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Prosperity Now, Nonprofits Sustain John Oliver’s “Mobile Homes” Video in Their Reports

April 29th, 2019 Comments off

 

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For those among the manufactured housing industry’s professionals, state association, or investment categories who stated a hope that the John Oliver video would blow over soon, guess again.

 

They’re [pro-MHI state execs] all drinking each other’s bath water with no objectivity left, whatsoever,” said a recent news tip to MHProNews included several messages from other association executives to make that source’s point.  That tipster was one of several that raised concerns about fellow state execs who are in their view engaged in wishful thinking, or worse.

Really? Was that quoted statement an accurate claim? Let’s look.

It will be recalled that MHProNews exclusively reported that Wisconsin Housing Alliance (WHA) Executive Director Amy Bliss said to other state executives: “I am very disappointed in two entities that are supposed to be in favor of manufactured housing.  ROC USA and North Country Cooperative both added this John Oliver junk to their facebook page and ROC USA also tweeted it out as if they were sharing good news. This is such an insult to the people that have chosen manufactured housing to live in.  If there were not investor owned communities, they would have no communities to “convert” to resident owned.  Such a shame.”

In so saying, Bliss was undercutting a member of her own association, and that of the Manufactured Housing Institute (MHI) too.  Was she alone? Hardly.

Jay Hamilton, from the Georgia Manufactured Housing Association (GMHA), chimed in with: “I agree with the ones who commented [in that MHEC executives message thread] about opening up a can of worms [i.e.: if a public reply is made to the John Oliver video]. You would be fanning the fire at this point. MHI responding in advance was the best play you could make and its made. My concern is what we can do as an industry to encourage Frank Rolfe to avoid engaging with reporters.”

MHEC is the acronym for the Manufactured Housing Executives Council, which has historically been open to national and state association leaders.  That means that MHI and MHARR can monitor those communications. Given the size and power disparity between MHI and MHARR, it should go without saying that if someone will kiss someone’s behind in a semi-public forum that is monitored, it is the larger trade group that they tend to bow towards, kneel to, or kiss the proverbial ring.  

 

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MHI, MHARR, MHEC logos, are each the property of their respective association, and are shown here under fair use guidelines.

 

That comment from Hamilton at GMHA reflects the point that other executives similarly made about that same John Oliver  “Mobiles Homes” video thread comments.  But this last example, in fairness, is a bit different.

For balance and accuracy, tips to MHProNews revealed that there was one state level executive that openly took a more nuanced view. “No surprise, other [media] outlets have picked up Oliver’s story. This is what my wife just sent me from “The Hustle”” said Logan Hanes, who is the Director of Education and Industry Advancement at the Kentucky Manufactured Housing Institute (KMHI).

For balance and accuracy, tips to MHProNews revealed that there was one state level executive that openly took a more nuanced view. “No surprise, other [media] outlets have picked up Oliver’s story. This is what my wife just sent me from “The Hustle” said Logan Hanes, who is the Director of Education and Industry Advancement at the Kentucky Manufactured Housing Institute (KMHI).  The Hustle was one of several publications that commented on the John Oliver video, in a typically dark view of various aspects of manufactured housing corporate behavior. That article that Logan forwarded used the feature image below.  It ripped Warren Buffett, Frank Rolfe, Clayton Homes by name. The Hustle ended with the following subheading and three short paragraphs. As we commonly do here on MHProNews, we’ll turn the text placed in quotes in bold and brown to make it pop, but the words are otherwise those of writer Wes Schlagenhauf in the Hustle.

 

TheHustleMObileHomeInvestingHotWarreNBuffettHomeownersGetBurnedMHProNews

Shill-ionaire of the people

Clayton stayed profitable through the financial crisis. In 2015, Clayton grabbed a record $700m in earnings, while foreclosing on over 8k homes.

Buffett has long been viewed as a corporate hero. The more he complains about his secretary having to pay higher income tax than he does, the more people view Big B as some rich do-gooder.

But Clayton homes’ manipulative business model, which Buffett immediately saw dollar signs in, contradicts many of the ideas of fairness for which Buffett is known.”

Thus, the comment by KMHI’s Logan was arguably responsible in the sense that it stated reality, without undercutting others not able to respond for themselves, absent the news tips.

Notice: Those being quoted herein, or others who want to defend them, are hereby invited, if they so wish, to submit an on-the-record the statements in response to this report.  Clearly, our quoting these sources is not intended to endorse their comments, but nor is it intended to undermine what good work they may also do or have done. One must separated the ‘wheat and chaff’ from all people, organizations, and things. That said, MHProNews’ editorially can not discern positive value to the industry in many of the comments exchanged by executives in that John Oliver-related MHEC thread.

But there is more to know…see further below.

 

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Who Among the State Executives Were Right On the Oliver Issue?

A short history lesson is timely.  Think back to the Seattle Times report.  First one, then another, in 2018 there was yet another installment on that same theme.  Look at what this Google search this evening revealed.

SeattleTimesCenterforPublicIntegrityClaytonHomesManufacturedHomeMHProNews4292019

 

Tim Williams from 21st Mortgage Corp, ironically, made the right point, in an on-the-record statement made previously to MHProNews.

 

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MHI failed to make a public response to that PBS segment. To date, MHProNews is unaware of an public response by MHI to the John Oliver video either. How will it be different? Despite the MHI whispered shares to state executives or others, does MHI want bad news to linger?  Consider Frank Rolfe’s word’s anew.

 

There are those in various segments of manufactured housing or the affordable housing advocacy world’s who find this Oliver satirical hit video against some of the industry’s giants a useful narrative useful for their purposes.  Agree or disagree, its their right, of course.

That means sober and realistic souls in manufactured housing must be able to respond in timely and effective ways. Verbally tossing ROC USA or Frank Rolfe under the bus accomplishes little in practical terms.

MHProNews and MHLivingNews have already provided several public responses.  While some have moaned and groaned about Oliver’s video, what are those moaners – save the sources of the shared tips – actually doing about it?

Those tips quoted above to MHProNews exposed something that association members at the state and national levels needed to see.

 

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MHProNews could provide screen captures of the other emails, but this demonstrates that Bliss and the others sent what was quoted above in that message exchange with MHEC.

 

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Many of these quotes are from MHI insiders.

Those association executives may take your dues, and while arguably undermining a person’s or firm’s reputation or interests. If they will do it to ROC USA or Rolfe, what is to keep them from doing that to you or your firm?

Furthermore, given the lessons learned from the report “How Gold Rules” what can the MHEC executives do – if they want to keep their jobs – other than give news tips to us?

It is increasingly clear that there are conflicts of interest involved in trying to point out who benefits and who is harmed by the John Oliver “Mobile Homes” video narrative? ICYMI, or need a refresher, the linked text-image box reveals prior tips from state association executives who are tired of how the MHEC system is manipulated, and how it arguably harms the interests of industry independents.

 

 

That said, Prosperity Now this sent out a statement about their most recent promotion of their use of John Oliver’s video narrative. Keep in mind that Prosperity Now has been getting funding from the Consumer Financial Protection Bureau (CFPB) for some years, among others.

Here’s the key part from the Prosperity Now release today, between the dashed — lines.

 

— start of Prosperity Now release quote —

John Oliver Addresses Manufactured Housing

John Oliver, host of Last Week Tonight on HBO, explained why manufactured homeowners need to be able to use resources within their communities to build their own housing parks by citing research from Doug Ryan, Senior Director of Affordable Housing at Prosperity Now. Watch the Full Segment here. Use Prosperity Now’s Manufactured Housing Toolkit to learn how you can spread awareness and advocate for affordable housing in your community.

 

— end of Prosperity Now release quote —

Note that quoting Prosperity Now is
not to be construed as an endorsement of their position.
Reporting or quoting aren’t an endorsement.

 

MHProNew’s publisher, L. A. ‘Tony’ Kovach sent an Op-Ed to an editor who fact-checked his claims, and then not only ran his letter, but did so in 5 markets, not just one.

 

  Jacksonville

  Gainesville

  Sarasota

  Lakeland

  Winter Haven

 

Those were based upon our initial public facing report on MHLivingNews, linked below.

 

 

Where is MHI’s public response?  Or Clayton Homes?  Frank Rolfe, or any of the other firms who have been negatively mentioned?

Agree or not, count on MHAction, Prosperity Now, ROC USA – among others – to keep beating this drum. Those state executives that aren’t caught in the ‘Gold Rules’ trap need to find ways to fight back for their independent members.

SpencerRoanePentagonPropertiesCreditsPostedDailyBusinessNewsResearchDataReportsMHProNewsIronically, it was Spencer Roane who said last week the following. After taking a backhanded ad hominem swipe at our publisher, he then said this: “The Jacksonville newspaper post is about the need for affordable housing.  Hard to argue w/ that.  The only fact-checking appears to be Kovach’s, and that involves MHI membership and Buffet affiliations.  So what?  Other than sharing the interest of many in the industry about overly aggressive community owners/managers, none of this has anything to do w/ me.”

