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About-Face! City Council Mh Prohibition Reverses Course

October 16th, 2015 No comments

Boy, it is nice when I get to share good news.  Wins for the industry and sharing good news are probably the two best parts of my job, and fortunately for me, those two things almost always go together.

Last night in Huntsville, Texas, the city council reversed course on what started out looking like another bad news day.  A couple of weeks ago the city council met and voted on first reading (they need two readings to make ordinance changes official) to prohibit all manufactured homes from being sited on a lot within the city limits.  Initially they had a small exception for homes going inside communities and for replacement of existing manufactured homes, which incidentally is state law that TMHA worked to get passed years ago.  But other than those two limited exceptions, no more manufactured homes.

The first reading vote was 5 – 2 in favor of the MH prohibition.

A local reporter covering the council wrote a story about the proposed prohibition, and Jenny Hodge with MHI emailed me alerting me about what the council was proposing.  We then pulled titling records and retailer selling records and started contacting retailers with a selling presence in Huntsville.  Thanks to Rob here at TMHA, we were also able to gather some telling data about manufactured housing in Huntsville.  Specifically, we learned that from 2011 to 2014 a total of 843 manufactured homes were sold with the city of Huntsville listed in their address.  MH presence aside the demographics were incredibly telling of a city in real need of more affordable housing, not less.  The median income of a household in Huntsville is $27,362 per year.  Of the existing housing in the city 16.6 percent is more than 45 years old.  Housing supply, specifically affordable housing supply, is clearly constrained because nearly two-thirds of Huntsville residents are renters and in this large renter category 61.8 percent spend more than 35 percent of their monthly income on their rent.  To consider further limitations on sources of affordable housing seems illogical.

But as we all know this isn’t a logic puzzle, it’s politics.  Because this was one of the more rare instances where we actually found out about a proposal before it was final we were able to inform our retailers who would be adversely impacted by the proposed prohibition.  From there those retailers and other citizens who turned up last night at the council meeting to testify against the proposed ordinance took over – and did all the heavy political lifting I might add.

We cannot thank Gary Adamek with Reliable Homes and Les Stone with Clayton Homes enough for the work they did, the time they spent, and the persuasive testimony they provided last night.  These retailers and the results they secured in a near complete reversal by the council (they voted unanimously to continue to allow MH within city limits) once again demonstrates the power of engaged, passionate, local advocacy.

Again, when it comes to local (city and county) politics it is imperative that local constituents and businesses are there to advocate for their industry.  When this happens in a timely manner the industry’s chances of securing a victory increase many fold.

I hope that Gary and Les’ success last night serves as an example to all those in our industry about the power of local political engagement.

Everyone has heard the term, “it takes a village,” and that applies to political advocacy.  The power of timely information coupled with individuals willing to engage locally on behalf of their interests, the interests of the industry, and the interests for consumers who want affordable housing options, can prevail when properly deployed.  I’m happy to report such a deployment occurred last night. ##

http://www.texasmha.com/news/featured/about-face-city-council-mh-prohibition-reverses-course

Exhaustion Sets In

August 8th, 2014 1 comment

I’m exhausted, Jerry, exhausted I tell you. “Exhausted, Marty Boy, why?” Well there are many reasons, and in trying to sort it all out, I’ve exhausted my feeble brain.

I speak of course about the state of the industry. It starts with L. A. ”Tony” K, the MHProNews impresario, whose boundless industry enthusiasm doesn’t quit. Now all this, mind you, as we scrape along on an annual shipments level which in the past we equaled and surpassed in a single month.

Getting your head around that enthusiasm is hard to sort out. So many reasons why MH should be great but woeful results, that’s what is exhausting me.

Story Time

Let me tell you a little story. Sometime along the mid 2000’s, say 2006 or 2007, I was invited to join Urban Land Institute, ULI, a well-known and respected real estate trade association/think tank. It is populated by some of the largest and most powerful real estate interests, a pretty awesome “who’s who” of the Big Boys in real estate.

Inside Trailerville then were people who had come to our industry from the real estate industry and thought manufactured housing communities was a land use that should be represented at ULI. An MH council was formed and I was invited, along with 30+ others, to join and was frankly flattered to accept. ULI has a great reputation.

I started going to the ULI meetings and the MH luminaries were everywhere in the council. My consulting assignment at Fannie Mae at the time profited from my attendance as I was at the industry’s train of thought at the highest level. All good, right?

