HUD Rescinds 2017 “Guidance” On Carport-Ready Homes

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MAY 21, 2019

In one of its first substantive regulatory reform actions under Trump Administration Executive Orders (EO) 13771 and 13777, the U.S. Department of Housing and Urban Development (HUD) announced on May 20, 2019 (see, copy attached), that it is rescinding sub-regulatory “guidance” issued in 2017, requiring Alternate Construction (AC) approval for “carport-ready” manufactured homes.

MHARR first raised the issue of HUD’s unilateral designation of certain manufactured home features as “add-ons” pursuant to 24 C.F.R. 3282.7(b) – and thus requiring AC approval – in 2014 meetings and communications with former HUD program administrator, Pamela Danner.  The Association continued to press the issue of defactorulemaking via sub-regulatory “guidance” memoranda (i.e., agency dictates issued without notice and comment rulemaking proceedings or Manufactured Housing Consensus Committee review as required by federal law) – concerning this and numerous other matters, in its EO 13771/13777 comments to HUD filed on June 7, 2017, further EO 13771/13777 comments submitted to HUD on February 20, 2018, and in an April 25, 2018 communication to Acting HUD General Deputy Assistant Secretary, Dana Wade.

HUD’s action in this matter is specifically based on recommendations of the Manufactured Housing Consensus Committee (MHCC), approved at its September 2018 in-person meeting.  As reported by MHARR at the time, “the Committee voted to recommend the withdrawal of HUD Field Guidance memoranda requiring Alternate Construction (AC) approval for carports, by effectively classifying carport-ready designs as involving an ‘add-on.’ The Committee also adopted a resolution supporting amendments to various sections of the Procedural and Enforcement Regulations to permit specific ‘add-on’ structures, including garages. Again, eachof these changes have been specifically addressed and advocated by MHARR in both written comments and direct interactions with HUD officials.”

Consistent with these MHCC recommendations – and, again, as noted by HUD in its May 20, 2019 Notice – a separate June 12, 2014 HUD memorandum concerning “attached garages” is not being formally rescinded pursuant to this Notice, but will, apparently, be addressed by forthcoming proposed-amended regulations.  Nevertheless, MHARR continues to maintain and assert in direct meetings with HUD officials and related communications that allsuch sub-regulatory “guidance” memoranda are unenforceableand must be withdrawn.

Moreover – and in addition to the foregoing – the fact that it has taken more than two yearsfor the HUD program, under its current leadership, to implement the very first substantive regulatory reform action since the Trump Administration took office, underscores a growing concern among manufactured housing program stakeholders, as first reported by MHARR following the recent April 30 – May 2, 2019 MHCC meeting, that some within the HUD program may be “slow-walking” long-overdue regulatory and program reforms in order to “wait-out” the current Administration and the tenure of Secretary Carson, who, according to media reports, may be leaving HUD at the conclusion of the President’s current term.

Regardless, MHARR will continue to aggressively pursue this matter with HUD, Congress and other appropriate authorities.

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MHARR Launches “Fighting Discriminatory Zoning Mandates” Manufactured Housing Project

Washington, D.C., May 15, 2019 – With manufactured housing producers, retailers and communities offering their best homes (and related consumer protection) ever, and in light of the failure of the ostensible representation of the industry’s post-production sector to fully and effectively advance the marketing, consumer financing and, most importantly, the full acceptance of federally-regulated manufactured housing as the nation’s premiere source of non-subsidized affordable housing and homeownership, the Manufactured Housing Association for Regulatory Reform (MHARR) has launched a new project and initiative to fight selected, especially egregious instances of discriminatory and exclusionary zoning targeting manufactured housing and manufactured housing consumers.

This “Fighting Discriminatory Zoning Mandates” project is the first substantive step being taken by MHARR to implement a decision of the MHARR Board of Directors, at its March 2019 meeting, to take the lead in addressing three major post-production sector issues that have stifled the growth and expansion of the manufactured housing industry and its ability to serve even greater numbers of lower and moderate-income American consumers. These three issues are: (1) discriminatory zoning restrictions; (2) placement exclusions; and (3) increasing the availability of manufactured home consumer lending pursuant to the Housing and Economic Recovery Act of 2008 (HERA).

The MHARR zoning project, which is designed to take place in cooperation – and with the assistance of — manufactured housing industry state associations, asks states (see package attached) to cooperate with MHARR in providing, for review, study, analysis and follow-up, the two most egregious instances of exclusionary and/or discriminatory zoning within their respective states – with one involving the development or expansion of a manufactured housing community and the other involving the placement of an individual home on private land.

MHARR’s plans include, among other things, selecting several instances of each type of discrimination/exclusion, which will then be fully vetted and analyzed.  MHARR will subsequently select one instance of each type of discrimination (i.e., community and single-home/landowner) and then begin to advance these matters to the highest necessary and appropriate court (either state or federal).

In Washington, D.C., MHARR President and CEO, Mark Weiss, stated: “Nearly twenty years after Congress adopted the enhanced federal preemption of the Manufactured Housing Improvement Act of 2000, smaller industry businesses and consumers have waited long enough for a resolution of the discriminatory zoning restrictions and exclusions that, for far too many, have slammed shut the door on the American Dream of home ownership.” Weiss continued, “Against the backdrop of a longstanding defacto leadership vacuum on this and other crucial matters, MHARR will seek to appeal to the moral compass of every industry member to join-in and support this effort, much the same as occurred in the 1990s, when MHARR’s leadership brought the industry together to modernize the original 1974 federal ‘trailer’ law and cement the status of manufactured homes as legitimate ‘housing’ through the Manufactured Housing Improvement Act of 2000.”

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

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MHARR Testimony to Congress Seeks Increased SAA Funding and Corresponding Contractor Reductions

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Washington, D.C., May 10, 2019 – With manufactured housing production levels heading downward again in 2019, the Manufactured Housing Association for Regulatory Reform (MHARR) has once again called on Congress, in appropriations legislation for Fiscal Year (FY) 2020, to direct HUD to reduce funding for its bloated, over-grown program “monitoring” contract and, instead, direct a corresponding amount of overall program funding to increase payments to its State Administrative Association (SAA) partners.

In written testimony (see copies attached) submitted on May 9, 2019 to both the House and Senate Transportation, Housing and Urban Development and Related Agencies Appropriations Subcommittees, MHARR points out that funding for the monitoring contract – with an entrenched 40-year-plus contractor and multiple pseudo-governmental functions that should not be performed by a contractor – has grown steadily, even as the production of new manufactured homes remains at levels far below historical averages.  At the same time, HUD funding for SAAs, which provide front-line consumer protection for an ever-growing number of both new and existing homes, has declined in relation to those same historical production averages, leading a number of states to consider leaving the program.

To remedy this anomaly, and to ensure that the monitoring contract is properly restricted to those functions – and only those functions – authorized by the Manufactured Housing Improvement Act of 2000, MHARR’s testimony seeks a $2,000,000 annual reduction in the budgeted program contract function and a corresponding $2,000,000 annual increase in SAA funding.

