Independent National Manufactured Housing Post-Production Association Takes Major Step

NewIndependentNationalManufacturedHousingPostProductionAssociationTakesMajorStepMHARRlogoManufacturedHousingAssocRegulatoryReform

Washington, D.C., January 8, 2019 – The National Association of Manufactured Housing Community Owners (NAMHCO), a new, independent association representing a key manufactured housing industry post-production constituency, has announced a major step in its initial organization and the start of national-level advocacy activities to better and more effectively represent the post-production sector in Washington, D.C. Accordingly, essential activity to begin addressing and correcting a major gap in the manufactured housing industry’s national-level representation in Washington, D.C. is starting to gain important momentum.

After announcing its formation as an independent organization in late-2018 — including as members (among others), state manufactured housing associations which had previously withdrawn from the Manufactured Housing Institute (MHI) — NAMHCO, issued a News Release just before the start of 2019, stating that it has now retained the services of a lobbying consultant in Washington, D.C. to act on its behalf at the national level, where multiple issues continue to vex the manufactured housing industry’s post-production sector with significantly negative consequences for the entire industry and American consumers of affordable housing. Indeed, the industry – the nation’s premiere source of non-subsidized affordable housing — after a nine-year rebound from historically-low production levels reached in 2009, has just suffered its third consecutive month of flat-line or negative growth – at a time when production levels, due to an unusually strong national economy, shouldbe booming.

In large measure, the industry — since 2000 — has seen its growth unnecessarily thwarted, undermined and impeded by a combination of factors primarily affecting its post-production sector. With manufacturers producing their best, highest quality homes ever, and with production-related regulatory issues at the federal level reduced to some degree in recent years by the highly-focused efforts of the Manufactured Housing Association for Regulatory Reform (MHARR) in conjunction with the administration of President Donald J. Trump, it is in the post-production arena – and most particularly the failure to effectively address and remedy major issues affecting zoning, placement and especially consumer financing for HUD Code manufactured home purchasers – where the most significant constraints have been imposed on the industry and its ability to serve the millions of mostly lower and moderate-income American families that want and need affordable, non-subsidized homeownership, and rely on manufactured housing to fill that need.

While HUD Code manufacturers and other smaller and mid-sized industry businesses have — and have had for nearly thirty-five years – independent, aggressive, national-level representation in Washington, D.C. through MHARR, that type of independent representation has been almost entirely absent for the post-production sector and most importantly, its thousands of smaller, independent businesses, since the National Manufactured Housing Federation disappeared as an independent entity and was subsumed into MHI decades ago. And, indeed, the formation of NAMHCO is consistent with the call for an independent, national-level, post-production manufactured housing association set forth in a study, presented to and approved by MHARR’s Board of Directors in 2017.  Furthermore, this new entity will create opportunities – and a venue – for other state associations that have been seeking better and more effective representation of their post-production members in Washington, D.C., particularly with respect to the key issues of zoning, placement and consumer financing.

As was anticipated by MHARR’s study, the establishment of this new association could – and hopefully will – help to encourage and create potential areas of policy cooperation and synergy between MHARR and NAMHCO with benefits for the entire industry (and particularly its smaller, independent businesses) as well as consumers. MHARR has already communicated with the leadership of NAMHCO regarding matters of mutual interest, and will continue to follow-up as appropriate in the near future.

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.

Production Decline Continues in November 2018

Production Decline Continues- in November 2018

Washington, D.C., January 3, 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), HUD Code manufactured home production declined once again in November 2018. Just-released statistics indicate that HUD Code manufacturers produced 7,670 homes in November 2018, a 10.8% decline from the 8,602 new HUD Code homes produced during November 2017. On a cumulative basis, industry production for 2018 now totals 90,612 homes,[1] still a 5.8% increase over the 85,657 HUD Code homes produced over the same period in 2017.

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 November 2018 — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

StateCumulativeCurrent Month (Feb. 2018)20182017
Texas85,422 homes1,40417,54715,735
Louisiana32,202 homes3474,6155,366
Florida28,109 homes7676,7615,468
Alabama20,168 homes3304,4775,435
N.C19,105 homes3584,2043,555
Mississippi17,126 homes2383,3573,395
California16,926 homes3413,7113,385
Michigan16,181 homes5204,1644,412
Kentucky15,359 homes2392,6602,930
Tennessee13,173 homes1762,5712,424

The latest information for November 2018, does not result in any changes to the cumulative top-ten list.

