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CityLabs Spotlights ROC USA’s Bright Communities Brand, Lessons for Manufactured Home Professionals, Investors

July 19th, 2018 Comments off

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Manufactured home communities have a long history of providing low-cost housing in the U.S., where residents drive their homes in, secure them, and pay a monthly rent to stay on the owner’s land. These homes are typically the least expensive option when it comes to unsubsidized housing, serving households with a median annual income of about $30,000,” wrote Hallie Golden, in a new article for CityLabs. 

Golden – a freelance writer, who per LinkedIn does some work for the AP too – is the most recent to look at the topic of manufactured homes, land-lease communities, specifically through the lens of cooperatives as a form of resident owned communities (ROCs).

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Golden’s story – and the majority of others through the years in mainstream media and third-party research – is readily categorized as positive, at least for ROC USA. Here’s how Golden opened her report,

When a landlord sells a mobile home park1, it can upend an entire community. Through co-ops, residents are finding a way to stay where they live and control their rent costs.”

It’s frankly a common theme in academia, and in mainstream media reports.  That point about “insecurity” for manufactured home owners in a land-lease is often played up by Prosperity Now (formerly, CFED), or resident activist groups such as NMHOA, and MH Action.

Golden cites Jim Wallace, a resident in a community who she says is “now a 71-year-old retired manufacturing engineer.” “I was doing some pacing on the floor,” said Wallace, when the community he lived in for years was about to be sold by its owner.

I was doing some pacing on the floor,” said Wallace.

Per CityLab’s account, “Wallace and the other members of the 25-home community had a plan. For years, the residents had wrestled with the fact that they have little to no say in the park’s long-term future. So in July, they wrote a letter to the landlord, expressing their concern. “We wanted assurance that our homes would be safe for us to enjoy in the future,” said Katy Bowen, president of the Duvall Riverside Village’s board of directors and one of its residents. The next month, the landlord sent them a letter offering to sell them the property.”

They formed a co-op, got a loan, and bought the 4.5-acre land, about 25 miles northeast of Seattle, for $1.18 million,” said Golden. “With that, they officially became Duvall Riverside Village.”

Golden’s story references the Manufactured Housing Institute (MHI) on a factoid that’s likely accurate. Namely, that the average income of a mobile or manufactured home owner hovers around $30,000.

But her CityLab report also references some other claims, including from Apartment List, which published a report that’s a mixed bag of accurate and problematic data. Golden’s figure on the number of communities comports with no known source, so perhaps she split the difference between what MHI and a source like “Frank and Dave” use.  As she put it: “an increasing number of approximately 40,000 mobile home communities1 in the United States have opted to take landlords out of the equation.”

Frank Rolfe, Dave Reynolds, George Allen, Manufactured Home Community Controversy Continues

That may be technically true, but if someone reads that as if there is a wave of ROCs, that’s not true. ROC USA’s president, Paul Bradley, has told MHProNews that they can convert roughly 15 communities a year as they are currently configured.  Would they like to do more?  In time, of course.

By the way, Mike Bullard told MHProNews today that they attempt to educate those they speak to about the proper terminology.  He also said that crane’s are obviously rarely used in the moving of a HUD Code manufactured home.

Here’s part of how Golden reported, “Owners [of manufactured homes] also must be able to afford the $5,000 to $15,000 price tag that may be needed to move the structure. Bullard said the process involves a crane and a truck, and often additional vehicles to escort the oversize load.”

 

Why the ROC Articles Matter, Lessons Learned?

The industry faces a real image issue that MHI and thousands of others in our industry have arguably only put their toe in the water on addressing.

Consider the comment below, posted on Golden’s article:

Gary_Gilmore: The housing solution that no one wants. No developer wants this – no profit. No architect wants it – no glory. No neighbor wants this – too much drain on the tax base.”

Almost every word of the above is demonstrably inaccurate.  But there’s plenty of evidence that there are millions who believe similarly.  Until MHProNews posted a reply, that statement went unaddressed.  Why?

Moving on, ROC USA has for years had overwhelmingly positive media. While they are at times misunderstood within the industry, that’s perhaps due in part due to the action of groups apart from ROC – like NMHOA or MHAction. When they demand ROCs, people believe they must be in cahoots with Bradley’s group.

There’s evidence to the contrary, like Bradley’s reply to the rent control issue.  As the commentary linked below from Bradley to MHProNews reflects, his view on rent control is hardly the position of NMHOA or MH Action.

 

Fair and Balanced on CFED – plus – Another View On Rent Control

So beyond the industry, where some totally get Bradley and company’s vision, and others don’t (joke – welcome to that club), ROC USA is widely admired.  Try to find a negative article in mainstream media that includes ROC USA.

You’ll be hard pressed to do so.

ROC isn’t the only one that gets positive media, but consider how often the industry gets negative media. Each one of those stories – good, bad or meh – are wake-up calls for manufactured housing professionals.  Just consider the series of largely negative stories on Clayton Homes in the Seattle Times, Buzz Feed and others.  While Clayton gets positive media, those are often fawning fans of Buffett who are bragging about their latest acquisition of a site builder.

The bottom line is that ROC USA is a bright spot for the industry’s story, but they shouldn’t be the only one.  There are, as Bradley has told MHProNews, numbers of good community operators who safeguard resident interests.

Bradly has also encouraged that the industry clearly define land lease communities that protect resident tenancy, and those who may sell out for redevelopment.

