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Posts Tagged ‘mhc’

What More Can We Accomplish After This Year’s Manufactured Housing Institute (MHI) Congress and Expo?

May 13th, 2014 No comments

Like many others, I attended the 2014 National Congress & Expo two weeks ago in Las Vegas. I also chose to attend the National Communities Council Spring Forum held all day Tuesday prior to the opening reception. There were some exceptional programs! The attendance was very high according to reports from MHI. While there was an eye brow-raiser (or two…) on the agenda, off-agenda items that were pretty interesting and overall the Spring NCC Forum and MHI's Congress and Expo featured seminars with speakers focused on current industry topics and issues. Numerous vendors on hand shared their services, displayed their products and provided opportunities for deal making.

What should not come as a surprise was the number of new individuals who attended the Congress.

Many professionals from all facets of the housing, finance and investment sectors were on hand to listen and learn about the manufactured housing industry. This is another great indication on the positive future for the industry.

Today, there is something in the neighborhood of Two (2) Billion Dollars chasing the manufactured housing industry! That's Billion with a capital B!

Those dollars may or may not be invested in our sector; only time will tell. What we need to realize is that there is capital willing to invest and grow in manufactured housing. With new capital much can change, improve and set the stage for a brighter future of the industry.

Yet, even with the large amount of new capital looking to invest in the industry, manufactured housing will still be a very small piece of the roughly One (1) Trillion Dollar annual U.S. housing market.

The questions I continue to ponder are;

  • what can we do to grow the manufactured housing industry’s share of the overall housing industry?

  • How do we get to the root of the obstacles that continue to impede the MH Industry’s growth?

Flying home after Congress and Expo, those nagging questions bugged me. Below is a thought that came to mind that may provide a profitable starting point.

Why not host an – August 2014? – organizational networking/deal making opportunity event that is Trans-Associational?

Why not consider a location near a fine newer MHC property that breaks the stereotypes – such as Saddlebrook Farms in Grayslake, IL – where the potential for new development could better be understood by those who only know the 1 or 2 star MH properties? Would love to hear suggestions on other possible sites that fill the bill.

That property would also feature great looking, residential style product that is ground set, so this would shatter the 'mobile home' image for potential investors who only know the entry level product.

As you can see, I am not suggesting replacing any current event, such as the upcoming MHI annual meeting, NCC Fall Leadership Forum or other association or industry functions.

Rather I am suggesting something totally fresh and different.

Let’s bring the stakeholders and potential investors to the table at the same time with professional facilitation and the opportunity to participate.

The focus of the meeting would be how to get those multi-billions moving ahead, as well as advance the MH Industry as a larger and viable part of the overall housing market.

What makes this concept different than other current programs is that interested parties are invited regardless of current relationship issues or biases. Bringing goal and solution oriented individuals from differing backgrounds, all committed to growing the manufactured housing industry could be groundbreaking.

Please do not misunderstand; while I'd like to be involved, I am not volunteering to take the lead in this event due to my current business obligations. I am putting the idea out in this public forum for discussion.

The way this gets done is for

  • commercial real estate brokers and appraisers,
  • commercial RE lenders and brokers,
  • MH finance companies (personal property and Mortgage lenders),
  • Any – or all – HUD Code manufactured housing and modular builders,
  • developers
  • Suppliers and other service vendors

to pay for the costs of the meeting, mixers and main meals.

Pick a place that is nice clean convention location, and keep the entry fee really low.

Let's put an asterisks next to this one. What if we make it easy for the hundreds (or thousands?) of owners of MHCs who are looking to exit due to age, health or other reasons to come at a pre-event day to discuss their properties face to face with those who may want to buy them?

Might this be a good way to facilitate the capture of more of that circling capital which would also facilitate the improvement of languishing communities and the sales of more homes in them?

There also ought to be an ability for the event organizers to bar this or that person or group at will, so that the Ishbel Dickens/NMHOA or Industry naysayers don't get in. That keeps this focused on business and solutions.

Just think about the number of organizations who would want to take part in an event of this nature. Here are a few who I believe would join the effort.

rick-rand-industry-voices-mhpronews-com

There probably are others who should be included on this list. These are the organizations that came to my mind while thinking about who the stakeholders are in the future of the MH Industry.

One more critical point. Let's tackle the creation of a vibrant, efficient resale market for manufactured homes. This is absolutely critical for the future of our industry, the benefit of our residents and lenders as well as our homes' broader acceptance.

By being trans-associational, this could also prove to be fertile ground for meeting with and recruiting new members.

As to a target date, based on the interest being shown about the industry, sometime in the near term would be better than delaying. By doing it in the summer, a successful meeting could position the 2015 trade shows for dovetailing with this concept.

The location must be close to a major airport so that there is easy access to the event. As noted, having some newer and older MH communities nearby would be beneficial so that participants can take a charter actually view the new homes and better understand the true breadth of the MH product and variety of community lifestyles.

