Congresswoman Cindy Axne (IA-03) introduced legislation co-sponsored by Representative Ro Khanna (CA-17) that would impact manufactured home industry professionals and consumers in a variety of ways.
Their bill, which will be detailed further below, was introduced on January 7, 2020.
On January 8, 2020, the Manufactured Housing Institute (MHI) issued an email to their members and readers. The topics covered, per their own bullets, were as follows.
- Ushering in a New Era for MHI in 2020
- Submit Comments to HUD about Rules and Actions that Negatively Impact Manufactured Housing
- Remembering Hala Jawad, President of RADCO, A Twinning Company
- MHI to Participate in MHCC Regulatory Enforcement Subcommittee Call About Subpart M
- MHI Unveils CrossModTM: A New Class of Manufactured Home
- RV/MH Hall of Fame Announces Class of 2020 Inductees
- Secure Your Seat at MHI’s 2020 Congress and Expo
- Say Hello to MHI at the Louisville Manufactured Housing Show
The substance of the MHI email will be addressed in upcoming reports, fact-check and analysis. But note for now that none of those MHI topics referenced Representatives Axne and Khanna or their legislation. More on that detail shortly.
Outsiders looking into manufactured housing via this platform must realize that state and federal legislation has been anticipated for months concerning the issues that the new Axne-Khanna bill addresses. The rumblings began before the HBO’s Last Week Tonight with John Oliver launched their pointed lampoon in a 15 plus minute video, found in the report linked below. That viral video further fueled the momentum for action. The report linked below unpacks those issues, including a key point that Oliver missed.
The underlying issues – notably harm to residents in manufactured home communities subject to often severe hikes in site fees – have been elements of discussion at the state and national level through much of 2019. Sources in Iowa and beyond have steadily informed MHProNews. Given that reality, are we then to believe that MHI with their larger staff, part- and full-time lobbyists, numerous members and state affiliates are in the dark on what Representatives Axne and Khanna seek?
Not to be forgotten, MHI has a paid, professional legislation tracking service which provides them with updates of bills that might in even a minor way impact manufactured housing.
Rephrased, there is no logical way that MHI doesn’t know about the Reps Axne and Khanna plan.
That begs the question. Why didn’t MHI tell their own members about their bill yesterday? Does the legislation sought by House members Axne and Khanna in some way foil or disrupt MHI’s own self-praising narrative and their own agendas?
Keep those thoughts and questions in mind, because much of the attention in the legislative plan by Reps Axne and Khanna are related to a specifically named MHI member company, Havenpark Capital a.k.a. Havenpark Management. But other firms that are MHI members and/or state affiliate members have also drawn attention for the same purportedly predatory behavior. See one of several reports, linked below. 2020 Democratic presidential hopeful Senator Elizabeth Warren’s letters that are a download from the report linked below include Havenpark, as has Axne’s office, but other firms with ties to MHI too.
Let’s note that for now, MHProNews is not taking any formal position regarding the proposed legislation. So what follows are facts and positions per Congresswoman Axne office’s statements.
The Legislative Proposal – Per Congresswoman Cindy Axne’s Office
Elements of the language of the bill reads as follows.
- Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
- SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Manufactured Housing Community Preservation Act of 2020’’.
- 2. GRANT PROGRAM FOR MANUFACTURED HOUSING 2 PRESERVATION.
- (a) AUTHORITY.—The Secretary of Housing and Urban Development shall establish a grant program under this section and, to the extent amounts are made available pursuant to subsection (i), make grants under such pro7 gram to eligible entities under subsection (b) for acquiring and preserving manufactured housing communities.
- (b) ELIGIBLE ENTITIES.—A grant under this section may be made only to entities that meet such requirements as the Secretary shall establish to ensure that any entity receiving a grant has the capacity to acquire and preserve housing affordability in such communities, including—
- (1) a nonprofit organization, including land trusts;
- (2) a public housing agency or other State or local government agency;
- (3) an Indian tribe (as such term is defined in section 4 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 21 U.S.C.4103)) or an agency of an Indian tribe; or
- (4) a resident organization in which home23 owners are members and have open and equal access to membership; or
- (5) such other entities as the Secretary deter2 mines will maintain housing affordability in manu3 factured housing communities.
