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Metro Town Rejects Hundreds of Affordable Housing Units, Cites Reasons Against Using Manufactured Homes

December 27th, 2018 Comments off

 

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Image above used to illustrate an actual attached garage to an existing manufactured home, which is noted as part of the proposal in the story details further below.

Taxes. Appearances. Uncertainty about the future.

 

Those are some of the excuses, err, reasons that trustees of South Elgin, a part of the Chicago metro, rejected a 296 unit manufactured home community development that would have served residents 55 and older.

It’s a story that affordable housing and manufactured home industry pros know, but as 2018 winds down, illustrates just how much work lies ahead.

Freelance journalist Janelle Walker’s Courier News report ironically made the Chicago Tribune. The Tribune has had serious financial ties to Sam Zell, whose Equity LifeStyle Properties (ELS) is one of the top two community operations in manufactured housing.

In a split decision, the South Elgin Village Board declined a proposal late last month for a new manufactured home community. Developers PND 3001 Investments had sought a zoning change for a special use permit, said Walker, for a site plan approval for the 296 units it wanted to place on an 88-acre site on Umbdenstock Road.

 

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Walker was writing for the general public, so an industry professional wouldn’t normally need some details her generally fine narrative provided.

But concerns about how the state taxes manufactured homes — also called mobile homes — and how those taxes would be split among governing bodies stopped some trustees from approving the project.

The state of Illinois taxes mobile homes as “chattel.” While a buyer pays sales tax on the initial home purchase, an annual fee to the state and rent to the owner for use of the land, the property owner only pays taxes for the land on which the homes are located,” per the Tribune account.

 

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Walker said that trustees John Sweet and Mike Kolodziej voted in favor of the development.

They look nice … different from a stick-built home but not really,” Sweet said. “I think it is an alternative,” and adds another option to the village’s housing stock, explaining his vote, adding “We need more diversity in our housing.”

But South Elgin village board trustee Scott Richmond said he could not support the development.

I don’t think it is the right project for us,” said Richmond. “This puts the village tax base at risk. This project on this land is not appropriate.”

The land is currently zoned for industrial use, explained Walker. But there are housing developments on two sides with an industrial park to the south. To the east is farmland, which may also be the target for future development activity.

PND’s plan included an agreed to limit the development to residents 55 and older or restricting children from living there for more than 14 days at a time.  The PND Plan also included an attached garage for each home. All of those items were apparently added following initial discussions with the South Elgin Planning and Zoning Commission and later with the Village Board.

Larry Lapin of PND 3001 estimated taxes on the property at some $400,000 a year. To mollify the concerns over the relatively lower tax revenue such a project would bring compared to other possible projects, the developers had also offered to add a clause to the agreement to pay an additional $350 per unit.  That $350 bump was to be divided between the village and the South Elgin & Countryside Fire Protection District.

 

A YIMBY vs. NIMBY View of the South Elgin Case

Apparently the added sweeteners and incentives didn’t work. 

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Tye has argued that manufactured homes should be seen as a plus, not a minus.  Perhaps as or more important is the hidden cost to a town, individuals, society, and taxpayers when affordable housing isn’t made available.

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NBER researchers Hseih and Moretti make the case that failure to provide affordable housing near where people work costs the U.S. $2 trillion annually in lost GDP. To learn more click the link here, or see the related report, further below.

 

Trustee Greg Lieser agreed with Richmond, arguing that if the property was sold, new owners would not follow agreements being made in the present, or would seek to have them changed.  But isn’t that ‘concern’ possible for other kinds of developments too? Does that argument against this proposed project just mask a NIMBYite view against affordable homes in general, or manufactured homes specifically?

 

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There is too much uncertainty with the owners and rent, and what this might look like in 10 or 20 years. I do appreciate that you listened. I wish you would have come in originally with a solid plan,” Lieser said.  Rephrased, was Lieser concerned that manufactured homes would – after a decade or two – somehow morph into the appearance of 70 year old trailers houses?  Isn’t prejudice and more at work in the background of this South Elgin tale?

 

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As 2018 winds down, and 2019 looms, projects like this reveals just how much work lies ahead for the greater acceptance of affordable housing in general, and manufactured homes in particular.