Roane is reportedly a regular reader, but publicly with his circle, he is not a fan of MHProNews, per sources. That said, it is hard to argue with that Roane and others in the community sector are vexed by “overly aggressive community owners/managers” – which he then distances himself from. While he dismissively says, “So what?” he makes it clear that the “only fact-checking appears to be Kovach’s, and that involves MHI membership and Buffet affiliations.” Call it what it is, a back-handed compliment.

But Roane missed perhaps the most important point.  It is Warren Buffet who via dark money channels has provided funding via the NoVo Foundation and Tides nonprofits to MHAction.

 

After years of fact-checks on irksome issues, MHProNews and MHLivingNews are uniquely positioned to do a useful response and analysis.

In this Oliver video case, it is demonstrably MHI backers who’ve sparked the bad news.  Roane is correct that this is an issue for independent community owners. But it is a key MHI backer – Warren Buffett – who have purportedly helped fund MHAction.

 

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Building that case, one fact after another. Follow the money trail. Ask who benefits? Cui Bono?

Now, MHAction with Prosperity Now and others are fanning the flames of their attacks on manufactured housing’s image – and thus, manufactured housing independents, including Roane and others like him. What will the National Association of Manufactured Housing Community Owners (NAMHCO) or others publicly do in response?

 

CenterForPublicIntegrityFundingTidesFoundationDailyBusinessNewsMHProNews

Ironically, it was Tim Williams at 21st Mortgage who obliquely provided this news tip to MHProNews a while back. CPI teamed up with the Seattle Times to do the original ‘hit’ on Clayton Homes. So there is a pattern that is arguably emerging. Buffett bucks goes to sources such as CPI or MHAction, at times via dark money channels.  Those nonprofits like CPI or MHAction in turn attack ‘black hat’ practices that may indeed include Buffett’s own brands, but  it is done in a way that makes the industry-at-large look like black hats to those who don’t go beyond the surface.  

NovoFoundationWarrenBuffettTidesFoundationFundsMHActionManufacturedHousingIndustryDailyBusinessNewsMHProNews

Similar conclusion to Influence Watch, but this graphic is from Cory Morningstar. Open Secrets makes the point that it is difficult to trace these kinds of contributions, which may explain the disparity between the totals shown.

DarkMoneyBasicsWikipediaOpenSecretsManufacturedHousingIndustryDailyBusinessNewsMHProNews

  • MHI’s leadership has been asked to respond to these allegations previously.  Silence.
  • MHI’s outside attorney has been asked to respond to these documented points, he too is silent.
  • Clayton and 21st, the same ‘nada’ responses.

That silence speaks volumes.

 

Part of a Pattern?

Then consider this in the following context.  This pattern is akin to tax and regulatory barriers, bigger firms can handle those better, per researchers.  Buffett can back whomever he wants to politically.  But what do you call it when Buffett’s backed POTUS Barack Obama – who in turn backed Dodd-Frank and the CFPB. Meanwhile MHI, Clayton and 21st claimed to be working to change a law that POTUS Obama said would be vetoed?

That truth about years wasted pursuing Preserving Access was hiding in plain sight.

 

Aren’t the effects similar?  Can you spell, MHI and Berkshire-brands head-fakes? Say one thing, and do another?

FollowThe MoneyPayMoreAttentionToWhatPeopleDothanwhatTheySaySpySea72MartyLavinYachtManufacturedHousingINdustryProMHProNews

Ask yourself. Do these Marty Lavin dictums apply in this case?

 

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Notice. One can agree with 21st Mortgage CEO and prior MHI Chairman Tim Williams’ presentation, from which the slide above was taken with permission, while still questioning how it came to be that Williams was being intellectually at odds with Berkshire Hathaway Chairman, Warren Buffett. To see all of William’s informative slides, click the graphic above. http://www.MHProNews.com/industry-news/industry-in-focus/is-tim-williams-21st-mortgage-ceo-mhi-chair-at-odds-with-berkshire-hathaway-chairman-warren-buffett

WarrenBuffettMedalofFreedomAwardfromBarackObama2010-UPI-DailyBusinessNewsMHProNews525

Oh, what a tangled web we weave, when first we practice to deceived.” –  Sir Walter Scott.

 

Are the head-fakes and patterns of deceptions becoming more clear?  Do they fit Buffett’s castle and moat metaphor?

 

UnderstandingWarrenBuffettCastleMoatMetaphorsQuotesDailyBusinessNewsMHProNews

Never forget that even during medieval times, castles and their moats were in fact breached.

 

Meanwhile, consolidation in MHVille continues…

 

The Lesson Learned?

At a minimum, more MHI affiliated association executives need to join the Omaha-Knoxville-Arlington resistance,” observed MHProNews publisher, L. A. ‘Tony’ Kovach. “For those that can, why not consider doing what Neal Haney helped lead some associations out of MHI in the last two years?”

NealTHaneyNAMHCOWhyBreakawayfromManfuacturedHousingInstituteMHI

Once the rules of engagement and methods used are better understood, then one can often predict what will follow. 

It isn’t just deception in ‘fighting’ regulations, or evidence of Buffett’s bucks fomenting bad news in MHVille.  It is purportedly also evidenced by diverting lower-cost financing away from retailers and communities too.

MarkWeissDTSQuoteManufacturedHousingAssocRegulatoryReformMHARRDailyBusinessNewsMHproNews

Your thoughts? See the related reports, further below.

That’s 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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Related Reports:

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In a series of direct quotes in context, a document from 21st Mortgage signed by Tim Williams, and video recorded comments by Kevin Clayton, these all line up to demonstrate how independent retailers, communities, and producers – among others – where purportedly harmed by action that could be deemed an antitrust violation. Why hasn’t Allen told his readers how that cost them money?

Mobile Home Militia – “Clayton [Homes] Wants Your Cornbread Too” “Join the Revolution” – ‘You Gotta Have Swagger’

Warren Buffett’s Moat, Understanding Manufactured Housing Requires Grasping Strategic Economic Moats

MHARR Calls on New Fannie Mae CEO Hugh Frater to Fully and Properly Implement Federal Law

“Lead, Follow … Or Get Out of The Way”

 

“The Illusion of Motion Versus Real-World Challenges”

 

 

 

 

 

 

Peer Alleges State Execs Crossed Line, “Kissing Ass” Clayton Homes, Manufactured Housing Institute, Back-Stabbed MHI Member Reacts

April 15th, 2019 Comments off

 

AmyBlissWiscHousingAllianceWHAStateExecCrossLineKissingAssClaytonHomesManufacturedHousingInstituteMHImemberReactsMHProNews

Off the record, but these [other] state associations [in this email thread] have crossed the line with their blind loyalty and kiss a — to Clayton [Homes] and MHI. This is not healthy for the industry well-being and [the] future of the industry,” said one of several news tips received by MHProNews last week.

 

That comment was tied to the embarrassing-for-the-Manufactured Housing Institute (MHI) and Clayton Homes viral video on Last Week Tonight with John Oliver entitled, “Mobile Homes.” MHLivingNews did a fact-check that posted said video and unpacked it’s points, hits and misses, in a report linked below.

 

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

 

That fact-check on MHLivingNews landed on page 1 of Google early Sunday morning.  That’s relevant, but first the evidence of that factoid.

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More of that email-thread between various state association executives may or may not be reported in the days ahead.   But for this report, we’ll focus on a specific comment about a multi-year Manufactured Housing Institute (MHI) member by an MHI affiliated state association executive.

That executive?

Amy Bliss, of the Wisconsin Housing Alliance (WHA).

It should be noted that, per sources, MHI monitors those electronic transmissions among the MHEC execs, which is open to most industry trade association staff leaders.  So that ‘monitoring’ by MHI – which sources say are periodically forwarded to Executive Committee members that include Berkshire Hathaway brands – may in various ways influence comments like the one that follows.

It would be somewhat akin to mom and dad monitoring their teenagers’ emails.  Or more to the point, a stern boss overseeing all the messages his staff sent via email.

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Wheat and chaff, fairness, with all people, organizations, and things. Bliss was instrumental in the work of starting and operating the Tomorrow’s Home Foundation, learn more at this link here. That said, what follows isn’t the only questionable behavior by Bliss. See the link here for a recent example.

Here’s what Bliss said, following the screen capture of the email, with her photo added to the top left of her words as an illustration that was not in her original message.  As is the custom here on MHProNews, we’ve turned her direct quote into bold and brown text so it pops.

 

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Photo provided under fair use guidelines for media.

From: Amy Bliss
Date: Wednesday, April 10, 2019
Subject: RE: [mhexecs] FW: How Private Investors Are Threatening the Fate of Manufactured Housing

I am very disappointed in two entities that are supposed to be in favor of manufactured housing.  ROC USA and North Country Cooperative both added this John Oliver junk to their facebook page and ROC USA also tweeted it out as if they were sharing good news. This is such an insult to the people that have chosen manufactured housing to live in.  If there were not investor owned communities, they would have no communities to “convert” to resident owned.  Such a shame.

