Land Lease Lifestyle Communities Celebrate 20 Years of History in 2013
Blog # 228 Copyright 2013 13 January 2013
Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.
Land Lease Lifestyle Communities Celebrate 20 Years of History
‘Hooray!’ for MHCA’s ‘The Future of Manufactured Housing’…
2013, a Breakout Year? Maybe if…
Land Lease Lifestyle Communities Celebrate 20 Years of History
For a multifamily rental property type that’s been around for 70 years, land lease lifestyle community (a.k.a. manufactured home community) contemporary history ‘first blossomed’ 20 years ago, during 1993.
Prior to 1993, national advocacy decisions were handled by an ad hoc committee, during Manufactured Housing Institute meetings. But when rumors of IPOs (initial public offerings of stock), pursuant to REIT (real estate investment trust) formation, became commonplace, it was generally agreed national advocacy would be in need of marked and formal improvement.
Prior to 1993, only one book had been authored during the preceding two decades, describing any aspect of mobile home park operations. And that was Mobile Home Park Management, self – published in 1988 by PMN Publishing in Indianapolis, IN. Six years later, in 1994, J. Wiley & Sons debuted Development, Marketing & Operation of Manufactured Home Communities. Both books ‘sold out’ within six months after being released. Since then, the first book has gone thru six updates and is now titled, Landlease Community Management. The second tome, long out of print, and considered by many to be an industry classic, continues to be available via PMN Publishing and Amazon.com. Point? Prior to 1993, HOW TO information, along with benchmark operating statistics re the LLLCommunity asset class, were exceedingly difficult to find.
Prior to 1993, two print trade publications, the Journal – which is still in existence, and the Manufactured Home Merchandiser magazine (now defunct) were unabashedly ‘HUD – Code home manufacturing & retail sales oriented’. No question about it, and no apologies offered. When I started writing columns, for both publications, during the late 1980s & early 1990s, it was understood they were token nods to the realty segment of the MHIndustry. Since that time, other trade pubs have come and gone, e.g. Modern Home and Community Management. The Allen Letter professional journal (1991) and the Allen CONFIDENTIAL! (1999), both subscriber – supported newsletters; along with a few online ezines, feed our appetite for industry and asset class information.
Prior to 1993, little to no professional property management education. While MHI’s Manufactured Housing Education Institute’s (‘MHEI’) Accredited Community Manager® or ACM® program debuted in 1991, it took a couple years to reach its’ potential; and in 2001, was joined by PMN Publishing’s Manufactured Housing Manager® or MHM® program. Today, PM training & certification programs are in place – but not utilized nearly as much as they should be, given 50,000 LLLCommunities nationwide. This sad situation has not improved much at all since 1993.
So, what’s the big deal about year 1993? Well first; know two separate resources, birthed in successive years, combined to create a third decisive occasion benefiting the entire specialty property type! In 1989, the ALLEN REPORT (a.k.a ‘Who’s Who Among LLLCommunity Portfolio Owners/operators in North America!’) replaced Roulac’s Strategic Real Estate ‘List of 25 Largest Mobilehome Park Owners in the U.S.’ And the following year, nearly 100 ‘mobile home park owners’ convened in Clearwater Beach, Florida, for the first of 21 annual International Networking Roundtable events. And subsequent to that first meeting, this idea was birthed…
Bringing us to 31 August 1993. While details of the historic event, formation of the Industry Steering Committee, or ISC, predecessor to MHI’s National Communities Council (‘NCC’) division, is recounted in Appendix G of How to Find, Buy, Manage & Sell a Manufactured Home Community (J. Wiley & Sons, 1996), a summary of those events follows here. That day, 19 owners/operators of (then) manufactured home communities met at an airport hotel in Indianapolis, IN. Among the 19, were executives from all the firms that’d launch IPOs during the next two years: MHC, Inc. (today, ELS, Inc.); Sun Communities, Inc.; Chateau Properties, Inc.; ROC Communities, Inc. (latter two eventually merged). And UMH Properties (then, United Mobile Homes), already a REIT – from the 1980s, was also present, as were a half dozen other private and corporate property owners. Following that watershed meeting, several additional Task Force gatherings convened at locations around the U.S., culminating, on 1 January 1996, with MHI forming the NCC (now division), to formalize national advocacy in behalf of land lease lifestyle communities nationwide.