Although industry production as reported for November 2017 may have been skewed somewhat higher due to the production of disaster response homes for the Federal Emergency Management Agency (FEMA) (insofar as the HUD production reports do not differentiate between FEMA production and shipments and units produced for the general consumer market), the fact remains that production levels remain disappointingly low for a HUD Code industry that should be booming based on the strength of the broader economy, including both job and wage growth, versus the increasing cost of other types of housing. In part, as MHARR will soon address in greater detail, the industry’s difficulty in once again reaching – and substantially exceeding – the 100,000 home-per-year benchmark, is, to a substantial degree, a product of continuing problems affecting the industry’s post-production sector, including, principally, exclusionary zoning affecting communities, related placement issues, and, most importantly, the continuing unequal, secondary market treatment of the nearly 80 percent of manufactured home-buyers who rely on chattel loans to finance the purchase of their home.  Significantly, though, it appears that the post-production sector could be on its way to more effectively addressing these and other issues through independent representation at the national level. More on this development will be forthcoming soon.

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.

President Trump Announces Nominee Dr. Mark Calabria to Become New Director of Federal Housing Finance Agency

President Trump Announces Nominee Dr. Mark Calabria to Become New Director of Federal Housing Finance Agency-2

President Trump, on December 12, 2018, announced the nomination of Dr. Mark Calabria, currently the Chief Economist for Vice President Mike Pence, to become the new Director of the Federal Housing Finance Agency (FHFA), when the term of current FHFA Director, Melvin Watt, expires in January 2019. The nomination to serve a five-year term as head of the federal agency with direct regulatory responsibility over both Fannie Mae and Freddie Mac is subject to Senate confirmation.  A confirmation hearing date has yet to be announced.

Over the years, Dr. Calabria has held many positions in Washington, D.C. — both within and outside of the federal government — addressing various aspects of housing and housing finance policy.  Among other things, he served previously as Director of Financial Regulation Studies at the Cato Institute, as a staff member for the U.S. Senate Committee on Banking, Housing and Urban Affairs, where he worked on housing, housing finance and insurance-related issues for Senators Richard Shelby (R-AL) and Phil Gramm (R-TX), and as Deputy Assistant Secretary for Regulatory Affairs at the U.S. Department of Housing and Urban Development.

In these various roles, MHARR has engaged extensively with Dr. Calabria regarding manufactured housing regulatory and finance issues.

Given the crucial role of FHFA (and its leadership) regarding the implementation of the Duty to Serve Underserved Markets (DTS) by the Government Sponsored Enterprises, MHARR will act to follow-up with the new Director once he has been confirmed and takes office.

MHARR will keep you apprised of further significant developments affecting this matter as they unfold.

Production Flatline Continues in October 2018

ManufacturedHousingAssocRegulatoryReformMHARRLogoHUDCodeManufacturedHomeProductionOctoberFlatlines

Washington, D.C., December 3, 2018 – 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), HUD Code manufactured home production declined slightly, once again, in October 2018.  Just-released statistics indicate that HUD Code manufacturers produced 8,588 homes in October 2018, a slight .5% decline from the 8,636 new HUD Code homes produced during October 2017. This being the second month in a row with a slight year-over-year production decline, MHARR will carefully monitor – and begin analyzing these numbers — going forward. On a cumulative basis, industry production for 2018 now totals 82,795 homes, a 7.4% increase over the 77,055 HUD Code homes produced over the same period in 2017.

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 October 2018  — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

StateCumulativeCurrent Month (Oct. 2018)20182017
Texas84,018 homes1,64016,14313,682
Louisiana31,855 homes4614,2684,851
Florida27,342 homes6475,9944,981
Alabama19,838 homes3274,1474,694
N.C18,747 homes4543,8463,284
Mississippi16,888 homes2813,1193,046
California16,585 homes3773,3703,097
Michigan15,661 homes5803,6444,039
Kentucky15,120 homes2312,4212,715
Tennessee12,997 homes2162,3952,190

The latest information for October 2018, does not result in any changes to the cumulative top-ten list.

HUD Publishes Final Revised Rv Exemption Rule

HUDPublishes.FinalRevisedRVExcemptionRule-ManufacturedHousingAssociationRegulatoryReformLogo

TO:HUD CODE INDUSTRY MANUFACTURERS, RETAILERS,
COMMUNITIES, STATE ASSOCIATIONS AND PRESS
FROM:MHARR
RE:HUD PUBLISHES FINAL REVISED RV EXEMPTION RULE

The Department of Housing and Urban Development (HUD) has published a final rule in the November 16, 2018 Federal Register (copy attached) amending the exemption of certain recreational vehicles (RV) from regulation under the National Manufactured Housing Construction and Safety Standards Act of 1974 (as amended) and related HUD standards and enforcement regulations set forth at 24 C.F.R. Part 3280 and Part 3282.

