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Three Times in (Land lease) Community History, Owners/operators Have Convened to Plan & Effect Their Collective Business Future

Wednesday, January 8th, 2020

Blog # 567 @ January 2020; 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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! MHM class: 1/14/2020 in KY

INTRODUCTION: One of the intriguing things about being an industry and realty asset class historian, is sensitizing oneself to historic happenings before and as they occur. Year 2020 finds us on the cusp of circumstances potentially affecting the near and interim futures of manufactured housing, and land lease communities – large and small – coast to coast. Read on….

I.

DID YOU KNOW?

Three Times in (Land lease) Community History, Owners/operators Have Convened to Plan & Effect Their Collective Business Future

First time was 31 August 1993 in Indianapolis, IN. Then, 19 owners/operators, anticipating the REIT wavelet of 1994 & 1995, formed an Industry Steering Committee, to ensure better national representation and advocacy as a viable realty asset class! RESULT? On 1 January 1996, MHI launched its’ National Communities Council (eventually) division. The NCC story is told in Bruce Savage’s 2013 book, The First 20 Years! available at educatemhc.com

Second time was 27 February 2008 in Tampa, FL. Then, 100 owners/operators, dismayed by the continuing HUD-Code housing shipment slide (81,889+/- that year), met for the first time, in a National State of the Asset Class (‘NSAC’) caucus. RESULT? Five Strategies & Action Areas: Need to improve political influence & community advocacy; need for an advertising campaign; importance of value proposition re housing product, loan terms, and rental homesite rates; need to improve resident relations practices; and, need for reasonable access to chattel capital for home-only loans on-site, plus creation of a secondary market. A decade later these five strategies and action areas continue to influence the business model.

Third time was 27 February 2009 at the RV/MH Hall of Fame in Elkhart, IN. Then, 100+ owners/operators and HUD-Code housing manufacturers convened for a second NSAC caucus, to address the now precipitous housing shipment slide (49,789+/- that year). Two RESULTS? Agreement on a new housing design for HUD-Code homes going into land lease communities. These were singlesection and modest-sized multisection homes with WOW factors, and durability-enhancing features to speed ‘make ready’ between owners and or renters. This new model, later that year named Community Series Home, replaced the Developer Models (a.k.a. ‘big box = big bucks’ units) of the mid to late 1990s. Second RESULT? In 2009, only 24% of new HUD Code homes (i.e. 12,000 units) went directly into communities; by year end 2014, the volume increased to 40%, or 26,000 new HUD-Code homes! Today? Likely plateaued, and…

Once again, Land Lease Community Owners/operators Are Expressing Interest in Convening, to Plan & Effect Their Collective Future

The informal, semi-public open discussion meeting planned to occur during the upcoming Louisville MHShow in Kentucky, on 16 January 2020, is NOT intended to be large like the three historic meetings just described. Rather, it will be a dozens gathering, during which a decision will be made whether to plan and facilitate a major national convening of land lease community owners/operators, and interested parties, mid-year 2020. If sincerely interested, and have ‘skin in the game’ as a HUD-Code housing manufacturer executive, or community owner/operator, even a GSE or NGO rep, let me know, via gfa7156@aol.com or Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Attendance is somewhat limited by meeting space availability.

So, what matters appear to be precipitating this push for a major national convening of land lease community owners/operators, mid-year 2020? Here’re some of the key factors brought to my attention of late:

• To direct, dues-paying members of MHI’s National Communities Council, the division appears to be askew, given recent departures of key NCC staffers; especially one who’s kept members abreast of Federal Fair Housing matters. And there’s still no NCC-dedicated news media published on a regular basis.

• Given that CrossMod™ HUD-Code homes meet GSEs MH Advantage & CHOICE Homes DTS program requirements for real estate-secured lending, what will present & future access to home-only (chattel) loans be, during this second round of DTS program planning?

• In days of yore, say the 1970s, when ‘mobile home park’ owners increased site rent unconscionably, other investment property owners in the same local housing market, would visit the offending party and entreat them to ‘back off’ or face blackballing. What might be practical and effective remedies today, when outsiders (some say interlopers) likewise abuse their homeowners/site lessees?

And there’s more, much more that could be penned here. If interested in the complete list of 13 Evergreen (‘always present’) Issues worthy of industry and asset class leadership action, read them in the 31st annual ALLEN REPORT, distributed by EducateMHC during January 2020. To obtain your copy, visit www.educatemhc.com

In summary, the goals of meeting together informally, in a semi-public, open discussion venue during the Louisville MHShow are to:

1) Gauge interest in participating in a national convening of land lease community owners/operators during mid-2020. Who is interested in leading & facilitating?

2) What are the ‘hot topics’ to include in the meeting agenda? Does not have to be restricted to the known and publicized, albeit perennial, Evergreen Issues. Have you noticed? No one else is asking!

3) One or two day program? Involvement of MHI, MHARR, NAMHCO, EducateMHC?

4) Preferred locations? Probably Midwest, to attract coastal owners/operators. Chicago, RV/MH Hall of Fame in Elkhart, IN, Indianapolis, etc..?

Finally, and again; if desiring to participate in the Louisville MHShow meeting, you must let me know via email and or telephone this week! On or before Friday, 10 January 2020! Remember, attendance is limited! And if unable to attend, but interested in staying abreast of national meeting plans during mid-200, let me know likewise, via email. GFA

***
POSTSCRIPT

Be aware, The Allen Confidential! Publication, effectively a merging of the Allen Letter and the Allen CONFIDENTIAL! business newsletters is much more, content wise, than the two predecessors. We’ve really ‘pulled out all the stops’ to get you the latest land lease community news; photos you’ll see nowhere else; muckraking – when need be, not effected by anyone else; and, so much more! Visit www.educatemhc.com today and become a subscriber if not one already! CLICK HERE for BASIC EDITION OR CLICK HERE for PRIME EDITION. GFA

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

31st annual ALLEN REPORT a.k.a. ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Throughout North America!

Friday, January 3rd, 2020

Blog # 566 @ 3 January 2020; 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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! MHM class: 1/14/2020 in KY

INTRODUCTION: Most owners/operators of land lease communities, large & small, throughout the U.S. & Canada, are familiar with the annual ALLEN REPORT. After all, it’s researched and reported on community portfolios for more than 30 years. And frankly, a high proportion of the 500+/- portfolio owners/operators purchase the report each year to stay abreast of benchmark statistics and trend identification needed to manager their properties professionally and well.

ANSWERS to Challenges in Land Lease Community Ownership/Operations continues to point out key passages, within the 8th edition of Community Management in the Manufactured Housing Industry, that make this 250 page tome a MUST HAVE reference on-site in every land lease community throughout the U.S. & Canada! Have you purchased copies for your on-site and regional property managers yet?

On a similar subject, know the next one day Manufactured Housing Manager (‘MHM’) training and certification class is scheduled for 14 January in Louisville, KY. To register, phone (317) 738-3434 and or visit www.educatemhc.com

I.

31st annual ALLEN REPORT
a.k.a.
‘Who’s Who Among Land Lease Community Portfolio Owners/operators Throughout North America!

Year 2020 celebrates the beginning of a New Era for land lease communities, large & small, nationwide! For the first time in the 80 year history of the realty asset class, there’s now a dedicated source for community-focused products (books, directories & newsletters) and services (Professional Community Evaluation & property management training/certification). Heretofore, community owners/operators relied on print material I produced and distributed via GFA Management, Inc., dba PMN Publishing. Henceforth, EducateMHC, will cover all those bases, and more, digitally. All ten of EducateMHC’s invaluable Resource Documents are identified in this ALLEN REPORT.

The written history of the land lease community property type begins during the mid-1980s, and is summarized in this 31st edition of the ALLEN REPORT. Did you know, in 1989 we knew of only 38 portfolio owners/operators? And today we know of 500+/- such firms; 100 of which are ranked by total rental homesite count, and profiled by home office location and more, in this ALLEN REPORT.

