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Bryan Manufactured Homes Ban Passed, But Petition Count, Other Legal Moves May Stop Texas City

April 11th, 2019 Comments off

 

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WTAW, Bryan’s website, and locals on the ground tell the Daily Business News on MHProNews that “The Bryan city council voted 5-2 Tuesday night to eliminate future manufactured home placement on individual lots.

Joining Greg Owens, who made the motion, and Buppy Simank, who seconded the motion, were Reuben Marin, Brent Hairston, and Andrew Nelson.

Voting no were Prentiss Madison and Mike Southerland.”

But the battle isn’t over, say locals.  As KAGS TV said, a petition count could cause the city counsel vote to be invalidated.

 

The second local news video provides a different, and in some ways, a stronger take.

 

 

But beyond the petition count, there are several other possible legal issues that are pending.  Among them are constitutional ones.

A manufactured home retailer in Texas sent the following to MHProNews, about the subject of “unconstitutional takings.”

This will be one of several possible courses of action, per sources, to MHProNews. Let’s dive in.

 

TMHA Legal Review Unconstitutional Takings

DJ_Pendleton_Executive_Director_Texas_Manufactured_Housing_Association_TMHA_credit_MHProNewsThe basics are this, if a local government passes some ordinance or rule that either directly or indirectly deprives or divests a property owner from his or her property without compensation, then it is a government taking under the Fifth Amendment of the Constitution,” said the D.J. Pendleton for the Texas Manufactured Housing Association (TMHA), in an article linked here.

But that is rapidly followed by a not so fast. “Not only is it not legal advice, it isn’t good advice. Why? Because such thinking is based on a gross oversimplification, and while clearly hyperbolic, one can see that even a lesser fashioned reaction is one that won’t generate legitimate consideration from any city official or politician. Worse yet, such a response could solicit a reaction from potential adversaries that you don’t know what you are talking about.”

Why?  Says Pendleton, “…this area of the law has been in play at the Supreme Court level for over 100 years. What’s the punchline? The punchline is that despite all the time and all the cases and opinions rendered in this area, to this day no set formula or bright line standard exists as to what constitutes an improper taking, save a physical invasion or a denial of all economic or productive use of the land. And based on the history of the court, it doesn’t appear likely that a clear standard will ever exist.”

What Pendleton does is what attorneys are trained to do, learn to argue from both sides of a question. He says, “…know that this area of law requires argument and there is no clear path to victory. Now we [meaning manufactured home professionals] know this reality. And I would guess competent council for a local government knows it as well.”

Let’s rephrase Pendleton’s point. It isn’t that an unconstitutional taking is necessarily a bad argument. It is that a city attorney or outside counsel knows that this is a fight they too might win. Given no clear path for victory by a property owner or manufactured home professional, a city may be willing to gamble on that your attorney won’t want to risk the cost of the lawsuit.

Challenges under the takings provisions of the Fifth Amendment and the Equal Protection clause of the Fourteenth Amendment are extremely fact sensitive. So not only do you have to go through an actual incident, it must also be shown to the court that it is “ripe.” All “ripe” means is that a final determination has been made after exhausting all local appeals and other processes or that waiting for such a determination would be futile.”

For decades courts looked for bright line tests when deciding if some action was a compensable taking by a government actor. The Supreme Court has provided such a test in only two situations. The first is when there is a permanent physical occupation. The second is when there is a denial of all economically viable use,” said Pendleton.

Many of the cases I’m going to mention actually involved manufactured home communities. However, if the case and opinion refer to the community as a “mobile home park” I use that term below. This is not in an effort to be derogatory. Far from it. But I use it to provide consistency with the court opinions being referenced and in some cases to provide the appropriate time stamp in history when a specific case was heard. So please, don’t get offended by the term rather than using community.”

Let’s note that this review the Daily Business News on MHProNews is cutting out some of the analogies that Pendelton provided, and is cutting to the meatier parts of his commentary and legal analysis. Let’s note too that in referring to cases in the Ninth Circuit, while interesting, that is also perhaps the most liberal circuit court in the country.  As a non-attorney, we simply note that it is not unusual for those cases to get overturned if they hit the Supreme Court.

The Ninth Circuit actually took up two cases involving mobile home parks. In one case the court analyzed the owners’ claim as one of a taking by physical occupation when a city ordinance required the owner to offer tenant leases of unlimited duration. The court compared the case to the Supreme Court cable stringing case because the ordinance transferred the right to occupy in perpetuity to the tenants and the tenants could transfer the right without the landlord’s approval. The court said that the landowner loses forever the aspect of ownership that is the right to control wholly who will occupy his property and on what terms, while giving the tenants’ rights they can later sell when they leave the property.

