Archive

Posts Tagged ‘Manufactured Housing Consensus Committee’

MHI and it’s varied divisions as compared to MHARR

December 14th, 2011 No comments

Over the last several years trial balloons have been released suggesting that the industry’s best interests would be served by a merger of its two major trade organizations the Manufactured Housing Institute (MHI) and the Manufactured Housing Association for Regulatory Reform (MHARR). MHI serves as a trade organization for all of the major segments of the industry. Those segments (manufacturers, suppliers, communities, retailers and lenders) are represented within MHI by their own specialized division. In contrast, MHARR makes their position absolutely clear that their mission is to protect specifically manufacturers from an over reaching federal bureaucracy in the area of regulatory issues.

My position has been consistent over that same time frame that a merger of MHI and MHARR would not be a good idea for the industry. On a couple of occasions that position was incorrectly interpreted as criticism of MHI. My point instead has been that because of MHI’s role of being an overall industry trade (manufacturers, suppliers, communities, retailers and lenders) organization, taking a very aggressive role in the area of regulatory reform can be a difficult role to fill. On the other hand, MHARR makes no apologies for its repeated efforts to rein in a federal agency that is continuing to take positions and implement new regulations that will have significant cost impacts on our product with unsubstantiated benefits. As the chief executive of MHARR, Danny Ghorbani has been relentless in pursuing that mission. While he would like to be able to operate in concert with HUD, the federal agency that oversees our industry, he is not concerned about remaining pals with HUD if HUD is not functioning within the bounds of current statues.

Recently a proposal has been floated for communities to form their own organization to the point of eliminating MHI. A review of MHI’s current action list should provide a reasonably quick conclusion that one would have little confidence in the ability of a newly formed communities trade organization to accomplish even a fraction of the items on the list absent MHI. Communities (and retailers) should feel free to establish a separate trade organization if they desire to see more focus on the needs of their segment of the industry. That representation can be organized and still lend a voice to the overall trade organization as needed. As a retailer I certainly feel at times that MHI’s role is dominated by the interests of manufacturers. My solution, if so motivated, would be to establish a retail equivalent of MHARR. A retail trade organization that would then be focused on issues facing retailers. I believe that could be possible without establishing a goal of destroying MHI.

While I am not in favor of dismantling MHI, I will concede that I disagree strongly with MHI’s recent capitulation in regard to the preemption of fire sprinklers as they relate to the HUD Code and the activities and positions of the Manufactured Housing Consensus Committee. MHARR’s position was statutorily correct and should have been backed by MHI rather than be undermined. Over a period of twenty years or so of my relationship with MHI, this issue does not mark my first disagreement with them and I have certainly never called for their dissolution due to any of those disagreements. MHI has the capacity and the history to be a very effective voice for the industry. We should work within the organization to address those areas where we disagree.

Douglas Gorman

Response On a Bold Proposal for Moving MHI, MHARR and Manufactured Housing Ahead

November 21st, 2011 No comments

 

One of the proposals being run up the flag pole is to merge MHI and MHARR with Danny Ghorbani to run the areas that are related to manufacturing and with George Allen running the areas related to communities. One obvious omission here is retail – not to mention lending, suppliers and other Industry elements at the Manufactured Housing Institute (MHI) – but the proposal has other issues that would suggest against implementation of such a concept.
 
 
Danny Ghorbani is imminently qualified to serve in a role overseeing the manufacturing issues within MHI. From Danny's point of view though, how long would he function before a clash in organizational culture styles might force him out the door?
 
 
Danny is fiercely defensive of issues that negatively affect his organization's members. Many of those members are small or even single plant operations that rightly or wrongly feel they do not have a sufficient voice in MHI. That perception is the reason MHARR was formed. Without some strong reassurances that small manufacturers will gain confidence regarding their voice and that Danny could not summarily be dismissed after the dismantling of the Manufactured Housing Association for Regulatory Reform (MHARR), I do not see a merger having success.
 
