Industry Voices

Over the last several years trial balloons have been released suggesting that the industry’s best interests would be served by a merger of its two major trade organizations the Manufactured Housing Institute (MHI) and the Manufactured Housing Association for Regulatory Reform (MHARR). MHI serves as a trade organization for all of the major segments of the industry. Those segments (manufacturers, suppliers, communities, retailers and lenders) are represented within MHI by their own specialized division. In contrast, MHARR makes their position absolutely clear that their mission is to protect specifically manufacturers from an over reaching federal bureaucracy in the area of regulatory issues.

My position has been consistent over that same time frame that a merger of MHI and MHARR would not be a good idea for the industry. On a couple of occasions that position was incorrectly interpreted as criticism of MHI. My point instead has been that because of MHI’s role of being an overall industry trade (manufacturers, suppliers, communities, retailers and lenders) organization, taking a very aggressive role in the area of regulatory reform can be a difficult role to fill. On the other hand, MHARR makes no apologies for its repeated efforts to rein in a federal agency that is continuing to take positions and implement new regulations that will have significant cost impacts on our product with unsubstantiated benefits. As the chief executive of MHARR, Danny Ghorbani has been relentless in pursuing that mission. While he would like to be able to operate in concert with HUD, the federal agency that oversees our industry, he is not concerned about remaining pals with HUD if HUD is not functioning within the bounds of current statues.

Recently a proposal has been floated for communities to form their own organization to the point of eliminating MHI. A review of MHI’s current action list should provide a reasonably quick conclusion that one would have little confidence in the ability of a newly formed communities trade organization to accomplish even a fraction of the items on the list absent MHI. Communities (and retailers) should feel free to establish a separate trade organization if they desire to see more focus on the needs of their segment of the industry. That representation can be organized and still lend a voice to the overall trade organization as needed. As a retailer I certainly feel at times that MHI’s role is dominated by the interests of manufacturers. My solution, if so motivated, would be to establish a retail equivalent of MHARR. A retail trade organization that would then be focused on issues facing retailers. I believe that could be possible without establishing a goal of destroying MHI.

While I am not in favor of dismantling MHI, I will concede that I disagree strongly with MHI’s recent capitulation in regard to the preemption of fire sprinklers as they relate to the HUD Code and the activities and positions of the Manufactured Housing Consensus Committee. MHARR’s position was statutorily correct and should have been backed by MHI rather than be undermined. Over a period of twenty years or so of my relationship with MHI, this issue does not mark my first disagreement with them and I have certainly never called for their dissolution due to any of those disagreements. MHI has the capacity and the history to be a very effective voice for the industry. We should work within the organization to address those areas where we disagree.

Douglas Gorman

I am pleased that the Insurance, Housing and Community Opportunity Subcommittee is having this field hearing today.  Manufactured housing plays a vital role in meeting the housing needs of the nation by providing quality, affordable homes to over 18 million people.  This $8 billion a year industry has long been a major economic driver in places like Elkhart County, Indiana by directly employing thousands in manufactured housing plants and thousands more in suppliers’ factories, not to mention contributing to the local municipal tax base. 

I appreciate the hard work the industry has done for communities across our country and particularly in areas like Northern Indiana, which I am proud to represent.  This industry knows all too well the pain felt by this economic crisis.  The last couple of years have not been easy, and the suppliers, manufacturers and dealers have been patient and worked hard to continue to make quality homes and keep hardworking Americans employed so they can provide for their families. 

As we work to emerge from this housing crisis, we realize that now, more than ever, it is important that people have access to quality homes that they can afford.  As millions of Americans are facing or on the brink of foreclosure, we must recognize the value and cost-effectiveness that these homes provide.  Manufactured housing should be considered a critical solution to helping us emerge from this housing crisis. 

Creating affordable homeownership is one of the fundamental building blocks of our society and plays a fundamental role in achieving the American Dream.  It helps to provide families with economic security and build strong communities.  I hope today is an opportunity to highlight this industry’s important contributions and identify how Congress can ensure it remains a thriving and successful job-creator in America and a source to meet our current and future housing needs. # #

Congressman Joe Donnelly

Media contact: 

Elizabeth Shappell

Communications Director

Congressman Joe Donnelly (IN-02)

1530 Longworth House Office Building

T: (202) 225-3915

F: (202) 225-6798

• Could MHARR member manufacturers have confidence in such a proposed restructure?
• Could retailers and others have confidence in a proposed restructure where they are not even mentioned?