In Washington, D.C., MHARR President and CEO Mark Weiss stated: “If Trump Administration regulatory reform policies are to have any impact at all – and any staying power in the future – it is essentialthat the HUD manufactured housing program monitoring contract be pared-back, while SAA participation in the program is assured and properly-funded as well.  Congress can assure this by reducing contractor funding while directing HUD to devote additional corresponding funding amounts to the state SAAs.  The resulting benefits for both the industry and consumers would be extremely significant.”

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

 

 

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Assistant Secretary Brian Montgomery Removal of Obsolete and Superseded Guidance Documents Letter

HUDDeputySecretaryBrianDMontgomeryPhotoLetterObsoleteGuidanceDocumentsManufacturedHousingAssociationRegulatoryReform

Re:  Notice of Removal of Obsolete and Superseded
Guidance Documents – Docket No. FR-6156-N-01

Dear Secretary Montgomery:

As you know, the Manufactured Housing Association for Regulatory Reform (MHARR) is a Washington, D.C.-based national trade association representing the views and interests of smaller and medium-sized independent producers of manufactured Housing regulated by the U.S. Department of Housing and Urban Development (HUD) pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended by the Manufactured Housing Improvement Act of 2000 (42 U.S.C. 5401, etseq.). MHARR member companies operate in all regions of the United States.

On April 5, 2019, HUD, pursuant to Executive Order (EO) 13777 (“Enforcing the Regulatory Reform Agenda,” issued February 24, 2017), published a “Notice of Removal of Obsolete and Superseded Guidance Documents” (Notice) in the Federal Register.[1]Section 2(iv) of EO 13777, among other things, requires federal agencies to terminate, consistent with applicable law, “programs or activities that derive from or implement Executive Orders, guidance documents, policy memoranda, rule interpretations and similar documents, or relevant portions thereof, that have been rescinded or … terminated during the fiscal year.”  In accordance with this directive, the April 5, 2019 Notice announces the removal of certain “obsolete and expired guidance documents from” HUD’s “main program websites.”[2]With respect to manufactured housing and HUD’s Office of Manufactured Housing Programs (OMHP), the Notice, at “Appendix F,” lists 13 editions of the OMHP “The Facts” newsletter that, pursuant to EO 13777, are “no longer in effect.”[3]

While MHARR commends Secretary Carson for ordering the removal of these unofficial, non-regulatory, pseudo-interpretive documents from the OMHP website, this action fails to address the status of multiple other OMHP pseudo-regulatory pronouncements and erstwhile “guidance” documents that should also be withdrawn and declared null, void and “no longer in effect” pursuant to both EO 13777 and U.S. Justice Department memoranda issued by the Attorney General on November 16, 2017 and January 25, 2018, stating that the Justice Department would not enforce “guidance” and similar-type documents that have not been published for Notice and Comment pursuant to the Administrative Procedure Act (APA).

MHARR specifically addressed this matter in its EO 13777 written comments filed on February 20, 2018[4]and in a subsequent communication to Acting FHA Commissioner and General Deputy Assistant Secretary for FHA, Ms. Dana Wade, on April 25, 2018.[5]In those documents, MHARR specifically called for the express and explicit repeal of multiple OMHP “guidance” documents that were either: (1) rendered obsolete and invalid by subsequent amendments to governing federal statutes – e.g., HUD’s January 23, 1997 and May 5, 1997 “guidance” documents regarding the scope of federal preemption under 42 U.S.C. 5403(d); (2) were plainly erroneous and inconsistent with governing law when issued – e.g., HUD’s February 5, 2010 “Interpretive Rule” regarding the role and authority of the Manufactured Housing Consensus Committee (MHCC); or (3) were issued without either MHCC review as required by 42 U.S.C. 5403, or notice and comment as required by both that section and the APA.[6]

To the extent that HUD, thus far, has yet to take action with respect to the repeal and invalidation of those documents in accordance with EO 13777, and insofar as each of those documents is fatallydefective, either procedurally, in violation of 42 U.S.C. 5403 or the APA, or otherwise in conflict with and in violation of applicable statutory law, as previously explained in detail by MHARR in its attached comments, MHARR reiterates its call for HUD to withdraw and invalidate those “guidance” documents in accordance with EO 13777. The repeal of these obsolete, baseless and invalid so-called “guidance” documents would do far more than the removal of a few newsletters from the OMHP website, to help reduce and eliminate unnecessary and baseless regulatory compliance costs, which disproportionately harm smaller industry businesses such as those represented by MHARR.

Thank you again for your consideration of these comments.

Sincerely,

Mark Weiss
President and CEO
cc: Hon. Ben Carson
Hon. Mick Mulvaney

[1]See, 84 Federal Register, No. 66, April 5, 2019 at p. 13695, etseq.

[2]Id. at p. 13696, col. 2.

[3]Id., col.3.  Seealso, Id. at 13709.

[4]See, Attachment 1, hereto, at pp. 20-30.

[5]See, Attachment 2, hereto.

[6]See, Attachment 1, hereto at p. 30 and OMHP documents referenced therein.

New, Revised, and Proposed Energy Conservation Standards and Test Procedures for Manufactured Homes

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Ms. Sofie Miller
U.S. Department of Energy
Room 6A-013
Office of Energy Efficiency and Renewable Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585

Re: Proposed Procedures for New or Revised Energy Conservation Standards and Test
Procedures for Consumer Products – EERE-2017-BT-STD-0062; RIN 1904-AD38

Dear Ms. Miller:
The following comments are submitted on behalf of the Manufactured Housing Association for Regulatory Reform (MHARR). MHARR is a Washington, D.C.-based national trade association representing the views and interests of producers of manufactured housing regulated by the U.S. Department of Housing and Urban Development (HUD) pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401, etseq.) (1974 Act) as amended by the Manufactured Housing Improvement Act of 2000 (2000 Reform Law). MHARR was founded in 1985. Its members include independent manufactured housing producers from all regions of the United States.

On February 13, 2019, the U.S. Department of Energy (DOE) published a proposed rule in the Federal Register[1]that would significantly modify its procedures for developing new or revised energy conservation standards and related testing procedures for consumer products, “appliances,” and certain commercial and industrial equipment. Among other things, the February 13, 2019 proposed DOE procedural rule would: (1) expand various procedural protections to the development of testing standards for regulated products; (2) define “a significant energy savings threshold that must be met before DOE will update an energy conservation standard;” (3) address issues related to the cumulative regulatory burdens imposed on regulated products and consumers of those products; and (4) “clarify DOE’s commitment to publish a test procedure six months before a related standards [Notice of Proposed Rulemaking].”

While this proposed rule, as published, does not specificallyreference standards development and/or testing procedures under section 413 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17071) (EISA), concerning energy conservation standards for federally-regulated manufactured homes, its procedural protections should nevertheless apply (as appropriate)[2]to the development and revision of DOE manufactured housing energy standards and related testing procedures under that provision, insofar as the proposed rule, by its express terms,doesapply to DOE’s Appliance Standards Program, and boththe previously-proposed June 17, 2016[3]DOE standards for such homes and the currently-pending proposed energy standards for manufactured homes, set forth in an August 3, 2018[4]DOE Notice of Data Availability (NODA), derive directlyfrom a “negotiated rulemaking” process conducted by and within the DOE Appliance Standards Program.[5]Given that the proposed and still pending DOE manufactured housing standards were developed under DOE Appliance Standards Program procedures that areaddressed by the changes proposed in the February 13, 2019 DOE Notice, the procedural modifications noted in that proposed rule shouldbe applied to the manufactured housing proceeding, including both any initial DOE manufactured housing energy standards and any subsequent modifications or updates to those standards. Thus, DOE should expressly provide in any final rule for the application of appropriate procedural protections to manufactured housing energy standards in the event that such standards remain under the jurisdiction of DOE and an element of – or within – the appliance standards program.