Did you know there are now, no fewer than five national advocacy entities serving HUD-Code manufactured housing in general, land lease communities in particular? Well there are, and they are identified by name, along with their telephone number for contact purposes.

To assist the ‘first time reader’ of an ALLEN REPORT, we’ve included two paragraphs; one summarizing the types of factory-built housing and related shipment volume history, along with other related statistics and curiosities. The other paragraph focuses on the land lease community income-producing property type, and the spread of that 50,000+/- community inventory throughout the U.S.

Then, the ALLEN REPORT proper begins, covering these major categories of land lease community portfolio operations information:

• State summary of portfolios, relative to where portfolio home offices are located.

• Overall summary of rental homesite tallies, and number of communities in portfolios

• Top Ten reporting portfolio firms, by total MH & RV rental homesite count

• Presence of rental units and contract sales within land lease communities

• Average national physical occupancy, from year 2014 to present day

• Average national operating expense ratios (‘OER’), from year 2010 to present day

• Evergreen Issues. Debuted in 30th anniversary ALLEN REPORT and continued here! Nowhere else will you find a more comprehensive recitation of ‘always present’ issues and obstacles affecting manufactured housing and land lease communities nationwide !

And that’s not all that’s featured in the 31st annual ALLEN REPORT. The firm, DATACOMP, has supplied Figures, again, showing average rental homesite rents in MSAs throughout the U.S. and a list of the number of land lease communities estimated to be in every state of the union.

It should be obvious to you by now, that if you own and or fee manage one or more land lease communities, you need to acquire a digital copy of the 31st annual ALLEN REPORT. To do so phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or subscribe to the Prime Edition of the Allen CONFIDENTIAL. The report is available as a standalone purchase (after January 8th), or in conjunction with obtaining 12 monthly issues of the newly-formatted Allen Confidential business newsletter as a Premium Subscriber.

II.

ANSWERS to Challenges in Land Lease Community Ownership/Operations…

Good resident relations within a land lease community is a key indicator professional property management is an important and routine effort effected by the owner/operator, and appreciated by homeowner/site lessees, a.k.a. residents. But getting to that desirable end requires knowledge, and takes effort to achieve! How? Well first, a quick look at the beginning and history of resident relations in this unique, income-producing property type.

It didn’t occur until mid-1993, when 19 (then) manufactured home community owners convened in Indianapolis, IN., to lay plans for achieving better national advocacy and representation – before the REIT wavelet would begin in 1994. Among matters discussed at the meeting, there was concern community owners/operators take steps to foster good resident relations, in a manner similar to what was routinely observed within apartment communities.

Enter (now retired) Martin Newby of Newby Management, headquartered in Ellenton, FL. Newby Management, was and is, a 100% fee management company, specializing in land lease community operations. The firm, under Martin’s leadership, had unique resident relations enhancing practices in place, e.g. 24 Hour Rule, where any problem on-site, brought to management’s attention, would be fully resolved within 24 hours, or a written commitment to do so provided to the resident at the time! The firm also had a chaplain on staff who traveled among the firm’s all adult communities, meeting residents’ needs of all sorts, performing marriages, etc.. And on-site managers routinely collected rent from shut-ins, by going from home to home on a golf card, distributing fresh donuts to residents as they went.

Though Martin is long retired, his firm’s cutting edge resident relations efforts continue unabated via top management succession of Tim Newsy, and now Todd Newby.

How can YOU effect practices fostering Good Resident Relations? Buy a copy of EducateMHC’s Community Management in the Manufactured Housing Industry, 8th edition. by Allen, McCarty & Smith, all certified Manufactured Housing Managers! Chapter # 5 of the text is dedicated to this timely and vital topic; and teaches the ‘Six Rs of Resident Relations’ as a training aid! If not familiar with these six practical practices, you need the book, and you need to apply the unique formua!

To order the book, visit www.educatemhc.com

***

Re-Introducing The Allen Confidential publication

Friday, December 27th, 2019

Blog # 565 @ 23 December 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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! MHM class: 1/14/2020 in KY

INTRODUCTION: A new year is close upon us; and with it comes both change and opportunity. Change in the nature of the longest running print-now-electronic business newsletter, offering you even more industry news and information than ever before. And opportunity. You’re likely aware of the conversations taking place, coast to coast, these days, relative to the ‘new type’ manufactured home and the impact it might have on land lease communities; threat of national rent control; and other such challenges. The opportunity? To meet together during mid-January in Louisville, KY.

I.

Re-Introducing The Allen Confidential publication

EducateMHC is celebrating a full year of growth and transition, and are now excited to announce the evolution of George Allen’s monthly newsletter publications. Those of you who are currently ‘Basic Edition’ Allen Letter subscribers will begin receiving more rich content than ever before, with a preview of, and access to, monthly Resource Documents! Those who are currently ‘Prime Edition’ subscribers to the Allen CONFIDENTIAL! will continue to receive the ‘Prime Edition’ chock full of MHIndustry hot-off-the-press findings, given George’s unique perspective and access, as a 40+ year veteran and activist in the industry and realty asset class. “Prime Edition’ subscribers will also receive the coveted annual ALLEN REPORT and 12 monthly Resource Documents in their entirety. The two levels (Basic & Prime) of this business journal will be delivered electronically as a PDF, via Email to subscribers. Monthly editions and subscriptions are available via our website www.EducateMHC.com

Beginning January 2020, George Allen’s MHIndustry Business Journal Publications:

The Allen Confidential: Basic Edition @ $240 for 12 monthly issues
(Annual ALLEN REPORT & monthly Resource Documents sold separately)

The Allen Confidential: Prime Edition @ $544.95 for 12 monthly issues
(Subscription includes annual ALLEN REPORT & 12 monthly Resource Documents)

All the aforementioned Resource Documents are listed here for your consideration:

• The annual (31st in 2020) ALLEN REPORT, a.k.a. ‘Who’s Who Among Portfolio Owners of LLCommunities Throughout North America!’ MHIndustry’s longest running data report!

• Official State of the MHIndustry & LLCommunity Asset Class. Covers ALL data points!

• 21st National Registry of ALL Lenders, includes real estate-secured and chattel capital

• ‘Who Ya Gonna Call in 2020?’. Only directory of freelance consultants nationwide

• Directory of MH & LLCommunity Print & Online Media (+) all State MHAssociations

• Official MHIndustry & LLCommunity Lexicon & Glossary of Trade Terminology

• Official MHIndustry & LLCommunity Directory of GSE & NGO Organizations (+) Property Management Training & Certification Programs

• MHIndustry & LLCommunity Trending Topics (+) Definition of Affordable Housing

• MHIndustry & LLCommunity Directory of National Advocacy & Related Organizations

• All HUD-Code Housing Manufacturers; also Community Series Home & CrossMod™

• Industry Briefing Sheet. Only statistical compendium covering industry & asset class

• Statistic Sourcing & Valuable Formulae for MHIndustry & LLCommunity Research

And, from time to time, when a new Resource Document is created, it will be included as a preview in the basic edition of the Allen Confidential, and in its’ entirety in the prime edition of the Allen Confidential.

II.

Will You Help Articulate Solutions, or Be Part of the Problems Affecting Our Industry?

Since I first floated the idea of an industrywide, informal, semi-public meeting of concerned businesspeople, on 1/15 or 1/16, during the Louisville MHShow (Kentucky), I’ve had more than a dozen individuals commit to be present.

Present for what? To identify new and evergreen (‘always present’) issues affecting the manufactured housing industry and land lease communities nationwide. Topics already requested include:

• Desire for more information about CrossMod™ homes – and, whether this emphasis might be a return to the land & home package debacle of the mid to late 1990s.

• Whether GSEs will, soon and finally, effect Duty to Serve (‘DTS’) programs in 2020, restoring reasonable access to chattel capital for home-only loans in communities.

