019

August 2019; 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 is sole online national advocate, official ombudsman, asset class historian, research reporter, PM education resource & communication media for all land lease communities!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: promote HUD-Code manufactured housing & land lease communities as U.S. Source of affordable attainable housing! Next MHM class @ 9/11/19

INTRODUCTION: One important topic today! Yes, it’s that important. Period. And, as Part I of this week’s blog posting asks…

I.

Please Pass This Blog Onto Land Lease Community Owners/operators Nationwide

This year is the 28th consecutive year Carolyn & I have hosted the International Networking Roundtable. And it’s the first time, since years 2008 & 2009, this popular land lease community owner/operator-focused event, is timed and positioned to play a key role influencing the fate of the manufactured housing industry going forward!

How so? Well, if you’ve been following weekly blog postings, at this website during the past month (blogs # 544, 546, & 547), you know of the homeowner/site lessee (a.k.a. ‘residents’) unrest within institutional investment grade land lease communities owned by some – but certainly not all, property portfolios controlled by fewer than a dozen private equity fund managers. Oft at issue, is the immediacy, size, and or frequency of rental homesite rate increases, upon acquisition of land lease communities.

Two recent indicators of present and future, impending concern:

‘Legalized Looting: Mobile Home Rent Increases Require Wall Street Reforms’. Headline; U.S. Senator Elizabeth Warren’s guest opinion piece dated 26 July 2019. Quoted from blog # 544.

‘The (manufactured housing) industry needed a regulatory framework on construction in 1976, and it needs a new framework for community ownership & operation in 2019. House Bill HR 2832 is a start!’ Quoted from Doug Ryan’s op/ed piece in Prosperity Now press. Blog # 547.

So, what to do about this troublesome matter? Discuss it at the 28th Networking Roundtable, 8-10 September in Indianapolis, IN. Already, several open forums are scheduled:

• Spencer Roane, MHM, from 3-4PM, 8 September, will host an open discussion about ‘financing homebuyers/site lessees who can’t qualify for conventional chattel loans’.

• From 4-5PM, I’ll host a ‘fireside chat’ type discussion ‘on topics of choice’ by individuals so-gathered. Can be ‘evergreen issues’*1, or otherwise*2. Or not here listed.

• And during the Roundtable proper, either 9 or 10 September, time will be set aside for the overarching topic described earlier in this blog – IF there’s interest in doing so. You?

A caveat (‘warning’). Should there be no group meeting/discussion, among private equity fund managers and or their land lease community portfolio owners/operators, with industry and realty asset class leaders – and the aforesaid national legislative regulatory threat continiues to grow, expect a clarion (‘obtrusively clear’) call for the first National State of the Asset Class (‘NSAC’) caucus in a decade*3! So, let’s get this conversation started in early September. If not already registered for the Networking Roundtable event, visit www.educatemhc.com or phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

End Notes.

1. Evergreen (i.e. ‘always relevant’) Issues: 1) responsibility for proper, safe & secure installation of HUD-Code homes; 2) HUD declares manufactured housing ‘affordable’ but refuses to overtly promote same; 3) present MH stock is aging faster than new homes are being fabricated & shipped; 4) continuing lack of reasonable access to chattel capital & disparate loan percentages between chattel capital & real estate-secured rates – even with property owner guarantee; 5) propensity to sell homebuyers more house than they can truly afford, by not including utility expenses in PITI & site rent $ total; 6) negative symbiotic comparing of new HUD-Code homes going onto private sites conveyed fee simple, with those going onto rental homesites within land lease communities; and, 7) lack of two secondary markets: one to value and sell resale homes, and marketing of seasoned chattel capital loans.

