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Posts Tagged ‘Affordable (Manufactured) Housing’

Warren Buffett, Charlie Munger Video Interview at Berkshire Hathaway Annual Meeting on GSEs Lending for Affordable Manufactured Housing and Clayton Homes

May 6th, 2019 Comments off

 

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For those that are new or want a refresher, the exclusive report by the Daily Business News on MHProNews of the Clayton Homes related 2018 data from Warren Buffett and Berkshire Hathaway is found at the report linked from the text-image box below.

 

 

2018 Berkshire Hathaway Annual Report, Clayton Homes, Shaw Data Revealed, Facts Others Lack

 

This weekend has witnessed the so-called “Woodstock of Capitalism,” the 2019 edition of the Berkshire Hathaway annual shareholders meeting in Omaha, NE. An estimated 40,000 plus were expected to attend.

Yahoo provided coverage of the event, and the video below is from that source.  Per Yahoo, “Buffett said it would be “very good for America” if Fannie Mae and Freddie Mac did more to help finance manufactured homes, such as those made by Berkshire-owned Clayton Homes.”

 

 

There is a lot to unpack from this 4 minutes, 2 second long video.

As close, thoughtful, and longtime readers of our pro-industry trade media platforms already know, there have been allegations for years of market manipulation by Clayton Homes within the manufactured housing industry and finance space.  One such report, based upon a letter from Tim Williams at 21st Mortgage Corp, the words of Buffett himself from that same year, and a nearly 1-hour long video with Kevin Clayton, are all found at the link above.

What is discerned from this weekend’s statement by Buffett and Munger ought to be viewed through that lens, and what follows.

Furthermore, there are sources inside the GSEs, and from a Berkshire brand led by CEO Tim Williams at 21st that indicated that for some time, the powers-that-be from Omaha-Knoxville metros worked first to foil, and more recently, to redirect lending from Fannie Mae and Freddie Mac away from the bulk of manufactured housing.

 

For such reasons, the Manufactured Housing Association for Regulatory Reform (MHARR) has been engaged in a tough, protracted battle to encourage the full implementation of the law, not just a partial one.

 

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MHARR Calls on New Fannie Mae CEO Hugh Frater to Fully and Properly Implement Federal Law

With all due respect to Buffet, as the next link reveals, there have been times that what he said did not line up.

More recently, HBO’s Last Night Tonight with John Oliver viral video errantly dubbed “Mobile Homes” reflected the revelation that it was Buffett’s brands and Manufactured Housing Institute (MHI) connected companies that were causing the industry blowback in mainstream media reports.  Our publisher in a letter published in 5 markets in Florida, including Jacksonville called on the public to hold those responsible for purported misdeeds, not the industry at large.

Warren Buffett must be construed in the light of not only his words, but also of the deed of the brands they own.  Furthermore, as Buffett and Berkshire has been wont to fund both sides of certain battles, that raises fresh concerns, as the report linked here documents.

Those points and the linked evidence and logic from those articles should be kept in mind by investors, advocates, researchers, policy wonks, politicos  — plus, of course, the industry’s home owners and professionals.

That said, will Buffett’s comments this past weekend could potentially be used to encourage Fannie Mae and Freddie Mac to lend on all manufactured homes, or just on select ones, as the Clayton-MHI backed ‘new class of homes’ effort promotes? Time will tell.  But as with all things connected to Buffett, it bears a nuanced consideration. See the related reports, further below.

That’s this post-dawn Monday morning episode of professional life in MHVille, exclusively from the #1 most-read “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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Related Reports:

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

 

Warren Buffett’s Profitable Lessons for Manufactured Housing

“Mobile Home Militia,” Retail/Production Sources, Sound Alarm Against Clayton Homes, CMH, New “Anti-Competitive Practices” Allegation

News Tip, Document – Is Clayton Homes Engaged in False Down Payments? Deceptive Trade Practices?

