Given the many industry controversies that often involve legal and regulatory issues, it seemed fitting to begin 2020 and this new decade with an in-depth interview with a true industry legal expert and cover ground that has never been previously published in any manufactured housing trade media.
Mark Weiss, who is the President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) in Washington, D.C. He has served in that position since January 2015. Prior to that, he served as MHARR’s Senior Vice President and General Counsel for over 25 years.
MHARR is a national trade organization representing the view and interests of producers of HUD Code manufactured housing. Its members are mostly smaller and mid-sized manufacturers from around the country. Founded in 1985, MHARR is dedicated to fighting excessive and unnecessary regulation, to protecting, defending and advancing manufactured housing in accordance with federal law, and to preserving the affordability and availability of manufactured housing.
An honors graduate of Rutgers University with a degree in Political Science, Mr. Weiss received his Juris Doctor (J.D.) degree from the George Washington University School of Law in Washington, D.C. in 1983 and began working on manufactured housing regulatory issues almost immediately as an attorney for the firm of Casey, Scott & Canfield, P.C. — then General Counsel for the Manufactured Housing Institute (MHI), and later General Counsel for MHARR. Mr. Weiss later became General Counsel for MHARR in his own right and, in 2006, was named as MHARR’s Senior Vice President.
During his career with MHARR, Mr. Weiss has been involved in formulating and supporting MHARR policies with respect to nearly every aspect of the federal regulation of the manufactured housing industry.
He played a direct role in the development and passage of the Manufactured Housing Improvement Act (MHIA) of 2000. Those keen insider insights have supported his work to advance the views and interests of the industry’s smaller businesses before Congress, HUD, the federal Manufactured Housing Consensus Committee (MHCC) and other government agencies, boards and committees.
In recent years, given the increasing difficulties of the industry’s post-production sector -including retailers, communities and finance companies – Mr. Weiss and production-focused MHARR have become progressively more involved with advancing the regulatory perspective and interests of this important segment of the industry as well. Most recently, Mr. Weiss served as a member of the U.S. Department of Energy (DOE) Working Group on manufactured housing energy conservation standards, voting against those proposed standards – and leading the industry effort to roll-back those proposals — that would significantly and needlessly increase the cost of manufactured homes for American homebuyers.
For newcomers, one more point should be stressed. Some have been unclear about the distinction between production and post-production issues. Production related regulatory issues refer to those regulations that specifically impact the producers (production) of federally regulated HUD Code manufactured housing. Post-production issues then are all the other items that occur after a home has left the production center. Both are important, as manufactured home industry veterans routinely know.
With that backdrop, what follows is a Q&A between MHProNews and Mr. Weiss. The numbered questions are from MHProNews and are followed by Weiss’ (A) written reply to that specific inquiry. As with our popular Cup of Coffee series of interviews, this methodology provides unequivocal accuracy in our interviews, as they reflect the specific response by the interviewed subject as they were written by that person in response to a given question.
MHProNews Q 1) For the benefit of increasing number of newer readers, please give a brief description of what the Manufactured Housing Association for Regulatory Reform (MHARR) is and what its mission is, within the HUD Code manufactured housing industry?
Mark Weiss, J.D. – A) When manufactured housing became federally-regulated in 1976, it did not take long for smaller manufacturers to realize that federal regulators needed to be monitored and checked when necessary, in order to prevent or stop over-regulation. By the mid-1980s, this concern reached crisis proportions for smaller producers, as the Manufactured Housing Institute (MHI) did not appear to be living-up to that function. So a number of smaller manufacturers separated from MHI and formed a new association (then named the Association for Regulatory Reform) with the objective and mission of protecting, defending and advancing the interests of HUD Code manufacturers, while ensuring full protection for homebuyers consistent with maintaining the inherent affordability of manufactured homes.
- Mark, you have been President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) for exactly five years now, how do you see that period?
A) That five years can be divided into two distinct periods — the first two years (2015 and 2016) and the next three years (2017 to date).
- What is the major difference between the first period that you describe, and the second?
