MHVillage Releases MHInsider Magazine ‘State of the Industry’ Edition for July/August
The inaugural issue of the MHInsider magazine “State of the Industry” edition has been mailed to homes and offices and is available in digital magazine format.
The MHInsider™ is the leading source for news and information in the manufactured housing industry.
The July/August magazine edition takes a special deep dive into the news, events and industry trends throughout manufactured housing. The latest magazine includes…
Q&As with manufactured housing industry leadership
A sit-down interview with HUD Sec. Ben Carson
The differences between CHOICEHome℠ and MH Advantage®
Advice from industry experts
What’s trending in fee-based management
A run-down on rent control
New industry infographics and much more
The MHInsider Magazine “State of the Industry” edition caters to professionals in manufacturing, sales, finance, community ownership/management, insurance and investment.
‘State of the Industry’ is 100 Pages of Manufactured Housing News
MHInsider Magazine’s “State of the Industry” edition is MHVillage’s largest edition to date. It contains industry coverage from California to Washington D.C., brought to manufactured housing professionals via a dozen writers and editors.
Publisher Darren Krolewski, co-president of MHVillage/Datacomp, points to industry progress made evident through enhanced marketing efforts, increased engagement with federal housing officials and new lending programs that increase options for middle-market buyers.
“Needless to say, these are only a few things to be excited about as an industry,” Krolewski states. “In this, our first State of the Industry edition of The MHInsider, we focus on the progress of manufactured housing as some of the leaders in our industry share their thoughts on what we’ve accomplished and what to expect for the remainder of 2019 and beyond.”
The Federal Housing Finance Agency released a 128-page report on the progress that Fannie Mae and Freddie Mac have made in addressing affordable housing concerns. Each of the entities exceeded goals for the purchase and securitization of land-home loans, the report states.
Freddie Mac and Fannie Mae have been in conservatorship since 2008, far longer than anticipated at the time. Each of the entities is planning to exit government oversight, which also is a stated goal of both the FHFA and the White House.
The share of 2018 loans purchased by the Enterprises for low- to moderate-income borrowers in the manufactured housing market was higher than in previous years.
In addition to increasing the number of land-home loans, Fannie and Freddie each independently engaged with industry stakeholders to inform the development of pilot criteria and standards for chattel financing programs that will increase support of loans to home-only borrowers.
The organizations used three-year historical averages for loan purchases to inform the 2018 goals. Below is a comparison of Enterprise baselines, goals and actual loan purchases.
FHFA Director Mark Calabria speaks during the Innovative Housing Showcase in Washington, D.C., in June.
Fannie Mae – Land-Home Loans
Three-year average baseline: 8,072
Year 1 Goal: 8,750 loans
Year 1 Purchases: 12,604
Freddie Mac – Land-Home Loans
Three-year average baseline: 2,985
Year 1 Goal: 3,075 loans
Year 1 Purchases: 3,601
The numbers show that Fannie Mae finished 2018 44% ahead of its goal, and Freddie Mac completed the year 17% above its goal.
“As both Enterprises entered 2018, they had insufficient capital reserves to absorb losses due to the deficit at the end of 2017,” the reports states. “However, during 2018, the Enterprises generated sufficient income to allow each Enterprise to re-establish the agreed-upon $3 billion Capital Reserve Amount.”
FHFA Director Comments on Secondary Loan Markets
FHFA Director Mark Calabria commented on his then-pending recommendations to Congress during the Innovative Housing Showcase on the National Mall in Washington, D.C. in June.
“One of the things I will be asking Congress to do is to authorize me to issue additional charters so that if we can have more than just Fannie and Freddie, we can have other competitors come to the marketplace that’ll push Fannie and Freddie to be leaner and meaner and more aggressive and more innovative, but also to bring new thinking,” Calabria said.
“How do we make sure it’s not just Fannie and Freddie, but how do we get banks more involved? How do we get insurance companies more involved? How do we get other types of lenders more involved? It really has to be a variety of different processes that bring this, so that at the end of the day lenders who are successful are successful because they have great management, they have great execution, and they have great innovation,” he said. “Not because they’ve got rules and regulations stacked in their favor.”
From The Manufactured Housing Institute
The Manufactured Housing Institute, which represents all aspects of the factory-built housing industries nationwide, issued a “Housing Alert” following the publication of the report, which has been delivered to Congress with suggestions for ending government sponsorship and generally strengthening the Enterprises.
“As Congress considers reforms to the housing finance system, MHI will continue its advocacy efforts to ensure that manufactured housing is included in discussions and deliberations,” MHI state in its alert. “In February, MHI joined in an industry letter in support of housing finance reform, with MHI successfully adding language to the letter singling out manufactured housing as an important component of any government-sponsored financing effort. MHI also offered recommendations about housing finance reform to the Senate Banking Committee for retaining a Duty to Serve or some other directive for any government-sponsored enterprises to serve manufactured housing.”
