A Cup-of-Coffee with… Joe Kelly

Cup-manufacturedhomepronewsWho, What and Where: (Your name, and your role/job title at what organization or firm)?

I’m Joe Kelly, Executive Vice President of the Iowa Manufactured Housing Association (IMHA), a 63-year-old trade association located in Des Moines, Iowa.

  1. Your Background?

I was born in western Tennessee, about 60 miles north of Memphis. I graduated from Lambuth College, in Jackson, TN, with a B.A. degree in English. I taught high school English in Ripley, Tennessee, for three years. Then, my wife, Mary, also an English teacher, and I moved to Aurora, Colorado, where we both taught for one more year. She grew up in Denver.

*Then I acted on a desire of mine to get into broadcasting. We moved to Minneapolis for about nine months, so that I could take the Brown Radio School of Broadcasting course. In those days, the 1970’s, to work in radio, one had to obtain some sort of radio engineer’s license. The theory was that everyone had to be able to know enough to keep the station on the air, should one be working a shift for a rural station where a real engineer wasn’t around at all times. That was a joke. Memorizing all that technical information didn’t make one qualified to troubleshoot technical problems. The FCC has since dropped this requirement. My first radio job was in Kalispell, Montana, a beautiful area of the country. However, it was too far from our families. We came to Des Moines for a radio job, where I spent four years doing news and sports play by play broadcasting of high school and college sports. One year I was the primary play by play broadcaster for the Drake football team. I even got to broadcast a Drake game versus Temple from the old Veterans Stadium in Philadelphia where the NFL Eagles played.

It was fun, but the pay wasn’t very good. I moved over to association management, landing a job with the Iowa Manufacturers Association, comprised of industrial corporations. I learned a great deal working there. The primary thing I learned is that I liked public affairs. I had grown up in a family that paid a great deal of attention to politics and discussed it with great frequency. So I guess I shouldn’t have been surprised that this interest was rejuvenated.

When a friend of mine, Gary Thomas, learned that I wanted a job lobbying, he directed me to IMHA, where he had worked for two years. That was 29 years ago this November, and I’m still here.

  1. What are your personal interests or hobbies? How do you like to spend non-work time?

I like to read. I don’t read fiction or poetry anymore. It’s all books about history, biographies, and politics. I like to golf. I also like to watch sports on TV.

  1. How do you personally like to respond to challenges that come up for you professionally? (In other words, how do you try to tackle problems and arrive at effective solutions?)

I think I’m better at it than I use to be. Our industry has a track record at the Iowa legislature and before regulatory agencies. It takes time to build a strong reputation, to build up a reservoir of trust. Working with public officials, all we have is our reputation for telling the truth and attempting to solve problems.

The first point is not to deny that a problem exists. The second point is to be patient. If we’re attempting to pass legislation that would be helpful, it doesn’t always come quickly. Other interest groups have ideas about what you’re wanting. Is the legislative climate conducive for passing the legislation? What do the legislative leaders think about your proposal? Do you get along with both political parties?

I try to pay attention to other interest groups and observe how they are approaching their problems and opportunities. If we’re having a particularly sticky legislative problem, I’ll talk to numerous lobbyists and association managers to seek their take on our issue. You never know who is going to give you a great perspective on your issue. There is a lot of standing around and waiting during a legislative session. There’s no need for that down time to go to waste. I’ve found that people are flattered when you ask them their opinion about something.

It’s useful to keep in touch with association executives in one’s own state, as well as the association executives around the country who work for manufactured housing associations. I’ve known a lot of these execs for many years. If you’re having some sort of problem, as it either relates to governmental affairs issues, or as it relates to the management of the association, these colleagues have usually been confronted with just about every issue. There’s loads of experience ready to be tapped, if one only asks. That brings up another issue. In a small association, such as ours, it’s easy to get tunnel vision. We usually have so much to do that we don’t remember to do the canvassing of others that can be so critical in approaching our problems and opportunities.