So, year 2013 commemorates the 20th anniversary of LLLCommunity owners/operators ‘taking control of their collective future’, and laying the groundwork for representation and advocacy they’d need as several property portfolios ‘went public’. Year 2013 also marks the 17th anniversary of the NCC division proper. And for those reading this history, but not yet direct, dues – paying members of MHI and its’ NCC division, know that the next biannual meeting is 25 & 26 February in Arlington, VA. For membership and meeting information, phone (703) 558-0666 or 0678. And tell’em ‘George sent me!’ Hope to see you at the meeting in late February….
As a related aside, the RV/MH Heritage Foundation has been approached about effecting some sort of formal commemoration of this 20th anniversary, so important to owners/operators of land lease lifestyle communities. Perhaps special mention will be made of the Industry Steering Committee, and its’ 19 Pioneer attendees (most of whom have now retired or died), at the 2013 Induction Banquet honoring Hall of Fame inductees, during August 2013. Guess we’ll have to wait and see….
‘Hooray!’ for MHCA’s ‘The Future of Manufactured Housing’…
Have YOU read it yet? What? The Manufactured Housing Communities of Arizona (‘MHCA’) January/February 2013 ‘newsletter’ cum 30+/- page booklet, titled: Today & Tomorrow. Actual title of this issue: ‘The Future of Manufactured Housing’. Kudos to executive director Susan Brenton, for planning and pulling off this futuristic coup! Want a copy? Phone Susan @ (480) 345-4202.
OK, here’s what I like about the overall newsletter cum booklet. There are no fewer than nine feature articles, penned by several attorneys (West of the Mississippi, they’re ‘everywhere’!), representatives from three national Advocacy bodies, one erstwhile land lease lifestyle community manager, one LLLCommunity owner, and MHCA’s president, Neal Haney, owner of NTH Management, a fee management firm.
There’s good substance buried within most of these articles, but you must ferret it out…
For example: Attorney Michael A. Parham’s piece, ‘A Dystopian Future for manufactured housing?’ Where dystopian is ‘…a society characterized by human misery, squalor, oppression, disease and overcrowding.’ His final paragraph reads, “I am gloomy about the future but still have some optimism that with innovation and hard work this industry can survive and perhaps prosper. But we need to recognize what is happening around us and be nimble enough to act to avoid the bad consequences and take advantages of opportunities presented by all of these new developments.” (Evidently, attorneys don’t use commas in AZ. GFA)
For example: Erstwhile property manager L.A. ‘Tony’ Kovac pens: “A well known, successful community operator has told me that if we aren’t careful, the land lease MH Communities of today will turn back into the corn fields, will be bought out by big box stores or ‘higher and better use’ developers. We have natural advantages because we do offer quality, affordable homes and living. But that doesn’t mean that we don’t have threats.” And he goes on, to rightly decry subsidized housing. Other threats?
For example: Attorney John A. Buric reminds us: “A segment of our industry will also continue to cater to lower income individuals, providing necessary housing to those who might otherwise be unable to afford decent housing. While many outsiders tend to bash our industry and some of its low end housing, the reality remains that such communities are an economic necessity and provide housing to individuals who could not otherwise afford a decent place to live.” How many times do we forget that perennial truism?
Here’s where & how I think MHCA can improve on this project, in the event they decide to perform this valuable service for the manufactured housing industry next year.
