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Posts Tagged ‘manufactured housing community’

Whew! What a Whirlwind 44 Hours

October 20th, 2013 No comments

That is the NCC Fall Leadership Forum: “Building a Vision For The Future” held this past week in Chicago. First and foremost, kudos to my very good friend Jenny Hodge. Jenny is Vice President of MHI’s National Communities Council (NCC) and responsible for organizing and bringing forth this exceptional event. David Lentz is to be commended for his leadership and vision for the NCC.

While on the train from Milwaukee to Chicago I reviewed the agenda just to be certain I was up for the show which began in earnest Thursday morning. There was no doubt in mind that we were in for a very intense Thursday and Friday morning!

Wednesday evening’s reception was a very nicely arranged meet and greet with appetizers and an open bar. It has certainly been some time since we've seen MHI in a position to host such an event.

The real work began Thursday morning. The fact is that there was something to learn for everyone involved in the Manufactured Housing Community industry (MHC) whether you attended one session or attended all of the sessions.

The attendees were made up of a mix from the community business. When there was a show of hands early Thursday morning it appeared that there was a fairly even split of community owners present. One third were smaller owner with less than five communities, one third with less than 10 communities and one third owners or more than 15 communities.

rick-rand-great-value-homes-l-sam-zell-equity-lifestyle-properties-els-chairman-jim-clayton-clayton-bank-chairman-industry-voices-manufactured-home-pro-news-.jpg

Rick Rand, Great Value Homes (l) Sam Zell, Equity Lifestyle Properties (ELS) Chairman (c),
Jim Clayton, founder Clayton Homes and Chairman of Clayton Bank (r)

In addition, in attendance were lenders specializing in community financing, manufactures who are interested in serving the community owners needs to provide homes for vacant sites, Real Estate Brokers who market and sell communities along home lenders and other firms providing resources to community owners.

As is not uncommon at events like this, networking opportunities were abundant. I am more than certain that new relationships were forged, deals discussed and ideas exchanged. That is part of what makes these interactive events such great opportunities for all segments of the industry.

For those who focused on the Build A Vision For the Future agenda, they were rewarded with session after session of individuals both from within the industry and from other industries sharing their knowledge and experience. Topics relating to marketing, selling, community relations and all the important component of customer service which forward thinkers in the MH Industry are working to accomplish. Not only did the presenters share their knowledge and experience, they also made time for provocative interaction and dialog amongst all of us in attendance. ##

(Editor's Note: Read more of Rick's commentary – plus photos – on the NCC Fall Leadership forum at this link here.

You can see NCC dinner cruise and event photos at this link here.)

 

rick-rand-great-value-homes-manufactured-home-pro-news-industry-voices-guest-blog-.pngRichard J. Rand
President
Great Value Homes, Inc.
9458 N. Fairway Drive
Milwaukee, WI 53217-1321
414-352-3855
414-870-9000 (cell)
RickRand@gvhinc.net

Back to the Future Mobile Home Cartoon

July 22nd, 2013 No comments

In 1964,  while doing research for my master’s thesis on Manufactured Housing  community design at the University of Illinois I came across this cartoon in an architecture cartoon book, ‘The Last Lath.’ 

credit-the-last-lath-cartoon-book-1952-sent-don-westphal-posted-by-manufactured-housing-professional-news-.jpg

It’s amazing how ahead of their times many cartoonists are.  In the 1970’s the Mobile Home Manufacturer’s Association  sponsored the study entitled ‘New Housing Systems,’ a similar idea of placing Mobile Home modules in egg crate type superstructures.

don-westphal-posted-on-mhpronews-com.jpgPost Submitted by
Don Westphal
Donald C. Westphal, Associates
71 North Livernois Ave.
Rochester Hills, MI 48307
PH: 248-651-5518
Fax: 248-651-0450

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.)