Dear State Association Executives:

We’ve been closely following your email discussion regarding the regulation of outside steps, including, particularly, the issue of federal versus state/local authority, questions concerning federal preemption and the possibility of approaching the MHCC with a proposal.

Unfortunately, this problem goes back to an issue raised by MHARR, some 8 years ago, when the federal installation standards (24 C.F.R. 3285) were first proposed by HUD and debated by the MHCC.  HUD has taken the position, based on an indefensible “interpretation” of the 2000 law, that installation is not part of “construction” and that only the Part 3280 construction and safety standards are preemptive – meaning that the Part 3285 installation standards are not preemptive.  MHARR (without help from others in the industry), vigorously opposed – and continues to oppose — this “re-codification” of installation, as is more fully explained in Fact Sheet No. 8 of the MHARR Fact Sheets regarding HUD’s failure to implement key 2000 law reforms that we sent to you on September 14, 2011.

The bottom line, for now, is that the Part 3285 installation standards, as construed by HUD, remain non-preemptive.  So, even if steps were part of the 3285 installation standards, or were made part of the installation standards, the federal step standard would still not be preemptive of state and/or local requirements.  Worse yet, because the MHCC only has statutory authority over “construction and safety” standards, HUD’s codification of the installation standards outside of the Part 3280 construction and safety standards, at a minimum, makes it doubtful whether the MHCC could even consider a proposal to amend the Part 3285 installation standards to include steps (and would create an endlessly muddled legal no-man’s land, if it did).

MHARR has been warning, ever since the installation standards were re-codified outside of Part 3280, that HUD’s baseless distinction between installation and construction would come back to haunt the industry and consumers in the form of inconsistent and needlessly costly state and local requirements.  And what you’re seeing here is likely just the tip of the iceberg, as we also noted that the full impact of all this would not begin to be felt until the federal installation program was fully implemented. Unfortunately, this is just one simple illustration from among the ten key reforms of the 2000 law (see your MHARR Fact Sheet packet), designed to complete the transformation of manufactured homes from the trailers of yesteryear to the modern legitimate housing of today, that HUD has refused to fully and properly implement – reforms that were designed to help the industry and its consumers that have been languishing at HUD for over ten years because of a lack of pressure from the entire industry.

Thanks,

Mark Weiss
Senior Vice President
Manufactured Housing Association for Regulatory Reform (MHARR)

cc: HUD Code Retailers and Communities

Tony,

The industry faces the problem that the Manufactured Housing Association for Regulatory Reform (MHARR) assessment of the composition of the Manufactured Housing Consensus Committee (MHCC) is reasonably accurate. Initially both the Manufactured Housing Institute (MHI) and MHARR were allowed to have two of the seven industry seats. Today, HUD no longer allows that balanced and knowledgable representation.

Over the past several years we have seen other seats incorrectly given to government employees and other parties with anti-industry bias. The Designated Federal Officer (DFO) and non-voting twenty-second seat on the MHCC (the political appointee) has not been reappointed for several years now. One of the purposes for the existence of that position is to provide some perspective to the HUD Manufactured Housing Program that is not held hostage by preconceived biases inside the HUD permanent staff.

The shift in committee composition has brought with it members who tend to vote their ideology without regard to cost implications. Evaluating cost implications of proposed changes is statutory and yet is ignored by HUD staff and the MHCC with no consequences.

MHI’s recent actions in regard to fire sprinklers is well intended and is an effort to at least establish controls in advance of what MHI perceives as potentially hugely damaging costs if a preemptory sprinkler system is not advanced by the industry. MHARR’s point that extremely valuable ground in the world of preemption is being surrendered is true and does not bode well for the industry on both fire sprinklers and other preemption issues as they arise.

