Harvard’s Joint Center for Housing Studies ‘STATE Of The NATION’S HOUSING 2023’ – Manufactured Housing Industry’s 21st Century Collapse-Facts+Analysis Yields Causes, Cures; plus MHMarket Update
An MS Word search of Harvard’s Joint Center for Housing Studies (JCHS) “State of the Nation’s Housing 2023” mentions zoning 13 times in about 50 pages of their latest research. Zoning is specifically mentioned as a barrier in the context of manufactured housing. “Affordable housing” is mentioned 9 times, including these remarks: “As the [declared COVID19] pandemic highlighted, high-quality, stable, and affordable housing is foundational to widespread well-being and, as such, both merits and necessitates greater public attention.” “Consequently, the need for more affordable housing options in a broad range of communities will only grow, as will the need to ensure fair access to these units and neighborhoods.” “Further, in the face of persistent and growing racial wealth and income disparities, the need for safe, affordable housing for households with lower incomes and households of color is ever more urgent.” “The nation continues to face critical housing challenges. There is a significant housing shortage, and affordable housing programs pale in comparison to the need. Housing insecurity and homelessness are on the rise as [declared COVID19] pandemic-era programs expire.” Among the most affordable housing in the U.S., manufactured housing is specifically mentioned several times by Harvard researchers. An MS Word search of JCHS’s “State of the Nation’s Housing 2023” yields “manufactured home” 4 times and “manufactured housing” 4 times. By way of contrast, the term “modular” in the sense of housing (i.e.: modular housing) is used only once. The JCHS’ 2023 housing remarks are often useful and favorable from the perspective of manufactured housing industry professionals, investors, stakeholders, and advocates. For instance, per the JCHS’ 2023 report: “smaller single-family homes represented 37 percent of new units as recently as 1999. Manufactured housing, with an average sales price in 2022 of just $127,000 excluding land, provides a more affordable alternative to site-built housing. However, just 113,000 manufactured homes shipped in 2022. By comparison, annual manufactured home production averaged 247,000 units in the 1980s and 302,000 units in the 1990s.”
Those quoted remarks from Harvard arguably validate scores of reports by the Manufactured Housing Association for Regulatory Reform (MHARR), Manufactured Home Pro News (MHProNews), and Mobile and Manufactured Home Living News (MHLivingNews). They are also perhaps an embarrassment for some in the industry. Another MS WORD search of the JCHS document will reveal how.
According to MS WORD’s search tool of the JCHS 2023 housing research document, the National Association of Realtors are mentioned 5 times. The abbreviation for the National Association of Realtors (i.e.: NAR) was used 10 times. By contrast, there are no results for the Manufactured Housing Institute (MHI), nor for manufactured housing association. Ouch.
Part I of this report will provide each of the segments of the JCHS 2023 research which includes a mention of manufactured home or manufactured housing.
Part II will include what the Manufactured Housing Institute (MHI) said about this fresh Harvard annual research. It will also include other cross references to studies by others that have looked at manufactured housing in 2023 and 2022. Part II will highlight the tremendous potential for manufactured housing, while pointing out how the obstacles that could be solved if people of good will robustly apply EXISTING LAWS to overcome the industry’s hurdles.
Restated, when what Harvard and other researchers reveal are properly understood and combined with other known facts should lead manufactured housing industry pros, investors, officials, and affordable housing advocates to grasp is this. While this or that piece of new legislation may be useful, much of the manufactured housing industry’s current and enduring 21st century woes could be solved by properly understanding the causes of the industry’s extended depression and the cures available through a muscular deployment of existing laws.
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Part III is our Daily Business News on MHProNews macro- and manufactured housing connected market report with ‘headline news’ that spans the left-right media landscape.
Part I – Quotations About Manufactured Housing and Other Specific Topics from a WORD Search of Harvard JCHS’ “State of the Nation’s Housing 2023”
Per information from the U.S. Department of Housing and Urban Development (HUD), 2023 is the 36th annual JCHS State of the Nation’s Housing (SofNH). The financial need for more affordable housing is summarized in this remark from page 3 of Harvard’s research. The quote collage at the left uses images from their report combined with quote marks and the MHProNews third-party content disclosure.
