Menu

Click bottom right for full screen video.

A+ A A-

MHARR Exclusive Report & Analysis, June 25, 2018

  • Written by Mark Weiss

IN THIS REPORT: JUNE 25, 2018

EXCLUSIVE REPORT & ANALYSIS:

  • SAA/PIA MEETING REFLECTS PROGRAM CHANGES
  • NEW POST-PRODUCTION ASSOCIATION ANNOUNCED
  • MONTGOMERY CONFIRMED AS HUD ASSISTANT SECRETARY
  • MHARR CALLS FOR WITHDRAWAL OF HUD MH “GUIDANCE”
  • HUD MUST NOT REPEAT PAST MISTAKES ON CONTRACT
  • UNRESOLVED DODD-FRANK ISSUE RAISES MORE QUESTIONS
  • REACTIVATION OF ENERGY RULE MAY REQUIRE LEGAL ACTION
  • HUD LEADERSHIP CHANGES REFLECTED IN SAA/PIA MEETING

Leadership changes within the HUD manufactured housing program — spearheaded by MHARR — were clearly reflected at the most recent HUD-PIA-SAA conference held from June 19-20, 2018 in St. Louis, Missouri. In both tone and substance, the meeting represented a distinct and positive break from previous such conferences during the tenure of former manufactured housing program administrator, Pamela Danner. This change reflects positively on the leadership of both Secretary Carson and HUD Deputy Assistant Secretary Dana Wade, who have taken the first essential steps toward the implementation of long-overdue program reforms in accordance with the Manufactured Housing Improvement Act of 2000 and the regulatory reform policies of the Trump Administration.

To start, the meeting — although convened by HUD — was organized and led by participating State Administrative Agencies (SAAs), including the Missouri SAA (as the host organization), the Arizona SAA and the Oregon SAA, and included multiple presentations by SAA (and PIA) participants. The conference, accordingly, unlike almost every other such meeting in the past, focused more on: (1) the legitimate role and activities of the states within the federal-state partnership which lies at the core of the HUD program; and (2) practical, cost-effectivesolutions to substantive issues encountered in the field, and less on the overgrown, over-extended and unnecessarily costly activities of HUD’s pseudo-regulatory contractor surrogates. Indeed, HUD’s installation contractor was not even present at the meeting and the program “monitoring” contractor, while represented, played virtually no role in either the conduct or substance of the conference.

Consistent with this fundamentally different theme – and contrary to the baseless regulatory approach taken by HUD and its “monitoring” contractor for the past decade, which has thwarted the performance-based ingenuity that lies at the heart of the affordability of manufactured housing — the Oregon SAA unveiled a new in-plant monitoring/inspection plan focused on actual production outcomes (i.e., specific consumer impacts) rather than seeking, critiquing and tweaking manufacturer quality control (QC) procedures and related minutiae that are not even addressed by the Part 3280 HUD standards, but have instead been unlawfully elevated as defactoregulatory mandates by HUD and its contractors through pseudo-regulatory “guidance” memoranda, “field guidance” pronouncements and other similar devices. This new program, instead of attempting to micro-manage producers’ quality control programs (and thereby expand contractor earnings), if replicated elsewhere, would return the enforcement focus of the HUD program to where it should be – i.e., consumer outcomes related to significantPart 3280 issues, rather than subjective, vague and undefined “process” issues under the QC-based monitoring platform utilized by HUD’s entrenched “monitoring” contractor. This would not only be consistent with the original design of the program and the federal-state partnership which lies at its core, but would also be in accordance with the specific recommendations of the National Commission on Manufactured Housing, which led to the enactment of the 2000 reform law.

Similarly, this approach would also be consistent with MHARR’s separate call — in comments to HUD pursuant to Trump Administration Executive Orders 13771 and 13777 and in a separate communication to HUD based on U.S. Justice Department policy rulings — for the repeal of allsuch pseudo-regulatory “guidance” which was not subjected to notice and comment rulemaking as required both by the Manufactured Housing Improvement Act of 2000. (See, article below).

