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Further Evidence of Industry Complicity with Regulators to Downgrade the MHCC

November 12th, 2010 No comments

Item sent to MHARR Email List on November 12, 2010

MHARR logoShown below, for your review and information, is an article authored by an independent industry trade journalist, published in the Manufactured Home Marketing Sales Management (MHMSM) blog on November 11, 2010. The article is based on developments at the recently-concluded October 26-27, 2010 Manufactured Housing Consensus Committee (MHCC) meeting in Washington, D.C.

We encourage you to carefully read this article to its conclusion, as it clearly reveals the support and free hand that HUD regulators regularly receive from part of the industry to ignore or evade existing laws – in this case improperly downgrading the MHCC.

As MHARR has been warning the industry for years, regulators’ continuing evasion of the good laws passed by Congress, on all matters, is similarly enabled and facilitated by industry apologists, under the guise of “working with” those regulators, which – whether it be in the consumer finance or production arena – has resulted in nothing but 12 years of industry decline with no corresponding accountability.

Indeed, in this case, while two senior members of the MHCC (community and retailer) attempt to explain the failures of HUD regulators in dealing with the MHCC, the spokesperson for their national representation seeks to justify the actions of those regulators.

Nevertheless, with the current mood of the country, a power shift and major changes impending in Washington, D.C., the industry once again has a window of opportunity to correct the abuses of the past 12 years through strong and focused policies and actions that provide positive results, rather than more of the same go-along-to-get-along agenda that produces nothing but more excuses.

Click here for Industry in Focus Report

MHI Outlines Priorities for 2011 Industry Unity Critical For Success

November 9th, 2010 No comments

by Thayer Long

MHI 75th Anniversary logoEarlier this year, MHI outlined three broad areas where resources must be focused to protect and promote the industry. These three areas also encapsulate over two dozen separate legislative and regulatory initiatives MHI works on a regular basis. The three areas were 1) improved climate for financing, 2) updating the HUD-Code, and 3) protecting preemption.

At the time of this writing, the 2010 mid-term elections [were] just a few weeks away. And while the political landscape [was then] uncertain, the issues we are facing are not. In late September at the MHI Annual Meeting, MHI members and Board of Directors outlined priorities for the industry and the association in preparation for 2011 and the incoming 112th Congress. The priorities represent the collective input of manufacturers, lenders, community owners, manufactured housing state associations, retailers and suppliers—the entire MHI membership. A strong unified voice from all industry segments gives us a much greater likelihood for success. MHI is prepared to put forth every effort it can muster on these priority issues.

Of utmost importance will be implementation of the financial reform bill. The Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173; P.L. 111-517) was enacted into law on July 21, 2010. The law is considered the most significant rewrite in decades of rules governing banking and financial services and will impact every financial institution and credit instrument in the nation.

One of the most visible and significant creations of the law is the establishment of a new independent and autonomous Consumer Financial Protection Bureau (CFPB), housed within the Federal Reserve, that will regulate all consumer financial products and participants, including mortgages, credit cards, banks, payday loans and other financial products.

Initial estimates conservatively indicate the act will require more than 240 new rulemakings, nearly 70 new one-time reports/studies, and more than 22 new on-going studies. This does not include the administration of existing regulations and laws that will be transferred to the new CFPB—there are nearly 20 existing consumer/housing finance-related laws that will now fall under the new bureau’s jurisdiction—or existing rulemakings that were in progress at the time of the bureau’s inception.

Since this legislation addresses all financial products, it stands to reason that provisions in this bill contain significant issues for manufactured home lending. Addressing these issues, and correcting them, must be the primary focus in 2011.

There still is work to be done at both the national and state level regarding SAFE Act implementation. The Dodd-Frank Bill transfers jurisdiction and oversight of a number of mortgage-related laws from the Department of Housing and Urban Development (HUD) to the CFPB. Included in the regulatory transfer is the shift of enforcement over the SAFE Act from HUD to the CFPB. HUD maintains jurisdiction over the SAFE Act until the designated transfer date of July 21, 2011. It is unclear if HUD will issue a final rule on the SAFE Act. However, regulatory oversight of the statute will eventually shift to the CFPB.

The SAFE Act, and uncertainty around its application to many industries, including manufactured housing, remains a key issue to be resolved in 2011. Achieving clarity in application and making the SAFE Act more relevant to the manufactured housing industry will be a high priority in 2011.

In the past three months MHI has been invited to White House sponsored events on the future of government in housing. All expectations are that the GSE reform will begin to move seriously in 2011. The U.S. Treasury Department is required to submit a report to Congress, no later than January 31, 2011, on ending the conservatorship of Fannie Mae and Freddie Mac and reforming the housing finance system. For more than a decade, GSE and federal support of manufactured home lending and finance has been limited, even with strong Congressional guidance in the Housing and Economic Recovery Act of 2008 (HERA).

Since manufactured housing is “housing” plain and simple, MHI will need to be actively engaged with committee members, administration officials and external stakeholder groups at the national and grassroots level to ensure manufactured housing is on a level playing field in any new housing finance system.

Tax extensions and tax reform have made the news headlines lately. Section 45L of the tax code provides a credit of $1,000 to manufacturers of Energy Star HUD Code manufactured homes and $2,000 for modular homes. The credit was originally enacted as part of the Energy Policy Act of 2005 and for the past several years has been extended on an annual/temporary basis. The credit officially expired December 31, 2009.

Regardless of whether tax extenders legislation is enacted during the 111th Congress “lame duck” session which is getting underway, the need to pass an extension will again arise early in 2011. The ability to rely on the long-term availability of the new energy efficient home tax credit is of critical importance. In addition, with energy efficiency standards potentially becoming more stringent the cost to build such homes will also increase.

In 2011, MHI will work to pursue a strategy that: 1) increases the amount of the tax credit; 2) provides for a long-term/permanent enactment of the tax credit; and 3) potentially monetizes the tax credit. MHI will also examine other options to provide maximum benefit to the industry.