CFPB and 21st, Second Shoe Drops? Flooring w/21st Mortgage Corp? Insider Tips

Tim Williams, PBS News’ Bad Bargain, Manufactured Housing Institute, Buffett’s Mirror, and Clayton’s Costume

Manufactured Housing Institute’s Monthly Economic Report Spotlights Challenge, What MHI, WHA’s Amy Bliss Said

White Collar Shakedown, Fear, Hobbs Act, and Manufactured Housing Independents Struggles

 

 

“Lead, Follow … Or Get Out of The Way”

 

MHARR Calls on New Fannie Mae CEO Hugh Frater to Fully and Properly Implement Federal Law

“The Illusion of Motion Versus Real-World Challenges”

 

 

 

 

 

 

Independent Businesses, Affordable Manufactured Housing, Open Markets, & Robust MH Sales Growth

February 28th, 2019 Comments off

 

IndependentBusinessesAffordableManufacturedHousingOpenMarketsRobustMHSalesGrowthDailyBusinessNewsMHProNews

According to their website, “The Open Markets Institute uses journalism to promote greater awareness of the political and economic dangers of monopolization, identifies the changes in policy and law that cleared the way for such consolidation, and fosters discussions with policymakers and citizens as to how to update America’s traditional political economic principles for our 21st century digital society.”

 

The Open Markets Institute (OMI) website also says, “In America today, wealth and political power are more concentrated than at any point in our country’s history. The Open Markets Institute, formerly the Open Markets program at New America, was founded to protect liberty and democracy from these extreme — and growing — concentrations of private power.”

In an article entitled, “Entrepreneurship & Monopoly,” OMI said this.

Since the founding, Americans have viewed entrepreneurship as a way to secure our nation’s political freedom. Thomas Jefferson’s celebrated the civic virtue of “yeoman farmers.”  Since then a long line of American political thinkers have seen independent, small-scale business and property owners as guarantors of a vibrant democracy.”

This is a principle that every small- to midsized-business should be able to relate to easily. Note that property ownership – think affordable home ownership – is an important element to a vibrant free people.

But in the U.S., the world’s richest nation, home ownership is at relatively low levels. The U.S., per the data compiled from Wikipedia, isn’t even in the top 40 nations for the rate of home ownership. Why?

 

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HUD Secretary Ben Carson promoted during his first year at HUD the notion that the average net worth of a household that owned a home is some $200,000. By contrast, said Secretary Carson, the average renting household had an average net worth of only $5,000.  Home ownership is a worthwhile goal.  More home ownership would in time create less dependency on federal or other programs.

 

Affordable Housing, Manufactured Housing, and Monopolies are Nonpartisan Issues  

OMI’s article doesn’t mention manufactured homes, but it would be nice if it did. Because not only is small business important for a vibrant economy and a free people, so too is home ownership.  No form of permeant home ownership exists today that is more proven than federally regulated HUD Code manufactured homes.

 

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Image collage by MHProNews.com and MHLivingNews.com.

 

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Note, this graphic will be updated with the link to Rev, Tye’s comments, later today.

 

That noted, “Americans also know that new business ventures are essential to economic progress and upward mobility,” said OMI in “Entrepreneurship & Monopoly.”

In manufactured housing, there are on paper three national trade associations. The Manufactured Housing Institute (MHI) represents the bulk of the production and claims to represent “all segments of factory-built housing.” That means that post-production issues should fall into their domain.

But in fact, the other two national trade groups both sprung from MHI, each pointing to the failure of MHI to properly represent their respective interests.

The Manufactured Housing Association for Regulatory Reform says it “is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.”

 

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A key word above from MHARR is independent. The newly minted NAMHCO – the National Association of Manufactured Housing Community Owners put their breakaway from MHI like this.

 

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There are several industry voices that have equated MHI as the big business lobbyists, with smaller businesses there as the buffet – or Buffett? – serving-line for their next or future acquisition.

While MHI puts out an antitrust statement at their meetings, they oddly fail to give more than lip service and posturing to the interests of small business. MHI award winner, Marty Lavin put it as follows.