In the other mobile home park case heard by the Ninth Circuit, the court held that rent control ordinances were not a physical taking.”

But… “The court reasoned this case was different from the Ninth Circuit ruling because the landowner could choose to no longer rent the land and change the use, therefore nothing permanent had been taken. The court said this was not a physical taking, but did say that while not a physical taking it could have been analyzed as a regulatory taking. However, since the alternate issue of a regulatory taking was not brought up prior the court did not provide an opinion as to a regulatory taking and only ruled that it was not a physical taking.”

Pendelton then says that “…many state constitutions have provisions against improper takings that can result in stricter interpretations by state courts. The Supreme Court of Washington invalidated a state law requiring a right of first refusal be granted to tenants of a manufactured home community because the court concluded the law was a compensatory taking based on the state’s constitution. Texas also has taking provisions in our state bill of rights in Article 1, Section 17.”

The TMHA state executive director sums it up like this: “Takeaway – When government action deprives an owner the power to exclude others from his/her own property, a taking may have occurred.”

A clearer path, per Pendleton is if there was a denial of all economically beneficial use.” The Supreme Court in 1992 held that denial of all economic use outweighed and therefore trumped the government’s goal to substantially advance a legitimate state interest.”

He then explained that “…The government denial must be for all economic use. Not merely some denial of economic use and not even for denial of the best economic use. To illustrate this rather steep threshold, the Third Circuit in 1987 held that a per se compensable taking had not occurred when a city rezoned a portion of a landowner’s property from industrial to agricultural because of community opposition to an industrial development project. The landowner alleged that the rezoning dropped the value in his property from $495,600 to only $52,000 (an 89.5 percent decrease in value), but the court held no taking had occurred under this theory because the land still had some value and was viable for “residual economically feasible use.” Essentially the property owner must prove loss of all reasonable use.”

The colorful Pendleton tried to liven up the dryness of the law by laying out the following.

Lower courts have held when governments downzone or revoke permits blocking continued development of previously approved projects that a taking has occurred when the effect is a reversal of prior approved reasonable economic use of the property. Texas actually has a specific state law related to prior approved projects and the grandfathering of that approval despite subsequent local changes so long as certain conditions are met.

For some manufactured home community owners the denial of prior approved projects may be the only viable option to meet the high burden under a denial of all economic use theory. In fact, in 1989 a Michigan appellate court held that a taking had occurred when a city rezoned to block the expansion of a mobile home park by changing zoning and imposing large two and a half acre minimum lot-size requirements that precluded development. The rezoning of the land for agriculture purposes was proven by the landowner that no viable agricultural uses were capable of surviving on the rezoned property.

Courts will look to the existing use of property to determine reasonable use and if government interference with the owner’s expectations has occurred.”

That point is logically pertinent in the Bryan, TX scenario, but keep in mind that this article was written in 2016, 3 years before the current case.

Also, worth noting is the Supreme Court has held that both personal property as well as real property are covered by the Takings Clause,” per the TMHA article.

The legal review then lays out a third path that he says is a more difficult legal test.

The Supreme Court established in 1978 and confirmed again in 2005 that a three part test in Penn Central Transportation Co. v. City of New York is to be used to decide if a regulatory (not a per se) taking has occurred:

The character of the government action in question;

The economic impact of the regulation on the landowner; and

The extent to which the regulation has interfered with distinct investment-back expectations...”

 

Pendleton’s Summing Up

To summarize, in order to challenge a government action it should be based on specific facts that as specifically applied have had a real, not theoretical, adverse impact. All efforts locally to resolve the conflict must be exhausted. Then if a property owner can prove the action fit within one of the two per se takings claims, either a physical occupation or denial of all reasonable use, the property owner can prevail. However, if there is only an impairment of use having some negative, but less than total, loss of value the owner must run through the three part test looking at the character of the action, severity of economic impact, and the investment expectations. Case history proves that prevailing on this three-part test for the property owner is far from easy.

I will also point out that a takings cause of action is not the only argument a property owner might have when faced with government interference with their property. Substantive due process; procedure due process; equal protection; 42 U.S.C. Section 1983 claims; first amendment like political speech, commercial speech, free speech (the one adult entertainment owners are particularly fond of using against regulations), free exercise of religion; the commerce clause; and state constitutions with their own due process and takings causes of action may be used to confront government action.”

Pendleton concludes by saying that it is doable, but not an easy win.

 

Other Options…

A number of other options exist, some of which are available as a download from the previous report, linked below.