 

Amy Bliss, CAE
Executive Director,
WI Housing Alliance and WI Recreational Vehicle Dealers Alliance

If indeed comments like Bliss’ are monitored by MHI, then why didn’t the Arlington, VA based trade group come to the defense of a member being tagged by Bliss in such a manner?  Normally, an association member would never know – and thus would never have had a chance to respond to on behalf of the themselves and/or the organization being disparaged.  What does this incident say about not just Bliss, but MHI, or some others in MHEC?

Agree or disagree with ROC USA on this or that, but they have first amendment rights – even if Bliss doesn’t care for that protected speech.  MHProNews, once that and other messages were provided by multiple parties, asked for comments from both Bliss and Paul Bradley, ROC USA President.

Bradley replied as follows, his photo is likewise added for illustration purposes, and as with Bliss, we turned his statement to MHProNews and Bliss bold and brown for clarity and emphasis, but his words are unedited.

paulbradleycredtimhpronewsstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnews

Award winning, Paul Bradley, President, ROC USA.

Hello Tony and Amy,

I am happy to talk directly anytime, Amy, but will respond at this late hour to the two of you here.    

First, it probably goes without saying that I have no control over the independent press or a satirist like John Oliver.  However, as Tony knows, I am always quick to point out that there are many good operators in the business. 

John Oliver focused on the onslaught of aggressive new money in the sector.  The examples of rent hikes cited were alarming and atypical but also real.  I know one of the examples well.  (In fact, I referred that one to Rick Robinson at MHI to handle when Time Magazine called recently.) 

Oliver was making a point about the fate of residents in communities that experience significant rent increases and, as any good debater would, chose stories that best illustrated that point.

He pointed to resident ownership as a way to mitigate such increases by removing MHCs from the speculative real estate market, and we agree that it is.  This was hardly an attack on the homeowners who suffered these hardships — that’s something we would never condone. 

In terms of our sharing it, I am not going to miss an opportunity share the ROC USA story with our followers when we appear on national TV.  I certainly understand the piece is embarrassing to some operators who subscribe to a certain school of thought when it comes to homeowners and MHC ownership. 

I know the three of us actually care about the homeowner experience for both business and basic humanity reasons, and many others do, too.  I believe we all wish it was universal. 

Thank you.  Happy to talk anytime.  Paul

Given several days to respond to Bradley or MHProNews, Bliss said nada in the way of a follow up to this publication. If she did so privately to Bradley, he has not so indicated. From an editorial perspective, Bradley’s reply above – especially give the circumstances – could fairly be described as ‘classy.’

 

Part of a Pattern?

By contrast, Bliss – per sources in the George F. (F?) Allen camp – has supposedly called for a “boycott” of this site last year that Bliss concurred with.  When asked about that claim by MHProNews, Bliss neither confirmed nor denied that allegation lodged by members of Allen’s following.  The reason that is relevant will be made clear.

It is this.  One is left with an impression of Bliss as someone that – at least among her state association peers – wants only the MHI party line.  That’s what seemingly sparked the tips – outrage – like the one comment noted at the top. That comment was not the only one…

That apparent desire for only the MHI party line by Bliss is seemingly true even with respect to another MHI member – i.e. Bradley/ROC USA.  A source with knowledge indicated that ROC USA is a member of the WHA – led by Bliss – not just MHI.

If so, Bliss arguably ‘back stabbed’ a dues paying member of her WHA trade group and a dues payer to MHI.  How does that impact that member’s business interests?  Why did none of the MHEC Execs openly chide her for that in that email thread?  Why did some feel the need to send that and other messages to MHProNews to expose what some other execs are doing to one or more dues paying members?

Because there was another dues paying member of MHI that was likewise mentioned between the state execs.

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Apology or…?

Given the influence that state association executives have with numbers of people in this industry, will Bliss step up and at a minimum, publicly apologize?  If not, what remedial steps should be taken?

Or what about the group messages – which are supposed to be used by the MHExecs to discuss issues faced by members, such as zoning, legal, or legislative issues.  That list’s use presumably ought not include slamming members of the industry’s trade groups by those they pay dues too.

 

FactsFoulPlayFearFreedomWarrenBuffettBerkshireHathawayClaytonHomesManufacturedHousingInstiutute#MHIUpdateMHProNews

It must not be thought that just because Warren Buffett happens to be a staunch Democrat, that all other Democrats are like him. Or because Clayton Homes and their Berkshire Hathaway lending affiliates has purportedly done dark deeds, that everyone that works there are the same. There is good, bad, and meh in all people, organizations, associations, etc. One must fairly discern ‘wheat and chaff’ – what’s good and not – in individuals, people, and organizations. Each of us has been tempted to do good, evil, or nothing while evil occurred. There is a path for successful, profitable, honorable resistance.   Watch for an upcoming special report – Facts, Foul Play, Fear, and Freedom.

 

Even More Important?

Perhaps as or more important, what has Bliss, other execs, MHI, or others done to respond in a constructive way to the John Oliver video on “Mobile Homes?”  That HBO/Oliver video, when properly understood, disparages specific larger MHI members.  Has Bliss taken any of them to task, given it was logically their purported behavior that fueled Oliver’s sharp satirical commentary?  ROC USA might benefit from Oliver’s video, but they are not the focus of HBO’s sharp satirical attack.

If any state execs took MHI to task in a public way, that has not yet been provided to MHProNews.  That said, several are disgusted enough to share with MHProNews what was shared.

  • Time will tell if Bliss has the chutzpah to stand up to the powers-that-be in a manner even modestly analogous to what she did with ROC USA and North Country.
  • The industry will also see if Bliss – or any state exec – asks the powers-that-be to behave in ways that might avoid such harmful and embarrassing mainstream media commentary, satirical or otherwise.

Finally, as the articles linked below the byline make clear, Warren Buffett’s ‘follow the money-trail’ leads one to a reasonable conclusion that he has helped fund MHAction through ‘dark money’ channels. Will Bliss and her state association colleagues hold Buffett, the Berkshire brands, and others accountable for business practices that harm the image of an already struggling industry?

2019-04-01_1358December2019ManufacturedHousingIndustryShipmentsDailyBusinessNewsMHProNews600

It isn’t just the MMHF states. 7 of the top 10 states in manufactured housing shipments are reporting declines. At what point will MHI – the self proclaimed representative of “all segments of factory-built housing” actually do something useful to reverse this troubling trend? Or will they reveal by inaction that they are allowing it, perhaps with the goal of causing more independents to sell out to big boys, or close shop?

 

Other reports that correct the record, debunk, and/or jujitsu key concerns on that issue are linked from the report below the byline and notices. That’s manufactured home “Industry News, Tips, and Views Pros Can Use.” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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To report a news tip, click the image above or send an email to iReportMHNewsTips@mhmsm.com – To help us spot your message in our volume of email, please put the words NEWS TIP in the subject line.

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MHARR Calls on New Fannie Mae CEO Hugh Frater to Fully and Properly Implement Federal Law

 

 

 

 

 

 

 

 

 

 

 

 

Manufactured Housing Institute’s Monthly Economic Report Spotlights Challenge, What MHI, WHA’s Amy Bliss Said

March 18th, 2019 Comments off

 

ManufacturedHousingInstituteLogoMonthlyEconomicReportJan2019DataMarch2019ReportWisconsinHousingAllianceWHAAmyBlissPhotoDailyBusinessNewsMHProNews

The Manufactured Housing Institute (MHI) released its monthly economic report.  It will be recalled that the Manufactured Housing Association for Regulatory Reform (MHARR) published their similar data about 2 weeks ago, and that MHARR previously raised concerns about the causes and trajectory of declines new HUD Code manufactured home shipments starting with production reports in last months of 2018.

 

Let’s begin with what the Arlington, VA based MHI said.  MHI bills itself as representing “all segments of factory-built housing” – meaning production and post-production issues. Most of the key issues that face the industry today are arguably in the post-production realm. So, that is the lens we often scrutinize their performance through, because it is their own claim.

Here below is the meat of MHI’s March economic report.

 

ManufacturedHousingInstituteMonthlyEconomicReportLogoDailyBusinessNewsMHproNews600

7,493 New HUD Code Homes Shipped in January [2019]

In January 2019, new manufactured home shipments decreased 13.3% to 7,493 homes as compared to the 8,646 homes shipped in January 2018. Total shipments for January 2019 were 1,509 homes more than the prior month of December. Compared with January 2018, the trend is mixed with shipments of single-section homes down by 28.4% and multi-section homes up by 5.4%. Total floors shipped in January 2019 decreased 7.7% to 11,607 compared to January 2018.

Of the 7,493 homes shipped in January, there were only 25 homes designated as FEMA units shipped which is significantly less than the 850 FEMA units in January 2018.

