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Posts Tagged ‘2011’

Our experience with Resident Owned Communities – no BS

January 15th, 2014 No comments

The “No BS about Resident Owned Communities” article that appears on this site brings to mind President George W. Bush’s comment while visiting Canada in 2004:

I would like to thank all you Canadians for your warm welcome at the airport. Especially those of you who waved (pause) with all five fingers.”

I get it. We have a successful business model that is reshaping resident ownership and that invites reactions from competitors.

I stand by our record of performance to prove we have a lot of five-finger waves and cheers in the marketplace for ROC USA® as we’ve closed:

  • 13 resident-owned community (ROC) purchases in 2013;
  • 12 in 2012; and,
  • 11 in 2011.

In fact, we have closed a ROC transaction every 37 days on average since we launched in 2008.

We got there by being 100-percent focused on making resident ownership effective and efficient and successful. The marketplace is the true judge.

One of the keys to our success is that we don’t have to chase capital to finance resident purchases. We have already raised all the financing the resident corporation needs — including funds for deposits and due diligence — in a U.S. Department of Treasury-certified Community Development Financial Institution.

We have current liquidity to finance $40 million of resident purchases today. No one else in resident ownership services has raised capital in advance the way we have. We did it so we could create a different transaction experience for buyers and sellers.

We’re not simply brokers who get paid at closing and walk away — we equip homeowners with the tools and training they need to successfully manage their communities. The fact is that we care about each community’s long-term performance and we know every democratic association needs leadership development and cost-effective shared services to be competitive. ROC USA has a national leadership institute for ROC leaders, a national marketing program for ROCs, and an online and in-person training system to help ROCs and ROC leaders succeed.

At ROC USA, we use the limited equity co-op for simple reasons: It is the most effective and efficient, the fairest and the most affordable model for homeowners. We stand by our work of the last 30 years with more than 140 ROCs that we took from tenants to owners.

Not one of those communities has failed.

That 30-year track record demonstrates the competency and capacity of ROC members and leaders with whom we work.

Every one of these ROCs is real ownership where each homeowner can purchase one low-cost membership interest in the corporation that owns and controls the MHC. There are no outside parties with an ownership interest in the co-op or the MHC, only the homeowners can be member owners.

ROC USA is a nonprofit and thus must serve low- and moderate-income communities, but that doesn’t limit us to small communities. Our largest completed transaction was a two-MHC portfolio transaction worth $23 million for nearly 500 home-sites in 2012. Further, and not surprisingly, every MHC we’ve worked in has sufficient numbers of low- and moderate-income — that’s not an issue.

We don’t apologize for being well-funded or widely publicized. Getting things done attracts interest and attention. Every closed transaction gets a press release and we send postcards to announce purchases. Often we’ll quote the community owner or the broker. Here are two recent ones:

The business model that ROC USA has developed is superb. It was a different transaction in that you usually have to jump through a litany of different hoops in regard to banks and bank regulations. But that simply wasn’t the case here. I would certainly do it again, and I will.”

Joel Erlitz, Broker,
First Commercial Property Corp.

 

“It’s no different than a sale to any third-party.”

Phil Johnson,
Seller in Minnesota

ROC USA does not practice public policy. In fact, we eliminated the part-time policy position at ROC USA in 201l.

We’re out earning our way in the marketplace — just like you.

That’s how we ROC ‘n’ roll. ##

paul-bradley-rocusa-president-posted-industry-voices-manufactured-housing-pro-news-com-.jpgPaul Bradley, President
ROC USA, LLC
pbradley@rocusa.org / 603-856-0709

(Editor's Note: this article comes as a response by the Paul Bradley to the Featured Article entitled No BS about Resident Owned Communities.

Other perspectives on this topic or any that impact manufactured housing are welcome. Please put OpEd, Letter to the Editor or Industry Voices in your subject line and send proposed article to – latonyk@gmail.com and/or iReportMHNewsTips@MHMSM.com – thank you.

As an additional reminder, we welcome tips on topics and local/regional/national/international news that impacts factory built housing. Readers like you can be and are a part of the story here! )

What Manufactured Housing Competes Against

August 7th, 2012 5 comments

l;ance-inderman-mhpronewsI think we need to take a serious look at what our industry is competing with in the housing marketplace and the regulation that each of our housing competitors are facing.