Into the Great Green North

January 25th, 2011 1 comment

A Conversation with Kathleen Maynard, CMHI

CMHI logoUnlike the manufactured housing industry in the United States, the market for manufactured homes in Canada remains rather prosperous by comparison. A Canadian Manufactured Housing Institute (CMHI) report for the 3rd quarter of 2010 shows some 3,608 factory-built single-family homes were started in the third quarter, representing a 17 percent improvement over the same period in 2009; and that factory-built units have started to improve as a share of total single- family housing starts. In raw numbers, that may not immediately impress, but consider the population variation. The population of Canada is approximately 33,700,000, compared to some 307,000,000 in the U.S.

The healthy market has attracted a number of U.S. companies to become certified to do business in Canada where communities are being updated and renovated. There are also important distinctions in the market that some credit with the success of the industry in our northern neighbor.

The third-quarter report also showed a surge in imports of manufactured buildings, and weak exports resulted in Canada registering a trade deficit of manufactured buildings, its first since the fourth quarter of 2008. The report indicates that although the U.S. still accounts for the majority of exports of manufactured buildings, demand should continue to waver as the housing market in the U.S. remains depressed.

Kathleen Maynard, Executive Director and CEO of the Canadian Manufactured Housing Institute, spoke with MHMSM.com about some of the differences between the market and regulatory environment in the U.S. and Canada.

A major difference, and one that has kept the market strong and attracted U.S. companies, is the fact that chattel loan financing is for the most part readily available in Canada.

Maynard explains the Canada Mortgage and Housing Corporation provides chattel loan insurance for manufactured homes when land is not involved.

“If you’re putting a home into a land-lease community without purchasing the land, then they provide the insurance to facilitate those sales,” Maynard says. “It’s required you need to get mortgage insurance with less than 25 percent down payment. CMHI provides that.”

A five percent down payment requirement is typical in Canada. The maximum amortization period on chattel loans is 25 years. Effective March 18, the maximum period is 30 years for other mortgage loans. Maynard says other features of the two types of loans are consistent. Default rates on chattel loans are not available.

Perhaps most notable is that Maynard says there is typically appreciation on homes purchased with chattel loans in Canada.

“There would be a comparison made of recent purchase prices of similar homes in the area, and factors such as improvements and retrofits made would be taken into account,” she says.

While manufactured homes in the United States are somewhat distinct from other forms of both factory-built and site-built housing because they follow federal manufacturing and safety standards, Maynard explains there is no equivalent to the HUD Code in Canada.

“There’s no across-the-board federal standard,” Maynard explains. “Anything produced in the factory has to meet the same requirements.” In some ways, she says, it may be easier to have factory-built housing installed in Canada. All factory-built housing must meet standards set by the Canadian Standards Association (CSA).

That’s not to say local building officials aren’t able to at times restrict the placement of manufactured housing. Local building officials do have the authority over technical requirements.

For example, Maynard says some local jurisdictions don’t approve homes built to something known as the Z240 standard, which she says is the closest thing Canada has to the HUD Code.

“If it’s just built to CSA Z240, they may not approve it,” she says, explaining that that standard has recently been updated to mirror the national building code, which is voluntarily adopted by Canada’s provinces.

Zoning issues can also prevent placement of manufactured homes in Canada, but that, she says, is largely due to issues surrounding terminology and outdated regulations. These issues are particularly acute in the province of Alberta.

This is not to suggest the grass is always greener across the northern border. The industry has had its ups and downs in recent years. Maynard says while 2008 was generally a very good year for the industry, 2009 was terrible, and while 2010 started off strong, there was a bit of a decrease in the second half.

“Most economists are projecting deceleration for 2011, but not a complete collapse or anything; just a downturn in keeping with demographic requirements,” Maynard says. “Prior to economic meltdown, we were producing at levels above what was projected by demographic requirements. Particular markets were very hot. What they’re saying now is a return to normal. 2009 was below normal. 2010 and 2011 are stabilizing.

Regionally, Maynard says Quebec and Ontario did better in 2010 than 2009 and activity in British Columbia is on the rise, but Alberta is “not as hot as it used to be.”