The seasonally adjusted annual rate (SAAR) of shipments was 88,461 in January, up 4.1% from the adjusted rate of 85,008 in December 2018. The SAAR corrects for normal seasonal variations and projects annual shipments based on the current monthly total.

In January, 134 plants representing 35 corporations reported production data which is an increase of one active plant and the same number of corporations compared to December 2018.

##

 

Note that nowhere does this report reflect any concern, analysis or solutions to the problem of shirking shipments during a well-publicized U.S. affordable housing crisis.

MHProNews waited a few days to see if MHI would before or after this economic report explain their plan to address the troubling data in their own report.

While there are hints of reasons why ‘future growth’ could be found in their new consumer research, they fail to explain why that research is hidden behind a member-only login. Why would a post-production trade group – which normally publishes for all the world to see research that is claimed at being positive – is instead hidden.

 

MHIlogoNewsUpdates362019DailyBusinessNewsMHProNews

 

Isn’t that contradicted by MHI’s own data?

Furthermore, the research and results of the PBS and prior MHI Chairman Tim Williams’ own statement, along with other MHI published members statements, all point to a need to address the root causes of manufactured housing’s malaise.

Prior MHI Chairman Nathan Smith admitted on camera that the national association had often failed to be proactive. He pledged to members on camera that his goal was to change that dynamic.  Now, years later, how did that pledge work out for the industry?

 

 

But what has been working out for Nathan and his peers is the consolidation of the industry into ever fewer hands.  Coincidence?

 

Tim Williams PBS

Besides MHI itself, none of their more prominent surrogates offer any reasonable explanation or plan either.

Take the example of Amy Bliss – who is allegedly connected with part-time MHI surrogate George F. (F?) Allen’s call for a boycott.  Bliss previously made a public claim which an attorney with antitrust insights said could constitute tying, which like a boycott, is another antitrust flag.

Bliss, the Executive Director the Wisconsin Housing Alliance (WHA), told Kurt Kelley’s MHR last month the following.

 

MHR Q) What’s the biggest challenge to acting as the leader of the Wisconsin Housing Alliance?

WHA’s Bliss-A)

For me, the blatant hypocrisy of Federal, State and local governments. They all talk about wanting affordable housing and workforce housing, but when it comes down to it, they exclude manufactured homes at every turn. They feel the only acceptable form of affordable housing should be apartments. It frustrates me that most of the grant funding always excludes land lease community residents and they are the people that often need the help the most.”

 

What her comments fail to mention is that the role of any post-production trade group, WHA’s or MHI, is precisely to address such concerns. What’s the goal of hand-wringing over ‘hypocrisy’ by public officials?  Is the looking for an amen?  Instead, why aren’t they routinely using the ‘enhanced preemption’ argument in public and with public officials? Why is MHI instead hiding it on their own website?

 

C:\Users\L. A. Tony Kovach\Downloads\ManufacturedHousingInstituteLogo2019-01-09_1250ManufacturedHousingEnhancedPreemptionSearchMHProNews3.png

A recent check revealed the same result.

 

Bliss contradicts herself, as the next two Q&A’s reveal. She also signals what she – as a reportedly periodic receiver of selected MHI insider insights – may have been told what to expect. Keep in mind that the major companies all know their production levels soon after the end of each month.  With the production of the Big 3 accounting for about 80 percent of all manufactured homes, MHI could easily know weeks before others what the data is going to look like before HUD Reports it.

With that factoid in mind, let’s look at what Bliss also.

 

MHR-Q) Can you tell us a few pressing issues facing manufactured housing in Wisconsin?

WHA’s Bliss-A) “The industry in Wisconsin is doing well. The most pressing issues I hear from my members is lack of installers and transporters, municipalities increasing fees or eliminating services for community owners and of course the number one issue is lack of financing. Another item of concern is older communities that have not been managed well. The biggest reason for community closures is because the municipality revokes the license to operate because the owner has let the community go into a state of disrepair. I hate to see Wisconsin lose sites and it is extremely sad for the tenants.”

 

Within Bliss’ answer above is already an implied string of contradictions to her claim that the “industry…is doing well.” The industry in her state and others are wildly underperforming.  Her predecessor – Ross Kinzler – was so alarmed, that he created this graphic before he left the role to Bliss. The facts summarized below blows away Bliss’ ‘sunshine and roses’ claim that all is so well in the industry. It isn’t.

 

average-shipment-per-decade-manufactured-home-posted-on-mhpronews-com-d

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

 

The next question further contradicts her claim that the ‘industry is doing well.’  This reply by Bliss to MHR is another stark alarm for manufactured housing industry professionals.

 

MHR- Q) What industry and association concerns wake you up at night?

 

AmyBlissWisconsinHousingAlliancePhoto

Photo provided under fair use guidelines for media.

Bliss-A) “I worry about another downturn in the industry. We lost a tremendous number of retailers and we had to live off our reserves for several years. That was not a fun time for anyone in the industry and I would hate to see that happen again. I am fully aware that the housing industry in general has cycles, but I hope it never goes that low again. Wisconsin lost a manufacturer that had been in business for over 50 years.”

Once more, this begs several follow up questions that MHR never asked, or at least, never published. For example:

Where is the reaction by Bliss or MHI to the document, quotes, and video linked below that constitute an ostensible ‘smoking gun’ of artificial market rigging, a restraint of trade that could be construed as a violation of federal law. Silence.

Where is the reaction by Bliss, or voices from Arlington and Knoxville, to claims by state association executives that they were strong-armed by 21st and Tim Williams? There has been off the record confirmation of those concerns, but no one is willing to speak out on the record.

Why not?  In a phrase, fear for their job.

That fear is another potential Hobbs Act issues, see that linked report.

 

 

The Bottom Line?

Talk radio king Rush Limbaugh expressed his belief on the radio today that “…most limitations are self-imposed…”

That may be true for some as a factor in manufactured housing’s stunted performance.   There are some voices that say there is significant upside for the industry.  But MHI is largely silent on that potential. Why?

 

Investors, Professionals, Planners, Advocates – Examining Affordable Manufactured Home Industry Market Potential

But in our much-needed part of the affordable housing industry, manufactured home professionals have time and again expressed fear of stepping out or speaking out.  Those fears arguably fall into the definitions that can spark potential federal or state criminal, administrative, or civil actions. The reason for that fear is based upon passed actions that have become ever more widely known.

There are several reported and known investigations underway.  But one of the ways that could be accelerated is by more people speaking out, not by more people being intimidated into silence.

LATonyKovachHenryFordQuotes

Rollohome, like the firm that Amy Bliss mentioned in the quote above, was a Wisconsin based builder. Other builders of HUD Code and modular homes have vanished from Bliss’ state. How many more companies must unnecessarily vanish during an affordable housing crisis? Where is the discussion by Bliss or MHI on the impact of market manipulation on current MH owners and potential consumers?

 

The law and facts are debatably on the side of those who are beginning to coalesce in the post-production side, just as MHARR previously did on the production side. There will be more on these themes in the days ahead.

That is tonight’s “News Through the Lens of Manufactured Homes and Factory-Built Housing” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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Canadian-Owned U.S. “Mobile Home Park” Condemned, Residents Must Scramble to Meet Deadline to Vacate

March 5th, 2019 Comments off

 

CanadianOwnedUSMobileHomeParkCondemnedResidentsMustScrambletoMeetDeadlineToVacateWLNS-MI-DailyBusinessNewsMHProNews

This troubling story out of the northern U.S. is one that periodically crops up in state-after-state.  As Amy Bliss, the Wisconsin Housing Alliance (WHA) state association executive director recently said to MHReview (MHR),  “The biggest reason for community closures is because the municipality revokes the license to operate because the owner has let the community go into a state of disrepair. I hate to see Wisconsin lose sites and it is extremely sad for the tenants.”

 

This specific planned closure of a condemned community is in the state of Michigan. The reasons cited by officials include a state of disrepair that the residents at this community can no longer successfully address, because of what local media says is an ‘absentee’ owner in Canada.

Per WLNS, in Jackson County, Michigan, “Several families in a Jackson mobile home park will be forced to leave on March 13th because of unfit and dangerous living conditions.”

The issues of alleged bad management and poor maintenance at the Fisher Mobile Home Park date back for a year.

Don Hayduk, Division Director for Environmental Health, Hayduck said he knows condemning the property isn’t convenient for the residents.  But that official says he believes that resident safety has to come first.

I like it here, and…I don’t want to move,” says Ginger, a current resident at Fisher says in the video posted produced by WLNS.I hate change.”

It seems likely that the costs of living are low, which is something for cash-strapped residents to like.

 

 

But moving is exactly what Ginger and other remaining residents at the community will have to do in about 8 days, if they hold to the order. Fisher Mobile Home Park was condemned by the Health Department for several reasons, dating back for more than a year.

Hayduk said absentee management is a factor.

There is no onsite management and hasn’t been for quite some time,” Hayduk says. “They don’t have a certified water operator, as per Michigan requirements, as well as the park is unlicensed at this point.”

