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Home > Affordable Housing, Analysis and Commentary, Association, Legal, Legislation, News, regulation > Havenpark Capital Management Responds to Senator Elizabeth Warren, Congressman Dave Loebsack

Havenpark Capital Management Responds to Senator Elizabeth Warren, Congressman Dave Loebsack

June 21st, 2019

 

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The formal response to a letter in late May 2019 from Senator Elizabeth Warren (MA-D) and Congressman Dave Loebsack (IA-D) to Havenpark Capital has been obtained by MHProNews.

 

ICYMI, or want a refresher, the Daily Business News on MHProNews most recent report on this issue is linked below. As a thumbnail, Havenpark stirred regional controversy by sharply raising site fees on residents in manufactured home communities that they purchased. Havenpark has been accused of “predatory” practices by residents, activist groups, lawmakers, and others. In the wake of those concerns, Senator Warren and Rep. Loebsack addressed Havenpark, with a series of ‘discovery’ like requests – seeking facts and information. That letter from Senator Warren is part of the report below. 

 

Manufactured Home Communities’ Dodd-Frank Moment Looms, Senator Elizabeth Warren Takes Aim at Several Manufactured Housing Institute Community Members

 

The response by the community operator was printed on plain paper (sans letterhead) to the Democratic lawmakers named. The written response was signed by Managing Partners J. Anthony Antonelli and Robison Pratt for Havenpark Management.

Note: publishing their response should not be construed as an agreement with their claims, but rather what it is – Havenpark’s formal position as submitted. An analysis will follow their letter. Dashed ———- lines represent division made in the original letter to denote footnotes in their reply. The companies address was cited at the top, and is not shown below, but otherwise, the letter is structured as in the original. The … indicate a break in the copy due to footnotes, to mimic the original. 

 

The Honorable Elizabeth Warren
309 Hart Senate Office Building
Washington, DC 20510

The Honorable Dave Loebsack
1211 Longworth House Office Building
Washington, DC 20515

June 18, 2019

Dear Senator Warren and Representative Loebsack,

This letter is in response to the letter we received from you dated May 28, 2019.

We respect, understand and agree with your concerns regarding the issue of affordable housing. Affordable housing is among the most pressing issues America faces today, and we are proud to be a small part of the solution to that crisis.

We strongly support the notion that solving the affordable housing crisis starts with preserving existing housing stock.1 Few types of real estate housing are more at-risk of disappearing than manufactured home communities located in commercial districts and other prime acreage of high-demand areas.2

Manufactured home communities are prime targets for developers of big box retail, luxury apartments, office buildings and other types of development.3 Tragically, this gentrification is occurring with greater frequency from all corners of the country in cities large…

 

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1 Why Preserving Affordable Housing is More Important than Building it. May 15, 2017. Retrieved from http://www.icastusa.org/why-preserving-affordable-housing-is-more-important-than-building-it/

2 Sullivan, A. America’s Most Invisible Communities – Mobile Home Parks. August 10, 2017. Retrieved from https://www.ted.com/talks/esther_sullivan_america_s_most_invisible_communities_mobile_home_parks/transcr ipt?language=en

3 Turner, S.L. Mobile Home Park Redevelopment & The Loss of Unsubsidized Housing. May 2010. Retrieved from https://repositories.lib.utexas.edu/handle/2152/22331

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and small4 5. The results are disastrous – the unconscionable act of mass evicting all community residents – and are occurring at an alarming rate around the country6 7.

Preserving existing manufactured home communities is tantamount, but it is not enough. Those properties also need preliminary and ongoing capital upgrades, good maintenance, and helpful onsite property managers to ensure the property is a safe and clean community for all residents for the long term.

Havenpark is a regional operator of manufactured home communities. We are committed to preserving affordable housing by purchasing manufactured home communities and investing heavily in them – upfront, and on an ongoing basis – to ensure they are a secure, safe, clean and desirable place for our residents to live long-term.

