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Posts Tagged ‘manufactured home’

“No Greater Resource” in Manufactured Housing Industry

January 16th, 2018 No comments

Dear Tony and Soheyla,

Thank you for your great reporting on our industry and the challenges we face as independent retailers.

There is no greater resource that speaks to the issues and opportunities than your publications.

We are glad you spotlight the key issues we need to address to succeed.

GusRodriguezTejasHomesConroeTXIndustryVoicesDailyBusinessNewsMHProNews

“Too bad not enough fellow retailers are planning accordingly.”  Thank you both.  ##

 

GusRodriguezTejasHomesConroeTxGus Rodriguez
Tejas Homes,
Conroe, Texas.

JD Harper – Manufactured Housing Assoc Exec Director – Sounds Off on Zoning & HUD Failure to Enforce Preemption

December 7th, 2016 No comments

Tony, thanks for the opportunity to comment on the actions of the City of Stuttgart relating to the placement of manufactured/modular homes within the city’s boundaries.

This action by the city – like most others we encounter – is a reaction to the response of residents to a factory-built home being placed in a residential zone.

City officials look at the placement of the home as a mistake – something that should be remedied and not allowed to happen again – rather than as the right of a resident to exercise his/her housing choice on land that is zoned for single-family housing.

With 500 cities and incorporated towns in Arkansas – it is increasingly difficult for a one-person staff to keep up with all of the ordinances and regulations being enforced by local governments.

stuttgartcitymanufacturedhousingzongingissue-postedindustryvoicesmhpronews

While Arkansas does have a law that prohibits cities from banning manufactured homes or restricting their placement to only leased-land in parks or communities – most cities view factory-built structures through the same prism as billboards, cell towers and sexually-oriented businesses… something to be avoided if at all possible, but restricted and heavily regulated if allowed at all.

It has been our organization’s policy over the past two decades to offer assistance to cities as they address manufactured/modular housing placement within their boundaries – and not to ‘pick fights’ with cities to force factory-built homes into areas where they would not be compatible with surrounding structures or have values consistent with other forms of housing.

I’ve told many city officials that I don’t believe that manufactured homes belong on every lot in every zone in every town – but I DO believe there are MANY lots in MANY towns which restrict manufactured homes where a factory-built residence would provide access to decent, affordable housing for working Arkansans — without having an adverse impact on surrounding property values or the quality of life in that neighborhood.

The larger question is why the U.S. Department of Housing and Urban Development has failed to embrace its duty to encourage inclusive zoning and acceptance of a Federally-regulated housing product.

jdharperarkanasasmanufacturedhousingassociationindustryvoicesmanufacturedhomecommentarymhpronews

Image credit, MHProNews.

Recent efforts to urge HUD regulators to update outdated and obsolete guidance and policy relating to the preemptive nature of the HUD program – even after the 2000 Act which ‘strengthened preemption’ – calling for preemption to be ‘broadly and liberally construed – have fallen upon deaf ears within the Department. [See attached letter to HUD officials].

Thanks for allowing me to vent. ##

jdharper-ar-manufacturedhousingassoc-creditlinkedin-postedmanufacturedhousingindustryvoicesmhpronews

Photo credit: LinkedIn.

JD Harper
Executive Director
Arkansas Manufactured Housing Association
1123 South University – Suite #720
Little Rock, AR 72204

(Editor’s Note: This is a widespread issue that Harper is addressing in this Op-Ed. He is spot on with his statement that HUD has routinely failed to enforce the enhanced preemption under the Manufactured Housing Improvement Act of 2000 (MHIA 2000). See a related article, linked here. MHIA 2000 download, linked here.)

Manufactured Homes? Mobile Homes? Housing? Factory-Built Homes? What Should We Call our Homes?

July 13th, 2015 No comments

Hollywood,

For forty plus years, the MH industry has tried to change the mobile home perception and sophisticate the MH product by changing the name.  When business was sooo good, newbie MBA’s came in and screwed  things up as that was their job which was to make changes and expose what is wrong.

