Issue link: https://read.dmtmag.com/i/63983
MHARR VIEWPOINT Time to Stop HUD Program Backsliding BY DANNY GHORBANI Just as the industry is struggling to maintain the momentum of a fragile seven-month market recovery, there's mounting evidence that the HUD manufactured housing program is turning back to the discredited practices and methods of the past. Despite hopeful signs in 2011 related to changes in program management and notwithstanding the first-ever congressional oversight hearing regarding the implementation of theManufactured Housing Improvement Act of 2000 on February 1, 2012, it appears that the program – almost instinctively -- is beginning to revert back to its legacy of closed-door decision- making, discriminatory interpretations, proce- dural shortcuts and other evasions. More than anything, this highlights the need for an ap- pointed non-career programadministrator as di- rected by the 2000 law who would be directly accountable to Congress, the Administration and program stakeholders. And while the in- dustry's two national organization – MHARR andMHI – have pleaded withHUD to follow the 2000 law and appoint a knowledgeable non-ca- reer administrator, the Department has made excuses, leaving the industry and consumers of affordable housing as victims, subject to the whims of program regulators. Program regulators, for example, are once again pressing expanded in-plant regulation, suffocating the industry's small businesses with unnecessary costs and needless impositions on the construction process at a crucial point when the industry is just beginning to get back on its feet. HUD admits that this programchanges the entire focus of in-plant regulation, but no part of it has ever been submitted to the Manufactured Housing Consensus Committee (MHCC) which, under the 2000 law, must review every change to inspection and monitoring procedures – as confirmed by the MHCC itself through a MAY 2012 12 THE JOURNAL 2004 resolution -- or the change is "void." Though all of this, once touted as "voluntary" by HUD now has mandatory enforcement con- sequences as originally predicted by MHARR, HUD continues -- despite repeated pleas for re- consideration -- to bypass MHCC review based on a specious 2010 "interpre- tive rule" which effectively reads theMHCC review sec- tion out of the 2000 law. And even though HUD- proposed changes to the Pro- cedural and Enforcement Regulations designed to pro- vide the legal basis for such expanded regulation failed to achieve an MHCC consen- sus, HUD has simply pushed forward with this program, expanding the in- plant regulatory system in ways that hit smaller businesses the hardest in order to create new work for the program monitoring contractor which otherwise would have seen its revenues drop in lockstep with dramatic decreases in in- dustry production. As if to reinforce this point, HUD – after Congress cut 2012 programfunding bymore than half -- is now back with a proposed 2013 program budget seeking an additional $1 million in funding for the monitoring contract while continuing to starve State Administrative Agencies (SAAs) which serve as the first line of protection for consumers in a steadily growing number of new and existing homes. In the key area of on-site completion, HUD has dragged its feet – for nearly two years -- on final implementation of an on-site completion rule proposed in June 2010. That proposal, supported by the industry and approved by the MHCC, would avoid the necessity of multiple AC approvals and significantly streamline the time and cost to complete final construction of the home in conformance with the standards at the home-site, but remains stalled without ex- planation. To make matters worse, program regulators are seeking to retract a January 2009 ruling (contrary to the 2000 law because it was not brought to the MHCC) by the then-program ad- ministrator which ex- empted manufacturers obtaining HUD AC ap- proval for specific roof ridge designs from the necessity of conducting costly on-site IPIA in- spections. Now HUD apparently contends that the Administrator had no authority to grant such an exemption, which should be a lesson that when the industry deals with regulators who skirt the law, what those regulators give, those regulators can also take away. Adding to the confusion and chaos is the fact that the retraction is being applied only to new AC approvals. Thus, manufacturers which had AC requests approved before the retraction will be able to continue without on-site inspections, while newer AC approvals, some of which have been delayed by regulators for more than a year without explanation, will require costly on-site IPIA inspection, placing companies with the newer AC approvals at a major competitive dis- advantage while needlessly increasing costs and delaying move-in times for homebuyers. At the same time, HUD reg- ulators have resumed efforts to downgrade the MHCC, the centerpiece of the \ 15