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Strong HUD Code Production in April 2018

  • Written by Mark Weiss

Washington, D.C., June 4, 2018 – 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), year-over-year manufactured housing industry production grew again in April 2018. Just-released statistics indicate that HUD Code manufacturers produced 8,262 homes in April 2018, a 15.0% increase over the 7,184 HUD Code homes produced during April 2017.  Cumulative industry production for 2018 now totals 33,646 homes, a 10.0% increase over the 30,568 HUD Code homes produced over the same period in 2017.

A further analysis of the official industry statistics shows that the top ten shipment states from the beginning of the industry production rebound in August 2011 through April 2018 — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

STRONG HUD CODE PRODUCTION IN APRIL 2018

The latest information for April 2018 results in no changes to the cumulative top ten list.

Montgomery Confirmed as HUD Assistant Secretary

  • Written by Mark Weiss

MHARRThe nomination of Brian Montgomery to serve as HUD Assistant Secretary for Housing – Federal Housing Commissioner has finally been confirmed by the United States Senate, after an extended delay.

Montgomery, who was initially nominated by President Trump in September 2017, was confirmed by a vote of 74-23 on May 23, 2018, following repeated requests from all segments of the housing industry – including MHARR – for final action on his nomination.

Montgomery, who previously served in the same position in the Administration of President George W. Bush, now becomes the Trump Administration political appointee with direct oversight of – and responsibility for — the HUD manufactured housing program.

With major Trump Administration initiatives currently pending within the federal manufactured housing program – including, but not limited to, the appointment of a new program administrator, completion of the “top-to-bottom” regulatory review announced by HUD in January 2018, and indications that the Department, for the first time, will pursue a legitimate solicitation for the program monitoring contract — a continuation of the positive and effective leadership begun under HUD General Deputy Assistant Secretary Dana Wade, will be essential and will be aggressively pursued by MHARR.

MHARR will continue to keep you apprised on this important matter as further developments unfold.

Final HUD “Guidance” Letter and News Release

  • Written by Mark Weiss

MHARRFOR IMMEDIATE RELEASE
MHARR CALLS FOR REPEAL OF HUD
MANUFACTURED HOUSING “GUIDANCE” DOCUMENTS 

Washington, D.C., April 25, 2018 – The Manufactured Housing Association for Regulatory Reform (MHARR), citing recent rulings by the U.S. Department of Justice (DOJ) stating that DOJ would no longer use its authority to enforce Executive Branch agency “guidance” documents in civil court enforcement actions relating to alleged violations of federal health, safety, civil rights and environmental laws, has called on HUD to formally repeal manufactured housing regulatory “guidance” documents which should have been published for notice and comment and subjected to Manufactured Housing Consensus Committee (MHCC) review pursuant to section 604(b)(6) of the Manufactured Housing Improvement Act of 2000, but were not. MHARR, in the same April 25, 2018 communication (copy attached), also calls on HUD to repeal a 2010 “Interpretive Rule” which erroneously construes section 604(b)(6) of the 2000 reform law to require notice and comment rulemaking and MHCC consensus review onlyfor HUD regulatory actions that would otherwise constitute “rules” within the meaning of the federal Administrative Procedure Act (APA).

For decades, the HUD manufactured housing program used “guidance” and other psuedo-regulatory pronouncements to evade the rulemaking requirements of both the APA and the original Manufactured Housing Construction and Safety Standards Act of 1974.  When Congress sought to put an end to this abusive practice by including section 604(b)(6) in the Manufactured Housing Improvement Act of 2000 – which, on its face, requires prior MHCC review and rulemaking for any new or modified “policies, practices or procedures” relating to “standards, regulations, inspections, monitoring or other enforcement activities” – HUD promptly ignored Congress’ clear directive, ultimately issuing the 2010 Interpretative Rule, which effectively and unlawfully read section 604(b)(6) out of the law, by limiting its application to “rules” that already require rulemaking under the APA.

This action to negate the clear and unambiguous will of Congress (with the passive acceptance of some within the industry), effectively opened the floodgates to a train of ever-increasing abuses during the Obama Administration – and particularly under the tenure of former program Administrator Pamela Danner – which saw multiple new, costly and needlessly burdensome defactoregulatory mandates imposed by HUD via “field guidance” and so-called “Standard Operating Procedures,” which were never brought to the MHCC for prior review, or published for notice and comment. These include, but are not limited to: HUD’s massive expansion and re-direction of in-plant regulation; “frost-free” foundation “guidance,” which effectively modified an existing regulation; new and modified requirements for attached garages and other “add-ons;” baseless restrictions on multi-family manufactured housing; and memoranda relating to on-site completion, among other things.  Such actions – and many other similar pseudo-regulatory mandates — have significantly harmed both manufacturers (particularly smaller independent producers) as well as the industry’s post-production sector, by needlessly increasing regulatory compliance costs and simultaneously undermining the industry’s ability to compete with other segments of the housing market. Through these devices, and through the unchecked and unaccountable activities of its program “monitoring” contractor (set forth in a non-competitive contract which itself violates multiple aspects of federal law), HUD has developed – and enforces — an entire secondary tier of unlawful mandates under the guise of “interpretations” and “guidance.”