It should be noted that in this instance, based upon the visual evidence from the video, the community appears to be comprised mostly – or perhaps entirely – of pre-HUD Code mobile homes. If so, it is indeed a “mobile home park.”

 

TrailerHouseMobileHomeManufacturedHomeFactoryBuiltHousingEvolution101MHProNews-MHLivingNews

You must meet people where they are. Terminology must be taught and caught. Make a habit of using the correct terminology.

 

Remaining residents have been trying to handle problems themselves, but can’t.

It is beyond their capability,” Hayduk stated. “And I give them all the credit in the world, the residents. They are trying their best to live there, to create an environment that is acceptable for them. But it’s gotten to the point where it’s not sustainable.”

According to WLNS, different Michigan agencies have tried contacting the property owner, who they say lives in Canada. The video report indicated that there has been no response.

A case worker was assigned by public officials to the Fisher MHP to help those remaining families and households find new places to live once time runs out.

 

Not Just MH Communities, but Manufactured Home Industry Impacts?

It is one more headache for residents, and one more black eye for the industry. Community closures are all too commonplace.  How they are handled – or mishandled – is an ongoing issue for community operators, and the industry at large, since about 1/3 of all new manufactured homes are installed in a land-lease community, per the Manufactured Housing Institute (MHI).

It must be considered as part of the puzzle of items that contribute to shirking new home sales at the very time that affordable housing is most needed.  You can access the related report below, and others that follow the byline, by clicking on the linked text-image box.

 

As Affordable Housing Crisis Rages, New HUD Code Manufactured Housing Shipments Fall, Some States Drop 35-40 Percent

 

The Google search result shown below are from this morning.  The comments on that graphic are integral to the understanding of this issue, and how it impacts the industry at large.

 

MobileHomeparkRedevelopmentClosureGoogleSearch2019-03-05_0816DailyBusinessNewsMHProNews600

 

One might wonder what is next for this Jackson County, MI location?  Will it be redeveloped?  Is the city doing the work of eviction for an absentee owner who wanted to see the property closed in as inexpensive a way as possible?

The Daily Business News on MHProNews will strive to monitor this matter, and others like it.  See the related reports below the byline, notices, and business development opportunities for industry commentary on this and similar issues.

 

MartyLavinJDFormerCommunityOwnerMHIAwardWinner-NotEnoughHunger-IndustryVoicesMHProNews-500x365

Marty Lavin, JD, was a long time community owner, before selling the properties, in at least one case, into resident ownership. He is an MHI award winner, did work for many years in retail and lending.  He is also a part-time industry critic, who may aim sharp words to stir the desire for positive changes.

 

Comments are encouraged on this topic.

 

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

 

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HUD, Urban Institute Webcast on Housing Vouchers Thursday Sept 20th – Manufactured Housing Opportunities?

September 19th, 2018 Comments off

 HUDlogoUrbanInstituteLogoWebcastHousingVouchersThursdaySept20thManufacturedHousingOpportunitiesDailyBUsinessNewsMHProNews

On July 29, 2016, the Housing Opportunity through Modernization Act of 2016, (H.R. 3700) was signed into law,” with Wisconsin Housing Alliance (WHA) reminds readers. “This gives the more than 2 million families that have a HUD Section 8 voucher the added flexibility of using the voucher to pay for the full annual cost of purchasing a manufactured home.”

 

It’s a move that many supported, inside and outside of the manufactured housing industry.  But so far, there’s been little appreciable change that can be specifically pin-pointed to this new law, as the HUD Code manufactured housing shipment chart below reflects.

ManufacturedHomeMHShipments1990-2017DailybusinessNewsManufacturedHousingMHProNews

There are plenty of opportunities in manufactured housing, one of them being this HUD Voucher program, at least on paper. But as the shipment diagram above reflects, since the program was passed, there is no appreciable change that can be pin-pointed to this program. It remains to be seen if the Thursday webcast will address this issue, which if properly implemented in a fair and balanced fashion, could be good for HUD, consumers, and the manufactured home industry.

The law also makes it possible to use housing vouchers for site fees in manufactured home land lease communities. See a document from HUD on that topic, linked here as a download.

HUD Secretary Ben Carson, M.D., and the Urban Institute did research aimed to increase the impact of those housing vouchers.  A webcast will be held tomorrow, see the details per the HUD news release to MHProNews.

After the release HUD release below will be some closing points, and related report links.

 

HUDGovPressNewsMediaDailyBusinessNewsMHPronEws

THURSDAY, SEPTEMBER 20, 2018

2:00 – 4:00 P.M. EDT

 

HUD AND URBAN INSTITUTE TO PRESENT STUDY ON LANDLORD ACCEPTANCE OF HOUSING VOUCHERS

Secretary Carson launches major landlord outreach campaign

At 2 p.m. EDT on Thursday, September 20th, the U.S. Department of Housing and Urban Development (HUD) and the Urban Institute will present the findings of a new study examining landlord treatment of renters participating in the nation’s largest housing subsidy program, the Housing Choice Voucher Program. HUD’s Pilot Study of Landlord Acceptance in the Housing Choice Voucher Program examines landlord acceptance of housing vouchers in five cities:  Philadelphia; Los Angeles; Fort Worth; Newark, New Jersey; and Washington, DC.

HUD Secretary Ben Carson recently formed a Department-wide Landlord Task Force and is launching a nationwide outreach campaign to hear directly from landlords and property managers.  Scheduled listening forums are intended to reveal how HUD might make the voucher program more accessible and acceptable, specifically in higher opportunity neighborhoods where landlord participation is lowest.  Read more.

This presentation will be offered via webcast at https://www.hud.gov/webcasts/schedule

 

WHO:            Members of HUD’s Department-wide Landlord Task Force

                        Urban Institute research team

 

WHAT:          Landlord acceptance of housing voucher holders

 

WHEN:          Thursday, September 20, 2018

                        2:00 p.m. – 4:00 p.m. EDT

 

HOW:             Watch HUD’s webcast at https://www.hud.gov/webcasts/schedule

###

WHASection8VouchersCanNowBeusedOnManufacturedHomesDailyBusinessNewsMHProNews

MHProNews readers are reminded that the Urban Institute (UI) has ties to Warren Buffett, and Berkshire Hathaway.

 

The Manufactured Housing Institute (MHI)’s SVP Lesli Gooch recently referred to Brian Montgomery as “their” candidate. These may or may not be relevant for the webcast tomorrow and what follows.  But those related reports are linked further below.

 

MHProNews plans to monitor this program, to see if it is tilted toward what former MHI award winner Marty Lavin has called “the big boys” that often seem to get special treatment at MHI.  “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Wisconsin Housing Alliance – an MHI ‘Affiliate’ – Amy Bliss’ Messages Raise New Anti-Trust Issue

March 2nd, 2018 Comments off

GavelLegalWisconsinHousingAllianceAmyBlissWHAanMHIafffilateAmyBlissMessagesRaisesNewAntiTrustConcernDailyBusinessNewsMHproNews

 

From Justice.gov, is “CHAPTER 5 : ANTITRUST ISSUES IN THE TYING AND BUNDLING OF INTELLECTUAL PROPERTY RIGHTS.”

 

AmyBlissLinkedinWisconsinHousingAllianceDailyBusinessNewsMHProNewsMHI has given their members full access to the information [Ducker Worldwide ‘New Class of Homes’].  This is not government produced research and MHI would not be obligated to share this with anyone except for the members who are essentially the ones who paid for the research to be done.  If someone wants to know more, they can most certainly join and share in the expense of doing important consumer research,” said Amy Bliss, Executive Director of the WI Housing Alliance (WHA) and WI Recreational Vehicle Dealers Alliance in an email to MHProNews.

 

Bliss is one of several ‘popular’ state executive directors, who stepped up and defended the Manufactured Housing Institute (MHI) in message exchanges with MHProNews. 

MHI has referred to state association as ‘affiliates.’  So Bliss can be seen as acting as a surrogate or ‘mouthpiece’ of MHI.

The topic is the Ducker Worldwide report, and possible anti-trust issues.  MHI was supposed to make the plan public to the industry, but that presentation was cancelled at Louisville in January, as the Daily Business News previously reported.

 

MHProNews has repeatedly raised concerns about this issue, as potentially harmful to small to mid size companies, as well as to potentially millions of manufactured home owners.

Secretive “NEW” Class of Manufactured Housing Raises Serious Concerns

 

To date, MHI has not refuted – or even tried to refute – those concerns, though they’ve been given a number of opportunities to do so.

MHProNews replied in part to Bliss’ message saying “FYI, my [MHProNews publisher’s] dues money helped pay for that [Ducker] research, and they still didn’t give it to me, why?

But there are several issues that Bliss – apparently acting as an MHI surrogate – uncovered another point that points to concerns about anti-trust issues at the Arlington, VA based association.