First Class

Now, understand something, ULI is not MHI or MHARR. ULI goes first class only, no Motel 6’s here. They meet at the very highest level venues, read this to mean “Expensive,” and invite powerful and well-known guests and speakers. Contrasting this with the MH world is eye-popping. If one spends an average of $1,000-$1,500 to attend an MHI convention, ULI seems to come in at $4,000-$6,000 per conference, a not inconsiderable sum for poor boys like me who peeled those dollars out of my own back pocket to attend.

I don’t really mention the cost of attending an MHARR meeting, as long distance phone rates are so low that the occasional MHARR meeting takes little time and virtually no expense. Networking is not really what MHARR is all about.

Lacking Candor

Back to ULI. I found most of the early meetings of the MH council, or whatever its name, a poor version of MHI meetings. While the intent was to foster an exchange of ideas and information from the very highest level of MHdom, the Big Boys were there, but they were all wearing vests so they could keep thoughts and information close to their vests. Even when we were to break for lunch seemed to be a secret. The lack of candid response from participants, who seemed to be going through the motions, disappointed me.

Here we had the greatest minds in MH, but I could gain better industry knowledge and information from the third string attendees from the same companies at an MHI meeting, at 1/3rd to 1/4th the price. I was beginning to waiver about my continued involvement in ULI.

Excited

Then, a ULI conference was announced, where the MH council was to feature a housing study by a prominent economist whose expertise was in housing demand. Whoa! Here’s something I could get my head around. Maybe after the study was presented I could relearn the words to “Happy Days Are Here Again” which in ’06 or ’07 I hadn’t sung since that 1998 post-HUDcode record of 373,000 home shipments. The best industry performance since the 1973 573,000 homes shipped, which had occurred when I was a young man and before the HUDcode.

The economist came, the lights went out, and the demand charts started to flow. Holy craps, Robin, get that song out! It was back. So I kept following the economist’s report carefully and he said the same things then we are still saying today: low cost housing demand, high conventional housing costs, factory built quality, yada yada yada, it was all falling into place, Jerry. Music!

But despite the obvious buy-in by most participants there, their choirboy gleams revealing, I had the uneasy feeling that, just as I do today, of an unfinished report.

Finally, biding my time, as I was as insignificant a participant as there was there, I screwed up my courage and asked the following: Yes, of course, I understand the demand side of the MH equation, but can you tell me, Mr. Eminent Economist, how your exuberant MH sales expectations will be financed?

What?

Huh? He was a housing demand expert. not a finance guru. He hadn’t the slightest idea as to how it would be done. Note that as you hear all the reasons today why MH should be kicking housing azz, that question remains unanswered for the most part.

I could see narrowed eyes around the room directed at me, the thought clear on its face; how dare you, you F’ing Azzhole, challenge Mr. Eminence? He just returned from Mt. Sinai with this report! I though it a fair question to ask, just as I do today.

In 1972 I came into the industry. By the time of the ULI economist meeting I had been kicked around HUDville 35 years. Even with my extraordinarily thick cranium, some knowledge had managed to creep in. By the early 2000’s I had seriously begun to question whether the 1998 shipments top and heavy decline thereafter was a “normal pullback” as had happened frequently in the past. Ah, it will all be back soon was the industry refrain. If I believed that early on, by 2002 there were clear signs to me this time was different, very different.

Not This Time

Working against the industry grain, my study of MH loan performance, the horrific losses suffered by lenders and their investors, got me to thinking the industry had real, long-term problems, from which recovery would be difficult, at best. Did I envision a drop to 50,000 annual HUD shipments? No, I was not born in swaddling clothes.

Further, and this was hard to grasp and accept, since the industry’s real volume emergence in 1969 to the 1998 top, the great volume the industry enjoyed was based on faulty lending losses by most lenders during that period, averaging close to 250,000 annual shipments. I then did the presumptive math on what volume might be with a rigid, but survivable lending regimen, and the numbers were scary low. Not as low as they got, but low.

If you don’t understand the preceding paragraph, read no further until you do. Every time you hear of glowing future prospects for HUD Code homes ask the predictor “How will they be financed?”

Huge industry volume subsidized by huge lender losses. It was an illusion, and it went on so long we all believed it would always continue. When I wrote about this early on in my Newsletter, “Marty’s News and Notes,” I can say the concept was neither generally accepted nor was my writing and lecturing about it well received. Let’s just say I was not the industry’s Favorite Son.

The Book

Fast forward to the present. I just plowed though “Dueling Curves; The Battle for Housing” by Bob Vahsholtz. This is a prodigious work, with the slant from a man well familiar with much of the industry’s early years and a home designer with great home building knowledge. His book is worth reading for the history lesson and for his ideas for reviving the industry going against the site builders.