At the same time, though, the positive and fundamentally different theme of the St. Louis meeting underscores a significant “disconnect” within the program that MHARR has continually emphasized and which must be addressed and corrected by the Trump Administration (and Congress). This “disconnect” involves the radically unbalanced funding of the HUD “monitoring” contractor – with funding that has increased by 62% since 2011 despite substantially declines in industry production – as compared with HUD payments to state SAAs, which have seen their functions expand over the same time period, but have not received a base funding increase in over a decade.

Given the crucial role of the federal-state partnership that underlies the HUD program, and the accountability and responsibility that states bring to the program – as contrasted with unaccountable, revenue-driven contractors – it is essential that the role of the states, at a minimum, be maintained and strengthened. While HUD has already proposed changes to the outdated and clearly inadequate SAA funding system that currently exists, those changes must be advanced more rapidly and implemented in conjunction with fundamental changes to the monitoring contract process, not only to make that process more competitive, but also to restrict and limit the monitoring function to its legitimate PIA evaluation role as prescribed by Congress in the 2000 reform law.

MHARR, accordingly, will continue to seek the renewal, revitalization and reinvigoration of the role of the states within the HUD program and the vital federal-state partnership that lies at the core of both the functionality and legitimacy of that program. This includes – but is by no means limited to – seeking and advancing continued state participation in the HUD manufactured housing program and ensuring a level of funding that will allow and promote that participation. It also includes demanding a legitimatenew monitoring contract and a legitimate procurement process for the next monitoring contract that ensures full and fair competition as required by federal law.

STATES ANNOUNCE NEW INDEPENDENT POST-PRODUCTION ASSOCIATION

State associations representing manufactured housing communities – Manufactured Housing Communities of Arizona (MHCA) and the Manufactured Housing Community Owners Association (MHCO) of Nevada – both of which had previously withdrawn from the Manufactured Housing Institute (MHI), have announced the formation of a new, independent post-production manufactured housing association, similar to that suggested by MHARR in a 2017 study and analysis (see, November 15, 2017 MHARR News Release – “MHARR Releases Study Recommending Independent Collective Representation for Post-Production Sector”) to function at the national level.

In its initial communication regarding the new group, MHCA states:

“The MHCA had joined a national association in the hopes that we would get … representation and effectiveness at a national level. The national legislation and rulemaking over the last ten years has proven that we do not have that representation. *** The MHCA has taken the first steps in establishing a new organization to lobby on behalf of community owners and associations representing community owners. The new organization is the National Association of Manufactured Housing Community Owners, Inc. (NAMHCO)….”

The MHCA communication concludes by observing that “we have a problem at the national level,” and invites other post-production groups to become “part of the solution” by joining and supporting the new national association.

While this action (at present including only HUD Code communities) – is both positive and encouraging, the industry’s entirepost-production sector (communities, as well as retailers, developers, finance providers, insurers and others) remains in desperate need of an independent, collective, national association and representation to deal effectivelywith national-level issues that are today either not being addressed at all, are not being addressed effectively, or are, in effect, being held captive to the interests of the industry’s largest corporate conglomerates.

At present, HUD Code manufactured housing is nearly alone, as a major industry, in being without an independent, national, collective post-production association, and this crucial “missing link” needs to be decisively corrected as soon as possible if the industry is to advance and expand to its full economic and market potential. While HUD Code production is gradually recovering and improving from its recent modern-day minimum level, and manufactured homes, in 2018, offer superb quality with unprecedented value for consumers, the industry’s post-production sector has, conversely, regressed, with repeated failures in critical areas such as consumer financing, placement, zoning and installation, among others.

These failures suppress and unnecessarily restrict industry growth as untold thousands of consumers are eliminated from the market due to unnecessarily high interest rates on manufactured homes and particularly manufactured home chattel loans (due to the ongoing refusal by Fannie Mae and Freddie Mac to provide market-significant securitization and secondary market support for such loans). To make matters worse, even for consumers who would be able to obtain such financing, the refusal of local communities to permit the development of new manufactured housing communities, or otherwise permit the placement of manufactured homes in vast areas of the United States, needlessly drives potential homebuyers away from the HUD Code market. As a result, while manufactured homes have progressed substantially, once they leave the factory, the industry (and consumers) are ill-prepared, ill-equipped and ill-served in the field.

