The Masthead

Do you want to grow your business by 400% to 1600%? Want the simple tool to help make this happen? Well, then, please read on!

The Summer of 2010 has been a busy one for many of us.  We may not be selling all the factory built homes we desire, but we’ve made some marginal improvements during a time that housing in general continues to struggle.   We’ve seen a dizzying array of issues face our Industry, from finance, to regulatory and more.

Let’s be candid, we could use some help on Capitol Hill!

During the MHI Summer Meeting, Thayer Long said that over 80 Industry Members made personal visits to Congress.  A lobbyist – as well as Congressional representatives and their staffs – have expressed to me how important it is for your Senator or Congressman to hear from you, personally.  Lobbying is needed in this day and age.  But no one does it like YOU can do it.  A letter, fax or email from you to your Congressman or Senators can have an important impact.

MHARR and MHI have both advocated ‘engagement’ with Congress during this critical period of time for our Industry.

With the above in mind, I put together the message that follows. This was done with some very helpful polishing assistance from our Associate Editor Catherine Frenzel, whom I hereby publicly thank and acknowledge for her many contributions behind the scenes to our ever improving efforts at MHMSM.com.  I sent this off by email and in one case also by fax to each of the three who represent me.

I share the guts of it for your consideration.  You are welcome to use this, or elements from this, in your own outreach to Congress.  I won’t say this is comprehensive, it doesn’t touch on the SAFE Act issue for example.  But what it does is outline a variety of points that are important for us to achieve our potential as an Industry!

I am mindful that last month, we flooded the FHFA with “thousands” of comments!  There were so many, that it reportedly shut down their email posting system. Let’s approach Congress with that same type of vigor.

Take 20 minutes to an hour, and just do this.  Reach out to your Congressperson and your two U.S. Senators.  Please, do it today if you can, but don’t let it fall off your radar.  You are in this Industry.  You have associates whose jobs depend on this Industry.  Think, we could grow 400%-1600% by some estimates, if these items are addressed successfully in Washington.

That should be all the incentive that you and everyone who works with you needs.  I guarantee you, that if Congress gets floods of messages, like this, or in your own words, we will see action in 2010. I personally sent this on our letterhead.

==>  Here’s the meat Tony sent to U.S. Legislators.  Feel free to use it. <==

Dear Congressman/Senator

I am a resident of Glenview, IL and a member of the Manufactured Housing Institute (MHI), an industry trade association that is based in Washington, DC. I am writing you today as the publisher of Illinois-based Manufactured Home Marketing Sales Management trade magazine (www.MHMSM.com), the Industry’s premier news and views resource, with 30,300 readers in July 2010. Our readers include owners, executives, association leaders and management of companies with more than 500,000 people still working across the U.S.

I have been working in various aspects of the Manufactured Housing Industry since 1981. To my recollection, we have never faced so many challenges as an Industry, as we do now.

We need your help, please!

INTRODUCTION

Danny Ghorbani, president and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR), has stated in interviews with us that the industry has many friends on Capitol Hill. In fact, he has told me personally that we are “a dream industry” and loved by many elected officials, because we provide affordable quality homes for people of low to moderate income; we do so without subsidies and can also serve people of any income with appealing, safe homes that cost some 30-40 percent less than conventional construction. In states such as Texas, manufactured housing has provided as much as one-third of all new housing starts, but due to financing and regulatory challenges, we have slipped from a high of more than 372,000 homes in 1998, to just under 50,000 new homes sold by manufacturers in 2009.

At precisely the time that our great nation needs more jobs and affordable, quality homes, our Industry faces serious challenges. Congress has given the industry great legislation such as the Manufactured Housing Improvement Act of 2000 (MHIA 2000), FHA Title I Reform and the GSE’s “Duty to Serve” underserved markets provision passed in 2008. Yet implementing this legislation has been a real issue.

There are voices in Washington who now say we should turn away from supporting home ownership, and turn instead to providing support for rental housing. Where is the logic in that thought? Someone has to own a home, be it a rental or owner occupied! Support for rentals is like saying we will pump money into the hands of those who have it – the landlords – rather than give millions an opportunity to own. Those millions could build equity and improve their lives if affordable housing is made available to them.

The problem with the mortgage meltdown was due in part to forces putting people into homes they couldn’t afford, due to terms and qualifying that were too lax or counterproductive to long-term ownership and economic interests. But the idea of home ownership should not be discarded because of a breakdown or abuses of the system. That would be like saying that we should jail honest citizens because some people commit crimes.

Rather, the answer is that we need to create jobs through the availability of affordable quality homes! The manufactured housing industry, which has served the nation for decades, provides the answer.

THE CHALLENGES

Before addressing specific issues, let me paint a picture for you of what America faces and why manufactured homes and factory built housing in general makes so much sense.

1 The U.S. population is growing larger.

Based on the middle-series projections, the nation’s population is projected to increase to 392 million by 2050 — more than a 50 percent increase from the 1990 population. See: http://www.census.gov/population/www/pop-profile/natproj.html

2 The U.S. population will be older than it is now.

In all of the projection series, the future age structure of the population will be older than it is now. The last of the Baby-Boom population will reach age 65 in the year 2029. By that time, the Baby-Boom population is projected to be only about 16 percent of the total population. See: http://www.census.gov/population/www/pop-profile/natproj.html

3 The U.S Housing stock is aging.

The median age of US Housing Stock is 36 years. See: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-138 (July 1, 2010)

An early report shows that the median year American homes were built was in 1969.

