Archive

Posts Tagged ‘industry professionals’

CFED’s Doug Ryan Sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

October 4th, 2014 No comments

cfed-logo-posted-industry-voices-guest-blog-mhpronews-com-.gifThe CFPB report supports what CFED and other nonprofit organizations have said in recent years:  Manufactured Home loan borrowers are vulnerable to expensive products and are often not well-served by the current financing market due to the lack of competition, lack of liquidity and the costs of the loans.

I have no doubt, as the Bureau reported, that many borrowers of chattel products could have qualified for traditional, less expensive mortgages but did not get the chance simply because they were not offered or made aware of the options. Indeed, one clear way to address this issue would be for industry to support titling reform that would give families the option to title their homes as real estate and the opportunity to access real estate loans.

The report supports, quite explicitly, the need for the Bureau’s current rules to remain in place and enforced. As the Bureau wrote, “the manufactured housing borrowers being charged interest rates or upfront fees above the HOEPA thresholds are the very populations that HOEPA is designed to protect."

I also believe that this report, and related efforts by industry and CFED and its nonprofit partners, offers an opportunity to develop new loan products, expand the pool of lenders and, ultimately, lower the costs of borrowing.

CFED absolutely believes manufactured housing must be part of the affordable housing solution in communities across the US. Far too many advocates and policy makers are unaware of the quality and aesthetic appeal of manufactured homes. There is no doubt industry has made great strides to modernize the energy efficiency, the design and the value of the homes. Quite simply, the CFPB’s report underscores the need for the financing to be modernized, as well. ##

doug-ryan-cfed-posted-manufactured-home-living-news-industry-voices-guest-blog-mhpronews-

Doug Ryan
CFED
dryan@cfed.org

 

 

Related Links:

1) – MHI's Response to CFPB's Report (Note, the MHI link includes the full CFPB report as a free download)

2) – MHARR's Response to RV legislation and CFPB's Report on Manufactured Housing

3) – CFPB Report on Manufactured Housing Signals Areas of Future Concern

4) – Manufactured Housing Institute Responds to Doug Ryan-CFED commentary on CFPB report on Manufactured Housing Finance

(Image credit: Corporation for Enterprise Development (CFED logo.)

(Editor's Note: As with any opinion column, the views expressed by Mr. Ryan are his own and/or those of the organization he works for, and should not be construed to be the views of MHProNews or our sponsors. Other viewpoints on this or other industry topics are encouraged.

MHProNews plans an Industry in Focus Report using extensive comments from a range of industry professionals on this topic. Watch for it mid-week at the news/reports module link above!)

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

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

May 20th, 2014 No comments

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

Note that the Speakers knew they were being filmed.

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

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

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

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

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

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

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

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

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

Manufactured Housing Institute CEO Richard Jennison’s letter to Princeton’s WordNet requesting Definition Correction

April 12th, 2013 No comments

wordnet@princeton.edu 

Research can be valuable and informative if it approaches its subject in a non-biased, factual manner.  Your recent definition of "manufactured home" however immediately casts your research intentions into serious doubt with such prejudicial, outdated, and uninformed terminology.

Official, legal, definitions are available on many state and national government websites and will provide you a more balanced and timely reflection of the state of manufactured homes in 2013.  I request that you update your own definition using one of these, without the insertion of your flawed and outdated misunderstanding of today's manufactured homes.

Should you need any additional assistance in defining manufactured homes, please contact me and I will be happy to provide you with correct information.

Richard JennisonSincerely,
Richard Jennison
President and CEO
Manufactured Housing Institute

(Editor's Note: Dick Jennison's cogent response is published with permission, and is in response to this 'definition' published online by Princeton's WordNet as shown below:

MHProNews thanks MHI's Dick Jennison, Lisa Tyler's (Walden University) heavily documented letter, Georgia Manufactured Housing Association's Jay Hamilton, MHRetailer Jody Anderson and MHC manager James Cook for their published responses to this issue, along with the others who have directly addressed wordnet@princeton.edu to ask them to update their flawed definition of manufactured home. We have word from sources that other efforts will be made to encourage Princeton to update this obvious error.

Until Princeton's Wordnet Team has made a proper update, please take a moment and add your voice to these and other respected industry professionals who have emailed wordnet@princeton.edu asking them to correct their flawed online definition. You could use one of the examples given by others linked above, or write your own, but please do write them.

