HR5302; Big 3-C Mfr. Ads; & MHAlive!
Blog # 407 Copyright 2016 COBA7® @ 31 July 2016, community-investor.com
Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’
This blog posting is the sole national advocacy voice, official ombudsman & historian, research reporter & online communication media for North American LLLCommunities!
To input this blog &/or affiliate with Commu9nity Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764
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INTRODUCTION. What follows here, are a couple of the salient and pithy topics scheduled for open discussion at Monday’s (1 August 2016) MHAlive! ‘Think Tank’ session in the library of the RV/MH Hall of Fame in Elkhart, IN! Even as you read these lines, it’s not too late to participate. Just be in the library before 9AM, when we start with ‘manufactured housing’, and at 10:15AM when we switch to LLLCommunity matters until 11:30AM. No fee to attend. Just come with an open mind and willingness to ‘think inside & outside the box’ relative to industry/asset class issues and challenges! Hope to see you there. Phone (317) 346-7156 to let me know you’re coming. Thanks, GFA
Why Don’t ‘Big 3-C, HUD-Code Home Manufacturers’ Advertise Large, Like the Major Automobile Brands?
Reacting to a headline in his local business press, which read: ’Home sales are at the fastest pace in years!’, a land-lease-lifestyle community owner, queried his business associates: “A question for others higher up the chain than me: Why aren’t MH sales, of our affordable housing product, matching this trend? Is it interest rates or something else beyond our control?” Hmm. Good question.
To which, one of his fellow LLLCommunity owners replied:
“Here’s my take on the matter. People don’t buy what they don’t know about! What other industry produces and sells a product whose target market amounts to 100,000,000 US consumers, but does not have a national advertising campaign? Reminds me of the definition of insanity.*1 Don’t look to either of ‘our national advocacy organizations’ to organize, promote, & execute a national (advertising) program – they are ONLY national lobbyists. A good part of what we all now pay for ‘dues’, on the new homes we buy, should start going to another organization, one that handles a national brand advertising program! The $100.00 floor fee, on each of the 70,544 new HUD-Code homes shipped during 2015, would have funded $7,054,400.00 to this end! While that amount would not buy many Super Bowl ads, it would surely generate a heck of a lot more manufactured housing product awareness than we have now!”
But is that the whole story? No it’s not; nor do I think we’ll ‘answer the leading question’ in this op/ed piece; however, some historical statistical background data might set the stage for the transfer of national brand advertising dollars away from Washington lobbyists, in toto or via each of the Big 3-C firms, to a marketing entity capable, experienced, and motivated to bring maximum product exposure to the manufactured housing industry! Here’s the data.
Remember last week’s ‘first time ever published’ stats describing HUD-Code home manufacturers 38 year consolidation, between 1977 and year end 2015?
• In 1977, the Top 25 ‘mobile home’ firms shipped 70 percent, or 186,462 new homes of the 265,651 manufactured that year! Consolidated national MH brand advertising did not occur that year, and it’s doubtful it ever will, when more than two dozen ‘players’(corporate egos) must agree with ad design and placement.
• In 2015, the ‘Big 3-C’ HUD-Code firms*2 shipped 71+/- percent, or 50,086 new homes of the 70,544 manufactured that year! Consolidated national MH brand advertising still has not occurred, but certainly makes more sense, now there’re but ‘three’ decision-makers, and not 25. However, to do so, two of the ‘players’ must overcome concerns about further consolidation; and all three, in the past, have worried (rightly or wrongly?) about smaller home manufacturers benefitting from their largesse.
As an industry, we already know we’re 16 years into a major business model paradigm shift – where LLLCommunity owners/operators are rapidly supplanting independent (street) MHRetailers as major purchasers of new HUD-Code homes, often Community Series Homes, from manufacturers. As you’ll likely recall, in 2009, when the MHIndustry hit its’ shipment nadir (lowest point ever), only 25% of new HUD-Code homes went into LLLCommunities nationwide. That percentage blossomed to 40% by year end 2015; and some say, we’ll likely hit 75% by year 2020. No wonder, pundits are calling this the NEW ERA for Manufactured Housing!
That said, the ‘Big 3-C HUD-Code home manufacturers’, in this veteran industry observer’s opinion, should want to ‘Get the word out!’, as suggested by the first LLLCommunity owner quoted at the beginning of this piece. After all, LLLCommunity owners/operators are now commonly referred to as being the ‘New Breed of MHRetailer & Lender’. ADVERTISE MORE & Get the traffic a-coming into Salescenters, off and on-site, in these properties coast to coast. This ‘NEW ERA of Manufactured Housing’ is entering a tender stage, where it will further blossom (with aid of national advertising) or stall – given the continued difficulty of accessing chattel capital. Which will it be?
