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Posts Tagged ‘HUD Code’

This makes my blood boil…

January 14th, 2012 1 comment

… about the USFA's (United States Fire Administration) "fact sheet" about "manufactured housing."

Stuff like this makes my blood boil and I had to respond thusly, please see below.

I will let you know if they respond to me.

Ken Haynes, Jr.

(Editor's note: Ken was very kind to share this with our readers. This is a copy of the information he sent to the USFA. Frankly, we need more actions like this by industry pros from coast to coast. If every time a government agency, private firm or media misstated facts about manufactured or modular homes, an Industry pro would speak out, we would over time have fewer such errors and over time we would sell more homes too. Let us hereby thank Ken and encourage you and others to do the same.)

Thank you for submitting the following to USFA.

Comment for:

Dear USFA,

I just read your flyer titled, "Live Safely in Your Manufactured Home, A Fact sheet on Manufactured Home Safety."

You should be ashamed of yourselves publishing such drivel without explaining the differences between "mobile homes" constructed prior to the implementation of the Federal Manufactured Housing Construction and Safety Standards Act (HUD Code) developed and enforced by the Department of Housing and Urban Development (HUD), and "manufactured homes" constructed to the specifications of the HUD Code.

The information you have provided in the publication is inaccurate, misleading and slanderous. You have lumped together two completely different types of affordable housing. To make an analogy that you might understand, comparing it to the automotive industry, you are saying that the safety of a Ford Model A is in the same category as a 2011 Ford Fusion because they are both motor vehicles with four tires and a steering wheel.

The truth is that fire frequency and death rates of manufactured homes built to the HUD Code is comparable and even less than site built homes, yet your publication makes absolutely no reference to this fact.

You obviously have no idea of what you are talking about, grouping all factory built housing in the same category.

Are you purposely trying to kill the manufactured housing business with false claims put forth in publications such as this? It seems to me that you are.

In my opinion, this is just another effort to foster the notion that manufactured homes should be forced to have fire sprinklers, but that site built homes should not be forced to have fire sprinklers, thus promoting an unfair and costly expense to manufactured housing, diminishing their popularity and giving an unfair advantage to site-built home builders.

This form should be withdrawn and corrected immediately, a retraction issued, and an apology issued to the manufactured housing industry.

Sincerely,

Ken Haynes Jr

401 Shatto Dr

Carlisle, PA 17013

717-258-3799

Open letter to Association Executives on: State Association Dialogue Regarding “STEPS”

November 2nd, 2011 No comments

Dear State Association Executives:

We’ve been closely following your email discussion regarding the regulation of outside steps, including, particularly, the issue of federal versus state/local authority, questions concerning federal preemption and the possibility of approaching the MHCC with a proposal.

Unfortunately, this problem goes back to an issue raised by MHARR, some 8 years ago, when the federal installation standards (24 C.F.R. 3285) were first proposed by HUD and debated by the MHCC.  HUD has taken the position, based on an indefensible “interpretation” of the 2000 law, that installation is not part of “construction” and that only the Part 3280 construction and safety standards are preemptive – meaning that the Part 3285 installation standards are not preemptive.  MHARR (without help from others in the industry), vigorously opposed – and continues to oppose — this “re-codification” of installation, as is more fully explained in Fact Sheet No. 8 of the MHARR Fact Sheets regarding HUD’s failure to implement key 2000 law reforms that we sent to you on September 14, 2011.

The bottom line, for now, is that the Part 3285 installation standards, as construed by HUD, remain non-preemptive.  So, even if steps were part of the 3285 installation standards, or were made part of the installation standards, the federal step standard would still not be preemptive of state and/or local requirements.  Worse yet, because the MHCC only has statutory authority over “construction and safety” standards, HUD’s codification of the installation standards outside of the Part 3280 construction and safety standards, at a minimum, makes it doubtful whether the MHCC could even consider a proposal to amend the Part 3285 installation standards to include steps (and would create an endlessly muddled legal no-man’s land, if it did).

