Evergreen Issues & Evergreen Questions ‘&’ 16 April 2019

April 6th, 2019

# 527 @ 1 April 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 posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities
To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.
Motto: ‘U Support US & WE Serve U!’ Online media goal? Inform, opine, transform & improve manufactured housing & land lease community performance! Visit www.educatemhc.com
INTRODUCTION: I’ve been penning this blog posting series for more than a decade. And know what? Many of the same ‘issues & questions’ arise year after year after year! So, awhile back, I started to identify and iterate them in public, as a means of drawing attention to matters deserving resolution albeit improvement, over time and circumstance. Do YOU agree with what follows here? In either event, please let me know via email (gfa7156@aol.com) or the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. In the meantime, if not already subscribed to the Allen Letter, please do so via a visit to www.educatemhc.com Doing so, keeps this blog, and other Resource Documents coming your way! GFA
And, don’t miss Part II of this blog posting, relative to IREM’s webinar on 16 April 2019.

I.
Evergreen Issues & Evergreen Questions
“Evergreen content is content that is always relevant…like evergreen trees retain their leaves all year. Interesting and relevant content that does not become dated, (&) is necessary in order to be found online by search engines.” That’s how blog posting # 512, in early December 2018, began. A brief review of the Evergreen Issues identified at that time, is timely and necessary, before turning our attention towards equally Evergreen Questions. The issues?
• Responsibility for the proper, safe and secure installation of new HUD-Code manufactured homes sited on scattered building sites conveyed fee simple, and on rental homesites within land lease communities. That issue continues to go begging!

• HUD, manufactured housing’s federal regulator resists promoting this type factory-built product as the attractive homelike, top quality, non-subsidized, energy efficient, transportable, affordable housing it is. Our nation’s affordable housing crisis continues!

• Existing manufactured housing stock is aging faster, in toto, than replacement stock can be fabricated and shipped from more than 100+ factories nationwide! And there’s an estimated 250,000+/- vacant rental homesites in land lease communities nationwide.

• All types of shelter sited within land lease communities continue to be ineligible for real estate-secured home financing, forcing said homeowners/site lessees to pay, on average, three points more for home loans than when sited on scattered building sites!

• Manufactured housing industry should sell new HUD-Code homes our prospective homebuyers and homeowner/site lessees can truly afford, based on local housing market Area Median Income, & Annual Gross Income of individuals and households.

• Marginal at best, is the public image of manufactured housing & land lease communities. While this might be the ‘price we pay’ for supplying the most affordable housing & lifestyle in the U.S. today, there is much room for improvement, via ads, etc.!
Those are some of the major Evergreen Issues afoot today. And there are more, e.g.
• Lack of secondary market for valuing, selling, and financing resale manufactured homes

• Lack of secondary market for selling-off seasoned chattel capital loans to replenish $

• Lack of widespread professional property management training & certification of staff
Now we turn to Evergreen Questions. To some wags, these perennial queries are known as the Dirty Little Secrets of Manufactured Housing & Land Lease Communities….
MANUFACTURERS. When will HUD-Code housing manufacturers, after 70 years in business, eschew their salacious D&R Delivery (i.e. ‘Drop & Run’) reputation, taking full responsibility for the installation of their unique housing product? Immediate consequences? Customer satisfaction & far less home warranty and post-installation repair and replacement costs!
FINANCE. When will manufactured housing lenders, independent third party firms and in-community transactions alike, include estimated annual household utilities expenses into the standard 30 percent Housing Expense Factor (‘HEF’) – or ‘front end debt limit’ qualifier, rather than position homeowners & homeowners/site lessees, to pay these bills in addition to monthly PITI (loan principal & interest, taxes & insurance) payments? This single factor accounts for the difference between housing finance transactions being ‘affordable’ or ‘risky’!
GOVERNMENT. When will HUD and other regulators ‘get out of the way’ of Free Enterprise efforts to provide quality, affordable housing products to the American citizenry? For example: once and for all, allow widespread use of properly engineered Frost Free Foundations for manufactured homes within and outside land lease communities. Stop meddling!
LAND LEASE COMMUNITIES. When will property owners ensure rental homesite rates are in sync with other forms of multifamily rental housing in the same local housing market, and cease maximizing profitability that lowers home values, spawns ill will, risks lower physical and economic occupancy, and creates marginal curb appeal along the way? Use the 3:1 Rule as a guide. Apartment rent at $900/month? Land lease community site rent maybe $300+/- month.
NATIONAL ADVOCACY ENTITIES. When will they finally learn to truly work together – if ever? For example: difference in how new home monthly shipment totals, based on Institute of Building Technology & Safety (‘IBTS’) input are calculated. And when will ‘affluence gerrymandering’ end (patronizing expensive meeting venues many cannot afford – discouraging participation), and begin allowing for ‘proxy voting’ to offset sparse meeting attendance?
And of course there are even more Evergreen Issues & Evergreen Questions. Please share your thoughts on these matters via gfa7156@aol.com
Suggest you print off a copy of this blog posting and keep it handy as a reminder of the Evergreen Issues & Evergreen Questions that continue to beg answers & solutions during the months and years ahead.
II.
16 April 2019
I’ve been a Certified Property Manager (‘CPM’) member of the Institute of Real Estate Management (‘IREM’) since before 1980. Over the decades I’ve penned articles about manufactured housing & land lease communities for their Journal of Property Management, and fruitlessly encouraged them to include our unique, income-producing property type amongst the commercial property types supervised by their membership. Well now, after 40 years, institute leaders have, in effect, ‘discovered’ manufactured housing & land lease communities – though 125+/- CPMs claim affinity for the realty asset class! So, on 16 April 2019, I’ll deliver an hour long webinar, introducing

Evergreen Issues & Evergreen Questions – & – 16 April 2019

April 5th, 2019

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ’mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US 7 WE Serve U!’ Online media goal? Inform, opine, transform & improve manufactured housing & land lease community performance! Visit www.educatemhc.com

INTRODUCTION: If you missed the Tunica MHSHow, you missed out on some superb education (e.g. Spencer Roane, MHM, holding forth on lease-option transactions); emergency preparedness training; and, most important of all, parallel introductions to Freddie Mac’s CHOICE &Fannie Mae’s ADVANTAGE housing finance guarantee programs! And if you read the Allen Legacy column on pp. 81 & 82 of MHINSIDER magazine, you were introduced to industry icon Dick Moore (selling our homes since 1958), and Elvis Presley, his first manufactured home in 1974. Dick and his wife Jean were with us at the Hollywood Casino, for dinner, Wednesday evening.

And if you have any doubt that real estate pros and affordable housing ‘housers’ aren’t paying attention to us today, be sure to read Part II that follows herein!

I.

An Open Letter to the FHFA
(‘Federal Housing Finance Agency’)
concerning
Freddie Mac’s CHOICE & Fannie Mae’s ADVANTAGE*1 Housing Finance Programs
for
Factory-built homes, with site-built housing features, fabricated per HUD-Code!

Blogger’s note to reader. What follows here is a taste of what will be ‘explored in detail’ within the May issue of the Allen Letter, available from EducateMHC via www.educatemhc.com

Therein will be full length narrative descriptions of the two ‘very similar but differently named’ New Type*2 of factory-built housing product. The feature story will begin with a ‘reminder’ of our sad history the last time we attempted to compete head-to-head with site-builders in the land & home package arena, using our brand of ‘big box = big bucks’ homes. Then there’ll be summary descriptions of Freddie Mac’s CHOICE & Fannie Mae’s ADVANTAGE programs, per very similar sets of six/seven features required of New Type factory-built homes, raising these questions:

‘Why confuse prospective home buying customers with two different GSE-specific terms for this New Type housing, when one umbrella term would/should suffice?’ (&) ‘Is this a territorial or charter or ‘some other’ issue not readily apparent to the eye?’

Furthermore, given the two GSE programs are designed for ‘land & home’ package application only, let’s not forget to also serve the fastest growing ‘traditional but renewed market’, that of new home placement on rental homesites within land lease communities, large and small, nationwide! Remember: Fewer than 12,000 new HUD-Code homes shipped directly into communities during 2009, but jumped to more than 28,000 by year end 2015, a 2.35 increase during just seven years!

Finally, there is, in this industry observer’s opinion, an important and historic Achilles ’ heel to this attempt to serve a middle growth market, bridging the $100-250 thousand gap between factory-built and site-built housing. If you’ve been around this business since the 1990s, you likely remember what happened that time around? And I’m not just talking about the housing finance liberties we took, that resulted in loss of easy access to chattel capital – a handicap that continues to this day, but another failed challenge as well! Think about it….

Well, that’s all there is for today’s blog posting, on this timely and evolving subject. Want to read more, be sure the Allen Letter comes across your desk in early May 2019.

End Notes.

1. Published moniker for the Fannie Mae program is MH Advantage. Since one of the recommendations for ‘improving & consolidating’ these two similar programs involves minimizing reference to manufactured housing or MH, said initials have been removed from this introductory piece.

2. New Type is the continuing generic moniker related to a new design of factory-built housing product birthed, via research and discussion, during the Manufactured Housing Institute’s (‘MHI’) annual meeting in October 2017 and continuing. Suggested ‘new names’ to date, will be covered in the aforementioned newsletter if not here.