A) During the initial two years, under the Obama Administration and with Pamela Danner as administrator of the HUD program, MHARR essentially had to maintain the course that it established over the prior 15 years, of doing everything that it could to compel full compliance with the major reform aspects of the Manufactured Housing Improvement Act of 2000, which has been MHARR’s touchstone since it was enacted by Congress. There were constant challenges, though, including a flurry of sub-regulatory dictates contained in sub-regulatory “guidance” documents that MHARR strongly and consistently opposed.
Over the past three years, with the Trump Administration in office, MHARR has had the opportunity to be more aggressive in its efforts to block new and unnecessarily costly regulation and to fully implement the major remaining reform elements of the 2000 reform law. All of that is to the credit of the MHARR Board of Directors which, at its March 2016 meeting, adopted a comprehensive plan of action based on a possible Donald Trump victory in the 2016 presidential election, which allowed us to hit the ground running when that occurred. So, as the Washington Post reported, MHARR was instrumental in the removal of Pamela Danner from the program administrator position and in exposing program regulatory excesses that ultimately led to the “top-to-bottom” review of all program regulations by Secretary Carson that continues today. We also took a very strong and consistent stand against unnecessary and unduly costly federal energy regulation – in particular a “negotiated” regulatory proposal which MHI initially supported. Indeed, I firmly believe that it was MHARR’s strong and principled opposition to that regulatory proposal which led to the retraction of DOE’s proposed rule in 2017. And we’ve continued to take a strong stand both to stop such energy regulation, to reform the HUD program to make it less burdensome and to reduce needless regulatory compliance costs which are passed along to consumers, and to finally get financing equity through Fannie Mae and Freddie Mac for manufactured homebuyers.
4. Have the successes of the last three years – the second of the two periods that you describe – embraced the entire spectrum of the federal manufactured housing program?
A) Unfortunately, no. On the whole, we’ve done reasonably well on the production side of the ledger, although there is still unfinished business and constant vigilance is absolutely necessary – and ongoing on the part of MHARR. The same cannot be said, though, on the post-production side, where the industry has not done nearly as well, and continues to face major issues and challenges that have hurt – and continue to hurt — sales long-term and still are not being aggressively and effectively addressed. Indeed, in some cases, matters are getting worse.
- Please elaborate on the distinction between progress made regarding the production side of the industry, as contrasted with what you cite as the lack of progress on the post-production side?
A) As you and everyone else within the industry, for that matter, are well aware, HUD Code manufacturers are building their best homes ever, at prices which continue to be highly affordable, combined with world-class customer service which itself, is better than ever and continues to improve as shown by the nearly non-existent level of referrals to state and federal dispute resolution programs. Despite all of these production-side successes, the industry remains mired – and has been for more than a decade – at production levels below 100,000 homes per year because, after the industry’s excellent homes leave the factory, there are major problems that have not been resolved – or even addressed – despite the fact that MHARR, funded solely by manufacturers I remind you, was able to lead the effort to secure good laws, including several key provisions of the 2000 reform law and the “Duty to Serve” provision of the Housing and economic Recovery Act of 2008 (HERA), to provide the lynchpin necessary to fix the post-production problems that have hurt the industry. But those post-production provisions (principally enhanced preemption and the Duty to Serve) still have not been fully and properly implemented.
- Back to the production side, what are the main components of the Manufactured Housing Improvement Act (MHIA) of 2000 that still have not been fully and properly implemented by HUD in MHARR’s view?
A) Although there are still issues involving the operation and management of the Manufactured Housing Consensus Committee (MHCC) which need to be dealt with, the three remaining “big picture” reforms of the 2000 law which still – after twenty years – need to be fully implemented in order for the federal program to function as designed by Congress and to fully meet all of the statutory objectives of federal manufactured housing law, are: (1) implementation of the enhanced federal preemption provided in the 2000 reform law; (2) the appointment of a non-career program administrator; and (3) implementation of – and compliance with – legitimate, competitive contracting processes for all program contracts, but, most particularly, the program monitoring contract which has been held by the same entity (albeit under different corporate names) since the inception of federal regulation of manufactured housing some 43 years ago – an ongoing failure to achieve any level of full and fair competition that is almost unheard-of in Washington, D.C.
- You’ve indicated that serious, industry-debilitating problems remain to be addressed on the post-production side. Can you elaborate?
