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Posts Tagged ‘executive director’

Law Allows Real Estate Personnel to Sell Homes in Your Manufactured Home Community

March 7th, 2018 No comments

Real estate personnel are now allowed to sell homes in manufactured and mobile home parks without first having to be licensed as a broker under the Arizona Division of Manufactured Housing, Department of Housing.

The new law [in AZ] allows:

1) Licensed real estate brokers and salespeople to sell new or used manufactured homes and mobile homes located in mobile home parks if the licensed broker or salesperson is acting as an agent for a licensed Manufactured Housing Dealer and the Dealer is responsible for filing all of the required paperwork and submitting the required fees on the sale of the home

2) Licensed real estate brokers and salespeople to sell used manufactured homes and mobile homes located in mobile home parks if they are acting on behalf of a private party and the broker or salesperson then remains subject to the real estate licensure requirements

MHCA’s task force on this topic, consisting of Greg Johnloz, Keith Vanderhout and Mel Comstock, are done with all of the forms real estate personnel will need to sell the homes. MHCA hired a law firm which works with the Arizona Association of Realtors (AAR) to prepare the forms, and then sent them to MHCA’s attorneys for review. AAR has shared the contracts and information on this law with their members and we should find some realtors interested in selling our homes.

RealEstatePersonnelCanSellMHCASusanBrentonManufacturedHousingIndustryVoicesDailyBusinessNewsMHProNews

In addition, MHCA is preparing a three-hour class on selling homes in our communities and hopefully it will be approved as a class eligible for the continuing education required of real estate personnel. We will also be working with the 12 different Multiple-Listing Services in Arizona on this topic.

MHCA believes this is an important new law which will bring more prospective buyers into our communities. ##

Susan_BrentonManufacturedHousingCommunitiesAZ-DailyBusinessNewsMHProNews202Susan Brenton
MANUFACTURED HOUSING COMMUNITIES OF ARIZONA

2158 North Gilbert Road
Suite #116
Mesa, AZ 85203

Editor’s Note: the headline and the graphic/quote are provided by the publisher, as is customary.

DJ Pendleton Reacts – City Councilman’s Plan, Forcing Manufactured Home Communities to Provide Amenities

October 14th, 2016 No comments

First, I’m all for community owners investing in upgrades and tenant amenities to improve their communities as they see fit.  Improving and upkeep takes financial resources, which are inevitably passed on to the residents.

So there is always a balancing of desired improvements to affordability.  And these decisions should be made individually and in a manner that makes the most sense for a community.

The draft I have seen is lacking logistical details.  Namely:

  • how large does the vegetable garden space have to be?
  • Where can it be located in a community?
  • Who is responsible for the gardening?
  • What happens when like many Austin communities that are 100% occupied without existing space to spare? Meaning is some tenant going to be told their lease will not be renewed, not because they didn’t pay their rent or follow the rules and not because the land owner doesn’t want them to stay, but rather because the city is demanding a vegetable garden be placed where their home currently sits.
  • And even if there is vacant space, for some communities and prospective residents, the better use of available space could be to put another home there and allow another family a place to live rather than a garden.

I don’t know much about gardening, but from what I understand, it is a labor intensive and an expensive endeavor engaged by those with a passion for it. It is not a means of providing low cost, locally sourced fruit and vegetables.  So what happens if they build it and no one comes?  What if no one wants to garden in the community?  For some communities I can see this turning into a neglected part of the community.

I’m confused by the Council Member Renteria’s quote of, “There’s huge mobile home parks now being built all along the Eastern Crescent, on the border of the city.” “This is a little urgent now because there are so many in the pipeline.”

I know Scott Roberts got a rezoning approval for the construction of a new community, but the quote gives the implication there are tons of parks under development.  I’d of course love it if that were actually the case, but other than Robert’s Resorts, I’m not aware of any.

In fact, the city just turned down a request to allow for a new community to be developed after neighbors showed up to oppose it.

djpendletontmhaexecdirector-manufacturedhousingindustryvoices-anotherexamplegovtoverreachtargetingmanufacturedhomes-mhpronews

Links and headline were added by MHProNews. Graphic credit, MHProNews.

This just seems like yet another city overreach with an idea that has not yet been thoroughly thought out as to its practical impact.  And it is once again, the singling out of manufactured home communities compared to other housing options.

Notice there is no proposal to mandate vegetable gardens in multi-family housing, or even in other single-family neighborhoods in Austin.

And as for the playground or recreation facility requirement this would impose on new construction, I again think these amenities work for some communities – but others for reasons of cost, maintenance, and liability – it doesn’t.

I might add that the City of Austin has closed in the past some city parks and pools because they city did not want to spend the money to maintain them. But somehow the idea of forcing this onto a community with the idea that they can mandate such things and they will be magically provided for free is either an attempt at political pandering or a lack of understanding of logistics and costs. ##

dj-pendleton-mhpronews-com-executive-director-texas-manufactured-housing-association-DJ Pendleton
Texas Manufactured Housing Association (TMHA)

(Editor’s Note – Pendleton’s reaction to another zoning/MHC case, is linked here.)

