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Posts Tagged ‘Manufactured Housing Improvement Act of 2000’

Who’s in Charge Here?

June 3rd, 2014 No comments

Rick Rand’s excellent proposal for an all-industry conclave at a neutral location is gathering momentum. Such a venue should certainly not screen out the smaller operators who have always been a prime source of innovation, and it is vitally important that the “big guys” also be at the table. Make room for the various associations charged with the thankless task of placating the placating the industry’s many voices.

As a long-retired veteran of manufactured housing, I’m appalled at the conflicts, back-biting and lack of leadership that has always hamstrung our young industry. It was understandable in the early days when the largest manufacturers controlled less than ten percent of shipments and no other industry constituent was in a position make things happen beyond his own company (in those days, the leading players were all men).

Today, though manufactured housing is a shadow of its former self, the product itself is far better, the need for affordable housing is far greater, the leading manufacturers remain profitable, the market for manufactured housing communities is heating up and the stick competition is in disarray. So why are our sales volumes in the dumper?

It is true of course that we, as an industry, have made many mistakes. And we’ll make more.

In a free enterprise system, we learn from our mistakes and keep moving forward. That’s exactly what needs to happen at the kind of meeting Rick has proposed. Pull the tribe together with an agenda focused on the problems we’ve created, the opportunities ahead and agree upon a broad based strategy to deal with today’s challenges. Ideas and innovations are often sparked over a cup of coffee or glass of beer, and contacts have always been the lifeblood of the industry.

But far more is needed than griping about Dodd-Frank and what names we should use for our products. Consider some fundamentals.

Housing is one of America’s least efficient industries. That includes stick builders and us too. Why is that? Well, there’s no serious foreign or domestic competition, no real industry leadership, way too much regulation and negligible innovation. That’s been the case for a hundred years.

Academics and all sorts of advanced thinkers have, for at least that long, looked to industrializing the building process to break out of housing’s quagmire. It has finally happened. The industry we now call manufactured housing has demonstrated the ability to build good housing at roughly half the cost of traditional methods, and we have the black eyes to prove it.

As one result, America’s largest home builder is one of us, and one of the world’s richest men bankrolls MH financing. Something like 20 million Americans live in homes we’ve built and the vast majority of them appreciate the comfort and value those homes provide. There’s ever so much more that could and should be done, but we’ve made a better start than any other tilter at housing’s windmills. Many have tried.

One thing the MH industry agreed upon some 40 years ago was to unite under the HUD banner. That turned out to be a painful process with about as many negative as positive outcomes. We banded together again to reform that process with the Manufactured Housing Improvement Act of 2000 (MHIA 2000), but guess what? Big Brother has its own ideas about “Improvement” which do not include a lot of use for industry committee input.

We’ve got a lot going for us, and yet the squabbles continue. If there’s an industry strategy, it did not emerge from my recent research. What is happening is a plethora of tactics, put forward under various banners, mostly going nowhere.

As an industry professional, you can put forward some ideas for how to deal with these challenges. So can I, and I’ve done so in my recent book, Dueling Curves. It’s not enough.

Maybe at Rick’s gathering of the tribes, some sort of consensus can be reached, on a whole bunch of nifty ideas.

But that’s not enough either.

The single most important objective of such a congress—or whatever it’s to be called—should be to the emergence of industry leadership. Not a task force, committee or agency, but a person of vision who commands the respect of the industry.

A tribal chief who can weave the disparate strengths of the manufacturers, suppliers, financiers, retailers, MH owners and community operators into a strategy we can all salute. Oh well, yes, there will always be a few curmudgeons. No one will be entirely happy with any strategic vision adequate to unite us; not even the leader who ultimately propounds it.

But let me suggest this. Should we fail to unite behind competent leadership, I can suggest who will become take charge of the industry. Well, maybe I shouldn’t name names, but the initials are H.U.D. ##

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

No God, Jerusalem or Manufactured Housing?

September 16th, 2012 14 comments

by Michael Barnabas

You don't have to be Jewish to feel deep concern about what took place at the Democratic National Convention (DNC). Responding to political pressure to put the word "God" back in their platform as well as to once again name Jerusalem as Israel's national capital, DNC delegates where asked to pass the motion by a 2/3 vote. The video I've asked to be posted below tells the tale. For those who question the commitment by Democrats to fair elections, please watch this CSPAN video and share it with others.

