Proof of ‘New Breed of MHRetailer & Lender’!

COBA7® via Blog # 337 Copyright @ 22 February 2015

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 primary national advocacy voice, official ombudsman, research reporter, & online communication media for all LLLCommunities in North America!

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Introduction to this week’s COBA7® blog posting at website:

When was the last time you had, figuratively speaking, a light bulb turn on in one’s brain experience? Well, during the past two weeks I’ve had a pair of enlightening afflatuses!

The first, described in Part I following, has to do with finding U.S. Census Bureau data confirming the long-sensed trend of an annually increasing percentage of new HUD-Code homes being shipped directly from factories into land-lease-lifestyle communities!

The second, has to do with the unvarnished back story regarding the Dodd-Frank Act cum corporatism; what really precipitated the 2008 financial crisis; and, what must yet happen during the years ahead to see this regulatory nightmare repealed.


‘New Breed of MHRetailer & Lender’

U.S. Census Bureau Data Confirms Emerging Support Role of Land-lease-lifestyle Communities (a.k.a. manufactured home communities) in behalf of the Manufactured Housing Industry

Here’s how we got to where we are today…

Easy access to chattel capital, for loans on new manufactured homes going into (then) manufactured home communities, ‘went away’ soon after the turn of the 21st century. As that lifeblood $ dried up, the number of independent (street) MHRetailers – traditional ‘filler’ of vacant rental homesites in 50,000+/- MHCommunities nationwide, waned from thousands to a few hundred retail salescenters in the U.S. At that point, owners/operators of (larger communities or property portfolios) this unique, income-producing realty type, were forced to sell homes on-site, whether ‘repo’ units, good quality resale homes, or (Gasp!) new manufactured homes. For decades earlier, these owners/operators eschewed new home sales, preferring homebuying customers ‘eat the depreciation’ on said transactions; or, pass them onto ‘street dealers’ who owned such properties, and at times engaged in ‘closed park operations’, i.e. ‘buy here, pay here – twice’.

In any event, by 27 February 2009, (then) MHCommunity owners/operators, having already launched their own national advocacy body, the National Communities Council (‘NCC’) division of the Manufactured Housing Institute (‘MHI’), realized, at their first National State of the Asset Class (‘NSAC’) caucus, in Tampa, FL., they must take control of their destiny, or risk being marginalized by similar factors affecting the manufacturing and distribution of HUD-Code manufactured homes. A year later, on 27 February 2009, a mix of home manufacturers and realty investors met at the RV/MH Heritage Foundation’s Hall of Fame facility in Elkhart, IN., to agree, once and for all, ‘What it’d take for MHCommunity owners to buy more new homes; and, what manufacturers needed to do to incentivize the purchase of more new homes?’ Answer? New home design! By year end, Community Series Homes (so-named by industry consultant Don Westphal), or CSH Models: singlesection homes & modest-sized multisection homes with WOW factors and a plethora of durability-enhancing features (to ease the turnaround of such ‘park-owned homes’ between owners or renters) were being marketed by dozens of Business Development Managers (‘BDM’) coast-to-coast. And the process continues; to such an extent, it’s almost standard parlance in the manufactured housing industry today, to refer to (now) land-lease-lifestyle community owners/operators ‘selling & self-financing new homes on-site’ as the New Breed of MHRetailer & Lender.*1

Here’s where we are today.

U.S. Census Bureau data confirms what’s described in the previous paragraph:
the increased sale and placement (i.e. installation) of new HUD-Code manufactured homes on-site within (many but certainly not all) LLLCommunities throughout the U.S.

To mine this data, launch one’s computer browser to ‘Manufactured Homes Survey’. Once there, left click on the ‘Historical Data’ heading. And once on that view, left click on the ‘Selected Characteristics’ label – listed vertically, where statistics are grouped by year, e.g. 2009, 2010, 2011, 2012, & 2013, with a choice of accessing either PDF or XLS. At each of those years, compare the number (thousands) of manufactured homes going ‘Inside MHCommunities’ with total number of homes shipped that year, e.g.

2009 12T into (now) LLLCommunities, divided by 55T = 22 percent
2010 13T ditto 51T = 25.4 percent
2011 12T ditto 48T = 25 percent
2012 15.6T ditto 52.8= 29.5 percent
2013 16.9T ditto 56.3= 30 percent

The Good News, of course, is that the number and percentage of new HUD-Code homes being shipped directly into LLLCommunities, and not necessarily via independent (street) MHRetailers, continues to increase. It will be interesting to see the results for year 2014.

Concerned about the relatively few homes going into ‘subdivisions’ mixed in with the numbers shown above? I’m not. While undefined at the moment, there’s more than one way the demarcation between ‘land lease’ and ‘conveyed fee simple’ might be blurred, e.g. resident-owned communities, etc..