We worry way to much about what one of the 3-C's of manufactured home building are doing than we should. As a percentage of new homes sold, we just keep loosing ground.

The site builders are pushing us further and further into the rural abyss. I have a partner that builds homes with me in Lubbock and we are able to build a brick home with porches and 6/12 roof pitches for around $40 a square foot including material and 100% subcontract labor.

I have another friend that builds about 125 new homes a year with annual sales of about $35,000,000 and a little over 10% net bottom line. He does this with 9 employees, no multi-million dollar building, total work in process and finished goods of about $1,500,000. He has no licensing requirements. His company and his salespeople have no continuing education requirements. He does not offer paid vacations to his employees or laborers. He is not faced with massive unemployment taxes if he does not have a house to build tomorrow. Government mandated health insurance does not affect him. Basically he has almost no regulation and very little overhead. He builds a quality product and is very successful.

I drove down the beach between Beaumont and Galveston and pass one RV park after the other with all types of RV's up to buses that cost over a million dollars.

I saw manufactured homes that were at least 12 feet in the air to protect a $40K double wide from flooding. The construction cost to complete these jobs has to be close to exceeding the cost of the home itself. This does not appear to be a very efficient way to supply housing to me. It looks to me that the RV industry is getting a big piece of our pie and the site builders are getting an ever increasing bite as well.

We have to become more efficient at what we do from the factory to the finished product.

I think the factories do a fabulous job building 16×76's, its the most efficient 3 bed 2 bath housing I have ever seen. But by the time we: 

  • market that 16×76 to our customer at retail,
  • deal with all the regulatory requirements to install and complete the home,
  • deal with private finance against government subsidized financing on site built's,
  • escrow over priced insurance and taxes and
  • then deal with the cost of servicing a home in the middle of nowhere,

our monthly payments are as much or more than most people can buy a new starter home including land in a tract home subdivision.

We must do everything in our power to control these costs, including, but not limited to:

  • getting our finance on a level playing field,
  • getting higher deductible lower cost insurance in our market,
  • factories working with the retailers/installers to do everything possible to lower the cost of installs and
  • last but not least keeping the regulators at bay.

I think our industry has a remarkable product that we can build and a great story to tell but all you hear and see is "I don't want a trailer in my back yard."   Most of those yards now include a brick home with an RV in the driveway.

I've said it a 1000 times that if we did not have FHA, FNMA and Freddie Mac that our industry would be producing the most affordable quality housing option on the market. What gives?

Lance Inderman

l;ance-inderman-mhpronews(Editor's note: Lance Inderman is arguably one of the most successful independent retailers of manufactured homes in the country. Champion Homebuilders recently purchased Athens Park Homes, a HUD Code, modular and park model builder that Lance and his associates operated. He was the Chairman for the Texas Manufactured Housing Association in 2010-2011 and remains an active player there. Lance plans to attend the TMHA annual event.)  

Avoiding the Perception and Reality of Discrimination

August 3rd, 2011 1 comment

In a disappointing scenario being played out in disaster-stricken communities across the nation, Federal Emergency Management Agency (FEMA) policies are resulting in de facto discrimination against HUD Code manufactured housing as both temporary emergency and permanent replacement housing.  At the same time that these policies are unnecessarily complicating badly-needed relief for disaster victims, FEMA, on June 7, 2011, hosted a day-long meeting in Washington, D.C. to explore, discuss and otherwise consider the details of a possible “small footprint” temporary HUD Code emergency home design.  Given these two seemingly opposite directions, a good many HUD Code manufacturers, anxious to meet the current pressing need for post-disaster housing with the most affordable, transportable and rapidly deploy-able homes available, while facing historically low productions levels, are starting to wonder exactly what is going on.