• Decide on a theme, like you did this time around, but solicit a more heterogeneous group of writers. While MHCA is a land lease lifestyle community owners’ trade association, only two of the nine articles are authored by 1) a bona fide LLLCommunity owner; and, 2) owner of a highly respected fee management firm specializing in this unique, income – producing property type. In my opinion, half the articles should be written by community owners/operators and HUD – Code home manufacturers. The other half? Industry advocates again, and certainly representatives from the chattel and real estate – secured finance (mortgage) segments of the manufactured housing industry.
• Hire a proofreader and content editor to polish all submissions! There were grammar, word choice, spelling, and punctuation issues within every article, e.g. missing commas, too many ‘that’ words, etc.. Also consider terminology alternatives and give writers an Approved List to use. In this year’s debut pub, nine variants were used to describe our unique, income – producing property type: ‘communities’ (Here Haney & Buric have the right idea); manufactured home community; manufactured housing community; parks; land lease lifestyle communities; and, one writer used three variants interchangeably: MH Communities, Land lease MHCs, and MHC’s. And, in my opinion, drop the use of ‘dealer’ next year in lieu of independent ‘street’ MHRetailer, and maybe ‘company stores’ (to differentiate manufacturer – owned sales centers from the former). Also prefer use of ‘resident’ and or homeowner/site lessee instead of tenant, and rental homesite or site, instead of lot, pad, stall, or worse.
• And there will be missteps, no matter how careful one parses, that slip by unnoticed. For example; in the MHARR piece, this statement is made: “What is needed…is dedicated, independent, national representation of the post production sector to effectively advance its’ interests in the nation’s capital (sic) – working in cooperation with the (home) producers’ national representation….” (author’s underlining) This is an obvious call for national advocacy association reorganization. Yet, when given an opportunity to advance said cause, two months after those lines were penned, the author waffles, claiming a subsequent change in priority.
Know what MHCA’s ‘The Future of Manufactured Housing’ issue reminds me of (excusing the dangling participle)? How ‘years ago’, the short – lived slick print trade publication, Community Management, prepared and distributed an annual compendium of Best Articles Published That Year, including some new material, regarding all aspects of (then) manufactured home community ownership and management. And there’s an interesting coincidence to be found in that comparison: both publications were researched and prepared by manufactured aficionados domiciled in Arizona!
Originally thought it was just me, but have since learned there’re many ‘skin in the game’ businessmen and women around the country who observe and think similarly about contemporary issues, disturbing trends, and more; all affecting the manufactured housing industry and land lease lifestyle community asset class. In no particular order or priority or emphasis, here’re those we’ve been seeing and pondering most of late…
Talking about ‘fair value propositions’, relative to homeowner/site lessees living in LLLCommunities, and enabling this to occur, is difficult if not impossible to ensure, when the property owner/operator touts a Maximize Profitability business model (i.e. ‘maximize – rental – income & minimize – operations – expenses’). Bottom line? Either enable ‘fair value propositions’ for one’s homeowner/site lessees, or stop boasting about the matter among your peers!
The sad disconnect, between word and deed, by national elected leaders talking ‘industry unity’ out of one side of their mouth; yet through inaction, encouraging the birthing of at least one, if not two, new national, not for profit manufactured housing – related trade bodies. Can’t help but recollect a similar scenario in 1985, when a group of disenchanted HUD – Code home manufacturers split from the Manufactured Housing Institute to form the Manufactured housing Association for Regulatory Reform. Paraphrasing a pair of oft – quoted, and related, aphorisms: ‘Those who fail to learn from the errors of their past, are likely to repeat them; and at greater cost, the second time around.’
The ol bugaboo of family leadership slippage, usually between first generation entrepreneurs and their adult children, when risk – taking and passion often wane in the face of business school acumen, fuzzy OJT, or some other supposed leadership education by osmosis. Time in the military, especially as a junior officer, oft helps here; unfortunately, most today do not go that route. A solution? Too little too late for many of you, but ‘Cut em loose for a year or two’, then see if they come back around, 1) more appreciative of their family’s business heritage, and 2) ready to be passionate, risk – taking, responsible business leaders! Of course, ‘the downside(?) risk’ is they find career fulfillment elsewhere and don’t return. I twice learned that lesson, first as a son, later as a father. But know what? In retrospect, I’d not have the matter evolve any other way….
