SECO20 NATIONAL CONFERENCE OF COMMUNITY OWNERS, SEPT. 28-OCT. 1
THE MAGAZINE FOR MANUFACTURED HOUSING PROFESSIONALS
ADUs ARE A HOT RESIDENTIAL BUILDING TREND PATRICK INDUSTRIES – A DECADE TO REMEMBER
SEPTEMBER / OCTOBER 2020 | MHINSIDER.COM A Publication of
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ADUs ARE A HOT RESIDENTIAL BUILDING TREND
CONTENTS IN MEMORIAM 6 Clayton Homes, Auto Co-Founder Joe Clayton Laid to Rest HAPPENINGS 8 Industry Happenings EVENTS 12 Upcoming Industry Events BUILDER / RETAILER 17 Clayton Launches New Website to Find Land 24 Hollywood Backlot Homes Makes Good Use of Opportunity Zones COMMUNITY 26 Community Owner Post-Eviction Best Practices for Debt Collection 30 Communities Need Attention Despite Travel Restrictions 33 Sun Communities’ Desire for RV Resort Opens Door for New Manufactured Home Community 34 YES Communities Starts New Podcast to Profile Resident Voices, Experiences 36 Parkview Homes of Minnesota Wins Extended Legal Battle with City of Lexington PLANNING / DEVELOPMENT 38 Planning, Design Firm Merger Complete with Unveiling of The Nadi Group
VOLUME 3 • ISSUE 5 SEPTEMBER / OCTOBER 2020 MHInsider.com Publisher Patrick Revere patrick@mhvillage.com
Senior Graphic Designer
46 PATRICK INDUSTRIES — A DECADE TO REMEMBER
Merit Kathan merit@mhvillage.com
Contributing Editor George Allen gfa7156@aol.com
Contributors Steven Blank Mark Dollan Kevan Enger Suzanne Felber Ryan Fishman Dr. Lesli Gooch Daniel T. Rudderow Bruce Thompson John Ace Underwood
Cover Image Photo courtesy of Genesis Homes
SERVICE / SUPPLY 42 Creative Ways to Source Goods For Your Next Interior Design Project
The URBANEER 510 is a 510 square-foot accessory dwelling unit built in three locations in partnership between URBANEER and Champion Homes. The home has high-tech features and flexibility, including a moveable wall, and a hideaway bed.
51 MHVillage Launches Online Reputation Management Service
Advertising Sales
54 Be Proactive to Protect Your Community from ADA Claims SALES 59 Three Things We Have Learned or Will Learn From COVID-19 LENDING 63 Mortgage Rates Drop to New Low Eight Consecutive Times BROKERAGE 64 How COVID-19 is Fueling a Final Inning for the Mobile Home Park Seller’s Market STATE ADVOCACY 68 A Word From the State Execs
Call: (877) 406-0232 advertise@mhvillage.com
Disclaimer Although we make every effort to ensure that the information in this issue was correct before publication, MHVillage, Inc. and the publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. Opinions expressed are those of the author or persons quoted and not necessarily those of MHInsider or the publisher MHVillage, Inc.
Copyright Notice Copyright ©2020 MHVillage, Inc. All rights reserved. Reproduction of MHInsider content, MHI or other contributor content, in part or in whole, is prohibited without written authorization from MHVillage, Inc.
ADVOCACY 71 Looking Beyond 2020 - Seizing the Moment to Help Grow the Market THE ALLEN LEGACY 80 Tracing Manufactured Housing & Community History Through the Authors – Part II: 1990 – 2020
MHInsider™ is published by:
2600 Five Mile Road NE Grand Rapids, MI 49525 (800) 397-2158 www.MHVillage.com
FROM THE PUBLISHER
QUALITY PARTNERSHIPS ARE MORE IMPORTANT THAN EVER
O
Operating during difficult times has become an oft-used phrase in every American industry and sector during recent months. Let it be said, the work of manufactured housing professionals during this time has been exemplary. With very few exceptions, our plants, communities, offices, and even retail enterprises have found innovative ways to keep up the construction and delivery of affordable homes to the American consumer.
Thoughtful, wellpositioned, high-quality partnerships can overcome challenges that airplanes and expanded technology cannot touch.
Our communities are flourishing, and the brand of factory-built housing seems to steadily gain positive ground in the minds of the people and the interests of the nation.
A lot goes into that kind of progress. One of the primary ingredients, especially now, is the ability to identify and agree upon a good partnership. Thoughtful, well-positioned, high-quality partnerships can overcome challenges that airplanes and expanded technology cannot touch. In this edition of MHInsider, evidence of quality partnerships can be found throughout the pages between Upcoming Events and The Allen Legacy. Those sections in themselves are the product of fruitful partnerships. Check in on state and national advocacy, which is all about planning and partnerships. Learn about the merger and rebranding that created a new international urban planning and design firm. Read about MHVillage’s collaboration on the first-ever virtual SECO National Conference of Community Owners. Quality partnerships defy geography. They add strategic vision to blind spots. Partnering offers the kind of camaraderie and improved industry culture that can create more and more opportunity for every manufactured housing industry professional and their customer. Finally, and most importantly, join MHInsider in sending condolences and healing thoughts to Clayton, the Clayton family, and all of those who benefited from the kind heart and good spirit of Joe Clayton. The co-founder of Clayton, brother to Jim Clayton, died Aug. 3 in a tragic helicopter crash. A memoriam for Mr. Clayton can be found on page 6. Blessings,
Patrick Revere is associate vice president of publications for MHVillage and publisher for the MHInsider magazine and blog for industry professionals. His background is in print news, language, and communication.
4 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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IN MEMORIAM
In Memoriam
Joe and Jim Clayton, brothers and business partners. Photos courtesy of Clayton.
Clayton Homes, Auto Co-Founder Joe Clayton Laid to Rest
M
r. Joe Clayton, 84 of Knoxville, Tenn., co-founder of a business empire in auto and home sales, passed away Monday, Aug. 3, 2020, in a tragic helicopter crash that shook the Knoxville community and the manufactured housing industry. Brother and Clayton Co-founder Jim Clayton, grandson Flynt Griffin and family friend Jay McBride survived the crash. Mr. Clayton was president of Clayton Automotive, Clayton Volvo, and was the co-founder of Mercedes Benz of Columbus in Georgia. He also was the co-founder of Clayton Homes and Vanderbilt Mortgage with his brother. He a lways enjoyed putting a dea l together whether it was with a customer, a partner or even with his kids. But of all his business partners and ventures none were greater than the ones he and his brother and best friend shared together. These partnerships spanned a 63-year history of success operating side by side.
Mr. Clayton was a loving husband, father, grandfather and son. He is preceded in death by his wife Dot Clayton and his father and mother Cratus and Ruth Clayton. Mr. Clayton is survived by sons Richard Joseph Clayton and wife Victoria, Mark Eads Clayton and wife Ashley, daughter Deborah JoAnne Justus and husband Randy, grandchildren Jessica Clayton, Christina Clayton Sullivan and husband Josh, and Britney Justus. He also is survived by his brother
6 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
IN MEMORIAM
James L. Clayton and wife Michell, as well as nieces, nephews, and many other family. Born and raised in Finger, Tenn., on a farm of sharecroppers, Mr. Clayton realized he wanted a different life for himself. He left the farm in his late teens and attended Draughon’s Business College in Nashville where he graduated with a business degree, and later attended Middle Tennessee State University and University of Tennessee at Knoxville. While working his way through college, Mr. Clayton worked for a local television and radio station. A young listener named Dorothy called in one evening requesting a song. The host thought she had the sweetest voice and lucky for him she called back the next night. It was not long after that Dorothy became Joe Clayton’s lifelong sweetheart and wife of 53 years. With Dorothy by his side, Mr. Clayton ventured into his career alongside his brother. He was instrumental in helping with the creation of the many Clayton organizations in the auto and home retail business, home construction, and financing. In addition, Mr. Clayton was the president of the Lincoln-Mercury Dealer Council and Volvo Dealer Council. He was president and chairman of the Tennessee Automotive Association, and served on the boards of Clayton Homes, Clayton Bank, First Horizon Bank, and the YMCA. Mr. Clayton like his brother was a pilot and avid flyer, often captaining family to their favorite vacation and getaway spots. Though he owned a variety of aircraft during the years, Mr. Clayton most favored his KingAir, which he sold shortly prior to passing. When he wasn’t flying, Mr. Clayton could be found playing golf, especially with his granddaughters and closest friends. His closest friendships were developed through many rounds of golf, often at Hilton Head Island, S.C. While there Mr. Clayton enjoyed waking early for a long walk on the beach, using his camera to capture photos of the sunrise, and then again in the afternoon for the sunsets. In lieu of f lowers, the family of Mr. Joe Clayton asks that donations may be made to The First Tee of Greater Knoxville and the Boys and Girls Club of Knoxville. Friends may leave thoughts and memories at www.berryhighlandmemorial.com. MHV
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 7
INDUSTRY
Happenings RHP Expands Michigan Holdings RHP Properties has expanded its manufactured home community portfolio in Michigan with the recent purchase of the 375 homesite Woodland Estates in Oakland County. The purchase brings the firm’s Michigan properties to 18 and its national reach to 260 manufactured housing communities. RHP plans to upgrade the existing amenities and reposition the property as an affordable alternative to the higher-priced single-family homes in the area. Woodland Estates
is approximately 30 miles north of Detroit and five miles from the town of Lake Orion. The acquisition brings RHP’s manufactured housing communities’ home count to more than 65,000 nationwide. The company owns and manages properties in 27 states.
Massachusetts Community Sells for $2.35 Million American Mobile Home Park in Auburn, Mass, has sold for $2.35 million through NAI Glickman Kovago & Jacobs. The Worcester real
estate agency’s vice president, David Eldredge, represented the seller, Johnson Family Associates of Dennis. The agency’s principal, Michael Jacobs, represented the buyer, American MHP, LLC, which is owned by Bob, Kevin and Gary Baker, who have addresses listed in Newton. The community has 38 homesites. The deal closed April 22.
Chicago Group Acquires Four New York State Communities Green Courte Partners, LLC, of Chicago has acquired its fourth
HAPPENINGS
investment fund, Green Courte Real Estate Partners IV, LLC and its affiliates, adding to its portfolio four all ages land-lease communities located in the greater Rochester area. The communities add 1,213 sites to the portfolio, 15 communities with over 5,600 sites in five states. GCP will invest capital in new home inventory and amenities, including aesthetic and infrastructure improvements. GCP will also implement value-add initiatives such as employing a rental home and sales operation led by its in-house, national land-lease community management platform.
Six Rock Properties Purchases Community Near Charlotte Six Rock Properties has purchased Fairview Park, a Gaston County, N.C. mobile home community off Interstate 85 about 25 miles from Charlotte. The acquisition is also the third deal that Six Rock completed within a year, including the purchase of Oak Grove Park in Dallas last year. The 34-site prop-
erty offers residents access to the planned Franklin Urban Sports & Entertainment District as well as the CaroMont Regional Medical Center and the Schiele Museum of Natural History and Planetarium. Six Rocks owns and manages six other manufactured housing communities in North Carolina.
Housing Tech Leaders Dvele and Blu Combine Forces in Southern California Dvele, a San Diego-based housing technology company, has acquired Blu Homes, a pioneer in modern luxury prefab homes in La Jolla, Calif. The purchase melds two leaders in the luxury factory-built housing and technology fields. Blu has more than a decade of experience building beautiful prefabricated homes across the U.S., including the award winning Breezehouse™. Dvele launched its self-powered home initiative, providing a comprehensive approach to address climate change and promote power grid resilience.
