Blog Column # 286 Copyright 2014 2 March 2014
Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities cum ‘mobile home parks’, comprise the real estate component of manufactured housing.’
Reason for this Bg. ‘It’s the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’
Input this blog & Affiliate with the Community Owners (7 Part) Business Alliance, a.k.a. ‘COBA7’, via Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764
WHY I CONTINUE…
to write about manufactured housing & land-lease-lifestyle communities.
The following unsolicited reader response to last week’s blog posting, ‘UPSIDE DOWN in a Mobilehome Park’, struck a thoughtful chord with me, as I pondered where to take us on our manufactured housing adventure this week.
“We, as in ‘the totality of the manufactured housing industry’, have left the Free Enterprise ‘tempered-by-social-consciousness’ building, all but forgetting our trademark roots: fast, low cost, decent quality housing! Most rental homesite rents are too high in many local housing markets; home payments (i.e. ‘PITI’, as in principal, interest, taxes & insurance alone, not including utility costs) often exceed the 30% federal Housing Expense Factor guideline by at least an additional 10-20%; we continue to not protect our residents with long term leases; and finally, continue to market new homes, as described in ‘UPSIDE DOWN in a Mobilehome Park’, the way we’ve always done: ‘Ain’t she purty, dontcha want one?’, instead of diligently matching housing needs and wants with prospective homebuyer’s ability to pay.” (Edited, GFA) And I add: Until we develop a viable secondary market for HUD-Code manufactured home valuation, marketing, and resale – we’ll NOT return to the prosperous days of 250,000 new homes shipped per year!
So, in light of such dismal status quo and future for HUD-Code housing, ‘Why Do I continue to write about contemporary manufactured housing and LLLCommunities’? And as need be, (1) alternately support, expose, even agitate decision-makers and trade politicos responsible for the industry’s 15 year malaise, (2) continuing slide into obscurity, and (3) pricing oneself out of many local housing markets throughout the U.S.
BECAUSE No One Else, it Appears, Will Do So! They certainly haven’t done so to date!
But know what? There’re business and personal cost and consequences to exposing and agitating decision-makers and trade politicos – even (especially) when one is ‘right’ about what is said or penned, as is with the case of the aforementioned ‘blog flogger’ (reader), citing: ‘too high new housing product costs and too high site rents compared to other forms of multifamily housing in the same local housing market.’ And of course, this reality is aggravated by the inability of prospective homebuyers to qualify for chattel capital, unless they enjoy the highest of credit scores. What’s the business and personal cost of being right and forthright? Oft times, rejection by some – but of late, acceptance by a few and support by many more!
Let’s begin with my Chapbook of Business & Management Wisdom. Near the end, there’s a chapter titled, ‘Scintillatingly Salient but Salacious Secrets to Business Management Consulting Success…’ which contains this pithy, time-honed Rule of Thumb:
“To clearly identify one’s supporters, detractors, and in-betweens; observe who contracts for one’s consulting services, buys one’s books, and pays to subscribe to one’s periodicals – and who does not do so!” The ‘rule’ goes on to point out: “Some smart ones buy and subscribe – to learn or imitate what you’re doing well; the lazy ones simply don’t care or know any better; and the rest? Their ‘not-buying’ mirrors their protest.”
This is so very true. I’ve been watching it play out on the national scene this past year, in three clear but different ways.
• We’ve long made it a point to observe who subscribes, and who does not, where the Allen Letter professional journal & The Allen CONFIDENTIAL! business newsletter is concerned. Both are subscriber-supported, with some advertising revenue in play. Here, the frequently cited Bell-Shaped Curve is instructive. At one end of the curve are a relatively few mega-sized property portfolio owners/operators who do NOT subscribe to anything (Though their peers do so), likely because they believe ‘They’re big enough to be know it alls’, eschewing information, good advice, and services from outside their corporate boardrooms. At the other end of the bell-shaped curve are small Mom & Pop firms who generally can’t afford annual subscription fees – or don’t think they can. But then, there’s the huge center-of-the-curve mass section of the curve, where we find the remaining single property owners and super-abundance of small to mid-sized, even large-sized LLLCommunity portfolio owners/operators from throughout the U.S. and Canada.