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

It’s the kind of advice that professionals should consider, because it comes from a voice that has carved a positive name for their brand in an often unjustly dismissed industry. Perhaps the new communities association that is being formed will take on this issue? Doing so well is arguably worth tens of billions of dollars in more revenue for the industry every year.  “We Provide, You Decide.” © ## (News, analysis, and commentary.)

Footnote 1 Typo or terminological error is in the original. For a better understanding of industry terminology, click here and here.

Related Reports:

“Why Advocates Need to Rethink Manufactured Home Quality,” Harvard, GSE, Genz, “High Satisfaction”

Good News With Harmful Twist, Anti-Community Owners MHAction Activist Grabs Headlines

New Manufactured Home Industry National Association Related Statements

 

‘Tip of Iceberg’ – Rick Rand; Marty Lavin, Communities have ‘No Confidence’ in Manufactured Housing Institute, New National Trade Group Announced

 

“Trailers for Sale or Rent,” “Pencil Head, Its Not a Trailer Park,” Manufactured Home Rental Reality Checks

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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.

Drama, Take Three – MHC Infighting Over Potential Sale

April 20th, 2017 Comments off
MHCWeighsAcquisitionOfferUnderStrangeCircumstancescreditZillowBriarcrestEstates-postedtothedailybusinessnewsmhpronewsmhlivingnews

A home in Briarcrest Estates. Credit: Zillow.

In the ongoing saga of Laconia, New Hampshire – based Briarcrest Estates, both the tempers, and stakes, are higher than ever.

According to the Laconia Daily Sun, Briarcrest co-op board members Joe McCarthy, Don Vachon and John Drouin have resigned from the six-member board, after they came under fire over a proposal to sell the community to Hometown America Corporation.

A special meeting has been called for April 24 to fill the vacancies, and another meeting has been set for May 20 to consider selling the community.

As the Daily Business News covered here, the Briarcrest story dates back to July 2013, when community owners Mark and Ruth Mooney tentatively agreed to sell the Briarcrest Estates to Hometown America for $10 million. In compliance with state law, the terms of the transaction were disclosed to the tenants, who had 60 days to make a counteroffer by presenting a purchase-and-sales agreement. The law requires the community owner to bargain in good faith with the residents or their organization.

Residents of Briarcrest Estates then formed The Lakemont Cooperative Inc. and, with assistance from ROC-USA and the New Hampshire Community Loan Fund, matched the offer from Hometown America Corporation.

After initial resistance, Mark and Ruth Mooney agreed to sell the 183 acre, 241 home site community to the cooperative, which has owned and managed it since April 2014.

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Credit: Google.

Fast forward to January 2017, when things changed. That change came in the form of a offer to buy Briarcrest Estates.

It was from Hometown America.

It’s an unsolicited offer, period. A fire-from-the hip” proposal, said Vachon at the time.

The Hometown America deal reportedly included retiring the outstanding balances on a $8 million loan from TD Bank and $2 million loan from the New Hampshire Community Loan Fund as well as covering the prepayment penalty of $873,000 on the bank loan, closing costs and real estate transfer taxes associated with the transaction.

For some residents, the timing was “convenient.”

Although the board has claimed the offer was not solicited, the letter from Hometown America Corporation outlining its terms begins ‘per our discussions,’ indicating that board members have been communicating with Hometown America for some time,” said Katherine Carlson, who also was among the first officers of the cooperative.

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Credit: Briarcrest Estates.

Residents in the community say that it has become a neighbor-versus-neighbor battle, with one faction wanting to sell the community, and the other wanting it to remain a cooperative.

It’s just been ridiculous,” said McCarthy’s wife, Carrie, who said her husband and the other board members were unfairly targeted for suggesting cooperative members consider an unsolicited purchase offer.

There are a small number of people in this park [sic] who are so toxic,” said McCarthy.

All they are trying to do is stop the vote. It’s not all wonderful here in the co-op. People fight and argue. It’s like something you’d see on TV.”

Resident Louise Rosand, who is in favor of remaining a co-op, says that the ability to avoid rent hikes and keep control of the community are both critical. She also feels that the three board members who resigned were not completely honest about the situation with Hometown America.

They went behind our backs,” Rosand said. “There is no financial reason to sell. We are in good standing. We have extra money to put away. The bank loves us. The park has been running smoothly.

It’s kind of like a group against group. Your neighbor could be for or against. I live in a little section where there are four of us who are not for the sale, but if you go down the street you may find somebody who is for the sale. But you don’t go in your backyard and yell. You wave at everybody who goes by.”

 

ROC USA Commentary

An unrelated ROC USA community. Credit: ROC USA.

The ROC-NH program of the New Hampshire Community Loan Fund has helped convert nearly all of that state’s resident-owned communities, now numbering over a hundred. ROC-NH Director Tara Reardon told MHProNews it often takes time for a new cooperative to develop leaders and grow into what will become that community’s personality.

We’re confident that, if the process is transparent, the residents at Briarcrest will make the right decision for their neighbors’ and their own futures,” said Reardon.

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Mike Bullard. Credit: Linkedin.

ROC Members are empowered to make decisions for themselves and their communities. Democracy, as they say, isn’t always pretty, I think we can agree in the wake of last year’s elections, that’s a fact,” said Mike Bullard, ROC USA Communications and Marketing Manager, in an email to MHProNews.

But making a tough decision, or even a bad decision is better than having no choice at all.” ##

 

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RC Williams, for Daily Business News, MHProNews.

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