Moreover, the fact that such fundamental procedural protections – now deemed necessary and, indeed, essential by DOE itself – were notaccorded the industry and consumers in the DOE manufactured housing negotiated rulemaking and subsequent related proceedings, constitutes yet another basis  (among many others previously detailed by MHARR) for the withdrawal of any and all previously-proposed versions of the DOE manufactured housing standards – developed under or derived from — the inherently tainted DOE “negotiated rulemaking” process, and the ultimate development of a new rule (if necessary) based on a legitimate and lawful standards-development process consistent with the regulatory policies of the Trump Administration.[6]The application of the new procedural rule to the manufactured housing energy rulemaking, could also help to assure that any future revisions of that rule are not subjected to the same type of coordination between part of the industry and energy special interests that led to the fatally-tainted and illegitimate “negotiated rulemaking” which resulted in both DOE’s original 2016 proposed manufactured housing energy standards rule and subsequent 2018 NODA proposal.

Accordingly, for all of the foregoing reasons, MHARR asks that DOE, in any final rule in this matter, expressly apply all pertinent procedural protections and safeguards, as set out in its February 13, 2019 proposed rule for the appliance standards program, to any manufactured housing energy conservation standards, revisions thereto, or any applicable testing procedures developed by DOE pursuant to EISA section 413.

Sincerely,
Mark Weiss
President and CEO
cc: Hon. Rick Perry
Hon. Ben Carson
Hon. Mick Mulvaney

[1]See, 84 Federal Register, No. 30, February 13, 2019, at p. 3910, etseq.  The deadline for comments from interested parties concerning this proposed rule was subsequently extended to May 6, 2019, by notice published in the April 2, 2019 edition of the Federal Register.  See, 84 Federal Register, No. 63, April 2, 2019, at p. 12527, etseq.

[2]Portions of the proposed procedural rule, such as provisions relating to American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) reference standards, would obviously not apply to manufactured housing standards as defined by section 413 of EISA.

[3]See, 81 Federal Register, No. 117, June 17, 2016, at p. 39756, etseq.

[4]See, 83 Federal Register, No. 150, August 3, 2018 at p. 38073, etseq.

[5]See, NODA Packages, Draft Results, July 2018, at p. 2: “Incremental cost and savings calculations are based on methods and data presented in the 2016 NOPR” which, in turn, derived from the 2014-2015 DOE negotiated rulemaking process under the auspices of DOE’s Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC).  Seealso, 81 Federal Register, supra, at p. 39763, col. 3, noting that DOE applied the same “analytical framework” for manufactured housing standards “that DOE uses for developing energy efficiency standards for appliances.”

[6]Seee.g., (1) MHARR August 8, 2016 comments on “Energy Efficiency Standards for Manufactured Housing” (EERE-2009-BT-BC-0021; RIN 1904-AC11); (2) MHARR July 14, 2017 comments on “Reducing Regulation and Controlling Regulatory Costs Under Executive Orders 13771 and 13777 – Request for Information;” and (3) MHARR September 17, 2018 comments on “Energy Conservation Standards for Manufactured Housing Notice of Data Availability – Request for Information” (EERE-2009-BT-BC-0021; RIN 1904-AC11).

HUD Code Manufactured Home Production Decline Continues, May Updates

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Washington, D.C., May 6, 2019 – The Manufactured Housing Association for Regulatory Reform (MHARR) reports that according to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD), year-over-year HUD Code manufactured home production declined once again in March 2019. Just-released statistics indicate that HUD Code manufacturers produced 7,590 homes in March 2019, down 14% from the 8,830 homes produced in March 2018. Cumulative industry production for 2019 now totals 22,359 homes, a decline of 12.4% from the 25,531 HUD Code homes produced over the same period in 2018.

This ongoing significant production decline, following a long period of only modest industry growth after its modern-era production low in 2009, underscores the importance and validity of the decision by the MHARR Board of Directors to begin aggressively tackling three major issues – discriminatory zoning, placement exclusion, and the failure of the Government Sponsored Enterprises, to date, to provide market-significant securitization and secondary market support for manufactured home personal property loans. These three major issues, individually and in combination, have worked to inhibit and stifle the growth of the manufactured housing market after the industry’s outstanding homes leave the factory, and deny millions of Americans the affordable, non-subsidized homeownership that manufactured housing can uniquely provide.  MHARR will launch its plan of action on the most important of these three issues – discriminatory zoning – in mid-May, 2019.

A further analysis of the official industry statistics shows that the top ten shipment states from the beginning of the industry production rebound in August 2011 through March 2019  — with cumulative, monthly, current year (2019) and prior year (2018) shipments per category as indicated

The latest information for March 2019 results in no changes to the cumulative shipments list.

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

StateCumulativeCurrent Month (Mar. 2019)20192018
Texas90,272 homes1,2733,7655,310
Louisiana33,174 homes3339811,370
Florida30,605 homes7021,9351,680
Alabama21,521 homes3191,0231,743
N.C20,484 homes3631,1441,183
California18,293 homes3881,0901,037
Mississippi17,879 homes3247531,057
Michigan17,661 homes3591,1771,193
Kentucky16,124 homes256606749
Tennessee13,838 homes158526789

The latest information for March 2019 results in no changes to the cumulative shipments list.

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

MHCC Addresses Multiple Issues, HUD Secretary Carson Praises Manufactured Homes at Meeting

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  • MHCC ADDRESSES MULTIPLE REGULATORY ISSUES
  • MHCC CITES “MAJOR INACCURACIES” IN DOE-NODA
  • SUBPART I TO BE REVIEWED AGAIN
  • MHCC CALLS FOR WITHDRAWAL OF FROST FREE IB
  • MHARR PROPOSAL ON MHCC ROLE ADVANCES
  • PD&R REPORT OFFERS ON-SITE CHANGES
  • HUD SECRETARY PRAISES MH IN ADDRESS TO MHCC 

The Manufactured Housing Consensus Committee (MHCC) held its most recent in-person meeting in Washington, D.C. on April 30-May 2, 2019. The Committee, as detailed below, considered a number of regulatory reform and regulatory modification matters, including a response to the 2018 Notice of Data Availability (NODA) issued by the U.S. Department of Energy (DOE) concerning manufactured housing energy standards, a report prepared by HUD’s Office of Policy Development and Research (PD&R) concerning HUD’s needlessly complex and costly 2015 “on-site construction” rule, and proposals submitted to HUD pursuant to Trump Administration Executive Orders 13771 and 13777.