Given the rapidly rising land values and rental rates across the country, Havenpark agrees there is a place for local, state and federal governments to pass legislation that would truly help the residents of manufactured homes. For example, the proposed legislation creating refundable tax credits for renters paying more than 30 percent of their income for housing are worthy of exploration. As are laws that would give mobile home park residents greater notice of rent increases before they can go into effect. Another proposal would benefit residents by providing federal tax incentives to owners of manufactured home communities if they sell the community directly to the residents. The current laws, rules and regulations likely need to be updated to protect both residents and landowners alike. Havenpark will continue to adhere to all current and future municipal, state, and federal rules regarding the operation of manufactured home communities.

We respect that as elected leaders you have the power to create real solutions. By looking at the affordable housing issue, real improvements are possible. To do that also requires a candid examination of the fiscal realities and costs. For example, one must acknowledge that had Havenpark not recently purchased manufactured home communities in North Liberty, IA and Waukee, IA – two of the fastest-growing areas in the region and country8 9 – they almost assuredly would have been sold to a developer that would have closed those communities –

 

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4 Mobile Home Parks at Risk of Redevelopment. September 25, 2018. Retrieved from https://www.statesman.com/NEWS/20180207/Mobile-home-parks-at-risk-of-redevelopment

5 Nearly 300 mobile homes lost since 2011. June 15, 2019. Retrieved from https://missoulian.com/news/local/affordable-housing-crisis-nearly-mobile-homes-lost-in-missoulacounty/article_a93950eb-7d0f-5c0c-89ec-7046511b3930.html

6 As land values rise in Phoenix area, mobile-home parks disappear. July 26, 2018. Retrieved from https://www.azcentral.com/story/money/real-estate/catherine-reagor/2018/07/25/mobile-home-parksdisappear-fewer-affordable-housing-options-metro-phoenix/789332002/

7 Half of Hennepin County’s Mobile Home Parks Have Closed. July 17, 2017. Retrieved from http://www.startribune.com/as-mobile-home-parks-close-attention-turns-to-how-to-protect-them/434708163/

8 Waukee, IA one of the 10 fastest-growing suburbs in the U.S. July 18, 2018. Retrieved from https://businessrecord.com/Content/Default/All-Latest-News/Article/Waukee-one-of-the-10-fastest-growingsuburbs-in-the-U-S-/-3/248/83265

9 North Liberty among fastest growing cities in Iowa. Retrieved from https://www.thegazette.com/subject/news/government/north-liberty-among-fastest-growing-cities-in-iowa20170525

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mass-evicting hundreds of residents – in order to repurpose that prime real estate into something more valuable. In this case, developers are who we outbid in order to make these two purchases in Iowa, securing long-term affordable housing for hundreds of Iowan families in the process. Havenpark is now in the process of making a substantial capital investment to ensure the communities are brought up to our operating standards and have sufficient upgrades and amenities to meet our residents’ needs. Market forces dictated the purchase price of those two properties, which went far beyond what the current income on rent provided. Taken together with the heavy capital commitment we’re making to ensure a good quality of life for our residents, we had to normalize the rents to the level of comparable manufactured home communities in the immediate area, otherwise we would effectively be “under water” and unable to preserve their current use. Even after normalizing rents, these two communities provide among the most affordable units in their respective markets with site rent leasing for approximately 30% of the cost of the average apartment in the area and are in-line with other manufactured home communities of comparable quality in those markets.

We do understand that any housing price increase is a burden, especially when residents haven’t seen rent increases that align with cost of living adjustments for several years. This was the case in the two Iowa communities referenced here. This is why after meeting with community residents from those two properties we decided to stagger the rent increases over a period of two years. This amounted to an increase in monthly rent of $75 (North Liberty) and $100 (Waukee) during the first full year of operations. This rent normalization was the cost of securing and preserving these communities.