 
The merger idea has been floated before and gained little traction. I have spent approximately ten years working with both MHI and MHARR through my role on the Manufactured Housing Consensus Committee (MHCC). The two organizations functioned very well together in that regulatory environment, but Danny has been free to take up potentially controversial issues that MHI has been able to avoid.
 
 
I have pointed out previously that MHI, by its nature is a trade association that represents the entire industry. By that very nature, it serves in an umbrella or big tent role and all participants may not support an aggressive stance against actions taken by the Federal Government that impact our industry.
 
 
From the perspective of a medium or small manufacturer a significant concern would be to make sure Danny was mentoring a replacement as he gets closer to a time he may choose to retire.
 
 
Recent defensive stances taken by Danny include opposition to unwarranted increased regulatory monitoring activities (implemented by HUD) by the PIAs, exposure of inaccurate fire safety reports by NFPA, and presenting strong arguments for repositioning 3285 installation regulations into 3280 standards to allow for pre-emption of installation guidelines. Would Danny have been free to raise and argue these issues (just to name a few) as an employee of MHI?
 
 
The two individuals suggested certainly have the qualifications to share running a newly configured MHI. But:
 
  • Could MHARR member manufacturers have confidence in such a proposed restructure?
  • Could retailers and others have confidence in a proposed restructure where they are not even mentioned?
 
 
As a manufacturer, I would want to have a membership in both MHI and MHARR. I would look to MHI to continue to serve in the broad role as the industry's trade organization. I would look to MHARR to continue to monitor government actions that are an overreach with negative impacts on affordability for our customer base. # #
 
 
by Doug Gorman,
MH Retailer
HomeMart

Manufactured Housing Consensus Committee analysis of MHI and MHARR positions

October 26th, 2011 No comments

Tony,

The industry faces the problem that the Manufactured Housing Association for Regulatory Reform (MHARR) assessment of the composition of the Manufactured Housing Consensus Committee (MHCC) is reasonably accurate. Initially both the Manufactured Housing Institute (MHI) and MHARR were allowed to have two of the seven industry seats. Today, HUD no longer allows that balanced and knowledgable representation.

Over the past several years we have seen other seats incorrectly given to government employees and other parties with anti-industry bias. The Designated Federal Officer (DFO) and non-voting twenty-second seat on the MHCC (the political appointee) has not been reappointed for several years now. One of the purposes for the existence of that position is to provide some perspective to the HUD Manufactured Housing Program that is not held hostage by preconceived biases inside the HUD permanent staff.

The shift in committee composition has brought with it members who tend to vote their ideology without regard to cost implications. Evaluating cost implications of proposed changes is statutory and yet is ignored by HUD staff and the MHCC with no consequences.

MHI’s recent actions in regard to fire sprinklers is well intended and is an effort to at least establish controls in advance of what MHI perceives as potentially hugely damaging costs if a preemptory sprinkler system is not advanced by the industry. MHARR’s point that extremely valuable ground in the world of preemption is being surrendered is true and does not bode well for the industry on both fire sprinklers and other preemption issues as they arise.

The Manufactured Housing Improvement Act of 2000 (MHIA of 2000) actually gave more teeth to the preemptive language of the original 1974 act. HUD’s manufactured housing program management staff should be valiantly defending that preemptive language when other parties take actions that violate the most recent version of that language. My experience of nearly ten years of working with HUD management as an MHCC member has showed me that HUD will not undertake that defense.

In anticipation of a worst possible outcome scenario, MHI’s actions are an effort to head off potentially devastating costs of meeting fire sprinkler requirements with no parameters. MHARR’s position is the more legally accurate, but faces unknown consequences in the efforts that would be required to enforce the strictly legal position. While I am not privy to all the arguments for both cases, I do know that I hate to give up valuable ground.