Louisville from the Eyes of a Newcomer

February 3rd, 2016 No comments

Our trip to Louisville, Kentucky for the Manufactured Housing Show was a bit of a whirlwind, with an early arrival and even later departure. (A massive winter storm forced organizers to cancel the final day of the show, so we took a late flight back the night before.)

I was asked to write about my trip to Louisville “from the eyes of a newcomer.” This was my first trade show and I should point out, the first time I had seen any manufactured homes, so I have nothing to compare it to. Perhaps naively, (but also as a reflection on how many outsiders view the industry) I was expecting more of the stereotypical box-like mobile home from the 70s and 80s. So you can imagine how pleasantly surprised I was to see row after row of beautifully crafted homes!

Maybe it had something to do with homes in an enclosed space, but they all seemed much bigger and more beautiful than I expected. I didn’t expect shutters, porches or open concept rooms. I didn’t expect large walk-in closets (The picture I took below is probably my favorite of the whole trip!) and whirlpool tubs. Even the single section homes seemed much larger than I expected. But other than the finishes and décor on the inside, it was difficult to tell the difference between manufacturers, which I suppose could be good or bad.

2016LouisvilleManufacturedHousingShowHomes-credit-WHA-postedIndustryVoices-MHProNews-com

I was surprised to see that one manufacturer, Clayton Homes, used a hi-tech approach to attract buyers. (See picture below) I would expect this at any other home show, but when you still have members who don’t even have computers, it was reassuring to see.

2016LouisvilleManufacturedHousingShowClaytonHomesDisplay-credit-WHA-postedIndustryVoices-MHProNews-com

As I imagined, I saw everything from the gentleman in a dapper suit to the gentleman in a cowboy hat and suspenders. But they were all very kind and welcoming. It was great to see those of you who stopped by the Wisconsin Housing Alliance booth! I look forward to next year’s show and to seeing more homes in person. ##

LaurieMercurioCommunicationsDirectorWisconsinHousingAllianceExDirTomorrowHomeFoundation-postedIndustryVoicesMHProNews-com-Laurie Mercurio
Communications Director, WI Housing Alliance
Executive Director, Tomorrow’s Home Foundation
258 Corporate Drive, Suite 200C
Madison, WI  53714

 

(Editor’s Note: Let’s welcome Laurie to the widely respected WHA and the MH Industry again. Additional content about the 2016 Louisville Show, are found at the articles linked below.) 

Louisville Hits a Home Run

Sights and Sounds – Videos – from the 2016 Louisville Manufactured Housing Show

 

Crossing the Finish Line in DC is up to YOU!

December 7th, 2015 No comments

In the next 10 days, the industry has a chance to turn around its fortunes regarding financing.  Step 1 is to pass S 682, the Preserving Access to Manufactured Housing Act.  It’s companion bill, HR 650 has already passed the House on a bi-partisan vote.  In the Senate, there is no chance for our bill to pass as a standalone bill because it will be vetoed.  If however, it is attached to an appropriations bill that must pass, the President will have no choice but to sign it. 

Let me say that again, if S 682 is passed as part of an appropriations bill, the President will sign it.

We need industry members to press for S 682 to be attached as a so-called policy rider.  This is a normal process for getting legislation passed at the end of a session.

Please Call or Fax Your Senators.

Here is the message: 

1. We need S 682, the Preserving Access to Manufactured Housing Act, added as a policy rider to the Banking Appropriations Bill.

2. The bill HR 650 passed the House on a bi-partisan basis.

3. The bill addresses the overreach of the CFPB in applying Dodd-Frank to manufactured housing in a way it doesn’t apply it to real estate agents. ##

RossKinzlerWisconsinHousingAllianceExecutiveDirector-IndustryVoicesblogManufacturedHousingProfessionalnews-MHProNews-comRoss Kinzler
Executive Director
Wisconsin Housing Alliance

(Editor’s Note: MHProNews supports this bill and our publisher has personally contacted his Senators and Congressional Representative, as Ross Kinzler suggests. Joe Kelly’s OpEd on this same topic, is linked here.

For those who want more information, see Lesli Gooch’s column this month, linked here. Ross and Joe are correct, just take 5 now, and let’s get this done.)

2015 Tunica MH Show Numbers Exceed Past Years

April 1st, 2015 No comments

With the new location of the Tunica Show at the Resorts Casino and Hollywood Casino, we as the SCMHI Board were anxious to see if the number of attendees would change or even decrease this year.  The number of attendees actually exceeded our expectation and even surpassed the past three years Tunica Show attendance numbers. 

The 2015 attendees were as follows: 1013 retailers, 82 community managers,  61 builder/developer, and 36 installers.  With the exhibitor attendees, the total attendance for the show was 2239.  MMHA along with AMHA thanks all of the attendees  for making this year’s Tunica Show a huge success by your participation.  A special thank  you to all of our Sponsors for their continued support of the Tunica Show.

I made it a point to visit  with several retailers and community managers from various states during the show to get their feed back on the new location and lay out of the show and I heard nothing but POSITIVE comments.  They liked the convenience of all of the display homes being in one area;  the lunch area being inside to avoid weather elements; the supplier exhibit area layout;  and the informative educational seminars.