A severe threat to affordability and the HUD-Code is underway because of the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140) which contains provisions requiring the Department of Energy (DOE) to establish and implement energy efficiency standards for manufactured housing (Sec. 413).

The bill specifically tasks DOE, not the Department of Housing and Urban Development (HUD) to come up with new energy standards for manufactured homes.  MHI has developed a legislative proposal that would place responsibility for implementing energy efficiency standards developed by DOE within HUD and ensure that new standards strike a balance between energy efficiency and maximizing housing affordability for very low- and low-income families. The 112th Congress may yield opportunities to make targeted revisions to EISA.

If 2010 has been a pivotal year for MHI and the industry, 2011 will be a critical year for the industry. The market appears to have stabilized, however significant economic headwinds, a fragile housing market, and an active legislative and regulatory environment still threaten the industry.

We are all in this together. In particular, state association members, homeowners and residents represent the lifeblood of the industry, and MHI will be giving special attention to its grassroots mobilization efforts in 2011. MHI will be gearing up on effectively engaging these constituency groups and stressing the importance of direct member and industry involvement in the government relations process.

MHI is here to serve. We always welcome suggestions and feedback. If you are not involved, I encourage you to become active at the national level. The industry needs your voice.

###

Thayer Long is Executive Vice President of MHI, the preeminent national trade association for manufactured and modular housing industries, representing all segments of the industries before Congress and the Federal government. He can be contacted directly at (703) 558-0678. For more information on MHI, visit www.manufacturedhousing.org.

Highlights of 2010 Mid-Term Election

November 3rd, 2010 1 comment

MHI logoA Republican wave on November 2, 2010 surged across much of the nation with a decisive victory. As is evident from last night’s election, this country is changing and that will have a long-term effect on our politics, political parties and policies. Republicans regained control of the House of Representatives by a margin of 239-187. The U.S. Senate split 51 (D) – 46 (R ); 3 seats undecided, and several House and Senate races are still too close to call and a number of races may require election recounts.

MHI-PAC had a successful election cycle with 84% of the pro-business candidates endorsed won their elections. Click here for the Post-Election Update of MHI-PAC’s Win/Loss Record. Thanks to hundreds of our members nationwide, MHI had the ability to support government leaders who will work to further the goals of our industry.

On a positive note, several key manufactured housing proponents retained their seats:

  • Congressman Joe Donnelly (D-IN-02), a member of the House Financial Services Committee. Through his leadership, HR 5369 the “Manufactured Housing Licensing Clarification Act of 2010” was introduced in Congress. The purpose of the legislation is to clarify and exempt certain activities conducted by manufactured home salespersons and retailers from the requirements of mortgage loan originator licensing.
  • Congressman Barney Frank (D-MA-03), Chairman of the House Financial Services Committee. On MHI’s behalf, Chairman Frank sent a letter to HUD Secretary Shaun Donovan seeking clarification of the SAFE Act and to convey the importance of the manufactured housing industry.
  • Congressman Ken Calvert (R-CA-44), 9th term member of Congress and Republican chairman of the House Manufactured Housing Caucus. Congressman Calvert will be instrumental in helping the industry navigate though the implementation process of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

We note with sadness that several key manufactured housing champions lost their re-election bids:

  • Senator Blanche Lincoln (D-AR), a member of the Senate Finance Committee and a leading advocate in supporting legislation to require the Administrator of FEMA to implement a plan which addresses the abundance of surplus manufactured housing units stored by the Federal Government.
  • Congressman Baron Hill (D-IN-09), a member of the Energy and Commerce Committee. Congressman Hill introduced the Energy Efficient Manufactured Housing Act (H.R. 1749). The Legislation authorize the Department of Energy (DOE) to make grants to states to provide owners of manufactured homes constructed prior to 1976 with a one-time only rebate of up to $7,500 to use towards the purchase of a new Energy Star qualified manufactured home.
  • Congressman Bob Etheridge (D-NC-02), a 7th term member of Congress and Democratic chairman of the House Manufactured Housing Caucus. Congressman Etheridge supported tax extension legislation (H.R. 4213) which was approved by the House of Representative. The bill extends, section 45L, the tax credit providing $1,000 to manufacturers of Energy Star HUD Code homes and $2,000 for modular homes.

In addition, MHI looks forward to working with all new members of Congress, Republican or Democrat, who as a matter of strategic principle, MHI has sought to build relationships on both sides of the aisle in order to be well positioned whatever the electoral outcome. We could not have scripted the outcome of this year’s elections, but the wisdom of a bipartisan approach has been vindicated.

In January 2011, the 112th Congress will bring many newcomers to Capitol Hill. If a new Member of Congress represents your state or district, please make it a priority to call, write or visit these new representatives as soon as possible. Every election is a beginning, not an end; every new Member of Congress is an opportunity to win new friends for MHI.

In the coming weeks, House GOP leaders are expected to conduct leadership elections and formalize the chamber’s leadership for the 112th Congress. Following this, House and Senate leaders will begin the task of formalizing committee rosters and hiring committee staff. The new House GOP leadership will have an opportunity to begin putting its new majority to use relatively quickly. The President is slated to provide the State of the Union Address in mid-January followed by the release of the 2012 budget outline in early-February. Both are expected to garner strong resistance from the new House Republican majority and provide an opportunity to highlight key policy divisions between Republicans and Democrats.

MHI is beginning the process of reaching out to new House and Senate members in an effort to build a cohesive coalition in support of the industry’s priorities. The 112th Congress is expected to be heavily partisan and provide little opportunity for substantial policy reform. It is critical the industry begin the process of communicating policy concerns to new and existing Members of Congress now.

If you have any questions contact the MHI Government and Legislative affairs team at RBevington@mfghome.org or 703-558-0675, or jboehlert@mfghome.org 703-558-0660.

