George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

Blog Posting # 779, Copyright 9 February 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! Educate MHC is the online advocate, historian, trend tracker, and text resource for these two business models. Access EducateMHC via (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole MH-focused professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership/management, and as an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is the only emeritus member of the Manufactured Housing Institute (’MHI’), a founding board member of MHI’s National Communities Council (‘NCC”) division, an RV/MH Hall of Fame enshrinee, MHInsider editor &INFLUENCER, Vietnam combat veteran & retired lieutenant colonel of U.S. Marines, as well as author/editor of 20 books & chapbooks re MH, communities, business management & prayer.

OUCH!

The results are in. Year 2023 was NOT a good year for HUD-Code manufactured housing production! We knew we were sliding, but how badly? Well, during the past few months, Institute for Building Technology & Safety (‘IBTS’) reports showed we were 20+ percent off our year 2022 stride when we produced 112,886 new HUD-Code homes.*1

Final MH production figure for year 2023? Only 89,169 units; that’s 23,717 fewer new HUD-Code homes than produced during year 2022; and, 861 fewer new homes than EducateMHC predicted a month ago. Estimated total production VALUE of 89,169 new HUD-Code home produced during year 2023? $3.86 billion dollars! How many in government realize that?

By the way, how do these 89,169 new HUD-Code manufactured homes produced, compare with the total number of new recreational vehicles (‘RVs’) produced during the same period of time (2023)? Well, 313,000 new RVs produced during 2023 represents a 36.5 percent DROP in production compared to year 2022! Guess you could say, ‘MH misery loves company!’

Reasons for this lackluster MH production performance? Rather than regurgitate those reasons here, suggest you scroll back to blog posting # 774 and re-read the expose’ titled: ‘MH Headed to the Bottom Production-wise? Ah, But to the Top, Price-wise!’ That’ll tell you just about everything you need to know about the inner workings of the HUD-Code manufactured housing industry. IMHO, I don’t think our manufacturers want to produce more new MHs!*2

End Note.

1. Institute for Building Technology & Safety (‘IBTS’) is HUD’s official scorekeeper where the HUD-Code manufactured housing industry is concerned. IBTS data is routinely quoted by HUD, MHARR, MHI, & EducateMHC.

• IMHO = ‘In my humble opinion’

‘When It Rains, It Sometimes Pours!’

I believe that idiom, but how ‘bout now, when maybe it should be raining, even pouring, but is not?*1 As an industry, we might soon be faced with the reality of that idiom; but first, another salient observation, from radio talk show host Chris Plante (105.9 in Washington, DC): “The mainstream media’s greatest power is the power to ignore.”*2 So true, especially in today’s world. But what do those two truisms have to do with manufactured housing and land lease communities? Right now, only a little; but in the near future? Here goes….

Major law firms have filed antitrust class lawsuit(s) in the U.S. District Court for the Northern District of Illinoi, “…on behalf of mobile home owners impacted nationwide, against nine manufactured home community management companies and one manufactured home market data provider” alleging “they suffered substantial financial losses due to their landlords’ conspiracy to fix, raise, and systematically inflate manufactured home lot rental prices at more than 150 locations across the United States.” We all knew this was going to happen someday.

However, to date there’s been little to no mention of this in mainstream media and trade press.

And it’s alleged, one or more national advocacy and or legacy bodies, related to manufactured housing and land lease communities, recognizes – in a positive and awarding fashion, firms who’ve maybe have had bad ratings with Better Business Bureaus (‘BBBs’) in local housing markets where they do business. Isn’t this counterproductive to our image-improving efforts?

Here too, little to no mention of this peccadillo (?) in the mainstream media or trade press.*3

Given the HUD-Code manufactured housing industry’s perennial poor reputation and public image of the past, we hardly need additional fuel thrown one either of those two smoldering fires.

So, for now, and in general terms, negative media publicity is not raining down, let alone pouring down on us; however, if we, as an industry and realty asset class, continue to press our luck, so to speak, in either or both nefarious matters just described, we can expect not only rain pouring down on us, but more mainstream media attention than we need or want.

Anyone listening out there? Your reactions and suggestions welcome via gfa7156@aol.com

End Notes.

1. ‘When it rains, it pours’ is an idiom that ‘captures the experience when events, usually unfortunate, occur simultaneously or in rapid succession.’ An online definition. 

• It’s why today conservative print and broadcast media (e.g. New York Post & The Epoch Times & Fox News), in my opinion,outperform news reporting at the New York Times, Washington Post & MSNBC & CNN).

• Pecadillo. ‘a trifling offence’ – or worse?

NAHB, Freddie Mac, & NAR at Odds!

These three well known housing-related NGOs & a GSE are seriously at odds with one another when it comes to estimating the size of the nationwide housing shortfall these days!*1 Here are their respective estimates:

NAHB, in year 2021, publicized an estimated housing shortfall of 1.5 million housing units

Freddie Mac, in 2020, publicized an estimated housing shortfall of 3.8 million housing units

NAR, in 2021, publicized an estimated housing shortfall of 5.5 million units

Why the 4,000,000 difference in estimates between lowest and highest of these three estimates? In a word, ‘methodologies’. Here quoting from a Harvard Joint Center for Housing Studies press release, on this subject, dated 29 January 2024:

NAR “calculates the difference between the current number of vacant units for-rent or sale, and the total that would exist under ‘normal’ vacancy rates for each metro in the country, defined as the long-term average rates. The NAHB estimate is a sum of all U.S. metropolitan areas….” (Does not include non-metro areas, hence possibly why the lower estimate)

Freddie Mac’s estimate “…is also based on how much lower the current vacancy rate is than ‘normal’. However, there are notable differences in the two calculations. Freddie Mac’s estimate covers the entire US, not just metro areas. Second…Freddie Mac’s estimate includes an additional 0.4 million units for ‘missing’ households that did not form because of the shortage of housing units.”

NAR “…estimate does not compare vacancy rates. Instead, NAR based the estimate on the impact of the net slowdown in the rate of housing construction since 2000. Specifically, NAR compared the number of new homes added in 2001-2020 (being 1.225 million/year) to the number of homes that would have been produced if the previous historical annual average construction rate for 1968-2000 (i.e. 1.5 million/year) had held.”

There is an additional data point to consider. The National Low Income Housing Coalition (‘NLIHC’) estimate holds “…there is a shortage of 7.3 million units of housing affordable to the nation’s 11 million renters with extremely low incomes, defined as those who earn up to 30 percent of the median income for their area….” Wow! A 5.8 million difference between NAHB & NLIHC. No wonder folk are confused when they read reports from these four entities.

BOTTOM LINE to all this? “…affordability challenges faced by millions will require a concerted effort to not just add more units, but also more units affordable to the most economically vulnerable households.” And here, once again, HUD-Code manufactured housing and land lease communities nationwide hold the ‘affordability’ answer to this challenge! But will HUD finally get behind a major effort to not only identify, but promote, our brand of factory-built housing and lifestyle to the American home-buying public? Again, IMHO, ‘No’! Why? Political football!

So, what are we to do as an industry? Well, I’ve been saying and penning this for years, but here goes once again: Schedule national and regional strategic planning meetings to be attended by businessmen and women ‘with skin in the game’ (i.e. owning factories and communities) willing to invest a day or two of their time to address this national challenge! It’s been done before, in the land lease community segment of MH. In 1993-96 leading to the birth of MHI’s NCC division; in 2010 at meetings held in Tampa, FL., & Elkhart, IN., to move our industry off its’ nadir (lowest production point in history), using Community Series Homes (‘CSH’); and finally, in 2016, at the RV/MH Hall of Fame when community owners/operators were taught how to spec and buy new HUD-Code homes from factories, to market and sell on-site at their properties. We can do this again! We just need national leaders with vision, purpose and chutzpa (‘effrontery & gall’) to get it done! Are you one of those leaders?!

