“The first step in solving a problem is to recognize that it does exist.”
– Zig Ziglar,
per Quote Fancy.
“I think Dad’s quote says it best:
“You cannot solve a problem until you acknowledge that you have
one and take responsibility for solving it.””
– Zig Ziglar,
“Many of our friends in the industry, including my friend Tony at MHLivingNews,
have questioned why MHI hasn’t made a strong rebuttal response to the PBS story.
There are good arguments that we should respond to every story, refute every
statistic, and make our case to the public.”
– Tim Williams,
prior Manufactured Housing Institute (MHI) Chairman,
President and CEO of 21st Mortgage Corporation, a Berkshire Hathaway brand.
“The entire [manufactured home] industry must focus on one goal – increasing the value
proposition to the homeowner. If we cannot offer our homeowners realistic value for their
housing dollar, how do we expect to compete in the marketplace. This means giving the
customer true value with their purchase, then keeping them happy after the sale. This means
ensuring the homeowner builds equity and wealth in their home. And finally, this means providing
for stable, viable resale market for when it is time to sell the home. Once the industry delivers this
value, the rest will fall into place naturally.”
– Chris Stinebert,
former President and CEO of the Manufactured Housing
Institute (MHI) in his farewell message to the industry.
“The manufactured housing industry did not become the legitimate and affordable housing of
today from the trailers of yesteryear THROUGH REVOLUTION, BUT RATHER THROUGH
EVOLUTION, thus establishing a long and rich history of success, which many in the industry
today tend to distort and/or forget altogether in order to fit what is to their own benefit.
We must not allow this to occur.”
– Danny Ghorbani,
retired engineer, former MHI vice president,
founding president and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR),
trade show manager, and periodic industry consultant.
A variety of third-party facts and research suggest that the manufactured housing industry could be producing and selling at retail hundreds of thousands of new HUD Code manufactured homes a year.
That claim is supported by MHI’s past president and CEO, by the current president and CEO of MHARR, by data-points in publicly traded companies that are routinely MHI members and from mainstream housing sources.
The graphic above from the National Association of Realtors (NAR) and the one below from Skyline Champion, with commentary added by MHProNews, serves to illustrate that point.
There are reams of positive third-party research which would support the public’s acceptance of manufactured housing. More on that further below, after the preface.
Preface. The operating premise of this report is set on the foundational notion that manufactured housing has been underperforming for years.
That underperformance is based upon the evidence that many of the industry’s problems are rooted in internal issues that can be traced to specific corporate, association and individual professional misses and/or misbehavior.
For those who may be among the new readers at this industry-leading trade publication that need more insights on the evidence for those points, the related reports at the end of this article and after the byline will provide ample grounds for those ideas.
It will be further noted that a recent public online debate on these issues was conducted and an intelligent and well-informed party with an opposing viewpoint threw in the proverbial towel. That professional did so having acknowledged that certain principles behind the case advanced here that the industry’s underperformance has had the effect of steadily consolidating the industry into a fairly small handful of larger brands that happen to routinely have ties to MHI.
So, the premise of this report is that the need for affordable housing is greater than ever. There is a report of a study that projects homelessness will grow by some forty percent post-pandemic. That estimate may be low, because there are over 36 million Americans who were thrown out of work in the past two months. A university researcher contacted MHProNews and expressed their belief that the industry is poised for historic opportunities, precisely because the need for affordable housing will be bigger than ever.
To understand the opportunities is not to neglect the severity of the pain and the rising death count that is soaring beyond 85,000 in the U.S. and far more globally. Indeed, an argument can be made that one eye must be focused on the causes and cures for the “Crimson Contagion” – known as the Wuhan Virus, COVID19, the CCP (Communist Chinese Party) Virus, coronavirus and so on. But the other eye must be focused on solutions, on the road ahead.
“During my time [as president and CEO] at MHI, I was often asked the same question, “What must happen for business to return – for manufactured housing to begin growing again?” My stock answer would usually start with ‘financing’ and end with a general comment about the need to bring ‘value’ to our customers.”
– Chris Stinebert, former President and CEO of the Manufactured Housing Institute (MHI).
If longtime readers my think that sounds a lot like what Mark Weiss, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) has said for years, they would be right.
MHARR’s argument could to a high degree be summed up in three big points, buttressed by other lesser but still important items. They are financing, placement and effective post-production promotion of the industry via a new trade group dedicated to that purpose. Let’s examine each one sequentially.
