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Manufactured Home Communities, Retailers, Developers Face Disruptive, Troubling Trend

TroublingTrendManufacturedHousingIndustryDailyBusinessNewsMHProNHews

There’s an old axiom that describes the purported three options that someone faces when confronted with a threat.Fight, flight or deal with it.”

 

Marty Lavin, JD, is one of a few voices in manufactured housing who has publicly called out in digital print the problem of discrimination against manufactured homes where thousands can consider it.

MartyLavinJDMHProNewsLavin’s professional history has included involvement in a high volume retail center, land-lease communities, manufactured home lending, and working with a GSE. Lavin made the speaking circuit for years, was featured in the now defunct Manufactured Home Merchandiser Magazine, has periodically contributed for MHProNews, and published himself. He was awarded one of the Manufactured Housing Institute’s (MHI) most coveted awards, the Tataro, for his lifetime of service to the industry in financing.

So when Lavin says that “The HUD Code is a discrimination code,” it’s a phrase that should make industry readers across the spectrum sit up, and take notice. It should raise questions, like what does that mean?  We will explore that, and step-by-step see how it leads up to an emerging issue – one that is holding the industry’s sales at bay – related below. 

 

Discrimination Against MH

Ponder for a few moments the fact that modular, prefab, and tiny house builders – those who don’t build manufactured homes – distance themselves from manufactured homes. It isn’t just stick builders, or others in the general public, who attempt to besmirch manufactured housing, often by unjust and inaccurate reference to HUD Code homes as “mobile homes,” or “trailer houses.”   

There are regrettably voices within Manufactured Housing that mix the terminology in problematic ways too.  The need to correct terminology is real.

 

It’s a flawed strategy to diminish manufactured housing, or misuse the terminology, said L.A. “Tony” Kovach years ago. It plays into the hands of those who unjustly target any factory-built home.

Which is part of the reason why MHProNews and MHLivingNews periodically use the Steve Duke quote and graphic below.

Brad Lovin of the NCMHA put a different, but related point on the issue of mainstream media reporting.  

 PublishingHandPickedInformationCanBeWorsefortheImpressionItMakesOnManufacturedHomesandOurIndustryThanStatingEntirelyFalseInfo-BradLovinNCMHA

It is all part of the puzzle that has kept manufactured housing at historically low levels, during an affordable housing crisis.

 

Fractures Within the Factory Housing Industry

There are several fractures, and conflicts that exist within the ranks of factory builders. Modular homes get trucked in too.  Some modular homes have a permanent frame, at times referenced by industry members as “HUDulars,” while other MODs use a detachable carrier.  But site-built housing components get trucked to a job-site too. Does that make a site-built house, a trailer or pick up house?

Retailers have been known for decades to target residents in a land lease community for trading in their older manufactured home, encouraging them to buy a new one that would become part of a land-home package. No more “landlord” is part of the argument made in such cases.

Communities have competed with each other for residents, what some have called “poaching.” While unpopular among land-lease community owners, it is arguably free enterprise at work. Deal with it.

Developers of fee-simple land/home projects are impacted too, as the case below will explain.

All of these fractures demonstrate a lack of industry cohesion. But perhaps it is to be expected.  Certainly HUD has said that they don’t believe that it’s realistic to expect the industry to speak with one voice.  The related report linked below can be read later for additional depth of understanding on the point.

 

 

Regardless, all of the above plays into the hands of those in the offices of local jurisdictions who are prepared to discriminate against the sellers of – or providers of home sites for – HUD Code manufactured homes. 

 

Exclusive Hilton Head MH Development  

A developer and realtor in posh Hilton Head was recently in their local news for proposing a small development of single family manufactured homes.  The owner of the parcel wanted to subdivided it into lots for manufactured homes, to create some more affordable housing there.

HiltonHeadDevelopmentManufacturedHOusingIndustryDailyBusinessNewsMHProNews

Screen capture from Google News.

Push-back from NIMBY-minded locals was deafening.  They said they did not want “a trailer park” [SIC] with “mobile homes” [SIC] in their neighborhood.

 SICSicutJournalismDefintionSocietyProfessionalJournalismDailyBusinessNewsMHProNews

The realtor involved with the Hilton Head, SC, development plan told MHProNews that the homesites would be sold fee simple, they are not planned as a land lease. Every home owner would own their own land, the so-called land/home package.

That important detail that the proposed manufactured home development – that it was not going to be a “park” – didn’t seem to matter to locals.

 NimbyBananaDailyBusinessNewsManufacturedHomeLivingMHProNews

It is an example of the prejudice against manufactured homes being displayed for all who “google the news” about this industry to see. It exemplifies Lavin’s point about the HUD Code being used as a discriminatory target. 

While this directly impacts retail sellers of manufactured homes, it impacts factories too, and thus other product and service providers to the industry. 

The Hilton Head and other cases like it raise several legal issues. But law suits might cost that property owner in Hilton Head more than the profits from the sale of that parcel of land for development for manufactured homes may be worth. Sam Zell’s point about defending the property line is an apt one.

sam_zell_2013_ncc_fall_leadership_forum_featured_speaker_photo_credit_mhpronews_com_c_2013_lifestyle_factory_homes_llc_

Zell’s comments on defending the property line, along with other community related comments, are found in the interview linked here.

