September/October 2024

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CONTENTS

Several officials from the U.S. Department of Housing and Urban Development met in Grand Rapids, Mich., in August, at the request of Rep. Hillary Scholten, to discuss residential housing needs in an area that has heavily impacted by economic conditions and market trends.

Barndominium, the word itself comes from Old English, a portmanteau from a pair of words creating something new that also retains the meaning of both the previous. Barn, the first part meaning grain and the second meaning house or dwelling.

The book “The State of Housing Design”, put out by the Harvard University Joint Center for Housing Studies sheds light on how housing demand, market concepts, and thought leadership in residential offerings has merged with what the manufactured housing industry has been doing for decades.

What is a DSCR Loan? Understand the Ins and Outs of the Popular Lending Tool

Manufactured Housing and LandLease Communities Among Policymakers

Community Rating Systems Since 1935 From Travel Trailer Magazine To Woodall’s Stars To Abclassification System

VOLUME 7, EDITION 5 | 2024 SEPTEMBER / OCTOBER | MHInsider.com

PUBLISHER Patrick Revere | patrick@mhvillage.com

SENIOR GRAPHIC DESIGNER Merit Kathan | merit@mhvillage.com

CONTRIBUTING EDITOR George Allen | gfa7156@aol.com

EDITORS Dawn Highhouse | dawn@mhvillage.com, Sean Vichinsky | sean@mhvillage.com

CONTRIBUTORS Steven Blank, Mark Bowersox, Dan Dempsey, Justin Eldredge, Lesli Gooch, D.J. Pendleton, Joanne Stevens

COVER PHOTO Courtesy of Deer Valley Homebuilders Inc.

ADVERTISING SALES (877) 406-0232 advertise@mhvillage.com

EDITORIAL & GENERAL INQUIRIES Patrick Revere | 2600 Five Mile Road NE Grand Rapids, MI, 49525 (616) 888-6994 patrick@mhvillage.com

FED CUTS RATES publisherFROM THE

It’s the headline we’ve been awaiting. For the first time in five years, The Federal Reserve has reduced interest rates.

Well, as I write this in July — with a pair of Fed meetings between me and you, the reader — the best guessers in the guessing business foresaw no change in July and quarter point cut in September… already, now, or some day soon.

What does just a quarter point mean?

It means a slightly less expensive house and lower monthly bills.

But more importantly, it’s what it means to the psyche of the American consumer. It’s a deep sigh of relief, just the notion of a cut. Consumers sitting on their next purchase begin to ponder them again. And as they ponder, the Fed is set to meet again in October and again in November.

Could we get .75 or a point off this year? Maybe or maybe not.

But that dot you see in the darkness is the light at the end of the tunnel.

Patrick Revere is vice president of communications at MHVillage and publisher for the MHInsider magazine and blogs. His background is in print news, language, and communication.

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INDUSTRY happenings

Transactions

Yale Secures $19M CMBS Loan in Southeast

Yale Advisors has secured a $19 million CMBS loan for a 450-homesite manufactured home community portfolio across Alabama and Tennessee. With 55 percent parkowned homes and flood zone challenges, the max cash-out refinancing achieved better terms than initially proposed by agencies, representing a significant step forward for this size portfolio in the area.

FG Increases Presence in North Carolina

FG Communities has acquired a manufactured housing community in Brevard, N.C., minutes from downtown. The community has approximately 35 homesites on five acres. Brevard is a tourist destination and the area is known as a “Land of Waterfalls," with approximately 250 waterfalls within a short drive.

CAPREIT Poised to Sell Canadian Portfolio

Canadian Apartment Properties Real Estate Investment Trust, or CAPREIT, has agreed to sell its manufactured home community portfolio to an entity controlled by TPG Real Estate for $740 million excluding transaction costs. The portfolio includes 12,138 homesites in 75 communities. The purchase price will be satisfied in part through an interest-only vendor take-back loan of $140 million, with a 3 percent interest rate over five years, with the remaining $600 million satisfied in cash.

Oak Creek Hospitality Buys Sedona Property

Oak Creek Hospitality has acquired Oak Creek Mobilodge, a 62-homesite manufactured home community in Sedona, Ariz., situated about 30 miles south of Flagstaff. Creekfront Holdings LLC sold the property for $5.3 million. Marcus & Millichap represented the seller and Coldwell Banker found the buyer.

Florida Property Changes Hands

A 200-homesite manufactured home community in Lakeland, Fla., has been purchased for $10 million by Bedrock Communities. The community last sold in 2004. Imperial Manor is a gated, age-restricted community with a clubhouse, swimming pool, game room, and access to a lake among other recreational activities.

Community Management

Group Buys Idaho Park

Community Management Group has acquired Eagle Wing Mobile Home Park in Mountain Home, Idaho. The acquisition is CMG’s sixth in Idaho and 28th in its portfolio. The newly acquired park has 47 homesites. CMG said it intends to upgrade the community and bring in new homes. “We are committed to creating vibrant, thriving communities where people are proud to live,” CMG co-founder Patrick McDonald said. “Eagle Wing Mobile Home Park is a wonderful addition to our portfolio, and we are excited about the opportunities it presents.”

Recognition

Flagship Receives Honors from KMHI

Flagship Communities, a real estate investment trust, has been awarded Community of the Year for White Pine Point, 345-homesite community in Covington, Ky., a remarkable turnaround story. Flagship transformed the manufactured housing community within a short span of 15-months, providing a large clubhouse and office, municipal grade playground, pickleball court, dozens of new homes, as well as street paving and new solar lighting. Flagship also received awards for Retailer of the Year and Retail Salesperson of the Year. “We are thrilled to receive these high honors from the Kentucky Manufactured Housing Institute and be awarded Community of the Year for the third consecutive year,” Flagship CEO Kurt Keeney said. “Our team has done an outstanding job of transforming this community and welcoming new, diverse homeowners to the community.”

Industry Giving Association Provides Four Scholarships

First State Manufactured Housing Association has provided four scholarships, each for $2,500. The scholarships go to Samantha Buckley, of Millsboro, Del., a 2024 graduate of Sussex Central High School; Ellis Jack, of Lewes, Del.; Emma Moyer, from PotNets Lakeside in Long Neck, Del., a 2024 graduate from Sussex Central High School; and McKenna Vest, from Clayton, Del., a 2024 graduate from Delaware Military Academy.

Yes Communities Continues Relationship with Local High School

Yes Communities, a Denver-based operator of manufactured housing communities, has awarded its annual

Building Futures Scholarship to Camila Alvarez Salsas, a student at Arrupe Jesuit High School. The award provides Salsas with a hands-on work-study program with Yes and $5,000 to go toward her education. She intends to enroll in dental hygiene coursework at the community college. Since the inception of its partnership with Arrupe Jesuit High School in 2010, Yes has provided 60 corporate work study opportunities to students.

RV/MH Library Receives Naming Donation

A name has been attached to the library at the RV/MH Hall of Fame. In honor of his late wife Joanne, hall enshrinee Newt Kindlund donated $150,000 to help further its mission in preserving the industries’ history, lifting up its honorable members, and educating guests on what both industries are all about. Coinciding with his generosity and passion for the industries’ incredible history, the Hall of Fame has renamed the library Kindlund RV/MH Library.

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OPERATING IN A HIGH INTEREST RATE ENVIRONMENT & Lasting Changes within Manufactured Housing Communities

By Steven Blank

Traditionally, Manufactured Housing Communities have sold for roughly a 200-basis point spread between capitalization rate (net operating income divided by sale price, which shows you the rate of return before debt service) and mortgage interest rate. The relationship between capitalization rates and interest rates have been intriguing to watch over the past 5 years. When interest rates dropped in 2020/2021, it seemed like every community was selling for a 5 cap and even at these high prices, we were asked over and over, how do these prices make sense? The threefold answer is bonus depreciation, low cost of debt, and the refinancing capability based on the increase in community valuation. A common business model that we saw over and over, looked something like this:

A buyer purchases a community for $5 million, puts $1.25 million as the down payment and gets a mortgage on the rest. After 5 years, they implemented their business plan and increased the value of their property and doing a cash out refinance. The reality of this situation is, that interest rate is now 6.5-8 percent, not the projected 4.25 percent , which will reduce the debt burden the property can carry and therefore the community valuation.

Interest rates are up, the bonus depreciation is sunsetting and implementing a value-add strategy for communities is more difficult than ever. So, the prices of communities should be coming down, right?