“There was a huge boom in Alberta and Saskatchewan in ’06, ’07 and ’08,” Maynard says. “It’s not as hot as it was, but still good there. No market is experiencing a huge boom.”

Maynard says “the landlease community option has been more attractive to first-time buyers looking for lower cost, or seniors who want to free-up equity and spend half the year in Florida. Typically the industry has looked to those consumer segments.”

While manufactured housing typically makes up ten percent of single-family housing starts in Canada, Maynard says, as for over-all starts, multi-family is accelerating faster than single-family.

“It could be due to housing costs, aging population, all sorts of things,” she says.

While the hottest industry topics in the United States seem to center around financing and regulation, the most talked about issues in Canada are an aging population and how that affects the number of sales and type of units and how design might be affected, a shortage of skilled labor and the use of social media.

“The shortage of labor is in a way a result of aging population,” Maynard says. “The average age of a brick layer is something like 68. There are a range of federal and provincial programs trying to deal with that.” For example, she says the ideas of additional apprenticeship certifications and allowing apprentices to move across provinces are being explored.

Maynard says the aging population is resulting in more multi-generational households, so demand for homes with two master suites, as an example, is on the rise.

The biggest difference, Maynard says, between the industries in Canada and the United States is the distinction made between manufactured and factory-built housing in the U.S. That distinction isn’t made in Canada and may be the reason why what is called manufactured housing doesn’t have much of a stigma across the northern border.

“There has been a lot of positive press (in Canada) with improvements in design and green technology and with manufactured housing being an environmental choice,” Maynard says. “There’s interest in the architect and design community. Developers and planners are seeing it as a good green choice.

“We talk more about factory-based construction,” she says. “That’s been a way to address the stigma. That was a concern for many years. There’s more of a recognition that with certification and quality control, waste-management and protection from the weather, the benefits are more recognized.”

President Obama’s Regulatory Executive Order Puts HUD Regulators on the Spot

January 20th, 2011 No comments

MHARR LogoAttached for your information and review is a copy of a Executive Order regarding federal regulation just issued by the White House on January 18, 2011. The Order, released in conjunction with a companion Wall Street Journal article by the President on over-regulation, marks a major policy shift by the Administration that has implications for manufactured housing as a federally-regulated industry.

In fact, it appears this Order almost could have been written with the HUD Code manufactured housing industry in mind. Its focus is on promoting the type of fair, reasonable and open regulatory environment that the HUD Code industry needs to thrive while serving consumers of affordable housing. Among other things, it states, as Administration policy, that the federal regulatory system, while protecting health and safety, must also advance “economic growth, innovation, competitiveness and job creation” through an “open exchange of information” that includes “affected stakeholders” – exactly the opposite of what is happening today in the HUD program.

Consequently, after carefully examining the Order overnight, MHARR, on January 19, 2011, acted to press HUD officials to fully comply with this Order as it relates to all aspects of the federal manufactured housing program including, most importantly, its ongoing rapid expansion of in-plant regulation. This expansion, which began innocuously as a program of “voluntary cooperation,” is now being transformed into a full-blown de facto regulation that will needlessly increase regulatory compliance costs passed to consumers by manufacturers and retailers, as the ongoing expansion now appears to target both. Details of the latest phase of this expansion, developed entirely behind closed doors, are emerging piece-by-piece, having been adopted without any official procedures.

All of this is addressed in detail in the attached copy of MHARR’s self-explanatory January 19, 2011 MHARR letter to HUD Assistant Secretary-Federal Housing Commissioner, David Stevens, a copy of which is attached for your information and review. This letter addresses the ways that the President’s January 18, 2011 Order applies to – and must alter – the practices of both the HUD regulatory program and HUD’s consumer financing programs, specifically including the FHA Title I manufactured housing program, which has been subject to severe limitations which thwart competition and market growth.

We urge you to carefully review this package, as it provides details of the latest phase of HUD’s ongoing expansion of regulation – mandatory three-day audits and costly enhanced Subpart I involvement by third-party inspectors – that are on-course to be imposed on manufacturers and retailers, because the industry establishment in Washington, D.C. refused to join forces with MHARR in order to force HUD to comply with the law by going through consensus committee and rulemaking procedures. Now, as shown by the attached letter, the industry has a major task on its hands to try to stop this.