The new group along with industry insiders claimed that the name “mobile home” was not proper.  They said the name is disgraceful and trashy like “trailer.” Industry vets went along with new culture hires and agreed to the name change. The purchasers or those who live in the MH didn’t care at the time and still don’t. 

We changed the name to manufactured housing and after decades of pounding manufactured housing into the public’s mind, most new MH purchasers and MH dwellers still used the term mobile home, so then we decided to change the name to just housing and that did not work as there was no identity to our product, so then some geniuses said to change to factory built homes and so on and so on – so many names.

Its-EvolutionaryTrailerHouse-MobileHome-ManufacturedHome-modular-manufacturedhomelivingnews-comWB-660x330

The image above was not part of Barry Cole’s Letter to the Editor, but the graphic  is linked to an article which is related to this topic. Barry’s article also follows others on the subject from our June Issue Featured Articles.

Still after 4 decades, the public still relates to the mobile home name and per all data, mobile home is used on the internet as much or more than manufactured housing.  Thus, we should never down grade the mobile home name of past which did so much good during a very special time in our industry and especially with so many MH customers still living in them.

So what do we do?  You and I have had numerous conversations as to industry concepts and image and that is why we both have always used the name MH.

You are correct in using MH for the industry’s product name in all of your writings.  It is much easier to say, write and change to.

The recreational vehicle changed to RV and everyone knows the RV name.  The same should be used with MH.

Keep up the good work by using MH in your publications and you will realize more and more using MH.

Barry

barry-cole-rv-mh-hall-of-fame-manufactured-home-insurance-services-mhisBarry Cole

Manufactured Housing Insurance Services (MHIS)

RV/MH Hall of Fame Inductee – Class of 2014.

CMHI’s “Jack E. Wells Memorial Award” for distinguished service to the manufactured home industry.

Past Chairman RV/MH Hall of Fame

(Editor’s Note: this message to L. A. “Tony” Kovach (whom Barry and some other industry pros like to refer to as “Hollywood”) is an on-the-record commentary  by Barry on the article, linked below. Numerous other ‘off the record’ comments have come in as well. As always, your comments – on or off the record – are encouraged.)

http://ManufacturedHomeLivingNews.com/cancer-cures-and-todays-mh/

A Cup of Coffee with…Barry Cole, is linked here.

Wow!

December 20th, 2014 No comments

A drowning MH retail lot has been turned into a viable business, in just 90 days. Okay, now that I have your attention let me explain. Several of the businesses that I own currently and in the past, have been profitable. I have been in the manufactured home business for only 2 years as of October 2014. Our retail center is positioned between Dallas and Houston, in a town with a population of less than 4,000.

After struggling for 2 years doing it “my way,” I hired a professional marketing and sales coach. WOW!!! What a difference this guy has made. You may be thinking that “he,” the sales coach, just pointed out the obvious and had us do what we knew deep down we should be doing . . . and you would be correct.

However, as Paul Harvey said, “here is the rest of the story” (or part of it ;-).

I met our coach two years ago in Tunica at the manufactured housing show. I even purchased a book he was selling. So why did it take 2 years to call him for professional help?

Being a hard-headed Texan may be part of it; however, I thought I could just do what I had been doing and the business would grow. My retail lot looked good enough and surely people would want to buy their new home from me.

Flags were flying and the doors were open 6 day a week. Hundreds of cars drove past our lot every day, and that was the problem, they just drove on by.

There were days when not one customer called or came in to our dealership. I had been floating the business for 20 of the past 24 months. My way was not working, and I only had enough capital to last about 6 more months.

After many sleepless nights, and much praying, I picked up the book I had purchased in Tunica and began reading. A few days later, I made the call.

Hiring a marketing and sales coach to rescue my struggling MH Retail business was put into play. After all, professional sports teams have coaches. The coaches train the team during the week and on game day.

