“The [popular] definition of insanity is repeating the same actions over and over again and expecting different results.”
– sources, Solon, Psychology Today.
“Its like selling tickets to a zoo where only ‘1 in 100 are eaten by lions!’”
– Paul Bradley, President, ROC USA,
speaking about the problems caused by the issue of manufactured home land-lease community closures.
MHProNews has from the outset cited sources and those that deserve or wish to be acknowledged.
It was an off-the-record comment by a manufactured housing state association executive and award-winning winner member of MHEC – the Manufactured Housing Executives Council – who said that the proper role of a good association can be summed up with this 3 letter acronym, P.E.P. Protect, Educate, and Promote.
It was an association peer of that MHEC member who said that the industry is now witnessing “association malpractice” on display from the Manufactured Housing Institute (MHI), but also by others too.
In fairness, there are several associations that could lay claim to working hard at authentically attempting P.E.P.
But can an objective, informed, evidence oriented professional say that Manufactured Housing Instiutte (MHI) can honestly be named among them?
- The industry is continuing to consolidate while the industry remains mired under 100,000 shipments for over a decade.
- Our publisher L. A. ‘Tony’ Kovach was still an active MHI member when he said that there is a “high cost of low [manufactured home industry] volume sales.”
- Within weeks of that analysis being published, U.S. Bank closed its manufactured housing lending division.
- Since then, more independent retailers, and thousands of manufactured home communities have closed or were acquired by larger firms.
- Several manufactured home producers have closed and/or were been consolidated since Warren Buffett led Berkshire Hathaway acquired Clayton Homes, Oakwood Homes, and Clayton’s affiliated lending.
- Because sales volumes and/or occupancy are much lower than they were during the roaring 1990s, those businesses were bought at what is arguably a reduced value for their business.
That ‘bargain’ or ‘value acquisition’ – defined as being something under the intrinsic value of that thing – just happens to be the mantra of Warren Buffett, and others who follow that investment philosophy.
Buffett-led Berkshire Hathaway and a relatively small group of firms dominate the Manufactured Housing Institute (MHI). Is it a coincidence that since 2003, when Buffett purchased Clayton Homes, that the industry’s sales are still at historic lows? Or is it mere chance that the industry is still selling fewer HUD Code manufactured homes than when Berkshire acquired Clayton and their affiliated manufactured home lenders?
Or does MHI’s routine failures – acknowledged by their own elected and staff leaders in the videos below – have a subtle but open and obvious explanation?
Is there a scheme involving MHI to consolidate independents that is publicly unstated, but is nevertheless the increasingly apparent goal?
On MHLivingNews there are two new reports. One is the call from a community leader for congressional investigations. ICYMI, that report is found from the link below.
Manufactured Home Resident Leader Asks For Federal Investigations – manufacturedhomelivingnews.com
Californian Robert ‘Bob’ Van Cleef is involved in manufactured home resident advocacy. Bob and his wife sold their home and moved into a manufactured home. They enjoy their manufactured home, but were unpleasantly surprised by certain developments in their community. That’s when Bob stepped up to volunteer as community leader.
The other is a new spotlight about Nathan Smith and his partner’s in SSK Communities rebranding as Flagship Communities. Renaming is their right.
- But does the manufactured housing industry’s white hat firms really think that it’s okay that the Kentucky Manufactured Housing Institute (KMHI) gave one of those rebranded communities an industry award?
- Is it appropriate when Smith’s SSK Communities was one of the firms that John Oliver’s viral hit video spotlighted as predatory?
- Or when Smith and his partners’ You Got It Homes is rated as a “C-“ below average by the Better Business Bureau (BBB)?
- Or when the BBB rates Smith and his partners’ SSK Communities as a “F” a failing grade?
Home Shopping Consumer Alert – BBB “F” Rated SSK Communities Rebrands As Flagship Communities – manufacturedhomelivingnews.com
It’s a sad day when a good and necessary product or service gets sullied by the bad behavior of certain businesses. At the end of this fact check and expos will be a video with happy manufactured home customers, but they are not customers of SSK Communities, who recently changed their name to Flagship Communities.
