SAAs, PIAs & ‘Shiners’; RECONFIGURE MH Shipment %s

Blog # 490; Copyright @ 25 June 2019; community-investor.com

Perspective. ‘Land Lease communities, previously manufactured home communities, & ‘mobile home parks’, comprise the real estate component of manufactured housing.’

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INTRODUCTION: Did YOU Know? The month of JUNE has been National Homeownership Month all along?! Wow; as an industry of ‘housers’, we ALL missed that public opportunity to ballyhoo ‘manufactured housing & land lease communities’ to prospective homebuyers/site lessees! Hmm. Perhaps our gross oversight, on this matter, is symptomatic of our industry inability, to date, to get enthusiastically on board and MAKE MANUFACTURED HOUSING GREAT AGAIN! Think about it…

Part I. After 40 years in the MHBusiness I don’t get to participate in very many truly unique personal experiences. Well, this was indeed one of them. Read on…

Part II. It’s not so much I ‘made a mistake’ estimating percentage of new home shipments going into land lease communities, as it is better sourcing of apt data now available.

Next blog posting (#491)? New HUD-Code housing price increases aggravate land lease community owners. If regulations accounts for 30+% of multifamily development costs, how much does regulation of HUD-Code homes cost homebuyer/site lessees? And, preparations being made for 30th anniversary edition of the ALLEN REPORT (January 2019 distribution); anyone interested in coming alongside to learn how to do this? And maybe: a new SSRD under development: ‘Sources of MH & LLCommunity-related Statistics’

I.

SAAs , PIAs, & ‘Shiners’ in St. Louis, MO.

Huh?

Yes, for many – if not most, reading this blog posting, the title bears some explanation. Frankly though, it shouldn’t, IF you’ve been a ‘houser’ for more than a decade. But what do I know? I’ve been a housing provider for four decades and still need to look at my ‘cheat sheet’ to recall the names of the two state agencies described by SAA & PIA abbreviations. And it took this trip to HUD’s Western & Midwestern Regional Meeting, to learn what a ‘shiner’ is. So, here goes….

State Administrative Agency, or SAA is responsible for inspecting new manufactured housing installations – and in some cases, like in Minnesota, even installations of relocated resale (used) manufactured homes.

Primary Inspection Agency, or PIA folk are the in-plant inspectors ensuring factory compliance with HUD’s performance-based federal building code, where manufactured housing is concerned.

And ‘shiner’? Well, those are the (shiny) heads of nails unintentionally exposed on shingled roof systems of manufactured homes. They tend to move, over time, and in doing so cause damage to the roof system, i.e. leaks.

So, what happened at this State Administrative Agency & Primary Inspection Agency Western & Midwestern Regional Meeting facilitated by HUD’s Office of Manufactured Housing Programs, and led by Teresa Payne, acting administrator of this office.

SAAs & PIAs, from throughout the U.S., shared inspection and record keeping methodologies, and hands on experiences, pursuant to their respective housing product and installation evaluations – and in the latter instance, typical remedial recommendations, even demands, of errant parties. Quite an educational experience for this veteran of factory-built housing fabrication (during 1970s & 80s) and longtime owner/operator of land lease communities (from 1990s thru 2017). Bottom line for me? Impressed to learn how relatively few homeowner/site lessee complaints make their way through the federal Dispute Resolution Program these days, at an average of maybe only a dozen per year per state.

Two recommendations to HUD for future such meetings? First, spread this educational, networking (opportunity) tent in a far larger way! Encourage all HUD-Code housing manufacturers to be represented at this event. This time around, only CAVCO Industries was represented. But I was encouraged to see our national advocates present: MHARR, MHI, & COBA7, as well as IBTS (Institute for Building Technology & Safety…HUD’s scorekeeper re # HUD-Code homes shipped every month of the year…more about IBTS later in this blog). More SAAs & PIAs need to get on board as well. Given a quick check of the 55 name attendee list, I identified nearly two dozen states ‘not represented’ by their SAAs & PIAs. Why?

And there’s a unique opportunity afoot here! Believe it or not, among these erudite manufactured housing folk, I heard repeated references made to trailers & coaches (GASP!), ‘mobile homes’, manufactured housing, and more. Also reference to ‘park model RVs’, container houses, and yes, Tiny Houses. And I got the distinct idea, individuals had any idea why the trade press now talks of land lease communities rather than ‘mobile home parks’ and manufactured home communities. Point? Someone, and why not have it be HUD’s Office of Manufactured Housing Programs, that puts forth a Style Manual of sorts, listing and explaining various preferred manufactured housing-related trade terms; then publish and distribute it widely throughout the industry and among the real estate asset class, HUD may not be aware, COBA7 already publishes (circa 2015) the industry’s Official Lexicon, Glossary of MHIndustry Terminology, and would be pleased to contribute a copy to jump start such a worthwhile project.

So, next time you hear of a State Administrative Agency & Primary Inspection Agency Meeting taking place, consider attending, to learn – as I did, the basics and nuances of housing product and installation inspections per the HUD-Code. Consider it a key step along the way to MAKE MANUFACTURED HOUSING GREAT AGAIN!

II.

RETHINKING

Percentage of New HUD-Code Homes Going Directly into Land Lease Communities, 2009 thru 2017….