- (c) USE OF GRANT AMOUNTS.—Amounts from a grant under this section may be used only for—
- (1) the acquisition and preservation of manufactured housing communities;
- (2) such acquisition and preservation, together with costs for making improvements to common
- areas and community property for acquired manufactured housing communities; or
- (3) the demolition, removal, and replacement of dilapidated homes from a manufactured housing
- (d) PRESERVATION; AFFORDABILITY; OWNERSHIP.— A grant under this section may be made only if the Secretary determines that the grantee will enter into such binding agreements as the Secretary considers sufficient to ensure that—
- (1) the manufactured housing community acquired using such grant amounts—
- (A) will be maintained as a manufactured housing community for a period that begins upon the making of such grant and has a duration not shorter than 20 years;
- (B) will be managed in a manner that benefits the residents and maintains their quality of life for a period not shorter than 20 years;
- (C) will, for a period not shorter than 20 years, be subject to limitations on annual increases in rents for lots for manufactured homes in such community either through resident control over increases or, if owned by a party other than the residents, as the Secretary considers appropriate to ensure continued affordability and maintenance of the property, but not in any case annually to exceed the percentage that is equal to the percentage increase for the immediately preceding year in the Consumer Price Index for All Urban Consumers (CPI-U) plus 7 percent, and such rents will comply with any applicable State laws;
- (D) will be owned by an entity described in subsection (b) for a period not shorter than 20 years; and
- (E) has not been the primary beneficiary 22 of a grant under this section during the preceding 5 years; and
- (2) if in the determination of the Secretary the provisions of the agreement have not been met, the grant shall be repaid.
- (e) AMOUNT.—The amount of any grant under this section may not exceed the lesser of—
- (1) $1,000,000; or
- (2) the amount that is equal to $20,000 multiplied by the number of manufactured home lots in the manufactured housing community for which the 10 grant is made.
- (f) MATCHING FUNDS.—The Secretary shall require a grantee of grant under this section to provide non-Federal matching funds for use only for the same purposes for which the grant is used in an amount equal or exceeding the amount of the grant provided to the grantee.
- Such non-Federal matching funds may be provided by State, tribal, local, or private resources and may be a grant or loan, in cash or in-kind.
- (g) APPLICATIONS; SELECTION.—
- (1) APPLICATIONS.—The Secretary shall provide for eligible entities under subsection (b) to apply for grants under this section, and shall require such applications to contain such assurances as the Secretary may require regarding the availability of matching funds sufficient to comply with subsection
- (f) and any organizational documents regarding the manufactured housing community for which the grant is made, as may be required by the State in which such community is located.
- The Secretary shall accept applications on a rolling basis and approve or deny each application within business 7 days of receipt in order to facilitate market-based transactions by an applicant.
- (2) SELECTION.—The Secretary shall establish criteria for selection of applicants to receive grants under this section, which criteria shall—
- (A) give priority to grantees who would use such grant amounts to carry out activities under subsection (c) within areas having a high concentration of low-, very low-, or extremely low-income families (as such terms are defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b));
- (B) give priority to grants for the benefit of communities that have not received a grant under this section during the preceding 22 years; and
- (C) ensure that not more than 40 percent of grant funds for any fiscal year are awarded to entities identified in subsection (b)(5).