A) The post-production debacle can be summarized very succinctly. As I mentioned earlier, once our homes leave the factory, there are many cities, towns and other jurisdictions in the United States where they cannot be placed because of zoning or other placement exclusions which should be federally-preempted, but have been ignored by HUD. Further, millions of consumers who might wish to purchase and live in a manufactured home are discriminated-against when it comes to purchase-money financing because of the near-total failure – after more than a decade – of Fannie Mae and Freddie Mac (and their federal regulator, the Federal Housing Finance Agency) to implement the “Duty to Serve” mandate in any meaningful way. And this abject failure has only been compounded by efforts within the industry itself, to divert DTS support from mainstream HUD Code manufactured housing to much more costly “new generation” or “new class” type homes produced primarily by the industry’s largest corporate conglomerates. This either excludes untold numbers of potential purchasers from the mainstream HUD Code housing market altogether, or subjects purchasers to higher-cost interest rates – particularly for personal property (or “chattel” loans) because of the lack of secondary market support and a resulting lack of full free-market consumer financing competition.
- Specifically, then, with regard to the Duty to Serve Underserved Markets (DTS), what problems do you see with regard to its full implementation, or lack thereof?
A) Congress, through the DTS mandate, directed Fannie Mae and Freddie Mac to fully serve the mainstream HUD Code manufactured housing market, something that they have not done, despite the fact that mainstream HUD Code manufactured housing is indisputably the most affordable type of housing and homeownership in the United States, which HUD studies have proven. Yet, after more than a decade: (1) the GSEs have done nothing to provide any type of secondary market or securitization support for the personal property loans which comprise nearly 80% of the manufactured housing finance market as shown by U.S. Census Bureau data; (2) the GSEs, under their 2017-2019 DTS implementation plans, have financed a grand total of approximately ten HUD Code homes under their highly-touted MH Advantage and CHOICEHome initiatives, as disclosed at the recent St. Louis DTS “Listening Session;” while (3) slight increases in purchases of new real estate-based manufactured home loans by the GSEs constitute well below 2.5% of the total manufactured housing market. The bottom line then, is that eleven years have seen virtually no progress in implementing DTS for the mainstream HUD Code manufactured housing finance market, while efforts continue to divert whatever minimal level of support is available to a much more costly type of hybrid housing which is more akin to the site-built homes that Fannie and Freddie would still prefer to deal with. DTS, at this point, therefore, is less an exercise in “serving” the HUD Code market, than it is an effort – with the assistance of some within the industry – to divert DTS away from the mainstream manufactured housing market.
- So, with almost no service for personal property or ‘chattel’ lending on mainstream manufactured housing, what happens to that nearly 80% of the market? Where do many of those people go for on home only purchase-money consumer financing?
A) Well, this is where you “follow the money” to see who benefits – and conversely, who suffers – from the non-implementation of DTS. The full, robust and market-significant implementation of DTS would draw new lenders into the mainstream HUD Code manufactured housing finance market. The entry of new lenders, by definition, would generate more robust competition than currently exists. More robust competition, in and of itself, would give consumers more choices and would lower interest rates for personal property loans. Beyond that, the securitization and secondary market support for such loans by the GSEs, again, by definition, would lower existing risks for lenders in – or entering – the HUD Code market. Lowering the risk borne by lenders would also have the effect of reducing interest rates. DTS implementation, then, would give consumers more – and less costly – financing choices. In the absence of DTS support, most consumers are stuck with a limited number of portfolio lenders charging higher-cost interest rates than would be the expected norm in a fully-competitive market. Higher interest rates mean that fewer people or families can qualify for purchase loans, and those who do pay higher rates than would otherwise characterize a fully-competitive financing market. So, the dominant portfolio lenders and their parent corporations are the “winners” under the status quo, while the broader industry and consumers are the “losers.” Add to that the lack of full and proper implementation of the 2000 reform law’s enhanced preemption, and you have the root of the problems and failures undermining the industry’s post-production sector.
- Exactly who benefits from the non-implementation of DTS and the various aspects of the 2000 reform law that you have cited?