This dichotomy, between significant successes in the production realm, as contrasted with significant failures in the post-production realm, not only undermines industry growth and needlessly excludes large numbers of consumers from the HUD Code market, but also harms, as one of its primary victims, the state associations on which post-production industry businesses rely so heavily. While most state associations continue to do excellent work under difficult circumstances, they are unfairly handicapped in many instances, by a lack of centralized policy information, formulation, direction and coordination. This effectively leaves state associations either “on their own” to individually seek relevant factual and policy information from other states, or worse, dependent on MHI and its few industry-dominant corporate conglomerates on matters that rightfully should be discussed, debated, formulated and decided on a collective, independent and collaborative basis. In either case, the collective functionality of the state associations and the post-production sector is not what it should be, or needs to be, in order to successfully advance both the post-production sector and the industry as a whole.

This matter, moreover, has been unnecessarily complicated by the involvement of self-promoting individuals and/or entities that not only have difficulty in grasping the magnitude of the ongoing failures of the post-production sector – and the damage thereby inflicted on the industry and consumers – but also continue to press and advance ostensible remedies (publications, conferences, meetings, etc.) that are overly simplistic, unduly parochial, and simply inadequate to address the much larger and significantly more complex problems underlying this crucial issue.

MHARR, therefore, for reasons that it has previously spelled-out in detail, supports the formation of the new, independent communities association. In addition, MHARR also supports and encourages the expansion and further development of this association going forward.

SENATE CONFIRMS MONTGOMERY AS HUD ASSISTANT SECRETARY

The United States Senate, after a lengthy delay, has finally voted to confirm Brian Montgomery as HUD Assistant Secretary for Housing-Federal Housing Commissioner. The Senate vote brings to an end an eight-month confirmation marathon that began when Mr. Montgomery – who served in the same position in the Administration of President George W. Bush – was nominated by President Trump in September 2017.

While MHARR supported Mr. Montgomery’s confirmation, he returns to HUD at a crucial juncturefor the Department generally and for the HUD manufactured housing program in particular. As industry members are aware, the HUD program is at a potentially groundbreaking turning point. Its former administrator, an Obama Administration holdover, has been re-assigned, and the program itself – including all of its regulations and related pseudo-regulatory actions – are undergoing a “top-to-bottom” review, pursuant to Trump Administration regulatory reform Executive Orders 13771 and 13777.

With the federal program at a potentially historic cross-roads, Mr. Montgomery effectively will have a second opportunity to achieve what he did not do previously – i.e., ensure the full and proper implementation of the Manufactured Housing Improvement Act of 2000 in ways that cannot be immediately undone or ignored by rogue regulators. While Mr. Montgomery had an opportunity to permanently “set in stone” the key reforms of the 2000 law during his earlier tenure at HUD, he failed to do so, instead adopting a passive stance while career regulators undermined key reforms, such as section 604(b)(6)’s requirement for MHCC pre-approval and full rulemaking for all “changes” to policies, practices and procedures relating to inspections and monitoring.

The reform processes underway within the program and within HUD more broadly, provide a long-overdue opportunity to finally undo these and other baseless distortions of the 2000 reform law that occurred under prior career administrators, and return the HUD program to the policy path and direction mandated by Congress in the 2000 reform law. MHARR will carefully monitor Mr. Montgomery’s actions to ensure that such reforms are finally cemented in place.

MHARR CALLS FOR WITHDRAWAL OF HUD “GUIDANCE” DOCUMENTS

MHARR, based on recent rulings by the U.S. Justice Department, has reiterated and amplifiedits call for HUD to immediately withdraw any and all manufactured housing program “guidance” documents that were not: (1) presented to the statutory Manufactured Housing Consensus Committee (MHCC) for prior review and recommendations; and (2) published for notice and comment rulemaking in the Federal Register.

