National Economic Impact of Manufactured Housing, Part II

Blog Posting # 596 @ 31 July 2020; Copyright 2020.

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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National Economic Impact of Manufactured Housing,
Part II.

Last week, via blog posting # 595, we identified four past and present documentations of economic impact of manufactured housing and land lease communities on national and state levels. Remember? They were:

• RV/MH $ Economic Impact in Indiana during 1997, courtesy of the IMHA/RVIC
• MHI’s debut of Dr. Stephen Cooke’s ‘production value’ of a new 2013 HUD-Code home
• Annual ALLEN REPORT, as it pertains to land lease community portfolio performance
• Foremost Insurance’ now defunct manufactured homeowner market demographics

Well, guess what? There’s a fifth economic impact study to add to this list and it comes from the state of Wisconsin – and the stats are less than one year old! Another template to use.

This Economic Impact study was prepared by the University of Wisconsin-Whitewater Fiscal & Economic Research Center. It covered three sectors of the manufactured and modular housing industry: manufacturing, retail and services and park residents. Bottom line? Taken together, these sectors “… generate more than $2.65 billion and 26,063 jobs in Wisconsin annually.”
Furthermore, “…manufactured home manufacturing has a $185.9 million economic impact, and creates 1,115 jobs in Wisconsin each year. Manufactured home manufacturing also accounts for $48.76 million in total wages and $4.2 million in state and local taxes.”

“Manufactured home retail and services are responsible for $456.4 million in annual economic impact, with 2,884 total jobs, $85.7 million in total wages, and $31.5 million in state and local taxes.”

“The economic impact of manufactured home park residents is even more staggering, contributing $2.15 billion to Wisconsin’s economy annually. Manufactured home park residents account for 22,064 total jobs, $881 million in total wages and $157 million in state and local taxes.”

And there’s more! But I think you get the idea: ‘How helpful it’d be to be reading similar economic impact information for states in which you engage in manufactured housing and ownership/operation of land lease communities. But this is not going to occur unless you take steps, via your state manufactured housing association, to initiate and fund such a study in your local housing market (state) area. For advice on identifying and selecting a research firm to serve your association, contact Amy Bliss, CAE, Wisconsin Housing Alliance: (608) 255-3131.

Also remember. EducateMHC plans to enclose the aforementioned RV/MH $ Economic Impact study (circa 1997) as part of the August issue of The Allen Confidential! business newsletter. This could serve as the research and reporting template you need to replicate Economic Impact findings in your state. To subscribe, visit


One More Reason…

‘ How we tend to be isolated as a niche industry!’

I first encountered this reality early in my career as a land lease community owner cum freelance consultant. Back in the late 1970s, and throughout the 1980s, ‘everyone’ – it seemed, had a Rule of Thumb for valuing (then) ‘mobile home parks’, eventually manufactured home communities. But none of these ‘formulae’ were based on facts or research, just whimsy. That is, until the early 1990s, when Larry Allen, MAI and I conducted national studies, via Manufactured Home Merchandiser magazine, to quantify operating expense ratios (‘OER’), patterned after Experience Exchange format and data from the Institute of Real Estate Management (‘IREM’) resources for conventional apartment communities nationwide.

I parlayed the knowledge we gained, into a useful valuation tool, as a review appraiser. And for some time, made good money, demonstrating how virtually every ‘mobile home park appraisal’ was wrong! Why? Because, to that point in time, everyone kinda assumed the OERs were the same as those for conventional garden style apartments. NOT. For example: because homeowner/site lessees were/are responsible for their homes inside and out, the maintenance expenses characteristic of apartment living were far less in a land lease community. And, due to very low turnover (5% for homes & 10% for homeowners) at the time, marketing expenses for land lease communities were much lower as well. How much so? Overall, at least 10-15%, i.e. garden style apartments = 55% OER; land lease communities = 40%. This difference alone resulted in most land lease communities being undervalued.

That lasted until J. Wiley & Sons published my book, How to Find, Buy, Manage & Sell a Manufactured Home Community, in 1996&8. My lock on ‘review appraiser’ work continued for a while – until MAI appraisers realized the Industry Standard Chart of (Operating) Accounts and OERs contained therein (e.g. page # 13) was the hands-on tool they needed to effect more accurate valuations of this unique type income-producing property type.

See what I mean? And this sort of scenario continues today, 25 years later. How so? As recently as this past week I was invited to listen-in on a webinar purported to be the ‘last word’ relative to Incorporating Manufactured Housing – as affordable housing – in the Builder Model. First off, I don’t think any of the four or five panelists actually ‘works’ in manufactured housing, let alone land lease communities. And while ‘affordable housing’ was given a lot of lip service during the webinar, not once did anyone actually define or quantify the concept. Furthermore, everyone seemed enamored with CrossMod™ homes and Fannie Mae’s MHAdvantage $ program. But nary one of them knew that only six such homes were placed under the MHAdvantage program during all of 2019. And, as I pointed out in post-webinar correspondence, NO mention whatsoever of land lease communities in this presentation, even though as much a 40 percent of today’s new HUD-Code housing shipments are going directly into this type investment property type! Once again, as an industry and realty asset class, we are little understood.

YES, we tend to be an isolated niche ‘real estate asset class’ within the ‘manufactured housing industry’, and because of that, folk simply don’t study us as one might think. The upside of this conundrum occurs when one (i.e. you & me) takes time to study and understand these sectors. We can, in our own way and timing, parlay what we know into self-serving and self-rewarding opportunities!

George Allen, CPM, MHM

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