The places across the country that seem to have the most homelessness, said HUD Secretary Ben Carson, seem to be the places that have the most regulatory barriers. That was said on 8.20.2019, just last night on Fox News’ The Story with Martha MacCallum.
Secretary Carson said he also thinks that people have lost a true understanding of what “real compassion is” for people. He spoke the obvious by saying that it isn’t compassionate to leave people on the street “sleeping in their own feces and vomitous” isn’t compassionate. Leaving thousands of homeless in that state “exposes them” to all kinds of germs and diseases, Dr. Carson said, as well as doing the same to those who are passing by.
Secretary Carson said there is a need to stop, take a deep breath, and say “what makes sense?” And “those [common sense notions] are the things that we should do.” It might have been an adaptation of G. K. Chesterton who mused about a century ago, “What is wrong is that we do not ask what is right,” per Goodreads.
Carson stressed again that “this only seems to occur in places where there are massive amounts of regulations.”
MacCallum said his comments were fascinating. “I know you have thought about this,” she said and asked Dr. Carson to give her a couple of things that San Francisco – or presumably other places in the U.S. – could do to improve the situation. She said the city is doing “72 apartments that cost the city $700,000” each. That was a figure that caught the eye of MHProNews earlier in the day, and we planned a report on that topic. MacCallum and Secretary Carson gave us a useful jump on it.
Those 72 units will only help 72 people, said MacCallum, what happens after they move in there?
“What would you advise Governor Newsome?” asked the right-of-center Fox News anchor.
Secretary Carson mentioned the President’s Council on removing barriers to affordable housing. “That is what I would start doing,” Carson said. Meaning, HUD’s top man said he’d advocating eliminating those affordable housing barriers.
In cities and towns across the nation, for years now, zoning and regulatory barriers have been increasingly erected that hamper the placement of HUD Code manufactured homes. It had become so bad that manufactured housing community, retail and finance veteran Marty Lavin, J.D. told MHProNews that the HUD Code had become a discrimination code.
Secretary Carson said that it was “mostly the local regulations” that are causing the affordability crisis, and its cousin, the homeless crisis. He cited height and density restriction. Wetlands, the environmental restrictions were mentioned too. He said those “things can be done in a reasonable way.”
Carson cited the National Association of Home Builders (NAHB) that about 25 percent of the cost of a single-family home is regulations. For multi-family housing, it is up to 42 percent of construction costs.
MHProNews has cited the fact before that for some years, the United States – on paper the wealthiest country on earth – nevertheless is not in the top 40 nations on the planet in the rate of home ownership. How is that possible? Applying Carson’s analysis, at least part of that problem are regulatory barriers.
Carson said that you will never get a hold of the problem of homelessness and affordability until you deal with the regulatory issues.
MacCallum, citing a local resident who said that they built condos for employees of Twitter and other tech companies forced people from affordable housing out onto the street. Carson replied to that by saying that in San Francisco, “a single person” can voice opposition to affordable or other housing and stop it. “That doesn’t make sense,” he added.
MacCallum, playing off that went to the NIMBY trope. They – some person or group – doesn’t want them living in their neighborhood or back yard.
MacCallum played a clip of a business owner in California that had gone viral. That shopkeeper said that she has to clean the pee, poop, and syringes off her enterprise’s door step in order for people to come into her business. That business owner said that she has compassion, but that it is the small business owners who are being punished by this problem of homelessness.
Over a year ago, MHProNews’ publisher and small business expert Tom Egelhoff, who himself is a manufactured home owner that previously owned a conventional house, teamed up to do an article that outlined the estimated two trillion dollars a year that it costs the country not to have affordable housing near where it is needed. Egelhoff and L. A. ‘Tony’ Kovach, citing third party research, made the case for a broader use of modern manufactured homes wherever possible.
Returning back to Secretary Carson’s narrative, he mentioned the recent Innovations in Housing Showcase that offers single family and multi family building methods that are affordable, but that can’t be used because of regulatory barriers. While he didn’t per se mention manufactured housing last night, that showcase included manufactured homes.
MacCallum asked, has California “reached out to HUD” on the issue of regulations?
Carson replied by pointed to the mayor of Los Angeles who made some concessions by allowing accessory dwelling units – or ADUs. Again, while Carson didn’t elaborate, those ADUs can be built by a variety of prefabricated housing methods which could include HUD Code manufactured homes. Carson said, “There is some progress, but we have a long way to go.”
What Went Unsaid?
What was never mentioned by either MacCallum or by Dr. Carson is that by law, under the Manufactured Housing Improvement Act (MHIA) of 2000, the HUD Secretary and his deputies could be exercising the agencies federal enhanced preemption for manufactured homes.