While the meeting offered some positive notes, both Committee members and others expressed frustration with the extremelyslow pace of action by HUD and the HUD program, not only in implementing years-old recommendations of the MHCC, but also, in achieving and actually implementing, specific regulatory reforms. Thus, while HUD and the current Secretary took decisive and necessary action to remove the former program administrator, not a single unnecessary or excessive manufactured housing regulation, not a single HUD pseudo-regulation, not a single sub-regulatory “guidance” letter, or other rogue regulatory action adopted in violation of notice and comment requirements, or other unnecessary or excessive mandates, has yet been repealed or significantly amended through final agency action, now more than half-way through the first term of the Trump presidency. Indeed, the onlymanufactured housing program actions/documents that have been officially retractedatallto date, pursuant to Executive Order 13777, as “obsolete,” are thirteen past issues of the program’s “The Facts” newsletter, issued by the former administrator, identified in an April 5, 2019 Federal Register notice.

And while HUD’s position — that proposed regulatory changes and regulatory reform proposals must be processed through the MHCC — is correct and consistent with the Manufactured Housing Improvement Act of 2000, there is no valid or legitimate reason for HUD’s failure to convene either the full MHCC and/or relevant MHCC subcommittees more than oncesince September 2018, or more than once per year, in order to expedite the consideration, adoption and, most importantly, the implementation of such changes in order to reduce regulatory compliance burdens (which disproportionately impact the industry’s smaller businesses) and related costs and inefficiencies imposed on homebuyers. Indeed, there is no legitimate excuse for failing to immediatelyschedule additional MHCC and MHCC subcommittee meetings, as necessary, right now, in order to complete a full and timely review of all pending regulatory and regulatory reform items for recommendations to HUD. Nor is any allegedlack of funding for such meetings a legitimate or valid excuse. Instead of over-funding a bloated monitoring contract, sufficient amounts can and should be re-directed to fund as many MHCC and subcommittee meetings as are necessary to complete a total review of all pending items in a matter of months not years.

In short, with reports that Secretary Carson may be leaving HUD at the end of President Trump’s first term, it is apparent that the institutional bureaucracy at HUD could be attempting to “buy time” and run out the clock on any genuine reform of the manufactured housing program. This is why MHARR has consistently maintained that two actions – as mandated by the 2000 reform law – are essential to the full and lastingreform of the HUD program, namely, the appointment of a non-career program administrator and full, fair and legitimate competition for the program monitoring contract (and, in fact, a new monitoring contractor after more than 40-years). These two institutional reforms must be accomplished, and MHARR will continue to aggressively pursue their realization.

MHCC DISPUTES MAJOR ELEMENTS OF DOE ENERGY PROPOSAL

Among its significant actions, the full MHCC adopted a final response to the U.S. Department of Energy (DOE) regarding 15 specific issues relating to manufactured housing energy standards, posed by DOE in a 2018 Notice of Data Availability (NODA). The MHCC, in modifying certain aspects of a draft response prepared and approved by the MHCC’s Regulatory Enforcement Subcommittee during an April 2, 2019 conference call meeting, focused on specific analytical and cost-benefit fallacies inherent in the DOE-NODA – as did MHARR in written NODA comments filed on September 17, 2018 – which, MHARR maintains, render the proposals  set forth in the NODA fatally defective.

Among other things, the MHCC, in its response, emphasized that the NODA’s cost-benefit calculation (like the earlier June 2016 DOE proposed manufactured housing energy standards rule) significantly understates and underestimates regulatory compliance costs connected with the proposed standards. In addition, the MHCC noted that DOE efforts to compare the energy utilization and energy operating costs of manufactured homes with other types of homes on a per-square-foot basis, are inherently inaccurate, unfair and improper, and should instead be considered on a “whole-home” basis, as MHARR has consistently maintained since its initial comments to DOE’s “negotiated rulemaking” Manufactured Housing Working Group. Related to this point, the MHCC further criticized the NODA proposals for calculating alleged operating-cost savings arising from the proposed standards based on a 7-10 year payback period, noting that, in many cases, purchasers do not remain in their homes for that long a period, and instead recommended a 6-8 year payback calculation period based on a more realistic estimate of initial ownership and tenancy periods.

Beyond these specific cost-benefit-related comments and recommendations, the MHCC retained language from the original Subcommittee draft, noting that initial acquisition cost increases resulting from the proposed standards are – and should be — more analytically significant than long-term operating cost savings, because of the relative price inelasticity of manufactured housing and the likely exclusion of large numbers of potential purchasers as a consequence of standards-driven purchase price increases. This again, is consistent with earlier MHARR comments dating back to the DOE “negotiated rulemaking” process. Those comments, moreover, demonstrated – based on documents obtained through the Freedom of Information Act (FOIA) — that the entire DOE “negotiated rulemaking” process was a pre-arranged sham between DOE and energy special interests, among others.  MHARR, as a result, has consistentlymaintained that the NODA, which, by DOE’s own admission, is based on cost-benefit data derived from that fatally-flawed “negotiated rulemaking” process, is itself, invalid, arbitrary and capricious, in violation of both federal manufactured housing law and the federal Administrative Procedure Act (APA).

Insofar as the MHCC NODA response takes issue with – and recommends against the use of multiple assumptions and data points underlying the NODA – that response, together with the comments previously filed by MHARR, provide a compelling case to DOE that the NODA proposals should be withdrawn as the product of an invalid and illegitimate negotiated rulemaking process, and that DOE should instead pursue a legitimate manufactured housing standards process based upon new data and new fact-finding, and a commitment to minimumstandards that promote maximum consumer choice and consumer freedom.

MHCC TO CONDUCT FURTHER REVIEW OF SUBPART I

Following 2014 amendments to Subpart I of the HUD Procedural and Enforcement Regulations first initiated by a July 2001 MHARR Petition for Rulemaking, the MHCC, based on regulatory reform proposals submitted by MHARR (denominated DRC-26) and others, voted to refer the matter of furtherSubpart I reform (or even possible elimination) to its Regulatory Enforcement subcommittee.

The recall and correction provisions of Subpart I, which as MHARR has stressed many times previously, are an artifact of the National Highway Traffic Safety Act, an automobile law, which — although inapposite to and inappropriate for housing — served as the model for the National Manufactured Housing Construction and Safety Standards Act of 1974. As a result, MHARR, for two decades, has called for either the elimination of Subpart I, or major Subpart I reform to eliminate its needless focus on either minor or non-existent issues, its excessive costs, and its excessive paperwork requirements, which provide little or no corresponding benefits for consumers, and its unlimited duration, which is unlike any other housing-related regulatory mandate.

Subpart I, moreover, as construed by HUD, has evolved into a virtually unlimited warrant and excuse for unreasonably intrusive actions and pseudo-regulatory abuses by HUD’s monitoring contractor, which has misused that authority to impose extremely costly demands and mandates on manufacturers that exceed or are otherwise not fully-based on existing standards and regulations.

Subpart I reform, accordingly, can and shouldgo well beyond the 2014 HUD amendments, in order to ameliorate the excessive costs and regulatory burdens imposed by the current Subpart I, while maintaining appropriate protection for consumers in relation to legitimate defects for a reasonable period.