They also commented on the positive attitude of the employees of the two hotels and casinos and how much they made them feel welcomed.  I also heard positive comments from the manufacturers and suppliers that they had a very good show. 

There was lots of activity in both the supplier exhibit area and the display home area, retailers and mangers came to buy this year.   Certainly we can continue as a Board to make improvements at this new location and we always welcome input from our attendees.  I think we are off to a good start for the 2016 Tunica Show. We want to continue to make this the biggest and best  outdoor manufactured  home show in the United States. ##

jennifer-hall-mississippi-manufactured-housing-association-executive-director-posted-mhpronews.com-75x75pxl-Jennifer Hall

MMHA Executive Director

 

Editor’s Note: Related Articles:

2015’s Amazing April (Includes Tunica MH Show Recap Video).

4 Year Chart of Tunica Manufactured Housing Show Attendance, by categories.

Sandra Lane’s right, Ohio’s Energy/MH business is bright! Manufactured Home sales doubled in Ohio

December 26th, 2014 No comments

Tony, Sandra Lane's Daily Business News article on UMH and the Ohio shale activity is enlightening and exposes the lazy journalism inherent in the Seeking Alpha article.

http://www.MHProNews.com/blogs/daily-business-news/alpha-barking-up-the-wrong-tree-decline-of-mhcs-in-pa-and-oh-doubtful

As Sandra's article underscored, drilling is continuing unabated in Ohio. 

Furthermore, the tremendous infrastructure necessary to move the gas, oil and separate the various byproducts such as ethane, propane and feed stock for the petrochemical industry has resulted in billions upon billions of dollars in construction projects involving processing plants and pipelines criss-crossing Ohio.

Oil is only one byproduct produced in the region.

The wet and dry natural gas which is typically extracted from the same well allows the drilling and production to provide multiple economic benefits and is the "real story" here.

The cheap natural gas to run factories has resulted in significant manufacturing expansions and relocations to Ohio. The unemployment rate in Ohio, once the poster child for the "Rust Belt," is now below the national average. Manufactured home sales have more than doubled here in less than 3 years.

I'll take the Ohio prospects for MH in any Vegas odds making! UMH Properties had foresight in expanding its holdings in Ohio and will reap the benefits. 

Seeking Alpha has done better on some other MH related articles, but this one they did on UMH that Sandra Lane reported on indeed missed the mark. Kudos to Sandra for setting the record straight. ##

(Editor's Note: related, see A Breakfast with…Tim Williams, at this link.)

tim-williams-ohio-manufactured-home-association-mhpronewsTim Williams
Executive Director
Ohio Manufactured Homes Association (OMHA)
5640 Frantz Road
Dublin, Ohio 43017
Office:
 614-799-2340
Fax: 614-799-0616
Email: twilliams@omha-usa.org

Website: welcomehomeohio.com

How to advance the manufactured housing industry in 2015?

December 15th, 2014 No comments

Where do we start? The industry has failed to change the perception of the general public that 'a home built in a factory is inferior to a home built on site.' Why? The building materials are the same. The innovative and advanced construction techniques in a factory are often superior to the hammer, nail and screw approach to construction. Could the cause be that the sales process and customer service experience is lacking throughout the entire home buying process?

Sales are not flat for all retailers and community developers. Those that have figured out that they are home builders are doing well. Those that think they are still selling a product and once the “sale” is complete the customer is on their own (like the process was in the 70’s, 80’ & 90’s) are not doing as well. The business is no longer about “selling,” it is about “home building.”

As long as customer service trends at lower levels, home buyers will tell their families and friends what a negative experience they, had and no mass marketing plan will change the old perceptions.

Advancing the industry must begin at the grass roots level.

Manufacturers still sell homes to retailers who they know perform at less than desirable levels, because if they don’t sell the MH, another manufacturer will. Often discussed is a “franchise” system to encourage and assist retailers with better performance. In order to carry the flag of XYZ manufacturer, a retailer must meet certain standards of excellence. It works for automobile retailers, hotels and many other types of businesses. It is not such an outrageous idea. It could be done and be successful.

MH Retailers must realize that they are not selling a product and become home builders. When you look at many retailer websites or advertising you will still see “You can get in a home for $39,999” or “Buy a home this weekend and get a 50” big screen TV.”

The more successful retailers have become the general contractor for the turn key home building process. You will see that clearly in all of their marketing messages.

Once there is improvement in the home buying experience, the industry must move to the internet and all types of social media and mass marketing.

The younger generation wants low maintenance homes and lifestyles, perfect for the manufactured home life. However, they do not always own televisions or have landlines. They operate through computers, laptops, tablets and cell phones. The industry message must be consistent and through across multiple internet methods.

One benefit of this idea is that other than the costs of message development, the actual cost of the marketing is relatively inexpensive, using YouTube for example.

There are plenty of knowledgeable marketing people in the industry to form a national marketing strategy task force. The task force would be charged to come up with some internet marketing ideas on a broad scale to present to MHI members and others and to suggest ways to develop and fund a national, targeted social media and online campaign for 2015 and beyond.

These are just some of my ideas on advancing the industry in 2015.

nancy-geer-new-york-housing-posted-manufactured-home-professional-news-mhpronews-com-50x50-Nancy Geer

Executive Director

New York Housing Association

County Violated the Law in restricting placement of older Manufactured Homes?