Most American housing is located in metropolitan areas; www.huduser.org/periodicals/ushmc/fall00/summary-2.html

Age, Size and Equipment Characteristics of U.S. Households: More than 90 percent of the current U.S. housing stock was built before 1990. See:

http://eetd.lbl.gov/ie/pdf/LBNL-43640.pdf

When we think about the lower energy standards of those older housing units, and the fact that many homes are 70-100+ years old, there is no question that American housing needs updating.

4 The current economic instability means lower earnings for millions of Americans.

President Obama has twice gone to Elkhart, Indiana, where unemployment is among the highest in the country. Elkhart is also home to many manufactured housing producers. The promise of jobs that were made there could be kept by providing the necessary political and regulatory support for manufactured housing.

VIABLE SOLUTIONS

To me and thousands of others in our Industry, when we look at the facts, we see a picture that says this:

• The real driver behind the U.S. Economy for decades has been housing.
• We need housing for a growing population. There is likely to be a large demand for smaller houses and more affordable houses
• We need to replace housing that is aging or in poor condition, including 2 million pre 1976 mobile homes (i.e., pre-HUD Code).
• As the population ages, we will need more single-level and affordable housing
• Only manufactured and modular construction of homes can rapidly meet the needs of the nation during a disaster.
• We need jobs, we need manufacturing…
• …so we need manufactured housing now more than ever!

We in the manufactured housing industry have production; we have an energy-efficient and affordable quality product. We have customers; we have demand. So the problem is not in our industry – it found in various bottlenecks is in Washington, DC.

WHAT CAN CONGRESS DO TO HELP?

HUD’s Teresa Payne told the MHI members at our Summer Meeting in Washington, DC this past July 13-15th, 2010, that “Manufactured Housing Still Rocks!” See

http://www.mhmarketingsalesmanagement.com/blogs/tonykovach/manufactured-housing-still-rocks/

That said, here are issues that in many cases have been hampered in Washington, DC, that are crying out for Congressional action.

1. Financing is the key to any big ticket sale. Financing helps retailers sell more new homes, and proper financing would help consumers re-sell used manufactured homes. There are currently some 20,000,000 such home owners in the U.S. and cutting off financing to them is like trapping them in their homes, should they need or want to sell. The next two points could specifically address this critical need for the Industry and the millions of people it serves.
2. GSE’s “Duty to Serve.” Congress passed this in 2008, and the GSEs have stonewalled. Let me share an analogy. If a citizen fails to abide by the law, we get fined, jailed or perhaps strung up! How can the FHFA fail to move on getting the GSE’s to implement the will of Congress?  What is the consequence for ignoring the law?
3. FHA Title I reform. The standards and rules that FHA has put in place will allow only the largest lenders to do FHA loans, due to the high capitalization requirements. While there are efforts underway to move this ahead, Congressional intervention could speed the process.  Letters from the House and Senate to FHA on making the entry requirements for lenders on the Title I Program could make a difference!
4. SBA Floorplan lending. Congressman Joe Donnelley of IN is seeking bi-partisan support for a measure to extend and improve the SBA floor plan lending program. Without wholesale (floor plan) lending, many retailers, developers and community operators simply can’t purchase homes from factories to display for retail buyers to see them. Donnelley’s measure could aid the industry considerably in this practical need, along with giving similar support for the RV and the Automotive Industries. H.R. 5734. The companion bill was the Small Business Lending Fund Act of 2010, Sen. Mary Landrieu, D-La.
5. Passing the Energy Efficient Manufactured Housing Act. Senate Energy and Natural Resources Committee adopted the Energy Efficient Manufactured Housing Act (S. 1320). The House passed companion legislation (H.R. 5019) in May. This would help replace older mobile homes, – i.e., those factory-constructed houses built prior to the passage of the HUD Code for manufactured housing went into effect on June 15, 1976 – with new Energy-Star-qualified homes. This helps the most poor and elderly.
6. MHCC and HUD. MHARR has expressed grave concerns that the intent of Congress in creating the Manufactured Housing Consensus Committee (MHCC) is being neutralized by HUD. I’ve personally spoken with members of the MHCC, who echo MHARR‘s Danny Ghorbani’s concerns. If regulators are allowed to push forward any regulation without an effective voice for consumers and manufacturers, then regulators – no matter how well intentioned – can de facto wreck havoc on the Industry they regulate. HUD should have a clarification of the intent of Congress in passing the MHIA of 2000, which clearly spells out the fact that HUD must go through the MHCC process and can’t impose its will outside of and apart from expressed approval the MHCC process. Some regulatory issues now pending, include:

• RE: RIN 2502-A172 Manufactured Home Construction and Safety Standards, Test Procedures for Roof Trusses
• Docket Number FR-5295-P-01; RIN 2502-A183 On-Site Completion of Construction of Factory Built Manufactured Homes.