II.

Where Will You Be on 16 April?

Real estate professionals have discovered factory-built housing, manufactured housing, and land lease communities – but not necessarily in that order. And said interest kinda culminates on 16 April 2019 as three distinctly different realty-related events occur the same day.

National Association of Realtors’ affiliate, the Appraisal Institute, along with Freddie Mac, will be hosting a class that day in Dallas – and several others following, introducing new and improved methodology for MAIs (‘Member, Appraisal Institute’) valuing HUD-Code manufactured housing in general, Freddie Mac’s CHOICE homes in particular! Other classes? 4/23 in Atlanta; 4/25 in Charlotte, NC; and 5/7 in Detroit, MI. A question that begs answering here is, why are Freddie Mac and Fannie Mae approaching this vital valuation matter separately, rather than as a joint effort? Visit ai.org for more information.

National Association of Realtors’ affiliate, the Institute of Real Estate Management (‘IREM’), that same day, hosts an hour long webinar introducing its’ Certified Property Manager (‘CPM’) members to HUD-Code manufactured housing and land lease communities. Cost? Only $99.00. Visit irem.org for more information. I’ll be teaching the webinar….gfa

National Housing conference, also on the 16th, hosts a daylong session in Washington, DC. Title of session? ‘Solutions for Housing Communication’. Visit nationalhousingconference.com for more information.

***

George Allen, CPM, MHM
EducateMHC
Box # 47024, Indianapolis, IN. 46247

(317) 346-7156

An OPEN LETTER to FHFA about Freddie Mac’s CHOICE, & Fannie Mae’s ADVANTAGE Housing Finance Programs – & – April 16, 2019

March 29th, 2019

Blog # 526 @ 24 March 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 posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US 7 WE Serve U!’ Online media goal? Inform, opine, transform & improve manufactured housing & land lease community performance! Visit www.educatemhc.com

INTRODUCTION: If you missed the Tunica MHSHow, you missed out on some superb education (e.g. Spencer Roane, MHM, holding forth on lease-option transactions); emergency preparedness training; and, most important of all, parallel introductions to Freddie Mac’s CHOICE &Fannie Mae’s ADVANTAGE housing finance guarantee programs! And if you read the Allen Legacy column on pp. 81 & 82 of MHINSIDER magazine, you were introduced to industry icon Dick Moore (selling our homes since 1958), and Elvis Presley, his first manufactured home in 1974. Dick and his wife Jean were with us at the Hollywood Casino, for dinner, Wednesday evening.

And if you have any doubt that real estate pros and affordable housing ‘housers’ aren’t paying attention to us today, be sure to read Part II that follows herein!

I.

An Open Letter to the FHFA
(‘Federal Housing Finance Agency’)
concerning
Freddie Mac’s CHOICE & Fannie Mae’s ADVANTAGE*1 Housing Finance Programs
for
Factory-built homes, with site-built housing features, fabricated per HUD-Code!

Blogger’s note to reader. What follows here is a taste of what will be ‘explored in detail’ within the May issue of the Allen Letter, available from EducateMHC via www.educatemhc.com

Therein will be full length narrative descriptions of the two ‘very similar but differently named’ New Type*2 of factory-built housing product. The feature story will begin with a ‘reminder’ of our sad history the last time we attempted to compete head-to-head with site-builders in the land & home package arena, using our brand of ‘big box = big bucks’ homes. Then there’ll be summary descriptions of Freddie Mac’s CHOICE & Fannie Mae’s ADVANTAGE programs, per very similar sets of six/seven features required of New Type factory-built homes, raising these questions:

‘Why confuse prospective home buying customers with two different GSE-specific terms for this New Type housing, when one umbrella term would/should suffice?’ (&) ‘Is this a territorial or charter or ‘some other’ issue not readily apparent to the eye?’

Furthermore, given the two GSE programs are designed for ‘land & home’ package application only, let’s not forget to also serve the fastest growing ‘traditional but renewed market’, that of new home placement on rental homesites within land lease communities, large and small, nationwide! Remember: Fewer than 12,000 new HUD-Code homes shipped directly into communities during 2009, but jumped to more than 28,000 by year end 2015, a 2.35 increase during just seven years!

Finally, there is, in this industry observer’s opinion, an important and historic Achilles ’ heel to this attempt to serve a middle growth market, bridging the $100-250 thousand gap between factory-built and site-built housing. If you’ve been around this business since the 1990s, you likely remember what happened that time around? And I’m not just talking about the housing finance liberties we took, that resulted in loss of easy access to chattel capital – a handicap that continues to this day, but another failed challenge as well! Think about it….

Well, that’s all there is for today’s blog posting, on this timely and evolving subject. Want to read more, be sure the Allen Letter comes across your desk in early May 2019.

End Notes.

1. Published moniker for the Fannie Mae program is MH Advantage. Since one of the recommendations for ‘improving & consolidating’ these two similar programs involves minimizing reference to manufactured housing or MH, said initials have been removed from this introductory piece.

2. New Type is the continuing generic moniker related to a new design of factory-built housing product birthed, via research and discussion, during the Manufactured Housing Institute’s (‘MHI’) annual meeting in October 2017 and continuing. Suggested ‘new names’ to date, will be covered in the aforementioned newsletter if not here.

II.

Where Will You Be on 16 April?

Real estate professionals have discovered factory-built housing, manufactured housing, and land lease communities – but not necessarily in that order. And said interest kinda culminates on 16 April 2019 as three distinctly different realty-related events occur the same day.

National Association of Realtors’ affiliate, the Appraisal Institute, along with Freddie Mac, will be hosting a class that day in Dallas – and several others following, introducing new and improved methodology for MAIs (‘Member, Appraisal Institute’) valuing HUD-Code manufactured housing in general, Freddie Mac’s CHOICE homes in particular! Other classes? 4/23 in Atlanta; 4/25 in Charlotte, NC; and 5/7 in Detroit, MI. A question that begs answering here is, why are Freddie Mac and Fannie Mae approaching this vital valuation matter separately, rather than as a joint effort? Visit ai.org for more information.

National Association of Realtors’ affiliate, the Institute of Real Estate Management (‘IREM’), that same day, hosts an hour long webinar introducing its’ Certified Property Manager (‘CPM’) members to HUD-Code manufactured housing and land lease communities. Cost? Only $99.00. Visit irem.org for more information. I’ll be teaching the webinar….gfa

National Housing conference, also on the 16th, hosts a daylong session in Washington, DC. Title of session? ‘Solutions for Housing Communication’. Visit nationalhousingconference.com for more information.

***

George Allen, CPM, MHM
EducateMHC
Box # 47024, Indianapolis, IN. 46247

(317) 346-7156

Yes, We’re a Big Deal(s)! (&) ‘An Underutilized $ Tool!’ (+) One Unique Book Review a-comimng!

March 21st, 2019

Blog # 525 @ 17 March 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 posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!’ Online media goal? Inform, opine, transform & improve manufactured housing & land lease community performance! Visit www.educatemhc.com

INTRODUCTION: Manufactured housing industry & land lease community consolidations have been facts of business life for these related enterprises since the late 1970s – upon implementation of the HUD-Code, and appearance of limited partnership syndicators. Today ‘the trigger words’ are mega-manufacturers & mega-property portfolio ‘players’. Read on…

It boggles my mind how otherwise savvy businesspeople ignore the most easily accessible of demographic indicator tools, Area Median Income per postal zip code, when estimating how much house prospective homebuyers & homebuyer/site lessees can afford to purchase!

Not often one reads a book that describes their life experiences during an earlier period of time. When Lou Vela gave me ‘the book’, little did I expect it’d propel me back 50 years in time to when my life was on the line as a young Marine lieutenant. But it certainly has done that…

I.

Now Part of a Much Bigger Busine$$ Picture!

Private Equity Industry Targets Land Lease Communities

By now you’ve likely heard of, if not read, the misnamed ‘Private Equity Giants Converge on Manufactured Homes’ (i.e. insert ‘land lease communities’ in lieu of manufactured homes). And how, in the eyes of some homeowner/site lessees, activist organizations and ethnographer authors, high rental homesite rates levied by private equity owners of communities coast-to-coast, are ‘manufacturing homelessness’ in their pursuit of super profitability.

In the aforementioned report, private equity firms Stockbridge Brookfield, TPG Capital, Apollo Global Management, Federal Capital Partners, Blackstone Group, and Carlyle Group are named as owners of land lease community property portfolios.

The March 11, 2019 issue of Blomberg Businessweek magazine singles out private equity firms in this illustrative fashion:

“…private equity firms manage upwards of $3 trillion. …one firm, Carlyle Group LP…has a total of about 900,000 employees in all the companies it currently owns. Other major players include …Apollo Global Management LLC – which in 2017 raised a record-setting $24.7 billion for its’ ninth fund…TPG Capital, and the biggest of them all, Blackstone Group. These firms raise money from insurance companies, pension funds, endowments, and other big investors. They’re well-paid for their work: typically “2 & 20” – a ‘2 percent annual management fee & 20 percent of any profits’. They remake the purchased companies, sell them off to private buyers or take them public, and reap the rewards.”p.9.