2. Otherwise issues: 1) ‘New Type’ HUD-Code manufactured home for underserved markets (e.g. millennials & retirees); 2) GSEs ‘slow walk’ DTS (Duty to Serve) programs for chattel capital, & parallel efforts to serve realty-secured loans via Choice & MH Advantage programs; 3) local housing market intransigence relative to zoning & rezoning in behalf of manufactured housing & land lease community development; 4) national advocacy overlap diluting lobbying effort on national stage; 5) lack of state MH association support by many property portfolio firms; 6) Big Three MH manufacturers (i.e. Clayton, Cavco, Skyline-Champion) garnering 80+/-% of national market share of HUD-Code homes; and, 7) growing evidence of near-predatory site rent increases.

3. As described in blog # 544, two National State of the Asset Class caucuses were held; one on 2/28/2008 & another, 2/28/2009. In the first instance, more than 100 (then) manufactured home community owners/operators gathered at a community in Tampa, FL. Result? Five Strategies & Action Areas designed to preserve their collective business model. A year later, to the day, a second NSAC caucus was hosted by the RV/MH Hall of Fame in Elkhart, IN. This too was attended by 100+, a mix of HUD-Code housing manufacturers & land lease community owners/operators from throughout the U.S. Result? New HUD-Code housing design friendly for community placement, featuring WOW! Factors and durability-enhancing features intended to reduce turnaround time and cost expenditure, between home buyers and or renters. Later labeled, by Don Westphal, landscape consultant, as Community Series Homes – to, in part, differentiate from ‘big box = big bucks’ Developer Series Homes of the late 1990s.

***

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

Told you so! (&) What’s the $ margin?

Saturday, August 17th, 2019

Blog # 547 @ 15 August 2019; 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 is sole online national advocate, official ombudsman, asset class historian, research reporter, PM education resource & communication media for all land lease communities!

To input this blog &U/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.eduatemhc.com

Motto: ‘U Support Us & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable obtainable housing! Next MHM class @ 9/11/19

INTRODUCTION: Three widely disparate topics today: threat of national rent control – a fact or fiction? How ‘bout the $ difference between production value of a new HUD-Code home and its’ retail sale value? And five things many might want to see occur inside our nation’s capitol beltway, but don’t hold your breath! If you enjoy these blogs, you’d really appreciate the Allen Letter each month! Just go to www.educatemhc.com to subscribe.

I.

TOLD YOU SO!

This from Doug Ryan’s recent article in Prosperity Now publication: “The (manufactured housing) industry needed a regulatory framework on construction in 1976, and it needs a new framework for community ownership and operation in 2019. (S0) house bill HR 2832 is a start!”

If Doug is right about this second historic ‘start’, what do you, as a land lease community owner/operator, suppose the ‘finish’ or regulatory legislation will be like if/when passed?

Remember now, we’re talking about the consequence, in large part, due to flagrant site rent increases by some property portfolio firms owned, in some cases, by private equity management firms.

If somehow this is ‘new news’ to you, take time NOW, to scroll back through blog postings # 543 thru 546 on this website.

Where do we go from here? Well that’s up to you. As host, along with EducateMHC, of the upcoming 28th annual Networking Roundtable (8-10 September in Indianapolis, IN.), I’ve been asked ‘time & again already’ to arrange private and public meetings among concerned parties, concerning this threat of national rent control. Registered attendees already represent a broad spectrum of land lease community owners/operators, from small Mom & Pop owners to several of the 500 known portfolio ‘players’. Will you be present for this year’s event? Not too late to register. Simply go to www.educatemhc.com right away.

II.

$44K Margin Between Production & Sales Value?

You tell me. Some statisticians say the 96,555 new HUD-Code homes shipped during year 2018 sold for $6.4 billion in retail value, or an average of $66,200 per manufactured home, all configurations. AND, the estimated ‘production value’ of those 96,555 new HUD-Code homes was $4.2 billion or $43,126 per manufactured home, using Dr. Stephen C. Cooke’s 2013 base year data. This calculates to a $2.2 billion margin between the two values, or $23,074 per HUD-Code manufactured home.

OK ‘out there’ anyone else have a better handle on this elusive subject? Personally, given the increases in manufactured housing product cost between years 2013 & 2018, the $43,126 production value is probably too low to be accurate today. But hey, what else do we have to work with at this point in time? I keep hearing rumors: ‘We’re working on an update’, but we continue to wait.