Recognizing the extremely damaging effects of such psuedo-regulation and reflecting the regulatory reform policies of the Trump Administration, the DOJ, in its rulings issued on November 16, 2017 and January 25, 2018, determined that it will no longer “use noncompliance with guidance documents as a basis for proving violations of applicable law” in civil lawsuits to enforce federal health and safety laws, such as the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended by the Manufactured Housing Improvement Act of 2000.  To the extent that HUD’s manufactured housing “guidance” documents conflict with this ruling and Trump Administration regulatory policy, MHARR’s April 25, 2018 communication calls for their retraction and repeal as part of HUD’s Executive Order (EO) 13771/13777 “top-to-bottom” regulatory review of the federal manufactured housing program. Similarly, insofar as the DOJ rulings show that HUD’s 2010 Interpretive Rule is fundamentally erroneous and fatally flawed, MHARR’s communication calls once again for the repeal of that rule.

In Washington, D.C., MHARR President and CEO, Mark Weiss, stated: “The Justice Department, which is charged with bringing civil actions to enforce federal health and safety laws, has now made it crystal clear that HUD may not use sub-regulatory ‘guidance’ documents that have not been considered by the MHCC and have not gone through rulemaking, in order to impose new or modified mandates on manufacturers of HUD Code homes, and new unnecessary costs on manufactured home purchasers. The tragedy is that Congress itself said exactlythe same thing nearly two decades ago when it included section 604(b)(6) in the Manufactured Housing Improvement Act of 2000. The time has come for HUD to finally obey the law as written, and its ongoing EO 13771/13777 review of all existing and pending regulations and “regulatory actions” offers the perfect opportunity for HUD to formally renounce both the fatally-flawed 2010 “Interpretive Rule” and its pile of invalid pseudo-regulatory “guidance” documents – before the Justice Department, or a federal judge, does it for them.”

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

mharr.hudinterprulewithdrawalletter.pdf

 

“Washington Post Article Underscores Clear Need for An Independent Post-Production Association”

  • Written by Mark Weiss

MHARRA recent article in the Washington Post regarding the HUD manufactured housing program and the reassignment of former program administrator, Pamela Danner, vividly highlights the glaring need for a new, independent, collective, national trade association to more effectively represent the industry’s post-production sector.  

 

While the Post article, published May 2, 2018, was surprisingly objective in describing MHARR’s successful effort to change the leadership of the HUD program following the election of President Trump (noting that the Manufactured Housing Institute, by contrast, “did not weight-in on [Pamela] Danner’s reassignment”), the story concluded with an all-to-typically-negative account of late-2017 post-production enforcement activity by HUD regulators focused on homes sited in a Massachusetts manufactured housing community. That HUD and a Washington Post reporter would focus on a post-production regulatory issue and related post-production enforcement activity, however, is not, in itself, surprising, given HUD’s evolving – and expanding -- regulatory emphasis on post-production matters and post production issues. 

 

Indeed, such growing emphasis by HUD and its defactoenforcement contractors (i.e., the Institute for Building Safety and Technology and SEBA Professional Services, L.L.C.) – and others -- on post-production issues and post-production targets, is an entirely predictable by-product of the success of the industry’s production sector in two crucial areas, and represents a majorchallenge that the broader industry must now step-up to effectively address and resolve.

 

The first area in which the success of the production sector is inevitably driving regulatory “mission creep” toward the post-production sector (in the absence of an independent, collective, national post-production association), is the modern industry’s unequalled ability to produce safe, high-quality homes that comply with all applicable federal standards, at an inherently affordable price-point.  Data compiled on behalf of HUD proves this point.  In the July 2015 edition of the “MHARR Viewpoint,” MHARR observed that according to HUD’s federal dispute resolution contractor, of the 123,174 HUD Code manufactured homes placed in 23 federally-administered dispute resolution (DR) “default” states between 2008 and 2014, only 24 homes -- or .019% -- were referred to federal dispute resolution, a process encompassing, and available to, homeowners, producers and installers.  Of those 24 referrals, only 3 – or .002%-- were found to actually qualify for dispute resolution under applicable HUD regulations.  Given those undisputed facts, MHARR pointed out that federal DR referrals “are a direct barometer of compliance with the relevant construction and installation standards, and the responsiveness of regulated parties (including manufacturers, installers and retailers) to homebuyers.” 