So, where’s the damage being done? From aforementioned report: “When community owners raise the lot (sic) rents, residents are trapped, choosing between paying rent and abandoning their home.” & “…private equity investors are relying on manufactured home residents’ limited mobility to ensure steady revenues, squeezing fast profits out of low-income families and seniors.” Understand, this report is apparently the joint project of MHAction, Private Equity Stakeholder Project, & Americans for Financial Reform Education Fund, so has a specific axe to grind. Continuing, “…realtors estimate that for every $100 increase in space (sic) rent, a manufactured home loses $10,000 in value.” (per Los Angeles Times).

Bottom line? Today we are enduring the effects of a third consolidation wave to hit this real estate asset class since the late 1970s: first, syndicators of limited partnerships who benefitted from an income tax (loss) loophole until mid-1980s; then the mini-REIT wave of mid 1990s, with strident ‘pressure to perform’ from Wall Street analysts; and now, massive acquisition consolidations by private equity giants! Yes, all you just read can adversely affect homeowner/site lessees (i.e. residents) living in communities owned/operated by one or another giant – and some not so giant – private equity firms and funds. But as was oft said during the previous consolidation waves, ‘This too will pass!’ – just maybe not quick enough.

Be sure to read ‘the rest of the story’ in the April issue of the Allen Letter. Subscribe via www.educatemhc.com or phone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

II.

An Underutilized Analytical Tool

HUD-Code Housing Manufacturers & Land Lease Community Owners Selling Homes On-site, Should, Like Banks, Pay More Attention to Area Median Income (‘AMI’) per Postal Zip Code

In the same issue of Bloomberg Businessweek we read “…JPMorgan Chase branch openings and closings, since the first of this year, are determined by median household income of branch zip code.”

For example; in New York City postal zip codes, where AMIs ranged from a low of $27,000 to high of $106,000, bank branches were closed! However, in three areas (a.k.a. local housing markets) where AMIs ranged from $118,000 to $123,000, new bank branches were opened. While apparently not a hard & fast rule, in some markets banks do service a mix of low to moderate AMI consumers.

So, how’s this related to selling manufactured homes within and outside land lease communities? Simple. Using the strangely named, but popular ‘Ah Ha! & Uh Oh! Formulae worksheet, and AMIs of $36,000 in one instance (typical of land lease community residents in family properties), and $51,229 in another (typical of U.S. average AMI), it’s easy to see how homebuyer/site lessees moving into a community charging $333/month site rent, can afford to buy a new or used home for $68,000+/- (if paying household utility expenses separate from PITI or principal, interest, taxes, insurance), and only $41,000 if said expenses are paid along with PITI, together comprising 30 percent Housing Expense Factor (‘HEF’) measure of affordable housing. Therefore; why try selling $100,000 housing in either AMI market, unless prospective homebuyer has verifiable Annual Gross Income (‘AGI’) of that much or more?

And the same principle holds true for HUD-Code housing manufacturers selling into various local housing markets, characterized by AMIs per postal zip codes. Interestingly, the same ‘Ah Ha! & Uh Oh! Formulae worksheet calculates ‘land & home’ housing price points, per postal zip code AMI’s. For example: $36,000 AMI or AGI = $158,000 max housing value (less value of underlying realty), exclusive of household utility expenses. Why higher? Because no rental homesite rent to pay. And, using $51,229 AMI or AGI = $119,000 max housing value (less value of underlying realty), inclusive of household utility expenses.

So, you using AMI to analyze local housing markets targeted for acquisition investment? You should be! If needing a copy of the ‘Ah Ha! & Uh Oh! Formulae worksheet, visit www.educatemhc.com

III.

Coming: A Most Unusual Book Review…

Greg Jones’ Last Stand At Khe Sanh, ‘The U.S. Marines Finest Hour in Vietnam’ (2014).

Why unusual? Because incidents described in this book often interface with my experiences during a 13 month tour of duty ‘there & then’. Book review likely to be published in the April issue of the Allen Letter. Here’s a sample of what to expect.

“About 5:30 a.m., as the North Vietnamese assault on Hill 861 sputtered to a close, the Marines on the battered hill were startled by an ominous sound to the southwest, toward the border with Laos, about seven miles away.’
BOOM BOOM BOOM
BOOM BOOM BOOM
BOOM BOOM BOOM
A few seconds later, they heard the sound of explosions southeast of their position. Forward observer Dennis Mannion looked at his radio operator. He recognized the sounds of big artillery guns firing, and he knew what it meant Khe Sanh Combat Base was under attack.” P.36

***

I arrived in Vietnam in time to participate, as a combat engineer officer, in the breakout from Khe Sanh, clearing roads of land mines, building bridges, and more. I heard about the ‘big guns’ hidden along the Ho Chi Minh Trail.

But it wouldn’t be until a year later, when as a company commander with the 3rd Shore Party Battalion, I saw them firsthand. At that point, they’d been captured during a daring assault by Marine infantry. Twelve 122mm field guns were captured, and all but two were ‘spiked’ (‘destroyed) by the NVA. Two Russian artillery advisors had been killed during the firefight.

My job, as battalion rigging officer, was to supervise the separation of the huge gun barrels from their wheeled carriages, then retrograde them, along with captured ammunition and firing tables, via ‘flying crane’ helicopters, out of the Ashau Valley, and back to the Dong Ha Forward Combat Base. During the night before the helolift began, we endured assault after assault by NVA and Red Chinese troops intent on recovering their weaponry. Once the Russian field guns were back at base they were shipped back to Quantico, VA., and Fort Leavenworth, KS – for test firing, and eventual display in the U.S. Marines Museum – and that’s where one of them is to this day. The other one? An exciting tale for another day.

Reminder. If not yet a subscriber to the Allen Letter; do so by visiting www.educatemhc.com

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

Someone Else is Telling Our Story – But Not Very Well!

March 15th, 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 posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: 2019 has become the ’Best of Times & Worst of Times’! How so? ‘Housers’ (i.e. policy makers) view HUD-Code manufactured housing as a practical solution to this nation’s affordable housing crisis! That’s the good news. At the same time, however, social action warriors, academic ethnographers, and not for profit tenant-focused bodies are attacking the industry and realty asset class on several fronts. Part I recasts Prosperity Now’s ’10 Facts Show MH is an Affordable Homeownership Solution’ (Octo 2018). Part II summarizes collective attacks manifested in a trade publication article, special report, and new ‘tell all’ book. If you’re not already on board to defend our industry and realty asset class, you’ll surely be by the time you finish reading and reflecting on the content and consequences of this blog posting! GFA

I.

Telling Our Own Story…

No one knows manufactured housing better than we who manufacture, transport, site, sell, and finance the most affordable housing in the U.S. today!

Prosperity Now, formerly CFED, a social and housing activist entity, recently updated their ‘Manufactured Housing: Top 10 Truths’ resource retitled: ’10 Facts That Show Manufactured Housing is an Affordable Homeownership Solution’. It’s worth reviewing their mixed bag of views regarding homes and communities:

1. Manufactured homes are not mobile
2. Today’s manufactured homes are well-designed and constructed
3. Manufactured housing is home to a significant number of Americans (20 million)
4. Manufactured housing is energy efficient
5. Manufactured housing is a stable housing option
6. Manufactured housing is found across the United States
7. Most manufactured homes are located on individual lots, not in ‘trailer parks’
8. Owning a home on rented land is a precarious situation, but residents can own and operate their own parks
9. Residents of manufactured home parks can own and operate their own communities. See ROCUSA.com
10. Manufactured homes can appreciate (presumably in value. GFA)

Now it’s time to tell our own story. Save and use these ‘talking points’ when appropriate.

• ‘Manufactured housing as a high quality & affordable homeownership solution’

• Manufactured housing is designed with today’s homebuyer in mind, relative to size and configuration (e.g. singlesection or multisection), with a plethora of site-built housing features.

• Manufactured housing is built in compliance with a federal preemptive building code in place since 1976.

• Manufactured housing is built in factories, under climate-controlled conditions, by trained and supervised employees, using inventoried building supplies and appliances protected from the weather and pilferage.

• Manufactured housing is highly energy efficient

• Manufactured housing is transportable to the site of installation, but quasi-permanent or permanently sited, with an expected lifespan of 50+/- years.

• Manufactured housing has the potential to appreciate (increase) in value when properly installed and well-maintained on building sites conveyed fee simple or rental homesites in well-managed privately or resident-owned land lease communities
.
• Manufactured housing, when permanently installed on a building site or rental homesite, in states allowing conversion of ‘titles’ to ‘deed documentation’ of ownership, pay real estate taxes. If not so located, but titled, homeowner pays a generally lower personal property tax or license fee, depending on local practice and jurisdiction.

Yes, HUD-Code manufactured housing is certainly an affordable housing solution, but also much more!

II.

Someone Else Is Telling Our Story…

‘YOU, WE, ARE ALL NOW UNDER ASSAULT! (And some of this is, frankly, self-inflicted!)’