Inverted Cap Rate to Interest Rate

The argument is that communities are more expensive today than ever before because the cap rates that MHC’s are trading at have come up, but not nearly enough when compared to the cost of debt. The deals that are currently listed on the market largely have an inverted cap rate to interest rate spread,

meaning the mortgage interest rate is higher than the cap rate. Some would argue that cap rates are not the only way to value a property, specifically on deep value-add projects, and they would be correct, but this is a measure that every financial institution valuation is based on, so I believe it is a fair barometer of the industry. One thing holding MHC prices so steady is the extremely low default rate on the mortgages, especially when compared to other forms of real estate.

Neutral Trading Ground

Even though sale prices have stayed steady, it doesn’t mean that communities are selling. Although transactions are still getting done, we are seeing more communities pulled from the market than ever before. Sellers want aggressive prices and buyers are expecting a deeper discount because of the above-mentioned changes in the market. Sellers are also not in a position where they necessarily need to sell, they are still making their debt payments, but our prediction is that more community owners will be in a position where they need to sell as more communities come up for refinancing over the next 12-24 months.

A New Age of Operating

Inside of communities, we have seen some changes that we believe are here to stay, that have altered the financial viability of communities. We see value-add business plans regularly and those are the plans that have been the most affected. I feel like an old man saying back in my day, but »

Purpose Driven and Results Oriented: We

not too long ago we used to be able to purchase a new home for $29,000, modify the lot and set a home for $10,000- $12,000. Now, we are over $50,000 for a new home and $20,000 for the lot modification and set, in most midwestern markets, anyhow.

That makes infilling homes a lot more challenging, because selling a $70,000 home is difficult in markets where the average single-family home is not over $250,000. The pivot here is we are now seeing communities go further with renovating existing homes. Where a home would have been demolished years ago, today it is undergoing an extensive renovation to keep the end sale price closer to what the market can absorb.

Payroll has also become a large burden, especially for small communities

with limited budgets. The average entry-level, full-time community employee makes roughly $20 per hour and those prices have increased to keep up with basic retail and service industry competition. The reliable $15/hour employee is a thing of the past and now we are having to adapt. What that looks like is cutting staff and outsourcing basic maintenance functions, like snow removal, lawn care, and basic plumbing repairs.

All those items have also increased in cost, so the savings (if any) is not significant. On the management side, we have centralized and automated as much as possible within our corporate office to lower the need for on-site staff. There used to be a need for someone on-site collecting rent, processing leases, handling resident

communications, but all of that can be taken off-site and/or automated. What is more important now than ever is the need for skilled labor caring for the property.

If the last year has taught me anything, is our crystal balls are broken and while things have become more difficult, strong operators are continuing to be successful and overcome these challenges. Proactivity and innovation always win out. 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.

ADVOCATE CONNECT EDUCATE ENGAGE

Chevron Ruling and the Future of Federal Regulations

By D.J. Pendleton

There has been a lot of media commentary about recent opinions from the Supreme Court of the United States. But there is one opinion, in particular, the manufactured housing industry should be aware of and start tracking for its potential impact.

Full disclosure: this article is probably only interesting to my fellow uber-legal nerds out there. We are talking about federal administrative law, which understandably gets a pronounced eyeroll from family members. That said, I am grateful for an outlet to delve into the nerdy minutia of federal administrative law and try to vividly imagine the world that changes as a result.

By now I’m sure you have read the opinion in Loper Bright, the case that overturned Chevron. Technically, it was a pair of cases in Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce, where the court

overruled Chevron… but for those few who maybe haven’t gotten around to it, let’s hit the high points.

The Cases in Question

In 1984 there was a case — Chevron v. Natural Resources Defense Council — that created for the last 40 years the “Chevron doctrine.” Basically, the idea was that when a federal law wasn’t clear or was “ambiguous” the courts had to defer to the federal agencies’ interpretation so long as the bureaucracies’ interpretations were “reasonable.” To most, a reasonable standard (or burden) sounds, well, reasonable. But legally a reasonable threshold is, in fact, a very low bar to clear. It really can mean nearly any justification under the sun so long as the reasoning is not so blatantly shocking that a normal reasonable person would conclude, “that’s too far.”

Now before I get on with hyperbolic conjecture, I need to address the “no big deal” counterclaim. Full disclosure, Chevron deference hasn’t really been used in recent years. In fact, SCOTUS hasn’t relied on Chevron for the past eight years. More so in recent opinions the Court distinguished and clearly indicated a growing distance from Chevron. So much so Chief Justice Roberts wrote in his majority opinion that the Court’s recent “constant tinkering” of Chevron contributed to the doctrine being “unworkable” and “misguided.”

Many federal administrative law practitioners, including some of the federal rule writing bureaucracies, will tell you that they haven’t used or relied on Chevron as any sort of rule writing safety net for a long time because they were able to read the tea leaves of the Court anticipating Chevron’s eventual overturning.

More Than a ‘Nothing Burger’

casually follows the Court, most of the time dissenting opinions are merely filed. Only when a justice feels significantly impassioned , as they might in the movie “A Few Good Men” shouting “I strenuously object” do they announce their dissent. She also wrote that the opinion “will cause a massive shock to the legal system.”

FULL DISCLOSURE: THIS ARTICLE IS PROBABLY ONLY INTERESTING TO MY FELLOW UBER-LEGAL NERDS OUT THERE. WE ARE TALKING ABOUT FEDERAL ADMINISTRATIVE LAW, WHICH UNDERSTANDABLY GETS A PRONOUNCED EYEROLL FROM FAMILY MEMBERS.

Vehement dissenting opinions aside, officially with the June 28 decision by the justices (6-3 vote) to overturn Chevron, the world of federal administrative law has forever changed. I won’t go into the particulars of the case, only to say it had to do with fishing regulations, so if that hook grabs you (had to do it), then you can read the cases on your own.

What Does This All Mean Now?

Perhaps this article should end there. Perhaps, this is a bit of a “nothing burger” formality. But I don’t think so.

During the 40-year span, Chevron has been cited in federal courts case more than 18,000 times. Clearly even if everyone now claims to have foreseen the eventual overturning by SCOTUS, and even steered clear of relying on it with prior administrative cases before SCOTUS, that doesn’t mean it wasn’t used in arguments and cited in briefs in lower federal courts. Plus, “a thing is a thing, until it isn’t a thing anymore,” ... uncertain of the attribution on that quote, probably Yogi Berra, but the point is there is significant weight and importance when SCOTUS overturns any precedent. So, don’t let anyone convince you this isn’t impactful.

My last point and evidence of the significance of the opinion is that Justice Elena Kagan announced her dissenting opinion along with reading a summary of her dissent from the bench. This is a bit inside baseball, but for anyone who

Well, like any pivotal opinion from the highest court in the land, it will take some time and more cases to follow to fully understand the impact. But fundamentally what it means is that federal judges will decide what a law means based on the court’s own judgment.

Part of the concept behind Chevron, and the claim by those who support Chevron, was that the people, experts, and career administrators have a greater depth of understanding and expertise in the subject they regulate, so deference should be afforded to their opinions when interpreting unclear or ambiguous laws passed by Congress.

This changes all of that. There is no more “tie-goes-to-thefederal-agency” interpretation.

The majority opinion essentially says that courts and judges are more than capable of understanding complex cases, even those dealing with ambiguities in technical or scientific issues. A quick barrage from Chief Justice Roberts’ opinion on this line of analysis is as follows:

“Chevron… demands that courts mechanically afford binding deference to agency interpretations, including those that have been inconsistent over time.” »

“A statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question.”

“And when courts confront statutory ambiguities in cases that do not involve agency interpretations or delegations of authority, they are not somehow relieved of their obligation to independently interpret the statutes.”

“Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do. “

“The Framers anticipated that courts would often confront statutory ambiguities and expected that courts would resolve them by exercising independent legal judgment.”

“Chevron’s broad rule of deference, though, ambiguities of all stripes trigger deference, even in cases having little to do with an agency’s technical subject matter expertise. And even when an ambiguity happens to implicate a technical matter, it does not follow that Congress has taken the power to authoritatively interpret the statute from the courts and given it to the agency.”

“Congress expects courts to handle technical statutory questions, and courts did so without issue in agency cases before Chevron.”

To answer the million-dollar (more like multi-million dollar) question of, “Ok, so what?” I can give you the legally astute answer of, “We’ll see.”