Would be trade journalists unable to move beyond ‘throwing enough stuff against the wall – to see what might stick’, should focus attention and effort on business topics their prospective readers need and desire to see and learn, and less on opinion and editorializing, in print and online. Unfortunately, it appears the trendy need for ‘immediate gratification’, in all areas of life, has supplanted good old fashioned research and word smithing before publishing!. But there’s an opposite extreme as well. Trade columnists writing for pubs that boast of ‘using writers to fill white space among ads’. Geesh. How many ways can a columnist describe, over a period of 20 years, ‘HOW TO install skirting on a manufactured home’? Maybe that’s why readership is down.
How pimping a present day business relationship – or a potentially profitable relationship foreseen in the future, can trump doing the morally and organizationally right, albeit difficult thing to do today, given one’s position as an elected leader of a national body. But as they say, ‘What goes around comes around’. Just sad to say; it’s already happened on our watch.
2013, a Breakout Year? Maybe if…
Attention all C.A.S.H. Program Aficionados! As you’ll soon read in the 24th annual ALLEN REPORT, January 2013 marks the one year anniversary of the birthing of 21st Mortgage Corporation’s bold, symbiotic, new home purchase and chattel finance program; you know, the one that’s WOW – WOW – WOW for our home buying/site lessee customers, the land lease lifestyle community owner/operator, and the mortgage finance firm!
Well, a number of land lease lifestyle community owners/operators, knowing Spencer Roane, MHM®, David Funk, MHM®, and I, this time last year, worked with Matt Kerlin and Lance Hull, of 21st Mortgage Corporation, to establish the basics of 21st Mortgage Corporation’s exciting C.A.S.H. Program, have been inquiring about the possibility of getting together and talking about the progress, Lessons Learned, and more, during the Louisville MHShow in KY, during 23 – 25 January 2013. Informally, several of us have agreed to attempt to do so. So, to express ‘your interest’ in being part of an informal get together, contact Spencer via (678) 428-0212. We already know of C.A.S.H. Program users coming in from both coasts, as well as from throughout the Midwest.
And get this, learned just this week of yet another new chattel finance program is in the offing, maybe even during the aforementioned Louisville MHShow! This one, modeled somewhat after the C.A.S.H. Program, does not require $ participation by the LLLCommunity owner/operator, and applies only to lease – option and true lease agreements, relative to new and resale homes sited within LLLCommunities! Watch this weekly blog for further details. And if you see me at the MHShow in Louisville, ask me for more information then….
Will year 2013 be a breakout year for HUD – Code manufactured housing? Depends on a number of factors, for sure; but with the appearance of new and exciting finance programs, like the ones just described (2012) and hinted at (2013), we’re close to being ‘on our way back’ to increased home shipment volume!
The 24th annual ALLEN REPORT is in the process of being distributed to hundreds of Allen Letter professional journal subscribers nationwide! Will you be among those receiving this seminal document during the next couple weeks? If not a paid newsletter subscriber (only $134.95/year), phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 today to subscribe. OR, buy single copy of ALLEN REPORT for $500.00.
If interested, and not already registered to participate in the POWER Networking Luncheon, at the Crowne Plaza Hotel in Louisville, KY, @ 11:30Am – 2:30PM on 23 January, either phone the above – referenced MHIndustry HOTLINE; or better yet, print off the attachment to the BEBA (Blast Email Blog Alert) bringing you this posting, complete it and FAX it back to us ASAP via (317) 346-7158. Why is all this So Important? Because we expect to attract 75+/- land lease lifestyle community owners/operators to attend the Louisville MHShow for the very first time – to see Community Series Homes (or CSH Models) on display, and visit dozens of supplier booths, the afternoon after the luncheon and all day on the 25th of January. How can YOU not want to participate in this multipurpose occasion and event?
George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247