The title hints at a recently published article, special report, and 250 page new book, that collectively ‘take the land lease community realty asset class to task’ for a host of reasons, including ‘park closures’ & sordid (‘mercenary’) consequences thereof, as well as perceived predatory rental homesite rate increases, and other offenses, at the hands of ‘Private Equity Giants (Converging) on Manufactured Homes’ (Actual title of the special report).

The subtitle, in turn, alludes to a recent email letter distributed, by yours truly, to the ten ‘private equity giants’, and additional property portfolio owners/operators not singled out in the special report. Why the email correspondence? It has been obvious, to date, that no national advocacy entity, claiming to represent land lease communities nationwide, has alerted owners/operators to the assault already underway!

If all this arouses your curiosity, be sure to read the April 2019 issue of the Allen Letter. Why? Key parts of the special report: ‘Private Equity Giants Converge on Manufactured Homes’ are featured, as is the full book report on Dr. Esther Sullivan’s MANUFACTURED INSECURITY, ‘Mobile Home Parks & American’s Tenuous Right to Place’. In the latter instance you’ll read of numerous instances where this present day business trauma has been self-inflicted.

Bottom line? To combat negative press coming from several quarters (e.g. MHAction; Americans for Financial Reform Education Fund; Private Equity Stakeholders Project; Prosperity Now (previously CFED) – reread part I of this blog posting; social activists, academic ethnographers, even some homeowners/site lessees living in land lease communities, ‘be forewarned so as to be forearmed, when the naysayers come a-calling!

To subscribe to the Allen Letter and or the Allen CONFIDENTIAL! Business newsletters designed specifically for land lease community owners/operators, visit www.educatemhc.com And if you’d like to talk about this sorry matter, share information, or suggest remedies, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***

George Allen, CPM, MHM
EducateMHC
Box # 47024, Indianapolis, IN. 46247
(316) 346-7156

Building Trade News & Be Perplexed & Angered!

March 7th, 2019

Blog # 523 @ 3 March; Copyright 2019; www.educatemhc.com
Perspective. ‘Land leases communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.
This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Mott: ‘U Support US & We Serve U!” And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!
INTRODUCTION: Ah, what I like best to report in this weekly blog posting to friends and colleagues: pithy building trades news; along with some new, albeit controversial, information about manufactured housing and or land lease communities. Part I will inform and educate you; Part II will likely anger and or depress you. GFA

I.
What We Learn From Builder/Developer Friends
about Demographics, Affordable Housing & Land Development
Following passages quoted from Builder magazine, February 2019, and its’ companion publication, Engineered Wood, Issue # 22, Winter 2019. Appropriate page references indicated. Lightly edited. GFA
DEMOGRAPHICS
“Demographics ultimately drive housing demand. Sure, higher interest rates and economic recessions can dampen demand in the short term; but in the long run, demand sets the bar for housing supply.” P.34 Recall this truism as you read the final sentence in the AFFORDABLE HOUSING segment of Part I of this blog posting.
“A new cohort, reported to make up a quarter of the U.S. population turns 22 this year. They were 10 when iPhones came out. Millennials may have been the first digital natives, but this new group of adults – Generation Z – takes ‘what that means & why it matters’, to a new level. Half this 7-to-22 year-old group is – demographically – racial or ethnic minorities. Almost 60% of them, versus 53% of millennials, go to college, and 43% of them grew up in homes with college-educated parents. Are you ready for them?” p.18 Now you know who ‘they’ are!
“The huge millennial generation is set to drive demand for the next decade at least. Yes, problems with student debt, a so-so job market for recent graduates, relatively low household formation rates, and delays in getting married and having kids, have so far been flood gates to this generation’s demand to own a home. So much so, only one-third of those under 35 years old now own a home.”
“As a result, most builders have been reluctant to make a big bet on affordable, starter housing. However, with the U.S. Census Bureau and First American title insurance company forecasting millennials will buy at least 10 million houses in the next 10 years, maybe builders need to double down on this influential demographic group. As it is, in 2018, 50% of purchased mortgages, guaranteed by Fannie Mae & Freddie Mac, went to millennial first-time buyers.” P.34
HOUSING AFFORDABILITY
“Housing cost and price growth, combined with higher interest rates and lackluster income gains, took a significant toll on housing affordability in 2018. Home sales suffered during the second half of the year as a result. According to the NAHB/Wells Fargo Housing Opportunity Index (‘HOI’), just 56% of new and existing home transactions nationwide were affordable for a typical family during the third quarter of 2018. At the start of last year, the (HOI) index was at a level of 62, which in turn was down from 78 at the start of 2012.” P.136.*1
The conundrum here is, if housing affordability slipped so during the last quarter of 2018, why didn’t the HUD-Code manufactured housing industry step in and profit from that opportunity? Remember now; new manufactured homes characteristically cost 50 percent (per square foot, not including value of underling realty) less than site-built homes! BUT, as you’ll also recall, ‘we too slipped’ from our heady 100,000 ‘new homes to be shipped in 2018’ goal and pace, during the final quarter of the year! Reasons for that shortfall range from widespread supply side ‘inventory adjustments’ at HUD-Code housing sales centers nationwide, to continuing-if-not-increasing demand side local regulatory barriers to all forms of affordable housing. And so the troubling housing paradox continues – unexplained.

LAND DEVELOPMENT
What you read here and following, pertains in almost equal measure to development of individual building lots and entire land lease communities.
“The land development process has undergone wrenching changes since the Great Recession. For one, it takes far more upfront capital than in the pre-recession days, which is placing serious burdens on small and mid-sized builders.” P.11
Quoting Infrastructural Financial, “…a lot of communities don’t really want affordable single-family subdivisions (& land lease communities. GFA). They’d really prefer to have empty-nesters in mansions or maybe an industrial park. Those generate the most amount of (tax) revenue. Communities often oppose affordably priced subdivisions (& land lease communities. GFA) that would be ideal for people with children, because it means school budgets would dramatically increase.”
“Another factor is, many people who sit on approval boards don’t really understand the world of development a d construction. They’re often not sophisticated business people who know how to delve into an impact study.” P.13.
End Note.
1. HOI is one of sex measures of affordable housing; the other five being Housing Expense Factor or HEF – usually 30 percent, Housing Wage or HW, Workforce Housing or WFH, Income to Home Value Ratio or IHVR, and ‘One who believes’ housing is affordable if/when the price is right! Source: SWAN SONG, George Allen, COBA7, 2017, page 44.

II.
Prepare to be Perplexed, & Maybe Angered
Many if not most folk reading this weekly blog posting subscribe to the Allen Letter. Why? Surely there’s a plethora of differing reasons; and one of them surely is, advance notice of ‘things to come’ potentially affecting, if not already impacting, the HUD-Code manufactured housing industry and its’ realty sector, land lease communities nationwide. What follows here is an example of the former, ‘something to watch out for’, as in being ‘forewarned is forearmed’!
There’s a new (2018) paperback book on the market with a suggestive wordplay title, and subtitle that predisposes what the reader is expected to learn and believe about ‘mobile home parks’, to wit:
MANUFACTURED INSECURITY, Mobile Home Parks and American’s Tenuous Right to Place
This 250 page text, by ethnographer Dr. Esther Sullivan, assistant professor of sociology at the University of Colorado Denver, according to the text’s back cover “…is the first book of its kind to provide an in-depth investigation of the social, legal, geospatial, and market forces that intersect to create housing insecurity for an entire class of low-income residents.”*1
Have not yet read the entire book, but enough to be disturbed at the author’s dual themes; one intentional, the other, ‘guilt by association’. Will share a few of the author’s remarks here, admittedly out of context; but promise a full review in an upcoming issue of the Allen Letter, available by subscription, via www.embarkmhc.com
• “With the purchase of the mobile home (they) became ‘halfway homeowners’. They assumed the risks of living on land they did not own (sic) to gain the emotional and symbolic rewards of the American Dream of homeownership.” Prologue. Already, on page # 1, no mention of ‘benefits’ (e.g. freedom to relocate, lower taxes, etc.), only ‘risks’, plus a new term, ‘halfway homeowners’, to ponder. This book focuses on the ‘closing’ of land lease communities in FL & TX, but not desirability of the lifestyle.

• “Nationally, 73 percent of households living in mobile homes earn less than $50,000 a year, with a median annual household income of about $30,000 in 2009 (CFED 2014). In short, mobile homes are a primary way that America’s poor are housed.” P.15

• “One of the nation’s largest mobile home park owners explained the mobile home park industry thrives precisely because it capitalizes on a captive and needy population. Summarizing his industry’s capacity to wring profits from impoverished and effectively immobile home park residents, he stated, “We’re like a Waffle House where everyone is chained to the booths’.” P.18 Guess who is quoted here? But know what? There IS another side to this story, but it’s not found in this ‘book with a prejudice’ against income property closure.