Once you've watched this objectively, everything else is spin and commentary.

Among the emails that come into me are from a White House 'group.' Some months back, there was an outreach by that White House group to the business community. The president, it was said, wants to help ease burdensome regulations, to make it easier on small businesses.

Excuse me?

How can we take such an election year outreach to small businesses seriously, by those who executed Dodd-Frank and ObamaCare?

Talk to an independent manufactured home builder. Ask them, with consumer complaints at new lows, why is HUD pushing more and more 'voluntary' – and other – regulations? Why don't we have the Duty to Serve implemented by the GSEs/FHFA?

The energy sector creates demand for factory-built housing, in places such as North Dakota, Texas, West Virginia, Ohio, Pennsylvania and other states. The current administration's policies, up until election year, were favoring gas prices of $8 to $9 a gallon for gas, as this video clip of testimony by Energy Secretary Steven Chu demonstrates.

While this next video clip has been pieced together, it reflects in President Obama and Vice President Joe Biden's own words, a path designed to foil coal fired energy production in the United States.

Without belaboring the point, some believe that anti-domestic energy policies such as these were a path to promote green energy by making conventional domestic energy sources harder to come by. Such policies directly harm domestic energy firms. But they indirectly harm our industry, which often provides housing for those workers, especially when they are in areas with high demand for housing.

We scarcely hear about enhanced pre-emption for HUD Code Homes these days. Why not? Wasn't it part of the Manufactured Housing Improvement Act of 2000?

Community operators created some 10 billion worth of paper to finance manufactured homes in their land lease locations. This was a free enterprise solution designed to fill the gaps created when lenders who vaporized – such as Conseco – went good-bye. But SAFE, Dodd-Frank and a plethora of other laws and regulations have so squeezed this 'captive finance' free enterprise solution in MHCs, that now community owner/operators are turning to rental homes in their properties instead.

Rentals?

Rentals in once all owner occupied communities?! The entire business model of community operators is being changed by the Regulators and their political allies who passed and fund those regulations. Shame on us if we let the party of Regulation be rewarded.

I'm appalled that some still want to believe in "hope and change," when we are heading "forward" towards a new fiscal cliff and a new recession in 2013. Some commentators already believe we are already back in recession.

How could we move "forward" by following the advice of those who gladly took Fannie and Freddie's PAC money? Politicians such as Congressman Barney Frank and then Senator Barack Obama? ACORN, community organizer Barack Obama and the Clinton Administration worked together to force lenders to issue loans to those who were not credit qualified. No doubt there were Republicans who colluded. Shame on all involved.

But it is gutless by Republicans to let the Democrats dish it out and not respond to such fables, blaming Bush II for the mortgage/housing meltdown when Democrats had a firm hand in the cookie jar that caused that whole fiasco.

They should call it the mortgage/financial services industry's version of Russian roulette.

When government interferes so massively in the free market, of course there will be unintended consequences.

But to falsely blame supply side economics for the mortgage/housing collapse is a creative lie or brutal ignorance. Neither the option of lie or ignorance are worthy of credence or support.

We don't hear much in Manufactured housing circles about how the run-up to the mortgage meltdown harmed our Industry. But it did! Easy qualifying, liar loans and the like created a false opportunity for hundreds of thousands of conventional housing buyers. A percentage of those buyers were or normally would have been manufactured home owners. As some manufactured home lenders about those owners who walked away from their HUD Code homes to get conventional houses during the run up to the mortgage/housing bust.

That put pressure on MH lenders and the MH market in general. As MHs where being left behind, of course values dropped, just as they have more recently in conventional housing neighborhoods plagued by foreclosures.

So federal policy harmed our industry in the early 00s, as thousands of our home owners left what become over-leveraged HUDs for what turned out to be over-leveraged conventional houses.

You can thank those politicians who made that happen to us then and more recently.

But let's not thank them by rewarding them with our support or our votes. That is like rewarding the thief by putting him in charge of law enforcement.

When politicians plunder the public treasury to fund with borrowed and tax payer money programs contrary to the Constitution and the public interest, it is time to end such madness.