Earlier this year, Oregon’s governor signed a bill into law imposing rent control across the entire state. The law, which went into effect the day it was signed (Feb. 28), is the first statewide rent control measure in the country. But it might not be the last.
Lawmakers in several states are aggressively trying to push rent control bills through their legislatures. If they succeed, it could have serious consequences for the manufactured housing communities in their states.
Though Oregon is the only U.S. state capping rents with a single, statewide standard, it’s not the only state that imposes rent control. According to the National Multifamily Housing Council, 17 states do not preempt their municipalities from enacting local rent control policies. However, in only four of those states are municipal governments actively capping rents. Those states are California, Maryland, New Jersey, and New York. In fact, during June, the New York state government passed a rent control bill that included rent caps and eviction protections for residents of manufactured homes. The remaining states prohibit or preempt rent control.
Why Rent Control?
The push for rent control is a reaction to the nation’s affordable housing crisis, which has two core causes. First, there’s the decline in production that started during the Great Recession. Second, the prevalence of student-loan debt burdens most first-time homebuyers today, according to Frank Bowman, executive director of the Illinois Manufactured Housing Association.
Municipal governments compound the problem with exclusionary housing policies, Bowman said. In order to prop up existing property values, they often restrict new housing — including manufactured housing. Also, local governments tend to develop office parks and retail spaces without housing needed by the workers those new businesses attract.
According to Bowman, the appeal of rent control is that it sounds like a simple solution. “If you think your rent is too high, just pass a law capping it.”
But the consequences of rent control are complicated. An abundance of national studies — from both sides of the political spectrum — make clear that rent control does more harm than good.
For starters, it limits the supply of affordable housing. Residents of rent-controlled housing tend to stay where they are, keeping that housing off the market. To make up for lost profits, owners of rent-controlled housing tend to raise rents on their non-rent-controlled housing. Or they turn rent-controlled housing into condos. Would-be renters end up competing for a shrinking market. And a shrinking market tends to raise prices.
“Economically, rent control makes no sense,” Sheila Dey, executive director of Western Manufactured Housing Communities Association, said. “But the problem is political. Economic arguments don’t work with a city council that has angry residents in front of them.”
Oregon May Be A Test Case
Oregon’s new law applies to apartments, manufactured housing communities, and other income-producing properties statewide. It caps rent increases at an annual rate of 7%, plus the Consumer Price Index (CPI). Since Oregon’s CPI is 3.3% in 2019, that makes for a rent ceiling of 10.3% for the year — a “very generous” limit, considering the average annual rent increase for the state’s manufactured housing lots is around 3.5, said Chuck Carpenter, executive director of Manufactured Housing Communities of Oregon.
But Carpenter believes the generosity is deceptive. It will be easy for future state governments to lower the rent limit — and he sees no reason why they wouldn’t.
The Oregon Legislature battled over rent control for two decades. But a recently elected Democratic supermajority pushed the new bill through both chambers “like a freight train”. And that was the hard part. Now that the bill is law, lowering the cap should be easy, Carpenter said.
“We will all regret the day they passed this bill,” Carpenter said. “It’s clearly a signal that this state is very hostile to property rights and landlords.”
Apartments Lead the State Conversation
There are roughly 1,200 manufactured housing communities in Oregon, containing about 60,000 lots. However, the push for rent control was driven by drastic rent increases in urban apartments. Droves of people are moving to Oregon’s larger cities, particularly Portland, contributing to the affordable housing crisis, Carpenter said.
Rent control proponents seem to think the new law will lead to the growth of more housing in the state, but Carpenter disagrees.
“In the long run, this will have a chilling effect on investors wanting to provide rental housing,” he said.
Carpenter thinks Oregon will become a test case. He knows other states are contemplating rent control measures of their own, and are watching his state closely. Manufactured housing groups in those states have no choice but to fight back, he said.
“My advice for other states is to keep fighting, keep educating legislators,” he said. “I hope other states do not adopt these policies. It’s a huge mistake.”
Photo courtesy of UMH Properties.
Illinois Rent Control, Chicago and Elsewhere
Like the rest of the country, Illinois is in the grips of the affordable housing crisis. The most consequential effects are being felt in Chicago, where rents are skyrocketing and neighborhoods are gentrifying, forcing many long-term residents to move.
In response, Chicago residents have pushed legislators to rescind a statewide ban on rent control and establish regional boards to cap rents. That effort was defeated in the Illinois Legislature in March. Bowman said a coalition of realtor, apartment owner and property owner associations, including IMHA, made “great headway”. The coalition was able to educate state legislators about the ill effects of rent control. But Chicago’s presence looms large in the state legislature. And rent control proponents will likely try again, Bowman said.
