Yes, that headline is boldly akin to a well know candidate’s tag line; and just as America is great – but could be much greater, so too – manufactured housing is great and could be enjoying a much greater reputation, resale demand and new home sales than it currently does.
How? There are many things necessary. The first is to do what Republicans did after their 2012 loss for the Oval Office; and what business author Jim Collins refers to as looking at the cold, hard and brutal facts with clarity. Let’s start with a Jim Collins-style reality check.
A Small part of a Huge and Vital Industry
Housing is a trillion dollar a year industry, a close rival to the 1.1 trillion dollar automotive industry in size and scope. Yet manufactured housing, which MHI likes to point out was 21% of all housing starts for about 2 decades, today is only about 12% of all new single family housing starts.
Why is this so? Manufactured housing is more affordable than conventional housing and more affordable than most apartment rents, in a nation increasingly starving for quality, affordable living. Isn’t that an implied blue print for success?
Some quickly point to financing, which has a degree of accuracy. But it is frankly also a dodge from reality. The facts show that mainstream housing recovered to a degree that manufactured housing has not. So while we indeed ought to pursue Duty to Serve (DTS) implemented by FHFA and the GSE’s (see the Michael Parham, JD, article linked here) or getting the CFPB to relent – or Congress to enact Preserving Access to Manufactured Housing Act (HR 650/S 682) – financing alone is far from the issue.
So we must think multiple causes and parallel paths towards long term solutions that will yield a robust, sustainable MH market. By contrast, putting all of our eggs into one proverbial basket will limit our industry for years to come. The later is avoidable!
Here are some of the issues the industry needs to be pursuing daily:
- Improving the industry’s image through educational, events, marketing, public relations and media outreaches. If the industry was better understood and there was more demand, we would not be fencing with the FHFA, nor would the GSE’s be balking. Please see the latest video interview linked here that reveals how one of the industry’s largest and oldest lenders has made attracting banks and credit unions into MH lending a reality
- More best practices used by MH marketing and sales companies. As we’ve noted many times over the years in the Cutting Edge of marketing and sales blog, and in other articles and posts – compared to other industry’s, manufactured housing is harming its own potential by failing to properly forge this and the next generation of sales professionals. There are exceptions, such as Sunshine Homes’ recently launched initiative, linked here, which has been embraced warmly by those who have taken part in the start of their effort.
Better informing the mainstream media and policy advocates. This needs to be both attraction and response, as was the case with MHI’s Lesli Gooch’s recently published rebuttal to Doug Ryan’s article, which we dealt with at this link here.
- We also have to learn how to deal with the underlying reasons why the GSE’s and others are happy to loan on MH land lease communities, but are pushing back hard on making chattel loans for MH. Let’s be blunt. If there was more demand for MH – new and pre-owned – then prices would rise. One of the fears of the GSE’s is frankly the cost of repossessions, not to mention the regulatory regime in place that drove out giant U.S. Bank from the MH space. But the flip side is also revealed in such facts, that existing MH lenders have made chattel financing profitable. There are blueprints available for successful non-recourse personal-property lending on MH.
- MH Pros must learn to protect lenders from losses as much as possible, and that means a more vigorous remarketing effort must be part of the industry’s plans and efforts.
Multiple Tracks to Cure What Limits Manufactured Housing in DC, at the state and local level
One of my concerns – which I’m going to share with you right now – is that the industry-at-large is either silent or for some reason invisible on the issues that the 2016 presidential candidates are promoting. Where is MH in that mix? How will the election of this candidate over that one impact our industry? For some insights on that topic, please click here and read the entire piece, because its the final portion that deals with positions that are clearly going to impact MH; one way, or another.
Shouldn’t we avoid having another SAFE Act-style impact on MH? Now is the time to make MH voices heard with the candidates of both parties who are on the campaign trails.
This is a year of political upheaval, and that could be made to work in the favor or our nation and our industry. While we certainly ought to work to get Duty to Serve implemented by the GSE’s and Preserving Access to Manufactured Housing passed, focusing on that alone would be self limiting – and perhaps avoidably – self defeating. We need parallel paths that address the issues.
We also need to understand how we got here, and what it will really take to advance the causes we and millions impacted should care about.
HUD’s own stats suggest that today’s manufactured housing is the best quality, perhaps ever in our industry’s history. From entry level models to elegant, we have a great story to tell. Our sales are rising modestly, but not nearly to the levels that make our industry more attractive to lenders who Triad’s Don Glisson Jr says are asset hungry.
No Single Pro – no one Organization – will make MH Great Again
This doesn’t take everyone, but it does take enough savvy, forward-looking pros and other people of good will to pull together to raise the boats of all good, solid, long term MH players and affordable housing advocates. Putting our heads in the sands about why the GSE’s are pushing back will not make them embrace lending on our product. Embracing the difficult reality that we must energize ourselves as pros, our MH home owners and MHC residents – as the Florida Manufactured Housing Association is striving to do – and others keen on policy and advocacy, these are some of the ways to advance our industry.
We’ll build on this topic in the days ahead. What is certain today is that manufactured housing can be made great again in its sales volumes, but it will take some serious effort. It must start with each of us doing what we can in our market to make MH better understood, appreciated, desirable and popular! Respect and demand for our unique housing product can make MH great again.
We’ll look at this in more depth at the Tunica MH Show, during the March 22nd Education day. Our team will be at booth #74, please come by and get involved. ##
By L. A. ‘Tony’ Kovach.