MHARR, therefore, in an effort to curb and reverse the course of this runaway expansion of in-plant regulation, will now include and use the President’s Order and its January 19, 2011 letter to HUD in its overall ongoing activities with the 112th Congress, to demonstrate how HUD is violating the Administration’s own policy.

We will continue to keep you apprised as new developments on these issues unfold.

Danny D. Ghorbani, President
Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Ave N.W., Suite 508
Washington, D.C. 20004
Phone: 202/783-4087
Fax: 202/783-4075
Email: mharrdg@aol.com

Why is Louisville so Important?

December 14th, 2010 No comments

Until only in recent years, the heartland of America has been the center of the market for low and moderate income families who have a special fondness for manufactured housing as a viable alternative to less affordable site-built housing.

Photo from Louisville Manufactured Housing Show

From the Northern reaches of America’s breadbasket in the Dakotas, Wisconsin and Minnesota to the south-central states of Kentucky and Tennessee, with strong central Midwestern states representation by Illinois, Indiana, Ohio and Michigan, manufactured housing has appealed to both urban and rural home buyers; this in spite of the many myths about wind safety aspects of factory built homes. Some of our finest retirement communities have been built around many Midwestern urban areas, such as Chicago, Detroit and Michiana. So-called modular homes built to the wide-ranging, ill-defined state codes, hasn’t had the impact here as they have in Northeastern, New England and Mid-Atlantic States.

Is it the affordability? Is it the prices? Is it the home designs? Or is it just the relative ease with which so many Mid-American families find manufactured housing a good value? I guess only an expensive survey will tell, but who cares?

Photo from Louisville Manufactured Housing Show

For many years running, the most successful of showcases for our uniquely American form of housing in mid-Western markets has been the Louisville Show. Coordinated by Showays’ Dennis Hill, it has a reputation for not only putting on a great physical display of the latest in home designs by top manufacturers, but it also provides the many attendees with a wide range of products and services that support these unique homes, ranging from the latest in home financing options and home insurance, to new innovative products for safely installing homes, accessories to supplement the homes, and the latest in insurance, wholesale and retail financing programs.

The show is popular not only with retailers and developers, but with their staffs, installers, salespersons, and suppliers. The introduction of many new innovative concepts in HUD code and Modular homes have started trends in the industry that are prevalent today. A highlight of the show is the many seminars and industry speakers bringing timely subjects to the industry.

January’s 2011 show will also offer insightful seminars that can help you grow your business or address specific needs. In addition to the many homes and booths, the conference speakers will share their decades of experience for those who attend.

  • George Allen will be presenting his “Ah Ha! Oh, No” formula for calculating the ideal pricing of homes and site for long term success.
  • Ken Rishel will be presenting a must-attend topic for many who are looking for new sources for chattel financing. He should call it, “Yes, you can!” with captive finance. But whatever the title, it is good material that every community owner needs to hear, and many retailers should listen to as well.
  • Don Westphal has become the go-to guy on the topic of Community Series Homes as well as being the stand-out man when it comes to development or redevelopment of a community.
  • Bob Stovall and L.A. ‘Tony’ Kovach of MHMSM.com fame will be presenting their marketing magic ideas for driving traffic to your retail or community locations. Check out their “Dominate Your Local Market!” presentation. I saw Tony’s talk on a similar theme in Phoenix, and gave him a 10 out of 10.
  • Finally, I will be presenting an intro on site and an off-site presentation on how you can get manufactured housing community financing or refinancing – yes, even in today’s more challenging lending environment. ‘Tony’ Kovach will act as moderator for this off-site event, with Bedford Lending being present to help with a little-known, but very valuable FHA 207m private lender loan guarantee program. Learn more or sign up for that seminar at this link. This important seminar is to be held for from 1:00 to 5:00 p.m. the afternoon of Thursday Jan 13th at the nearby Louisville Crown Plaza hotel, which is adjacent to the Exposition Grounds, and is easily accessed by car or the shows’ internal transportation system.
Photo from Louisville Manufactured Housing Show