• What’s can be done to ameliorate the threat of national rent control, now that three states have adopted this form of landlord-tenant legislation.

• Where does the work of the understaffed NNC division of MHI leave off, and lobbying effort of the National Association of Manufactured Housing Community Owners begin?

The foregoing gives you an idea of what’s on the minds of concerned MHIndustry & LLCommunity businessmen and women these days. All good reasons for convening an industrywide, informal, semi-public meeting on 1/15 or 1/16, during the Louisville MHShow in Kentucky.

If you are seriously interested in participating, let me know via email (gfa7156@aol.com) or phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Details of the meeting location and time will be shared at that time.

George Allen, CPM, MHM
EducateMHC

Deep Thinkers Respond to FHFA Frustration: ‘Too Few ‘new type’ Homes Financed to Date’

Thursday, December 19th, 2019

Blog # 564 @ 12 December 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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! MHM class: 1/14/2020 in KY

INTRODUCTION: This week’s blog posting (#564) is how I’ve long wanted this online communique to function; as a means of two way communication between you and me! In Part I we have three bona fide Deep Thinkers, from the manufactured housing industry, sharing their considered views on a lively and timely topic. Wish every week was like this! And Part II? One more clear example of how the 250 page text, Community Management in the Manufactured Housing Industry, is the One Stop Resource for anyone owning and or operating a land lease community in North America today. If you don’t already have a copy of this tome in hand, you should! GFA

I.

Deep Thinkers Respond to FHFA Frustration:
‘Too Few ‘new type’ Homes Financed to Date’

In other words, ‘Why so-few CrossMod® home loans effected, to date, via Fannie Mae’s MHAdvantage & Freddie Mac’s CHOICEHomes DTS programs?

YES, that was the question raised in last week’s blog posting (#563). The sole answer offered, at the time, was this: “Along with new type of homes comes a new class of home seller – the Developer. Their projects don’t develop quickly.” Along with this answer came this apt caution, based on sorry historic (1989-2002) precedent: Independent (street) MHRetailers and ‘company stores’, envisioning themselves as contractors, must indeed be capable, experienced and motivated to do this complicated and expensive work properly and expeditiously!

Ended Part I of last week’s blog discussion with an open invitation to share ‘your take’ on this and related matters.

And respond ‘some of you’ did! Interestingly, three ‘deep thinkers’ from three distinctively different, and geographically distant-from-one-another local housing markets (i.e. Southeast, Midwest, and West) did so.*1 The important point here, to keep in mind, is how ‘all real estate is local’. With that said, here’s a summary of salient points made by these sage individuals:

• “Not at all thrilled with the CrossMod® name.” No aesthetic appeal whatsoever!

• “Manufactured housing is a housing type. Why purposely diminish that type, by creating a subset whose purpose is to say it is better?” Think about that. Revives the question: Is manufactured housing the epitome of ‘affordable housing’, or simply ‘big box = big bucks’ housing? Difficult to both well simultaneously.

• “The ‘new type’ (manufactured home) will not make a significant impact until developers begin to use the product in subdivisions of many homes.”*2

• Independent (street) “MHRetailers have never succeeded in attracting, in any meaningful way, conventional homebuyers. Conventional (home) buyers don’t go to a (sales) lot to buy; they go to a (subdivision) development.”

• In one region, “…the market for traditional manufactured housing remains strong”; so, “No motivation to expand into new markets” using ‘new type’ homes!

• In that same region, “…there has been push back from homebuilders (re) Fannie’s 4:12 & Freddie’s 5:12 minimum roof pitch requirements” as lower sloped roof pitches are preferred.

• And again, in that region, “…manufactured housing is zoned out of many urban and suburban areas….”; and, though legal challenge is favorable, ‘no sense of urgency at this time’.

• In a distinctly different and distant housing market, ”Recently a number of rental home developments have been site-built here. They are renting like hot cakes. (Perhaps) This is the model” for placement of CrossMod® homes.

A lot to ponder here! Do these eight summary points stimulate further thought, on this matter, from your perspective? If so, let me know ASAP, via gfa7156@aol.com

Now here’s a troubling thought. If we, as an industry, are unable to popularize CrossMod® homes now and in the near future, will said ‘failure’ provide pause and excuse for GSEs, NOT to work further on similar chattel capital DTS programs for home-only loans on new HUD-Code homes going into land lease communities onto rental homesites?

SPECIAL ANNOUNCEMENT. HUD-Code housing manufacturers, MHRetailers, land lease community owners/operators, even a rep or two from the FHFA and GSEs have asked me to arrange for an informal, semi-public, face-to-face meeting of concern-minded individuals (i.e. Relative to present day and future of manufactured housing shipment volume, and land lease community operations where the threat of national rent control, are involved!). If YOU are sincerely interested in participating in such a meeting, on 15 or 16 January, during the Louisville MHShow, let me know; again, via gfa7156@aol.com. Once I have the meeting location and times established I will let you know.

End Notes.

1. Deep thinker, in this instance? Present day and recently-retired business executives, each with a minimum of 35 years experience in the manufactured housing business; and, two of whom are RV/MH Hall of Fame members.

2. This deep thinker went on to say, These are “still trailers in the minds of some purchasers, and a significant marketing effort will be needed here. For example, in the Midwest, basements are essential and these (CrossMods®) are equivalent to slab on grade site-built homes that lack storage available in basements.”

II.

ANSWERS to Challenges in Land Lease Community Ownership/Operations…

Did YOU Know? There is an Official Quality Classification System for Land Lease Communities, Large & Small, Nationwide?

Yep, there sure is. But first a little history. Back in the 1960s, up through the mid-1970s, a company called Woodall’s published a telephone directory-like reference listing all mobile home parks throughout the U.S. The company had a staff of property inspectors, who doubled as advertising salespersons, and routinely visited these properties to categorize them as being of 1 Star, 2 Star, 3 Star, 4 Star, & 5 Star quality, with 5 Star being the highest level.

Then these inspectors would ‘change hats’, so to speak, and sell these same communities ads in the Woodall directory. (Hmm. Wonder if bigger ads resulted in a better grade?) This system worked well enough for a decade or two, as long as mobile homes were small enough to be towed behind personal automobiles, and those relocating benefitted from such a directory. This cozy arrangement came to an end around 1976. Since then, at least until the mid-1990s, there was no follow-on property quality grading system. Unfortunately, many real estate brokers have continued the Star Rating myth, to their ends, for the past 40 years.

Enter the ABClassification System for Manufactured Home Communities. This new ‘do it yourself’ evaluation system features seven areas of quality measurement: Appearance (i.e. ‘curb appeal’), Layout, Individual Homesites, Individual Homes, Infrastructure, Amenities, and Community Management. For each of the seven areas, user is challenged to determine whether the property is A = One of the Best; B = Better than Most; C = Good or Average; or D = Fair-Poor. And within each of the seven areas evaluated, the user allocates 100 points; all to one category, or more often than not, split between two adjacent quality grades, e.g. Appearance = A @ 100 points; or maybe B = 50 points & C = 50 points. When all seven areas have been ‘weighted’, the point totals under each of the four (A,B,C,D) categories are totaled, providing an overall ‘value’, often split unevenly between two adjacent values (e.g. A&B or B&C, or C& D…)

The ABClassification System is easier to use than perhaps it sounds/reads. And it does provide a far more detailed quality summary of any given land lease community, large or small.

The system has had an interesting history. First proposed to MHI’s National Communities Council (‘NCC’) for adoption, during the late 1990s, it met covert resistance from one or more of four existing REITs at the time. Why? There was concern, Wall Street analysts, already wreaking havoc with unrealistic quarterly profit expectations (i.e. treating illiquid real estate assets as growth stocks), would seize upon a quality grading system to fine-tune buy-sell stock recommendations of said REITs and property portfolios. So there was no approval or adoption forthcoming from the NCC.