Austin Community Forms Cooperative Residents of the North Lamar Mobile Home Park in Austin, Texas are now co-owners of the community after changing their ownership model to cooperative housing. Aided by a mixture of monies from various lenders that included the City of Austin and a national organization for cooperative housing, residents obtained a $7.15 million loan in order to purchase the 69-homesite community. Nearly all the residents are low-income, making less than $60,000 for a family of four.
Palace Way Completes Entitlement Process for New Land-Lease Project in San Marcos San Antonio-based real estate developer Palace Way Partners LLP has completed the entitlement process for a 250-space land-lease manufactured home community in the City of San Marcos. With zoning, utility approvals, rights-of-way and Âť
HAPPENINGS
easement acquisitions complete, the firm can begin the project, a planned Class A land-lease facility with a full array of amenities. The project will have access from Highway 21 near the San Marcos airport and the new Highway 110 bypass. The project is in the San Marcos qualified Opportunity Zone.
Marcus & Millichap Deals Wisconsin Community Marcus & Millichap, a leading commercial real estate investment firm, has closed the sale of Park West Mobile Home Park, a 73-space manufactured home community in Spooner, Wis. Spooner is located in Washburn County, about 108 miles northeast of Minneapolis. The area has convenient access to state routes 53, 63 and 70. The community is within walking distance of numerous restaurants, coffee shops, retail storefronts, and museums in downtown Spooner.
Arizona Communities Purchased by The Carlyle Group Washington, D.C.-based investor The Carlyle Group paid $230 million for four Mesa manufactured home communities, expanding its interests in Arizona’s affordable housing market. The purchase included more than 1,000 homesites in four communities constructed in the 1960s and 1970s. Affordable housing is in high demand in metro Phoenix, not only with a growing number of renters but with some of the world’s biggest real-estate investors. Since 2017, investors have spent more than half a billion dollars on
mobile and manufactured home parks in the area.
Three Pillar Communities to Upgrade Modesto Property Through Refinancing Three Pillar Communities has closed on a $11.1 million refinancing loan for Voyagers Cove, one of the 29 manufactured housing communities the company owns and operates. Voyagers Cove is located in Modesto, Calif., and encompasses 149 units built in the 1970s. Three Pillar acquired the property in 2014 and is midway through upgrading it with new, energy-efficient units. With the refinancing, the operator plans to add a playground and a picnic area, upgrade the pool and re-pave the roads and driveways. Voyagers Cove provides homeownership opportunities to 600 residents.
Inspire Communities Obtains Second Property on Arizona Golf Course California-based Inspire Communities has announced the purchase of On the Greens, a 55-plus active lifestyle community along with the adjacent Coyote Trails Golf Course in Cottonwood, Ariz. The purchase gives Inspire Communities a pair of communities aimed at active adults and families in Cottonwood, having owned and operated Pine Shadows, the adjacent property at the same golf course. Having both communities provides the opportunity to share management, investment capital, and infrastructure to expand the scope of services and programming for the active lifestyle communities.
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Plans to enhance the amenities at the combined community include pickleball courts, a paved and lighted cart path between the communities, an enhanced fitness center with yoga studio, and improvements to Coyote Trails Golf Course. Inspire will add a lifestyle director on staff to program group activities, social events, and golf tournaments.
Florida Lender Monroe & Giordano Provides Refinancing for New Mexico Community Monroe & Giordano has provided a $16.5 million loan for the refinancing of Trails West, a high-end 427 site manufactured home community in Las Cruces, N.M. The community is located at the foot of the Organ Mountains in southern New Mexico, completed in 1996 and expanded to 75 acres last year. The property includes a new clubhouse with an indoor swimming pool, exercise room, coffee bar, and outdoor pet playground. Residents also have access to amenities such as shuffleboard courts, sports court, a horseshoe pit, barbeque grills, and a gazebo. Activities for the community include water aerobics, art classes, holiday festivals and card games.
Fort Collins Leaders Approve Zoning to Protect Manufactured Home Communities New zoning approved by the City of Fort Collins, Colo., is aimed at the preservation of existing factory-built housing and homesites. At the same time the city extended a moratorium on new park development. Council members had to choose between
crafting the zoning designation to allow for manufactured and mobile homes and little else, or one that would allow a wider range of uses, including single-family and multi-family housing. The Council opted for the narrower zoning, explaining that their primary goal was to prevent existing communities from being redeveloped and displacing residents. The Council gave itself the rest of 2020 to rezone some or all communities into the new zoning category.
Industry Veterans Team for ADA Compliance Inspections
MOBILE INSURANCE
Protecting Your Investments
Attorney Daniel Rudderow has partnered with ACE Mobile Home and RV Park ADA Compliance Experts to offer community owners and operators an added resource to ensure compliance for residents and visitors, as well as to help business owners and investors avoid costly lawsuits. The MHRV ACE team provides certified access specialists in an on-site inspection process to protect customers and businesses. ACE can be reached at mhrvada.com.
In Memoriam: Pennsylvania-based Home Designer Bill Brabant passes Manufactured home designer William E. “Bill� Brabant, 84, of Manheim, Pa. passed away Thursday, May 14, 2020. He was born in Deckerville, Mich. A very creative person, Mr. Brabant also was an avid woodcarver, artist, musician, and singer. He is survived by his wife Rose, five children, nine grandchildren and 11 great-grandchildren. Contributions may be made to Life Spring Fellowship, 490 W. Lincoln Ave., Lititz, PA 17543.
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SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 11
upcoming INDUSTRY EVENTS IMHA Annual Conference & Member Meeting Sept. 16-17 Virtual Annual Meeting The Illinois Manufactured Housing Association invites members to a virtual annual meeting for legislative and regulatory updates, networking, and educational programming to help grow your business and sell more homes. Visit imha.org/events for more information.
SECO2020 Sept. 28-Oct. 1 Virtual Conference The SECO National Conference of Community Owners will hold its annual gathering in a virtual format designed to create the same type of learning opportunities, networking, and introduction to the latest product offerings in manufactured housing that attendees have become accustomed to during the organization’s 10-year run of hosting in-person events.
Mid America Manufactured Housing Expo Sept. 29-Oct. 1 Deadwood, S.D. — The Lodge Manufactured housing professionals from Montana, Nebraska, North Dakota, South Dakota, and Wyoming will have association meetings, with a social event and golf to follow. On day two, the expo will have educational presentations, expert panels, a lenders Q&A, and another round of golf. MHI CEO Dr. Lesli Gooch will provide an update on national advocacy and progress in Washington, D.C. on the final morning.
MHI Annual Meeting Oct. 5-8 Virtual Meeting MHI’s largest membership meeting of the year provides an opportunity to exchange information with industry friends, stay current on housing marketplace trends and attend the board, committee and division meetings.
12 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
EVENTS
2020 Manufactured Housing Industry of Arizona Annual Convention and Golf Outing
National Communities Council Fall Leadership Forum 2020
Oct. 20-22 Sedona, Ariz. Hilton Sedona Resort at Bell Rock This annual membership convention provides education, fun, and relaxation for attendees, which include retailers, manufacturers, lenders, developers, contractors, and suppliers to the industry throughout Arizona.
2020 Georgia Manufactured Housing Association Annual Convention Rescheduled to Oct. 25-27 (Previous dates were Aug. 18-20) Jekyll Island, Ga. — The Westin Jekyll Island The GMHA will open its annual gathering with an introduction and keynote speaker. The convention also will include a silent auction, golf tournament, banquet, entertainment, and professional networking.
2020 WMA Convention & Expo October 13-23 Virtual Conference Western Manufactured Housing Communities Association’s annual event blends educational programs with entertainment and networking forums.
2020 Arizona Manufactured Housing Conference Rescheduled to Oct 27-29 (Previous dates were May 6-8) Maricopa, Ariz. — Ak-Chin Hotel and Casino The event will open on a Tuesday with a golf tournament and pool party, followed by two days of business with industry exhibitors, professional seminars and presentations, and networking with colleagues. Check backroom availability when the hotel reopens.
Nov. 4-6* Join MHI at the only strategic executive-level event of the year for those involved with manufactured home communities as an owner/manager, manufacturer, service provider, broker, lender or consultant. * Events are as tentatively scheduled due to COVID-19. Visit MHI’s website at http://manufacturedhousing.org/ for updates.
RV/MH Hall of Fame Induction Ceremonies and Dinner Rescheduled to Dec. 3 (Previous date was Aug. 3) Elkhart, Ind. — RV/MH Hall of Fame Greet and celebrate the 10 new inductees into the Hall of Fame with a celebration that begins at 5:30 p.m. with a cash bar cocktail party followed by the dinner and induction ceremonies at 6:30.
Louisville Manufactured Housing Show 2021 Jan. 20-22 - Louisville, Ky. Kentucky Exposition Center The Midwest’s premier event for manufactured housing professionals. The annual show brings out an array of new manufactured home designs, the latest in technology, the best in supplier offerings and a look at all the newest amenities and system-built options the industry can offer. * In-person versus virtual meeting platform dependant on guidance and best practices amid COVID-19 safety protocols.
Have an event you'd like listed here? Call Magazine Publisher, Patrick Revere, at (616) 888-6994, or email at patrick@mhvillage.com SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 13
EVENTS
SECO TEAMS WITH MHVILLAGE TO BUILD UNIQUE ONLINE CONFERENCE OF COMMUNITY OWNERS
O
One of the biggest advantages of in-person events is the networking and personal connections that happen naturally during the course of the event. Chance encounters between sessions, at the bar, or in the elevator often turn into friendships and business deals. This is one area that virtual events have struggled to replicate. Most platforms on the market today feel more like online courses than events, and struggle to create collaborative networking opportunities. With those challenges in mind, SECO teamed with MHVillage to create a live online conference that will help attendees feel more connected. And the first step was to identify a platform for the event that preserved the essence of the SECO National Conference for Community Owners while overcoming the challenges of typical virtual events. “We expect SECO20 to stand out as a unique online event, and provide the sense of connection and community that the gathering is known for in our industry,” MHVillage Vice President of Marketing Mark Dollan said. “So, we elected to go with a platform built for remote workforces instead of an off-the-shelf virtual event service. Going with a system built for remote teams will give us more tools for building connections and collaboration for attendees and sponsors. Plus, it will feel more like attending an event than other options we explored.”