Let me know your thoughts on this matter via gfa7156@aol.com or (317) 346-7156

III.

On a Purely Political Note…

When I first read Mark G. Brennan’s ‘Five Modest swamp-Draining Proposals’, in CHRONICLES, a magazine of American culture, I just knew I had to prepare and share a digest of the author’s points with you:

• “Remove all air conditioners (and fans) within the geographic limits of Washington, D.C.” Some want a Green New Deal? “…what a better way to kick it off than to eradicate unnecessary energy use?”

• “All congressmen, senators, and federal employees must prepare their own taxes with no help from anyone, either their accountants nor their spouses.”

• “Congressional representatives and senators will serve as Casualty Notification Officers (‘CNOs’) for the deaths of all military personnel in their districts.”

• ‘All congressmen, senators, and federal employees will be paid the lesser of their current salary or the median national income. According to the U.S. Census Bureau, the median household income for 2017 was $61,372.”

• “All congressmen, senators, and federal employees must send their children to the Washington, D.C., public schools.”

Just saying….

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

Beware Site Rent Regulatory Reform! (&) Rule of Thumb Bastardization

Friday, August 9th, 2019

2019; 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 is sole online national advocate, official ombudsman, asset class historian, research reporter, PM education resource & communication media for all land lease communities!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.eduatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable obtainable housing! Next MHM class @ 9/11/19

INTRODUCTION: We’re revisiting, from two perspectives, private equity firms acquisition of land lease communities nationwide, and proposed private equity reform legislation. And what the realty asset class can do to influence both matters. Response & participation requested.

And then there’s the perennial issue of how manufactured housing and land lease communities might be better represented (i.e. lobbied in behalf of), in legislative and regulatory matters, in our nation’s capitol.

I.

‘STOP WALL STREET LOOTING ACT’

Yes, that’s the title of Democratic presidential candidate Elizabeth Warren’s – & 13 other Democratic members of Congress – private equity reform legislation. It’s far-reaching, and if land lease community portfolio owners/operators don’t ameliorate rental homesite rate increases going forward, they run the very real risk of being swept up in this turmoil.

If what you read in the previous paragraph is ‘new to you’, scroll back to blog posting # 544/5 for background information, in Part II, titled:’ Legalized Looting: Mobile Home Rent Increases Require Wall Street Reforms’.

Now, here’s what Washington advocacy group, Americans for Financial Reform (‘AFR’), has to say about Warren’s proposed legislation: “It is not anti-private equity, but more about making sure private equity managers have skin in the game”. Contrast that statement with this from private equity advocacy group, American Investment Council (‘AIC’), also in Washington, claims this legislation is simply ‘about politics going into the 2020 election season’, i.e. “When there is no crisis, you have to invent it.”*1

The AIC spokesperson goes on to describe how “…public pension funds are private equity’s biggest investors, where over the last 10 years, it has outperformed other asset classes, returning a 10 year median annualized return of 10.2% in 2018.” *2

Do you see irony (i.e. ‘frustration of hopes’) playing out here; where and how pension funds, private equity firms, and homeowners/site lessees living in land lease communities, are intertwined? Result is a classic ‘rob Peter to pay Paul’ scenario! Specifically, pension funds provide investment capital to private equity firms who oft acquire land lease communities frequently populated by retirees. Who are, in turn, dependent on pension funds for income from which they pay site rent. And within this cycle, private equity firm managers increase rental homesite rates to ensure annualized returns of at least 10 percent per annum.*3 And the beat goes on….

So, where do we, as manufactured housing aficionados and land lease community owners/operators go from here? To date, no national advocacy group affiliated with our industry or realty asset class has stepped forward to address these matters: profuse rental homesite rate increases, and now, private equity reform legislation. As I suggested in the previously referenced blog posting, private equity firms owning land lease communities, and portfolios thereof, should attend one or more of three following events, encouraging discussion of this timely and potentially business – restricting private equity reform legislation:

• 28th Networking Roundtable, 8-10 September, Indianapolis, IN. Register via www.educatemhc.com & I will set aside time to meet privately & productively.