RE: The Mid-Term Elections

November 3rd, 2010 2 comments

Here is the message that I sent to my members and to the members of the other association that I represent, just FYI.

One of the most precious gifts afforded people in the United States is the right to vote for our leaders. Unlike countries where radical and revolutionary elements make the determination of the leadership of their countries, we have a democratic representation that can change without the furor that others experience.

However, that gift is not as much a gift as a ‘right’ earned by the struggle of many patriots throughout our history. I am certain that we have quite a few of those in our own families. Those who are fighting for freedom of choice and those who have given their own lives in the defense of this right and privilege deserve at least the effort on our parts to exercise that right.

Tomorrow, November 2nd, we have that opportunity to exercise that right and I hope that you take the time to do just that. So many people give the usual reasons for not voting such as “my vote won’t count as it is already decided”, or “I don’t know who to vote for as I don’t like any of them”, and on and on and on…you all have heard it before.

For those who do not vote, you are tacitly agreeing that the current situation that we have is OK and that you do not wish to voice an opinion, therefore; you have voted by not going to the pools on Tuesday.

It is imperative that people in our great country utilize this right and privilege that so many have sacrificed for. Many recent presidents and scholars have stated that we are unique in that our system of government has survived for so many years, and it is true. Our founding fathers were more intuitive than most to have crafted a constitution that has stood the test of time. But this will only continue with the citizens of this land exercising that right bestowed on us.

Tomorrow, November 2nd, please take the few minutes that it will take to exercise your right and privilege and vote. Be the leaders of our industry and cast your vote as your heart and mind dictate – just vote!

Thanks 

R W Thieman, Jr., CAE
Executive Director
Illinois Manufactured Housing Association
3888 Peoria Rd
Springfield, IL 62702
217-528-3423
Fax: 217-544-4642
bthieman@imha.org
info@imha.org
www.imha.org

Urge Senators to Co-sponsor the Advanced Energy Tax Incentives Act of 2010

November 2nd, 2010 No comments

(S. 3935) Measure Expands and Extends Tax Credits for Energy Star Factory-Build Homes

MHI logoCongress is currently scheduled to return for a lame duck session the week of November 15 to complete work on a number of must-pass legislative measures, including a potential energy tax incentive package.

MHI is seeking assistance to ensure legislation extending and expanding tax credits available for the production of Energy Star-qualified manufactured and modular homes is included in any tax package considered by Congress

Download Word doc of Sample Letter to Committee Members. (PDF version)

BACKGROUND:

At the end of September, Sens. Jeff Bingaman (D-NM) and Olympia Snowe (R-ME) introduced the Advanced Energy Tax Incentives Act of 2010 (S. 3935). The measure would extend a variety of tax incentives, including Section 45L for manufactured and modular homes.

The legislation would amend the tax code to provide a credit of $1,500 for qualifying Energy Star manufactured homes, an increase from the current $1,000 credit. The credit increases to $2,500 when new, more stringent manufactured housing Energy Star requirements go into effect in 2011.

For the highly price sensitive manufactured home market, tax credits are vital in helping offset the added costs associated with the construction, purchase and ownership of an Energy Star home.

The existing $1,000 tax credit has been valuable in helping expanding the market for Energy Star manufactured homes, which currently make up approximately five percent of total manufactured homes sales nationwide. However, the high cost of building to Energy Star standards remains a barrier to affordable housing. Increasing the credit will be instrumental in placing Energy Star homes within reach of moderate- and low-income families.

MHI, along with a broad coalition of energy efficiency, environmental, and affordable housing organizations have expressed strong support for extending and expanding the Energy Star tax credit for manufactured and modular homes.

KEY TALKING POINTS:

  • Senators are asked to endorse the Advanced Energy Tax Incentives Act of 2010 (S. 3935), to promote energy efficiency for manufactured and modular homes for the following reasons:
  • For the highly price sensitive manufactured housing market, these credits are vital to helping buyers afford the added costs of purchasing an Energy Star home
  • For manufactured homes, energy costs represent a larger proportion of the total costs of homeownership versus site-built housing; energy price hikes are felt most acutely among owners of manufactured homes
  • For moderate- and low-income households, escalating energy prices are more likely to translate into real declines in disposable income and pose a major impediment to building equity and financial security
  • The energy savings associated with owning and Energy Start home more than compensate for the higher construction costs. In high cost energy areas, for instance, cost savings can total roughly $800 or more per year.
  • The tax credit is viewed by a growing number of state and local government agencies, as well as housing and energy efficiency advocates as a critical foundation for encouraging Energy Star manufactured home construction.
  • The tax credit has moved state governments and utilities to offer companion programs to promote Energy Star predicated on the availability of the tax credit. The delay in extending the tax credit has begun to slowly unwind these initiatives that are so vital to building support for Energy Star around the nation.

ACTION NEEDED:

MHI members are urged to contact members of the Senate Finance Committee and ask them to co-sponsor S. 3935. A list of Finance Committee members is below and a draft letter is also attached for your convenience.