But from the cheap seats it appears that the decision opens the doors to more court challenges of federal agencies’ rules and interpretations.

We will see a lot more lawsuits in the coming years. When this materializes, federal court dockets will become even more strained, and litigation will take even longer.

Perhaps not as visible as formal court challenges, there will be a real impact caused by a “chilling effect” going forward for agencies now reticent to make legal interpretations, especially bold ones. The mere threat of a legal challenge without the safety net of Chevron will cause federal regulators to think twice before issuing regulations.

This can cut both ways. I think mostly this will have an industry benefit, but if there are interpretations by regulators you like but others don’t, then you might not like this.

Recall that Chevron originally came out of efforts from the conservative President Reagan Administration with his appointees and agency heads running the EPA, who interpreted the Clean Air Act to ease regulations from the previous President Carter Administration.

For our manufactured housing industry, one of the many thoughts that came to mind was the limited interpretation, certainly hesitancy in practice, of HUD’s interpretation of the 2000 Act:

“Federal preemption under this subsection shall be broadly and liberally construed to ensure that disparate State or local requirements or standards do not affect the uniformity and comprehensiveness of the standards promulgated under this »

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section nor the Federal superintendence of the manufactured housing industry as established by this title.”

For years, people in our industry have been asking for a HUD interpretation of federal preemption under the “broadly and liberally” mandate to encompass some degree of local zoning preemption. HUD has not done so, sticking only to elements of home construction preemption. And HUD’s silence on local zoning preemption, despite countless requests and prodding, in and of itself could infer their “reasonable” interpretation that Congress did not intend to play in the local zoning preemption sandbox. In an alternative universe where HUD had interpreted the law to include local zoning preemption, then overturning Chevron would be a bad thing for us. But since that isn’t the case, perhaps a court can now more freely take on that role to decide the lengths of Congress’ intent nearly a quarter-century ago on just how far “broadly and liberally” should go.

It would be logical to think that ambiguities in federal laws will diminish because of the ruling. That Congress will have to start drafting with greater specificity and clarity. Maybe.

But ambiguity is sometimes what is needed for a bill to have a shot at ever passing to become a law in the first place. The more detailed, the lengthier, and the more specific provisions in a bill, the more targets the opposition can attack. This will make passing bills even more difficult. And even if ambiguity is not intentionally used in bill writing for political purposes, as the majority opinion points out, “[m]any or perhaps most statutory ambiguities may be unintentional.”

Not as pithy or catchy as the more vulgar version of the bumper sticker, but I’m thinking of adorning the back of my car with, “Ambiguity Happens,” guaranteeing another series of eyerolls from the family.

Regardless of how or why ambiguities come to pass, a significant impact is that this ruling will necessitate more bills to pass into law. If the first version turns out to not be specific enough and a court decision is perceived to take longer than writing and passing a new bill in Congress, then new legislation will be needed. And this doesn’t just impact legislation going forward. The opinion changed the landscape that allows for interpretations of old laws

long on the books as taking on new meaning through new regulatory interpretations.

This route of modifying old laws to have new meanings through revised regulatory interpretations as time goes on has been the common route to, effectively, lash new regulatory sails to the masts of old law ships.

No more. If you want a new regulation with a clear interpretation, you are going to have to go to Congress and have them build a brand-new boat.

Clearly the importance of crystal-clear bill drafting now comes at an even higher premium. And if the length and detail in bills explodes, then it becomes critical to have accomplished, skilled, and highly experienced people at the helm carefully reading every word and dissecting every angle.

And it’s probably time to beef up everyone’s expectations and budgets for litigation in the future.

The trickle-down impact of overturning Chevron at the state level will be another area to watch with focused interest. Granted the particulars of the case technically only apply to federal laws and agencies, but there is a chance some

states, like Texas, will take queues from SCOTUS. And if we don’t overtly see a run of state litigation in this space, again, I expect there to be a chilling effect on a go-forward basis from state regulators when they consider issuing interpretations of state laws.

Challenging agencies (federal or state) in court has always been a tool in the toolbox. Case in point, the current litigation TMHA is involved in with MHI in federal court over the DOE energy standards. And going forward in a more crowded court docket, I think this will be a slow-moving tool.

That said, when needed I think the result of the recent SCOTUS decision is that perhaps it is slow moving, but it is now a much sharper tool when used. MHV

D.J. Pendleton is the executive director for the Texas Manufactured Housing Association, and advocates at the national level for the manufactured housing industry. Pendleton earned a law degree from Baylor.

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HUD Visits West Michigan Market

Availability, Cost of Homes Emblematic of Nationwide Challenge

By Patrick Revere

From left, HUD Acting Secretary Adrianne Todman, U.S. Rep. Hillary Scholten, and Grand Rapids Housing Commission Executive Director Lindsey Reames.

Several officials from the U.S. Department of Housing and Urban Development met in Grand Rapids, Mich., in August, at the request of Rep. Hillary Scholten, to discuss residential housing needs in an area that has been heavily impacted by economic conditions and market trends.

HUD Acting Secretary Adrianne Todman said she was urged to visit by Scholten, and was intrigued by the idea of better understanding a locale that historically has enjoyed a moderate cost of living and in recent years has experienced growth in population as well as a rapid increase in home prices and rents.

“We wanted to draw attention to the absolute massive housing crisis we have here in West Michigan,” Scholten said. “Affordable housing is, right up there with transportation, the number one thing we hear from constituents in West Michigan as the area continues to grow exponentially.”

Grand Rapids home prices have risen by approximately 50 percent since 2020, reflecting the strong local demand for housing relative to a constrained supply… high-income

able to take a few moments to discuss manufactured housing.

“There is a lot of growth in factory built housing, and it’s not just for people with financial challenges,” Todman said. “Whether it’s manufactured housing or modular, there are ways to meet the needs of younger homebuyers or retiring professionals as well as families that need a stable entry to home ownership.”

BY APPROXIMATELY 50 PERCENT SINCE 2020, REFLECTING THE STRONG LOCAL DEMAND FOR HOUSING RELATIVE TO A CONSTRAINED SUPPLY… HIGH-INCOME WORKERS MOVING IN FROM ELSEWHERE AND MILLENNIALS CONTINUING THEIR TRANSITION TO HOMEOWNERSHIP.

—Grand Rapids Housing Market – 2023 in Review, by Seidman School of Business, Grand Valley State University

She and Todman, meeting with local housing officials at a HUD-supported mixed-housing residential development called Campau Commons, agreed on the value of taking stock in the areas “current wins but also the current challenges.”

Scholten said she views the conversation as one that builds a 10-year, or 20-year housing plan for the area.

“The challenges with housing are not going to go away, we are going to continue to see this growth,” she said.

workers moving in from elsewhere and millennials continuing their transition to homeownership. Local construction activity is still low compared to the early 2000s and in contrast to the recovery seen at the national level. Local inventory of homes was still at a very low 1.3 months’ supply in September 2023.

While the acting secretary was touring the apartments and townhomes that make up the village on Grand Rapids’ southeast interior, she was

Todman said a growing segment of the general public is “warming to the concept of manufactured homes.” The secretary also said she realizes the industry continues to battle against the preconceived notion many buyers have of what a manufactured home is.

“These homes are beautiful,” she said.

Moreover, people deserve to live in a safe home that makes them proud, Todman said.

“But how do you do that to scale? There is a realization on that point about the national role manufactured housing can play as part of the solution. It’s efficient, it’s proven, and it comes in at a better price point than most other forms of housing across the country.

“I was not a student of manufactured housing, I didn’t learn about it to a great extent until I came into this position,” Todman said. “I’ve been inspired, not just by the homes but by the industry itself. I know how invested they are in what they do.”

HUD Secretary Marcia Fudge resigned from the role and retired in »

March. Todman, who had been deputy secretary, was named her interim. She previously worked as a legislative director for Congressman Ron de Lugo, a delegate of the U.S. Virgin Islands, served as a policy aide in HUD’s Office of Public and Indian Housing, was CEO of the District of Columbia Housing Authority, was CEO of NAHRO, and was selected in 2017 as the CEO of the National Association of Housing and Redevelopment Officials before returning to HUD.

Todman was asked how HUD has been affected by other regulatory bodies, notably the U.S. Department of Energy, attempting to impose rules on the manufactured housing industry.