• MHI’s annual meeting in Savannah, GA, 22-24 September. Phone (703) 558-0400

• SECO Conference in Atlanta, 8-10 October. Spencer Roane, via (678) 478-0212

Frankly, if this national ‘rent increase’ imbroglio continues, even worsens, and there are no informal meetings, on this subject, at any of the three venues, a National State of the Asset Class (‘NSAC’) caucus will be scheduled, in November or December, likely (again) at the RV/MH Hall of Fame in Elkhart, IN.*4 Will you be part of the solution or continuing problem?

Your thoughts on this serious matter? So far, every email and telephone message, received here, has been positive and encouraging. Email: gfa7156@aol.com or phone using the Official MHIndustry hotline: (877) MFD-HSNG or 633-4764. At that time, let me know if you’re a private equity fund-owned land lease community portfolio owner/operator and plan to attend the Networking Roundtable. Several firms have already registered for this event.

End Notes:

1. Pensions & Investments, ‘the International Newspaper of Money Management’, 5 August 2019, pp. 1 & 25.

2. Ibid.

3. Traditional market(s) for land lease communities = ‘newlyweds & nearly dead’

4. This is the first time in a decade we face business model challenges serious enough to warrant national attention and action. Veterans of the realty asset class will recall previous NSAC caucuses: On 2/28/2008 in Tampa, where we agreed on Five Action Areas to preserve our business model going forward; and, 2/28/2009 when 100 HUD-Code manufacturers and community owners met and agreed on a new housing design suitable for in-community placement. This was the birth of the Community Series Home. And with it, the realty asset class became HUD manufacturers’ new ‘big’ customer, increasing the percentage of new HUD-Code homes going onto rental homesites in communities, from only 25% in 2009, to more than 40% by year end 2015! Now we need answer(s) to this regulator reform challenge.

II.

Rule of Thumb
‘Is a time-proven site rent guideline morphing into a measure that will sink us all?’

To begin with, a Rule of Thumb is an informal means of estimation that’s made according to a ‘rough & ready’ practical rule, not anchored in science or some exact measurement. With that said…

The Rule of Thumb referenced here, has been commonly referred to in manufactured housing circles, since the early 1970s, as the 3:1 Rule. Simply put, conventional apartment rent, for a 3BR2B unit, in a given local housing market, is generally three times larger than the amount of site rent charged in a land lease community located in the same local housing market. For example: apartment rent @ $900/month; suggests site rent to be near $300/month.

Since 1994, when the REIT (real estate investment trust) wavelet, comprised of four privately-owned portfolio firms, consolidated 88,450 rental homesites in (then) manufactured home communities, the unique income-producing property type has seen rental homesite rents increase moderately at first, then profusely, as Wall Street analysts pressed for ‘ever increasing’ financial gains. This rental increase trend continued, some say worsened, as we entered the new millennium, and private equity firms joined in the consolidation of privately-owned properties and portfolios thereof, into new and larger collections of land lease communities.*1

Results? By year end, 2018, the three remaining public REITs (ELS, Inc., SUN Communities, Inc., and UMH Properties) owned/operated 300,566 rental homesites throughout the U.S. and Canada. And overall, there are 500+/- known land lease community portfolio owners/operators in North America, with an average of 43 properties per portfolio and average size community with 211 rental homesites – based on data provided by 100 respondents to the ALLEN REPORT questionnaire circulated during Fall 2018.*2

Another, more difficult to ascertain result, has been the morphing – among larger communities – of the 3:1 Rule into a 2:1 Rule. Meaning, if apartment unit (3BR2B) rent in a given local housing market is $900/year; expect rental homesite rent for larger properties to be close to $450/month. Consequences? Homeowners/site lessees, coming into the land lease community, spend $450/month in site rent, and have $150/month less to invest in the new or resale home they’re buying there.