MHARR has been warning, ever since the installation standards were re-codified outside of Part 3280, that HUD’s baseless distinction between installation and construction would come back to haunt the industry and consumers in the form of inconsistent and needlessly costly state and local requirements.  And what you’re seeing here is likely just the tip of the iceberg, as we also noted that the full impact of all this would not begin to be felt until the federal installation program was fully implemented. Unfortunately, this is just one simple illustration from among the ten key reforms of the 2000 law (see your MHARR Fact Sheet packet), designed to complete the transformation of manufactured homes from the trailers of yesteryear to the modern legitimate housing of today, that HUD has refused to fully and properly implement – reforms that were designed to help the industry and its consumers that have been languishing at HUD for over ten years because of a lack of pressure from the entire industry.

Thanks,

Mark Weiss
Senior Vice President
Manufactured Housing Association for Regulatory Reform (MHARR)

cc: HUD Code Retailers and Communities

The IBISWorld Controversy and the Manufactured Housing Industry

April 13th, 2011 3 comments

Exclusive MHMSM.com Industry In Focus Report

The March 2011 IBISWorld report that cited manufactured home dealers as a ‘dying industry’ has made news inside and outside of the manufactured housing industry. MHMSM.com has contacted a variety of Industry leaders and personalities from coast to coast to get their comments. On-the-record comments have included national association leaders, as well as professionals in factory-built housing from the manufacturing, retail, communities and lending sectors.

Messages, comments and calls to MHMSM.com from manufactured home industry professionals dribbled in at first, and then gained in volume as publications such as The Atlantic and Business Insider covered the IBISWorld report. As an example of mainstream media coverage, a TV station in Houston reportedly called a regional firm to interview them about the developing IBISWorld story.

Derek Thompson, associate editor at The Atlantic, penned a commentary that included these words:

“At the center of a perfect storm of boomer burnout, a brutal recession,
and a rapidly changing industry, the mobile home retail market
could be the worst industry in America. Here’s why.”

Photo from The Atlantic
Photo from The Atlantic

“If I asked you to name America’s least fortunate industry, your mind might go to record stores, obliterated by on-demand apps; or photofinishers, left in the cold as digital cameras turn Americans into our own photo editors; or fabric makers, where business is booming … in Shenzhen, China.

“But when it comes to unlucky industries, it’s manufactured home (aka mobile home) retailers who really hit the trifecta. First they missed out on the housing boom. Then they felt the gut-punch of the recession. Now they might yet miss out on the recovery. That makes them America’s fastest dying industry, according to a new report from IBISWorld.”

Paul Bradley with Resident Owned Communities USA (ROC USA) was one of the first in the manufactured housing world’s leadership to publicly respond to this IBISWorld report. Bradley wrote a feature article for MHMSM.com that analyzed the IBISWorld report. Quoting from Bradley’s analysis:

“The (IBISWorld) report states ‘demand is dwindling’ and ‘sales are stagnant because the industry is not innovating, and that sales are likely to continue falling in the coming years.’ They go on to say, ‘Manufacturers have made cosmetics changes to manufactured homes, but they have not been significant enough to alter their life cycle stage.’ The report puts MH retailers in the ‘Industry stagnation’ category of declining industries.

“Are you kidding me? These are ‘deeply researched answers’?

“First, the headline clearly comes from their marketing division as a means of grabbing headlines. The research is not about a dying industry but a declining industry segment – one of two long-standing distribution channels in the business.

“With MH shipments in 2010 at 50,000 or 20 percent of 2000 levels, it’s not news that retailer revenues over that period declined. On that data, I’m surprised establishments are not down more than 56 percent. It suggests that the segment has excess capacity and additional closings are likely.

“Most surprising to me is laying the blame at the feet of manufacturers on the issue of design! From a ground-level market vantage point, that’s misplaced.

“The industry’s great declines came about as a result of, first, an industry-created chattel collapse where the seeds were sown in run-up to the 373,000 shipments in 1998. The collapse, and the repossession overhang which followed, began the decline like a skilled boxer’s well-placed left jab.