Monthly payments on the US median-priced home, including taxes and insurance, shot up from $2,200 in January 2022 to $3,100 in October after the annual interest rate on 30-year fixed-rate mortgages jumped from 3.4 percent to 6.9 percent (Figure 2). Median monthly payments then settled to $3,000 by March 2023 as interest rates plateaued at 6.5 percent, but millions of renter households were nonetheless priced out of homeownership. Agency data provided by the Urban Institute show a 22 percent annual decline in the number of mortgages originated to first-time homebuyers in 2022, including a year-over-year drop in the fourth quarter of nearly 40 percent.”
In no particular order of importance are the following sections of their report that help paint a picture that is useful for manufactured housing professionals, business owners, marketers, investors, affordable housing advocates, public officials and other stakeholders. Manufactured home or manufactured housing is specifically mentioned in each of these following segments. When highlighting is shown, it is added by MHProNews.
#1) – JCHS’ SotNH 2023 page 3.
Single-Family Construction Slowing
Single-family homebuilding declined significantly last year as buyers reacted to sharply higher borrowing costs. Single-family housing starts dropped 10.8 percent in 2022, with the slowdown growing more pronounced throughout the year. The annualized rate of single-family housing starts averaged just 876,000 new units in the second half of the year, down 23.2 percent from the same period the year before and well below the 1.0 million units averaged since 1990 (Figure 3).
The decline in new homebuilding is particularly acute for lower-priced homes, due to rising construction and land costs, limited lot availability, and regulatory barriers like minimum lot sizes that restrict entry-level housing production. In 2021, just 24 percent of new homes—or 236,000 units—were under 1,800 square feet, compared with 37 percent of new completions in 1999. Likewise, manufactured housing, often an even more affordable option, totaled just 113,000 shipments in 2022. Although up from recent lows, manufactured home shipments regularly topped 200,000 units annually in the 1980s and 1990s.
#2) JCHS’ SotNH 2023 page 15.
Slowing New Construction
In both the for-sale and rental markets, significant amounts of new construction are required to alleviate the supply shortages. However, housing production declined modestly in 2022, driven by a sharp slowdown in single-family homebuilding. The number of newly started housing units fell from 1.60 million in 2021 to 1.55 million in 2022, a small but significant 3.0 percent decline in the context of the nation’s housing shortfall. Similarly, the number of permitted units declined 4.1 percent to 1.67 million in 2022. However, in the near term, more supply is coming online as the number of housing units completed continued to rise 3.7 percent to 1.39 million units last year.
In the single-family market, construction dropped precipitously in 2022, after climbing to the highest level in 15 years in 2021. Just 1.01 million single-family homes were started last year, down 10.8 percent from a year earlier. The decline in construction was much starker in the second half of the year, as interest rate increases took hold. From January through June 2022, the seasonally adjusted, annualized rate of single-family housing starts was 1.13 million units, up 1.7 percent on average from the previous year. But from July through December 2022, the rate of single-family starts was just 876,000 units, down 23.2 percent, and remained at an 830,000-unit pace in the first quarter of 2023.
Most new units target the high end of the market. The median sales price for newly built single- family homes was $457,800 in 2022, up an inflation- adjusted 23 percent since 2019. Likewise, the production of smaller, typically less expensive, single family units remains historically low. In 2021, just 236,000 homes under 1,800 square feet were built, less than a quarter of all single-family home completions. By comparison, smaller single-family homes represented 37 percent of new units as recently as 1999. Manufactured housing, with an average sales price in 2022 of just $127,000 excluding land, provides a more affordable alternative to site-built housing. However, just 113,000 manufactured homes shipped in 2022. By comparison, annual manufactured home production averaged 247,000 units in the 1980s and 302,000 units in the 1990s.
In contrast, the multifamily construction sector was extraordinarily resilient in 2022. The number of multifamily starts rose 15.5 percent from an already-high 474,000 units in 2021 to 547,000 units in 2022—the highest level since 1986. The seasonally adjusted rate of multifamily starts remained strong throughout the year, averaging 540,000–550,000 units in both the first and the second halves of the year.
The number of multifamily units under construction continues to reach new heights, driven by the strong multifamily sector and the growing time required to complete such units as the costs of building materials rise and larger urban-infill apartments dominate production. Of the nearly 1.7 million housing units under construction in March 2023, fully 960,000 were in multifamily structures (Figure 11). This number represents an increase from 818,000 units a year earlier and is the highest rate of multifamily units under construction in almost 50 years.
Given the glut of apartments under construction and rising vacancies in the professionally managed apartment sector, multifamily construction is likely to moderate going forward. Already, the Federal Reserve Board’s Senior Loan Officer Opinion Survey on Bank Lending Practices reported tighter lending standards and weaker demand for multifamily loans and commercial real estate construction loans.