1. It should be noted that the intent of Congress was to make manufactured housing performance based, as opposed to a proscriptive code. This would allow for technological advances to move the Industry ahead, control material waste and costs and give the best possible product to the consumer. The MHCC process was supposed to foster that, but as noted, a discussion with a number of MHCC members indicates that HUD is now trying to effectively over-ride/neutralize the Committee, contrary to the intent of Congress in passing the MHIA of 2000. Let’s not hamstring American ingenuity.  A letter to HUD on this issue from your office would be helpful.
2. Federal Pre-emption of HUD Code Manufactured Homes. Pre-emption simply means that the federal HUD Code pre-empts local building codes. This was a marvelous idea that dated back to the original passage of the HUD Code by Congress back in 1974. Pre-emption – in theory – simplified and reduced those costs for construction that were mostly regulatory in nature. I say ‘in theory,’ because practically speaking, local jurisdictions often ignore pre-emption! Nor does HUD often impose its authority in those cases where pre-emption is ignored. Let me give another analogy to make this point. If the FBI shows up at a crime scene and asserts federal jurisdiction, the local law enforcement agencies have to stand aside. The same should be true with the HUD Code for Manufactured Housing! Local jurisdictions don’t attempt to over-ride HUD on fair housing laws, why does HUD allow it with respect Manufactured Housing? A letter to HUD asking them to enforce federal pre-emption may set the stage for more vigorous action by HUD when state or local jurisdictions ignore federal law regarding manufactured housing placements and related regulatory issues. The widespread use of the HUD Code could and would flourish if pre-emption and the points made above would be enforced.

MYTHS

There are many myths about manufactured housing that we have tackled in various “Industry in Focus Reports” by our Eric Miller.

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/723-hurricane-risk-prove-manufactured-housing-safer-bet

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/696-tornado-caused-more-destruction-to-conventional-construction-than-to-mobile-or-manufactured-homes

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/739-insurer-study-on-manufactured-homeowners-provides-insights

These require a free sign up and login, which is linked below:

http://www.mhmarketingsalesmanagement.com/user-registration

The point is that today’s manufactured homes are not yesteryear’s ‘mobile homes.’  They should no longer be treated as mobile homes, they should be treated on par with conventional housing!  America needs this industry, and you and Congress have an opportunity to support a jobs creation simply be supporting the items noted herein.

SUMMARY

I could summarize the news stories above by saying that insurance, university, government and other studies prove that today’s manufactured housing is stronger, smarter, safer, stylish and offers major savings. Today’s Manufactured Housing (as opposed to pre-HUD Code mobile homes, those houses built in factories prior to June 15, 1976, when the HUD Code for Manufactured Housing took effect) is in many ways superior to conventional construction. It is greener than conventional building can be. Size for size, manufactured homes are more energy efficient and less costly to maintain. Manufactured homes create jobs, and offers affordable housing to millions of Americans.

To show the potential appeal for today’s manufactured homes, you can visit our photo gallery at:

http://www.mhmarketingsalesmanagement.com/photo-gallery

The point is this. The Industry has lost dozens of manufacturing facilities. It has seen what once were its two largest HUD Code manufactured housing builders go into bankruptcy, along with many smaller manufacturers that have vanished. Had Congressional legislation been properly implemented, much of this could have been avoided.

In our July 2010 interview with Congressman Walter Jones (R-NC), he stated to us that

1. Congress can issue letters to regulators.
2. It can hold hearings.
3. As needed, it can pass legislation.

There are some items that need a vote or co-sponsorship of legislation that is ending. At the very least, House or Senate Members can send a letter saying, ‘What gives?”

We need some of each of these actions – from you, please.

Twenty million Americans who live in manufactured housing or pre-HUD Code mobile homes and the 500,000+ jobs the Industry represents are counting on your support. Please let your voice be heard and take action on any of the points outlined above.

Write your Congressman

Write your Senator

Thank you.

Respectfully,

L. A. ‘Tony’ Kovach

Publisher, http://www.MHMSM.com

tony@MHMSM.com

847-730-3692

History is often seen as a series of ‘great events.’ While great events obviously occur – the Stock Market Crash of 1929, the attack on Pearl Harbor, the Invasion of Normandy, the attack on the World Trade Center, the sub-prime bubble bursting in 2008 and so on – history is in fact made up of countless deeds that don’t make headlines or history books. In fact, it is numbers of individual actions or inactions that lead up to every ‘great’ historical event that ever was or will ever be.

So what does this observation have to do with manufactured housing?

Everything.

As I write this, we are at the end of July, August is upon us. We have five months left to do the everyday things that will effect the great manufactured housing turn-around of 2010! We as an Industry are up over last year in shipments! We have individually and collectively as companies and associations taken important steps that can move our businesses up, and those steps will move our Industry up!

When I wrote in the blog last Wednesday that ‘thousands’ of you reportedly wrote into FHFA to comment on the financing issue, what does that mean? That means that you, or someone like you, took the time to do an everyday thing.

Thousands – one individual event at a time – emailed or faxed FHFA. Throngs of you wrote or called your Congressman or Senators! Individual, everyday events that collectively can lead to more financing. In time that can lead us to still more sales, and that can yield good things for our customers, our businesses, associations, the Industry and our Nation.

Such seemingly small steps as sending a message into public officials, ‘those individual events,’ collectively can change the course of our Industry’s history!

Great things happen when a number of ‘little things’ happen first.

You and your team’s choices on the use of time and every day actions do matter. They are like drops of water that in time fill the bucket.

We have plenty of issues that our great Industry faces. We have demonstrated to ourselves as manufactured housing industry professionals and to public officials that we can mobilize thousands. Because we did this once in 2010, we can do so again. If we did this well once this year, we could do it even better next time!

We have another comments issue looming in August. We need to respond again. If you responded on the FHFA finance issue, respond to this HUD on-site completion issue. If you didn’t respond to the FHFA comments issue, here is your chance to be heard on what is truly another key topic for our Industry’s future. Please don’t let someone else do it, take the time to do it yourself, and then ask others to do the same. That discipline to act on these issues can lead us to a big benefit for more home sales for our industry.

Because individual actions matter, let’s do it again.

I will invite one or more industry pros to cover the importance of this on-site completion issue. Until then, please look at what MHARR has already provided us as the start of the understanding process.