A) Well, it’s really no secret and not rocket science. Maintenance of the status quo benefits those who have prospered under the conditions that have existed for more than a decade. That means the industry’s largest corporate conglomerates and particularly the combination of Clayton Homes, Inc., Vanderbilt Mortgage Corporation (Vanderbilt) and 21st Mortgage Corporation (21st) under the Berkshire Hathaway umbrella. These entities have access to virtually unlimited capital that is not shared by other potential competitors. As a result, they have ample funds to lend, can better sustain a comparable level of risk as contrasted with potential competitors, and because of these factors and the consequent absence of full and robust free-market competition, among other things, can charge higher interest rates than would otherwise be the case. And, indeed, in one of his “Shareholder Letters,” Berkshire Hathaway head Warren Buffet acknowledged that Clayton Homes earns more on lending through its finance affiliates than it does on the manufactured homes that it builds. That sort of says it all. Effectively, what we have in DTS, is a good law that has been hijacked – hijacked by Fannie and Freddie (and their regulators) who would prefer it did not exist, and by status quo interests essentially sharing the same view based on their own self-interest.
- Based on your experience and observations — and with the overall good job that’s been done on the production side of advocacy to advance the manufactured home industry and its consumers — why isn’t the industry reaching its full potential of producing and selling hundreds-of-thousands of homes each year? Why are many consumers unable to buy our homes as relates to the post-production side of the equation?
A) Again, it comes back to the post-production side of the equation. The simple fact that – under present circumstances – consumers cannot place manufactured homes in vast swaths of the United States due to discriminatory zoning or placement exclusions or restrictions, necessarily (and illegitimately) limits the market. Imagine how the HUD Code market would grow if those restrictions were significantly reduced. Similarly, the lack of a fully-competitive consumer financing market for HUD Code homes is a major roadblock. Lower interest rates and more sources of consumer financing would make manufactured housing fully available for millions more American families. And again, imagine what that would do for the overall HUD Code market.
- Recognizing that MHARR is a producer’s association, what if anything has MHARR done to try to resolve this problem?
A) As you and others in the industry are aware, MHARR is an association of HUD Code producers. We are not funded – at all – by anyone or any entity within the post-production sector. Despite this, at every step, we have done everything that we can to seek progress on the post-production side. When part of the industry dropped the ball with regard to the SAFE Act, FHA reform and other matters, the MHARR Board instructed my predecessor, Danny Ghorbani to get involved with consumer financing companies and the result was the development of the DTS legislation. With regard to zoning, I have addressed that issue for years under the preemption doctrine and particularly the enhanced preemption of the [MHIA] 2000 reform law, and just within this past year, MHARR offered to partner with one or more state associations to target particularly egregious zoning exclusions, but there were no takers. That will not stop us going forward, but the real solution to all of this would be the creation of an independent, national, collective post-production association to act as an aggressive advocate for the post-production sector on a full-time basis, as MHARR has done within the production sector. The bottom line is that this missing piece in Washington, D.C. has – and will continue to – significantly harm the industry as a whole.
- Speaking of an independent post-production association, how do you see the role of the various state-level manufactured housing industry associations? Would say that they have done a good job in representing the industry in individual states?
A) The state associations absolutely do a good job representing their members on the state level, and that is vitally important. But because of the very nature and focus of the state associations, they have a difficult balancing act to maintain. They must represent all segments of the industry and business of all sizes, from the largest corporate conglomerates to the smallest independent entrepreneurs, on a wide range of issues arising at the state and local level. That keeps them extremely busy, with a constant need to carefully prioritize their activity. But this only underscores my point that there is still a missing piece of the puzzle at the national level. And that is the type of independent, collective, national post-production association that MHARR has long called for, with which it could partner – at the national level – to advance these key issues that have been limiting industry growth for far too long.
- Given that manufactured housing is comprehensively regulated, and it was Congress that mandated the two good existing laws that you have referred-to, how do you see the role of Congress, as it relates to the industry and manufactured housing consumers, going forward?
A) The proper role of Congress – e., the type of congressional activity that would most benefit both the industry and consumers of mainstream manufactured housing – is defined by the problems that I’ve described, which face the industry and its consumers nationwide. So, what are those problems? As I’ve stated, they are, principally (although by no means exclusively), problems with the implementation of the [MHIA] 2000 reform law (i.e., implementation of enhanced preemption, appointment of a non-career administrator, and implementation of program contract reforms) and problems with the implementation of the Duty to Serve (i.e., it hasn’t happened after more than a decade). It’s not a matter, then, of seeking new laws – we already have the good laws that we need to fix the problems I’ve outlined. What we do need, and what has been missing on all of these matters, is the implementation of the good laws that we already have. Thus the best role for Congress, right now, is oversight and monitoring related to these implementation issues to put needed pressure on HUD, FHFA, the GSEs and others to do what is necessary and what Congress has already directed them to do.