Research I've seen indicates that some 44-47% of voters will vote for President Obama no matter what he says or does. That means the rest of us who are capable of a critical analysis and independent thought better show up at the polls and cast ballots wisely.

While applauding columns like the one on Voter Fraud, I was frankly disappointed when MHProNews published an interview with Congressman Joe Donnelly. Donnelly may be a co-sponsor of HR 3849, but he also voted for HERA 2008, which gave us the SAFE Act. Donnelly voted for Dodd-Frank. So while I understand the desire for 'balance,' I question the timing or "political correctness" of publishing the Donnelly interview during campaign season.

What we need when the industry is already in the lifeboats and are looking at possible new waves looming on the horizon is enhanced clarity, not confusion.

When even Time Magazine, Newsweek and the New York Times Magazine are publishing stories and OpEds that call into question or openly attack the Obama Presidency, MH trade publications need to be coming out loud, clear and strongly in favor of less government, lower taxes/regulations, a sane pro-domestic energy program and more free enterprise leadership.

The first pair of drafts of this article I was asked to edit and tone down. So this is the toned down version. I was also told that the editor would add a disclaimer and an invitation for responses. So be it.

Back to the top. Sham votes matter. They speak volumes.

Election year political posturing, via asking independent business owners and executives how to reduce the burdens or regulations matters too. It is the age old trick of seduction at work. We are being divided and conquered.

We are watching borrowed money and our tax dollars being turned against us to destroy the greatest economic system and the most free society in world history.

9/11 and U.S. Embassies ablaze reminds us why Jerusalem and God matters to America, and why that Democratic sham of a platform vote matters.

Manufactured housing matters too. President Obama stood in Elkhart, IN – an area where so many manufactured housing plants and suppliers are – talking jobs. Are there connections between all that is being covered in this column? Yes. They are just different corners of the same bolt of American political cloth.

If we sweep the current left wing crop of Democrats and RINO Republicans aside in favor of more free market oriented leaders, manufactured housing can blossom and grow again. All we need is a level playing field.

Some speculate that Ben Bernanke may have decided on QE3 – de facto printing money – to boost stock prices short term to help Team Obama win re-election. Whatever his motivation, the credit down grade cited below reminds us that the Bernanke/FED/QE3 policy is misguided. It will harm the middle class and seniors. Economic history reminds us that you earn, not print, your way to success.

“Ratings firm Egan-Jones cut its credit rating on the U.S. government to "AA-"

from "AA," citing its opinion that quantitative easing from the

Federal Reserve would hurt the

U.S. economy and the country's credit quality.” – CNBC

If we have supply-side Republicans in charge of the House and Senate, but fail to sweep out Architect Obama – the leader of our changed and hopeless society – we have not done enough.

“Patriotism means to stand by the country. It does not mean to stand by the president or any other public official, save exactly to the degree in which he himself stands by the country. It is patriotic to support him insofar as he efficiently serves the country. It is unpatriotic not to oppose him to the exact extent that by inefficiency or otherwise he fails in his duty to stand by the country. In either event, it is unpatriotic not to tell the truth, whether about the president or anyone else.”

― Theodore Roosevelt

26th President of the United States

For anyone who votes to re-elect the man who wants to move us 'forward' off the looming fiscal cliff, such a person could qualify as unpatriotic by Roosevelt's definition.

Don't let that happen. Half measures won't be enough. ##

(Editor's Note: All Industry Voices and other opinion columns, including the Masthead blog, et al, represent the views of those who write them. They do not necessarily represent the views of MHProNews.com or our sponsors. It has been our long standing policy to invite guest columns from people with opposing perspectives. You can send your own letter to the editor or OpEd column on a subject connected to factory built housing to the email address linked here, with Industry Voices in the subject line. Thank you.)

Post submitted by
Michael Barnabas

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.

“Pathway Paved Toward Progress”

September 7th, 2011 No comments

With production of manufactured homes continuing to erode by double-digits in 2011, change — real change — cannot come fast enough for the industry or beleaguered American consumers of affordable housing. To have the most beneficial impact on the condition of the industry, however, that change needs to begin with and needs to be led by the federal program that comprehensively regulates manufactured homes and is responsible for the “superintendence” of the industry. And now, after more than a decade of intransigence and seeming lack of concern for the worsening plight of the industry and manufactured homebuyers, hopeful signs are emerging that this long-overdue and much-needed change could be in the offing.