  1. What are some of the biggest issues for the industry in Iowa? Are they the same as issues nationally?

Most of our issues are pretty much the same around the country. The issues don’t always occur at the same time around the country. But, if we see particular types of bills introduced in Wisconsin, Minnesota or pretty much any other state, we know that it won’t be long before the same concepts arrive at the Iowa legislature. After all, legislators have their own national legislative associations they belong to. They share ideas.

The biggest issue we all have today is financing of manufactured homes, especially in lease communities. And the largest core issue we have is that manufactured housing is still considered an inferior product by far too many people. It was that way almost 30 years ago when I started work here, and I’m sad to say that attitude is still far too prevalent today.

We have a major issue developing in the Iowa legislature in 2011. The Des Moines Register, the largest and most influential newspaper in the state, has written nearly 10 major stories and two editorials on the mismanagement of a manufactured housing lease community in Johnson County, just outside Iowa City. Everything related to the laws on management of our communities is on the table. Our state legislature has recently added “oversight” committees, whose only job is to “investigate” the conduct of state agencies. With regard to manufactured housing, there is no state agency having direct jurisdiction over manufactured housing communities. For 32 years, the Iowa Department of Health licensed manufactured housing communities. Working with the Department of Health, we were able to drop this licensing provision in 1986. The Oversight Committee will probably examine whether reauthorizing some sort of licensing program makes sense. The program didn’t work well in the past. The state, relatively speaking, has fewer resources now to conduct such a program.

The other offshoot from the Register’s series of stories is that the landlord/tenant law, chapter 562B, will be the subject of numerous bills. IMHA intends to offer some bills ourselves. This is a different type of strategy for us. Usually, we would have hunkered down and attempted to defeat all the bad bills. We’ve had a great track record playing absolute defense. However, it has occurred to us that we need to keep our customers and potential customers in mind. What is the big issue in buying an $80,000 manufactured home and moving it into a lease community? The answer, in our view, is security. How long are the leases? In our state, most leases are monthly leases. That’s very convenient for our owners/managers in synchronizing notices, especially rent increase notices. However, it doesn’t lend itself to reassuring residents. Yes, they may trust you, but you might sell your community. The new owners might not like you and decide to end your lease. All it takes is a 60 days’ notice, with no cause needed to be specified in the notice or defended in court. Most of our members do things right. They’re in the business of renting spaces and providing a wonderful place to live.

But there are those who aren’t very adept at management or have no sense of ethics. They’re giving the good actors nightmares, all on page 1 of the newspaper. When someone is evicted, it’s expensive to move the house. It opens up the industry to charges of evicting residents for the express reason of taking advantage of the situation, especially when the cause of eviction is something other than non-payment of rent. Our critics call it “stealing homes.” Of course there are circumstances where the resident just can’t make payments, not unlike what happens in a bank foreclosure. We do have a law that allows the manufactured home to stay on site for another 60 days after the eviction is completed. The current law allows the community owner to veto this option. If the home has value, then the community owner is generally going to opt to allow the home to remain for 60 days. The resident, after eviction, can’t live there during the 60 days, but it does allow time for the resident to make arrangements to move the home or to possibly sell the home. One of IMHA’s legislative proposals will be to take away the community owner’s veto of the 60 days’ provision.

It’s going to be impossible to give all residents absolute security. However, there are some changes we can make to our landlord/tenant law that will be helpful. The IMHA board wants to do these things, not only because it’s the right thing to do, but also because it will probably be good for business. We’ll always look out for the interests of management; however, if some of our laws are keeping potential customers from choosing to reside in manufactured housing communities, it’s not a victory to maintain those laws.

  1. What is one of your proudest accomplishments or the achievement of the Iowa Manufactured Housing Association?

1984 and 1985 were the best years I can remember for legislative achievement. In 1984, Iowa became one of the first 5 states to pass anti-discrimination laws to protect consumers who choose manufactured housing for placement on private property. That was the bill that tested the association’s ability to work as a team on a very difficult piece of legislation to achieve. The very next year we were able to pass another bill, just as popular, if not more so. It was the law that brought in a 40% reduction on the sales/use tax on the sale of new manufactured homes. The law also stated that the tax was to be collected only once, so that subsequent sales of the home were free from tax. In 2008, we were able to reduce the tax on new homes another 40%. Today, our customers are paying 1%, instead of 6%, when they purchase one of our new homes. We also gained a 40% reduction for modular homes.