 

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The Trulia research reinforces what HUD’s PD&R on manufactured homes appreciated side by side with conventional housing discovered. Namely, that affordable homes and manufactured homes don’t negatively impact property values.

 

These are the kinds of projects that a post-production manufactured home advocacy trade group needs, that the Manufactured Housing Association for Regulatory Reform (MHARR) has long argued should be created.  It is also the kind of project that the national umbrella trade group, the Manufactured Housing Institute (MHI), has only occasionally made any effort at addressing.

Is MHI’s failure to act due in part to dominating Clayton Homes increased attraction to more profitable conventional housing?  That’s but one conflict of interest that bears more exploration, and which mainstream media and advocacy groups arguably ought to explore and spotlight.

A prior Daily Business News on MHProNews report on this same project is found under the related reports, linked further below the disclosures and bylines.  “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.

 

Plan for New 296 Site Metro Manufactured Home Community

MHARR Releases Study Recommending Independent Collective Representation for Post-Production Sector

 

FEAR, a Solution to the Affordable Housing Crisis, and the Manufactured Home Dilemma

 

Zillow Research Reveals Impact of Rising Rents on Homelessness, Affordable Housing Advocates, Public Officials, and Investors Take Note

 

 

 

 

 

 

Black Home Ownership Lags Almost a Decade After the Great Recession

July 21st, 2017 Comments off
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A decade after the housing crash destroyed the American Dream for millions of homeowners, black homeownership rates have dropped to levels not seen since the 1960s, hobbling African-Americans’ efforts to build their wealth,” says the Chicago Tribune.

Only 42.2 percent of blacks in the U.S. owned homes in 2016, compared with 71.9 percent of whites, per Harvard University’s Joint Center for Housing Studies.

Homeownership is a way for people to generate stability and wealth and not just go to work every day,” said Deborah Moore, neighborhood planning director for Neighborhood Housing Services of Chicago. In addition, homeownership can “change the trajectory of neighborhoods,” she said.

Her words echoed that of HUD Secretary, Dr. Ben Carson.  Carson has taken up the mantra of saying that those who own a home have an average household net worth of $200,000.

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Dr. Ben Carson, HUD Secretary, official photo.

Those who rent? They have only $5,000 average net worth.

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Image credits are as shown.

Without homes, blacks lack a powerful source of wealth creation, said Jonathan Spader, a senior research associate with Harvard’s housing study center.

The Institute for Housing Studies at DePaul University stated that 53 percent of renters in Cook County are paying more than what is considered manageable – more than 30 percent of their income.  For the definition of affordable housing levels, see the report, linked here.

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To see definitions of Affordable Housing, click the article, in the hot-linked graphic above.

The Tribune’s report went on to outline a program in Chicago that took federal taxpayer money, used it to upgrade properties and sell them.

In Chicago’s Woodlawn neighborhood, about $2 million from a $30.5 million Housing and Urban Development Choice grant is being used to lure buyers to homes that are empty and in need of rehabilitation,” the report said. 25 homes were sold because of the program.

The prices of once dilapidated, and then rehabbed houses ranged from about $100,000 to $150,000.  What the report didn’t spell out – but was implied by the facts provided – is that without an average of $80,000 per rehabbed house in subsidies, the program that also links buyers to lenders, would not work.

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Donald Tye’s parents provided homes like these within city limits.  They sold for some $24,000 in the early 1970s, and today sell for about 4 times that price. Values went up for conventional housing too, much like a HUD PD&R report stated occurred in Oakland with HUD Code manufactured homes less than a decade ago. Tye knows from experience that this will work again, if prejudices and political roadblocks are overcome.

The Tye Take

Actively retired businessman and minister, Donald Tye Jr. told MHProNews that, “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.”

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Ownership builds character, competence and integrity,” Tye said in soft yet potent tones.

One thing that is completely missed by politicians and prejudice towards manufactured housing is the tax benefit.”  Tye explained that once vacant lots that his mother and father’s factory-built homes were sited on in Cincinnati naturally boosted the tax rolls, which benefited the city.

It should be stressed that for Tye, this isn’t a racial issue. He believes that all Americans need and deserve equal opportunities.