November 12th, 2014 No comments

Tony,
We are currently working with Bulloch County, Statesboro, Georgia Code and Enforcement Department as it relates to the recent article you ran in the Daily Business News concerning community member backlash at the recent County Commissioners meeting where they basically devalued all pre-owned homes by limiting their movement and permit process.

The local Code and Enforcement Department was not aware that GMHA had crafted legislation concerning this several years ago. That law prohibits any Georgia Municipality from limiting permits or re-location based on the age of a home. We politely suggest to the counties who pass pre-owned home ordinances like this to read Senate Bill #384 as signed by the Governor. 

We do share some ways of limiting uninhabitable units from being approved by making a set of suggested requirements for individual county Building Inspectors or commissions based on their current housing inventory.

These suggestions may require the Installer to purchase a Completion Bond that cost about $200 per year. This Bond requires the Installer / Seller of the home to insure that all major systems such as electrical, plumbing are in working order.

This Bond can be used over and over but only on one working installation at the time. This Bond may include other cosmetic items such as home to have no missing metal, no missing vinyl, no missing shingles, etc. That the home has adequate entry and exits as well with no broken windows or structural damage. It may require no floor seams or floor damage inside the home.

The county can choose to not require a Bond, but just require certain system and cosmetic items be completed before allowing utilities.  What they can’t do is restrict a home based on age alone. If its restricted based on certain requirements, those requirements have to be published in advance. They can't include items generated at the time of install or the moment of permitting.

Please call if you have other questions, but I believe at the current time the Board of Commissioners have witnessed the true scorn of their voters and are now willing to compromise. Only time and actions will answer that question though.

Thanks,

jay-hamilton.jpgC. Jay Hamilton
Executive Director
Georgia Manufactured Housing Association

(Download of PDF of GA State Law on this issue is attached at the link here.)

DJ Quixote’s Adventures In La Manufactured Housing

November 10th, 2014 No comments

This is my third attempt at writing this article. I had to trash my two previous efforts.

After a bit of time, a bit of reflection, and a bit of perspective I’m giving it another shot. This third attempt was born from my previous efforts to understand why I was having such a difficult time penning a response to the CFPB white paper as more discarded paper accumulated around my desk.

spanish-windmill-credit-dj-pendleton-mhpronews-com-executive-director-texas-manufactured-housing-association-

The only reason I can determine is that like the self-proclaimed knight, Don Quixote, turned crazy by an obsession of returning to a world of chivalry, I have at this point been driven…nuts.

The experiences I have had over these last few years reading federal laws, proposed regulations, final regulations, interpretations of regulations, readiness guides, flowcharts, and watching hearings, have finally infected my brain in a way that has put me on a course, for this article at least, into a world of perception distortion and fantasy.

Similar to Don Quixote’s obsession that he was a knight out on a noble quest, my incessant reading of CFPB publications has cast me down a path that is no less fantastical. Rather than fight against this effect, I’m choosing to steer into the mental skid.

There are many industry responses on the recently published CFPB white paper on manufactured housing. Those lamenting the inadequate attention the Bureau gave to realties in our market and glancing over things like cost of funds, interest rate risk, borrower risk, lack of secondary market, and portfolio based lending are all well founded. For more on this I’d suggest Dick Ernst article Deconstructing the High Cost Mortgage Loan. In my two earlier drafts I did this too. And for follow up articles after I come back from my journey today atop my skinny stead, Rocinante, I might publish them as well.

But not today.

Today I’m asking that you travel with me and my trusty sidekick, Sancho, off into a distorted reality of a world of my creation. So indulge me for a little while, even if some of the suggestions are as preposterous as fighting windmills I believe to be giants. For this is my Don Quixote journey compelled by my most recent reading of the CFPB white paper on manufactured housing.

BACKGROUND

Before jumping into my La Mancha, a quick bit of context could be helpful for those not as familiar with recent CFPB happenings.

On September 30, the CFPB published a white paper on manufactured housing. If one were inclined to give the CFPB the benefit of the doubt, you could conclude they tried their best to present an objective analysis of our industry without injecting any intentional or unintentional biases. Of course, there are those that will assert they did not achieve this, and others still that claim this was never their intention. My goal will be to stay more positive than the cholericly tempered literary counterpart in my feeble attempt at analogy, but forgive my moments of weakness when certain angers are irrepressible (Note: I’m trying to up my level of analogy by turning to classic literature, but worry not as I’m sure Star Wars and Lord of the Rings themed articles will dominate my future efforts).

The white paper identifies the following seven “key findings:”

  1. Manufactured housing is disproportionately located in non-metropolitan areas.
  2. Compared with residents of site-built homes, manufactured-housing residents are somewhat more likely to be older and tend to have lower incomes or net worth.
  3. Manufactured homes typically cost less than site-built homes.
  4. About three-fifths of manufactured-housing residents who own their home also own the land it is sited on.
  5. An estimated 65 percent of borrowers who own their land and who took out a loan to buy a manufactured home between 2001 and 2010 financed the purchase with a chattel loan.
  6. Manufactured-home owners typically pay higher interest rates for their loans than site-built borrowers.
  7. The current state of manufactured housing production, retail, and financing reflects in part a rapid growth during the 1990s and subsequent sharp contraction.