I wanted our team to become a professional Manufactured Housing sales team that was successful. Bi-weekly virtual sales training began immediately. After the first session with our sales coach, we all began to see MH in a completely new light. Phrases like, "affordable luxury," "systems-built" and "custom homes," were phrases that had previously never come to my mind about MH.

To say our sales coach opened our eyes is an understatement. He not only educated us on marketing and sales, but he began to systematically motivate us in ways that are hard to express.

He began with a process. Yes, a precise process that even ebbs and flows with real life situations.

The excitement has become obvious to all of our employees. One recently commented that he has seen more homes sold in the past 60 days than the previous 6 months, and another commented on how the attitude is undeniably so positive that it is exciting to be at work.

Breaking old habits is hard and yes, sometimes painful; however, the proof is in the results.

Sales have exploded, and with so much growth we are recruiting two more sales agents for our sales team. With the right training, attitude and practice, success is very much attainable.

I will begin to share our real life sales experiences in my next column, “WOW”! ##

Dwayne-Somerville-Fairfield-Homes-and-LandDwayne Somerville

Fairfield Homes & Land

Favorable Juncture of Circumstances – CMHI Viewpoint

November 12th, 2014 No comments

(Editor's Note: The facts industry veteran and CMHI President Jess Maxcy below are written using California statistics, but the same points he's made could be applied to other markets – does that mean yours too? Look at this thinking, and think about how this can apply for your market and state.)

My dictionary defines opportunity as “a favorable juncture of circumstances/a good chance for advancement or progress.”

“Favorable Juncture of Circumstances” A case can easily be made that we have arrived at a juncture of favorable circumstances that could lead to significant gains in home ownership opportunities for California families and increased market share for manufactured housing. Consider the following:

Median Home Price/Affordability

• The median home price in August was as its highest point ($480,280) since 2007. The median price has increased year over year for the past 30 consecutive months.*

• From the first quarter of 2012 to the second quarter of 2014 the annual required income to purchase the median priced home with a qualified mortgage increased 66% to $93,590* • Consequently, the monthly payment on the median priced home increased from $1,410 to $2,340… A payment only 23% of California families can afford!

Qualified Buyers

• The share of equity home sales in California increased to 91% in August and has accounted for more than 80% of total sales for more than twelve months.*

• This favorable circumstance has increased the number of potential cash and/or financeable buyers,

many of whom are looking to down size and are excellent prospects for high value manufactured home

purchases.

• Additionally, the rising median home price has significantly reduced the home ownership opportunities for California’s middle income families for whom midrange and higher end

(developer series) manufactured homes are an excellent answer to their housing needs. While priced

out of the site-built market many have already saved enough for the down payment on a high value

manufactured home. But…it is highly unlikely that middle income buyers will be attracted to model displays and financing and advertising programs that violate their perception of the home buying process. The industry, which encompasses retailers, manufacturers and lenders, all working together, needs to develop a distribution system and financing programs that take advantage of the design advances that have made manufactured homes an acceptable housing option to a wider market.

A Good Chance For Advancement or Progress”

To have a good chance for progress we must have affirmative answers to the following:

1) Do we have an adequate retail distribution network?

2) Are manufactured home sales centers:

• Consumer oriented?

• Sufficiently stocked with fresh homes to promptly respond to the housing expectations of new consumers as well as our traditional market?

• Arranged to display homes in their best light?

Retail Distribution

To be able to take advantage of these favorable circumstances, to really have a good chance for advancement or progress and increased market share, we must improve our retail distribution

network. Consider the following:

• As of July 2014, our approximate retail inventory was only 761 new homes.

• Of those approximately 193 (25%) were very aged.

• Through August 2014, only 194 California retailers have registered at least one new home sale. Of those 51% have registered only two new homes sales in eight months.