• “Trash. The word encapsulates the disposability of mobile home park residents and the communities they call home.” P.23 NOT. The author, at least this early in the book, makes no mention of successive generations of families who happily reside, as homeowner/site lessees, in land lease communities from coast to coast in the U.S. and throughout Canada. The author should, in this industry observer’s opinion, have spent equal time in beautiful BayWood Greens in Lewes, DE, sprawling SaddleBrook Farms in Grayslake, IL., and unique Lido Peninsula in Newport Beach, CA., for a comprehensive, balanced view of the entire spectrum of land lease community ownership and homeowner/site lessee residency.
That’s all for now. If you’d like to read ‘the rest of the story’, watch for it in a future issue of aforementioned Allen Letter. The book review will not be featured here, in a blog posting. To subscribe, visit www.educatemhc.com
End Note.
1. Ethnology. ‘The science of the origin, history, customs, etc. of people. ’Webster
***
George Allen, CPM, MHM
EducateMHC. c/o Box # 47024,

FOREMOST Insurance Rides Again! & Preparatory/Predatory Sins

February 28th, 2019

Blog # 522 @ 24 February; Copyright 2019; www.educatemhc.com
Perspective. ‘Land leases communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Motto: ‘U Support US & WE Serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: Have you missed studying the periodic Foremost Insurance market research report, profiling manufactured housing’s homeowners? Well, after a six years hiatus it’s back!

I view the widespread lack of preparatory new home sales training, for land lease community owners/operators, as a Sin of Omission, slowing the increase in annual shipment volume!

And I view the widespread reality of predatory rental homesite rate increases as a Sin of Commission, often preventing homebuyer/site lessees from buying the home of their choice!

I.

‘FOREMOST Insurance Rides (researches) Again!’

If you’re new to the manufactured housing industry, and or land lease community real estate asset class, you’re excused for not understanding the point of that headline.

You see, Foremost Market Research, since 1979, and for more than three decades following – through 2012, published, every several years, detailed statistical reports containing actionable insights regarding manufactured housing, the firm could use to advance their marketing and product development efforts. And that information also proved highly valuable to HUD-Code housing manufacturers and owners/operators of land lease communities.

Well, for reasons of their own, Foremost stopped doing this research and reporting six or so years ago, without telling anyone. When I picked up on the omission during 2017, I approached my contact within the firm and coaxed them to reengage. They did so, during 12-26 June 2018, and what follows here is a titillating taste of what will be covered in detail in the March issue of the Allen Letter.

In the meantime, here’re Key Findings from this latest Foremost Insurance Group study of the manufactured housing industry:

• 32% of respondents bought their manufactured home NEW

• 48% of manufactured homes from the survey were of the single wide (sic) variety

• 51% of manufactured homes from the survey were located outside of a traditional subdivision, park or co-op setting (& 41% of homes located in land lease communities)

• 72% of manufactured home owners reported annual household income less than $50K

• 46% reside in a home that was manufactured within the last 22 years

• 54% of responses came from manufactured home residents age 50 or older

• 47% of respondents estimated the value of their manufactured home below $30K

• 32% of mobile home (sic) households also own a recreational vehicle

• 26% have a graduate or post graduate degree

Yes, there’s much more interesting and helpful information in this study. Read the rest of the report in the March 2019 issue of the Allen Letter. To subscribe, visit www.educatemhc.com

II.

Preparatory & Predatory

Sins of Omission & Commission Plague the Land Lease Community Business Model from Coast to Coast!

If you own or operate a land lease community (a.k.a. manufactured home community), do you know HOW to calculate manufactured housing price points that’ll sell in your local housing market; HOW to ‘spec’ (select features) and order a home from your factory of choice; HOW to secure wholesale (i.e. floor plan) financing; HOW to properly install that home on-site; HOW to sell said home; and when need be, HOW to seller-finance or rent the home?

If NOT, then you have been, and continue to be, a victim of the manufactured housing industry’s ‘failure to prepare’ YOU to navigate those six pivotal HOW TOs required in today’s vastly different market environment from the last five ‘go-go’ years of the 20th Century! Some say, this is the manufactured housing industry’s Sin of Omission!

A timely and practical ANSWER to this major education omission? Start doing, nationwide, what the IMHA/RVIC (Indiana) state association has been doing since 2016. Identify the nearest concentration of manufactured housing plants, engage meeting space nearby, then plan Two Days of Plant Tours & Home Sales Seminars, covering HOW TO areas per price points, features selection, product ordering procedures, floorplan financing resources, installation basics, ‘How to Sell – or Rent Effectively’, and what chattel capital funding sources are available.

The way this works, is to offer free plant tours to seminar attendees, on a day different from the seminars, or intermingled in a fashion where attendees ‘pick & choose’ what they prefer to do, from hour to hour. Sure it takes much planning to do this successfully, but here are key points to ensure a successful program:

• Selected presenters must be knowledgeable and experienced relative to their chosen or assigned topic, and highly motivated to share this knowledge and experience! Require each presenter to prepare and distribute a handout covering their topic. Consider binding handouts into a takeaway resource.

• Reserve extra meeting space at the host facility and arrange to have sponsors on hand to support the learning experience and display their products and services. Sponsor fees help underwrite expenses associated with the two day event.

If you’d like to learn more about meeting planning details for this much-needed educational event, contact Ron Breymier via (317) 247-6258 x 11.

The preceding paragraphs cover only half the story needing telling here!

While the manufactured housing industry, including state and national advocates, has been dilatory preparing land lease community owners/operators to fill vacant rental homesites with new home sales and or rental units, (i.e. Sin of Omission), many in the realty asset class itself have been, in this observer’s opinion, guilty of a Sin of Commission.

That’s right. In a word, this is the practice of levying ‘predatory’ rent rates on rental homesites in land lease communities. And let’s be clear, this is NOT a blanket indictment of all land lease communities! But it’s become commonplace enough to spawn this sort of headline in more than one newspaper: “U.S. ‘mobile homes’ affordability slips as corporates move in.”*1

So, what makes for predatory rent rates, and where and why do they occur in some-to-many of today’s local housing markets across the U.S.?

Let’s begin with one land lease community in one local housing market. As a due diligence task pursuant to ‘closing’ a real estate transaction, particularly an income-producing property, it behooves the due diligence team to conduct one or more local housing market surveys, usually including all forms of multifamily rental properties, especially other land lease communities. Not only should the due diligence team demonstrate, for the buying investor, how the subject property’s rental homesite rate compares to other like properties in the local housing market, but how those rent rates relate to other types of multifamily rental housing as well.

One way to do this is to compare the monthly rental rates of 3BR2B-sized apartments with rental homesite rates in the same local housing market. How to do this? Survey all conventional (non-subsidized) apartment communities, targeting 3BR2B or townhouse units – generally closest in size to singlesection or small multisection manufactured homes. Assume the average 3BR2B apartment rent surveys at $900.00/month, plus cost of utilities. A traditional Rule of Thumb, is to divide that amount by three, and arrive at $300.00/month as a target rental homesite rate, in land lease communities, in that local housing market. And this comparison is meant only to be a guide; i.e. is site rent higher or less than $300/month? The answer to that question guides the buyer investor in his/her acquisition decision, and actions after ‘closing’.

But that’s not what has been happening of late – since the turn of the century, when consolidation of communities skyrocketed, e.g. REIT wavelet @ 1994 & 1995, followed by equity plays since then. As property portfolios have grown in size (e.g. REITs alone have exploded from four in 1994 controlling 88,450 rental homesites, to three in 2018, but controlling 300,566 rental homesites! As property portfolios have grown in number (now @ 500+/-) and size*2, profit expectations have increased as well, oft at the behest of Wall Street analysts, and investors from outside the manufactured housing industry ‘wanting in’.

Consequence? Not in all local housing markets, but in many, the traditional 3:1 Rule of Thumb has quietly been supplanted with one akin to 2:1. In other words, local housing market apartment rent average being $900.00/month; now divide by two, not three, and arrive at $450.00/month as a target rental homesite rate for land lease communities in that local housing market. Bottom line consequences of this site rent inflation? Several. Sure, increased profitability for the owner/operator (i.e. mantra: ‘maximize income & minimize expenses’), but also ‘less house purchase capability’ on part of prospective homebuyers/site lessees.

How so? Given an individual or household’s AGI (Annual Gross Income) of $36,000, a 30 percent Housing Expense Factor (‘HEF’), $333/month site rent rate, and 9.5% mortgage rate for 20 years, the homebuyer/site lessee can afford to purchase a $68,000 manufactured home. However if the $333/month site rent rate is increased to $500/month (Keeping in mind the two aforementioned 3:1 & 2:1 ratios), the same homebuyer/site lessee can only afford to purchase a $48,000 manufactured home; i.e. $20,000 ‘less house’ than when rent is/was only $333/month.

And know what? The affordability challenge worsens when one realizes today’s modus operandi is to expect homeowner/site lessees to pay household utility bills in addition to the PITI (principal, interest, taxes, insurance) calculated as being part of the 30 percent HEF – making the transaction ‘risky’. However, when 25 percent of the 30 percent HEF is set aside to pay household utility bills, leaving less residual for paying PITI; well, less house can be bought, but the homebuyer/site lessee is in a far more ‘affordable’ position than before! For example, given same previous ‘givens’, the ‘affordable’ mortgage pencils out this way under the 3:1 & 2:1 ratio scenarios. In the first instance, $36,000 X .3 HEF, then X .75(%) to account for 25% holdback for utility payments, divided by 12 months, deduct $333/month site rent = $342 for mortgage, or $41,000 ‘affordable’ home purchase. Increase site rent to $500/month and end result is a $19,000 manufactured home purchase– less than half the purchase power!