In essence, intentionally or not, Bliss confirmed questions put to MHI leadership.  That will be part of a follow up and related report planned for Saturday, unless a hotter news item hits before.

 

 

UnitedStatesDeptOfJusticeChapter5AntiTrustIssuesTyingBundlingIntelectualPropertyRights575

 

What WHA’s Bliss Messages Point to is Known as “Tying and Bundling,” Which can be Illegal

What follows below is verbatim from the DOJ website, Chapter 5, cited above.

Bold or red text is used below by the Daily Business News to underscore potentially salient point and provide comments, with respect to what WHA – an MHI ‘affiliate’ – and thus apparent surrogate Bliss – said with respect to MHI and their Ducker ‘research.’

Note too, while MHProNews is not offering legal advice or opinions, in insuring with an attorney about this topic today, it was confirmed that this could indeed be an example of tying in a manner that is prohibited by anti-trust laws.

Here is part of the message that an attorney sent to the Daily Business News with respect to this issue, “A tie-in is used to create an illegitimate link between a popular product and an unpopular one. In this case, tying access to the new class of home to mhi membership, thereby forcing a customer of one to also “buy” the other.”

Isn’t that what Bliss – again MHI describes the WHA as an ‘affiliate,’ plausibly described what MHI is doing?

  • Namely, tying to get small to mid sized companies being a member to getting this report?
  • A report that MHI has indicated will be used to influence public policy, and potentially HUD regulators?
  • And thus it can seen as being a monopolistic influence on the proposed market?
  • And what are the implications for millions of manufactured home owners values?

The anti-trust and consumer concerns seem real.

These concerns ought to be carefully considered by any and every MHI member, but particularly those who are involved in membership (state associations), or stockholder organizations.

It is MHProNews’ understanding that liability could be created through this anti-trust clouded concept, per the legal opinion previously noted.

More specifics are found below, from the DOJ website.

AntiTrustAllegationsManufacturedHousingInstituteMHIMHIndustryDailyBusinessNewsMHProNews

DOJ and MHI Logos are the property of their respective organization, and are shown here under fair use guidelines. Collage credit, MHProNews.


  1. INTRODUCTION

“Tying and bundling [are] so ubiquitous that we forget they are there . . . . Tying and bundling [are], roughly speaking, what the modern firm does. It’s the rationale. It puts things together and offers them in packages to consumers.”(1)

A tying arrangement occurs when, through a contractual or technological requirement, a seller conditions the sale or lease of one product or service on the customer’s agreement to take a second product or service.(2) The term “tying” is most often used by economists when the proportion in which the customer purchases the two products is not fixed or specified at the time of purchase, as in a “requirements tie-in” sale.(3) A bundled sale typically refers to a sale in which the products are sold only in fixed proportions (e.g., one pair of shoes and one pair of shoe laces or a newspaper, which can be viewed as a bundle of sections, some of which may not be read at all by the customers). Bundling may also be referred to as a “package tie-in.”(4) Case law in the United States sometimes uses the terms “tying” and “bundling” interchangeably.(5)

In view of their potential efficiencies, many economists believe that, in general, tying and bundling are more likely to be procompetitive than anticompetitive.(6) Analysis of the anticompetitive effects of tying and bundling by U.S. courts, by contrast, has evolved over time. Although courts long have expressed concern that tying or bundling might enable firms to use monopoly power in one market as leverage to curb competition, and thereby acquire monopoly power, in a second market,(7) judicial concern has eased as tying and bundling have become better understood. Once thought to be worthy of per se condemnation(8) without examination of any actual competitive effects, tying currently is deemed per se illegal under U.S. Supreme Court rulings only if specific conditions are met, including proof that the defendant has market power over the tying product.(9) Further, the Supreme Court has recently recognized that competitive markets and tying arrangements are not incompatible.(10) Indeed, some lower courts have required proof of likely or actual anticompetitive effects and efficiencies in tying cases.(11)

(MHProNews Note: Isn’t this precisely what Bliss/MHI are suggesting?)

At the Hearings, one panel discussed how the Agencies and the courts could best analyze tying and bundling when two or more products are tied or bundled together and at least one of the products is protected by intellectual property rights. Panelists discussed how to reach the right answers in particular cases and how to give private parties a reasonable ability to predict how their intellectual property licensing practices will be treated under the antitrust laws.(12) As discussed below, panelists generally doubted that tying and bundling involving intellectual property are likely enough to harm consumer welfare to justify per se treatment, and therefore advocated a rule of reason approach that would require proof of likely or actual anticompetitive effects and allow consideration of the efficiencies that such arrangements may generate.(13)

  1. LEGAL ANALYSES OF TYING AND BUNDLING(14)

Ever since the late 1940s, when the Supreme Court stated in International Salt Co. v. United States that “it is unreasonable, per se, to foreclose competitors from any substantial market,(15) and in Standard Oil Co. v. United States that “[t]ying agreements serve hardly any purpose beyond the suppression of competition,”(16) U.S. courts have found tying to be per se unlawful.(17) Although the Court’s 1984 Jefferson Parish opinion confirmed the continued role of a per se analysis,(18) it emphasized that market power in the tying product was a requirement for per se illegality.(19) Later that same year, the Court explained that the application of the per se rule to tying had evolved to incorporate a market analysis:

[T]here is often no bright line separating per se from Rule of Reason analysis. Per se rules may require considerable inquiry into market conditions before the evidence justifies a presumption of anticompetitive conduct. For example, while the Court has spoken of a “per se” rule against tying arrangements, it has also recognized that tying may have procompetitive justifications that make it inappropriate to condemn without considerable market analysis.(20)

Consistent with this approach, the Supreme Court recently acknowledged that “[m]any tying arrangements . . . are fully consistent with a free, competitive market.”(21) Indeed, leading treatises have commented that the test lower courts use to determine whether to apply the per se rule to a particular alleged tie “increasingly resembles a rule of reason inquiry.”(22)Although the elements of a per se tying violation have been articulated differently, courts generally require that:

(1) two separate products or services are involved, (2) the sale or agreement to sell one is conditioned on the purchase of the other, (3) the seller has sufficient economic power in the market for the tying product to enable it to restrain trade in the market for the tied product, and (4) a not insubstantial amount of interstate commerce in the tied product is affected.(23)

(MHProNews Note: Again, isn’t this what Bliss/MHI are suggesting?)

For other per se violations, such as naked agreements to fix price, plaintiffs are not required to define the relevant product markets or show that the defendant has market power in a relevant market. In addition, some courts have shown a willingness to consider business justifications for the alleged tie,(24) and some courts have required proof that the tie has anticompetitive effects.(25)

Courts have sometimes analyzed bundling under the rubric of tying. In United States v. Loew’s, Inc.,(26) for example, the Supreme Court found that the practice of licensing feature films to television stations only in blocks (or “bundles”) containing films the stations did not want to license constituted unlawful tying in violation of section 1 of the Sherman Act.(27)Nonetheless, in explaining its tying analysis in Jefferson Parish, the Supreme Court noted the fact that “a purchaser is ‘forced’ to buy a product he would not have otherwise bought even from another seller” does not imply an “adverse impact on competition.”(28) Thus, to prevail on an unlawful tying claim, a plaintiff would have to show an exclusionary effect on other sellers as a result of plaintiff’s thwarted desire to purchase substitutes for one or more items in the bundle from other sources that harms competition.

III. TYING AND BUNDLING INVOLVING INTELLECTUAL PROPERTY

Linking intellectual property with products or other intellectual property can take many forms, such as offering licenses that cover multiple patents or copyrighted materials or tying the sale of two patented goods or one unpatented and one patented good. Such linkages carry various labels, depending on whether the linked product embodies intellectual property, whether one price or separate prices are charged, and whether the linkage is accomplished contractually or technologically. Classic “contractual” patent tying occurs when the tying product (such as a mimeograph machine) is patented, the tied product is an unpatented commodity used as an input for the tying product (such as ink or paper), and the sale of the patented product is conditioned on the purchase of the unpatented product. A “technological tie” may be defined as one in which “the tying and tied products are bundled together physically or produced in such a way that they are compatible only with each other.”(29) The government’s tying claim against Microsoft involved both the contractual and technological bundling of the Internet Explorer web browser (the tied product) with its Windows operating system (the tying product).(30)

Multiple intellectual property rights may themselves be combined into bundles or packages. Mandatory package licensing occurs when a patent owner refuses to license a particular patent unless a licensee accepts an entire package (or where the patent owner’s royalty scale has this effect).(31) It also includes “block booking” of motion pictures or television shows. Panelists explored the economic, legal, and practical issues raised by these various practices, all of which involve intellectual property tying or bundling.