While there is no doubt that the manufactured housing industry, since its peak production year in 1998, has suffered from numerous problems that have contributed to its decline, including restrictions (both existing and impending) that have disproportionately reduced the availability of financing for manufactured home buyers, bad practices — now corrected — that provided an excuse for such restrictions, the debt crisis that undermined the availability of floor-plan financing for many retailers, the collapse of the mortgage insurance market for lower and moderate-income buyers, unreasonable restrictions on the placement of manufactured homes and a host of others, all of these are inextricably related to the federal regulation of manufactured homes and, more specifically, to HUD’s failure to fully and properly implement the Manufactured Housing Improvement Act of 2000.

That law, as MHARR has often pointed out — through its “Findings,” its sweeping “Statement of Purpose” and specific program reforms — was designed to complete the transition of manufactured homes from the “trailers” of yesteryear to the modern “housing” of today, at parity with all other types of residential construction. Put differently, it was designed to end systematic discrimination against manufactured housing and manufactured homebuyers in connection with regulation, financing and a range of other issues affecting the availability and use of manufactured housing. HUD, however, has not fulfilled this vision over the past decade and the industry, as a result, has been trending downward at a time when it should be doing better.

Fortunately, though, all of this is now coming to a head for proper resolution, because MHARR, instead of limiting its focus to the symptoms of this problem, has consistently worked to address their common root cause — HUD’s failure to fully and properly implement the key reforms of the 2000 law. This effort took on a whole new dimension and heightened level of energy in the Fall of 2010 when forward-looking members of the MHARR Board of Directors, in anticipation of the changed national political dynamics brought about by the November 2010 elections, initiated a bold, multi-front approach to Congress designed to address these overriding issues, hold regulators accountable for full and proper compliance with the 2000 law and, most importantly, begin a process to rectify both the root cause and its various consequences. The overriding goal of this initiative, from its inception, has been to break the 10-year logjam on the implementation of relevant laws (most particularly the 2000 law) and advance the cause of the industry and its consumers in the nation’s capital. And now, after ten months of intensive, aggressive and sharply-focused engagement with Congress, it appears that this effort is beginning to pay tangible dividends.

For the first time in ten years, the HUD program, as a result of this congressional initiative, has come under specific scrutiny by Congress regarding its non-compliance with the 2000 law, including the impact that non-compliance has had on the industry’s smaller businesses. In the process, Congress has realized the need for comprehensive intervention and engagement on these matters, as was demonstrated at a July 20, 2011 mark-up session of the House Financial Services Committee (the authorizing committee for the HUD program) when leaders from both parties called for congressional action to address the “unfair disadvantage” faced by the industry and manufactured homebuyers. It is this ongoing “unfair disadvantage” — which the 2000 law was designed to correct — that lies at the root of nearly all the problems that have fueled the industry’s decline and needs to be corrected by Congress.

Moreover, as this intensive congressional activity has played out, it has been paralleled, as anticipated by MHARR, by significant personnel changes within the HUD program. Those changes have seen the departure of much of the career-level program management, as well as long-term program support attorneys within the HUD Office of General Counsel (OGC). These officials have been replaced by new leadership operating under a newly-appointed Acting Assistant Secretary for Housing-Federal Housing Commissioner. Thus, the entire program management structure that resisted the full and proper implementation of the 2000 law, originated the “interpretations” that have undermined key reform aspects of that law, and adhered to those interpretations notwithstanding clear evidence that they were wrong, is now gone.

What all of this means, effectively, is that much of the heavy lifting to break the logjam of the past decade and change the dynamics affecting the industry and its homebuyers in Washington, D.C., has already been done. Such efforts, moreover, have created a process and opportunity for the industry to unite on the issues and press forward for their resolution.

On post-production matters, the industry has done well in identifying the key issues that need to be addressed, namely private and public financing, including, most importantly, repeal or reform of the Dodd-Frank and SAFE Act provisions affecting manufactured housing which have hamstrung consumers’ ability to qualify for and obtain manufactured home purchase loans. MHARR has — and will continue to — fully support the ongoing effort to address and resolve these problems. Conversely, MHARR expects that the rest of the industry will fully support its effort to ensure the full and proper implementation of all reform aspects of the 2000 law, in order to eliminate the industry’s “unfair disadvantage” and remedy the key problems affecting both the post-production and production sectors of the industry.