OK, back to the predatory rent rate(s) comment made early in the second half of this ‘Preparatory & Predatory’ treatise. Today, more than ever, we want to see the manufactured housing industry as a whole, and especially the land lease community sector of it, return to say 200,000 new HUD-Code homes shipped annually (We’re at 96,555 year end 2018), and far less than the estimated 250,000 vacant rental homesites nationwide, so must keep home prices and rental homesite rates reasonable and under control! Unfortunately, some, if not all, published regional site rent surveys are skewed, with ‘dollars higher than overall reality’, as market surveyors cherry pick larger, institutional grade land lease communities, characteristically found within the 500+/- property portfolios. The vast majority and numbers of small to mid-sized Mom & Pop communities are rarely included in these surveys. Why? Their site rent rates are generally lower, and they’ve not been consolidated into a property portfolio. Result? Published survey results trend higher and higher year after year, providing cover for properties not worthy of premium site rent rates, but swept up in the supposed prosperity of others, nonetheless.

What to do ‘bout all this? As you can imagine, these are corporate decisions. Either continue to be predatory and enjoy maximum profits in the short term, and let others (future buyers of properties in question) deal with the consequences (i.e. usually increased number of vacant rental homesites) later; OR, be in the business for the long haul, treating present and future homeowners/site lessees as the valuable and valued customers they are!

Preparatory & Predatory. Where do YOU pencil-out relative to these two perspectives? Is someone teaching you the ropes of new home purchase, selling, and seller-finance; or, are you assisting your peers in this area?*3 And how ‘bout the rental homesite rates at your land lease communities? Do they really ‘make sense’, relative to other forms of multifamily rental properties in your local housing market, or are you engaged in predatory practices?

End Notes.

1. Thomson Reuters Foundation, Washington, DC. February 2019.

2. 30th anniversary ALLEN REPORT poll of 100 such portfolios showed an average portfolio size of 43 land lease communities, and average property size of 211 rental homesites. To purchase a copy of this seminal resource document, visit www.educatemhc.com

3. A popular format today involves Four Steps to Selling & Financing New Homes On-site Within Land Lease Communities: Getting Ready! Buying Homes! Selling Homes! Financing Homes! All via the Six Right Ps of Marketing: Right Product, Right Place, Right Price, Right Promotion, Right People, Right Process. If you’d like a FREE 3X5” plastic wallet card featuring these two guidelines, simply request one via gfa7156@aol.com or visit www.educatemhc.com

George Allen, CPM, MHM
EducateMHC
Official MHIndustry HOTLINE: (877) M

Can Of-Site-On-Site Builder Clayton Homes Serve ‘Two & Two’ Markets with ‘Prefabulous’ Homes? – & – Naysayers Beware!

February 21st, 2019

Blog # 521 @ 19 February; Copyright 2019; www.educatemnc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: Clayton Homes is ‘on fire’ in a good marketing way; good manufactured housing trade press is being supported by the industry & realty asset class; and, here’s a preview of the Fall meeting season, where the 28th annual International Networking Roundtable is concerned! This is a GREAT TIME to be in the manufactured housing business and owning/operating land lease communities – except in the latter instance, if one is being predatory with exorbitant rental homesite rates.

I.

Can Off-Site-On-Site Builder Clayton Homes Serve ‘Two & Two’ Markets With ‘Prefabulous’ Homes?

To fully understand and appreciate the gist of what follows, one should read a recent article in Builder magazine titled: ‘Berkshire Hathaway’s Clayton TV Blitz Takes Aim at Home Buyers (that) Recovery Has Left Behind’ – millennials & baby boomers.

The feature does a yeoman’s job setting the stage for Clayton Homes’ “…striking hard, fast, and with a broad swath of impact, with a marketing, advertising, branding, and sales push aimed to both fuel desire and remove friction from the path of would-be home buyers on both ends of demographics barbell (sic)-shaped spectrum, Millennials & Baby Boomers.”

But therein ‘lies the rub’ for some of us! The first ‘two markets’ being ‘Millennials’ & ‘Baby Boomers’; the next ‘two markets’ being manufactured housing’s traditional markets, ‘land & home’ & ‘land lease communities’? Do you see where we’re going with this?

The New Type, ‘prefabulous’ HUD-Code housing described in the referenced article boasts: 1) purchase prices half that of site-built homes, 2) design and features of same*1, and recent 3) debut of GSE Fannie Mae’s Advantage Mortgage program. Given all this, it’s easy to see how Now Is Time for Clayton – and other ‘Big Three C’ HUD-Code manufacturers (?), to engage in national brand public media promotion for this exciting New Type housing product, and the favorable financing thereof!

Again OK. While that’s fine for ‘Millennials & Baby Boomers’ two markets, what about the other two markets: ‘land & home’ target market inferred in the previous paragraph, AND 50,000+/- ‘land lease communities’ (a.k.a. manufactured home communities’) with their estimated 250,000+/- vacant rental homesites nationwide? No mention of this whatsoever!

Now for a little apropos history. During the industry’s nadir year 2009, when only 48,789 new HUD-Code homes were shipped, 24 percent of these went directly into land lease communities. With the advent, that same year, of Community Series Homes*2, designed to be more community-friendly than the ‘big box = big bucks’ Developer Series Home behemoths of the late 1990s, the volume of new homes going into communities increased to 40 percent by yearend 2015, with estimates today ‘nearing 50 percent’ by year 2020.

Bottom line? Again, ;by year 2020 it might be half the annual shipments of HUD-Code homes, Community Series Homes, will be shipped directly into land lease communities; and the other half, the New Type ‘prefab’ or ‘prefabulous’ homes will be sited on scattered building sites conveyed fee simple, i.e. ‘land & home’ installations. Not a thing wrong with that; just don’t want readers – and HUD-Code housing manufacturers, to lose sight of the reality that land lease communities continue to be an emerging ‘market in need’ for new HUD-Code manufactured homes!

And know there is some CAUTION on the national housing market scene today! The QUESTION: ‘If the national economy is growing, and workforce is employed, WHY is the housing market weakening? Three possible ANSWERS: 1) student debt (Among millennials, according to National Association of Realtors, 46 percent have loan balances of at least $25,000 and are discouraged about buying a home), 2) lack of housing inventory (Experts say we’re 370,000 units shy of what is needed for a robust housing market today), and 3) interest rate uncertainty going into the future. Just saying….

In the meantime, if this New Type manufactured housing focus, pursued by Clayton Homes, results in the firm becoming ‘America’s Number One Home Builder!’, then so be it!

End Note

1. “Available prefab home features…permanent foundation with porch, pen floor plan concept, upgraded all-wood cabinets and farmhouse sink, ecobee3 lite smart thermostat and energy efficient appliances, wide plank flooring and drywall interior.”

2. Community Series Home. Singlesection, or modest-sized multisection, in configuration with a WOW factor or two, as well as an array of durability-enhancing features to ease and control ‘get ready’ costs upon homeowner/site lessee turnover.

II.

NAYSAYERS BEWARE

“WARNING. Don’t be swayed by a perennial naysayer! Patronize (trade) magazines and newsletters with the best interests of the industry at heart, and write that way!” Quoted from introduction to blog posting # 520.

And blog # 520 ended with this reminder. “While we suffer an online interloper these days, let’s work together to ‘get the word out’ accurately, and in a positive and timely fashion! We don’t need naysayers spouting half-truths and information that hurts the progress we’re finally enjoying. So, support good trade journalism and honest, fair commentary, by subscribing to some or all the trade publications just described!”

MHInsider, Manufactured Housing Review, Allen Letter, and the Allen CONFIDENTIAL!

Response to those admonitions? Overwhelmingly positive and numerous! Here’s what one well known manufactured housing executive, from the manufacturing and independent (street) MHRetailer segments of the industry penned: “I love the naysayer comment. Well done!” And for now, ‘Nuff said!’

III.

Preview & Opportunity

28th International Networking Roundtable will occur 8-10 September 2019, in Indianapolis
Yes, you read that right. Moving this popular seminal venue to Sunday, Monday, Tuesday this year, at the Alexander Hotel. And on 11 September there’ll be the day long Manufactured Housing Manager (‘MHM’) training & certification class for land lease community owners & managers.

While we’re well into compiling an exciting agenda of informative and educational topics and presenters (Some hints follow here), we’re also interested in hearing from manufactured housing and land lease community businesspeople who’d like to address this august group.

Three keynote presentations this year. Likely a theme and presenter focus addressing the Affordable Housing Crisis in the U.S. today, and how manufactured housing & land lease communities are a significant part of the answer to solving this challenge! Promises to be the ‘Don’t miss!’ topic and event of all 2019! Very special presenter invited….

Another keynote has to do with the answer to this question: ‘Frustrated with the mixed messages about new HUD-Code housing installation regulations, and enforcement thereof, emanating from Washington, DC. and state regulators?’ How ‘bout a panel presentation, then open group discussion by way of questions and answers?

And this’, a ‘keep em in their seats’ keynote presentation the final day of the Roundtable! Yes, you read that right, and here’s what panelists are preparing to cover; the rehabilitation of manufactured homes on-site! A ground floor presentation and discussion of Lessons Learned in this important, but often overlooked, area of maintenance and marketing expertise!