In a recent communication, MHARR calls for fullHUD compliance with the procedural requirements and safeguards of the Manufactured Housing Improvement Act of 2000 – requiring prior consensus committee review and notice and full rulemaking for allnew and modified standards, regulations and Interpretive Bulletins, andchanges to HUD policies, practices and procedures affecting inspections and monitoring — following Justice Department rulings issued on November 16, 2017 and January 25, 2018 asserting that U.S. Attorneys may “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) and standards promulgated under that law.

In rejecting enforcement actions based on such unpublished “guidance” documents, the Justice Department maintained that it could not and would not use its “enforcement authority to effectively convert agency guidance documents into binding rules” and that such “guidance documents cannot create binding requirements that do not already exist by statute or regulation.”

HUD, by contrast, has resorted to “guidance” and other pseudo-regulatory pronouncements to skirt rulemaking and other requirements of applicable law for decades. This abusive practice finally led Congress, in the Manufactured Housing Act of 2000, to include a new section 604(b)(6), which – on its face – requires prior MHCC review and rulemaking for virtually any change to existing rules, regulations, interpretations, policies, practices and/or procedures relating to any aspect of enforcement, inspections or monitoring. HUD, however, promptly ignoredthis mandate, issuing an Interpretive Rule in 2010 designed to negate this clear and unequivocal mandate and effectively strip it out of the 2000 reform law.

As MHARR’s communication makes clear, however, the recent rulings by the Trump Administration Justice Department demonstrate and establish (as MHARR has consistently maintained) that the HUD 2010 Interpretive Rule is plainly wrong and invalid, and should be withdrawn, and that any and all HUD manufactured housing program “guidance” documents which purport to establish requirements not otherwise found in the law or properly promulgated standards and regulations, and which have not themselves been subjected to prior MHCC review and full rulemaking, are unenforceable and must be withdrawn.

MHARR, consequently, has asked that such “guidance” documents, as well as HUD’s arbitrary and clearly erroneous 2010 “Interpretive Rule,” be withdrawn as part of HUD’s pending regulatory review process pursuant to Trump Administration Executive Orders 13771 and 13777.

MHARR WARNS HUD ON MONITORING CONTRACT

MHARR has again warned HUD against any type of re-solicitation process for the manufactured housing program monitoring “contract” that does not entail — and does not, in fact, produce— full and fair competition for that contract, as required by both the Manufactured Housing Improvement Act of 2000 and federal contracting law, and a new monitoring contractor for the federal program. For the moment, however, the monitoring contract re-solicitation, originally scheduled to begin in December 2017 (before the re-assignment of former manufactured housing program Administrator Pamela Danner) remains on “hold.

In meetings and other communications with the new Trump Administration leadership at HUD, MHARR has stressed that much, if not most, of the dysfunctionality and defactolawlessness of the current HUD manufactured housing program derives from – and is driven by — abuses of the “monitoring” function, which have grown and expanded over the 40-year tenure of the current revenue-driven contractor (particularly during the tenure of the reassigned former program Administrator), to essentially encompass the entire program, while pseudo-governmental powers have unlawfully been delegated to the entrenched incumbent contractor. As has been the case for decades, this unlawful, excessive, unnecessary and unaccountable contractor activity (expanding now into the post-production realm), produces few, if any, benefits for consumers, while needlessly driving-up costs for homebuyers, thus depriving untold thousands of Americans of affordable manufactured homes in violation of the fundamental purpose and objectives of the 2000 reform law.

MHARR reiterated and reasserted allof these points in

written comments recently submitted to HUD in connection with its pending “top-to-bottom” manufactured housing program regulatory review, stressing: (1) that the absurd and indefensible 40-year defactosole-source tenure of the existing “monitoring” contractor must be ended; (2) that there must be full and fair competition for the monitoring contract as required by the Manufactured Housing Improvement Act of 2000 and other applicable law; (3) that the impending RFP for the monitoring contract must be structured to ensure such full and fair competition; and (4) that HUD must award the monitoring contract (or any element of a multi-contract monitoring structure), to “separate and independent” contractors as mandated by the 2000 reform law.