The Manufactured Housing Improvement Act of 2000 (MHIA of 2000) actually gave more teeth to the preemptive language of the original 1974 act. HUD’s manufactured housing program management staff should be valiantly defending that preemptive language when other parties take actions that violate the most recent version of that language. My experience of nearly ten years of working with HUD management as an MHCC member has showed me that HUD will not undertake that defense.

In anticipation of a worst possible outcome scenario, MHI’s actions are an effort to head off potentially devastating costs of meeting fire sprinkler requirements with no parameters. MHARR’s position is the more legally accurate, but faces unknown consequences in the efforts that would be required to enforce the strictly legal position. While I am not privy to all the arguments for both cases, I do know that I hate to give up valuable ground.

Doug Gorman
HomeMart
Former MHCC member

Like many young newlyweds in the south, my first homeowner’s experience was a brand new “double-wide” manufactured home.  In the mid to late 1990’s, owning a home was considered a “right of passage” and I was thrilled that my (now former) husband and I were able to accomplish this goal before the age of 25.  Unfortunately, it wasn’t long before my enchantment with my new home was overshadowed by the negative stigma associated with manufactured housing.  Feelings of pride diminished as references of “trailer,” “tornado magnet” and “cheap housing” were made.

My employment in the retail division of the industry made me fully aware of the truth, but social misconceptions fueled by the media and peer snobbery made me feel slightly ashamed and inadequate.  It did not matter that our home included a two car garage, concrete sidewalks, large front porch, and back deck that wrapped around an above ground swimming pool.  Society deemed that we lived in a “trailer.”

Years later, when presented with the opportunity to use the equity towards the purchase of a ranch style brick home, we did not hesitate to complete the transaction.

In keeping with the comedic southern tradition of a “mobile home” being lost in a divorce, the division of property resulted in my retention of the brick home which was worth substantially more than the purchase amount.  Of course, the large down payment was made possible only by the appreciation of value and subsequent equity in the manufactured home.  The home deemed “second class” by society was the only thing that enabled my family to afford a socially acceptable conventional house.  How’s that for ironic?

Maslow’s hierarchy of needs tells us that the first level of human requirements is basic biological needs – food, clothing, and shelter.  This level of hierarchy is followed by safety needs: belongingness, esteem and self actualization needs.  In short, people need to feel a connection with others and want to be accepted in society.  Self esteem needs are fulfilled through social approval and recognition.  The intrinsic need to feel a sense of pride is one of the most motivating and influential factors of decision making.  It is also a necessary component for fulfilling the basic needs of human behavior.  Yet, the feeling of pride about living in a manufactured home is often swayed by inaccurate perceptions and negative stigmatization.

As productive members of society, we work hard to provide necessities for our families.  As parents, we strive to provide a better life for our children than what we experienced.  The misconceptions about manufactured housing certainly impact our children.  After all, who wants “little Johnny” to get off the school bus among whispers that he lives in a “trailer park?”  Or for “little Suzy” to get overlooked for the cheer-leading squad because her parents are “too poor to live in a real house”” It does not matter that “little Johnny” lives in a well kept community with paved roads, maintained yards, enhanced safety through resident screening and visual appeal or that “little Suzy” lives in a brand new “double wide” that was chosen because the floor plan meets her family’s needs.

Social acceptance and pride often trump logic.  Even though it is logical and practical for consumers to choose manufactured homes, the misconceptions and negative stigma can influence how consumers view themselves and their abilities to provide for their families.

How can the industry convince consumers that living in a manufactured home will fulfill the need of self affirmation (i.e. pride)?

What strategies can be developed to reverse the negative stigmatization?

The obvious answer is to change the image of the industry, but that battle cry has only gathered a small portion of the troops.  Despite the significant changes of the last two decades, the consumer’s perception of the product has not changed.

Instead of trying to reinvent the image, perhaps the industry should modify its approach to the consumer.  A collective voice wields more power than an individual voice.  Create a venue that will fulfill the human needs of belongingness and esteem.  Involve homeowners by providing a way for them to connect with others that share the same interests and lifestyles, thus creating a feeling of belonging and acceptance.  Follow in the footsteps of other industries by changing the image through consumer participation.