Our original column that launched this topic on MHProNews is linked here and a different version meant for the public is found here on MHLivingNews) ##

Testimony of Ishbel Dickens, Executive Director, Manufactured Home Owners Association of America (MHOAA)

February 10th, 2012 No comments
(Editor's Note: MHProNews.com provides the following account of the testimony of Ms Dickens without endorsing or agreeing with the view points expressed.  We as Industry Professionals must understand the views of homeowners and groups such as those represented by the MHOAA.  We thank Ms. Dickens for willingly sharing the following with our readers.  Please see some editorial commentary at the end of her testimony.)
 
 
United State House of Representatives
Financial Services Committee
Subcommittee on Insurance, Housing and Community Opportunity
Implementation of the Manufactured Housing Improvement Act of 2000”
Wednesday, February 1, 2012
2128 Rayburn Housing Office Building
Washington, DC
 
Testimony
Ishbel Dickens
Executive Director
Manufactured Home Owners Association of America (MHOAA)
 
Good morning Madam Chair Biggert, Ranking Member Gutierrez, and Members of the Committee. Thank you for the opportunity to share the manufactured home owners’ perspective with you this morning.
 
My name is Ishbel Dickens and I am the Executive Director of the Manufactured Home Owners Association of America (MHOAA).
 
I have been working with manufactured home owners for more than 20 years. First as a volunteer for my church, gathering signatures to help preserve a manufactured housing community nearby; then as a community organizer, working with manufactured home owners in Washington to help them gain stronger legal protections to save their communities and consequently their biggest asset – their homes. Since that time I had the opportunity to attend the University of Washington, School of Law and earned my law degree specifically to be a stronger advocate for people who own their homes but not the land under them. After law school, I was awarded a two year fellowship by Equal Justice Works to continue my manufactured housing work and was then hired as a staff attorney by a legal services agency. I have been the Executive Director of MHOAA since November 2010.
 
MHOAA is a national association of manufactured home owners and represents the interests of 17 million people who live in manufactured homes in this country.
 
There are more than 50,000 manufactured housing communities throughout the United States and they provide rental spaces for 2.9 million home owners and their families upon which to place their manufactured homes.
 
There are a variety of reasons why people choose to purchase manufactured homes, not least being their relative affordability. The average price of a new manufactured home is $68,000. This may seem like a “steal” and it may be if the owner is able to afford to own the land upon which they want to place the home. Additionally, manufactured home living can be a good way for young families to start out on the home ownership ladder, and it can also be a way for seniors to “downsize” when adult children have moved out or when a spouse has passed away and the seniors want to continue to live independently in their own homes.
 
However, if the home owner does not own land and is considering placing the home in a manufactured housing community, then the dream of home ownership may quickly turn into a nightmare when the home owner realizes what renting space in a manufactured housing community really means.
 
For instance, does it make sense to purchase a home and then place it on a rented pad when you do not have security of tenure? Yet that is the reality facing manufactured home owners. Most states that have Manufactured/mobile Home Landlord Tenant Acts (and 15 states have no such laws) allow for no more than one year rental agreements, and some do not even allow that.
 
State laws also allow community owners to close the community without compensating the home owners for any costs associated with this displacement, thus not only is the household displaced from their neighbors, friends, chosen location, but in all likelihood they will also lose their biggest asset, their home, as a result of the community closure since it is unlikely that there are vacant lots in other manufactured housing communities to move to.
 
Additionally, manufactured home owners, living in land lease communities find themselves at the mercy of landlords, who can raise lot rents as much as they want, knowing full well that they have a “captive audience” since the home owner, unlike someone renting an apartment, cannot simply up and move when the rent gets too high or the landlord neglects the upkeep in the community.
 
Indeed, many manufactured home owners feel like “prisoners in their own homes” since they lack any other affordable housing option. Thus, instead of rewarding people who choose to live within their means by purchasing an inexpensive home, we are crippling them by forcing them to stay in communities that are becoming less and less affordable to seniors on fixed incomes.
 
I do not make this claim, inadvisably. Indeed, at a public hearing before the Lynnwood City Council in Snohomish County WA, a city council member asked the attorney representing the community owners if he would advise his own mother to move into a manufactured housing community. The attorney responded that not only would he not advise his mother to move into a manufactured housing community, but he would not advise anyone to move into a manufactured housing community.
 