But ever since then, for the past two decades, a standard form used to effect A, B, C, D quality gradings (also referred to as being of 1, 2, 3, 4 ‘diamonds’ quality), has been a popular professional property management tool among land lease community owners/operators wanting to categorically know their property(ies) quality firsthand, rather than relying on a real estate broker’s opinion, oft times couched in defunct STAR grades.

The ABClassification System is featured in the Community Management in the Manufactured Housing Community textbook as Appendix # 47. To order the text, visit www.educatemhc.com

George Allen, CPM, MHM
EducateMHC

MHs Mixed Bag of ‘#s & $s’; Rick Robinson’s new gig 7& new book!

Thursday, December 5th, 2019

December 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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.educatemh;c.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: 1/14/2020

INTRODUCTION: As an industry that ‘keeps score’ by tracking new home shipment volume, rather than new home sales, we are slipping backwards, and hardly anyone seems to notice! Read Part I here. And Part II? Read how one of the most popular executives at MHI, during recent years, and who’s since gone elsewhere –might be embarking on a new job adventure every bit as exciting as the thrillers he authors! Part III? Our way at EducateMHC to let you know of the many practical resources available via www.educatemhc.com

I.

Mixed Bag of Manufactured Housing Production Volume & Value, and Finance

Last week’s blog posting (#562) began with this observation from Listening Session # 1 in St. Louis, MO:

“Fannie Mae & Freddie Mac are frustrated and disappointed with the too few ‘new type’ HUD-Code manufactured homes (Now, CrossMod® homes according to MHI) financed via their respective MHAdvantage & CHOICEHomes programs to date.”

This was followed with a request by James Gray of the FHFA, for readers of this blog to recommend, ‘How to generate more consumer interest in these two real estate-secured finance products for manufactured homes?’

Well, readers responded. This from a middle level executive at one of our HUD-Code housing manufacturers:

“Why (did it take) 11 months for the first MHAdvantage home in Texas to be sold? Along with a new type of homes comes a new class of home seller – The Developer. Their projects don’t develop quickly. So, not many MHAdvantage or CHOICEHomes are coming out of the ground yet.”

Point made and taken. There’s a cautionary message here as well – supported by a 20 year old memory dating back to the day when these ‘big box = big bucks’ Developer Series homes were all the rage (Recalling 372,943+/- new HUD-Code homes shipped during year 1998!). The Achilles’ heel then, were independent (street) MHRetailers who wrongly marketed themselves as developer/contractors. Not. Their lack of contracting expertise, and resulting installation shortfalls, pretty much doomed that brief second renascence for the manufactured housing industry. Corollary point? Let’s not repeat the same industrywide mistake! Ensure our developers and installers KNOW what they’re doing, and they’re doing it right this time around!

Personally? I think the plethora of names and labels emerging to describe this, now two years old, ‘new type’ HUD-Code manufactured home is leading to far more confusion than consensus, e.g. CrossMod® (MHI), MHAdvantage (Fannie Mae), CHOICEHomes (Freddie Mac), Genesis series (Skyline/Champion), and going back a few years, ‘MHSelect’.

Back to that mixed bag of MH production volume – and value. Everyone knows the pace of new HUD-Code housing shipments has slowed during the past couple years, but few have taken time to ‘work the numbers’. Here’s how bad the situation really is:

Between 2015 & 2016, we enjoyed an increase of 10,592 new HUD-Code homes shipped
Between 2016 & 2017, we enjoyed an increase of 11,766 new HUD-Code homes shipped
Between 2017 & 2018, saw an increase of only 3,653 new HUD-Code homes shipped
Between 2018 & 2019, likely 5,009 fewer new HUD-Code homes will be shipped by year end.

How so? Extrapolate 82,942 new HUD-Code homes shipped through October 2018 with that year’s total of 96,555; then with 79,912 new HUD-Code homes shipped through October 2019. Result is an estimated total of 93,027 new homes to maybe be shipped by year end, or 3,528 fewer new HUD-Code homes than previous year shipment pace! And certainly fewer than the 100,000 industry goal for year 2019. Startled yet? You should be. And should be asking, ‘Why?’

Moving on to value. As official statistician for the land lease community real estate asset class, EducateMHC is forced to continue using Dr. Stephen C. Cooke’s HUD-Code housing ‘production value’, computed using base year 2013 cost factors. MHI continues to promise an update, even expansion, to this key data, but it hasn’t occurred to date. SO, are we, in terms of production value, a $3 billion industry (2018), using six year old data, or closer to $4 billion?

This info readily available from EducateMHC via its’ monthly MHShipment ‘#s & $s’ Report, published as an integral part of each monthly issue of the Allen Letter and the Allen CONFIDENTIAL! business newsletter. Visit www.educatemhc.com to subscribe.

Finally finance. Easy to describe. Real estate-secured new home financing is available from a variety of local, regional, and national sources. Personal property (i.e. chattel capital) lending continues to be elusive for home-only transactions occurring on leased land, e.g. new and resale homes on rental homesites within land lease communities. And of course this mixed bag of housing finance resources is complicated by the S.A.F.E. Act and regulations implemented by the Consumer Finance Protection Bureau (‘CFPB’).

Always happy to learn ‘your take’ on these business dampening matters: gfa7156@aol.com

II.

Rick Robinson, esquire, joins MANUFACTUREDHOMES.COM Team as
VP of Industry Relations

Congratulations Rick! We’ll miss your presence and yeoman’s work at the Manufactured Housing Institute (‘MHI’) – especially where Federal Fair Housing is concerned. We now know far more about that important program, and how it relates to land lease community ownership and operations, than we did before you. Who will take up that torch at MHI; or will this be part of your work at Manufacturedhomes.com? An inquiring public would like to know…

Brad Melms, president of Manufacturedhomes.com, in a recent press release describing Rick’s job change stated, he’ll “…be working to bring a new level of consumer technology to those buying homes and residing in communities.” Hmm. While ‘time will surely tell’ what Bruce means by that statement, one wonders if this might be akin to ‘throwing down the gauntlet’, figuratively speaking, in the direction of MHVillage, the manufactured housing industry’s premier and perennial marketer of resale homes ‘for sale’ on-site in land lease communities?

In the meantime, if you haven’t already heard or read, Rick has a new novel (thriller) available for purchase: Opposition Research. I read it over the Thanksgiving holiday and had difficulty putting it down! Includes a couple examples of the influence manufactured housing has on his creative writing. The book is available for purchase from Amazon.com

III.

ANSWERS to Challenges in Land Lease Community Ownership/Operations…

Industry Standard Chart of Operating Accounts and Operating Expense Ratios (‘OERs’)

Know the most frequent questions I’m asked as consultant to the land lease community real estate asset class? ‘What and where are the operating expense industry standards for land lease communities?’ Answer: In two appendices # 32 & 33 of the Community Management in the Manufactured Housing Industry 250 pages textbook! That’s right, the official Industry Standard Chart of Operating Expense Accounts & accompanying Operating Expense Ratios (‘OERs’) are easily available to land lease community owners and managers alike. The historic genesis of this unique property type information makes for an interesting tale.

This story was first told in SWAN SONG (History of the Land Lease Community Real Estate Asset Class & Official Record of Manufactured Housing Shipments, 1955 to present day’), but blog readers will likely find it engaging to read again.

During the spring of 1992, while a Major in the USMC reserves, I was called to active duty for service during the Desert Storm initiative in Iraq. However, by the time I was cleared medically, that brief conflict had come to an end – so I was ordered to Honduras along with several other staff officers. While there we supported helicopter air strikes (interdictions) against drug stills in the mountain region of that country. Not much publicity about it back in the U.S., but we believed our Marines were shot at with more intensity in Honduras, than they would have been over in Saudi Arabia.