Simply put, there are too few retail sales centers and/or home displays with sufficient fresh inventory to attract new consumers. Especially those who have rejected or not considered manufactured housing in the past. This is especially true for shoppers seeking new rather than resale homes.

Companies that have invested in displaying new homes and properly managing their inventory tend to

outperform all other retailers in their market.

• While there is no single solution to improving the distribution systems, some of the alternatives are:

• More environmental boulevard sales centers.

• Enhanced factory model displays.

• Regional environmental model displays, and

• Model displays /sales centers in new

and existing manufactured housing communities.

Synergy

The first steps toward ensuring a “good chance for progress” and for increasing market share must be a joint commitment to improve our distribution system. This is not a task that can be taken on by only one segment of the industry. Manufacturers and their retailers, working together, must take whatever steps are necessary to develop properly inventoried sales centers designed to meet the needs and buying patterns of today’s home buyers. ##

* California Association of Realtors

Improvement in Site-Built Equity Home Sales Increases Potential
Cash Buyers for Manufactured Housing

Single-Family Equity Home Sales

cmhi-org-improving-equity-could-boost-more-manufactured-home-sales-posted-industry-voices-mhpronews-com-.png

jess-maxcy-cmhi-president-posted-industry-voices-mhpronews-com-By Jess Maxcy – California Manufactured Housing Institute (CMHI) President.

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

October 6th, 2014 No comments

Tony,
As the national association serving as the voice of the manufactured housing industry, Tim (Williams) asked that MHI respond to your inquiry. Our official response is provided below.

Doug Ryan and CFED have been consistent supporters of manufactured housing and continue to recognize manufactured housing as an important source of affordable housing for low- and moderate income families, particularly in rural and underserved communities.

Unfortunately, they fail to recognize the valuable role retailers and sales representatives have historically played in helping consumers identify financing alternatives. Ryan's message insinuates the industry is somehow preventing consumers from selecting less expensive real estate-secured mortgage loans. He says, "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.”

mhi-logoAs the regulations are currently written—this is what MHI is attempting to fix in HR 1779/S 1828—the retailer cannot help the customer find a mortgage lender or inform the consumer of alternatives. The consumer needs the retailer’s help to become informed of the financing alternatives.

Today, a consumer might contact a dozen conventional mortgage lenders without locating a lender willing to assist them with a low balance mortgage. Prior to the CFPB Loan Originator compensation rule (CFPB defines sales commission from the sale of a home as meeting the compensation definition under the Loan Originator rule), a retailer representative could discuss financing alternatives with consumers including conventional mortgage lenders who offer low balance conventional mortgage loans.

Since the Loan Originator rules became effective, it has become nearly impossible for a retailer to assist consumers without inadvertently becoming considered a Loan Originator and becoming a covered person under Bureau regulations. CFED wants consumers to be informed of financing alternatives, but the people who have the best opportunity to inform them are effectively barred from having those conversations.

Ryan adds, “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 manufactured housing industrysupports legislation in all states to provide the alternative of titling manufactured homes as real estate where the home is sited upon land owned by the consumer and when financing is needed, the consumer pledges a first lien position in the land.

jason-boehlert-manufactured-housing-institute-(c)mhpronews-com-75x75-.gifJason Boehlert
Manufactured Housing Institute (MHI)
Senior Vice President of Government Affairs
1655 North Fort Meyer Drive
Suite 104
Arlington, VA 22209

Related Links:

1) – MHI's Response to CFPB's Report (Editor's 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) – CFED's Doug Ryan sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

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

    (Editor's Note: The views expressed by Jason Boehlert are his own and/or those of the MHI, 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 anIndustry in Focus Reportusing extensive comments from a range of industry professionals on this topic. Watch for it mid-week at the news/reports module link above.)