  1. The Economics of Bundling Involving Intellectual Property

Economists on the panel discussed features that may distinguish intellectual property from tangible property. One such feature is that the development and exploitation of intellectual property typically involves high fixed costs but low marginal costs, but the panel discussion did not make the relevance of this distinction to the analysis of bundling clear. One panelist suggested that predicting anticompetitive effects may be more difficult in cases involving intellectual property bundling than in cases involving the bundling of tangible property.(32)Another panelist stated that it is difficult to determine whether intellectual property bundling in a particular case is driven by efficiencies and, as a result, the analysis is ultimately fact-intensive.(33)

Two economists have considered the bundling of so-called information goods, such as copyrighted music, programming, and other online content on the Internet.(34) They observe that the marginal cost of adding additional units of an information good to a bundle of other information goods typically is very low. They also observe that demand for bundles of goods across customers can be more homogeneous than the demand for the individual components. In such circumstances, it can be more profitable to offer such goods only in a bundle. In their analysis, competition between two firms that each offer sufficiently large bundles can make consumers better off,(35) and bundling by a firm facing no competition can increase total welfare but increase or decrease consumer welfare.(36)

Another distinction between intellectual and tangible property is that the validity of patents can be challenged. It is widely believed that intellectual property bundling “is apt to affect private incentives to challenge the IP”(37) –most likely decreasing incentives to challenge it. Some find it difficult to assess the likely welfare effects of this decrease, however, because the optimal level of incentive to challenge intellectual property rights is not clearly known.(38)

  1. Legal Issues Relevant to Intellectual Property Bundling

Courts have not taken a consistent analytical approach to tying and bundling cases involving intellectual property. In 1999, the U.S. Court of Appeals for the Eleventh Circuit applied the per se rule to a package license for television programming because the package at issue could not be distinguished from the block booking that the Supreme Court declared to be illegal per se in Loew’s.(39)

By contrast, the U.S. Court of Appeals for the D.C. Circuit’s 2001 decision in United States v. Microsoft rejected application of the per se rule to “platform software,”(40) thereby “carving out what might be called a ‘technology exception’ to that rule,”(41) as one submission suggested. The court reasoned that application of traditional per se analysis in the “pervasively innovative” platform software industry risks condemning ties that may be welfare-enhancing and procompetitive.(42) According to one panelist, however, “the rationale [that the court] articulated for abandoning per se condemnation applies well beyond just the software industry,” notwithstanding “the court’s protestations to the contrary.”(43) Although in Illinois Tool Works Inc. v. Independent Ink, Inc. the Supreme Court recognized that many tying arrangements, “even those involving patents and requirements ties,” can be procompetitive,(44) that case did not present a vehicle for the Court to revisit its conclusion that some tying arrangements constitute per se violations.(45)

The Agencies’ rule of reason approach to intellectual property bundling is reflected in the Antitrust Guidelines for the Licensing of Intellectual Property (“Antitrust-IP Guidelines”). The Antitrust-IP Guidelines recognize that “[c]onditioning the ability of a licensee to license one or more items of intellectual property on the licensee’s purchase of another item of intellectual property or a good or a service has been held in some cases to constitute illegal tying,”(46) but also state that “[a]lthough tying arrangements may result in anticompetitive effects, such arrangements can . . . result in significant efficiencies and procompetitive benefits.”(47) Pursuant to the Antitrust-IP Guidelines, the Agencies, as a matter of prosecutorial discretion, consider both the anticompetitive effects and the efficiencies attributable to a tie. The Agencies would be likely to challenge a tying arrangement if: “(1) the seller has market power in the tying product, [which the Agencies will not presume necessarily to be conferred by a patent, copyright, or trade secret]; (2) the arrangement has an adverse effect on competition in the relevant market for the tied product; and (3) efficiency justifications for the arrangement do not outweigh the anticompetitive effects.”(48) If a package license constitutes tying,(49) the Agencies will evaluate it pursuant to the same rule of reason principles they use to analyze other tying arrangements.

Whether the legal analysis applied to intellectual property bundling is some form of the per se rule or the more searching rule of reason, a plaintiff will have to establish that a defendant has market power in the tying product. Recognizing that “Congress, the antitrust enforcement agencies, and most economists have all reached the conclusion that a patent does not necessarily confer market power upon the patentee,” the Supreme Court has held that “in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product.”(50) Thus, market power should not be presumed merely from the existence of a patent.(51) As the Court explained:

[W]e conclude that tying arrangements involving patented products should be evaluated under the standards applied in cases like Fortner II and Jefferson Parish rather than under the per se rule applied in Morton Salt and Loew’s. While some such arrangements are still unlawful, such as those that are the product of a true monopoly or a market wide conspiracy, that conclusion must be supported by proof of power in the relevant market rather than by a mere presumption thereof.(52)

The Agencies, as a matter of sound economics, had chosen not to rely on such a presumption prior to Illinois Tool.(53) As the Antitrust-IP Guidelines explain, the Agencies “will not presume that a patent, copyright, or trade secret necessarily confers market power upon its owner. Although the intellectual property right confers the power to exclude with respect to the specific product, process, or work in question, there will often be sufficient actual or potential close substitutes . . . to prevent the exercise of market power.”(54) The Agencies therefore investigate the relevant market to determine whether the intellectual property at issue grants any market power in the economic sense. If such market power is found, the Agencies further investigate whether the business practice under scrutiny is likely to be anticompetitive on balance.

  1. Practical Issues Regarding Intellectual Property Bundling

Panelists addressed several issues that attorneys confront when counseling clients with regard to intellectual property bundling. One panelist noted that, in addition to the courts’ inconsistent treatment of cases involving intellectual property bundling, courts have also differed in ordinary tying cases as to whether: (1) a plaintiff must show harm to competition in the tied product market; and (2) a defendant’s evidence of business justification is admissible.(55) “The result of this is when the client asks you about what the rules are governing bundling of intellectual property . . . you cannot give a clear answer. [Lawyers have to give] the cautious advice . . . please, don’t do it; the risk [of litigation] is too great.(56)

(MHProNews Note: Doesn’t this goes to the heart
of issues raised by the Daily Business News for companies with stockholders,
or organization’s with members, in the linked article, below?)

Fiduciary Responsibility to Corp Shareholders-MH Anti-Trust Concerns; Plus MH Market UPdate$

 

The panel also discussed the extent to which attorneys counseling their clients will consider the likelihood that an enforcement agency or private party will challenge intellectual property bundling.(57) Due in part to the rules on antitrust injury and standing, the probability of being sued may be small, but one panelist expressed the view that, “given the state of the law today you just can’t advise a client that has an intellectual property right that it’s okay to tie . . . . It’s just too dangerous.”(58) Counseling about potential antitrust liability also occurs when a client is about to bring an infringement suit, because such a suit may trigger an antitrust counterclaim even when an antitrust suit would otherwise be unlikely. One panelist expressed the view that “it’s per se malpractice to fail to advise a client who is considering an intellectual property infringement suit that he must be prepared to litigate any manner of crazy antitrust or misuse counterclaim — or misuse defense.”(59)

Another panelist observed that firms that have been advised by counsel will often offer alternatives to a package license. He suggested that “one way to [offer] package licenses and not get immediately hauled into [f]ederal [d]istrict [c]ourt is to make sure there’s an alternative available.”(60) When another panelist questioned the wisdom of advising clients “that they are essentially home free on bundling pricing where intellectual property is involved,”(61) the other replied that, although this practice does not provide a complete safety zone, “the difficulty of proving that the pricing bundle is sufficiently coercive . . . given the expense of bringing an antitrust case . . . gives you a measure of comfort . . . .”(62)

Finally, one panelist argued that, although defendants in many cases could “devise ways of achieving the same efficiencies without tying,”(63) the per se rule creates “enormous cost in terms of firms without market power and with intellectual property rights trying to figure out the best way to exploit those rights,” such as small firms trying to enter a market in which metering through tying may work best.(64) Another panelist suggested that “product combination decisions[,] like things that can be characterized as ties[,] ought to be presumptively lawful” and that the real problem with the per se rule against tying is that it is “potentially applicable to an enormous range of harmless commercial decisions which nevertheless tend to attract involvement with law enforcement and the civil justice system.”(65)

  1. Suggested Approaches to Improving the Law on Intellectual Property Bundling

The panel explored ways to improve the law on tying in general and with regard to intellectual property bundling in particular. One panelist highlighted three approaches.(66) First, he suggested that the courts, instead of carving out exceptions to the per se rule against tying (as the D.C. Circuit did for “platform software” products in Microsoft(67)), should follow the approach taken by the U.S. Court of Appeals for the Seventh Circuit in Khan v. State Oil Co.,(68)which applied the per se rule against vertical maximum price-fixing while carefully explaining the shortcomings of the approach and inviting the Supreme Court to overturn it, as the Court ultimately did.(69) Second, testifying prior to Illinois Tool, he suggested that Congress should consider legislation mandating that there shall be no presumption of market power from the mere possession of a patent or copyright in antitrust cases.(70) Third, he suggested that the Agencies should advocate improvements in the law through amicus participation in cases involving intellectual property bundling, both in the district courts and courts of appeals, with the hope that the decisions of these courts may eventually be reviewed by the Supreme Court.(71)

Panelists acknowledged that conducting a rule of reason analysis of intellectual property bundling or other practices results in a very fact-intensive inquiry, the outcome of which will likely be difficult to predict.(72) An economist on the panel suggested that, rather than attempting to categorize the conduct (e.g., as tying or not) or looking at cost standards, a better approach would be “to ask why are you doing this; what are the efficiencies, are there other ways to achieve the efficiencies; do you expect it to block competition[?]”(73)

  1. CONCLUSION

Legal and policy analysis of intellectual property bundling has evolved over time. Older case law, with its per se rule and presumption of market power, contends with the current analysis of the Agencies and some more recent lower court decisions that embody, in essence, a rule of reason approach. Moreover, the Supreme Court recently eliminated its rule presuming market power based on intellectual property. Panelists noted that, although intellectual property bundling may have anticompetitive potential in certain circumstances, there may also be significant efficiency justifications for such bundling in some cases. Thus, as a matter of their prosecutorial discretion, the Agencies will apply the rule of reason when evaluating intellectual property tying and bundling agreements.(74) Given the ubiquitous use of these arrangements by businesses lacking in market power and the efficiencies that such arrangements can often entail, these practices usually are not anticompetitive. When the Agencies do identify anticompetitive situations, however, they will pursue them.

