CONSPIRACY THEORISTS, ‘Gather Ye Round!’

CONSPIRACY THEORISTS, GATHER YE AROUND!

Great & Greater Conspiracies; State of MHIndustry & LLCommunity Asset Class

Let’s get something straight, right up front! Portions of what I pen here will anger a few individuals, but confirm the beliefs of many others. And it’s this type industry news reporting & opinion sharing, that’s prompted a scant number of salaried corporate & trade association executives – but interestingly – not sole proprietors & business owners, to get upset & holler, ‘Harm to the industry!’ Well, I think not. After 60 years of manufactured housing industry history; during 30 of which, I’ve been invested in as a landlease community owner & industry consultant, it’s high time we revisit our roots as affordable housing, seek new ways to rejuvenate our housing product, the way we market it, how we treat our customers, & much more! Frankly; if I don’t speak out, I seriously doubt anyone else will, and our industry will continue to suffer on, maybe even die, in silence! GFA

I.

The Great Conspiracy isn’t a conspiracy at all! It’s the well known but embarrassing phenomenon of self – immolation (Webster: as in ‘killing oneself – or industry – as a sacrificial victim’). In the case of manufactured housing, this self – defeating state of affairs is characterized by ‘resistance to change’ (e.g. Like automobile plants, we count our ‘shipments’, not homes ‘sold’, & cling to vestigial trade lingo like it’s Biblical writ); greed (e.g. Think, ‘Bigger boxes = bigger bucks!’); and, frequent lack of product (installation) responsibility (warranty) once the house leaves the factory (e.g. Remember ‘DAR’? It’s the industry’s continuing mantra, in some circles, as in ‘Drop (that house) And Run!’). And there’s more. How ‘bout cyclic short term abuses of chattel and realty finance sources, followed by reaping self – sacrificial long term consequences of going without (e.g. Only 50,000+/- new HUD Code homes ‘shipped’ during years 2008, 2009 & 2010)? Of course, there’s also the perennial, not – so – private, lobbying – defeating, internecine squabbling between our national advocacy trade bodies inside the Washington, DC beltway. Will it ever end? Plus, landlease (nee manufactured home) communities are not without blame! Too many still deserve to be viewed as nothing more than ‘trailer parks’, awash with negative societal mores and perpetuating a very poor public image of an otherwise desirable, affordable lifestyle. And in the same breath, do we dare mention the nefarious (in some eyes) or business risk – mitigating (in other eyes) practice of ‘churning’ our (property owner) self – financed homeowner/rental homesite lessees? And the list goes on….

Is there a solution? I believe there is. But we need a charismatic, respected, well known, successful businessman or woman leader, to step forth and publicly announce, ‘The HUD Code manufactured housing industry is at an impasse! And if we’re to move forward together, and profitably, during the next decade, we’ve simply got to Get Our Act Together, the sooner the better!’ Building on that proverbial line in the sand, this leader (We do have at least one, that I can know of, in this industry – but will he/she heed this call?) and cohorts, might consider following the twice set precedent of 2/27/2008 in Tampa, FL., & 2/27/2009 in Elkhart, IN., at two National State of the Asset Class (‘NSAC’) caucuses, by now calling for a two day Open Strategic Planning Meeting of businessmen and women ‘with skin in the game (of their respective companies and associations)’, committed to participate in this historic event at their own expense! Maybe require advance preparation on the part of everyone attending. For example; early on, submit a short (500 words or less) letter, describing ‘why’ they’re participating, and ‘what’ they’d like to see accomplished. Once responses have been collected, prepare and distribute a preliminary packet of information, containing industry benchmark statistics and brief summary of aforesaid input. Furthermore, such an event – to be effective – must be a joint effort between members of the Manufactured Housing Association for Regulatory Reform (‘MHARR’) & Manufactured Housing Institute (‘MHI’), Open to non – member business owners who wish to attend! Ultimately, however, proceedings should be planned and guided, under the authority of an independent third party strategic planning meeting specialist, for event results to be accepted industry wide.

Are YOU one of the charismatic, respected, well known, successful businessmen and women leaders about whom I write and challenge in the foregoing paragraphs? Probably. This particular blog posting is being sent to those who fit the multifaceted description. Now ‘the ball is in your court’. Your response?

The Greater Conspiracy is more difficult to pin down with specifics. In a big nutshell, it’s generally described (Have no doubts about the fact the Greater Conspiracy exists, as it’s a matter of discussion, within industry gatherings, from coast to coast, or I wouldn’t be wasting blog space here!) as quiet collusion among some industry executives (i.e. Grass maybe perceived as being greener on the other side of the ____ fence); our competitors for national housing share (i.e. Not enough business to keep stick builders & factory – built aficionados employed over the long haul!); even regulators of our unique housing product type (i.e. We didn’t ask for this added work in the first place!). Some of the symptoms are difficult to pigeonhole, as to whether part of the aforementioned Great Conspiracy or a Greater Conspiracy. So, let’s begin with one recent example.

When MHIndustry & LLCommunity businessmen and women converged on Washington, DC. recently, they were given prepared ‘talking points’ to use when meeting with their respective members of Congress, relative to changing pending Dodd-Frank legislation. One recommendation read:

“Eliminate unrealistic methods for appraisal (of) manufactured housing. Site – built oriented appraisal requirements have little applicability to manufactured housing and ultimately penalize manufactured homeowners.”