The publication of this final rule, based largely on an amended regulation recommended by the Manufactured Housing Consensus Committee (MHCC), concludes a process which began on October 1, 2014, when the former HUD manufactured housing program administrator issued a unilateral memorandum allegedly “clarifying” existing HUD regulations and related statutory provisions regarding the applicability of HUD manufactured housing regulatory criteria to various types of recreational vehicles.

MHARR, as it has with respect to numerousother unilateral HUD regulatory actions under the former program administrator, strongly objected to such off-the-cuff regulation by memorandum (a practice subsequently renounced by the Department of Justice), and called, among other things, for proper MHCC consideration of – and recommendations pertaining to – this matter.  In particular, MHARR, as it has consistently, called for a regulatory (as opposed to statutory) resolution of issues relating to the evolution of RVs and the applicability or non-applicability of HUD manufactured home standards and regulations to various classes of RVs,

With substantial MHARR input, the MHCC, in December 2014, developed a proposed RV exemption, which was published – with certain relatively minor revisions – as a proposed rule by HUD on February 9, 2016. In written comments supporting that proposed regulatory amendment, MHARR stated: “MHARR believes that the HUD proposed rule takes the appropriate approach to this matter: (1) by resolving potential uncertainty regarding the scope and parameters of the RV exemption on a regulatory – rather than statutory – basis; (2) by maintaining the “designed use” conceptual basis of the MHCC consensus recommendation; and (3) by maintaining the primary operational language of the MHCC consensus recommendations….”

And, while the final rule makes certain further modifications to the February 9, 2016 proposed rule based on comments received during the rulemaking process, a preliminary review of the final rule indicates that it maintains the fundamental intent and structure of the rule as initially proposed, and, more importantly, functions to harmonize the regulations with their authorizing statute.

The final rule, as indicated by the Federal Register announcement – together with its requirements relating to a manufacturer’s notice for units claimed to be exempt pursuant to the final rule – will become effective on January 15, 2019.  In the meantime MHARR, as always, will continue to review, analyze and evaluate all relevant aspects of this matter, and will further inform the industry as warranted.

Please feel free to share this information and document with any and all parties with an interest in this matter.pdf-images.-2jpg

“A HUD MONITORING CONTRACT ‘BRIDGE TO NOWHERE’”

A HUD MONITORING CONTRACT BRIDGE TO NOWHERE

Let’s start off with a truism. And that truism, quite simply, is that within the HUD manufactured housing program, the so-called “monitoring” function has grown, expanded and metamorphosized over time, to become something that it was never meant, designed or intended to be, with a private contractor exercising defactogovernmental authority over regulated parties. Of course, HUD claims (and protests loudly whenever confronted) that ithas the final say, and the final authority on all regulatory matters, and that, as a result, everything is perfectly legitimate. But the reality, for decades – in fact, since the very inceptionof the HUD program more than forty years ago – has been quite different.

A detailed review and analysis of the last monitoring contract by MHARR (see, MHARR Viewpoint, October 2015, “Monitoring Contractor’s Domination of Federal Program Must End”), shows quite clearly that the program monitoring contractor is (and has been) tasked by HUD with the performance of pseudo-governmental functions, and rendering what amount to final decisions on discretionary enforcement matters, often with no substantive involvement by responsible HUD officials at all. And driving the inexorable expansion of contractor functions over time, the inexorable expansion of related regulatory burdens and costs imposed on regulated parties, and, not surprisingly, corresponding increases in monitoring contractor revenues — has been a defacto, HUD-sustained monopoly on the program monitoring contract by just one entity (the Institute for Building Safety and Technology, “IBTS,” previously named the National Conference of States on Building Codes and Standards, “NCSBCS” and Housing and Building Technology, “HBT”).

For any of the Trump Administration’s regulatory reform agenda to have a real or lasting impact on the federal manufactured housing program, however, the Administration’s political leadership at HUD mustassert itself, the 40-year-plus monitoring contract monopoly mustbe ended, and the contracting process itself mustbe reformed in order to produce full and fair competition, as required by law throughout the federal government. Sadly, though, after a seemingly promising start, concern is growing that this particular aspect of “draining the swamp” could be starting to backslide in the wrong direction – unless, that is, the entireindustry and consumers take action to stop the slide.