For example, people of retirement age are no longer viewed as “too old to do anything.”  Instead, thanks in part to the work of AARP, retirees are able to enjoy an enhanced quality of life that includes a wide range of benefits, products and services.

Another example is the insurance industry.  For a small annual fee of $35, members of Farm Bureau Insurance receive benefits such as reduced premiums, discounts on cell phone packages, rental car discounts, access to community room, personalized tax preparation and a monthly magazine full of useful information and ideas.  Insurance is no longer viewed as a hassle, but as a worthwhile investment in which some of the benefits can be enjoyed without reporting a loss.

Would creating an alliance of manufacturers, retailers, suppliers, service providers, and homeowners be the change needed to turn the industry around?  It is certainly has potential.  As a former manufactured home owner, single parent, community member, and consumer I would definitely pay $36 a year to belong to a group that shared interests, understood issues and validated my housing decision.  It is a small price to pay in order to help fulfill the need of pride and acceptance.

The industry players are not the only stakeholders that see the need for an image change.  The stakeholder with the most power to make the change is the homeowner.  It’s time to give them a voice and the tools necessary to make the change.

Having been in the manufactured housing industry for about a decade, I sincerely appreciate the invitation to attend the webinar regarding the MH Alliance/Phoenix Project.  The opportunity provided a wealth of information, including possible resolutions for challenges facing the industry.

Speaking as an MBA moving towards a PhD, from an academic perspective, the MH Alliance identifies the gaps in current system processes and offers a holistic resolution.  The plan is set up to include not only retailers, manufacturers, suppliers, and finance providers, but the group that holds the most power and has the most vested interest – HOMEOWNERS!

As a marketing instructor, I like the outreach involving every facet of the industry, so the MH Alliance will have the ability to turn this industry around!

For years, industry experts have attempted to improve the image of manufactured housing.  While significant improvements in products and processes have been made, consumer awareness and education has faltered.  The collective power of the MH Alliance can certainly change the image of the industry and product, thus making it a contender for a consumer’s FIRST choice in housing, not the last choice.  Great job Tony and all those on board to promote the MH Alliance/Phoenix Project theme! # #

(Editor’s Note: All links in this article were provided by MHProNews.com for context to Ms. Tyler’s article. Here is a link to some recent feedback on the MH Alliance by more Industry pros. http://www.mhmarketingsalesmanagement.com/blogs/daily-business-news/grass-roots-industry-turn-around-plan-gains-momentum/)

Lisa Tyler, MBA
Walden University
Planning a doctoral dissertation on manufactured home marketing and image.

A question brought up by an individual at a real estate investment group meeting in  Tacoma, WA did not get answered at that time so thought I would attempt to put my perspective on it and then get feedback as to other people’s opinion.

The question:   Where do you think the MHP industry (a.k.a. Manufactured Home Park, Manufactured Home Community, Land Lease Community) is headed?

To start, I will explain some of the chatter on the internet on this subject.

Many are under the impression that within 5-7 years the MHPs will fade into history. Manufacturers are not listening to MHP Owners and are not building the types of manufactured homes needed to fill the lots available in the older MHPs.

The MH Retailers have such a high markup from the factory price that the end users cannot afford their homes.

Banks & Mortgage Companies are not interested in financing a “mobile home” that is not attached to land.

So MHP Owners have had to step in and do the financing for the individuals looking to buy. Politicians are trying to over-regulate the industry by passing new laws dealing with financing, rent control, maintenance issues. Their interference with the free market is killing the industry overall.

On paper in WA (lip service?) some politicians have made efforts to extended benefits to help Owners maintain and develop MHPs as the last form of affordable housing. Yet they did not provide funding to support their magnanimous ruling on paper.

On top of all this the taxes keep going up – calculated as a commercial operation according to the Pierce County Assessor’s Office instead of as multifamily residential. That is where it stands. In order to bring some relief to the overall picture all parties need to get together and work out a solution.

There are numerous summits and all of the above are represented, except there are no representatives from Mobile Home Park Owners that count. The ones who have 500 -1000 units are there, but they do not represent the ‘mom and pop’ MHP Owners as a whole.  Community Owners need to get their input into these meetings in some way.