What is “going on,” is that FEMA, facing an immediate need for both short-term emergency relief housing and permanent replacement housing in communities where the existing housing stock and infrastructure has largely been decimated, has, for now, seemingly retreated from the use of new federally-regulated HUD Code housing as a primary source of emergency housing.  Instead, displaced disaster victims have been put-up in rental housing as much as an hour away from their former homes, or in non-HUD Code modular units.  Media reports, for example, indicate that FEMA is currently constructing up to 324 three-bedroom modular homes in Kansas City, Missouri, that will be sited on city-owned land in the north part of town, for some 624 Joplin families and individuals in need of housing.

In part, this appears to be a reflection of specific policy choices by FEMA.  In a May 31, 2011 Associated Press article regarding Joplin, Missouri relief housing, a FEMA spokesperson stated, “despite the distance, putting people in permanent housing is preferable to trailers….”  Another FEMA spokesman commented  that “the agency will consider bringing trailers to Joplin if enough existing housing isn’t available.”  Consequently, FEMA policy seems to be that today’s HUD Code manufactured homes, despite serving as “permanent housing” for millions of Americans and being regulated under federal law as residential dwellings and not “trailers,” are somewhere down its list of options to house disaster victims.

In other places, like Cordova, Alabama, FEMA has failed to overrule — or even object to — local officials who have barred the placement and use of HUD Code manufactured homes as emergency relief housing based on local ordinances, even though such emergency housing is provided with federal tax dollars by a federal government that, under the Manufactured Housing Improvement Act of 2000, is supposed to “facilitate the availability of affordable manufactured homes.”  According to news reports, FEMA’s official comment on this HUD Code  housing ban affecting large numbers of displaced disaster victims, was that “it’s a local issue….”  Whether this is an outgrowth of a “second choice” policy for HUD Code housing or simply unwarranted deference to biased local officials, the result is the same — discrimination against HUD Code manufactured housing that hurts both disaster victims and the industry.

In the meantime, against this backdrop, FEMA, at its June 7, 2011 gathering, devoted an entire business day to a discussion — with industry members — of hypothetical “small footprint” one-bedroom HUD Code units that FEMA might be interested in purchasing under a “possible” future contract.  This, in turn, has led to the creation of  task forces, committees, discussion groups and the like, and meetings of those groups, to explore the particulars of such units, while, at the same time, it was apparent from the various FEMA presentations, that there is considerable confusion and disagreement, within FEMA, regarding the most basic aspects of such a unit, including: its size and configuration; its compliance with federal accessibility criteria; possible mandatory compliance with the International Residential Code; the installation and storage of such units; and the possible use of such “small footprint” homes as permanent housing.  And all this is if FEMA goes forward with such an initiative at all — with FEMA officials cautioning that nothing has yet been decided.

The bottom line for now, is that while there is the appearance of discrimination against new HUD Code manufactured housing in the field for both relief and permanent replacement housing, the industry has been left to chew over the details of a possible new opportunity that may be, could be, or might not ever be.  So, what to do?

Let there be no mistake, the industry can and should continue to work with FEMA.  The HUD Code industry has traditionally taken the lead in providing — on a quick, timely and flexible basis — safe, decent and readily deployable relief and replacement housing for disaster victims.  The industry should continue to pursue this role vigorously with FEMA at the policy level, which is why MHARR participated in the June 7, 2011 FEMA meeting and the Association has already started to follow-up on ways that the HUD Code industry can provide even more assistance to FEMA and other government agencies responsible for post-disaster relief.  The HUD Code industry already has the knowledge, know-how and experience to  provide whatever FEMA and disaster victims need.  But it must also address current FEMA policies.  Very simply, FEMA must be urged to change policies that have resulted, effectively, in discrimination against HUD Code manufactured housing and to re-commit to the use of HUD Code housing — of all types — as an equal participant in its federally-funded programs for both short-term emergency housing and permanent relief housing.

In MHARR’s view, the HUD Code industry has long been at the forefront of helping government provide both temporary relief and permanent replacement housing for victims of natural disasters, and with appropriate policies in dealing with FEMA, there is no reason why it should not continue in — and even expand — that role. # #

Danny D. Ghorbani is President of the Manufactured Housing Association for Regulatory Reform.  MHARR is a Washington, DC-based national trade association representing the views and interests of producers of federally regulated manufactured housing.  Danny can be reached at 202-783-4087.