Doug Gorman
HomeMart
Former MHCC member

“HUD Seeks to Institutionalize Expanded Regulation”

October 14th, 2011 No comments

Almost as an afterthought to its March 2010 proclamation that manufacturer compliance with new expanded in-plant regulation originally billed as voluntary would, henceforth, be “not voluntary,” HUD has recently announced that it intends to proceed with a new rule that would institutionalize that expansion and, at the same time, substantially alter existing regulations defining the pivotal relationship between third-party Primary Inspection Agencies (PIAs), manufacturers and HUD.  What is worse, is that HUD plans to institute rulemaking on this major and costly alteration of the existing in-plant regulation structure without a consensus of the Manufactured Housing Consensus Committee (MHCC) and without even presenting a complete proposal to the MHCC as required by law and as requested by the MHCC itself.  Indeed, the story of how this has come about is a textbook reflection of HUD’s efforts over the past decade to minimize, circumvent and evade the program reforms of the Manufactured Housing Improvement Act of 2000, and a case study for Congress when it examines the Department’s failure to fully and properly implement that law.

Back in 2008, HUD approached the MHCC with “concepts” for changing the fundamental role of third-party PIAs (and particularly private PIAs) as well as the nature of their relationship with both manufacturers and HUD.  These “concepts” ultimately led to HUD proposed revisions to elements of the Procedural and Enforcement Regulations (PER), that were presented, in piecemeal fashion, to the MHCC Regulatory Enforcement Subcommittee.  That process, however, was halted by a vote of the Subcommittee in September 2008, based on MHARR objections that the consideration of piecemeal proposals – that did not allow a complete evaluation of the interaction between various components – was improper, as was the consideration of such proposals without relevant cost information or justification as required by the 2000 law.

Confronted with this rejection, HUD responded with a three-pronged strategy.  First, beginning in late 2008, it embarked on a campaign to expand and fundamentally change in-plant regulation on the ground, without first complying with the due process requirements of the 2000 law, based on an elaborate series of “enhanced checklists,” “field guidance” documents and “standard operating procedures” that were not – and still have not been – presented to the MHCC for consensus review or published for notice and comment rulemaking.  Initially, and for nearly a year-and-a-half afterward, HUD characterized the major changes implemented by these documents as a process of “voluntary cooperation,” only to ultimately deem them “not voluntary” in March 2010.  An August 24, 2011 article in the Capitol newspaper “The Hill” aptly describes this type of process (being used increasingly by regulators), stating: “Th[e] new guidelines are  supposedly ‘voluntary,’ but don’t be fooled.  The federal government … has long been engaged in an egregious and unconstitutional regulatory power grab.  The strategy simply is to saddle disfavored industries with regulations disguised as ‘voluntary,’ and therefore not subject to the normal rulemaking process and judicial review.”  Although written about a different set of “voluntary” guidelines, the same logic and analysis holds here.

Second, in 2009, HUD returned to the MHCC with a unified regulatory proposal to amend the PER regulations in a way that would legitimize and provide legal support for such “on the ground” expanded in-plant regulation.  In a formal September 2009 letter ballot, however, HUD was unable to secure an MHCC consensus on this proposal, specifically due, as reflected by MHCC minutes, to the Department’s failure to provide the Committee with adequate justification showing the need for such changes, as well as its failure to provide concrete information regarding the cost-impact of its proposal.

Third, when MHARR continued its objections to the “on the ground” imposition of such a costly regulatory expansion without compliance with relevant due process protections, HUD, on February 5, 2010, issued an “interpretive rule,” without opportunity for public comment, designed to ensure that the MHCC would never get an opportunity to review its expanded in-plant regulation checklists, “field guidance” and standard operating procedures, by simply reading catchall section 604(b)(6) – requiring MHCC consideration and related rulemaking for any change in “inspection practices” – out of the 2000 law.