    CFPB Report on Manufactured Housing Signals Areas of Future Concern

    October 6th, 2014 No comments

    On Tuesday, the Consumer Financial Protection Bureau (“CFPB”) released a white paper summarizing their research on the manufactured housing industry. The Bureau relied upon information compiled by various surveys, data available pursuant to the Home Mortgage Disclosure Act (“HMDA”), and voluntary submissions of information by institutions in the manufactured housing industry. Although the CFPB acknowledges that they are still seeking additional information on the industry, the report, among other things, provides a detailed description of the manufactured housing market, the demographics of consumers who reside in manufactured homes, and the impact of the current regulatory climate on the industry.

    The CFPB also developed seven “key findings” from this research, many of which likely will come as no surprise to those actively involved in the manufactured housing industry. For example, the Bureau explains that manufactured homes are more likely to be located in non-metropolitan areas than site-built homes, and that manufactured homes typically cost less than site-built homes. These types of findings lead the Bureau to conclude that the industry is “an important source of affordable housing, in particular for rural and low-income consumers.” On the other hand, however, they believe that “these same groups include consumers that may be considered more financially vulnerable and, thus, may particularly stand to benefit from strong consumer protections.”

    With respect to the specific protections that may be necessary, the CFPB declines to make any conclusions and, in fact, leaves certain questions open for further research. For example, the white paper describes how consumers in the manufactured housing industry can either utilize real-property financing or chattel financing, and explains some of the short-term and long-term trade-offs that exist between the two options. However, it appears that the Bureau is concerned with, and wants more information on, “[t]he extent to which consumers are aware of these trade-offs and how consumers weigh them.” This information indicates that the CFPB will pay particular attention to whether or not borrowers are adequately informed about the trade-offs associated with pursuing chattel financing instead of real-property financing.

    The report does acknowledge that some of the title XIV Dodd-Frank Act amendments, including those made to the Home Ownership and Equity Protection Act (“HOEPA”) and the Truth in Lending Act (“TILA”), expand protections for consumers in the manufactured housing market. They also briefly describe the actual and theoretical impacts of these laws and the underlying regulations. For example, they admit the possibility that additional disclosure requirements and other burdens could increase the cost of extending credit to consumers seeking financing for a manufactured home. Prior to the rules being finalized, the CFPB received comments expressing concern that the proposed HOEPA high-cost thresholds would disproportionately impact small-balance loans that are often used to purchase manufactured housing. Many in the industry believe that these standards, which have been in effect since January 2014, are in fact reducing the availability of credit in the manufactured housing market because these loans are now classified as high-cost.

    Similarly, the new Loan Originator Compensation (“LO Comp”) rules in TILA may also be increasing the consumer’s cost of obtaining credit for a manufactured home. Unlike realtors, manufactured housing retailers are not exempt from the LO Comp rules. In order to avoid being considered a loan originator, and to avoid having to go through an expensive licensing process, manufactured housing retailers are often not referring potential borrowers to specific creditors that they know are willing to extend financing for a manufactured home. This has resulted in consumers being left unaware of which creditors are willing to extend credit and the requirements each creditor has for approving a loan. Consumers, therefore, are submitting more applications and, because of the lack of important information, are more frequently being needlessly denied.

    Despite acknowledging that the manufactured housing industry still has concerns about the impact of the CFPB’s new rules, the Bureau declines to accept that the rules have adversely impacted the market. Instead, they “will continue to monitor the effect of [their] rules on the manufactured housing industry and on consumers who purchase or seek to purchase manufactured homes.” In the meantime, the Preserving Access to Manufactured Housing Act, which would address at least some of these concerns, remains in Congress.

    If nothing else, this white paper should serve as a warning that the CFPB has taken an interest in the manufactured housing industry. The Bureau is continuing to monitor the impacts of the new mortgage rules on the manufactured housing market, which could signal that the Bureau may be open to making adjustments to the rules that would reduce burdens on creditors and lower the cost of credit for consumers. However, they have also tipped their hand to at least one area of ongoing concern. Creditors originating chattel mortgages should pay particular attention to the amount, and types, of information that is being provided to borrowers and should ensure that they are fully informed of their financing options and the costs and benefits associated with each.