However, despite the significant barriers to manufactured home ownership, a significant number of people choose to purchase manufactured homes. If only it was easier to do so! For instance, it is rare for a potential purchaser of a manufactured home to have access to the same financing products as are available to the potential purchaser of a “site built” home. Manufactured home purchasers are more often steered towards chattel loans which tend to have much higher interest rates and shorter amortization times than real estate mortgages. Some may argue that chattel loans are better for manufactured home owners because the closing costs may be less. That may be true, but the actual monthly payments on a chattel loan will be almost double the amount that would be required if the same loan had been financed with a real estate loan product.
 
For instance, the principal and interest monthly payments for an FHA 5.375% fixed rate 30 year mortgage on $100,000 are $560 whereas someone with a chattel loan for the same amount would likely pay $1,136/month since the loan would be offered at an interest rate of 10.99% and would have a maximum term of 15 years. Indeed, I heard recently that a triple-wide home owner who has his home on waterfront property was required by his credit union to pay 1% higher interest on his mortgage because when Chase took over his former bank they refused to allow him to refinance his loan.
 
By highlighting the issues inherent in manufactured housing community living, I hope I have also identified some of the areas where the consumers that I work with and represent could also get together with the manufactured housing industry to work on matters of common concern. After all if home owners are scared away from living in manufactured housing communities because of ever increasing rents, short-term leases, and lack of security of tenure, then the sales of manufactured homes are going to continue to decrease.
 
MHOAA welcomes the opportunity to work with the industry as together we do our best to guarantee (i) adequate financing products to ensure loans on manufactured homes are as competitive as those for “site built” homes, (ii) long-term security of tenure, and (iii) reasonable rents and rules so that manufactured housing community living really is an attractive option for lower income households and retirees who desire to own their own homes, and so that home owners are not forced to abandon their homes as a result of economic eviction.
 
MHOAA also welcomes the opportunity to work with the Department on two very specific issues that could make a huge difference in the lives of the 2.9 million households who live in manufactured housing communities. For instance, as I mentioned earlier there are 14 states that do not have any laws on the books to protect the rights of home owners living in manufactured housing communities. This means that these home owners are amongst the most vulnerable home owners in the country. Indeed, not only are they at risk of losing their biggest asset, their homes, but they may well be living in situations where their basic constitutional rights are being infringed upon, since their landlords may have established rules that prevent them from meeting together to discuss issues of common concern, or they may fear retaliation if they attempt to pass out fliers inviting their neighbors to a meeting. MHOAA encourages the Department to look at ways to incentivize states to establish manufactured home landlord tenant acts so that manufactured home owners are entitled to the same fundamental freedoms (freedom of speech, freedom of assembly, freedom from retaliation, and equal protection under the law) as everyone else in the country can exercise without fear of eviction. One way to do this would be to withhold HOME funds from any state that had not enacted a manufactured housing landlord tenant act.
 
A second proposal that the Department might consider, which would be of great importance to manufactured home owners, would be to look at ways to incentivize community owners so that they are encouraged, should they be considering selling their property, to sell it to the home owners’ association, the local housing authority, or another non-profit affordable housing agency. This way manufactured housing communities can be preserved and continue to provide affordable housing options for senior and low income households. There are over 100 resident owned communities in the country and not one of them has yet defaulted on its loan. Housing Authorities in some jurisdictions have also stepped in to purchase at-risk manufactured housing communities and preserved them as affordable housing for hundreds of home owners. An incentive program that encouraged community owners to sell the land to their tenants and/or other non-profit affordable housing agencies would help preserve this affordable home ownership opportunity for current and future low income households.
 
Furthermore, next week this Committee will be considering a housing voucher reform bill, the Affordable Housing and Self-Sufficiency Improvement Act of 2012”. As currently drafted this bill only allows manufactured home owners to use vouchers to help pay for the lot rental in a manufactured housing community, but there is no language in the bill that allows a low income household to use the voucher to help pay off the mortgage or insurance on the home. I encourage you to consider amending the voucher reform bill to include such additional opportunities for manufactured home owners.
 
These are just three examples of ways that the federal government could help protect and preserve this unique home ownership opportunity in a way that would benefit both the consumers and the industry.
 