• Then there’s the relatively recent hijacking of land-lease-lifestyle community national advocacy effort by a couple of the largest property portfolio firms and a couple politically-active individuals. The game plan here plays out in dual-focus fashion: On one hand, ‘affluence gerrymandering’ (i.e. ‘The artful limiting of meeting attendance by keeping the cost of member participation higher than necessary.’) enables ‘these few’ to plan and effect decision-making ‘in behalf of everyone’ (members). And, on the other hand, ‘once a year’ – as was the case this past Fall, invite the most affluent ‘players’ in the realty asset class, to the most expensive of downtown venues, for a day long ‘see and be seen’ ego-enhancing session, where little of substance was accomplished.
• Since the first of the year, there’s been a needed and noticeable ‘Breath of fresh air’ flowing through the ranks of land-lease-lifestyle community owners/operators nationwide and Canada. Interested parties have hailed from manufacturing and post production segments of the manufactured housing industry. affiliating with the Community Owners (7 Part) Business Alliance, or COBA7, to collectively advance their mutual business interests, NOT via periodic meetings in high cost urban and resort settings, but via reasonable peer networking and deal making environments! There’s also been a keen and growing desire for improved print and online communication of key industry and asset class statistics, identification of trends, and How To information. And last but not least, interest – finally, in availing themselves of affordable professional property management training and certification among LLLCommunity owners and managers alike.
No, this is not the whole, and certainly not the end of the story, where manufactured housing and land-lease-lifestyle communities are concerned. It is, however, a tender stage. While the seven functions of COBA7 have been identified and publicized, time and again these past 60 days, it’s vital the manufactured housing industry and land-lease-lifestyle community asset class have united and ‘more than adequate’ national advocacy representation in our Nation’s Capitol. Therefore, the following, perennial, tough question continues to be asked, and remains – to this day – unanswered by our elected and salaried leaders:
Is the present day dual national advocacy representation format (two national trade bodies) and foci (‘Change Dodd-Frank legislation & CFPB regs), for HUD-Code manufactured housing, the Most Effective Approach to lobbying legislators and regulators in our nation’s capitol; OR is it time, for a Serious National Conversation regarding where (1) manufactured housing production and distribution, (2)all post-production segments of the industry, and (3) the land-lease-lifestyle communities realty asset class are today; where we should or would like to be going; and how to best arrive at said destination(s) or goal(s)? Until we do so, frankly, as an industry ‘we’re dead in the water’ of business opportunity and return to prosperity! Hope our national leaders are paying attention….
The sole whiff of intent, to this end (Reread previous paragraph) can be seen and read in full page ads run by the Manufactured Housing Association for Regulatory’ Reform (‘MHARR’), in current issues of The Journal and the Allen Letter professional journal – the only two remaining trade print publications continuing to serve the manufactured housing industry & land-lease-lifestyle community realty asset class! Read & Respond!
Your considered response to all this? Let me know via this website, or the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
‘What Does It Take to be an Exceptional Company?’
Quoted from an ad for Deloitte Consulting in the ATLANTIC magazine.
Reportedly, after analyzing 45 years of data, among 25,000 companies, Deloitte Consulting identified 174 exceptional companies, whose successes appeared to depend on a commitment to Three Rules apparently governing how exceptional companies think – under any and all circumstances, these being:
• Better Before Cheaper. Be known for higher quality, not lower prices
• Revenue Before Cost. Higher revenue is worth more than lower cost
• There Are No Other Rules. Make every choice based on the first two rules.
After reading, rereading, and pondering these Three Rules, I found myself attempting to apply them to companies I’ve known, over three decades, in manufactured housing and throughout the land-lease-lifestyle community realty asset class. Know what? I can easily think of firms who, for awhile anyway, excelled as their quality housing product, and exceptional lifestyle opportunities buoyed them above their competition at the time. And even at the other end of the spectrum, where producing/shipping inexpensive housing, and operating bare bones rental properties, were concerned, one still had to perform ‘better than cheaper’, where the competition was concerned.
And Revenue Before Cost. Not as ‘cut & dry’. Any businessman or woman, with a modicum of business sense, understands this ‘rule of thumb’. BUT, for awhile, just prior to the turn of the century, when HUD-Code home manufacturers, in concert with independent ‘street’ MHRetailers competed head-to-head with site builders; and LLLCommunity REITs, et. al., increased rental homesite rents to please Wall Street analysts, our ‘double dual industry’ (home manufacturing/distribution & realty development/investment) went on such a ‘revenue binge’, selling homes and leasing sites, to people who couldn’t afford them, that today – 15 years later, we’re still reeling from the negative consequences of playing that rule too far too long.