Why is the monitoring contract so important? Well, the Trump Administration and Secretary Carson have taken a number of important steps to startthe process of reforming the federal program, and to bring it back to what Congress and the law – particularly the Manufactured Housing Improvement Act of 2000 – designed it to be, a preemptive program of minimum performance-based standards and uniform enforcement that protects consumers while simultaneously preserving, protecting and advancing the inherent (i.e., non-subsidized) affordability of manufactured homes. At MHARR’s specific urging, the Trump Administration, in late 2017, replaced and re-assigned the over-reaching career administrator of the HUD program, Pamela Danner. Shortly thereafter, again as advanced by MHARR, HUD began a “top-to-bottom” review of all existing (and proposed) HUD standards, regulations, and pseudo-regulatory action (such as “Interpretive Bulletins” and “Field Guidance” documents), incident to concurrent rulings by the Attorney General that the Justice Department would not undertake enforcement actions in federal court based on such “pseudo-regulatory” guidance documents.

Both of these actions represented necessary first-stepsto begin the process of restoring the rule of law – and common-sense – to the federal program, consistent with the express statutory purposes of the 2000 reform law. The job, though, does not end with initiating a “process.” “Process,” in and of itself, is not a goal. Positive, substantivechange within the program and for both the industry and its consumers is the goal. For genuine progress, the program administrator’s position, for example, must now be filled by a non-career appointee, as required by the 2000 reform law, andthe regulatory reform process initiated under Trump Administration Executive Orders 13771 and 13777 must lead to substantive action by the Administration to repeal (or significantly modify) layer-upon-layer of unnecessary and debilitating regulations, interpretations, and pseudo-regulations, developed and imposed over time with little or – in most cases – noconsideration for their impact on the cost of manufactured housing or the ability of lower and moderate-income American families to purchase a manufactured home.

As important as those steps are, though – and ultimately could be with proper follow-through – real, on the ground, and lastingchange for the federal program will require a fundamental shift in the way that the program does business with respect to the monitoring function, including the monitoring contract itself, the nature and scope of the monitoring function, and ultimately, hiring a new program monitoring contractor after 40-plus years of defactomonopoly.

Thatdefactomonopoly, for which MHARR has been unable to find anyparallel anywhere else in the federal government, is the most compelling and probative evidence that the HUD monitoring contract process itself is entirely dysfunctional. While repeated monitoring contract procurements at HUD, since the inception of the federal manufactured housing program, have allegedlybeen “competitive” in nature (as defined by federal law), and have been conducted asallegedlycompetitive procurements (i.e., without the formal protections required by law for non-competitive, sole-source contract solicitations), the facts show this to be patently false (and arguably fraudulent). Instead, based on HUD contract “award criteria” that, through successive solicitations, have been tailored to match the “experience” of the one and only entity to ever hold the contract – i.e., NCSBCS/HBT/IBTS – the monitoring contract procurement, through its entire history, has been a defactosole-source procurement without any type of meaningful, actual or legitimate competition.

Indeed, on the one occasion when a competing bid, lower than that of the one-and-only monitoring contractor –IBTS — wassubmitted, nearly three decades ago, by a highly-respected and credible code organization (i.e., the former Council of American Building Officials – “CABO” — now, the International Code Council – “ICC”), HUD, rather than awarding the contract to another entity, initiated a “best and final” round of revised offers, which ultimately led to an award, once again, to the one-and-only monitoring contractor — IBTS — (as shown by documents grudgingly provided by HUD to Congress after multiple requests by former North Carolina Senator Lauch Faircloth).

This contract manipulation and the resulting domination of the program over the course of its existence by oneentrenched, self-servingcontractor, has had a ruinous effect on the HUD manufactured housing program, the industry itself and consumers in particular, as the purchase price of manufactured homes has needlessly been inflated by unnecessary, unjustified and baseless expansions of regulatory compliance burdens at the initiative and behest of the entrenched monitoring contractor. Indeed, detailed MHARR analyses have demonstrated how HUD payments to the monitoring contractor have ballooned over the past decade in particular (to more than $25 million in the last five-year contract), even as industry production levels have fallen to historic lows and referrals to the HUD dispute resolution system (reflecting unresolved consumer issues in new HUD Code homes) have been – and remain – at microscopic levels, well below 1% of corresponding industry production over the same period.

The needless regulatory costs and burdens imposed because of the contractor, moreover, disproportionatelyimpact and harm smaller industry businesses (and consumers of affordable housing) while conversely benefitting the industry’s largest producers, which can spread spurious pseudo-regulatory costs over a larger base of production. It should thus be no surprise that you will hear little or nothing about this issue from other industry organizations, which are beholden to the support of those larger entities.