 

 

Second, and closely-related to the production sector’s high-level of compliance with applicable standards and correspondingly high-levels of consumer satisfaction, has been the highly-effective (as illustrated by the Washington Post article itself) national-level representation of independent HUD Code producers by MHARR, with its emphasis – and prime mission, as set forth in its founding charter – on fair and reasonable federal regulation that is fully-compliant with all applicable law. Since MHARR’s founding as a production-sector organization in 1985, therefore, HUD Code manufacturers have had a strong, independent, collective, national voice in Washington, D.C., to advocate on behalf of their interests, to hold federal regulators accountable for their actions, and to seek a regulatory climate which – as required by law – maintains a proper balance between protection and affordability. 

 As with everything else, though, success within the production realm has been paralleled by challenges in other areas which the industry has failed – and continues to fail -- to effectively address, precisely because it lacks an independent, collective, national voice to lead and advocate on those matters on behalf of the industry’s post-production sector. And, as the Washington Post article demonstrates, with just a single example, those challenges will continue to fester and expand, limiting the growth potential of the industry as a whole and the availability of inherently affordable manufactured housing for millions of lower and moderate-income American families, unless and until this underlying issue is properly addressed and resolved.

 

 Put differently, the industry’s success in the production realm has elevated HUD Code manufactured housing to a level of quality comparable to any other type of home and, simultaneously, a level of value that exceedsother types of housing, because of the significantly lower acquisition cost of manufactured homes for consumers. While undeniably positive and beneficial for both consumers and the industry, this evolution of manufactured housing, perse, as a product, has had the correspondingly negative effect of shifting much of the focus and attention of industry adversaries, detractors and regulators to what transpires afterthese outstanding homes leave the factory, with profoundly negative impacts for both the post-production sector and the industry as a whole. These adversaries, detractors and regulators -- like flowing water naturally seeking lower ground -- have figured-out how to attack and take advantage of the post-production sector as the weak link in the industry’s growth and progress. 

 

Nor are these issues -- and their negative impacts -- confined strictly to “regulation,” perse. Continuing significant problems in areas such as financing, installation/placement, zoning, and an overall plan of action to advance the industry and its products, just to name a few, are the obvious initial challenges which recent history has shown cannot be effectively addressed and resolved unless and until there is an independent, collective, national association to represent the industry’s post-production sector. Indeed, the post-production sector today is arguably at the same juncture that the industry’s production sector was in the early 1970s, facing a stubborn stigma that led to negative publicity for the industry as a whole (as exemplified by the infamous, early-1970s “60 Minutes” expose) and other similar developments, ultimately leading to the enactment of the 1974 federal manufactured housing law. 

 

Thus, an initial list of tasks to be addressed and resolved by a new independent, collective, national post-production association would necessarily include, but not be limited to:

 

  • All aspects of manufactured home consumer financing, including secondary market support for -- and securitization of -- all types of manufactured home loans in market-significant numbers by Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the Government National Mortgage Association (GNMA) and all other sources of government-supported or sponsored home loans; 
  • Effectively opposing and combatting restrictive zoning ordinances and other baseless restrictions, which have prevented the development of new manufactured housing communities and have otherwise been used to exclude manufactured homes from vast areas of the United States; 
  • Ensuring reasonable, cost-effective installation and placement criteria that promote a proper policy balance between regulation and affordability consistent with federal manufactured housing law; 
  • Promoting increased community responsibility while simultaneously empowering communities in dealing with federal, state and local governments; and 
  • Exploring and developing national advertising and other related national promotional opportunities to advance the growth and prosperity of the industry.  

And the list does not end there, as there are manyother areas in which an independent, collective, national post-production association would – and would need– to function, in order to advance the industry, promote full and vigorous competition, encourage new businesses to enter the HUD Code market, and simultaneously protect consumers.

Significantly, this is not, cannot – and mustnotbe – an “academic” debate, for the simple and self-evidentreason that unless and until such an independent, collective, national post-production representation is established (or, more accurately, re-established), the growth and expansion of the industry will continue to be needlessly stifled, notwithstanding an economic environment where the need for affordable, non-subsidized housing and homeownership – as provided by manufactured housing – has never been greater. To be sure, there are today, individuals and organizations which claim to advance the industry’s post-production sector.  But seminars, tours, books and meetings are no substitute for a strong post-production sector advocacy organization.  Instead, decisive action will ultimately be required to help move the industry toward a more prosperous future for allof its members and not just a few corporate conglomerates.

             

                        

Mark Weiss


MHARR is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

“MHARR-Issues and Perspectives” is available for re-publication in full (i.e., without alteration or substantive modification) without further permission and with proper attribution to MHARR. 