Given the extensive history of abuse – both substantive and procedural – of the program “monitoring” function andthe “monitoring” contract procurement process by both the HUD program and its entrenched contractor, MHARR will closely monitor allactivities relating to the next monitoring contract solicitation and, if HUD violates basic norms and statutory requirements once again to effectively “steer” a new contract to the current entrenched contractor, the Association will have no alternative but to take further action.

MAJOR UNRESOLVED DODD-FRANK ISSUE RAISES NEW QUESTIONS

While Congress has enacted legislation to eliminate certain restrictions in the original Dodd-Frank finance reform law which prohibited manufactured housing retailers from assisting consumers in the home financing process unless qualified and licensed as “loan originators,” that legislation nevertheless leaves intact – and unresolved – Dodd-Frank restrictions on manufactured home consumer loan interest rates and the statutory designation of loans that exceed those rates as “high-cost” loans, thus triggering additional requirements and/or risks for those lenders. Both the enactment of that loan originator language, however, and the corresponding absence of any interest rate relief – after a full decade of supposed full-scale engagement by part of the industry, leave many open and highly-significant questions for the industry and particularly its post-production sector.

On the one hand, the ten-year delay in securing relief for retailers that wish to provide financing assistance to potential homebuyers – and then, only by divorcing that provision from the interest relief amendment that was also included in the version of the Dodd-Frank reform bill passed in the House of Representatives – raises obvious questions as to: (1) whether such relief could have been obtained more quickly with separate relief bills; (2) why separate relief bills (i.e., one bill for loan origination and a separate bill for interest rate/high-cost loan relief) were not attempted, sought, or advanced previously; and ultimately (3) whether loan originator relief was purposely held captive to “high-cost” relief and thus delayed for years needlessly for the benefit of the industry’s largest corporate conglomerates.

Similarly, industry experts are beginning to question whether the industry’s largest lenders and largest producers are serious about the full and robust implementation of the “Duty to Serve Underserved Markets” (DTS). Specifically, what conceivable incentive do those industry-dominant lenders, in particular, have to demand market-significant securitization support by Fannie Mae, Freddie Mac and FHFA for manufactured home chattel loans – which would likely erode already high interest rates and simultaneously draw additional competing lenders into the HUD Code market – when those current dominant lenders can still seek statutory Dodd-Frank relief from Congress to continue making high-cost loans (or charge even higher rates) with no additional liability risk?

All of this, once again, underscores the lack of accountability of the current “umbrella” industry representation to rank-and-file post-production sector businesses, and the corresponding need for a national, independent, post-production association to represent those businesses.

REACTIVATION OF DOE ENERGY RULE MAY NECESSITATE LEGAL ACTION

As reported by MHARR on June 11, 2018, the revival of a previously “inactive” energy rule for manufactured homes by the U.S. Department of Energy (DOE) may trigger legal action by MHARR on behalf of smaller HUD Code industry businesses.

As MHARR previously advised the industry, the baseless, contrived and excessively-costly DOE-proposed manufactured housing “energy” rule, developed as part of an illegitimate “negotiated rulemaking” process — as shown by documents released by DOE to MHARR under the Freedom of Information Act — was designated an “inactive” rule by DOE in the Fall 2017 Federal Semi-Annual Regulatory Agenda (SRA). That proposed rule, however, has now re-appeared in the Spring 2018 SRA, with a notation indicating that a “supplemental” Notice of Proposed Rulemaking (NPRM) is being targeted for publication by DOE by August 2018.