Recognizing this as a major structural and policy problem within the federal program — as a result of education efforts by MHARR — Congress, in the Manufactured Housing Improvement Act of 2000, attempted to halt this manipulation of the HUD contracting process. Remedial provisions thus inserted in the 2000 reform law by Congress included, among other things, a mandate for an appointed, non-career program administrator, a requirement for “separate and independent” contractors for monitoring and other functions, a narrow and limited definition of the “monitoring” function (i.e., the “periodic review of the primary inspection agencies … for the purpose of ensuring that [they] are discharging their duties under” the 1974 Act as amended), and a requirement – in section 604(b)(6) – for notice and comment rulemaking and Manufactured Housing Consensus Committee (MHCC) review and approval for all changes to HUD policies, practices and procedures concerning enforcement-related activities.

HUD, though, over the past two decades, has either totally ignored, unduly restricted, or chipped awayat these safeguards, effectively neutering Congress’ effort to restore standards and accountability to the monitoring contract process. HUD has thus not only failed to protect the industry’s smaller businesses (and consumers of affordable housing) from regulatory excesses and abuses, but has actually undermined one of the primarypurposes of the 2000 reform law.

Nevertheless, there were indications, in 2017, that HUD, under Secretary Carson, would begin to reform this process and actually conduct a legitimate procurement for the monitoring function. This included an “Industry Day” meeting for prospective bidders in November 2017 and the division of the monitoring contract into design and production monitoring functions. Now, though, there is disconcerting evidence that HUD could be backsliding on this essential program reform. Specifically, MHARR has learned that the last IBTS monitoring contract, which was due to expire in August 2018, instead of being replacedwith a new, genuinely competitive contract, has instead been extendedfor (at least) one year through a no-bid, sole-source, so-called “bridge” contract.

As objectionable and damaging as this is in itself, for continuing – on a dejurebasis – HUD’s addiction to sole-source procurements for this function, the official HUD “Justification for Other than Full and Open Competition” (Justification Document) for this contract, actually lauds the entrenched incumbent contractor in ways that could indicate that there will be no “full and open” competition for the full-term monitoring contract that succeeds the alleged “bridge” contract. For example, the Justification Document states, among other things: “the depth and breadth of knowledge demonstrated by the contractor [i.e., IBTS] during the performance of the current contract makes them uniquely qualifiedto perform services during the 12-month bridge. *** The contractor’s experience is uniquebecause the contractor has extensive knowledge of working with HUD’s national building code 924 C.F.R. 3280) in areas of code administration and enforcement for several decades.” (Emphasis added).

Such language – coupled with the no-bid, sole-source “bridge” contract itself – indicate that HUD could well have no intention of conducting a legitimate, competitive solicitation for the next monitoring contract that will “drain the swamp” of 40-plus years of abuse. Indeed, such accolades for the entrenched incumbent could become a self-fulfilling prophecy, discouraging other bidders from even competing for the contract, thereby continuing and reinforcing HUD’s multiple violations of applicable law (again, MHARR has searched for, but has been unable to locate, anysimilar instance of such a 40-year-plus dependence on one entrenched defactosole-source contractor) and undermining Secretary Carson’s effort to reform the manufactured housing program. Indeed, legitimate competition, a new monitoring contractor and a monitoring contract that complies with substantive law regarding the limited nature of the monitoring function, are essentialto the successful implementation of any such reforms.

This no-bid, sole-source “bridge” contract is — and should be — totally unacceptable to the entireindustry, and particularly its smaller businesses, as well as consumers of affordable housing.

If the HUD monitoring contract “swamp” is to be “drained,” the time for complying with the law – and finally ensuring full and fair competition for the program monitoring contract – is, emphatically, now.

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.

Financial Services Chairman Calls for End of GSEs

FinancialServicesChairmanJebHensarlingCallsForEndofGovernmentSponsoredEnterprisesGSEsManufacturedHousingAssociationRegulatoryReformMHARR

NOVEMBER 6, 2018
Rep. Jeb Hensarling (R-TX), retiring Chairman of the House Financial Services Committee, has called for an end to the two Government Sponsored Enterprises (GSEs) – Fannie Mae and Freddie Mac – and the repeal of their federal government charters.

In a Press Release (copy attached) issued on November 2, 2018, the Chairman of the House Committee with oversight responsibility for the GSEs’ federal regulator – the Federal Housing Finance Agency (FHFA) – and, by extension, the GSEs themselves, called the “GSE model a failure,” and asserted that “it is time for it to [be] end[ed]” through “meaningful housing finance reform legislation that protects taxpayers, encourages greater private sector participation, and once and for all … repeals the GSEs’ government charters.”

Perhaps nowhere else has the GSEs’ failure to comply with their respective charters — and their failure to serve the lower and moderate-income homebuyers that they were specifically created to help – had a more profoundly negative impact than in the manufactured housing market and, most especially, the 80% of the manufactured housing market comprised of personal property, or “chattel” loans.