My invitation to participate in this hearing asked that I not only address the current state of manufactured housing but that I also focus on four specific questions which were listed in the invitation. I turn to them now.
 
1. Has the Department fully implemented the Manufactured Housing Improvement Act of 2000?
 
I believe the Department is better placed to respond to this question than I am. It is my understanding that given the limited resources available to HUD to carry out the intent of the Manufactured Housing Improvement Act of 2000 that staff are doing what they can.
 
2. How does the Department determine the make-up of the Manufactured Housing Consensus Committee (MHCC)? What role does the 2000 Act give to the MHCC?
 
The Manufactured Housing Consensus Committee (MHCC) is made up of 21 voting members, seven represent the manufactured housing industry, seven represent consumers, and the remaining seven are supposed to represent the general public. Each member of the MHCC serves a three-year term and may renew for one additional three year term. I have been serving on the MHCC since January of 2011 and was appointed by the Secretary of HUD following the submission of my application and due consideration.
 
It is my understanding that the MHCC is required to meet no less than once every two years. Indeed, I attended two in-person meetings in 2011, as well as an in-person new member orientation meeting. There were also several sub-committee conference calls. The MHCC’s role is to advise HUD on issues relevant to the construction of manufactured housing to ensure quality products are available to consumers, and to provide balanced input regarding regulations relating to manufactured housing. This quality oversight is of vital importance to consumers since they are investing in their biggest asset, their home, and they need to know that is durable, mold resistant, has healthy indoor air quality, is energy efficient, is built to last and will not fall apart after the warranty period has expired.
 
3. How often are the construction and safety and installation standards for manufactured housing updated? How does the Department utilize the MHCC in updating these standards?
 
The MHCC has four sub-committees: General, Regulatory Enforcement, Technical Structure & Design, and Technical Systems. Every MHCC member serves on two sub-committees. The sub-committees meet as and when needed, sometimes by conference call between in-person meetings of the whole and generally there is time set aside at the in-person meeting for sub-committee meetings too. All committee and sub-committee meetings are open to the public and the public also has the ability to submit written comments for the MHCC members to review. The main industry representatives, the Manufactured Housing Association for Regulatory Reform (MHARR) and the Manufactured Housing Institute (MHI), make very good use of the public process that is provided for their input. Indeed, I would go so far as to suggest that MHI and MHARR dominate the public comment period and, on occasion, provide in-depth written materials for the MHCC members to digest and consider.
 
MHCC members are provided with a log that lists all the requests for changes to the HUD code regarding manufactured housing and these log items are assigned to the appropriate sub-committee for discussion and review.
 
In my opinion, the MHCC spends considerable time, sometimes too much time, reviewing proposals, but also providing opportunities for expert and public input, and discussing the pros and cons of particular proposals.
 
Ultimately, while the sub-committee needs only a majority vote to bring the proposal to the full MHCC for further deliberation, it requires 2/3 vote of the MHCC members before the proposal can move forward to HUD. In addition, the MHCC members may choose to vote definitively, vote in principal, or reject any proposal before them.
 
I must say the process can seem labored at times, especially when an issue one cares deeply about gets stalled repeatedly. I believe consumers and industry representatives on the MHCC have all felt frustrated by the process at different times. Several examples that have frustrated me recently are:
 
(1) The unwillingness of industry representatives to support energy efficiency standards that had been proposed. Given the high cost of utilities it certainly made sense to the consumers that manufactured homes be produced to be as energy efficient as possible but there were not enough votes to get energy standards out of the Committee. Fortunately, the Department of Energy currently has jurisdiction over energy efficiency standards for all types of housing (manufactured and “site built”) so at least manufactured housing consumers can be assured that their homes are no less energy efficient than other housing types;
 
(2) Indoor air quality standards. A member of the public brought this issue to the MHCC in 2009 and illustrated quite graphically how roof ventilation systems that did not meet residential building code standards are causing manufactured home owners serious illness. (The residential code requires 10 feet minimum between the combustion exhaust and the ventilation intake yet in manufactured homes only three feet is required between them.) This issue has yet to be acted upon by the MHCC; and
 
(3) Despite a presentation, in March 2011, from an expert on improving moisture durability standards for manufactured homes, the MHCC has had no further discussion on this important issue.
 
