Reading Between the Lines!
Reading Between the Lines!
‘There is an answer in here somewhere, for manufactured housing
& landlease (nee manufactured housing) communities!’
Don’t miss reading paragraph four (IV) of this blog posting!
Several recent feature articles from four different business magazines, never once mention manufactured housing or landlease communities, but convey subtle messages applicable to our industry and asset class!
In ‘Homeownership Under Attack’, by Ken Trepeta, in June issue of RISMedia’s REAL ESTATE magazine, begins this way:
“…when you add up the various laws, proposed laws, regulations and proposed regulations, it is hard not to conclude homeownership is under attack. Regulators, legislators and members of the administration are proposing laws or changes affecting homeownership, acting as if their actions are being done in a vacuum. Many of the proposals, may even make partial sense when taken alone, but when taken as a whole, are devastating to homeownership and the housing industry.”
The writer describes provisions in the impending Dodd – Frank law that “… propose a Qualified Residential Mortgage (‘QRM’) requiring 20% or more in down payment for securitized loans…super strict debt – to – income ratios and credit standards that leave no margin, even for a single payment lost in the mail.” And a “…Qualified Mortgage (‘QM’) regulation (that) tightens credit standards even further, and has features that’ll cause one to question whether they can profitably lend money to anyone.” Sounding familiar yet?
Trepeta concludes “…it isn’t hard to conceive of a world where no one is willing to lend or securitize, except to a narrow group of consumers with perfect credit, W-2 income, no debt, and who can put more than 20% down. In 2010, according to National Association of Realtors data, that was only about 25% of home buyers.” Hmm. Where does this apparent ‘attack on homeownership’ leave landlease community owners/operators who, responding to the wholesale disappearance of MHRetailers (circa year 2000), have been marketing and selling new and resale homes on – site; and, when necessary, engaging in one or another form of self – finance, e.g. via ‘buy here – pay here’ & captive finance methodologies; or, most recently, lease options, and upon occasion, rental of manufactured homes as apartment units? Apparently we’re not in this morass alone.
Then, in a short piece titled ‘Affordable Rents Shrink’, by Claire Easley, writing in Multifamily Executive magazine, we learn “Rental housing is home to 38 million U.S. households (according to National Low Income Housing Coalition or NLIHC).” While many rent by choice, numerous others find doing so, a matter of economic necessity.
With “The average renter wage in the U.S. estimated to be $13.52 per hour”, an amount short of what it takes to rent even a modest apartment, “the (large) number of renters spending more than 50% of their income on rent and utilities” demonstrates a severe and all time high cost burden, according to Harvard University’s Joint Center for Housing Studies (‘JCHS’) report: ‘America’s Rental Housing: Meeting Challenges, building on Opportunities”. Guess whether manufactured housing and or landlease communities are mentioned in that study, as a means of meeting said rental challenge, or an opportunity on which to build? Not.
Furthermore, “…just when it seems to be needed the most, the country’s rental stock is disappearing, with low – cost rentals faring the worst.” While here we sit, with a minimum of 250,000 vacant rental homesites in landlease communities throughout the U.S.! But then; to date, we can’t get more than a couple HUD Code home manufacturers truly motivated to fill these sites with affordable Community Series Homes! Go figure.
Geesh! This is indeed a timely opportunity to ‘get the word out’ about our industry and asset class. Last week’s blog described a precious few MHActivists presently afoot within manufactured housing and landlease community environs. Did I miss YOU, as an MHActivist? I hope so. And if so, write and let me know what YOU’re doing to position manufactured housing and landlease communities as viable answers to the aforementioned ‘attack on homeownership’, and in the immediately preceding paragraphs, a ‘practical means of meeting this nation’s rental challenge’!
In the June issue of Multihousing Professional magazine, in an excerpt from a work penned by Carisa Chappel, multihousing (as in apartment and landlease communities) gets some attention. “The demand for multihousing continues to grow across the country, but one segment particularly under – served and attracting the attention of Fannie Mae, is the affordable housing market, according to the recently released White Paper: ‘Fannie Mae & Workforce Rental Housing’.”