To Bowman, the obvious solution to the state’s affordable housing crisis is a greater supply of affordable housing. The greater the supply, the greater the chance that rents come down. Manufactured homes can be a crucial part of that solution, but they struggle with an image problem. Bowman attended a city council meeting earlier this year where business leaders said their workers need houses in the $100,000 to $150,000 range.
“We’re all over that. That’s our niche,” he said. “But that city excludes factory-built housing.”
Washington State to Heat Up in 2020
Statewide rent control in Oregon is a “disaster” for the housing business, said Craig Hillis, executive director of Manufactured Housing Communities of Washington. And because Oregon is right next door, there’s a good chance rent control will rear its head in neighboring Washington state.
The state of Washington currently preempts rent control, but Hillis expects a vigorous statewide debate on the topic in 2020. In the past year alone, the Washington Legislature has considered 106 housing-related bills. The impetus of all the activity is the affordable housing crisis, Hillis said.
The top impediment to affordable housing in Washington is the Growth Management Act, a statewide zoning regulation that strictly limits development. Competition for usable land is fierce, and manufactured housing, which doesn’t generate as much income as apartments or condominiums, is at a disadvantage, Hillis said.
“The Growth Management Act is a 20-year-old provision,” Hillis said. “It needs to be updated.”
What’s Happening in New Jersey
Rent control used to be a hot topic in New Jersey, but the controversy has waned over the years. Fewer municipalities cap rents compared to a decade ago, said Jane Chady, executive director of the New Jersey Manufactured Housing Association.
Chady couldn’t explain the decline but expressed her own opinion about rent control.
“If you study rent control long enough, you learn it doesn’t work,” she said.
Chady doesn’t think what happened in Oregon could happen in New Jersey — at least not to the state’s manufactured housing industry, which is dominated by communities.
“We’re an extremely tenant-friendly state,” she said. “Our rents are low compared to apartment houses. Nobody’s looking at manufactured housing here and targeting it for rent control.”
New Jersey isn’t immune to the affordable housing crisis, of course. It’s an extremely expensive state to live in, but its municipalities are obligated by law to emphasize affordable housing in their zoning regulations. The state also is considering a workforce housing bill to address the affordable housing crisis, Chady said.
“If we can get a little bit of zoning relief through this workforce housing bill, it’ll be a better solution than rent control,” she said.
Colorado Rent Control
An attempt to repeal the statewide rent-control prohibition and allow local jurisdictions to adopt their own ordinances died in the Colorado Legislature April 30.
Tawny Peyton is the executive director of the Rocky Mountain Home Association (Colorado’s state association) and the Utah Housing Alliance.
She said the latest push for rent control started before the 2018 midterm elections. Candidates for public office heard about the need for affordable housing on the campaign trail, and decided rent control was the best solution.
Peyton said the attempt was defeated with help from the state’s realtor, apartment, lender and manufactured housing industries.
But she expects another push for rent control next year.
To combat that and other attempts, she said the industry needs to be more proactive. It needs to focus more on communication and education rather than reacting to every bill. The public and lawmakers need to know that, in the long run, rent control does more harm than good, she said. They need to learn alternative ways to solve the affordable housing crisis, like relaxing zoning rules and boosting lending in the industry.
And there’s the perennial need to improve the manufactured housing industry’s image. The effort goes on to rid people of the stereotypes they hold about mobile homes.
In the other state she serves, Utah, Peyton said a push for rent control was possible, but so far state officials are looking at other ways to solve the affordable housing crisis.
California and Its Patchwork of Mandates
Statewide rent control like Oregon’s is bad for the industry. But at least it hits everywhere and everyone the same way, said Thomas Casparian, an attorney and partner with the Cozen O’Connor law firm.
Without the imposition of uniform rent control, you get a patchwork of different policies (or none at all) in every city and county. That’s the situation in California, Casparian said.
Patchwork rent control can distort the manufactured housing market in various ways. Local caps can limit annual lot rent increases to a paltry amount, which can drive the value of the homes sitting on the lots to “ludicrous” heights. Communities in rent-controlled municipalities are selling new manufactured homes for $400,000 and more, said R.C. “Dick” Bessire, president of Bessire & Casenhiser, a property management company. Bessire said he knows of an old beachfront mobile home in Oxnard that’s selling for $700,000 — because its lot rent is so low.
The State’s Focus on Manufactured Housing Controls
According to Dey, WMHCA’s director, 110 of California’s cities and counties apply rent control to manufactured housing communities within their borders. This is compared to only seven municipalities that apply rent control to apartments. Rent control in those 110 municipalities runs the gamut from full vacancy control (capping rents even after a tenant moves out of a home) to full vacancy de-control (allowing the landlord to set rents for new tenants at market value).
