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Posts Tagged ‘Manufactured Housing Consensus Committee (MHCC)’

HUD Code Manufactured Home Producers Want Regulatory Fairness and Stronger Congressional Oversight

August 18th, 2014 Comments off

is=hud-making-home-less-affordable--graphic3-daily-business-news-mhpronews-com-A builder of HUD Code manufactured homes contacted MHProNews  Monday morning with comments regarding concerns that arose from a conference call with producers, HUD’s third party inspectors and others they said took place last Wednesday, August 13th at 2 PM ET.

The caller urged that we contact other independent producers, asking them for their take on allegations such as the following:

  • that no cost-benefit analysis is being done by HUD on the impact of their requirements,
  • that the consensus process is being ignored or bypassed,
  • HUD is going past its mandates, 
  • that third party inspectors are essentially benefiting when more regulations are put in place

among other issues raised. Asked about the above allegations, a C-Suite level official at another independent manufactured home (MH) producer made this statement to MHProNews, quoting verbatim:

Your caller is 100% correct, in my opinion, on each and every point made.”

Fear of Regulators?

The original source stated that HUD Code MH producers are “scared to death” about making public or on-the-record statements on such matters, because there are “…so many gray areas in the regulations that it would be easy to get shut down on a relatively minor point, and essentially be put out of business.”

MHProNews  contacted HUD about these allegations. We were informed that MH program director Pam Danner is “out until  Wednesday, September 3, 2014.”  Two alternative contacts were given, including Rick Mendlen, whose voice mail stated he would be “out until August 26th.” Patricia McDuffie  was the other alternate contact, and she nor others at HUD returned our inquiries as of press time.

gao-report-to-congressional-requesters-july2014-manufactured-housing-efforts-needed-to-enhance-program-effectiveness-and-ensure-funding-stability-The MH Industry’s Need to Know

I just do not think most people in our business understand the burden and arbitray nature of the regulations,” a C-Suite level HUD Code builder claimed.

An executive level producer’s comment – likewise shared off-the-record – was “There is no new revelation” in these comments, but empahsized that “It just needs to be better understood” by MH Industry professionals as well as by Congress, who is supposed to be providing oversight to regulators.

Indeed, a recent GAO report issued that was requested by members of Congress, dealt with HUD Code program challenges in some depth.

Regulatory Impact on Potential Home Buyers?

Young people aren’t buying homes,” said a builder, yet “rental rates continue to rise” in the housing market. The source’s point was that regulatory burdens – certainly not only for manufactured housing, but true for other industries including finance – are harming affordability and access by consumers to options they’d normally seek absent those regulations.

Another comment was that much of what comes out of Washington, DC is couched in legalize, making it hard for greater numbers in the industry to relate to the true impact of this or similar issues regarding “regs.”

The same could be said about finance and regulations,” a lender told MHProNews.  “Nor am I talking about MH regs alone, just look at the number of community banks that have shut down since Dodd-Frank went into effect.” Regulatory costs are easier for the larger banks to deal with, that source asserted.

Off the Record from HUD?

The Manufactured Housing Consensus Committee (MHCC) is the body that the Manufactured Housing Improvement Act of 2000 (MHIA 2000) established to insure reasonable and effective regulations. A source close to the HUD MH Program stated the following:

I assume the manufacturers are complaining about program guidance. The only thing that must be submitted to the MHCC for comment are actual regulation changes.  Guidance may be written, but unlike regulations, guidance does not have the force and effect of law.  While guidance may determine how HUD and its agents (IBTS, IPIAs and DAPIAs) will go about enforcing the regulations, they are not law and are subject to legal challenge.” 

MHProNews  was also told by an informed source:

Well, the new label fee is now law.  Honestly, I think it is justified.  Congress has stopped supplementing the program budget with tax dollars, so they really needed a big increase.   When you think about it, $100 per unit really isn’t that much to reimburse HUD for all the program activity that unit requires.  One problem I can see would be the windfall HUD would gain if the industry experiences a strong recovery. I’m for a label fee rule that would be based on a formula that would adjust based on production.” 

More than just hikes in HUD Label Fees…

A source who spent years with a major MH producer emailed MHProNews the following statement on these issues:

I can tell you the following.