 

Developing Trend that Communities and Execs are Telling MHProNews

MHProNews has been virtually alone in reporting to the industry news stories like the one in Wisconsin, where local officials want to shut down a community they don’t like, by non-renewal of their operating license.  The details can be read later, in the article linked below.

Reprieve in Community Closure Collision, Another Round Ahead?

That attorney, others, MH Communities professionals, and executives are among those that have called or messaged MHProNews with their insights and concerns on what they described as a “disruptive, emerging trend.” 

Community operators have told MHProNews that they’re concerned that local jurisdictions targeting “blighted” properties near their own well-kept ones, which could be later used as a wedge to arguably undermine their license renewal too. 

 

Non-Renewal 

There are multiple cases in various parts of the nation where local officials are in various stages of non-renewal of a community’s license to operate, which would be a prelude to closing a community.

Such a forced closure could be a prelude to redevelopment with far more costly housing, or other forms of development. The biggest losers are arguably the residents, and they routinely say so to local media. The related report about a corrupt practice raised by Fox contributor John Stossel could be playing out in a similar way in MHVille.

Hundreds of New Manufactured Home Communities Opened, But How Many Have Closed? Industry Research Result$

All of the above are examples of what family-community operator Tom Fath has called an industry under assault.

TomFathTheMHCommunityWillSucceedWhenWeFocusOnFactsNoSaleBasedUponIllusionOrFeelingsDailyBUsinessNewsMHProNEws 

While this impacts producers of manufactured homes indirectly, it is a post-production issue. What have MHI discussions or “task forces” actually done to address such issues?

NorthStar and Manufactured Housing Radix

What positions will that the emerging new national association for community operators take to address such matters? Their stance could decide how many MHI members, or non-aligned communities, they will attract? 

 

Is the Industry’s Image Being Defined by the Lowest Common Denominator? 

Publisher Kovach has been a consultant, service provider, and a multiple award-winning manager/owner involved in the front lines of manufactured home retail and communities for decades. He says that this unjust discrimination against manufactured homes is but another example of how the underlying issues must be dealt with, rather than discussing the symptoms.

Among the reasons that the Daily Business News on MHProNews has spotlighted problems in the industry, is to help industry members fully grasp how officials and the public reacts to stories, like the one in Moscow, Idaho, or the more recent ones coming from Northern Georgia tied to controversial SECO board member, Tom Lackey.  The referenced links below can be read later.

“Jail Him!” NPR’s “Mobile Home Park Owners Can Spoil An Affordable American Dream” Refuted

More than one SECO member has attempted to defend their ‘hands-off Tom Lackey’ position.

One of them said recently that they are trying to lead by example. They attempt to show operators of visually unappealing or problem plagued properties how to upgrade their communities. They don’t want to be cops, policing their own industry.

Understandable. But does that go far enough? And when the SECO planning board members are in the news, drawing problematic headlines, what examples does that set?

 

Spencer Roane w/Southeast Community Owners (SECO), Praises Tom Lackey, Accused of Rent-to-Own Manufactured Home Sales Improprieties

 

In Ohio, stories about actual pre-HUD Code mobile homes burning down were used to change their state’s regulatory structure. It was an entirely unjust line of attack. Resident groups and the state association worked together to attempt to preserve the successful regulatory structure.

But in the end, the voices in Ohio pushing a “dangerous dwellings” narrative image won. Those anti-MH naysayers won, even though manufactured homes are safer than site built homes against a fire.  The anti-MH voices won despite the fact the incidents cited were true mobile homes. The appearance of MHI VP and general counsel, Rick Robinson made no appreciable difference, did it?

Manufactured Homes Commission Abolished, Effective January 21, 2018

 

Getting to the Underlying Issues 

It is the problematic stories in MHVille that are part of the root causes of the industry’s challenges, argues Kovach. It impacts all, but it is largely a post-production issue.  

Each individual business must create a distinction in the minds of the local home buying public. “That’s the opportunity in disguise,” Kovach says. 

Each business, every location, must learn how to effectively define itself. Otherwise, time after time, others will define you, often to your disadvantage.”  UMH’s Sam Landy is correct when he says that ultimately, each business must market itself.

But it is also a problem that an effective post-production national association could be utilized to address such challenges.

Fight, flight or deal with it.” Without dealing with the underlying issues, the industry can expect more of the same. The popular definition of insanity is to keep doing the same things, in the same ways, and expect a different result.  ##  (News, analysis, and commentary.)

(Third party images, content are provided under fair use guidelines.)

Related Reports:

Promoting Manufactured Home Ownership – With “Only 1 in 100 Eaten by a Lion”

On Aurora “Mobile Home Park” Closure, related Negative Media Coverage

Local Developer Says MH Community Hurts Property Value

George Allen Blasts MHI, NCC Ignoring Own, Spencer Roane, SECO, COBA7, Tom Lackey Controversies

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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.

 


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