By HUD enforcing their authority under enhanced preemption, numbers of these types of issues could be swept away under federal authority. The Feds exert their clout on other local issues, why not this one?
Indeed, former Office of Manufactured Housing Programs (OMHP) administrator Bill Matchneer said in an exclusive reported below that “enhanced preemption” was one of the keys to the entire regulatory framework of the MHIA.
If so, why isn’t it being enforced? Read the report above to learn more.
In discussions with federal officials in Washington, D.C. MHProNews’ publisher has been told that they don’t think Dr. Carson has been brief on preemption. Given the nature of giant agencies like HUD, that is entirely possible. But that begs the question, if he hasn’t been briefed, why hasn’t the Manufactured Housing Institute (MHI) which has had numerous face to face opportunities with Secretary Carson raised that issue?
The Manufactured Housing Association for Regulatory Reform (MHARR), has raised the topic in a letter sent by FedEx to Secretary Carson. But addressing someone doesn’t mean that person has read it; HUD staff could have opened that letter from MHARR, and not passed it along.
After months on end of routine pressure from MHProNews and MHLivingNews in reports, MHI finally addressed the matter last month with Secretary Carson, but also in a letter that is again unlikely to have been brought to his attention.
Under Pressure, MHI Pivots “HUD Must Implement and Enforce its Enhanced Preemption Authority”
But during the HUD Manufactured Housing Consensus Committee (MHCC) conference call reported and linked above with a different nuance linked below, MHI’s representative voted down DRC 1, which specifically called for HUD to fully implement the MHIA, specifically mentioning enhanced preemption.
Despite the posturing, there is evidence in articles linked below the byline that a variety of laws and capital access methods have been deployed in manufactured housing as a means to thwart the industry, often purportedly led by members of the so-called Omaha-Knoxville-Arlington axis.
There are three logical possibilities with respect to Secretary Carson and enhanced preemption.
· Dr. Carson may be unaware of enhanced preemption under the MHIA, and thus can’t cite – much less enforce – what he doesn’t know.
· He may be aware of enhanced preemption but doesn’t want to start with the big hammer. A top-level staffer in Washington mentioned that possibility to MHProNews earlier this month. But if so, isn’t that a form of misguided compassion, using Dr. Carson’s analogy from last night?
· Or he is somewhere in between, perhaps dimly aware but not fully so.
But here is the vexing part. There are clearly HUD staff, some of them are senior officials, whose job it is to know about the law. Why are they not telling Secretary Carson? Why are OMHP staff not insisting that the law be enforced, when Secretary Carson has arguably done more to promote manufactured housing than any HUD Secretary in the 21st Century?
That points to problems within the agency, which will be the focus for an upcoming exclusive by MHProNews.
There are with respect to Arlington, VA based MHI these logical possibilities.
· They clearly know about enhanced preemption, as their letter to Secretary Carson in July specifically cited the matter.
· MHI clearly knew about it for years before, as MHProNews documented in prior reports.
· MHI have for whatever reason(s) hasn’t pressed the MHIA and enhanced preemption matter until recently in that letter. That failure to act has arguably left manufactured housing struggling.
· Certainly, one logical conclusion is that MHI could de facto be working with major players to consolidate minor ones and is doing so by restraining the marketplace. If so, that raises antitrust, fraud, RICO and other issues that MHProNews has raised for several years.
That last bullet is in keeping with Warren Buffett’s principle of value acquisitions and his economic Moat stratagem.
The bottom line is that MHI has arguably not done their job properly, or has deliberately acted in a manner that benefits a few big players at the cost of lesser ones. That is in keeping with what Marty Lavin, former affiliate members as noted by Neal Haney, and others have said about the strangely ineffective behavior of MHI.
Whatever the granular details may be at MHI and HUD, the homeless and the millions in need of affordable housing are waiting for action that is within HUD’s power. These are reasons why honest state AGs, federal antitrust, other officials, lawmakers and their staff should investigate, document, and then act upon. Certainly, a community leader is among those who believes the evidence calls for precisely that to occur.
This entirely avoidable and tragic pattern has gone on for years. As a result, thousands have been forced out of their once profitable businesses at a discount or lost their business entirely through this purported scheme. The mainstream media report, reviewed below, is but one example that spotlighted certain issues, but missed nuances completed by MHProNews and MHLivingNews reports.
The bottom line is that there are millions who have been impacted. It is time for public officials to do their jobs. It is also a good time for mainstream media on each side of the left-right aisle to step up and investigate these matters too. Political candidates for higher office should raise this issue in their pitch to voters, and on camera.
That’s today’s first look at “News through the lens of manufactured homes and factory-built housing,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.
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