I sought the answer from his book to my “How will it be financed?” and found in his multiple step program to improve the industry the following on finance:

Accept the penalty of chattel financing or leasing and use it to include such necessities as skirting and exterior storage. Repos should result only from family disasters and crooks. Even better financing – even from local small-town banks – will come with a proven track record. Good affordable homes need no subsidies. Earn a solid reputation from performance rather than waiting for the government to enforce its arguable notions of engineering and financing.”

Very little to argue with there, but will that guide us back to 150,000 to 250,000 HUDcode homes? Annually? I wouldn’t hold my breath.

Phewff

Exhausted, Jerry, exhausted, I say, that questions just exhausts me.

Let’s be clear here, whether I was writing my newsletter, on my consulting assignments, at ULI or MHI, reading Vahsholtz’s book, or discussions with L. A. ”Tony” K and others, THE question which must be answered is to find a way to finance the demand for our housing, at a 150,000 to 250,000 annual sales level. The present sales level just won’t create a stable, growing industry.

So what is it that causes such low sales volume with such high demand? It is because a great part of our demand comes from a tier of people whose credit capabilities make them unfinanciable. Yah, Marty, no big secret there. And when we can finance some of our demand, it comes with a high tariff, an interest rate generally applied by Guido in his transactions These rates, often more than twice and even three times the present rate for site-builds, are needed to ameliorate our high default rates and high losses on defaults.

How?

Let’s deal with the most important reason for this missive; how does MH create demand that has a greater chance of being financed, assuming stupid lending money is not stage left, waiting to enter? How, indeed?

Sometime in the mid 2000’s, the industry commissioned a market study by Roper Associates to ascertain the public’s view of MH. Let me cut through the bull pucks, they reported they had never compiled a study where the industry had such a negative public perception. Oh, man, we finally were the best at something!

A lengthy industry discussion set in, mostly at MHI, meeting after meeting, innumerable committees, and finally a joint meeting with the RV boys to discuss the merit and results of their “Go RVing” campaign. The RV’ers were exuberant about their campaign and urged us in the strongest terms to do our own campaign.

The RV industry had a different problem than MH, just the opposite. Their customer demand came from buyers with good credit, they just weren’t seeing enough of them. On the other hand at MH, we see many customers, enough to fuel many more sales, we just don’t see enough customers with sufficient credit capability. We needed to find a way to get more credit capable people tromping our sales locations. The intent of the Roper study and the follow-up presentation was to lead to a campaign to induce more credit capable buyers to our stores. You know, a campaign to boast the image of the industry and consumer acceptance through increased positive knowledge.

Embarrassment

So meeting after meeting, discussions aplenty, and finally two outcomes, one embarrassing the other catastrophic. The first result was the campaign presentation meeting should have climaxed in a buy-in to move forward with the pros.

The initial presentation was hardly a finished campaign, but the MH Yahoos raised such a ruckus about their vision of what the campaign should be, that it turned into a bitching session of the first water. I saw MOBES who can’t spell “campaign” reaming the pros, turning into a bewildering babble of conflicting ideas. I found that in their other job, sales lot operators and LLC managers, carried out image campaigns, professing to know more than the pros, howling with authoritative criticism. The pros didn’t know MH. They, on the other hand, are the folks who brought you the 40-50,000 annual sales volume, so yes, they know MH.

I met one of the leaders of the campaign presentation after the meeting and he could only shake his head. Yes, not everything they had ever done for others went smoothly, but this was a different order of foolishness. He wondered why they had been hired, as the industry appear to have all the answers. Why, indeed?

Worse

But bad as that was, and yes I was embarrassed to see all of the negative comments I had heard about the industry from outsiders played out before me, the following was worse.

I don’t think I spill any secrets saying a small coterie of individuals run the industry associations. A cocked eyebrow from one of these Brahmins effectively ends any discussion. So the industry opportunity at salvation, already fleeting as all this occurred, tumbled completely due to the well-engrained industry principle, “never do anything that might help a competitor.” And the industry moment when there was still barely enough $$$ muscle to fund an image campaign passed, and with it the last of the passing life rafts.

Succinctly stated, so no one misses my meaning: The industry must find a way to attract a far more capable buyer to our sales locations, or what you presently see is what is likely to prevail. Chances are the image campaign train has left the station and another does not follow close behind.