Even in the face of an express statutory directive from Congress to finally begin serving the manufactured housing market, including the chattel loans relied upon to finance the industry’s most affordable homes (i.e., the “Duty to Serve Underserved Markets” mandate of the Housing and Economic Recovery Act of 2008), the GSEs – which for decades have refused to provide securitization or secondary market support for manufactured housing loans – have remained defiant and non-compliant, refusing to provide any level of market-significant support for the vast bulk of manufactured home chattel loans. The resulting harm to lower and moderate-income American homebuyers, in the form of either total exclusion from the housing market or higher interest rates than would be the case otherwise, is indefensible and should be unacceptable to the industry, Congress and FHFA.  Moreover, these extreme negative impacts have been facilitated and exacerbated by the absence of independent, national representation for the industry’s post-production sector in the nation’s capital to aggressively address this matter, not only with FHFA and the GSEs, but with Congress and the Administration as well.

Accordingly, regardless of whether the House of Representatives, following today’s election, is controlled by Democrats or Republicans, the underlying failure of the GSEs and the “GSE model” has been exposed, and the GSEs’ continuing failure to properly serve the manufactured housing chattel market – despite the DTS mandate — will be a major issue going forward, potentially providing the industry’s post-production sector with a second chance to ensure that securitization and secondary market support for manufactured housing and manufactured home chattel loans are provided by the GSEs on a market-significant basis.

This issue will be discussed in more detail at MHARR’s upcoming Board of Directors meeting.

September 2018 Manufactured Home Production Data Shows Slight Flatline

September2018HUDCodeManufacturedHousingAssociationRegulatoryReformmMHARRLogoData

Washington, D.C., November 6, 2018 – 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), HUD Code manufactured home production flat-lined slightly in September 2018. Just-released statistics indicate that HUD Code manufacturers produced 7,519 homes in September 2018, a 0.8% decline from the 7,580 HUD Code homes produced during September 2017. Cumulative industry production for 2018 now totals 74,207 homes, an 8.4% increase over the 68,419 HUD Code homes produced over the same period in 2017.

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 September 2018  — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

StateCumulativeCurrent Month (Sep. 2018)20182017
Texas82,378 homes1,45914,50311,692
Louisiana31,394 homes3723,8074,383
Florida26,695 homes5835,3474,474
Alabama19,511 homes2683,8204,221
N.C18,293 homes2913,3923,006
Mississippi16,607 homes2672,8382,716
California16,208 homes3162,9932,778
Michigan15,081 homes3203,0643,672
Kentucky14,889 homes2472,1902,385
Tennessee12,781 homes2002,1791,962

The latest information for September 2018, does not result in any changes to the cumulative top-ten 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.

MHARR Communication with HUD Assistant Secretary Brian Montgomery Regarding Program Monitoring Contract

BrianMontgomeryAstHUDSecretaryFHAOfficialPhotoHUDLogoMHARRlogoCommunicationMonitoringContractManufacturedHousingAssocRegulatoryReform

October 26, 2018

VIA FEDERAL EXPRESS

Hon. Brian Montgomery
Assistant Secretary
U.S. Department of Housing and Urban Development
Suite 9100
451 7thStreet, S.W.
Washington, D.C. 20410
Re: Manufactured Housing Program Monitoring Contract

Dear Secretary Montgomery:

As the national representative organization for small businesses within the comprehensively-regulated manufactured housing industry, the Manufactured Housing Association for Regulatory Reform (MHARR) continuously monitors regulatory and regulation-related matters that could negatively impact the purchase affordability of manufactured homes – the nation’s premiere source of inherently affordable, non-subsidized homeownership.

Given this core mission, MHARR has been gratified by the actions undertaken by President Trump since his inauguration – and by Secretary Carson – to reduce unnecessary regulatory burdens at HUD, including those imposed on the nation’s manufactured housing producers. That said, however, MHARR has begun to observe, in recent months, what appears to be backsliding within the manufactured housing program, away from the full implementation of the regulatory reform policies exemplified by Executive Orders 13771 and 13777, and toward a return to the type of baseless, unwarranted and excessively costly regulatory excesses and abuses that characterized the program under previous administrations. In particular, there is an extremely serious and damaging aspect of that activity that warrants your personal involvement and intervention.

