The MHCC Should Assert its Statutory Right to Review and Comment On HUD’s Expansion of its Regulations

MHARR logoPrior to the Manufactured Housing Improvement Act of 2000, the HUD program routinely used “interpretations” – developed behind closed doors without the involvement or input of the public or program stakeholders – to change the meaning of existing standards and regulations, and to impose new de facto requirements.

Because of these abuses, the U.S. Congress replaced the National Manufactured Housing Advisory Council – which could consider only “standards” – with an independent consensus committee that would have authority to propose and/or consider, and comment on, not just standards, but regulations, interpretive bulletins, and all changes to enforcement and monitoring, which can affect the price paid by consumers for manufactured homes.

After a multi-year process including hearings and a report to Congress by the National Commission on Manufactured Housing, and a series of congressional hearings and meetings including all program stakeholders, Congress, in the 2000 law, specifically empowered the MHCC to review all new and amended program regulations, including interpretations of those regulations (section 604(b)), and all changes to program policies, practices and procedures relating to the “standards, regulations, inspections, monitoring or other enforcement activities” (section 604(b)(6)).

Now, HUD is seeking to systematically strip the MHCC of this authority to review and comment on regulatory and enforcement matters.

  1. In February 2010, HUD issued an “interpretive rule,” without opportunity for comment by the MHCC or the public, that attempts to effectively read section 604(b)(6) out of the law, by limiting it to formal “rules,” as characterized by HUD.
  1. Now, as shown by the agenda for the October 2010 meeting, HUD is not brining any such regulatory matters to the MHCC, effectively attempting to read all of section 604(b) out of the law, even though one of the most significant issues facing the industry is the ongoing expansion of in-plant enforcement by HUD and its monitoring contractor.

Even though HUD is working to implement an unprecedented expansion of in-plant regulation, based upon a change in its entire focus, none of this expansion has been brought to the MHCC, even though new elements are still being developed, such as an open-ended “continuing improvement process” with no specific benchmarks for compliance or enforcement that would give HUD, the monitoring contractor and PIAs a blank check to control the manufacturing process and impose significant new compliance costs.

This unfolding effort to completely remake in-plant regulation, with major cost consequences for consumers, falls squarely within section 604(b) and 604(b)(6), but has not been – and is not being – brought before the MHCC. This, even though the continuing development of this system was discussed at the September 2010 HUD-COSAA meeting and will, presumably be addressed at a November 2010 “auditors” meeting.

This is precisely the type of situation where Congress wants consensus input to the Secretary of HUD. Instead, HUD is attempting to bypass the MHCC and is receiving advice from non-consensus forums where not all program stakeholders are represented and special interests are over-represented.

Having been created by Congress through statutory enactment, and using U.S. government funds for its operations, the MHCC and its members have an independent duty to follow the law in all its respects, even if HUD does not.

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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