Bear in mind that some people are prospering under the present scenario. Not too many, but a few, especially those with eyebrow power. Reduction of competition can be salubrious, even if it only consists of a larger portion of a smaller industry. I can only assume as the image campaign was eye browed down, people would know that, or at least suspect it.

No Mojo

So we now find ourselves as an industry with insufficient muscle to fire up any sort of campaign. Some have wondered whether social media or other Internet driven endeavors might substitute for the traditional media campaign we can no longer fuel as an industry, being a real block buster campaign driven by a $20-30 million effort, one that can successfully reach a broad segment of American consumers and educate them about the many advantages we claim for our housing, to attract those folks we so sorely need. Whether the vaunted Internet driven efforts can succeed, I have no knowledge, but I’ve seen no evidence it is being much attempted or positive residue therefrom.

Phone Call

Would it be that in 5 years someone calls me and says “Yah nana nana, you F’ing jerk. See I told you the ad hoc campaigns could work.” I’m not staying up nights in fear.

The years go by, the same silly things are repeated endlessly, about industry promise, the quality of the homes, the future of all homes to be factory built, the far lower cost, and on and on. All great stuff of course, but how do you sustainably finance 150,000-250,000 HUD homes annually? On that, which is the number one issue, the industry is remarkably silent. ##

marty-lavin-posted-on-mhpronews75x75MARTIN V. (MARTY) LAVIN
attorney, consultant, & expert witness
350 Main Street Suite 100
BURLINGTON, VERMONT 05401
802-660-8888 office / 802-238-7777 cell
marty@martylavin.com

Who’s in Charge Here?

June 3rd, 2014 No comments

Rick Rand’s excellent proposal for an all-industry conclave at a neutral location is gathering momentum. Such a venue should certainly not screen out the smaller operators who have always been a prime source of innovation, and it is vitally important that the “big guys” also be at the table. Make room for the various associations charged with the thankless task of placating the placating the industry’s many voices.

As a long-retired veteran of manufactured housing, I’m appalled at the conflicts, back-biting and lack of leadership that has always hamstrung our young industry. It was understandable in the early days when the largest manufacturers controlled less than ten percent of shipments and no other industry constituent was in a position make things happen beyond his own company (in those days, the leading players were all men).

Today, though manufactured housing is a shadow of its former self, the product itself is far better, the need for affordable housing is far greater, the leading manufacturers remain profitable, the market for manufactured housing communities is heating up and the stick competition is in disarray. So why are our sales volumes in the dumper?

It is true of course that we, as an industry, have made many mistakes. And we’ll make more.

In a free enterprise system, we learn from our mistakes and keep moving forward. That’s exactly what needs to happen at the kind of meeting Rick has proposed. Pull the tribe together with an agenda focused on the problems we’ve created, the opportunities ahead and agree upon a broad based strategy to deal with today’s challenges. Ideas and innovations are often sparked over a cup of coffee or glass of beer, and contacts have always been the lifeblood of the industry.

But far more is needed than griping about Dodd-Frank and what names we should use for our products. Consider some fundamentals.

Housing is one of America’s least efficient industries. That includes stick builders and us too. Why is that? Well, there’s no serious foreign or domestic competition, no real industry leadership, way too much regulation and negligible innovation. That’s been the case for a hundred years.

Academics and all sorts of advanced thinkers have, for at least that long, looked to industrializing the building process to break out of housing’s quagmire. It has finally happened. The industry we now call manufactured housing has demonstrated the ability to build good housing at roughly half the cost of traditional methods, and we have the black eyes to prove it.

As one result, America’s largest home builder is one of us, and one of the world’s richest men bankrolls MH financing. Something like 20 million Americans live in homes we’ve built and the vast majority of them appreciate the comfort and value those homes provide. There’s ever so much more that could and should be done, but we’ve made a better start than any other tilter at housing’s windmills. Many have tried.

One thing the MH industry agreed upon some 40 years ago was to unite under the HUD banner. That turned out to be a painful process with about as many negative as positive outcomes. We banded together again to reform that process with the Manufactured Housing Improvement Act of 2000 (MHIA 2000), but guess what? Big Brother has its own ideas about “Improvement” which do not include a lot of use for industry committee input.

We’ve got a lot going for us, and yet the squabbles continue. If there’s an industry strategy, it did not emerge from my recent research. What is happening is a plethora of tactics, put forward under various banners, mostly going nowhere.

As an industry professional, you can put forward some ideas for how to deal with these challenges. So can I, and I’ve done so in my recent book, Dueling Curves. It’s not enough.