Understanding the Industry Through the Eyes of the Those Outsiders Looking In
The industry must learn to see how others through the lens that others see manufactured housing.
- Democratic lawmaker’s staff have told MHProNews recently that MHI is viewed as being “anti-consumer.” Ouch.
- The history of Clayton Homes,
- the costly legal woes at Cavco Industries since the November 2018,
- or the ongoing headaches and heartaches that are caused often by Nathan Smith’s SSK,
- or embarrassment sparked by other MHI member firms such as Havenpark Capital (a.k.a. Havenpark Management)
those are just some of the reasons why the industry’s image is suffering, even though the quality of the homes is overall high, per federal data. Or how does this factoid look to those who ponder it?
An Interesting Tip from Equity LifeStyle Properties (ELS).
It was voices from Chairman Sam Zell’s Equity LifeStyle Properties (ELS) home office that encouraged MHLivingNews to do more than just puff-pieces on MHLivingNews, a comment shared while Vice-Chair Howard Walker was still alive.
Walker himself said the following, which strikes a similar note.
That obliquely raises the following point.
Third-party data reflects the point that MHProNews dominates in manufactured housing trade media.
That said, readership on numbers of Manufactured Home Living News (MHLivingNews) articles routinely dwarfs the totals of individual articles on MHProNews. There are far more total articles on MHProNews, but the readership of MHLivingNews articles, fact-checks, and analysis reports are often far more popular than similar ones done on MHProNews.
Given that there are more consumers than professionals, that data is as it should be. But that also means that the years invested in developing MHLivingNews can yield serious benefits for home owners, home seekers, advocates, investors, industry professionals, and all others.
Manufactured Housing Professionals Should Police Ourselves in Concert with Public Officials, or Others Will Police MHVille to the Detriment of Many White Hat Businesses
Ironically, KMHI – which recently gave Nathan Smith and the former SSK Communities/Flagship Communities an award – says that they have a code of ethical conduct. Presumably MHI does too.
What code of ethical conduct explains the track record of high-profile members misbehaving in a way that draws negative attention on the entire industry? When has MHI publicly admonished or repudiated bad behavior by one or more of their member(s)?
MHARR has been involved in several important initiatives over the years that are useful for the manufactured housing industry. After some prodding, MHARR put together the list linked below so that others had a more complete understanding that their methods are fruitful.
White House Announces Council on Eliminating Regulatory Barriers To Affordable Housing | Manufactured Housing Association Regulatory Reform
MHARR participated in a conference call on June 25, 2019, conducted by the U.S. Department of Housing and Urban Development (HUD), during which White House officials announced the impending issuance of an Executive Order (EO) to create a “White House Council on Eliminating Regulatory Barriers to Affordable Housing.”
But MHARR have long said that they need a post-production partner. In November of 2017, they published a deep dive white paper that explained why such a post-production association is needed.
MHARR Recommending Independent Collective Representation for Post-Production
Washington, D.C., November 15, 2017 – The Board of Directors of the Manufactured Housing Association for Regulatory Reform (MHARR) has authorized the public release of a comprehensive internal study by the Association of the past, present and future representation of the post-production sector (PPS) of the federally-regulated manufactured housing industry.
Indeed, as MHProNews has reported, the:
- Mainstream conventional housing has numerous trade groups, not just one. NAHB, NAR, MBA are just three of numbers to make the point.
- The automotive and RV industries also have several trade groups.
- Why is it that so many in manufactured housing have been lulled into believing that our industry needs only one trade group?
- When MHI is presiding over an era in our industry that benefits only a few ‘big boy’ companies, why should the balance of the industry trust MHI?
Benefits of a New MH Trade Group?
1) If post-production alliance of ‘white hat’ firms and-or a post-production association of white hat companies were forged, and worked with MHARR, then increased pressure on lawmakers and public officials to enforce good laws already on the books due in good measure to MHARR’s visionary efforts could be brought to bear.
2) By contrast, posturing and claims by MHI and several of their affiliates continues. Meanwhile, new rent control laws are being passed that will be harder on smaller communities who are routinely NOT the ones that cause rent-control or other such laws to be passed in the first place.
