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“RESTORING THE RULE OF LAW TO MANUFACTURED HOUSING REGULATION” – MH Leader Call to Action

July 10th, 2018 Comments off

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The rule of law, and the supremacy of law over the arbitrary whims of individuals who happen to wield government power, was a profound concern for the founders who debated and developed the Constitution of the United States. For over two centuries, legal scholars have pointed to the primacy of the “rule of law” in the system of limited government and defined powers established by the Constitution, stating, for example: “The rule of law may be the most significant and influential accomplishment of Western constitutional thinking. The very meaning and structure of our Constitution embody this principle. Nowhere expressed yet evident throughout the Constitution, this bedrock concept is the first principle on which the American legal and political system was built.”

   Mark Weiss, J.D., President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR).

 

 

MarkWeissJDPresidentCEOManufacturedHousingAssocRegulatoryReformDailyBusinessNewsMHProNewsFor too long, though, the rule of law, as envisioned by the nation’s founders, has been undermined, ignored, or bypassed by the so-called “Fourth Branch” of government – the permanent, overgrown and largely unaccountable bureaucracy that has ballooned within the federal government, often in concert with overpaid and largely unaccountable government contractors,” said Weiss in a MHARR release to the Daily Business News. 

While this is a major socio-political issue with ramifications that extend far beyond the scope of this column, federally-regulated manufactured housing faces challenges of its own regarding the rule of law, and with a new Administration – with a new regulatory philosophy — now in place, there is no time like the present to clearly address this issue within the unique context of manufactured housing regulation,” said Weiss.

In the manufactured housing arena, the most fundamental expression of the primacy of the rule of law is the Manufactured Housing Improvement Act of 2000,” Weiss said

It’s a theme that MHARR, and editorially MHProNews, have held for years. 

Indeed, the 2000 reform law is a direct outgrowth of – and a direct congressional response to and remedy for – administrative abuses that had piled-up within the federal manufactured housing program over the first quarter-century of its existence. These included, but by no means were limited to:

 

(1) de facto rulemaking by “interpretation;”

(2) circumventing, evading, or ignoring notice and comment requirements;

(3) abuses of the “Interpretive Bulletin” process;

(4) closed-door standards development activity;

(5) non-consensus standards development;

(6) contracting abuses resulting in a non-competitive, de facto “sole-source” program monitoring contract, the same monitoring contractor for the (now) entire 40-year-plus history of the program, and the delegation of governmental power to an unaccountable private entity; and

(7) activity to subvert the operation and objectivity of the former Manufactured Housing Advisory Council, and a host of other actions that undermined the basic fairness, reasonableness and, ultimately, legitimacy of the federal manufactured housing program.   

Weiss, an attorney known for being detail-oriented, got into the weeds in his analysis. 

He also commented on the “Deep State” style “subversion” of the HUD Code program. 

Just as importantly, through nearly every step of this decade-plus subversion of the 2000 reform law, “deep state” regulators at HUD have been aided and abetted by “institutional” program contractors – i.e., de facto sole-source contractors, such as the program monitoring contractor – which constitute a “deep state” of their very own, wielding unlawfully-delegated and largely unaccountable governmental power, together with a built-in incentive to continually expand both the scope and cost of regulation, thereby increasing their own power and influence and, not surprisingly, their contract revenues,” stated Weiss, adding that “This needless regulatory expansion, in itself, has excluded hundreds-of-thousands of Americans from the benefits of manufactured home ownership, based on studies conducted by the National Association of Home Builders (NAHB), and has unnecessarily slowed and stunted the industry’s recovery from its modern production low in 2009, disproportionately harming smaller industry businesses.  Nor does the industry itself escape part of the blame for this activity, as far too many of its largest corporate conglomerates – and their representatives — have provided protection and “cover” for the HUD status quo and program “leaders” who have gone to extraordinary lengths to undermine the most important elements of the 2000 reform law.” 

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For newcomers to the website not familiar with modern manufactured homes, learn more by clicking the image above or the link here.

The change in presidential administrations, however, has opened the door to potential remedies for this fundamentally lawless regulatory activity. In particular, the Trump Administration’s “top-to-bottom” review of HUD’s manufactured housing regulations and “regulatory activities,” under Executive Orders 13771 (“Reducing Regulation and Controlling Regulatory Costs”) and 13777 (“Enforcing the Regulatory Reform Agenda”) provides a viable basis for action to repeal both the 2010 HUD interpretive rule and the slew of “field guidance” and other sub-regulatory mandates issued by HUD based on the Department’s unlawful construction of section 604(b)(6),” wrote Weiss.    

