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

December 27th, 2018 Comments off

 

TownRejectsHundredsAffordableHousingUnitsCitsReasonsAgainstUsingManufacturedHomesDailyBusinessNewsMHProNews

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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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:

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Plan for New 296 Site Metro Manufactured Home Community

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Plan for New 296 Site Metro Manufactured Home Community

September 25th, 2018 Comments off
Plan296SiteMetroManufacturedHomeCommunityDailyBusinessNewsMHPronews

The photo above is for illustration purposes only.

PND 3001 Investments has proposed developing a 296 manufactured home development in South Elgin, IL. It is about an 88-acre site.

 

The plan is for an adult, 55 plus community.  Planners are positioning a comparison to Saddlebrook Farms in Grayslake, IL, which Chuck Fanaro developed, and years later, Hometown America bought into.

The plans for the 296 site development were put on hold Wednesday when the South Elgin Planning and Zoning Commission requested more data on how much traffic the project would generate, said MuckRacker, “South Elgin Village Board approval of a special use permit and rezoning from industrial to residential are required before work can begin.”

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Peter Lappin, a principal for PND, agreed to provide the added information.

Plans for the development call for one entrance/exit off [325] Umbdenstock Road, Lappin said. If a second access point is required, it could be added on Lancaster Road,” per the Chicago Tribune.

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The Kane County Reporter obtained the meeting minutes from a discussion in April about the same project.  Those minutes are linked here as a download. Some pull quotes from those minutes include:

  • The lots are at a minimum of 50 feet in width, the minimum interior lot area is 5,000 square feet, and the minimum corner lot area is 7,500 square feet.
  • The Planning and Zoning Commission reviewed this petition and recommended acceptance at their March 21, 2018 meeting. Rich Gerard from PND 3001 Investments, LLC introduced the team planning this development. Rich Olsen, landscape architect for the project, explained that the land is currently zoned l-2.
  • Mr. Olsen explained that there will be a 30 foot landscape buffer on the southern edge of the property.
  • Trustee Richmond then asked what kind of buffer will be along Lancaster Road. Rich Olsen explained that there will be a 25 foot buffer along those homes.
  • Trustee Kolodziej asked who is responsible for the upkeep of the land. The community will handle all mowing and snow removal in the area.
  • Trustee Guess asked if these are manufactured homes and if they will be five feet apart. Rich Olsen answered that each unit will be a minimum of five feet from the lot line making the minimum distance between these manufactured homes ten feet. Trustee Guess said she is concerned with fire issues. Marc Mclaughlin explained that the Village has adopted the latest building codes and these units will have sprinkler systems.
  • Trustee Lieser explained that manufactured homes lose value as they age and the value of the land appreciates. He is concerned that the homeowners do not own the land. Value is questionable. Rich Olsen stated that people are going to want to maintain their units. President Ward stated that he understands Trustee Lieser’s concerns.

Let’s review that last pull quote above for a few moments, because it and other statements from the local commission reflect the kind of thinking that makes obtaining approvals for these new properties so difficult.  As regular, careful and motivated Daily Business News readers know, there is a growing body of evidence that manufactured homes can and do gain in value. While that can be more of a challenge in a land-lease, depending on various factors, there are numerous cases where appreciation occurs in manufactured home communities too. See a related report, linked below.

Improving Resale Values: Manufactured Home Owners, Professionals, Shoppers – NMHOA & MHAction, What’s Right, Wrong, Supply & Demand – How to Achieve Mutual Victories

More pull quotes from meeting minutes include these:

  • Trustee Guess asked for a price range for the homes. Chris Lappin answered that they should cost between $80,000 and $150,000. Trustee Kolodziej stated that the homeowner does not pay real estate taxes. Chris Lappin said the development will be licensed from the state. The homeowner will annually pay a privilege tax for the use of the land and will pay sales tax on the home when purchased
  • Mr. Lappin estimated that…the amount of the HOA fee would be between $500 and $800 per month.
  • Trustee Lieser stated that purchasers will not be able to get secure conventional mortgages. Chris responded that Freddie Mac is offering more mortgages than before. There are five or six banks offering loans. His company may also provide loans.

The latest is that “an informal poll of the commissioners indicated most were in favor of the project as long as their questions about traffic and tax rates were answered,” per the Tribune.

They concluded, saying “Gerard said the land has not yet been purchased. They are awaiting village approval before closing on the deal, a situation that could become problematic if there are more delays because their option to buy is expiring soon, he said.”

The process reveals several of the nuances that have to be navigated in the era of NIMBY. MHProNews plans to monitor developments on this project. See related reports, linked below. ## (News, analysis, and commentary.)

1. Terminology error – the word ‘trailer’ is in the original. It is unclear from the article if these are mobile homes, post-HUD Code manufactured homes, or a combination of both.

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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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