The major stumbling blocks to national brand advertising? Apparent lack of such advertising expertise among the ‘Big 3-C firms’, and lack of a national trade body skilled at orchestrating an aggressive, collective, first ever, national ad campaign! With that said, however, beware those who’ll surely step forward, after reading this op/ed, and offer their services. The acid test = If they’re so GOOD, about what they offer to do, they’d be doing it now with a flair, for themselves, and or another company or companies.…
1. Definition of insanity attributed to Albert Einstein: “Doing the same thing over and over again and expecting different results”
2. Big 3-C HUD-Code home manufacturing firms: Clayton Homes, Cavco Industries, Champion Home Builders
SO, What do YOU Know about HR5301, the Seller Finance Enhancement Act?
The HR5301 legislative initiative has taken MHI, MHARR, & COBA7® by surprise! As I pen these words, on 26 July, all of us are scrambling to sort out the content of this bill to ascertain:
Is it indeed the proverbial and much-needed ‘silver bullet’ for small to mid-sized LLLCommunity owners/operators (i.e. making seller finance transactions OK for ‘mobile homes’ but limited to 24 per year), or is it just another false start to come down the legislative highway during the past decade or so?
In the meantime, to learn more about it, go to www.sellerfinancecoalition.org/learn-more
And continue to rely on this weekly BEBA (Blast Email Blog Alert) and blog posting to keep you informed of matters just like this.
MHAlive! ‘Think Tank’ on 1 August at RV/MH Hall of Fame in Elkhart, Indiana
This is why you’re receiving this weekly blog posting four days early; to give you one last chance to beat feet to Elkhart, IN., on Sunday 31 July, to be in place at 9AM Monday morning, in the library of the RV/MH Hall of Fame (21565 Executive Parkway), to participate in the manufactured housing industry’s inaugural MHAlive! – a ‘Think Tank’ experience for anyone in the industry or realty asset class who wants to participate and engage in open discussion of industry issues and other matters. No fee. Just phone (317) 346-7156 to let me now to expect you.
This is the ‘real deal’ and a ‘real $ deal’ for you! Up until a year or so ago, the Urban Land Institute’s Manufactured Housing Communities Council (‘MHCC’) convened in similar fashion, a couple times each year – but you had to be a member or invitee to attend, and even then, it cost one upwards of $1,000 – 2,000 to participate! MHAlive!, again, is FREE, to MHIndustry & LLLCommunity aficionados. Will you be present?
So, what’re we going to be talking about that morning? The preliminary agenda, published in this blog series a few weeks ago, remains unchanged.
• Status of chattel capital & Duty to Serve rulemaking – with emphasis on ‘lack of creative thought to date’ = “a conspiracy theory busman’s holiday”; status of MHI’s bill; & more on HR5301.
• Are one or more forms of hybrid chattel capital on the horizon for the MHIndustry? This seminar description from the 25th anniversary Networking Roundtable, hints: “Wise business people look at where they’re already having success, and try to do more of it! There’s one company in the LLLCommunity business, currently operating with Fannie Mae ‘home only’ loan product in some of their properties. How does it work? What are the key elements of the program? Is it a new model for ‘home only ‘loan production with the GSEs?” No details at MHAlive!, just promise of ‘what’s to come’….
• Status of DOE energy regs and when to expect ‘net zero energy use’ MHomes? (Hint: 2020 in CA). COBA7® was at recent DOE public hearings & will share some startling observations about attendees and the proceedings. Not a pretty picture.
• Finally. Able to quantify the $ impact MHProduction (alone) has on the national economy, Come and learn the secret sauce (Hasn’t been written about by anyone else yet…)
• Corporate consolidation. The topic of last week’s and beginning of this week’s blog postings…
• ‘Two Days of Plant Tours & Home Sales Seminars’. Two exciting announcements!
• Be aware & beware HUD-Code home shipments numbers being reported differently by IBTS, HUD, MHARR, COBA7®, vs. MHI. Why does this self-immolation continue?
OK, those are the manufactured housing topics. And there’re seven more, relative to the LLLCommunity asset class, but we won’t go into them here.
Decide now whether you want to swoop to Elkhart, IN., over the weekend to participate in MHAlive!
Besides phoning me, consider hanging around the rest of the day to attend the RV/MH Hall of Fame Induction Banquet that evening. To make a reservation and buy banquet tickets, phone (574) 293-2344. Hope to see you there!
George Allen, CPM, MHM
Box # 47024
Indpls, IN. 46247