I believe that an event like this will assist in not only promoting the Manufactured Housing Industry but also could be a catalyst for additional new capital investment and future financing opportunities.

We must not lose sight of a key goal of the meeting; how to advance the MH Industry as a larger and viable part of the overall housing market.

Please feel free to comment below or email me with your thoughts. The future of the MH Industry is ours to create. ##

rRck RandRick Rand is the president of Great Value Homes, and has been involved in small and large scale MHC operations. You can contact him at:
Richard J. Rand, President, Great Value Homes, Inc.. 9458 N. Fairway Drive, Milwaukee, WI 53217-1321,

414-352-3855
414-352-3631(fax)
414-870-9000(cell),
RickRand@gvhinc.net

Why Retailers and Community Operators should go to Tunica!

March 19th, 2014 No comments

As I read the digital 2014 Tunica Show brochure and business building and profit protecting seminar line up, it became crystal clear why Retailers and Community Owner/Operators ought to be in Tunica next Wednesday morning through Friday at noon (March 26-28)!

Retailers and Communities can get free:

  • Networking with your peers,
  • Compare Manufacturers side by side, over 80 homes will be on display!
  • Compare products and services needed by your business side by side,
  • Get the latest on Manufactured Home Lending available TODAY, from all the major lenders all under one roof.
  • Get expert guidance on Commercial Lending on MH Communities,
  • Get marketing and sales tips in the Dominate Your Local Market 2.0 Seminar, featuring manufactured housing marketing and sales veteran, L. A. “Tony” Kovach.
  • Compare CRM products in a free panel discussion with Scott Stroud and myself, and learn why they are a key to growing your sales in 2014 and beyond.
  • Get success tips on MH Communities (MHCs) from pros with successful firms who know!

Let me give you a quick snapshot of the last bullet point above, which will provide the reasons you need to grab your business cards, and have your photo ID so you can enter the Tunica Show, free!

In the last decade, as the numbers of retailers and shipments declined, manufactured home communities (MHC) have of necessity become on-site-home leasing and selling operations.

Communities have always had to do the types of services and duties that developers and multi-family operations have provided in the conventional housing world.

Tunica has become a magnet in recent years, attracting more communities as well as more retailers than in prior years.

Here is the line up of on the panel for MHC Lessons Learned, to be held Thursday, 10:00 AM – 10:55 AM on March 27th.

Success Tips from Manufactured Home Community Owners & Executives!

For anyone in or thinking about getting into the land-lease community business, this panel discussion is for you! Hear practical tips from community operators that can help you operate your community more professionally and profitably.

jenny-hodge-national-coummunities-council-ncc-industry-voices-manufactured-housing-pro-news

Jenny Hodge, Vice President of the National Communities Council (NCC), will be your panel moderator.

You can learn more about Jenny in this month's MHProNews exclusive interview A Cup of Coffee with…Jenny Hodge.

tammy-fonk-8-2013-cbre-posted-mhpronews-industryvoices

Among those on the three person MHC panel is Tammy Fonk, an Associate with the CBRE MH/RV National Group. Tammy was born and raised in the MH industry with two family owned communities. She operated the family owned company's sales and marketing business as well as having an active role in day to day community operations and resident relations. As a member of the MHRV Team, Tammy now works closely with public and private investors on building business relations and opportunities to enhance the Manufactured Housing Industry as well as the RV Resort and Marina properties in North America. Tammy works with owners and buyers of small, medium and larger communities in addition to representing large portfolio owners.

maria-horton-newport-pacific-capital-posted-industry-voices-manufactured-housing-pro-news-com

Maria Horton is a regional manager with West Coast powerhouse, Newport Pacific. Maria's bio is linked here, but having met her, let me tell you what her resume doesn't say. This is a warm, delightful engaging professional! You will love to hear here insights and experiences on this panel discussion.

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

Rick Rand (l), Sam Zell (c), Jim Clayton (r)

Last and not least, is Rick Rand, who made quite a stir recently with this guest column. Rick was the subject of another MHProNews.com interview, A Cup of Coffee with…Rick Rand.

If online registration for the Tunica Show is closed by the time you read this, don't worry! You can bring your business card and a photo ID, retailers, communities, builder-developers, realtors and installers will be able to sign up at the door, free with those credentials!

Let me close with a tip of the hat to L. A. Tony Kovach. Dennis Hill recently gave Tony quite the well deserved public shout-out, for his key role in the come back of the Louisville Manufactured Housing Show.

Community Operations executive Ted Gross, with Continental Communities praised his session as being the best marketing presentation he had seen since coming into the MHC business.

We've worked with Tony about 90 days now, and let me tell you from first hand experience his deep passion for the MH Industry.

Tony cares about the success of people, operations and loves to see happy consumers enjoying our product.