Again; your thoughts on these timely and critical matters? GFA 7156@aol.com

End Note.

1. NGO = non-government organization, e.g. NAHB & NAR. GSE = Freddie Mac. Specifically, National Association of Home Builders & National Association of Realtors.

Blog Posting # 778, Copyright 2 February 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRD’) component of MH! Educate MHC is the online advocate, historian, trend tracker, and text resource for these two related business models. Research EducateMHC via (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole MH-focused professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH and community ownership/management, and life an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is the only emeritus member of the Manufactured Housing Institute (‘MHI’)¸a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, Vietnam veteran & retired lieutenant colonel of U.S. Marines, as well  as author/editor of 20 books & chapbooks re MH, communities, business management & prayer.

Year 2023. A Lousy Year for You too?

By the time you read this blog posting Friday or Saturday (2 or 3 February 2024), the Institute for Building Technology & Safety (‘IBTS’) – HUD’s scorekeeper for manufactured housing production, will have reported the MH production level for December 2023. At that point I’ll add their data point to the year to date (‘YTD’) figure MHI, MHARR & EducateMHC already know, then let YOU know, via our monthly MH production & stock market report, just where we wound up for year 2023. My guess today is we’ll be roughly 22 percent below where we were this time last year, likely around 95,000 new MHs. That’s DOWN from 112,886 new HUD-Code homes produced during year 2022. A lousy year for MH!

How will our MH total compare with our sister industry, recreational vehicles? Well, the RV industry, this past week, announced their year 2023 production total of RVs to be at 313,000 units, DOWN 36.5 percent from where they were the year before. So MH is not the only industry in a free fall right now. A lousy year for RVs!

Yes, discouraging year end results for both industries! Prospects for improvement during year 2024? As a perennial optimist I’d like to think so; but as a realist, I think not. Why? This is a presidential election year, and given the present uncertain state of our national economy, I think both industries will be exceedingly fortunate if they can match their respective year end totals in 2024 with those in 2023; no better, no worse. Next week’s blog posting will contain the year end MH production total for year 2023.

Anecdotally, there’s an urban legend from years past (i.e. post 1972 when RV/MH Hall of Fame was founded), that the two pairs of letters, ‘MH’ & ‘RV’, would be featured in a sequence indicating which industry was enjoying the most production success at the time, e.g. MH/RV Hall of Fame or RV/MH Hall of Fame. However, as I research and pen the history of the RV/MH Hall of Fame, I’ve been able to document that fable. Hmm. But it does cause one to wonder: Perhaps it should it be the MH/RV Hall of Fame for a while’

READ ‘VISIONS IN LEISURE & BUSINESS’

Well the online edition of ‘Visions in Leisure & Business’ is available for you to read! Simply visit https://scholarworks.bgsu.edu/visions/vol25/idd2/ There you’ll find a whole series of articles focused on various aspects of recreational vehicles. As you likely know, from past blog postings during 2023 I researched and wrote ‘RVs as Affordable Housing’ for this academic journal. And Al Hesselbart, retired historian of the RV/MH Hall of Fame penned a brief history of the RV industry. For those with business interest in recreational vehicles, I’m confident you’ll find this to be an informative and helpful tour of our sister industry.

5Barriers for Entry-level MHomeownership

Were you part of the buzz last week when Harvard’s Joint Center for Housing Studies (‘JCHS’) published their new study titled ‘Five Barriers to Greater Use of Manufactured Housing for entry-level Homeownership’? It was hard to miss, as everyone was talking about its’ content and possible influence on HUD-Code manufactured housing and land lease community development. Here’s a brief summary of the content (For more, go to jchs@harvard.edu

Introductory paragraph. “The sharp rise in home prices and interest rates over the last few years has pushed homeownership out of reach for millions of renters, as documented in our ‘State of the Nation’s Housing 2023 Report.’ Under these conditions, it is more important than ever that affordable homes are available for entry-level homeownership. Manufactured housing offers just that, thanks to lower production costs; indeed, the construction cost of a basic single-section manufactured home is roughly 35 percent that of a comparable site-built home. While the savings for larger homes is smaller, it is still significant, with a double-section home costing 60 percent, and a CrossMod home (which most closely resembles site-built housing) costing 73 percent of comparable site-built homes.”

Parenthetically, while I see and kinda understand the industry’s aggressive marketing of CrossMod homes; until we document and publish the actual number of such units produced year-by-year, I think we’re guilty of ‘gaslighting’ prospective home-buyers about the alleged popularity of this line of new homes. *1

OK, here’re the barriers to greater use of MHs for entry-level homeownership:

“Negative Perceptions of Manufactured Home Quality.” Pre-HUD homes (i.e. pre 1974) continue to taint MH public perception, while contemporary new MHs are akin to site-built homes. Edit: How do we, as an industry, escape the grim reality of economically-challenged homebuyers and renters having ‘nowhere else to go & live’, other than to become homeless?

“Restrictive Zoning and Land Use Regulation.”  As an industry we are ‘so used to’ NIMBY, LULU, & BANANA.*2 Even state laws preventing outfight exclusion of manufactured housing are oft burdened with other barriers, e.g. roof pitch, foundation heights, site sizes, setback requirements, and more. Edit. How many in our industry live in manufactured homes?

“Market Conditions.” While ameliorating restrictive zoning & land use regulations is vital, favorable market conditions like lower land costs, lower density development, and lower household incomes are equally important. That’s why the nature of local housing markets is so critical to the development of raw land into land lease communities and scattered site building.

Edit. Is our local housing market amenable to affordable housing of all types, especially MH?

“A Unique & Limited Supply Chain.” Noted by JCHS: “…homebuyers purchase a home from a retailer but are required to find land on their own….” & “Developers…must learn a new set of specialized skills related to getting local approvals, siting homes….” With only 140 factories nationwide, delivery is an issue. Edit. Where to go? Many land lease communities are now full.

“Access to Mortgage Financing.” Conventional real estate financing available only to homes on homeowner-owned sites and MHs permanently affixed thereto. Personal property loans, a.k.a. chattel mortgages, have limited availability for homes sited on leased realty, e.g. in land lease communities. Former feature more attractive terms; latter have higher rates and shorter terms.

Already ‘commentaries’, about this study, have arrived at our offices, suggesting additional barriers to greater use of MHs for entry-level homeownership. These include: lack of land development initiatives on the part of land lease community owners/operators and by factories; lack of national marketing effort by and among the Big Three-C manufacturers *3; and no effort on the part of HUD to promote manufactured housing – the very housing type they regulate, to the home-buying public; and, the list goes on….

So, what do you think? What are other barriers to greater use of manufactured housing for entry-level homeownership? Let me know via gfa7156@aol.com

End Notes:

1. Gaslighting. On line definition = “A colloquialism. Manipulating someone into questioning their own perception of reality.”

• NIMBY = ‘Not In My Back Yard’; LULU = ‘Locally Unwanted Land Use’; & BANANA = Build Absolutely Nothing Anywhere Near Anybody!’ And there is YIMBY = ‘Yes In My Back Yard’ when local regulatory barriers to all forms of affordable housing disappear. Quoted from ‘SWAN SONG’, available from EducateMHC

• The Big Three-C HUD-Code housing manufacturers: CAVCO Industries, Clayton Homes, & Skyline-Champion, who together, enjoy more than 70 percent of the national manufactured housing market share.