‘Of the current 15.2 million rental units, only about 6.5 million are considered affordable housing for those earning less than half of their (local housing market’s) Area Median Income or AMI. The number of affordable units available for households earning less than 30 percent of AMI is significantly lower, at 2.4 million….” And, “Typically, 90 percent of Fannie Mae’s multifamily financing supports housing for renters earning at or below their region’s AMI.” Where do landlease communities fit in this mix? It’d be interesting to know. Perhaps I can find out before posting next week’s blog. Point? Once again – in this case – the multifamily housing rental market continues to move along, albeit not as well as in the past, with little to no sensitivity to the presence of landlease communities, and how many more bona fide ‘homeowners/rental homesite lessees’ might indeed play a greater role in addressing this housing shortage.
OK, enough ‘reading between the lines’ for the time being. Let’s talk internal politics for awhile.
Several blog postings ago, we challenged manufactured housing and landlease community leaders to caucus, in a public and grassroots manner; to, 1) get a handle on where we are today in the history of our industry/asset class; 2) ‘brainstorm’, or by whatever means works, articulate business plan(s) to invigorate housing production/distribution and property development/investment functions; and 3) commit to take necessary steps to get us off our 60 year, three years running (maybe four) nadir of 50,000 housing units shipped per year! Have YOU heard of any such plan of late? I haven’t. Is there an alternative? I believe there is, and it might, during the next few months, materialize in this fashion….
The 20th annual International Networking Roundtable (a.k.a. ‘Triple Anniversary Roundtable’, honoring MHI’s 75th birthday, Roundtable’s 20th session; and National Communities Council’s 15th year in operation!) will occur 14 – 16 September 2011, at the Hyatt Regency’s Hill Country Resort & Spa on the west edge of San Antonio, TX. Besides the 20+ presenters covering as many timely topics, there’ll be ample time for property and portfolio deal – making, as well as interpersonal networking. One of the most important things that’ll occur at this year’s event is scheduled for the final session on Friday: ‘What’s to become of the research & reporting, print & online communication, and property management education resources now enjoyed by 50,000+/- landlease community owners/operators nationwide?’ Registered to attend? We’re already approaching the midpoint of our 200 attendee limit, so don’t be left out. Register today! See contact information at the end of this blog posting.
A couple weeks later, from 2 – 4 October, at the beautiful Hilton Hotel Tapatio Cliffs in Phoenix, AZ., MHI will host its’ annual meeting. They’ll soon be publishing an agenda. Watch to see if time is set aside for an industry/asset class wide caucus during or after this event; or whether mention is even made of a need for such a ‘coming together’ of industry /asset class stakeholders from all segments of the industry. If not; well….
There’s precedent for the convening of national caucuses among manufactured housing and landlease community aficionados! Remember the first National State of the Asset Class (‘NSAC’) caucus at FountainView Landlease Community in Tampa, FL., on 2/27/2009? Were YOU among the 100+/- landlease community owners/operators present that day, crafting a Five Step Program in effect to this day? And the following year, on 2/27/2010, just as many manufactured housing and landlease community folk convened in Elkhart, IN., at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility, for the 2nd NSAC caucus. Were YOU present that day, when the Community Series Home concept was birthed, and dozens of Business Development Managers named to sell this new housing product to landlease community owners/operators?
Know what? There were preliminary plans for a 3rd NSAC caucus during February of this (2011) year, but these were put on hold when it was (wrongly) sensed our national elected and salaried leaders, at the time, would be carrying on that two year old initiative. Well, neither event happened!
This blog posting’s BEBA (Blast Email Blog Alert) now goes out to nearly 400 manufactured housing executives and landlease community owners/operators weekly. If you’re one of these blog floggers (readers), and believe a 3rd National State of the Asset Class should be scheduled, for the good and future of manufactured housing and the landlease community asset class, during February 2012, and probably in Florida – as Chicago can be a bit nasty, weatherwise, that time of year, let me know by phone: MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156, mail: GFA c/o Box # 47024, Indianapolis, IN. 46247; or email: firstname.lastname@example.org If I receive a minimum of 50 sincere indications of support for the idea; planning a 3rd NSAC will begin during mid to late October 2011- at the same time the time a new research/resource team is compiling the 23rd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’), scheduled for publication 1 January 2012. What say YOU?
Want to be one of the stakeholders intent on preserving and rejuvenating manufactured housing and landlease communities into and beyond year 2012? If so, let me know ASAP!
George Allen, CPM®Emeritus & MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247