MHCC RECOMMENDS WITHDRAWAL OF PROPOSED “FROST-FREE” IB

The MHCC, after a lengthy debate, approved a motion to recommend that HUD “never finalize” its pending Interpretive Bulletin (IB) on so-called “frost-free” foundation design for manufactured homes. The IB, published in the Federal Register on June 21, 2017, as demonstrated by MHARR’s written comments, would have substantively modified section 24 C.F.R. 3285.312 of HUD’s Federal Manufactured Housing Installation Standards – in violation of section 604 of the Manufactured Housing Improvement Act of 2000 — to effectively eliminate the current option in section 3285.312(b)(3) to base frost-free foundation designs on either American Society of Civil Engineers (ASCE) reference standard 32-01 or“acceptable engineering practice.” Instead the proposed IB, would establish an effective equivalence between ASCE-32-01 and “acceptable engineering practice,” thus eliminating the ability of a particular consumer in a particular area to select a frost-free foundation design customized for that location and certified by (i.e., bearing the seal of) a licensed architect-engineer.  As a result, MHARR has consistently opposed this alleged HUD “interpretation” of 24 C.F.R. 3285.312(b), ever since it was first announced in an “Interim Guidance” document issued unilaterally by the former program administrator in April 2016.

After noting that the federal standard, as currently stated, provides consumers with reasonable options for the design of “frost-free” or “frost-protected” foundations and reasonable protection through the required certification by a registered architect engineer, the MHCC adopted a motion stating that “no changes are required to Part 3285 regarding frost-free foundations,” as well as a request (and recommendation) by the MHCC that HUD “never finalize” the proposed IB (denominated IB I-1-17) which currently, according to HUD, is not being actively pursued by the Department, but could be reactivated at a future date.  Given this possibility of reactivation, the MHCC recommendation serves an important purpose in placing the full MHCC on record as opposing the substance and basis of the proposed IB.

MHARR PROPOSAL TO END BASELESS RESTRICTIONS ON MHCC ADVANCES 

A regulatory reform proposal by MHARR (denominated DRC-2) seeking the repeal of a February 5, 2010 “Interpretive Rule” (IR) which unlawfully eliminated a major aspect of the MHCC’s review and recommendation functions, has been referred to the MHCC’s General Subcommittee for further review, together with other proposals relating to the function and role of the MHCC.

The MHARR proposal seeks to invalidate and repeal the IR, which effectively negates via alleged “interpretation,” section 604(b)(6) of the 2000 reform law.  That “catchall” section of the law was designed to ensure that HUD could not avoid the MHCC consensus process (and notice and comment rulemaking) through the simple expedient of designating a de factochange to the Federal Manufactured Housing Construction and Safety Standards or Procedural and Enforcement Regulations to be a mere “interpretation,” “regulatory guidance,” or similar sub-regulatory action.

Repeal of the baseless 2010 IR – and restoration of the full role and function of the MHCC — is a crucial element of the regulatory reform of the manufacture housing program and the proper and effective implementation of EOs 13771 and 13777.  Furthermore, and even more importantly, its repeal is key to ensuring that after the conclusion of the EO 13771/13777 process, and under a future administration, HUD does not revert to its old practice of imposing costly new mandates on manufacturers and consumers through a “backdoor” process of supposed “interpretation.”

MHCC TO CONSIDER CHANGES TO “ON_SITE” RULE

The MHCC will once again take up the issue of “on-site” completion, which has been a source of major controversy since HUD’s 2015 adoption of a final “on-site” rule which needlessly complicated – and significantly increased the cost of – a consensus “on-site” proposal that had previously been recommended by the MHCC (and supported by MHARR). MHARR, in its original EO 13771/13777 (departmental) comments to HUD and subsequent EO 13771/13777 comments specifically addressing the HUD program, sought significant changes to the final rule to lessen its cost and delay impacts without compromising appropriate consumer protection. And now, that MHARR regulatory reform proposal (denominated DRC-17) has been referred to the MHCC Regulatory Enforcement subcommittee, together with a preliminary report by HUD’s Office of Policy Development & Research (PD&R), which addresses and, on its face, appears to recommend certain on-site reforms that are consistent with those sought by MHARR.

In its report, which was presented to the MHCC as a non-final, “pre-decisional” document, PD&R appears to reject a delegation of on-site construction approval and inspection  responsibilities to the states (which has been advocated by California and others), but does propose a reduction to the current 100% site inspection requirement in order to eliminate both unnecessary costs and needless time delays in securing final occupancy permits for on-site completed homes. This recommendation is consistent with MHARR’s long-standing call for targeted, representative inspections of on-site homes – rather than 100% “blanket” inspections – in order to ensure compliance and consumer protection, but at a lower cost and with less unnecessary delay, in much the same manner as the in-plant inspection and monitoring process. Both this and other reforms, designed to untangle the needlessly complex web of paperwork, inspections and 18 new regulatory mandates (at a minimum) which were established by the HUD 2015 final “on-site” rule, if considered and recommended by the MHCC, would go a long way toward restoring the original intent and purpose of the MHCC’s initial on-site proposal – to both expedite and lower the cost of on-site home completion and to provide consumers with additional home amenities that they seek.

The referral of this matter to a Subcommittee should thus represent the first step in a process to return the on-site completion process to the cost-effective and efficient process first envisioned by the MHCC nearly a decade ago.

SECRETARY CARSON PRAISES MH IN ADDRESS TO MHCC

HUD Secretary Ben Carson, in an unscheduled address to the MHCC, praised manufactured housing as a source of affordable homeownership which fills a “need which would otherwise go unmet.” Noting that manufactured housing is a “real priority” for HUD and that HUD, under his leadership, would be a “strong proponent” of manufactured housing, the Secretary pledged that HUD would work to “reduce regulatory barriers” to manufactured housing, while maintaining its quality, durability, safety and “affordability” for consumers.

While these comments are welcome, appropriate and appreciated, much remains to be done, as noted above, to translate these goals and objectives into concrete accomplishments – i.e., specific regulatory reforms – that will fully implement the regulatory reforms mandated by both the 2000 reform law and the Trump Administration, and advance manufactured housing a source of affordable, non-subsidized homeownership for millions of Americans. More than two years into the Trump Administration, the regulatory reform of the HUD manufactured housing program must become a reality, with specific, concrete policies and actions designed to fully clear-away the regulatory abuses of the past and ensure – finally – the full and complete implementation of all reform aspects of the Manufactured Housing Improvement Act of 2000.  This has been and will remain MHARR’s first and highest priority.

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MHARR Calls on HUD Secretary to End Discriminatory And Exclusionary Zoning of HUD-Regulated Manufactured Homes

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Washington, D.C., April 30, 2019 – The Manufactured Housing Association for Regulatory Reform (MHARR) in an April 24, 2019 communication to U.S. Department of Housing and Urban Development (HUD) Secretary, Ben Carson (copy attached), has called on the Department to federally preempt local zoning ordinances which discriminatorily exclude manufactured homes regulated by HUD pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974 and the Manufactured Housing Improvement Act of 2000.