In order to advance such cooperation, and given the complexity of the issues involved in Title VI reforms (i.e., 2000 law reforms), MHARR has researched all the available documents and information generated during the 12-year effort leading to the passage of the 2000 law, and has condensed that information into a series of straightforward, easy-to-read one-page Fact Sheets that explain the key 2000 law reforms in a concise manner, as well as the importance of the full and proper implementation of each such reform. The entire set of these Fact Sheets will be officially published and released after congressional lawmakers return from their Summer recess in early September.

In MHARR’s view, the industry can and should present a united position on all of these key reform issues in order to eliminate the industry’s “unfair disadvantage” and restore its prosperity and growth.

Written and submitted by Danny Ghorbani

 

MHARR logoMHARR is a Washington D.C.-based national trade association representin Danny Ghorbani

the views and interests of producers of federally-regulated manufactured housing.


Reading The National Association

August 12th, 2011 2 comments

The Journal

I get “The Journal” monthly, the Jim Visser published magazine that appears to be the sole remaining print manufactured housing periodical. Others, including the much beloved Manufactured Housing Merchandiser, dropped by the wayside in the recent past, as advertising support fell off. Take HUD Code home shipments from 372,800 in 1998, and let them free-fall to some 50,000 in 2010, and that 86% drop annihilated much of an entire industry. We see the results about as everywhere.

I read The Journal regularly, reading some articles carefully and skimming others of less interest to me, but I look at all of them. Note that all of the writers therein are either executives at MH trade associations, or consultants. The tradeoff for the publication is a plentiful supply of written material for free, which they sandwich around their advertising. The writers, mostly consultants, get no pay but are happy to write the pieces to highlight their acumen in their area of expertise, sometimes leading to paid consulting assignments.

We also get some “infomercials” from paid advertisers. They buy an ad and the periodical allows them to write a “puff piece,” often nothing more than a glorified press release. No worries mate, The Journal is not the Wall Street Journal and no one expects it to be.

All the materials therein provide information, which is what advertising is meant to do. The reason Jack uses Enzyte after playing golf is that it makes him a “bigger” man. Informative, right?

Read the articles written by a number of the regular contributors in The Journal or an online ezine like MSMSM.com, and you begin to have a feel for the person or organization producing these pieces.

Trade Associations

As an example, both the manufactured housing trade associations, Manufactured Housing Institute (MHI) and Manufactured Housing Association for Regulatory Reform (MHARR) use the pages of The Journal and MHMSM.com to report their goals and positions on industry matters they deem important. It is also very obviously a recruitment tool for them.

And what can we glean from the decade plus of pieces there by the two national associations in The Journal?

The first thing we deduce is that MHI, through its last three leaders, strikes a measured approach to Washington matters. Being a collection of both home production and the dreaded “post production” segments, they come across as informed, conciliatory, and doing what they can to further the industry’s goals, as envisioned by a few large and powerful members, especially those who are heavy dues payers.

The MHI employee count has plunged in the last 10 years almost as much as industry home shipments, yet I do not notice that much fall-off in their accomplishments. This either says a great deal about the efficiency of the present crew there or the common occurrence in organizations to grow employees more than accomplishments.

On the other hand, MHARR has been, with a brief hiatus in the last few years, almost exclusively the venue for the HUD Code home producers. At MHARR “post production” seems like two dirty words. The HUD Code, the feared federal regulatory scheme of the late 1970’s, brought cries of “it will destroy the industry” before it’s taking effect. Since then, like the “Stockholm Syndrome” it has taken full control of MHARR, and their strong expressions in the pages of The Journal and everywhere else they’ll be heard.

One can only view it as a hate-love relationship with the HUD Code as interpreted, declared and attacked by MHARR’s fearless battering ram, Danny Ghorbani. Say what you will about Danny, he is knowledgeable about the HUD Code as no one else, and relentless in his pursuit of seeing it applied as he sees its meaning.