Now let me shift gears for a few moments to another everyday issue that is a key part of the great Industry turn-around of 2010.

Some months back, our featured writer John Underwood made a statement that I think bears repeating. The turn-around of the Industry begins with the turn around and sales expansion of you and your firm! When your business is growing, so is the Industry! John also said that if we were doing a better job closing sales with the prospects we are already seeing, then we would be growing our businesses in a common sense fashion. John’s message bears re-reading; catch it here.

Our MHMSM.com IT and Production Manger, Bob Stovall, made an important point in his Cutting Edge in Online Marketing Blog recently that is related. Your people are spending time during working hours surfing the web. For most companies, it happens daily. Why not use that fact to your company’s advantage? Why not encourage or reward your team to spend that time getting to know their industry better? Why not encourage people to take advantage of all the free resources here at MHMSM.com?

As I write this, July is winding down. Our statistics tell us that nearly 1000 people a day are logging onto our site, that would be nearly 30,000 logins by professionals like you a month! Why are they – or you – here? Because our readers see value! They see news and views they can use! Leaders are readers. Learners are earners!

Some day, we will look back at 2010, and see how our everyday acts added up. The great turn around of 2010 is a series of modest, everyday events. Revolutions start with a few, and then those numbers grow.

You will look back someday. Will you look back with pride that you and your team did the everyday things that added up to make a difference? Will you do so with the knowledge that common sense daily disciplines resulted over time in a great outcome?

Vince Lombardi, or any great coach or leader, started their success stories with the basic daily drills. They started with the facts and the pep talks that challenged and encouraged their teams to give and be their best!

History is a great teacher. We can learn from our own experiences and from those of others. We read books or articles, or listen to podcasts, precisely to learn from others! To be inspired by another! We don’t want to be all alone. We instinctively know, we need others in order to be a success.

Innovation – Information – Inspiration for Industry Professionals is our tag line. As in our new book, The Manufactured Housing Revolution, over 500 years of experience by Industry pros can only help you and your team! Being involved in associations, but also being involved here daily, that can only help you and your team!

But it can only do so to the extent that you get and stay involved in The Manufactured Housing Revolution! Take the daily steps that make a difference. Read an article, then apply it’s lessons. Listen to or read Factory Built Housing Industry News at Noon and daily Manufactured Housing Market reports, and see what it may mean for you and your business.

Great events start with a series of modest ones. If we want the great event to have a lousy outcome, then we should waste our time on meaningless or less important stuff. But if we want a great outcomes, then we should do those little daily steps and drills that lead us over time to fantastic victories!

Thank you for being here, and for asking your associates and friends to be here too at MHMSM.com. We do it all for the factory built housing industry that we ourselves work in and serve daily. We do it all for…

…you. # #

L. A. ‘Tony’ Kovach
Manufactured Home Marketing Sales Management Industry Trade Journal
www.MHMarketingSalesManagement.com or MHMSM.com
tony@mhmsm.com
847-730-3692

“Manufactured Housing Still Rocks!” with those words, Teresa Payne addressed the crowd at the busy L’Enfant Hotel solarium this morning, July 15th, an apt summation of this important MHI Summer Session meeting.

This will be the first of a series of reports you will find exclusively here on the Masthead blog, in articles by our MHMSM.com Industry In Focus Reporter Eric Miller’s articles and on our Factory Built Housing News at Noon podcasts by Erin Patla.

We want to start by taking hats off to Thayer Long and the rest of the dedicated MHI staff who worked hard to make this a productive and informative series of meetings. Much more on those staff members and committee leaders work in future reports.

Some of the items you will see in the days ahead will include details on::

• Over 80 visits by Industry professionals with Congressional members took place during the afternoon on Capitol Hill Wednesday, July 14.
• A reception held on July 14 with Congressional members and staff present, to informally meet with MHI members. We plan a series of exclusive follow ups with various members of Congress here on our pages (see sample photo below).
• Discussions on key topics such as financing, the SAFE Act, regulatory issues and strategy sessions took place. MHMSM.com plans to ask industry experts for their input on the technical topics, as part of our post-meeting coverage.
• Meetings with FEMA officials, as a prelude for what can result in new business for manufactured housing and park model home builders took place.
• Meetings and presentations with HUD and DOE officials took place. Individual reports will be found on our media site in the days ahead.
• A meeting with federal Rural Housing officials took place, to brief MHI industry members on how more retailers can tap into zero down payment financing on manufactured homes, not ‘someday,’ but right now!
• Systems Building Research Alliance report on a cost effective frost free foundation system approved for Manufactured Housing.
• SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Yes, there are opportunities, as a good look at this flash report suggests.
• MHI PAC and other MHI division reports.
• MHEI’s plans to collaborate with Manufactured Home Marketing Sales Management.com (aka MHMSM.com) trade journal to sell book, videos and possible other cross marketing and cross promotional efforts.
• HUD’s MH Program Associate Deputy Assistant Secretary, Office of Regulatory Affairs and Manufactured Housing, Teresa Payne comments at the meeting, as well as those of Elizabeth Coche and other officials associated with HUD and the new office for consumer financial protection.
• Past and present Congressmen who addressed the Industry personally at this meeting and who attended the Industry reception.

…and much more as well!