George Allen, CPM, MHM

POSTSCRIPT

How does one pen a personal note on a social media platform like this? I don’t really know, even after posting nearly 800 blogs during the past 15 years. Yes, we started blogging round about year 2009. Anyway, I’m going to give it a try in the following paragraphs.

From time to time during last year (2023) and before (Since I retired mid-2021), business friends and acquaintances have come to me personally (Like during the Louisville MHShow last week), via correspondence, and otherwise. All asking me why there isn’t a dedicated forum like this one (i.e. weekly blog via EducateMHC) associated with and hosted by national trade advocates like MHARR or MHI? I have no answer to that question.

I’m an Emeritus member of MHI, as well as founding board member of their National Communities Council (‘NCC’) division (circa 1996); also a longtime and bona fide friend of Danny & Mark at MHARR. But neither body has ever asked me to write in their behalf. And who knows, perhaps I shouldn’t – even if asked. Since 1980 I’ve enjoyed self-published platforms like the ‘Allen Letter’ & ‘Allen Confidential’, as well as columns in the now defunct ‘Manufactured Homes Merchandiser’ magazine and ‘The Journal’ tabloid.*1 In all these I was careful to pen truths, as a pundit, about our industry and realty asset class, along with my opinions on various matters. Sure wouldn’t want to compromise that freedom unless need be.

As I often do here, ‘What do you think?’ Do our national trade advocates need an alternative to their bland routine messaging to members, words from someone who’s been an entrepreneur businessman, ‘with skin in the game’ in this ‘double dual business environment’ for the past 40 plus years – or leave matters just as they are?*2 I’d like to know your thoughts on this matter, and I’m somewhat sure MHARR and MHI would as well.

OK, now I’ve said it. Will leave it well alone unless and until I hear back from you and or ‘others’.

End Notes.

1. My Allen Legacy column in every issue of ‘MHInsider’ magazine is of a different composition; i.e. MH industry & land lease community matters and individuals from an historical perspective.

• ‘double dual industry’ = manufacture and retailing of HUD-Code housing, and the development & operation of land lease communities of all sizes in all locales.

GFA

Blog Posting # 777, Copyright 26 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models. Reach EducateMHC via (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH and community ownership/management, and as an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is the only emeritus member of the Manufactured Housing Institute (‘MHI’), a founding board member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, Vietnam veteran & retired lieutenant colonel of U.S. Marines, as well as author/editor of 20 books & chapbooks re MH, communities, business management & prayer.

Louisville MHShow Potpourri

Most frigid weather, for me anyway, since I started attending this annual manufactured housing show in 1978. Brrr. And what made the weather even worse was having to arise at 6AM the first two days of the show to be present for the State of the Industry panel Wednesday morning and Manufacturers’ Panel on Thursday. My ‘take’ on these presentations?

• In the first instance, four state MH association execs or officers expressed opinions concerning the State of the Industry today; specifically, what is happening in their Midwestern state. No executive presence or input, however, from Ohio & Wisconsin.

• Manufacturers’ Panel. Salaried (not senior executives) individuals from the Big 3-C firms, plus one, held forth on what their firms are doing for the industry and buying public these days. Some talk about the much vaunted CrossMod manufactured home – but when asked how many had been produced annually to date, no one had an answer.

One of many highlights of the MHShow for me was meeting with ROC-USA founder Paul Bradley, and his team, especially those helping to launch a new subsidiary, Integrity Community Solutions. ICS plans to acquire and operate ‘but for’ land lease communities before reselling them to homeowners/site lessees. ‘But for’ communities include portfolio transactions, and value-to-add properties in local housing markets where new affordable (manufactured) homes are needed. For more information about ICS, contact Jessika via jessicap@icsmhc.com

I was also heartened to learn of and meet with individuals interested in acquiring and relaunching the Manufactured Housing Manager (‘MHM’) land lease community property management training and certification program. I started the MHM curriculum in 2001. By the time I retired in 2021, we’d trained and certified more than 1,000 MHMs! Today the program is dormant, but the textbook, ‘Community Management in the Manufactured Housing Industry’ is in many communities across the U.S. and still marketed via EducateMHC.com

One pleasant surprise at the MHShow was to learn of the Fourth Annual MHInsider (magazine) Industry Awardees. I was honored to be named the INFLUENCER Award winner, along with three friends. Byron Stroud, with Skyline Champion Corporation, who was honored as ADVOCACY Award winner. And longtime friend Debra ‘Dee’ Pizer, MHM, of Zeman Homes, was tapped as LEADERSHIP Award winner. Especially pleased to see Ted Boers, founder of DATACOMP, designated as VISIONARY Award recipient! For more information about these awards and individuals read the January/February 2024 issue of MHInsider magazine.

 SHOCKING STATISTICS

Quoting from Harvard University’s Joint Center for Housing Studies report titled, ‘Home Price-to-Income Ration Reaches Record High’. (22 January 2024)

“In 2022, the median sale price for a single-family home in the US was 5.6 times higher than the median household income. As recently as 2019, the national price-to-income ratio was just 4.1”

And a few days earlier, the JCHS (on 19 January 2024) shocked homebuyers and Realtors with this news: “The number of cost-burdened households in the US rose dramatically during the pandemic, and in 2022 reached levels not seen since 2011. In total, 42.0 million households were cost burdened in 2022, paying more than one third of their income for housing. This is an increase of 1.5 million households from 2021, and 4.9 million since 2019.”*1

End Note.

1. “Cost-burdened (severely cost-burdened) households pay more than 30 percent (severely-burdened = more than 50%) of their income on housing.”

George Allen, CPM, MHM

Blog Posting # 776, Copyright 19 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of manufactured housing! EducateMHC is an online advocate, historian, trend tracker, and text resource for these two related business models. Reach EducateMHC via (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH and community ownership/management, and as an author & freelance consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), is an RV/MH Hall of Fame enshrinee, a Vietnam veteran & retired lieutenant colonel of U.S. marines, as well as author/editor of 20 books and chapbooks re MH, communities, business management & prayer.

Tough Love for the Manufactured Housing Industry

In year 2010, as the manufactured housing industry staggered to understand ‘how & why’ they shipped only 48,789+/- new HUD-Code homes during all of 2009, one executive stepped forward and proposed a Five Part Market Share Recovery Plan for the industry and realty asset class. This was Randy Rowe, former executive with REIT ELS, Inc., founder of Hometown America, and present owner/operator of Green Courte Partners. But we’re getting way ahead of the story you need to rehear before delving into a summary his ‘Five Part Market Share Recovery Plan for Manufactured Housing Industry & Land Lease Communities’.

Following paragraphs contain edited passages from an article on this subject, circa year 2010.

“Some of us knew, way back in year 2000, as manufactured housing stepped onto the slippery slope of chattel finance legerdemain (i.e. ‘sleight of hand, conjuring’) -turning our customers upside down financially, but few cared to listen!*1 For that matter, recalling a conversation aboard a private jet flying between Hilton Head and Las Vegas (in 2007), these same folk also saw site-built housing stepping onto its own slippery slope, misusing realty-secured finance cum predatory lending. Then too, no one listened until it was too late! Now folk are listening, sort of. Today’s acid test is whether business is bad enough (in 2024), in the manufactured housing arena for corporate stakeholders to once again take the following measures (i.e. five part market share recovery plan) to bear, and implement necessary changes to affect a factory-built housing market share rebound.”