Danny’s problem, of course, is that not everyone sees it his way. I haven’t noticed MHI being quite so animated in its pursuit of “the Code.” Oh, I’m still waiting for Danny to complete the Manufactured Housing Improvement Act of 2000 (MHIA 2000) Subpart I mandates, his 10-year quest I think as yet uncompleted.

Different Heads

Anyone who has read the pieces by the national association heads here at MHMSM.com and elsewhere will have the feeling that MHI and MHARR are very different organizations. If I’m asked which is more effective I can only comment that neither has been able to stop the regulatory onslaught nor marshaled a unified approach to correcting the deficiencies of the Manufactured Buggy Whip industry. Their efforts have all been in Washington, where they all live and work. Other than the “Duty to Serve” inserted into the GSE mandates, I’ve seen little or nothing which would sell one more home, which should be the aim of the national associations, not the ease of home production.

Blocked weather radios?

Well Hells Bells, Boy, that saved $40.00 per home! Look how that saved $40.00 spurred the sale of homes!

The industry has a whole news media constantly telling the public of the danger of turbulent weather towards manufactured housing. So the battle against weather radios comes off in the media as lack of care for consumer safety by the MH industry. Instead, the weather radio, perhaps not the best weather Paul Revere, could have been taken by the industry and used to show how much MH cares about consumer safety in a lemons to lemonade move. The industry might also have supported proper installation and anchoring of homes. Those moves were fought everywhere, including Florida, where anchors were slammed down our craw. Who was the first to take credit for the very fine job anchored MH demonstrated after the numerous hurricanes in Florida? You tell me!

Waiting to See

But here’s the article I’m awaiting to see in MHMSM.com and in The Journal, by both organizations: Here is a list of the items we have accomplished in Washington, and elsewhere WHICH HAVE LED TO THE SALE OF x MORE HOMES AND MADE THEM A BETTER VALUE FOR OUR CONSUMERS. Wanna see that one? I sure do.

Perhaps it’s unfair to pick on the two national associations. They are both staffed with good people doing what they think is right for the industry. Maybe our expectations for their results are too high.

Could it be these national associations exist only to create and support networking opportunities between industry players and to inform of matters deemed to be important or interesting as it affects the industry? Long ago I came to that conclusion.

The starkest example of the inability of the national associations to really matter beyond information and networking occurred during the period of 2001-2010, especially in 2004-2008, as frequent attempts were made to “restructure” the so-apparent industry defects which were destroying industry sales.

For a variety of reasons, none of the grandiose measures proposed, vetted and formulated in writing came to fruition, as we saw our associations have no ability to restructure an industry. Only the marketplace has that ability, and it proceeds to do so apace. Note that shipments through June of 2011 were down almost 12.3% from last year. Let’s face it, we blew what little wad we had in Elkhart in June of 2010 when FHFA, the GSE’s regulator, told the industry plainly: Our Duty to Serve (DTS) the MH industry doesn’t extend to chattel lending, as the GSE’s already have enough problems without getting into new and potentially troublesome areas, where they have very limited expertise. So much for Duty to Serve and all the homes it would sell through new chattel financing from the GSE’s.

Minor Success

The associations did help get FHA Title I (Chattel Loan) reformed last year, after the program was long time moribund. First year loan volume in 2010 was hardly encouraging, but OK, put that on the list as an accomplishment, limited as it is.

The horse has left the stable on SAFE, Dodd-Frank, other regulations and Super Consumer Agency. Both national associations are actively trying to reform major portions of the laws to exempt MH retailers and others from the force of the laws and their regulations. I suppose a strong selling point by the industry can be the straightforward reputation MH has for integrity in the sale and financing of homes. (Ah, they may have to back off from that one.) I think instead they are going to use affordability of our homes and limiting consumer choices as reasons to exempt manufactured housing from the new regulations. That event, should it transpire, should turbo-boost new home shipments! Right?

Wait a minute. Those laws, bureaus and regs haven’t been in effect all during the explosive industry dismantlement since 1999, so even if the above laws do not take effect against MH they will only reduce the slide, and do nothing to increase shipments. Whoops!

Communiqués Aplenty

Every month we read the numerous communiqués from both national associations. MHI seems the more measured with a range of information and an attempt to influence law makers and regulators with an effort to strike a balance between persuasion and facts. They do not seem to get much done, but then again, why should we expect the MH industry, a true 90 pound weakling, to get things done on SAFE, Dodd-Frank, and Super Consumer Agency when real powerhouses like the Mortgage Bankers and Realtors have had so little success. How, indeed?