“MHI has a strong relationship with Secretary Todman and she has been engaged with us on DOE, FHA and HUD Code. She has consistently been very positive about manufactured housing and overcoming barriers to increase the market.” — MHI CEO Lesli Gooch

“We have worked very closely with energy,” Todman said. “And we will continue that work. And leadership on the floor will continue the work that can sometimes be thorny, and I’d certainly consider this a thorny issue.”

Todman was quick to remind that the energy department was compelled to take action because of a 2017 lawsuit filed against it by the Sierra Club. Continued discussion among the departments, as well as with the Manufactured Housing Institute, has delayed the schedule for any pending changes to manufactured housing energy standards. On top of that, the courts continue to consider a suit filed against the DOE by MHI and the Texas

Manufactured Housing Association that chiefly asks for HUD to be the sole regulator for the industry.

Asked if she would support legislation that explicitly designates HUD as the sole regulator of manufactured housing, Todman asserted it already clearly has the authority.

“HUD is built-in that way,” Todman said. “It’s in the name, the HUD code.” MHV

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Eventstrade shows

SECO NATIONAL CONFERENCE OF COMMUNITY OWNERS

Monday, Sept. 16 — Thursday, Sept. 19, 2024

Atlanta | Renaissance Atlanta Waverly Hotel and Convention Center

From industry panels, presentations, and roundtable discussions to the professional exhibits, the SECO National Conference of Community Owners again seeks to improve on that fresh, compelling interaction. The event provides six display homes to tour from Cavco, Clayton, Skyline Champion, Legacy, and Live Oak. Manufactured housing professionals receive four days of high-level interaction, including educational seminars, panels, roundtables, fireside chats, and mini-TED talks.

MHI ANNUAL MEETING

Monday, Sept. 23 — Wednesday, Sept. 25, 2024

Phoenix | Sheraton Wild Horse Pass

MHI’s largest membership meeting of the year provides an opportunity to stay current on housing marketplace trends and attend the board, committee, and division meetings. Visit www.manufacturedhousing.org/conference-meetings for more information.

IMN MANUFACTURED HOUSING FORUM

Tuesday, Oct. 29 — Wednesday, Oct. 30, 2024

Nashville, Tenn. | Hutton Hotel

Manufactured Housing Forum from Information Management Network will provide exclusive educational content and industry insights. The program will feature

If there is an event or gathering you would like to have listed with MHInsider, please contact us at:

www.mhinsider.com/manufactured-housingindustry-trade-shows/

discussions on all aspects of the industry including modular, pre-fab, and community operations. Use Discount Code MHInsider for a 15 percent discount.

MHI’S NCC FALL LEADERSHIP FORUM

Wednesday, Nov. 13 — Friday, Nov. 15, 2024

Chicago | Westin Michigan Avenue

The NCC Fall Leadership Forum held each year draws more than 400 attendees and is the only strategic executive-level event of the year for national community owners. The meeting is geared toward professionals involved with manufactured home communities as an owner/manager, manufacturer, service provider, broker, lender, or consultant. Organizers and presenters explore new ideas, examine trends, and offer a unique industry perspective.

LOUISVILLE MANUFACTURED HOUSING SHOW

Wednesday, Jan. 15 — Friday, Jan. 17, 2025

Louisville, Ky. | Kentucky Exposition Center

The Louisville Manufactured Housing Show is the nation’s largest indoor show for manufactured home professionals. The annual gathering is organized by the Midwest Manufactured Housing Federation, supported by the state associations of Illinois, Ohio, Michigan, Indiana, and Kentucky. The 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 offsite-built options.

UMH PROPERTIES, INC.

A PIONEER IN MANUFACTURED HOUSING

• $2.1 billion in total enterprise value

As a publicly traded REIT (NYSE:UMH), we have been providing quality a ordable housing since 1968. Our portfolio provides high pro t margins, recession resistant qualities, reliable income streams and the potential for long-term value appreciation.

• 136 communities, 25,800 homesites, 2 joint venture communities containing 363 homesites, 11 states

• Housing approximately 22,000 families

• 7,800 total acres, 3,800 acres in Marcellus and Utica Shale regions Awarded 2024 Manufactured Home Community Operator of the Year by the Manufactured Housing Institute For more information, visit www.umh.reit or contact ir@umh.com

Expanded Expo Center Space IN LOUISVILLE MEANS MORE

HOMES, EXHIBITORS

The Louisville Manufactured Housing Show, Jan. 15-17, 2025, will greet industry attendees with more model homes to tour and an increase in exhibitor space, among other improvements.

“We are extremely excited about the progress we’ve made this year in planning the Louisville Show for 2025,” Midwest Manufactured Housing Federation President Eric Oaks said. “ The variety of homes to consider this year is something manufactured housing professionals can’t miss.”

The 2025 Louisville Show marks MHVillage’s second year managing the event.

“The added expo space for the 2025 show provides a big opportunity for us, our sponsors, builders, and exhibitors to improve the attendee experience,” MHVillage/Datacomp Co-President and Chief Business Development Officer Darren Krolewski said. “ The 2025 show will have some compelling food and snack options attendees have not had previously, and we continue to build the educational schedule with topics and speakers that are ideal for professionals from all parts of the industry.”

In addition to a strong showing of community focused product, the show intends to expand its emphasis on the builder and developer markets, as well as encourage a greater percentage of ADUs and park models, Krolewski said.

Manufactured housing professionals from across the country have been attending The Louisville Show for more than 60 years. It is the industry’s annual launch to the new year for home sales, and an integral place for community operators and retailers to see, touch, and ask questions about the latest homes, products, and consumer trends.

The MMHF represents the industry for the states of Illinois, Indiana, Kentucky, Michigan, and Ohio.

In 2024, The Louisville Show counted more than 3,500 attendees, including seven builders that showed more than 40 homes from a dozen factories across the country. More than 120 product and service exhibitors set up shop and welcomed industry professionals.

“The Louisville Show in 2024 was one of the highest-quality home shows I’ve been around and 2025 is certain to build on that momentum," Louisville Show Chairman Byron Stroud remarked. “It’s going to be a great time to be involved in the event in preparation for what could be a surprisingly strong year for our industry,”

In addition to homes and service and supply exhibitors, The Louisville Show offers a robust series of educational seminars and expert panels. Industry topics and speakers will be announced in the months to come. For more information on The Louisville Show in 2025, including sponsorship opportunities, visit www.thelouisvilleshow.com. MHV

SECO Provides Insight for Community Operators Nationwide

The SECO Conference of Community Owners in 2024 returns to Atlanta’s Cumberland neighborhood, a bustling section of the metro that, among other things, hosts Truist Field, the home park for Major League Baseball’s Atlanta Braves.

SECO24 will have an expanded collection of model homes in a village setting that shows the latest design developments, structural improvements, architectural features, and “oh wow” technologies that are driving the manufactured housing industry.

Homes from Cavco, Clayton, Skyline Champion, Legacy, and Live Oak will be on display throughout the week. Management Monday is a full day of operational insights for manufactured housing community professionals. The schedule includes a 9:30 a.m. Q&A on Legal Considerations in Property Management, followed by Mitigating Risk On-Site, a talk on How to Manage Property Reports, Using

Technology to Improve Operations, and an afternoon panel on Preventative Maintenance.

The day finishes with a discussion on social media promotion and then instruction on site prep and home installation.

SECO24 kicks off in earnest Tuesday morning with a breakfast, welcome reception, opening remarks, and introductions.

Registrants and other guests of SECO 2024 will get the experience of staying at the Renaissance Atlanta Waverly Hotel, which is a short walk from the ball field and entertainment district with many area attractions including some of Atlanta’s best eateries.

Approximately 400 manufactured housing professionals are expected to attend SECO24, which runs Sept. 16-19. The event includes a golf outing on Monday morning. The Braves host the Los Angeles Dodgers for a four game set that ends on Monday evening.

Educational Sessions at SECO24

THURSDAY

Meet Sponsors and Exhibitors

10:00 - 10:45 a.m.

Economic Outlook 11:00 a.m. - Noon

Commercial Real Estate Negotiations

2:00 - 2:45 p.m.

Manufacturer Panel

3:00 p.m. - 3:45 p.m.

Cost Segregation & Bonus Depreciation

Wrap Up — Pass the Mic 11:45 a.m. - Noon 17 TUESDAY

4:00 - 4:45 p.m.

A Tuesday night reception with food and drinks will be held outside where the model homes are staged.

Developing New Manufactured Home Communities 10:00 - 10:45 a.m.

Sourcing New Homes to Fill Vacant Lots 1:00 - 1:45 p.m.