I don't personally know of anyone who gives more time away for the benefit of the industry.

Tony's consulting and banner ads have helped our company's growth and presence in MH significantly! On MHProNews, he brings out the articles, experts and tackles the topics others shy away from, and is a friendly, peace loving professional and family man.

When you think about it, Tony's efforts to inspire our industry to do more and grow at shows like Louisville and Tunica are part of the rising tide of sales in our industry. You may or may not know it yet, but he makes you money just by being here and spreading the good word about our industry on sites like ManufacturedHomeLivingNews.com and here on MHProNews.com.

These are among the reasons why I'll be voting for him as MHI Supplier of the Year, and I hope others that read this will consider doing the same.

We will be at booth 13H in Harrah's Convention Hall. Change your plans! Make your travel arrangements! Fly, drive or hitch a ride, but we hope to see you in Tunica for the 2014 Tunica Manufactured Housing Show! ##

brad-nelms-coo-manufactured-homes-com-posted-mhpronews-comBrad Nelms
COO
ManufacturedHomes.com

Subsidized Housing vs. MHCs from an MHC Owner’s Perspective

February 7th, 2014 No comments

I could believe that a lot of community owners are unaware of the subsidized housing threat. Unless you live in a city large enough to be targeted by developers and unless you are living in a state with a very active Finance Authority, you may not see what is coming down the pike.

However, if Des Moines Iowa is any example, "affordable/subsidized" housing, is coming on "Big Time" and killing both HUD manufactured housing sales and rentals.

It is likely that this will expand out into the smaller and smaller communities over time. Most "affordable/subsidized housing" is new, upscale, geothermal, and well below market. If it is not new, they are able to get millions in government grants to renovate—I don't believe community owners have access to federal or state "renovation grants.”

I can hardly turn on the TV without a least a weekly pronouncement by some politician or city councilman that, "We need more affordable housing!" Of course, what they are really saying is, "We need more subsidized housing.”

But as might be surmised, if they told the truth, the reception of that statement would be very different.

"Affordable/subsidized" housing is NOT affordable to the majority, who pay for it. In part, I fault MHI for some of our impending "affordable/subsidized" housing problems. Why, without so much as a whimper have they allowed subsidized housing to steal our "affordable housing" label? To call subsidized housing "affordable" is perverse and Orwellian, yet MHI says NOTHING. ##

Margaret-Clark-Co-owner-Grandlakeview-Retirement-MHCs.jpgMargaret Clark
co-owner of Grand Lake View Retirement MHC
grandlakeview.com
grandlakeview@gmail.com

(Editor's Note: This column was submitted in response to the following Masthead blog post, Your Thoughts on “I Am Affordable Housing.” We welcome other perspectives on this topic or others of industry interest. Editorially speaking, we are unable to accurately comment at this time on what efforts MHI or the NCC may have in motion on this subject.)

Our experience with Resident Owned Communities – no BS

January 15th, 2014 No comments

The “No BS about Resident Owned Communities” article that appears on this site brings to mind President George W. Bush’s comment while visiting Canada in 2004:

I would like to thank all you Canadians for your warm welcome at the airport. Especially those of you who waved (pause) with all five fingers.”

I get it. We have a successful business model that is reshaping resident ownership and that invites reactions from competitors.

I stand by our record of performance to prove we have a lot of five-finger waves and cheers in the marketplace for ROC USA® as we’ve closed:

  • 13 resident-owned community (ROC) purchases in 2013;
  • 12 in 2012; and,
  • 11 in 2011.

In fact, we have closed a ROC transaction every 37 days on average since we launched in 2008.

We got there by being 100-percent focused on making resident ownership effective and efficient and successful. The marketplace is the true judge.

One of the keys to our success is that we don’t have to chase capital to finance resident purchases. We have already raised all the financing the resident corporation needs — including funds for deposits and due diligence — in a U.S. Department of Treasury-certified Community Development Financial Institution.

We have current liquidity to finance $40 million of resident purchases today. No one else in resident ownership services has raised capital in advance the way we have. We did it so we could create a different transaction experience for buyers and sellers.

We’re not simply brokers who get paid at closing and walk away — we equip homeowners with the tools and training they need to successfully manage their communities. The fact is that we care about each community’s long-term performance and we know every democratic association needs leadership development and cost-effective shared services to be competitive. ROC USA has a national leadership institute for ROC leaders, a national marketing program for ROCs, and an online and in-person training system to help ROCs and ROC leaders succeed.

At ROC USA, we use the limited equity co-op for simple reasons: It is the most effective and efficient, the fairest and the most affordable model for homeowners. We stand by our work of the last 30 years with more than 140 ROCs that we took from tenants to owners.

Not one of those communities has failed.

That 30-year track record demonstrates the competency and capacity of ROC members and leaders with whom we work.