 

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MHProNews looks at the facts, considers the sources, and follows the evidence.  We curate quotes that apply to specific topics.

 

Why does that matter? OMI says that, “…startups help create an inclusive economy. They provide opportunities for women and minorities to more quickly achieve financial success and leadership than in larger firms. New enterprises also are responsible for high rates of job-creation and innovation. According to the U.S. Small Business Administration, small firms employ over half of the private-sector workforce and created nearly two-thirds of the nation’s net jobs over the past fifteen years.”

Yet while entrepreneurship is essential to the American Dream, over the past thirty years the rate of new business formation has declined. The number of companies less than a year old, as a share of all businesses, dropped by 44 percent between 1978 and 2012. In all 50 states, the number of firm exits has outpaced new firm formation,” said “Entrepreneurship & Monopoly.”

The pattern of foiling new business startups combined with growing consolidation is a serious one for manufactured housing independents. MHI has helped document the trend on the production side.

 

 

As new producers have begun to emerge during the Trump Administration, how has the largest producer behaved?  Each of the text/image boxes is a hot link to a report on that topic.

 

“Mobile Home Militia,” Retail/Production Sources, Sound Alarm Against Clayton Homes, CMH, New “Anti-Competitive Practices” Allegation

 

MHI and Clayton, each asked to comment on the above and other topics linked from this report, have both declined to respond on numerous occasions.

The exercise of market power by companies like Clayton Homes, 21st Mortgage, and Vanderbilt Mortgage and Finance (VMF) have manifest themselves in other ways too. One notorious example is laid out in the report below.

 

Bridging Gap$, Affordable Housing Solution Yields Higher Pay, More Wealth, But Corrupt, Rigged Billionaire’s Moat is Barrier

 

That isn’t the only such case, as bold as it seems to be.  A more recent news tip and follows up revealed the following, which officials at Knoxville declined to comment on.

 

CFPB and 21st, Second Shoe Drops? Flooring w/21st Mortgage Corp? Insider Tips

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At the heart of these issues are access to capital, the impact of overburdensome regulations, the need for education, and timely communications.  Former MHI Chairman, Tim Williams, addressed the later like this.

 

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Williams is arguably right that there are good reasons to respond to each case of media or other misinformation. How else will ignorance or bias be corrected? Then, why does MHI so often fail to do what their former chairman said was logical?

 

These manufactured housing related issues are much in keeping with the thesis from OMI .  While noting that no one factor is to be solely blamed, OMI said “Similarly, overly broad regulations can hamstring new startups.”

OMI also adds these noteworthy points, bulleted below.

 

  • Another less discussed cause is a set of legislative changes that have weakened anti-monopoly laws over the past thirty years.”
  • Market concentration harms new business formation in many ways.  For example, when monopolistic firms learn of new entrants, they can engage in loss-leading.”
  • Similarly, well-established firms in concentrated industries can collude with each other…”
  • The impact of lower enforcement of antitrust laws has harmed small businesses, and by extension, the public, “The effects on small business and entrepreneurship have been devastating. According to the Institute for Local Self-Reliance, between 1997 and 2012, “the number of small manufacturers fell by more 70,000, local retailers saw their ranks diminish by 108,000, and the number of community banks and credit unions dropped by half, from about 26,000 to 13,000.”

 

Even MHI member producers have complained about the lack of independent retailers. But it was arguably the action of 21st, Clayton Homes, and Berkshire Hathaway Chairman Warren Buffett “Moat” principle that has arguably contributed to throttling thousands of independent retailers.

Legacy Housing is not the only one producer that is going into more vertical integration to counter the trends, but they are in some ways the higher profile example of the trend, given their recent IPO.

 

Legacy Housing IPO (LEGH) Quiet Period Set to Expire, SA’s Don Dion

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Legacy clearly believes in the future of the business, because they are raising capital to expand their retail base.  Trend lines and data like the above also tell the story of how much more manufactured homes could be doing, because it did so in the past.  Why aren’t more sold today?  What role does market collusion and manipulation play in limiting manufactured housing, so that larger firms can acquire smaller ones at a discount?