California’s Costa-Hawkins Rental Housing Act limits local governments’ ability to enact rent control. But the act doesn’t apply to manufactured home communities. This makes the state’s manufactured housing industry particularly vulnerable because it can’t make a common cause with other rental industries, Casparian said.
Last November, California voters rejected a ballot initiative seeking to repeal Costa-Hawkins and expand rent control across the state. There might be more rent control legislation introduced in the near future, Dey said.
“There’s going to be a real fight,” Bessire said. “The governor is promising statewide rent control.”
California’s manufactured housing community owners might prefer statewide rent control to the current patchwork approach, however — if the statewide law ties rent increases to CPI and includes vacancy decontrol, Bessire said.
Register for Educational Workshops, Networking, Factory, and Home Tours
MHI’s National Communities Council (NCC) is expanding its reach with the NCC Western Summit, scheduled for Aug. 14-16 at the Wild Horse Pass Hotel & Casino in Chandler, Ariz., near Phoenix.
This new event in the western United States will feature education, networking, and exhibitors geared to community managers and smaller owner/operators. Join others within the manufactured housing industry for three days of community insights, educational workshops, ongoing engagement, and a local plant tour. Hear leaders in the industry discuss the state of the market, resident relations, effective marketing and much more.
What the Western Summit Has to Offer
Mark Bowersox is MHI’s executive vice president for industry relations.
“The NCC Western Summit is a new event designed with small community operators and community managers in mind,” Bowersox said. “It begins with a tour of a manufactured home production facility where attendees will see homes in every phase of construction. From there, it’s a day and a half-filled with training sessions on measuring customer satisfaction, maximizing positive customer experiences and fair housing.
“Our speakers will also share big-picture issues such as the state of the industry and MHI’s showcase of manufactured homes on the National Mall in Washington, D.C.,” Bowersox said. “Of course, there will be plenty of networking opportunities to talk with peers or meet with exhibitors and sponsors. There’s no other event of this caliber in that part of the country.”
The Western Summit’s educational workshops have been curated and created with manufactured home community managers and operators in mind. They will address the resident experience, customer satisfaction, fair housing and much more.
The factory tour will be held Aug. 14 at Skyline Champion’s Chandler, Ariz., production facility. Attendees will get a description of the plant’s construction process. They will see manufactured homes in every stage of production, and watch them go from a bare chassis to a fully built home. At the end of the tour, attendees will walk through a completed home.
Register for MHI’s NCC Western Summit in Chandler, Ariz.
The Western Summit will have limited spots for attendees and potential exhibitors. Early bird registration ends July 23 — cost is $229 for MHI members and $329 for non-members. Regular registration rates are $299 for MHI members, $399 for non-members. Hotel rooms cost $99 per night, plus tax, through July 23.
A new Clayton Homes model built during 2018 in Maynardville, Tenn., is shown during The Louisville Show in January 2019.
18 Clayton Homebuilding Facilities Get ENERGY STAR® Certified Homes Market Leader Awards
Clayton Home Building Group, one of America’s largest off-site and on-site home builders, has been recognized by the U.S. Environmental Protection Agency (EPA) as a 2019 ENERGY STAR Certified Homes Market Leader for its outstanding commitment to energy-efficient new homes through the ENERGY STAR program in 2018 at 18 of the company’s home-building facilities dedicated to constructing off-site built homes.
The Market Leadership Award recognizes the facilities’ continued commitment to providing homebuyers with ENERGY STAR certified homes nationwide.
Clayton Home Building Group
Clayton’s home-building facilities recognized in the manufactured housing category include:
Appalachia
Buckeye
Maynardville
Nashville
Oxford
Perris
Rutledge
Savannah
Sulphur Springs
Waycross
Albany
Giles
Hermiston
Richfield
Rockwell
TRU Belton I
TRU Halls
TRU White Pine
“We are truly honored to have 18 of our home-building facilities receive this award,” said Clayton Home Building Group Vice President of Engineering and Design Mark Ezzo. “Our goal is to continue to find ways to help our homebuyers save money by utilizing energy-efficient building practices and materials that can reduce the cost of utilities, while also helping the environment.”
In 2018, over 3,000 Clayton off-site built homes were ENERGY STAR certified. ENERGY STAR aligns well with one of Clayton’s guiding principles, that of “we will leave the world and company a better place“. The certified homes include location-specific requirements for construction and installation.
Energy Star Home Features Include:
Airtight ducts
Efficient heating and cooling equipment
Increased insulation
Efficient hot water heaters
Low emission windows
A new Clayton home at The Louisville Show in January 2019, built during 2018 at the Maynardville, Tenn., facility.
Clayton’s mission is to provide quality, energy-efficient homes and appliances for families across the nation. The company’s 40 home-building facilities continue to push the boundaries on attainable housing for all income brackets using the best off-site construction methods. Every Clayton home-building facility is ISO 14001 registered for green construction practices, and together in 2018 they diverted over 21,000 tons of waste from landfills through recycling and waste management.
