MHARR Washington Update — Report and Analysis October 21, 2011

In This Report:                                    

MHCC Meeting — Exclusive Report and Analysis

MHCC Recomends Conditional Sprinkler Standard
MHCC Accepts Further Erosion of its Role
MHCC Recommends  de Facto Accessibility Standards
Summary and Conclusions
    

MHCC Accepts Conditional Sprinkler Standard

In a move that could ultimately open the door to an across-the-board federal fire sprinkler mandate, the Manufactured Housing Consensus Committee (MHCC) at its October 18-20, 2011 meeting, voted to accept and recommend to HUD a Manufactured Housing Institute (MHI)-proposed federal standard that “establishes the requirements for the installation of a fire sprinkler system in a manufactured home.”  The Committee voted to accept this proposal and thereby insert sprinkler criteria in the HUD Code, for the first time, despite now-undisputed evidence that the current HUD Fire Safety standards, without fire sprinklers, already provide reasonable life-safety protection as required by federal law.  

The vote in favor of the sprinkler proposal came just one day after the National Fire Protection Association (NFPA) was forced to concede that today’s manufactured homes are as fire-safe and even safer than site-built homes.  In the wake of an August 11, 2011 MHARR letter to NFPA disputing aspects of the data, analysis and conclusions of its July 2011 report on manufactured home fires, that organization — which has led the national campaign to mandate residential fire sprinklers — was forced to completely overturn the key finding of its report, that the fire death rate per 100,000 manufactured homes, is “13.25% higher than the rate for other one and two-family homes.”  This assertion was revised in an October 14, 2011 NFPA “errata sheet” — buried on the MHCC website and not distributed to or highlighted for Committee members in advance of the meeting — to state that “If all pre-HUD-standard manufactured homes were removed from the inventory, the fire death rate per 100,000 occupied manufactured homes would be estimated at 2.4[%] or within the range estimated for other one and two family homes.”  (Emphasis added).  Elsewhere, the NFPA report was revised to state that “If all pre-standard homes were removed from the inventory of occupied units, it is estimated that the manufactured home fire death rate would be comparable to the rate in other one or two-family homes.  (Emphasis added). The NFPA report, in its original form, already confirmed — as reiterated by direct NFPA testimony before the Committee  — that manufactured homes have fewer fires than other types of one and two-family homes and fewer fire injuries than other types of homes.

On the basis of this evidence, showing that the current HUD fire safety standards already achieve the reasonable fire safety required by federal law and that sprinklers only add needless costs that exclude purchasers from the market, MHARR reiterated that HUD should completely preempt sprinkler mandates in local jurisdictions. With the Committee’s vote, however, pressure on HUD to take a stand and broadly preempt sprinkler mandates based on the enhanced preemption of the Manufactured Housing Improvement Act of 2000 will now be unavoidably diminished. The “conditional” standard, if adopted — and if enforced by HUD, a major “if” in itself — would not  eliminate existing local sprinkler mandates, or prevent the adoption of new ones, but would only “manage” them, by federally prescribing an acceptable sprinkler system.  It could also easily backfire on its industry supporters (and consumers) by reinvigorating the broader campaign for residential sprinklers, leading to a surge in such local mandates.

Furthermore, as stressed repeatedly by MHARR, any federal sprinkler standard, even a conditional one, is a significant step forward for sprinkler advocates who continue to seek an across the board sprinkler mandate for all manufactured homes (as a counterpoint to failing efforts to implement the 2009 International Residential Code sprinkler mandate for all homes), putting them one step closer to their goal and opening the door for inevitable pressure on HUD’s Secretary to make the conditional sprinkler standard mandatory.

MHARR, accordingly, invited HUD, once again, in advance of the vote, to provide some assurance that the conditional sprinkler standard would not ultimately be expanded to become a mandatory across-the-board standard (after the previous program management stated that “of course“ HUD could not provide any such assurances).  The new acting program manager, however, stated that there can “never” be any guarantees.  

The end result of this activity, accordingly, will be to expose consumers and all segments of the industry — manufacturers, retailers and particularly communities, many of which do not have adequate water systems to support residential sprinklers — to the risk of even more local sprinkler mandates and, ultimately, an extremely costly across-the-board federal sprinkler mandate, all in order to standardize manufactured home sprinkler systems in a relatively small number of localities, principally on the West Coast.

MHCC Green Lights HUD End-Run On Expanded Regulation

The MHCC’s Regulatory Enforcement Subcommittee, with absolutely no other action items on its agenda due to HUD’s long-standing refusal to bring regulatory changes to the MHCC, could not muster the votes to advance a motion calling on HUD to bring an impending proposed rule — designed to institutionalize the Department’s ongoing and extremely costly expansion of in-plant regulation — to the MHCC for consensus review and comments prior to publication in the Federal Register.  Instead, the Subcommittee, with the acquiescence of all but one producer member, opted to simply accept HUD’s refusal to bring a new proposed regulation to the MHCC, further eroding the role and authority of the Committee under the 2000 law and inviting yet another damaging precedent among the many pushing the Committee ever-further toward the toothless status of the now-defunct National Manufactured Housing Advisory Council.

As was explained more fully in the October 2011 MHARR Viewpoint, published in The Journal of Manufactured Housing, HUD, in the wake of its March 2010 assertion that manufacturer compliance with its new program of expanded in-plant regulation would henceforth “not [be] voluntary,” announced at an August 17, 2011 Regulatory Enforcement Subcommittee meeting that the Department plans to publish a proposed rule on the role and activities of Primary Inspection Agencies (PIAs) that would effectively institutionalize that program without further consultation with the MHCC.