By now, many if not most of you reading this blog posting have ‘heard or read the following drill’:

‘During year 2009, the manufactured housing industry’s nadir year, it shipped buy 49,789 new homes, with approximately 24% of those, or 12,000+/- going directly into land lease communities nationwide. That year also saw the debut of Community Series Homes (‘CSH models’), designed for in-community placement – and given the demise of 10,000+/- independent (street) MHRetailers since the turn of the century (per MHI), community owners began to have to buy, sell, and oft seller-finance new homes on-site, to fill vacant rental homesites within their income-producing properties.’

OK, all was, and is, well (accurate) to that point, but here’s where we (me?) went astray, using published data available to us at the time.

‘By year end 2015, when the manufactured housing industry shipped 70,544 new homes, including many CSH models, federal records seemed to indicate 41% of those, or 28.000+/- new homes, were shipped directly into communities nationwide. And I, for one, predicted that percentage might escalate to 75% by year end 2020 – and indeed it might!’

But two things have happened, so far during year 2018, to bring the second percentage (i.e. 41%) into serious question, as well as the 75% prediction. Firstly, an emerging trend. Secondly, a renewed look at commerce.gov website data not available earlier.

In the first instance, new HUD-Code housing sales via independent (street) MHRetailers is experiencing an uptick in many local housing markets; so much so, they’re now competing with community owners for the services of licensed installers. This has not been a challenge during the past decade or so, but certainly has become one now.

Second. When one accesses Department of Commerce records regarding annual shipment volumes of HUD-Code manufactured homes, one finds a different numbers picture than painted during the recent past. Here’s the corrected array

Year 2009 = 49,789 new homes shipped, with 24% or 12,000+/- going into communities

Year 2012 = 54,881 new homes shipped, with 29% or 16,000+/- going into communities

Year 2013 = 60,228 new homes shipped, with 30% or 18,000+/- going into communities

Year 2014 = 64,331 new homes shipped, with 33% or 21,000+/- going into communities

Year 2015 = 70,544 new homes shipped, with 34% or 24,000+/- going into communities

Year 2016 = 81,336 new homes shipped, with 34% or 28,000+/- going into communities

Year 2017 = 92,902 new homes shipped, with 32% or 30,000+/- going into communities

The estimated shipment numbers, in the seven previous lines, have been rounded, to ease comprehension and retention. As such, they clearly demonstrate two points:

• First, by year end 2015 we were evidently not shipping 41% of new HUD-Code homes into land lease communities, but rather 34%.

• Second; it is encouraging to see how the volume of new HUD-Code homes being shipped into communities has increased ‘almost’ three fold between 2009 & 2017

Furthermore, it’s interesting to estimate what the shipment total (into communities) might be by the end of 2018, as we surpass the 100,000 new HUD-Code homes total. As another 32% year, that could mean as many as 32,000 new homes so delivered. And at 34% the number of new HUD-Code homes shipped would increase to 34,000. Bets anyone?

Now here’s an interesting, related sidebar. As the in-community siting percentages increased by at least 4% between 2012 & 2017, the number of new homes titled as personal property, but ‘not in-community, dropped by 4%, e.g. 2012 = 77 personal property titles (-) 29% in-community homes = 48% personal property titled homes on privately-owned scattered building sites. And, 2017 = 76 personal property titles (-) 32% in-community homes = 44%. personal property titled homes on privately-owned scattered building sites. So, 48% – 44% = aforesaid shift of 4% fewer homes on privately-owned scattered building sites. .

Two final points to be made:

• First, if you’re a land lease community owner/operators, you’ll surely want to save and or record the above seven year shipment volumes and, for the most part, increasing percentages going into our unique, income-producing property type.

• Second. About those annual new HUD-Code home shipment totals listed above. Those are not only copied directly from the www.commerce.gov website, they are also the same totals published by HUD, MHARR, & COBA7! All three national regulatory and advocacy entities use unadulterated new HUD-Code housing shipment data researched and published monthly by the aforementioned Institute for Building Safety & Technology (‘IBTS’).

Lesson to be learned here? Use data from the sources identified in this paragraph.*1

So there you have it, the RETHINKING of Percentage of New HUD-Code Homes Being Shipped Directly into Land Lease Communities Nationwide. One more key data point along the road to MAKE MANUFACTURED HOUSING GREAT AGAIN!*2

End Note:

1. Want the comprehensive ‘Official Record of MH shipment Data, from 1955 thru 2017’? Order a copy of the newly released second edition of SWAN SONG, from PMN Publishing, for discounted price (until 1 August 2018) of only $24.95 (includes postage & handling), by phoning the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. Want to be part of the industry wide discussion of How to MAKE MANUFACTURED HOUSING GREAT AGAIN! ? Plan to be at the RV/MH Hall of Fame in Elkhart, IN., the morning (9AM-Noon) on 6 August 2018, for this year’s MHAlive! ‘think tank’ event. Cost? Only $20.00 at the door (to defray meeting-related costs), but RSVP a MUST, on or before 31 July 2018, by email: gfa7156@aol.com or phone (317) 346-7156.

George Allen, CPM, MHM c/o Box # 47024, Indianapolis, IN. 46247.

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