#3) JCHS’ SotNH 2023 page 29.
Indeed, efforts to increase homeownership cannot be limited to financial products. To truly provide equitable access to homeownership, concerted efforts are needed to reduce the cost and increase the supply of homes available for first-time buyers. Manufactured housing is an affordable path to homeownership that is underutilized in most of the country and could be encouraged by reducing zoning limitations and by providing owners of manufactured homes better access to lower-cost mortgage products like those available to site-built homes. Other general reforms of zoning laws, regulatory restrictions, approval processes, and development fees could help to drive down production prices on the types of more affordable homes that buyers want and need. Lastly, along with the production of new units, policy needs to help preserve the affordable owner-occupied stock to prevent losing properties to disrepair as the housing stock ages.”
#4) JCHS’ SotNH 2023 page 37.
Increasing the use of alternative construction techniques—such as manufactured housing and off-site, modular, or panelized construction—could help to address cost constraints. The Terner Center found that off-site construction can reduce construction times on a 3- to 4-story multifamily building by at least 40 percent and costs by 20 percent. Despite these potential savings, most homebuilders use on-site, stick-built construction, in part because of the high up-front costs and lack of financing for off-site techniques.”
All eight (8) uses of the words manufactured home(s) or manufactured housing are found in those four quoted segments above.
Off-Site Construction
The term “off-site” construction is used 4 times, per a MS WORD search of the 50 page JCHS 2023 research report. Some of those instances are as follows.
As long as housing remains prohibitively costly for millions of would-be buyers, builders will struggle to expand home production significantly. More lower-cost housing is clearly needed, but expanding development will require zoning reform to support a broader range of housing types and investments in off-site construction methods that could reduce development costs. Moving the needle on closing racial homeownership gaps will also require policy interventions to reduce the formidable financial barriers to homeownership.
As long as housing remains prohibitively costly for millions of would-be buyers, builders will struggle to expand home production significantly. More lower-cost housing is clearly needed, but expanding development will require zoning reform to support a broader range of housing types and investments in off-site construction methods that could reduce development costs. Moving the needle on closing racial homeownership gaps will also require policy interventions to reduce the formidable financial barriers to homeownership.
Zoning is Mentioned 13 Times
Some of the examples of zoning being mentioned in the ‘State of the Nation’s Housing 2023’ are insightful, as Part II will explore.
“The national housing shortage is also the product of local restrictive zoning policies and other regulatory barriers that make it difficult to build a range of housing types at different new residential construction has increased 35 percent since the start of the pandemic, including even steeper rises for some common building materials like plastic construction and gypsum products (Figure 27).”
“Exclusionary zoning contributes to this continued pattern of residential racial segregation. In many cities and suburbs, zoning favors single-family homes, which are typically owner-occupied and more expensive than multifamily options. This limits opportunities for households and renters with lower incomes, many of whom are people of color. In an effort to address this problem, Washington and Montana recently joined California, Oregon, and Maine in passing legislation to allow more types of housing on land previously zoned exclusively for single-family homes.”
“…Manufactured housing is an affordable path to homeownership that is underutilized in most of the country and could be encouraged by reducing zoning limitations and by providing owners of manufactured homes better access to lower-cost mortgage products like those available to site-built homes. Other general reforms of zoning laws, regulatory restrictions, approval processes, and development fees could help to drive down production prices on the types of more affordable homes that buyers want and need…”
Arguable Examples of Harvard Bias
The principle of separating the wheat from the chaff must be applied to all sources. Harvard’s apparent acceptance of, for example, the notion of ‘climate change’ as if it were a fact is in evidence from the below. An MS Word search of Harvard’s research reveals the term “climate change” is used 10 times. Despite much of the left-leaning news media, numbers of academics, and others acting as if ‘climate change’ is a proven fact or settled science, it is anything but, as reports from credible sources like the one linked below reflected.
While pro-climate change belief bias is in evidence in Harvard’s research, as the example quoted below illustrates. But then note that the balance of that same paragraph is packed with information that robust and sustainable growth oriented manufactured home industry advocates could be using, if they were properly motivated.