    ##

    Republished with permission. This article first appeared in Financial Services Litigation & Regulatory Compliance Alert, a publication of Bradley Arant Boult Cummings LLP.

    About the Authors:

    Jonathan_R_Kolodziej-jd-bradley-arant-boult-cummings-llp-posted-industry-in-focus-mhpronews-com-75x75-Jonathan R. Kolodziej, JD, is an associate in the Birmingham office where he is a member of the firm’s Financial Services Litigation and Compliance Team. His regulatory compliance practice involves assisting some of the nation’s largest financial institutions and mortgage companies as they implement, and demonstrate compliance with, various obligations imposed on them by the Consumer Financial Protection Bureau (CFPB) and state banking regulators.

    bill-matchneer-jd-formerly-hud-cfpb-now=bradley-arant-boult-cummings-llp-posted-industry-in-focus-mhpronews-com-75x75-

    William “Bill” W. Matchneer, JD, recently joined the Washington DC office as senior counsel. He retired from the CFPB in February, where he had been one of the team leads for the regulations implementing the Dodd-Frank mortgage requirements. He previously spent ten years at HUD as manager of the Office of Regulatory Affairs and Manufactured Housing and Senior Counsel for Regulatory Enforcement.

     

    Related Links:

    1) – MHI's Response to CFPB's Report  (Editor's 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) – CFED's Doug Ryan sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

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

    (Editor's Note:  The views expressed by Messrs. Kolodziej and Matchneer are their own and/or those of the organization they work 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.)

    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!)

    “What’s Happened to the HUD Code Manufactured Home Industry?”

    July 9th, 2014 No comments

    Many years ago, a famous Movie Cowboy, Mayor of Beverly Hills, Editor of the Saturday Evening Post and Entertainer, Will Rodgers said, “If Stupidity got us into this mess, then why can't it get us out?”

    Manufactured housing has seen its media image perpetuated and the public perception remains consistently tarnished for quite some time. The HUD Code manufactured home (MH) appears too often to be viewed by government, Realtors  ® and the public as not being desirable. The MH Industry has seen its home production decline and new MH Communities (MHCs) have declined as well. Many of these existing communities are tired with no “Innovation” or “Cool” factor for prospects.

    On this date in 2014, along comes the “Tiny House,” a version of the factories “RV Park model.”

    The “Tiny House” is less than 400 square feet. It sits on a trailer frame; it has wheels and a hitch. It appears to be of the same type of construction as a RV Park Model or a small HUD Code manufactured home. Media professionals like “Tiny Houses” for stories and about those who live in them. See example below.

    tiny-houses-steven-lefer-industry-voices-posted-mhpronews-com

    Wow, the media’s attention is so positive to the “Tiny House” that it far exceeds that of the old and tired HUD Trailer/Mobile Home industry. TV shows with Bob Vila endorse it and A+E TV Network will begin showing “Tiny House Nation” July 9, 2014 at 10 ET/11PT on their home product.

    The articles point to how “Cute” and functional this small single wide home is; and how they even have a “Cool,” “Hip” factor with “NO” negative publicity. It's astonishing. These homeowners and their tiny houses brag about the size and in some cases folks live in 120 square feet, which is no bigger than a backyard shed. A woman in the article below left a MHPark to live one, ouch!

