2022 TO APE 2021 OR BE BETTER?
Blog Posting # 672 @ 7 January 2022: EducateMHC
Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’
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2022 TO APE 2021 OR BE BETTER?
Were you one of hundreds to recently receive my ‘Expression of Appreciation & Look Forward into Year 2022’? If not, you’ll want to read the following four paragraphs to learn how our industry appears to have ended year 2021; what 2022 ‘looks like already’; and, why I’m not bullish on the land lease community real estate asset class. Here goes….
“How will year 2021 end relative to new HUD-Code housing shipments? Even though we shipped fewer new HUD-Code homes during November 2021 @ 9,069 compared to previous month of October @ 9,254*1. To date (i.e. end of November), we’ve already shipped more new homes @ 97,758 than during previous 15 years, going back to 2006 @ 117,510. But will December’s shipment total be enough to eclipse the 2006 year-end number? At this point we need only 19,752 homes shipped to do so! Hence, the speculative answer is ‘yes’! In any event, we’ll be back above the 100,000/year target total. BUT, how long will we enjoy that momentum – or will we grow – or slip backwards again?”
“2022? While we’re ‘on a roll’ shipment-wise right now, future performance depends on resolution of alleged supply chain issues, controlling arbitrary price increases by housing manufacturers, and if/when we finally bring reason and resolution to our perennial chattel capital (i.e. home-only) financing challenges. After all, it’s been 13+/- years since we lost easy access to this type financing, e.g. 1998 = 372,943 new homes shipped, compared to 2009 and only 48,789 new homes shipped during the latter year – our industry’s nadir year.”
“I want to be bullish about the land lease community sector of the manufactured housing industry, but am not! Why? In my opinion, ‘consolidation’ of sole proprietor-owned communities into one or another of 500+/- property portfolios has generally run amuck. Property sale prices, for the most part, are driven by greed (on the part of ‘sellers’), and willingness, on the part of ‘buyers’ to greatly increase site rents following ‘closing’. At the very least, we’ve seen the rise of tenant activism on a near national scale; something we’ve not dealt with before. And how are we going to convince prospective homebuyers/site lessees to buy new homes within land lease communities when site rent is no longer a third, but fully half the amount – or more, they’d pay for a conventional, non-subsidized 3BR2B apartment unit in the same local housing market? I fear we may well see a ‘shaking out’ among hedge fund investors who’ve entered the realty asset class during the past five years.”
“So, where do we go from here? Again personally, I yearn for far more effective national advocacy than we suffer now! At the very least, a salaried executive at the Manufactured Housing Institute (‘MHI’) and its’ National Communities Council (‘NCC’) division should be solely-tasked with day to day administration and representation of land lease communities nationwide – just like it used to be, from January 1996 to pre-2010. In addition, endorse professional property management among on-site and regional managers by insisting on ‘education & certification’ in a meaningful manner! This by dint of Accredited Resident Manager (‘ARM’) and Certified Property Manager (‘CPM’) member programs via the Institute of Real Estate Management (‘IREM’), OR some other credible in-person (NOT online) training program! This obvious professional property management shortfall continues to be the Achilles’ heel of land lease community management and ownership nationwide.”*2
1. The new HUD-Code housing shipment totals as reported by the Institute of Building Technology & Safety (‘IBTS’), HUD, MHARR, and EducateMHC.
2. You serious about providing the property management tools on-site and regional managers need to do their jobs right? Every property should have a copy of ‘Community Operations in the Manufactured Housing Industry’ – available via www.educatemhc.com
DID YOU KNOW?
Biloxi Manufactured Housing Show to be held from Monday, 28 March, through Thursday, 31 March, at the IP Casino Resort and Spa in Biloxi, Mississippi. This trade show is successor to the popular Tunica, Mississippi MHShow. For more information: www.biloxihomeshow.com
MHI’s Congress & Expo is scheduled for Monday, 11 April thru Thursday, 14 April, at the Rosen Shingle Creek Resort. For more information: www.manufacturedhousing.org
Stephen Braun, co-CEO, has retired from Hometown America. For corporate contacts, email either Ken Kravenas via KKKRavenas@HometownAmerica.net for operations-related matters; or Greg Lynch via GLynch@HometownAmerica.net for all other matters. Stephen’s leaving has been so quiet, it reminds me of when Barry McCabe, another Hometown alum, faded from the scene a decade ago. Hometown America was founded by Randy Rowe (presently head of Green Courte Partners) in 1997, and today owns 66 land lease communities in a dozen states – including the well-known SaddleBrook Farms in Grayslake, IL.
You a fan of the popular TV show series NCIS? I am, and one of my Christmas stocking presents from Carolyn was a copy of the magazine GIBBS FOREVER. Best part? Finally, I have a complete list of what show fans know as Gibbs’ Rules. There’re 34 of them in all. A few gems appear to apply to the business world: #3 Never be unreachable. #5 You don’t waste good. #11 When the job is done, walk away. #15 Always work as a team. #18 It’s better to seek forgiveness than ask permission. #28 When you need help, ask. #51 Sometimes you’re wrong. And a personal favorite = #23. Never mess with a Marine’s coffee if you want to live!
I’m old enough to remember the influence and death of social and political activist Saul Alinsky in mid-1972. He authored ‘Rules for Radicals, Reveille for Radicals’ – a simplification of Vladimir Lenin’s original scheme for world conquest by communism, under Russian rule. He wrote there are eight levels of control that must be achieved before one is able to create a (new) social state. They are:
1. Healthcare. Control healthcare and you control the people (Pandemic anyone?)
2. Poverty. Increase the poverty level as high as possible; poor people are easier to control and will not fight back if you are providing everything for them to live (Think illegal immigrants)
3. Debt. Increase the debt to an unsustainable level. That way one is able to increase taxes, and this will produce more poverty. (Present national debt level sustainable?)
4. Gun Control. Remove the ability of citizens to defend themselves from the Government. That way one is able to create a police state. (Gotta love the second amendment!)
5. Welfare. Take control of every aspect of citizens’ lives (Food, Housing, & Income)
6. Education. Take control of what people read and listen to – take control of what children learn in school. (Errant social media platforms, Critical Race Theory, etc.)
7. Religion. Remove belief in God from the government and schools. (No prayer in schools)
8. Class Warfare. Divide the people into the wealthy and the poor. This will cause more discontent and it will be easier to tax the wealthy with the support of the poor.
Well, there you have it, a veritable blueprint on how to convert a democracy (republic) into a totalitarian state. Now that you know how it’s done, do your part to prevent it from happening!
George Allen, CPM, MHM