Maybe at Rick’s gathering of the tribes, some sort of consensus can be reached, on a whole bunch of nifty ideas.

But that’s not enough either.

The single most important objective of such a congress—or whatever it’s to be called—should be to the emergence of industry leadership. Not a task force, committee or agency, but a person of vision who commands the respect of the industry.

A tribal chief who can weave the disparate strengths of the manufacturers, suppliers, financiers, retailers, MH owners and community operators into a strategy we can all salute. Oh well, yes, there will always be a few curmudgeons. No one will be entirely happy with any strategic vision adequate to unite us; not even the leader who ultimately propounds it.

But let me suggest this. Should we fail to unite behind competent leadership, I can suggest who will become take charge of the industry. Well, maybe I shouldn’t name names, but the initials are H.U.D. ##

bob-vahsholtz-author-dueling-curves-battle-for-housing-posted-industry-voices-guest-blog-mhpronews-com-manufatured-housing-professional-news-75x75-Bob Vahsholtz is the author of DUELING CURVES The Battle for Housing Bob can be reached at kingmidgetswest@gmail.com. Web: www.kingmidgetswest.com

The RV Industry is Attempting to Amend the HUD Manufactured Housing Code

May 28th, 2014 No comments

The Recreational Vehicle Industry Association (RVIA) is pushing a proposal through the U.S. Congress to change the definition of manufactured home in the National Manufactured Home Construction and Safety Standards Act.  The proposed change would specifically exclude certain “RV trailers,” including Park Model RVs, from the definition of a manufactured home in the federal HUD Code.

The stated purpose of the proposed change is to provide regulatory certainty to lenders, state or local taxation and land use officials that a Park Model RV is a recreational vehicle, not a manufactured home.

Their urgency for this change is that some lenders are apprehensive about making Park Model RV loans in light of the new Dodd-Frank Act requirements.

A concern with the language, as proposed, is that it may allow ANSI Park Model RVs to expand beyond the current 400 square foot size limitation. 

This would be harmful to the HUD-Code RV Park Model industry in states like Florida by encouraging the sale of ANSI Park Models that exceed 400 square feet.

The proposed amendment states, “a park model RV that has a gross area not greater than 400 square feet based on the exterior dimensions of the unit measured at the largest horizontal projections in the set-up mode, including all floor space that has a ceiling height of more than 5 feet” (emphasis added). 

The ceiling height language was inserted to codify a 1997 HUD interpretation that loft areas which are less than 5’0” in height are not considered in determining the size of the structure. The proposed language does not limit the ceiling height exclusion to loft areas, thus allowing for the possibility of “slide-out rooms” or “build-outs” less than 5 feet high.

RVIA is emphatic that the intent is not to increase the size of ANSI Park Model RVs.

According to RVIA, concerns about enlarging the size of Park Model RVs are unfounded because specific rules are in place to measure the size and calculate the square footage of Park Model RVs. Additionally, Park Model RVs are built to standards administered by the American National Standards Institute (ANSI), a national voluntary consensus body. The ANSI A119.5 standards would have to be amended to allow for larger structures.

While these safeguards are in place today, the statute will drive future requirements. If the federal law is ambiguous enough to assert that larger ANSI RV Park Models are allowed, then the rules will change to accommodate this view. 

The RVIA is working hard to get this amendment accomplished during the 2015 HUD appropriations process. RVIA is not looking for industry support, but rather seeks to quell any opposition.

MHI has taken a neutral position on the proposal, while MHARR is adamantly opposed to it.

This proposed change to the National Manufactured Home Construction and Safety Standards Act will have a negative impact on the HUD-Code Park Model industry in Florida. Most Park Models are permanently sited and larger ANSI Park Model RVs will encourage permanent, year round living. ANSI Park Model RVs are designed and intended for recreational use and seasonal living only and are not built to the more stringent HUD building code.

The Florida Manufactured Housing Association (FMHA) has asked RVIA to consider amending its proposal to specify that the 5 foot ceiling height exemption applies to loft areas only. This will ensure that ANSI Park Model RVs are not built in excess of 400 square feet.

Reasserting the current size restriction in the proposed amendment will satisfy the RV industry’s objective of clarifying the differences between ANSI Park Model RVs and HUD manufactured homes for financing and land use purposes, while promoting ANSI Park Model RVs as a desirable option for recreational and seasonal accommodations. ##

james-ayotte-Florida-Manufactured-Housing-Association-posted-on-mhpronewsJames R. Ayotte, CAE
Executive Director
Florida Manufactured Housing Association
3606 Maclay Blvd. South – Suite 200
Tallahassee, FL 32312
Ph:(850) 907-9111
F:850) 907-9119
jayotte@fmha.org
www.fmha.org

Finance Expert Dick Ernst of FinmarkUSA: introduction at Tunica Manufactured Housing Show 2014

May 20th, 2014 No comments

Editor's note. This public introduction was videoed during the business building seminars held during the 2014 Tunica Manufactured Housing Show.

