Danny Ghorbani is an award-winning engineer and national association leader who served for years as a vice president in what is today known as the Manufactured Housing Institute. Ghorbani has been described by a former MHI chairman as ‘the elephant in the room’ during an MHI meeting. Because of the complex, costly, and critical nature of the DOE manufactured housing energy rule and related litigation (Case No. 23-cv-00174 In the United States District Court for the Western District of Texas), MHProNews has asked Ghorbani to explain why MHI’s stated plan is risky and could lead to a destructive and serious downturn for the manufactured home industry (see below).
The Q&A that follows in Part I of today’s report was conducted mostly by email. The remarks by Ghorbani are as he submitted them in writing, save for the requested by phone addition of some hotlinks by MHProNews in his remarks that did not change his written statements. Part II includes additional related information with some focused MHProNews analysis in brief.
Part I
MHProNews Question to Danny Ghorbani:
The implementation date of the US Department of Energy’s (DOE) Manufactured Housing “energy standards” regulation is fast approaching, as you know. The Manufactured Housing Institute’s (MHI) and Texas Manufactured Housing Association (TMHA) belatedly-filed law suit is still pending. The Manufactured Housing Association for Regulatory Reform’s (MHARR) provided aggressive and factual opposition to the DOE plan, demanding that DOE junk their manufactured housing energy rule and go back to the drawing board for a re-do. DOE, in a move that some believe may be a deal to side-track the MHI-TMHA lawsuit, has announced a delay in the implementation date of that regulation. Given the checkered past of DOE and MHI on this energy rule, this has increased the chaos, confusion, and mistrust around this rule-making process. Concerns or anxiety among stakeholders – such as independent producers of HUD Code manufactured homes – is understandable, given that manufactured home builders would have to implement the costly DOE rule. But other industry members and consumers must also bear the brunt of the ultimate price for this regulation. In an effort to bring clarity — and, hopefully, a positive vision to this critical and complex issue that the industry and consumers have faced since the passage of the Manufactured Housing Improvement Act of 2000 (MHIA or 2000 reform law) — MHProNews in its March 30, 2023 edition published an article that is essentially a side-by-side comparison of MHI’s and MHARR’s public communications regarding the DOE’s latest move and each association’s response.
With that brief background and given your knowledge of and involvement with the passage of both the Manufactured Housing Improvement Act of 2000 (a.k.a. the 2000 Reform Law) and relevant provisions of the Energy Independence and Security Act of 2007 (EISA), the enabling legislation for DOE’s energy regulation — added to your engineering background — as well as an update to our July 2022 Q & A on the same subject, will you please explain to our readers in a brief and simple-to-understand language:
1- Where are we with the DOE’s market-killing, destructive, discriminatory, and devastating final MH energy rule? And…
2- Please do the same with a simple and understandable explanation of this DOE energy rule issue.
Danny Ghorbani’s Answer:
That is quite a laundry list that only people like you and Kurt Kelley, I might add, even bother to provide, let alone explain to readers in our industry these days. As I have said many times since the federalization of our industry (by necessity) in 1974, manufactured homes are a simple product with a very complicated and complex, but necessary federal law and regulation. The problem is that very few industry folks, and particularly newcomers, fully understand these complex issues and are thus prone to being misled by wannabe “experts” who know practically nothing about these matters, but insist on pontificating and, sometimes, actually trying to represent the industry on a national, state, local level. This has to change, as it is hurting our industry particularly at the national/federal level, as evidenced by this draconian DOE MH energy regulation.
Back to your questions with a minor correction…you are correct with your statement about my knowledge and full involvement with the 2000 Reform Law. But MHARR and I were not involved with EISA until the very end of the legislative process, when we included the provision about DOE consulting and working with HUD and MHCC to craft the energy regulation, which, of course, DOE has never fully complied with. It was an ugly legislative process, the relevant details of which have never been told for certain reasons. Maybe I will reveal that someday, if I ever write the book about our industry that many industry people are encouraging me to do — but not now.