Another problem that will arise is that many Owners are from out of state and depend on a mismanagement company to run their operations. They do not have an office on site – their office is 5-10 miles down the road or more. These MHPs fall into a state of disrepair and then the city officials step in and close them down.

The tax base from the personal property taxes are not very much. By closing the MHPs down, then they can build a new car dealership or motel that brings in more taxes for the city. Watch over the next 3-7 years to see how many MHPs are closed by city officials and not a developer Buyer.

As for the smaller operations – business will continue as usual. A home is abandoned – take it over, rehab it or have a Lonnie Dealer do it for you with you providing concessions for them. Sell the homes and finance it with a note. Same with those that are selling their homes: Buy it at a discount, rehab it, sell it on a note – never RENT a MH. If repo homes come available in another MHP – the Owner of that MHP should jump on the opportunity of keeping the home in their MHP. If they do not and it is available, you need to buy it, relocate it to your MHP and get it occupied.

Several of the trainers for the Washington State Mobile Home Community Owners Association have provided classes explaining to all in attendance that for each home that comes into your MHP you increase the overall value of your MHP.

For example if lot rent is $400/month and you bring in a home to fill a vacancy. The rent for one year is increased by $4800 (12 X $400). Dividing this by 0.10 (10 CAP) the value of your MHP just increased by $48,000.00. As long as you have the frame in your MHP, the mobile home can be rebuilt and your income stream will continue to flow in.

One MHP can be considered a pretty decent retirement plan. Most people who get involved in the industry are not satisfied with just one and may have more. Just be careful not to get overextended. Why?  The scuttlebutt on the internet is that the commercial loans will have the same problems as the residential loans. One cause is that loans are not being made. The financial institutions are saving their funds for when interest rates climb to 11-12%. (A rumor was started that this was supposed to happen in November 2009). The main cause will be that the banks and mortgage companies will be sticking their noses up in the air and looking down on financing or refinancing of MHPs. Many MHP Owners have 3-5-7 or 10 year balloons that will be coming due soon.

Last year at the convention I brought this up and one of the instructors stated that one of his clients was in this type of predicament. One solution is for the use of Private Money to bail out fellow MHP Owners. The elimination of the banks and mortgage companies would be a great relief to many. Yet, who has deep enough pockets to take them out of the picture?

Email me your thoughts as to where you see the MHP industry going in the future. The above is my own personal observation of where things are going.   # #

Dale Osborn
Owner of 1 MHP in CO and 2 in WA.
dale_w_osborn@msn.com

Here’s what Warren Buffett suggested to cure the economy and gridlock, during an interview on CNBC. If combined with PeopleFirst Leadership in business and the transition to value based capitalism it could be a start of great opportunity for everyone.

Buffet told CNBC, “I could end the deficit in 5 minutes.” adding, “You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.

The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months and 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971…before computers, e-mail, cell phones, etc.

Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land…all because of public pressure.

Warren Buffet is asking people to forward this as an email or as a link to a blog post like this one, to a minimum of twenty people on their address list and in turn ask each of those to do likewise.

In three days, most people in The United States of America will have the message. This is one idea that really should be passed around. The results would be increased opportunity and the possibility of a higher standard of living for people today and in the generations that follow.

Let’s get this past…The Congressional Reform Act of 2011

1. No Tenure / No Pension.

A Congressman collects a salary while in office and receives no pay when they are out of office.

3. Congress (past, present &future) participates in Social Security.
All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

4. Congress can purchase their own retirement plan, just as all Americans do.

5. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

6. Congress loses their current health care system and participates in the same health care system as the American people.

7. Congress must equally abide by all laws they impose on the American people.

8. All contracts with past and present Congressmen are void effective 1/1/12. The American people did not make this contract with Congressmen.

Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

“Interesting thoughts…Could be game changer if combined with business leaders realizing that the selfish intentions of business damage their business and they begin to operate based on helping, serving and doing what’s best for their employees and customers…PeopleFirst Leadership Is the best solution and path to a successful ‘new economy’!”  - Mike Moore

Post submitted by
Mike Moore
Making Customers

Almost as an afterthought to its March 2010 proclamation that manufacturer compliance with new expanded in-plant regulation originally billed as voluntary would, henceforth, be “not voluntary,” HUD has recently announced that it intends to proceed with a new rule that would institutionalize that expansion and, at the same time, substantially alter existing regulations defining the pivotal relationship between third-party Primary Inspection Agencies (PIAs), manufacturers and HUD.  What is worse, is that HUD plans to institute rulemaking on this major and costly alteration of the existing in-plant regulation structure without a consensus of the Manufactured Housing Consensus Committee (MHCC) and without even presenting a complete proposal to the MHCC as required by law and as requested by the MHCC itself.  Indeed, the story of how this has come about is a textbook reflection of HUD’s efforts over the past decade to minimize, circumvent and evade the program reforms of the Manufactured Housing Improvement Act of 2000, and a case study for Congress when it examines the Department’s failure to fully and properly implement that law.

Back in 2008, HUD approached the MHCC with “concepts” for changing the fundamental role of third-party PIAs (and particularly private PIAs) as well as the nature of their relationship with both manufacturers and HUD.  These “concepts” ultimately led to HUD proposed revisions to elements of the Procedural and Enforcement Regulations (PER), that were presented, in piecemeal fashion, to the MHCC Regulatory Enforcement Subcommittee.  That process, however, was halted by a vote of the Subcommittee in September 2008, based on MHARR objections that the consideration of piecemeal proposals – that did not allow a complete evaluation of the interaction between various components – was improper, as was the consideration of such proposals without relevant cost information or justification as required by the 2000 law.

Confronted with this rejection, HUD responded with a three-pronged strategy.  First, beginning in late 2008, it embarked on a campaign to expand and fundamentally change in-plant regulation on the ground, without first complying with the due process requirements of the 2000 law, based on an elaborate series of “enhanced checklists,” “field guidance” documents and “standard operating procedures” that were not – and still have not been – presented to the MHCC for consensus review or published for notice and comment rulemaking.  Initially, and for nearly a year-and-a-half afterward, HUD characterized the major changes implemented by these documents as a process of “voluntary cooperation,” only to ultimately deem them “not voluntary” in March 2010.  An August 24, 2011 article in the Capitol newspaper “The Hill” aptly describes this type of process (being used increasingly by regulators), stating: “Th[e] new guidelines are  supposedly ‘voluntary,’ but don’t be fooled.  The federal government … has long been engaged in an egregious and unconstitutional regulatory power grab.  The strategy simply is to saddle disfavored industries with regulations disguised as ‘voluntary,’ and therefore not subject to the normal rulemaking process and judicial review.”  Although written about a different set of “voluntary” guidelines, the same logic and analysis holds here.

Second, in 2009, HUD returned to the MHCC with a unified regulatory proposal to amend the PER regulations in a way that would legitimize and provide legal support for such “on the ground” expanded in-plant regulation.  In a formal September 2009 letter ballot, however, HUD was unable to secure an MHCC consensus on this proposal, specifically due, as reflected by MHCC minutes, to the Department’s failure to provide the Committee with adequate justification showing the need for such changes, as well as its failure to provide concrete information regarding the cost-impact of its proposal.

Third, when MHARR continued its objections to the “on the ground” imposition of such a costly regulatory expansion without compliance with relevant due process protections, HUD, on February 5, 2010, issued an “interpretive rule,” without opportunity for public comment, designed to ensure that the MHCC would never get an opportunity to review its expanded in-plant regulation checklists, “field guidance” and standard operating procedures, by simply reading catchall section 604(b)(6) – requiring MHCC consideration and related rulemaking for any change in “inspection practices” – out of the 2000 law.

Now, HUD is taking the next step to institutionalize expanded in-plant regulation.  As announced by HUD regulators at an August 17, 2011 meeting of the MHCC’s Regulatory Enforcement Subcommittee, the Department plans to go forward with a proposed rule relating to the role and activities of the PIAs without further consultation with the MHCC, despite the absence of an MHCC consensus due to HUD’s own failure, in 2009, to provide justification and cost information that the MHCC is required to consider by the 2000 law.  Questioned about this procedure, HUD’s representative stated that the MHCC had “had its chance” in 2009.