Now, HUD is taking the next step to institutionalize expanded in-plant regulation.  As announced by HUD regulators at an August 17, 2011 meeting of the MHCC’s Regulatory Enforcement Subcommittee, the Department plans to go forward with a proposed rule relating to the role and activities of the PIAs without further consultation with the MHCC, despite the absence of an MHCC consensus due to HUD’s own failure, in 2009, to provide justification and cost information that the MHCC is required to consider by the 2000 law.  Questioned about this procedure, HUD’s representative stated that the MHCC had “had its chance” in 2009.

This stance, however, flouts (once again) the requirements of the 2000 law. Section 604(b) of the law requires that the MHCC consider every proposed PER regulation, absent a declared emergency.  Further, section 604(e) of the law requires that the MHCC consider the cost-impact and justification for any such proposed regulation.  The MHCC, however, has never been provided with this requisite information by HUD.  As a result, there are two possible scenarios in this matter, both of which violate the 2000 law – (1) if HUD’s new proposal is in any way different from the proposal that failed to attain an MHCC consensus in 2009, then it has never been considered by the MHCC and violates section 604(b); (2) if the new proposal is identical to the 2009 proposal, it still has not been properly presented to and considered by the MHCC in accordance with the law, because mandatory elements required for MHCC consideration in accordance with the law – cost-impact data and a showing of justification – were never provided.  Put differently, if HUD’s position were correct, the Department could effectively evade the consensus requirements of the 2000 law on every proposal simply by refusing to provide the MHCC with cost-impact, justification, or other  information needed or required for MHCC review and consensus comments.

HUD, in an attempt to minimize this further restriction of the role and authority of the MHCC and its own obligation to comply with the due process requirements of the 2000 law, noted that Committee members could submit comments during the public comment period on the proposed rule, but this misses the central point of the MHCC and the 2000 law – that regulatory changes should be based on the consensus agreement of all program stakeholders.  And there is not – and never has been — a consensus on any changes relating to the role of the PIAs or an expansion of in-plant regulation.  Simply stated, a federally-regulated industry that has lost more than 80% of its production over the past 12 years, should not allow this kind of incremental evasion of the law.

In MHARR’s view, this proposal, a vestige of prior program management that sought to minimize and bypass the reforms of the 2000 law, should be withdrawn by the new program management and re-submitted to the MHCC, this time with proper cost-benefit information and specific justification – if one exists.

MHARR VIEWPOINT
By Danny D. Ghorbani

Manufactured Housing Association for Regulatory Reform (MHARR) is a Washington D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.

Manufactured Housing Production Rebounds at Last

October 5th, 2011 No comments

Washington, D.C., October 5, 2011 – The Manufactured Housing Association for Regulatory Reform (MHARR) reports that according to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD), manufactured housing production rebounded in August 2011, posting its first increase in 12 months.  Just-released statistics show that during August 2011, HUD Code manufacturers produced 5,187 homes, up from the 4,896 HUD Code homes produced in August 2010, representing a corresponding month increase of nearly 6%.  The last time that industry production recorded a corresponding-month increase was in August 2010, when production grew by 9% over August 2009 levels.  This increase brings 2011 cumulative industry production, through the end of August, to 32,015 homes — 9.9% lower than corresponding industry production of 35,566 homes over the same period last year, but a distinct improvement over double-digit cumulative production declines earlier this year.

While any production increase is welcome news, the manufactured housing industry – given its status as the nation’s primary source of truly affordable non-subsidized home ownership — should be experiencing more significant long-term growth in the face of a sluggish economy that accentuates the affordability of its homes in relation to other types of housing and features historically low interest rates on home loans.  The fact that it has not yet benefitted from conditions that, in the past, have stoked industry growth, underscores that the sustained industry decline since 1998 is less a result of the broader economic environment than factors uniquely affecting manufactured housing – specifically, the unavailability of consumer financing and HUD’s failure to fully and properly implement key reforms of the Manufactured Housing Improvement Act of 2000 that were designed to ensure the parity of manufactured housing as “housing.”