At this point in history (2008-2010), two meetings occurred as precursors to when the ‘Five Part Market Share Recovery Plan’ would be introduced, albeit implemented. First was a National State of the Asset Class (‘NSAC’) caucus (February 2008), held on-site at the Fountain View community in Tampa, FL., with 100+ owners/operators present. Goal? To identify key industry issues and seize control of their collective business destiny. Later, MHI in a ‘Quick Links’ newsletter to members (May 2010) proposed, “…improving financing for our customers, advocating for implementation of updates to the HUD Code, and protecting preemption of the federal building code.”

So, did these events get the industry on track to restored profitability? No! As a well-known industry pundit (i.e. ‘a learned man’) opined at the time:

“Unless GSEs are dragged kicking and screaming into the mix, the MH industry is doomed. We must have changes in the industry business model (i.e. ‘Stop taking advantage of financially fragile home buyers…’).” And “MH demand has always existed…but after the 1996-2005 MH bond meltdown, every investor knew of the extreme danger of lending on our product. It continues to this day. Can’t or don’t fix that, and the industry is forever severely limited.”*2

That’s the disturbed business background to which Randy Rowe’s ‘Biggest Issues Facing the Industry’ played at the 19^th International Networking Roundtable in Phoenix, AZ., during September 2010. Here’ the five parts to said market recovery plan:

1. Better warranties and better (customer) service. Need 10 year after-market warranties that include a turn-key delivery to customer, addressing installation issues in the process.

• Chattel financing matters. Now need community owners/operators to “provide new and resale home financing on-site in their properties”; loan origination and underwriting must be in accords with federal and state statutes, e.g. S.A.F.E. Act of 2008

• Economic security. Implement long term written leases. Use Area Median Income (‘AMI’) of  local housing markets & annual Gross Income (‘AGI’) of homebuyer to estimate affordable loans

• Multiple listing services. Use the evolving internet to emulate NAR’s Mutilating Service (‘MLS’)*3

• National marketing (image improvement) measures. A proposed national program went nowhere, as manufacturers, during fall 2008, believed ‘dollar assessments on new homes’ would create a pricing advantage among non-participants in said program. MHI’s NCC challenged to address image improvement among communities.*4 Need for a Code of Ethics

So, if you’ve been in the MH and or community business for a decade or longer you know which of these measures have gone forward and which ones died on the vine, so to speak. Today we’re at a new nexus (i.e. ‘a link in time’); Whether to sell fewer new manufactured homes at higher prices, or to sell more new homes at lower prices. More information to follow during the weeks ahead. Tough Love? Sitting manufacturers down and asking them to ‘splain’ to us what they are doing to our industry. Are we no longer interested in being the most affordable housing in the U.S. of A?

End Notes.

1. Read the classic commentary, ‘Upside Down in a Mobile Home Park’ in SWAN SONG. Book available via EducateMHC.com

• GSE. Government-Sponsored Enterprises, e.g. Fannie Mae & Freddie Mac

• NAR = National Association of Realtors; MLS = Multilisting Service

• NCC= National Communities Council division of the Manufactured Housing Institute

KING OF THE TRAILER PARK

Ready for a break in last three weeks of serious writing about present and future business prospects of manufactured housing and land lease communities? Well, here it is; an edited version of an obituary published shortly after the demise of a land lease community homeowner/site lessee, a.k.a. ‘King of the Trailer Park’, during year 2023. No real names or locations, but you’ll probably enjoy the ‘drift’.

Joe, a divorcee, father, grandfather, and proud owner of a few lots in the trailer park had had enough, so up and died on us this fall – to avoid another Presidential stolen-election mishap in the near future.

As a gluttonous eater of fried foods and snack cakes, as well as the occasional chili cheese dog, Joe tried in vain to give up the ghost by clogging his arteries and having a stroke in 2015. His sons had other plans and made him go to the hospital. While waiting in the ER at the hospital, he was heard saying, ‘Let’s make a break for it!’ Overheard by one of the hospital staff, he was forced to go through the appropriate check-out procedure.

On many occasions in life, Joe was seen in is backyard at the trailer park during the early hours of the morning, hammering beers, standing over country-style ribs, and yelling, ‘It’s got a head like a cat on it!’ while nearby neighbors would peek out their windows bearing looks of disgust and amazement, as his party guests were slurring remarks about needing to speed-up his cooking style, ‘We’ve been here since five o’clock’ – ‘I’ve got work in the morning.’

We don’t know if he was married, but he definitely was a lady’s man. There was Jenny, Trudy, Anne, Patsy, Shirley, etc., etc… ‘It’s in the bones’ he told us as he proudly pointed to his skinny, pasty-white legs. ‘Women love a good shin’. We think he might even have some females waiting for him on the other side. Joe loved his family more than anything else in the world…except ice-cold Busch, room-temperature Busch, T-bones, New York strip, prime rib, shrimp, swimming, poker, hatch-back Mustang GTs, tank-tops, Tennessee men’s basketball, and his personal copy of Eddie Murphy’s Raw.

He leaves behind his second-favorite son, in Arizona City, AZ., his favorite son in KY, a younger brother Al, and unofficial daughter Fanny in the trailer park, as well as a pair of old boxers which have ‘Buttweiser the King of Rears’ printed on the design He will be moderately missed. 

Not the sort of guy who’ll make it into the RV/MH Hall of Fame. But know what? Stranger things have happened in the past – and rumor has it we may see a misfit in the not too distant future….

And yes, this is a bona fide obituary that made its’ way into my collection of interesting tales, statistics, and other trivia about MH and communities. Perhaps someday I’ll share a blog tale with you titled, ‘The Bad Boys of Manufactured Housing’ – in which I profile a murderer, bagman, and criminal, all with ‘reps’ in the community business years ago….

George Allen, CPM, MHM

Blog Posting # 775, Copyright 12 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable, attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of manufactured housing! EducateMHC is an online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC via (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as an author & consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), is an RV/MH Hall of Fame enshrine, a Vietnam veteran & retired lieutenant colonel of U.S. Marines, as well as author/editor of 20 books re MH, communities, business management & prayer.

‘Thanks for putting into print what no one else will say out loud!’

In a manner of speaking, the ink wasn’t dry on last week’s blog posting before responses arrived on my PC. All commentaries have been in support of the straightforward question directed to HUD-Code housing manufacturers who’ve seen, on the average, production of new homes drop by 22 percent year to date (‘YTD’) 2023, and product pricing rising 77 percent between years 2017 & 2022. Here’s the question:

“Are we, as an industry and affordable housing player, more interested in selling fewer new (manufactured) homes at higher prices, OR selling more new homes at lower, atttainable prices?”

That question prompted the title line of this week’s blog posting: ‘Thanks for putting into print what no one else will say out loud!’ And that wasn’t all that’s been penned to this end.

A veteran state MH association executive shared these observations and frustrations. “You are correct about the prices of new MHs staying stubbornly elevated. Many of our members got burned during Covid as prices (of new HUD-Code homes) skyrocketed! Our independent (street) MHRetailers could not adjust the price quoted to their customers, so they had to suffer  lost revenue in many cases! Now manufacturers and retailers feel they can make just as much money selling fewer homes and that is what they are going to do. Working smarter, not harder! Unfortunately, this is not a good long-term strategy, and it will come back to bite us. Today, as I travel the state extolling the virtues of our industry to municipal leaders and others, saying we are ‘affordable’ is no longer my sales pitch, because it may no longer be true if prices do not dome down.”