“The right overhand came next in the form of aggressive sub-prime and predatory lenders in the site-built market. In that run-up, traditional MH buyers – who were harder to finance for MH as a result of the chattel collapse – were lost to site-built housing in an eerily familiar boom market.

“Dazed by the right hand blow to our collective heads, the left to the body that has people reeling now is the regulatory reaction – the SAFE act, etc. – to the clearly consumer-eating lending practices of the last decade.

“The results of this three punch combination are declines of the magnitude widely reported and felt, and like a good whack, the pain lasts a while.

“Innovation in housing design, however, is not the industry’s chief failing.

“For those of us in the community market segment, in fact, innovation in new homes is a small issue – not a non-issue but a mere shadow of the aforementioned home financing issue. In fact, we are seeing demand for replacement and in-fill homes but only where we are able to arrange decent home financing. People want more efficient homes and the cost savings with new EnergyStar homes can be dramatic based on buyers with whom I’ve spoken.”

(Editor’s Note: The complete analysis by Paul Bradley can be found at this link.)

Other commentary in the form of articles proposed for publication, private and public comments followed. Thayer Long at the Manufactured Housing Institute issued this email as part of his response:

“State Execs & MHI Board:

“A very well articulated response to the IBIS report from last week by Paul Bradley which was just posted on www.MHMSM.com.

“I’d also just add that the sentiment at the Tunica Show, the Louisville Show, and the expected strong turnout at the Congress & Expo and the Tulsa Show and York Show later this month certainly don’t indicate this industry is going anywhere.

“Tony/Paul – I hope you don’t mind me sharing. We’ll see you in Las Vegas. Thanks for your support.

“Thanks-

“Thayer”

MHMSM.com spoke with Danny Ghorbani at the Manufactured Housing Association for Regulatory Reform (MHARR) and to Thayer Long at the Manufactured Housing Institute.

Danny Ghorbani stated in a telephone interview that his comments were not the official position of MHARR, but represented his own views on the IBISWorld report and related.

Ghorbani stressed that the IBISWorld report represented the “failure” of “the post-production sector of the Industry” [meaning, MHI] in “serving that segment of its membership.”

The MHARR official then referenced two previously published documents that do represent MHARR’s official position, which were previously published on MHMSM.com in August and October 2010. These MHARR Viewpoint articles called for ‘the post-production segments’ of the manufactured housing industry to form their own national association; a thinly veiled vote of no-confidence from MHARR towards MHI.

MHMSM.com spoke extensively with Thayer Long at the Manufactured Housing Institute (MHI). The typically soft-spoken Long was quick to respond.

Long was at times tongue-in-cheek, at other points direct in his comments about the IBISWorld report and Ghorbani’s often pointed comments on the matter. It should be stressed that Long’s comments, which follow, should be viewed as his own, and not necessarily reflective of the official view of MHI.

In an exclusive interview with MHMSM.com, Long shared the following thoughts:

Thayer Long:
“If it is a dying industry, then ok, then I guess I quit! And if Danny wants to blame it on us [MHI], okay, what else is new? … I am still struggling to figure out what he (Danny Ghorbani) is doing right now. Name one thing that he has accomplished … in the past three years? What has he accomplished…? I would love for you to think about that and get back to me. What has he accomplished? We [MHI] win and lose some battles. But at least we try. We have accomplished some things. Except, except, except… [MHARR]…nothing….

READ THE FULL INDUSTRY IN FOCUS REPORT

IBIS Report and the Manufactured Housing Retailer’s Future

April 10th, 2011 1 comment

Having spent 40 years in the industry, I have experienced every down cycle the industry has had since they started keeping records in 1961. After a peak nationally of almost 600,000 units in 1973, we suffered a dramatic plunge that was felt the most in the Southeast where I was located at the time. I relocated to Oklahoma in the 1980s and endured a drop in shipments from about 13,000 homes in 1983 to about 350 or so in 1988. Shipments again took a hit in the early 1990s as lending became almost nonexistent. The current down cycle began after a peak of nearly 373,000 shipments nationally in 1998 and has fallen below 50,000, which is lower than when the record keeping began in 1961. 