· The HUD Label is a pass through to the end consumer. It is a line item like any other option and it is marked up like any option. The end consumer will bear the brunt of additional HUD Label cost. Just like the Beef industry. The end consumer ultimately pays for all material or labor increases.

· Larger manufacturers can implement regs much easier because they have a Quality Control Manager at each plant and this is his or her only job where at smaller independent manufacturer this job may be assigned to someone in the plant that has other responsibilities.

· The HUD Labels have to be purchased from the State SAA or whatever state agency has the IPIA Inspection contract and are issued after completed inspection. They are not purchased directly from HUD.

· All Manufacturers fear additional HUD Regulations because the HUD Code already takes up a 3000 page book of requirements and you can only teachlaborers so much.

· To interpret and build to a new HUD Reg wrong, even though unintentionally, can result to thousands of dollars in fines and Temporary Plant Closure.

· When HUD pinpoints a Reg that a plant has not adhered to it can also require the plant to go back and change every house in the field they have ever built which can cripple a Manufacturing facility. So yes, there is a high degree of fear by all plants.

·The lower your production levels are, the more dollars per unit new Regs can cost. All plants are operating at roughly 50% to 65% of their capacity.”

Feeding the above comment back to a previously cited producer drew this reply:

Well said and nice to hear how others live in fear as we do.

Yes, the labels are a pass through and in and of itself not crippling, but in context of all the regulation costs, why has there not been any cost benefit analysis?  If anything””there has to be some push back from the industry or they will frequent this well all too soon.

Keep in mind most of us are building several codes in our facilities because HUD numbers have dropped so far, making additional regulations and changes even more difficult to deal with. The more we have to deal with, the less ability we have to build our mandate: high value homes.”

This comment below from yet another industry professional/MH producer, likewise given the opportunity to be on or off the record with MHProNews, stated as follows regarding the impact of regulations by HUD on builders:

I agree on all fronts, I don’t seeing what naming anyone does to benefit the cause. The fact that no one can justify being on record should say more about how oppressive HUD and this administration is to our industry.“##

(Editor’s Note: On or off the record comments are welcome: iReportMHNewsTips@mhmsm.com.)

(Graphic credits: GAO Report cover, and Making Home Affordable – albeit modified – as shown.)

Congressional Committee asks for GAO Probe of HUD MH Program

December 1st, 2011 Comments off

MHProNews has received a communique from the Manufactured Housing Association for Regulatory Reform (MHARR) noting a copy of a letter on the stationery of Rep. Spencer Bacchus (R-Ala.), Chairman of the House of Representatives Financial Services Committee, and Rep. Barney Frank (D-Mass.), Ranking Member of the Committee. The letter is addressed to Comptroller General Gene L. Dodaro of the Government Accountability Office (GAO). It is signed by Rep. Judy Biggert (R-IL), Chairman of the Subcommittee on Insurance, Housing and Community Opportunity, and Rep. Bacchus. The letter asks Mr. Dodaro to examine the Housing and Urban Development’s (HUD) regulation of the manufactured housing program, specifically the implementation of the Manufactured Housing Improvement Act (MHIA) of 2000 designed to establish standards for construction of MH, and how that has affected the overall MH industry. The MHIA also set the boundaries for federal preemption and allocated resources to deal with MH issues. The letter also asks the agency to examine the effect the Manufactured Housing Consensus Committee (MHCC) has had on revisions to HUD’s guidance of the MH program and what authority the MHCC has in advising HUD. Noting the inspection fee HUD collects from manufacturers, the letter asks the GAO to examine how the fees are collected and administered, if it is being done according to law, and what effect the fees have on production.

(Graphic credit: Wikipedia)

MH Field Hearing Yields HUD, MHI, Industry, and Resident Viewpoints

November 30th, 2011 Comments off

At the “State of the Manufactured Housing Industry” Congressional Field Hearings in Danville, Virginia, Nov. 29, members of the House Congressional Subcommittee on Housing, Insurance, and Community Opportunity heard from a variety of persons in the MH arena.