Separate from but in what may seem like an echo the Stinebert quote above, Weiss has argued that the Duty to Serve (DTS) manufactured housing – a finance related issue – has to be fully and properly implemented. Indeed, MHARR has been pressing on that topic, as the most recent item on their website reveals.
While MHI’s current CEO, Lesli Gooch was publicly arguing to allow Fannie Mae and Freddie Mac to reduce their commitment to the already paltry number of loans made under the purportedly failing MHI backed ‘new class of manufactured homes’ initiative they now call “CrossModTM” homes, David Dworkin President and CEO of the National Housing Conference – and a former VP for a Government Sponsored Enterprise (GSE or Enterprises) made a far pithier and better case to provide lending on all manufactured homes. The quote below sums up the essence of his argument.
So, Stinebert, Dworkin, Weiss and Ghorbani have all made the argument for more lending on manufactured homes. The irony is that laws – not just DTS, but other federal laws – are already enacted that obviously support that cause. By accident or design, what MHI has been arguing for – support for a failing-in-the-marketplace CrossModTM project – benefits only a handful of lenders in the largest corporate conglomerates.
The next topic MHARR has promoted is the full and proper implementation of the Manufactured Housing Improvement Act of 2000. Some have called that a ‘place to put’ zoning and placement issue.
“Place to Put”
Any number of companies that are MHI, MHARR or non-aligned with either national trade groups well know that zoning and placement issues have been among the thorniest problems facing the industry.
In fairness, MHI and MHARR – in conjunction with several state associations – worked together to enact the Manufactured Housing Improvement Act (MHIA) of 2000 (sometimes called the ‘2000 reform law’). A source with long ties to MHARR recently told MHProNews that while there were times that MHARR “fought hard” with MHI’s Chris Stinebert, they acknowledge that he could at times be reasoned with and was part of some useful joint efforts. MHARR sources have also told MHProNews that MHI has lost its “institutional memory,” when vice presidents with extensive HUD Code manufactured home industry experience left that trade group.
While on paper MHI still says they support the full implementation of “enhanced preemption” provision of the MHIA, oddly, they have no evidence for that language on their own website. Yet as an insider tipped MHProNews in late 2019, MHI used to have the following document on their website. Why is it now hidden or otherwise unavailable? What sort of revisionist history, posturing or other gameplaying is going on there?
An MHI associated consultant, Bill Matchneer, J.D. – who happens to be the first administrator for HUD’s Office of Manufactured Housing Programs (OMHP) – was quietly separated from his law firm not long after he made a statement in support of the full and proper implementation of the “enhanced preemption” provision of the MHIA.
Matchneer has used various phrasing to describe the importance of that part of the MHIA. Here is one example.
A visit to the MHARR website an putting the words “enhanced preemption” into their site search tool would reveal numerous ‘hits’ or results for that phrase.
Why is it that MHI has zero hits, while MHARR has so many?
To the Ziglar point at the top, one must first identify the source of the problem. MHI is arguably either inept, incompetent, toadies following orders from above or are corrupt. Because people like Lesli Gooch, their CEO and a Ph.D., and Mark Bowersox, their president are educated and intelligent people, it is hard to make the argument for the first two options. They likely don’t think of themselves as ‘corrupt,’ but sources from within MHI make it clear that the current and prior leadership do whatever the MHI executive committee tell them to do. If that harms the many while benefiting the few, that fits what longtime MHI award winning member Marty Lavin has said.
Pro-growth MHI member Curt Hodgson, co-founder and Chairman of Legacy Housing has said in public statements that there is a “place to put” challenge for the industry. Mary Gaiski, director of the Pennsylvania Manufactured Housing Association and an MHI affiliate has said that the problems regarding placement are getting worse, not better. It all begs the question. Why doesn’t MHI support in deed, not in word only, the full and proper enforcement of good existing laws?
On two of the three items that MHARR has said are necessary for industry growth – which are largely in keeping with Stinebert’s farewell message – MHARR’s actions match their words. Oddly or corruptly, why doesn’t MHI’s words match their deeds?
Which brings someone to the third point that Ziglar’s wisdom points toward. MHARR has said for years that there is a need for a new post-production trade group that they can partner with in order to break through the logjam from within the industry.
The Pandemic Has Opened Up Opportunities
Thomas Jefferson, who drafted the Declaration of Independence for the founders, penned this penetrating phrase: “and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.”
A battery of sociological or psychological research could not be more succinctly summed up than Jefferson did in those few words.
People tend to change patterns of behavior – their ‘suffering’ from ‘evils’ – most commonly only so long as “evils are sufferable.” For example, it may take a heart attack or other health crisis to cause someone to seriously diet, exercise and change their personal behavior. Similarly, in business and politics, it often takes a crisis to force people to do what was obvious for some time.