And that wasn’t all sent my way. Here’re excerpts from yet a particularly savvy state MH association exec. Responding to my list of five – no, make that six, key reasons why new HUD-Code manufactured housing production is down 22 percent this year, he/she writes:

“…the two biggest obstacles the industry faces which were not mentioned in your blog, in blue states, remain trade unions who are the largest contributors to liberal democrat political candidates at all levels, who want to keep factory-built housing out of competition for labor; and HUD itself. HUD hands out Community Development Block Grants (‘CDBGs’) to pretty much every municipality that applies for one, but does NOT require utilization of HUD-Code housing in any of those municipalities (i.e. ‘promoting zoning discrimination’).”

Furthermore, “…next of my list would be the NIMBYs (‘Not in my backyard!’), university-educated socialist urban planners, and local building officials who refuse to trust third party inspections.”

And “Yet another reason production is down has to do with rental homesites in existing land lease communities. Most vacant sites have been filled by ‘new’ corporate owners, who, in the race to get into the (commercial real estate investment) game, paid too much for those communities in the first place.”- and have jacked site rent rates soon thereafter, causing turmoil.

It’s not too late for you to sound-off with your observations and opinions on this timely, albeit controversial topic: ‘Higher prices and fewer houses’ OR ‘lower prices and more houses’? What say you? Gfa7156@aol.com

As I opined last week, it will be interesting to see and hear IF this timely matter is addressed by the State of the Industry panel scheduled to address attendees at this year’s Louisville MHShow, early morning the 17^th of January. Hope to see you there!  GFA

About the Louisville MHShow. Yes, I’ll be there and will have updated training and marketing materials with me to distribute FREE to those requesting for them. They are:

• A plastic 3X5 wallet card with ‘Four Steps to Selling & Financing New Homes On-site Within Land Lease communities’ on one side, & ‘Six Right Ps of Marketing New Homes Within Land Lease Communities’ on the verso side. Also a similar wallet card is availablae for HUD-Code manufacturers selling homes into land lease communities.

• ‘George Allen’s Investment Real Estate Number Crunching Card’, featuring the cash-on-cash formula, a loan amortization chart, New Rule of 72 – for estimating value of an average land lease community, real estate asset class operating expense ratios (‘OERs’), and How to Use the 3:1 Formula for estimating rental homesite rate, compared with like-size conventional apartments in any local housing market. A real keeper of a card!

• A handy card describing three texts that should be on-site in every land lease community nationwide: 1) ‘Community Management in the Manufactured Housing Industry’, 2) ‘SWAN SONG’ a history of land lease communities, and my autobiography: 3) ‘From SmittyAlpha6 to MHMaven’. All available via educatemhc.com and archived in the RV/MH Heritage Foundation’s Hall of Fame in Elkhart, IN.

RVs as Affordable Housing

My major business writing project during year 2023, was to research and pen an academic article describing present day and future prospects of recreational vehicles (‘RVs’) as affordable, attainable housing. The finished product, ‘RVs as Affordable Housing’, was submitted to the publisher in October, and I suspect the periodical will be distributed during the first half of year 2024. Once it’s published, I plan to share it in toto with my readership here, and in other RV & MH-related publications, such as ‘Manufactured Housing Review’, our industry’s online trade media.

In the meantime, I continue to read and gather interesting additional material to this end. What I share here is a bona fide observation and prediction about ‘automobile trailers’, from 88 years ago! At that time, neither recreational vehicle (‘RV’) or mobile home (‘MH’) trade terms had  been coined. So here’s the remark from Roger W. Babson’s article ‘We’ll Soon Be Living On Wheels’, quoted from the ‘Los Angeles Times’, in the February 1936 issue of Woodall’s ‘Trailer Travel’ magazine:

“Within 20 years, more than half of the population of the United States will be living in automobile trailers.” Wow! What a prediction! Did it happen? No. But during year 1956, there were 124,300 new mobile homes (oft called ‘trailers’) produced, and an indeterminate number of automobile trailers manufactured for recreational use. But it is interesting to read of the enthusiasm some had, at the time, for this new form of housing. What is sobering, however, as an industry, we haven’t produced that many homes since year 2005 (@ 146,644) and we’re not going to eclipse 100,000 units during all of year 2023! Read carefully: ‘It’s like we’re purposely going backwards and not forward these days!’ Why? Again, that’s the question for which we’re awaiting an answer from our HUD-Code housing manufacturers!

My major business writing project during year 2024? To research and author a comprehensive history of the RV/MH Heritage Foundation Hall of Fame in Elkhart, IN. Part I was penned by the late Dr. Carlton Edwards (a Hall of Fame inductee), covering the period of time between its’ founding in 1972 through 1993. I expect Part II will cover from 1994 on through year 2024. So, if you have information on this historic subject that you’re willing to share with me, let’s start a conversation via email: gfa7156@aol.com

George Allen, CPM, MHM

Blog Posting # 774, Copyright 5 January 2024. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the commercial real estate (‘CRE’) component of manufacture housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815l email: gfa7156@aol.com, or visit www.educawtemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as an author & consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), an RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, & author/editor of 20 books re MH, communities, business management & prayer.

MH HEADED TO THE BOTTOM PRODUCTION-WISE? AH, BUT TO THE TOP, PRICE-WISE!

By dint of my personal nature, I am NOT a naysayer (i.e. ‘a person who habitually expresses negative or pessimistic views’ Webster). However, I would not be faithful to my manufactured housing journalist principles if I did not share information in the following paragraphs with you.*1

Between years 2010 and 2021 we saw annual HUD-Code manufactured housing production increase, from just 48,789 units in 2009 to 112,886 during 2022! However, during this year (2023) we’ve seen new MH production decrease, year to date, by 22 percent! We’ll be fortunate, as an industry, to eclipse 90,000 units by year end (2023) when the Institute for building Technology & Safety (‘IBTS’) publishes this data a month from now (i.e. during first week of February 2024). *2

So, why are we languishing this year? Three blog postings ago (i.e. #771 on 15 December 2023) I shared my observations on this very matter – in End Note # 3. Specifically,

“Some say 1) lack of easy access to ‘home only’ loans (a.k.a. personal property or chattel financing) & presently high interest rates, 2) pandemic era high prices on scarce building components & lack of available labor, 3) local regulatory barriers to all forms of affordable housing, 4) too few MH housing sales centers, a.k.a. independent (street) MHRetailers & ‘company stores’, and lately, 5) challenges working with local permitting and engineering authorities, even when land planning and zoning boards approve and desire development of raw land into land lease communities and subdivisions.”

Well, seems I missed an observation (i.e. #6): the increasingly high prices of new HUD-Code manufactured homes; ‘increasing more than site-built homes’! 

Here’s what the Manufactured Housing Institute (‘MHI’) had to say on the matter in a communique to members on 4 January 2024. Remember, as you read, the majority of MHI’s operating funds come from their HUD-Code housing manufacturer members:

“The (Lending Tree) analysis found the average sales price of new manufactured home rose by 77.1% between 2017 & 2022, while the average sales price of new site-built, single-family homes, excluding land, rose by 46.7% over the same period. The average cost for a new manufactured home was $127,300 in 2022 while site-built homes sold for an average of $430,808.”

And here’s MHI’s explanation of that observation. “While many of the media reports focus on the overall difference in the percentage increase between manufactured and site-built homes, in real dollars manufactured homes cost an average of $303,508 less than new single-family homes. Additionally, many of these stories have focused on luxury developments in high-cost-of-living areas that do not represent the average American homebuyer.”