HUD initially proposed elements of such a “PIA rule” in 2008.  Consideration of those proposals, however, presented piecemeal to the Regulatory Enforcement Subcommittee, was halted by the Subcommittee in September 2008.  In 2009, HUD returned to the MHCC with a unitary version of a “PIA rule,” designed, among other things, to provide legal support for its expanded in-plant regulation.  In a formal September 2009 letter ballot, however, that proposal failed to gain an MHCC consensus, specifically because of the Department’s failure to provide the Committee with adequate justification showing the need for such changes, as well as its failure to provide concrete information regarding the cost-impact of its proposal, as was noted extensively in the Committee minutes.

Questioned during the Subcommittee meeting on August 17, 2011 about the “PIA rule” that it now plans to publish, HUD has stated that it will not be returning to the MHCC on this new proposed regulation.  This action, however, as MHARR has informed the Regulatory Enforcement Subcommittee, flouts the requirements of the 2000 law.  That law requires that the MHCC consider every proposed Procedural and Enforcement Regulation (PER) absent a declared emergency.  Further, the law requires the MHCC to consider the cost-impact and justification for any such proposed regulation.  The MHCC, however, has never been provided with such information by HUD.  

As a result, there are two possible scenarios, both of which violate the 2000 law – (1) if HUD’s new proposal is in any way different from the proposal that failed to attain an MHCC consensus in 2009, then it has never been considered by the MHCC and violates section 604(b) of the 2000 law; (2) if the new proposal is identical to the 2009 proposal, it still has not been properly presented to and considered by the MHCC, because mandatory elements required for MHCC consideration in accordance with the law – cost-impact data and a showing of justification – were never provided.  

HUD, in an attempt to mask the gravity of its actions, noted that Committee members could submit comments during the public comment period on the proposed rule, but this misses the central point of the MHCC and the 2000 law – that regulatory changes should be based on the consensus agreement of all program stakeholders.  But there is not – and never has been — an MHCC consensus on any changes relating to the role of the PIAs or an expansion of in-plant regulation.  

De Facto “Accessibility” Mandates Gain HUD Code Beach-Head

In another significant action, the MHCC approved two proposals regarding exterior door and hallway widths that were originally submitted to and recommended by the MHCC General Subcommittee as amendments to enhance the “accessibility” of manufactured homes.

Under one of the accepted proposals, at least one exterior door would need to have a minimum width of 32 inches, as compared with the current 28 inches.  Under the second proposal, the minimum hallway width for homes 14 feet or greater in exterior width would be increased to 30 inches from the current 28-inch requirement.

Although these proposals, as received from the General Subcommittee, were ultimately scrubbed of “accessibility” verbiage by the full Committee and instead characterized as “egress” improvements in the “rationale” statements forwarded to HUD, this likely will have little practical difference going forward, as the minutes of the subcommittee, where the proposals were initially considered and accepted, contain repeated references to the proposals as “accessibility” criteria, and the full Committee record is replete with written testimony — solicited by accessibility advocates serving on the Committee — specifically endorsing these changes as accessibility criteria.

Ultimately, as MHARR warned the Committee (and has consistently warned the industry), this de facto beach-head in the HUD Code for accessibility-driven mandates will spawn new and additional demands — upon the Committee and HUD — for more significant and much more costly changes to the standards, even though such features are already available to home buyers on an optional basis.  As if to prove the merit of this warning, upon the opening of debate over the 30-inch hallway proposal, a Committee member representing a consumer advocacy group immediately moved to amend the subcommittee proposal to require a minimum 36-inch hallway width for multi-section homes.  Although this amendment was eventually defeated by the full Committee on a 13-7 vote, it is a clear harbinger of the wave of further prescriptive and costly proposals that is likely to be unleashed by the Committee’s approval of these changes, despite the fact that such features are offered by the industry and fully available now as a matter of consumer choice.

Summary and Conclusions

The results of the October 18-20, 2011 MHCC meeting, while possibly characterized as positive by some, are anything but.  The major proposals accepted by the Committee (as detailed above) will pave the way for more extreme and costly demands in the future that could further erode the affordability and market niche of a product that is already in an extended decline.  The sprinkler proposal, in particular, opens huge risks for the industry and consumers, doing nothing to stop the adoption of local sprinkler laws, while offering only relatively minor “standardization” benefits for a few manufacturers in a relative handful of local jurisdictions (which is already available now through the NFPA 13D standard).  Similarly, the Committee’s failure to protect its remaining statutory authority regarding regulations — after successive HUD “interpretations” of the 2000 law that have already stripped it of much of that authority — stands to greatly diminish the role of the MHCC in providing a transparent consensus forum for the consideration and review of program regulations — one of its primary functions as envisioned by Congress.  

All of these actions point to even more problems ahead in the immediate future for a struggling industry and for actual consumers who, more than ever, need and want affordable home-ownership.  Recent HUD appointments to the MHCC have altered the fundamental balance of the Committee, filling it with narrowly-focused special interest advocates and activist members of collective groups, while denying collective industry voting representation on the Committee.  This creates a substantial imbalance in favor of the positions of HUD regulators and in favor of ever more expansive regulation with little or any regard for cost and affordability.

The fact that many in the industry, as well as consumers of affordable housing, currently do not seem to appreciate the potentially disastrous trajectory that the program is now on, is astounding to many knowledgeable observers in Washington, D.C. and around the nation.

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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