SENATE FINANCE COMMITTEE

Chairman
Max Baucus (D-MT)
  202-224-2651
Ranking Member
Chuck Grassley (R-IA)
  202-224-3744
     
Democrats    
John D. Rockefeller, IV (WV)   202-224-6472
Kent Conrad (ND)   202-224-2043
Jeff Bingaman (NM)   202-224-5521
Blanche L. Lincoln (AR)   202-224-4843
John F. Kerry (MA)   202-224-2742
Ron Wyden (OR)   202-224-5244
Charles E. Schumer (NY)   202-224-6542
Debbie Stabenow (MI)   202-224-4822
Maria Cantwell (WA)   202-224-3441
Bill Nelson (FL)   202-224-5274
Robert Menendez (NJ)   202-224-4744
Thomas R. Carper (DE)   202-224-2441
     
Republicans    
Orrin G. Hatch (UT)   202-224-5251
Olympia J. Snowe (ME)   202- 224-5344
Jon Kyl (AZ)   202-224-4521
Jim Bunning (KY)   202-224-4343
Mike Crapo (ID)   202-224-6142
Pat Roberts (KS)   202-224-4774
John Ensign (NV)   202-224-6244
Michael B. Enzi (WY)   202-224-3424
John Cornyn (TX)   202-224-2934

Download Word doc of Sample Letter to Committee Members. (PDF version)

If you are a member and have questions, contact MHI Vice President of Political and Legislative Affairs Rae Ann Bevington at 703-558-0675 or RBevington@mfghome.org or Vice President Legislative Affairs Jason Boehlert at 703-558-0660 or JBoehlert@mfghome.org

MHI PAC and the Upcoming Midterm Elections

October 26th, 2010 2 comments

Industry in Focus Reporter Eric MillerWASHINGTON, DC – Indiana representative Joe Donnelly is the top recipient of contributions from the Manufactured Housing Institute Political Action Committee (MHI PAC). According to OpenSecrets.org, Donnelly received a $6,000 contribution during the 2010 election cycle.

As of October 13, 2010, receipts totaled $101,019.00 with $79,590.00 cash on hand. Total spent amounts to $118,584.00. Sixty-five percent of contributions were made to Democrats and 32 percent went to Republicans, with specific Republicans receiving some of the largest contributions.

Donnelly and several key members of the Manufactured Housing Congressional Caucasus are facing tight races. The biggest recipients in House of Representatives races include Barney Frank (D-MA) with $3,000 and Bill Posey (R-FL) also with $3,000 and Baron Hill (D-IN) $2,000. In the Senate races, top recipients include Blanche Lincoln (D-AR) with $4,000 and Richard Shelby (R-AL) with $3,500.

House
Total to Democrats: $31,750
Total to Republicans: $15,500
Recipient Total
Aderholt, Robert B (R-AL) $1,000
Bachus, Spencer (R-AL) $1,000
Boswell, Leonard L (D-IA) $2,000
Boyd, Allen (D-FL) $2,000
Brown-Waite, Ginny (R-FL) $1,000
Calvert, Ken (R-CA) $1,000
Camp, Dave (R-MI) $2,000
Chandler, Ben (D-KY) $1,000
Childers, Travis W (D-MS) $2,000
Clyburn, James E (D-SC) $1,000
Davis, Geoff (R-KY) $2,000
Donnelly, Joe (D-IN) $6,000
Driehaus, Steve (D-OH) $2,000
Duncan, John J (Jimmy) Jr (R-TN) $2,000
Etheridge, Bob (D-NC) $1,000
Frank, Barney (D-MA) $3,000
Hill, Baron (D-IN) $2,000
Hoyer, Steny H (D-MD) $2,500
Matsui, Doris O (D-CA) $1,000
McHenry, Patrick (R-NC) $1,000
Miller, Brad (D-NC) $1,000
Olver, John W (D-MA) $1,000
Paulsen, Erik (R-MN) $250
Posey, Bill (R-FL) $3,000
Scott, David (D-GA) $2,000
Souder, Mark E (R-IN) $1,000
Tanner, John (D-TN) $1,000
Thompson, Bennie G (D-MS) $1,000
Tiberi, Patrick J (R-OH) $250
Tonko, Paul (D-NY) $250
Senate
Total to Democrats: $12,000
Total to Republicans: $6,500
Recipient Total
Baucus, Max (D-MT) $1,000
Corker, Bob (R-TN) $1,000
DeMint, James W (R-SC) $1,000
Dodd, Chris (D-CT) $1,000
Lincoln, Blanche (D-AR) $4,000
Murkowski, Lisa (I-AK) $2,000
Nelson, Bill (D-FL) $2,000
Pryor, Mark (D-AR) $1,000
Reed, Jack (D-RI) $1,000
Schumer, Charles E (D-NY) $2,000
Shelby, Richard C (R-AL) $3,500
Wicker, Roger (R-MS) $1,000

Based on data released by the FEC on October 25, 2010.

Feel free to distribute or cite this material, but please credit the Center for Responsive Politics. For permission to reprint for commercial uses, such as textbooks, contact the Center.

In terms of voting records on industry related issues and the S.A.F.E. Act, as well as Title 1 reform and Duty to Serve, were all contained in the Housing and Economic Recovery Act of 2008 (HERA). In the Senate, Reid, Shelby and Lincoln all voted for the Act. Then-Senator Obama did not vote. In the House, Donnelly, Hill and Frank all voted for the bill. Posey was serving in the Florida State Senate at the time. Would-be Speaker of the House John Boehner voted against HERA.

The National Association of Homebuilders (NAHB) and the National Association of Realtors (NAR) has also provided contributions to these candidates. As of October 13, Donnelly received $1,000 from the NAHB PAC. Frank received $5,000 from NAHB, as did Posey. Hill is not listed as having received a contribution from NAHB. In the Senate races, NAHB gave $2,500 to Lincoln and $5,000 to Shelby. In contrast to MHI PAC’s contributions, the NAHB gave 39 percent to Democrats and 60 percent to Republicans. The total spent by the Homebuilders in the 2010 cycle is $3,012,057.

MHI-PAC contributions chart
Chart created by MHMSM.com’s Industry in Focus Reporter Eric Miller from information available on opensecrets.org

Contributions by the National Association of Realtors far exceed that of either the NAHB or MHI. As of October 13, the Realtors gave 58 percent to Democrats and 41 percent to Republicans. Donnelly received $6,000 from the Realtors, Frank received $6,000, Hill received $6,000 and Posey was handed $5,000. In the Senate races, Lincoln received $14,000 and Shelby $3,000. Total expenditures for Realtors in the 2010 cycle are $11,218,449.00.