Every one of these ROCs is real ownership where each homeowner can purchase one low-cost membership interest in the corporation that owns and controls the MHC. There are no outside parties with an ownership interest in the co-op or the MHC, only the homeowners can be member owners.

ROC USA is a nonprofit and thus must serve low- and moderate-income communities, but that doesn’t limit us to small communities. Our largest completed transaction was a two-MHC portfolio transaction worth $23 million for nearly 500 home-sites in 2012. Further, and not surprisingly, every MHC we’ve worked in has sufficient numbers of low- and moderate-income — that’s not an issue.

We don’t apologize for being well-funded or widely publicized. Getting things done attracts interest and attention. Every closed transaction gets a press release and we send postcards to announce purchases. Often we’ll quote the community owner or the broker. Here are two recent ones:

The business model that ROC USA has developed is superb. It was a different transaction in that you usually have to jump through a litany of different hoops in regard to banks and bank regulations. But that simply wasn’t the case here. I would certainly do it again, and I will.”

Joel Erlitz, Broker,
First Commercial Property Corp.

 

“It’s no different than a sale to any third-party.”

Phil Johnson,
Seller in Minnesota

ROC USA does not practice public policy. In fact, we eliminated the part-time policy position at ROC USA in 201l.

We’re out earning our way in the marketplace — just like you.

That’s how we ROC ‘n’ roll. ##

paul-bradley-rocusa-president-posted-industry-voices-manufactured-housing-pro-news-com-.jpgPaul Bradley, President
ROC USA, LLC
pbradley@rocusa.org / 603-856-0709

(Editor's Note: this article comes as a response by the Paul Bradley to the Featured Article entitled No BS about Resident Owned Communities.

Other perspectives on this topic or any that impact manufactured housing are welcome. Please put OpEd, Letter to the Editor or Industry Voices in your subject line and send proposed article to – latonyk@gmail.com and/or iReportMHNewsTips@MHMSM.com – thank you.

As an additional reminder, we welcome tips on topics and local/regional/national/international news that impacts factory built housing. Readers like you can be and are a part of the story here! )

Rent Control in MHCs

September 4th, 2013 1 comment

Tony,

The phone rang one morning and a young man returned my call to him, we'd been playing phone tag. I had left a message with his wife in Oregon earlier, and he was calling about two Vermont MH communities I have listed for sale. From the voice of each, I guessed they were both far younger than I.

Speaking with him, as I answered his questions, it was obvious this was not his first call on LLCs for sale. In a knowledgeable way he wound thru the obvious questions, finally asking whether Vermont LLCs are rent controlled. Yes, I explained, they are. I went on to explain Vermont allows CPI, about 3% annually presently, without concern, and a big one, allows provable capital improvements in addition, annually. I told him that as a former VT LLC owner I had found the scheme fully workable, as do many of my contemporaries.

The next day I got an email message saying he and his partner/wife had decided not to invest in any locale where rent control is in force. OK, I get it, but that removes quite a swath of locales, many which are hot purchase markets. This philosophy allows investment in say Mississippi or Alabama, but negates purchases in Florida or much of California. Oh…

After that, my mind wondered over my experiences of the dangers of rent control and lack of it. Yes, I said the danger of the lack of it. I actually was pretty young once, had hundreds of apartments and almost 2000 MH/RV sites. With the exception of a Florida LLC, I was in no jurisdiction where rent control was in effect. And when rent control was threatened in a jurisdiction, I was the first to the battlements opposing its imposition. I was and am a capitalist, and rent control seemed an anathema to my beliefs. I'm not alone, right?

But time went by, slowly the days passed, and some of my beliefs at 40 years of age made transition to a more measured understanding as I aged and acquired experience I previously lacked. Let me be frank, I was an accomplished and notorious rent increaser, which in my twilight years brings me no acclaim by others, and more importantly, myself.

What I found was that in apartments, and we're not speaking of New York City here, the market rents in an area kinda act as rent control. You find yourself as the top dog in rent rate for your 1000 sq. ft three bedroom apartment in your area. What you are very likely to find, as I did, your apartment rents last and less, staying empty longer than it should. Recovering the lost time and money brings you back to Earth and unless your calqy is busted, your late debt payments slap Hai Karate hard. I found apartments very self correcting as to rents.

Now, on to LLCs. We all know the reasons we invest in communities; they own the dwelling unit, they can't move the house, etc. All good stuff, of course. So as I bought LLCs from original owner/developers, I found that as longtime owners they had allowed their rents to slip behind the market, keeping their management easy, with many long term residents.

Of course, the purchase price always reflected the oft unspoken premium of raising rents to market. "Hell, they can pay a lot more than that!" So I paid more than cash flow to get the community, not real unusual, right? Then the rent increases started. Often stiff and early increases happened shortly after closing.