And indeed, MHARR in its February 20, 2018 regulatory review comments to HUD, specifically urged the program to return to the rule of law, through the withdrawal of the 2010 interpretive rule and all of the program’s sub-regulatory mandates issued without MHCC consideration and notice and comment rulemaking.” 

This effort…received a major boost when the U.S. Department of Justice notified federal agencies, through memoranda issued on November 16, 2017 and January 25, 2018 that it would no longer enforce administrative “guidance” documents issued without notice and comment rulemaking.  In part, the Justice Department stated: “Guidance documents cannot create biding requirements that do not already exist by statute or regulation.  Accordingly … the [Justice] Department may not use its enforcement authority to effectively convert agency guidance documents into binding rules.  Likewise, Department litigators may not use noncompliance with guidance documents as a basis for proving violations of applicable law…” said MHARR’s president.

For the full, unedited MHARR release, please click here. “We Provide, You Decide.”  © ## (News, analysis, and commentary.)

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Related Reports:

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

 

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MH Resistance – Unmasking, Demystifying, Manufactured Housing Industry’s Roadblocks

January 19th, 2018 Comments off

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Broadly speaking, there are two sets of roadblocks or choke points to the manufactured housing industry’s growth.

 

They are?

Internal road blocks, and external ones.

The nearly concluded Louisville Manufactured Housing Show marks 50 years of Show Ways Unlimited’s Dennis Hill’s leadership of the event.

Every significant event in the industry creates numerous opportunities for interaction between the factory-built housing professions members, as well as for newcomers to the industry.

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Discovery – Newcomers, “Fresh Eyes”

Among the dozens of one-on-one interactions between MHProNews and event attendees was with a newcomer exploring the professional opportunities manufactured homes could create.

That specific gentleman was “blown away” at the quality and value of manufactured homes,’ compared to conventional site built (“stick built”) housing.

But that newcomer – who is already successful in a complementary field – was equally stunned to learn that manufactured homes were going to finish 2017 at fewer than 100,000 shipments.

State of the Manufactured Home Industry, Comparing RV vs. MH Data

When the final numbers come in, preliminary indicators suggest the total number of HUD Code manufactured homes will be around 92,000 (+/-).

So what explains the low [new home shipment] totals?’ – that visiting professional asked.  Their operation is pondering making a play related to manufactured housing.

It’s a penetrating question.  One that the MH industry’s pros ought to ask themselves routinely.

When Harvard University researcher Eric Belsky projected that manufactured housing ought to outperform conventional housing by 2010 – a fact once cited by the Manufactured Housing Institute – an objective analyst must ask, ‘what caused the miss in Belsky’s estimate?’

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Appealing Manufactured Housing Institute (MHI) Marketing, Finance Booklet Reviewed

Belsky knew of the repossessions and financing shifts circa the late 1990s/early 2000 when he made his educated observations. Those issues – in Belsky’s view – seemed to be transitional.

As the manufactured housing industry’s first and still only Daily Business News has previously observed, there is only one national association in the industry that claims to ‘represent all of factory built housing.’ That would be the Arlington, VA based Manufactured Housing Institute (MHI).

As the self-proclaimed industry’s leaders, who tell their members about “MHI Zen” and ask, “Got Clout?” – they can’t have it both ways.

They can’t both claim clout and ‘Zen-like’ leadership, and then not take responsibility when things go awry.

 

RickRobinsonJDSVicePresidentManufacturedHousingInstituteLogoPhotoMHIGotCloutWheretheBeefDailyBusinessNewsMHProNews

MHI Sr VP and General Counsel, Rick Robinson, is a congenial guy and a good writer. He has published a periodic “MHI Zen.” MHI asks, Got Clout? Okay, where’s the beef? For the 400 word executive summary, click here or above.

They are either successful gurus, or they are something else…

Indeed, MHI’s own prior Chairman, Nathan Smith, said the association had to admit to itself that it had often ‘failed to be pro-active’ in their efforts. Here exactly how he said that, in context, in the video below.

Why not ponder for a few moments, and take Nathan Smith at his word?

If it is wiser to go to the district office to see a congressman or senator, then why for years has MHI organized their Washington, D.C. meeting?

Why not take Smith as his word, as he laughs and says, he doesn’t want the competition?