Democrats currently hold a 256-178 majority in the House of Representatives, with one vacancy. The battle for control of the House focuses primarily on 64 competitive races–58 Democratic-held seats and 6 Republican-held seats including 9 members of the Manufactured Housing Caucus.

According to MHI, two races that are particularly important to the manufactured housing industry are those including Congressman Baron Hill (D-IN) and Congressman Joe Donnelly (D-IN). Beyond financial contributions, MHI says it will be working with members in these key districts to get-out-the-vote for their candidates.

According to their report to members at their Denver meeting in September, MHI believes as do many political analysts that a Republican takeover of the House of Representatives is possible. If so, House Minority Leader John Boehner (R-OH) is in line to become Speaker of the House. A GOP majority would mean major changes as a number of senior Democrats chairing committees important to manufactured housing would face demotions to lesser roles including Housing Financial Services Chairman Barney Frank (D-MA), a staunch supporter of manufactured housing.

The current Senate line-up is 57 Democrats, 41 Republicans and 2 Independents. The Republicans must win 10 seats to recapture the Senate. The odds favor continued Democratic control, but a significant surge by Republican candidates could lift the Republicans into striking distance of gaining control of the Senate.

More information on the MHI PAC is available at http://www.manufacturedhousing.org ##

Some Say the Future for Manufactured Homes Is Downtown

October 24th, 2010 2 comments

Industry in Focus Reporter Eric MillerMark Dillard, Executive Director at the Manufactured Housing Institute of South Carolina (MHISC) uses a photo of a vacant lot near his office, just blocks from the state Capitol to demonstrate the potential to place manufactured homes on vacant lots throughout the state. In the state capital of Columbia, Dillard says there’s already a trend of bringing condos and retail downtown, and the addition of more moderately priced workforce housing in the form of manufactured homes makes sense.

Single-section HUD-Code Home, Oakland, California
Single-section HUD-Code Home, Oakland, California

Most manufactured homes produced today are destined for suburban and rural locations, and Dillard’s vision would defer to the exception rather than the rule.  Experts say an increasing amount of residential development in the coming years will be in urban areas and inner suburbs. Even within the suburbs, development will not be of the ranch-style-home-on-half-acre-lot most manufactured homes emulate, but of the new urban sort with sidewalks and a mix of retail office and residence. It’s a cost-effective thing for the utilities and municipalities, says Dillard. “What we’ve seen thus far is condos, but we’re talking about individual affordable homes. It seems like it fits the trend.”

Even so, this may present a problem as well as an opportunity for the manufactured housing industry.

An article in the Journal of the American Planning Association (JAPA) earlier this year argues that manufactured housing could solve the affordable homes crisis in urban areas, but only if planners help local people to overcome their prejudices.

Writing in the winter issue of JAPA, two leading urban affairs and planning experts—Professor Casey Dawkins and Professor Theodore Koebel from the Center of Housing Research at Virginia Tech—urge urban planning officers to support proposals for manufactured homes. The research was sponsored by HUD and has yet to be released in its entirety.

In the research, Dawkins and Koebel argue that the planning process discriminates against people with low incomes unless planners speak up for the design improvements, longevity, and value for money that make manufactured housing a feasible and affordable alternative to traditionally built homes.

Their new research shows that planners see high land prices and citizen opposition as the biggest barriers to manufactured housing developments in urban areas.

According to the journal article, government subsidies—including grant and loan programs supporting low-cost housing construction and rehabilitation, tax incentives and gap-financing programs for low income borrowers, tax credits for affordable housing production, and public and nonprofit ownership—have been the most common tools for increasing the supply of affordable housing in the United States. Alternatively, policy could focus on reducing market barriers to low-cost housing producers.

In South Carolina, Dillard says a major barrier is zoning restrictions.

“A lot of the municipalities in South Carolina banned manufactured housing 20 or 30 years ago,” Dillard explains. “We’re looking for opportunities to talk to them about affordable housing and the declining population a lot of municipalities have.”  It’s that window for conversation, opened by the sagging economy that may help bring changes to zoning laws to welcome manufactured housing.

The potential application for manufactured housing in this arena is significant. Absent subsidies, the researchers at Virginia Tech say manufactured housing costs less per unit than any other housing type because of economies of scale in production and because it uses standardized inputs and labor processes. In metropolitan areas with high land costs, manufactured housing offers potential for substantial cost savings by substituting other inputs for land.

Koebel told MHMSM.com that high land costs in urban areas make residential development with a low price point problematic. That has been helped with the use of modular housing, and it can also be addressed with manufactured housing, but builders are not likely to mix the two.

“Most builders are not going to do mixed-production types in a subdivision,” Koebel says.  “It’s a question of how are you going to do subdivisions that are going to pay for the cost of land. It’s hard to do it with any type of construction with a modest price point. If they’re going for a modest price point, they’re either going to go modular or manufactured, I don’t think they’re going to be mixing and matching.”

If the zoning laws can be amended to allow manufactured housing, Dillard says there are benefits for South Carolina’s cities and towns. The first is a reduction in suburban sprawl, which he says is a frequent goal in the state. The second is a savings on infrastructure costs. Another prong of their approach has been to contact power companies and explain the benefits of using manufactured housing for infill development. He points out that a power line with 10 houses on it is more efficient than one serving six. Municipalities can realize those same benefits with transportation and sewer and water infrastructure.

Previous Efforts at Infill and Brownfield Development

There have been efforts and successes over the years to bring manufactured housing to both brownfield and infill sites in urban areas. Most notable perhaps is Oakland, California.

“Oakland is certainly an example of using HUD code to promote infill,” Koebel says.

Structural innovations now allow modestly pitched roofs, as well as two-story stacking of units, although most manufactured housing units do not have these attributes. Those innovations have helped the East Bay city to demonstrate the utility and cost advantages of placing manufactured housing on infill lots in a built-out city.