Henry Czauski, Acting Deputy Administrator for the Office of Manufactured Housing programs, noted the affordability aspect of Manufactured Housing (MH) to moderate and low-income families. He stressed the importance of federal regulations in ensuring MH is built to standards that enhance the safety and security of the structure, and the involvement of the Manufactured Housing Consensus Committee (MHCC) in that process. Noting that the “certification” fees HUD collects on each MH section has declined with the decrease in sales, he said Congress has appropriated funding to supplement these fees in three of the last four years.

Kevin Clayton, president and CEO of Clayton Homes, and secretary of the Executive Committee for the Manufactured Housing Institute (MHI), testified that 72 percent of all new homes sold in 2010 under $125,000 were manufactured homes. While noting that the industry as a whole provided 75,000 full-time jobs in 2010, 200,000 jobs have been lost as the industry has declined. Clayton said provisions of the Dodd-Frank Act will disparately impact manufactured home lending, that the SAFE ACT, now under the auspices of the Consumer Financial Protection Bureau (CFPB) needs clarification in its implementation, and that HUD’s outdated building codes and guidance on preemption have left the industry vulnerable to state and local regulators.

Tyler Craddock, of the Virginia Manufactured and Modular Housing Association, said manufactured housing comprises 5.6% of all the housing in Virginia, but in many rural areas where construction labor is not readily available, 15-20% of the housing is MH. Craddock said factory-built housing sales are moving more in the direction of modular in his area, and blamed the lack of affordable financing for consumers wanting to purchase manufactured housing.

Adam Rust, research director of the Community Reinvestment Association of North Carolina, noting the difficulty in obtaining financing for MH, said a person applying for a manufactured home loan is three times more likely to be turned down than someone applying for a site-built home loan. Rust said GSEs could be restructured to make financing more available to persons buying manufactured homes, because interest rates are too high and consumer protection is too low. He also suggested making funds available for community groups to buy MHCs.

Stanley Rush, of MHD Empire Service Corporation, says SAFE Act implementation is hurting MH salespeople who are only helping consumers with paperwork, not with lending decisions. With so many sources of lending drying up because regulators are encouraging lenders to stay away from MH loans, the industry is being further crippled, Rush stated.

J. Scott Yates, president of Yates Homes of Pittsylvania County in Virginia, testified his company has dropped to five employees from 19, and from selling 180 homes a year to only 30. Yates said he is now selling modular homes to keep his company alive because the codes are the same for site-built homes and financing is easier to obtain. He said the big loser is the American consumer of more modest means.

MH Virginia resident Carla Burr said she could only afford her $113,000 home because she had sold her condo and had the cash. Her other option was to finance the home at 10 percent, despite a good credit rating, a figure she says prevents many people from being able to afford MH. She said not only does the government need to promote manufactured housing through the myriad of programs already existing, but it also needs to protect community residents who sometimes are at the mercy of unscrupulous community owners.

MHARR provided written testimony for the committee.

(Editor’s Note: The full written portion of the statements from each of the above are available for your download and reading here below).

Mr. Henry S. Czauski, Acting Deputy Administrator for Manufactured Housing Program, U.S. Department of Housing and Urban Development

Mr. Kevin Clayton, President and Chief Executive Officer, Clayton Homes, Secretary for the Executive Committee of the Manufactured Housing Institute (MHI)

Mr. Tyler Craddock, Executive Director, Virginia Manufactured and Modular Housing Association

Mr. Stan Rush, Account Representative, Haylor, Freyer and Coon, Inc.

Mr. J. Scott Yates, President, Yates Homes

Mr. Adam Rust, Research Director, Community Reinvestment Association of North Carolina

Ms. Carla Burr, Manufactured Housing Resident

Written Testimony submitted by Danny Ghorbani for the Manufactured Housing Association for Regulatory Reform (MHARR)


(Graphic credit: Wikipedia  U.S. House of Representatives)