It’s difficult to hold it to one or two items. Our association has done an excellent job in public affairs activities. As a lobbyist for IMHA, I’m fortunate to have the strong support that I have.

  1.  How can the industry best work together to face its current challenges?

I suspect you’re alluding to the national situation. We have two national associations for one industry. That’s not totally uncommon. We have a few situations like that in Iowa. However, working Congress is an immense job. I’ve known Danny Ghorbani forever, and I’ve known all the MHI leadership over the years. We have very good people in both MHI and MHARR.

The late Will Ehrle of the Texas Association, and I were brought in when MHI and MHARR developed the working agreement that resulted in the 2000 reform bill that passed Congress. We’re at another critical position in the history of the industry. With so much housing reform at our doorstep in the coming few months, we’re going to miss an outstanding opportunity if we don’t replicate that kind of working relationship between the two associations on the specific issue of financing our homes. And there is another dynamic going on. As good as our two associations are, will it be enough to effect the kinds of changes we need within HUD and the new FHFA? There is a proposal floating around from some in the industry to hire someone who has special credentials to work for the industry to help shape the new regulations such that it will be positive for the industry and its customers. Otherwise, we may be put at an even deeper disadvantage. Calling for this kind of additional help is no denigration of MHI or MHARR. It’s like going to your doctor who has given you great service for many years, but one day tells you that you need to see a specialist. You can bemoan the fact that your regular doctor can’t perform the medical service, or you can take his advice to see the specialist. That’s an oversimplification, but we’re at the point where we need to do whatever is necessary to jumpstart our sales. There are some people/companies available to us who have some special experience, talents, connections, friendships, etc. with the very regulatory bodies that we need assistance with. Will this extra step happen? I’m not sure. We’ll probably talk it to death. By the time we’re ready to move, it might be too late. It reminds me of the General Patton line: A good plan (violently executed) today is better than a perfect plan tomorrow.

  1. Why is membership so important?

Associations are important because they allow individuals to leverage their effectiveness. As great as Michael Jordan was playing basketball, his Chicago Bulls couldn’t win the championship until Jordan got some talented players around him. Individual business persons are limited in what they can accomplish alone. Associations are especially important in achieving legislative and regulatory goals. When an association advances an idea, legislators assume that the idea has been debated and vetted within the association.
If a non-member from a profession has a legislator introduce a bill affecting the industry, committee chairs and leadership will want to know what the association thinks of the proposal. If the consensus of the association finds the proposal to be negative, it’s unlikely to advance. Legislators can’t know everything about every issue. They depend upon associations for information. If you’re an industry person with an idea, your first challenge is to convince your colleagues that your idea is useful.

Associations are important to keep members informed. Associations are very useful in providing a forum for members to get together and trade management ideas. People who aren’t association members are more likely to fail in their businesses, chiefly because they aren’t keeping up with new information affecting their business.

Pure trade associations, like manufactured housing, are especially difficult because everyone is in the same business and many are direct competitors. As time goes on, and members lose customers to each other, it becomes difficult to cooperate. We’ve been fortunate to have a critical mass of people in Iowa who have put aside their competitive issues to work together on issues of common concern.

Because the economy is struggling, especially manufactured housing, our industry associations are naturally getting weaker financially. There is no absolute law that associations have to exist forever. I’ve seen many go bankrupt in our state. We’re looking for creative ways to keep IMHA financially strong. Aside from cutting expenses everywhere we can, we’re looking for more ways to obtain income. About a year ago, IMHA launched a plan to collect dues on the sales of used homes. Most industry associations have survived on the dues collected from the sale of new homes. Since new home sales have plummeted, and used home sales have risen, it made sense to add this approach. It doesn’t solve all our financial shortfall, but it is helping us.

  1. Any other advice or comments?

Our future will be determined by how well we work together.

A Cup of Coffee with…Mark Weiss, President & CEO of MHARR (Manufactured Housing Association for Regulatory Reform)

A Cup of Coffee with…Ed Zeman, Zeman Homes

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