As amended by Congress in 2000, federal law authorizes HUD to preempt any state or local “requirement” that impairs “federal superintendence of the manufactured housing industry” and the accomplishment of the federal purposes of that law, including, but not limited to, “facilitat[ing] the availability of affordable manufactured homes … for all Americans.” The broad sweep of this language, in turn, was stressed by key congressional supporters of the 2000 reform law, who stated in a November 2003 letter to HUD (copy also attached) that such changes to the law give “HUD the legal authority to preempt local requirements or restrictions which discriminate against the siting of manufactured homes … simply because they are HUD-Code homes.”

Given the fact that confronting and resolving discriminatory and/or exclusionary zoning and placement restrictions against HUD Code manufactured homes (as well as the availability of consumer financing) are top MHARR post-production priorities, the Association, in its communication, invites the Secretary – and HUD – to become fully engaged and join forces in advancing this critical matter, beginning with a study of the scope and impact of such discriminatory mandates as a first step going forward.

In Washington, D.C., MHARR President and CEO, Mark Weiss, stated: “Secretary Carson has specifically recognized the toxic impact of exclusionary local zoning on the availability of affordable housing and homeownership in communities around the United States. The 2000 manufactured housing reform law provides him with exactly the type of robust federal authority he needs to end such discrimination against manufactured homes and the millions of moderate and lower-income Americans who rely on HUD Code homes as a premier source of affordable, non-subsidized homeownership. Secretary Carson should – and must – take this bold step to ensure that manufactured homeowners are not discriminatorily excluded from entire communities based on either their income or their choice of housing.”

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

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“Lead, Follow … Or Get Out of The Way”

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The last decade-plus has not been especially kind to the manufactured housing industry and consumers of affordable housing. The 21stCentury began with a great deal of promise for the industry and consumers alike. With record production levels and a comprehensively-reformed federal manufactured housing law (i.e., the Manufactured Housing Improvement Act of 2000) that officially recognized manufactured homes as legitimate, affordable housing for millions of American families, manufactured housing appeared poised to approach production levels at or near 500,000 homes per year.

Soon after, though, production began to trend downward and, within little more than a decade of its record high, cratered to historic lows never before seen in the industry’s modern era. Following that historic low-point, production levels subsequently stabilized and even achieved modest year-over-year gains, to the point that many observers expected the industry to once again meet or surpass the historical 100,000 homes-per-year production benchmark in 2018. But that did not happen. As the industry entered the last quarter of 2018, year-over-year production levels began to decline – slightly at first, but then more markedly – ultimately limiting annual 2018 production to 96,555 homes, better than 2017, but well shy of the 100,000-home benchmark. Even worse, the decline that began in 2018 has now extended into the first quarter of 2019, with cumulative 2019 production to date (i.e., January and February), 11.5% behind the same time period in 2018.

While it is impossible to predict, at this time, whether this nearly six-month production decline represents the resumption of a broader negative long-term trend, or is little more than a hiccup on the road to continued modest recovery, the fact that industry production, for better than a decade, has remained far below its historical norm (i.e., average production of 169,596 homes per year over the past 30 years and 116,600 homes per year over the past 20 years), shouldbe sounding an alarm bell for someone, somewhere, that all is notas it should be, and that urgent action is needed to: (1) identify the problem(s) lying at the heart of this market descent; and (2) take concrete steps to address, to the greatest extent possible and practicable, those problems, once identified.

Fortunately – or unfortunately — one does not have to go too far, or engage in overly-taxing mental gymnastics, to identify a myriad of problems affecting the industry and its consumers.  As was noted in the January 2019 edition of MHARR Issues and Perspectives, however, such problems – for the most part— do not currentlylie within the industry’s production sector. This is notto say that there are noproblems affecting the production sector today. There are. As a result, constant vigilance and aggressiveprotection of the industry’s interests (and those of its consumers) – such as that provided by MHARR — is essential. Nor is it to say that the most impactful of the problems affecting the industry’s post-production sector – detailed below — are the onlyproblems affecting that sector. They are not. But the effort to find solutions to — and the resolution of — these matters has got to start somewhere, and it might as well begin with the problems that appear to be having the most profoundly negative long and short-term impacts on the industry and both current and potential consumers of manufactured housing.

Consequently, although it is still burdened to some degree by HUD (and other government) regulatory overreach and related costs in various respects (e.g., the pending U.S. Department of Energy “energy conservation” standards), as well as the potentialreturn of significant regulatory overreach in a future presidential administration as early as 2020 (or, through the continuation, potentially, of a defactosole-source “monitoring” contract), the production (or supply) side of the industry’s economic equation is not the principalculprit in the industry’s failure to reach its full market potential. Instead, it is afterthe industry’s outstanding, inherently affordable homes leave the factory that they hit a proverbial “brick wall.” Indeed, objective analysis shows that the principal market-limitingfactors for the industry today, are clustered, almost entirelyon the demand – or post-production— side of the equation (i.e., once the home leaves the factory) where they have not been addressed either decisively or effectively due, primarily, to the lack of coherent, focused and aggressive leadership and the corresponding absence of an independent, national representative for that segment of the industry.

Interestingly, this parallels the experience of the industry’s production sector in the late 1970s and early-1980s — following the federalization of construction and safety regulation — which led to the establishment of MHARR, in 1985, as an independent, national representative of smaller production sector businesses. The development of an aggressive, independent national representation within the production sector has ultimately led to a situation where the worst regulatory abuses within that realm have been, are being – and will continue to be — effectively addressed and resolved. There is no comparable independent, national representation in the post-production arena, however, which has allowed regulatory and related abuses to either migrate to – or otherwise fester – within that sector, ultimately harming the entireindustry, as well as consumers of affordable housing.

Now, though, both the absence of an independent, national trade representative for the post-production sector and the related long-term failure of the broader industry to effectivelyaddress crucial issues within that sector, have led the MHARR Board of Directors (based on decisions made at its March 2019 Annual Meeting) to “take the bull by the horns” and direct MHARR to aggressively target three major post-production issues which, in its view, have most significantly contributed to the industry’s stagnation over the past decade-plus. These critical matters are: (1) in cooperation with the industry’s state associations, MHARR will select two extreme cases of zoning exclusion and/or discrimination, one involving single-home placements and the other involving the development or expansion of one or more manufactured home communities, and legally challenge the underlying ordinances or related mandates; (2) to similarly challenge other types of local placement restrictions or limitations on individual manufactured homes and manufactured home communities; and (3) to publicly expose the failure of Fannie Mae, Freddie Mac and the Government National Mortgage Association (Ginnie Mae) to fully and properly implement existing law, thereby forcing manufactured housing consumers into higher-cost, allegedly “predatory” purchase loans, while excluding other potential purchasers from the manufactured housing market altogether. Together and in combination, these issues have established a post-production “brick wall” — a perfect economic storm that especially harms smaller industry businesses and HUD Code consumers, while benefitting only the industry’s largest businesses.

Again, while these three issues are not the onlyfactors suppressing the manufactured housing market, by far, they are – both individually and cumulatively — the most significantdrags that exist today on the growth, expansion and positive evolution of the HUD Code housing market, and, conversely, if resolved, either in whole or in part, in favor of the industry and its consumers, would liberate the industry from the severely debilitating limitations that have impeded its growth and its ability to serve many more Americans in need of affordable, non-subsidized housing and homeownership.