Chattel Lending 2 - 2:45 p.m.

Capital Projects in Manufactured Housing Communities

3:45 p.m. - 4:30 p.m.

MANAGEMENT MONDAY

(Requires Separate Registration)

MH2X Workshops — New Homes and L-O Sales 9:00 a.m. - 9:45 a.m.

Community Financing to Fuel Acquisitions and Expansion 10:00 - 10:45 a.m.

State of the Market — Brokers Insights 11:00 - 11:45 a.m.

Registration and Breakfast

7:00 a.m.

Welcome to SECO 8:30 a.m.

Practices for Successful Community Operations

9:00 a.m.

Mitigating Risk Onsite 10:30 a.m.

Management Reporting for Success 11:00 a.m.

Preventative Maintenance Panel 2:00 p.m.

MH Sales Tips 3:45 p.m.

Site Prep and Home Installation 4:15 p.m.

www.manufacturedhousing.org/ncc-meeting/

HOLDING FIRM

How a ‘Lonnie Deals’ Homebuyer

Turned Community Owner Gained Long-Term Outlook, Business Expansion

By Patrick Revere

15 years ago, what many manufactured housing professionals know as “Lonnie Deals” kept Kirby Horton and his colleagues busy. They would buy distressed homes, fix them up and sell them.

“We kept going and kept growing,” The Firm founder and owner Kirby Horton said. “Owning the community was a big step from renovating old homes, but it was sustainable.”

Horton said even then it was about buying properties that needed help, putting time, money, love, and labor into them before finding an institutional buyer that would be a good fit for the community.

“We would re-do the infrastructure, replace homes, and sell,” Horton said.

That was when interest rates were low and the numbers for repeating a succession of transactions made sense. In the new higher-rate climate, the sales volume has slowed and The Firm has committed to holding on to the parks it has.

“There is a big disconnect between the owners of the park and what these investors want to buy,” Horton said. “It’s hard to see something today for what it was worth even three years ago… It’s a matter of catering up.”

‘Good Parks’

The industry needs quality infill, Horton said.

“You have to judge multiple factors when bringing in homes, including size and position of the home, setbacks, prep work, setting the home, and finishing it so that it’s move-in ready,” he said. “You have to be careful not to do something that’s going to sacrifice affordability.”

The Firm bought and made available 109 homes in September of 2022. It had been at 600 homes per year, Kirby said, and in the new environment found it was down to placing about 90 per year.

“We were all staffed up, we have all of the equipment and know-how, but

we no longer need this experience and these services as much as others do,” Horton said he realized. “We can take a lot of burden off the park manager.”

So now The Firm, in addition to owning and operating several parks, also is taking on clients that need expertise in how to revitalize properties and turn them into “good parks”.

“Honestly, we thought we were going to start slow…” Horton said. “But the phone has been ringing,”

Flexible Management Services

Horton said The Firm can work 50/50 with community staff accomplishing community milestones like repairing water or sewer disruptions,

pulling out and fixing or replacing broken windows, managing trees and landscaping, providing guidance for the sales team, or setting up resident programs.

“It’s almost like third-party management ,” he said. “We can do all of the things that park management is too busy to do, or we can take over and do everything.”

The Firm has a staff of 50 professionals that operate in Texas and to the east. They have experience with properties in Houston and Dallas, northeast to the Carolinas, and down to Tennessee, Georgia, Alabama, and Mississippi. Horton said The Firm

has local teams in Arkansas, Georgia, and Indiana.

The traveling culture has caught on among its employees. The Firm owns a pair of RV parks where employees can stay between jobs.

“A lot of employees have taken to RVing,” Horton said. “Most of the employees have fifth wheels so they jump in and go to stay on site until the job is done and then they’re off to the next location.” MHV

THE CLOCK IS TICKING

How Lack of Proper Care of a Prime Asset Sets Up a Financial Nightmare

By Justin Eldredge

There is an asset that’s often overlooked in the manufactured housing industry. It’s widely used by residents and owners, and it’s often one of a community’s most valuable investments. It’s also one of the most neglected.

We are talking about asphalt.

Asphalt is one of the most widely used materials on the planet. Roughly 94 percent of all roads in the U.S. are paved with asphalt, and industry revenue is approximately $33 billion a year. Asphalt is widely used because it is durable and cost-effective. If you own or manage a manufactured housing property, that property probably has asphalt roads or parking lots.

But for all its positives, asphalt is not infallible. It is a deteriorating asset that, if neglected, can end up costing thousands or hundreds of thousands of dollars to repair or replace. In this article, we’ll discuss why you should pay attention to your asphalt, the importance of proper maintenance, and the drawbacks and costs of deferred maintenance. »

Understanding Asphalt Degradation

Before we go too far, it’s essential to understand a few basics.

Asphalt has two parts: the aggregate (small rocks) and the binder (the glue that holds everything together).

Asphalt begins to deteriorate almost immediately after it’s installed. Several factors cause the asphalt to oxidize, which makes the asphalt binder harden and eventually crack.

Weather conditions like rain, snow, and extreme temperatures can accelerate oxidation. In the manufactured housing industry, these environmental factors are usually some of the biggest culprits of asphalt aging and oxidizing.

Asphalt’s life expectancy can dramatically decrease without proper maintenance, leading to costly repairs. According to the Asphalt Pavement Alliance, well-maintained asphalt has a life expectancy of 15 to 20 years. In contrast, neglected surfaces may need significant repairs or replacement in as little as five years.

The Cost of Neglect

Community Acceptance and Aesthetic Considerations

Beyond the financial aspects, the condition of your roads, parking areas, and pathways directly impacts community acceptance.

Poorly maintained asphalt can lead to cracking or potholes, which can decrease the property’s perceived value and negatively impact the living experience in that community.

Aesthetically, well-kept roads enhance the overall look of a community, boosting curb appeal and potentially increasing property values.

THE NATIONAL ASPHALT PAVEMENT ASSOCIATION ESTIMATES THAT FOR EVERY $1 SPENT ON PRESERVING AND MAINTAINING ASPHALT ASSETS, OWNERS SAVE

$6 TO $10 IN FUTURE REPAIRS

The financial implications of neglecting asphalt maintenance depend on the amount of asphalt in the community, but the numbers can be staggering.

Regular maintenance costs are significantly lower than the expenses of extensive repairs or complete replacements. For example, the National Asphalt Pavement Association estimates that for every $1 spent on preserving and maintaining asphalt assets, owners save $6 to $10 in future repairs. In the HOA industry, when communities perform proper preventative maintenance on their asphalt assets, they routinely see projected savings of over $1 million over the life of the asset.

A National Association of Home Builders study found that good exterior aesthetics could enhance property values by up to 7 percent.

Maintenance Strategies for Longevity

Several maintenance strategies can be employed to ensure the longevity of asphalt assets. It’s important to remember, though, that early action is paramount. There is a common misconception that once you install new asphalt, it will stay good for decades before it requires any maintenance.

This isn’t the case.

A large portion of asphalt deterioration occurs within the first four years of its life, so the earlier you act to prevent age hardening, the longer you can expect asphalt to last.

Surface treatments should be utilized early in the asphalt’s lifecycle to protect and extend the life of the underlying pavements.

This is where you need to be careful, though. Seal coats are often used as a catch-all in the pavement preservation industry, but seal coats are just one category of surface treatment, and they are usually not the most effective at preserving asphalt assets.

Depending on the condition of your asphalt, treatments like High Density Mineral Bonds or Slurry Seals might provide more extension of asphalt life than traditional seal coats.

Financial Planning for Asphalt Maintenance

We’ll likely cover this topic in more detail in future articles, but proactive financial planning for asphalt maintenance is vital. Setting aside funds for regular upkeep can prevent the need for unexpected financial outlays on major repairs. Communities can take a page straight out of the HOA playbook and consider establishing a dedicated reserve fund for infrastructure maintenance.

These types of funds are required for associations in certain states and could benefit the manufactured housing industry as well.

Leveraging Professional Help

Before undertaking an asphalt project, it is best practice to consult an expert.

Pavements aren’t created equal, and taking the wrong course of action can have almost as much of a negative

impact as taking no action. A professional in the asphalt industry will help you determine the best course of action to maintain your asphalt assets and achieve the maximum extension of asphalt life for every dollar spent.