In any event, it’s instructive and encouraging to see, once and for all, clear evidence of the evolving trend so many of us ‘knew’ was occurring, but had little to no empirical data supporting said contention. Bottom line? ‘Long live the New Breed of MHRetailer & Chattel Capital Lender!’


Here’s What I Learned This Past Week About ‘The New Corporatism of Dodd-Frank’, & ‘GSEs, the Federal Reserve, & the Elements of True Financial Reform’

Following quotations are from the book, Dodd-Frank: A Law Like No Other, a collection of writings from seven lecturers sharing their thoughts at Hillsdale College during 2014.

David A. Skeel. “Once every generation or two, after a major financial crisis, Congress redesigns American financial regulation.” P.2

‘The Dodd-Frank Act is Congress’s redesign of financial regulation for our generation. …there are two very odd features of the Dodd-Frank Act.” P.2

‘The first is…built on the premise the same guys who orchestrated all the bailouts that caused so much trouble, should be the ones who decide what to do about it.” P.3 (Specifically, Henry Paulson, Timothy Geithner, & Ben Bernanke)

“The second odd feature…closely related to the first. Traditionally, American debates over how to regulate our major financial institutions, have pitted those who believe the biggest institutions should be broken up if they begin to dominate Amercican finance, against those who believe giant institutions are inevitable and government should simply make sure it has the tools to control them.” p.3

“…key architects of Dodd-Frank hailed from the big-is-okay side of the traditional divide.” P.4

“…the Wall Street reform portion of Dodd-Frank has two very clear objectives: the first is to limit the risk of the so-called shadow banking system by more carefully regulating the key instruments (e.g. derivatives & financial innovations) and institutions (e.g. .J.P. Morgan Chase, Citigroup, or AIG) of contemporary finance.” P.4 Note: “Shadow banking…is the use of nontraditional sources of finance.” P.5

“The second objective is to limit the damage in the event one of these giant institutions fails. The Dodd-Frank Act thus has two simple objectives – limiting risk before the fact and trying to limit the damage if a giant financial institution nevertheless falters.” P.5

“It also has a recurring theme: partnership between the government and the largest banks. This partnership, in which the government locks arms with a small group of dominant institutions, looks a lot like the European style of regulation that is known as corporatism.” P.5


Peter J. Wallison. “The 2008 financial crisis was a major event, equivalent in its’ initial scope – if not its duration – to the Great Depression of the 1930s.” p.49

“By 2000, the developing (housing) bubble was already larger than any bubble in U.S. history, and it kept growing until 2007, when – at nine times the size of any previous bubble – it finally topped out and housing prices began to fall.” P.54

“With the largest housing bubble in history deflating in 2007, and more than half of all mortgages made to borrowers who had weak credit or little equity in their homes, the number of delinquencies and defaults in 2008 was unprecedented. One immediate effect was the collapse of the market for mortgage-backed securities that were issue by banks, investment banks, and subprime lenders, and held by banks, financial institutions, and other investors around the world. These were known as private label securities or private mortgage-backed securities, to distinguish them from mortgage-backed securities issued by Fannie and Freddie. Investors, shocked by the sheer number of mortgage defaults that seemed to be underway, fled the market for private label securities; there were now no buyers, causing a sharp drop in market values for these securities.” P.55

“This radical withdrawal of liquidity from the market was the financial crisis.” P.56

(And) “…the crisis was not caused by insufficient regulation, let alone by an inherently unstable financial system. It was caused by government housing policies that forced the dominant factors in the trillion dollar housing market- Fannie Mae and Freddie Mac – to reduce their underwriting standards.” P.56

“What…should have been done? …a thorough reorientation of the U.S>housing finance systems away from the kind of government control that makes it hostage to narrow political imperatives – that is, providing benefits to constituents – rather than responsive to the competition and efficiency imperatives of the market system.” P.56.

“A bubble energizes itself by reducing defaults as prices rise. This sends the wrong signal to investors: Instead of increasing risk, they tend to see increasing opportunity.” P.57

In conclusion, “…Dodd-frank was based on a faulty diagnosis of the financial crisis. Until that diagnosis is corrected – until it is made clear to the American people, the financial crisis was caused by the government rather than by deregulation or insufficient regulation – economic growth will be impeded. It follows that when the true causes of the financial crisis have been made clear, it will become possible to repeal Dodd-Frank.” P.57.


End Note.

1. New Breed of MHRetailer & Lender, a.k.a. New Breed of MHRetailer & Chattel Capital Lender. A new moniker for land-lease-lifestyle community; specifically, where the owner/operator routinely engages in the on-site wholesale purchase, retail sale, and when need be, the self-financing or renting of said manufactured homes to prospective homebuyers and renters, mainly to ‘keep the site rent meter running’.


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