    I understand “Four Lights Tiny House Company” will be attempting to build a “Village” for people to live in a community of them. What? How? Is this not an RV Community? If you are part of the HUD Code Manufactured Home Industry, I am sure you are not aware of this image change nor have the leaders of the industry addressed or invited these competing folks to their convention. Are they part of the HUD Industry or do they prefer NOT to be? It sure makes me wonder?

    credit-tiny-house-nation-series-graphic-Wednesday-july-9-10et-11pt-

    Image credit FYI.TV

    Here are three links for you to ponder!

    http://www.deadline.com/2014/02/ae-lifestyle-network-fyi-sets-first-slate-launch-date/

    http://www.sanluisobispo.com/2013/12/31/2857011/bette-presley-arroyo-grande-house.html

    http://www.bobvila.com/articles/tiny-house-village/

    Where and what happened to the HUD Code Manufactured Home Industry? ##

    steve-leflervicepresident-modular-lifestyles-industry-voices-mhpronews-com75x75-Steven Lefler
    Vice President
    Modular Lifestyles, Inc.
    (888) 437-4587
    Dual DRE and HCD Salesperson
    Advanced Green Building Professional
    CEC Solar Wind Retailer/Installer

    http://www.modularlifestyles.com

    (First image supplied by Steve Lefler)

    (Editor's Note: MHProNews strongly believes that accurate terminology matters, and as was noted with Ken Haynes' Industry Voices guest column today, the thoughts and statements made above are solely those of the writer.

    Further, there are points in this commentary that are broad statements that could be construed as technically inaccurate, was used as hyperbole and thus depending on the context, should not be taken literally. Steve Lefler well knows about the recent positive press from CBS News or the Boston Globe, among others, touting the value of today's manufactured home.

    Those who know Lefler's noteworthy work in net-zero and near-off-the-grid factory built homes makes him a pioneer, and that has lead him to a level of what might politely be described as frustration with the industry-at-large and its leaders for not promoting our factory-built home product, as his column above suggests.

    As a recent Masthead blog post – Manufactured Housing's Declaration of Independence – underscored, market facts tell us our industry ought to be booming.

    As on any issue of industry relevance, MHProNews accepts submissions of articles that may represent similar or other viewpoints. Subject line, “Letter to the Editor” or “OpEd for Industry Voices blog” can be sent to latonyk@gmail.com.

    The Value of IMAGE, The Image of VALUE

    July 9th, 2014 No comments

    There is much talk of the need to “do something” about our industry’s image. Wow, that’s some understatement!

    But what? And how? And who will pay for the refurbishment?

    It’s a deep problem. It’s hard to refurbish an image that was never really “furbished” in the first place! The MH industry has a lot of growing up to do, and it’s quite a challenge.

    Tony Kovach recently published the following graph.

    manufactured-housing-mobile-home-shipments-graph-chart-calculatedrisk-posted-masthead-blog-mhpronews-com-

    Our eyes jump to the trend of the past decade, which emphasizes the need to “do something.” I invite you to study the other end of that graph. The sixties.

    In that decade, as today, the rule of thumb for a stick builder was to dedicate about half of construction cost to materials. That didn’t work for those building homes in factories. They had to build a product sturdy enough to ship a thousand miles on its own wheels, and if material content dropped below 60 percent—lock the factory doors. No reputable dealer would buy. In those days, despite buying all that material factory-direct and very efficient labor, the MH cost was far higher per square foot than a house (excluding land).

    By the end of that decade, the rule of thumb—the MH optimum for sales maximization—was 70 percent material, 10 percent labor, 10 percent overhead and 10 percent pretax profit. In good years, that worked and profits rolled in. In bad years, you got hammered.

    Sounds like a loser business?

    Not if you knew your stuff. If you managed 30-plus inventory turns, collected cash on delivery of the homes, operated in a pole-barn factory and had nominal investment, you could operate on your supplier’s 30-days-same-as cash payment plan. Banks released floor-plan cash upon delivery of the home. 100 percent return on equity was not out of the question. But everything had to work.

    Look again at Tony’s graph. Everything did work during that decade for those who managed well. A year of no sales increase was considered a recession.

    Manufacturers had to master that formula or get out of the race. Competition was brutal, but everyone understood that no one could do it alone. Manufacturers, suppliers, dealers, developers and banks. All were highly profitable when they got their sums and strategies right.

    The quality of manufactured homes soared and the cost of producing them plunged. Such was the magnitude of opportunity in the sleepy housing industry.