 

 

History and Aggressiveness

An MHI member executive wrote in recently to say, “You seem pretty aggressive against MHI?  There must be history there.  To me, we need groups like them to move the industry forward.”

While it is debatably true that there is a need for trade groups, the better question is this. Is MHI part of the problem, or part of the solution for independents and industry growth?  If they were part of the solution, than how is the vexing trend summarized below to be explained?

 

 

If MHI were part of the solution, why have they routinely deferred to what the monopolizing forces Omaha, NE based Berkshire, or Knoxville metro based Clayton, 21st, and VMF want?

 

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Graphic by MHProNews, using information provided by each corporation, or named entities.

 

As an MHI-only member company of official complained about the way that the Duty to Serve (DTS), for example, has arguably been manipulated to serve the interests of Omaha and Knoxville, “What are we, chopped liver?” What about using DTS to serve all of manufactured housing, not just some of it?  Isn’t it tragic that industry voices feel compelled to speak off the record, because they fear retaliation or career harm if they spoke their minds openly?

 

“What Are We, Chopped Liver?” MHI Member December 2018 Reactions

 

As MHARR’s president put it like this.

 

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While the comment was about DTS, there are parallel educational principles that apply. Manufactured housing arguably should be doing more sales of all kinds of lending. To accomplish that is in part an educational and communication issue. That is a post-production topic too, and yet where are the efforts by MHI to teach retailers and communities to attract more qualified customers to their offices and sales centers?

 

Manufactured Housing was poised to overtake conventional housing in production in the 2010s, said Harvard’s Eric Belsky.

 

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Why did Belsky miss his predicted date? Because it came before Buffett’s entry into MH? See the report linked here.

 

But the purported manipulation of the credit markets and other regulatory, zoning, communications and other factors have worked to foil what Belsky said was going to occur. As MHI member Frank Rolfe lamented.

 

 

The regulatory burdens, capital access, educational and communications efforts are barriers to entry as well as to maintenance, and exit for a business. That combination yields lower sales levels. In turn, the means most communities and each retailer’s businesses are worth less. That happens to play into Warren Buffett’s ‘value acquisition’ aim, plus his Moat.

 

Warren Buffett’s Moat, Understanding Manufactured Housing Requires Grasping Strategic Economic Moats

 

Coincidences?

 

Conquest Capitalism – Thoughts of Chairman Warren Buffett – Billionaires Campaign to Control Trillion Dollar Affordable Housing Market

 

These various federal, state, or local level policies or the failure to robustly enforce antitrust laws ought to be front and center in the efforts of any good post-production trade group. Yet, the case linked below reflects that MHI often fails to intervene. State associations sources have told MHProNews that if they don’t do what Knoxville and Arlington, VA based MHI wants, they fear for their jobs.

 

Dramatic Reversal, City Passes Urgency Ordinance Effectively Banning Manufactured Homes, Front & Back Stories

 

A combination of federal and state investigations, plus a new post production trade group could help change these dynamics. See the related reports for more.

What is certain is that more of the same will only yield more of the same.

As to “history” between MHI and MHProNews, there is indeed history there. Our publisher was a member for years, and was elected by his peers to serve on an MHI board. But after years, there was no changes to issues like those noted taking place. Why pay a group for doing something that NAMHCO’s Neal Haney and others have said is not working for them?  Why not rather forge a new association that actually does, what MHI claims to do?

 

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Back to OMI…

The principle of wheat and chaff has to be applied to OMI, and all others. Learn and apply what is good, but understand that sometimes an organization, person, or other source self-contradicts its own principles.  It must not be construed from this article that every position that OMI takes is hereby endorsed.