Maintaining asphalt assets in manufactured housing communities is not just about avoiding costs but investing in the community’s future. Regular upkeep not only saves money in the long term but also enhances safety and aesthetic appeal, contributing to a more vibrant and desirable living environment. MHV

Justin Eldredge, of Holbrook Asphalt Company, consults with public agencies and HOAs throughout the U.S. to extend the life of asphalt assets. He frequently contributes to industry and community publications, advocating for and educating asphalt owners on cost-effective best practices for asphalt ownership. Eldredge serves as the marketing director at Holbrook Asphalt. He can be reached at justin@preserveasphalt. com. For a free Asset Preservation Journal detailing the pros and cons of various maintenance treatments, email report@ preserveasphalt.com with Asset Journal in the subject line.

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PURDUE LOOKS AT ADVANCED FACTORY BUILDING PRACTICES

NextHouse Takes Shape

The Center for High Performance Buildings at Purdue University is about two years into a project that strives for more efficient ways to incorporate vital systems within a factory built home.

NextHouse organizers are looking for manufacturers and other partners in the off-site homebuilding sphere in pursuit of $160 million in federal funding.

“We need better homes that prioritize affordability, sustainability, and resilience,” center director and Purdue Engineering Professor James Braun said. “The only way to do that is to change our paradigm of how homes are built.”

The NextHouse team’s initiative depends on harnessing industry expertise to work alongside its academic efforts “to create a revitalized, fully-automated, and scaled-up factory-built housing industry.”

Combine the Best Elements

Braun said NextHouse is assembling an industry consortium of housing companies, material suppliers, architectural firms, supply chain providers, and governmental stakeholders to continue to build relationships so that there will be a smooth pathway from conducting research and putting into practice its advancements. »

He said he envisions NextHouse not just as a housing “think tank” but as a new pipeline of labor and manufacturing processes to help transform the sector.

The team has been “building within a building” since 2022 to work through fully-reconfigurable climate control equipment that is pre-built in a wall. This and similar experiments can be expanded with the planned development of a large factory-lab for prototyping and testing.

“This enables experimentation of construction techniques for modular housing and serves as a training center for workers,” Braun said in a Purdue University release.

The facility will have will a “massive house-sized environmental chamber” called the Housing Environmental Evaluation Testing (HEET) Lab, enabling controlled testing and evaluation of full-scale finished housing products under varying environmental conditions.

NextHouse has been awarded $1 million from the National Science Foundation and continues to compete for the $160 million in funding from NSF’s Regional Innovation Engines program, with a mind toward cementing Indiana

and southern Michigan as the Silicon Valley for sustainable, cost-effective housing.

The effort is overseen by Purdue Applied Research Center and includes by Purdue’s Travis Horton and Panagiota Karava, both a professors of civil engineering. University of Michigan, Notre Dame, Michigan State, Ivy Tech, and Lansing Community College have all committed to partnering on NextHouse.

“We definitely have a long history in the area of factory-built housing,” Horton stated in an Indiana business magazine. “We think there are opportunities to go far beyond what has been done today and go to a fully industrialized model for housing.” MHV

MANUFACTURED HOMES ARE ALL WE DO

When you need an appraisal on a new or pre-owned manufactured home, go with the time-tested experts on market-based comparable valuations since 1987.

At Datacomp, manufactured homes are our singular focus — and you won’t find more expertise, specialization, or reliability anywhere else.

INSPIRED COUNTRY LIVING

The Barndominium Is All the Rage

By Patrick Revere

The word itself comes from Old English, a portmanteau from a pair of words creating something new that also retains the meaning of both the previous.

Barn, the first part meaning grain and the second meaning house or dwelling. Grain house.

So what to make of the barndominium? Or its cool siblings the barndos?

“We’ve always been known for being kind of an outside the box builder,” Steve Lawler, the president and CFO at Deer Valley, said. »

The 20-year-old company based in Guin, Ala., has made a name for itself building homes that don’t look like what other people build, homes for odd shaped lots or big broad shouldered homes for open land, homes with floorplans that bring the outside in, stated Lawler.

“You see a lot of those barndominium go up, and we began to kick it around,” Director of Sales James McGee said. “We have that tradition of doing something a little different, so we began to put some ideas together.”

Visualizing What Deer Valley’s Build Might Be

The team at Deer Valley dedicated a substantial amount of time to the idea of a barndominium , which was a fair

amount of dedication for a home style that had only begun to pick up a few Google searches.

“We met on this three to four times a week for months,” Deer Valley Executive Vice President and General Manager Joey Aycock said.

The original barndominium from Deer Valley, is a four-section modular home that marries a rustic charm with contemporary design. After the four boxes are crane lifted in for the first floor, the Deer Valley crew comes in and installs the second floor.

“The upstairs, from the very first time we did this, was put together through a panelized process,” Aycock said. “From an installation perspective,it’s a lot simpler to have the builder go set up and install the house. They just stand back and watch.

“ The two outside boxes are 41 feet and can be run at the same time end to end on the same line. The center boxes are 62 feet,” he said.

Tim Gann, production manager at Deer Valley, said it’s a two-day installation if all the parts are in place and the crew is graced with good weather.

How Customers React to the Barndominium

Deer Valley has sold a couple of the new barndominium homes in Alabama, Louisiana, Mississippi, and Texas. All of those homes are scheduled for production.

“We knew that this would gain some attention, but the response has really been overwhelming,” McGee said. “We’ve had inquiries from Los Angeles to Canada. It brought us a different buyer.

“We had a couple that were looking to have a barndominium built on site and they saw our home built in the factory and called us,” he said.” They were very thorough, we went over the whole thing and told them how it’s built and what they’d get. I told them in their market it likely will end up costing more than half a million and they said ‘We’re in.’”

“I’m amazed,” McGee said. “They’re flying in to see the display barndominium.”

McGee said Chance of Chance’s Home World, a popular YouTube offering of factory built home tours, was “chomping at the bit” to get in the barndominium. He was adamant on being the first one in.

“I actually moved up my plans to come here,” Chance of Chance’s Home World said in the video of the home tour. “The people have got to see this!”

The channel has 757,000 subscribers and the video has gained more than 1.5 million views.

Building a Barndo Family

Deer Valley is pushing forward with the barn-inspired concept, laying plans for a series of such homes. The effort is largely inspired by the innovative legacy of their former leader, Chet Murphree, who passed away in October of 2020.

“The entire Deer Valley team wants to dedicate this to him,” McGee said. “This is something in his honor his vision.”

The extension of the series is to provide smaller homes in the same style; the Hay Barn, the Dairy Barn, and the Tobacco Barn. MHV

BARNDOMINIUM SPECS AND MATERIALS

BUILDING SPECS:

2x8 Double Perimeter and Marriage Wall Rails

12” I-Beams with 8’ OC Outriggers

Continuous Ridge Beam - Entire Length of Home

Fully Vented 10” Residential Eaves

Fiber Cement Fascia Plank

Exterior Wall On Center: 16” OC

Exterior Wall Studs: 2x6 Exterior Wall

Floor Decking: 23/32” OSB Tongue and Groove Floors

EXTERIOR SPECS:

Exterior Doors Features Steel Jambs

Pex Plumbing T/O Home

Exterior Frost Proof Faucet

Front Door: (38x82) 3680 Steel Front Door with Deadbolt Raised Panel Vinyl Shutters Front Door Side

Exterior Lighting: Deluxe Exterior Coach Lamps

KITCHEN SPECS

Extra Electric Outlets in Utility and Each End of Island

Name Brand Electric Appliances

Maple Cabinets/Deluxe Cabinet Pulls

Solido Edge High Definition Countertops

Deluxe Cycle Dishwasher with Delay Start

Single-Lever High Rise Faucet with Sprayer

Residential Stainless Steel Deep Sink

Hand Laid Floor Tile

January 15-17, 2025

The Louisville Show has drawn manufactured housing professionals together for over 60 years. By attending the year’s first major event you can:

Network with over 3,000 industry professionals that attend the show

Discover the latest home trends and innovations from the industry’s leading manufacturers

Learn about products and services from more than 100 exhibitors and connect with key decision makers

HARVARD UNIVERSITY JOINT CENTER FOR HOUSING STUDIES

Puts Out the Book on Housing Design

The book “The State of Housing Design”, put out by the Harvard University Joint Center for Housing Studies sheds light on how housing demand, market concepts, and thought leadership in residential offerings has merged with what the manufactured housing industry has been doing for decades — optimizing production, creating efficiency and affordability, and providing options for rural living or thoughtful urban density.

