HUD (and Other) Proposals Will Further Downgrade the Federal Program and Manufactured Housing
The federal government has published its latest Semi-Annual Regulatory Agenda (SRA). The SRA lists upcoming and anticipated rulemaking actions by the various federal agencies, including those with authority over the regulation and financing of HUD Code manufactured housing.
The SRA, published on December 7, 2009, includes proposed rules affecting manufactured housing by five federal agencies — HUD, the Federal Housing Finance Agency (FHFA), the Department of Energy (DOE), the Federal Housing Administration (FHA) and the Environmental Protection Agency (EPA). We urge you to review — and familiarize yourself with — the attached summaries of these actions.
HUD PROPOSED RULES
Of particular interest to manufacturers is a new rule, under development by HUD, which represents the next step in the Department’s ongoing effort to downgrade key reforms of the Manufactured Housing Improvement Act of 2000 (2000 reform law) that were intended to secure the status of manufactured homes as legitimate housing.
Specifically, section 604(b)(6) of the reform law is designed to ensure that — in addition to new standards and regulations — all new policies, practices and procedures regarding enforcement activities, inspections and monitoring undergo consensus review and evaluation by the Manufactured Housing Consensus Committee (MHCC). HUD, however, has consistently refused to implement this provision and is now preparing a rule to “clarify the types of statements that are subject to the proposal, review and comment process.” Given the Department’s track record of progressively limiting the role, authority and functionality of the MHCC since 2004 this “clarification,” undoubtedly, will severely restrict the types of HUD actions that are subject to the MHCC consensus process and leave the industry without the broad safeguards against excessive or unreasonable enforcement, inspection, or monitoring activities that section 604(b)(6) was supposed to provide. This would be another step toward turning the MHCC into the toothless Advisory Council of the original 1974 manufactured housing law.
Also of importance to manufacturers is the fact that the SRA does not include any upcoming rulemaking activity regarding either the production oversight changes that HUD is attempting to impose on manufacturers under the guise of “voluntary” cooperation, or its extensive proposed changes to the regulations governing production enforcement that failed to gain the consensus support of the MHCC. While the absence of proposed rules on these matters was anticipated by MHARR (see, MHARR Memorandum, December 2, 2009) and is gratifying to the extent that it is a consequence of aggressive action by MHARR since May 2008 to oppose such activity as unnecessarily costly and unjustified, the fact remains that HUD and its monitoring contractor continue to pressure manufacturers to “voluntarily” adopt such changes.
MHARR maintains that HUD cannot “have it both ways” on this important and costly matter. It either needs to adopt a new rule to address this matter through proper rulemaking as required by law, or it needs to stop its coercion of manufacturers to adopt procedures not required by the current regulations, now.
It is noteworthy that such coercion — in the absence of an existing rule or regulation — could not occur except for the fact that the changes being demanded have been accepted, as a de facto regulation, by another segment of the industry in Washington, D.C. (representing mostly larger producers), which has been meeting and negotiating with HUD regulators and the monitoring contractor over its specific content.
MHARR will continue to press HUD to halt such activity unless and until it proceeds with proper rulemaking regarding all such changes.
In addition to these matters, the SAR indicates that HUD will be proceeding with proposed rules to adopt — after years of delay — the second set of proposed standards revisions recommended by the MHCC, including revised roof truss testing procedures recommended by the MHCC.
The SRA includes an entry for the FHFA “Duty to Serve Underserved Markets” (DTS) rule. While MHARR had hoped that FHFA, after receiving comments on its Advance Notice of Proposed Rulemaking, would proceed directly to a final rule, the SRA indicates that FHFA will be publishing a proposed DTS rule soon. MHARR is becoming increasingly concerned about the pace of this rulemaking, and is reviewing options to address this matter soon.
The SRA includes an entry for the anticipated DOE “Energy Efficiency Standards for Manufactured Housing.” Authority for such standards was transferred from HUD to DOE by legislation adopted in 2007. This legislation, which relied upon industry-sponsored research and passed when half of the industry relented, carves the subject of energy efficiency out of the HUD Code and authorizes new DOE standards that will not be preemptive and need not take purchase cost and affordability of the home into consideration, although DOE is required to consult with HUD and bring the proposal to the MHCC. This activity is classified as being in the “pre-rule” stage, with final action on a rule not expected until 2011.
A proceeding concerning the regulation of formaldehyde emissions from pressed wood products, started in 2008 under the prior Administration, remains among the entries for the EPA. There has been no significant activity, however, in 2009 and this matter is now described as a “long-term action” with no projected activity until 2012.
FHA is projecting the adoption of final rule in 2010 to substitute the HUD model installation standards for current foundation and basement requirements.
MHARR will carefully monitor all of these pending matters — at every step — and will respond as appropriate on behalf of the industry.
Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Ave N.W., Suite 508
Washington, D.C. 20004