Footnotes:

MHProNews is providing only the following footnote, as being of particular interest to industry readers.

  1. Business practices merit treatment as per se illegal if “their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable.”N. Pac. Ry., 356 U.S. at 5.

The entire DOJ content with footnotes can be found at this link.

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Related:

“F-Bombs” Fly – Cursing Manufactured Housing and Tornadoes – Engaging Public, Experts, Officials, and Media

Progressive “Nation” Reports on Monopolies Cites Buffett, Clayton, Others – MH Industry Impact?

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Manufacturing Housing Pros rallying Troops for More Financing Options in 2016

December 10th, 2015 Comments off

committee_on_appropriations__wikipediaWhile H. R. 650, the Preserving Access to Manufactured Housing Act passed the House in April with bi-partisan support, the Senate companion bill S 682, cannot pass the Senate as a standalone measure because it would be vetoed.

If, however, it is attached as a rider to the must-pass appropriations bill, the president will sign it, according to Ross Kinzler, Executive Director of the Wisconsin Housing Alliance, who urges all in the MH industry to notify your congressional representatives to vote for this measure, which will correct the inadvertent powers bestowed on the CFPB by Dodd-Frank.

Joe Kelly of the Iowa Manufactured Housing Association (IMHA) reminds us that we cannot get much closer to relief from the onerous provisions of Dodd-Frank that hamper MH sales than for S 650 to be rolled into the large omnibus appropriations bill that has to be passed to keep the federal government from being shut down.

Even if your representative and senators have already voiced support, it doesn’t hurt to remind them again of the importance of S 650 as a policy rider to appropriations. He reiterates that conditions are always changing in the halls of Congress, we are approaching an election year and we do not know what may happen in 2016, so it’s best to do it now: contact your emissaries in Congress today.

Tyler Craddock, Executive Director of the Virginia Manufactured and Modular Housing Association, says “One click. One minute of your time.

MHProNews and MHLivingNews publisher L. A. “Tony” Kovach, echoing the words of other MH industry pros, says Ross Kinzler is correct, POTUS will sign off on an appropriations bill, but the MH industry needs to garner support for putting pressure on both parties in Washington to include S 682 in the appropriations bill.

While there is a two-year window for the legislation to pass next year, that is Plan B, which is much less certain. Kovach says, “If one-in-ten workers in our industry did that (contacted Congressional members) you could virtually guarantee that this rider would stay attached to the omnimbus appropriations bill, and this would thus pass this year. Passage this year means that next year, Joe Kelly’s right. We’d all be selling more homes as a result, plus our exiting home owners and lenders would be better off too!Affordable quality housing is a non-partisan issue.

Barack Obama learned community organizing as a young man, and used that to engineer two terms in the White House. The MH industry needs to learn that we as a community can use that same organizing tool to get what we want—not someday when maybe it falls in our lap, or tomorrow, which never arrives. Apollo Creed’s mantra from Rocky 3 is, “There is no tomorrow!!” Click here to send a message to your Members of Congress, now!

Link to Ross Kinzler; to Joe Kelly; to Tyler Craddock; to L. A. “Tony” Kovach. ##

(Image credit: wikipedia commons)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

HUD Finalizes Rule Regarding Onsite Completion of Manufactured Homes

October 1st, 2015 Comments off

mhi  photo credit  mh under productionMHProNews has learned from the Wisconsin Housing Alliance that the Department of Housing and Urban Development’s (HUD) Final Rule that allows manufacturers to complete the construction of manufactured homes on site instead of in the factory with gaining permission.

The rule will eliminate the need for time-consuming approval under the Alternative Construction (AC) process for on site work needed to complete construction. The rule does not apply to garages, which will be addressed in the future by HUD.

Prior to occupancy, the manufacturer’s IPIA or agent will be required to do a final inspection. MHI had suggested the work be done as an extension of the factory inspection process.

The final rule takes effect March 7, 2016, and includes the following construction that may be done onsite:

Completion of roof dormers;

Addition of stucco, brick or other siding that is subject to damage in transit;

Retailer changes to the home on site, when the home is taken out of compliance with the Construction

and Safety Standards and then is brought back into compliance with the standards;

Site installed appliances that are listed or certified for use in manufactured homes;

Hinged roof and eve construction unless exempted as installation by the Manufactured Home Installation

Standards. Notably, as recommended by MHI, the final rule now allows peak flip and peak cap construction

in which the roof pitch of the hinged roof is less than 7:12, when located in Wind Zone I, to be deemed part

of the installation standards (24 CFR Part 3285) and not subject to the requirements of this final rule;

Components or parts that are shipped loose with the home and that will be installed on site, unless exempted as installation by the installation standards;

Other construction such as roof extensions (dormers), site installed windows in roofs, removable or open floor sections for basement stairs and sidewall bay windows.

Additionally, manufacturers must obtain DAPIA approval for any part of construction that is to be done onsite, provide instructions for completing the work, and inform the purchaser that the home requires onsite work.

The manufacturer assumes responsibility for all the onsite work, and once it is completed, do a full inspection report and submit it to the IPIA. The IPIA, or the IPIA’s agent, must then do its own inspection before the home may be occupied. ##

(Photo credit: Manufactured Housing Institute-manufactured homes in production)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

 

Passages: Norman Schweiss

August 10th, 2015 1 comment

norman_schweiss__obit__madison__creditNorman Schweiss, 87, founder of Norm’s Mobile Home Sales, passed away in Eau Claire, Wisconsin. In 1953, at 25 years of age, Norm started his business, which eventually grew into seven locations throughout Wisconsin and Illinois, and in the 1970s, he expanded into developing and managing land lease communities, according to madison. Ross Kinzler, Exective Director of the Wisconsin Housing Alliance, said Norm was one of the pioneers in the manufactured home (MH) business in Wisconsin.

His son-in-law, Bryan Folz, of Sterling Properties, is chairman of the Tomorrow Home Foundation, a Wisconsin non-profit funded by members of the MH industry that provides emergency assistance grants to people living in MH in need of critical repairs.

MHProNews extends its deepest sympathies to the family on his passing. ##

(Photo credit: madison–Norman L. Schweiss)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

The Atlantic’s article on Manufactured Housing Evoked Comments

October 29th, 2014 Comments off

mfg_home__pine_grove_mfg_homes_incCommenting on The Atlantic‘s article about manufactured housing (MH), the CFPB and MH financing, Amy Bliss of the Wisconsin Housing Alliance, compliments the piece for citing facts such as:

> energy efficiency,
> less waste in the building process,
> availability to middle-incomers,
while acknowledging the difficulty in finding financing for chattel loans.

Writing on Industry Voices  at MHProNews, she notes the lack of a secondary market with few lenders for MH loans, saying the CFPB should mandate that any lender allowing conventional mortgages cannot simply deny a manufactured home loan.

Doug Ryan, with the Corporation for Enterprise Development, a non-profit that supports manufactured housing as an affordable alternative, says in The Atlantic, The biggest problem (with MH loans) is with how the loans are done. It’s about as enjoyable as buying a used car.”

Bliss says many manufactured home consumers are elderly, the disabled and families with children. The industry should make a talking point out of the disparate impact made on these three protected age groups when lenders refuse to make loans to MH in communities.

Bliss notes that considering manufactured homes in land lease communities as real property is not an answer, but suggests filling communities with new MH will add vigor to the communities. For the full Bill OpEd, click here.

MHProNews  will have a more in-depth look at The Atlantic‘s coverage of the CFPB’s MH Finance report, planned for later this week. ##

(Photo credit: Pine Grove Manufactured Homes)

matthew-silver-daily-business-news-mhpronews-com(Submitted by Matthew J. Silver to Daily Business News-MHProNews)