That said, OMI is arguably correct on much of the history and impact of the issues that the nonprofit group raises. For a recent example, “Open Markets Institute calls on Congress and the Federal Trade Commission to immediately investigate how to protect America’s independent news media from the power and predatory business models of Google and Facebook.” That’s an issue that MHProNews has also raised for some time.

Open Markets Institute sent a letter to House Judiciary Committee Chairman Jerrold Nadler with recommendations on how to approach the problem of monopoly this Congressional session,” noting that MHProNews recently did a focus on a top-antitrust attorney Lina Khan possibly heading to the staff of a Democratic lawmaker.

Political and professional posturing is not limited to any one party or organization. There are several ways that the Trump Administration, Democrats, and numbers in the GOP could be working together to get to the heart of much of what ails America, affordable housing, and manufactured homes role in serving the nation.

 

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Facts, evidence, following-the-money, history, and trend-lines should speak loudly. Without real change, the industry will continue in its current funk. The fact that MHI uses apparent threats from attorneys against this former member instead of publicly engaging on the issues raised speaks volumes, see below.

 

 

YouAreEntitledtoYourOwnOpinions.ButYouAreNotEntitledToYourOwnFactsDanielPatrickMoynihanDailyBusinessNewsMHProNews

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Still from MHI Video, logos added by MHProNews.  At the time that MHI created this video, sources say that they already knew that the production/shipment slide was coming.  Instead of addressing it, instead, they created a video that touted all that they were doing. But if all of these claimed efforts were so good, where are the measurable results? 

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CompareMobileHomeTrailersPastManufacturedHomesSaferMoreDurableQuoteScholasticaGayCororationPhotoSmallPercentageDamagedDuringHUrricanesMHProNews

 

Tunica is a place where independents meet by the hundreds, and it’s a place that this dynamic could be changed, by establishing a new post-production group that will fight-like-hell for the heavenly causes that MHI has arguably laid down on.

That’s industry “News, Tips, and Views Pros Can Use,” © where We Provide, You Decide.” © ## (News, analysis, commentary.)

 

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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.

12 Reasons to Oppose a New Manufactured Home Post Production Association

 

21st Mortgage Suit’s CFPB Denial, Exclusive Document on Berkshire Hathaway Manufactured Housing Brands Investigation

 

“The Illusion of Motion Versus Real-World Challenges”

HUD Code Manufactured Home Production Decline Persists – Time For Action Not Excuses

 

 

 

 

 

 

 

 

 

 

 

 

 

How Many Renters? How High are Rent$?

July 25th, 2017 Comments off

HowManyRentersHowHighAreRentsDailyBusinessNewsPixabayManufacturedHousingIndustryProNewsIt’s not a secret that the need for affordable housing is a problem in major metro areas throughout the United States.

A new Pew Research study reports there are more renters than at any time since 1965.

Recent stories coming out of San Francisco are just one example of the growing housing crisis, like the decision to expand income restrictions to allow more individuals and families to be eligible for assistance.

Or Facebook’s announcement that they are building a “village” which will offer at least 15 percent of their units under market rates.

But another new study spotlights facts on just how far from true affordability the nation’s rental housing is.

 

NLIHC 2017 Out of Reach Report

The recently published “2017 Out of Reach Report” from the National Low Income Housing Coalition (NLIHC) shows that current rental rates are out of reach for low-wage workers throughout the United States.

Per that study, there are only 12 counties in the U.S. where a minimum wage worker can afford a one bedroom apartment at today’s market rental rates.

According to the NLIHC report, the average “per hour” rate needed for one person to reasonably afford a one bedroom apartment is $17.14; similarly it would require a single individual to make $21.21 per hour to afford a two-bedroom apartment.

A full-time worker earning the minimum wage needs to work 117 hours per week for all 52 weeks of the year to afford a two-bedroom rental home or 94.5 hours per week for a one-bedroom rental home,” the NLIHC report says.

With the cost of rent so far out of reach, the idea of home-ownership is often far from the ability of a low-income earning renter to turn the dream of ownership into a reality.