- (h) DEFINITIONS.—For purposes of this section, the following definitions shall apply:
- (1) MANUFACTURED HOME.—The term ‘‘manufactured home’’ means a structure, transportable in one or more sections, that—
- (A) in the traveling mode, is 8 body feet or more in width and 40 body feet or more in length,
- or when erected on site is 320 square feet or more;
- (B) is built on a permanent chassis and designed to be used as a dwelling (with or with out a permanent foundation when connected to required utilities) and includes plumbing, heating, air conditioning, and electrical systems; and
- (C) in the case of a structure manufactured after June 15, 1976, is certified as meeting the Manufactured Home Construction and Safety Standards issued under the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401 et seq.) by the Department of Housing and Urban Development and displays a label of such certification on the exterior of each transportable section..
- Such term shall not include any self-propelled recreational vehicle.
- (2) MANUFACTURED HOUSING COMMUNITY.— The term ‘‘manufactured housing community’’ means a community comprised primarily of manufactured homes used primarily for residential purposes.
- (3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Housing and Urban Development.
- (i) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated for grants under this section $100,000,000 for each of fiscal years 2021 through 2025.
- (j) REGULATIONS.—The Secretary shall issue any regulations necessary to carry out this section.
The draft of the bill was obtained by MHProNews and is found linked here.
MHProNews Analysis in Brief
Summing up, $500 million or ½ billion dollars in grants would be authorized by the enactment of this bill for the fiscal years in question. These would be used to support resident ownership and/or control over their own ‘resident owned communities,’ or what is often referred to as ROCs.
There will doubtlessly be supporters as well as detractors to this bill, which clearly aims at preserving manufactured home communities in a manner that would protect residents from the type of purportedly predatory behavior that Havenpark Capital and other MHI connected firms have participated in.
As previously noted, Havenpark and others that are accused of aggressive rent hikes often happen to be MHI members and/or obvious ties to the Arlington, VA based trade group.
As has been previously noted, not all MHI firms participate in such problematic behavior. Nor do all staff or management members of the purportedly predatory firms agree with the practices. Some of the sources for MHProNews include those who often strongly disagree with the business practices that MHI promotes, and that by extension, this Axni-Khanna legislative initiative to some degree seeks to confront.
More from Rep Axne’s Office
In a statement to media regarding the legislation, Axne’s office said as follows.
Rep. Axne Unveils Bill to Keep Manufactured Housing Communities Affordable
WASHINGTON D.C. — Today, Rep. Cindy Axne (IA-03) introduced legislation to keep manufactured housing communities (MHC) affordable by providing federal assistance for acquiring and preserving these communities. The legislation seeks to help MHC residents like those in Waukee, who last year faced rent hikes at rates up to 70% after purchase by a Utah-based investment firm.
The Manufactured Housing Community Preservation Act directs the Secretary of Housing and Urban Development to create a grant program to help nonprofits, resident-formed cooperatives, and other local entities purchase and maintain an MHC through awards of up to $1 million. The legislation includes oversight provisions to ensure rents remain affordable for residents after purchase by grant recipients.
“I met with the residents of Midwest Country Estates in Waukee. I heard their pain after facing astronomical rent increases and the possibility of losing their homes,” said Rep. Axne. “This legislation will protect residents, particularly seniors and fixed-income Iowans living in these mobile home communities, by providing the tools necessary to preserve their affordable housing and protect against corporations spiking their rents merely to line their pockets.”
Last year, Rep. Axne wrote to Utah-based investment firm Havenpark Capital to demand answers on the significant rent spikes at five different Havenpark-owned MHCs, including Midwest Country Estates in Waukee.
Rep. Axne also toured Midwest Country Estates homes with Senator Sherrod Brown (D-OH) to meet with residents and hear about the financial hardship and requirements imposed at the community by the new ownership.
“I promised after meeting residents in Waukee that I would find solutions to make housing more affordable for all Iowans,” said Rep. Axne. “This bill will give communities like theirs the financial assistance to help level the playing field with these private equity companies who are more interested in profits than resident wellbeing.”
The bill was introduced today with Rep. Ro Khanna (CA-17).