Each year, the ENERGY STAR Residential New Construction program presents Market Leader Awards to outstanding partners who have made important contributions to energy-efficient construction and environmental protection by building or verifying a significant number of ENERGY STAR certified homes and apartments, or by sponsoring a local program that supports these activities during the previous year.
More than 98,000 ENERGY STAR certified single-family homes and multifamily units were built in 2018; nearly 2 million homes since 1995.
JLT Market Reports Available for Immediate Download
Datacomp has published its July 2019 manufactured home community rent and occupancy reports for Colorado, Delaware, New Jersey, and Wyoming.
JLT Market Reports provide detailed research and information on communities in nearly 180 major housing markets throughout the United States. These include the latest rent trends and statistics, marketing programs and a variety of other useful management insights.
Datacomp publishes the JLT Market Reports and is the nation’s #1 provider of market data for the manufactured housing industry. JLT Market Reports are recognized as the industry standard for manufactured home community market analysis.
July 2019 manufactured housing market data published in JLT Market Reports for Colorado, Delaware, New Jersey, and Wyoming include information on 241 “All Ages” and “55+” manufactured home communities.
Altogether, the reports on the four states’ manufactured home communities include data representations for 63,279 homesites.
“The four states represented in the July 2019 publication of the JLT Market Reports are recording growth in occupancy and average adjusted rent across the board, except for one small dip in occupancy rate in the Wyoming market,” Datacomp Co-President and Chief Business Development Officer Darren Krolewski said.
More About JLT Market Reports
Each JLT manufactured home community rent and occupancy report from Datacomp has detailed information about investment-grade communities in the major markets. The information includes:
Number of homesites
Occupancy rates
Average community rents, and increases
Community amenities
Vacant lots
Repossessed and inventory homes, and much more
JLT Market Reports include management insights that rank communities by number of homesites, occupancy rates and highest to lowest rents. Established reports show trends in each market with a comparison of July 2019 rents and occupancy rates to July 2018, as well as a historical recap of rents and occupancy from 1996 to present date in most markets. Some reports include information on rent control and next increase, if applicable.
Each fully updated report for mobile home communities is a comprehensive look at investment-grade properties within a market, enabling owners and managers, lenders, appraisers, brokers and other organizations to effectively benchmark those communities and make informed decisions.
James Dougherty, developer and owner of The Bluff on Manistee Lake in Michigan, provides a presentation during the 2018 Networking Roundtable on measures that go into opening a new community.
Networking Roundtable Returns to The Alexander in Downtown Indianapolis
The 28th Annual Networking Roundtable for manufactured housing professionals will take place at The Alexander in Indianapolis, Ind., Sept. 8-10.
The Networking Roundtable is the ideal gathering for industry professionals to receive a hands-on, timely education on every aspect of operating or property management for a manufactured housing land-lease community.
Programming for the gathering includes presentations, panels and discussions with some of the leading professionals in the business. A keynote address from U.S. Senator Todd Young, from Indiana, will get business underway the opening morning of the Roundtable.
“Senator Young being in Indianapolis to speak to our industry is yet another clear sign of the elevation of manufactured housing in D.C. as a solution toward solving the affordable housing crisis in our country,” event organizer Erin Smith said. “We appreciate the Senator’s willingness to appear at the 28th Networking Roundtable, as well as his continued support for our industry and the Indiana workforce that is so vital to what we do.”
Jose Villareal, left, and Ben Navarro, of Fannie Mae, and Griffin Cotter, from Freddie Mac, field questions from Roundtable attendees.
Networking Roundtable Preliminary Schedule
Attendees of the 2018 Networking Roundtable in Indianapolis take in a presentation from Joe Stegmayer, an industry veteran and executive for Cavco Industries.
Education and professional networking at the Roundtable will feature topical talks on community management, finance, sales, technology, and community acquisition. Speakers include Dave Reynold of Impact MHC, Michael Callaghan of Four Leaf Properties, Paul Bradley of ROC USA and event founder George Allen of EducateMHC.
In addition to the two days of official programming, Allen will greet early arrivers for an open conversation and networking reception on Sunday, Sept. 8. EducateMHC also will host a Manufactured Housing Manager certification class on Sept. 11. Registration for the MHM class is separate from event registration.
A full schedule for the 28th Networking Roundtable will be announced in mid-summer.
For the third consecutive year, the Networking Roundtable will be held at The Alexander in downtown Indianapolis. The Alexander offers premium conference space, as well as ideal accommodations for manufactured housing professionals traveling to the event.
Manufactured Home Community Upgrades Benefit the Industry as a Whole
One of the most difficult issues facing the manufactured housing industry today is the presence of many older, unattractive land-lease communities on the nation’s landscape.