If you would like to see the press release from the CFPB you can find it here:

If you want to read the 54 page white paper you can find it here:

http://www.mhpronews.com/home/industry-news/industry-in-focus/8460-cfpb-report-alleges-manufactured-housing-lending-is-expensive-sparks-controversial-comments-from-cfed-mhi-and-other-mh-industry-professionals (Editor's note: See download at the link above.)

I’m not going to address in detail or systematically attack the CFPB assertions. Quite the opposite.

I’m going to assume the basis for the examination of our industry and the subsequent white paper was intended to drive future policy based decisions and discussions. Where I might differ with the regulators is where I think the facts they have compiled should direct us, and the questions it brings to light that should be the focus of their future efforts.

However, I have a feeling my policy proposals will only come to be in fantasy and not in reality. But come on Sancho; I’m sure this will only hurt a little.

Here is my list:

  1. Why is manufactured housing disproportionately located in non-metropolitan areas? Shouldn't the policy be of inclusion and consumer choice rather than exclusion and limits?
  2. Wouldn’t it be nice if the housing playing field were level, markets not artificially influenced by selective polices, and either the removal of subsidies or, alternatively, bring the subsidization to manufactured housing to compete, rather than stacking the deck against us?
  3. Why was there no attention given to existing state laws, regulations, consumer complaint levels and consumer notices? And why does the white paper read as though there is a critical and immediate need for more regulations and notices?

WHY ARE CITIES STILL ALLOWED TO HATE US?

The white paper does list factors as to why manufactured housing is more of a rural housing option and not in more populated metropolitan areas. They mention zoning prohibitions as a contributing factor. Those of us in the industry know this is the factor limiting manufactured housings’ presence in urban settings. The question this should spawn is whether or not it is good policy to allow cities this type of prohibition. With new, modern, efficient, heavily regulated manufactured homes, what is the public policy that benefits a city from prohibiting manufactured homes and what are the benefits to removing these restrictions?

My case for the latter is simple – in city zoning restrictions modern manufactured housing should be treated exactly the same as all site-built residential construction. Equality. This would create a world where any type of discriminatory treatment directed exclusively towards manufactured housing placement is void.

Now some regulators and city officials might scoff in stern disagreement, but why?

Whatever the city restrictions are for site-built housing placement have those apply equally to manufactured housing. The preemptive federal construction code and state installation requirements modeled from the national standard satisfy any safety and soundness concerns.

Allow these standards that insure the homes are not substandard to serve the purposes they are intended. And if a city decides to impose some sort of home aesthetic mandates, energy efficiency standards, or any other requirements (so long as they don’t interfere with the federal construction or installation codes), simply require the standard to apply to all housing equally. This would allow manufactured housing to compete on the same playing field and increase consumer choice.

Another reason this is good policy is to consider the benefits the economy and labor force receive through a manufactured setting.

We are talking about factories with skilled, well paid, middle class, labor jobs. They draw paychecks, pay taxes and receive benefits. Not to mention worker protections and oversight from internal safety and quality control, to regulatory oversight and redress like worker’s compensation protection and OSHA. They are also U.S. jobs that are not outsourced.

In manufacturing you have greater efficiency in construction, less waste, organized and predictable supplier networks benefiting those producers down the line. How is it that this reality isn’t championed like other manufacturing industries?

How much more do you think your car would cost if instead of being produced in a factory all the parts were shipped to your driveway where contract workers showed up and built it on site. How long do you think it would take to build it? What about your television? How about your cell phone? If the market is allowed to work without manipulation efficiencies in production lower costs allowing some consumers the opportunity to pay less for an equivalent product. The white paper addresses the fact that on a square foot basis manufactured homes cost less than half as much as the estimated $94 per square foot site-built home.

Some consumers would like to have this choice when it comes to housing. And for others it would open up the chance for them to be homeowners who otherwise would not because they were priced out of the site-built market.

And yet, I’m not even advocating for a wild swing in the pendulum away from site-built to manufactured housing. I’m simply saying remove the non-level playing field, and allow us to compete equally.

Could the CFPB impact this? Sure.

With its broad authority and charges for greater equality, fair housing, transparency and consumer choice there are measures the Bureau could take to level the field.

One quick suggestion, when dealing with a new manufactured home in a metropolitan area that conforms to the federally mandated code and equivalent site-built restrictions for a given area, in order for a local government to pass a housing restriction on only manufactured housing and not any other residential housing, they must demonstrate an overwhelmingly compelling reason as to why they believe such a restriction is superior policy. In their required justification they would have to defend why their selective exclusion would not have an adverse or disparate impact on housing choice and any protected classes such as families who would like to live in something larger than a one-bedroom apartment or elderly retirees on fixed income who need a lower cost home choice. Failing to meet a much higher burden in ordinance creation would result in the ordinances being deemed void as either against public policy or a violation of fair housing ideals.

I know, such things are crazy talk from a guy wondering around in the sun in an old suite of armor. Completely irrational, right?

Well, I got the outfit on, and I’m on the damn horse so I might as well go for it, so here it goes.