Read one of the missives from MHARR and at first blush these beautifully structured sentences and paragraphs speak of power, passion, and a non-compromising attitude. I suppose the reality would be more palatable if not for the fact that this association is a loud-mouthed 90 pound weakling, but a weakling nonetheless. Their endless wrangling with HUD and others almost seems like that cartoon where Bugs and Elmer Fudd go to work every day, punch the time clock, spend 8 hours abusing each other, then punch out at day’s end and go home for a burger and a cold beer. It’s all a game.

And I don’t really blame the staff at MHARR, as they are employees who are guided by the officers and members of the association. It is they who foster this pugnacious attitude. If they have turned MHARR into a “wind them up and let ‘em pummel” HUD or whoever, it is because many in MH have this deviant thought that the “affordability” of the homes the industry produces allows them special prerogatives at the political table. What they do not apparently understand is that affordability of our homes is in the eye of the beholder, and in any event, loan defaults trump home affordability. The industry and their national associations make too much of “affordability” and the results show.

This would all be amusing, of course, if in the course of being a lobbyist, which MHARR is, it actually got things accomplished. Instead, we see a lobbying effort whose response from those they lobby is to roll their eyes about MHARR and call in sick when they are expected to visit.

MHI is conciliatory but gets little done and MHARR is pugnacious and gets little done. Maybe our expectations are too high for what each can and does accomplish. And certainly as shipments have plunged, so has the industry’s importance, PAC money and influence. Hang on to that affordability, it’s all we’ve got!

The Roles

Currently, as the MH industry press explores the roles of the two national associations and whether another is needed, or whether there is any hope the existing two could and should merge, I’m bemused by all the attention to this concern. (Merger you say? Sure! Fool me once, shame on you, etc.) The role of each seems clear to me. MHI is the broad purveyor of consensus and civility, calling on uncaring bureaucrats who do little for them, but meet with them. MHARR is the pit bull, knocking on D.C. doors wherein frightened bureaucrats lie prostrate, with the door well locked. Don’t come in! One tries persuasion, the other intimidation. Both can work in the right hands and proper hands, but the limitations of each, as it applies to the industry, is clearer than ever.

At the heart of the matter is that mortgage defaults and loan losses trump home affordability and consumer choice. No matter the strategy employed by the two national associations, talking home affordability has its limits. In fact I daresay it is not affordability which drove bloated 1990’s MH shipments and sales. No, it was transaction ease, that is, it was easy during the Greenseco era to buy and finance a manufactured home. Home affordability to a degree remains, but transaction ease left, with the results we now see. I’m not sure how the national associations can react to that, for in order to re-establish transaction ease, someone has to take on some massive chattel loan losses. Any volunteers? Danny? Thayer? Anyone? # #

Post by

MARTIN V. (MARTY) LAVIN
attorney, consultant, expert witness
practice only in factory built housing
350 Main Street Suite 100
Burlington, Vermont 05401-3413
802-660-8888
802-238-7777 cell
web site: www.martylavin.com

email mhlmvl@aol.com / marty@martylavin.com

 

 

 

 

Avoiding the Perception and Reality of Discrimination

August 3rd, 2011 1 comment

In a disappointing scenario being played out in disaster-stricken communities across the nation, Federal Emergency Management Agency (FEMA) policies are resulting in de facto discrimination against HUD Code manufactured housing as both temporary emergency and permanent replacement housing.  At the same time that these policies are unnecessarily complicating badly-needed relief for disaster victims, FEMA, on June 7, 2011, hosted a day-long meeting in Washington, D.C. to explore, discuss and otherwise consider the details of a possible “small footprint” temporary HUD Code emergency home design.  Given these two seemingly opposite directions, a good many HUD Code manufacturers, anxious to meet the current pressing need for post-disaster housing with the most affordable, transportable and rapidly deploy-able homes available, while facing historically low productions levels, are starting to wonder exactly what is going on.