What else to expect this year at the Roundtable? ‘All you ever wanted to know about property management office automation but didn’t know who to ask!’ And ‘risk management’, for insurance purposes, in the land lease community. And resident relations, as practiced by the firm that brought this property management function to our asset class 40 years ago – and continues to practice same to this day.

Finally; it would not be a Roundtable without the two finance panels; one regarding real estate-secured mortgages for land lease community acquisition and refinance, and one comprised of various approaches to chattel capital loan origination.

And ‘all that’ is only part of the agenda so far.

Now for the opportunity! If YOU believe you have a particular talent or expertise worthy of sharing with a national audience, please reach out to me ASAP via gfa7156@aol.com or MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

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

Communicating Among Manufactured Housing & Land Lease Community Businesspeople!

February 14th, 2019

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!’ And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: I am more than ‘cautiously optimistic’ about what year 2019 has in store for the manufactured housing industry and land lease community asset class. And the major cheerleader for continued rise in new HUD-Code housing shipment volume, is the rejuvenated trade press! Forget about the one naysayer, and concentrate on what you read in MHInsider, Manufactured Housing Review, the Allen Letter and the Allen CONFIDENTIAL! Let’s work together now, to read here this time next year: We did it! Shipped more than 100,000 new HUD-Code homes with a production value estimated to be more than $4.3 billion!

I.

Communicating Among Manufactured Housing & Land Lease Community Businesspeople!

2019 Begins a New Communication Era for Manufactured Housing & Land Lease Communities Nationwide. Are YOU aware & ready to read & learn?

Last month marked the first publication anniversary of MHInsider magazine, by MHVillage of Grand Rapids, MI. The anniversary issue was distributed, in great number, at the Louisville MHShow, and was chockfull of lively and timely articles describing various aspects of manufactured housing and land lease community investment and management. I felt especially honored, having my own column inside the back cover of the magazine. Labeled as the Allen Legacy, editors have given me free reign to write about upcoming trade shows, giving them an historical flavor. Given that thought, you’ll likely enjoy the Allen Legacy in the Tunica MHShow issue coming out next month. Hint? Be ready to be ‘Moore’ surprised! If not already receiving MHInsider, reach out to Darren@datacomp.com or Patrick@mhvillage.com. And to advertise, Mattm@datacompusa.com

For the better part of a year, we’ve enjoyed Kurt Kelley’s ezine, Manufactured Housing Review. Reading the online pub is almost like reading a hard copy print version. How so? Well, as a page is read, one ‘clicks’ on bottom right corner of the page shown, and it folds over to the left, just like it would if held in hand. The subject material? A mixed bag, given the variety of writers and their respective areas of expertise and opinions on various matters ‘manufactured housing’ & ‘land lease community’. Easy to find; just Google manufacturedhousingreview.com

Now, here’s the biggest trade press change during year 2019. The conversion, from print trade publications to online digital, of all materials distributed heretofore by COBA7, now via EducateMHC. And what is EducateMHC? It’s a new iteration of what you’ve long (i.e. 40 years!) received from GFA Management, Inc., dba PMN Publishing – and since 2014, COBA7. Said transition improves distribution efficiency of in-house trade pubs, scheduling Manufactured Housing Manager professional property management training and certification classes, as well as facilitating of the annual Networking Roundtable. And amidst all this, I get to continue writing to my favorite audience – you, while enduring less day to day stress. Here’re the pubs…

FREE weekly blog posting. Hard to believe I’ve been sending blogs your way for more than a decade! That’s why this blog is labeled as # 520. For many of you, I’m told, this weekly posting is the only trade press you rely on for timely information and informed opinion. Well, you should avail yourself of some or all trade pubs described in following paragraphs. But first; if not receiving this FREE weekly blog posting, but wish to, simply communicate your desire via: gfa7156@aol.com

Know what? There’s an ‘industry news distribution media’ you likely know little about, unless already on the receiving end. In-house, we refer to recipients as being the ‘Influencers & Deep Thinkers’ of manufactured housing & land lease communities! Recipients are subscribers to either or both the Allen Letter and the Allen CONFIDENTIAL! There’s no set distribution schedule for this special online ‘mailing’. Often it’s a spur of the moment declaration of ‘breaking news’ (e.g. 96,555 new HUD-Code homes ‘shipped’ during 2018, with production value estimated to be $4.2 billion) and or insights into important matters (e.g. 30th annual ALLEN REPORT spots new trend: ‘number of new homes used as rental units exceeds number sold on contract’). How to maybe receive? Subscribe to the Allen Letter and or the Allen CONFIDENTIAL! for awhile, then write to me, expressing your desire to be added to this inner circle Influencers & Deep Thinkers’!

Speaking of the Allen Letter. This year (2019) marks the 30th consecutive year this newsletter for land lease community owners/operators has been published and distributed throughout North America! Many, I’m told, believe a subscription to this newsletter is the basic ‘first step’ one takes when buying their first land lease community. And, proud to say, many of the portfolio ‘player’ folk have been loyal subscribers for decades. How ‘bout you? It’s still only $134.95/year. Simply go to www.educatemhc.com to learn more, and begin one’s subscription. It’s always full of interesting and helpful information. FYI. Just finished penning the March 2019 issue. One article describes at least eight major differences between property operations during the 1970s and today.

the Allen CONFIDENTIAL! Is probably the ‘most fun serious’ manuscript I author each month. How so? Unlike magazine articles and newsletter content, where we collect material ahead of time and outline same, in this case, I fly pretty much by the seat of my pants. That means I am always sensitive to what is happening to ‘thee & me’ around & about the MHIndustry & LLCommunity asset class. So, when I sit down to write, I do a ‘brain dump’ of oft sensitive material, letting you know ahead of just about everyone else, what’s happening – and better yet, what’s likely to occur during the days and weeks ahead! Over the years, regulators, housing manufacturers, and major portfolio owners/operators have let me know of plans ‘on the QT’, but expecting me to release said information at just the right time – to you. Guess that’s part of ‘why’ TAC! is so popular. Interested? Again, go to www.educatemhc.com

In closing, it really does seem the manufactured housing industry and land lease community asset class, where it’s print and online press is concerned, is enjoying a renascence of sorts in 2019. And the timing couldn’t be better! Yes, we narrowly missed shipping 100,000 new HUD-Code homes during 2018, but should be able to do so by year end 2019. And know what’ll help to that end? While we suffer an online interloper these days, let’s work together to ‘get the word out’ accurately, and in a positive and timely fashion! We don’t need naysayers spouting half-truths and information that hurts the progress we’re finally enjoying. So, support good trade journalism and honest, fair commentary, by subscribing to some or all the trade publications just described!

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

Once Again: ‘And Now There Are Four, Maybe Five…’

February 12th, 2019

Blog # 519 revised @ 4 February; 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 posting is sole national advocate, official ombudsman, historian, research reporter, education resource & online communication media for North American land lease communities

To input this blog, &/or affiliate with EducateMHC, formerly Community Owners (7 Part) Business Alliance, or COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Motto: ‘U Support US & WE Serve U!” And, goal for online media? To inform, opine, and help transform and improve manufactured housing and land lease community performance!

INTRODUCTION: This week’s blog posting probably does not need an introduction, as it ‘speaks for itself’, profiling ‘four, no make it five’ national advocates for manufactured housing and land lease communities. Don’t think this has been done before, so is likely a ‘keeper’ for future professional reference where investors, employees, and peers are concerned.

This time around however, I’ve effected a few minor edits to make the blog more readable. So am sending it out for a second time, as so many ‘friends in the business’ asked me to do so. GFA

I.

And Now There Are Four, Maybe Five…

The Increasing Number, Evolving Nature, & Varied Efficacy of National Manufactured Housing Advocacy

In 1975 there was one. By 1985there were two, as a new manufactured housing advocacy entity splintered from the first. Then, between 1993 & 1996, a subgroup of the first entity emerged to ostensibly represent (then) manufactured home communities nationwide. In 2014, a ‘for profit’ alliance ensured ongoing national statistical research, print & online communication, interpersonal networking, and professional property management training & certification for (now) land lease community owners/operators. And during 2018, a new national lobbing group launched out West, to position a dedicated lobbyist, for the realty asset class alone, in Washington, DC.

So, do you think you know who all these folk are? Well, let’s see….

Manufactured Housing Institute (‘MHI’), birthed during 1975, absorbed the National Manufactured Housing Federation – of state associations (‘NMHF’) in 1991. Today, MHI claims to represent all sectors of the factory-built housing industry from its’ offices in Arlington, VA. Majority of its’ income is from HUD-Code housing manufacturer sector members. Visit mhi.org to learn more.

Manufactured Housing Association for Regulatory Reform (‘MHARR’), to better effect regulatory reforms, splintered from MHI during 1985, under the founding leadership of now retired Danny Ghorbani. Its’ membership, to this day, is comprised solely of HUD-Code housing manufacturers, and some state associations. And in the minds of many, MHARR faithfully serves as manufactured housing’s ‘regulatory watchdog’ in “Washington, DC. Visit mharr.org to learn more.