The CFPB is big on consumer notice and consumer choice, so why not add a consumer notice for any site-built home being financed that says, WAIT. Before you sign, did you know you might be able to buy an equivalent house for less than half the cost per square foot of this one?” The same notice mandate could be applied to Fair Housing regulations requiring disclosures prior to a home purchase or a residential rental that a manufactured housing option would be hundreds of dollars less per month in all-in housing costs.

Reading between the lines of the white paper it sounds like more notices and warning mandates are coming down the pike for the manufactured housing industry, so I’ll ask another crazy question. Why don’t we ever get notices showing our clear advantages for consumers?

WHERE ARE YOU SUPPOSED TO LIVE IF YOU MAKE $26,000 YEAR?

The demand of affordable housing is undeniable. As incomes stagnate and living costs increase the demand for affordable housing will continue to grow. The manufactured housing story in this equation is one of “haves-and-have-nots.” But in our story the multi-billion dollar issue is subsidization. And we are in the “have-not” camp.

Any way you slice any of the myriad of “affordable housing” incentives or programs, at their core is government subsidization. I know there are the Libertarian minded readers out there disgusted at the idea of government subsidy. And similar to the city ordinance restriction argument I previously made, all things being equal and all subsidy removed, I know manufactured homes would compete for a much higher market share of housing.

However, while I’m admittedly crazy in this current effort, I’m not crazy enough to ever think all subsidization in all forms could practically be removed. I might think I’m a knight on a horse, but I’m not so nuts to think I’m the back-end of a horse (though some may beg to differ).

Instead, this Don Quixote is on a different quest of insane ideas. If you are going to subsidize programs to foster home affordability, why don’t you provide subsidy and incentive to clearly the most affordable housing option of manufactured homes?

Manufactured housing is, at times, somewhat eligible for some types of current programs. But in practice the government policies and attentions applying affordable housing subsidy in large scale to manufactured housing are more of a unicorn than an everyday work horse.

The subsidy is pervasive starting at the federal level, but also at state and city levels. Site-built and multi-family developers are granted incentives, tax breaks, and many other subsidies if they are building affordable homes or units. Most of the time the requirement to get the subsidy is that only a small portion of the total development provide affordable options. This is most common in apartment construction, but site-built and condo development also share in these subsidy treasures.

I know I’m the crazy one on the horse here, but let me see if the sane world has clearly figured this out.

The government will provide incentives, tax breaks and subsidy to build affordable housing that only serves a small percentage of the total development, then additional government subsidy is layered on to the buyer or renter in down payment assistance, reduced principal programs, subsidized lower interest rates, forgivable loans or rental housing vouchers to get people into “affordable housing.” I’m sure this makes perfect sense to everyone else, but in my clearly delirious mind it begs the question, “Why not just focus on housing that costs the least?”

Granted, there is a lot of dangerous substandard housing. The Colonia problem in Texas to name just one. But for safe, efficient, and easily replicable affordable housing, how is it that manufactured housing is either ignored or purposefully overlooked?

The white paper provides the facts on the superior affordability of manufactured housing in Table 5 when they compared manufactured housing in both metro and non-metro areas to both site-built and renters. Manufactured housing was less expensive ranging by more than half the monthly costs (metro site built $1,505 to metro manufactured housing $686) to about $100 less per month (non-metro rental $654 to non-metro manufactured housing $551). This means we win in all categories in all locations on affordability.

Table 5 Source, CFPB Report.

If manufactured housing is the least expensive compared to any other safe, regulated, quality living accommodation, then imagine the benefit of subsidization directed at manufactured housing. Wouldn’t such a crazy idea better serve the goal of providing affordable housing to more people?

Coming out of the recent housing crash, the idea of people choosing a home they could afford and living within their means seemed to penetrate the psyche of most of America. However, there seems to be some terrible stigma in maintaining this simple idea, even in the context of affordable housing, if the result is a conversation about homes that cost less than $100,000, less than $70,000, less than $50,000 and especially homes below $30,000.

Why?

If the home is regulated to ensure consumer safety, efficiently produced, and in nearly all cases larger than any other option at a similar price point, why then is the idea so ludicrous that this might be the best choice some buyers or renters could make?

I can’t get an answer out of my horse or Sancho on this, so I guess I’ll have to accept the idea that the saner approach for a person who can only afford a $45,000 house is to live in a $165,000 house with $120,000 worth of combined developer and individual subsidy attached to it.

It sure seems to make sense that subsidy dollars could go further and help more people if applied to the type of housing clearly superior in affordability. But then again, I’ve lost my marbles.

By the way, just under $40 billion was budgeted to be spent by HUD for all of its subsidized affordable housing programs in 2012, and this does not include any of the loan guarantee dollars and authority to incentivize securitization of mortgage loans that drastically underutilize manufactured housing.

I’m not saying manufactured housing programs should receive all or even the bulk of the subsidies. I’m merely suggesting that when doling out billions of dollars some focus and some programs specific to manufactured housing should be adopted. Such programs would better achieve the goals of providing safe, affordable housing while preserving the dignity and self-worth of recipients who receive the benefits.