More than ever before, the MH industry needs to gather up our resources, spruce up our thinking and light up our resolve to bring new life to a waiting American public. With all our Nation’s problems associated with high unemployment and large numbers of foreclosures, manufactured housing homes look even better than before as a real, viable alternative to more expensive site-built homes. New financing programs like the FHA Title I program, existing programs like the FHA 207m community financing program, and green home building options being offered by some manufacturers are concrete proof of our commitment to the general public in bringing safe, affordable, functional housing to Americans. There is an energy and opportunities aplenty to learn at a manufactured housing show that you simply can’t get any other way.

And it will all start in 2011 with the Louisville Show. I’ll be there, and I hope to see you there too!

Editor’s Note: Photos of the 2006 Louisville Show by Edward ‘Eddie’ Hicks

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By Eddie Hicks
Consultants Resource Group
Lic. RE Broker, Lic. Mortgage Broker
(813) 661-5901 Office
(888) 264-6472 Toll Free
www.mobilehomepark.com/
www.factorybuilthome.com/
www.Interlokhome.com/

FHA207(m) Loans for M/H Land Lease Communities Seminar

Why Go to the Louisville MH Show?

December 8th, 2010 1 comment

As a 39 year industry veteran, I have always been a sucker for industry shows. I hear arguments that with the industry shipments down that we should cancel the shows and focus on survival. While I have significant experience focusing on survival, I believe industry shows are a way to send the message out that we will not be beaten down.

My career in the industry began in Georgia in 1971 where I remained until moving to Texas in 1983, followed by a move to Oklahoma in 1988. For many of those years in Georgia, a high point of the year was making the journey to Louisville, in horrible January weather, to go to the Louisville Show. Why was that trip important to me despite the cold weather and taking time away from my own business? The opportunity to see new innovations as they were being introduced, instead of months later; the chance to visit with industry friends that have come in from vast distances across the country; the potential of finding a new product line before my competitor saw it, and the benefit of being able to learn and grow at the industry seminars that were always a part of the event.

My last trip to Louisville was in January 2008, which happened to be the 50th anniversary for the show. I can again say that I enjoyed the trip and even picked up a new product line while I was there. I can’t say that for absolutely sure I will make it to the 2011 Louisville show. I can confirm that I will do my best to do so.

I have had the pleasure of serving as chairman of The Great Southwest Home Show for the third year running. Like Louisville, The Great Southwest Home Show is held in an indoor facility (The Quick Trip Center). No rain problems during set-up, show days or tear-down. No generator rentals or air conditioning expenses for the manufacturer exhibitors. The Tulsa show is located at almost the geographic center of the United States and is serviced by several major airlines including Southwest. The 10.5 acre Quick Trip Center is also configured in such a manner to provide adequate security to allow for several days of Public Days following the retail period of the show. Supplier exhibit booths are conveniently located in and amongst the area where the homes are displayed.

Retailers, especially in the states contiguous to Oklahoma should not miss the opportunity to travel a very short distance to experience the thrill of seeing a huge display of exciting homes all located under one roof at one time. The educational seminars are a bonus. A bonus we got as an industry last year was that HUD brought its staff to Tulsa and held the meeting of the Manufactured Housing Consensus Committee (MHCC) in Tulsa in conjunction with The Great Southwest Home Show and Oklahoma’s state convention for the Manufactured Housing Association of Oklahoma (MHAO). The show and convention were enthusiastically received by both HUD staff and by MHCC members and the newly appointed Associate Deputy Assistant Secretary of HUD, Teresa Payne was the keynote speaker at the MHAO convention. The opening remarks by Teresa Payne at the next MHCC meeting held in Washington DC were to express thanks for having had the opportunity to hold the meetings in conjunction with the industry events in Oklahoma.