Market forces continue driving housing prices and rental rates up. For example, it was recently noted that the average one-bedroom apartment rent in the Des Moines market experienced a 17% increase since last year10. Clearly, wages are not growing anywhere near that rate. Therefore, we believe there are some proposed policies and solutions that should be explored that would potentially mitigate the effects of such rent increases that many middle and lower income Americans are dealing with.

We also hope you acknowledge our financial investment which improves the properties and raises the quality of life for our residents. These include repaving streets, adding improved lighting, building dog parks, adding community playgrounds, renovating community centers, landscaping, and others. The biggest investment many Americans have is their home. These capital investments improve the value of our residents’ homes11 12, instill community pride, promote camaraderie among neighbors, and contribute to the overall well-being of our community residents.

 

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10 2019 Annual Rent Guide. Retrieved from https://www.apartmentguide.com/blog/apartment-guide-annual-rentreport/#Rent_Increases

11 Will a Manufactured Home Appreciate in Value? FAQ Retrieved from https://www.manufacturedhousing.org/faq/

12 New evidence shows manufactured homes appreciate as well as site-built homes. September 13, 2018. Retrieved from https://www.urban.org/urban-wire/new-evidence-shows-manufactured-homes-appreciate-wellsite-built-homes

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Our overall mission is to secure and preserve affordable housing across the country. We look forward to continuing to invest in our communities to make them attractive, safe, clean places for individuals and families alike.

We note that your letter requested Havenpark answer a long list of specific questions about our company. We have been advised by counsel not to respond point-by-point.

We hope to be of assistance in the discussion and formation of policies and regulations that would preserve existing affordable housing and create more options for affordable housing going forward.

Respectfully,

JAnthonyAntonelliHavenparkManagementRobinsonPrattHavenparkManagementSignedLetterSentorWarrenRepLoebsackMHProNews

 

The video below is from the Iowa City Press Citizen. Once more, this reflects the views of those speaking, and ads balance to the report.

 

 

MHProNews Analysis and Commentary

In our analysis, MHProNews will focus on a particular part of the Havenpark reply letter.  That portion of their letter is shown below, with each bullet as a line from paragraph 7, above.

  • Given the rapidly rising land values and rental rates across the country, Havenpark agrees there is a place for local, state and federal governments to pass legislation that would truly help the residents of manufactured homes.

The above quote is arguably an attempt at jiujitsu and posturing, as are other portions of their letter. Continuing with their next line:

  • For example, the proposed legislation creating refundable tax credits for renters paying more than 30 percent of their income for housing are worthy of exploration.

That second sentence from paragraph 7 is a reference to proposed legislation that would arguably shift the burden of rising rents to taxpayers. It’s a bold, de facto call for federal subsidies of their communities. Their third sentence:

  • As are laws that would give mobile home park residents greater notice of rent increases before they can go into effect.

Besides the errant use of terminology, this is disingenuous at best. Having re-calibrated after serious blowback in Iowa, Havenpark’s management well know that they can give ‘greater notice’ without a law. Posturing.

Sentence four, paragraph 7:

  • Another proposal would benefit residents by providing federal tax incentives to owners of manufactured home communities if they sell the community directly to the residents.

That’s a reference to a bill that bears scrutiny on several levels, see the report on that topic linked here. Let’s note that while MHProNews believes there are clear merits to resident owned communities (ROCs), those who believe they are a panacea or utopia are mistaken. The Millie Francis case reflects the vexing reality that ROCs that are improperly run can have their own problems: see that, linked here.

Final sentence, paragraph 7:

  • The current laws, rules and regulations likely need to be updated to protect both residents and landowners alike. Havenpark will continue to adhere to all current and future municipal, state, and federal rules regarding the operation of manufactured home communities.

Much of this obliquely reveals a concern that MHProNews and our sister site have raised on numerous occasions previously. The purported ‘black hat’ behavior in this matter unjustly creates a public perception that impacts others in the community world who don’t engage in such allegedly aggressive practices.  Further, mainstream media reports on scenarios like those involving Havenpark likely have a negative impact on new and pre-owned manufactured home retail sales too.