Combat environs are famously known for days and week long periods of relative peace and nonconflict, abruptly interrupted by inconvenient moments of intense conflict with, and maneuvering against, one’s adversary at the time. And this is the way it was in Honduras. Some days were hot and boring, others just as hot, but as physically and mentally demanding as you can imagine.

Well, it was during one of those periods of relative peace and nonconflict I found myself, sitting on a camp stool, pondering mobile home park operating expense statistics I’d gathered during research conducted while writing for the Manufactured Home Merchandiser magazine. Given I had nothing else of importance to do at the time, ‘the numbers just seemed to come together’ in a very cogent fashion, especially operating expense ratios. So, when I returned to the U.S. a month or two later, the two new resources found their way into my column at the Merchandiser, then an earlier edition of Manufactured Home Community Management.

Today, that text and its’ 13 chapters and 52 appendices are available for purchase from EducateMHC via the website: www.educatemhc.com

1st Listening Session Revisited

Tuesday, November 26th, 2019

November 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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: 1/14/2020

INTRODUCTION: Pretty straightforward! More info from Listening Session # 1, plus a request for assistance. AND, the second installment of ANSWERS addition to this weekly blog posting.

I.

1st Listening Session Revisited…

Fannie Mae & Freddie Mac are frustrated and disappointed with the too few ‘new type’ HUD-Code manufactured homes (Now, CrossMod® homes according to MHI) financed via their respective MHAdvantage & CHOICEHomes programs to date. Accordingly, James Gray of the FHFA, and others present at the Listening Session, requested input from attendees – and YOU, if not an attendee; regarding ‘How to generate more consumer interest in these two real estate-secured finance products for manufactured homes!’ If you have ideas, please pass them onto me, and I’ll ensure they are forwarded to the appropriate GSE, or both. Simply email: gfa7156@aol.com or phone the Official MHIndustry hotline: (877) MFD-HSNG or 633-4764.

Was interesting to learn of GSE’s interest in long term written leases as protection against surprise and exorbitant rental homesite rate increases. Also their sensitivity to securing chattel capital loans in land lease communities that might close for redevelopment. And where property owner loan ‘guarantees’ are concerned, these appear to be of more interest to lenders than, surprisingly, to the GSEs. And finally, we were assured time and again the end of conservatorship of the GSEs would have little to no effect on DTS programs present and future.

If you’re reading this blog posting and participated in Listening Session # 2, and/or plan to ‘present’ during Listening Session # 3, please share your narrative with me. Most likely, with your permission, I’ll reprint it in an upcoming issue of one or another of our widely read business newsletters, the Allen Letter and the Allen CONFIDENTIAL! If not already a subscriber to either or both media, visit www.educatemhc.com to do so.
II.

ANSWERS! A New Emphasis for this Blog.

Last week we introduced you to the ’10 Helpful Steps to Manager & Leasing Consultant Safety’, one of many helpful aids for land lease community owner/operators, contained in the recently released 8th edition: Community Management in the Manufactured Housing Industry.

This week; introducing you to three authors who penned unique chapters in this textbook.

George Porter literally ‘wrote the book’ (i.e. regulations & protocols) on manufactured housing installation. To this day, he is relied on by HUD, manufacturers, state associations, and land lease community owners/operators to not only teach them to be eligible for installer licensing, but he troubleshoot troublesome situations as well. George articulated the Frost Free Foundation! Read George’s chapter # 8 is George’s in Community Management in the Manufactured Housing Industry.

Fred Rice, co-owner of Spectrum Utilities – a nationwide utility submetering company, is an attorney, and active member of the Utility Management & Conservation Association. We had our choice of several submetering practitioners, but were well aware of Fred’s ongoing efforts to educate land lease community owners/operators in this important cost savings activity. Planning to submeter one’s property or retrofit existing meters? Chapter # 9 will be invaluable.

Dave Hegemann’s staff at London Computer Systems and Rent Manager prepared this ‘first ever’ resource on property management (‘PN’) software in the land lease community. The PM areas covered in chapter # 10, include accounting, collections, marketing, maintenance, integrated phone systems and websites, credit reporting, and so much more! Like the previous chapters, this one too has been authored by the best known and respected expert in the field.

So, if manufactured housing installation, water submetering, and taking your community digital, are lively concerns of yours, you need to routinely refer to Community Management in the Manufactured Housing Industry! Obtain your copy via www.educatemhc.com

It’s my personal belief; a copy of this book belongs in every central property management office, and every land lease community in the U.S. and Canada. That’s how valuable the information is in this 250+ page tome used as base text of the Manufactured Housing Manager (‘MHM’) professional property management training & certification class! Next class? 14 January in Louisville, KY. Visit www.educatemhc.com for more information & to register.

George Allen, CPM®, MHM®
EducateMHC

‘This is a very Critical Issue!’

Friday, November 22nd, 2019

November 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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 & and lease communities as U.S. source of affordable attainable housing! Call for next MHM class info

INTRODUCTION: Wow! FHFA & GSE Listening Sessions are off to a ‘flying start’ – with much good and timely input from the manufactured housing market! And, in this blog posting, we introduce a NEW FOCUS for the weekly communique! Hope you take good advantage of what’s being offered to you. Finally; if we don’t talk again beforehand, here’s wishing YOU a Happy Thanksgiving holiday. GFA

I

“This is a very critical issue!”
Clinton Jones, FHFA

(During beginning of St. Louis, MO. Listening Session)

40 men and women sitting in the amphitheater of the Federal Reserve Bank of St. Louis, at first 2019 Listening Session hosted by the Federal Housing Finance Agency, Fannie Me & Freddie Mac (Enterprises). Audience was divided among the hosting organizations, and representatives from the Affordable Housing Preservation, Manufactured Housing, & Rural Housing Markets.

Once Jim Gray, from FHFA, explained Guidelines for this Listening Session, and how questions would be processed – from GSEs to scheduled presenters, the listening sessions got underway.

For the purposes of this blog posting, I’m limiting my observations to those pertaining to the manufactured housing market.

The national manufactured housing industry and land lease community real estate asset class were represented by four individuals, in the following order:

George Allen, CPM, MHM of EducateMHC. This presentation, titled: ‘Two+ Decades of Manufactured Housing Shipment & Finance Turmoil (1998 – 2020) Can End with Help from FHFA & GSEs!’ debuted nationwide, last week, as blog posting # 560. So, when done reading this blog posting (#561), scroll back into the blog archives to reread # 560. This presentation will also be featured in the December issue of the Allen Letter, via www.educatemhc.com.

Edward Hussey, Jr., VP of Liberty Homes, Inc., and chairman of the Manufactured Housing Association for Regulatory Reform (‘MHARR’), did an excellent job describing regulatory-related matters, progress and failures, where Duty to Serve (‘DTS’) programs have been concerned at Fannie Mae & Freddie Mac of late. While Mr. Hussey’s remarks are available directly from the MHARR, it’s anticipated they’ll also be featured in an upcoming issue of the Allen Letter.

Spencer Roane, MHM, president of Pentagon Properties, Inc., a portfolio land lease community owner/operator, delivered an impassioned presentation from his unique community ownership perspective, honed over 30+ years. Mr. Roane is one of many community owners/operators who’ve turned the ‘lemon into lemonade’, two decades long paradigm shift – from distribution of new HUD-Code homes via independent (street) MHRetailers, to new home sales & seller-financing on-site, from a forced burden into a near art form of profitability. Mr. Roane’s presentation too will likely appear as a feature article in the Allen Letter.

Kara Beigay, of the Manufactured Housing Institute did a superb job representing MHI, articulating concerns about GSE’s checkered progress, relative to existing DTS programs and plans for the next several years. She also used her talk to introduce the audience to CROSS-MOD, the name MHI has finally given their ‘new type’ manufactured home designed to qualify for Fannie Mae’s CHOICEhomes & Freddie Mac’s MHAdvantage programs. What was unique here, but not surprising, was how examples, shortfalls, etc., cited by all three presenters paralleled one another. For a copy of Ms. Beigay’s presentation, contact MHI directly.