In short, this was a busy, busy 3 day session indeed! Among the items we plan to look at in more depth:

• The proposal by an association leader that the industry consider putting all of the current issues pending before the government into a new single piece of legislation, which this member proposed as the Manufactured Housing Improvement Act of 2010 (or 2011, etc.). The concept – suggested in one of the meetings – would be designed to take a more pro-active approach on Industry issues, and to combine efforts into one bill rather than take an issue by issue approach.
• Discussion on the proposal by a state association leader on a recent conference call, to create a focused lobbying presence on some key issues relating to regulatory agencies or Congress. The suggestion included the hope that MHARR and MHI could collaborate on this effort. While no commitments were made either way on this topic, MHI officials said they were open to ‘anything’ that would advance the cause of the Industry at large. There was also a statement and some concerned discussion that such a move not result in a ‘third voice’ for the Industry being created, if this proposal were to come to fruition.

A key feature of the meeting wasn’t even on the main agenda. This was a meeting after the meeting with key federal officials to discuss how the Title 1 and other government involved lending programs could be made successful through careful, collaborative input by experienced Industry lenders and other stakeholders, such as manufactured home community operators, manufacturers, retailers and others. This was apparently the direct result of efforts at and immediately after the Congressman Joe Donnelly lead meeting in Elkhart in early June, 2010.

As is our custom, in an effort for balance in our reporting, we contacted MHARR in advance of this trip and during my stay in DC as well, to see if we could meet for comments and discussions on key issues facing the Industry. Scheduling conflicts on both ends kept that meeting with MHARR officials Danny Ghorbani and M. Mark Weiss from taking place.

On another meeting related note, the release of the new book The Manufactured Housing Revolution was met with considerable interest and praise. The vast majority of meeting attendees took a copy. HUD’s Commissioner Stevens, Teresa Payne and Liz Coche all wanted autographed copies, we look forward to their private (or public!) feedback, along with comments from others connected with our Industry.

Speaking of others, George Allen plans to do a book review of MHMSM.com’s popular new The Manufactured Housing Revolution soon on his blog, We have already had some early and positive comments, and anticipate other reviews and comments on this timely volume.

It is also worth noting that the Consortium of Industry publishers had their second meeting on July 13th. More on that discussion with George Allen, Ken Rishel and the planned follow up with come soon.

When the bullet points of a two and a half days of meetings takes some 2.5 pages to outline, that gives you a small sense of how busy and varied the topics were! Again, congratulation to Thayer Long and the MHI team for making this happen. I’d also like to underscore the positive facts that Congressmen, HUD officials, FEMA officials, Rural Housing program officials and numerous staff for the proceeding made this a rich series of opportunities for Industry professionals.

This would be a good time to note that membership in MHI brings value to those who participate and attend such functions. Access to this level of Congressional and government officials is enhanced by participation and engagement via MHI.

We will strive to bring you reporting in the days ahead that will capture the keys to all that took place. For those sitting in those meeting rooms with an open and attentive mind, you would have to walk away with the impression that the Industry is trying to come to grips with challenging issues in a very direct and positive fashion.

If you haven’t already done so, please check out Hometown America’s Greg O’Berry’s post on a time sensitive topic, submitted yesterday evening and that went live the same day. Greg’s comments were a direct result of discussion during the National Communities Council (NCC) meeting. This would be an appropriate time for me to personally invite meeting attendees, public officials and MHI staff to consider sharing their perspectives publicly via our Industry Voices Guest Blog.

My personal thanks to all who took the time to share a few minutes with me, to the many who had positive or encouraging words to share about our MHMSM.com trade journal. In turn, I want to thank the dedicated writers and team members at MHMSM.com who made this trip for me possible, because good people kept the wheels of our electronic platform ever moving ahead! The reality of a solid team doing their respective functions well made my trip to Washington with family for this timely event a reality.

Hats off and our thanks to one and all involved! # #

A letter came to my attention that was circulated via email. The letter which follows my introduction here addresses the growing concern over HUD’s ‘handling’ of the Manufactured Housing Consensus Committee, or MHCC. The MHCC is a critical body from the Industry’s perspective. The MHCC exists to protect the interests of both the Industry and the public, while providing safeguards for all concerned. If you are in the Industry, the MHCC is important to you!

Sadly, too many in the HUD Code Industry fail to recognize the importance role that the MHCC is intended to play. So as you dig into this topic with me, you’ll see that indeed “storm clouds are gathering” over the MHCC and HUD officials’ recent actions regarding the MHCC is an import issue! The Manufactured Home Industry obviously needs Manufactured Homes that are appealing, durable, well designed, safe and affordable. The MHCC was designed to play a key role in that process.

In the memo that follows this introduction below, the concerns are being expressed by officials at MHARR, one of the two national Industry trade organizations. Certainly the concerns are also true among members of the MHCC and others in the HUD Code Home Industry regarding the ‘handling’ of the MHCC by HUD.

To put it bluntly, many believe that some at HUD are trying to neuter the MHCC, and strip it of its legally established status ‘check valve’ status.

The MHCC was established by the Manufactured Housing Improvement Act of 2000 (MHIA 2000), so it has a legal status. The MHCC exists as a check point to keep HUD, the federal government or other forces from arbitrarily imposing their will upon the Manufactured Housing Industry, notably in the construction of homes and construction-related regulations.