“A consistent message across the most recent decade of these reports has been a sobering, comprehensive overview of high demand, low inventory, and skyrocketing costs, particularly for those Americans in the middle and below,” the publication states in its opening paragraph, penned by Sarah M. Whiting, an architect, critic, and academic administrator. »

The book seeks to reveal “the extent to which design — the form and space of rooms, residences, and collective spaces; building densities, heights, and setbacks; and programming — can and should affect our country’s collective life and future, in addition to all our safety standards and economic bottom lines.”

Urban planner Daniel D’Oca and architect Sam Naylor in describing the state of housing design pointed to the value of factory built system.

“While good design is always site-specific, the magnitude of the housing shortage means we must also deploy elements that can be repeated. Scalability is addressed most directly in our chapter on ‘Modular, Panelized, and Pre-Made’ but scalable solutions for flood proofing, circulation, financing, and other elements can be found throughout,” the authors stated.

Researchers from the center circulated a short survey in August through November of 2022. More than 1,300 people from 42 U.S. states responded. More than half of the field reported themselves to be mid- to late-career professionals in an array of housing related fields.

Respondent Makeup

The survey was intended to inform the framing of the publication and to “gut-check our early assumptions on emerging design trends.”

It asked “In the last two years, what design ideas have you noticed the most in newly built housing?”

Responses fit into a pair of primary categories: Size and Density. Among the top single-word and short phrase responses were “smaller”, “modular”, “micro”, “higher density”, “ADUs”, “Tiny”, and “For Families”.

One respondent, a code official in Montana, said simply “smaller living spaces but more storage space”, while an academic and designer in Oregon said “Smaller residences, tiny houses, clustered developments and townhouses”. An academic and researcher in Georgia noted a trend toward “Prefabricated structures sited in smaller infill lots.”

The survey asked respondents if they could change one thing, what might it be? The resounding answer was “zoning.”

One respondent said an interpretation of the phrase “right-housing” is the idea of putting simple parameters on design and zoning and let people innovate and require engagement with residents and the neighborhood.

Mimi Zieger, a Los Angeles-based architecture and design critic, wrote about “disguised density” which fills a gap between single-family residential and large-scale multi-family.

For instance, a smaller rental apartment or condo building could look from the street like a pair of midsize homes on neighboring parcels but have offstreet parking and multiple residences in a shared courtyard setting.

The authors are looking for “Stealth. Disguised. Gentle.”

The 184-page book, which can be ordered and downloaded at the HJCHS website, covers everything from “Creative Corridors” to “Emergency Villages”, and adds in “Small and Skinny” construction, kind of like putting a manufactured home on its nose and building a staircase.

“We highlight projects built on this knife’s edge of a cultural battle — creating compelling character within the tight constraints of neighborhood and market demands,” the authors assert. MHV

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WHAT IS A DSCR LOAN?

Understand the Ins and Outs of the Popular Lending Tool

By Dan Dempsey and Joanne Stevens

A DSCR loan refers to a loan where the primary consideration is the Debt Service Coverage Ratio. The lender pays close attention to the borrower’s ratio to assess creditworthiness and ability to manage debt. The DSCR is a financial metric used to assess a borrower’s ability to cover debt payments with operating income and is commonly used in commercial real estate and for business loans. Below is a breakdown of the primary aspects of a DSCR loan:

Debt Service Coverage Ratio and Its Purpose

This ratio is calculated by dividing a borrower’s net operating income by their total debt service. Total debt service includes principal and interest payments. For example, if a business has an NOI of $120,000 and debt payments of $100,000, the DSCR would be 1.2.

Lenders use DSCR to evaluate the risk associated with lending to a borrower. A DSCR greater than 1.0 means the borrower can cover debt obligations. A ratio less than 1.0 indicates possible payment struggles. For commercial real estate loans, lenders usually require a minimum DSCR of 1.2. This ensures the property generates enough income to cover payments.

Advantages of a DSCR Loan

Focus on Cash Flow

DSCR loans focus on cash flow rather than just credit score or collateral. They can be accessible to borrowers with strong income but limited assets or imperfect credit.

Predictable Requirements

The DSCR requirement is a simple metric that clarifies the income needed for a loan. It helps borrowers plan their finances effectively.

Flexibility in Use

These loans can fund commercial real estate acquisitions, business expansion, or refinancing, as long as income covers the debt service.

Risk Mitigation

A higher DSCR requirement can mitigate risk for both borrowers and lenders. It ensures that there is a buffer for unexpected fluctuations in income.

Disadvantages of a DSCR Loan

Higher Requirements

Loans with high DSCR requirements might be challenging to qualify for, especially for businesses or properties with fluctuating or lower than average income streams.

Income Sensitivity

If a borrower’s income goes down, it might affect their DSCR and their ability to pay back the loan. This could lead to refinancing challenges or higher costs. »

Potential for Higher Rates

Some lenders might offer higher interest rates for loans where DSCR is a primary consideration, to account for the risk of income variability.

Complex Evaluation

Assessing DSCR requires thorough analysis of financial statements and projections. Missing financial statements can make these evaluations difficult or nearly impossible.

Term Length and Amortization

DSCR loans often have terms from five to 20 years, the most common terms being five to 10 years. But, based on property specifics and the lender agreement, the term can be longer. The amortization period, which is the time it takes for the loan to be repaid, might be longer than the term. For example, a 10-year loan might have a 20- or 25-year amortization period dependent on cash flow.

Interest rates can be fixed or variable, and there may be prepayment penalties. Some loans might require a

balloon payment at a specific time. There are different approaches, and much of the value in this type of loan is its flexibility and the reduced number of documents required when closing or refinancing. MHV

Dan Dempsey joined NAI Iowa Realty Commercial in early 2022 after years of building his own personal portfolio. His area of focus is in investment properties, with expertise in multifamily properties. Being a real estate investor himself, Dempsey enjoys working with investor-clients to help them determine and meet their real estate needs now and as the portfolio grows.

As one of the most recognizable names in the mobile home park industry, Joanne Stevens is consistently sought out to provide her expert market insight to a wide range of audiences. Stevens is a real estate agent with more than 15 years of experience of listing and selling mobile home parks.

Elevating Manufactured Housing and Land-Lease Communities Among Policymakers

By Lesli Gooch and Mark Bowersox

From the White House to Congress to state and local legislatures, solving the nation’s housing supply shortage has become a critical priority. Policymakers at all levels of government are hearing about the rising cost of housing and they are eager to explore policy solutions. In this environment, MHI’s efforts to engage policymakers about manufactured housing has placed the industry at the forefront of recent discussions about solving the nation’s housing supply crisis.

A recent announcement by the White House about actions the administration is taking to address the nation’s housing supply shortage included HUD’s actions around manufactured housing, noting that “manufactured housing provides an essential path to increasing overall housing supply and offers significant

savings over site-built housing.” The bottom line is that the importance of the manufactured housing industry is being recognized — when policymakers talk about housing supply, manufactured housing is discussed as an important part of the solution. The national building code, the HUD code, that manufactured¬ homes are constructed to has emerged as a federal seal of approval for quality, ensuring buyers receive resilient, energy efficient homes at prices within reach thanks to the economies of scale that the federal building code facilitates.

Advocacy for Attainable Homeownership

In addition to elevating the homes themselves, though, MHI’s work ensures that policymakers understand the range of locations where homes »

can be placed. The variety of designs that exist for today’s HUD code manufactured homes, such as single-section, multi-section, CrossMod, duplexes, and ADUs allow manufactured homes to meet a wide range of needs around the country. MHI’s work includes highlighting the importance of land-lease communities as a critical affordable housing model. About 30 percent of the manufactured homes produced are placed in communities. The financial and lifestyle benefits of owning a manufactured home in a land-lease community have resulted in millions of individuals and families choosing this housing option.

The desirability of land-lease communities is evidenced in both U.S. Census data and independent research conducted by MHI, showing manufactured housing community residents report high levels of satisfaction and that they are likely to recommend land-lease community living to others. The research shows that the satisfaction levels are increasing. Low vacancy rates and waiting lists also demonstrate the strong appeal of this hybrid-homeowership option.

For those who have visited or have lived in a landlease community, it is no surprise to see such strong satisfaction and demand. MHI research shows that affordability is consistently a key reason for choosing a land-lease community over other options, including:

• Having more space

• Not having to share walls with a neighbor and, having an immediate outdoor space

• Pools, walking paths, and trails

• Parks

• Fitness centers

• Lawn Care

Other areas that residents and potential residents favor are the social events, such as summer barbecues and movie nights.