From the consumer perspective the 2/3 vote required to move these issues forward to the Department was incredibly frustrating especially as at least one of the issues deals with health risks that some manufactured home owners currently face since their indoor air quality could be making them very sick.
 
However, it might be helpful to know that even where there is consensus and the Department moves forward to issue proposed regulations based on the advice of the MHCC, individual MHCC members, as well as the general public, are still at liberty to provide their own comments regarding the proposed rules and therefore have an opportunity to voice concerns contrary to the vote of the MHCC should they choose to do so.
 
4. In its FY 2012 budget, the Department proposed to charge a $60 label fee for each transportable manufactured housing unit produced. What is the Department’s process for collecting and administering revenue generated from its label fees? How are these fees used in accordance with the 2000 Act and what effect will the increased fee have on production levels for the manufactured housing industry?
 
The Department’s process for collecting and administering revenue is laid out in the 2000 Act. See Section 620 (42 U.S.C. 5419). Given the limited resources currently available to the Department I would assume that these fees will be deposited in the Manufactured Housing Fees Trust Fund and that the money will be used to support the State Administrative Agencies (SAAs) (the states’ manufactured housing inspection programs) and the Dispute Resolution Program so that consumers can access timely help if they need to address problems caused by either the manufacture, sale, or installation of their manufactured home, since this dispute resolution program is only available for the first 12 months after the installation of the home.
 
Presumably the cost of the fee will be passed along to the consumers and the increase to $60 will be money well spent since the SAAs and access to the Alternative Dispute Resolution Program provide consumers with meaningful programs to ensure that they purchase and have installed the best products available and ones that are in compliance with federal and state building and installation codes.
 
Having responded, as best as I am able, to the specific questions presented, I would now like to offer some personal reflections on the value of the MHCC to consumers.
 
One of the most important aspects of the MHCC from the consumer perspective is the opportunity it provides to “level the playing field.” Consumers of manufactured homes are always at a disadvantage. They do not have access to the same loan products as those buying more conventional homes; people who place their homes in manufactured housing communities have no security of tenure, no guarantee of reasonable rents, and few legal protections; and without government oversight there would be no way for manufactured home owners to be assured that the home they were purchasing was going to last. Thus, the MHCC provides consumers with a venue to share their concerns with the manufactured housing industry and to find ways to work with the industry to improve its product so that it will continue to be a viable affordable home ownership option for millions of home owners for years to come.
 
Additionally, unlike the producers of many other products, the manufactured housing industry does not really need to rely on “brand loyalty.” It is unlikely that a manufactured home purchaser will ever need to buy another manufactured home, so without regulation and oversight, it would be possible for the industry to simply provide a product that looks good at the dealers’ lot and can survive the one year warranty period but that might not be habitable for the long-term. The MHCC and the Department provide necessary checks and balances for the consumers and provide guidance to the industry in a way that benefits everyone.
 
There are more and more “small footprint” homes on the market every day – one only needs to put the words “small footprint homes” into a search engine to be inundated with webpages devoted to this subject. A lot of these small footprint homes are too expensive for the average manufactured home owner but it might give the industry pause to consider how they can compete with this up and coming market in a way that will provide lower income households and seniors with quality affordable manufactured homes.
 
In closing, let me reiterate some of the ways in which I believe the consumers and the industry could work together for the benefit of all involved. First of all I think it would be extremely helpful if the industry could support better financial tools for the purchase of manufactured homes. Indeed, homes will not sell if potential purchasers cannot afford the loan payments, and chattel loans, as I pointed out earlier, are relatively expensive to pay off.
 
Second, having the industry work with home owners to secure long term leases in manufactured housing communities, as well as reasonable rent structures and other legal protections, would go a long way towards encouraging potential purchasers to buy manufactured homes. This is especially important as more and more manufactured housing communities are being owned by large corporations who register as “Real Estate Investment Trusts” (REITS). REITS are exempt from paying federal corporate income tax, so at the same time as they are raising lot rents and pricing seniors and low income households out of their homes, these companies are also benefiting from not having to pay corporate income tax.
 
Finally, having the consumers and the industry work together to improve the “image” of manufactured housing, by showing that these homes are energy efficient, durable and healthy, will allow seniors to “age in place”, and will be an asset that will have increased equity over time could really help boost the sales of manufactured homes.
 