Who suggested that wording? NOTHING COULD BE FURTHER FROM THE TRUTH.

It’s the continued use of traditional ‘(depreciating) book value’ methodology that seriously harms manufactured home owners when selling their homes! Site – built housing’s ‘market comparable’ appraisal methods are clearly applicable to manufactured housing, especially those sited on realty owned fee simple! So, who’s at fault here, for perpetuating this just quoted mistruth? ‘The industry’ – who penned it (i.e. As another apt example of self – immolation, per the Great Conspiracy just described), and or the ‘GSE’s’ (Government Sponsored Enterprises) who, year after year, opt for ‘the easy way out’, by endorsing ‘depreciating book valuation’ methodology to estimate the value of HUD Code manufactured housing – as part of this Greater Conspiracy, to eventually do away with our industry?

Furthermore, and in other arenas, who are/were major dissenters, when (past) attempts were effected to improve design and serviceability of HUD Code manufactured homes? Think’ removal of frames’ from beneath HUD Code homes, as but one example. Then there’re site – builder trade associations, afraid of lower – priced, factory – built competition taking (more) work from their carpenters. And who, until a recent U.S. Supreme Court decision declared ‘black balling’ of HUD Code manufactured housing from (home sale) multi – list systems across the country as being illegal, has effectively derailed the creation and nurturing of a functional secondary market for the listing and resale of manufactured housing product? It’s one more reason we see so few licensed real estate salespersons and brokers pursuing listings within and outside landlease communities.

Know the clearest indicator of a Greater Conspiracy? In my opinion, it’s HUD’s abject failure to fully and properly implement key reform provisions of the Manufactured Housing Improvement Act of 2000 (‘MHIA@2000’)! Here we are, nearly 11 ½ years after passage of the Act, and HUD has all but neutered the federal regulation, without complying with relevant provisions within the Act; has diminished and ignored the enhanced federal preemption of MHIA@2000; has failed to appoint a non – career program administrator, per HUDs whim; has utilized the same federal contractor (Albeit under different entity names), for more than three decades (i.e. Talk about job security, at our industry’s expense!); and, has re – codified two new MHIA@2000 programs – installation and dispute resolution – in the process, rendering them non – preemptive, and outside the authority of MHIA@2000’s Manufactured Housing Consensus Committee (‘MHCC’). Are you angry yet?

What to do about the Greater Conspiracy? Frankly, I don’t think there’s much we can do at this point in time, except…. If we have folk within our industry, who have divided loyalties to our competitors and regulators, then they need to be confronted. But beyond that, the immediate, timely and strategic challenge, as described earlier, is to call for a national meeting of truly concerned businessmen and women, willing to invest their personal and corporate resources to be an integral part of a national plan to rejuvenate, and reposition – if necessary, HUD Code manufactured housing! Are YOU one of those (hopefully) many individuals? If so, here’re several things you can do TODAY:

• Make your views, on this matter, & personal availability known, to Joe Stegmeyer, chairman of MHI, via Thayer Long @ (703) 558-0678.

• Make your views, on this matter, & personal availability known, to John Bostick, chairman of MHARR, via Danny Ghorbani @ (202) 783-4087.

• Make your views, on this matter, & personal availability known, to me, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or gfa7156@aol.com

• Or, if you’d prefer to make your views known directly to either of the above board chairmen, let me know….

Continue to faithfully read this weekly blog posting for progress in combating the Great & Greater Conspiracies affecting the HUD Code manufactured housing industry.

DISCLAIMER. I am not one of the charismatic, respected, well known, successful business leaders of which I write in the previous paragraphs!

As I’ve said time and again, of late, I’m attempting to retire, but would be pleased to see the manufactured housing industry and landlease community real estate asset class rejuvenated, and at least on its’ way back, to a new renascence, like we enjoyed in 1998; but this time, without abusing our customers and financial resources. GFA

II.

I know I promised a State of the MHIndustry & LLCommunity Asset Class this week. Well, it’s prepared, but requires the entire blog space; so once again, will not be included here. Perhaps I’ll have to effect a special posting somewhere along the line.

III.

If you’re reading this blog posting every week, but are not yet a paid subscriber of the Allen Letter professional journal, please consider doing so now. What are you missing? April’s issue is headlined by ‘Something Old, Something New, Something Borrowed, Something Blue’ – describing four measures for successfully filling vacant rental homesites in landlease communities! For the first time, there’s (national) political commentary for your reading curiosity. Also, the only MH & LLCommunity ‘stock watch’ published anywhere in the industry/asset class, along with major rate indices for LLCommunity loans. And you’ve just gotta see Troy & Cheryl Brost’s ‘love letter’ to their friends in the MHIndustry. Let me ask you this: ‘Where else in the MHIndustry & LLCommunity asset class will you find 1) 13th annual National Registry of LLCommunity & Chattel Lenders; 2) 12th annual ‘Who Ya Gonna Call During 2011?’ list of freelance consultants; and 3) First published definitive description of Lease – Options, in the LLCommunity? Answer? Nowhere! And did I mention book reviews of LLCommunity owner Chuck Irion’s Roadkill Cooking for Campers and Autograph Hell; plus, Glen Beck’s The Overton Window (Read this and you’ll not look at national events & trends the same, ever again.). To subscribe, phone (317) 346-7156 or via this website.

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George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indpls, IN., 46247 (317) 346-7156.

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