Be that as it may, WHY did the average sales price of new manufactured homes rise by 77.1% between 2017 & 2022? So far I’m not hearing or reading any plausible explanations relative to this question. Have you? We’ve been down this road before, several times. Frankly, it appears, as an industry, we’re clearly pricing ourselves out of our widely acclaimed affordable (i.e. some say ‘attainable’) housing market. Is this due to profiteering, greed, or what? We should remind ourselves of philosopher George Santayana’s famous quote: “Those who cannot remember the past are condemned to repeat it.”*3

In the meantime, we’re well on our way to a trend characterized by production of a marginal volume of new HUD-Code homes, stuck at or slightly below or above 100,000 new MHs per year, – versus 579,940 new ‘mobile homes’ in 1973, & 372,943+/-  new manufactured homes in 1998. At the very same time we’re jacking the average sales price of our new MHs. This puts forth the pithy question: ‘Are we, as an industry and affordable housing player, more interested in selling fewer new homes at higher prices, OR selling more new homes at lower prices?’

Wonder if this timely trend – no, question, will be covered by state MH association execs addressing attendees at the Louisville MHShow the morning of 17 January 2024; specifically, the ‘State of the Manufactured Housing Industry’. Will you be present? I hope to be. Let’s ask for answers to the above question! For more information on this sensitive subject, read the EducateMHC ‘MHShipment Volume @ November 2023 & Stock market Report @ 3 January 2024’. Available for the asking via gfa7156@aol.com

End Notes.

1. Principles of Journalism: Report the facts, check resources, and be understood via plain writing style.

• IBTS = HUD’s MH scorekeeper. It’s where HUD, MHARR, MHI, and EducateMHC subscribe, to receive this MH production data, month by month.

• George Santayana, ‘The Life of Reason’, vol. 1, 1905, p.284

UMH PROPERTIES CONTINUES TO IMPRESS

Simply put, ‘UMH Properties celebrates its 55^th anniversary at the New York Stock Exchange on 10 January 2024. Congrats to Eugene, Sam, and the rest of their land lease community portfolio team!

George Allen, CPM, MHM

Blog Posting # 773, Copyright 29 December 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And, land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as author/consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), an RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, & author/editor of 20 books re MH, communities, business management & prayer.

LAST WEEK = CRE; THIS WEEK = HOMEBUYERS/RENTERS

Last week I shared ‘What to Expect During Year 2024’, where commercial real estate (‘CRE’) &

investing is concerned – quoting from Real Estate Forum magazine. This week I’m quoting from

a Newsmax (January 2024 issue) magazine article penned by David Patten and titled,

‘Skyrocketing Mortgages Drive Homebuyers Out of Market’. Pp. 16 & 17. Spoiler Alert: Not the

sort of news one likes to hear heading into a new year!

“Extraordinary news arrived in the closing weeks of 2023: Nearly 34 percent of all home sales

were cash deals without mortgage loans. (This) meant buyers were spending big bucks to buy

homes and investment properties.”

“Between January 2021 and September 2023, Federal Reserve data shows interest payments

for a median-priced mortgage rose from $8,500 to over $24,300 – a staggering 285 percent

increase.”

“Goldman-Sachs analysts predict a 4 percent decline in housing starts this year. Sales of

previously owned homes will fall to their lowest level since the early 1990s….” And…

“New housing starts for single-family homes fell to a three-year low, dropping 11.3 percent

compared to July.” Meanwhile, new HUD-Code housing production, year to date (‘YTD’),

dropped 24 percent and is not expected to improve. This will likely be a seven year low, with

85,000 units produced during 2023, compared to 81,136 during year 2016. How low can we go?

Well, in year 2009 we produced only 48,789 new HUD-Code manufactured homes.

“Higher mortgages, of course, tend to force consumers to rent instead. But they might not find

much relief there these days. The double whammy of inflation and high demand is forcing

rental costs up as well.”

“Rental costs approached record levels in September – at over $2,000 a month, according to

Redfin and Rent.com Compare that to as recently as (year) 2000, when the average new rental

went for $1,499 a month.” How’s that compare with rental homesite rates in land lease

communities? Well, using the traditional 3:1 ratio, land lease community site rent in year 2000

would have been in the neighborhood of $500/month; today that figure has escalated to

approximately $666/month; and in communities owned/operated by aggressive portfolio

‘players’, expect today’s rate to be closer to $1,000/month.

So, there you have it, over a two week period of time; what to expect in the CRE world during

year 2024, and what to expect where land lease communities are concerned.

OPERATION PINEAPPLE EXPRESS

Were you, like me, disgusted with the way our nation pulled its’ military forces out of

Afghanistan during mid-2021? We abandoned tens of millions of dollars in equipment,

weapons, and related material. We also abandoned Afghani interpreters and special forces

operators who’d worked side-by-side with U.S. troops for years – leaving them to certain death.

I remember hearing, at the time, how private individuals and NGOs (non-government

organizations), mostly former military-related, clandestinely rescued hundreds of their

comrades-in-arms, along with their families – but I never knew the full story, until now.

The recently released 400 pages book, ‘Operation Pineapple Express’ by Lt. Col. Scott Mann

(now retired) tells Incredible Story of a group of Americans who Undertook One Last Mission

and Honored a Promise to Afghanistan.’ And this story is told nowhere else!

“In April (of 2021) an urgent call was placed from a Special Forces operators serving overseas.

The message: ‘Get Nezam, one of the Afghan National Army’s first group of American-trained

commandos, out of Afghanistan now.’ The message reached Nezam’s former commanding

officer, retired Lt. Col. Scott Mann, who can’t face the idea of losing another soldier in the long

War on Terror. He sends out an SOS to a group of Afghan vets (Navy SEALs, Green Berets, CIA

officers, USAID advisors). They all answer the call for one last mission.”

What happened? “Operation Pineapple Express is a true story that reads like a thriller – and

along the way, proves that guts and resourcefulness and honor did not vanish with America’s

Greatest Generation.” Steven Pressfield, author of ‘Gates of Fire’ & ‘The War of Art’.

Scott Mann established an informal, unofficial headquarters for Operation Pineapple Express,

and for several months, raised funds, and pulled together resources and personnel needed

to get hundreds of wartime comrades out of Afghanistan. The book is a day by day account of

what happened, in the eyes of the commandos and families being rescued from Afghanistan,

as well as the men and women manning Operation Pineapple Express. And surprising to me,

anyway, was the copious amount of color photographs supporting the narrative. A great ‘read’

for anyone with an interest in U.S. and military history.

Thanks to the organizers of the annual SECO conference in Atlanta, GA., I got to meet Lt. Col.

Scott Mann at their event this past fall. I find it interesting that no other national MH-related

gathering honors our military in this fashion. And it is one of the few, that I know of, national

conferences where, at the very beginning of the program, everyone stands and repeats the

Pledge of Allegiance to the American flag. We need this to happen more often in our industry!

George Allen, CPM, MHM

Blog Posting # 772, Copyright 22 December 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And, land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as author/consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), an RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, & author/editor of 20 books re MH, communities, business management & prayer.

What to Expect During Year 2024

A different perspective this time around. The December 2023 issue of ‘Real Estate Forum’ magazine featured an article titled ‘2024 VISIONS’. What attracted my attention was how closely the writer’s (Erik Sherman) prescient views of commercial real estate (‘CRE’) apply to the land lease community component of HUD-Code manufactured housing. See if you agree.

Here’re comments, taken out of context, from said article (pp.9-12), to underscore what many of us already realize is happening where our unique income-producing property type is concerned. For some, if not many, this will be a ‘wake up’ call.

“CRE pros are being much more careful and circumspect now.” The only certainty being uncertainty. Yet,

“…the private market is still overpriced.” A seller’s market continues. I know owners/operators who are not selling, simply to protect their homeowners/site lessees from predatory buyers and their high-priced salaried executives or ‘hired guns’. That’s putting resident relations before profiteering!