That results in the “renters cycle” continuing – with 73 percent of renters paying more than half of their income for housing costs. That in turn means there is never a chance to save for a down payment large enough to qualify for a mortgage on a traditional home.

CompareNewMedianConventionalSiteBuiltHouseManufacturedHomeJan2017MortgagePaymentDataJuly12017ManufacturedHomeLivingNews350Manufactured Housing Offers a Solution

However, there is a solution that the industry’s professionals know very well.

As we think about housing in today’s world, the most important aspect should start with affordability. When home ownership is affordable, it has ancillary benefits,” said actively retired businessman and minister, Donald Tye, Jr.

The average cost of a brand new single-section manufactured home in the U.S. in December 2016 was about $49,900, according to the U.S. Census Bureau.

The more affordable option is clear when you look at those numbers – but still manufactured homes are the generally overlooked answer to the affordable housing crisis that millions in the U.S. are currently drowning in.

While some non-profits and researchers note the manufactured home options, others miss it – sometimes, completely.

This year’s report shows that housing affordability continues to be a significant challenge for low wage workers. It makes a compelling case that the problem is national in scope and is not limited just to urban areas or places with high housing costs,” Andrew Aurand, the NLIHC VP for Research wrote in an email to Refinery29.

Affordable housing is not just an urban issue. It’s an urban, suburban, and rural issue,” Aurand says.

These 12 counties, where a full-time minimum-wage worker could afford a modest one-bedroom apartment, are located in states with a minimum wage higher than the federal level. A higher minimum wage is important, but won’t solve the housing crisis. In no county can a full-time minimum-wage worker afford a two bedroom apartment, which is important for someone supporting a family. In many communities, even the average renter’s wage is insufficient to afford a two-bedroom apartment.”

As James McGee and Chet Murphree of Deer Valley Homebuilders told MHProNews, it’s all about education and debunking the old, outdated myths.

To share a public focused version of this report that can help more Americans get it about manufactured homes, click here.  # # (News.)

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JuliaGranowiczManufacturedHomeLivingNewsMHProNews-comSubmitted by Julia Granowicz to the Daily Business News for MHProNews.com.

Affordable (Manufactured) Housing Done Right – NextStepUS Annual Report

September 9th, 2016 Comments off

leelucilleallen-nextstepus-posteddailybusinessnews-mhpronewsCompared to where we were, there is no comparison,” said Lee Allen. “It’s been 10 years of good memories.”

When you walk through Lee and Lucille Allen’s front door, it feels like home,” begins the NextStepUS Annual report.

Over a decade ago, the Allen’s became NextSteps first home owners. “Lee is a bluegrass musician who played with Ralph Stanley and The Clinch Mountain Boys, a retired police officer and a natural storyteller. Lucille is a hairdresser at a local funeral home, a volunteer at the nursing home and an avid quilter.”

Tyler Mullins, the designer of the report and Megan Neff Sherehiy share the gift of knowing how to tell the NextStep story in a compelling way.  MHLivingNews and MHProNews have both periodically reported over the years on the organization and its vision, which touts green, energy saving manufactured homes “done right.”

staceyeppersonpresidentfoundernextstepnetwork-posteddailybusinessnews-mhpronews_001Stacey Epperson, the president and founder of NextStepUS was part of an interview that reflects how she, as a conventional builder at first hated “mobile homes,” but then she took a closer look at modern manufactured homes, and now she loves the product and how it can change people’s lives – like the Allen’s – for the better.

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NextStep’s work is worth attention, and there are numerous potential takeaways from how they present their work to others that manufactured housing pros at all levels can benefit from. To see their annual report, click here or the graphic above.

For a video interview with Stacey Epperson, click here.

The graphics on this page are part of their annual report, to see full NextStepUS report, please click here. ##

(Image credits, NextStepUS)

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L. A. ‘Tony’ Kovach is the publisher of MHProNews.com and MHLivingNews.com.

Submitted by L. A. ‘Tony’ Kovach to the Daily Business News, MHProNews.com.