Here’re several out of context remarks made during Tuesday, 19 November Listening Session:

FHFA would like to see ‘a new research center’ birthed by MHI – or, barring that, any other entity closely aligned with the HUD-Code manufactured housing industry and land lease community real estate asset class. Anyone ‘out there’ listening and inspired? Hmm. Am thinking

FHFA and the GSEs challenged Listening Session participants to suggest ways to make the CHOICEhomes & MHAdvantage programs more marketable in general, more attractive to prospective homebuyers in particular. Consider identical ‘specs’ for both programs!

A surprising sidebar realization occurred when it became apparent land lease communities might well be eligible for GSE consideration under Affordable Housing Market parameters – somewhere we haven’t been before. I’ll be looking into this in our behalf.

Finally. The GSEs were warned to ensure mortgages they’re writing on land lease communities are not being ‘set up for failure’, due to extravagant rental homesite rate increases. How to tell? Research HUD’s new Fair Market Rent (‘FMR’) stats per specific geographic region, and compare with said site rents (e.g. Divide FMR$ by ‘3’ for estimated and historic equivalent)

II.

ANSWERS! A New Emphasis for This Blog

Every land lease community owner/operator faces unique and changing challenges within a particular property or throughout one’s portfolio of communities. The goal is to identify these internal challenges and solve them in the most efficient manner possible.

In this instance, let’s begin with the safety and security of one’s on-site staff when ‘showing product’, whether selecting a vacant rental homsite for one’s new or resale home; or, walking through one or more model or ‘spec’ homes available for purchase. Have you considered or taught measures to reduce personal risk during these routine leasing and sales tasks?

Well, a few years ago, during a Manufactured Housing Manager (‘MHM’) professional property management certification class, this question was raised by a veteran on-site manager. We discussed the matter as a class, and came up with a few practical measures. I recorded them, and during several more MHM classes, elicited response on this subject, from candidates.

Today, and for some time now, a list of ’10 Helpful Steps to Manager & Leasing Consultant Safety’ has been part of the MHM curriculum. Now it’s Appendix # 45 in the 8th edition of the Community Management in the Manufactured Housing Industry textbook!

Sample ‘helpful steps’? “Never walk into a house or room first; be the one to follow!” & “Carry a small but very loud whistle with which to summon help!” And there’re eight more great tips!

To order a copy of this valuable property management text, simply visit www.educatemhc.com

And since a copy of this 250 pages property management text is given to every MHM candidate during all Manufactured Housing Manager classes, consider attending one! Next MHM class is scheduled for 14 January 2020 in Louisville, KY – the day before the Louisville MHShow begins. Visit website or phone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to register.

***

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

Here’s My FHFA & GSEs-hosted Listening Session Presentation

Tuesday, November 12th, 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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! Call for next MHM class info.

INTRODUCTION. Have you wondered what a formal presentation, at an FHFA & GSE-hosted Listening Session, reads like? Well here’s what I’ll be presenting, in your behalf, at the St. Louis, MO. Listening Session on Tuesday, 19 November.

And, for those of you reading this, and attending MHI’s NCC Leadership Forum in downtown Chicago this week – with this blog in hand, ask staff what they will be saying, in your behalf, at the upcoming Listening Sessions in St. Louis and or Washington, DC. As a member, you have a right to know.

Here goes:

Two+ Decades of Manufactured Housing Shipment & Finance Turmoil
(1998 – 2020)
Can End with Help from FHFA & GSEs!

George Allen, CPM®Emeritus, MHM®Master
‘Input for FHFA & GSEs-hosted 2019 Listening Sessions’

See Enclosure: ‘Ah Ha! & Uh Oh’ Formulae worksheet; EducateMHC., Franklin, IN., 2008

Setting the stage. During year 1998, 372,943+/- new HUD-Code homes were shipped nationwide; but from there onward, it was downhill till nadir year 2009, when only 48,789+/- new homes were shipped.*1 At the dawn of the 21st century, according to the Manufactured Housing Institute (‘MHI’), more than 10,000 ‘ independent (street) MHRetailers’ closed their doors; and new HUD-Code homes, particularly Community Series Homes, began to be shipped directly into land lease communities, ‘for sale’ & seller-financing, as well as rental units.*2 And that’s where we are today. How do Fannie Mae & Freddie Mac fit into this two decades long paradigm shift scenario? As an industry, manufactured housing is surviving, albeit recovering slowly, from 48,789+/- new HUD-Code homes shipped during 2009, up to 96,555 new homes shipped throughout year 2018, but still sorely in need of reasonable access to chattel capital for home-only loans in land lease communities, large and small, coast to coast!

***
I was present at the historic meeting, during early 2010 in Elkhart, IN, when the FHFA & GSEs informed HUD-Code housing manufacturers, that going forward, the industry would be on its own, where housing finance support was concerned, i.e. end of easy access to chattel capital to finance new home-only loan transactions within land lease communities nationwide! Why?

While naive at the time, about housing finance and the GSEs, I understood Fannie Mae & Freddie Mac’s angst with the manufactured housing industry. A decade earlier, I had penned an expose’ titled, ‘Upside Down in a Mobile Home Park’, first published in Manufactured Home Merchandiser magazine. It detailed widespread financial shenanigans and predatory lending practices – and consequences, that’d hurt and haunt the industry during the decade ahead – as described in the previous paragraph.

Fast forward a few years, to the International Networking Roundtable held in Peachtree City, GA. That event marked the return of the FHFA, Fannie Mae & Freddie Mac, to meet and talk firsthand with manufactured housing industry businessmen and women most affected by the their departure a few years earlier; specifically, the owners/operators of land lease communities, now routinely selling and seller-financing new HUD-Code homes on-site. We learned a lot from each other during the two day event; but most important of all, was the obvious pent-up optimism, and belief we could forge a new housing finance way forward together!

How so? Well this was nigh the time of Duty to Serve (‘DTS’) planning at Fannie Mae & Freddie Mac. Manufactured housing aficionados, and land lease community owners/operators, were invited to participate in open discussion sessions at GSE headquarters, as well as during formal Listening Sessions around the U.S.

Results? That’s been a decidedly mixed bag; complicated by whatever perspective is being espoused by whoever is speaking, about what, at the time. In summary; here’s how I see it:

Relative to DTS focus on manufactured housing, there’s been limited progress in the real estate-secured lending arena, speaking specifically of Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHomes programs. In my opinion, the programs are welcome and needed, but are too confusingly similar in terms of seller concessions, down payment minimums, transaction type, terms, and more. Of particular ‘rub’ are distinct differences in housing valuation methodology. And a further tripping point is MHI’s ‘new type’ of HUD-Code manufactured home, designed for underserved markets. To date, even after several years, there’s no consensus name for this ‘more expensive’ manufactured home design that qualifies for both GSE home loan programs. Bottom line? How’s a prospective homebuyer to know what (no name) manufactured home design to consider buying, and which of the two near-twin GSE loan programs to use?

Even more ‘telling’ – some would say ‘appalling’, relative to DTS focus on manufactured housing, there’s been NO progress towards a new or renewed chattel lending product program! And while volume estimates vary, the vast majority of manufactured housing finance, these days, is needed for chattel, or home-only, transactions occurring on-site in 50,000+/- land lease communities located throughout the U.S.! To date, land lease community owners/operators have exhibited an admirable degree of creativity, initiative, and chutzpah – even in the face of increased state and federal financial oversight, to consummate new home-only sales transactions on-site. We still sorely need reasonable access to chattel capital, other than via one independent third party firm that, reportedly, corners 70+ percent of the national market share of this type lending. Furthermore, we continue to need a viable secondary market for selling seasoned manufactured housing financing products!

