Richard J. “Dick” Klarchek
President, Capital First Realty
(MH Retailer and Manufactured Housing LLCs)
Working with the government has become an integral part of most businesses today, and since the construction side of the manufactured housing industry is HUD regulated, our industry is perhaps more impacted than many by government. While it is critical to seek to work effectively and positively, it is equally important to balance the desire to ‘get along’ with the need to advocate and advance the causes critical to the success of manufactured housing in the future.
Financing, regulations, zoning and more are issues that call for action so that we can properly serve the millions who are downsizing, starting out or starting over in life. We can also effectively serve those growing numbers who are upsizing but who want to do so in a greener, more quality yet affordable fashion.
As an industry, we can’t sit idly by and watch independent manufacturers close one after another. Retailers and community operators alike need independent manufacturers, even if they happen to buy from one of the larger corporations. Healthy competition keeps everyone on their toes, and that is good for the consumers who make our pay checks possible!
With that lead-in, let me briefly address some key topics that face our industry and the nation today.
- The Haitian disaster crisis. Given the state of American politics, even if we may personally oppose the idea of foreign aid, the reality is that the world is more connected than ever before. If we leave 2,000,000 people in tents that live less than 700 miles from Florida, we are setting ourselves up for future issues if we don’t act to help them.
- Jobs, Factory Built Housing and Haitian relief. The president promised jobs and promised not to let Haiti down in their ‘hour of need.’ We can do both! Our manufacturers and their suppliers are often idle at present or running at 30% capacity or less. Putting Americans to work in our manufactured and modular building plants constructing strong, modest, climate-appropriate and permanent homes for Haitians can have a positive effect on the entire manufactured housing industry if it is properly handled. We can have teams of Americans teaching Haitians how to install and do infrastructure – everyone wins and everyone lowers their unemployment – Haitian families are kept together and future issues are avoided in Haiti that could later hurt the U.S and other nations. We don’t build homes in our company, but I want our factory builders to have orders so that when I need them, they will be there for our customers – our American home buyers!
- Working with regulators and Congress. Congress passed the Manufactured Housing Improvement Act of 2000 and Congress mandated a ‘duty to serve’ the manufactured housing industry some 18 months ago. We can all sell more homes when those Congressionally mandated actions are properly followed. In theory, our preemptive construction code status is an advantage, but since when does an individual buyer or business have to sue some local jurisdiction to enforce a federal law? We need to work effectively with local, state and national agencies and our elected representatives to make sure that we are truly getting what these laws promises us! We pay taxes, we should make sure that we get the most for our tax dollars too. Our industry directly employs perhaps 500,000 or more people and we provided homes for the 20,000,000 Americans. That’s a lot of constituents! Further, there are millions more who live in modular, panelized or pre-fab construction and tens of thousands more employed by those firms.We aren’t beggars; we have a great product that serves a real need! Let’s stand tall and politely, eloquently and firmly communicate that to regulators, Congress and the President that the time is now to act on behalf of our industry and its millions of customers. Let’s get construction and jobs again, that will flow through the economy to other firms – we all benefit in that process.
- Promoting Factory Built Housing. There is no consensus or funding at the national level to create a nationwide manufactured housing educational and image building campaign. The reality is that what we do in Chicago is different than what we do in the Twin Cities or Indiana. Your market is unique too! So what makes the most sense is to work within a market area, and that likely means working with state associations or groups of retailers, developers and community operators within those associations and areas If we worked together we could create market-specific ways to bring many of those millions who need our product but who don’t have the right image or proper understanding of manufactured homes. In the last 15 months or so, Capital First has learned that we can bring people in using new approaches, and once they see what we have, many will buy into our lifestyle. The internet and other marketing options create opportunities we’ve never had before. The key is working together; our ‘competitors’ aren’t others in our industry; the competition are the conventional housing and rental housing markets!
- We can’t put all our eggs in one basket. Our company doesn’t put all its eggs into one marketing basket and as an industry we can’t wait for any one thing to happen to return our industry to good health.
Working with our lenders, we’ve created financing opportunities just as some others have done. We have to protect our lenders and make sure that what happened in the past doesn’t happen in the future. Financing is a life-blood to our industry, so just as we need builders, we need lenders!
Our firm is fortunate to have good lenders, but that doesn’t mean that we shouldn’t work with government to resolve issues that still face our industry in lending. In our market, even with the higher loan limits in FHA’s Title I home-only program, the loan limits are too low. Congress can help us, but we have to work with our elected officials and regulators to make sure that reforms go far enough and fast enough to help our industry.
Be it associations, or marketing, or whatever – we have to have a diversified approach to make sure that we get to where we want to go! We need to team up as much as possible with like minded leaders in the industry! Together, we can carry the day and make tomorrow brighter for us all.
It is Super Bowl time. You don’t win just with a defense; you have to have both a solid offense and defense to be a winner! If our line isn’t tackling those who try to penetrate, then we have to drill and improve our coaching and execution in order to win on game day. If we aren’t blocking for our quarterbacks, it is hard to move the ball down the field to score. Similarly, we have to block and tackle these key issues, press ahead offensively and defensively and if we do, if we use team work, we will win.
The bottom line for us is – we at Capital First Realty are staying the course, we believe in our great industry just as we believe in our great country! We are promoting new options and working to support new opportunities in the industry that allow us to serve potentially millions of people across America who may not otherwise ever own a home. We have to devote the time, energy and resources not only to our businesses but also to get and keep others engaged in the good fight to make manufactured homes a thriving part of the American housing landscape.
Richard J. “Dick” Klarchek, president and owner of Capital First Realty, standing in the Klarchek Information Commons at Loyola University in Chicago.