What the SECO20 Virtual Platform Offers SECO20 will feature a visually-interactive event venue that is custom-designed by MHVillage. The venue covers three virtual floors including spaces for seminars, networking lounges, exhibit booths, meeting spaces, and a virtual home show. Additionally, there is a separate auditorium dedicated to “Manager Monday” – a new series of educational sessions developed exclusively for community managers. Attendees and sponsors will be able to make use of oneon-one video meetings, group meetings and networking sessions, roundtables that cover hot topics in the industry, and built-in direct messaging capabilities. Educational programming for SECO20 will cover community-specific topics such as new home sales and financing, due diligence, marketing, and case studies from successful communities. SECO20 will begin nationwide with an opening address from musician, TV show host, and entrepreneur John Rich, followed by 2- to 3-hour educational segments from the morning of Sept. 28 through Oct. 1. For more information, including registration, exhibiting, and sponsorship details at the 2020 SECO National Conference for Community Owners, go to secoconference.com. MHV
14 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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personal. With 40 years of experience, you can lean on us and rest easy.
newportpacific.com modularlifestyles.com cirusdevelopment.com 16 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
(800) 437-6178
BUILDER / RE TAILER
CLAYTON LAUNCHES NEW WEBSITE TO FIND LAND “Find Land” helps future homebuyers find the perfect property for off-site built homes
Photo Courtesy of Clayton Homes
C
layton, a national homebuilder of site-built and off-site built homes, has launched Find Land, a search engine tool to help homebuyers find property listed for sale where off-site built homes could be placed. The new digital experience taps into the Multiple Listing Service (MLS) and allows future buyers to search by zip code for available lots on a regional map. Users can f ilter land-for-sale searches by preferred distance from the chosen zip code and by price range. Search results provide photos, added property detail such as zoning, as well as real estate agent contact information. Clayton said the company invested in the technology and released the product as part of multi-pronged
approach to creating more access to the benefits of factory-built homes. More and more off-site built homes are being permanently attached to land with features like garages and porches, so Clayton integrated the “find land” feature into its digital home shopping experience. “In a time when our customers may understandably prefer to shop digitally as they search for the perfect new home and property, innovative website tools like Find Land help make this possible,” said Pat Egan, vice president of Clayton corporate marketing. “Clayton remains committed to improving our customer experience by transforming the journey to find the perfect home for families who are seeking an affordable, quality housing solution. We know finding the ideal location to place a forever home is just
as important as finding the dream floor plan.” Find Land assists many homebuyers, including those purchasing CrossMod™ homes, the newest class of manufactured housing, which incorporates features that are similar to site-built homes. These beautiful homes are designed to be permanently affixed to land and have the potential to increase in value over time. Clayton’s CrossMod home features include a permanent foundation, enhanced cabinets, drywall interiors, energy-efficient standards and features, an elevated roof pitch, and a covered porch, garage, or carport. Find Land assists homebuyers and homesellers by integrating the property buying process and the off-site built home shopping experience. MHV
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 17
BUILDER / RE TAILER
The URBANEER 510, an ADU built in partnership with Skyline Champion Corporation's Genesis Homes.
18 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
BUILDER / RE TAILER
ADUs Are A Hot Residential Building Trend by Bruce Thompson
I
n recent years traveling the country, discussion with innovators and leaders in the housing industry led to a realization of one of the most interesting developments we’ve witnessed in residential housing. The accessory dwelling unit, or ADU, is one of the fastest-growing housing types in the country. As cities across the country revise zoning to allow for the addition of backyard housing, there is growing interest for the ADU to be a key piece of the solution for the U.S. housing crisis. »
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 19
A rendering of how a smaller accessory dwelling can both match current aesthetic and provide much-needed residential living space in developed neighborhoods. Image courtesy of Backyard Cottages.
The interior design of the URBANEER 510 from Genesis Homes includes a moving wall. Photo courtesy of Skyline Champion Corporation.
In mid-2018, Jonathan Lawless, vice president for product development and affordable housing at Fannie Mae, pointed to “the perfect storm” at the center of the housing shortage. Lawless said a great deal of the pressure comes from Boomers staying in their homes longer than anticipated, which creates a lack of inventory for first time homebuyers, many of whom already are hamstrung by college debt, for instance. The problem was being further compounded in urban areas, particularly on the coasts, that have existing high-density neighborhoods where adding new units is extremely difficult.
While there won’t be a single solution to the housing crisis, Lawless stressed that ADUs placed in the backyards of single-family homes where land was essentially free would play a key role in helping to relieve the housing shortage.
Fast Forward to 2020 and the Rise of ADUs Municipalities across the country are embracing ADUs. Zoning has been revised in many locations to allow the diminutive structures to be more easily built and placed. California has gone so far as to pass state-wide zoning that allows for ADUs. This, theoretically, opens up nine
20 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
BUILDER / RE TAILER
million backyards to new housing units that can be as large as 1,200 square feet in living space. During a three-month stay in the Bay Area this spring, my wife Brenda and I met with San Mateo County officials who are “rolling out the red carpet” for homeowners interested in ADUs. Silicon Valley is the epicenter of the U.S. housing crisis, with the spike in rental rates at an unsustainable pace. San Mateo County alone added 80,000 jobs since 2011, yet has only 11,000 new housing units during that time. At a small seminar on ADUs, the county provided a workbook for residents looking for guidance on building a backyard ADU. Event attendance was far beyond what was anticipated, and it was fascinating to learn that the small city of Hillsboro on Feb. 15 had already received 50 building permit applications and that 45% of those were for residents interested in building an ADU. More than once there was the mention of a “civic duty” to provide more housing, with a mind toward the plight of teachers, first responders, healthcare professionals, and other essential workers who many times cannot afford to live in the area they serve. In a region where some workers commute as many as three hours a day, ADUs can play a key role in helping to alleviate the housing shortage where workers are needed. A number of municipalities in California, — including San Diego, Los Angeles, and Santa Clara, — are allowing mobile ADUs, which can be a tiny home on wheels, or a park model RV. For a state that is targeting 3.5 million new housing units by 2025, it needs every option available. And allowing temporary units could be a game-changer for remote workers and those who look to age-in-place.
The History of Accessory Structures Although ADUs might be viewed as a new housing type, historically they were common until the mid-’50s when many municipalities banned new units and allowed existing units to remain. The notion of ADU actually dates back to Colonial times when smaller homes were built as temporary homes while larger residences were constructed. Until the advent of zoning ordinances in the early 20th century, landowners could have as many dwellings on their property as they desired.
ADUs have fallen into several categories of housing, and have been called granny flats or in-law apartments. These included detached units as a stand-alone home or interior “apartments” in single-family homes. Often the interior quarters have been in a basement or above a garage. Each type continues to be created today, but the detached unit is the fastest growing. Terms for the stand-alone structure range from junior accessory dwelling, or JADU, or DADU for detached ADU.
With up to 10,000 Baby Boomers turning 65 every day in the U.S., ADUs provide a great solution for aging-in-place.
It is estimated that 3,500 ADUs were grandfathered in Chicago when the zoning changed. It also is estimated that there are 50,000 illegal ADUs in Los Angeles that now may be eligible for amnesty subject to inspection under the new ADU program. A recent study by Freddie Mac asserts that there are 1.4 million unique properties with ADUs in the U.S. The research shows an increase in first-time ADU listings at an average annual rate of 8.6%. In 2019, 78,00 ADUs were either sold or rented, up from 36,000 ten years prior, with southern and western regions of the country leading the way.
continued on page 23
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22 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
continued from page 21
BUILDER / RE TAILER
How Accessory Dwelling Units are Used Today Uses for ADUs range from rental income for the owner of a primary residence to a place for a loved one to live independently in a nearby location. However, a majority of ADUs today are being deployed as a means of easing housing affordability. Some home builders, such as Classic Cottages in Alexandria, Va., are setting up separate business entities to pursue the ADU market both for new builds and as an addition to an existing home. Backyard Cottages launched last year and in August the principals laid out their plans for diversification. The company already has several site-built units and have just taken delivery of their first modular unit built by Skyline Champion Corporation in its Strattanville, Pa, homebuilding facility. Classic Cottages envisions ADUs
that will help the Millennial buyer qualify for a mortgage, given the income potential of up to $2,500 per month for a backyard rental in the D.C. area. And all of this can be done with relative ease. For new homes, it is one permit, the build, and one finance application.
Top 10 Metro Areas for ADU Growth Portland (Ore.) Dallas Seattle Los Angeles Miami Chicago Austin Orlando Virginia Beach Fort Worth With up to 10,000 Baby Boomers turning 65 every day in the U.S., ADUs provide a great solution for aging-in-place. And, given the fallout from COVID-19 in senior living facilities, there is ever more demand across the U.S. for ADUs as a standalone transitional housing option. “We see the lifestyle changes associated with the COVID-19 pandemic only accelerating the growth potential of ADUs in our local D.C. market over the next three to five years,” Backyard Cottages CEO Pierce Tracy said. “The rental value proposition in this area was already very strong and remains. However, the family-need side has seen a rise as separate spaces on one lot for multigenerational households are at a premium. Building a backyard cottage allows you to keep an aging parent close, but not too close.” MHV Bruce Thompson’s career is the convergence of two passions: the built environment and the digital revolution. After a 20-year career in the global technology industry. he and his wife Brenda founded URBANEER to help relieve the housing crisis through innovative solutions that create compact, configurable, and connected living spaces.
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BUILDER / RE TAILER
Hollywood Backlot Homes Makes Good Use of Opportunity Zone by Patrick Revere
Hollywood Backlot Homes is in development in one of California’s 8,700 registered Opportunity Zones.
Multi-Opp, LLC is putting in sought after amenities at the North Hollywood community.
new “ground up” community called Hollywood Backlot Homes leveraged federal Opportunity Zone funding to offer single to three-bedroom homes for residents to get “the neighborhood you’re looking for at the price you want”. Opportunity Zones have been in existence since April 9, 2018. They allow investors and developers in any of the 8,700 designated areas across the country to defer capital gains and net 1231 gains through 2026. Deferred gains must be put in a Qualified Opportunity Fund and reinvested in the property within a reasonable amount of time.
Additionally, Opportunity Zones offer a 10% to 15% federal tax exemption on those gains if the developer or investor maintains ownership of the property for three to five years, respectively. Hollywood Backlot Homes is developed in a zone in North Hollywood, one of 879 “distressed” areas within California alone. Multi-Opp, LLC, the development company for the property, received a $36 million bridge loan from 3650 REIT for the acquisition and redevelopment of the 10-acre manufactured home community aimed at fulfilling the demand for attainable housing in Los Angeles.
A
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BUILDER / RE TAILER
There are Opportunity Zones in each of the 50 states, as well as in Washington, D.C. and U.S. territories. States and districts nominate underutilized or distressed tracts of land for the federal designation. Access to an Opportunity Zone map, property listings, and answers to other frequently asked questions about Opportunity Zones are at www.irs.gov/credits-deductions/opportunity-zonesfrequently-asked-questions.
Community Named to Celebrate Nearby Film Studios North Hollywood’s association with the film studios and production inspired the “backlot” name. Hollywood Backlot Homes is a rental community with 140 HUD-code homes marketed as luxury apartments. Amenities include a gated entry, outdoor pool, clubhouse, gym, gaming center, dog run, grill pavilion and outdoor lounge. Monthly rental pricing for the homes ranges from $1,800 to $2,495. The community’s attainable price points relative to the area will allow renters to enjoy the privacy and extra space of a detached single-family home. Multi-Opp, LLC Co-founder Mauricio Oberfeld said the all rental concept in an identified zone is the perfect match. “We believe this project embodies the true goal of the Opportunity Zone legislation, to encourage investment, housing, and job creation,” Oberfeld said. “When we discovered the Hollywood Backlot Homes property, we immediately realized it would be the perfect property to launch our detached multifamily rental concept, where renters can enjoy all the benefits of a class A multifamily asset while living in a detached residential environment with attainable rents.”
The U.S. Economic Development Administration and Opportunity Zones The EDA gives through competitive grants to foster job creation and attract private investment to support development in economically distressed areas of the United States. The administration encourages its economic development partners to think of Opportunity Zone investment as “a new arrow in the quiver” to not only enhance ROI
for business interests, but also to encourage the public/ private partnerships needed to drive private investment to distressed areas.
Emphasis on Opportunity • In FY18, EDA issued a Notice of Funding Opportunity that made Opportunity Zones eligible for funding from EDA, through its special needs category, even if the area would not meet EDA’s economic distress criteria. • In June 2019, EDA added Opportunity Zones as one of its five Investment Priorities to help significantly increase the number of catalytic Opportunity Zone-related projects the administration can fund. • As part of the White House Opportunity and Revitalization Council (WHORC), EDA provides an overview of our role in the initiative at Opportunity Zone roundtables that are bringing together local elected officials, business leaders, community groups, and others across the country. MHV
Together, we build the confidence that sells homes.