Specifically, in the realm of zoning, how can the industry significantly expand its reach and potential market when vast areas of the country are effectively “off limits” to manufactured housing or else sharply restricted, including many of the most heavily populated places in the United States? Regarding placement restrictions, how can the industry thrive, prosper and expand to its full potential as an affordable housing resource, when new manufactured housing communities, in the overwhelming number of cases, cannot be developed and existing communities cannot be expanded or modernized?  And, in the area of consumer financing, how many millions of lower and moderate-income Americans are (and have been) excluded from the manufactured housing market because of higher-than-necessary interest rates on the personal property loans that represent nearly 80% of manufactured home consumer loans …  rates that are higher-than-necessary because Fannie Mae and Freddie Mac, more than ten years after the enactment of DTS, still do not provide market-significant (or, indeed, any) securitization or secondary market support for such loans — directly contrary to existing law?

Moreover, while these specific problems are open, notorious, and well-known, and have been obviousas a growing source of trouble for the industry over the entire time that manufactured housing production has fallen far below historical averages, they have not been resolved, or even seriously or aggressively addressed by the broader industry (and the Manufactured Housing Institute), which – while collecting significant funding (i.e., dues) from retailers, communities, finance companies, insurers and state associations, among others – has seemed content to let the industry’s largest corporate conglomerates consume an increasing portion of a market that has contracted by 74% over the past 20 years.

On zoning and placement, for example, what has been done (at the national level) to actively press jurisdictions to accept manufactured homes, or, even more importantly, contest and oppose efforts to exclude HUD Code homes, such as occurred just days ago in Bryan, Texas and has been an accelerating trend in recent years?  Where is the advocacy?  Where is the litigation to prevent the discriminatory exclusion of manufactured homes – and lower and moderate-income manufactured homeowners – from entire jurisdictions? Particularly now that HUD and HUD Secretary Ben Carson have specifically recognized restrictive zoning as a major impediment to affordable housing and homeownership?  And what about consumer financing and DTS?  What has been done at the national level by the broader industry, for ten-plus years, to demandthe full and proper implementation of DTS for manufactured home personal property loans?  And even now, instead of pressing that issue, which directly prejudicesnearly 80% of the manufactured housing finance market, MHI is trumpeting cooperation with Fannie Mae and Freddie Mac on financing for a supposed “new class” of manufactured homes which are neither inherently affordable nor within the mainstream of HUD Code manufactured housing.

As a production sector association, it should not be necessary for MHARR to take the lead on post-production matters.  But, for the past 25 years, MHARR has been compelled to lead on many key industry issues.  Like reform of the original 1974 manufactured housing law, where passage of a final bill was delayed by a full decadebecause MHI, at the last minute, withdrew its support for language that both MHI and MHARR had previously committed to (which would, among other things, have provided for a removable chassis). Or HERA’s DTS provision, where critical language was provided by MHARR. Or the removal and reassignment of the previous HUD program administrator, which was pressed with HUD by MHARR (while MHI, by its own admission, as reported by the Washington Post, “did not weigh in on [Pamela] Danner’s reassignment”).  MHARR’s initiative to aggressively pursue zoning reform (all the way to the Supreme Court if necessary) andthe full and proper implementation of federal law with respect to manufactured home consumer personal property loans, thus represents the fourth time in recent history that MHARR has had to assume the mantle of such leadership because the broader industry – and its erstwhile national representative – have either failed, or simply not tried.

This effort will not be easy and there are no guarantees.  But in the absence of a genuine, aggressive effort, what prospects does the industry face? Its defactoexclusion from entire jurisdictions across the United States?  Continued blatant discrimination against its homes and its customers?  The slow strangulation and elimination of manufactured home land-lease communities which is evolving because of the refusal of most jurisdictions to permit new (or expanded) communities while older communities are closed or “re-purposed?”  Decades more delay on DTS from Fannie Mae and Freddie Mac, which have no seeming interest in providing securitization or secondary market support, as directed by Congress, for the vast bulk of the manufactured housing consumer financing market?  On all of these fronts, there would be more of the same – endless delay and evolving decay as the industry, closed-in by ever shrinking walls, withers to economic irrelevance.

The industry’s smaller, independent businesses, as represented by MHARR, are unwilling to accept this slow “death of a thousand cuts” without a fight, and will therefore lead with this initiative as far – and as long – as it takes.

Mark Weiss

MHARR is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

“MHARR-Issues and Perspectives” is available for re-publication in full (i.e., without alteration or substantive modification) without further permission and with proper attribution to MHARR.

MHARR Supports Proposed Repeal of HUD “Formaldehyde Health Notice”

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The Manufactured Housing Association for Regulatory Reform (MHARR), in comments filed with the U.S. Department of Housing and Urban Development on April 16, 2019 (copy attached), has voiced its support for the proposed repeal of the red “Formaldehyde Health Notice” required to be “prominently displayed” in every HUD-regulated manufactured home (but not other types of homes) since 1984, pursuant to 24 C.F.R. 3280.309.  The repeal of the “Health Notice on Formaldehyde Emissions” mandate is part of a broader HUD-proposed rule, which – as required by the Formaldehyde Standards for Composite Wood Products Act of 2010 – would conform HUD manufactured housing standards concerning formaldehyde standards, testing and labelling with standards adopted generally by the U.S. Environmental Protection Agency (EPA) for composite wood products in accordance with that law.

While MHARR has long advocated the repeal of the HUD formaldehyde notice as a discriminatory imposition on manufactured homes constructed with the same materials as other types of homes not subject to any such mandate, and specifically called for the repeal of the HUD “Health Notice” in 2013 comments to EPA, the proposed repeal of the HUD “Health Notice,” in and of itself, does not end the longstanding practice of baseless discrimination against HUD Code manufactured homes with respect to formaldehyde emissions and related mandates.  Rather, that pattern and practice is continued with the EPA standards (and the parallel HUD proposed standards) insofar as HUD-regulated manufactured housing is designated as a “finished good,” and therefore subjected to certain related regulatory requirements, while site-built homes are expressly exempted from the definition of a “finished good” contained in EPA’s 2016 final rule on formaldehyde standards.  As MHARR noted then, and continues to press with relevant agencies and federal officials, there is no legitimate basis whatsoever, for exempting site-built homes, but not manufactured homes from the definition of a “finished good,” particularly when no such exemption was contained in EPA’s original proposed formaldehyde rule.

Accordingly, while MHARR supports the repeal of the discriminatory HUD “Formaldehyde Health Notice,” it continues to strongly object to EPA’s blatant double-standard – and continuing discrimination against manufactured housing – with respect to the “definition of a “finished good” and formaldehyde mandates related thereto.

In the event that you wish to comment individually on this matter, please feel free to reference or quote MHARR’s attached comments.