Note that the Speakers knew they were being filmed.

Dick-Ernst-Financial-Marketing-Associates-tony-kovach-mhpronews-com1

An exclusive interview with Dick Ernst is planned to be featured in our upcoming June issue. Dick moderated the finance panel at aDick-Ernst-Financial-Marketing-Associates-tony-kovach-mhpronews-com3 packed room of industry professionals at the 2014 Tunica Show. Dick Ernst also moderated MH home lending and commercial panels, in an overflow crowd during the 2014 Louisville Show.

Dick is a key figure in meetings with industry and public officials, including the CFPB, FHFA and more.

Dick-Ernst-Financial-Marketing-Associates-tony-kovach-mhpronews-com2

You'll get exclusive insights into the widely acknowledged top man in the manufactured home finance business, into industrymhpronews-interviews-with- finance issues, how to generate more profits and much more. Watch for it – and the. Watch it – in June!

More video Interviews available today are found at this link below.

http://www.MHProNews.com/home/industry-news/industry-in-focus/7540-global-eyes-on-manufacturedmodular-home-movers-shakers-and-news-makers

Our thanks to Dick Ernst at FinMarkUSA.com for his profit-making and protecting leadership for businesses, associations and others, and my thanks too for his kind words shared in the video above. ##

(Image and video credits, ManufacturedHomes.com in association with MHProNews.com)

Why the Continued Conflict?

March 8th, 2014 No comments

One has to ask themselves why this conflict continues? You ask what is the conflict and why do we as an industry need to concern ourselves with this issue? The answers are simple; the conflict is the continued divide between MHARR and MHI. The reason we must concern ourselves is obvious; industry unity will bring us further and faster than continued disunity.

I am not alone in asking this question about the root causes of the conflict.

Recently individuals from both inside the industry and the regulatory sector have written about the approach and tone of the messages sent by the Manufactured Housing Association for Regulatory Reform's (MHARR) President and CEO, Danny Ghorbani.

There is no reason for messages of the nature like the one linked here to continue.

Just this week the industry received some well needed good news that Pamela Beck Danner, JD, was appointed as the new Career Administrator for the HUD Manufactured Housing Program.

Rather than just leaving the message as a congratulatory letter, Danny stated that MHARR will challenge HUD’s change to the law regarding the position to being a career vs. non-career administrator.

Even if HUD has inappropriately changed the law, why send this widely distributed mixed message? Why not just congratulate Pamela and then quietly send HUD an objection that would not be widely distributed?

Continuing this pattern of creating conflict is not beneficial to anyone involved in Manufactured Housing regardless of which area of the industry one is involved in. Are these the types of messages that we want as we work to accomplish our industry goals? I think not.

Just think how much more our industry could accomplish by working together! It is critical that as an industry we focus on the target and develop a cooperative effort to move our goals forward.

Both organizations do not always have to agree; in fact we may agree to disagree. Even in that case, we must show our public unity and spend our collective time working on the core issues.

By not working together some think we weaken our message. By contrast, when we work together we can send a more powerful message to Congress, the Regulators and all others involved that we stand together to accomplish our collective goals.

Clearly MHI is moving the ball forward in this regard, on both the regulatory and legislative fronts. One might ask, if MHI can do it alone, without Danny Ghorbani/MHARR, will MHARR and Danny become politically irrelevant?

I have been in the Manufactured Home Community and Home Sales businesses for over 32 years. During this time I have worked with manufacturers that were members of both MHI and MHARR. In fact, some of the manufactures whom I purchased homes from were only MHARR members. Naturally, I have spent a great deal of time with the principals of these companies along with Danny discussing many issues.

We have developed close personal relationships from working together. From our times together I have learned much about many issues, some which I was not aware of previously, others that could affect my business. There have been issues on which we have not agreed upon, yet we never treated each other rudely or without mutual respect.

That is the type of relationship which both organizations must strive to maintain, especially in today’s difficult times.