You Build It, We’ll Back You Up. Ron D’Ambra National Manufactured Modular Program Manager
803.917.1946 rodambra@2-10.com
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 25
COMMUNITY OWNER POST-EVICTION BEST PRACTICES FOR DEBT COLLECTION So, What About the Balance? by Ryan Fishman
Editor’s Note: Second installment of a 2-part overview on community owners’ best practices for debt collection.
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If it’s not enough that you’re exhausted by the process of rent collection, you’re stuck with the accumulation of unpaid rent and fees, along with potential damages and other expenses. Throw in the accelerated rent if you’re not able to quickly mitigate your damages and re-let the home or site, and these post-eviction outstanding balances can be shocking.
gross collections rates most often are at 5%. All they can really do is beg for your money with letters and phone calls and have no real tools at their disposal to incentivize these payments other than massive discounts or penny ante payment plans. You know this is an exercise in futility because you’ve already asked for the money on multiple occasions and had no success.
What’s Next? After sending your security deposit notice and demand for payment, you could pick up the phone and call the resident about payment, but they have very little incentive to pay now that the symbiotic part of your relationship has come to an end. Unfortunately, this is typically where the ability of you or your staff to collect these payments runs its course. However, this does not mean give up or write it off and move on — but it is time to internally cut your losses and pursue a third-party alternative to collect that money — it’s your revenue and you deserve it. Often out of habit, the shortcut option that comes to mind is to hire a collection agency. There are many reasons boiler room bill collectors add little value, which is why community owners or operators often turn to a debt collection law firm – beyond the cash value of actual success collecting, law firms are far better equipped to shield their clients from liability. Bill collectors are handcuffed in their abilities to collect from your debtors – that’s why it’s easy to understand that anecdotally their
If negotiations for a payment plan or settlement do not quickly materialize between the firm and the debtor, the firm will file a lawsuit on your behalf.
Conversely, a debt collection law firm has an arsenal of tools to legally compel payment. The first letter and phone call from a collection law firm comes with the signature of authority of an attorney and your debtors will understand you are serious about getting paid. If negotiations for a payment plan or settlement do not quickly materialize between the firm and the debtor, the firm will file a lawsuit on your behalf. This will allow the firm opportunity for a judgment on your behalf and, depending on where your communities are located, garnish wages, bank accounts, and
state income tax returns; seize cars and other assets; lien real property and compel a debtor’s appearance in court to satisfy a judgment. Qualified debt collection law firms understand the operation of a manufactured housing community and the laws regulating how you do business, but they’re also studied in the legal risks involved in debt collection, another area where simple collectors are known to be reckless. Law firms often employ compliance attorneys to ensure the firm is acting responsibly on your behalf. The reality is that the debt collection field – especially as it relates to manufactured housing – is becoming more legally hazardous as time passes. Exposing your community to the unnecessary potential for lawsuits or penalties eventually will hurt your bottom line and rack up losses more damaging than just the defaulting tenants. Constructing a standard operating procedure from move-in to post-eviction collections can be arduous, but the long-term benefits for your community are overwhelming. Take the time to consider today how to improve the best practices to boost cash flow and reduce the likelihood of defaults. MHV Ryan Fishman leads the Fishman Group, a creditor’s rights law firm with a team of experienced attorneys who specialize in debt collection. Fishman is a regular contributor in media reports on the industry and serves as a subject matter expert in collections law.
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 27
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SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 29
COMMUNIT Y
COMMUNITIES NEED ATTENTION DESPITE TRAVEL RESTRICTIONS by Steven Blank
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Whether or not your state employed a “stay-at-home” order, it’s been clear that traveling and managing remote properties has become increasingly difficult. Traditionally, manufactured housing community owners have been able to manage multiple properties across the country because of on-site staff and the ease of travel for regional managers and corporate staff. During recent months with coronavirus precautions and restrictions, traveling has been made very difficult, if not impossible. Many corporations have implemented a freeze on travel — either out of due caution or cost-cutting measures — and some employees simply cannot or are unwilling leave home overnight for many reasons, including childcare. So how do community owners and operators ensure that their properties are meeting expectations?
Here’s one idea: Trust a qualified representative to visit the communities on your behalf. Blank Family Communities, for example, visits MH Communities located in Michigan, Ohio, Indiana, and Illinois for owner/operators who are located out of state and cannot easily or safely get to their properties. Third-party management provides the service for less than it costs most out of state operators to fly corporate staff to communities. There are no cars to rent, no flights to book, no hotels to stay in and no dinners to expense. This keeps staff safe, while keeping the insight on your properties where it should be. Essentially, third-party managers act as liaisons for the management of your properties. Most hired property managers take less than full management of a client’s properties. Rather, it takes over the “boots on the ground look” at each property, »
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 31
COMMUNIT Y
bringing an owner’s perspective, making sure the most important aspects of the community are in good working order. It may also provide secondary services and aid in ways that may be unforeseen at the time two parties enter the contract, particularly with the dynamic nature of community operations and management under the best protocols to prevent the spread of COVID-19. As ever, the effort is to provide great value in a safe, healthy living environment. Most hired management companies set a monthly schedule for visiting properties. For Blank Family Properties, given the uncertainty of the global health crisis, the contractual commitment is offered on a monthto-month basis. The monthly visit is followed up by sending the owner/ operator an in-depth site-inspection report and high definition video drive-through to vividly show the current condition of the community.
Some areas that this service can cover: · Aid in ongoing construction projects · Help with collections and delinquency · Community curb appeal · Communication and aid with corporate staff on ongoing to-do list items When you can’t get to your property, reports from an on-site manager won’t give you all of the information you need to make informed decisions. But it offers the best way to be there without being there. To find a third-party management company in or near the market of your properties, take a look at regional to national providers in the Service Providers section of the MHInsider Buyer’s Guide — search for property management. MHV Steven Blank is the president of Blank Family Communities, a third-party management group in the Midwest, with 10 years of MH owner/operator experience and membership in the MMHA.
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32 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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Sun Communities’ Desire for RV Resort Opens Door for New Manufactured Home Community by Patrick Revere
Smith Creek Crossing in the Rocky Mountains near Granby, Colo. Photos courtesy of Sun Communities.
The community has a variety of home styles for residents to choose.
When Sun Communities wanted to expand its RV resort offerings in Colorado, it turned to a town off Route 40 not far from Denver. However, officials in Granby, Colo., expressed concern about an RV resort that may leave employees with few housing options. Affordable housing is something Sun Communities knows a lot about. So the company offered to buy additional land in the area for a new manufactured housing community if it was able to go forward with the RV plans. Eighteen months later, residents are moving into the much-anticipated Smith Creek Crossing. “We are selling beautiful, high-quality, affordable homes, and we also have a rental option for residents. About 10% of the homes at Smith Creek Crossing will be available for rent,” Sun Communities Regional Vice President Lisa Felix said. Homebuyers can choose from multiple home styles in Smith Creek Crossing. Floor plans range from a 971 square-foot, two-bedroom, two-bath home to the larger 1,866 square-foot, four-bedroom, two-bath model.
The 310-homesite community has manufactured homes for sale starting at $99,995. Site rental for homeowners ranges from $643 to $693 per month depending on location in the community. “We have a large clubhouse with a fitness center and hot tub,” Felix said. “And, of course, living in our community puts residents in close proximity to the amazing River Run RV Resort. The combination of having general public access to the resort, and the beauty of the mountainous surrounding area makes Smith Creek Crossing a highly desirable place to live. “Granby is a beautiful place northwest of Denver, high up in the Rocky Mountains,” Felix said. “There is so much wildlife, with regular sightings of elk, bald eagle, big horn sheep. It really is an amazing place.” Sun Communities also is developing amenities such as a playscape, hot tub, dog park, fire pit, and grilling area. Smith Creek Crossing held a community grand opening Aug. 29, with new residents, city officials, representatives from Sun Communities, the wider community, and eager homebuyers. MHV
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YES Communities Starts New Podcast to Profile Resident Voices, Experiences
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YES Communities in August launched a new podcast to tell the stories of residents and to share the dynamic advantages of living in a manufactured home community. “What Living Means” is available at the YES Communities website as well as through most commonly used podcasting platforms. YES Communities Vice President of Marketing Vanessa Jasinski will be the host of the show, which will provide a mix of authentic resident stories with discussions about particular experiences in raising children, engaging with the broader community, and finding ways to live affordably. “This podcast is a way to look at manufactured home communities a little more closely from all angles, with both serious discussion and entertainment thrown in,” Jasinski said. “We work to make quality, affordable housing a reality for individuals and families across the United States—now we want to share those stories.” Steven Schaub, YES Communities CEO, said “What Living Means” explores and brings to a wider audience the individual stories of residents that are powerful, and
need to be heard in a new way. Guests on the show will share experiences from manufactured home communities nationwide, providing a variety of backgrounds and perspectives. Some current topics being explored include the impact of afterschool programs for manufactured home community residents, the value of organized sports for children, and local resources that can provide family support and structure for individual residents. “Our goal is to inform our listeners and recognize the individuals who are a part of YES Communities. We believe that both our residents and community team deserve more appreciation for the integral part they play both in their individual communities, as well as our larger YES Communities family,” Schaub said.“We want to highlight the impactful but sometimes overlooked everyday actions that take place in our communities. We believe the podcast will allow a wider audience to join us in experiencing the extraordinary magic that lives in our family of communities.” MHV
34 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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Parkview Homes Of Minnesota Wins Extended Legal Battle with City Of Lexington
P
by Patrick Revere
Parkview Homes, a 220-site manufactured home community in Lexington, Minn., was awarded a $435,000 settlement after five years of litigation regarding the local preemption of 20 state permit applications for new homes. In a closed meeting on July 16, the city of Lexington discussed the settlement related to the complaint Parkview Homes LLC v. City of Lexington. Parkview Homes, an Oregon-based owner and operator, purchased the community in 2014 with anticipation of filling 35 vacant lots. The following year, Parkview filed applications for building permits to add 22 new homes. Two of the permits were granted, 20 were denied. The company filed multiple complaints against the city for blocking the new homes, and those lawsuits made their way through state and federal courts before the city opted to settle. In addition to the cash settlement, terms include a provision requiring the city to issue the 20 building permits that had been denied in 2015. The U.S. District Court of Minnesota had determined the city’s preemption of state licenses for placing the homes could be based only on construction standards and safety of the home itself, and not on operating condition of utilities in the community.
Upon the settlement of the case, the city of Lexington issued a statement through its attorney, Justin Templin. “The city had ongoing concerns about maintenance, compliance with legal requirements and public health and safety in the park — particularly with regard to the park’s aging private water system — that would be made more pressing by adding more units to the park,” Templin said. “The city attempted to engage Parkview in a discussion about those issues, but Parkview sued the city and the matter has been in litigation for five years since.” The city also agreed to the current use of the community water system through at least 2026. In addition to the monetary award, permitting, and operating provisions, Parkview is entitled to repayment of expenses related to the lawsuit. Templin followed by stating the parties have put in place a “more expedient system to resolve any future disputes”. Parkview asserts that the city had used its permitting process to halt residential expansion as means to force a redevelopment plan that would change the property from affordable housing, and potentially to an altogether different use. MHV
36 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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PL ANNING / DEVELOPMENT
Photo Courtesy of Tharakan Consulting
Planning, Design Firm Merger Complete with Unveiling of The Nadi Group By Patrick Revere
L
andscape architecture and urban design firm Donald C. Westphal and Associates merged with Nadi Design in January of 2020, combining two dynamic firms under one name, the Nadi Group. “We feel the opportunities that clients have to see their project through with confidence, excitement and ease have dramatically increased with this evolution,” Emeka Nnadi, the founder and principal of Nadi Design said.