A sidebar issue is published market surveys purporting to show average adjusted site rent rates for metro areas throughout the U.S… Generally speaking, these surveys include only ‘institutional investment grade’ properties located in said SMSA. and not ‘all’ such properties, especially smaller ones. Result? A convenient ‘excuse’ for owners/operators of larger communities to justify site rent increases based on ‘studies’, rather than on operational needs of the property per se, and ability of homeowner/site lessees to pay.

Bottom line? As the subtitle of this part (I) of blog # 546 questions: ‘Is a time-proven site rent guideline morphing into a measure that will sink us all?’ If we’re not careful, that’s precisely what will happen!

End Notes:

1. 30th anniversary ALLEN REPORT, EducateMHC, IN., 2019
2. Ibid

III.

Has Anyone Else Noticed?

On 6 August 2019, MHARR’s ‘Exclusive Report & Analysis’, featured the headline: MHCC Regulatory Enforcement Subcommittee Advances MHARR Regulatory Reform Proposals.
&
On 7 August 2019, MHI’s ‘News & Update’ Press Release featured this headline: MHI Proposals Serve as Guide for MHCC Regulatory Enforcement Subcommittee Actions.

Reading through both Press Releases, one wonders: These proposals are so similar, ‘Why does it take two national manufactured housing industry advocates to tell the same story?’ Answer? It doesn’t! That’s just how we’ve been relating to the HUD-Code, and other regulatory reform measures since 1985. And now, with the debut of the National Association of Manufactured Housing Community Owners, during late 2018, we have a third hand in the mix. Don’t you think, after 35 long years, it’s time for a sweeping change in how the manufactured housing and land lease community realty asset class lobbies in Washington, DC? I certainly do!

At this point (and this is not the first time this issue has surfaced), the question that begs answering is always: ‘How to accomplish this needed and widely desired consolidation of political presence ‘inside the beltway’ at our nation’s capitol?’

Hint. In my opinion, and to begin with, it’s going to take a charismatic, capable, experienced, motivated ‘leader of men & women’ who has manufactured housing in his/her blood, and is capable of communicating well online, in print, and in person. Does such a person exist? Yes.

The 2X factors.

1) As you may or may not know, MHI will be changing top salaried leadership the first of year 2020. Some opine that’s a good time to effect this needed industry consolidation.
Will it happen? Only if you’re reading this and are an active, dues-paying member of one or more of the present national advocacy entities and make your views well known!

2) Narrow the focus of MHI’s activities, going forward, to lobbying and regulatory reform. This could mean, no more national social meeting venues and leadership forums; leaving those to rapidly growing regional (e.g. SECO Conference in Atlanta, Louisville MHShow, Tunica MHShow, and Western Summit), and the nearly three decades old educational, social event, like the annual Networking Roundtable.

Yes, this is a tall tall order for any industry entrenched in its’ ways for more than a half century. But if we’re going to continue recovering from our industry’s shipment nadir year 2009, of only 48,789 new HUD-Code homes shipped, to beyond where we are today (96,555 units in 2018), then we have to be prepared to do something different, something better than has been done to date. And this is certainly one of those possible, albeit difficult, alternatives leaning forward.

The purpose of this blog posting is to get you to thinking about the matter, and exerting influence where you may.
***

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

If not yet registered to attend the upcoming (8-10 September) 28th Networking Roundtable, visit www.educatemhc.com today! And MHM professional property management training & certification class (one day, no tests) will als

MH Dejavu? Today’s Site Rent Levels Akin to Early 1970s, When MH Quality Facilitated Federal (HUD) Regulation? (&) More…

Thursday, August 1st, 2019

2019; 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 is sole online national advocate, official ombudsman, asset class historian, research reporter, PM education resource & communication media for all land lease communities!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: Promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable obtainable housing! Next MHM class @ 9/11

INITRODUCTION: Two key and timely parts to this week’s blog posting. One describes a dozen opportunities for YOU to improve job skills, engage in interpersonal networking, and ensure your voice and opinions are made known to industry and realty asset class’ salaried and elected leaders of all three national advocacy entities! AND, don’t for a minute, think the ‘private equity consolidation/profiteering storm’ has passed. It hasn’t. In fact, where land lease communities are concerned, the whole sorry affair now runs the risk of becoming a national debate issue during the upcoming presidential campaign. Be sure to read Part II following – and take action!