Formaldehyde Rule Implementation Date Change

  • Written by Mark Weiss

MHARRUnder a recent federal court order, the compliance date for formaldehyde emissions standards, record-keeping and labelling requirements (including requirements applicable to HUD Code manufactured homes) established by the U.S. Environmental Protection Agency (EPA) in its December 12, 2016 final Formaldehyde Standards rule — which had been extended by EPA to December 12, 2018 — have now been moved forward again to June 1, 2018.

The order, entered by the U.S. District Court for the Northern District of California in a case filed by The Sierra Club, followed a February 16, 2018 ruling by the court finding that EPA, under the Formaldehyde Standards for Composite Wood Products Act (15 U.S.C. 2697) and the Administrative Procedure Act (APA), lacked the statutory authority to extend the compliance dates set out in the original rule.  EPA and the plaintiffs, with the approval of the court, subsequently presented an agreed order to revert the relevant compliance dates back to June 1, 2018, as announced by EPA in a notice published in the April 4, 2018 Federal Register (see, copy attached).

Under the agreed order, “by June 1, 2018, and until March 22, 2019, regulated composite wood panels and finished products containing such composite wood panels that are manufactured [in the United States] or imported … must be certified as compliant with either the [Toxic Substances Control Act] Title VI or the California Air Resources Board [CARB] … Airborne Toxic Control Measures Phase II emissions standards … by a third-party certifier approved by CARB and recognized by EPA. Previously these products were required to be [TSCA] compliant by December 12, 2018.”

MHARR, in May 15, 2017 comments filed with EPA pursuant to its Trump Administration Executive Order (EO) 13771/13777 regulatory review process, called for the retraction of certain record-keeping requirements in the EPA Final Rule which discriminate against HUD Code manufactured housing producers. MHARR has also called on HUD, in EO 13771/13777 comments filed with the Department, to delete its current Formaldehyde Health Notice requirement and related standards, based on the adoption of the EPA formaldehyde standards rule.  The Department is currently conducting that review.

MHARR will continue to closely monitor activities concerning this matter.

cc:  Other Interested HUD Code Industry Manufacturers

Washington Post Article on HUD MH Program

  • Written by Mark Weiss

MHARRThe Washington Post has published an article (see, copy attached) concerning the HUD manufactured housing program and MHARR’s efforts in 2017 to change the leadership of the program in order to comply with applicable federal law.

Although the article is self-explanatory, an important point that I stressed in speaking with the author does not stand-out in the article – i.e., that MHARR’s principal objective is to seek, compel and ensure fullHUD compliance with all applicable federal laws relating to manufactured home production and, conversely, to oppose deviations from applicable law that could harm either producers or consumers. Thus, insofar as the Manufactured Housing Improvement Act of 2000 requires the appointment of a non-career administrator for the manufactured housing program in order to ensure both visibility, responsiveness and accountability, MHARR has consistentlysought and demanded a proper appointee in accordance with that law. 

In accordance with this fundamental mandate and mission, MHARR will continue to seek the full and proper implementation of the 2000 reform law with Trump Administration officials at HUD, including but not limited to: (1) the appointment of a non-career program administrator; (2) full utilization of the Manufactured Housing Consensus Committee (MHCC) in accordance with the 2000 reform law (including proper collective representation of the industry); (3) repeal of HUD’s unlawful 2010 “Interpretive Rule” on section 604(b)(6) of the 2000 reform law, and the full implementation of that section to require prior MHCC review and full rulemaking for all changes to HUD procedures and practices regarding enforcement and/or “monitoring;” (4) the solicitation and selection of a new program monitoring contractor – in accordance with the 2000 reform law’s definition of “monitoring” – based on full and fair competition; and (5) completion and implementation of the “top-to-bottom” program regulatory reform review currently underway at HUD pursuant to Executive Orders 13771 and 13777. 

WASHINGTONPOSTHUDARTICLE

HUD Code Production Increases in February 2018

  • Written by Mark Weiss

MHARRWashington, D.C., April 3, 2018 – 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), year-over-year manufactured housing industry production increased again during February 2018. Just-released statistics indicate that HUD Code manufacturers produced 8,065 homes in February 2018, a 10.2% increase over the 7,312 HUD Code homes produced during February 2017.  Cumulative industry production for 2018 now totals 16,701 homes, a 10.3% increase over the 15,139 HUD Code homes produced over the same period in 2017.

A further analysis of the official industry statistics shows that the top ten shipment states from the beginning of the industry production rebound in August 2011 through February 2018  — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

HUD CODE PRODUCTION INCREASES IN FEBRUARY 2018

The latest information for February 2018 results in no changes to the cumulative top ten list.

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

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