FollowTheMoneyPayMoreAttentionToWhatPeopleDoThanWhatTheySayMartyLavin6MillionYachtManufacturedHousingIndustryDailyBusinessNews600

Lavin is an MHI award winner, and a success story in communities, retail and finance.

When the Arlington-based association’s efforts and fact patterns demonstrates continued problematic performance, analytically speaking, they have only a few choices, if they want to maintain credibility.

It’s the same options any professional, or organization faces when a miscue occurs, because we all have them.  The issue isn’t only the miscue, rather, its what happens after a mistake takes place.

Or are they a case of – if they succeed or fail, a handful of MHI members profit either way?  Keep in mind some of the key takeaways from the Kevin Clayton video interview, found in a report linked further below.

There are only two kinds of competition Warren Buffett dislikes, foreign and domestic – Kevin confirmed that claim during the video.  Kevin also went on and on about “the moat.”

Warren Buffett, “the Moat,” Manufactured Housing, Berkshire Hathaway, Clayton Homes, 21st Mortgage, Vanderbilt, Wells Fargo, NAI…

 

MHI’s Miscue Options

1) Admit mistakes and failures as they occur, and attempt to correct them. MHI President and CEO Richard “Dick” Jennison said on camera that they do fail at times. But do they admit specificity what those failures are? Or how they plan to learn from and correct them?

When was the last time you saw MHI admit to an error?  Or when in recent years did they publicly take ownership of a failure to achieve a stated goal?

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2) Hide or ignore past or on-going failures to meaningfully advance the industry as a whole, not just select companies.

Arguably, this is one of the more common approaches MHI takes. Examples are issues ranging from:

  • Pam Danner at HUD,
  • to the DOE energy rule they initially promoted, and were finally forced by trade media, MHARR, and others to do a U-turn on.
  • Or on critical issues like lending, where Preserving Access has been a six-year odyssey, that prominent MHI member Frank Rolfe, or Bob Crawford, and others have criticized.
  • Or their own former MHI vice president, who correctly said years in advance that the Preserving Access to Manufactured Housing Act was unlikely to pass.
  • Or on Duty to Serve, where Tim Williams, 21st Mortgage Corp President and CEO, and prior MHI Chair — resisted change, while the association claimed to be working for DTS implementation.
  • How can such obvious contradictions be overlooked?

Andy Gallagher, “Ousting” Pam Danner, MHI, Clayton’s RVP, WVHI – “Transparency”

Links to articles detailing those issues are above and below.

MHARR vs. MHI on DOE Energy Rule, Pushback Pay$ Off?

Manufactured Housing Institute VP Revealed Important Truths on MHI’s Lobbying, Agenda

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

3) Distract from failures, rather than admit them. While distracting, do they quietly or publicly attack and attempt to undermine those voices that call their history of failures into question?  Every time one hears ‘the industry needs to unite’ behind MHI, one should ask, why?  Where’s their pattern of success that would warrant such a trusting unity?

‘We Want Your Money’ – 2018 MHI Membership, Infographic Fact Check

 

The “Secret Society

One need not believe any conspiracy theory to point to the fact that MHI’s current president and CEO ducked out on a long, previously publicized event during this week’s Louisville Show.

That’s self-evident.

Whether MHI’s CEO cancelled the night before, or less than 2 hours before MHI’s long-planned presentation is an interesting detail.  But regardless, Jennison was seen walking on the Louisville Manufactured Housing Show floor — at the same time he was scheduled to present.

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What happened? That report, is linked above.

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Embarrassing realities for MHI to explain? Or will they ignore, or try to explain it away? Did it have to do with recent reports, and the fact that MHProNews encouraged industry members to pepper Jennison with questions about their performance and problematic patterns?

 

The Bottom Lines?

A common refrain during this week’s show has been that ‘all factories are humming.’

That’s largely true. But HUD Code manufactured housing is still doing only a tiny fraction of the 500,000 or more new housing units that are possible annually, per numerous sources.  That’s also true.

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Graphic provided by Ross Kinzler when he was then the executive director of the Wisconsin Housing Alliance (WHA).

The industry won’t be taken as seriously as it should be doing under 100,000 new housing units a year. But the reverse of that is there’s a tremendous opportunity – a vacuum to be filled – by visionaries from inside or outside manufactured housing.

Nature abhors a vacuum.  The vacuum will be filled.  It’s only a question of by whom, by which entities.