I.

A MHIndustry & LLCommunity Potpourri of Opportunities

No particularly hot issue(s) taking place this last week of July & first of August. So, how ‘bout a potpourri of matters and opportunities on immediate and interim horizons. No busy businessperson is going to be able to avail themselves of all that follows here, just be aware of events and circumstances potentially influencing one’s workaday world. Here goes:

• the Allen CONFIDENTIAL! business newsletter distributed this week! Contains the sole published summary of ‘State of Nation’s Housing Report’ per JCHS at Harvard University; correspondence with Drs. Carson at HUD & Calabria at FHFA; and, update re New Type (HUD-Code) housing per MHI versus MHARR. To subscribe: www.educatemhc.com

• RV/MH Hall of Fame on Monday, 5 August, in Elkhart, IN. During day, meet with Spencer Roane, MHM & me at the Hilton Garden Inn, or board room or library at the museum. Banquet that eve. Tickets: (574) 293-2344. Daytime meeting details: (317) 346-7156

• ‘Using AMI to quantify local housing market housing affordability; & AGI, with Housing Expense Factor (‘HEF’), to calculate ‘risky’ & ‘affordable housing’ price points’ at Wisconsin Housing Alliance on 14 August. To participate, phone (608) 255-3131

• As you know, MHI has begun its’ search for a new salaried executive director, as Richard Jennison retires at the end of this year. And HUD continues to limp along without a non-career leader for its’ manufactured housing program. I’ve taken myself out of consideration both places, but am collecting names to submit. You? Gfa7156@aol.com

• New edition of MHInsider magazine to be distributed this week and next. You in line to receive a copy? If so, be sure to read the Allen Legacy column near the back of the publication. If not, reach out to Darren Krolewsky to subscribe: Darren@mhvillage.com

• MHI’s National Communities Council (‘NCC’) division to hold its’ ‘first ever’ Western Summit in Phoenix, AZ., 14-16 August. For info, phone (703) 558-0400. And visit National Association of Manufactured Housing Community Owners: (480) 96-2446

• Almost finished a new (4th edition) of Chapbook of Business & Management Wisdom, ‘What I Know Now I Wish I’d Known 50 Years Ago!’ Want a copy? (317) 346-7156

• 28th Networking Roundtable, 8-10 September, at The Alexander Hotel in Indianapolis. Last week’s blog posting listed most of this year’s presenters. Why don’t other national venues do likewise? Anyway, still room for more registrants: www.educatemhc.com

• And yet another one day Manufactured Housing Manager professional property management training/certification class! This one 11 September following the Networking Roundtable. Nearly 1,500 MHMs managing today! www.educatemhc.com

• MHI’s annual meeting will occur 22-24 September in Savannah, GA. This is MHI’s most important meeting all year; and in my opinion, is often ‘management by committee’ at its’ worst, but at least there’re opportunities to air one’s news & views. (703) 558-0400

• SECO conference 2019 in Atlanta. Similar to Networking Roundtable, and unlike every other national MH venue! It’s is a large homegrown annual event facilitated ‘by & for’ land lease community owners/operators in the Southeast! spencer@roane.com

• Another Manufactured Housing Manager professional property management training/certification class! This one, 11 October following SECO Conference in GA. Text? Community Management in the Manufactured Housing Industry. www.educatemhc.com

• Speaking of the Community Management in the Manufactured Housing Industry text, this 8th edition of Mobile Home Park Management (1988), is now 202 pages, and belongs in every land lease community in the U.S. and Canada! www.educatemhc.com

• MHI’s NCC division’s Fall Leadership Forum, 13-15 November in downtown Chicago, IL. (703) 558-0400

• National Housing Conference in Washington, DC, 3 & 4 December. NHC expressing interest in ‘things manufactured housing’, including land lease communities. Core group of MHIndustry businessmen and women participate in NHC events. (202) 466-2121

• MHI’s Winter Meeting, 16-18 February 2020 in Nashville, TN. (703) 558-=0400

• Next book update by EducateMHC? J. Wiley & Sons’ How to Find, Buy, Manage & Sell a Manufactured Home Community. Published in 1996, the case bound ‘bible of LLCommunity investment’ is long out of print but still sought! www.educatemhc.com

II.