Those of us in the business are all very conscientious of whom we choose to work with or purchase products from today. Our decisions are influenced by many factors; company history, price, service, product mix, warranty and personal relationships. I am about to purchase new homes to place in my communities. One consideration that I would be remiss to not consider in my decision making process is which manufacturers support the industry's goals that I support.

In addition, I have very strong reservations on working with a supplier who supports continued conflict and inappropriate messages being distributed by MHARR's CEO. Why would one work with a supplier who is not aligned with our industry's or my personal goals?

This is no different than one deciding to no longer buy homes from a manufacturer who lacks in timely, quality post-sale service and warranty support.

To financially support a manufacturer who through his association dues allows this discord and strife to continue in this small industry is questionable at best. We need to vote with our wallets! Maybe that will get the attention of those who fund the emailed or print messages that slow or harms our industry's message in Washington, DC.?

Maybe that would stop this avoidable and counterproductive multi-decade conflict. ##

rick-rand-great-value-homes-manufactured-home-pro-news-industry-voices-guest-blogRick Rand
Great Value Homes
Milwaukee, WI.

(Editor's Note, Rick stresses he is writing as an industry business professional, and not on behalf of any association. Rick was recently interviewed, see A Cup of Coffee with…Rick Rand., and is also in a video interview shown on the paged link here.)

Subsidized Housing vs. MHCs from an MHC Owner’s Perspective

February 7th, 2014 No comments

I could believe that a lot of community owners are unaware of the subsidized housing threat. Unless you live in a city large enough to be targeted by developers and unless you are living in a state with a very active Finance Authority, you may not see what is coming down the pike.

However, if Des Moines Iowa is any example, "affordable/subsidized" housing, is coming on "Big Time" and killing both HUD manufactured housing sales and rentals.

It is likely that this will expand out into the smaller and smaller communities over time. Most "affordable/subsidized housing" is new, upscale, geothermal, and well below market. If it is not new, they are able to get millions in government grants to renovate—I don't believe community owners have access to federal or state "renovation grants.”

I can hardly turn on the TV without a least a weekly pronouncement by some politician or city councilman that, "We need more affordable housing!" Of course, what they are really saying is, "We need more subsidized housing.”

But as might be surmised, if they told the truth, the reception of that statement would be very different.

"Affordable/subsidized" housing is NOT affordable to the majority, who pay for it. In part, I fault MHI for some of our impending "affordable/subsidized" housing problems. Why, without so much as a whimper have they allowed subsidized housing to steal our "affordable housing" label? To call subsidized housing "affordable" is perverse and Orwellian, yet MHI says NOTHING. ##

Margaret-Clark-Co-owner-Grandlakeview-Retirement-MHCs.jpgMargaret Clark
co-owner of Grand Lake View Retirement MHC
grandlakeview.com
grandlakeview@gmail.com

(Editor's Note: This column was submitted in response to the following Masthead blog post, Your Thoughts on “I Am Affordable Housing.” We welcome other perspectives on this topic or others of industry interest. Editorially speaking, we are unable to accurately comment at this time on what efforts MHI or the NCC may have in motion on this subject.)

Grass Cutting, Delinquency Goals and Modern Marketing

January 27th, 2014 No comments

Tony,

Just wanted to leave a quick note about the educational seminar you spoke at regarding “Modern Marketing.” I brought a few community managers along for your presentation…it was a real eye opener for them and me. While we take pride in the fact that our managers and staff maintain their communities and do a good job in collecting site rent, there is more to being successful than cutting grass and meeting the delinquency goals. The days when our customers came to us bringing their homes into our communities are long gone. If we can implement just a few of the ideas from your presentation it will make a huge difference how we will be able to attract potential customers to purchase homes and live in our communities.

I will certainly bring more of my community managers along if you will be speaking again at the 2015 Louisville Home Show.

continental-communities-logo.jpgRegards,
Ted Gross
Theodore M. Gross
Operations Manager
Continental Communities, LLC

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! )

9 Reasons Why You Need CRM

January 15th, 2014 No comments

Customer Relationship Management (CRM) is nothing new; it’s been around since the days of the Rolodex. Tickler files, ledgers, manifests, and even the ‘little black book‘ are relationship management tools that date back for centuries. But CRM has never been more important to closing sales than it is today.

Unless you do business on a very low scale (or work for only one or two clients) you are wasting precious time and missing sales opportunities if you’re not putting a CRM system to work for you. Here are 9 reasons why you need an effective CRM in your business:

Speed

Face it – the bulk of your leads and new customers likely come from online advertising – your website, directories, etc. If your customers find you on the web, they expect you to do business at the speed of the web, i.e., instantaneously. An effective CRM system should capture leads from online sources and send a response to new inquiries instantly and automatically.