In addition to expanding the supply of new homes, improving the existing housing supply is critical. Substantial investment will be needed to preserve the aging stock and respond to climate change. At 43 years of age, the median home in 2021 was the oldest it has ever been, up from 27 in 1991. The Federal Reserve Bank of Philadelphia estimates that the nation’s housing stock needs repairs amounting to $149 billion, including $57 billion for homes occupied by households with lower incomes. This investment is particularly necessary for the 9.5 million homes that had severe structural deficiencies or lacked basic features like plumbing, electricity, water, and heat in 2021.”
Other politically charged and policy-biased remarks are also found in their report. For instance, Harvard’s researchers, based on this report, clearly seem to believe that government is a necessary part of the solution to the affordable housing crisis. In a sense, that is arguably true, but mainly to the extent that unjust governmental interference in the housing market has caused problems that may not otherwise exist. If mountains of cash (i.e.: tens of billions of dollars annually at the federal level, and more from the state and local levels too) haven’t solved the housing crisis in decades, then why is more of the same going to do so? That would be a worthy point of discussion or debate with a panel of free market believers and Harvard researchers. That said, by applying the principle of separating the wheat from the chaff, Harvard’s research is one more useful array of data and evidence that could be deployed by manufactured housing industry professionals to grow the industry if they were properly encouraged and motivated to do so. Picturing their bias removed on certain issues, a wealth of data emerges from their annual research.
Part II – Additional Information with More MHProNews Analysis and Commentary
In the Manufactured Housing Institute (MHI) email to industry members on 6.28.2023 said the following. The link below is edited to the same document that MHI referenced but uses instead the one found on our website (since MHI has, per sources, ‘disappeared’ previously used documents from their site in the past, and other sources may move or remove too). Note to new readers, quoting MHI should not be construed as any kind of endorsement of that organization.
New Research from Harvard’s Joint Center for Housing Studies Examines the State of Housing in the US
Harvard’s Joint Center for Housing Studies recently released a report titled The State of The Nation’s Housing 2023 that examined the housing market landscape across the US during the past year. The report noted a continued slowdown in single-family construction while multi-family construction saw growth throughout the year. Read the full report here.
Unpacking MHI’s Brief Remarks
While those brief remarks from MHI may be technically true, they fail to paint the picture that Part I of this MHProNews report does. For example. MHI is an umbrella trade group, representing production and post-production interests. Zoning and finance are among the industry’s post-production issues. Every mention of zoning as a barrier to manufactured housing by Harvard or other researchers thus ought to be seen as a kind of slap in the face of MHI. How so? Because the Manufactured Housing Association for Regulatory Reform (MHARR), which long championed the push for what eventually became the Manufactured Housing Improvement Act of 2000 (MHIA), was finally joined in that effort by MHI in the late 1990s. With the industry riding high in the 1990s, as the JCHS remarks cited above reflect, the industry’s two national trade groups were able to get the MHIA enacted into law in about two years. As JCHS’ 2023 annual report rounded out the numbers produced and shipped of new HUD Code manufactured homes there was an average of “302,000 units in the 1990s.” They also noted that manufactured housing “production averaged 247,000 units in the 1980s…” So, much of the 21st century has been less than half of the total U.S. HUD Code home production 1980s achieved, and less than a third of what the manufactured housing industry collectively produced in the 1990s. It should be disgraceful for most association professionals following in the footsteps of those who witnessed far better outcomes without the internet and other technological advantages available to MHVille today.
More specifically, MHI for a time gave updates that included a mention of MHARR, as the copy of a document from MHI linked here reflects. Part of that document, entitled “Implementation of MHIA 2000” says the following.
Under the subcategory of “Activity” – “Federal preemption of HUD Code – “broadly and liberally construed.” The “Status” of that said on 2.17.2003 that: “Ongoing. Since MHIA enacted, HUD has sent at least two letters to municipalities advising them that their zoning ordinances are preempted by MHIA 2000. HUD also in process of issuing a new “Statement of Policy” regarding its interpretation of federal preemption language in MHIA 2000. Once issued, this statement may be used by sates and municipalities to fight discrimination against manufactured housing.”
Per the source that provided that MHI document to MHProNews as a news tip, that 2.17.2003 update from MHI to their members was publicly available. But 20 years later, searches of the MHI website at that time (December 2019) and since revealed that document is apparently no longer publicly available. Furthermore, on the public side of the MHI website, the words “enhanced preemption” is not to be found anywhere on the MHI website. Other research by MHProNews has since revealed that no news report that includes MHI has MHI mentioning both the “Manufactured Housing Improvement Act of 2000” (MHIA) and “enhanced preemption.” By contrast, MHARR, MHProNews, and MHLivingNews each use those phrases in published mainstream press releases and on their respective websites. Restated, even though MHI has far more financial resources, and a larger team, than MHARR, MHProNews, and MHLivingNews combined, nevertheless the later three have by far performed MHI in sharing with readers the facts and importance of the MHIA and enhanced preemption.