Multi-section Single-family HUD-Code Home, Oakland, California
Multi-section Single-family HUD-Code Home, Oakland, California

There are other examples including several in the Pacific Northwest the researchers looked at. Also in 1997 the Manufactured Housing Institute (MHI) undertook a pilot project to bring manufactured homes to five major urban areas. Working in conjunction with architectural firm Susan Maxman & Partners, the project focused on Wilkinsburg, Pennsylvania; Washington, D.C.; Louisville, Kentucky; Birmingham, Alabama; and Milwaukee, Wisconsin. Later in a 2003 showcase example, the Mills of Carthage project in Cincinnati brought 15 manufactured and modular homes to a brownfield site there.

MHI says on its web site the initiatives were intended to address the outdated assumption that manufactured homes are not appropriate for placement in major urban and suburban areas. Also in the case of the 1997 initiative, the project was designed to highlight any impediments and challenges to using manufactured homes, and help pave the way for a more extensive use of manufactured housing in future efforts.

The North Carolina Manufactured Housing Institute (NCMHI) began another venture to demonstrate that manufactured homes can be architecturally compatible with existing homes in urban settings and also be a solution to the affordable housing crisis facing many of the state’s urban and inner suburban areas. 

3 BR, 2BA bungalow style home blends in with it's Raleigh, NC neighborhood.The result was an attractive three bedroom, two bath, 1500-square-foot home in the shadows of the North Carolina statehouse in downtown Raleigh. Designed complete with a factory-constructed front porch, the house blends in with the 1920s bungalow-style architecture of the neighborhood in the southwestern part of the city. It was also priced some $80,000 less than comparable homes in the neighborhood.

Yet despite its affordability and quality, manufactured housing continues to face opposition and legal barriers. In Raleigh the new home was allowed under an exception to a Raleigh city ordinance, which currently prohibits manufactured housing within the city.

Those issues are not confined to North Carolina. As the Virginia Tech researchers point out, perhaps the most significant barrier to siting new manufactured homes in metropolitan areas is the presence of zoning codes that restrict the size, design, location and even existence of manufactured units. 

Overcoming Barriers

According to the research, several factors motivate local governments to adopt these and other manufactured housing regulatory barriers, including general prejudice against all forms of low-cost housing and the low aesthetic appeal of the traditional but outdated “trailer park” community design. Citing a variety of research, the authors conclude that planners are also influenced by erroneous perceptions that manufactured home residents constitute a transient population, that manufactured housing is substandard and unsafe, and that manufactured housing appreciates more slowly than traditional site-built homes and negatively influences adjacent housing prices.

However, as the authors point out, evidence suggests that nearly all of these claims are either illegitimate or unwarranted. Despite this evidence, negative stereotypes of manufactured housing persist, making it likely that local government officials will continue to impose regulatory restrictions on such housing.

A 1996 survey of 1,172 communities conducted by the American Planning Association, found that while almost all communities permit manufactured homes in some residential districts, on individual lots, considerably fewer allow them in all or in the most restrictive residential districts. Only 29 percent of responding communities had regulations that treated site-built homes and manufactured homes comparably.

“Our research shows that having a HUD code subdivision increases the number of homes going into an area,” Koebel says. “Having more land already zoned—small lot development at modest price points—and having areas of that sort identified and pre-zoned helps increase the number of units.”

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Tri-section HUD-Code Home Located in the Hills, Oakland, California

The authors received responses from 940 communities regarding the perceived barriers to placing manufactured housing. The survey respondents were asked to rate a list of potential barriers to HUD-code homes. The potential barriers with the largest share of respondents saying they were significant or would prevent placements were: the high cost of land (42.4 percent), citizen opposition (36.1 percent), no new parks (35.6 percent), zoning codes (33.4 percent), not much land (31.1 percent), deed restrictions (26.8 percent), and historic district regulations (26.1 percent). Fees, permits, wind codes, snow load standards, fire codes, and environmental regulations were the most likely items to be identified as “not a barrier” or a “minor barrier.”

The authors also found that by-right zoning, when manufactured housing is treated equally in single-family housing districts, has a positive impact on unit placement that is greatest when explaining whether a community has any manufactured housing placements at all as opposed to none. The effect of by-right zoning on the odds of placing one unit or more is three times higher than it is on the odds of placing more than 20 units. Above 50 units, the impact of by-right allowances diminishes in magnitude even further, although it is still statistically significant.

To some in the industry the idea that local zoning can impact the placement of manufactured homes in urban areas, or anywhere, runs counter to the intent of the Manufactured Housing Act of 2000 that says the HUD code should be broadly and liberally interpreted. Local zoning or aesthetic requirements, as well as building requirements, cannot be placed on homes built to the HUD code.

But Koebel says most manufactured housing placement has come by way of state preemption that allows manufactured homes in single-family neighborhoods. 

“I think HUD and the federal government would be highly reluctant to get into the details of preemption in terms of land-use regulations,” Koebel comments. “That’s just such a heavily state-oriented function. Some states require that you allow manufactured homes in single-family zones as a by-right use. You usually have that with some design standards. I personally don’t think the federal government is going to take on state and local governments on that.”

HUD Program Manager Edwin Stromberg told MHMSM.com the research was part of a wider effort to gain insight into barriers to affordable housing and that the report should be released within the next few months.

How Big is the Potential Market?

According to a 2009 study by RCLCO, both retiring baby boomers and maturing echo boomers are looking to move away from the suburbs. Both groups reported wanting to live in more urban, mixed use, mixed age areas that offer services, community and walk-ability. A study released in 2009 by the U.S. Environmental Protection Agency titled “Residential Construction Trends in America’s Metropolitan Regions” shows that there has been a striking move back to the urban core in many markets. While Generation X is small, experts say the larger Generation Y will be looking for urban amenities, but may not be able to afford living downtown. 