The bottom line? MHProNews continues to hear from interested parties in Texas and beyond. Stay tuned, look below the byline, notices, and offers for more.

That’s this tonight’s edition of News through the lens of manufactured homes, and factory-built housing.” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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“Economic Racism.” Angry Residents, Students, Civic Leaders Fight Plan to Ban Affordable Manufactured Homes, Industry Professionals Sound Off

HBO’s John Oliver on Last Week Tonight Mobile Homes Video, Manufactured Home Communities Fact Check

 

HUD Study, Analysis of Zoning Discrimination Against Manufactured Housing Sought

 

 

 

 

 

“Unconstitutional Taking,” “Gentrification on Trial” in Recent Oak Hill Manufactured Home Community Ruling

July 9th, 2018 Comments off

 

UnconstitutionalTakingGentrificationOnTrialRecentOakHillManufacturedHomeCommunityWik8RulingDailyBusinessNewsMHProNews

Easy doesn’t pay well.”

– John Bostick, Sunshine Homes

 

In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.”

– Ronald Reagan, Presidential Inaugural Address, Jan 20,1981.  

 

The Oak Hill Mobile Home Park in Iowa had been in Mark Ogden´s family for four decades before it ran into trouble with city authorities, who tried to have it shut it down, citing zoning violations,” said the Thomson Reuters Foundation to the Daily Business News via a news release dated July 5, 2018. 

The long struggle with city officials began in 2014.

AttorneyJamesENervigBrickGengryPCPhotoOgdenOakHillCommunityCaseManufacturedHOusingIndustryDailyBusinessNewsMHProNewsThat set up a legal battle between Ogden and the city of Des Moines that finally reached the Iowa supreme court, where in March, seven judges unanimously found in his favor.”

This case placed gentrification on trial for the first time,” said Ogden’s attorney James E. Nervig.

The Ogden decision is the first time to my knowledge that an appellate court invalidated a governmental plan to use a sham safety purpose as a means to further gentrification by elimination of an entire neighborhood of unsightly homes,” stated Ogden’s attorney Nervig, per Reuters’  charitable arm, in a column by Carey L. Biron, with editing by Claire Cozens. 

Des Moines city attorney Jeffrey D. Lester expressed disappointment over the ruling,”  stated Biron, “but rejected the charge the city took CareyLBironPhotoThompsonReutersFoundationDailyBusinessNewsMHProNewsaction with the aim of shutting down Oak Hill to make way for new development as “absurd and without any foundation.

 

Illicit War on Private Property, and on Affordable Housing? 

Court documents show the ruling was based on the zoning legalities of the park and did not take broader planning issues in account,” stated Biron.

Nonetheless, Ogden said it had been met with relief from other park1 [sic] owners who feared they could be the next target of city authorities,” read their release, which had a number of regrettably common terminology errors, such as the improper use of the word “trailer.”

TrailerHouseMobileHomeManufacturedHomeFactoryBuiltHousingEvolution101MHProNews-MHLivingNews

Make a habit of using the correct terminology, it matters.

 

He said there were 30 families living on the site when the city first ordered its closure in 2014, all on low incomes and with nowhere else to go in a city with long waiting lists for government-subsidized affordable housing.” 

Mobile homes, or trailers,1 have grown in popularity in the United States in recent years due to a shortage of affordable housing, but have so far received little government support,” stated Biron.

Indeed, the industry accuses authorities of using zoning laws to try to shut down unsightly trailer parks1 to make room for new housing developments – a charge they deny,” Biron wrote.  

OakHillMobileHomeParkMobileHomeManufacturedHomeINdustryDailyBusinessNewsMHProNews

Original photo, Thompson Reuters Foundation. comments from MHProNews.com. To see full size photo, click here.

Brion’s theme, while marked by numerous nomenclature mistakes1, is an important one to manufactured home professionals, and for affordable housing advocates. It echoes several aspects of years of reports by MHLivingNews or MHProNews.

Reprieve in Community Closure Collision, Another Round Ahead?

A possible recent example that could be offered is the case in Schofield, WI, linked above. But there are several variations of this troubling trend.  Others in the industry who are facing such scenarios, in the light of the Ogden ruling, may find some useful insights.  The linked articles can be read later for increased understanding.

Manufactured Home Community Owners Lost Troubling Creekside Appeals Case

They (local authorities) are just trying to get rid of all the old and want all the new,” Ogden’s attorney said.

 

Court Document Downloads 

A download of the court document on this highly charged issue are linked below. It is from court documents that the “unconstitutional taking” quote in the headline is found.