Speaking about a project in Boston that was widely known as a billion dollar boondoggle, Tye said, “If they had thought about replacing that dilapidated housing with affordable manufactured homes, they would have created a [tax] revenue stream that would last for generations. Three hundred homes would have generated taxes to pay for schools, parks, police, etc. Instead the apartments became the same old problem with a new paint job.”

Tye joins others who have called for HUD Secretary, Dr. Ben Carson, to comply with the law – the Manufactured Housing Improvement Act of 2000 – for the very reasons Carson himself stated.  It will be path to ownership that may not come to millions any other way. ##

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Tornadoes, Severe Weather Ravage South, Misconceptions Abound

January 23rd, 2017 Comments off
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Conventional housing destroyed on the left, reported ‘mobile home’ on the right. Credit: FOX News.

The southern U.S. was severely affected this weekend, as tornadoes and storms destroyed homes, injured dozens and killed 16.

According to the Chicago Tribune, a tornado blew through a manufactured home community in rural Cook County in southern Georgia causing damage and killing seven people.

The tornado leveled the park [sic] before dawn Sunday,” said Coroner Tim Purvis.

Emergency responders searched for survivors for hours after the twister struck.”

Purvis also said the community had about 40 manufactured homes, and roughly half were destroyed.

As Daily Business News readers are aware, officials, news agencies and the general public continue to specifically point out manufactured homes and communities – often identified incorrectly as “mobile homes” and “mobile home parks” – vs. site-built homes in damage reports.

On average, about 1 in 5 structures identified as “mobile homes” by the media are in fact pre-HUD code mobile homes.  They are routinely the ones that suffer the most damage, because HUD Code manufactured homes are more durable by design.

Where a storm strikes determines if more site-built housing is destroyed than factory-built homes.  See the related report, linked here. For example, in Joplin, MO, the deaths reported in 2011 were in conventional housing.

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Damage to a site-built home in Cook County, Georgia. Credit: Chicago Tribune.

As the video below shows, tornadoes, hurricanes and other natural disasters do not discriminate between site built homes, manufactured homes, apartments or any other structure. It should also be noted that properly installed manufactured homes that are built to HUD code are designed to withstand the same elements as site-built homes.  For an interview related on that topic with a former federal official, please click here.

Proof of Parity

Not far from the manufactured home community, Jenny Bullard, injured and wearing a sling on her arm, combed through the rubble of her family’s site built brick house.

All that remained standing Sunday afternoon was the master bedroom and parts of the kitchen.

It’s a horrible tragedy,” said Bullard.

But all this stuff can be replaced. We can’t replace each other. We’re extremely lucky.”

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Jenny Bullard picks up the pieces in her family’s damaged home. Credit: Chicago Tribune.

Per the Tribune, Bullard said she awoke before dawn Sunday to the sound of hail pounding the roof. When she went outside her bedroom door, a collapsing wall in the hallway knocked her down.

She managed to get up and found her father calling for her, trapped under a pile of debris.

She pulled him free, and they found her mother in the master bedroom. They escaped by climbing over piles of furniture and debris where the wall to their home office once stood. Their home was one of many.

A number of homes appeared to be destroyed along a road within about two miles of the manufactured home community, with cinderblocks scattered on the ground, and pine trees uprooted and snapped in half.

President Donald Trump said that he spoke with Georgia Governor Nathan Deal on Sunday and expressed his condolences along with his commitment to help.

Tornadoes were vicious and powerful and strong, and they suffered greatly,” said Trump. “So we’ll be helping out the state of Georgia.

An in-depth report that corrects the record on tornadoes, hurricanes, conventional housing and manufactured housing is linked here. ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Chicago Residential Market under Construction

January 28th, 2016 Comments off

chicago  wikipedia orgNew data obtained by MHProNews from skylinenewspaper indicates existing residential property prices rose 8.9 percent over the last year in the greater Chicago area, while the median price of a single-family home spiked 11.6 percent, according to the Chicago Tribune.

The average price of a single-family home rose to $217,700, while the National Association of Realtors reports the median existing home price for all types of housing hit $224,100, a gain of 7.6 percent over the previous year.