Manufactured Housing Institute Executive Vice President Thayer Long says Generation Y, the next generation of homebuyers, is a group bigger than the baby boomers and just coming of house purchasing age. The group is more environmentally aware and as far as preferring urban areas, Long says there may be more opportunities for the manufactured housing industry to get involved.

Most manufactured homes produced today, and at any time in the past, however, are destined for rural and suburban areas. For the past half-century the bulk of new residential development has occurred in greenfields, which is land that hasn’t been previously built on. Researchers now say the amount of new development occurring in brownfields and urban infill is on the rise. Manufactured home producers may wonder what the risk is of not meeting the needs of the urban market or homebuyers who prefer walkable urban districts.

“If we reached the point of having 25 percent infill/brownfield, that would be achieving a great deal,” Koebel says. “There’s some evidence that infill and redevelopment has increased market share.”

Koebel says modular products are well suited to infill development and that there are systemic barriers to significant placement of manufactured housing in high-priced urban areas.

“The industry got itself into a market segment that’s targeted to a rural, lower-end product and has never figured out how to take advantage of other market segments,” Koebel says. “Partly it’s the retail structure. The industry has serious problems with path-dependency. It got itself into a rut in terms of how you use the product and who is the market for the product, all the way down to how it gets advertised and sold; all of that becomes reinforcing and limits its use in urban areas.”

Conclusions

The researchers conclude planners can promote affordable housing by projecting the potential demand for manufactured housing in a number of ways including devising educational programs to promote community acceptance, reviewing and modifying existing regulations so they treat manufactured housing the same as site-built single-family housing and by designing incentives to promote affordable redevelopment using manufactured housing on vacant infill lots.

Dawkins and Koebel want planners to educate their local communities away from thinking that manufactured housing means “mobile” homes, “trailer parks,” and anti-social behavior. 

For Dillard, the solution is about education, but also about promotion. Part of his vision is to have major producers set up a cul-de-sac showcase of manufactured homes where they can be on display and later purchased.

But that’s down the road. For now, with the photo of a vacant lot in hand, he’s working to win over municipalities one at a time.

Notes:

HUD photos: Thanks to Steve Hullibarger

(Raleigh Photo: http://www.manufacturedhousing.org/developer_resources/urban_design_raleigh.asp

IMHA-RVIC News regarding the status of the Louisville Show

October 9th, 2010 9 comments

IMHA-RVIC logo

Please see the message below from the Midwest Manufactured Housing Federation regarding the status of the Louisville Show. We encourage all IMHA members to support this event.


As a part of the manufactured housing industry, you know how tough business conditions have been for the last several years. These same business conditions have taken a toll on the Louisville Manufactured Housing Show, reducing the number of show homes in 2009 and forcing its cancellation in 2010. As caretakers of this industry event, we’re doing everything possible to make sure it happens successfully in 2011 but we need your support to renew this tradition.

Maybe you’re a manufacturer who can take one home to the show. Maybe you’re already taking two homes but can take one more. Maybe you’re a supplier who has not yet committed to the show. Please call Dennis Hill at 770-587-3350 and make that commitment today! Maybe you’re a retailer or community owner who can call your manufacturers and tell them you hope to see their products at the show. Let your suppliers know you’ll be in Louisville in January. Maybe you can even make arrangements to purchase one of the show homes.

We’ve cut expenses by eliminating set management fees and reimbursements to the Midwest Federation members and have revamped the advertising campaign. With 7 manufacturers, 20 floors and 45 booths already committed we’re just 6 floors away from being able to finalize our contracts to make the 2011 show a reality.

We are quickly running out of time to get these final commitments. Everyone has a part in making this event happen, and with the support of the industry it will happen. Please do your part to support the Louisville show and plan on being there in January.


3210 Rand Rd., Indianapolis, IN 46241 • 317-247-6258 • Fax: 317-243-9174

Manufactured Housing Must Become Mainstream Housing

October 3rd, 2010 2 comments

by Thayer Long

MHI logoThe National Manufactured Housing Construction and Safety Standards Act of 1974 and subsequent changes found in the Manufactured Housing Improvement Act of 2000 laid the foundation to bring manufactured housing into the mainstream housing market. Over 35 years has passed, and great strides have been made in fulfilling this destiny. Over the past two decades we have represented over 20% of all new single family homes built in this country. This is a significant achievement, even given the fact that the last decade has seen some dismal numbers for this industry. But even the biggest industry supporters agree that the manufactured housing industry has yet to realize its tremendous potential. When will manufactured housing be considered mainstream housing?

That day will come when the industry fully embraces the concept that we belong in the mainstream housing arena.

America needs manufactured housing to be mainstream housing. We build high quality homes at a price most can afford. This concept is nothing new. I think we all see the benefit of having manufactured housing considered as an equal in the housing world. But the effort to get there has been the real challenge. We need to think outside of our traditional core set of issues. We need to acknowledge that the mainstream housing world is bigger than anything our regulators at HUD throw at us. We need to throw out some of the rules we used to play by and adopt some new ones.

First we need to start thinking of ourselves as mainstream housing. In the past, we have traditionally thought of ourselves as a niche in the overall housing market. If an issue didn’t specifically mention manufactured housing or there wasn’t a direct connection to our business, we chose to ignore it. Frankly, this way of thinking worked in the past. But those days are quickly coming to an end. The housing market is evolving, the consumer is changing. If we want to expand our presence and increase our business, and above all if we want the parity in the housing market we all desperately seek – we need to think broader in scope. If we want to be taken seriously, then we need to be prepared to think mainstream.

I know there are some that like the niche that we operate in and think the market and conditions need to change to us, instead of us to them. Some are afraid of what being part of the mainstream will mean, that we will lose our identity as affordable housing. As long as we can provide value to our customer, the demand for our homes will be there. But if we cut ourselves off from the rest of the housing market, we will be marginalized.