VIA FEDERAL EXPRESS AND ELECTRONIC SUBMISSION

Regulations Division
Office of General Counsel
Room 10276
U.S. Department of Housing and Urban Development
451 7thStreet, S.W.
Washington, D.C. 20410-0500

Re: Streamlining and Aligning Formaldehyde Emission Control Standards for

Certain Wood Products in Manufactured Home Construction with Title VI of

the Toxic Substance Control Act – Docket No. FR 6018-P-01; RIN 2502-AJ42

Dear Sir or Madam:

The following comments are submitted on behalf of the Manufactured Housing Association for Regulatory Reform (MHARR). MHARR is a Washington, D.C.-based national trade association representing the views and interests of producers of manufactured housing regulated by the U.S. Department of Housing and Urban Development (HUD) pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended by the Manufactured Housing Improvement Act of 2000 (42 U.S.C. 5401, etseq.). MHARR’s members are primarily smaller and medium-sized independent producers of manufactured housing, located in all regions of the United States.

  1. INTRODUCTION

On March 22, 2019, HUD published a proposed rule in the Federal Register to implement various aspects, described therein, of the Formaldehyde Standards for Composite Wood Products Act of 2010, incorporated as Title VI of the Toxic Substances Control Act (TSCA).[1]In relevant part, that statute – and regulations adopted thereunder by the U.S. Environmental Protection Agency (EPA) — established new formaldehyde emissions standards for all hardwood plywood, medium-density fiberboard and particleboard wood products, including such materials incorporated into “finished goods,” that are sold, supplied, offered for sale, manufactured, or imported into, the United States. The statute also directs HUD to amend its manufactured housing formaldehyde emissions standards[2]to ensure consistency with the EPA formaldehyde standards “not later than 180 days” after the promulgation of those standards.

In accordance with that statutory directive, HUD’s proposed rule seeks to revise its manufactured housing standards and regulations to: (1) “update … existing formaldehyde emissions levels for composite wood products used in manufactured homes;” (2) update “the certification, qualification, panel identification and testing requirements for formaldehyde emissions;” (3) update “third-party certification requirements;” (4) “revise … recordkeeping requirements” to “reduce the time a producer needs to maintain records; (5) require “inclusion of a statement indicating compliance with TSCA Title VI” on the home data plate; and (6) add ”requirements on non-complying lots and stockpiling,” consistent with TSCA Title VI. In addition, the proposed HUD rule would eliminate the existing “requirement for a formaldehyde emissions health notice for manufactured homes and remove HUD’s existing requirements in 24 C.F.R. 3280.308(d) for treatment after certification of plywood and particleboard with substances containing formaldehyde.”[3]

Consistent with its previous comments in relation to this matter,[4]MHARR supports the proposed repeal of the HUD “Formaldehyde Health Notice” currently mandated by 24 C.F.R. 3280.309 and the repeal of other extant provisions of Part 3280 that are inconsistent with TSCA Title VI, but continues to vehemently oppose the discriminatory treatment of HUD Code manufactured housing inherent in EPA’s December 12, 2016 final rule – which, without any valid or legitimate basis whatsoever, exempts site-built homes, but not manufactured homes – from the definition of a “finished good” set forth at 40 C.F.R. 770.3. Such baseless discrimination, which now will necessarily be incorporated in HUD’s Manufactured Housing Construction and Safety Standards — despite the fact that manufactured homes are constructed from the sametypes of materials as site-built homes — directly contravenes and will substantially impair the accomplishment of key congressional objectives underlying the 2000 reform law, including, most particularly, its purpose to “facilitate the availability of affordable manufactured homes and to increase homeownership for all Americans.”[5]

  1. COMMENTS

Repeal of the current “Formaldehyde Health Notice”

Mandated by 24 C.F.R. 3280.308 Is Appropriate and Necessary

MHARR supports both HUD’s proposal to repeal the “Formaldehyde Health Notice” currently required by 24 C.F.R. 3280.309 for all new manufactured homes manufactured in the United States, as well as HUD’s stated reasons for proposing that repeal.[6]However (and with full recognition that this matter is not entirely within the specific control of HUD in the current rulemaking docket), MHARR strenuously objects to the pattern and practice of overt discrimination that has been – and continuesto be practiced against manufactured homes — first by HUD and now by EPA, with respect to formaldehyde emissions standards and the above-referenced “Formaldehyde Health Notice.”

As MHARR noted in its original September 9, 2013 comments to EPA on proposed formaldehyde standards pursuant to the Formaldehyde Standards for Composite Wood Products Act of 2010, manufactured homes, regulated by HUD pursuant to federal law, have been subjected to HUD formaldehyde emissions standards for plywood and particleboard since 1984i.e., for 35 years– a time period during which there were noparallel or comparable federal formaldehyde emissions standards of any kind for site-built homes, constructed using the exact same types of materials. Yet, HUD-regulated manufactured homes,despite complying with formaldehyde emissions standards that were not imposed on site-built homes, were required by 24 C.F.R. 3280.309 to display the red-print “Formaldehyde Health Notice,” while no such notice or warning was required for site-built homes – with obviously-negative impacts on sales and utilization of manufactured homes. And now, even though HUD is proposing to eliminate the “Formaldehyde Health Notice” from the federal manufactured housing standards, federal discrimination against manufactured homes would continue, insofar as the final EPA formaldehyde emissions standards rule exempts site-built homes – and onlysite-built homes – from the definition of “finished goods” and the regulatory mandates related thereto. As MHARR stressed in May 1, 2017 verbal and written comments to EPA, the final EPA rule “effectively discriminates against manufacturers using a particular building process [i.e., HUD Code manufactured homes] with no rational basisto support any such distinction.” The EPA rule, moreover, effectively discriminates against manufacturers building homes in accordance with the one-and-only federal building code, i.e., the Part 3280 Manufactured Housing Construction and Safety Standards.

Accordingly, MHARR calls on both EPA and HUD to reject this baseless discriminatory mandate on HUD Code manufacturers.

  • CONCLUSION
    For all of the foregoing reasons, MHARR supports the proposed rule insofar as it provides for the repeal of the of the “Formaldehyde Health Notice” currently mandated by 24 C.F.R. 3280.309 and the elimination of existing requirements that are inconsistent with TSCA Title VI.  MHARR, however, continues to strongly object to the inherently discriminatory exemption of site-built homes from the definition of “finished good” contained in TSCA Title VI and formaldehyde standards and compliance requirements related thereto.

Sincerely,
Mark Weiss
President and CEO
cc: Hon. Ben Carson
Hon. Paul Compton
Hon. Andrew Wheeler
Hon. Mick Mulvaney

HUD Code Industry Manufacturers, Retailers and Communities

[1]See, 84 Federal Register, No. 56, March 22, 2019 at p. 10738.

[2]See, 24 C.F.R. 3280.308, 309.

[3]See, 84 Federal Register, supraat p. 10740, col. 1.

[4]See, September 9, 2013 MHARR comments in EPA Docket Nos. EPA-HQ-OPPT-2012-0018 and EPA-HQ-2011-0380 at pp. 3-4, attached hereto as Attachment 1. Seealso, May 15, 2017 MHARR comments in EPA Docket No. EPA-HQ-OA-2017-0190, Attachment 2, hereto, calling for the modification of EPA’s final formaldehyde standards for wood products implementation rule to “expressly exempt HUD-regulated manufactured homes … from labelling and recordkeeping requirements to the full extent that site-built homes … are … exempted under the final formaldehyde rule as published by EPA.”

[5]See, 42 U.S.C. 5401(b)(2).

[6]See, 84 Federal Register, supraat p. 10741, col. 2-3.