The first few increases were swallowed, albeit with plenty of bitching by residents. We raised rents as much in two-three years as the former owner did in 10 years. Note that in some instances the increased rent still didn't pay for the capitalized investment costs. I knew that, they only knew and cared their rent had doubled in short order. No esoteric explanations of cap rates and other MH investor jargon seemed particularly persuasive to the LLC residents.

Who was it, Newton, who theorized every action has an equal and opposite reaction? I raised rents, they moved out. And I acquired a reputation in that community as a rapacious rent increaser. And these reputations are hard to escape. I wouldn't really care that much except the reputation had a very bad impact on homesite rentals. That, I did care about.

At first I did the calculation I see many others doing. Yah, I had 100 homes at $100 per month, and even though I'm quickly down to 90 homes at $111 per month, hey, I'm getting the same money with less work and expenses. And it keeps going this way as rents increase, residents fleeing like a torrent, out the MH Paradise Estates gates, which has turned into Hell Bent Acres.  And as vacancies mount, you lose control of the community, no longer able to count on the desire to live in your LLC to keep people in line. And that desire includes pricing.

Were I the only one to have followed the raise-rents protocols, then only I would have suffered the residue, but of course, such was not the case. The MH industry's then flawed model, subsidized for years by flawed lenders, finally collapsed, dropping from 373,000 shipments in 1998, then tantalizing us into believing the hurricane-inspired 135,000 shipments of the mid 2000s was the stopping point, to the grim reality of 50,000 homes in the 2010s. Yah, I hear 60,000 homes could happen any day now.

I sat in on some very contentious MHI committees in the late 2000s era trying to formulate a chattel long term lease the GSEs could swallow. In concert with this I reviewed many LLC profiles showing monthly rent and occupancy. It probably won't surprise you that the vacancy was truly scary, yet rents occurred steeply and frequently.  I had already tried that, and even with the generous retail financing by GreenTree, CIT, The Associates, Security Pacific, Chase and their ilk, it didn't work. Now we were dealing with the GSEs, who I did not find stupid, and we were trying to equate rents in LLCs to the capitalized valuation of single family conventional real estate lots. Any thought of sharply limiting rent increases to gain long term and low rate financing being the trade-off, got serious push back. Such was not to be and by then as the effort lost all bouyancy, the GSEs woke up to far bigger challenges.

As a post script I am the very first to admit that some major figures in that committee have since come far closer to the rent restraints advocated in the long term lease effort as their stated belief for industry resuscitation.  Will that be enough? I greatly doubt it, but I sure think it is an indisputable industry wide measure in the road back to something other than Warren Buffett's table scraps.

So to my young friend in Oregon, rent control, other then confiscatory NYC apartments or some California cities in MH, can be a useful LLC owner restraint, quieting some of the early animal spirits we can all exhibit before experience shackles us. Did I like going to the rent hearings in my community in Florida and taking phallus down the throat to the gag control center? Oh, I loved it.

Still, Florida LLCs are and have long been highly prized acquisitions, not greatly injured by the relatively manageable process for raising rents.  With the relatively benign rent control such as in Florida and Vermont, you and the industry are actually protected from many of the practices employed in the industry, leading to so much push back against us.

Before you believe I'm asking you to petition your jurisdiction for rent control, let me disabuse of that notion. Nothing could be further from the truth. I rail against governmental intrusion in to my affairs daily. Everyday the beast grows larger, only a financial collapse likely to abort its growth. The only point I am making is that one must practice rental increase restraint on your own. Sometimes laws can help a process.

The flip side is that lack of restraint causes lack of residents at a time LLC vacancy nationwide forebodes another step down in industry size. In places like Vermont and Florida and others, rent control, which one should practice on their own, is instilled by statute. Perhaps not the best solution, but the record says the world did not end there.

Yes, we tell a great story which seemingly has legs of truth about our affordable housing heritage. But for whatever reason, even though its great dog food, the dogs won't eat it. Perhaps a legacy of rapacious rent increases, closing parks, high default rates and high home value depreciation could be a good place to start the industry resurgence. We build great homes, but my friends, that, by itself is not enough. ##

marty-lavin-posted-on-mhpronews(MARTIN V. LAVIN
attorney, consultant & expert witness
350 Main Street Suite 100
BURLINGTON, VERMONT 05401-3413

802-660-8888 off / 802-238-7777 cell
marty@martylavin.com

(Editor's note: The hot link was added by us, not Marty, nor was the link requested in any way by Marty. We think it is good for others to realize that while Marty is 'retired,' he is still involved in this industry and clearly cares about manufactured housing deeply. That is why he sounds off on issues, because he cares enough to raise them for discussion, thought and action.

As always, letters and articles by you or your colleagues that may agree or take other perspectives are encouraged. Send them to latonyk@gmail.com with Industry Voices Guest Column in the subject line. )

Will California Park Owners Begin Heading For the Exits?