This stance, however, flouts (once again) the requirements of the 2000 law. Section 604(b) of the law requires that the MHCC consider every proposed PER regulation, absent a declared emergency.  Further, section 604(e) of the law requires that the MHCC consider the cost-impact and justification for any such proposed regulation.  The MHCC, however, has never been provided with this requisite information by HUD.  As a result, there are two possible scenarios in this matter, both of which violate the 2000 law – (1) if HUD’s new proposal is in any way different from the proposal that failed to attain an MHCC consensus in 2009, then it has never been considered by the MHCC and violates section 604(b); (2) if the new proposal is identical to the 2009 proposal, it still has not been properly presented to and considered by the MHCC in accordance with the law, because mandatory elements required for MHCC consideration in accordance with the law – cost-impact data and a showing of justification – were never provided.  Put differently, if HUD’s position were correct, the Department could effectively evade the consensus requirements of the 2000 law on every proposal simply by refusing to provide the MHCC with cost-impact, justification, or other  information needed or required for MHCC review and consensus comments.

HUD, in an attempt to minimize this further restriction of the role and authority of the MHCC and its own obligation to comply with the due process requirements of the 2000 law, noted that Committee members could submit comments during the public comment period on the proposed rule, but this misses the central point of the MHCC and the 2000 law – that regulatory changes should be based on the consensus agreement of all program stakeholders.  And there is not – and never has been — a consensus on any changes relating to the role of the PIAs or an expansion of in-plant regulation.  Simply stated, a federally-regulated industry that has lost more than 80% of its production over the past 12 years, should not allow this kind of incremental evasion of the law.

In MHARR’s view, this proposal, a vestige of prior program management that sought to minimize and bypass the reforms of the 2000 law, should be withdrawn by the new program management and re-submitted to the MHCC, this time with proper cost-benefit information and specific justification – if one exists.

MHARR VIEWPOINT
By Danny D. Ghorbani

Manufactured Housing Association for Regulatory Reform (MHARR) is a Washington D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.

Washington, D.C., October 5, 2011 – The Manufactured Housing Association for Regulatory Reform (MHARR) reports that according to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD), manufactured housing production rebounded in August 2011, posting its first increase in 12 months.  Just-released statistics show that during August 2011, HUD Code manufacturers produced 5,187 homes, up from the 4,896 HUD Code homes produced in August 2010, representing a corresponding month increase of nearly 6%.  The last time that industry production recorded a corresponding-month increase was in August 2010, when production grew by 9% over August 2009 levels.  This increase brings 2011 cumulative industry production, through the end of August, to 32,015 homes — 9.9% lower than corresponding industry production of 35,566 homes over the same period last year, but a distinct improvement over double-digit cumulative production declines earlier this year.

While any production increase is welcome news, the manufactured housing industry – given its status as the nation’s primary source of truly affordable non-subsidized home ownership — should be experiencing more significant long-term growth in the face of a sluggish economy that accentuates the affordability of its homes in relation to other types of housing and features historically low interest rates on home loans.  The fact that it has not yet benefitted from conditions that, in the past, have stoked industry growth, underscores that the sustained industry decline since 1998 is less a result of the broader economic environment than factors uniquely affecting manufactured housing – specifically, the unavailability of consumer financing and HUD’s failure to fully and properly implement key reforms of the Manufactured Housing Improvement Act of 2000 that were designed to ensure the parity of manufactured housing as “housing.”

Now, though, the industry’s two national trade organizations, MHARR and the Manufactured Housing Institute (MHI) have agreed to work together, jointly and cooperatively, to address three major issues concerning consumer financing and the implementation of the 2000 law, specifically, the need to expand sources of consumer financing and eliminate unnecessarily

restrictive barriers to entering the manufactured housing market, the appointment of a non-career
administrator for the HUD manufactured housing program, as provided by the 2000 law, and the re-appointment of collective national industry representatives to the Manufactured Housing Consensus Committee, the centerpiece reform of the 2000 law.

A joint MHARR-MHI delegation has already met with senior HUD officials to address these three specific issues and will follow-up accordingly.

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.