In 1993, just ahead of the manufactured home community REIT wavelet, 19 property portfolio owners/operators met and formed an Industry Steering Committee (‘ISC’) to better represent their business interests on the national scene. Three years later, MHI absorbed the ad hoc group, forming the National Communities Council (‘NCC’) – later to become a division of MHI. Enthusiasm was high, early on. But as time passed, and given the decline of novel programs like the Community Attributes System (‘CAS’), and perennial internal issues, the NCC’s presence, in this observer’s opinion, waned, and attendance at meetings declined. Read an interesting history of the first two decades of the NCC, in Bruce Savage’s The First 20 Years! – available at www.educatemhc.com

Fast forward to 2018. During that year, several western states, frustrated over what they viewed as inadequate national lobbying in behalf of land lease community owners/operators, large and small, nationwide, formed the National Association of Manufactured Housing Communities (‘NAMHCO’). To date, a Washington, DC. based lobbyist has been hired and is ‘making waves’ already, as the group grows in membership and influence.

During most of this time, from year 1980 forward, there was a ‘for profit’ outlier, in Indianapolis, IN., working alongside the not-for-profit trade entities just profiled. Originally, GFA Management, Inc., dba PMN Publishing, a COBA7 division (‘Community Owners – 7 Part – Business Alliance’) materialized in early 2014, to serve land lease community owners/operators statistical research, print & online communication, networking & deal-making, as well as professional property management training & Certification needs. Now, in 2019, all this has undergone major change, transitioning from a print presence to 100% digital platform, under the guidance of EducateMHC. So, for land lease community products and services, via this ‘for profit’ presence as a national manufactured housing advocate, visit www.educatemhc.com

So, there you have an overview of four to five national advocates for manufactured housing in general, three of which focus on land lease communities in particular. Now, let’s take a closer, albeit subjective, look at each entity and how they’re perceived, by some, today….

But first, a general and important observation. In the 1980s and early 1990s, when there were two national advocacy bodies, MHI & MHARR, representing HUD-Code manufactured housing – in different ways (e.g. regulatory cooperation versus resistance), federal legislators and regulators were wont to play one entity off against the other, when pressed to legislate or regulate in regards to manufactured housing. So, this contretemps (‘embarrassing situation’), or evergreen issue, is not a new challenge to the industry, but one that continues to this day.

Manufactured Housing Institute. Some pundits say, ‘If there was no MHI there would not be a manufactured housing industry!’ Likely a lot of truth to that, as no other national advocacy entity comes close to representing ALL segments of that specific type factory-built housing. And there’s the first ‘rub’. If one accepts Don Carlson’s (publisher of now defunct Automated Builder magazine) description of factory- built housing, as comprised of 1) production site builders (i.e. stick builders using factory-fabricated components like roof trusses and pre-hung door and window units), 2) panelizers, 3) HUD-Code manufactured housing, and 4) modular homes; well, where does MHI fit into the ‘production site builder’ and ‘panelizer’ representation picture? It doesn’t. MHI also claims to represent the modular housing folk, but to a far smaller degree, than manufactured housing, given a minimal website presence. And there’s the institute’s questionable practice of reporting new home monthly shipment volumes, researched and published by HUD’s contractor, the Institute for Building Technology & Safety (‘IBTS’), differently from HUD itself, MHARR,NAMHCO, COBA7 – and now, EducateMHC.*1

Manufactured Housing Association for Regulatory Reform. Until the manufactured housing industry’s nadir year 2009, when only 49,789+/- new HUD-Code homes were shipped, MHARR’s focus was solely on regulatory matters pertaining to their core membership, mostly regional manufacturers of HUD-Code homes!*2 Since then, the association’s political and industry interest has broadened to include chattel capital sourcing for new HUD-Code homes going into land lease communities; and, the unique, income-producing property type itself. Additionally, MHARR has become known for its’ overt support of the creation of a new national trade body to, in their opinion, better represent post production business enterprises. And while this has yet to occur, some credit said encouragement as a catalyst speeding the emergence of aforementioned NHAMHCO.

National Communities Council division of the Manufactured Housing Institute. There is no separate MHI/NCC web site dedicated to the information needs of land lease communities, large and small. Over the years (1996 – present day), good ideas have come and gone. An attempt to ‘quality grade’ land lease communities was tabled out of fear of stigmatizing properties based on curb appeal, resident relations, rules enforcement, and other measures. And finally, in this asset class observer’s opinion, contemporary professional property management training and certification do not begin to garner the attention sorely needed, for image improvement, throughout the property type nationwide. So, it’s been no surprise to see other attempts at advocacy, education, and representation materialize in recent years.

National Association of Manufactured Housing Communities. Too early to say much about this new arrival on the national advocacy scene. However, some find it confusing to refer to ‘manufactured housing communities’ in the entity name, when manufactured home community has been di rigour since 1994, upon publication of J.Wiley & sons’ texts, Development, Marketing & Operation of Manufactured Home Communities, and How to Find, Buy, Manage & Sell a Manufactured Home Community. And of late, given that as many as six, some say seven, types of shelter can be found on-site in this unique, income-property type, makes for a good case for ‘land lease community’ as trade moniker of choice. *3

Community Owners (7 Part) Business Alliance, as of January 2019, has been absorbed by EducateMHC, a for profit firm, to continue the research, preparation, and distribution, via digital means, of products and services available from GFA Management, Inc., dba PMN Publishing, since 1980. *4

So, where does manufactured housing national advocacy go from here? Hard to tell. While everyone is enjoying the gradually increasing new home shipment volume, land lease community owners/operators have known, for a decade, they must control their own destinies – no longer relying on independent (street) MH Retailers and ‘company stores’ to fill vacant rental home sites! Yes, there’s ongoing need for overall industry representation by MHI, regulatory oversight by MHARR, advocacy by the NCC, lobbying by NAMHCO, and availability of seven categories of products and services available via COBA7 cum EducateMHC. What we don’t need now, frankly, is yet another national trade association.

And I’d be remiss here, if I didn’t make at least passing mention of major, ongoing consequences, resulting from sweeping ‘consolidations’ among HUD-Code housing manufacturers and land lease community owners/operators, where national and state advocacy is concerned! When an industry evolves, from dozens of housing manufacturers, to just ‘Big Three C firms’ controlling 80+/-% of national market share, expect political power ‘among those few’ to be concentrated on at the very top of the national advocacy pyramid. Much the same can be said about consolidation of land lease communities into 500+/- property portfolios. Early on, there were thousands of ‘Mom & Pop’ property owners actively engaged in state legislative affairs, today there are far too few, as major portfolio ‘players’ opt to not encourage on-site property managers to participate in local (state association) matters! Yes, manufacturer presence and power are very evident on the national level, while state and local participation goes begging, suffering benign neglect – until a major issue (e.g. pending landlord-tenant legislation) sounds an alarm and stimulates action.

In this industry observer’s opinion, while manufactured housing and land lease community national advocacy have increased in entity representation, and evolved in purpose and nature, they continue to struggle achieving efficacy in day to day application. Every businessperson involved in this industry and realty asset class today, should actively support their state association, and the national trade body they feel best represents their particular interests!

And there’s one more emerging, albeit increasingly major, ‘evergreen’ issue encouraging far better national representation and advocacy. That is, solving the ‘affordable housing’ crisis in the U.S. today! For the first time, during years 2017 & 2018*5, in my 40 years in manufactured housing, ‘housers’ (national housing policymakers) are actively investigating the role manufactured housing, and yes, land lease communities, might play in providing truly affordable, non-subsidized, energy efficient housing throughout this country. What’s amazing, to me, is how little these folk know about factory-built housing and its’ advantages. This is a major challenge right now, and in the immediate future, for all four-to-five national advocates. Are MHI, MHARR, NAMHCO, NCC, and EducateMHC up to the task? We’d better hope so! GFA

End Notes

1. IBTS reports a monthly total of new manufactured housing units shipped, including a varying number of DESTINATION PENDING 9’DP’) homes. MHI deducts the number of DP units from IBTS published total, but adds back in DP units from the previous month – assuming all have been shipped to specific locations. According to IBTS this is not a valid assumption, as there is no follow-up accounting for DP units, and it’s common for such accounting to be resolved only after a plant shutters, and remaining inventory is reported to IBTS.

2. MHARR does not publish a list of its’ member firms.

3. Mobile homes, manufactured homes, modular homes, park model RVs, ’RVs for a season’, stick-built homes fabricated on-site to imitate manufactured homes, and now ADUs (Accessory Dwelling Units) like Tiny houses.

4. Including the 30th anniversary ALLEN REPORT, monthly Allen Letter and the Allen CONFIDENTIAL! Publications, as well as the soon to be released ‘21st annual National Registry of ALL Lenders Serving Manufactured Housing & Land Lease Communities’. To purchase, visit www.educatemhc.com

5. National Housing conferences, in Washington, DC., initially challenged housing aficionados to come up with a workable definition for affordable housing. That’s been done. Today’s challenge is to educate ‘housers’ as to the practicalities of manufactured housing & land lease communities. Are you interested in helping? Contact gfa7156@aol.com

George Allen, CPM Emeritus, MHM Master
EducateMHC
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

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