- Is Congress doing – or poised to do – such oversight? Because we keep hearing that they are drafting new proposed laws to do this or that. Why is that activity occurring when key aspects of two good existing laws that would bring prosperity to the industry and homeownership to more Americans are still not being fully implemented or enforced?
A) This is a very good question. The type of “new” laws that have been tossed around merely tinker around the edges. The laws needed to address the problems that we have as an industry are already on the books and are already quite clear, they’ve just been ignored or distorted in some cases by career regulators and entities like Fannie Mae and Freddie Mac in the case of DTS, with virtually no accountability. This is a matter, as I’ve said, of oversight – not new laws. MHARR, for its part, has been aggressively pursuing congressional oversight, for example, on DTS. Everyone in the industry knows that Fannie Mae and Freddie Mac are not implementing DTS in a way that will make a material difference for anyone. It’s been years of smoke and mirrors – at best and now, they’re essentially trying to hijack DTS by diverting DTS support to a “new class” or “new generation” of homes that are not mainstream, affordable manufactured homes, and some in the industry are trying to help them with that subversion. MHARR is focused on the laws that we have. Good laws that would help the industry and consumers get what they need. Those laws need to be implemented and there needs to be maximum pressure to achieve that. Put another way, what good will new laws do around the edges when the laws that we have now are not being faithfully and properly implemented?
- Let’s talk about zoning and placement. How does MHARR see this issue?
A) Discriminatory and exclusionary zoning edicts are one of the most important challenges facing the industry and consumers. They needlessly harm consumers and limit the reach of the industry and its ability to put affordable home ownership within the reach of millions more American families. The saddest part of this, is that MHARR’s leadership has provided good laws to address this issue but, in the absence of an independent, collective national post-production association, the industry has failed time and again to win these battles or, sometimes, even to fight them.
- What is the practical impact of discriminatory or exclusionary zoning – on homebuyers? On the industry?
A) The practical impact is devastating. It excludes affordable manufactured housing from vast areas of the United States. This obviously hurts the industry by artificially suppressing and limiting the production of HUD Code manufactured homes. For consumers, such exclusions and restrictions – as HUD Secretary Ben Carson has himself acknowledged — needlessly inflate housing costs. This helps to exclude millions of moderate and lower-income American families from home ownership altogether, or prevents them from living how and where they would like, or forces them to pay more than would otherwise be the case for safe and decent housing. It represents baseless discrimination against both the industry’s products and the industry’s consumers.
- Is there a potential remedy that is already in federal law right now? And if so, why is it not being used.
A) There is. As I mentioned earlier, it is “enhanced preemption.” When Congress amended the federal manufactured housing law in 2000, it significantly strengthened and expanded the scope of federal preemption. Before the 2000 reform law, HUD took the position that federal preemption only extended to state and local construction standards that differed from a federal standard addressing the “same aspect of performance” of the home. They specifically took the position that preemption only addressed differing construction and safety standards and nothing else. So, when the law was amended in 2000, Congress: (1) specifically directed HUD to construe and apply preemption “broadly and liberally;” and (2) extended the scope of preemption to reach “other requirements,” beyond just safety and construction standards, imposed by state or local governments. These changes provide HUD with all the authority that it needs to preempt state and local zoning “requirements” that defeat – and stand as an obstacle to the accomplishment of – the purposes of federal manufactured housing law as amended by the Manufactured Housing Improvement Act [MHIA] of 2000.
- How does all this relate to the White House Council on Eliminating Regulatory Barriers to Affordable Housing that President Trump has established – chaired by Secretary Carson?