Value of Community Living

With U.S. housing costs universally skyrocketing, MHI research shows that the majority of community residents believe their rent is the same or lower than other housing options.

It is critical that the land-lease segment of the industry disallows the anecdote to be the narrative about community living. The facts are clearly on the industry’s side, and through continued advocacy efforts MHI will continue to communicate the positive housing option that land-lease communities offer, with desirable homes at price points within reach, and with a community setting that offers more than a house, but a lifestyle.

While there is strong demand by consumers and exceptionally positive resident feedback, the growth of the land lease community sector is hindered by barriers, such as zoning, which limit the expansion of the model. Across the country, there are countless examples of state and local zoning, planning, and development restrictions that either severely limit or outright prohibit the placement of a new manufactured home or the development of a new community.

The recent increased attention to manufactured housing has helped raise awareness about these barriers and MHI has expanded engagement with policymakers to address the barriers.

Beyond federal-level advocacy to address barriers, partnerships with state associations and National Community Council members have allowed MHI to provide support for conversations at the state and local levels about expanding access to manufactured housing and land-lease communities. To do this work effectively, we constantly are updating the research and information MHI uses to provide the clearest picture, and dispel misconceptions or misperceptions about homes and communities our industry creates.

Furthermore, by working with our members, MHI has had the opportunity to bring manufactured homes and other dwellings our industry builds to events where policymakers are able to personally tour the homes, see the depth of quality

housing our industry creates, and hear about the benefits of land-lease community living.

Through constant and diligent engagement MHI strives to elevate and grow awareness and understanding of the vital role of manufactured housing and land-lease communities.

Convene with Industry Colleagues

MHI’s work does not end with the policymakers. Providing support and resources for community owners to create high quality communities is equally as important as raising awareness with lawmakers. Through events like our National Communities Council forums in the Fall and Spring, MHI provides spaces and opportunities for community owners and operators to learn from one another, build connections, and improve their businesses

MHI’s 2024 National Communities Council Fall Leadership Forum will take place on Nov. 13-15 at the Westin Michigan Avenue in Chicago. Top-notch speakers will share real-world strategies that attendees can put into action now to strengthen their businesses. The program focuses on topics most relevant to manufactured home community leaders — owners, managers, manufacturers, service providers, brokers, lenders, and consultants.

Beyond events, MHI works to support communities through education programs. Through MHI’s two-part Accredited Community Manager education program, land-lease community owners, managers, and workers can expand their skills on a host of topics related to managing communities, from best practices for resident relations to federal and state laws that govern community operations to budget analysis.

It is undeniable that manufactured housing communities play an important role in addressing the national housing crisis. As Rep. Marc Molinaro — (R) N.Y., put it when he toured manufactured homes on the National Mall in June… “these homes build a community.”

As the only national trade association that represents every segment of the factory-built housing industry, MHI seeks to elevate housing innovation and expand attainable homeownership in America. At a time when policymakers on both sides of the political aisle and from all across the country are seeking ways to address the housing supply shortage, MHI welcomes the opportunity to support land-

lease community owners and operators by facilitating homeownership through manufactured housing for more people. Together, MHI and its members will harness the opportunities before and continue to elevate the industry to grow the market across the country. 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.

Mark Bowersox is a seasoned trade association executive with experience leading nonprofits at both the state and national levels. In his role as president of the Manufactured Housing Institute he is dedicated to elevating housing innovation and expanding attainable homeownership. Bowersox is a federally registered lobbyist and regularly speaks on behalf of MHI and the industry to a variety of constituent groups and industry associations.

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COMMUNITY RATING SYSTEMS SINCE 1935

FROM TRAVEL TRAILER MAGAZINE TO WOODALL’S STARS TO ABCLASSIFICATION SYSTEM

By George Allen, CPM Emeritus, MHM-Master

From the very beginning, homebuyers and investors have wanted to know the quality of rental properties where they might park overnight, site their home for the long term, or invest. And for 89 years this desire for information was met in at least three ways.

In 1936, Karl Hale Dixon launched Dixon Publishing and produced the first issue of Travel Trailer magazine. Two years later he published the first Directory of Trailer Parks & Camps,

containing 2200 listings, and selling for 24 cents per copy. In 1939, R. A. Woodall began working for Dixon and was made president of the company. During the period 1940-1946, no directories were published due to World War II. Then, in 1946, R.A. Woodall purchased Dixon Publishing and changed the name to Woodall Publishing Company. Two years later the first edition of Woodall’s directory was published, featuring a combination of mobile home parks, and campgrounds

that allow overnight stays. When R.A. Woodall died in 1965, Curtis Fuller bought a controlling interest in the firm, splitting the directory into separate publications: Woodall’s Mobile Home Park Directory and Woodall’s Tenting Park Directory & Woodall’s Campground Directory.

Woodall’s Mobile Home Park Directory continued to be published for another 10 years, “quality grading” mobile home parks in accordance with specific criteria observed during onsite inspections. By the mid-1970s, inspections, publication, and distribution of the mobile home park directory ceased. The company’s owner at the time, George Goldman – himself a community owner, in his autobiography “The Road Less Traveled”, hints at what crippled the directory:

“Then the Woodall ‘reps’ took off their inspector hats, donned their sales hats, and pitched some of the advertising opportunities to the park’s owner. Maintaining objectivity and independence in those two conflicting assignments was a constant challenge.”

A challenge distasteful enough, that one multi-property firm, angered at the lesser four star rating they received, allegedly for refusing to advertise in said directory, sued Woodall’s. Why? Due to the lesser Woodall rating received, their mortgage finance rate increased as well as their insurance premiums. Consequence? Woodall’s agreed to go completely out of the park rating business, but stayed active in the campground business.

So, what happened next? Nothing definitive right away. Manufactured home community owners, post-1976 continued to self-grade their properties using Woodall’s five star standards – and some do so even to this day.

Following a 20 year hiatus, in 1996, the late Tom Horner, Jr., a Kansas/ Missouri multi-community owner/ operator proposed The 21stt Century National Manufactured Home Landlease Community Rating System, featuring 15 specific grading and five amenities criteria that resulted in one of five A, B, C, D, and Unrated categories. Horner’s system debuted in the 1996 edition of “How to Find,

Buy, Manage, and Sell a Manufactured Home Community” published by J. Wiley & Sons. This out of print text can be found used through Amazon distributors and can be accessed in the George Allen Collection at the RV/MH Hall of Fame library in Elkhart, Ind. Unfortunately, the complicated evaluation criteria didn’t catch-on as a workable alternative to the Woodall five star system.

At the turn of the century, another community rating system debuted. This one was identified as the ABClassification System for the Manufactured Home Community Real Estate Asset Class. It was formulated and published »

Kurt Kelley President

by

GFA Management, Inc., dba PMN Publishing. It features a do-it-yourself format where users grade a subject property relative to its appearance, layout individual homesites, individual homes, infrastructure, amenities, and community management. Within each category, users make judgment calls as to whether key property characteristics are A=One of the Best; B=Better than Most; C=Good or Average; or D=Fair-Poor. And within each of the eight characteristic categories, users allocate 100 points – with all points going to one alphabetic grade or split between two letter grades, e.g. A or A/B, B, B/C, etc.. The ABClassification System continues in use across the U.S. The do-it-yourself form can be found in the property management

text “Community Management in the Manufactured Housing Industry”, available from www.educatemhc.com.

So today. There are Woodall star system aficionados still afoot (mostly real estate brokers), also community owners/operators who prefer a doit-yourself approach to grading their respective land-lease communities, and a few homegrown grading systems touted by individuals with particular agendas in mind. Many community operators feel NCC remains best suited to create or adopt a grading system that is agreeable to its members. MHV George Allen is a nonfiction author, internet blogger, and magazine columnist with expertise in manufactured housing and land-lease communities. He also is a retired lieutenant colonel of U.S. Marines,

with a combat tour in the Republic of Vietnam and service during Desert Storm. Read his autobiography, “FromSmittyAlpha6 to MHMaven” available via www. educatemhc.com, and also his “Chapbook of Prayer” and “Chapbook of Business Management & Wisdom” as well as other interesting titles. Allen can be reached at gfa7156@aol.com, (317) 881-3815 & GFA c/o Box # 47024, Indianapolis, IN. 46247.

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