The Fallibility of Memory

“The weakest ink is better than the strongest memory,” so the saying goes. And it’s true. Today’s sales professional is just too busy – and the workplace too hectic – to rely on memory alone to follow up with potential buyers. Without a single, organized place to record all client data, you will end up missing important communications – and losing sales. If you’ve ever grabbed whatever piece of paper is handy to record notes from an incoming phone call (and then lost or thrown away that paper as trash), then you know why you need a better system.

Awareness

Once you’ve attracted and recorded a new lead, you need a means to nurture their interest and remain front of mind with them. An effective CRM system will prompt you to keep in touch with prospects with relevant communications that address their key interests. Really good CRM systems will allow you to automate much of this process, including emails, phone calls, letters or post cards, and appointments. The goal: encourage a face to face meeting in your sales center.

Response

Nothing says “your not important; I don’t care” like failing to respond to a prospect’s question. Or not following up with them in a personal way. Or forgetting their name or the model or lot they’re interest in. An effective CRM system keeps all that information handy and accessible by computer, tablet or smart phone, and alerts you when you to appointments, incoming emails, or when it’s time to follow up with a phone call. And really good CRM systems allow you to store all relevant files – letters, plans, photos, etc., in the same place, so you always have every piece of information you need at your fingertips.

Management

So far, we’ve given valid reasons why every salesperson should use a CRM system. But it doesn’t stop there. If you manage a sales team, you need to know what opportunities are in the pipeline, which prospects are the most likely to close quickly, and what you can do to help move those urgent sales forward. You also need to see that every prospect is being properly followed up with by the sales consultant, and to give additional training and help where it’s needed. An effective CRM allows you to accomplish all that, and more.

Reports and Projections

What are your most effective lead sources and ROI from advertising? What are your projected sales (units and/or dollar volume) for the next month, quarter, and year? What is the average closing rate for your sales team? For individual salespeople? What is your average closing time, from initial contact to close? An effective CRM answers those questions and allows you to better manage your sales team, your advertising and your cash flow.

Service

Because your CRM program allows you to schedule appointments, tasks and alerts, you’ll be able to keep up with service calls or punch lists quickly, without ever worrying that an important call with fall through the cracks. Do you do annual maintenance, reviews, maintenance or renewals? Schedule these in your CRM, with alerts 30-days prior to the scheduled date to send notifications to customers and/or service agents. A really good CRM will automate these notifications and communications so you won’t have to.

Referrals

It should be the goal of every sales group to increase referral sales. A good goal is 30% – 40% of total sales. How do you reach that? By keeping in touch, servicing and nurturing existing customers or tenants. Every effective Customer Loyalty or retention program is powered by a CRM system. A CRM program will allow you to include past customers in any marketing events, such as open houses, seminars, or home shows, as well as send cards or congratulations on move-in anniversaries, for holidays, etc. A really good CRM will allow you to automate all of these processes, including alerts and email notifications, so that everything takes place seamlessly and without staff time to schedule.

Connectivity

While stand-alone CRM systems can provide all of the above, many will also connect and share data with other programs, such as your accounting program, inbound lead sources, rent or tenant management system, or point of sale program. This connectivity expands the value of a CRM to keep all customer data, from lead source to rent history, all in one place, saving time and avoiding ‘multi-system chaos’ that stifles use and frustrates business owners/managers.

So, there you have 9 good reasons to stop using that old, outdated spreadsheet or restrictive paper system and step up to a CRM system that will save you time, streamline your sales and marketing processes, and make your team more effective in closing more new and referral sales.

You should check out additional reasons to consider CRM at this story by Jason Brady linked below:

Start the Year off Right!

l-a-tony-kovach-scott-stroud-jason-brady-mhpronews-com1.jpg

Want to learn more? Then, join discussion moderator L. A. “Tony” Kovach, Jason Brady from ManufacturedHomes.com and me at the Louisville Manufactured Housing Show on Wednesday, January 23 at 9:30am SHARP for a special panel presentation on CRM for the Housing Industry. Go to this link at the www.TheLouisvilleShow.com site for details. ##

scott-stroud-posted-mhpronews-com-industry-voices-.jpgScott Stroud
180 Enchanted Dr.
Somerset, KY  42503
p. 606.677.04547

email:  sstroud@builderradio.com

(Editor's Note: The entire business building seminar lineup for the Louisville Show is linked here. It is currently the hottest page on their site, immediately after the home page!)