A) Restrictive and exclusionary zoning laws which needlessly increase the cost of housing, and exclude consumers from the housing market have already been recognized as a major issue by Secretary Carson, who chairs the [White House] Council. Thus the Council will provide an excellent forum to not only detail the nature of this matter as it specifically affects manufactured housing and manufactured housing consumers, but also to address and assert the remedies that already exist in current law and are available right now to correct this problem. Again, this is consistent with the reality that new laws are not what is needed at present. What is needed is the leadership necessary to enforce the existing laws that relate to this and other issues confronting both the industry and its consumers. There is also the danger, potentially, of any new law providing the regulators a basis or excuse to not fully and properly implement all the reform provisions of our existing good laws, through further delay and/or stonewalling.
- Can you please elaborate on the last part of your answer?
A) As you know, when a new law is enacted, agencies have to develop and write implementing regulations, and this process takes time. Given the industry’s demonstrated inability to fully and properly implement new laws, regulators would use this time to sandbag not only any new law, but remaining non-implemented reforms of existing law as well.
- We spoke earlier about the Manufactured Housing Institute (MHI) and the claim that they represent the “entire” industry, what is your view of that?
A) Well, they obviously do not. They may represent all “segments” of the industry, but that is arguably more of a problem than an asset, as their representation of the industry’s post-production sector, as I’ve been pointing out, has not only failed to produce positive results over the past decade-plus, but has allowed long-simmering and significant problems to fester, to the detriment of both the industry and consumers. And, just as MHARR, as an independent, collective national association has helped to produce positive results within the production sector, an independent, collective national post-production association would help to produce positive results in that area, which are desperately-needed. If anything, I cannot emphasize enough how much both the industry and manufactured housing consumers are suffering in Washington, D.C. because of the lack of such an independent national association, that would be organized and operate for the benefit of all members of the post-production sector and the industry as a whole.
- Those who are deeply into manufactured housing may not realize that it is uncommon to have a single ‘umbrella’ association. The more common examples in the trade association world is for various interest groups to have their own trade group. Please give some examples of that for readers to consider, and then explain why that’s a superior approach, useful for manufactured housing as well as others.
A) There are many industries in Washington (and elsewhere) – indeed most – which have separate associations to represent their “production” and “post-production” segments. One example is the site-building industry. Builders (e., the production sector) are represented by the National Association of Home Builders (NAHB), while realtors (i.e., the post-production sector) are represented by the National Association of Realtors (NAR). The same division of activity exists in the recreational vehicle industry with the Recreational Vehicle Industry Association (RVIA) representing producers and the Recreational Vehicle Dealers Association (RVDA) representing retailers, and in many other industries as well. And, for a comprehensively regulated industry such as ours, effective post-production representation is a must, not an option.
- Given the importance of this matter – and given the fact that such an organization does not even exist at this time — is there anyone who is properly addressing and resolving this broad deficiency?
A) Not really. There are some who posture as representing the post-production sector, but merely are engaged in self-promotion. That is not the same as representation and advocacy on a range of highly problematic post-production issues, and that is why we – and I know, you, as well, have had to step-in with regard to various issues, such as the Duty to Serve.
- Has MHARR taken any steps beyond calling for the creation of such a post-production association?
A) Well, MHARR’s Board of Directors, two years ago, instructed the Association to do a study on this matter with suggested recommendations, which we did. But we have not and cannot go beyond that.
- With MHARR itself having been developed from the ground-up, if such a post-production association was to be formed, is there any individual in the industry who you think would be best suited to become the President/CEO of that organization, in order to allow it to hit the ground running?
A) There are a number of highly capable state association executives who would be excellent candidates because their experience provides them with a knowledge of both production-side issues and the post-production challenges, problems and opportunities that would allow them to hit the ground running, from day-one.
- What is your view of what MHI has done recently regarding its management, specifically splitting the “President” and “CEO” roles? Is that typical in the association world?
A) Again, what MHI does in this regard is up to them and their members. It would seem a bit unusual to separate the “President” and “CEO” titles and, presumably, their functions as well. As a practical matter, if there are differing views on a subject, who makes the final call? Who is finally accountable to the membership for any given decision? And, conversely, who do members call if they disagree or wish to have input on any given decision? It seems to be tailor-made for confusion and potentially chaos, which is why most groups that I’m familiar with have only one top executive with final authority. So, unless one of these positions is essentially a figurehead role, it would seem to me to be a candidate for dysfunction. But again, that is between MHI and its members.