“With our team in four different locations across North America, we have perfected our internal communications and processes to ensure seamless project delivery. We’ve also taken advantage of innovative technologies that will improve efficiency in times of uncertainty.” Westphal and Associates, based in Michigan, has provided highly regarded landscape architecture and urban design services for more than 50 years. The firm
38 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
PL ANNING / DEVELOPMENT
has been active in manufactured housing, multi-family, and other residential development efforts, and over time has become one of the nation’s foremost authorities on manufactured home community design. Meanwhile, Nadi Design has operated in Canada and parts of the U.S for 10 years, celebrating a decade of design consultancy in September. During this time, the firm has received industry and peer recognition and international design accolades for delivering thoughtful, creative and sustainable design solutions for a variety of projects and clients. he newly reorganized group of designers, T architects, and urban planners will operate throughout North America, including Mexico. The merger and restructuring of these organizations into the Nadi Group will allow for… • Enhanced detailed design ability • Increased focus on resiliency and sustainability in building/architecture design • A greater understanding of the value and innovation behind manufactured home community planning and design across North America • Improved access to technical staff and services outside of the traditional design and planning services • Design of value-added amenities such as playgrounds, parks, environmental considerations, land art, water features, and architectural guidelines • A deeper relationship with clients that extends to economic analysis, feasibility studies, and innovative steps to ensure a successful project “The Nadi Group will continue to build on the same legacy of services that our clients have come to expect from us, but with enhanced quality, value-added innovation, and improved resources,” Westphal said. Westphal has said he intends to remain active with the new group for at least the next year to ensure a smooth transition for current clients and ongoing project work. Nnadi said he’s aware of the deep relationship his business partner has with long-term clients and has respect for the Westphal name and its reputation within the industries the firm serves.
“Donald C. Westphal and Associates has become a symbol of quality design and reliable project management,” Nadi said. “That legacy continues. We will continue to operate as Westphal Associates, a Nadi Group company, in support of our existing clients who have built relationships with Don Westphal over the past 50 years. However, at the same time, we hope new clients will embrace the Nadi Group name moving forward.” MHV
Emeka Nnadi
Don Westphal
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1119 Fuller Drive, Garrett, IN 46738
www.AdventureHomes.net 877-510-1955
SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 39
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SERVICE / SUPPLY
CREATIVE WAYS TO SOURCE GOODS FOR YOUR NEXT INTERIOR DESIGN PROJECT by Suzanne Felber
42 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
SERVICE / SUPPLY
S
Larger retail operations may continue to have the inventory you need because of the bulk buying power they possess.
Shutdowns. Shelter in Place. Self Quarantine. Lots of words that start with an S that won’t help with the S-word that affects business success more than any other - Sales. If you are still doing business the same way you did last year, you will be left behind - quickly. As a Lifestylist® whose business revolves around interior design and staging model homes, I started to see warning signs of a disruption in March when plants and companies began slowing or shutting down with no immediate reopening plans. Fast forward to July, and we in the home staging business are facing shortages in all areas — furniture, appliances, decor, and even labor. We pride ourselves in designing a business model that allows us to pivot quickly, and the coronavirus market impacts have put that model to the test. Happily, our methods have aided us in re-strategizing what we do in sourcing needed materials
and labor. Here are five ways we’ve discovered that work well in navigating shortages to get homes merchandised quickly and affordably. 1. Relationships Now more than ever, who you know, and the relationship that you have had with them on a business and personal level, can make all of the difference. We quickly found out that even though we thought there would be a surplus of furniture and home goods on the market, the exact opposite has happened. Sheltering in place has made people look at their homes with a different perspective, and now many are willing to invest more in their homes, because they will be spending a lot more time in them. It is next to impossible to get furniture from the company that I have always purchased from. In fact, they are quoting November delivery on most items! I have a great relationship with some »
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of my vendors, and this has been invaluable when calling to ask favors. So far, this has helped us to get all of our work installed on time. 2. Plan B Even though I rely heavily on one company, I always have attended trade shows and kept my eyes and ears open for new sources. I had started buying from some that are more expensive and harder to work with, but they do have inventory. These vendors have been an enormous help, and I will remember how great they have been when we get on the other side of this global crisis. Always have a Plan B or backup plan, so you have a way to continue moving forward when something you don’t expect happens. 3. B uy Retail Again, this is a more expensive way to get your homes completed, but it is an option. Many big furniture stores like Nebraska Furniture Mart and the Ashley Home Stores have tremendous buying power, so they may be able to get furniture a lot more quickly than I can. I am thrilled to have a Nebraska Furniture Mart nearby — they have been fantastic to work with, and I will probably continue this relationship. Plus, I now trust them enough to refer them to retail buyers who ask for a recommendation. Their pricing and customer service are exceptional. 4. Estate Sales and Auctions this is a place that you might not
have ever thought of looking, but estate sales companies often sell new or current furniture and accessories and vintage items from grandma’s closet. Site home builders often sell their model home furniture this way, so you can check with your local builders, or look on www.estatesales.net to see what is available in your area.
Always have a Plan B or backup plan, so you have a way to continue moving forward when something you don’t expect happens.
5. You Get What You Pay For This sounds like such a “duh” statement, but if you haven’t purchased furniture and decor items directly, there may be a lot of costs that you weren’t aware of, and didn’t ask about when making your purchase. A few things to consider: • Is the price delivered, or do you need to find a mover? Are there specific delivery days, or can they deliver quickly? • D oes delivery include having the items placed in your homes,
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or just dropped in a box on the curb? • Will the mover remove all of the packing materials, or do you have to unwrap and dispose of everything yourself? • A re the items assembled or RTA ready to assemble? Hiring someone who knows what they are doing can double the cost of an item, and a piece of furniture that is damaged, or put together incorrectly can be a liability for you. • If items arrived damaged, will they take care of the freight claims and replacement, or will you have to take your time and energy to do that? Will the item be replaced, or repaired and by whom? Finding a reputable person to repair a cut on a sofa or a scratch in a tabletop can take up your time and profits. Times are changing, but there is an enormous need and market demand for affordable, well-designed homes. If we keep moving and being resourceful, there are great, profitable times ahead. MHV Lifestylist Suzanne Felber has been active in the housing industry for over 30 years. Felber realized that factory-built housing was the housing of the future, and has been actively working to promote the lifestyle ever since. She started American Housing Advocates as a way to share the great news about manufactured housing. To learn more about her work, visit www.lifestylist.com and www. americanhousingadvocates.com, or read her @lifestylist social media posts.
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PATRICK INDUSTRIES A Decade to Remember by Patrick Revere
I
In September of 2010, Elkhart, Ind.-based Patrick Industries was a 50-year-old company with a stellar reputation for manufacturing and distributing a long list of building products and materials to multiple industries including manufactured housing. The company had enjoyed slow, steady growth. Like nearly every other industry and sector, the Great Recession took a toll. Patrick Industries survived, and it was staring in the face of a grand resurgence in RV and recreational boating, as well as a doubling of the manufactured housing industry.
Trading on the NASDAQ 10 years ago, investors picked up PATK shares for 94 cents apiece. Those same shares today are valued in the neighborhood of $64, growth of more than 4,600%. In the ’10s, Patrick Industries took its place in the eyes of Wall Street among the better-known decade darlings like Amazon, Tesla, Netflix, and Dominoes. An investor who put $4,000 into Patrick Industries 10 years ago would have made $270,000 on that investment alone. During that time the company grew to more than 8,000 employees, acquired more than 40
businesses, and reached annual sales of $2.3 billion. Still, there have been few headlines of Patrick Industries’ remarkable success, partially because investors and those who cover the Street focus on “large caps”, companies that start at $10 billion or better. A decade ago, PATK was a “small cap” at $22.3 million. By 2020 that valuation hit $1.2 billion. As the Elkhart company was powering through 4,600% growth the entirety of the S&P 500 increased 200% in the market surge. It certainly was a decade to remember. »
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Elkhart Executive Leadership Maintains Growth Focus The Elkhart executives, Todd Cleveland and Andy Nemeth, who led Patrick Industries through the phenomenal decade of growth have preferred and likely benefited from the low-profile success. In remarks during an earnings announcement and investor call at the close of the decade, Nemeth spoke of the quarter and the strong annual results with nary a word about the successes of previous years. “We are pleased with our fourth quarter and full-year performance, especially in light of the volatility experienced in all of our primary markets,” Nemeth stated. “Our team’s efforts reflect tremendous
focus on executing on strategic initiatives across all of our end markets, driving operational efficiencies and cost reductions to optimize and position our cost structure for 2020, leveraging synergies from new acquisitions and across our business units, and delivering market share gains. While our leisure lifestyle markets, comprised of RV and marine, continued to feel the impact of reductions in wholesale unit production levels to better align with retail demand, our housing and industrial markets exhibited positive momentum as we finished 2019.” True, RV demand began to level as manufactured housing output increased nine out of the 10 years. Within Patrick Industries’ business
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mix, manufactured housing contributes on a recent annual average about 17 percent to corporate revenue.