July 10th, 2013 1 comment

With the political changes in Sacramento, the tenant advocates are pressing their agenda with new vigor in 2013. Once again, they are pushing to amend the subdivision conversion statute (Government Code § 66427.5). They are advocating for changes which would allow local governments to deny conversions not supported by a majority of residents and which would give such governments authority to implement their own “conversion” regulations. There are even rumblings for statewide rent control for mobilehome parks.

Conversions under Section 66427.5 have been a favored exit strategy for park owners, resulting in related litigation all over the state. Recent decisions applying Section 66427.5 have been a "mixed bag." The decision in Sequoia Park Associates in 2009 was the “high water mark” for limiting the interference of local governments in conversions since the Ordinance was amended in 2002 to add the requirement that tenants be surveyed regarding their support. Based on that decision, many local governments and lower courts have approved conversions despite resident opposition. Subsequent reported decisions by different appellate courts have chipped away at and offered different interpretations of Section 66427.5. The 2010 decision in Colony Cove v. Carson held that local governments could "consider" the resident survey results, but the Court did not provide any guidance as to how local governments could consider or use the surveys. The Court did acknowledge, however, the lack of resident support in and of itself could not block a conversion.

The worst decision for park owners, Goldstone v. County of Santa Cruz, was decided in early 2012. Goldstone held local governments could deny subdivisions if the subdivision was not supported by a majority of residents. Although not explicit, the Court seemed to adopt the view that a "bona fide" or “non-sham” conversion is, by definition, one supported by a majority or at least a large percentage of tenants. Chino MHC v. City Of Chino, decided in late October 2012, took a decidedly more pro-park owner view, concluding that a local government was required to approve a subdivision unless there was overwhelming opposition by the tenants. The Court also made clear its view that a bona fide conversion was one in which the park owner truly intended to convert it to tenant ownership. Unfortunately, the Chino decision still encourages tenants to attempt to block subdivisions or extort favorable terms in exchange for support for the conversion.

Late last year, the California Supreme Court issued a decision directly relevant to conversions in coastal zones, Pacific Palisades Bowl v. Los Angeles. The Court in that case held that local governments did have some authority to review conversions for compliance with the Coastal Act requirements (and other state laws). The ultimate impact of this holding is not entirely clear, but it makes clear that local governments can impose conditions relating to the replacement of affordable housing in a coastal zone.

Under the existing statute which has been relatively favorable to park owners, there still has been substantial resistance to subdivisions in many local communities, in some cases, even where no rent control exists. The processing of a subdivision for Pacific Mobile Home Park in Huntington Beach is a good example.

Articles.000/4819-2353-3075v.1

Pacific initiated a subdivision in 2010 with the support of a majority of the residents in the Park. The City fought Pacific’s subdivision Application. Pacific had to file a lawsuit after the City denied the Application. The City not only aggressively defended the lawsuit, but attempted to extort a favorable result by filing a cross-complaint seeking immediate physical removal of homes owned by park tenants who the City claimed were “trespassing” on an unused City right of way for decades.

The City’s denial of the subdivision Application was reversed in July 2012, which resulted in the City approving the subdivision in November, 2012. However, on December 3, 2012, the newly elected City Council voted to rescind the approval. Pacific then obtained a court order invalidating the vote and barring reconsideration of the subdivision Application by the City. That court order still did not stop the City two weeks later from voting to confirm their illegal December 3 vote. This did not sit well with the Judge who issued the order. The Court granted Pacific’s Application to set a trial for Contempt of Court for 6 of the 7 Council Members and the City Attorney. Finally, with the threat of a criminal trial hanging over their head, the City Council abandoned its challenge of the subdivision.

If Section 66427.5 is amended, which seems likely given the current political environment, then park owners can count on more local opposition to subdivision. The sad reality is that while local politicians often talk about how important affordable housing is to them, they often really do not want to see mobilehome park uses become permanent, particularly in coastal or other “upscale” locations.

If the door to subdivisions is closed, the final path of escape for park owners trapped in confiscatory rent control is closure. The U.S. Supreme Court has made clear that governments cannot stop closures in Yee v. Escondido. Yee recognizes that the right to go out of business is one of the crucial “sticks” in the “bundle of property rights.” Of course, the crucial issues become the cost of closure and the viability of alternative uses. Government Code 65863.7 limits payments to tenants to the “reasonable cost of relocation.” The common sense interpretation of “reasonable cost of relocation” limitation means the cost of physically moving a mobilehome and the tenant’s belongings. Certain local governments have adopted requirements that exceed this limitation, but we do not have any appellate decisions directly addressing the question. If conversions are made more difficult, it is likely we will get binding authority, hopefully confirming a “common sense” interpretation of Section 65863.7. We can count on the courts for common sense, right?

mark-alpert-hk&c-law-manufactured-home-professionals-mhpronews-com-75x75-.jpgMark Alpert is a partner with Orange County law firm, Hart, King & Coldren. He focuses much of his practice on manufactured housing issues, and has a particular expertise in rent control, subdivision conversions and park closures. Mark can be reached at (714) 432-8700 or at malpert@hkclaw.com.

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

April 12th, 2013 No comments

wordnet@princeton.edu 

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

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

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

Richard JennisonSincerely,
Richard Jennison
President and CEO
Manufactured Housing Institute

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

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

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

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

Another letter to Princeton’s WordNet Team about their Flawed Definition of a “Manufactured Home“

April 11th, 2013 No comments

(Editor's Note: As with the Jody Anderson letter, linked here, this letter from a MH Community Manager is reprinted with permission, and was sent in response to this blog post.)

Princeton WordNet Team.

To whom it may concern,
Far be it from me to take issue with a definition published by such an esteemed institution as yours, I still must.

A recent industry article informed me that your definition of "Manufactured Home" is as follows:

"Mobile home: a large house trailer that can be connected to utilities and can be parked in one place and used as permanent housing."

I am sorry, but referring to modern manufactured homes as a "trailer" or "mobile home" is akin to calling a 2013 Lexus sedan a "horseless carriage" or Princeton as a "school."

It is a disservice to our proud industry who serves as housing for 8% of Americans including the poor, lower-middle class, and even millionaires (at least one in my community).  

The definition belies how far our industry has come in the areas of quality and craftsmanship and subjugates us to the level of redneck/hillbilly shacks.

Thank you for your consideration on this matter.

Respectfully Yours:

james-cook-mhc-manager-ma-posted-industry-voices-mhpronews.comJames Cook,
MHC Property Manager.
Ph (401) 402-0373
Fax (815) 572-5255

(Editor's Note: this is how Princeton's WordNet “definition” appears online in Google:

The email address for the WordNet team is: wordnet@princeton.edu 

Please take a few moments and send them a message of your own, or use a variation on the one MH Retailer Jody Anderson sent, or like the fine one above from MHC manager James Cook, both of which we deem better than the one Tony Kovach sent, linked again here.)

Other messages besides these have been sent to WordNet, but we need more from You and Your MH Circle until Princeton U 'gets the message' and changes their terribly erroneous, so-called definition of a manufactured home. So take a moment now and please send a message to wordnet@princeton.edu. CC latonyk@gmail.com in your message to Wordnet, Thank you! )

Manufactured Housing Consensus Committee 2012 Meeting Report

November 9th, 2012 No comments

The MHCC Holds First Meeting in 2012

Lois Starkey, Vice President, Regulatory AffairsThe Manufactured Housing Consensus Committee (MHCC) held its first and only meeting of 2012 on October 22nd – 25th to consider a number of recommendations for changes to the Manufactured Housing Construction and Safety Standards Program. HUD intended to have two meetings in 2012 but problems with the approval of a new contract for the Administering Organization, the National Fire Protection Association, resulted in a hastily arranged fall meeting in Arlington, VA. All but three of the 21 members were in attendance. Representatives from HUD included the Deputy Administrator of the HUD Manufactured Housing Program, the HUD engineering staff, and a representative from HUD’s office of General Council.

MHI was surprised and disappointed that higher ranking officials who oversee the program from the Department’s Office of Regulatory Affairs were not in attendance at any time during the meeting.

The Committee worked over two days to conclude work on all outstanding items before the Committee and to consider several new issues. This is despite the frustration voiced by MHCC members and MHI over HUD’s failure to implement dozens of recommendations of the MHCC over the last four years or more.

Highlights of the Committee Recommendations

Southern Yellow Pine Design Standards – By a 15-2 vote, the MHCC recommended that HUD delay implementation of the National Design Specification (NDS) for Wood for 2×2 and 2×4 southern pine lumber, effective January 1, 2013, until such time that it presents the MHCC with a proposal for changes to the existing standards as required by law, or until such time that HUD issues an emergency rule under Section 604(b)(5) of the Manufactured Housing Improvements Act of 2000. This is consistent with MHI’s petition to HUD earlier this year, and with MHI’s testimony before the committee.

Hinged Roof Assemblies – The MHCC voted 15-2 to recommend that HUD withdraw requirements for Alternative Construction Letters for certain types of hinged roofs designed for Wind Zone I until HUD clarifies current regulations regarding the on-site installation of hinged roof assemblies known as “double hinged” and “ridge box or peak cap” assemblies. The industry argued that such hinged roof assemblies do not need AC letters because they are constructed in the factory and are part of the “close–up” requirements under the installation standards, 3285,801(f). Members argued that methods for completing the installation of such homes are much less complicated than many multi-section home “close-ups.” These types of assemblies are common practice in the industry, and installers are trained and certified to complete these types of installations.