I believe we should support all of the industry shows that we can possibly attend. In addition to attending The Great Southwest Home Show last year, I took the time and the travel requirements to attend the Tunica Show and I enjoyed every minute of it. I will do my best to do so again in 2011, just as I said I would for Louisville. As industry members, I believe we should support and attend all the shows that are within reasonable travel access.

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Doug Gorman, President, Home-Mart, Inc.
Manufactured Housing Consensus Committee Member (MHCC)
Manufactured Housing Education Institute (MHEI) board member and past chairman
Manufactured Housing Association of Oklahoma (MHAO) board member and past president
Award-winning retailer in Tulsa, OK

Going to the 2011 Louisville Manufactured Housing Show

December 5th, 2010 1 comment

It’s great news that the Louisville Show is returning in 2011. It demonstrates that producers of factory built homes and services are positive about the future of our industry. It would be so easy not to be positive. We seem to find new impediments affecting our business every day. However, leaders are able to see further down the road. The bad laws will either be amended somewhat, or the industry will adapt. For those of you around in 1974, that was supposed to be the end of the industry because the federal government was taking over the supervision of the industry’s building code. We’ve had many such declarations of doom since the beginning of our industry. Some people just don’t believe it and figure out a way to proceed. When the Louisville Show didn’t go forward earlier this year, most people didn’t figure it would ever return. They were wrong. Thanks to forward thinking, it is back!

Let’s think about how remarkable this quick comeback really is. Many producers have found it easier and less costly just to have a show for their own retailers at company-owned factories. In that fashion, you don’t have your retailers looking over other homes at a larger setting like the Louisville MH Show. Business is difficult now. If you have a strong retailer, it might be easier to use this method, hoping the retailer won’t go to anyone else’s show.

But, on the other hand, if you’re part of a large show, then you might attract other retailers. As a company, you need to have confidence in your product. What better way to find out if your new model works than to show it off to as many retailers as possible.

In addition to the industry confidence displayed by this decision of bringing the show back, there are other benefits in having the show. For retailers and community owners, having a show of this magnitude is an excellent opportunity to visit with a large number of industry personnel and experts. Studies have shown that much of our learning experience comes from incidental learning. Going to a show, like the Louisville MH Show, gives one plenty of exposure to having informal conversations with other attendees and with experts on a wide array of topics. Formal learning is also important. The 2011 Louisville Manufactured Housing Show will have seminars on topics important to all segments of the industry.

Finally, there is just something special in being part of a large scene like the Louisville Show. When you get that many people together, there is an energy created that can’t be replicated at your office or factory. That’s why most executive directors enjoy our annual meetings. Sure, we find plenty of things to worry about: will that speaker I hired really do a good job… will the food be o.k., etc.?

What we enjoy is seeing our members come together, get excited about things, and create an energy that can propel some advancements.

That’s what the Louisville Show is all about. Even though Iowa is not a cosponsoring state, many Iowa retailers buy homes from producers who will be showing homes, products and services in Louisville. I know that Iowa retailers, as well as retailers and community owners and all industry personnel from throughout the trade area of the show, will be looking forward to attending the show in January.

Congratulations are in order for those who have brought this great show back into existence! Now it’s our turn to demonstrate the same confidence in the industry by attending and engaging ourselves in the 2011 Louisville Show, January 12-14th.

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Joe Kelly
Executive Vice President of the Iowa Manufactured Housing Association (IMHA), a 63-year-old trade association located in Des Moines, Iowa.

The Louisville Show is a Must Attend Event

December 1st, 2010 No comments

Louisville Manufactured Housing Show - January 12-14, 2011The Louisville Show is rich in history and tradition, and for many of us, memories of times gone by. For some, that would be reason enough to attend, because they see the Show as important and worthy of support as an industry statement of who and what we are. This show has chronicled our history and progress from 8′ wide “wobble boxes” to 32′-wide HUD Codes that are structurally superior to most site built housing.