Now, though, the industry’s two national trade organizations, MHARR and the Manufactured Housing Institute (MHI) have agreed to work together, jointly and cooperatively, to address three major issues concerning consumer financing and the implementation of the 2000 law, specifically, the need to expand sources of consumer financing and eliminate unnecessarily

restrictive barriers to entering the manufactured housing market, the appointment of a non-career
administrator for the HUD manufactured housing program, as provided by the 2000 law, and the re-appointment of collective national industry representatives to the Manufactured Housing Consensus Committee, the centerpiece reform of the 2000 law.

A joint MHARR-MHI delegation has already met with senior HUD officials to address these three specific issues and will follow-up accordingly.

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.

MHCC Decline Continues

January 3rd, 2011 3 comments

MHARR logoThe already diminished role and authority of the Manufactured Housing Consensus Committee (MHCC) as an independent check and balance on the power of HUD regulators took another major step backward on January 3, 2011 as HUD, for the first time, has selected the Chairman of the Committee. Until now, the MHCC had elected its own Chairman and Vice Chairman from among its voting members and had forwarded that vote to Secretary of HUD for final action.

The incoming HUD-selected Chairman, an original MHCC member appointed by HUD in 2002 and now serving a ninth year on the Committee, is the only one of seven term-limited MHCC members to be re-appointed for a new term by HUD, without any further explanation.

For your information and convenience, and based upon MHARR’s records, the departing MHCC members are: Susan Brenton (General Interest) (Chairman); William Lagano (General Interest) (Vice Chairman); Doug Gorman (Producer); Jack Berger (User); Karl Braun (User) (resigned) and William Farrish (Producer). MHARR would like to acknowledge the service of these former MHCC members and publicly thank them for their many years of fair, open-minded and thorough consideration of the critical issues brought before the Committee, as well as the right and concerns of all federal program stakeholders.

The new appointees announced by HUD on January 3, 2011, are: (1) William Freeborne, described by HUD only as a “retired engineer,” who will be joining the “General Interest and Public Officials” group, becoming the second former HUD staffer or consultant to be named to the MHCC in recent years; (2) Adam Rust (General Interest and Public Officials), of the “Community Reinvestment Corporation of North Carolina;” (3) Isabel Dickens (User) of the Manufactured Home Owners Association of America, another collective representation group; (4) Steve Anderson (User) described only as a “manufactured home owner” from Utah; (5) Jeffrey Legault (Producer) of Skyline Corporation; and (6) Leo Poggione (Producer) of Craftsman Homes. The one reappointed MHCC member and new Chairman, Richard Weinert, is an official of the California State Administrative Agency (SAA).

In addition to tightening its grip on the MHCC, HUD’s latest appointments to the MHCC continue to exclude collective industry representatives, even though non-industry collective organizations continue to be well represented within other MHCC interest groups. Effectively, the acquiescence of the industry establishment, the Manufactured Housing Institute (MHI) — which has repeatedly expressed that it does not object to being excluded as a voting MHCC member — has provided HUD with an excuse to refuse the appointment of non-lobbyist collective industry representatives who do want to serve. This ensures that the MHCC does not get the full benefit of the collective knowledge, know-how, expertise and institutional memory that the industry has painstakingly gathered in Washington, D.C. over the course of four decades.

With HUD’s intent regarding the role, status and authority of the MHCC continuing to unfold — i.e., to turn it into another meaningless forum like the defunct National Manufactured Housing Advisory Council of the 1974 law — MHARR now will redouble and intensify its efforts to make this a key issue for engagement with the new congress about to take office in Washington, D.C. In the meantime, MHARR will continue its efforts as a non-member of the MHCC to fight even harder to preserve the proper role, status and authority of the MHCC in accordance with the 2000 law.

cc: Other Interested HUD Code Manufacturers, Retailers and Communities

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