3) The status quo harms the interests of the bulk of the industry’s independents, while it seems to benefit those who consolidate the industry. Is that accident? Mere chance? Or is that trend by design?
Whatever the cause, it doesn’t change that fact that the trend is what it is. So in a sense, what matters most is that the industry’s independents act in a positive fashion, rather than continue to behave in ways that keeps the industry shrinking when it should be robustly growing.
Manufactured housing has a great story to tell, that when told well, results in sales. But it is MHI’s own Chairman, Joe Stegmayer who recently oddly admitted that the story about manufactured housing is in many ways an under-told story. That was a stunning admission on camera by the man who’s behavior purportedly sparked a Securities and Exchange Commission (SEC) subpoena that resulted in their stock value dropping like a rock overnight.
It was MHI member Terry Decio, whose father was once favorably found on the cover of Time Magazine, who in recent years lamented that he’s tired of being in the industry’s that is the best kept secret.
Stopping the Insanity
At Tunica, there was a meeting of a dozen industry professionals exploring a new post-production association. Susan Bretton with the newly formed National Association of Manufactured Housing Community Owners (NAMHCO) was in attendance. Bretton encouraged the group to advance the cause of a new post-production association. NAMHCO themselves broke from MHI for their years of lack of performance. Here’s how they put it.
It isn’t only about little companies vs. big ones.
Perhaps more to the point, it is unethical or problematic companies – so called black hat operations – vs. the interests of companies that behave in an ethical fashion. The black hat brands bring black hat headlines and cause the white hats of our industry avoidable grief.
But because there is no retail, finance, installer, transporters and other ‘white hat’ post-production trade group to work with MHARR, what remains are associations that are a mixed in with white hats. Who is harmed the most by that blending of black hats with white hats? Isn’t it obviously the white hat brands?
Our firm has worked with white hat companies to successfully increase sales at the local market level. Part of how that is accomplished is to distinguish a white hat company from black hat ones. Then educate consumers to look for the difference, as MHLivingNews has been doing for some time.
The message to prospective consumers can be simple. Manufactured housing and properly operated manufactured home communities are a good option that can save money and deliver a good lifestyle for millions.
But perspective homeowners ought to avoid the bad behavior of the few – who are often, but not always larger firms – which may also hold prominent roles in a national and/or state association(s). There are black hats in other sectors of housing, not just manufactured homes. So the need for consumers is to do their homework before buying, shop wisely, and work only with companies that take care of their customers.
It was the same year that Tony Kovach warned about the high cost of low-volume sales that MHProNews took part in a video production that included this clip with MHI president Richard ‘Dick’ Jennison.
That statement by Jennison was stunning then, and it is stunning – but also revealing – now.
After all, what trade association leader argues for low volume and slow growth? That statement by MHI’s president, in hindsight, was a warning sign. It seems like an open admission to the MHI agenda in recent years. Slow growth or negative growth results in consolidation. Mate that statement with the Nathan Smith comments in the video posted above reflecting his laughing as he said he wanted all of the communities for himself. Spoken like a true consolidator?!
MHI’s own prior president, Chris Stinebert, politely ripped his own association in the exit message for failing to put customers first, and in failing to provide for alternative sources of financing. ICYMI or need a refresher, see his exit message at the link below.
Former Manufactured Housing Institute President, Manufactured Home Owners, Urban Institute, and You – manufacturedhomelivingnews.com
” During my time at MHI, I was often asked the same question, “What must happen for business to return – for manufactured housing to begin growing again? ” My stock answer would usually start with ‘financing’ and end with a general comment about the need to bring ‘value’ to our customers.”
These breadcrumbs merit Congressional inquires.
Jennison, prompted, admitted in 2015 that manufactured housing could achieve 500,000 new HUD Code home sales per year. Why then is it that the industry is still struggling under 100,000 new home shipments? Why was there an 8 month dip in year over year new manufactured housing production/shipments?
How to Reverse the Trends, Benefiting Home Owners, Professionals, Investors and Others
If there were far more new home sales, as communities become full, the value of each home in that community arguably rises. Meaning, not only does a family-owned business benefit, but so to can their residents.
