HUD Continues to Downgrade MHCC

Washington, D.C., January 29, 2010 — The Department of Housing and Urban Development (HUD) has named five new members of the Manufactured Housing Consensus Committee (MHCC) and has released revised MHCC bylaws that would give HUD regulators veto power over the composition of MHCC subcommittees, where much of the MHCC‘s most important substantive works take place.

With its selection of these five latest MHCC appointees, HUD — while properly continuing the collective representation of consumers on the MHCC — has left the manufactured housing industry without any comparable collective MHCC representation, despite the fact that the HUD Code manufactured housing industry is subject to comprehensive regulation by the Department that directly impacts every aspect of the design, construction, transportation, installation, placement, financing, and cost of its homes.

The industry’s two Washington, D.C.-based national trade organizations, the Manufactured Housing Association for Regulatory Reform (MHARR) and the Manufactured Housing Institute (MHI), have both represented industry members collectively on the MHCC since it was first organized in compliance with the Manufactured Housing Improvement Act of 2000. HUD’s action to strip the industry of any such collective representation, however, and simultaneously rig the composition of the MHCC’s previously open subcommittees, is just the latest and most blatant step in a string of ploys used by Department regulators in recent years to downgrade the role, authority, independence and functionality of the MHCC, and reduce it to the feckless level of the former National Manufactured Housing Advisory Council, which was scrapped by Congress in the 2000 reform law.

The collective representation of the industry on the MHCC is important not only to the effective representation of the HUD Code industry, but also as a watchdog to ensure that management, practices, policies and processes of the MHCC are consistent with relevant law. Examples of this type of watchdog activity by MHARR and MHI, as voting MHCC members, abound:

  • When HUD regulators in 2004 acted to severely restrict the role and authority of the MHCC, the industry’s collective representation responded and provided the MHCC with research, analysis and a White Paper refuting HUD’s position and action;
  • When HUD re-codified installation and dispute resolution, the industry’s collective representation responded and provided the MHCC with research, analysis and documentation refuting HUD‘s position and action;
  • When HUD attempted in 2009 to impose a gag rule on MHCC members under the guise of an “ethics” bylaws amendment, the industry’s collective representation responded and provided the MHCC with research, analysis and documentation refuting HUD’s position and action;
  • When HUD, in 2008, attempted to bypass the MHCC to impose costly changes to the in-plant inspection and enforcement process, without justification or any cost analysis, the industry’s collective representation responded and provided the MHCC with research, analysis and documentation refuting HUD’s position and action.

In each of these instances, the industry’s collective representation assumed the full burden, in time and resources, of: (1) researching and analyzing the actions proposed by HUD regulators; (2) providing MHCC members with the relevant documentation; and (3) as a voting member of the MHCC, participating in MHCC debate — a process that, in each case above, led to MHCC disapproval of the proposed HUD actions.

And, while MHI, several years ago, decided to bow out as a member of the MHCC, the collective protection of the interests of the industry, together with the functionality, independence and integrity of the MHCC, was assured by the MHARR member of the Committee. The term of MHARR’s Committee member, however, expired on December 31, 2009, leading to the current round of appointments which have now excluded any collective industry representation from the MHCC.

The critical analysis, research and vetting of government proposals and activities are part of the routine duty and function of the collective representation of any industry, but are all the more important for an industry like manufactured housing, which is comprehensively regulated and can rise or fall on the whims of government regulators, which has been — and continues to be — a major contributing factor (production and financing) to the HUD Code industry’s ongoing and accelerating decline since 1998.

It is unrealistic, moreover, to expect individual company representatives on the MHCC to carry this burden or to undertake such tasks. First, company representatives serving on the MHCC, in addition to their day-to-day responsibilities, lack the time and resources to do the research, analysis and documentation that are part of the routine duties of a collective representation. Second, no matter how objectively stated, the response of a company representative to the management, practices, policies and processes of the MHCC, as contrasted with technical matters, could always be portrayed as self-serving. And, most importantly, any opposition by an individual company representative to HUD would — based on the long history of the program — expose that company to being targeted by HUD regulators and contractors for punitive or retaliatory enforcement activity.

Given the rapidly evolving politicization and polarization of the HUD program in the absence of an appointed, non-career Administrator, as provided by the 2000 reform law, MHARR has long suspected that HUD regulators would act to exclude collective industry representation from the MHCC. Thus, in a December 2009 letter to HUD Assistant Secretary for Housing, David Stevens, MHARR warned: “It is vitally important that the industry’s smaller manufacturers continue to be effectively represented on the Committee, on a collective basis, by a strong and knowledgeable advocate [although not a lobbyist] with the unfettered ability to aggressively address issues from their unique perspective. This is necessary to balance the Committee … providing an effective counterpoint to advocates from other interest groups…” Unfortunately, HUD officials, in excluding collective industry representation on the MHCC have gone along with program regulators, in yet another example of the way in which they are ill-served without a non-career program Administrator.

In Washington, D.C., MHARR stated: “It is regrettable that HUD officials are allowing such continual blundering by HUD program regulators and have refused to correct this by simply appointing a non-career program Administrator. MHARR is currently analyzing and evaluating this latest HUD action for proper follow-up.”

MHARR is a Washington D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.

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