MH Industry’s Call to FHA and HUD

November 23rd, 2011 Comments off

The Manufactured Housing Association for Regulatory Reform (MHARR) and the Manufactured Housing Institute, acting jointly as the Coalition to Advance Manufactured Housing (Coalition), held a 30-minute follow-up conference call Nov. 22, 2011 with Federal Housing Authority (FHA) Commissioner Carole Galante, and Housing and Urban Development’s program manager, Henry Czauski, to discuss three issues previously detailed: Easing of FHA Title I Government National Mortgage Association (GNMA) securitization requirements and increasing the number of loan originators; selection of a non-career administrator; and appointment to the Manufactured Housing Consensus Committee (MHCC) of MHARR and MHI staff members. The Commissioner stated as for the tight GNMA credit, she understood those loans under-perform, although she conceded the only data available is from the 1980s and 1990s, and that it would be difficult to obtain that information from current HUD Code manufactured home loans. MHARR pointed out one unintended consequence of tighter credit was de facto monopolization of MH financing by one or two companies. The Commissioner agreed to work with the Coalition to obtain more relevant data. As for a non-career administrator, Commissioner Galante replied that budgets are tight and she would work to involve the manufactured housing industry with policy decisions. Regarding the appointment of MHARR’s Mark Weiss and MHI’s Lois Starkey as representatives to MHCC, program manager Czauski noted the appointments are being processed and an answer should be forthcoming by the year’s end. MHARR reiterated the importance of including industry representation on the MHCC as required by law.

(Graphic credit: FHA/HUD)

 

 

MHARR Decries Sprinklers; NFPA says MHI Statement Incorrect

November 9th, 2011 Comments off

The Manufactured Housing Association for Regulatory Reform (MHARR) says the Manufactured Housing Consensus Committee (MHCC) report in support of a “conditional sprinkler system” for HUD Code homes destroys the opportunity to debunk the myth that manufactured housing poses a fire risk worse than traditional one and two-family homes. The National Fire Protection Association (NFPA) had originally stated in a July 27, 2011, report that the fire death rate in HUD Code homes is higher than in other homes, a charge MHARR said was unsubstantiated, and which the NFPA retracted October 14, 2011, conceding that HUD Code homes are as safe or safer than other homes. Even though the MHI (Manufactured Housing Institute)-HUD sprinkler system is conditional, MHARR notes, it implies that manufactured homes need additional fire protection. It may also open the door for potential lawsuits against manufacturers and communities in case of a fire loss. In addition, the conditional sprinkler system does nothing to preempt sprinklers from being mandated by local jurisdictions, and in fact may lead to more calls for sprinkler systems. Community owners may be forced to install costly water systems or face increased liability if they do not. Community expert George Allen notes he may have to say to community residents: “Would you please sign this waiver, acknowledging the inferiority of my property’s infrastructure design and capability, and accept the increased liability potential to your home, in the event it catches fire while sited here?” MHARR adds that HUD refuses to confirm that the conditional standard will not be expanded into an across-the-board mandate. Meanwhile, in FireEngineering, the NFPA says MHI has issued a misleading press release regarding fire death rates in manufactured housing. It says the fire death rate in all manufactured homes is 3.4 per 100,000 occupied housing units, well above the 2.3-2.6 rate in other homes. The rate in “post-standard manufactured homes” homes is 2.4 deaths, comparable to the rate in other homes. NFPA supports including sprinklers in the construction of manufactured homes.

(Graphic credit: MHARR)

(Image credit: Wikipedia)

MHARR: Sprinkler System Fires Up Again!

October 24th, 2011 Comments off

The Manufactured Housing Association for Regulatory Reform (MHARR) reports the Manufactured Housing Consensus Committee (MHCC) voted to conditionally accept an MHI (Manufactured Housing Institute) proposed federal sprinkler standard for manufactured homes. The vote came one day after the National Fire Protection Association (NFPA) admitted that manufactured homes have fewer fires than other one or two-family homes, and fewer fire injuries than other types of homes. While the conditional standard would only define what is accepted to pass federal standards in MH, as MHARR has repeatedly stated, this opens the door for a campaign to federally mandate sprinklers in all MH. The end result would be more costly homes in an industry that is already suffering.

