Land Lease Community = Lifestyle of Choice During Pandemic?
Blog # 585 @ 15 May 2020; Copyright 2020. Educatemhc.com
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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INTRODUCTION: Well, here’s your weekly update relative to the coronavirus hiatus; a look at what is amounting to a ‘lost opportunity’ for the manufactured housing industry – and ‘what to do about it’. Also, an announcement of a new website designed to help homeowners and renters to survive the COVID-19.
Land Lease Community = Lifestyle of Choice During Pandemic?
Just as there’re more births occurring at home these days than in hospitals – due to fear of coronavirus infection, and fathers prohibited from being present for the event, land lease community homeowners/site lessees are demonstrating support for their lifestyle, by paying March and April rent on time and in full. And May’s rent collection appears, to date, to be off to a near equally strong start – according to recent ‘earnings calls’ by public owners/operators of land lease community portfolios. And this from the National Multi Housing Council:
“Data from the National Multifamily Housing Council shows 80.2% of tenants had paid at least some of their rent by May 6, compared with 78% during the same time period in April. However, rent payments were down from May 2019, and some activists say they will continue with plans for rent strikes to put pressure on lawmakers.”
Hmm. And why might land lease communities be outperforming other types of multifamily rental properties? Well, unlike other forms of multifamily rental (and condo) housing – thinking conventional and subsidized apartment communities here, the manufactured housing owner/site lessee, in a land lease community, is living in a self-contained structure, not sharing walls and risking personal exposure in hallways with other tenants or residents. In other words, they’re more in control of their living environment (i.e. easy to social distance 24 hours per day), as to who comes and goes than would otherwise be the case. This is also the likely reason the investment value of this unique, income-producing property type has remained strong of late.
On a related matter, a recent article in Shelterforce magazine (Think tenant social activists), and titled ‘What Would It Mean to Cancel Rent?’ raises this related issue:
“…decommodified housing in the form of co-ops, land trusts, and nonprofit- owned housing already exist – housing a couple million households – and they all rely on rent payments of some sort for their ongoing operations. Calls to suspend or cancel rent payments across the board have made man managers of this type of housing uncomfortable. On the one hand, not having people on the street or struggling under additional rent burden is central to their mission, and none of them believe rent should be demanded right now from people who can’t pay.” Thinking of resident-owned communities or ROCs here….
So, where does all this leave us today? Depends on what one reads, sees, and hears in trade literature, personal experience, and on webinars, e.g. following out of context webinar observations.
• The Carlyle Group in Washington, DC. an owner/operator of a land lease community portfolio, anticipates more of a U-shaped economic recovery curve, vs. V-shaped one, during next few months.
• Warren Buffett & Sam Zell haven’t “…found anything to buy since the onset of the pandemic.” Lack of deals, due to a large spread, between seller expectations and buyer caution.
• While REIT shares “…are down almost 30% since late February” (Confirmed via EducateMHC’s monthly MH ‘Shipment Volume (+) Stock Market’ Report), rents are holding up well – as just pointed out. To access subject report, visit www.educatemhc.com
Do you have observations and opinions, on this complex and evolving topic that you’d like to share here and or in The Allen Confidential! Business newsletter? Simply email or mail your manuscript to me via firstname.lastname@example.org & GFA c/o Box # 47024, Indianapolis, IN. 46147.
Essence of Manufactured Housing’s Lack of Regulatory Reform Progress, Expressed in One Paragraph!
The following paragraph (lightly edited & only slightly enhanced. GFA) was the final one of 14 comprising MHARR’s typically wordy manufactured housing update, dated May 2020, and titled:
‘A RED FLAG WARNING FOR THE INDUSTRY AND CONSUMERS’.
“…the industry has wasted more than three years of President Trump’s first term and what is, without question, the most promising opportunity it has ever had, to achieve real and lasting regulatory reform within the HUD manufactured housing program. The current ‘slow-roll’ of the regulatory reform process by HUD, its contractors, and other allies, should be a ‘red flag’, a warning to the industry that this opportunity without immediate, targeted, aggressive action, could be lost! There is sufficient time, for now, to change course and move this process forward, but it must be a priority for senior-level decision makers at HUD, within the industry itself (including the Manufactured Housing Institute – MHI), for consumers of affordable housing, and within OMHP (including Administrator Teresa Payne). Put differently, the ‘crunch-time’ for significant action to help both the HUD Code industry and consumers of affordable housing is right now!”
As everyone reading this blog well knows, MHARR headquartered in downtown Washington, DC. has long been regarded, as it still is, the Watchdog of the Manufactured Housing Industry. And the above paragraph is fairly standard fare coming from the pen of Mark Weiss. With that said, however, he cannot pull off regulatory reform alone, just as MHI and NAMHCO (North American Manufactured Housing Communities Owners), as industry and realty asset class advocates cannot. What’s missing? In my opinion, based on 40+ years of observation and experience, as a business owner and land lease community owner/operator, constant cooperation and lobbying among all three national trade entities, is where such timely and vital efforts must begin and concentrate.
CFPB, FHFA*, & HUD Launch Joint Mortgage & Housing Website, during COVID-19
This website is designed to ensure homeowners and renters have the most up to date and accurate housing assistance information possible, during these turbulent times. Interested parties should visit cfpb.gov/housing
End Note. FHFA includes the two GSEs (Fannie Mae & Freddie Mac) as well as the Federal Home Loan Banks.
George Allen, CPM, MHM
If you haven’t heard or read yet, EducateMHC’s monthly MH ‘Shipment Volume (+) Stock Market’ Report brings something to the manufactured housing industry and land lease community realty asset class, we’ve not had, ever before – during our 75 year history! And that is unadulterated new MH shipment volume totals tallied by the Institute for Building Technology & Safety (‘IBTS’) – HUD’s perennial contractor for this very purpose; AND, the stock market performance of four public market HUD-Code housing manufacturers and as many land lease community portfolio owners/operators! If this new cache of timely and useful information is of interest to you, and it certainly should be, subscribe to The Allen Confidential! business newsletter as a PRIME subscriber! Do so today: www.educatemhc.com