MHARR is a production trade group that has ventured into “place to put” and financing related issues only because MHI was purportedly neglecting those issues so badly. But that should be, based upon MHI’s own stated mission, the role of MHI. Why have they so badly failed at their own mission? Is it accident, design, or both?
Part Three of the Puzzle Needed to Advance Manufactured Housing to its True Potential
ut the third part of the puzzle beyond financing and zoning/placement issues is the need to have a post-production sector association that they could partner with to promote and defend the industry. MHARR produced a white paper on this issue in November of 2017. They made it clear that they wanted to stay focused on their core mission, but would support the creation of a new post-production trade group.
The year following that MHARR white paper, NAMHCO was formed by breakaways from MHI. There is an argument to be made that NAMHCO had the right idea, but the wrong execution of it. They hired a former MHI vice president to be their point person in Washington, D.C. Nevertheless, NAMHCO’s Neal Haney said the following.
Summing up to this point, there is ample evidence – starting with production/shipment data – that the industry is underperforming. Whatever one wants to believe about MHI and why they do what they do, one point is irrefutable.
MHI have not gotten their own stated job and goals done. Everything else are matters of detail and analysis.
So, the industry by the standards set by MHI’s Stinebert should be ever-mindful of the good of consumers. MHI and their National Communities Council (NCC) has a code of ethical conduct. Yet an MHI board member is among the sources that recently told MHProNews that there is no evidence that they have seen that MHI has taken any action against any company that has violated their own code-of-ethical-conduct provisions. Just more window dressing and posturing?
The fact that MHI’s Stinebert only made his comments on his exit message, before his purported non-disclosure agreement (NDA) kicked in speaks volumes. Stinebert’s farewell message is fully reported on MHLivingNews at this link here. While MHProNews would not concur with some aspect of Stinebert’s specifics, broadly speaking, what he called for then are as useful today. That is an example of the reasons why applying the principle of separating the wheat from the chaff is stressed here and on MHLivingNews.
Every person or organization makes mistakes. What happens after a mistake is discovered – that is what separates the white hats from the black ones.
Tim Williams, while still MHI’s chairman, ironically underscored some of the points made by MHProNews, MHLivingNews and others. Williams said the industry must tell its story because we have a good story to tell. That’s demonstrably true.
What Williams said – which included praise for MHProNews and MHLivingNews – is as important as what he did NOT say.
While MHI went about hiring a public relations (PR) professional and they eventually did indeed create ‘story telling videos.’
But at about the same time, MHAction magically appeared. Coincidence?
Per the MHAction website, “MHAction launched as an independent project in May of 2016 and is fiscally sponsored at [the] Tides Center.” As MHProNews and others have noted, the Tides backed MHAction has had Warren Buffett, Chairman of Berkshire Hathaway.
Rephrased, directly and indirectly Berkshire and Buffett money was backing both the ‘promotion’ of manufactured housing and the attacks on the industry too.
It was quite in keeping with what occurred during the effort ‘pass’ the MHI promoted Preserving Access to Manufactured Housing Act. Buffett money was on both sides of that effort too, as MHProNews has previously detailed almost a year ago.
Someone can call these uses of Buffett’s bucks ‘coincidences,’ but the penetrating insight of the late Senator William Proxmire arguably applies. It took years of research to follow the threads, the money, the evidence that has brought the industry to this pivotal moment in time.
So, What’s Next?
The industry already has a production association that has multiple decades of consistent effort in Washington, D.C. to support the industry in a manner that also protects consumers. That’s MHARR. That MHARR track record of consistency and periodic successes despite what is arguably MHI treachery is noteworthy.
As Weiss said in a details interview linked here, the missing piece of the puzzle in the battle to enforce good existing laws is a post-production association they can partner with. With even some from the retail, finance, communities, installers, transport, and other product/service providers pulling together as MHARR members have on the production side, a ‘white hat’ post-production trade group, the industry could tip the scales in Washington and in state capitals.
Why is that possible? Because the laws that are needed already exist. Note that MHARR reached out years ago to consumers, because consumers are a key element to what is needed. By accident or design, that dovetails with Stinebert’s observation.
The Big Picture…
Broadly speaking, a picture can be painted of the ‘big boy’ backers of MHI fighting to consolidate the industry and they do so by keeping the industry underperforming. They posture effort without producing the very results they claim to be working toward.
What is needed is to enforce existing laws, and to Protect, Educate, and Promote (PEP) the industry’s story.