Others need much more to take the time and money to make the trek to Louisville. For them, the Show offers a chance to network with others in the industry and learn things they don’t know that could affect their choices and decisions in their businesses. In the past, much of this has been informal, but now Dennis Hill has stepped it up, and garnered experts to put on seminars and workshops on a variety of subjects vital to those planning on staying in the industry, at no charge to the attendees of the Show. These seminars are reason enough for community owners and retailers to attend.

The seminars are just the beginning, however. The Show is, as it should be, the biggest and best place to gather information about the new homes and products that are available. It is amazing how many retailers and community owners think they know what’s out there, that actually don’t know about products and homes they should be considering. This is the place to discuss why levers on doors, wider doorways and halls, and taller toilets can significantly increase sales when marketed properly. This is the place to learn about selling brand new homes into a community for $32,000.00 and still have a real profit of $5,000 or more.

It is the place to learn about the latest trends in financing from Title I, to low interest loans to A credit borrowers, to the burgeoning new opportunity that owner assisted captive finance presents. It is a place to learn about new trends in set-up and installation, from skirting to lower perimeter enclosures as well as marketing techniques to generate more foot traffic.

The Show also offers the opportunity to catch up with old friends and meet new ones. It also creates a venue to relax after hours with others who appreciate Roger Miller’s “King of the Road” at places like Howl at the Moon, or for industry rich conversation over dinner at the Brown Hotel. What more in the way of reasons does one need to be there?

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Ken Rishel of Rishel Consulting Group and Precision Capital Funding is the industry-acknowledged expert on owner assisted chattel financing. In addition, he was a highly successful community retailer and community owner, as well as working with an outside lender during their growth to a national force in manufactured housing. He has been on the Board of Directors of two state associations, was appointed by the Governor to serve as the first chairman of the State of Illinois Manufactured Housing Quality Assurance Board, and is a nationally recognized and sought speaker within the manufactured housing industry. He serves on the MHI Task Force on Dodd-Frank, and his company was the MHI winner of the 2010 Service Supplier of the Year Award. He is also the author of the Chattel Finance Newsletter, which has over 9,000 subscribers.

Information on the Louisville Manufactured Housing Show is available here.

A Book Review – The Manufactured Housing Revolution

November 21st, 2010 No comments

“Revolution” (The Manufactured Housing), Edited by L.A. ‘Tony’ Kovach July 2010 published by MSMHM.com.

When one thinks about the pejorative “living in a trailer,” the term “revolution” doesn’t normally come to mind, but when you read Tony’s latest publication, it’s easy to understand how the nascent transition to manufactured housing is upon us. He has created a compendium of noted experts who are on the “cutting edge” of manufactured housing, concluding we are truly on the “edge of a revolution” in housing.

How so, you say?

Well, this collection of recent articles and columns from widely divergent aspects of this uniquely American industry supports the concept that manufactured housing is poised to take advantage of the many families who have, in effect, been disenfranchised from safe, affordable, functional housing through the loss of their primary residence.

Intended for industry veterans and newcomers alike, it provides some helpful viewpoints on such diverse subjects as: selling manufactured homes in a tough marketplace, getting yourself up for the sales confrontation, understanding the corporate disconnect and handling issues such as the myths about tornado damage.

Thought provoking articles include: “The Power of Now” by John Underwood, “Upgrading Your Image” by Don Westphal, “Changing Perceptions” by the Editor, “Fight, Flight, or Freeze” by Amy Bliss, and from the ever popular motivational guru Zig Ziglar on “Pos-Zig-ative Thinking.”

Tony adds: “Sound implementation of proven strategies don’t cost, they pay.” And, “If you aren’t getting the results you want, then change what you are doing … but don’t change for change’s sake.”

Test the possibilities! Tony’s collection of works by successful manufactured housing industry experts can show you the way.

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Edward “Ask Eddie” Hicks
>Lic. RE Broker, Lic. Mortgage Broker, Columnist for the Journal of Manufactured Housing
(813) 661-5901
Easteddie@aol.com/
www.mobilehomepark.com/


This book is available at the The Manufactured Housing Revolution website. Now through December 31, get $5 off during the holiday special.