‘Legalized Looting: Mobile Home Rent Increases Require Wall Street Reforms’

So reads the headline from U.S. Senator Elizabeth Warren’s guest opinion piece dated 26 July 2019. Here’s what she goes on to say…

“The greed of Wall Street and private equity firms…affects more than just mobile home residents….Thousands of workers have been laid off from jobs at retailers, after private equity firms took over, drained their assets, slashed their jobs, and left them bankrupt.”

“Let’s call their actions what they are: legalized looting to make a handful of Wall Street managers rich while costing thousands of people their homes and jobs, bankrupting viable businesses and damaging communities across the country.”

“That’s why I’ve announced a new plan to rein in Wall Street firms engaged in unproductive and predatory behavior. Under my plan, private equity firms…won’t be able to buy companies, goose short-term profits by jacking up prices, and then walk away rich even if the company goes bankrupt. Instead, these firms would be required to align their interests with the long-term sustainability of the companies they buy – and the people those companies affect.”

Senator Warren concludes: “We need bold action if we’re going to deal with the excesses of private equity firms and their attack on American families.”

OK, so what’s the manufactured housing industry and land lease community real estate asset class to do? Here’s one possible, sequential course of action:

• Identify predatory private equity firms of which Senator Warren speaks. (Actually, that’s been done. There’s more than a dozen acquiring land lease communities today).

• Invite these private equity firms to attend upcoming industry forums (e.g. MHI’s NCC Western Summit in mid-August in AZ; Networking Roundtable in early September in IN; MHI’s annual meeting in late September in GA; and, annual SECO Conference in mid-October, also in GA).

• During said meetings, set aside time for open discussion of this volatile matter. If we don’t do so, we’ll have no one to blame but ourselves if/when onerous business- restricting national regulation of land lease communities comes our way!

Lest you think I jest. Remember this: 50 years ago, federal legislators offered the mobile home industry an opportunity to police itself, where ensuring housing product quality was concerned. We did not do so! Result? 1974 passage of the infamous HUD-Code by which we live and work today. Yes, to some extent, the manufactured housing industry turned this ‘legislative lemon’ into ‘lemonade’, benefitting from federal preemption of our factory-built housing product relative to state and local building codes. But are we willing to risk the future of our unique, income-producing property type this time around? Methinks not – and I trust YOU feel the same way. SO, contact our three national MH advocacy entities and tell them YOU want them to be a key part of the Solution to this trending challenge, not part of the continuing problem!

Me? I’ve already invited these land lease community portfolio owners/operators to the upcoming 28th Networking Roundtable, 8-10 September, at The Alexander Hotel, in Indianapolis, IN. Will they come? Some have already registered. How ‘bout you? For information, go to www.educatemhc.com

What might happen if above course of action does not materialize? Some reading these paragraphs will recall two National State of the Asset Class caucuses, 2/28/2008 in FL & 2/28/2009 in IN, when, in the first instance, and under the leadership of Randy Rowe, community owners agreed to Five Strategies & Action Areas ensuring continuing business viability. A year later, another hundred community owners and HUD-Code manufacturers convened to create the Community Series Home, stimulating new housing placement on rental homesites! Both venues = positive results! Point? Come November, and if no progress relative to this troubling matter, it’ll be time for a third National State of the Asset Class caucus. Have questions or comments to this end? Let me know via gfa7156@aol.com

***
George Allen, CPM, MHM
EducateMHC