Thus the opportunity for manufactured home owners and industry representatives to meet together through the MHCC has real benefit and I would hope that we can continue to explore areas of mutual interest for the betterment of all concerned.
 
Thank you. # #
 
Ishbel Dickens
Executive Director
Manufactured Home Owners Association of America
ishbel@mhoaa.us
206.851.6385
www.mhoaa.us
 
(Editor's Commentary: MHProNews.com believes that the consumer perspective is vitally important and needs to be considered in everything that we as an business professionals do individually or collectively.  We have repeatedly stated our call for 'win-win-win' actions that benefit all involved, professionals and consumers.  In fact, we believe that the only good deal is one that everybody involved benefits.  If all the parties to an agreement fail to benefit, over time, the 'win-lose' tends to become a 'lose-lose' situation. 
 
Happy residents and consumers do not run to have laws enacted that professionals must later fight to stop, modify or overturn.
 
This is one of many reasons why we have advocated and will continue to advocate for the MH Alliance, that can bring the interests of home owners and industry professionals together for the good of all concerned.  
 
Ishbel Dickens, the author who delivered the testimony reported above to the Congressional hearing on Manufactured Housing, frankly has an approach that we often do not agree with.  That does not mean that she is not sincere; my belief is that Ms Dickens is very sincere in favoring legislation such as Dodd-Frank, as do many of the members that she represents. Some of the goals Ms. Dickens believes in are good ones, while others in my view, such as Dodd-Frank are problematic.  In fact, some of her perspectives are arguably counter productive to the very members interests that she holds dear.  
 
For example, readers at MHProNews.com know that the vast majority of finance experts believe that Dodd-Frank – as written and as it will likely be enforced by the Consumer Financial Protection Bureau (CFPB) – will reduce access to financing for consumers dramatically, thus trapping many current owners of manufactured housing, because less credit access will lower home values the same as it has in the conventional housing sector.
 
While we would disagree with some of Ms. Dicken's reasoning and arguments, there are some points that I believe are a worthy goal, if, if, if they are properly approached by all parties involved.
 
It is reasonable to consider selling one's land lease community to residents via an organization such as ROC USA or a similar group.  This should be done without pressure or coercion.  The fact is that a community owner can get the same type of financial return from a home owners group that purchases a land lease community as an investor would pay.  So why not voluntarily provide the option to community residents, if you are thinking about selling?  
 
Ms. Dickens is correct, all of the ROC USA operated communities have been successful, and they send a good message that can benefit the Industry at large.  My take is that those MHC owners who have used the ROC process have found it to be positive financially, personally and professionally rewarding.  It should be noted that the ROCs are often of a size that would not be of interest to institutional investors or portfolio operators.  
 
As some of our readers know, we are working with Industry professionals on some of the good ideas that Ms Dickens suggests.  For example:
 
MHCs may with good reason want to offer long term land leases, would want to get access to market rate financing that is competitive with single family housing and we do indeed need an image campaign that brings us together in a way that advanced the interests and values of all involved. This should be voluntary, and not coerced.  
 
That said, arguably when Industry owners and professionals realize that the victory for the home owner insure the future of our Industry, and that all involved can prosper when the various interests are balanced, we as an industry will see our image improve, community values increase, home owners can see appreciation in their homes that are properly cared for, and we can see a boom in our industry that we have never experienced before.  Having spoken privately with business and association leaders on this topic, I do believe there are ways that win-wins can be crafted.
 
Win-lose, is always a loss for all in the long run.  That is so if it is business is taking advantage of a client, or if a consumer is taking advantage of a business.  Two wrongs don't make a right. 
 
We can and should work to become the first choice homes that consumers want, not last choice housing that people feel they must accept.
 
That is a goal visionaries on all sides can work towards and achieve.  Your comments to Ms Dickens, myself or posted comments are welcome.)

Electrifying Event!

January 20th, 2012 No comments

Wow! What a fantastic Louisville Manufactured Home Show! Since I had not been to the Louisville show in over a decade, I did not know what to expect in terms of attitude and atmosphere. If you were unable to attend, let me tell you that you missed a fantastic opportunity to network with some amazing and knowledgeable industry professionals. The excitement and optimism set the stage for an electrifying atmosphere. Whether your company is in retail, communities, manufacturing, finance, insurance, service or supply there were people, tools and resources available to help you succeed and grow. Various workshops, forums and seminars were conducted by some of the industry’s best and brightest.