An Analogy is Useful
By way of analogy, imagine there was a tool that could if deployed swiftly and routinely remove the obstacles that are blunting manufactured housing. But there is such a tool! It is the MHIA of 2000. MHI itself has admitted this. Kevin Clayton, President and CEO of Berkshire Hathaway owned Clayton Homes has acknowledged and said as much in testimony under oath to Congress.
Which begs the question. Given Clayton’s enormous resources (i.e.: the backing of Berkshire Hathaway and Warren Buffett’s pledge to the firm that Clayton has spoken of on video), one would think that manufactured housing would be producing half-a-million to a million or more HUD Code manufactured homes annually in the 21st century. But since the time that Buffett led Berkshire invested in Oakwood (2002) and then bought out Clayton Homes (2003), the manufactured housing industry has never recovered to its 2002 and 2003 levels.
Are thinking people to believe that Buffett, Berkshire, and Clayton are not able to accomplish what scores of independents collectively achieved in the 1980s and 1990s? To better grasp those points, one should see what Clayton said on video about Buffett’s pledge to manufactured housing and in its complete context.
Harvard’s data on manufactured housing production is incomplete, but nevertheless largely useful in painting the overall picture that manufactured housing has underperformed in the 21st century when compared to 20th century mobile home and manufactured housing era performance. The following chart is produced by publicly traded Skyline Champion (SKY), a prominent MHI member firm, as is part of a deeper dive found at this link here. Only a fraction of the people working in manufactured housing recall the 1980s, because they didn’t work in the industry during that era. Some MHVille pros where not even born until the 1990s or later. And because MHI doesn’t normally share this chart below, it is one more piece of evidence (those stubborn ‘facts’) that point to just how poorly MHI has performed. But that begs the question, why? Why do MHI’s larger corporate members tolerate this apparently gross level of incompetence? Or is something other than garden variety laziness or ineffectiveness at work?
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The Manufactured Housing Institue (MHI) and the Manufactured Housing Association for Regulatory Reform IMHARR) teamed up in the late 1990s to get the Manufactured Housing Improvement Act of 2000 (MHIA) enacted into law. It was supposed to, among other factors, give the industry ‘enhanced federal preemption’ to overcome zoning and placement challenges at the local level. What happened to that once joint push by MHARR and MHI? Note: depending on your browser or device, many images in this report can be clicked to expand. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection, you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts. https://www.manufacturedhomepronews.com/in-the-business-world-the-rear-view-mirror-is-always-clearer-than-the-windshield-warren-buffett-mhville-leader-showcases-efforts-to-renew-american-dream-plus-sunday-weekly/
Following the Money Trail
The relevance of the apparent disconnect between what MHI says it wants in items that are shown to industry members, and what they do may be illuminated by the pithy and insightful remarks of Roxanne Bland — “Forget what they told you. You want the truth, follow the money.”
In an era where paltering and posturing have become more commonly used by numbers of: politicians, public officials, corporate and association leaders, it is important to see who consistently walks their own talk. When there is a disconnect between words and deeds, it is important to look more closely and to “follow the money” trail.
Prominent MHI member Flagship Communities, whose co-founder Nathan Smith sits on the MHI board of directors and “served” as MHI’s chairman for a time as well, helps connected the dots. Flagship’s investor pitch illustrates the obvious reason why MHI may say they want relief on zoning, finance, the DOE Energy rule, or other issues, but is apparently paltering. Flagship publicly stated the following on its website on 6.30.2023.
Fragmented Industry with High Barriers to Entry and Imbalanced Supply and Demand Dynamics
The MHC industry is highly fragmented and primarily consists of local owner-operators, public real estate investment trusts and institutional investors. The top 50 MHC investors are estimated to control only 17% of the 4.2 million manufactured housing lots estimated to be available for rent in the United States, presenting an opportunity for consolidation. Factors such as regulatory restrictions, competing land uses and scarcity of land zoned for manufactured housing development have limited new supply, causing an imbalance in supply and demand and creating high barriers to entry for new market participants. The REIT’s management is unaware of any new MHCs having been built within its current operational footprint during the past 15 years.”