Regarding the MHCC, the MHIA of 2000 says in part:

‘‘(3) CONSENSUS COMMITTEE.—
‘‘(A) PURPOSE.—There is established a committee to be known as the ‘consensus committee’, which shall, in accordance with this title—
‘‘(i) provide periodic recommendations to the (HUD) Secretary to adopt, revise, and interpret the Federal
manufactured housing construction and safety standards in accordance with this subsection;
‘‘(ii) provide periodic recommendations to the Secretary to adopt, revise, and interpret the procedural and enforcement regulations, including regulations specifying the permissible scope and conduct of monitoring in accordance with subsection (b);
‘‘(iii) be organized and carry out its business in a manner that guarantees a fair opportunity for the
expression and consideration of various positions and for public participation; and
‘‘(iv) be deemed to be an advisory committee not composed of Federal employees.”
(Note: the parenthetical addition of the word HUD – short for Dept of Housing and Urban Development – used above was added for clarity).
In fact, this might be an appropriate place to share the purpose of the Manufactured Housing Improvement Act of 2000 or MHIA of 2000, which Congress passed and the president signed into law. Here it is:
SEC. 602. FINDINGS AND PURPOSES.
‘‘(b) PURPOSES.—The purposes of this title are—

‘‘(1) to protect the quality, durability, safety, and affordability
of manufactured homes;

‘‘(2) to facilitate the availability of affordable manufactured
homes and to increase homeownership for all Americans;

‘‘(3) to provide for the establishment of practical, uniform,
and, to the extent possible, performance-based Federal construction
standards for manufactured homes;

‘‘(4) to encourage innovative and cost-effective construction
techniques for manufactured homes;

‘‘(5) to protect residents of manufactured homes with
respect to personal injuries and the amount of insurance costs
and property damages in manufactured housing, consistent
with the other purposes of this section;

‘‘(6) to establish a balanced consensus process for the
development, revision, and interpretation of Federal construction
and safety standards for manufactured homes and related
regulations for the enforcement of such standards;

‘‘(7) to ensure uniform and effective enforcement of Federal
construction and safety standards for manufactured homes;
and

‘‘(8) to ensure that the public interest in, and need for,
affordable manufactured housing is duly considered in all determinations
relating to the Federal standards and their enforcement.’’
(Note: bold lettering above added for emphasis).
For those of you who are ready to read the entire MHIA of 2000, we have posted the entire Act at this link,

http://mhmsm.com/downloads/Manufactured_Housing_Improvement_Act_of_2000.pdf

with the Manufactured Housing Improvement Act of 2000 found starting on page 55.

We are a pro-Industry publication. We are here to provide news and views you can use. We’ve often stated – and will restate again – the fact that www.MHMarketingSalesManagement.com as an Industry Trade publication is neutral and doesn’t ‘parse’ or attempt to analyze who says what among trade organizations, etc..

www.MHMSM.com does from time to time, point out the well known fact that there are differences in the reporting between national associations or others in the industry, a point made in my article in the May issue on the MHCC’s April 2010 meeting in Tulsa, OK.

In researching the memo below and asking HUD, industry leaders and others to share their perspectives on this, it should be noted that no one stepped forward to speak ‘on the record.’ Yet virtually everyone I contacted had something to say off the record! Now that fact is in itself is telling, because here in America, we should feel comfortable and safe sharing our candid views that are stated intelligently, respectfully and without histrionics or hyperbole.  We call that ‘freedom of speech!’

One of the comments that came in to me off the record while researching this article below is quoted extensively here:
“I want to begin by thanking Danny Ghorbani for sharing the information on the recent MHCC meeting in Tulsa with the public. Shortly before the meeting, MHCC members were informed that certain governmental bodies had found that the MHCC is a Federal Advisory Committee and, as such, must follow the Federal Advisory Committee Act (FACA). Due to this ruling, HUD:

• Re-wrote the MHCC Bylaws. In the past, the MHCC re-wrote the Bylaws and voted to accept, reject or amend them with HUD’s final approval. Under FACA, HUD writes and approves the MHCC Bylaws.
• Decided during the Tulsa MHCC meeting that certain non-committee members were allowed to speak, while others were not, an action which shocked many of us, but HUD is now in charge of the meetings.
• Dissolved the MHCC Planning & Prioritization Subcommittee, which is a very critical action. This subcommittee received all proposed changes to the manufactured housing standards of construction, and assigned each a priority and to a specific subcommittee to develop a recommendation for the full MHCC’s action.
• Totally took over the function of developing an agenda for the meeting, down to which specific items would be discussed by each subcommittee during their meetings. In the past, the chair would ask subcommittee chairs how much time they wanted scheduled for their meetings and try to accommodate them. We would also try not to schedule the subcommittee meetings concurrently so a person could be an active member of more than one subcommittee. The Chair of the Subcommittee then set the agenda according to the priorities and other actions subcommittee members wanted to discuss.
• Personally, I also disagree with the decision by HUD and/or the current administration in Washington, DC regarding lobbyists serving on federal committees. According to HUD, if a person is a registered lobbyist (and many of the employees of national and state organizations are lobbyists), they cannot serve on the MHCC. I believe that in many cases, these employees of state and national organizations are excellent candidates for the MHCC. Often they represent various segments of the industry and speak with a variety of industry members over time. In most cases, they would certainly be better candidates for MHCC positions than someone who has never been in a manufactured home before (and this has happened).

I believe this change in how the MHCC is controlled by HUD is something which must be brought before Congress. I do not believe it can be repaired at any lower level.”

It should be noted that industry voices tell me that it is doubtful at least that Congress intended the Federal Advisory Committee Act (FACA) to apply to the MHCC, nor was the interpretation used from the outset of the functioning of the MHCC.

To rephrase that, applying the FACA to the MHCC is a recent and novel approach by HUD towards this Industry and public representative body.

What I’d like to urge Industry readers is to get into the meat of this issue, and then communicate your perspective to MHI, MHARR and directly to HUD on how you see the handling of the MHCC.