 
Hopefully, a similar line up and opportunities will be available at the Tulsa and Tunica Shows in March.
 
My role as an industry observer that sought information for a doctoral dissertation enabled me to interact with professionals from different segments. As always, it was nice to see old friends from my own days in manufactured home retailing that have weathered the storm of the housing downturn. It was also an honor to meet and network with industry professionals that shared their knowledge and experience. Their presence is proof that companies have recognized the need for change and are proactively adapting to the market.
 
One of the common themes among show participants was the need to attract better quality buyers and develop strategies to compete with traditional site built homes.
 
The mindset seems to be shifting from targeting customers with marginal credit and limited choices to ones that can afford a traditional house, but who can be introduced to appreciate the value of a manufactured home. Of course, that is not suggesting that used homes or the 'traditional' manufactured home buyers have no place in the market because they certainly do! However, a long term plan must include a strategy for targeting prime customers as well as marginal customers.
 
The manufactured housing industry is consumer driven, meaning that consumer wants, needs, and ability to purchase are determining factors in strategic development. All of the segments of our industry exist to fulfill the housing needs of a customer.
 
One of the main disconnects in our outreach seems to be in the sales, marketing, delivery, and after sale communication strategies. According to Margarethe  Kusenbach's Salvaging Decency: Mobile Home Residents Strategies of Managing the Stigma of 'Trailer' Living published in Qualitative Sociology (2009), the negative stigmatization of living in a manufactured home influences a consumer’s buying decision. In order for the manufactured housing industry to flourish, the consumer perception of the product must change.
 
How is that accomplished? In part, by researching other industries to determine strategies that have been effective and implementing them to improve weaknesses. Although this requires changes at all levels, it can be done. Look no further than the motorcycle and RV industries for inspiration about how change in customer approach can change the perception. One approach I recommend exploring is the MH Alliance/Phoenix Project plan, that I reviewed last year.
 
A strategy that will not likely be effective is waiting for the government to step in and “save” the industry. Without going into a political tirade, the bottom line is that the manufactured housing industry does not have the resources to heavily influence legislation. This certainly effects financing options, especially with the lack of the secondary market. While the secondary market may be marginal to non-existent, the manufactured housing industry has something much more powerful – the PRODUCT! Industry professionals have shown their dedication and passion. Now is the time to get creative about competing with traditional housing.
 
As noted above and in my previous articles for MHProNews.com, I am currently working on my doctoral dissertation as a requirement for the PhD designation. A doctoral dissertation is a long, tedious journey that involves identifying a business problem and researching the background and possible solutions. With over a decade of experience in the manufactured housing industry, my biggest obstacle at this point is narrowing down the problems and focusing on a specific issue.
 
Among possible dissertation topics, obviously, consumer perception can be considered one of the most important issues to resolve. Another potential focus is customer relationship management. Are retail dealerships and manufacturers using effective strategies to overcome and change consumer perceptions? Are some traditional marketing and sales approaches outdated? Would after sale communication help resolve the stigmatization and improve referral rates? Does the HUD code enable financial institutions to discriminate against manufactured housing? Any feedback and suggestions for a doctoral dissertation would be most appreciated. Please email me at lisa.tyler@waldenu.edu with any comments.
 
The 2012 Louisville MH Show was a positive – even electrifying – experience. Many I spoke with are already planning to attend next year's event. Will you be there? # #
 
Lisa Tyler
Walden University
 
 

An MH Industry Turn Around Plan, Part II

November 16th, 2011 No comments

An MH Industry Turn Around Plan, Part II

 
In my previous article, I explored the potential benefits of an alliance that included not only industry players, but the involvement of the end user – the homeowner. Regardless of the geographical location and cultural differences in this country, affordable housing is a necessity. Whether a consumer is interested in purchasing a manufactured home on land or renting a site (and/or home) in a manufactured home land-lease community, the end result is the same; occupancy of a manufactured home.
 