Specifically, as you are aware from your previous tenure at HUD, contracting processes within the federal manufactured housing program – and particularly the contracting process for the program “monitoring” contract, a statutorily defined and circumscribed function – have been dysfunctional at best and unlawful at worst. For the entire40-year-plus history of the federal program, the enforcement “monitoring” contract has been awarded to onecontractor, albeit under different organizational names. Although allegedly a “competitive” procurement, the facts show this is to be false. Instead, based on HUD contract “award criteria” that, through successive procurements, have been tailored to match the “experience” of the one and only incumbent contractor – i.e., the Institute for Building Technology and Safety (IBTS) but previously named the National Conference of States on Building Codes and Standards (NCSBCS) and “Housing and Building Technology” (HBT) – this procurement, through its entire history, has been a defactosole-source procurement without competing bidders, without any type of meaningful, actual or legitimate competition, and without anyof the safeguards required by law and applicable regulations for sole-source contracting.

Indeed, on the one occasion when a competing bid, lower than that of IBTS, wassubmitted, nearly three decades ago, by a highly-respected and credible code organization (i.e., the former Council of American Building Officials – “CABO,” now, the International Code Council – “ICC”), HUD, rather than awarding the contract to another entity, initiated a “best and final” bidding round, which ultimately led to an award – once again – to IBTS (as shown by documents provided Congress after multiple requests).

This contract manipulation and the resulting domination of the program over the course of its existence by oneentrenched, self-servingcontractor — which has effectively been delegated discretionary government authority in violation of federal law — has had a ruinous effect on the HUD manufactured housing program, the industry itself and consumers in particular, as the purchase price of manufactured homes has needlessly been inflated by the unnecessary, unjustified and baseless expansion of regulatory compliance burdens at the initiative and behest of the entrenched monitoring contractor. Indeed, detailed MHARR analyses have demonstrated how HUD payments to the monitoring contractor have ballooned over the past decade in particular (to more than $25 million in the last five-year contract), even as industry production levels have fallen to historic low levels and referrals to the HUD dispute resolution system (reflecting unresolved consumer issues in new HUD Code homes) have been – and remain – at microscopic levels, well below 1% of corresponding industry production over the same period. The needless regulatory costs and burdens imposed by the contractor, moreover, disproportionatelyimpact and harm smaller industry businesses (and consumers of affordable housing) while benefitting the industry’s largest producers, which can spread spurious pseudo-regulatory costs over a larger base of production. It should thus be no surprise that you will hear nothing about this issue from other industry organizations, which are beholden to the support of those larger entities.

Although Congress, in the Manufactured Housing Improvement Act of 2000 attempted to halt this manipulation of the HUD contracting process and the resultant domination of the federal program by the entrenched contractor through, among other things, its mandate for an appointed, non-career program administrator, its requirement for “separate and independent” contractors for monitoring and other functions, its narrow and limited definition of the “monitoring” function, and its requirement – in section 604(b)(6) – for notice and comment rulemaking and Manufactured Housing Consensus Committee review and approval for all changes to HUD policies, practices and procedures concerning enforcement-related activities, HUD has either totally ignored, unduly restricted, or chipped away at these safeguards, effectively neutering Congress’ effort to restore standards and accountability to the monitoring contract process. HUD has thus not only failed to protect the industry’s smaller businesses (and consumers of affordable housing) from regulatory excesses and abuses, but has actually undermined one of the primarypurposes of the 2000 reform law.

And, while there were indications, in 2017, that HUD, under Secretary Carson, would reform this process and conduct a legitimate procurement for the monitoring function (including a meeting for prospective bidders in November 2017 and the division of the monitoring contract into design and production monitoring functions), it now appears that HUD has backtracked from any such reforms, and that is our reason for writing to you.

Specifically, MHARR has learned that the last IBTS monitoring contract, which was due to expire in August 2018 (and which was the subject of the November 2017 bidders meeting), instead of being replaced with a new, genuinely competitive contract, has instead been extended for (at least) one year through a no-bid, sole-source, so-called “bridge” contract.

As objectionable and damaging as this is in itself, for continuing – on a dejurebasis – HUD’s addiction to sole-source procurements for this function, the official HUD “Justification for Other than Full and Open Competition” (Justification Document) document for this contract, lauds the entrenched incumbent contractor in ways that indicate that that there will no “full and open” competition for the full-term monitoring contract that succeeds the alleged “bridge” contract. For example, the Justification Document states, among other things: “the depth and breadth of knowledge demonstrated by the contractor [i.e., IBTS] during the performance of the current contract makes them uniquely qualified to perform services during the 12-month bridge. *** The contractor’s experience is unique because the contractor has extensive knowledge of working with HUD’s national building code 924 C.F.R. 3280) in areas of code administration and enforcement for several decades.”