Indeed, in many ways we are being pushed into the “mainstream” market whether we like it or not. MHI, for instance, has over two dozen issues that we consider priorities for the industry because of the way they will impact your business. Only a handful of them could be considered “manufactured housing only” issues. In reality, we are touched by a large set of regulations, including things like the SAFE Act, Truth in Lending, and Fair Housing laws. This has caused angst for many, yet these laws, and many others, are found in the rest of the housing world. Please don’t misread; I’m not calling for additional regulation by any means. But I am pointing out that if we want a “level playing field,” if we want the same access to capital that the site-built world has, if we want to be treated fairly, it will require us to understand a different set of rules and adhere to laws and regulations that we are unfamiliar with.

Second, we need to act like mainstream housing. MHI’s Three Point Plan to industry success includes 1) improving financing, 2) aggressively updating the HUD-Code, and 3) protecting preemption. All three points are geared to both moving the industry ahead in the mainstream and ensuring that our homes remain affordable to those who need it.

In the area of financing, all lender practices in the housing world are under increased scrutiny by the government and investors for safety, soundness and transparency to consumers. We need to be part of this debate, to show that we are willing to, or in some cases already have, put in place the same principles other market participants share. Without it, our ability to access capital on the same terms as the rest of the housing market will be limited. Second, by promoting updates to the HUD-code on a regular basis, we ensure our homes are designed and built using new, efficient and innovative construction techniques, and are built using codes and standards that are relevant in today’s building environment. We cannot build to codes adopted years ago and still expect equal status from the rest of the housing world. Third, by following points one and two, we will protect the preemptive status of manufactured housing, the most potent advantage our industry enjoys and which is the single largest contributing factor to our affordability. Thus, by thinking and behaving mainstream, we will ensure our viability for years to come.

The path to success and prosperity will be found when manufactured housing is no longer considered a stigma. What is required to make that leap can appear very frightening, which is why as an industry we have spent so much time using the same arguments and expecting different results. No amount of arm twisting from HUD or legal wrangling will change that perception. That change will happen only when, as an industry in a unified voice, we make the conscious effort to move manufactured housing into the mainstream housing arena. ##

Thayer Long is Executive Vice President of MHI, the preeminent national trade association for manufactured and modular housing industries, representing all segments of the industries before Congress and the Federal government. From its Washington, D.C. area headquarters, MHI actively works to promote fair laws and regulation for all MHI members and the industry. He can be contacted directly at (703) 558-0678. For more information on MHI, visit www.manufacturedhousing.org

Spreading the Good News

September 29th, 2010 No comments

Chrissy Jackson photoAre you doing your share to spread the good news? Are you helping spread positive words about manufactured housing? About the diverse placement opportunities (communities, subdivisions, co-ops, private property, residential lots)? About the improvements in appearance and quality (drywall, vinyl lap siding, shingled roof, skylights, innovative kitchen designs and floor plans)? About the customer-friendly finance programs (lower down payments, twice-a-month payments, no pre-payment penalty loans)? About the other quality people who own manufactured homes by choice (professionals, white collar office workers, retirees, single parents)?

Are you taking advantage of every opportunity to improve the image of the manufactured housing industry? Does professionalism show in your dress? In your language? In your way of doing business? In your personal and business ethics? In the way you treat your customers? In the way you treat your employees? In the number of referrals previous customers bring you?

Opportunities abound for each of us to shine in this area. No one person can possibly do it alone. It takes all of us, all of the time, working together to improve the image of manufactured housing, to increase sales – which in turn will increase production – and to continue to make inroads in the areas where zoning and image issues thwart our growth.

Look for speaking opportunities if you are a good public speaker. Take advantage of “Career Day” at your local high school. Talk at a Rotary Club meeting or other business gathering where a speaker is needed. The Chamber of Commerce usually holds a “Business After Hours” in most areas of the United States. Volunteer to host one. Invite public officials and chamber members to see our product, view the lifestyle your community offers and learn about manufactured housing.

Display your community name, logo and phone number proudly on vehicles, uniforms, caps and literature. Employ people who have enthusiasm for our product and are outgoing in dealing with the public. Keep your office and community sparkling – just as if it were an “Open House” every day – and, indeed, it is!

Advertise more than just a low price, low monthly payment or free rent to convince potential homeowners to visit your location. Advertise the beauty and efficiency of the homes you sell, the quality of the lifestyle your community offers, the professionalism of your staff. Spread the good news with well-written flyers, brochures and literature.

Attend zoning meetings, planning meetings; join the Chamber of Commerce; run for a local office; turn your clubhouse into a voting precinct; become a volunteer for Meals on Wheels or the Fire Department. Get involved in the surrounding area and make a difference. Just by being yourself, by making new friends and broadening your horizons, and by constantly being professional, you will be spreading the good news.

The good news is that we are more than just affordable – we are desirable! We are more than just “somewhere” to live – we are a lifestyle of choice! We are more than low investments and low monthly payments – we are efficiency, durability and quality! We are more than just “landlords” – we are real estate investment managers of multi-million dollar properties. We are more than just sales people, managers, activity directors and maintenance crew – we are the people who provide the backbone for the industry that has proven housing solutions, and also has the confidence of the buying public who live in our homes! We are more than just occupants for used-up agricultural land at the edges of town – we are a compatible housing product that fits into any environment through our superior design and engineering capabilities!

We are MANUFACTURED HOUSING – and we are proud of it! Spread the good news – it’s a challenge – from me to you! ##

Chrissy Jackson
President, Chrissy Jackson & Associates, Inc. www.chrissy-jackson.com
President, Florida Writers Association, Inc. www.floridawriters.net
Vice President, Florida Writers Foundation, Inc.
P. O. Box 66069
St. Pete Beach, FL 33736-6069

Editor’s Note: Be sure to check out Chrissy Jackson’s series of Feature Articles: