Hoping for Change Doesn't Cut It

by Ross Kinzler

For more than a decade, industry shipments of HUD Code homes have declined. A shorter, but just as severe decline has occurred in modular home shipments. Many in the industry have hoped that an uptick would be just around the corner. Sorry, but it is not coming without intervention.

The story is well known about the collapse of shipments. Shipment volume of around 350,000 in 1999 has fallen to less than 50,000. Industry giants Fleetwood and Champion have declared bankruptcy. Large and small retailers have disappeared. Community owners have found the number of homes available to fill sites has shrunk. In Wisconsin, we've seen shipments fall even more. During the same period, HUD Code shipments have fallen from 3,600 to 218!

Roughly half of home shipments in Wisconsin go into manufactured home communities. How do you keep over 50,000 sites filled with an available volume of around 100 homes?

Dramatic numbers should be a clarion call for drastic action.

Some industry voices have called for a reorganization of industry representation in Washington, D.C. That would be fine if changing the structure of who speaks for whom would have an immediate effect, but it won't. What might happen, however, is more internal fighting as the new organization representing manufacturers and the new organization representing retailers and community owners fight over pieces of a shrinking pie.

Other industry voices have advocated for a new paid lobbyist in Washington to focus exclusively on finance issues. That could work if the existing organizations don't view the effort as a new competitor rather than a complementary team player.

Out here in fly-over country, maybe the air is a little clearer. It seems that the real problem is lack of financing for industry buyers. The solution is not in Madison, Columbus, Jefferson City, St. Paul, Denver, Sacramento or Phoenix. It is in Washington, D.C. AND all of those other places. The members AND the team in Washington have to unite around some basic finance concepts. They then have to meet face-to-face with our government partners to pitch workable solutions.

Some members might say that all of that work is up to the industry lobbyists. I've been a lobbyist for over 30 years and it doesn't work that way if you plan to be successful. The members have to engage in the process.

I was hopeful that during the mid-term election cycle, the industry might be able to develop solutions and communicate them to candidates. With days left before the election, time has essentially run out.

Let me propose an alternative process. In March, the industry will gather in Washington, D.C. for MHI's Winter meeting. This event includes Congressional meets and greets. This year, that's not enough! This national meeting should be the focal point for a rebirth of the industry.

I urge members from across the country to come to D.C. ready to roll up their sleeves. It is time to do the following:

1. There are numerous ideas on how to open up financing to our customer base. Some solutions are pie in the sky and others require lenders to go back to lending "stupid money." Improving financing is also a regulatory issue. Asking the federal government for exemptions from new regulations might not go very far. Set those ideas aside and instead, let's focus on what is possible.

The first idea is to advocate for a new regulatory financing framework for manufactured housing. The focus would be on targeted regulation as an alternative to the one-size-fits-all housing finance regulation to which we are now subject. The message is for meaningful industry specific regulation, not blanket exemptions.

The second idea is to develop an industry specific loan program that goes beyond a generic "duty to serve" mandate. MHI has appointed a task force to start the process of developing a plan. Let's rally around their recommendations.

2. There will be no progress without agreement on an action plan to press the solutions with our government partners in the U.S. Congress and the various agencies. We can't go to D.C. without a plan. 

Some might shutter at my use of the term "government partners," but you can't participate in a federally-regulated industry and then declare war on your regulator. We need to develop a partnership with our regulator or don't be surprised if they continue to take a hard line against us.

3. The industry has lots of really well-connected members. The U.S. Congress has more members than there are days in the year. One truth in the lobbying business is that most congressmen don't really count. Committee chairs and ranking members set the agenda and limit what is possible. We need to identify within our membership who knows who to make things happen. Then we need to get those people to commit to getting involved.

4. MHI and MHARR are well positioned in D.C. to implement a part of the plan, but at the state association level is where the well-connected people exist. We need to agree on a process to go back to state association boards to garner the support for travel and expenses needed to make the plan work, using our well-connected members.

A targeted approach with realistic solutions can move us out of this shipment funk, but it will require a hands-on approach. Yes, this means making politics work for us and politics is not a spectator sport.

Care to join me in D.C.? I'm ready to move forward and I hope you are, too. # #

Ross Kinzler is the Executive Director of the Wisconsin Housing Alliance. He has been recognized as Executive Director of the Year twice by his colleagues. He has been the executive director of Wisconsin since 1989. Contact Ross at Ross Kinzler < This e-mail address is being protected from spambots. You need JavaScript enabled to view it .