Washington, D.C., November 9, 2010 – In an action reflecting the prevailing mood of the country toward efforts to correct the nation’s struggling economy, the Board of Directors of the Manufactured Housing Association for Regulatory Reform (MHARR), in the wake of the November 2010 midterm elections, has recalibrated the Association’s policies and agenda in an effort to fully engage and aggressively combat the industry’s persisting twin problems of scarce consumer financing and regulatory excesses. The Association has been directed by its Board to confront these two major issues by substantially raising the profile of the federal manufactured housing program and consumer finance laws, rapidly intensifying its approach to relevant federal agencies, the Administration and the new Congress regarding these matters, and, ultimately, by pursuing other remedies, if necessary.
Faced with one of the worst economic downturns in the nation’s history, the manufactured housing industry, and the millions of mostly lower and moderate-income American consumers of affordable housing that it serves, stand today at a crucial crossroads. While all sectors of the housing market have been impacted by the financial crisis and the weak economy, the manufactured housing industry – the only segment of the housing industry comprehensively regulated by the federal government – remains mired in a decline of unprecedented duration and severity.
Over the past 12 years, production and sales of manufactured homes have fallen by a shocking 86% – from nearly 400,000 homes in 1998, to a meager 49,789 homes in 2009. And while the site-built housing market has contracted as well, that decline has been nowhere near as prolonged (dating to 2006) or as severe as that of the manufactured housing industry, indicating that there are factors and forces beyond the general economy and the condition of the broader housing market that are impacting and impairing the stabilization and recovery of the manufactured housing sector.
Thus, while Congress, on a broadly bi-partisan basis, has taken major steps designed to help the manufactured housing sector recover from this downward spiral and return to prosperity, the industry and its consumers are faced with huge obstacles placed in their path by federal regulators – with the cooperation and support of a segment of the industry – that have thwarted the will of Congress and have prevented any kind of appreciable recovery.
In the area of finance, where private and public consumer financing for manufactured homes has become nearly unobtainable largely due to federal policies, federal regulators are undermining the “duty to serve” mandate of the Housing and Economic Recover Act of 2008 (HERA) by attempting to eliminate from its reach the vast majority of manufactured housing loans. Regulators, at the same time, are undermining HERA-based improvements to the Federal Housing Administration (FHA) Title I program by placing extreme conditions on the securitization of new FHA loans that can be met by a couple of large industry finance companies, but effectively exclude new loan originators needed for industry recovery and growth.
In the production arena, HUD regulators continue efforts to systematically dismantle reforms legislated by Congress in the Manufactured Housing Improvement Act of 2000 that were designed to increase the transparency and accountability of the program and subject both standards and regulations to an open consensus process. Instead, HUD regulators, with the cooperation and support of some in the industry, have sought to turn the Manufactured Housing Consensus Committee (MHCC) into a meaningless forum, while once again developing and imposing unnecessary, intrusive and costly new regulatory procedures behind closed-doors with selected participants.
Thus, whether it involves finance or production, a cozy relationship has emerged between federal regulators, and a segment of the industry, that benefits the industry’s largest businesses at the expense of smaller competitors (which are disproportionately affected and harmed by higher regulatory costs, as proven by the U.S. Small Business Administration) and, more importantly, growing numbers of American consumers who are excluded from the manufactured housing market due to increased regulatory compliance costs. Thus, it is no surprise that while the rest of the industry remains mired at extraordinarily low production and sales levels, the industry’s largest producer, as reported by the Wall Street Journal, has “acquired weaker rivals and become the dominant U.S. maker of manufactured homes, with a market share estimated at 45%.”
Consequently, MHARR’s new approach and direction will be designed to uncover, expose and address all the matters that have contributed to a seemingly endless decline, which has had a devastating impact on the industry’s small businesses and the mostly lower and moderate-income American consumers of affordable housing.
The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.