Restated, residents, potential buyers, and ‘white hat’ intendents are all among the ‘victims’ of black hat firms.

What Havenpark is doing is akin to what our publisher dubbed conquest capitalism, see the case for that, linked here. When organizations such as Warren Buffett led Berkshire Hathaway brands Clayton Homes and 21st Mortgage Corporation seemingly have escaped federal consequences – at least so far – for what’s described below, doesn’t that only embolden other operations to dare such misbehavior too?

 

SmokingGunEvidenceOfAntiTrustMonopolisticCollusionMoatClaytonHomesKevinClayton21stMortgageTimWilliamsWarrenBuffettMHLivingNewsMHProNews

In a series of direct quotes in context, a document from 21st Mortgage signed by Tim Williams, and video recorded comments by Kevin Clayton, these all line up to demonstrate how independent retailers, communities, and producers – among others – where purportedly harmed by action that could be deemed an antitrust violation. Why hasn’t Allen told his readers how that cost them money? https://www.manufacturedhomelivingnews.com/bridging-gap-affordable-housing-solution-yields-higher-pay-more-wealth-but-corrupt-rigged-billionaires-moat-is-barrier/

 

The industry’s good message is debatably clouded by such problematic behavior. See our prior report on the Havenpark linked controversy from the linked text-image box below.

 

Gannett Media Exposés, MH Community Owner Moves Sparks Outrage – IEDs of Manufactured Housing

 

While not every black hat firm is an MHI member, what John Oliver’s video obliquely revealed is that there is often a common tie between Buffett, Clayton Homes, MHI, and negative media.

 

 

Those bad news stories dwarf the exposure potentially positive events such as the Innovative Housing Showcase (IHS2019).

In the wake of such problematic media, as Havenpark and others have stirred up, is there any wonder that manufactured home sales are slipping instead of growing?

Not everything that goes wrong in the industry is purportedly caused by Buffett, Berkshire, Clayton, and MHI black hat brands.  That said, much arguably is.

In the related reports further below is a letter from a community leader that ought to spark thought among the industry’s ‘white hat’ operations.

That letter linked below the byline and notices could become part of the solution.  A second element that could rapidly play a useful role is to fully apply federal law, including the enhanced preemption clause of the Manufactured Housing Improvement Act (MHIA) of 2000. Again, for more, see the related reports below the byline and notices.

But a third element of the solution should include a new post-production trade association that stands up for the industry’s good post-production firms, and publicly denounces black hat behavior. Otherwise what happens is harmful to independent businesses and to potentially millions of Americans.

Havenpark, MHI, and others noted will be invited to provide their retort to these concerns in a letter to the editor.

 

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Related Reports:

You can click on the image/text boxes to learn more about that topic.

MH Community Leader Robert Van Cleef – Public Call – Federal Investigations of Berkshire Hathaway, Clayton Homes, 21st Mortgage, Manufactured Housing Institute

Nathan Smith, SSK Communities, Manufactured Housing Institute Leader, Profitably Correcting the Record

 

Dueling Statements, NAMHCO, MHI, MHARR, Weigh In On Controversial MH Bill, “George Allen Pawn Gambit”

 

Prosperity Now, Nonprofits Sustain John Oliver’s “Mobile Homes” Video in Their Reports

MHARRCallsHUDSecretaryCarsonEndDiscriminatoryZoningHUDRegulatedManufacturedHomesCommodoreHomesCorpMHARR

Photo of Commodore Homes model, MHARR logo, are provided under fair use guidelines. See article and letter to Secretary Carson, linked here. https://manufacturedhousingassociationregulatoryreform.org/mharr-calls-on-hud-secretary-to-end-discriminatory-and-exclusionary-zoning-of-hud-regulated-manufactured-homes/

 

Shocking, True State of the Manufactured Housing Industry, plus Solutions for Profitable, Sustainable Growth – May 2019

 

 

 

 

 

 


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