How Patrick Industries Handled the COVID-19 Shutdowns It certainly looked as though the only thing that could slow down the Elkhart company’s growth would be a global pandemic. When COVID-19 precautions began rolling out in midMarch, production slowed and stock tumbled to $19.43 per share. It took a matter of weeks to double its value and has been trading above $60 again since mid-July. “We are pleased with our operating and financial performance during the second quarter and the tremendous f lexibility and adaptability of our team as we navigated significant uncertainty and production shutdowns in both our leisure lifestyle and housing and industrial markets,” Nemeth said. “In particular, the RV industry experienced a five-week production shutdown, while various marine OEMs had production shutdowns ranging from one to five weeks. Our team took quick, disciplined, and focused actions to reduce our fixed cost structure to align with our revenue stream starting at the end of the first quarter and during the second quarter.” Patrick Industries was able to avoid potential harm from COVID-19 measures and worked toward solidifying its operations to address ongoing uncertainty related to the pandemic, Nemeth said. Again, rising demand in all major markets buoyed the company from
its short-lived pandemic dip. In the latter half of the second quarter, buyers looked at recreational vehicles and boating as safe alternatives to flying. And the manufactured housing market rose to near-2019 levels, largely with consumers either looking to downsize or move from apartments to single-family living. “We expect this momentum to continue into the second half of 2020,” Nemeth said in a recent investor call. “Additionally, we believe that the continued resilience and subsequent surge in retail demand in these markets have further reduced dealer inventories from what we believe were already at a low point heading into the 2020 selling season.” MHV
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MHVillage Launches Online Reputation Management Service by Mark Dollan
M
MHVillage, the leading online marketplace for manufactured
homes, has launched a new reputation management service called mh.reviews for manufactured home communities, retailers, and other product and service providers within the industry. Manufactured housing professionals can use mh.reviews to more effectively monitor their online reputation, respond to reviews and comments, and maintain a positive reputation online. Âť
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“According to a recent survey, 93% of consumers trust online reviews as much as personal recommendations,” MHVillage Co-President and Chief Business Development Officer Darren Krolewski said. “We developed mh.reviews to make it easier for manufactured housing professionals to monitor, encourage and reply to online reviews so that your business gets the visibility and online credibility it deserves.” The new reputation management platform from MHVillage, mh.reviews, is available immediately at an introductory rate of $99 per month, or $995 for a single annual payment, with an added $250 one-time setup fee. Subscribers to mh.reviews can actively monitor their reputation on multiple review websites like Google, Facebook, and others. The system makes it simple to respond to reviews and comments through a single dashboard, as well as proactively reach out to clients and prospects with customized emails, text messages, and templates. “We saw an opportunity where a lot of the existing tools for reputation management didn’t take into account
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the unique needs of the manufactured housing industry, let alone real estate, and were too complicated to use,” Krolewski said. “As we implemented our online reputation strategy, we decided to make many of the tools we have used to successfully manage our own business available to our clients.” Research has shown that four out of five consumers have changed their minds about a purchase decision after reading negative online reviews. Not only can reviews act as a trust signal, but they also factor into website placement on search engines and social media channels. “Even the most customer-focused organizations will occasionally get a negative review online, despite their best efforts,” Krolewski said. “The important thing is to show the public your credibility by responding promptly and professionally. You’re not just responding to the reviewer, you’re responding to everyone else that might consider your company for a purchase.” MHVillage is the #1 marketplace for manufactured homes and mobile homes for sale and rent, with over 40,000 manufactured home community listings, more than 28,000 home listings, as well as inventory and contact information for more than 2,300 retailers and home centers. “One of the more common situations we encounter at MHVillage is a consumer who mistakes our website as the owner or operator of a particular community,” Krolewski went on to explain. “As much as we wish we could help them with that neighbor who is playing loud music, the frustrations they air on one of our social media channels won’t help anyone. Our mh.reviews platform enables us to spot these types of comments quickly and reach out to the consumer to get those negative reviews removed, and to help find the correct contact information for the community.” Get a complimentary online reputation management review at mh.reviews, or call (877) 406-0232 to get more information on what mh.reviews can do for your business. MHV Mark Dollan is vice president of marketing
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52 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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BE PROACTIVE TO PROTECT YOUR COMMUNITY FROM ADA CLAIMS by Daniel T. Rudderow
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L
Like any other business, manufactured home communities are subject to claims brought under the Americans with Disabilities Act of 1990. ADA prohibits discrimination and requires all public accommodations and commercial facilities to be accessible to individuals with disabilities since its effective date of January 26, 1992. Construction and alterations to public accommodations and commercial facilities must meet the accessibility provisions of the 2010 ADA Standards and the presently enforced local building code. Accessible features are also required to be maintained in your community. A park operator’s failure to comply leaves the community vulnerable to being sued for discrimination by an individual that is denied access due to physical barriers. In court, ADA plaintiffs can be awarded thousands of dollars for improper access barriers encountered by the plaintiff, plus damages and attorney fees if the claim is successful. Often times, attorney fees may be even g reater than the cost of construction to remedy an ADA violation.
The Nature of ADA Claims Each year, ADA claims and ADA lawsuits cost communities hundreds of thousands of dollars to defend. Some claims may be legitimate while
others are dubious at best, but all of them require the community owner to spend a significant sum on hiring consultants, experts, and lawyers to get ADA issues resolved. What can communities do to avoid such claims? Management should be proactive and have their properties inspected by a certified access specialist, or “CASp inspector”. The CASp inspector is someone who has passed an examination and is certified by the State of California to meet the minimum requirements of knowledge of complex construction-related accessibility standards. The CASp inspector in California, much like ADA inspectors in other states, conducts a thorough on-site inspection of your property and then issues the park owner an inspection report. The report may have a determination that a community “meets applicable standards” meaning the park meets applicable construction-related accessibility standards. Alternately, the report may contain a determination of “inspected by a CASp”, which will contain a schedule of improvements in order to come into compliance with applicable construction-related standards. Management can then review the report and implement any necessary repairs in order to make the community ADA compliant. »
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Inspectors often times have referrals they can make to construction companies qualified to make the needed repairs or improvements. Keep in mind, property owners are required to maintain the accessible features of their business. If an area that was inspected is later altered or modified, the owner may need to schedule another inspection to ensure the new work will comply. The CASp inspector will know which standards to apply to your community based on the age of your business and its history of improvements. Manufactured housing communities have unique ADA-related demands that an inspector can address. For example, issues arise as to which part of the community is “open to the public” and thus subject to the ADA. Park entrances are deemed open to the public, but what about the clubhouse? The pool? The restrooms? The CASp inspector can help navigate through these questions.
What Does a Community Owner Receive with ADA Inspection? To help offset the expense associated with upgrades required by ADA regulations, the Internal Revenue Service has enacted tax credits and accelerated depreciation advantages to eligible small businesses that undertake accessibility upgrades. A CASp inspector can help guide management through the process of determining elig ibility for these programs. In addition to a written report, community owners also receive a Disability Access Inspection Certificate as a record of inspection. The
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certificate is numbered and has an indication of origin, such as a state seal. The certification is something that can be posted for public view at the community. Often times, a posted certification alone can dissuade frivolous claims and lawsuits. Property owners who have done a certified inspection also may be regarded as a “qualified defendant”. When a suit is filed, a qualified defendant can request a court stay and early evaluation conference in the legal proceedings, which may help resolve the matter in an expedited manner. With a CASp inspection, the park owner can confidently make repairs today that can buffer the community from liability if an ADA suit is filed at some later point. In the end, the CASp inspection is a wise and proactive option that helps the park avoid being embroiled in costly litigation. MHV Dan Rudderow is the principal of Rudderow Law Group. He ha s over 25 years of experience in manufactured housing, business, and real estate law. The group practices litigation, transactional work, assistance with client operations, and is a partner in the CASp inspection company MHRV ACE. Rudderow may be reached at dan@rudderowlaw.com or (949) 565-1344.
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SALES
Photo Courtesy of Clayton Homes
Three Things We Have Learned or Will Learn From COVID-19 by John Ace Underwood
D
epending on what part of the country you’re conducting business in, the COVID-19 pandemic seems to have had a fairly broad range of impact on your business climate. In some parts of the country, this virus has created havoc, in other areas it seems to have had a lesser impact. On a more personal level, for some this has proved to be tragic while for others it’s been an inconvenience. »
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SALES
Regardless of our individual circumstance, we all have to eventually move forward and let us, at the very least, seek out how the pandemic has permanently changed consumer behavior, and what we can all learn from this rather destructive and unfortunate life lesson. Perhaps the biggest impact this pandemic has had on our everyday life are the state-to-state orders requiring people to remain in their homes. For some it’s been a matter of weeks, others it’s extended into months of relative isolation. Bottom line, more people have become better at using their computer to investigate, research, shop, and buy the product or services they are considering. Second, while many of them didn’t pull the trigger and actually BUY the product and services they were looking for, consumers certainly spent more time investigating and doing their homework. If you were in the market for a new boat before the pandemic, while you may have delayed buying a boat, the desire to own a boat and the opportunity to shop online didn’t go away. So, what do we learn from this situation? Here are three things you have to learn and understand. These lessons are life lessons that are unlikely to go away.
1. N ever Underestimate the Power of the Internet Again! Your website, along with your customer’s ability to FIND your website is more important than it was even three months ago. Your potential buyers have been searching for a community and researching homes via the internet for months. For months they have been visiting and revisiting websites in search of their “ideal” place. The question now is, did they spend more time on your site or your competitor’s site? If your website isn’t generating more leads than you need to sell all of the homes and lease all of the spaces you have available, the answer is they were spending more time on someone else’s site. That needs to be fixed.
in today’s world, is measured in minutes, not weeks, days, or even hours. Frequency requires not one or two attempts, but something closer to the double digits, six of which need to be in the first 48 hours. Let me also suggest that without an effective Customer Relationship Management (CRM) system this will be impossible to measure. And that which you cannot measure, you cannot improve.
3. N ever Underestimate the Power of a Personal Relationship! The person who builds a personal (as opposed to a business) relationship with the prospective buyer first almost always wins. This is being proven over and over again. While technology may give the potential customer quicker access to a world of information, it is also a world of autoresponders, automatically generated e-mails, impersonal contacts, and emotional emptiness. Finding a community or a home is as much an emotional decision as it is financial. If not more so. The sooner you can reach out to the potential customer in a personal manner, and a personal relationship is built, the more likely that prospective customer will be sitting in front of your desk instead of spending time with your competitor. So, there you have it. These are three powerful lessons that will either be learned from COVID-19 or they will be confirmed by COVID-19. Either way, implement these lessons into your business and you will be handsomely rewarded. Failing to do so will likely have a far greater impact on your bottom line than you would ever care to admit. MHV John Ace Underwood is the founder of SellingEdge, a consulting firm within the manufactured housing industry, as well as microseminars.com, an online training program. Reach him at johnaceunderwood@ gmail.com, or 520-241-9907.
2. Never Underestimate the Power of Immediacy and Frequency. Immediacy refers to how quickly you respond to an inquiry and frequency refers to how often you try to reach out to the prospective customer. In your business, if you don’t know, you already have a problem. Immediacy, 60 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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62 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
LENDING
Mortgage Rates Drop to New Low Eight Consecutive Times
F
reddie Mac’s Primary Mortgage Market Survey® released Aug. 6 shows the 30-year fixed-rate mortgage averaged 2.88 percent, the lowest rate in the survey’s history dating back to 1971. “The resilience of the housing market continues as mortgage rates hit another all-time low, giving potential
• 15-year fixed-rate mortgages averaged 2.44 percent with an average 0.8 point, down from last week when it averaged 2.51 percent. The year prior, the 15-year FRM averaged 3.05 percent. • Finally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.90 percent with
buyers more purchasing power and strengthening demand,” Freddie Mac’s Chief Economist Sam Khater said. “We expect rates to stay low and continue to propel the purchase market forward. However, the main barrier to rising demand remains the lack of inventory, especially for entry-level homes.”
an average 0.4 point, down from the prior week when it averaged 2.94 percent. The year prior, the 5-year ARM averaged 3.36 percent.
Summary of the Primary Mortgage Market Survey • The 30-year fixed-rate mortgage averaged 2.88 percent with an average 0.8 point for the week ending Aug. 6, 2020, down from last week when it averaged 2.99 percent. A year ago prior, the 30-year FRM averaged 3.60 percent.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since its creation by Congress in 1970, Freddie Mac has worked toward making housing more accessible and affordable for homebuyers and renters in communities across the U.S. MHV
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How COVID-19 is Fueling a Final Inning for the Mobile Home Park Sellers’ Market by Kevan Enger
T
he COVID-19 pandemic has been hitting our economy hard. From restaurants and retailers to doctors and dentists, most businesses have endured some level of financial or operational hardship from the pandemic. The result has been devastating with real gross domestic product (GDP) decreasing at an annual rate of 32.9% in the second quarter of this year. The economic cliff dive has been accompanied by an unemployment rate of 11.1% in June with approximately 17.8 million people unemployed.
For the commercial real estate industry, the impact has been devastating. Retail, restaurant, and hospitality properties have been whacked the hardest as the pandemic forced most stores to close their doors and restaurants to halt all indoor sit-down business or cut their capacity by up to 75%. Many big restaurant chains notified their landlords they wouldn’t be paying rent for up to one year while innumerable operators had to permanently shut down.