Another study reveals that homeowners spend between one and four percent of the home’s value annually for maintenance and repairs.

While Dec. is not thought of as the best home-buying month, in the nine-county Chicago area last month over 8,265 homes were sold, marking an increase over Dec. 2014 of 2.1 percent. While Chicago prices are still below pre-recession levels (adjusted for inflation), in 2015 home sales totaled 111,462, a 6.6 percent rise over 2014 figures.

Alvin “Chip” Wagner III of A.L. Wagner Appraisal Group in Naperville, said, “The residential housing market in the Chicago region continues to see an undersupply of housing, and, with the increasing trend of homes under contract, it’s likely that we’ll continue to see increasing values in 2016. The reduced inventory of distressed housing, including short sales and foreclosures, is also helping our average sales price growth.”

The final word: Real estate markets tend to do well in presidential election years. ##

(Photo credit: wikipediacommons-Chicago skyline)

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Foreclosures on the Move

July 16th, 2012 Comments off

According to the Chicago Tribune, RealtyTrac reports of the homes sold in the first quarter of 2012 nationwide, 26 percent were foreclosed properties, an eight percent increase over 2011. While last year short sales accounted for nine percent of homes sold, this year that has increased to 12 percent in the first quarter. The second quarter of this year saw foreclosure filings drop from 608,000 Q2 2011 to 558,000 this past second quarter. Since 2008 some 3.6 million homes have entered the foreclosure process, and as MHProNews.com has learned, at least that many more may be slated for a similar fate.

(Photo credit: MerchantCircle)

Buffett a Newspaper Raider? Not.

May 21st, 2012 Comments off

In it’s second newspaper conglomerate acquisition in six months, HoumaToday tells MHProNews.com Berkshire Hathaway has purchased 63 of Media General’s newspaper properties for $142 million cash, including the Richmond Times Dispatch and Winston Salem Journal. “In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” Warren Buffett, Chairman of Berkshire said in a statement. “The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway.” Buffett delivered papers in his youth and decries the decline of newsprint. Thomas A. Silvestri, publisher of the Richmond Times Dispatch, says four BH executives visited the newspaper and greeted the staffers. Responding to comments on Facebook comparing the purchase to Sam Zell’s twisted acquisition of the Chicago Tribune, Silvestri says, “I don’t think I would ever put Warren Buffett and Sam Zell in the same sentence. In many ways, it’s the best possible outcome. We’ve got a new owner who loves newspapers and understands the vital role they play.” BH purchased his hometown paper, the Omaha World Herald Co. in November for a reported $200 million. Berkshire, which owns Clayton Homes also owns the Buffalo (NY) News and has a stake in the Washington Post. Sam Zell is CEO of Equity Lifestyle Properties, the largest MHC owner in North America.

(Image credit: Wikipedia Commons)

Manufactured Home Communities Dogged by Resident Complaints

July 22nd, 2011 Comments off

The Chicago SunTimes, Chicago Tribune, Journal Record and Des Monies Register have all reported in recent months on issues relating to resident complaints in manufactured home communities. A recent example is in Glenview, IL, where the Chicago Tribune reported on Sunset Village MHC, which is now in the hands of a court appointed receiver. Sunset Village has an active residents group that has kept a steady drum beat of complaints against the property owner coming into local media as well as to local and state officials. Iowa’s state association is among those which have declined to support manufactured housing business owners when questionable practices harm the Industry’s image.

http://www.chicagotribune.com/videobeta/707e0197-5af0-4c6e-b391-9d614aa81e2c/News/Sunset-Village-Foreclosure-puts-community-at-risk

(stock photo – video courtesy of the Chicago Tribune)

Real Estate Consultant Says Sell

January 2nd, 2011 Comments off

Steve Harney has some advice for homeowners sitting on the sidelines: sell. That, the real estate consultant says, is because prices may go down 5 percent to 8 percent as banks unload a glut of repossessed properties. Harvey told a crowd of real estate agents in Naperville, Illinois that the number of houses banks took back in August was up 49 percent over the year before, and September was the greatest month in history for repossessions. Harney’s advice was printed January 2 in the Chicago Tribune.