MHProNews and MHARR clearly have certain ties, they are an advertiser here. That said, while we see much alike, there are nuanced and other differences. They speak for themselves, we speak for ourselves.
For example, they have no clue that this article is being written at all, much less that it is being written today. Another example is that MHProNews publicly opposed the nomination of Brian Montgomery to his new role at HUD, while MHARR publicly supported that effort. Those disclaimers noted, by and large, their voices and ours substantially see the industry in much the same way as what Chris Stinebert’s parting message illustrated. Why? The argument can be made that it is because they and we both seek the facts, evidence.
MHI has white hat brands in it. Even inside so-called ‘black hat brands’ there are white hat professionals who have periodically provided valuable tips and insights that have been useful for MHProNews to unravel the tangled web of deception that has arguably been woven by those in alignment with Berkshire Hathaway and Warren Buffett. Posturing effort that for years goes nowhere is the clear outcome.
But tens if not hundreds of billions of dollars could be sold at retail by manufactured housing independents if the industry only did what Stinebert, Ghorbani, Weiss, Dworkin and others have called for – a pro-consumer, yet pro-industry growth effort that would go a long way toward solving the affordable housing crisis in America.
The industry needs a new post-production association. Just as MHProNews has worked with MHARR to spotlight the good and reveal the problems, so too, MHProNews/MHLivingNews are ideally poised to support the effort for a new post-production trade group. The other trade media and bloggers don’t even pretend to hold MHI accountable, which to Kurt Kelley’s credit, he has publicly admitted.
That proposed new trade group should have a very focused mission.
- It should support the full implementation of existing laws.
- It should also effectively support the proper understanding of manufactured homes by the general public. It can tap into potentially hundreds of thousands of largely happy homeowners.
- P.E.P. should be woven into everything that they do.
But that proposed post-production trade group should make a bright line distinction between the industry’s black hats and white hats. A code of ethical conduct should be a part of that proposed post-production association or alliance. It could be established as for-profit or non-profit, there are arguments for or against either option.
But until the purported corruption within the industry is understood by the public at large, while understanding that said black hat behavior is generally limited to a few specific brands, nothing much will change.
As founding father Jefferson put it, “and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.”
It is Warren Buffett who said that you can’t make a good deal with a bad person. That principle applies to organizations too. It is hard to make the argument that MHI has been good at much of anything other than ongoing consolidation through limiting industry sales and performance. Rephrased, Lavin is right. Big boys benefit at MHI, while most others suffer, wittingly or not.
The COVID19 pandemic has revealed many things. One is just how misguided American policy has been toward China. But as author and the late President Ronald Reagan speechwriter Pat Buchanan recently said, China’s current economic and military power and threat were made in the USA.
Berkshire Hathaway, Warren Buffett, Bill Gates, Microsoft, the Gates Foundation, Michael Bloomberg and a number of now huge conglomerates and uber billionaires have supported for years shipping American businesses and jobs into Communist China. You can’t make a good deal with a bad partner. It was a flawed foreign policy and trade principles supported under both Democratic and Republican Administrations.
The tragedy of the Crimson Contagion pandemic called COVID19 is precisely the wakeup call that the nation and our industry needed. The time to ‘abolish the forms’ to which our industry has become ‘accustomed’ is now.
Let the black hats support MHI all that they want to, but let the white hats of the industry forge a new post-production alliance that can work with MHARR and all others of good will toward the advancement of a brighter future for our industry.
Affordable housing will be need now more than ever. The correct type of post-production trade group could make that happen in relatively short order.
Conclusion and Summing up.
- Expose what is wrong candidly in manufactured housing, by drawing a bright line distinction between black hat brands and white hat ones.
- Promote what is right about manufactured housing by enforcing good existing laws.
- Protect, educate and promote (P.E.P.) the truth about modern HUD Code manufactured homes in a manner that is consistent with consumer protections while robustly advancing the enormous opportunities to profit in an ethical fashion.
The defenders of the status quo have little to show for millions spent in recent years. It is time for a new post-production operation to be formed that will support robust, ethical, sustainable growth.
In the folklore of the high middle ages there are stories that use the notion, “All for One, One for All” told in the context of ‘white knights.’ That ‘white knight’ concept is illustrated in the featured image at the top of this article. A truly white knight type post-production trade group could be the key to achieving 500,000 or more new HUD Code home shipments a year. That would be over a 500% increase in business. That’s a lot of opportunity.
The links above and below the byline are relevant to this topic. That’s a wrap on this installment of “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
The text/image boxes below are linked to other reports, which can be accessed by clicking on them.