SupremeCourtofIowaCityofDesMoinesIowaAppelleVMarkOgdenAppelantNo.16-1080DecidedMarch162018

Click here or the image above to get the download of the ruling.

Burton’s report weaves three outside groups into the Reuter’s narrative.

  Prosperity Now, citing Doug Ryan,

  ROC USA, naming Paul Bradley, and

  the Manufactured Housing Institute (MHI), with no specified person quoted.

Ryan and Bradley are quoted extensively, but MHI is limited to the following; “The Manufactured Housing Institute (MHI), an industry group, says there is a growing trend of municipalities trying to use zoning and other land use regulations “to restrict or eliminate manufactured housing in their jurisdiction,” wrote Biron.

While MHI is recently making some attempt at influencing the legal battle over such local issues, they have debatably eschewed perhaps their best option.

That possible approach? Consistently arguing the issues with HUD and local jurisdictions, and asking HUD to intervene on the basis of laws such as the enhanced preemption found in the Manufactured Housing Improvement Act of 2000 (MHIA).  

In the recent Washington Post report on HUD, it was revealed that MHI’s Vice President Lesli Gooch admitted that they took no position on having Pam Danner removed as administrator over the manufactured housing program office. That admission by Gooch is a wake-up call for independent retailers and communities nationally, who’ve complained for years about HUDs overreach, as well as their failures to enforce enhanced preemption.  Gooch/MHI and  MHARR quotes by the Washington Post are found in the article linked below.

Greener, Stylish Manufactured Homes – Hidden Facts in the Washington Post Manufactured Housing Narrative

Those issues about home placement and zoning are largely post-production issues, and would normally fall to a trade group. Trade associations would normally be arguing on behalf of their industry members. But as prominent MHI member Frank Rolfe observed, MHI is often silent on issues good or bad for the industry. Why? 

MHI award winner Marty Lavin told MHProNews that they only work on behalf of the “big boy” members.

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

Sam Zell, who’s Equity LifeStyle Properties (ELS) is a giant in the MH community sector, made the common sense observation last year that heavy regulatory burdens leads to consolidations.

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

Larger firms are better able to deal with heavy burdens. That helps explain why Warren Buffet, who is chairman of Berkshire Hathaway, has favored candidates like Barack Obama and Hillary Clinton. President Obama and Secretary Clinton both supported heavy regulatory regimes, that harmed the interests smaller companies, as well as consumers.

The pattern of failing to successfully advance the interests of community owners is precisely why two state level communities associations broke with MHI last year. They are now launching a new national communities post-production association this year.

New Manufactured Home Industry National Association Related Statements

MHARR – the Manufactured Housing Association for Regulatory Reform, which represents the interests of the independent producers of HUD Code manufactured homes – has for years promoted the need for more effective post-production representation.  

MHARR was revealed by the Washington Post as the industry’s unsung hero in having Pam Danner removed at HUD from her role as the administrator of the Office of Manufactured Housing Programs (OMHP).

While on paper both MHI and MHARR supported Vic DeRose for that OMHP administrator role, it was reportedly an MHI staffer that gave Danner the assist at getting her in at OMHP.  

MHI’s own President, Richard “Dick” Jennison made that admission to select industry members about an MHI VP that helped get Danner her role. Some of those sources so informed MHProNews, and which this publication confirmed at that time with Jennison.

But Jennison was told then by the ‘powers that be’ to “stand down,” per Daily Business News sources, from taking any action about that MHI VP who assisted at getting Danner in at HUD.

Why?

Whatever Jennison’s bosses motivations may have been, the net result is that MHI has years of history as posturing one thing, but often tacitly allowing or doing something entirely different. That comes from numerous industry sources, including those who are or were part of MHI, some of whom held division board member roles.

Only 3 Options – the Elephant in the Room

Let’s make the point about MHI simply. 

  • Where are the amicus briefs by MHI in cases like Ogden?  
  • Why is it only after the Daily Business News exposed the fact multiple times that MHI had failed to contact the CFPB after Mick Mulvaney took the helm there, that MHI finally began asking their members a few weeks ago to write for regulatory relief?

CFPB’s Mick Mulvaney Offers Yet Another Gift to MHVille

While Prosperity Now has years of a mixed pro-MH, but often anti-community owners agenda, at least Doug Ryan and their organization are consistent.

ChrisStinebertManufacturedHousingInstituteMHIPresidentCreditTheJournalManufacturedHomeProfessionalNewsMHProNewsMHI’s own prior president, Chris Stinebert used his exiting article to politely take the Arlington, VA based trade group to task for failing to take necessary steps on lending and other key issues. Troubling evidence like this makes it difficult for MHi to deny their own history. 