Such language – coupled with the no-bid, sole-source “bridge” contract itself – indicate that HUD has no intention of conducting a legitimate, competitive solicitation for the next monitoring contract that will “drain the swamp” of 40-plus years of abuse. Indeed, such accolades for the entrenched incumbent could become a self-fulfilling prophecy, discouraging other bidders from competing for the contract, thereby continuing and reinforcing HUD’s multiple violations of applicable law (i.e., MHARR has searched for, but has unable to locate, anysimilar instance of such a 40-year-plus dependence on one entrenched defactosole-source contractor) and undermining Secretary Carson’s effort to reform the manufactured housing program. Indeed, legitimate competition, a new monitoring contractor and a monitoring contract that complies with substantive law regarding the limited nature of the monitoring function, are essentialto the successful implementation of any such reforms.

This no-bid, sole-source “bridge” contract and related activity, accordingly, is totally unacceptable to the industry’s smaller businesses. We will therefore contact your office soon to schedule a meeting to address this extremely serious matter.

Sincerely,

Mark Weiss
President and CEO
cc: Hon. Mike Pence
Hon. Ben Carson
Hon. Mick Mulvaney
Hon. Michael Crapo
Hon. Sherrod Brown
Hon. Jeb Hensarling
Hon. Maxine Waters
HUD Code Industry Manufacturers

HUD “Clarification” on Frost-Free IB Offers More Questions and Confusion Than Answers

TeresaPaynePhotoOfficeManufacturedHousingProgramsHUDlogoManufacturedHousingAssocRegulatoryReform

OCTOBER 17, 2018

TO:                 MHARR MANUFACTURERS
                     MHARR STATE AFFILIATES
                     MHARR TECHNICAL REVIEW GROUP (TRG)

FROM:           MHARR
RE:                 HUD “Clarification” on Frost-Free IB Offers
More Questions And Confusion Than Answers

As a follow-up to the MHARR memorandum sent earlier today regarding finalization of the proposed “frost-free” Interpretive Bulletin (IB), it now appears that the HUD program, after doing nothing during the October 16, 2018 installation conference call (which was conducted by the contractor) to correct the impression created by its contractor – that HUD would not be taking action to finalize that IB – is now trying to backpedal, or leave itself room to adopt the proposed IB at some point in the future.

The supposed HUD program “clarification” (reproduced in full below), however, actually creates more confusion and questions about how the program plans to handle this entire matter both near and long-term, and illustrates the type of regulatory and enforcement uncertainty that is inevitably created when regulatory and pseudo-regulatory functions are unlawfully delegated to contractors.

This incident, moreover, and HUD’s conduct regarding this matter, could indicate that the federal program might be starting to gravitate toward the type of unacceptable practices that characterized it before the arrival of the Trump Administration.

MHARR will closely monitor this matter very carefully for further discussion at the upcoming MHARR Board of Directors meeting.

Further, on the specific issue of the proposed “frost-free” IB, MHARR will continue to oppose the final adoption of the proposed IB – or any variant thereof – and will continue to press this matter until it gets full and complete answers.

HUD EMAIL

From: Payne, Teresa L Teresa.L.Payne@hud.gov
To Lesli Gooch LGooch@mfghome.org, mmarkweiss mmarkweiss@aol.com
Cc Gormley, Joseph M Joseph.M.Gormley@hud.gov, Mcjury, Jason C Jason.C.Mcjury@hud.gov

_
Lesli and Mark,

Due to questions from both industry associations, this email is being sent to further clarify the answer provided by SEBA Professional Services to a question received during the Open Industry Conference Call for the Installation program.  The incoming question and response stated:

Question: “Has there been any update to the Interim Guidance on use of Frost-free Foundations?“

Answer: “At this time, HUD has decided not to take action on finalizing the Interpretive Bulletin concerning frost free foundations.”

The answer provided was not intended to state any new or final program or policy decisions by HUD with respect to the future of the proposed Interpretative Bulletin on Foundations in Freezing Temperature Areas (the IB).  Rather, the answer provided was consistent with similar commentary provided by HUD during the recent MHCC Meeting.  To reiterate the essence of those comments, at this time, there has been no work or decisions on finalizing the IB.  HUD’s limited resources and current priorities for the office are not currently focused on finalizing the IB.  To be clear, at this time, there have not been any new or final policy decisions on the future of this proposed action.   The Department has received public comment on the proposed IB and HUD has also received previous comments from the MHCC.  HUD is also aware of the MHCC’s consideration of log items from the September 2018 MHCC meeting agenda.

Teresa

Teresa Payne
HUD Office of Manufactured Housing Programs (OMHP)
Photo courtesy of ManufacturedHomeLivingNews.com