Issue link: https://read.dmtmag.com/i/320565
JUNE 2014 22 THE JOURNAL A Practical Approach to RV Industry Concerns MHARR VIEWPOINT BY DANNY GHORBANI In the world of regulated industries, words -- and their definitions in the law and implementing regulations – are vitally important, and the fed- erally-regulated manufactured housing industry is no exception. The statutory and regulatory definitions of "manufactured home," specify the types of struc- tures that are subject to the HUD Code of pre- emptive construction and safety standards, labeling and enforcement mechanisms and, in the wake of the 2000 reform law, HUD installation and dispute resolution mandates as well. So, ob- viously, what is or is not a "manufactured home" -- and treated or not treated as a "manufactured home" by federal and/or state regulators -- is of profound significance to a great many stakehold- ers, including consumers, the HUD Code indus- try and others. One of those "others" is the recreational vehi- cle industry, including manufacturers that pro- duce motorized, "self-propelled" recreational vehicles (RVs), towable "fifth-wheel" type RVs and "Park Model" trailers as well. That indus- try, for a variety of reasons, does not want its products to fall within the relevant federal defi- nitions of a "manufactured home." And the his- tory of how this all evolved, is both relevant and instructive. Decades ago, the RV industry was a division of the Mobile Home Manufacturers Association (MHMA), which included pre-HUD Code "mobile home" producers as well. In the late 1960s, when it became obvious that the two products were diverging – with "mobile homes" serving as permanent housing and RVs serving a "leisure" market -- decision-makers for the two industries determined that two separate national associations would be needed going forward. Thus, MHMA gave way to the creation of two separate national industry organizations – one for manufactured homes and the other for recre- ational vehicles. With the 1974 enactment of the federal man- ufactured housing law and the advent of HUD regulation two years later, RV industry decision- makers, anxious to ensure a firewall between res- idential "manufactured homes" and leisure-use RVs, insisted that the HUD regulations clearly delineate between the two. And, in fact, the HUD regulations do just that. The HUD Proce- dural and Enforcement Regulations (PER) state that "recreational vehicles" are "not subject" to either the PER regulations or the HUD Code standards. The regulations then define "recre- ational vehicle" as a "vehicle which is: (1) built on a single chassis; (2) 400 Square feet or less when measured at the largest horizontal projec- tions; (3) self-propelled or permanently towable by a light duty truck; and (4) designed primarily not for use as a permanent dwelling but as tem- porary living quarters for recreational, camping, travel, or seasonal use." Fast-forward to 1998. Apparently not satis- fied, the RV industry, without prior consultation with the HUD Code industry, used the congres- sional appropriations process to amend the defini- tion of "manufactured home" in the original 1974 federal manufactured housing law to exclude "self-propelled," motorized RVs. Going the ap- propriations route in Congress meant that there were no hearings on that amendment and no op- portunity for other stakeholders to address the substance of the change. Thus came about the first introduction of the term "recreational vehi- cle" into a federal housing law – setting the stage for future unintended consequences. After enactment of the 2000 reform law, those unintended consequences began to unfold, as the RV industry attempted to expand this statutory exclusion even further, to include towable RVs and Park Models trailers, but was turned down twice -- in 2008 and 2010 -- by the Manufac- tured Housing Consensus Committee (MHCC). A subsequent effort in Congress was equally un- successful in the face of major concerns voiced by the HUD Code industry, states, consumers and others. But now, the RV industry is back in Congress again, with a new proposal to re-open the federal law and broadly exempt Park Model trailers up to 400 square feet in size, as well as both self-propelled and towable RVs with no size limit. In support of this latest proposal, the RV in- dustry contends that a "clarification" of the law is necessary for its products to avoid being negatively impacted by the new Dodd-Frank regulations af- fecting manufactured home consumer financing and to ensure that those vehicles and structures are not: (1) taxed by states and localities as real estate; or (2) regulated by those authorities as residential dwellings. While new RV industry "justifications" for a broader exemption seem to emerge regularly, the problems with any such change for the HUD Code industry and con- sumers of affordable housing remain fundamen- tally the same. The most basic problem with the RV industry proposal, as stressed by the HUD Code industry, states and consumers, is that it would inevitably result in a new class of unregulated de facto homes – in competition with smaller manufactured homes -- without the type of consumer protec- tions that are provided by the HUD Code and en- forcement program for manufactured homes and state and local codes for other types of homes. Unregulated, substandard, de facto housing in RVs and Park Models, consumers contend, would pose obvious dangers, in addition to the unfair competition it would present for the HUD Code homes. But it would also have other ex- tremely negative consequences for the HUD Code industry. Far from "clarifying" anything, the RV indus- try proposal would actually blur the current dis- tinction in the law and relevant HUD regulations between a "dwelling" and temporary occupancy, by allowing and effectively promoting the de facto residential use of RVs and Park Models. Such improper use – and problems that would inevitably arise from such use – would eventually snowball into a barrage of negative publicity that would im- pact the public image of manufactured housing. Beyond this concern, the HUD Code industry has worked extremely hard in Washington, D.C. (and nationally), for decades, to establish man- ufactured housing as "housing" and to establish its federal law as a "housing" law among lawmakers, regulators and consumers. The RV industry proposal, by introducing non-motorized Park Model and towable RV "trailers" into the federal manufac- \ 25