    It was Skyline, Fleetwood and the like who got the publicity—biggest MH manufacturers, most profitable companies in the stock market and all that. Surely they should have stepped up to the plate and “done something” about the industry’s image?

    Well, they did what they could, but their hands were tied. Every nickel of such a manufacturer’s profit would have funded just one percent of industry sales for an image-building program. And what, one might ask, could a manufacturer have done for its image more useful than investing in product improvement? That’s what the critics and customers requested, and rightly so.

    The largest manufacturers each held less than 10 percent market share and had plenty of competition snapping at their britches. Which of those “leaders” should have stepped up to the plate and invested significant funds in the industry’s image? Sure the profits were good, but they didn’t stay that way.

    Look again at Tony’s graph, and what happened when things stopped going well for the industry in the early seventies. That’s why there was so much resistance to the HUD standard, and still is. That’s why it has always been hard to get those “big manufacturers” to spend “just a little bit more” on the want-of-the-week. If the competition doesn’t do the same, you’re toast. Real competition is not for the faint of heart, but it works wonders for customers.

    Competitive product improvement, step by step. Learning curve. That’s how the MH industry cut the cost of building homes in half. Focused, efficient, production in a housing market where nobody was in charge, regulation was rampant and good times were rolling. Don’t hold your breath waiting for a repeat of that kind of housing opportunity.

    My enthusiasm for today’s outlook is based on the fact that the leaders have survived and now have commanding market share, while retaining—improving—their production cost advantage over the stick guys. I don’t know what the Big Three’s margins are, but they’re profitable. We’re in a new and potentially better ball game.

    The outlook is marred by the yo yo of housing demand, fluctuating with the whims of the economy and regulators. That’s why, when asked to write a book on the potential of manufactured housing, I said, “You’ve got to be kidding!”

    It didn’t take much research to change my mind. The survivors seem to have learned to cope with such market volatility and stifling regulation. The production cost advantage is still increasing and the competition continues to doze. Well managed surviving MH producers remain profitable in a scenario that would have crushed any normal manufacturing industry long ago … but woe to the manufacturer who single-handedly takes on the cost of a major industry image upgrade.

    It needs to be done, but has to be a team effort, with participation by most members of the industry at large. And there has to be strong leadership so we all head the same direction.

    Given the squabbling we all see and regret, is there any hope?

    Of course there is! The MH industry has always been a teamwork affair, where even bitter enemies worked together to keep the system functioning, because we all had a vested interest in keeping this marvelous housing system pumping, cranking out houses and profits. That has not changed.

    Sure HUD, Dodd-Frank and their ilk are a royal pain in the butt, but they strangle the other guys, too. Despite best efforts of bureaucrats to rule by regulation, economics will win in the end, and we’ve figured out an inherently better way to build houses.

    Yes, for a time we fouled our nest. Young industries do that. Yes, the public disdains “trailers.” Tell me what sort of low cost housing they like? Nobody wants low cost housing except those having a nose for value or low income. Those are huge markets that no other product can satisfy that need as well as manufactured housing.

    What we lack in image, we more than make up in value.

    Let’s build on that. ##

    bob-vahsholtz-author-dueling-curves-battle-for-housing-posted-industry-voices-guest-blog-mhpronews-com-manufatured-housing-professional-news-75x75-Bob Vasholtz is the author of Dueling Curves. Bob Vahsholtz is the author of DUELING CURVES The Battle for Housing. Bob can be reached at kingmidgetswest@gmail.com. Web: www.kingmidgetswest.com

    A prior guest column from Bob – Who's in Charge Here – is linked.

     

    (Editor's Note: The chart show above is courtesy of CalculatedRisk and was used in the following article, Manufactured Housing's Declaration of Independence. As with all letters to th editor, articles and guest column, the views represented are those of the writer. Other perspectives are welcome, email latonyk@gmail.com with Letters to the Editor or OpEd in the subject line.)