Wind Design Standards – The MHCC voted 17-0 to recommend that the reference standards of the American Society of Engineers (ASCE 7) wind design standards be updated to the 2005 version from the 1995 version, and the existing wind speed design requirements in the HUD Code be adjusted accordingly. However, the committee did not recommend any code changes regarding design requirements for wind pressure. It voted to maintain the current three wind zones as opposed to four. The new wind safety recommendations are the result of many hours of work by an industry led task force that included HUD and members of the ASCE-7 committee, who concluded that any new requirements beyond what the MHCC recommended would not be cost beneficial.

Indoor Air Quality – The MHCC concluded action on pending recommendations debated over the last four years, to improve ventilation and indoor quality in manufactured homes. In a unanimous vote, the MHCC recommended that the HUD Code provide for the voluntary use of ASHRAE 62.2, Ventilation and Acceptable Indoor Air Quality in Low-Rise Residential Buildings. In a change supported by MHI, the Committee voted to amend existing regulations to provide more flexibility in the types and size of ventilation systems that may be utilized to ensure adequate ventilation. (In a related issue, see information below on the GAO report).

Other MHCC Actions

In other actions, the Committee added new testing and certification requirements for certain types of vinyl siding; provided a new reference standard for Medium Density Fiberboard (MDF); updated and clarified language regarding construction methods; tabled a proposal regarding alternative foundation designs; rejected a site drainage proposal; rejected updated testing and certification requirements for windows and sliding doors; and referred new issues to MHCC subcommittees regarding water heaters.

Highlights of HUD (Designated Federal Officer) Report and Comments to MHCC

Status of MHCC recommendations pending at HUD

• Final Rules for the proposed 2nd set of updates to the standards, changes to roof truss testing, and changes to 3282, Subpart I, are in Departmental Clearance.

• A final rule for On-Site Completion of Construction is still being developed by HUD staff.

• HUD is still working to develop a proposed rule on a proposal developed by MHI regarding ground anchor testing. HUD is also working on changes to the regulations regarding Primary Inspection Agencies.

MHCC recommendations need a cost benefit analysis

HUD's Designated Federal Officer (DFO), Henry Czauski, reported that the MHCC/DFO must present to the committee its recommendations with an economic cost/benefit analysis. The recommendations must be in a format consistent with the Administrative Procedures Act (APA) regarding proposed rules and should include a preamble.

Manufacturers need to adhere to regulations regarding Alternative Construction

During discussion of hinged roof designs and Alternative Construction (AC) letters Mr. Czauski noted that there have been numerous instances where manufacturers are not following the regulations under 3282.14 regarding Alternative Construction. If the industry members demand a timely response it is imperative that complete information is provided and regulations regarding inspections, labeling and reporting be followed.

DOE has not communicated on energy efficiency proposals

In response to a question by a committee member, HUD reported that it has had no recent conversations with the Department of Energy regarding energy efficiency standards, although the law requires it, and a recent Congressional directive, sought by MHI, directs DOE to also consult with the MHCC.

Highlights of MHI’s Public Remarks to MHCC

MHI staff provided the following public testimony during each of the three public comment periods:

• Recommended that the MHCC consider HUD’s inappropriate action regarding enforcement of the new design standards for southern pine lumber.

• Urged the committee to review and comment, if necessary, on the recent and pending changes to the NDS standard for southern pine lumber.

• Recommended that the MHCC review HUD’s guidelines for quality assurance under the procedural and enforcement regulations and codify the guidelines.

• Expressed concern about lack of transparency and timely action by HUD and the MHCC on MHCC recommendations.

• Thanked HUD for recent actions regarding preemption and the City of Richland, Mississippi.

• Announced that MHI is working on an industry-based energy efficiency standard and hopes to bring it before the MHCC early in 2013.

GAO Report Published on Indoor Air Quality to Coincide with MHCC Meeting

Coincidently, related to MHCC’s recommendation on indoor air quality, the Government Accountability Office (GAO) issued a report entitled “Manufactured Housing Standards – Testing and Performance Evaluation Could Better Ensure Safe Indoor Air Quality” (available at www.gao.gov/products/GAO-13-52.) The report was requested by several members of Congress last year to examine indoor air quality standards for manufactured housing.

The report's key findings conclude that some provisions of the HUD Code provide a lower margin of safety against a carbon monoxide exposure incident than those for site-built homes. The report concluded that the primary reason for the differences in ventilation standards for manufactured homes and site-built homes is that the HUD Code has not been updated and has not kept pace with standards tied to ventilation and air quality for site-built homes. This is despite recommendations by the MHCC in 2009 and 2010 to update various ventilation standards and carbon monoxide requirements. The GAO report is consistent with MHI’s position that the HUD Code, to remain viable, must be updated.  

Lois Starkey, Vice President, Regulatory AffairsLois Starkey, Vice President, Regulatory Affairs, Manufactured Housing Institute (MHI)

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