While there is no information yet as to what the “supplemental” NPRM may propose — or alter from the initial NPRM published by the Obama Administration in June 2016 — MHARR (unlike MHI, which voted in favor of the proposed rule as part of the illegitimate “negotiated” rulemaking process) has consistentlyand strongly opposed this proposed rule, which would needlessly explode the retail price of manufactured housing — by $6,000.00, or more, for a double-section home). A retail price increase of this magnitude would not only effectively force hundreds-of-thousands of potential lower and moderate-income HUD Code purchasers out of the manufactured housing market, based on research conducted by the National Association of Home Builders (NAHB), but would also be a major setback for retailers, communities, finance companies and other post-production sector industry businesses that are just beginning to recover from record-low industry production levels just a few years ago – demonstrating, yet again, the urgent need for an independent, national, collective post-production association.

Furthermore, the phony DOE “cost-benefit” analysis for the 2016 proposed rule, purportedly showing “benefits” for consumers remaining in the market, has been totally invalidated by subsequent actions of the Trump Administration, including: (1) its express disavowal and repeal of the Obama Administration’s invalid “Social Cost of Carbon” (SCC) construct (used by DOE to inflate the alleged benefits of the 2016 proposed rule); and (2) its withdrawal of the United States from the “Paris Climate Accord,” which formed part of the policy basis for the DOE proposed rule.

Consequently, unless the forthcoming “supplemental” NPRM substantiallymodifies and/or withdraws objectionable, unnecessary, and unnecessarily-costly elements of the initial DOE proposed rule, MHARR may have no alternative but to consider legal action to enjoin the enforcement of any resulting “final” rule. Prior to any such court action, however, MHARR (and the industry) will have a further opportunity to comment and take other administrative action, as warranted, with respect to the “supplemental” energy NPRM.

In addition to the revival of the DOE energy rule, HUD announced three regulatory actions in the Spring 2018 SRA impacting manufactured housing. First, HUD has withdrawn a pending “Third Set” of amended HUD Code standards, including recommended standards concerning “carbon monoxide detection, stairways, fire safety considerations for attached garages and duplexes.” Presumably, this action was undertaken pursuant to HUD’s current “top-to-bottom” review of all existing and pending standards and will be subject to further consideration and action as determined by that review.

Meanwhile, HUD has reactivated – on a long-term basis — two other manufactured housing rulemaking proceedings that had previously been suspended under the Trump Administration’s January 2017 regulatory freeze order. These are: (1) an “interim final rule” to amend HUD’s formaldehyde emissions standards based on the new formaldehyde standards adopted by the U.S. Environmental Protection Agency (EPA); and (2) a final rule on amendments to the HUD Code’s regulatory exemption for recreational vehicles. Both of these actions are slated for action by April 2019 and will be addressed further by MHARR on an administrative basis as warranted.

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.

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

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

Daily Business News Briefs

Skyline, UMH Gain, Manufactured Housing CV Soars, S&P, NASDAQ Hit New H…

Noteworthy headlines on – CNNMoney – Fox trying to pull Jesse Watters from O’Reilly comedy tour. Oil stocks are the biggest losers of 2017. US unemployment hits 4.4 percent, lowest...

05-05-2017

Read more

New Player Enters Manufactured Home, Communites, RV Game

Gelt Inc., a Tarzana, California based real estate investment firm, has announced the formation of a new subsidiary to purchase and manage manufactured home and RV communities. According to the...

05-05-2017

Read more

Website Upgrade – on MHProNews Begins This Weekend

The long-anticipated upgrade to MHProNews.com to version 3.0 will begin this weekend. The site will go down, starting Friday night/Saturday morning Eastern time. We anticipate the site coming back up...

05-05-2017

Read more

Analyst, Investor Action at Skyline – What’s Happening?

For Skyline Homes, a recent rough patch has analysts and investors making moves. According to the Cerbat Gem, TheStreet downgraded shares of the company from a “c” rating to a...

05-05-2017

Read more

MHARR on Tariffs, DOE, and, Federalized Installation – Exclusive Report and…

The Manufactured Housing Association for Regulatory Reform (MHARR) has released its latest Washington Update, an exclusive report and analysis that addresses key issues with the U.S. Department of Housing and Urban...