“…the 30-year bull run is over” where loan originator interest rates are concerned. Furthermore,

“..We’ve enjoyed cheap money for a very long time, but it’s led us to a lot of pricing perhaps that was reliant on that cheap financing.”  I wouldn’t even say ‘perhaps’; it’s a fact.

“…most banks are pretty much out of the lending business.” And we’ve certainly seen this before, e.g. circa 2007-2009.

Uh Oh! “…CRE loan values could drop in the face of falling property valuations, cutting asset values and making it harder to cover further worried (bank) withdrawals.” Another great shakeup on the way?

As “…defaults, workouts, and special servicing are all on the rise….” These are not fun experiences!

“There are more distressed situations and transactions happening because of the way projects were structured because of floating rate debt or even pressure from equity partners to get a faster exit.” And then there’s this…

“…signs of a secret distress market – increased bank CRE charge-offs and higher levels of distressed CRE loans – largely being handled privately and that has not broken out into a fully obvious run on distressed properties.” Yet

“…wake up to higher interest rates and to much higher costs of operating your property, and values are getting impacted. It’s a difficult time to navigate.”

Furthermore, “Credit card debt is at an all-time high and credit card and auto loan delinquencies are on the rise.” Not a CRE observation, but another leading indicator of trouble ahead.

In conclusion, “Consumers had built-up liquidity from Covid, but estimates, including from the Federal Reserve Bank of San Francisco, suggest that is likely gone. Not what you want to see when you’re hoping to avoid a recession, but consumer spending is 68 percent of GDP (gross domestic product).”

REPUTATION

“A man’s reputation is not in his own keeping. It lies at the mercy of the profligacy of others.” William Hazlitt. Profligacy here, meaning ‘reckless extravagance’ of reputation distribution.

If you recognize that quote it’s because you read it at the beginning of a personal memoir of mine titled ‘Got Rep?’ In it I describe my first civilian job as a lumber yard supervisor in Pennsylvania. During an informal going-away party with my work crew, before I relocated to Indiana, I learned of my reputation as a stone cold killer in Vietnam, wielding a Kbar fighting knife. Not true, but that was my ‘rep’, thanks to a Vietnam veteran on that crew.

Point? Protect your reputation, be very careful with it. Why? Because it could emerge publicly, deserved or not, at the most inconvenient of times, for good or bad. Frankly, I’ve see it happen time and again in this industry. And I have reason to believe more missteps may be on the horizon….

Examples.

There have been individuals, over the years, who cultivated (unknowingly or purposely?) a rep for offering whatever price a community seller wanted; then, just before ‘closing’ demanding to renegotiate, even threatening to walk away from the deal. These individuals earned reps as pariahs (‘outcasts’) in our real estate asset class.

Then there are the contemporary real estate investors who overvalue and overpay for land lease communities; then, soon after ‘closing’ jack rents and add ancillary fees paid by homeowners/site lessees. The only ‘winners’ being the sellers and maybe the acquisition firm(s). Time will tell, but that ‘rep’ is already out there, demoralizing folk, and giving rise to landlord/tenant legislation.

Poor operators. At times they seem to be everywhere, and manifest their bad reps in various ways. One New England operator, when asked about the abundance of potholes in his streets, crowed: “Well, at least they slow down traffic!” Another operator waives rental payments and late fees in return for sensual favors. And there’re operators who blatantly discriminate in accords with personal prejudices, in violation of Federal Fair Housing law. Don’t forget the ‘slumlords’ who allow their properties to become eyesores, prejudicing local housing market ‘city fathers’ against new raw land development as land lease communities. And the list goes on…

Yes, there’re more. Like would be trade publishers who drive away writers – and readers. Lenders who burden borrowers and community operators with questionable contract terms. Trade advocacy entities with tunnel vision where across-component issues are concerned, even differing in the reporting of key statistics (i.e. ‘Who to believe?’).

Again, you only have your personal, and at times corporate, reputation to accompany you through your business career. You really don’t want to have peers blackball you, local chambers of commerce shun you, and or state and federal legislators and regulators cast you in a negative light in public and the press. A final example. Recently, on LinkedIn, a land lease community portfolio owner/operator being honored by a trade publication for the firm’s positive work in a particular function area (i.e. Good Rep!), turned-off the Comments feature on that site. (i.e. Fearing a Bad Rep?). So, be careful to cultivate a Good Rep whenever and wherever possible!

FOUR

I bought five copies of the novel ‘FOUR’ as Christmas presents for family members and business friends. With each copy I enclosed this explanation: ‘Why am I gifting you FOUR?’ Here’re some of the reasons cited:

The author, Charles (‘Chuck’) Irion is a longtime business acquaintance and friend in the manufactured housing business out in Arizona. He’s also an artist, world traveler, philanthropist, and adventurer. He’s authored 12 novels in two series: Murdered by Gods, and Summit Murder Mysteries. His five non-fiction books cover remodeling, autograph collecting, used car sales, and divorce, plus a humorous cookbook titled, ‘Roadkill Cooking for Campers’.

FOUR is a standalone ‘men’s mystery & adventure’ novel, and in my opinion, is his very best work to date. (I’ve read them all.) Here quoting from the Amazon book order website:

“FOUR means death for us all. In many Asian cultures, the number four (‘4’) is considered unlucky because the ‘word’ for the number four, and ‘word’ for death, are the same!”

In FOUR, “Forces are in motion around the world. FOUR people have FOUR days to prevent World War FOUR and save the world from destruction.”

Introducing one of those four primary characters: “There was nothing but blue sky above and blue sea below, and from where Colonel George Allen was sitting, it was a little hard to tell the difference. He let his gaze roam the expanse, not really looking at anything in particular, but savoring the experience and the memories it brought. Twenty-odd years ago, this would have been the view from the cockpit window of his F/A-18C Super Hornet, and not merely a high-def projection transmitted back to the Virtual Combat Center – VCC – aboard the USS Enterprise CVN-80-a Gerald R. Ford-class aircraft carrier where Allen Lived the experience vicariously.” Pp. 31 & 32. Chuck wrote me into his latest novel, in recognition of the editing and writing advice we’ve shared these past several decades.

Finally; for clarification, the time frame of FOUR is year 2045, some 22 years into the future, and after World War III, 20 years ago.

The only things I’ll add here, encouraging you to order this 362 page book, are notes I penned to Chuck, as one writer to another: Like the short chapters, the believable albeit futuristic ‘tech talk’ throughout, and your good feel for military hardware and its specialized use. Good character development, right-on descriptions of life aboard ship and ‘on the run’, and exciting active plot development.

Hope you enjoy the ‘read’!                                                                George Allen, CPM, MHM

Blog Posting # 771, Copyright 15 December 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And, land lease communities, (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, and to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From SmittyAlpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as author/consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), an RV/MH Hall of Fame enshrine, retired lieutenant colonel of U.S. Marines, & author/editor of 20 books re MH, communities, business management & prayer.

Manufactured Housing’s Conundrum

(‘a riddle; hard question’)

Without land cost, the average HUD-Code manufactured home today costs $127,300 and average new single floor site-built house costs $430,808.*1

The Conundrum. In light of the previous paragraph, and our nation being in the midst of a perennial national affordable housing availability crisis, how can HUD-Code manufactured housing prices, up 77 percent between years 2017 & 2022, experience manufactured housing production down 24 percent year to date (‘YTD’) 2023???*2

WHY? I don’t know the answer to that question.*3 That conundrum is the very reason I proposed, months ago, our manufactured housing industry leaders should be discussing this matter among themselves, and including entrepreneur business people who have vested interests in this industry and realty asset class in the conversation! Is this happening? Not that I know of! IF it’s happening within the confines of national advocacy trade group gatherings (i.e. MHARR & MHI), it’s not apparent to those of us on the outside and wondering what the future holds for us.

