The 2015 HUD appropriations bill approved by the Senate Appropriations Committee on June 6, 2014 — in addition to excluding any language to expand the recreational vehicle (RV) exemption to the federal manufactured housing law – also omits language sought by HUD to allow future manufactured home label fee increases via perfunctory “notice” rather than full rule making as required by the Manufactured Housing Improvement Act of 2000.

In its 2015 budget request and justifications, HUD proposed a statutory amendment to allow future manufactured housing label fee changes via “notice,” with no institutional mechanism to ensure the ability of program stakeholders to offer comments and relevant input. HUD attempted to rationalize this significant weakening of 2000 reform law safeguards by maintaining that the rulemaking requirement “hinders the Department’s ability to make timely adjustments to fees to reflect appropriated fee levels and shifts in certification label volume,” leaving the “program at risk of being unable to perform its statutory duties due to shortfalls in fee collections.”

In written comments to HUD filed on May 22, 2014 – and shared with the Senate HUD appropriations staff during development of the 2015 bill – however, MHARR objected to any such change in the law for future fee changes, noting: “For HUD to suddenly claim a need to make ‘timely adjustments’ to its certification label fee after 12 years of no adjustments … strains credulity. The entire track record of the HUD program and previous changes – or non-changes — to the program fee, demonstrate that rapid modification has never been an issue.”

The omission of any change by “notice” language in the Senate appropriations bill, accordingly, is an important step to maintain the rights of program stakeholders – and especially the regulated manufacturers that are responsible for payment of the fee – and to preserve the safeguards, protections and reforms of the 2000 law.

Just as important as this exclusion, is language in the full Appropriations Committee report on the 2015 HUD bill – again tracking concerns raised by MHARR in its comments — cautioning the Department against excessive, make-work regulation and activities.

In its May 22, 2014 comments, MHARR highlighted sustained and increasing program monitoring contract expenditures – notwithstanding reduced industry production levels – as a major factor in HUD’s pending label fee increase to $100.00 per section, stating: “These sustained and increased contractor funding levels, despite: (1) significantly decreased production [since] 2009; (2) a minimal number of consumer complaints and referrals to the federal dispute resolution system; and (3) demonstrated consumer satisfaction with … manufactured homes as reflected in [recent] congressional testimony … are attributable, in whole or in part, to a major de facto expansion of in-plant regulation.”

And now, the Committee, in its report, takes HUD to task for these increased “make-work” contractor activities that were never considered or recommended by the MHCC, stating:

“The Committee recognizes that manufactured home production has declined substantially since peak industry production in 1998, and continues to decline due to a variety of factors. Expenditures supporting the [manufactured housing] programs should reflect and correspond with this decline, which has specifically reduced the number of inspections and inspection hours required for new units.”

(Emphasis added).

With this issue now established and clearly on the radar screen of Congress, MHARR will continue to press for reductions in needless contract activities (i.e., expanded in-plant regulation) that increase regulatory compliance costs without corresponding benefits for consumers. At the same time, MHARR will continue to urge the Department to increase funding for State Administrative Agencies (SAAs), which provide consumer protection for an ever-growing number of new and existing homes.