01-05-2017

Read more

Magnificent May – New Reports, Announcements, and Schedule

Beginning with RC Williams hot new exclusive this morning on the behind-the-scenes developments in the nation’s capital regarding manufactured housing lending, Magnificent May will continue the MHProNews tradition of independent...

01-05-2017

Read more

Patrick Rises Over 3 Percent, Manufactured Housing CV Broader Markets Jump

Noteworthy headlines on – CNNMoney – United and dragged passenger reach settlement. Southwest Airlines: We won’t overbook anymore. China’s Uber worth $50 billion after raising more cash. 10 things United...

27-04-2017

Read more

Is Time Finally up for the CFPB?

Movement by the House Financial Services Committee, led by Chairman Jeb Hensarling (R-TX), could spell the end for the Consumer Financial Protection Bureau as we know it. According to ACA...

27-04-2017

Read more

More First Nations Turning to Modular

Throughout Canada, many First Nations native tribes are struggling with the dual challenge of quality, and affordable, housing. Mold and other natural elements, when combined with overcrowding, present issues tribal...

27-04-2017

Read more

Bark Worse than Bite? Manufactured Housing Institute Slams Trump Administra…

Comments from Commerce Secretary Wilbur Ross on CNBC yesterday regarding proposed anti-subsidy tariffs on Canadian goods raised quite a stir. “The tariff is not the beginning of a trade war with...

27-04-2017

Read more

Drama in Ohio: Fake News, Facts and Myths

The ongoing battle between the Ohio Manufactured Housing Association (OMHA) and Ohio Governor John Kasich over the status of the Ohio Manufactured Housing Commission (OMHC) has been taken to a...

27-04-2017

Read more

New Sponsors

You Might Like

Classifieds

Press Releases

Zoning, Opening up Urban Infill and Making Sure Citizens who want Manufactured Homes are Heard

by Ed Schafer For the last three or four years, the South Carolina association’s focus is to move beyond killing bad zoning proposals and working to reopen areas that have been closed to manufactured homes for many years.

Schafer, Ed %COMMENTS 05-09-2016 September 2016

Zoning Eased to Allow MH for Flood Victims

Following up on a story concerning the flooding in Minot, North Dakota last spring, KFYR-TV reports the Minot City Council is relaxing zoning requirements to allow manufactured homes to be sited in areas not previously zoned for them, sometimes to the chagrin of neighbors. Working on a case by case basis, many of the homes [...]...

Matthew Silver %COMMENTS 09-05-2012 Daily Business News

Zoning Commission Recommends against Expansion of Manufactured Home Community

The Yellowstone County Zoning Commission unanimously turned down a zone change application that would have allowed Cherry Creek Estates manufactured home community (MHC) to expand by adding as many as 80 manufactured homes, reports billingsgazette. While the Yellowstone County Board of Commissioners will have the final say when it meets in...

Matthew Silver %COMMENTS 12-04-2016 Daily Business News

Zoning Changes on Tap for Manufactured Housing

A new proposal from the Columbus Junction (Iowa) Planning and Zoning Commission to the city council would create a manufactured housing (MH) district, and delete MH from R-2 and R-3 residential districts. According to muscatinejournal.com, current ordinances require any MH outside of a community to be placed on a permanent foundation and converted...

Matthew Silver %COMMENTS 27-09-2013 Daily Business News

Zoning Changes Could Affect Manufactured Housing

by RC Williams The Washington County, Maryland Board of Commissioners is holding a public hearing today regarding several proposed changes to the county’s zoning ordinance, including ones that affect manufactured homes.

Williams, RC %COMMENTS 04-03-2017 March 2017

Zoning Changes Allow Modular Units

Following up on a story we last posted May 2, 2012 about modular medical units temporarily placed on a property to house loved ones with special needs, MHProNews has learned several states, including Virginia, New York, and California have enacted legislation to allow these units to override local regulations and be sited on properties not [...]...

Matthew Silver %COMMENTS 24-07-2012 Daily Business News