Virtually every word in the above illuminates why MHI says one thing on zoning/placement barriers, but is doing something that benefits land-lease communities; arguably at the expense of independent street retailers. Despite years of MHI talking (to their own membership), attending meetings and conferences that are supposed to give the impression that they want to “open up” zoning for manufactured housing, if that were to occur then Flagship, and other MHI member community operators that are into consolidation, could lose the bragging points quoted above and as follows.
Factors such as regulatory restrictions, competing land uses and scarcity of land zoned for manufactured housing development have limited new supply, causing an imbalance in supply and demand and creating high barriers to entry for new market participants. The REIT’s management is unaware of any new MHCs having been built within its current operational footprint during the past 15 years.”
But what that means is that MHI is to some extent picking winners and losers in manufactured housing. There are potentially legal consequences to deliberately misleading industry members, investors, public officials, and others for associations and their board members. As the report linked below unpacks from MHI’s own ‘facts,’ their top four people were collectively paid over $1 million dollars in a year for NOT achieving the association’s stated goals? Why are they being given bonuses for apparent non-performance?
If MHI openly said that they will support policies that benefit land-lease community operators that are busily consolidating the manufactured home community sector, independent retailers, producers, and perhaps even white hat community operators might balk. So, the evidence-based case can be made that a wink-and-a-nod among industry insider’s is in used instead.
Given that Investopedia recently highlighted how the Illusory Truth Effect is an issue of concern for investors and professionals, the hypothesis that arrises from the evidence and facts becomes all the more interesting and compelling.
But to buttress the points made by Harvard’s 2023 research, consider what attorney Andy Justus said about manufactured housing. It mirrors remarks made by the JCHS, and vice versa. Both cite the usefulness and benefits from more manufactured homes. Both Justus and JCHS say that zoning and financing barriers are keys to the industry’s underperformance. As Justus framed it, what is holding manufactured housing back?
Nor is it the case that only Justus has made such observations. Another attorney, law professor, and zoning law expert, Daniel R. Mandelker bluntly said in the abstract to his research that an organization is needed in manufactured housing that will advocate legally and legislatively for the industry. Ouch! That is what MHI claims to be doing!
Those who openly proclaim, as Flagship does, that they are busy consolidating the industry appear to know that they can count on MHI to wring their hands and sound like they care about removing zoning barriers. Or about getting more financing at a lower cost for consumers that would help independent retailers sell more homes.
What Harvard Said, and Didn’t Say…
Harvard cited zoning and finance hurdles as limiting factors for manufactured housing. What they didn’t say is that Congress acted in a widely bipartisan manner in the form of the Manufactured Housing Improvement Act of 2000 (MHIA) to fix the zoning barrier piece, and to nudge the manufactured housing finance piece too. Who said? How about MHI? These relevant items are not found in Harvard’s research but are directly or indirectly implied. The growing body of evidence, which now includes Harvard’s research, are part of the record that has been painstakingly established by MHProNews, and a few others in MHVille (tipsters, whistleblowers, legal document providers, MHARR, and MHLivingNews) of what thwarts manufactured housing. By fixing those obstacles, the industry could robustly grow. That has been a key finding of our research reports and related analysis, particularly over the last 7 years, when the nature of MHI’s paltering began to be revealed.
When MHI brags that their producers build about 85 percent of all manufactured housing made in the U.S., what MHI doesn’t openly say is that 3 of their largest producers represent some 80 of all the production. Those so called ‘big three” are Clayton Homes (BRK), Skyline Champion (SKY), and Cavco Industries (CVCO). All others in MHI therefor get only 5 percent of the remaining market share. The consolidation of the industry, and just how far it has fallen during the 21st century are illustrated by this screen capture from a report from the now defunct Manufactured Housing Merchandiser Magazine.
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“In the business world, the rear-view mirror is always clearer than the windshield.” – Warren Buffett. That begs a key question. Why don’t more people LOOK at the rearview mirror so they can learn more about the patterns that influence what’s ahead? Note: depending on your browser or device, many images in this report can be clicked to expand. Click the image and follow the prompts. To return to this page, use your back key, escape or follow the prompts.
What is entirely missing from MHI’s paltering/posturing video from their 2023 Innovative Housing Showcase is any hint that MHI leaders used the face time with HUD Secretary Marcia Fudge to ask that she fully and properly implement the MHIA of 2000’s “enhanced preemption” provision. The head fake is like a magician’s sleight of hand. Trusting industry members are supposed to think of MHI as working in so many ways to improve the industry’s plight. They get nice comments on video from Fudge, or Congressional rep. But what is missing is any hint of those magic words: “enhanced preemption.”
