Today it’s about REALITY CHECK!
It’s REALITY CHECK, when ‘an Experience’ Trumps One’s Training, Everyday Practice & Common Knowledge
For more than a decade, I’ve taught Manufactured Housing Manager® candidates, how HUD’s preemptive, performance – based, federal building code has supplanted the inferior quality, sloppy workmanship, and other shortfalls characteristic
of pre – 1976 ‘mobile homes’.
Recently watched a 1962 era Homette 10X60 ‘mobile home’ dismantled in a landlease community I own. Was I ever surprised, when the outer aluminum skin was removed, there was little – to – no insulation; but most shocking of all, the exterior wall structure or skeleton, was fabricated entirely – not using 2 X 2 studs, as I’d always ‘thought & taught’, but rather with 1 ½” X 1 ½” vertical studs mortised to like – sized horizontal structural members every foot or so. Not that’s a REALITY CHECK!
Nearly five decades ago, I experienced a far different reality check. As a young Marine lieutenant, trained as a combat engineer officer, I’d learned the basics of explosives and demolitions, e.g. differences between cutting& cratering charges, booby trapping & disarming same, and safe handling of conventional and plastic explosives.
At the time, I was an engineer platoon commander at Landing Zone (‘LZ’) Studd, later renamed Vandegrift Combat Base, a few miles from the infamous Khe Sanh airstrip. We spent our days building roads, then clearing them of antitank and antipersonnel mines, constructing fighting bunkers, clearing fields of fire, and stringing razor wire.
On this particular day, I’d been teaching an enlisted Marine how to position, arm, and detonate M3 shaped charges, to blast large boulders partly blocking the road into and out of the LZ. He positioned the 12” diameter X 12” tall can – like container atop one boulder; crimped the open end of a blasting cap onto the freshly cut end of a foot long piece of time fuse, now firmly seated inside; inserted this detonator into the fuse well of the shaped charge; lit it; then walked briskly away, knowing we had less than a minute to await the explosion and pulverizing of the rock.
We were at least 100’ from the now armed, and soon to detonate, shaped charge. A minute went by, but no explosion! Another minute, then another went by, and still no explosion. Our radio crackled alive, telling us helicopters were inbound to the LZ, and would be over our worksite in less than five minutes; then asked if we were done blasting. When I radioed back we had a misfire, and were waiting out the requisite 30 safety period before disarming, I was ordered to disarm the charge immediately, as one was chopper carrying casualties. No time or point in arguing. So I started the ‘long walk’ to the unstable shaped charge, knowing it could explode any second, killing or wounding me. When I was a foot from the M3, I could see the fuse had burned and bubbled down into the blasting cap end protruding from the fuse well. I quickly grabbed the near end of the fuse, yanked it out, and tossed it aside. Nothing happened! What a relief! So, an early career REALITY CHECK, that surely trumped training, everyday practice, and common knowledge.
Know what? Today, businessmen and women in manufactured housing, and those of us owning/operating landlease communities, are faced with a new, serious, pervasive, federally – induced Reality Check, nearly unprecedented in our 70+/- year business history! The notable exception being, the period between years 1972 and 1975, when our industry’s new home annual shipment totals plummeted from 575,940 to 212,690 amidst the (then) implementation of another new, serious, pervasive, federally – induced Reality Check, the implementation of the HUD Code. This time around, however, we’re experiencing unprecedented financial regulation of our businesses. But first a little background.
Manufactured housing and landlease (f.k.a. manufactured home) community owners/operators have been purveyors of truly ‘affordable housing’ for decades. New HUD Code manufactured homes – for the most part, and throughout most regions of the U.S. – have been built and sold at but half the ‘per square foot price’ characteristic of traditional, site – built homes erected in the same local housing markets! When you get right down to it, manufactured housing is this nation’s most consistent supplier of quality, non – subsidized, ‘affordable housing’; but are we recognized and appreciated as such? NO, not even by the federal regulator (‘HUD’) tasked with overseeing the industry! They hardly ever mention us, let alone ballyhoo manufactured housing, as a perennial source of ‘affordable housing’, even in their annual planning document.
And that’s not the only ‘affordability’ factor characteristic of the manufactured housing industry. Over the decades, even when enjoying (too) easy access to chattel (i.e. personal property) financing, from independent, third party firms, in support of new – and at times resale home sales, landlease (f.k.a. manufactured home – and before that ‘mobile home park’) community owners/operators routinely…
1. Sold – in years past anyway – resale homes ‘on contract’ at whatever terms worked for both parties, the buyer and the seller
2. And when necessary, to preserve occupancy, rented homes on – site, often inexpensively, like apartment units – by the month or week
But today, with the widespread disappearance of independent ‘street’ MHRetailers, and as more and more prospective homebuyers, oft times with blemished credit, are unable to qualify for financing from independent, third party firms, landlease community owners/operators routinely…
3. Market and sell new homes on – site. These are often specially – designed Community Series Homes or CSH models, sold at or slightly above their wholesale, delivered price, and often far below what the same homes would cost if sited on realty owned fee simple outside the LLCommunity.
4. Engage in one or another of several self – finance methodologies (e.g. ‘captive finance’, ‘contract sale’, lease – option, etc.) to facilitate new and resale home transactions.
Today’s Reality Check is a new manifestation of federal regulation, this time in the area of housing – and related, finance. Think the S.A.F.E. Act (interpreted and enforced at the state level); onerous Dodd – Frank Bill provisions, including the already infamous Consumer Finance Protection Bureau (‘CFPB’); and other similar finance regulatory measures, ostensibly targeting predatory lending practices, money laundering, even identity theft. Well, this mishmash of (as yet) unclear regulatory measures is already acting as a choke on manufactured housing and landlease communities ability to provide ‘affordable housing at affordable prices with affordable terms’ to the very people who need it worst, those that federally – regulated lending institutions won’t serve! Bottom line? This contemporary finance regulations REALITY CHECK is ‘an unintended consequence’, marginalizing our industry and asset class’ ability and willingness to keep low to medium income individuals and families in shelter! This contemporary REALITY CHECK, in this veteran industry observer’s view, is now akin to ‘throwing the baby out with the bathwater’.
At GFA Management, Inc., dba PMN Publishing, we’ve started research and work on compiling a Very Special Handout for all attendees at the 21st annual International Networking Roundtable, 12 – 14 September 2012, at the Hilton Resort & Spa on Mission Bay, in San Diego, CA.
The guide is tentatively titled George Allen’s Guide to Manufactured Housing, Landlease Community, Affordable Housing, Realty & Lending – related Formulae, Rules of Thumb, Measures, Charts, and more… If you have helpful formulae, rules of thumb, and measures you’d like to see considered for inclusion in this booklet, designed to be user – friendly in size and ease of use, mail your suggestions to GFA c/o Box # 47024, Indianapolis, IN. 46247. Questions? Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. For that matter, if a LLCommunity owner/operator, and interested in receiving an invitation to attend this major national educational, networking, and deal – making event, let us know when you phone!
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