Now, it would be easy to stop here and feel ‘I’ve done my part’ at this Listening Session – but I can’t do that. A sentence in this recent Press Release (10/28/19): ‘FHFA Releases New Strategic Plan & Scorecard for Fannie Mae & Freddie Mac’ hooked me with the following statement:

“…solving our nation’s critical housing affordability challenges will require looking beyond the secondary mortgage market and addressing the true cause of this crisis: namely, the significant shortage of housing supply.”

Here I am, a businessman with 40 years experience in a housing arena capable of shipping 579,940 new ‘mobile homes’ during year 1973, and 372,943+/- ‘manufactured homes’ in 1998; but today, year to date through September 2019, we’ve shipped only 70,497 new homes! Why? Simply because we don’t have the chattel capital financing needed for home-only loans effected within land lease communities! And we don’t have ‘that’ because no one (Think FHFA, GSEs, et. al.) trusts our integrity to lend these monies wisely and securely! But the truth of the matter is, we can do both – and more! Here’s how to increase the supply of HUD-Code manufactured home to address this nation’s affordable housing crisis…

The manufactured housing industry routinely makes home loans, in land lease communities, giving the 30 percent Housing Expense Factor (‘HEF’) lip service, by including only PITI (loan principal, interest, taxes, insurance) and rental homesite fee in monthly mortgage payments!*3 What’s missing is household expenses (e.g. electricity, heat, water, sewer) – all which must be paid each month, but separate from the ‘mortgage payment’. Consequences? 1) A riskier loan, where homeowners/site lessee can ‘buy more home’ yes, but 2) generally pay considerably more than the prudent 30% HEF. Here are results of both calculations*4:

Given: $51,229 Area Median Income (‘AMI’) per local housing market’s postal zip code via zipwho.com, &/or Annual Gross Income (‘AGI’) per homebuying prospect or household. Also 30% HEF; $333 monthly site rent; and loan terms of 9.5% & 20 years.

Risky home-only loan. $51,229 AGI X .3HEF X 100% applied to monthly PITI & rent, divided by 12 months, less $333 site rent = $948/month PITI & rent payment. When loan terms applied = $101,702 max loan amount. Risky, because household expenses, when paid in addition to mortgage & rent, force homeowner/site lessee beyond the 30% HEF goal. So, consider changing this routine practice to what follows:

Affordable home-only loan. $51,229 AGI X .3HEF X 75% applied to monthly PITI & rent (with 25% kept out of 30% HEF for household expenses), divided by 12 months, less $333 site rent = $628/month PITI & rent. Loan terms applied = $67,372 max loan amount. Far less risky an investment, but also less home purchased.

Point? If home-only loans were effected in accords with the ‘affordable’ perspective, it’s logical there’d be fewer defaults as homeowners/site lessees lived within their means. Perhaps this is one of the long sought keys to improving the security of chattel capital loans on homes sited in land lease communities.

And there are additional measures to consider. One would be to enforce strict screening of loan applicants. Also consider a measure of property owner recourse on home-only loans effected within their owned properties.

Finally; consider applying HUD’s recently published Fair Market Rents (‘FMR’) for year 2020, as a guide to ‘check & ensure’ land lease community site rents are in accords with the traditional 3:1 ratio, e.g. $999/month @ 3BR2B conventional apartment (per FMR) = $333/month site rent in a land lease community in the same local housing market. *5

This concludes my remarks and recommendations relative to this Listening Session.

EducateMHC
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

End Notes.

1. (+/-) qualifier following manufactured housing industry annual shipment totals, until 2012, accounts for different totals published by MHARR & MHI. Since 2013 an official total, based on unadulterated data from the Institute of Building Technology & Safety (‘IBTS’), HUD’s contractor, is published by MHARR, NAMHCO, HUD, & EducateMHC

2. Year 2009 = 24% of new HUD Code homes (i.e. 12,000+/-) were shipped into land lease communities; by year end 2015, that percentage increased to 40%, or 28,000 new homes – and that percentage will continue to rise with access to chattel capital.

3. Housing Expense Factor or HEF @ 30 percent. One of at least six measures of housing affordability; other measures being: Housing Opportunity Index or HOI; Housing Wage or HW; Workforce Housing or WFH; Income to Home Value Ratio or IHVR; and, ‘one who believes’ he/she has consummated an affordable home transaction.

4. Reference: ‘Ah Ha! & Uh Oh! Formulae’ estimate maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately-owned homes of any type, sited on realty owned fee simple with home, or ‘home-only’ on leased land – as in a land lease community. Form available via www.educatemhc.com

5. For FMR, google ‘Fair Market Rents 2020’ to research state and city fair market rates.

Visit www.educatemhc.com for comprehensive array of products (newsletters & books) and services (PM training/certification & Performance Evaluations) tailored for land lease communities large & small, nationwide. The ‘Upside Down in a Mobile Home Park’ expose’, described in this narrative, is featured in SWAN SONG, a history of land lease communities and official record of mobile home/manufactured housing annual shipment volumes from 1955 to present day. This text is available for purchase from EducateMHC.

GFA/cc

MHIndustry New Years Resolution for 2020!

Friday, November 8th, 2019

8 November 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 the online national advocated, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764/ Also email: gfa7156@aol.comk & 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! Call for next MHM class info

INTRODUCTION: Yes, it’s early to announce the traditional New Year Resolution Challenge, but that’s what you’re about to read here. First, how it took 32 long and rocky years to get where we are today. Then a heartfelt challenge to three national MH-related entities to better represent, lobby in behalf of, and serve the product & service needs of land lease community owners/operators, large & small, nationwide! Here goes….

I.

Long & Rocky Road to Land Lease Community Advocacy & Respect!

It’s taken more than a quarter century for owners/operators of land lease communities (a.k.a. manufactured home communities, & before that ‘mobile home parks’) to arrive at the point in time (year 2020) when they have and benefit from…

• National advocacy via Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division

• National lobbying via National Association of Manufactured Housing Community Owners (‘NAMHCO’)

• National product & service resourcing (books, newsletters, professional property management training/certification, & consulting) via EducateMHC

But getting to this point in time, of representation, lobbying, and resourcing, has been a long and rocky road, commencing as far back as year 1988. Here’s a summary of key stages along the 32 year journey to land lease community advocacy and respect.

1988. The year Mobile Home Park Management text was published and distributed nationwide. It was the first professional property management text on the property type in two decades.

1989. Marked the debut of the ALLEN REPORT (a.k.a. ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Throughout North America!’), the longest-running (31 years to date) compendium of investment realty statistics and emerging trend documentation, in the history of the manufactured housing industry.

1993. 19 (then) mobile home community owners met in Indianapolis, IN., to form an Industry Steering Group (‘ISG’), taking first steps to improve national advocacy for the property type – before the mini-REIT wave of 1994. Before then, mobile home park matters were handled by a committee of volunteers during MHI national meetings.

1994. J. Wiley & Sons published Development, Marketing & Operation of Manufactured Home Communities. Another ‘first text on the subject in 20 years’, that sparked raw land development seminars during the next decade.

1996. MHI embraces the aforementioned ISC and launches the NCC, which remains in place to this day, as a full-fledged division of MHI, but is generally led by senior salaried executives of large property portfolios. Also during 1996, J. Wiley & Sons published How to Find, Buy, Manage & Sell a Manufactured Home Community. This case bound text, as its 1994 predecessor, has long been recognized as a realty asset class primary source of information.

2004. One of the rocks along the road to community advocacy and respect occurred when the Urban Land Institute (‘ULI’) launched the Manufactured Housing Communities Council (‘MHCC’). For slightly more than a decade, this was a quasi Think Tank for the realty asset class, hosting opportunities for open discussion among participants from all segments of the manufactured housing industry.