I would also like to say that MHProNews has done a great service to our industry and consumers by showing MHI’s and MHARR’s latest communications with their members about the DOE final MH energy regulation because since our June 2022 Q & A, this is the first time that your readers can actually see the stark difference in approach between MHI and MHARR regarding this very critical and most complex regulation. In fact, the titles of these two documents alone are quite telling as to why our industry will be devastated and potentially destroyed if this regulation is implemented as it is. So, we all should be grateful that the shroud and fog of secrecy surrounding this critical matter is gradually being lifted…not completely yet, though.
In my opinion, it is very simple to understand where we are, as both MHI and MHARR have gone to their respective corners, with their starkly different approaches, with one in flux and the other intact. MHI, in essence, is continuing with its “go along to get along” with DOE (only diverted slightly, thanks to MHARR’s continuing education of industry members, which forced MHI’s lawsuit against DOE, albeit too late — with, potentially, a behind-the closed-door compromise for DOE to delay its implementation date), which has resulted in the current devastating energy regulation, but finally asking DOE for some tweaking for the mandatory compliance with both EISA and the relevant provisions of the 2000 Reform law. MHI has been derelict, as it didn’t do this from the very beginning of the rulemaking process, thus allowing DOE and its energy special interest allies to get away with their current “final” regulation. MHARR’s document, on the other hand, staunchly sticks with its constant, correct, aggressive and forceful position, holding DOE accountable for its failure to fully comply with both relevant laws from the start, while demanding that DOE strike the current final regulation and go back to the drawing board for a re-do. With that, let’s delve into the relevant parts of the actual language of each of these two documents side by side.
MHARR’s Relevant Actual Language:
“This desperation move by DOE should not – and must not – result in the industry backing down on its pressure to strike down the DOE energy standards and any related enforcement mechanism in their entirety and to send DOE back to the drawing board on this entire matter, with proper input, consultation and coordination with both HUD and the Manufactured Housing Consensus Committee (MHCC) as required by applicable law.
The delay in the effective date of the energy standards stemming from a corrupted DOE “negotiated rulemaking” process initiated in 2015, effectively concedes the validity of MHARR’s longstanding assertion that DOE’s 2022 final standards could not become effective without a testing, enforcement and compliance mechanism, and that DOE’s final rule is fatally defective because the costs associated with such regulatory compliance – an essential component of any rule — were not included in DOE’s supposed cost-benefit analysis.
The industry’s objective, accordingly – and the objective of the pending litigation brought by the Manufactured Housing Institute (MHI) – cannot be the mere delay of an illegitimate and destructive rule that would ultimately devastate the manufactured housing market. Rather, the objective should – and must be – the total invalidation and rejection of the rule, either by DOE itself or pursuant to a court order after full litigation on the merits. MHARR, had it been a party to that litigation (notwithstanding the broad and liberal use of MHARR arguments and theories in that case), would have insisted on the final and total invalidation of the 2022 DOE final rule as the ultimate objective of that court action.”
MHI’s Relevant Actual Language:
“It is critical that DOE extends the compliance date for the manufactured housing energy efficiency standards until after the Department’s future enforcement procedures are created and take effect. MHI strongly recommends DOE take this action as without a clear understanding of how the Department intends to enforce these manufactured housing energy standards or how the standards will be evaluated for compliance, it is impossible for the industry to know whether or not its compliance efforts will be found satisfactory to DOE. DOE’s enforcement procedures should be created through robust consultation with the industry to apply the energy efficiency standards to the realities of manufactured home construction. The industry needs time to understand DOE’s enforcement procedures and prepare their operations to ensure compliance with the energy standards.”
These two documents speak for themselves because while MHARR’s document is clear, concise, consistent and unwavering, MHI’s document is its usual double talk and weak posturing, not even mentioning once and/or giving any hope to its dues payers, whatsoever, that it is willing to fight to reverse this regulation and force DOE to fully comply with both laws. MHI continues to posture, trying to play catch-up and clean-up some of the mess that it helped to create by going along with the industry’s foes, while ultimately advancing the current terrible regulation. MHI is trying to tweak the stuff that it initially ignored, as it failed to join MHARR from the very beginning to demand that DOE comply all applicable law. This is not rocket science. As the old saying goes, you can put lipstick on a pig, but it is still a pig. The point being that no matter how much MHI tries to correct its early and extremely damaging mistakes, they will not remedy or correct DOE’s final MH energy regulation, as the industry should demand and force DOE to junk that regulation and go back to the drawing board for a re-do in full compliance with both laws.