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BROKER AGE
Meanwhile, retailers previously on the brink were pushed over the edge even as lenders and landlords attempted to negotiate workarounds. The first wave of shutdowns was bad, but the second wave was too much for some and we’re already seeing the wave of bankruptcies starting to roll through. By all accounts, the effect has been disastrous for many commercial real estate asset classes. An exclusion, the mobile home park segment.
The 12th Inning In my last article, I predicted the upcoming end of the seller’s market bonanza we’ve been enjoying in the mobile home park category over the last couple of years. In fact, I was fully expecting to see transaction volume dwindle by the end of the fourth quarter. If we were lucky, we could’ve potentially run on the last bit of fumes into the first quarter of 2021. Fueled by very tight inventory and record-high demand, we’d had an amazingly good run in a sizzling sellers’ market that was by all measures in its 11th inning. Then, COVID-19 hit and it changed everything. The economic and financial impact of the pandemic has put a renewed focus on the now even more urgent need for affordable housing. Even before coronavirus, the National Low Income Housing Coalition was reporting that 10% to 15% of households were “housing insecure” with a quarter of all renters — and 71% of extremely low-income renters — paying over half their incomes for housing. Now with so many Americans unemployed, the housing crisis is going to worsen, driving many renters and even some homeowners to downsize and look for affordable housing options, which will include mobile home communities. This awareness has brought renewed attention from investors driving up demand and prices even higher than before. However, it’s essential to note that this boost and push into an unprecedented 12th inning is being partially supported by three situational components. The temporary nature of these components make the current sellers’ market a phenomenon potentially supported by matchsticks. However, it does provide mobile
home park owners an extension on their ability to sell at record high prices, but it won’t last and here’s why: 1. Historically Low Interest Rates Long the benchmark against which risk-bearing investments are measured, the 10-Year Treasury Rate, is at historical lows (.52% on 8/4/20). The rate at the time of this writing is much lower than the long-term average of 4.44% and represents a 70.29% decrease over last year’s rate of 1.75%. These super low rates are inciting renewed migration to the mobile home space for multiple reasons and from multiple investment vehicles as investors seek higher returns. However, even at the height of the Great Recession, rates hit rock bottom on December 30, 2008, before trending upward for almost two years. The recession didn’t technically end until June 2009.
If you’re thinking of retiring or exiting the space in the next five to seven years, now may be the time to sell.
2. S trong Collections Mobile home park owners are reporting that rent collections have exceeded expectations for March, April, and May. Undoubtedly contributing to the better than expected collection is the stimulus check sent to Americans, the unemployment benefits, and the additional $600-a-week pandemic-related federal boost that was enacted in March. »
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BROKER AGE
The boost expired July 31 and Congress has yet to renew it with many calling for its nixing or at the very least slashing to around $200 a week. This decrease in cash flow could put rent payments in jeopardy especially for lower-income households that have been particularly hard-hit from the pandemic. A report in May by the Federal Reserve noted that 39% of people working in February with household incomes below $40,000 reported job losses in March. Another survey conducted in early April by the Pew Research Center found that 52% of lower-income households reported a loss of employment or income due to the coronavirus outbreak. With the
$600-a-week boost gone, millions of people will be in jeopardy of losing their ability to pay their rent. This will soon begin to impact rent collections in the broader housing market as well as in the mobile home space. Even if the boost is extended and another wave of stimulus checks is paid out, the effect will still be temporary. 3. E conomic Stimulus While it may seem like an eternity, as of the publication of this article, it has only been about five months since the WHO declared COVID-19 a pandemic. In that short period of time, the government has pumped over $2.1 trillion in stimulus money
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What Does This Mean for Mobile Home Community Owners? If you’re thinking of retiring or exiting the space in the next five to seven years, now may be the time to sell. The temporary nature of the situational components supporting this extended run heightens the uncertainty and decreases the likelihood of a longer term run. In our own shop, while we’ve been experiencing record transaction volume exceeding last year’s activity, we know there’s a much shorter lifecycle to the boost this time around. The catch is that like COVID we don’t know when it’s going to end. MHV Kevan Enger is a partner and manufactured housing director for Capstone MH. He specializes in helping
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»A WORD FROM THE STATE EXECS MHInsider magazine collaborated with Randy Grumbine, executive director from the Virginia Manufactured and Modular Housing Association, and Jennifer Lassen, executive director of the Georgia Manufactured Housing Association, for a Q&A on what’s happening in Old Dominion and The Peach State.
EXECUTIVE DIRECTOR RANDY GRUMBINE 68 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
EXECUTIVE DIRECTOR JENNIFER LASSEN
STATE ADVOCAC Y
»1
hat has had you going W to the capital recently?
The Safety and Health Codes Board of the Virginia Department of Labor and Industry (DOLI) has adopted temporary regulations under which Virginia businesses shall operate in the wake of the COVID-19 pandemic. We are part of a coalition of business interests that lobbied to have the voice of business heard. Virginia is the only state, so far, to adopt its own regulations in the absence of federal guidance by OSHA. Post-adoption, we partnered with our coalition to keep the membership informed on what the regulations mean for their day-to-day operations.
–Randy Grumbine We just passed a bill to allow for on-frame mods. Prior to this bill, all mods in the state had to be off-frame. Due to the coronavirus and a major budget shortfall, we were uncertain if our bill would make it to the finish line. We are happy to it did.
–Jennifer Lassen
»2
hat is Georgia W doing for industry continuing education?
Installation classes in Georgia had been going through the state fire marshal’s office. However, they have asked us to partner with them and facilitate the classes. Initial licensing classes will go through MHI on-line and recertification classes will be run by our office.
–Jennifer Lassen We helped with a class for appraisers pre-pandemic in association with the Virginia Appraisal Institute on Appraisal of Manufacture Homes Featuring Next-Generation Manufactured Homes. We also held a “zoominar” for our community owners and managers regarding the legislative changes adopted in the 2020 General Assembly session that impacted the Manufactured Home Lot Rental Act.
–Randy Grumbine
»3
hat are you doing W to get membership together with coronavirus restrictions?
Unfortunately, very little. We canceled our 2020 Convention scheduled in August. We replaced it with a PAC fundraising Memorial Golf Tournament usually held in the spring only to subsequently cancel that event as well. We will be hosting an annual meeting on August 20th to conduct the annual business required by the by-laws. It will be virtual. Without inundating member mailboxes, we communicate need-to-know information to the membership as it develops, and less important information is combined into “Updates from Richmond”.
–Randy Grumbine We are having our convention. We moved it from August to October 25-27 at the Westin Jekyll Island. Additionally, we moved our office to provide more room and accommodate another staff person.
–Jennifer Lassen
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LOOKING BEYOND 2020 Seizing the Moment to Help Grow the Market by Dr. Lesli Gooch
A
s the nation continues to emerge from the unprecedented economic and social upheavals in 2020, the need for more affordable homeownership options has emerged as a critical priority of policymakers in Washington. The Manufactured Housing Institute is working in Washington to position the industry to support the nationwide demand for affordable homeownership. This includes ensuring American homebuyers have the
opportunity choose the quality home that fits their needs and budget and ensuring that financing is available to support the purchase of manufactured homes. MHI’s work to update the U.S. Department of Housing and Urban Development’s manufactured housing regulations and financing programs for manufactured homes has never been more important. During the pandemic, President Trump signed an executive order »
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ADVOCAC Y
granting emergency authority to agencies to expedite the rulemaking process for reforming regulations in an effort to provide American businesses a foothold as the economy recovers from COVID-19. As part of MHI’s ongoing advocacy efforts, we are urging HUD to utilize the opportunity this order presents to: ensure the Federal Housing Administration’s financing programs support consumers interested in financing the purchase of manufactured housing; finalize necessary updates to the federal manufactured housing construction and safety standards; create a more streamlined process for updating the HUD Code; and strengthen HUD’s efforts when it comes to state and local zoning practices and policies.
prioritized manufactured housing as a critical unsubsidized affordable housing option. MHI is encouraged by the progress that HUD has made to change the regulatory landscape for manufactured housing. HUD is finally making changes to our federal building code to support even greater innovations and efficiencies in our homes. The administration is also looking at ways to eliminate regulatory barriers at the state and local level that limit the placement of affordable housing in communities where they are needed most. It has maintained progress to make government-sponsored financing programs available for today’s manufactured homes that will support more Americans becoming homeowners.
Achieving Steady Progress in Washington
Ensuring FHA’s Programs Support Financing for Manufactured Housing
MHI has made steady progress in a divided Washington to support the industry through effective advocacy that tells the positive story of the manufactured housing industry. HUD Secretary Ben Carson and his team have
The economic impact of this unprecedented national health crisis makes access to FHA financing programs more critical than ever. As such, MHI is advocating for these programs to be updated so they are available for con-
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ADVOCAC Y
sumers seeking homeownership through manufactured housing. While updates to both the Title I (personal property) and Title II (land-home) programs have been needed for some time, updates to the FHA program to accommodate manufactured housing financing is particularly important as the industry launches its new class of CrossMod™ homes. While Fannie Mae and Freddie Mac have developed financing programs for CrossMod Homes, FHA’s rules and procedures have not been appropriately modernized to accommodate these types of homes. MHI was pleased that HUD’s September 2019 Housing Finance Reform Plan to President Trump supported innovations in manufactured housing, including a statement that: “FHA should consider innovative proposals to modify single-family housing mortgage finance underwriting to further encourage and promote additional supply of entry-level housing, particularly manufactured housing.” This is precisely what is needed. With COVID-19’s exacerbation of affordable housing supply and affordability challenges, MHI is advocating for the FHA to act quickly to modernize its policies to support CrossMod homes.
Finalizing Updates to the HUD Code Under the leadership of HUD Secretary Ben Carson, HUD’s approach to the regulation of manufactured homes has changed, ensuring the industry can support the American Dream of homeownership for more people. The administration recognized early on that because the HUD Code had not been updated in decades and because regulatory oversight had become an impediment to cost and innovation, it was increasingly difficult for manufactured home builders to offer consumers the latest innovations, technologies, and features. President Trump’s Executive Order “Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing” specifically referenced manufactured housing as an area that had been previously hindered due to “outdated manufactured housing regulations and restrictions.” At the direction of Secretary Carson, HUD’s Office of Manufactured Housing Programs has completely changed its approach to the oversight of manufactured home production, which had been increasing costs, slowing production lines, and limiting innovation. HUD’s policies and regulations over manufactured housing have been
comprehensively reviewed and HUD has proposed the first changes to the federal building code for manufactured homes in nearly a decade. The Code has not been so broadly or substantially updated in years and the revisions represent critical progress in clearing out the backlog of recommendations previously approved by the Manufactured Housing Consensus Committee pending final HUD approval and implementation. Changes include new standards for attached garages, carports, decks, and accessory buildings.
Secretary Carson said he hopes to see an increase in the number of families choosing manufactured homes given the great value they provide at an attainable price point.
Creating a More Streamlined Process for Updating the HUD Code In addition to clearing out the decades-old backlog, MHI is advocating for HUD to develop and implement a streamlined process for updating the HUD Code, so that future revisions are implemented regularly. While the HUD Code has brought standardization to the industry, in order for manufactured housing to achieve its full potential in addressing the affordable housing needs of the nation, it is important to ensure manufactured housing regulations stay current with today’s technologies. MHI has argued that since HUD is the standard-setting body for the nation’s manufactured home construction and safety standards, updates should follow a distinct »
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ADVOCAC Y
administrative path and be prioritized separately from unrelated policy matters. Secretary Carson has repeatedly affirmed HUD’s commitment to streamlining the administrative and regulatory processes that hinder innovation in manufactured housing. Such an approach was recommended by the Government Accountability Office in 2014 and again last year, by HUD’s own Office of Policy Development and Research. In addition, HUD’s September 2019 Housing Finance Reform Plan sent to the President embraced the recommendation from the GAO and PD&R, and called for HUD to “move to a regular cadence of updating its code to ensure that it is keeping pace with evolving technologies and best practices.” MHI is advocating for HUD to put a process in place where the Consensus Committee’s recommendations for updates to the code are implemented in a n a more timely way that is consistent with statutory directive.