These are the sorts of ‘inside baseball’ insights that mainstream reports are unlikely to know, absent input from a consistent source, such as MHARR.

Even the steps that MHI has taken in recent months on the communities front have only occurred after years of pressure from communities owners, professionals, including this trade publication. The balance of MHVille’s trade media, while they may present useful insights on specific topics, routinely fail to hold MHI accountable for their repeated patterns of arguably problematic behavior. 

Instead, in just the past two weeks, a long-time industry blogger took MHARR to task for pressing for more post-production efforts. Where’s the logic or consistency in that source, which has waffled for years between praising and condemning MHI?

 

ManufacturedHousingIndustryMonopoly-Oligarchy-GeorgeAllen-PostedDailyBusinessNewsManufacturedHousingIndustryMHProNews-

George Allen, has a modest following today, which once used to be a large following. As a former client of his told MHProNews, with George “It’s AAA, All About Allen.” If someone is doing good, and Allen’s not somehow in the mix, sources say it is not uncommon for Allen to attempt to undermine that source.  Allen has done some noteworthy things, and is an example of why a wheat and chaff  approach is needed by MH industry professionals. In the 3 quotes from his blog shown above, Allen, without mentioning MHARR, is parroting their position, while attacking MHI’s. Allen has privately thanked MHARR, per an email circulated to a few of his followers, and forwarded by one to MHProNews.  But publicly, Allen is said to “play the game” of seeking to undermine MHARR’s important efforts. MHARR is a producer’s trade boy, and thus focuses on protecting their interests from within the industry and from outside parties too. Much of what MHARR does, such as the removal of Danner, benefits the industry at large. The best they can practically do is more of the same, while encouraging the creation of new, post production trade bodies.

Isn’t that calling the kettle black, when Allen and Roane are also defending community owner Tom Lackey, who generated significant negative media for the industry?  Isn’t that especially troubling, when Lackey still sits on the SECO board today, per their website?

Allenites and Roane supporters are quick to say that they’ve both done good things. No doubt. But shouldn’t Allen and Roane clean up their own mess, before he taunts MHARR for de facto doing good for Allen and Roane’s own followers?

Where was Allen and Roane’s amicus briefs in the Ogden case? Don’t they claim to have a quasi-associations?

Talk can be cheap.

George Allen Reply to Mainstream Media re: Roane/Lackey/SECO Exposé, Plus MHI, MHARR, et al – “Make Manufactured Housing Great Again”

In the wake of challenges and scandals, a MHI member leader recently reminded MHProNews of the importance of accurate, vs weaponized reporting and analysis. He did so in a note of thanks. So while some jeers come this way, often from those closely aligned with MHI or Allen, the fact that more thank MHProNews, and read MHProNews than all others combined should speak volumes.

 

The MHC and Industry Takeaways from the Ogden Case?

Ogden exemplifies the truths that the quote at the top from President Ronald Reagan and Sunshine Homes’ John Bostick respectively said.  

Des Moines is but one of hundreds of local jurisdictions that fail to respect and appreciate the value of manufactured homes, and the work that thousands of land-lease communities that provide affordable unsubsidized living for millions of Americans.  

Based upon local reports, Ogden also is a cautionary tale. When a community fails to maintain standards of appearance or safety, it opens itself up to the kinds of actions that Des Moines undertook. That observation doesn’t justify that Iowa city’s posture and tactics, nor that of numerous others like Des Moines have taken from coast to coast.

But it is a practical reminder that savvy standards in a MH community’s “guidelines for living” ought to be prudently established and enforced. That would likely have made Ogden’s travails easier.

The case also reminds us that government at all levels – local, state, and federal – requires routine engagement. When professionals say, they hate politics or economic issues, and they cede the field to others, the outcome is often detrimental to thousands of members of our industry.

The words of President Reagan at the top should be a plaque in every office in America. 

There is an ongoing need for a new, post-production association that supplants what MHI does for small-to-mid-sized operations if or only when pressed, per several of their own past or present members.

Reality checks on the Ogden case could be mined for years of useful, practical lessons. It is no doubt useful for Iowa community owners, but it also provides helpful insights for those in all other states too. “We Provide, You Decide.” © ## (News, analysis, and commentary.)

(Third party images are provided under fair use guidelines.)  Footnote: 1 Terminology error is in the original.

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Publisher and industry consultant, L. A. “Tony” Kovach.

By L.A. “Tony” Kovach – Masthead commentary, for MHProNews.com.

Tony is the multiple award-winning managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

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