NOTICE, TRANSPARENCY AND CONSUMER PROTECTION

The white paper has been read by more than just this crazy rider as a volley of shots across the bow and foreshadowing of possible new regulations for manufactured housing.

Here are just a few excerpts:

“At the same time, these same groups include consumers that may be considered more financially vulnerable and, thus, may particularly stand to benefit from strong consumer protection. “

“Thus, manufactured-home owners who can choose either chattel or mortgage financing (generally, those who own the land to which the manufactured home is being permanently affixed) may face a tradeoff between lower costs at origination and a quicker closing with less collateral, on the one hand, and lower total costs over the life of the loan along with greater consumer protections on the other.”

“The extent to which consumers are aware of theses tradeoffs and how consumers weigh them remains an open question. It is not clear to what degree upfront costs and convenience, lack of availability for mortgage financing, or lack of relevant information about financing options drive consumers to chattel financing.”

“Chattel loans may close more quickly than or have lower upfront costs than loans secured by real property, but chattel loans tend to have higher interest rates and provide borrowers with lesser consumer protections than mortgages secured by real property.”

“The relative scarcity of data on manufactured housing compared with data available on site-built housing and mortgage finance in general remains a challenge for research related to manufactured housing. This gap in data availability may begin to narrow, however, in the coming years.”

“The classification of some manufactured-housing retailer activities as loan originator activities provides consumer protection for homebuyers in what may be a high-pressure sales environment.”

However, nowhere in the white paper, in particular when addressing consumer protection and apparent perceived abuse by the industry, does the paper mention state law or state regulation. Manufactured housing is arguably the most regulated form of housing stemming from both the federal level and state level.

At least in Texas there are numerous consumer disclosures and cooling off requirements prior to buying to address the often mentioned “high pressure sales.” Texas also has a three day right of rescission for all consumer funds. In fact, in Texas the consumer is so protected that an equivalent contract agreement that exists in the site-built world were a buyer may end up losing earnest money is not allowed in Texas for a manufactured home purchased from a licensed retailer.

The CFPB fails to acknowledge that state regulators and auditors are enforcing consumer protection laws and regulations. These state level “cops on the beat” audit consumer files to ensure disclosures are provided, and the goals of consumer choice and transparency are achieved.

In Texas, there is also a specific chattel manufactured housing lending regulator, the Office of Consumer Credit Commission. With existing state laws and regulations this additional regulator is there to protect consumers who obtain chattel manufactured home loans. Texas state law requires any chattel loan contract contain the name and contact information of the OCCC notifying all Texas chattel manufactured home borrowers who the consumer protection regulator is and how to get in touch with them to file a complaint.

The white paper implies there are great injustices and consumer harm befalling those extremely vulnerable who are forced, as a last result, to purchase manufactured housing. The CFPB’s perception of consumer harm prompts them to allude to future CFPB regulation. But before we run to put out some blazing inferno, maybe we should ask if there is even a fire burning.

Let’s look at Texas’ manufactured home chattel financing. In 2013 HMDA data shows there were 7,094 manufactured homes sold with financing in Texas. The titling data at TDHCA actually has the number of chattel financed manufactured homes sold in 2013 at 9,759. As many institutions are currently exempt from HMDA reporting, and by the CFPB’s own admission the HMDA data is lacking when it comes to manufactured homes, we are going to use the Texas titling data. However, in order to align with the fiscal year used in the reporting of the OCCC, the apples-to-apples time frame we need is August 2012 through September 2013.

In Texas we had 9,509 manufactured homes sold with chattel financing between August 2012 and September 2013. In this same time frame the total number of consumer complaints processed at the Texas OCCC for manufactured housing lenders of chattel loans was 15. This means the percent of complaints compared to chattel manufactured home loans is .157 percent. I hope I’m not being too crazy to think that any industry would love to have less than 1/5th of a percent as their ratio of consumer complaints to sales.

I know the skeptics and supporters of increasing regulation might take issue with my facts. In order to cover all my bases I also looked at the CFPB’s own consumer complaint database. According to the CFPB their complaint database for mortgages dates back to December 1, 2011. The complaint data does not distinguish manufactured home from site-built, nor does their mortgage category separate chattel from real property mortgage loans. But you can filter to just mortgage complaints in Texas where the consumer disputed the company’s (lender or servicer) response.

When you filter the data to those categories there are 1,419 consumer disputed, mortgage complaints in Texas. Again, we can’t narrow down the complaints to chattel manufactured housing, but the companies’ names are listed. Based on the names of the common lenders who make or service manufactured chattel loans, the total count I have for companies who possibly have chattel mortgage complaints lodged against them with the CFPB is 64. Obviously, all 64 of the complaints are not manufactured chattel loans, but there is no way for me to tell with the data presented. It is easy to assume, especially with manufactured housing accounting for only 7.6 percent of the Texas housing stock that if one were able to dissect the 64 only a small percentage might be manufactured housing chattel based complaints.

But let’s err on the side of very conservative assumptions. Let’s take all 64 as if all of them were the result of consumers complaining about chattel mortgages on manufactured housing in Texas. Since December 1, 2011 when the CFPB database begin populating complaints on mortgages through July 31, 2014 there were 23,292 manufactured homes sold with chattel loans in Texas. Again, knowing the real number is lower, most likely much lower, than 64, but using that for a conservative estimate the ratio of complaints to sales with chattel loans is .274 percent.

