Official State of the Manufactured Housing & Landlease Community Asset Class
Official State of the MHIndustry & LLCommunity Asset Class!
The unabridged title of this frequently requested public presentation goes like this:
‘Present State of the HUD Code Manufactured Housing Industry & the Landlease (nee manufactured home) Community Real Estate Asset Class!’
At least for the time being, HUD Code manufactured housing is returning to its’ affordable housing roots. How so? It’s a long but interesting story with some twists and turns…
From the mid 1940s thru mid – 70s, 80+/% of annual new home shipments (Remember, we count ‘shipments’ in this business, not new homes sold) were ‘singlewide’ mobile homes and 20+-% ‘doublewides’; and, 80+/-% of said homes were destined for siting in ‘mobile home parks’, the remaining 20+/-% on scattered building or subdivision sites owned fee simple. Note. This was a 30+/- year period in U.S. housing history when the concept and term ‘affordable housing’ meant affordable housing and a truly affordable lifestyle!
25 years later, by year 2000, those percentages reversed! Now 80+/- of annual new home shipments were ‘multisection’ manufactured homes and 20+/-% were ‘singlesection’ homes; and, 80+/-% of said homes were destined for siting on scattered building or subdivision sites owned fee simple, and generally referred to as Land & Home Packages; the remaining 20+/-% of new homes went into manufactured home (nee mobile home park) communities. Why? Our unique, homegrown type of factory–built housing had become more ‘homelike’ over the years and increasingly desirable to the homebuying consumer, who could not afford the $200,000.00 price tag on new site–built homes, and chattel (personal property) loan financing was plentiful. Note. This was also the 25 year period in U.S. housing history when the concept and term ‘affordable housing’ became bastardized, to mean whatever government bureaucrats and housing marketers, activists, academics, and journalists wanted it to mean, at the time, and for whatever selfish purpose – but all to the detriment of the homebuying citizen!
Another decade has almost passed, and the two 80/20 percent manufactured housing configuration and siting paradigms, referenced in the preceding paragraphs, are reversing again! That’s right, the number of new singlesection manufactured homes continues to increase while the number of multisection homes decreases. And an increasing volume of new manufactured homes, both singlesection and smaller multisection models – now commonly referred to as ‘community series’ homes*1, are purposely marketed into landlease (nee manufactured home) communities by dozens of Business Development Managers (a.k.a. ‘BDM’s) working for a dozen or so of the remaining HUD Code home manufacturers – more about this later. Why? First; the scattered and subdivision building site market has dried up, for a variety of mostly financial and economic reasons, for the time being; yet, there are an estimated 500,000 vacant rental homesites to fill in the approximately 50,000 LLCommunities in the U.S. today! And smaller manufactured homes are inherently more ‘affordable’ than behemoth multisection models; and certainly fit better, on otherwise functionally obsolete rental homesites within these unique income–producing properties. Furthermore, owners/operators of these ‘recession proof’ properties know, if willing to take on more risk and pay closer attention to daily management operations, they can ‘add value’ to these properties by acquiring, reselling and self–financing new and resale homes on–site within their properties. Note. It’s futile to define or describe ‘affordable housing’ these days, as the same players cited in the previous paragraph, refuse to acknowledge and correct their gross perfidy applying this key and timely housing concept–making it a near useless benchmark in today’s housing marketplace.
So, are there key, and otherwise important trends associated with the aforementioned paradigm shifts within the HUD Code manufactured housing and landlease community real estate asset class? Yes there are….
Many LLCommunity and MHIndustry purists date recognition of this latest shift – now – trend, to the 27 February 2008 National State of the Asset Class caucus held at FountainView Estate LLCommunity in Tampa, FL. 100+.-, when LLCommunity owners/operators attended. Result? A five part Action Plan to revitalize the asset class and, hopefully, breathe ‘home sale life’ into a severely contracted MHIndustry. One action area involved opening lines of communication between LLCommunity owners/operators and MHIndustry manufacturers.
One year later, to the day, 100+/- HUD Code home manufacturers representatives and LLCommunity owners/operators convened at the RV/MH Heritage Foundation’s Hall of Fame, Museum and Library in Elkhart, IN. for an Historic SUMMIT Meeting. Most of that day, 27 February 2009, was spent discussing ‘back and forth’ what the former could build and ship; and what the latter needed and desired on–site in their properties. Result? The soon redesign of housing product to be ‘LLCommunity–friendly’, now known as ‘community series’ homes. Read on…
Also during late 2008 and throughout year 2009, another emerging phenomenon, maybe someday to be identified as a paradigm shift, has taken root. Beginning simply as a Super Symposium, early venues were day long events, in IN, OH, GA, & IL., where LLCommunity owners/operators, lenders and third party finance specialists, and HUD Code home manufacturers convened to learn together ‘How to Market, Sell, and Self–finance New and Resale Homes On–site in LLCommunities!’ Now that basic seminar agenda has morphed into a multi–day affair, featuring not only education, but supplemented with several new HUD code ‘community series’ homes on display for participants to inspect, with the expectation they’ll order new home stock for placement on–site in their properties. Such Symposium/Showcase events have recently been held or are planned in IL, GA, NY and TX. Is your state planning to revitalize our industry and asset class in like manner? Perhaps you should contact your state executive and suggest they do so.
At the same time, several regional mega MHShows have become casualties of marketing and finance ill effects of the two (HUD Code & site–built) housing boom–bust cycles here in the U.S. The annual Midwest MHShow in Louisville, KY, is the latest decades–old event to fold.
So, are there any other realities and trends afoot affecting the MHIndustry and LLCommunity asset class? While time and space, here, does not facilitate discussion, they include:
Lack of floor plan (wholesale) financing for HUD Code manufactured homes
Paucity of qualified prospective homebuyers for manufactured homes
Lack of strong, unified national advocacy @ MHI & MHARR
No widespread manufactured housing ‘resale market’…valuation, multilist…
No national ‘image improvement’ & or ‘product promotion’ campaign to date
Diminished trade press presence with demise of Merchandiser & Modern Home
Uneven implementation of HUD home installation and Safe Act regulations
Future uncertainty of MHIndustry by dint of continued corporate consolidation
Slow growth of MHI’s National Communties Council division
Uncertain role of ULI’s MHCC ‘Think Tank’ for MHIndustry & LLCommunities
Lack of support for property management professionalism re CPM, MHM, ACM
Emergence of a Small Community Owners Forum at the 18th annual Roundtable
Believe it or not, there’s still more that could be included here. As usual, I appreciate your feedback. Hopefully you’ve made this Blog, at www.community-investor.com your Monday touchstone for all things pertaining to the MHIndustry and LLCommunity asset class! Let me know your feedback on these key matters….
1. Don Westphal serves as the national clearing house for developing standard descriptions relative to the ‘community series’ home designs and configurations: (248) 651-5518.
George Allen, Realtor®, CPM®, MHM®
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 46247