I’d point out that Danny Ghorbani and MHARR themselves are suggesting that this issue can and should be addressed by the Industry – and he mentions both MHI and MHARR as representing Industry interests – with HUD first.

Most of my sources tell me that this is an issue that won’t go away; in fact it will continue to heat up in the days ahead. So the storm clouds gather, because the MHCC plays a vital and often misunderstood or under appreciated role in our Industry.

MHARR often sends us news items, as does MHI. We post both organizations’ news routinely, and both get widely read on our Ezine. This particular item below came to me from a third party, and NOT from MHARR directly.

Against this backdrop, let me share the unedited letter below which sparked this research, as it relates to this topic of the MHCC and HUD’s recent actions.

============= start of MHARR letter ============

Ms. Susan Brenton, MHCC Chair
Mr. Bill Lagano, MHCC Vice Chair

Dear Susan and Bill:

I am writing to follow-up on the significant response that we have received regarding the April 2010 MHCC meeting in Tulsa, Oklahoma.

As you both know first-hand and, unfortunately, had to endure, what occurred at this meeting was outrageous and should be unacceptable to all federal program stakeholders. Nor should it be tolerated, either by the leadership of the Committee or by Committee members who should be committed to the role, authority, functionality and independence of the MHCC.

We understand, for example, that as the MHCC Chair, you were barred from even recognizing MHARR’s representative for a question or comment, while Department employees, consultants, contractors and other special interests were allowed to speak based on the formality of a “request” by a Committee. This is censorship that undermines the Committee’s access to the collective experience, knowledge, expertise and institutional memory of the regulated party that has been painstakingly accumulated in the nation’s capital over the course of four decades, and that is simply not available from any other source. In addition, it deprives Committee members of essential information relevant to their deliberations and votes on issues that are crucial to the industry and consumers.

Because this is discriminatory and arbitrary, and because it leaves important facts and perspectives off the table, we are surprised that Committee members did not openly oppose — and challenge — these rulings. We recognize, however, that the format of the meetings does not lend itself to such challenges. We also understand the frustration that has been conveyed to us by various Committee members.

Indeed, many program stakeholders are now beginning to recognize the importance of having the collective representation of the program’s regulated parties (i.e., the industry and particularly manufacturers) on the Committee as voting members, given their institutional memory, knowledge and expertise regarding the complex issues that the MHCC must regularly face. Unfortunately, the quick acquiescence of our sister association (MHI) in this exclusion of collective industry representatives, provided a ready excuse for the prior program management to eliminate MHARR from the Committee as well, under the guise of compliance with a White House “preference” to bar registered lobbyists from service on federal advisory committees. A recent MHARR analysis of this “guidance” however, reveals that it was overstated by the prior program management and that collective industry representation on the MHCC should be restored in order to balance input to the Committee from regulators, contractors, consultants and special interests, as was on display at the Tulsa meeting.

As it is, we trust that the MHCC’s Tulsa meeting was planned and conducted under the auspices of the previous program management, as it was clearly influenced by the policies and decisions of that management over the past several years. Hopefully, the new program leadership at HUD will take major steps to fully comply with section 602(b)(6) of the law — maintaining and advancing this centerpiece reform of the 2000 law going forward — as restoration of the role, authority, functionality and independence of the MHCC should be and remain a top priority for the industry, consumers and all program stakeholders.

MHARR continues to thank both of you for your hard work on the Committee and your patience under difficult circumstances.

Danny

cc: Ms. Teresa Payne
HUD Code Manufacturers
MHCC Members
Danny D. Ghorbani
President
Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Ave. N.W. Suite 508
Washington, D.C. 20004
Phone: 202/783-4087
Fax: 202/783-4075
Email: DANNYGHORBANI@AOL.COM

An Exclusive Interview with Doug Gorman

1. (Question from www.MHMSM.com by Tony Kovach for Doug Gorman). First, Doug, thanks for taking the time to do this interview. While you are widely known in the industry, please give us a brief background on your many roles and history in this industry, for those who may be new and don’t know you as well as they should yet.

My experience with the industry began in 1971 in the role of a consumer. My wife and I purchased a 12×60 three bedroom front living room which at the time seemed to have plenty of room for us as newlyweds. Shortly after that I went to work for the retailer who sold us our home and have been in the industry continuously since then. My industry work experience has included retail sales, sales center management, multi-location retail management in the Southeast and the Southwest. Field sales for manufacturing covering five sates in the Southeast, multi-outlet retail modular sales management and 22 years of owning a retail sales center in Tulsa, Oklahoma. I have served as the president of our state association in Oklahoma, chairman of MHI’s Federated States Division, chairman of MHEI, the sole retail representative to NFPA for five years prior to the creation of the Manufactured Housing Consensus Committee and for close to ten years now as a member of the Manufactured Housing Consensus Committee.

2. There is a lot of discussion going on in the Industry these days, and we’d like to get your take on some of those timely topics. For example, there is a new initiative out there to launch what is dubbed the MHIDEA, the MH Independent Dealers Association. What are your thoughts on the matter? What can you tell us about R E Crawford, George Allen, Ken Rishel and some of those backing or supporting that initiative?

I believe MHIDEA is a worthy endeavor and its creation is being undertaken by some of the most credible people in the industry. Retailers have numerous issues that can get lost in the broader efforts that are undertaken by MHI. I had hoped for years that the National Retailers Council (NRC) would serve that purpose, but I have not seen it materialize. I don’t fault MHI for that failure. The decline in retailer population has certainly been a factor and for that same reason could limit the success of the efforts around MHIDEA. The total retailer focus of MHIDEA may give it some strengths that are not inherent in NRC.