If new manufactured home communities and the enhanced preemption provisions of the Manufactured Housing Improvement Act existed, that would benefit consumers and most ethical industry owners/investors. New supply must be brought on line in order to address the problems caused allegedly predatory ‘black hat’ companies such as Havenpark, SSK/Flagship Communities, and others.
No one argues that there should be no more apartments built in order to make existing apartments more valuable. It is arguably madness – or worse – that MHI hasn’t addressed this problem years ago.
There are a several things that could result in sustainable surge of new manufactured home sales and new communities and privately owned home sites coming online. Here is a partial list.
- A new post-production alliance and/or trade association can make a bright line distinction between industry black hats and white hats. The KMHI and MHI examples, by contrast, seem to suggest that there is a lack of will or ability for those and possibly other MHEC members to address the negative blowback caused by black hat firms.
- Such a new alliance or trade group could do educational events targeting industry, the general public, affordable housing advocates, and public officials. It should be noted that Stinebert and manufactured housing industry investor Robert Robotti held something like those sessions for investors. But something more robust could be done that would boost the sales of those who are part of such a post-production group.
- Such a new trade group should publicly denounce black hat behavior, it should be part of their bylaws, along with an enforced code of ethical conduct.
- That trade group could work with MHARR and any others that want to see the industry grow in a sustainable fashion.
- That trade group could join hands with select resident groups that have a similar interest in boosting the image and understanding of manufactured housing, while calling out black hat behavior. It is a disgrace to the industry that lawmakers and their staff’s see MHI as being anti-consumer. That must change, and after years of waiting for MHI to change, it should be clearly argued that it is insane to keep waiting. MHI debatably has too many years of bad baggage. Isn’t it insane to keep doing the same things, and expect a different result?
- Resident and industry trade groups must call on Congress to hold public hearings on why problematic behavior that has kept good laws from being enforced have come from within the ranks of the manufactured housing industry.
- As an upcoming special report will spotlight, there is also evidence that certain public officials are part of that effort to misdirect and fail to implement the understanding of laws such as Enhanced Preemption.
This week the latest data on manufactured home shipments are going to be made known. If the 8-month downturn abates or not, it should not change the industry’s white hat members resolve to forge a new post-production trade group or alliance.
What’s the Alternative?
One of the attendees of the Tunica exploratory meeting made a case for trying to ‘take control’ of MHI. Months have gone by. Has anyone witnessed anything different from MHI since Tunica? Or is it just more of the same photo-opportunities and fig leaf posturing? There is hoopla presented to the industry’s members. But by contrast, where is the effort to use the good news that HUD Secretary Ben Carson or others have made possible?
It’s MHI members, past and present, that have been among their most vocal critics.
The journey of a thousand miles begins with a single step.
The opportunity to reform MHI has been repeatedly provided and has gone a wasting.
The trendlines make it clear. The time to form a new white hat post-production structure is now.
Lessons Learned…
It Isn’t Just MHI Members Who Believe They Benefit From Black Hat Behavior…
Keep in mind that some believe that they benefit from MHI’s ‘black hat’ behavior in an indirect way. So, don’t be surprised if white hat firms don’t immediately get on board with this renewed initiative.
But among the lessons to be learned from the Last Week Tonight with John Oliver viral hit video, errantly named “Mobile Homes” is this. Buffett’s and certain MHI member firm’s financial and other fingerprints are arguably on MHAction and the black hat operations. ICYMI, see that, linked below.
Prosperity Now, Nonprofits Sustain John Oliver’s “Mobile Homes” Video in Their Reports
Who would have thought in February 2019 that the John Oliver video was coming in April 2019?
There are billions of dollars in upside opportunities in manufactured housing. But in order to achieve that potential, operations of good will should either learn to do on their own what is described herein for their local market and/or they should join forces in a lawful fashion with ethical operations that want to grow and earn more should team up with others like them in a new trade group or alliance.
MHIdeals = Manufactured Home Independents Ethical Advancement Leadership Society
Such a society could foster what’s needed for manufactured housing to help millions of more Americans achieve the satisfying dream of home ownership.
