Issue link: https://read.dmtmag.com/i/647244
MARCH 2016 18 THE JOURNAL As Predicted by MHARR, HUD Delivers Worst of Both Worlds on Installation MHARR VIEWPOINT BY MARK WEISS Once again, predictions made years ago by MHARR regarding HUD's failure to correctly interpret and implement the Manufactured Housing Improvement Act of 2000 – and the profoundly negative consequences of those fail- ures -- are being proven true and accurate. And, as has been the case consistently, such failures, which are rapidly intensifying under the current federal program Administrator, have ei- ther been ignored or actively facilitated by oth- ers in the industry to the ultimate and significant detriment of American consumers and the in- dustry itself. The latest example of MHARR early-warn- ings going unheeded, but now being validated, concerns installation regulation and the HUD program's mangled, distorted approach to the installation mandates of the 2000 reform law, which will inevitably harm both the industry and consumers, saddling both with excessive and unnecessary regulatory compliance costs. Coupled with dispute resolution, the instal- lation provisions of the 2000 reform law were adopted to close significant gaps in the original National Manufactured Housing Construction and Safety Standards Act of 1974, as construed by HUD. Although the industry – and manu- facturers in particular – have always supported sound consumer protection and the safe and proper installation of manufactured homes (which had been at the root of the overwhelm- ing majority of consumer complaints prior to the 2000 law), HUD determined, early-on that it would not address the installation of manufac- tured homes under the 1974 law, because that law did not include specific authorization for such standards. Recognizing, however, that proper installa- tion is crucial: (1) to the proper performance of a manufactured home; (2) to the value of that home to its owner and consumer finance providers; and (3) to public and government ac- ceptance of manufactured homes as legitimate "housing," rather than "trailers," the industry and consumers went back to work for nearly 12 years, together with other stakeholders, to de- velop the installation provisions that were ulti- mately included in the 2000 reform law. The result was a statutory structure, based on the 1994 recommendations of the National Commission on Manufactured Housing, which authorized any state that wished to do so (i.e., a "complying" state), to establish (or continue) a state-law installation program and state-law installation standards, so long as those require- ments provided protection that met or exceeded baseline federal stan- dards to be developed by the Man- ufactured Housing Consensus Committee (MHCC) and adopted by HUD. HUD, by contrast, was authorized to regulate installation in non-complying (i.e., "default") states that failed to adopt a state-law installation program within five years of enactment of the 2000 law. This structure – which had been aggressively advanced by MHARR -- was consistent with the nearly-universal view of program stakeholders that varying soils and other installation-related conditions in different geographical areas made states the best and most appropriate party to reg- ulate the siting of manufactured homes. The 2000 reform law, consequently, allows states to take the lead role in the regulation of installa- tion, with HUD assuming that duty only in de- fault states that fail to adopt and implement a conforming state-law program. What the 2000 reform law specifically does not do, however -- again recognizing, as it does, the unique competence and ability of the states and state authorities to determine proper installation systems and techniques within their own borders – is authorize or direct HUD to sub- stitute its judgment for that of state authorities regarding the specific details and elements of any given state installation standard. Put differently, the 2000 law allows HUD to determine whether a state-law installation program and state-law installation standards as an integrated "whole" provide consumers with a level of protection equal-to-or-greater-than the HUD standards, but does not provide back-door authority for HUD to micro-manage state-law programs and/or standards or over-ride state judgments regarding the need for -- or content of -- any specific in- stallation requirement. Refusing to accept this fundamental aspect of the 2000 reform law, however, HUD, from the start, sought to undermine the law's clear division of federal-state re- sponsibility and its preference for state regulation of installation (including an express reservation of state installation authority added to the preemption section of the law), by separating installation from the Part 3280 Federal Manufactured Housing Construction and Safety Standards, thus giving rise to the "re-codifica- tion" of installation. While MHARR vigorously opposed this re-codification and the MHCC re- jected it as well, HUD ultimately got its way through the tacit acceptance of the Manufac- tured Housing Institute (MHI). As early as 2004, therefore, then-MHARR President and CEO Danny Ghorbani warned that HUD appeared intent on controlling installation and dictating installation criteria everywhere, including complying states with approved state- law programs. In an MHARR Viewpoint article entitled "Federal Installation Trap?" he wrote: "[F]rom both its approach to the substance of the model federal standard, and from the infor- mation that MHARR has been able to obtain, it appears that HUD has not abandoned its ambi- tion to totally federalize installation regulation, under its control." (Emphasis added). Now, more than a decade later – in the ab- sence of independent national representation for the industry's post-production sector and with the continuing tacit acceptance of other national industry organizations – this prediction is coming true, as HUD (both directly and via a non-ac-