2008 & 2009. Two years and two National State of the Asset Class (‘NSAC’) caucuses, in Tampa, FL. & Elkhart, IN. In the first instance, community owners/operators agreed on a Five Step Action Plan, to reinvigorate the industry and asset class. In the second meeting, HUD-Code housing manufacturers & community owners/operators agreed to begin fabricating and buying a new design of manufactured home, the Community Series Home. All this occurring during the industry’s nadir year (lowest shipment volume ever), 2009. These were also the two years during which the term ‘land lease community’ got widespread traction. Why? Because today’s properties site as many as seven types of shelter, no longer just ‘mobile homes’ and manufactured homes of yore.

2011. Unfortunately, but providentially, the year during which the issue of control and scope of MHI’s NCC came to a public and argued climax, i.e. Whether it’d be dominated by, and identified as, a portfolio owners/operators club, or serving communities of all sizes? This identity issue has played out during years 2014, 2018, and 2019.

2014. Community Owners (7 Part) Business Alliance or COBA7 was launched early in the year, providing tailored products and services to land lease communities, large and small.

2018. NAMHCO stepped forward to lobby, in our nation’s capitol, in behalf of all land lease communities, large and small, throughout the U.S.

2019. EducateMHC absorbed the COBA7 division of GFA Management, Inc., dba PMN Publishing, to continue that body’s goal to serve the product and service needs of land lease communities, large and small, from coast to coast.

2020. The land lease community real estate asset class has traveled the long and rocky road to advocacy and respect! Let’s identify these benchmark achievements:

• We’re now well-represented in Washington, DC. Add MHARR to the MHI & NAMHCO list

• The Institute of Real Estate Management (‘IREM’) now sells Community Management in the Manufactured Housing Industry to its’ Certified Property Manager (‘CPM’) members. This is 8th edition of the 1988 Mobile Home Park Management, & basic MHM textbook.

• We read a quality print trade publication (MHInsider), as well as three digital MH business newsletters, and a weekly blog posting.

• Via annual ALLEN REPORT, we know identities of all 500+ portfolio owners/operators of land lease communities throughout the U.S. & Canada.

• All our real estate asset class advocacy, lobbying, and resource needs are now handled by the NCC, NAMHCO & EducateMHC.

Know what? There’s still much more that could, and probably should, be said about land lease communities long and rocky road history. For example, the three – or is it four, consolidation stages we’ve passed through together; the slow growth – but at least there’s growth, of professional property management throughout the realty asset class via MHM and ACM certification programs. And then there’re the paradigm shifts the manufactured housing industry has experienced since 1972, especially the 20 year one we’re in now, i.e. distribution of new HUD-Code homes away from independent (street) MHRetailers, to direct sale of new homes into land lease communities nationwide.

And then there’s still that perennial ‘elephant in the MH room’. Specifically, whether the three identified entities – MHI/NCC, NAMHCO, & EducateMHC, or make it four with addition of MHARR, will work together – or apart, during the months in year 2020, especially considering the new and restructured leadership at the Manufactured Housing Institute. Let’s all watch and see what happens going forward….

If you’d like to read more about land lease community history, purchase a copy of SWAN SONG, via www.educatemhc.com And when you purchase the book, ask for a FREE copy of the booklet titled: ‘Who Will Preserve Your Legacy? Answer: You!’ The beauty of this offering is it summarizes ten autobiographies authored by industry pioneers to date; and in the end, describes how to pen your memoir and corporate history. Enjoy!

George Allen, CPM, MHM
EducateMHC
170 Commerce Dr.
Franklin, IN. 46131
(317) 346-7156

Your First VALEDICTION

Friday, November 1st, 2019

1 November 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 the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

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

Mot: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class info

INTRODUCTION: Now here’s something, about me, about which you knew or know nothing!
My practice of penning ‘valedictions’, or ‘fond farewells’, to friends and relatives when they die. Started doing this in 1996, upon the passing of my father. At the time, I rewrote a birthday gift story about him, into a tribute that was printed, read, and shared during his memorial service. Since then, I’ve continued the practice with individuals I’ve known well enough to have had personal experiences worthy of sharing in this fashion. The valediction included here is for one of the many owners/operators of land lease communities I’ve known well during the past four decades.

I.

A Valediction, a ‘bidding farewell’ to Darrel G. Cohron

I met Darrel Cohron, and his twin Harrel, during the early 1970s, when relocating to Indianapolis from Philadelphia, PA., as part of a plant management team tasked to build a new pre-fab housing plant in Franklin, IN. I’d been told, by local apartment and nursing home developers Frank, Ethan & Rollin Jackson, the Cohron brothers, and a Greenwood businessman – the late Bud Meyer, would be knowledgeable resources about factory-built housing in general; manufactured housing, mobile homes and parks in particular. Well we met, and ‘got a leg up’ on our assignment, learning how doing business in the Midwest would not be wholly akin to what we experienced back East – mainly how union labor was the exception rather than the rule, at the time.

Ten years later, long after the pre-fab plant closed, and shortly after I’d started my own firm;, I sought Darrel’s advice again. This time it had to do with me wanting him to critique my estimated value of the large manufactured home community I was fee-managing in Mooresville, IN> It was in foreclosure and no investor would pay anywhere near the amount of development money the bank had loaned and lost in the project. They asked me if I’d buy it. Well, I had but $10,000 in savings, a wife and two small children, and not desire to lose this fee-management client, so I estimated the 500 rental homesite property, with but 100 homes paying rent, to be worth only $400,000. Asked Darrel to ‘check my numbers’ and advise. Here’s how this part of the story is told in my 2017 book, SWAN SONG, a ‘Semi-autobiography, and history of land lease communities I since 1970’:

‘Darrel agreed with my estimate, and his parting word of wisdom was this: ‘There comes a point in everyone’s life when you decide to stay on the safety of the porch, or go out and run with the big dogs! George, I think this is your safe porch or big dog decision moment in life!’

Took Darrel’s advice, found a partner, along with $400,000 and bought the property. Now that’s the Darrel we remember and appreciate. Certainly for me!

Then there’s the 2010 book, The Trailer Twins, a.k.a. ‘The Harrel & Darrel Cohron Story’. Here are some of my favorite passages from this biography.

Mayor Paul Ricketts recalling “…( a) fond memory of Harrel & Darrel wrasslin’ in the gravel of their sales lot, both dressed in suits. They called such altercations their board meetings’. When they were through , they brushed themselves off, and we all went to dinner.”

And this from Darrel, talking about the manufactured housing business: “We loved it. We still do. You have to. If you’re not in love with what you do, you’re just not ever gonna make it.”

Darrel & Harrel’s business success formula? “First, you never lie to a customer and second, after a sale, you give good customer service and follow up to make sure the customer is satisfied.” Plus this, about working together for life: “We both know we’re dedicated to the business and to each other and our families. If something needs to be done, we will do it. Our motto is ‘get up early, stay late, and tell the truth’.”

Don’t know ‘bout you, but as a local manufactured housing businessman, I’ll miss the friendly camaraderie of those Christmas parties out in the barn in back of the Cohron’s home sales center along Pendleton Pike.

Well Darrel, you’ve lived a long and prosperous life – just look at the legacy you and Harrel leave behind, in family, friends, and fortune. When I get to heaven, I’ll ask St. Peter where to find you, and he’ll likely say the same thing as the folk at the assisted living facility where you lived this past year. “Just walk down that street of gold until you hear country music played loud and bold. That’s where you’ll find Darrel Cohron!” Hope to see you then and there old friend!

George Allen, colleague & fellow RV/MH Hall of Fame member, October 2019.

Want to buy either or both books mentioned in this valediction? SWAN SONG is available via www.educatemhcv.com And The Trailer Twins is available from the RV/MH Hall of Fame store: (574) 293-2344

Hope you liked the valediction to Darrel Cohron. Who knows? Perhaps someday I’ll pen a like tribute to you and your life adventure. GFA

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