Let MHI and black hat firms stay in MHI. If there is a new MHIdeals organization, that group could be the voice for honest business practices that are good for consumers and taxpayers.
Even membership in a properly operated MHIdeals would be valuable. Why? Because if a robust and enforce code of ethical conduct exists, then every MHIdeals member would arguably be a firm some home seeker, investor, or professional would want to do business with.
MHLivingNews, following the tip from ELS insiders and others, began laying the foundation for a method of spotlighting bad behavior from good. Manufactured homeowners, housing shoppers, and investors exploring the manufactured home arena are all finding this revised vision of MHLivingNews to be a useful and positive resource.
While ELS is eschewed by several, it should be recalled that they purchased a ROC and do so in a fashion that provided those residents with safeguards. It is too soon to say what may follow. But suggestions like the one made to MHLivingNews is noteworthy.
It should be noted, as a disclosure, that ELS is not, nor has been, a sponsor of either site.
It may sound odd that something that spotlights negative behavior can be a positive force. But the alternative is to allow lawmakers and regulators to punish the good along with the bad.
Open Letter – Kurt Kelley, Joanne Stevens, Frank Rolfe, Manufactured Housing Review About Senator Elizabeth Warren’s Request For Information from Manufactured Home Community Owners – manufacturedhomelivingnews.com
Kurt Kelley, JD, is the publisher of the Manufactured Housing Review ( MHR), as the below reflects in his quarterly’s ” Publisher’s Message.” For the 2019 Quarter 1 issue, his message read in part as follows. [in this issue] address Senator Elizabeth Warren’s attempt to gather private information from Manufactured Home Community owners.
The industry must police its own and call for appropriate actions. In response to a request for comment on the article above, Kurt Kelley put it in writing to MHProNews the following statement.
“I’m glad to call you a friend, Tony…You and some other industry leaders do a fine job of holding MHI and others accountable for their work. I’ve chosen to leave that to you.” Kurt Kelley, MHReview publisher.
Kelley did not protest any of the report linked here and above. Instead he said “You [MHLivingNews/MHProNews] and some other [presumably, MHARR] industry leaders do a fine job of holding MHI and others accountable for their work.”
That certainly sounds like encouragement of this platform’s – and arguably MHARR’s – efforts to expose and get to the root causes of the problems that are holding manufactured housing at artificially low levels.
We in turn value that Kelley has published articles that – even if obliquely – revealed the troubling nature of the Omaha-Knoxville-Arlington axis. Kelley is also the only trade media, besides ours, that occasionally will publish a MHARR article. By contrast, MHInsider, George F. Allen, and others are routinely publishing only pro-MHI material, and they – as well as Kelley – arguably do so uncritically.
Stop the Insanity
It is time to stop the insanity.
It is time to move beyond hoping or trusting that MHI might change. Hasn’t that proven to be fruitless? Or arguably counterproductive?
It is important to note in closing that MHProNews has given Kevin Clayton, Tim Williams, Nathan Smith, Joe Stegmayer, Richard ‘Dick’ Jennison, Rick Robinson, and MHI’s outside attorney several opportunities to respond to these and related concerns. They’ve opted to remain silent. Perhaps there is a good reason for them to take the fifth?
That’s today’s latest edition of “News Through the Lens of Manufactured Homes, and Factory-Built Housing,” © where “We Provide, You Decide.” ©. ## (News, fact-checks, analysis, and commentary.)
1) Marketing, Web, Video, Consulting, Recruiting and Training Resources
Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
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White House Announces Council on Eliminating Regulatory Barriers To Affordable Housing | Manufactured Housing Association Regulatory Reform
MHARR participated in a conference call on June 25, 2019, conducted by the U.S. Department of Housing and Urban Development (HUD), during which White House officials announced the impending issuance of an Executive Order (EO) to create a “White House Council on Eliminating Regulatory Barriers to Affordable Housing.”
MHI CEO Dick Jennison’s Pledge – 500,000 New Manufactured Home Shipments
Positive, Uplifting Third-Party Reports Favor Modern Manufactured Housing, So What’s Going Wrong?
