Responses to ‘Where There’s Smoke There’s Fire & Ire!’

Blog Posting # 634 @ 16 April 2021: EducateMHC

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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INTRODUCTION: Here follows an interesting mix of an Evergreen Issue (i.e. CONSOLIDATION), sad but needed expose’ of the plight of home-only loans, and a rare look back (60 years) into the early history of land lease communities.

I.
Responses to
‘Where There’s Smoke There’s Fire & Ire!’

Commentary continues to arrive from blog readers responding to this hot CONSOLIDATION topic from two and three weeks ago. Here’s a sampling of the responses – lightly edited:

“I appreciate this strong reinforcement of the previous blog message. Furthermore, I recommend walking away from the HUD-Code, and use local building codes already in place. They’re honestly not that much more costly than what we’re enduring now.”

“This blog message hits home. It is all too true. Someone overpaid for a park near me and now their site rent is $155.00/month higher than mine – with no amenities!”

“Ata Boy! Now places like California have made long term leases illegal and subject to rent control wherever enacted, and as of 1/1/25, even overriding existing leases.”

“Thank you for not whitewashing the truth about some of today’s land lease community (large property portfolio) ownership firms. This era of ‘get rich quick’ investment strategies is destined for doom, as real estate investments are cyclical. Why not invest for the long term? Ten years goes by very fast. If the acquisition is properly structured, and capital investments are made within the community, over time everyone will prosper.”

So, where do we go from here? Probably nowhere. Why? Ask yourself: ‘Who’s going to lead efforts to ‘right the wrongs’ of CONSOLIDATION – and other aberrations, among market-dominating HUD-Code housing manufacturers, and some of the largest owners of land lease community property portfolios?’ There’s your answer. No one! And as is oft the case, disparaging remarks will wend themselves my way for even bringing up these timely and troublesome topics.

So very frustrating!

II.
Home-only Loans Not a Priority
with FHFA, Fannie Mae & Freddie Mac

The following salient remarks are quoted directly from a communique distributed by the Manufactured Housing Association for Regulatory Reform (‘MHARR’), dated 25 March 2021:

“…an ongoing scheme by Fannie Mae, Freddie Mac, and FHFA, to exclude the vast bulk of the mainstream manufactured housing consumer financing market from the securitization and secondary market support mandated by Congress through the Duty to Serve Underserved markets 9’DTS’) provision of the Housing and Economic Recovery Act of 2008 (‘HERA’).”

“…FHFA deleted manufactured homes from its’ Enterprise Housing Goals (‘EHG’) for Fannie Mae & Freddie Mac….” relative to “…any DTS-based support for the nearly 80% of affordable mainstream manufactured housing consumer finance market represented by personal property (or ‘chattel’ loans).” – a.k.a. ‘home-only loans’

III.

Saving the Best for Last?

Here follows are promised “…excerpts from the transcript of a talk given by a pioneer park manager at a trade meeting in 1960….” Pp. 30 & 31 in Spencer MacCallum’s The Art of Community. Reproduced here as printed, except for parenthetical remarks for added clarity.

“Not only are many home owners unable, because of the shortage of lots (i.e. rental homesites), to relocate their homes when moving to another city, but they find many parks will only admit homes which have been purchased from them. The desirability of ‘closed’ versus ‘open’ parks is being debated in the industry. Certainly there is more architectural and planning control possible in the closed parks.” Note. In future years, after 1960, ‘closed parks’ will be outlawed as ‘restraint of trade’ measures, tying one arm’s length transaction to another.’ GFA

“You will find that the attitude of the people in a (mobile home) park is very different from that of people who live in apartments or subdivisions. You can move new guests into the park and the next morning when they walk down the street without having been formally introduced, they say good morning, just like on an ocean liner. There is a kind of spirit in a park that is different, and you must (as manager) maintain that.”

Now if you have an old grouch or crab, simply chase him out. Fortunately, under the laws of Florida, I can put anyone out of my park within two hours, and I tell my tenants that if they do not comply, I will hook their trailer (home) and set it out on a federal highway and let them do with it what they want.” Note. This sort of landlord freedom occurred well before enactment of Chapter 723 in the state of Florida. GFA

‘Tenants all respect their neighbors. You do not see any speed limit signs or humps in the road because I tell them when they come in that I am doing them a favor to let them live in my park and they must live like ladies and gentlemen. They must not create a nuisance.”

“I discovered you cannot operate a trailer (mobile home) park with more than one entrance. You must know everybody who comes into your park. You have a big responsibility. In my park I have 12 widows, and I am responsible for them. I have to know who comes into that park. You do not permit any solicitors or tradesmen who are unknown to you or who break your roads down.”

So, there you have it. How at least one on-site property manager viewed his mobile home park management responsibilities 60 years ago! (I was just entering high school at the time; how ‘bout you?)

George Allen, CPM, MHM
EducateMHC