“Every day, manufactured housing and mobile home communities are threatened by redevelopment contractors, aggressive investors, and greedy landlords,” said Rep. Khanna. “It is time for the federal government to step in and commit to preserving manufactured housing alongside the tremendous work of nonprofits and resident groups. This level of preservation will be a low-cost, effective tool to help ensure every family in Silicon Valley can become homeowners.”
The new legislation earned the endorsement of Prosperity Now, a nonprofit that works to expand economic opportunity for low-income communities across the United States.
“This bill, which would mark the first meaningful federal commitment to community preservation, is very much needed,” said Prosperity Now in a statement. “Since 2005, Prosperity Now has worked to improve the opportunities and asset-building potential of manufactured and mobile home community residents. We thank Rep. Axne and Rep. Khanna for their work and commitment to make this happen.”
The MHI Connection?
The Manufactured Housing Institute (MHI) – in response to thousands of consumers, so-called ‘white hat’ industry members, mainstream media, MHLivingNews and MHProNews’ steady attention to issues such as those outlined or linked from the reports herein – issued a new ‘code of conduct’ for their members last summer.
- Was that ‘code of ethical conduct’ just more posturing or window-dressing by MHI?
- Why doesn’t MHI reply to inquiries about any enforcement action by the trade group for apparent violations of their code of conduct?
Something like this Axne-Khanna bill’s plan might be a useful element in addressing the increasingly well-known symptoms being reported in Iowa, California and a growing number of other states.
But the underlying causes of what is occurring in IA, CA and elsewhere routinely traces back to behaviors that are arguably connected by straight lines to the members of the Manufactured Housing Institute (MHI). Either MHI is arguably looking the other way, or as some suggest, the trade group may be facilitating the problematic conduct – among others – that the Axne-Khanna bill seeks to address.
Axne and her colleagues would do well to hold investigative hearings into MHI and the giant/consolidating firms that dominate the Arlington, VA based trade group for potentially illegal practices. Shining the light at the source of the problem may itself bring rapid relief to residents plagued by predatory practices.
They could start with some history that aimed at what’s missing from this bill, which is the supply side of the equation. Without more new manufactured home communities and sites coming online, the pressures will only grow worse as time progresses. ICYMI, see the related report linked below.
Not unrelated is the finance side of the equation. See the five-page PowerPoint from our publisher linked here, plus the report found via the text-image box linked below. Note that in the collage of photos below are at the right some of the very residents that Axne’s efforts seeks to protect.
A perspective on the kinds of issues involved from a resident perspective are found via the report below. Note that community-leader quoted below addressed the FHFA virtual listening session on December 11, 2019.
The Last Word?
Meanwhile, MHI members and their affiliates ought to ask themselves simple questions.
- Why has “MHI 2.0” failed right from the outset of the Gooch/Bowersox era to even mention this $500 million Axne-Khanna legislation?
- Or is it because doing so would be a bad reflection on the Jennison era at MHI and the start of the Gooch/Bowersox administrations in Arlington?
The runaway most-read report on MHProNews at this time is the one linked below. For those who are reading it, they might say, ‘no wonder.’ The details cries out for added state and federal investigations.
And that report and others underscores why MHProNews is the still the largest and most-read trade media in the entire manufactured home industry. After all, who else tells the industry’s independents, those with white hat tendencies, and others of good will what the black hat behaviors routinely connected to MHI causes honest professionals and unwitting consumers that are the victims of Havenpark-MHI style behavior?
- A new in-depth interview with a manufactured housing leader should be ready for publication by early next week. Stay tuned, and if you aren’t already on our ever growing emailed headline news list, sign up in seconds at the link above.
- Related controversies to this topic above are brewing, expect additional details in the near term.
That’s all she wrote for this installment of manufactured housing “Industry News, Tips and Views Pros Can Use“ © – MHVille’s runaway #1 news source, where “We Provide, You Decide.” © (News, fact-checks, analysis, and commentary.) Notice: all third party images or content are provided under fair use guidelines for media.
Submitted by Soheyla Kovach for MHProNews.com.Soheyla is a co-founder and managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.