MHTrends Past, Present & Future; BOFUS in Vegas!

Blog # 240 Copyright 2013 7 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Trends
Past, Present, & the Future of Manufactured Housing

I.

TRENDS PAST

Since shortly after the dawning of the new millennium (2000), annual new manufactured housing shipments plunged to historic lows of 50,000+/- per year, and have remained there for the past five years. Even the fabrication of modular homes (at times called ‘hudulars’) and Park Model RVs, have not moved the industry off this record – setting nadir. Hundreds of housing factories have closed and more than a thousand independent ‘street’ MHRetailers have disappeared from the manufactured housing business scene.

Furthermore, independent, third party chattel capital lenders appear to have also disappeared from the HUD – Code manufactured housing scene; but reality, it’s the paucity of qualified borrowers for those funds that cripples the industry. Just about the only bright spot, among these post cum present trends, has been the now routine selling and self – financing, and sometime leasing, of new and resale homes on – site within land lease lifestyle communities. But not all LLLCommunities; mainly those among the 500 property portfolios domiciled throughout the U.S. and Canada.

The foregoing is what we’re living with today, along with a myriad of additional, albeit other minor trends, like: smaller, less vibrant state manufactured housing associations; weaker, thinly staffed national advocacy bodies; and a near wholesale retreat from professional property management training and certification. Today; seeing a new HUD – Code manufactured home being transported down the highway enroute to its’ point of installation, is about as rare an occasion as seeing the circus come to town.

II.

TRENDS PRESENT

Favoring the Big over the Small (business entity), on one hand predates Past Trends identified in the previous paragraphs, but at the same time has become a heady Present Trend whose consequences have yet to be fully played out on the national scene. The following paragraph was penned by a blog flogger (reader) in response to a recent posting:

”Herein lies the problem – big fish want to get bigger and eat the small ones. Going separate (ways) can allow for good operators to survive, but I doubt the MHIndustry would be what it could be. I shared your, and my, trading of thoughts with a banker friend. Interestingly, he likened it to the BIG banks loving all the regulation, because it hurt us little folk to keep up. You’d think they’d hate it (regulation) as much as we, the little community bank guys, because they do not compete in the small world anyway, and the regs cost a bunch to survive and keep informed. Have you thought to separate out land lease lifestyle communities? Gotta bet the medium and small operators would follow.” NB

More and more, small to mid – sized land lease lifestyle community owners/operators are having to fend for themselves, no longer counting on any particular national entity to do so for them. This is evidenced by national task forces being recently formed to study key issues, e.g. home finance alternatives within the LLLCommunity asset class; and, how to best ensure – going forward – that LLLCommunity owners/operators nationwide continue to benefit from statistical Research and ongoing Resource servicing. And then there’re the regional symposiums, which have grown in popularity, during the past decade, as MHIndustry businessmen and women seek meaty seminar programs featuring useful substance, rather than just sales pitch pabulum and lesser fare.

Then there’s the Uniform Manufactured Housing Act, passed during mid – 2012, by the Uniform Law Commission. Some are already equating its’ recommendations to ‘Throwing the (affordable housing) baby out with the bathwater (vehicle titling of manufactured homes). To date, none of the proponents of this model regulatory legislation have bothered to consider the potentially dire consequences of replacing vehicular type titling of manufactured homes with some sort of quasi realty ownership document that large banks find attractive enough to encourage them to start lending on this housing type. Likely long term consequence? ‘Easier access to conventional home loans = loss of manufactured housing affordability through higher taxes!’

And finally, how would YOU answer this question: “What would be the effect on your niche in the manufactured housing business if HUD was/is relieved from regulatory oversight of this industry, for the first time in 37years?” Think about it? Interviewers are traveling the county today, asking that question of home manufacturing and LLLCommunity executives. Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform, or MHARR, puts it this way:

The HUD federal program is a stable three – legged stool, comprised of three essential elements: 1) uniform, performance – based federal standards, 2) federal preemption relative to local building codes, and 3) uniform federal enforcement. Together, they ensure maintaining affordable manufactured housing; meeting the housing needs of lower and moderate – income American families; and ultimately, guide the success of the manufactured housing industry. Without any one of these elements, which only a federally – based program can provide, manufactured housing, as an affordable homeownership option for consumers, would soon die the death of a thousand cuts, as thousands of local housing jurisdictions would pile – on, with their own costly mandates and requirements.

Thus, lose this code and lose all uniformity, federal preemption, even building guidelines based on how a home should perform – all at the likely expense of product credibility, affordability, and universal acceptance! Are we, as an industry, ready for this? I don’t think so; but how many have really taken the time to think through the process and its’ logical consequences? Not many.

III.

TRENDS FUTURE

I’m not sure I’m up to taking on this challenge at this point in time. First off; the annual MHCongress is only a few weeks away, and there, some of us might learn of initiatives and tweaks affecting TRENDS FUTURE. Besides; have you read or heard of anyone else taking on the aforementioned PRESENT TRENDS of 1) adopting or not adopting the Uniform Manufactured Housing Act proposed by the Uniform Law Commission; or, for that matter, 2) even let us – out here amidst the grassroots of the HUD Code manufactured housing industry, know there’s a movement afoot to have HUD removed from regulatory oversight, where our industry is concerned? The answers to those two questions? NO & NO! Why? Ask them, not me.

The only thing I’ll pen about TRENDS FUTURE, has to do with industry and realty asset class representation on the national level. The Good News is MHARR & MHI are working together in three key areas, relative to securing additional private and public chattel capital sources. The not so good news, is institute members at large, some state MHAssociation executives, and small to mid – sized land lease lifestyle community owners/operators are frustrated at what’s perceived to be ‘marginal effectiveness’ in the national advocacy arena; the ill – advised wholesale change recommendations to the institute’s bylaws – and unintended consequences thereof (e.g. less dues revenue to states); and, nothing but ‘promises of action’, for two years now, from and to the LLLCommunity side of the house, even less to other post – manufacturing segments of the industry

Sure, there’s more I’m inclined to share with you on this topic. But the problem is; whenever I speak or write of practical solutions on the near horizon, or better ways to address what isn’t being accomplished now, some very territorial individuals immediately take issue with suggestions there’re better ways to achieve certain ends that the MHIndustry and LLLCommunity asset class have been missing or ignoring to date. No, I don’t feel like getting into an argument or discussion about the matter(s) just now; rather, as I’ve learned time and again, during the past 33 years as a successful entrepreneur businessman, I’ll wait and pick the right time and place to announce these new and rejuvenated opportunities to sell more homes and promote our unique lifestyle.

IV.

Bofus in Vegas!

Bofus can hardly wait to get there! Already we’ve been invited to two private dinners and no fewer than five late afternoon and early evening receptions. And, in my case, since my name and topic (‘How to Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities!’) have been yanked from the MHCongress program schedule, I’ve lined up two ‘paid’ speaking engagements, one for a corporate board of directors and one for a firm’s employees in attendance at this event. So, along with visiting exhibits, attending a couple select seminar offerings, and engaging in that Vegas pastime, ‘people watching’, there’ll be plenty to do on the 16th, 17th, & 18th of April.

When you see me walking around the MHCongress, come up and ask me – or Bofus, for your Toast; you’ll be glad you did so.

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

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