Learn more about these three rules at: TheThreeRules.com
Illinois Legislators Consider Needless
Letters, Phone Calls & Petitions Needed ASAP = Yes, This Coming Week!
A bill considered and defeated last year in the Illinois House, has been quietly and quickly resurrected – to the clear detriment of owners and residents of land-lease-lifestyle communities (A.k.a. manufactured home communities) throughout the state.
This bill, if passed, would force LLLCommunity owners to collect $1.00 – $3.00 per resident each month, to be paid into a Relocation Fund. This fund, in turn, would be used if/when a multifamily rental property of this type is closed at some point in the future.
Why is this proposed legislation needless? Because only two Illinois LLLCommunities have been ‘closed’ during the past decade, and relocation costs in both instances, were generous and paid by companies buying the properties to convert them into higher, better uses.
So, if you’re reading this blog posting and have business interests in the state of Illinois, contact the Illinois Manufactured Housing Association to learn how YOU can help defeat this onerous legislation this week!. Suggest phoning (217) 528-3423, and talk to Frank Bowman.
Do These COBA7 Opportunities Interest YOU?
Here’re Several Unique Opportunities for YOU to Consider This Week….
This past week, letters of inquiry went out to 60 individuals known as independent, freelance consultants serving the manufactured housing industry and land-lease-lifestyle community asset class nationwide. If you receive one of these letters, please respond right away, to ensure your talents and expertise are properly described in the 15th annual ‘Who Ya Gonna Call in 2014?’ Signature Series Resource Document, or SSRD, scheduled for distribution to COBA7 affiliates, in the March issue of the Allen Letter professional journal. And if you don’t receive one of these inquiry letters, but believe you should be included in the SSRD as ‘an independent, freelance consultant serving the MHIndustry & LLLCommunity asset class’, FAX your business description and or personal vitae, to (317) 346-7158 for consideration. Submission of information does not guarantee inclusion in the ‘Who Ya Gonna Call in 2014?’ SSRD. Questions? Call COBA7 via the Official MHIndustry HOTLINE: (877) MFD-HSNG o r 633-4764.
This past week, announcements were sent to 60 individuals who’ve participated in past FOCUS Group meetings, as well as LLLCommunity owners/operators who’ve expressed interest in participating in a future such gathering. If you receive one of these announcements, indicate your date & location preference, as well as list three topics you’d like to see discussed during the 1 ½ day session, and return the questionnaire via FAX, on or before Friday, 7 march 2014, using FAX # (317) 346-7158. If you’re a LLLCommunity owner/operator reading this, and would like to volunteer use of your clubhouse (Must seat 30+/- comfortably, from 8AM – 4PM), and the property is within a half hour of a major airport, contact me ASAP: (317) 346-7156. And if you’re a LLLCommunity owner/operator and would like to be put on the list of FOCUS Group invitees (for this or subsequent sessions), contact me via Official MHIndustry HOTLINE cited in the previous paragraph. COBA7 affiliates will be given priority as invitees. To become a COBA7 affiliate, also use the aforementioned Official MHIndustry HOTLINE.
This past week, tentative contract arrangements were made to host the 23rd International Networking Roundtable at a conference center in Peachtree City, GA., from 10 – 12 September 2014. Not ready to announce details; they’ll be coming soon.
Those of you who’ve expressed interest in writing a selection or two for inclusion in the Lessons Learned from LLLCommunity Operations book, being researched and prepared this year, should contact me by email (email@example.com) ASAP, so I have your name and tentative subject at hand. Also phone (317) 346-7156.
And probably the most exciting announcement of this past week, was that of the dates & location for annual SECO gathering of LLLCommunity owners/operators in Atlanta, GA., on 1 & 2 October 2014. Besides the half dozen or more new HUD-Code homes on display, and a series of exciting HOW TO seminars being planned, I’ll be conducting the popular one day professional property management, Manufactured Housing Manager® or MHM® one day class on September 30, at the same Wyndham Hotel, the day before the SECO event begins. What a Great Opportunity for YOU and or your on-site managers to participate in two seminal events in as many days! For information on both venues, contact Chris Nicely via (865) 385-9675 or firstname.lastname@example.org. And now there’s a website to visit: www.seco14.org
George Allen, CPM®Emeritus, MHM®Master
Box # 47024, Indianapolis, IN. 46247