Upgrading and improving these communities is important for several reasons. From an industry perspective, the negative impact these communities have on efforts to rezone land for future projects is legendary.
The “trailer park” image of some of these older communities often is the biggest argument against proposed modern community developments. From an investor perspective, many of the older developments are losing value because of their inability to accommodate newer, larger homes. And the negative image created by the aging asset is damaging for everyone.
How Do We Go About a Community Makeover?
Level I Renewals
So, how do we go about making a change for the better in these older communities?
The first step in the process is deciding the extent of the makeover. The activity could be as simple as a cosmetic enhancement of the existing facility. Or it could be as complex as a complete retrofit. This would require the removal of the existing homes and a planned redo of the community and infrastructure, which would accommodate newer, larger homes. This initial decision will determine the course of the actions to follow.
For decades, our firm has prepared upgrade documents for many projects, large and small, across the country. All of the projects have begun with a thorough assessment of the community. The first step in the process is the accumulation of the most complete maps and information on the community possible. In many cases, this involves digging deep into office closets, calls to the design engineer or planner or trips to the municipal or state agency to acquire archived copies of the approved construction plans. Conversations with managers and maintenance personnel further complete the base plans.
Often, drawings are unavailable. However, aerial photographs from government sources can be used to create base maps. Thorough site inspection and verification will complete the process.
Northville Crossings, a Sun Community in Michigan.
A Picture is Worth a Thousand Words
Walk the site with a camera and notepad in hand. Photographs have a way of focusing our vision on negative images we have grown to accept. They can save additional trips to the site to refresh our memory of forgotten details. Maps, pictures and notes provide a valuable resource in times of community crisis and a foundation for the work to follow. They also become a base against which to measure progress.
It is unlikely that the community image would decline through time without the images of the homes and home-sites declining. Therefore, it is helpful to consider the need for community renewal on two levels:
Items of owner/management responsibility
Items of resident responsibility
With this in mind, create an upgrade plan with an emphasis on short-term goals to produce immediate visual results, and long-term goals to achieve the desired end result. In this way, management’s example of immediate visual improvement can be justification for required resident home and site improvements.
You must lead by example if you are to be successful in this effort.
Level II Renewals
Now that we’ve discussed Level I renewals, let’s move into something a little more involved: Level II renewals.
Level II candidates are older communities than most Level I renewals, and, as a result, have a higher percentage of older homes. Many have serious age-related difficulties with the homes and homesite improvements. Some of the older homes may be owned by the community and rented. In addition, many Level II communities have vacant sites to lease.
As a result, a Level I renewal is a required first step in the upgrade process. Upgrades to the housing stock and homesites are so important to the process. And resident cooperation and acceptance of the program are essential. Just as research was important to the upgrade process for the community-owned items, it also is important to do proper research to upgrade the home stock and homesites.
The first step in the process is to inventory the homesites and determine, in accordance with local and state regulations, the maximum-size homes that can be accommodated on the existing home sites. In making that determination, information regarding regulations for separation and lot coverage is important. Many states allow older communities to apply the requirements in force when the community was new. This can make a big difference in the size of home that can be placed on a given lot, as well the amount of change that might be necessitated.
The next step in the research process is to inventory the age, size, and condition of each home in the community; which homes are renter-occupied, if any, and which homesites are vacant. This information can be placed on a spreadsheet and color-coded on a plan.
Level II Upgrades Require a Longer Schedule
Unlike the Level I upgrade, which can take place in a relatively short time, upgrading the home stock most often takes longer. Planning for the home stock upgrade takes considerable effort and creativity. One method of accomplishing this task is to review the research information in order to determine which homes can remain in the community in their present location, which homes might be acceptable if moved to a new location, which homes should be removed from the community, and which homesites are vacant.
The goal of this process is to begin, one section of the community at a time, to improve the home stock. The most visible location should be the first upgrade. This is a way to produce an early improvement and stimulate interest in the process. It might be determined that the priority is an area near the entrance that has several vacant sites. Some newer homes might remain, and two or three homes could be moved or relocated.
First, arrangements to relocate homes would be made to assist residents in the least desirable homes. Or they could move up to a newer home. At the same time, new or acceptable replacement homes would be placed on vacant sites in the area near the front. Those homes are made for sale.
Special incentives are provided to encourage existing residents to “move up”, and to entice new residents to move into the community. A marketing effort keying in on the Level I portion of the community renewal program and the home sale incentives could be initiated. This process, over time, would result in the phased upgrade of the whole community home stock. Such efforts could be part of a much-publicized, total-community “Grand Reopening”; or part of a quiet, metered effort over time.
Vacated City Parcels Get New Life, Potential Homebuyers Get Affordable Options
A Michigan company that began as a pilot project with modular housing under the auspices of a county land bank contract is shaping up to be a national model for city infill and affordable housing for some of the country’s most difficult and expensive places to buy a home.