In the face of this data, I’m forced to take off my helmet to scratch my head in confusion. Where is the extreme injustice? Where are consumers being harmed at such startling degrees that require significant federal regulatory reaction?

Let’s assume it is impossible to eliminate in any market all consumer complaints. If everyone can agree zero consumer complaints is not possible, then there must be some threshold goal. Ideally this goal is very low. In my delirious state I might suggest that less than half of one percent is very low. Everyone should further be able to agree that any additional regulation comes with additional costs that must be absorbed, almost assuredly in the form of pass through costs to all consumers. There is also the reality of diminishing returns triggered when each additional costs only produces fractional changes. The question then is, how much consideration and cost benefit analysis is being done when additional regulatory burdens are contemplated? If the reporting by consumers of all alleged harm is incredibly low, but the cost of additional regulations with the goal of reducing consumer harm further are felt by 100 percent of the consumers, is the additional regulation really in the best interest of the consumers?

I’ll put this another way. I’ll put it in the form of a consumer disclosure and consumer choice.

Consumer Notice: This industry historically experiences less than half of one percent in consumer complaints. Knowing this would you choose to pay an additional $175 to lower that amount by an additional .002 percent?

OBVIOUSLY RAMBLINGS OF A CRAZY OLD COOT

Clearly many of the points in this article are being made with hyperbolic language, rhetorical questions, sarcastic tone, and wild assertions. This was done with the purpose of trying to shock the system so that for some maybe these extremes make them see things or think of things differently.

For those that took the time to indulge my efforts in this article and leave with the same impression you started that I’m off tilting at windmills, well, then I’m sorry to have wasted your time. However, my hope is for most there were at least some things and some ideas that provoked more questions or ideas.

And finally, for the others who found themselves agreeing with me, nodding your head while you read, and pumping your fist thinking, “man, he is right,” (ok, that last one I know was a stretch), well I have news for you too…I hope you have lots of metal polish around to shine up your suite of armor because you are clearly just as crazy as me. ##

dj_pendleton__credit__mhpronewsDJ Pendleton

Executive Director

Texas Manufactured Housing Association

“A Home Is a Home” Conversation Starter

August 5th, 2014 No comments

From time to time, it is healthy to have a conversation about the best way we can move forward in a changing world, and in doing so, think through some potential long term goals and aspirations. If we do not at least have those conversations and think these sorts of ideas through, then we are guaranteed that nothing changes.

What follows are simply conversation starters based on my personal observations, no more and no less. They represent no more than my own thoughts.

To quote the American political philosopher, Robert Nozick, “My thoughts do not aim for your assent – just place them alongside your own reflections for a while.” In that spirit, I would offer the following ideas for our industry in Virginia:

Elimination of titles for manufactured homes — While we have been quite successful in cleaning up titling in Virginia, we should have a conversation about the continued long-term need for titles for manufactured homes. We sell homes, not cars, and as such, we should think about how to find a way to convey ownership and perfect personal property security interests in a way that reflects that fact, and in doing so, simplify the process for manufactured homes that are sold as real property. To be sure, doing this would require a viable alternative method of securing personal property interests in manufactured homes. Without such an alternative, elimination of vehicle titles for manufactured homes cannot happen.

Elimination of zoning discrimination against manufactured housing — We need to think about ways to eliminate zoning discrimination against manufactured housing in Virginia. A home is a home.

Being clear about what makes us who we are — We need to be clear that we are simply a mode of construction, just like our site-built friends and our colleagues in the apartment industry. Things beyond that distinction do not define us, and we should not let them. We are not a niche or boutique industry. We are no different than our site-built friends. We are not better, nor are we worse. We build homes, many times in a more efficient manner than many of our competitors. We sell those homes. We lease those homes and the land they are on. That is no more and no less than anyone else in the housing industry.

Embracing our diversity — We should embrace the diversity that characterizes various forms of factory built housing, and in doing so, make sure that we do not allow regulators and others to play us all off against one another. We all should support equity in zoning (a home is a home); all of our homes are well-built. We should, however, also be open about the various styles of construction and what distinguishes them.

Positioning ourselves for a changing development patterns — We should have a conversation about how we position ourselves in a nation that is becoming more urban and suburban and less rural with each passing day. For example, one trend in redevelopment is the use of mixed -use, mixed-income planned unit developments. Our homes (both manufactured and modular) offer the perfect solution for a number of the residential components of these types of neighborhoods at a cost per-square-foot and at a level of quality that allows us to compete favorably with our site-built competitors. But we need to make sure we have the right regulatory and marketing framework in place.

Again, these are just conversation starters. Nothing more. Nothing less. As always, I welcome your thoughts. ##

tyler-craddock-executive-director-virginia-manufactured-and-modular-housing-associationBy Tyler Craddock, Executive Director, VAMMA.

(Editor's note: while this first appeared in VAMMA's publication, the suggestion was made that this has value well beyond their borders. Conversations are needed in the industry, this has some important topics to consider! Published here with Tyler's expressed permission.)