I certainly do not have the credentials to refute the recent IBIS report that labeled the manufactured housing industry as being on the verge of extinction. I also approach the subject with some trepidation as I majored in Marketing and I am keenly aware that most of the buggy whip manufacturers are no longer in business. In order to accept the results of the report from a market demand stand point, we would have to arrive at the conclusion that the demand for new homes priced below $70-100 a square foot will become no longer significant. We would also have to accept that this disappearance of market demand will occur as down payment requirements are poised to increase to perhaps 20% while terms may be reduced to as low as 15 years. In the face of enormous down payment requirements and shortened terms for repayment, suddenly prospective home buyers are going pass over housing opportunities in the $20 to $40 per square foot category? 

We would also have to accept that demand for homes that can be titled without real estate will disappear. Suddenly no one will want to allow their kids or other family members to place a home on family land without encumbering the real property?

We would finally have to believe that no one living in a manufactured home community would have an interest in upgrading their home, and the communities would have no potential for new residents. 

I read Paul Bradley’s feature article in response to the IBIS report here in MHMSM.com. I share Paul’s optimism that a possible result of increased requirements for site-built housing may shift more buyers to the manufactured housing market.

We have had to endure ongoing discrimination of the allocation of lending resources even when the Duty to Serve language is rewritten to specifically cite manufactured housing. As a retailer, I do not see any shortage of willing buyers for the homes that we build. We do experience a series of problems related to recent acts foisted upon us by the federal government. 

I observed in a LinkedIn comment earlier that our industry trade organization, the Manufactured Housing Institute (MHI) is constricted by the composition of their membership from assuming the role of a being a strong advocate for individual industry divisions. Retailers would have to form an independent organization dedicated to retailers in order to have someone in Washington, DC truly going to bat on all the issues that retailers face. I don’t see the numbers or the money being there for that to happen. In the mean time, we accept MHI with its wrinkles, knowing that the diversity of the membership does not allow for the extreme dedication to our needs that we would like to have. 

The Manufactured Housing Association for Regulation and Reform (MHARR) serves in that capacity for independent manufacturers and manufacturers need that dedicated representation as they have many issues affecting them that are completely unknown to other industry segments. 

Another theory being floated by some industry members is that a conspiracy is in play to undermine the effectiveness that the HUD Code provides and bring about its demise. If that theory is true and if the conspirators have enough influence, market demand will not matter. I am not smart enough to know whether or not a conspiracy exists to destroy our industry. I would say that if it does exist, it is experiencing reasonable success. 

We do face very difficult times as an industry. I have quipped on more than one occasion in the past few years that “absence of stress is death…and I am very much alive.”

As an industry, we have taken a beating for the last twelve years. Some of that has been our own doing and some from lack of fairness by government actions or inactions. If a conspiracy does in fact exist, I am too small a player to have much impact on stopping it. Absent a conspiracy, our company plans to move forward and provide our clients with great values in housing and outstanding customer service. Hopefully our industry can see itself through the balance of any remaining down turn and see an increase in shipments in the years ahead. 

I was privileged to be invited to return to Georgia last summer to speak at the industry’s annual state convention. Given my 40 years in the industry, I was able to reflect back to 20% rates with no less than 10% down and no ability to finance land or improvements. I titled my presentation after Charles Dickens’ A Tale of Two Cities: “It was the best of times, it was the worst of times….”

And indeed it is. # #

by Doug Gorman

Doug Gorman owns Home-Mart in Tulsa OK, and is perhaps the most award wining retailer in the U.S. today.  He has served the Industry on the state and national levels, including as Show Chairman for the Great Southwest Home Show in Tulsa.  You can read his Cup of Cocoa with Doug Gorman at this Link. Contact Doug at doug@homemart.us

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.