Like an uncoordinated kid who accepts being chosen last for a sports team, the manufactured housing industry has all too often settled for being considered the less than optimal choice for consumers. At some point, that uncoordinated kid is going to learn the rules, receive instruction from coaches, gain support from teammates, and develops the skills and passion for success at the game. This hypothetical player is going to seek any available resources – from physical fitness and honing skills to setting personal goals and overcoming obstacles – in order to improve positioning. Obviously, the kid is not on this journey alone – coaches, teammates, parents, and fans play an integral role in turning the “last choice” into the first round pick.
 
In a similar manner, the MH Alliance is taking a holistic approach to providing solutions to the manufactured housing industry. One of the biggest hurdles is gaining support from all industry players. The MH Industry is highly segmented – manufacturing, retail, communities, suppliers, finance and insurance, government entities, etc – all hold separate paradigms. More time may be spent by some blaming the other segments for the industry downturn than is spent pulling together and taking action to reverse the trend. The concept of working together to identify and implement sustainable solutions may thus be overshadowed by the reluctance to change and move beyond one's comfort zone.
 
Sports teams recognize that the weakest link can be transformed into the strongest point through the right drills and effort. Therefore, the team takes a holistic approach by identifying specific problem areas and identifying solutions to increase the level of strength by improving the weakest link. The team members recognize each individual’s contribution and the value that it adds to the team’s performance. The MH Alliance is a collective venue that gives balanced value to every player on the team. The strategy is based on breaking down the walls of segmentation to form a team with a unified approach to problem solving. The only “favored children” ought to be the consumers – the manufactured home owners! – of the Industry's products and services.
 
Using a systematic approach, problems are identified and a collaborative effort is used to develop strategies and solutions. The MH Alliance can benefit manufacturers by distinguishing them as a valid and credible source of a much needed product. Quality control issues have been hammered in the media and public opinion. Industry professionals are well aware that manufacturers are held accountable for quality standards. However, the general public – POTENTIAL CUSTOMERS – are not privy to the same information. Consumer awareness and education is a necessary component for image change, yet the current individualized strategies are all too often ineffective. A more unified effort therefor is a must.
 
Information about manufactured homes are usually gleaned from internet searches or a visit to a retail sales center. Manufacturer participation would be linked to current homeowners through the MH Alliance. Not only would the linkage provide access to potential consumers, it would also improve accountability and provide transparency.
 
Manufactured home land-lease communities, MH Retailers and others would also benefit from the Alliance. Let's look at a quick example.
 
Unemployment, foreclosure, and divorce rates are at all time highs in this country. The commonality between the three is that the actions produce a greater need for affordable homes and rental units. Part of the consumer’s resistance to MH Communities (MHC) is the negative stigmatization that is derived from a lack of consistency among owners or managers. One MHC may require yard maintenance requirements and a neat home site with enforced rules while the other allows a goat to eat the grass or you can see barking dog chained to the steps or a tree. The carrot of access to marketing dollars can be a tool for the MH Alliance to involve community owners and encouraging a set of standards will move the choice far beyond the “trailer park” and “mobile home” mentality. Furthermore, by targeting and driving 1-2 star customers to 1-2 star locations, and driving 4-5 star prospects to 4-5 star locations, consumers will find the 'right lifestyle choice' for their needs, wants and budgets.
 
The same can be done with “street retailers” sales centers. We have all seen the state of the art sales centers with HUD Code and modular homes that look like or are ground set, with great landscaping, furnishings, etc. Such 4-5 star retailers should be the ones to see the 4-5 star customers. Those retailers who have 1-2 star locations will have the 1-2 star clientele driven to their sales centers.
In marketing, one goal is always to match the right product and service with the right buyer. One of the good points that the MH Alliance plan offers is that it will avoid marketing disconnects. This will result in more closed business.
 
A key point to remember is the MH Alliance is more than just marketing or image building. So while this article has focused on that aspect, it is important to remember that issues such as better exit strategies for lenders and home owners, improved financing and much more are a part of the mix. Perhaps we can look at those aspects in a future column. # #
 
Links to comments from Industry Professionals who have participated in an MH Alliance/Phoenix Project GoToMeeting small group webinar.
 
 
(Editor’s Note: All links in this article and some edits were provided by MHProNews.com for context to Ms. Tyler’s article. It is good to recall that Ms. Tyler's perspective includes years of MH Retailing and MH home ownership.)
Lisa Tyler, MBA
Marketing Instructor
Walden University
Planning a doctoral dissertation on manufactured home marketing and image.