As a preface to the question that follow, Doug, let me remind our readers that personally and editorially, www.MHMSM.com believes in the strong potential of our industry’s future. I could point to virtually every article, almost every blog post that underscores that fact. But At the same time, we have to look at real world challenges and address them. Many today are scared. So the following are not meant to be ‘doom and gloom questions, but rather to get a feel for how your take on such industry issues as matters currently stand, and to understand what we face in order to address it properly.

3. George Allen is one of those gents that most people in the industry know, especially in the LLC world. Allen has written about what he calls a ‘perfect storm’ or a ‘conspiracy’ to kill HUD Code housing by choking off finance initiatives in Washington, such as implementation of the FHA Title 1 and the “Duty to Serve” passed by Congress in 2008, and what amounts to concerns over leadership from national associations on such issues. How would you respond to that type of concern from a respected and informed industry leader?

I do not have any specific knowledge of a conspiracy to destroy our industry. At the same time I find many of the actions taken in Washington are in fact resulting in driving up costs for our industry’s clients while reducing the financing options available. If it is a conspiracy, those responsible are being remarkably successful as we look at a 90% drop in industry shipments. I don’t read a lot of news coverage of any other industry taking a hit of that magnitude.

4. It seems obvious that manufacturers and retailers – and these days, retailers often means land lease communities (LLCs) operators – have a natural need for each other. What concerns do you feel as a respected retailer who has years of manufacturing experience over the steady decline in new home shipments? What do you see as the needs to turn that 12 year decline in shipments around?

Clients want what we build. They are denied the ability to purchase our homes in many cases because of zoning issues and because of the inability to obtain financing. The zoning concern has to be addressed at the state level to achieve significant success. Improvement of financing will most likely only be achieved through increased pressure from our representatives in Congress to improve the application of existing programs.

5. Some have speculated that we are looking at the end of the HUD Code industry by 2020, others have said 2016. I spoke with a senior executive in the manufacturing world very recently who told me there is maybe 24 months to turn the industry around or many/most of the factories will be gone. What are your thoughts on the time line, and why don’t we see more being done to impact ‘saving our industry’ now?

I would not dispute either of the forecasts mentioned. Our program is the only Federal building code for and is administered by HUD. As an industry we certainly have a very real danger of national shipments continuing to be so low that we become irrelevant in the scheme of the Federal budget. If that were to happen manufacturers would lose the preemptive benefit of the federal code. They could possibly continue production meeting various individual state codes that might exist, but the federal umbrella would be lost.

6. You have expressed in the past your viewpoint on Danny Ghorbani’s importance at MHARR, saying “The industry needs Danny.” Can you elaborate on that, please?

For many of the same reasons that retailers may feel a need for a dedicated retailer trade association, many manufacturers feel a need for MHARR. I have no problem with MHARR’s position that their exclusive objective is to monitor regulatory events as they may affect our industry’s manufacturers and ultimately the cost of the home to our clients. Danny Ghorbani has worked tirelessly in this regard for many years. I do not always support or agree with a particular tact or undertaking by Danny, but the industry does not have anyone else who so fervently monitors the effects of proposed undertakings by our federal government.

As retailers, we do not understand to any significant degree the possible impact for instance of the current efforts by HUD to increase monitoring costs through an effort intended to improve quality control. While I believe the effort by HUD is well intended, I am also aware from conversations with manufacturers that many unintended consequences will drive up costs with no corresponding benefit to our client. MHARR will seek to route these efforts through the Consensus Committee. In HUD’s defense, a proposal on this subject was worked on by the MHCC, but was not moved forward due to lack of information regarding costs.

7. We did an exclusive interview posted on my blog with Eddie Hick’s recently about his initiative to promote product placement as an image building tool. During that interview, Hick’s said, and I’m quoting: “Well, I don’t think we need to wait and get a group like MHI involved. In some ways, they’ve failed to move this sort of thinking ahead on the image building issue.” As someone active with MHI and on the national scene, how would you respond to that comment and concern?

I would support any effort that Eddie can take in that regard. His idea makes sense and he sounds like he knows people that can help him accomplish his proposal. I don’t fault MHI and I don’t think Eddie does either. It is a statement of fact that MHI has not gotten involved in the RV type image building campaign. MHI was confronted by an industry made up of companies facing enormous cash demands in the face of the previously mentioned 90% decline in shipments. Major industry players such as Fleetwood, Patriot, Wick and Champion would ultimately face bankruptcy. That scenario is a difficult setting for raising millions in cash for a national image campaign.

8. Doug, any other thoughts you’d like to share about needs and issues facing the HUD Code and factory built housing industry today? What are your reasons for being optimistic about the industry potential and future?

As an industry we face many challenges. The SAFE Act will drive up costs for our clients while reducing the number of lending options. New FHA guidelines will also increase the costs of financing and increase the amount of cash needed to purchase a home. The new appraisal guidelines that went in to effect on February 16th will make appraisals more difficult especially with those appraisers that do not understand our product or do not understand the difference between an entry level home and a high specification home.

The Duty to Serve issue needs to be pursued as it holds huge potential for our industry. The government needs to move forward to fully implement the FHA Title I program and in light of 3285 retire the current permanent foundation requirements of the FHA Title II program.

Many of the concerns noted affect all housing while others are specific to our industry. I remain optimistic because the consumers want what we are offering. No other housing segment can touch what we offer. I can sell a three bedroom, two bath home for less than $30,000 and I can offer a two story modular for under $200,000. Isn’t life grand? Now if we could just have a good drought.