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Posts Tagged ‘future’

The Lost Decade Isn’t Over Until We Say it Is

June 19th, 2014 No comments

A decade ago, a shipment slump hit the manufactured housing industry. It actually started earlier in 2000, but by 2004 it was undisputed that shipments had dipped all across the country. The hope was that this decline was no different from those that happened before. Surely, sales would pick up and the good life would return. Now ten years hence, those hopes have been dashed. A new normal has set in. But has it? Recently, I asked industry professionals from all across the country if they were satisfied with an annual shipment level of 60,000 units?

60,000 units is the high point over the past three years. This uptick has again convinced some that the good times are about to roll again. But really? The April shipment numbers show that for the year, 19 states have increasing shipment numbers, four states have no change and 25 states are still declining!

So, in total, a handful of states have sufficient shipment increases to mask the decline in a broader range of states.

Taking the long view, the industry since the dawn of the HUD code produced one million HUD code homes in just its first three years. Over the following years, the next million mark took 4 or 5 years but recently it took a full 12 years to go from 7 million homes to 8 million. At the industry’s current pace, it will take 17 years to reach 9 million total homes.

Production of homes of course is but one industry metric. The number of HUD code plants has declined from 550 to 123.

A move back to the average performance of the industry over the 2000’s (which would mean doubling today’s production levels) could be a starting point for an industry goal. How do we get there? First, we need to recognize that many of today’s challenges existed back then too. Finance obliviously is an even more severe hurdle for customers and the industry. But fundamentally, the industry must strengthen each of its building blocks.

average-shipment-per-decade-manufactured-home-posted-on-mhpronews-com

Customer demand leads to new sales which leads to new orders which leads to filled community sites.

How do we fuel customer demand?

Interestingly, my thought is that we begin with the desired outcome and work backward.

An honest assessment of unfilled sites would say that many are not very attractive. Empty sites often are next to undesirable homes or unkempt spaces. Not places where a customer would want to put their shiny new home. We can do better.

The lack of independent retailers is also a factor. Few points of sale means less industry advertising. Essentially in many markets, the industry has gone dark on TV and other media. Given today’s technology we can reach customers in inexpensive ways. We can do better.

Ozzie and Harriet would love our homes. Too bad, they only represent a very small share of today’s households. The recent MHI design award winners point the way to new ways to think about what customers want. Notice I didn’t say “need” because customer buy based on wants. Only the housing desperate buy based on need.

How do we get to a new brighter future? It all depends on whether you’re satisfied with 60,000 annual shipments. If you are, do nothing. If not, we have work to do. ##

ross-kinzler-wisconsin-housing-alliance-executive-director-posted-industry-voices-manufactured-housing-professional-news-mhpronews-com-75x75Ross Kinzler
Executive Director
Wisconsin Housing Alliance

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

May 28th, 2014 No comments

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2013 CFED-I’m Home Retreat Snapshot

October 20th, 2013 No comments

Following a retreat for Next Step and its Partners, I was privileged to participate in the CFED I'm Home Retreat in Denver. Imagine a “for profit” mind immersed in a “non profit” retreat. It would have been easy to allow your head to spin if the topics discussed were not so familiar.

The Retreat was fully immersed in the role manufactured housing (MH) could play for the working poor as an answer for initial and replacement housing.

George McCarthy, from the Ford Foundation, gave some great statistics about those living in MH and the percentage of those populations in communities. These stats further magnified the continuing role MH communities’ play in general housing and manufactured housing specifically.

However, energies soon were redirected to the discussion on funding, both for inventory and retail; appraisals; placement, yadda yadda yadda.

As Barry Noffziger, from CU Factory Built Lending suggested – if you close your eyes, you could have sworn you were in any MH association meeting. The concerns and challenges seemed to be the same as the “for profit” side of the industry. The plea was to unite in order to facilitate change.

It was an interesting juxtaposition to find myself in the middle of a segment of the industry I knew/know little about; but yet I could appreciate their passion.

Their energy was unbelievable. Positive – glass seemed to be half full everywhere I looked.

Paul Bradley from ROC was there and talked about their success and plans for the future. 

There was a testimonial about efforts to re-house victims in a MH community affected by Hurricane Sandy; flood victims in Colorado and other locations.

Architect Bruce Tolar, of the Katrina Cottage fame, provided an overview on the lessons learned and how the Cottage is morphing for long term housing solutions. It was noted that long after the national news crews left the Gulf area, there are still victims of Katrina struggling to cope with inadequate housing – 8 years following the hurricane – FEMA gone, almost everyone else as well.

chris-nicely-posted-on-mhpronews-comHeck, that was only the first day and sadly, I had to leave. How often do you leave a meeting saying, “I can’t go, I want to hear and learn more."

Curious, the effort in the room was focused on the resident/owner and how MH can deliver more value and provide life with dignity. This, for a segment of the population most writes off as un-qualified buyers.

It was refreshing and left me wanting to know more about what I could do to help. Hopefully, I will get the chance. ##

chris-nicely-posted-on-mhpronews-com-2.jpgChris Nicely
9052 Legends Lake Lane
Knoxville, TN 37922
865.385.9675
cnicely929@aol.com  

What is the the future of independent Manufactured Home Communities?

October 22nd, 2011 1 comment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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