- MHI has a code of ethical conduct that they’ve touted. Has it struck you as odd that the HBO Last Week Tonight with John Oliver viral video – errantly named ‘Mobile Homes’ – features companies that are all members or tied to MHI?
A) Well, the show in its entirety was biased and fundamentally unfair in its representations concerning the industry and its homes. It does show, however, that the industry – and specifically MHI as the erstwhile representative of the post-production sector have a long way to go in presenting a positive image of that sector and its various components. The overall image and public acceptance of manufactured housing will not improve until the performance of the post-production sector at least equals the quality and performance of the homes that emerge from the industry’s production facilities, and the general public is made fully-aware of that performance.
- It wasn’t so long ago that Doug Ryan at then CFED – which has since been rebranded as Prosperity Now – slammed Clayton Homes and the Berkshire Hathaway lenders as monopolists.
More recently, Ryan’s concerns against Warren Buffett led Berkshire owned brands has not only been more muted, they’ve been collaborating on legislation and on so called stigma relief.
Given that Influence Watch or GSMOL, besides our MHProNews and MHLivingNews platforms, have shown links between nonprofits like Prosperity Now, MHAction, or other nonprofits involved in manufactured housing, do you see that as problematic? If so how?
A) MHARR made it a point about a decade ago, to reach out to manufactured housing consumer organizations, such as the National Manufactured Home Owners Association (NMHOA) and has continued to maintain productive ties to that organization to inform its views on consumer concerns. To a significant degree, the other organizations that you reference direct most of their ire and attention to matters affecting communities and financing which, again, are within the post-production sector. By contrast, within the production sector, consumer issues, for the most part, have been effectively addressed with respect to the vast majority of the industry’s homes, as reflected by negligible levels of dispute resolution referrals. That said, conflicts of interest are always a concern, and we will call them out when and where applicable.
- You often talk about the MHIA and DTS. But please elaborate on the other options that are often under-discussed, such as the need to reform FHA Title I and Title II programs, or other federally backed lending.
A) Well, FHA Title I, in particular, used to be a significant part of manufactured home consumer lending, but, over the past decade, has fallen to negligible levels, again helping to fuel the less-than-fully-competitive market that exists now for manufactured housing consumer financing. MHARR has met multiple times with the top leadership of Ginnie Mae, in an effort to ameliorate or roll-back that organization’s destructive 10-10 rule for the approval of Title I lenders. Ginnie Mae, however, wanted loan performance data which was – and is – not generated or held by the producers that MHARR represents. MHARR was able to obtain some data from outside of its membership, but that did not satisfy Ginnie Mae and it is unknown whether MHI or any of its finance members has provided the needed information. The bottom line on this is that MHARR has done as much as it can as a production association. MHI members have access to the additional data Ginnie Mae apparently needs to see in order to re-visit its destructive 10-10 rule. Reportedly, though, Vanderbilt and 21st are not interested in FHA loans, so there the matter sits.
- Given that 21st often holds sway over retailers not only through lending but also through floor planning, do you see value in the SBA making wholesale lending that works more available for independents?
A) Yes, of course. But this simply illustrates the representational problem that I’ve been referring to. Again, this is an issue and a problem within the post-production sector and it illustrates, once again, why the post-production sector needs an independent collective, national association to represent and advocate on behalf of all industry members regardless of their size. MHARR, again, is on record as supporting the creation of such an association. Unfortunately, though, we don’t have one yet.
- There are programs at HUD that on paper allow for development and redevelopment of communities under favorable terms. Not unlike FHA Title I, they are either little known, have problematic features that could be fixed at the administrative level and are under-utilized. Given the need to develop more options for manufactured housing, do you see value to having HUD elevate and tweak those programs too?
A) Yes, but again, this underscores the need for an independent, collective national post-production association to press on matters and programs such as these. The industry would benefit, consumers would benefit as well.
- Berkshire Hathaway has board positions on the MHI executive committee, plus has serious influence due to the dues they generate for that Arlington, VA based trade group. Does it seems to you as a long-time industry member and observer that MHI has established an echo chamber effect to try to amplify their message in the face of critiques and analysis?
A) MHI claims to represent “the entire industry,” but the “entire industry,” more and more, appears to be the interests of the industry’s largest producers. That, however, is a matter for them and their members. We encourage every independent HUD Code manufacturer to join MHARR where they will share an equal voice with their peers and an undiluted focus on the issues and matters that affect their bottom line.
- MHI has a larger budget and far larger staff. They have outside lobbyists and attorneys. They have demonstrated that they have ready access to key public officials. When you see those photo or video opportunities that MHI uses to prove that access, what does it make you think about?
A) Manufactured housing provides affordable homeownership for millions of Americans and affordable homeownership opportunity for millions more. The industry employs thousands of Americans in all its various sectors, all around the country. As an industry, we offer positives that appeal to both Republicans and Democrats. Yet, where are the results? The industry as a whole has underachieved for more than a decade. In the meantime, MHARR has – and will continue to – advance the industry’s cause in the nation’s capital. As you and others in the industry know, MHARR has led on initiating, crafting and enacting the industry’s two major legislative victories, the [MHIA] 2000 reform law and the Duty to Serve Underserved Markets. And it is true that MHI was a partner in bringing those two good laws to fruition. But, what has MHI, with all the tools that you reference, done with respect to the implementation of these two good laws. For example, the termination of Pamela Danner? No, as reported by the Washington Post that was MHARR. MHI actually supported Danner’s appointment. Termination of the disastrous 2016 “energy” rulemaking? No, that again was MHARR. MHI actually supported the proposal that emerged from the Department of Energy’s bogus “negotiated rulemaking.” Enhanced preemption? MHARR was a lone voice on enhanced preemption for years. Elimination of needless and unduly burdensome “guidance” statements by HUD? No again, MHARR has been a lone voice on that one as well, with MHI actually urging the MHCC to reject an MHARR proposal to eliminate such “guidance” documents that have now been specifically prohibited by President Trump under Executive Orders issued in October 2019. And the list goes on. Its results – not posturing — that matter, and MHARR has achieved a great deal based on just merit, without all of the advantages of our much larger sibling. In reality, if one scratches the surface, nearly everything that has benefitted all members of the industry and consumers over the past three decades, bears MHARR’s fingerprints in one way or another. So, sorry for the long answer, but these are the dots that need to be connected so that industry members can fully understand the past and move forward to prosperity now and in the future. ##
A previous Cup of Coffee interview with Mark Weiss conducted in September 2016 is linked here.
As a note, this style of interview involved several back and forth follow up questions and answers to clarify issue which resulted in the final above. Because the subject had the opportunity to carefully reflect on their responses, it is as close to ideal as one might get.
It should be noted that some questions posed by MHProNews were deferred by Mr. Weiss to a later date.
Disclosures: Mark Weiss and this writer have known each other for about a decade. As with any two people, there are views we hold similarly and differently on the same topic. There have been times we’ve debated certain topics with great vigor. While we have performed professional services for MHARR, we have also done so previously for MHI and others in the industry. That has been publicly disclosed.
There are some topics and replies by Mr. Weiss that this interview mentions that have additional related information on the MHARR website. What a careful reader will likely find are years of consistency. Some, but not all of those related topics are linked below the byline, as is a prior interview we did with Mr. Weiss from 2016.
Among the reasons MHProNews pressed for this interview is that there are industry members who have for about a decade discussed, explored or began the process of establishing a post-production association. Frankly, we’ve asked MHARR repeatedly to expand into post-production efforts, and they have declined for reasons Weiss explained above. In hindsight, that’s wise and consistent with their long history. But among the points the interview and articles from MHARR linked below the byline will reflect is this. Though modest in size, MHARR arguably has an outsized impact in pointing out what’s wrong and fighting for what’s right based upon evidence and the law. They do so without a PAC. Aren’t there may possible takeaways in the above and what’s linked below if a similarly dedicated post-production trade association was forged?
Two of numerous pull-quotes from the above are the first of several such quotable quotations we at MHProNews plan to weave into reports in the days ahead. With the industry mired for a decade at fewer than 100,000 new homes shipped per year, the underlying causes and potential cures find numerous pragmatic insights in what is above and further below.
“We Provide, You Decide.” © (Affordable housing, manufactured homes, interviews, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.)
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By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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