Strengthening HUD’s Efforts on Local Zoning Addressing local zoning and land planning ordinances that keep manufactured housing out of communities is also a top priority for MHI. Across the country, there are numerous examples of state and local zoning, planning, and development restrictions that either severely limit or outright prohibit the placement of a manufactured home. In 1997, under authority from the National Manufactured Housing Construction and Safety Standards Act, HUD
issued its “Statement of Policy 1997-1 State and Local Zoning Determinations Involving HUD Code.” This policy statement summarizes HUD’s position concerning federal preemption and certain zoning and/or planning decisions made by state or local governments. In its statement, HUD clarifies, “if a locality is attempting to regulate and even exclude certain manufactured homes through zoning enforcement that is based solely on a construction and safety code different than that prescribed by the [National Manufactured Housing Construction and Safety Standards] Act, the locality is without authority to do so.” The passage of the Manufactured Housing Improvement Act of 2000 significantly strengthened HUD’s preemption authority. The law explicitly states that the HUD Code has what is referred to as “supremacy” – that is, that localities have no authority to establish construction or safety standards for manufactured homes that deviate from the HUD Code. Unfortunately, there are still localities that do not follow this statutory rule and try to establish different standards, sometimes with the goal of creating barriers to siting manufactured homes in their community. MHI is advocating for HUD to exercise its preemption authority when local construction regulations or zoning, planning, or development policies adversely affect the placement of manufactured housing. While HUD has pursued individual cases where local jurisdictions have introduced construction and safety standards that are not
74 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
ADVOCAC Y
consistent with the HUD Code or have imposed zoning and planning requirements that exclude HUD-compliant manufactured homes, MHI has called on HUD to have a much greater role in this effort according to its congressional mandate. MHI has asked HUD to update its “Statement of Policy 1997-.’ MHI is also calling on HUD to take action to ensure that localities understand and comply with the supremacy of the HUD Code for manufactured housing – such as issuing strong guidance, or binding or enforceable rules that clearly state this important statutory provision. MHI’s advocacy is gaining traction among the nation’s leaders. In its annual report to the President, the White House Council of Economic Advisers stated that manufactured housing regulations are among the excessive regulatory barriers imposed by state and local governments that create higher housing prices and lower housing supply. In HUD’s Housing Finance Reform Proposal, Secretary Carson called for greater utilization and enforcement of HUD’s preemption authority. In addition, during a conference call with Vice President Mike Pence in April to discuss the housing needs of the nation during the pandemic, Secretary Carson reaffirmed HUD’s commitment to addressing state and local barriers to the siting of manufactured housing and said that manufactured housing is making a “big difference” in addressing the affordable housing shortage in the country, which he assured call participants remains a “huge” priority for HUD. Secretary Carson said he hopes to see an increase in the number of families choosing manufactured homes given the great value they provide at an attainable price point. The secretary concluded his remarks about manufactured housing by telling MHI, “You keep making the good stuff and we’ll be in good shape.”
Conclusion As the country emerges from the COVID-19 emergency, many potential homebuyers are going to be looking for safe, affordable housing that allows them their own space, free of shared-walls and cramped quarters. Ensuring these vulnerable families have access to quality manufactured housing has never been more important. By advancing updates to government-sponsored financing programs and allowing our industry to provide home buyers with
the innovations, technologies, and features they desire, HUD can galvanize its pledge to facilitate the availability of affordable manufactured homes and to increase homeownership for all Americans. MHI will continue to advocate for federal housing policy to support increased access to manufactured housing. As your national trade association, MHI is committed to ensuring our industry has the regulatory environment to thrive and create even more opportunities for homebuyers to realize the American dream of homeownership. If you have any questions, please contact MHI’s Advocacy and Communications Department at MHIgov@mfghome.org or 703-558-0675. MHV Dr. Lesli Gooch is the CEO of the Manufactured Housing Institute, the national trade organization representing all aspects of the factory-built housing industries.
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SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM | 75
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continued from page 80
THE ALLEN LEGAC Y
and consolidation of individual communities into property portfolios (e.g. Recall REIT wavelet of the mid-1990s. J. Wiley & Sons, New York publishers, produced two case bound texts supplying detailed information on these trending topics: “Development, Marketing & Operation of Manufactured Home Communities” of 1994, and “How to Find, Buy, Manage & Sell a Manufactured Home Community” in 1996. First printings of both books sold out within six months of release. Now-retired David Alley and Edward Hicks were two of three authors penning the first text; dozens of writers contributed to the second tome. Finance education, in this industry observer’s opinion, has long been an Achilles’ heel of the manufactured housing industry and and-lease communities. Thanks to Tony Petosa, Nick Bertino, Erik Edwards, and Matt Herskowitz of Wells Fargo, since year 2006, they’ve continually updated their comprehensive, and highly popular, “Manufactured Home Community Finance Handbook” – having to do with real estate secured mortgages for this type investment property. Four years later, the “Manufactured Housing $ PRIMER” debuted – and quickly sold out, at MHI’s annual Manufactured Housing Congress in Las Vegas. The primer showcased nearly 30 knowledgeable contributors, and covered chattel capital in a fashion never done so before! Today, it is out of print; and the perennial topic, chattel capital, goes begging for exposure. To show how far we’ve come in the knowledge arena, as an industry and realty asset class there have been several books published with sharp foci. One, “Land Lease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing” (2011) leaves no stone unturned relative to this unique income-producing property type. And the 2012 “Book of Formulae, Rules of Thumb & Helpful Measures” describes, and ’splains every mathematical that applies to communities. It even includes a description and example of the community valuation tool, the New Rule of 72 – exclusively unique to the realty asset class! Let’s end Part II with a review of the history books authored to date about the industry and property type. The late Dr. Carl Edwards researched and wrote about “mobile homes” from 1932 through 1993. He was a professor at Michigan State University, Cornell, and Syracuse. He wrote
and self-published “Homes for Travel and Living” in 1977. Then Allan D. Wallis appeared on the MH scene, in 1991, with his classic “Wheel Estates: The Rise and Decline of Mobile Homes”. There’s been no sequel. However, in 2013, former MHI executive Bruce Savage wrote “The First 20 Years!” to commemorate the debut, and two decades of growth, of national advocacy, on behalf of 50,000 land-lease communities nationwide! Then, during 2014, freelance writer Bob Vahsholtz published his deeply researched magnus opus, DUELING CURVES, The Battle for Housing”. While it has more to do with factory-built housing overall, than manufactured housing per se, it pulled key historical events, pioneers, companies, and product advances together for study and reflection. And finally, in 2017, came “SWAN SONG”, ostensibly a history of land-lease communities from 1970 to the present day, and the first published official record of manufactured housing shipments from 1955 to the present day. So popular a new release, the initial printing sold out within 30 days, and a new edition/printing appeared during year 2018. Bottom line? This was, and continues to be, the first and only comprehensive history of the realty asset class! So, where does one find – to buy – these aforementioned titles (i.e. the ones still in print)? Two locations: the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library in Elkhart, IN. (574) 293-2344. And via EducateMHC at their website: www.educatemhc.com Finally. Do you have a manufactured housing- or community-focused book you’d like us to review, and possibly write about in this Allen Legacy column? If so, talk to me about it via gfa7156@aol.com or mail a review copy to GFA c/o EducateMHC 170 Commerce Dr., Franklin, IN. 46131. MHV George Allen has owned and fee-managed land-lease communities since 1978. He’s a former MHI Industry Person of the Year and a member of the RV/MH Hall of Fame. He has been designated a Certified Property Manager-Emeritus and a Manufactured Housing Manager-Master. He’s also a senior consultant and staff writer with EducateMHC. Allen can be reached at (317) 346-7156 and gfa7156@aol.com.
78 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
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THE ALLEN LEGAC Y
Photo courtesy of Clayton Homes
Tracing Manufactured Housing & Community History Through the Authors Part II: 1990 – 2020 by George Allen, CPM Emeritus, MHM-Master
P
art I of this column scratched the surface of the first published historical record, relative to manufactured housing and communities. That’s because, in large part, there were so few industry and realty asset class pioneers who took time and made the effort to share their specialized knowledge and experiences. Today is much different. Part II takes us well beyond the seven businessmen introduced earlier. By way of review, “Managing Mobile Home Parks” was not the first book authored on that subject. During 1988, the book was self-published; and, during the next 32 years went through eight edition updates and three title changes. Today it’s marketed by the Institute of Real Estate Management as “Community Management in the Manufactured Housing Industry”. It is also the core text of the Manufactured Housing Manager™ professional property management training and certification program administered by EducateMHC, and taught by two of
the text’s three co-authors, Susan McCarty, MHM, and Erin Smith, MHM. Another “carry over”, nearly parallel to Gary Pomeroy’s home sales classic of the last century, is the “Guidebook for Selling & Seller-financing New Manufactured Homes On-site in Land Lease Communities” of 2016. This text, authored by Adriane DeRose, Richard Ernst, Jamie Dougherty, Ken Rishel, Spencer Roane, and Pamela Ziemer (all MHMs except Ernst & Rishel), embodies the 21st Century paradigm shift, where distribution of new HUD-Code housing units has moved away from independent (street) MHRetailers into land-lease communities nationwide. The book is precedent-setting, introducing Four Steps to Selling & Financing New Homes On-site, and Six Right Ps of Marketing applied to manufactured housing and communities. The 1990s saw two significant community trends emerge: developing raw land into and-lease communities,
80 | SEPTEMBER / OCTOBER 2020 EDITION • MHINSIDER.COM
continued on page 78
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RESULTS
Colleen Lannoo Melissa Wade Broker Associate | Senior Transaction Director of Data Research Manger (586) 580-7322 (586) 884-8415 colleen@mhreinc.com melissa@mhreinc.com
Richard Zicker Senior Advisor (407) 640-7044 richard@mhreinc.com
MANUFACTURED HOUSING GROUP
Detroit HQ Location 12900 Hall Road, Suite 190 Sterling Heights, MI 48313
Michel Mikkola Senior Advisor (407) 640-7046 michel@mhreinc.com
Tampa Location 100 S. Ashley Drive, Suite 600 Tampa, FL 33602
Melanie Ng Senior Analyst | Sales Associate melanie@mhreinc.com
www.mhreinc.com
PANELS THAT DEFEAT THE WEED EATER FOR ALL CLIMATE NEEDS RUSTIQUE RIBB • Limited lifetime warranty to Weed Eater Damage • Engineered for Impact Durability and Wind Resistance • Patented Design - US10,378,202 • Available in Airflow and Solid • Recessed vents for a classic appearance
RAPID WALL • Limited lifetime warranty to Weed Eater Damage • Panel backed with 2 inch Thermal Star EPS below grade foam by ATLASEPS for 9R+ insulation factor • Engineer certified projected energy savings • Complies with Hud wind loading for Zones I, II, III • Over fifteen years of use in the Manufactured Home Market 1300 Rustique Square • O’Fallon, Missouri 63368 636-498-5525 • 636-447-0400 fax www.rustiquerapidwall.com • www.rustiqueribb.com