(Graphic credit: MHARR)

 

MHARR: HUD is Overstepping MHCC

October 13th, 2011 1 comment

MHProNews has received a brief from Danny Ghorbani, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR), which says the Department of Housing and Urban Development (HUD) is expanding its in-plant regulation presence, and disrupting the relationship between Primary Inspection Agencies (PIAs), housing manufacturers, and HUD. As printed in The Journal, where MHARR publishes their organization’s monthly column, the changes are being instituted without being presented to the Manufactured Housing Consensus Committee (MHCC) in violation of the Manufactured Housing Improvement Act of 2000. All changes to the role of PIAs inside production facilities and expanded in-plant inspection are supposed to be approved by the MHCC, and based on cost-impact data and justification for making the changes. MHARR maintains that in an industry that has lost 80 percent of it’s production over the last 12 years, more regulation is not the answer. Further, MHARR suggests HUD is starting what could be a dangerous precedent by mandating changes without industry input.

(Graphic image: MHARR)

 

MHCC Set to Hear from HUD Housing Program

October 7th, 2011 Comments off

The Department of Housing and Urban Development (HUD) announces a meeting of the Manufactured Housing Consensus Committee (MHCC) will be held Oct. 18-20, 2011, at the Sheridan Suites Alexandria in Alexandria, Virginia, beginning at 9 AM on the 18th. Citizens wishing to address the committee are encouraged to contact the National Fire Protection Association in Quincy, Massachusetts, and have written comments prepared in advance. The agenda will include Federal Advisory Committee Preliminaries, subcommittee meetings and and proposals, a report from the HUD Manufactured Housing Program office, and consideration of proposals. The Committee will also allow time for public comment on matters already on the agenda. The meeting is scheduled to adjourn at noon on Oct. 20.

(image credit: HUD/MHCC)

MHARR States MHCC Continues to Mar MH Industry

September 22nd, 2011 Comments off

The Manufactured Housing Association for Regulatory Reform (MHARR) reports the “General” Subcommittee of the Manufactured Housing Consensus Committee (MHCC) met by telephone conference Sept. 20 to discuss accessibility proposals that have been dormant for nearly ten years and would impact the cost of production. They were revived Oct. 2010 by the new chairman who formerly worked on accessibility issues in the Housing and Urban Development (HUD) office. The mandates include increasing minimum hallway widths, increasing minimum ceiling height to seven feet, widening exterior swinging doors, and widening the opening of exterior sliding doors. MHARR says there is no specific data that justifies these across-the-board mandates, and that accessibility features in homes are routinely available as options. Additionally, these proposals are being presented when industry production is at an all time low, and will add an economic burden to producers and consumers. MHARR reiterates its position that the MHCC is stacked with HUD-picked members. The Subcommittee recommended MHCC reject the seven foot ceiling height and exterior swinging door proposals. It did, however, recommend the full Committee adopt the 30 inch minimum hallway width for homes 14 feet or wider, and a proposal requiring one exterior door to have a 32 inch clear opening.

(image credit:  MHARR)

Sprinkler Debate Continues at MHCC Teleconference

July 21st, 2011 Comments off

HUD Logo small

HUD Logo small

In a notice titled “Pressure Continues for Federal Sprinkler Standard”, the Manufactured Housing Association for Regulatory Reform (MHARR) reports the Manufactured Housing Consensus Committee’s telephone conference July 20 did not result in any voting. Discussion centered on the the federal sprinkler standard which is still before the Technical Structure and Design Subcommittee. Proponents of the Manufactured Housing Institute (MHI)’s “where required” regulation say it is just a technical issue about the sprinklers. One committee member said the issue of federal preemption of any sprinkler standard still needs to be addressed. MHARR maintains that any sprinkler standard in the Housing and Urban Development (HUD) regulations regarding manufactured housing could become an across-the-board standard. Henry Czauski, the new acting head of the HUD Manufactured Housing program, said the scope of federal preemption is being studied and he expects to have an answer for the MHCC “soon.” Czauski said the subcommittee is analyzing the costs and benefits of the sprinkler standard. These issues will be discussed at the in-person meeting of the MHCC October 18-10, 2011.

For a link to a related story from MHARR to its members obtained by MHMSM.com, click on this link: http://www.mhmarketingsalesmanagement.com/latest-news-from-mharr/1768-pressure-continues-for-federal-fire-sprinkler-standard-at-mhcc-meeting

(image courtesy HUD)