Thus, Bland’s classic insight: “Forget what they told you. You want the truth, follow the money.”
MHI either has a massively incompetent, corrupt and/or bullied board and staff leadership, OR they are busily working toward the industry’s consolidation. It is difficult to find a thesis of the current scenario in MHVille that fits all of the known facts. What that means is in order for manufactured housing to advance, several things ought to occur. In no particular order of importance are the following.
A) A white-hat post-production sector trade group that can team up with consistent and persistent MHARR. MHARR has asked for this for over a decade. One example is their deep dive into that topic, linked below.
C) Industry professionals that are growth and career minded must understand that a strong evidence-based case can be made that consolidation is harmful to the interests of the vast majority of industry pros. One of several possible examples is found in the report below.
D) There is an evidence-based case that some firms have proven their ability to hang in and also to grow despite the barriers left in place by MHI and its insider allies. Now imagine what would be possible if enough leaders of independent brands allied to form a new post-production trade group that would make bright line distinctions between MHI’s behavior and the opportunities which Justus, Mandelker, Harvard researchers, and others have demonstrated exists IF zoning barriers – as a key example – are overcome.
F) Until MHI either gets an authentic shake up, or they are probed and dealt with according to the law, it is foolish to think that new legislation ought to be pursued. Why chase a new rainbow when the previous ones have not been properly implemented, as MHI leaders themselves have admitted? MHI insiders can’t have it both ways.
G) Perhaps the best third-party legal case that has been forged about MHI’s problematic role in the industry’s 21st century underperformance is what Samuel Strommen, and other researchers cited below, have said.
Years ago, based on the insights and observations of a state Manufactured Housing Executives Committee (MHEC) member, MHProNews pointed out to readers the importance of a three-letter acronym. P.E.P. Protect. Educate. Promote. That, said that professional to MHProNews, is at the core of what a good post-production or ‘umbrella’ trade group should do for manufactured housing. The fact that MHI is failing at each of those roles speaks volumes. It is difficult for MHI to deny that they are failing at each of those roles, when they stand convicted by their own past words and current outcomes, especially those measured by hard data. The reports that follow tell the tale of apparent betrayal, but they also tell the tale of how those who have been doing the betraying could be brought to justice.
June site data for MHProNews will be gathered and analyzed soon. But going into the last days of the month, June surpassed by far any previous month in 2023 and for some time before that too. The industry professionals, investors, researchers, public officials, and others want to know what is being reported here and they respond by digging deeply into reports like this one. While page view per visit are down modestly, the total number of visitors are up significantly. We still have more pageviews per visit than Similar Web reported for giant news sites like Fox or CNN. To be clear, they are larger and get far more traffic. But as measured in pages per visit, they pale in comparison to MHProNews. So too does MHI and several of MHI’s rewarded ‘cheerleaders.’
Ironically, it is the disconnect between what MHI says, and what several of their own members have said and done that makes some of the most compelling evidence for a massive antitrust and RICO violating scheme that is operating in plain sight. When Cavco says that there is 2 trillion dollars in economic harm to the economy from not having enough affordable housing, believe them on that point.
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https://www.manufacturedhomepronews.com/manufactured-housing-institute-mhi-claims-contradicted-by-cavco-industries-ir-statements-shortage-of-affordable-housing-costs-economy-2trillion-annually-plus-mhville-markets-upd/ There is no lack of evidence that there is an affordable housing crisis. But that being so, why is MHI making the odd argument in their most recent (4.10.2023) Federated States ‘Newsletter’ that the industry ought to expect this current downturn because more expensive site built housing is also in a downturn? MHI’s research and reasoning are arguably a classic example of PALTERING and the use of a RED HERRING logical fallacy. Note: depending on your browser or device, many images in this report and others on MHProNews can be clicked to expand. Click the image and follow the prompts. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.
When Cavco says that the nation needs some 6 million affordable housing units, they are arguably correct, perhaps even still too low. But taking that 6 million figure from Cavco, cited above, if production were ramped up to a million units a year – so long as zoning barriers were removed and financing operated were at parity with conventional housing – it would take 6 years to close the gap. In the meantime people are born, immigrants come to America, and young people come of age. It is thus ludicrous for Skyline Champion, as another example, to have kept 8 plants idle when there were long ‘backlogs’ in much of 2021 and 2022. The disconnects are obvious to those who are familiar with the facts and realities of the industry.
Once the facts are understood, the narrative MHI and their allies spins collapses like a house of cards. That’s not to say that every MHI member is corrupt, but some most certainly appear to be manipulating the market for their own benefit.
MHProNews’ leadership have offered numbers of times to discuss or debate these concerns publicly. Let some of MHI’s largest brands, their staff, take a stage anywhere in the U.S. – be it virtual or in person. Let MHARR and this writer for MHProNews, plus any gutsy volunteers join in outlining to attendees the case outlined above. Invite the mainstream media. Invite academics, public officials, and researchers. See which side can best present their own case, based on evidence.
That has been offered several times, and his hereby being offered again. As Jim Ayotte aptly said, this isn’t rocket science. What ought to happen for manufactured housing is apparent. But the fact that Ayotte, Tim William, Elizabeth Birch, Amy Bliss, and others won’t publicly debate – side by side – with other MHI backers speaks volumes, doesn’t it? Yet those people are being paid to represent ALL segments of the industry, not just the consolidators!
Let Kevin Clayton, Tom Hodges, Tim Williams, Bill Boor, Mark Yost, and key members of Sun, ELS, Impact Communities, Flagship, RHP Properties and others take the stage in a great debate. Or perhaps they fear the possible humiliating outcome of prior debates?
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Ironically, Skyline Champion’s own investor pitch-deck provides ample evidence for manufactured housing industry underperformance. That same pitch-deck further provides evidence that Mergers and Acquisitions are a key part of their business model. What is there in such revelations that Birch and Williams miss? Bear in mind, that they are mere stand-ins who voluntarily raised their hands in defense of Berkshire and MHI firms like Skyline Champion. Notice: Several of the illustrations shown in this report can be opened in many browsers to reveal a larger size. To open this picture, click the image once. When the window opens, click it again to reveal the larger size photo. Use your browsers back key to return to the article. https://www.manufacturedhomepronews.com/masthead/true-tale-of-four-attorneys-research-into-manufactured-housing-what-they-reveal-about-why-manufactured-homes-are-underperforming-during-an-affordable-housing-crisis-facts-and-analysis/
Part III. Daily Business News on MHProNews Markets and Headline News Segment
Headlines fromleft-of-center CNN Business – from the evening of 6.30.2023
Cost cutting efforts
Shoppers enter a Walgreens store in Los Angeles on June 24, 2019.
Walgreens is closing 450 locations as it faces muted consumer spending and a pullback in demand for Covid vaccines
Fourth of July gas prices take an almost unprecedented plunge
Fox News pays $12 million to former producer who accused the network of rampant sexism
ESPN lays off top on-air talent
Twitter isn’t letting users view the site without logging in
JD Power quality survey: Alfa Romeo takes top spot
The pause on student loans is ending. That could be a storm cloud for the economy
The Fed’s favorite inflation gauge shows prices rose just 0.1% last month
News directors at Michigan TV station ousted after telling staff to ‘get both sides’ of Pride coverage
Actors poised to go on strike against studios, streaming services
Pokemon Go maker Niantic is laying off 230 employees
TSMC confirms supplier data breach following ransom demand by Russian-speaking cybercriminal group
Americans are growing optimistic about inflation
Travel in America is a crapshoot, and it won’t get better anytime soon
Geraldo Rivera says he quit Fox News after being fired from ‘The Five’
‘Serious concerns’: Top companies raise alarm over Europe’s proposed AI law
The Supreme Court’s affirmative action ruling could hurt the job prospects for candidates of color
Apple is now worth $3 trillion
California is about to give Hollywood studios a lucrative tax deal during the writers’ strike
$200 billion in frozen Russian assets could help rebuild Ukraine. Europe is trying to figure out how
Why Wall Street is bullish on beaten-down energy stocks
Dylan Mulvaney says Bud Light’s backlash response was ‘worse than not hiring a trans person at all’
This Chinese company will pay its workers $140 million to have kids
In instances such as Apollo, Berkshire Hathaway, Blackstone or others, manufactured housing may only be part of their corporate interests. Note: depending on your browser or device, many images in this report and others on MHProNews can be clicked to expand. Click the image and follow the prompts. For example, in some browsers/devices you click the image and select ‘open in a new window.’ After clicking that selection you click the image in the open window to expand the image to a larger size. To return to this page, use your back key, escape or follow the prompts.
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