What is “going on,” is that FEMA, facing an immediate need for both short-term emergency relief housing and permanent replacement housing in communities where the existing housing stock and infrastructure has largely been decimated, has, for now, seemingly retreated from the use of new federally-regulated HUD Code housing as a primary source of emergency housing.  Instead, displaced disaster victims have been put-up in rental housing as much as an hour away from their former homes, or in non-HUD Code modular units.  Media reports, for example, indicate that FEMA is currently constructing up to 324 three-bedroom modular homes in Kansas City, Missouri, that will be sited on city-owned land in the north part of town, for some 624 Joplin families and individuals in need of housing.

In part, this appears to be a reflection of specific policy choices by FEMA.  In a May 31, 2011 Associated Press article regarding Joplin, Missouri relief housing, a FEMA spokesperson stated, “despite the distance, putting people in permanent housing is preferable to trailers….”  Another FEMA spokesman commented  that “the agency will consider bringing trailers to Joplin if enough existing housing isn’t available.”  Consequently, FEMA policy seems to be that today’s HUD Code manufactured homes, despite serving as “permanent housing” for millions of Americans and being regulated under federal law as residential dwellings and not “trailers,” are somewhere down its list of options to house disaster victims.

In other places, like Cordova, Alabama, FEMA has failed to overrule — or even object to — local officials who have barred the placement and use of HUD Code manufactured homes as emergency relief housing based on local ordinances, even though such emergency housing is provided with federal tax dollars by a federal government that, under the Manufactured Housing Improvement Act of 2000, is supposed to “facilitate the availability of affordable manufactured homes.”  According to news reports, FEMA’s official comment on this HUD Code  housing ban affecting large numbers of displaced disaster victims, was that “it’s a local issue….”  Whether this is an outgrowth of a “second choice” policy for HUD Code housing or simply unwarranted deference to biased local officials, the result is the same — discrimination against HUD Code manufactured housing that hurts both disaster victims and the industry.

In the meantime, against this backdrop, FEMA, at its June 7, 2011 gathering, devoted an entire business day to a discussion — with industry members — of hypothetical “small footprint” one-bedroom HUD Code units that FEMA might be interested in purchasing under a “possible” future contract.  This, in turn, has led to the creation of  task forces, committees, discussion groups and the like, and meetings of those groups, to explore the particulars of such units, while, at the same time, it was apparent from the various FEMA presentations, that there is considerable confusion and disagreement, within FEMA, regarding the most basic aspects of such a unit, including: its size and configuration; its compliance with federal accessibility criteria; possible mandatory compliance with the International Residential Code; the installation and storage of such units; and the possible use of such “small footprint” homes as permanent housing.  And all this is if FEMA goes forward with such an initiative at all — with FEMA officials cautioning that nothing has yet been decided.

The bottom line for now, is that while there is the appearance of discrimination against new HUD Code manufactured housing in the field for both relief and permanent replacement housing, the industry has been left to chew over the details of a possible new opportunity that may be, could be, or might not ever be.  So, what to do?

Let there be no mistake, the industry can and should continue to work with FEMA.  The HUD Code industry has traditionally taken the lead in providing — on a quick, timely and flexible basis — safe, decent and readily deployable relief and replacement housing for disaster victims.  The industry should continue to pursue this role vigorously with FEMA at the policy level, which is why MHARR participated in the June 7, 2011 FEMA meeting and the Association has already started to follow-up on ways that the HUD Code industry can provide even more assistance to FEMA and other government agencies responsible for post-disaster relief.  The HUD Code industry already has the knowledge, know-how and experience to  provide whatever FEMA and disaster victims need.  But it must also address current FEMA policies.  Very simply, FEMA must be urged to change policies that have resulted, effectively, in discrimination against HUD Code manufactured housing and to re-commit to the use of HUD Code housing — of all types — as an equal participant in its federally-funded programs for both short-term emergency housing and permanent relief housing.

In MHARR’s view, the HUD Code industry has long been at the forefront of helping government provide both temporary relief and permanent replacement housing for victims of natural disasters, and with appropriate policies in dealing with FEMA, there is no reason why it should not continue in — and even expand — that role. # #

Danny D. Ghorbani is President of the Manufactured Housing Association for Regulatory Reform.  MHARR is a Washington, DC-based national trade association representing the views and interests of producers of federally regulated manufactured housing.  Danny can be reached at 202-783-4087.