“One of the largest housing challenges facing the United States is the lack of inventory,” said Todd Van Eck, a partner with David Allen in the newly incorporated business, called InnovaLab. “The lack of inventory in the urban setting has caused pricing to inflate at a rate that makes owning a home a real problem.”
The lack of inventory in urban communities and service-based communities is a crisis, Van Eck said. Families, in particular, cannot find affordable housing in the areas where jobs are most available.
“While the term ‘crisis’ is used to describe the housing inventory, the reality is that it negatively affects the very fiber of a community and the economy,” Van Eck said. “Quality housing, at an affordable price, is a must for every community.”
From County Pilot to Broad Incorporated Effort
MHInsider has followed the efforts of Kent County Land Bank — located in Grand Rapids, Mich., the county seat — and the rebranded InnovaLab entity in its efforts to provide a potential pilot program for an in-fill housing solution.
Since that time, Allen and his team have begun to phase out county contract work. It has set about the evolution of InnovaLab as a company to change the way housing is provided. And it uses off-site modular construction as one of its tools.
True to the root of its name — innovation — InnovaLab uses tools available to federal, state and local governments to generate affordable housing. It joins alternative methods of construction and efficient methods of operation to facilitate affordable housing at all income levels.
‘Breaking through traditional methods’
“InnovaLab is breaking through traditional methods of development to provide high-quality housing at an affordable price in communities throughout the country,” Allen said.
One of InnovaLab’s most important traits, as a company, is its ability to bring innovation to the development process. It does this with the use of tools available through various participants in order to get housing built.
Thinking beyond traditional residential development methods to work with the government, the nonprofit sector and private organizations has resulted in viable housing for in-fill. Among its most important partnerships in the new development process is InnovaLab’s relationship with Champion Home Builders. Champion makes a variety of factory-built housing, including modular.
InnovaLab cites numerous reasons why Champion Homes has been such a great partner. But, the predominant characteristic of Champion Homes is its team of people and processes, Van Eck said.
“Champion Homes has been outstanding in facilitating the design work of InnovaLab, providing its design expertise, putting those designs into modularized engineering,” he said. “Champion has been providing consistent high quality, and its ability to maintain a process that is simple and effective. Working with Champion Homes has allowed InnovaLab to provide an innovative cost-efficient mechanism that gets quality housing on in-fill properties.”
A crane drops one module of a home at a time on the southeast side of Grand Rapids, Mich.
What Can Be Done with Off-Site Built Homes?
The reality of off-site construction is that most housing can be built using off-site methods. Off-site methods are used to construct single-family homes, multi-unit housing, apartment housing, and hotels. For InnovaLab, off-site modular construction is a key component of housing inventory, currently and in the future.
Steve Payne is the director of business development for U.S. operations with Champion Home Builders.
“There are some limitations with modular construction, but in many cases modular systems can work. We use the same materials, meet the same building codes, look the same and have many of the same amenities of traditional site-built construction,” Payne said. “Also, we are capable of meeting the neighborhood architectural characteristics in most infill settings.”
For InnovaLab, Champion Homes was selected as its provider of housing because of the ability to consistently maintain InnovaLab’s core requirements.
Those InnovaLab core requirements include:
A defined process in design and construction
Consistent quality
Promotion of efficiencies
Clear communication
Maintenance of budgets and schedules
“The experience of actually going through the Champion Homes processes has exceeded expectations,” Allen said.
Why does InnovaLab see Off-Site Modular Homes as a key?
There are a number of reasons why InnovaLab uses off-site modular. The off-site modular construction process provides efficiency, consistent quality, defined timelines, and defined budgets. The Champion Homes process has permitted InnovaLab to generate designs that can be used on in-fill properties with great quality, desired layouts, and beautiful, modern interior design. The process also has provided InnovaLab with a clear pricing structure to permit an increase in amenities or a decrease in amenities with secure delivered pricing. It permits planning, budgeting, and execution of housing construction at a level unmatched by InnovaLab when using on-site methods.
In July 2018, InnovaLab had an entry-level modular home and a more high-end modular put on the city’s southeast side, as well as a mid-priced home on the northeast side of Grand Rapids.
All three homes came from Champion’s plant in Strattanville, Pa., and all arrived ready to set on their foundations within four weeks.
Each home came in at about 70 percent the cost of what its site-built counterpart would be, at about $105 per square foot. The median price per square foot in the U.S. is $148. In Grand Rapids, it’s about $129 — $142 per square foot in the metro area.
Eric DeLong, Grand Rapids’ interim city manager at the time, said he had some understanding of modular housing through his brother’s professional experience. It is impressive with how the product had taken great strides in quality, design, and aesthetics, he said.
“I felt that modular was a viable solution to the affordable housing problem here, and I’m pleased to see this pilot program going so well,” DeLong said. “InnovaLaB has launched a pilot with a lot of promise.”