To answer your second question, I will try to schematically explain this issue and make it even more clear with an example very roughly corresponding to our industry’s continuing and, in fact, worsening predicament with DOE’s final MH energy regulation, and what should be done about it.
Here it goes. Let’s assume a developer decides to build a 10-story building from a set of blueprints prepared by an architect that he trusts, but which are actually laced with numerous errors that the developer is not aware of. So, he naively goes forward and tells his trusted contractor to start the construction of the 10-story building. Let’s continue to assume that the contractor recognizes the errors in the blueprint, but goes forward and completes the construction, ending-up with a faulty, crooked, drastically tilted and worthless building that nobody would want be in. What are the developer option(s) at that point? The logical answer is to tear down the building and demand that the architect go back to the drawing board for a new and correct set of blueprints because no amount of tweaking of the original blueprints would correct the problem(s), save the building, or make it livable, as the building would soon collapse completely. Well, this extreme example is exactly the predicament that our industry and consumers are faced with today — i.e., a monstrous energy regulation that leaves the industry and consumers with no choice, but to demand (and force) DOE to junk the regulation and go back to the during board for a new set of manufactured home energy criteria in full compliance with both EISA and the relevant provisions of the 2000 Reform Law, no matter what it takes to accomplish that result.
As simple as that. ##
Danny D. Ghorbani
202/262-2170
dannyghorbani@aol.com
Part II Additional Information with More MHProNews Analysis, Views, and Commentary in Brief
As Lance Inderman has pointed out, Mark Twain aptly noted that it is easier to fool people than to convince them that they have been fooled. If asked, most career minded manufactured housing industry members would be unlikely to want a serious, protracted, and potentially destructive downturn. Yet that appears to be precisely what the industry faces if there isn’t a prudential course correction. Yet, as MHProNews has evidenced and suspected, MHI appears to be making either logically and demonstrably belated and foolish moves, or they are apparently undermining the manufactured home industry potential from within. Consider the evidence. Where was Kevin Clayton’s call for skyrocketing growth in his recent video and interview? As one of several obvious concerns, why didn’t Kevin mention the threat of the DOE energy rule?
And why do MHI leaders continue to duck accountability?
As MHProNews’ various Q&As with MHARR leaders have revealed, MHI’s posturing and maneuvers have left the industry as a shadow of its former glory.
Yet, the industry’s potential during a widely acknowledged U.S. affordable housing crisis ought to be obvious.
Instead of behaving in a manner that aims for total success, MHI leaders have instead played a documented part in bringing the industry to its current challenges. An MHI insider has told MHProNews that the industry ‘will never’ return to its former highwater marks in our lifetimes.
As an MHI member producer told MHProNews, without serious changes to the current course by MHI, the industry is heading for a sharp downturn. Even the pro-MHI TMHA has admitted that a downturn is likely (see linked remarks below). Which begs the questions. Whose side is MHI actually on? Why do they continue to play footsy with the industry’s competitors and agencies that have undermined the industry?
For arguably the most complete coverage and understanding of the role that past- and current MHI leaders have played in this process, see the various linked reports. Meanwhile, MHProNews plans to continue to shed light on why the industry is underperforming, and why the industry has suffered 4 straight months of downturn instead of sustainable, profitable, robust and rapid growth.
Every con-job relies on trust. When MHI’s own corporate and association leaders keeping ‘making mistakes’ that just happens to benefit consolidators, why should the industry’s independents and members trust them? Or will MHI’s leaders finally wake up, authentically pivot and do what is right for “all segments” of the manufactured home industry? Time will tell. MHProNews will continue to report and provide the insights and analysis that industry pros, advocates, and others crave.
With respect to the DOE manufactured housing energy rule issue? MHI’s job, and that of their attorneys in the DOE legal action, ought to be simple. Force DOE to start over, precisely as MHARR has advocated. Anything else is snatching defeat from the jaws of victory. Anything else risks harms that violate MHI and their corporate leaders’ fiduciary and other legal-ethical responsibilities to “all segments” of the industry. The industry can other grow to new heights or slow and sink to new lows. Which course will MHI leaders take? ##
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By L.A. “Tony” Kovach – for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
Related References:
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