There seems to be no escaping the fact that some of those problems originate within the industry itself.

ELS’ Sam Zell – Compliance Costs Destroys Smaller Businesses = Consolidation

MHI member Frank Rolfe and others have said so.

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MHI is currently spotlighting 5 operations, which in some ways is arguably a disadvantage to other MHI members.  How can they justify giving large sums that benefit only a favored few?  Reminder – MHProNews signaled months in advance that an MHI insider had informed the Daily Business News that ‘the big companies had figured out how to use MHI to get the smaller companies to pay for things that benefit the big companies.

Even some of the problems that are outside of the industry – problematic media coverage – often trails back to the failure on the part of MHI to engage the media in a ways that it should.

 

 

Yet, MHI was told years ago what was needed, how it could be done, and MHI’s now retiring Vice President Ann Parman praised this publication’s leadership in that regard.

AnnParmanVPManufacturedHousingInstituteMHILogoLATonyKovachMobileManufacturedHomeLivingNewsMHProNews800

 

CEO Jennison, and MHI’s Late Cancellation of their Presentation

If MHI is so proud of their new plans, why wouldn’t they want MHProNews to video the presentation?  Why not allow thousands of industry members – and potentially far more beyond the industry – to see that presentation via video?

The Top Twelve Questions for Manufactured Housing Institute (MHI) CEO, Richard “Dick” Jennison

Logical conclusions are that

  • if it was a good plan, beyond scrutiny and above reproach, they would have jumped at the chance for free media coverage.
  • The other option is more troubling. Why did they attempt to stop MHProNews from doing a video or otherwise cover their presentation? Why did MHI not use their considerable influence with the show’s management and the Midwest Manufactured Housing Federation (MMHF) board to press ahead with pro-industry trade media coverage of their presentation?   Are concerns raised by MHARR and others about their plan valid, and they didn’t want to expose their plan to scrutiny?  If they wanted to escape media coverage, did they really fail to consider that possibility, months in advance?  Aren’t all of these problematic?

MHARR’s pre-show concerns were voices in their report, linked below.

Jennison and MHI – per members of their own board to MHProNews – are acting like “a secret society.”  There are a few insiders, and all others are outsiders.

While there are those who say that publishing anything negative about MHI is like airing the industry’s dirty laundry,’ there’s a different view that other industry professionals take.

The best disinfectant is sunlight,” is an observation shared with MHProNews, as it applies to MHI and the forces that dominate that association.

Pro-MH Industry Voices some from inside, others from outside MHI – point to Berkshire Hathaway stronghold over MHI as reasons for dodging critiques, rather than doing an open, frank dialogue.

If MHI and Berkshire Hathaway owned units have nothing to hide, why do they fail to engage?

The article and the Kevin Clayton video interview posted in it are linked below. Per sources, they are one of several reasons why Jennison cancelled on the Louisville presentation to a few dozen members of the industry.  MHI has some explaining to do.  Ditto those who operate Berkshire Hathaway manufactured housing units.

Kevin Clayton Interview-Warren Buffett’s Berkshire Hathaway, Clayton Homes CEO

MHI, Clayton Homes, 21st Mortgage, Vanderbilt Mortgage et al, have an open invitation to engage the industry via this, the largest and most popular venue in manufactured housing. Why not do so in Tunica, via a video recorded public discussion?

The MHI/Berkshire Hathaway Challenge

Ladies and Gents at MHI/Berkshire Hathaway brands, are you up for the challenge?  Will you address the industry’s concerns and allegations about failure to perform for the broader industry, so that thousands of companies could help achieve the industry’s potential?

It’s not just that newcomer to the industry’s amazing potential that is left scratching their heads over why HUD Code manufactured homes will finish 2017 with under 100,000 new home shipments.  There are numerous voices inside and outside MH that feel – as Harvard researcher Belsky does – that the industry could dominate.

That’s arguably a crisis in leadership.

But as former president John F. Kennedy famously observed, the Chinese characters for crisis spell both danger, and opportunity.  Will the industry navigate its dangers?  Who in the industry – or those potential newcomers outside of MHVille – will have the guts to seize the opportunities?

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We Provide, You Decide.” © ## (News, analysis, commentary.)

Related:

Manufactured Housing Institute (MHI) Gives Written Responses – “Part of a Rigged, Corrupt System”

Upcoming – perhaps next week: A special report on Dick Jennison, MHI and the rewards that Berkshire Hathaway gave…

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.