More Modular Homes to Follow
The program continues its trajectory since the time those original three homes were installed last summer.
Another 10 modular residences have been installed, including a set of modular condos. And more orders are being taken.
Photos courtesy of Champion Homes.
Impressions of Modular Homes for City Infill
During a recent installation on the southeast side of the city, an agent for the home listings as well as nearby residents and business employees watched a crane lower pieces of two modular homes as work crews fixed them into place.
Tanya Powell-May is CEO of Legacy Homes GR, a Keller Williams agency.
“My team and I will list these three properties in a couple of months,” Powell-May said. “These are our first modular homes. We sold over 77 homes last year, but none were modular.
“I look at how quickly that home went up… that’s amazing,” she said. “We have a crisis here in terms of affordable housing. If we can get quality housing for people who need homes at this price point, that’s great. All over the nation, there’s a shortage in inventory, especially at this price point.”
Bobbie Locke, who works at a consulting agency across the street from the new homes, said it was “incredibly exciting” to see the new homes installed so efficiently.
“What a beautiful thing for the neighborhood,” she said. “The architecture is a perfect fit. Though the neighborhood is mature and established, they’ll fit right in. It’s a wonderful opportunity.
“It doesn’t just mean good housing, it means fast housing,” Locke said. “The fact they can do it so quickly means people who are waiting are going to get into homes faster.”
How Modular Homes Are Sold
Potential buyers can also treat these new modular homes as they would any other home for sale. When completed and priced, the homes are listed on the metro multiple listing service and will be open for offers. Allen said developers can make the math work for the land. So, the only obstacle is people’s general perception of off-site built homes.
Typically, that perception is changed with a walk-through of a modular home.
“The stigma associated with off-site modular homes is not well placed,” Van Eck said, noting how auto manufacturing has thrived with continued improved processes. “Like automobiles, it is time for housing to modernize its processes to focus on efficiency as well as quality.”
MHInsider Managing Editor Matt Milkovich contributed to this article.
MHVillage teamed with IMHA to present the 2019 MH FacTOURy Summit in Elkhart, Ind. The June 17-18 event helps community owners and operators, as well as other manufactured housing professionals, better understand the business and best practices for customer service, management, marketing, sales and more.
What follows is a series of quick soundbites from the education series provided by MH FacTOURy Summit presenters.
MH FacTOURy Summit Presenter on “Social Media Mastery”:
Social media has a higher close rate and is less expensive than Google AdWords PPC
More than 80% of U.S. consumers have social media
Facebook and Instagram are the most popular platform, with 88 and 60% saturation respectively
75% of consumers base purchases on reviews
More than half of social media users would rather message/text than call for customer service
When shunned on social media, 30% of those polled will go to your competitor
90 percent of Instagram users are 35 years old or younger
What to do on social? Educate about the buying process, post engaging content, share news, talk about local events, share listings, take a poll, or share testimonials/reviews, video/virtual tour, publicize charitable giving
No more free reach — organic reach on Facebook is dipping as low as 2%
Facebook pixel = use a code on your site that tracks visitors and shows them your ads
Be prepared to respond now — this generation wants things instantly
The chance of closing an online lead diminishes by 65% within the first 15 minutes of receiving the lead
You need to respond the way buyers want to reach you — don’t push toward other means of communication
Dee Pizer, Board Trustee for Zeman Homes
MH FacTOURy Summit Presenter “How to Buy the Right Manufactured Homes”:
Start with the site, measure the lot
Make sure the aesthetic of the home fits with the community
Upgrade siding to a darker color for corner lots
Create a color package — if someone wants to factory order, you have color packages that are sure to color coordinate
John Ace Underwood, of NRI Inc.
MH FacTOURy Summit Presenter on “Lead Management: Marketing Might Be Your Goldmine”
Marketing is all about finding people who are interested in your products or services
If you aren’t getting more leads than you can handle, you have a problem
There are no good or bad leads, only leads
We absolutely, unequivocally own the word ‘affordable’
Do not qualify people over the phone. Get them in front of you and then qualify them.
Never, ever end a conversation without having discussed and scheduled the next logical step in the sales process.
Everything is about how your prospect feels after having spoken to you
More than 1,500 manufactured housing professionals are expected in Las Vegas April 7-9 as the Manufactured Housing Institute’s Congress and Expo returns to the...
With more homes, more exhibitors, and more buzz than ever before, the 2026 Biloxi Show is expanding, and fast.
The Biloxi Manufactured Housing Show &...
A Michigan company that began as a pilot project with modular housing under the auspices of a county land bank contract is shaping up to be a national model for city infill and affordable housing for some of the country’s most difficult and expensive places to buy a home.
MH FacTOURy Summit Presenter “How to Buy the Right Manufactured Homes”:
