Over the past twelve years, the manufactured housing industry has been decimated. Every segment of the industry has felt the pain as production has tanked, plants have closed and jobs have disappeared. The impact has been no less harsh for consumers — particularly lower and moderate-income families — many of whom have seen their dreams of home-ownership erased by the same factors propelling the industry’s decline. Through good economic times and bad, while the market for other types of housing has been up and down, the trajectory of the HUD Code industry for over a decade has gone in one direction — downward.
The reasons for this are plain enough. The industry, despite good laws — such as the Manufactured Housing Improvement Act of 2000 and the Housing and Economic Recovery Act of 2008 (HERA), with its “duty to serve” mandate and improvements to the Title I and II manufactured housing programs of the Federal Housing Administration (FHA) — is treated as a punching bag by regulators at all levels. Key elements of these good laws, desperately needed for an industry turn-around and recovery, have either not been implemented at all, or have implemented in a way that twists their intended meaning and effect, turning them into battering rams against an already struggling industry, instead of meaningful reforms. Just some examples include the failure to implement enhanced preemption, the expansion of in-plant regulation in violation of the processes required by law, the ongoing destruction of the Manufactured Housing Consensus Committee (MHCC), the effort to exclude chattel financing from the “duty to serve,” the discriminatory restrictions placed on FHA Title I originators, and a host of others.
At the same time, knowing that federal regulators have never gotten beyond their “trailer” view of manufactured homes, despite repeated instructions from Congress to the contrary, opportunists elsewhere in government and the private sector have likewise targeted the industry and its consumers as an easy mark to advance their broader agendas. Like sprinkler advocates who, despite a losing battle nationwide to mandate costly sprinklers for all homes, opposed by all other segments of the housing industry, continue to press for a federal manufactured housing sprinkler standard — with help from HUD regulators and the industry establishment. Or “energy” zealots now using generic industry establishment research to push the Department of Energy (DOE) for requirements that could not only be crippling from a cost perspective, but could eliminate certain types of the most affordable manufactured homes altogether.
Yet despite this track record, this sorry, inexcusable decade-plus history of actions designed to keep manufactured housing in its outdated “trailer” straightjacket, while imposing discriminatory and needless mandates, demands and restrictions that handicap the industry’s ability to compete generally and particularly undermine its smaller independent manufacturers, retailers and communities, the industry establishment continues with its policy of go-along-to-get-along, a policy that is little more than code for — (a) doing nothing, or (b) giving regulators a free pass or cover on issue after issue. They argue this is necessary because the industry has “to work with these … folks,” i.e., regulators, “who are in the business of regulating.” Just ignore the fact that “working with these folks” for over a decade has accomplished less than nothing, as the industry has steadily and dramatically deteriorated.
By contrast, the industry establishment policy of “working with these folks” has been a boon to the HUD program and its contractors. Since 2008, the program budget and expenditures have increased by millions, the program has added staff and is increasing payments for contract monitoring, even though industry production over the same period plummeted from 81,000 homes to just over 49,000.
Luckily, though, the industry and consumers of affordable housing have been handed a golden opportunity to change the existing dynamic in the nation’s capital, where it is comprehensively regulated and where, as the events of the past decade-plus show, critical decisions are made that directly impact its success or failure.
As is now acknowledged by both political parties in Washington, D.C. — in Congress and in the Administration — the 2010 election delivered an unmistakable message and warning from the American people, that jobs, economic recovery, getting government off the back of small business and restoring overall business competitiveness must be a primary focus for lawmakers in the nation’s capital. The impact of this message is evident in the President’s Executive Order of January 18, 2011 which, among other things, emphasizes that federal regulation must “promot[e] economic growth, innovation, competitiveness and job creation.” It is also evident on Capitol Hill, where MHARR submitted testimony to a January 26, 2011 hearing of the House Financial Services Committee on “Promoting Economic Recovery and Job Creation: The Road Forward,” explaining how the HUD Code industry, a microcosm of the small business economy, is being dragged down by regulators pursuing their own agendas.
The good news then, is that lawmakers, aware of the mood of the country, are focused on the types of issues that could help revive the HUD Code industry and start ending the abuses that have done so much harm. The question for industry members, however, and especially for the smaller independent retailers and communities that have poured millions of dollars into collective representation in the nation’s capital just to be hammered by regulators, is whether they will continue to support a go-along-to-get-along approach, as their ranks continue to dwindle, or whether, like MHARR, they will demand that Congress and the Administration hold these regulators accountable for complying with all relevant laws?
It would be a good start in the right direction if those industry members who are in Washington, D.C. in March of this year, would make sure their representatives in Congress know that the good laws they have provided for the industry and consumers are not being fully and properly implemented by federal regulators, to the extreme detriment of the industry and Americans in need of affordable, non-subsidized home ownership.
In MHARR’s view, the industry has been presented a unique opportunity to reverse its fortunes in Washington, D.C. Whether this opportunity is seized and turned into change that is desperately needed, or simply passes by, will be up to each industry member and especially those in leadership roles.
MHARR is a Washington D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.