A suggestion. Perhaps the meeting planners and hosts of the upcoming Louisville MHShow (17-19 January 2024) would plan a public session where this conundrum is front and center! Several key individuals could be tapped to prepare in advance, brief personal or corporate reasons and solutions to this conundrum. Distribute these position papers at the door, then publicly discuss during said session. Who to invite? Heads of MHI & MHARR, as well as top executives of the ‘Big Three C’ HUD-Code manufacturing firms: Clayton, Skyline-Champion, & CAVCO. Limit each presenter to five minutes of explanation, followed by five minutes of controlled, moderated discussion; ending with a ten minute summation by the moderator. That’s one hour’s time to get our industry’s conundrum out into the open and, hopefully, stimulate action and resolution!

What do you think? If you agree with this suggestion, and are a member of either or both national advocacy groups cited above, reach out to them and suggest they encourage the Louisville MHShow organizer/host get started on this right away!

End Notes.

1. According to the U.S. Department of Housing & Urban Development (‘HUD’), U.S. Census Bureau Manufactured Housing Survey (‘MHS’), and Survey of Construction (‘SOC”)
2. Information from a Lending Tree Survey dated 12/23

• Some say 1) lack of easy to access ‘home only’ loans & presently high interest rates, 2) pandemic era high prices on building components & lack of available labor, 3) local regulatory barriers to all forms of affordable housing, 4) too few housing sales centers, a.k.a. independent (street) MHRetailers & ‘company stores’, and lately, 5) challenges working with local permitting and engineering authorities, even when land planning and zoning boards approve development of raw land into land lease communities and subdivisions.

Where Were You in 1968?

Me? During most of year 1968 (April through December), I was a young U.S. Marine lieutenant in the Republic of Vietnam. I share those adventures in my autobiography, ‘From SmittyAlpha6 to MHMaven’. (Google: From SmittyAlpha6 to MHMaven, & tap the educatemhc.com prompt)

Well, there’s a new book about to debut (January 15, 2024) covering that timeframe. It’s Rick Robinson’s ‘1968: A Primer for Understanding Baby Boomers’. I’ve already ordered my advance copy from amazon.com You’re probably already aware that Robinson is an accomplished and popular novelist (Think ‘Opposition Research’), besides being a primary resource at manufacturedhomes.com

Here’s what the book press release has to say about Rick’s book: “…a small-town deep-dive into one of the most significant and controversial years in American history. Vietnam, the assassinations of Martin Luther King, Jr., and Bobby Kennedy, civil rights protests at home and abroad, Nixon versus Humphrey, all made 1968 a seminal year. It offers a lens of understanding how this year helped shape not only baby boomers but all generations that followed.”

Blog Posting # 770, Copyright 8 December 2023. EducateMHC

Parallel Perspectives. HUD-Code manufactured housing is federally-regulated, performance-based, affordable & attainable factory-built housing! And, land lease communities, (a.k.a. manufactured home communities & ‘mobile home parks’) comprise the investment real estate component of manufactured housing! EducateMHC is the online advocate, historian, trend tracker, and text resource for these two related business models! Reach EducateMHC by phoning (317) 881-3815; email: gfa7156@aol.com, or visit www.educatemhc.com, and to order Community Management in the Manufactured Housing Industry. This is the sole professional property management text in print today! SWAN SONG is a history of land lease communities & official record of annual MH production totals since 1955; and my autobiography, From Smittyalpha6 to MHMaven – describes personal combat adventures in Vietnam, a 45 year business career in MH and community ownership/management, and as author/consultant.

George Allen, CPM®Emeritus, MHM®Master, is only emeritus member of the Manufactured Housing Institute (‘MHI’), an RV/MH Hall of Fame enshrinee, retired lieutenant colonel of U.S. Marines, & author/editor of 20 books re MH, communities, business management & prayer.

An Exciting Personal ‘Read’ & Holiday Gift!

Charles (‘Chuck’) Irion is a longtime business acquaintance and friend in the manufactured housing business, brokering and managing land lease communities in the Southwest. He is also an author, world traveler, philanthropist, and adventurer.

Chuck has authored 12 novels in two series: Murdered by Gods, and Summit Murder Mysteries. His five non-fiction books cover remodeling, autograph collecting, used car sales, and divorce, plus a cookbook titled, ‘Roadkill Cooking for Campers’.

His recent release, ‘FOUR’ is a standalone ‘men’s mystery & adventure’ novel; and in my opinion, is his very best work to date! Quoting here from the Amazon book website:

“FOUR means death for us all. In many Asian cultures, the number four (‘4’) is considered unlucky because the ‘word for number four, and ‘word’ for death, are the same!”  So, in FOUR,

“Forces are in motion around the world. FOUR people have FOUR days to prevent World War FOUR, and save the world from destruction.”

One of the FOUR people driving this tale? “There was nothing but blue sky above and blue sea below, and from where Colonel George Allen was sitting; it was a little hard to tell the difference. He let his gaze roam the expanse, not really looking at anything in particular, but savoring the experience and the memories it brought back. Twenty-odd years ago, this would have been the view from the cockpit window of his F/A-18C Super Hornet, and not merely a high-def projection transmitted back to the Virtual Combat Center – VCC – aboard the USS Enterprise CFN-80- a Gerald R. Ford-class aircraft carrier where Allen Lived the experience vicariously.” Pp. 31 & 32. This book is set 20 years into the future, 20 years after WWIII.

Irion drives his stories with action and intrigue, not sex scenes and profanity. A terrific ‘read’ or gift, and available via Amazon.com  I’ve purchased five copies for family members and friends.

Getting Down to Business!

As MHI, MHARR, and EducateMHC, point out, the annual production of new HUD-Code manufactured homes continues on a downward slide! Through October 2023, our YTD production is down 24 percent from a year ago! MHI’s ‘seasonally adjusted annual rate’ (a.k.a. ‘SAAR’) also continues its’ downward trend, dropping from a 97,919 estimate in September to 97,919 through October. And EducateMHC estimates the ‘end of year’ SAAR to be in the neighborhood of 86,000 new HUD-Code homes to be produced during all of year 2024. ‘Ugh!’

With that gruesome (‘horribly repulsive’) foretelling, it’s encouraging to hear and read of individuals within MH, and among land lease community owners, who’re experiencing ‘good times’ and or expect year 2024 to be better, far better, than what we endured during year 2023. This from Amy Bliss, executive director of the Wisconsin Housing Alliance:

“Merry Christmas to you and your family as well George! Things are looking up in Wisconsin. We have a good deal of development being planned and hopefully (it) will come to fruition within 2024 or early 2025. First time we have heard of such talk, but the time is right because we need a lot of housing here, and people are starting to accept us (i.e. manufactured housing & communities) as a solution. I am feeling positive about the next couple years.” ‘Hoorah!’

So, make it a point to climb aboard the optimistic wagon of manufactured housing performance, and plan now to attend the annual Louisville MHShow, 17-19 January 2024! While I deferred (i.e. postponed) planning and hosting an industrywide meeting (to ID and discuss sensitive industry issues) at this seminal event, I – and many others, plan to be present to see and buy new manufactured homes and interact with our peers from throughout the U.S.

And, while you’re at it, mark your personal planning calendar with the date 9-12 September 2024. These are the dates for SECO 24, at the Renaissance Waverly Hotel in Atlanta, GA.

George Allen, CPM, MHM