Issue link: https://read.dmtmag.com/i/672763
MAY 2016 18 THE JOURNAL HUD's Forty Years of Wasted Opportunity MHARR VIEWPOINT BY MARK WEISS In a 2015 address, HUD Secretary Julian Cas- tro had glowing words for manufactured housing. Calling HUD the "Department of Opportunity," the Secretary spoke of manufactured homes as a "vital solution" to the nation's "affordable hous- ing crisis." In reality, though, HUD and the federal manufactured housing program have spent the last forty years – since the inception of the federal program in 1976 -- wasting opportunities (or worse) when it comes to manufactured hous- ing. While documenting all these wasted oppor- tunities would take an entire book, some recent examples from the post-Manufactured Housing Improvement Act of 2000-era will illustrate the point. The Secretary's flowery prose regarding the "vital" role of manufactured housing -- a role ironically ignored by HUD in its last two depart- mental strategic plans, where it actually counts – stands in sharp contrast with objective evidence of the Department's actual perspective on HUD Code homes and the role of the federal program. Like the illusionist's "shiny object," used to dis- tract an audience, political pronouncements are a diversion. Instead, the truth – and its real world consequences – are to be found in the con- crete actions of program officials and, occasion- ally, in "under the radar" HUD documents, which provide a less guarded insight into the in- stitutional mindset that underlies and drives those actions. One such HUD document has just been pub- lished. Entitled "Manufactured Housing: Re- flections from HUD Leadership – A HUD 50 th Anniversary Publication" (MH Reflections), it offers a simultaneously revealing and disturbing glimpse into the pathology of a misdirected and mismanaged HUD program that violates its gov- erning law -- to the benefit of industry competi- tors (site-builders, realtors, the rental housing industry, etc.) and the detriment of the HUD Code industry and its consumers -- every day. The HUD manufactured housing program can – and should be -- a model of successful collab- oration; an example of what an effective partner- ship between federal and state governments, consumers and private industry can do to help lower and moderate-income Americans (who might otherwise be excluded from the housing market altogether) achieve the American Dream of home ownership and all of its benefits. As MHARR emphasized in its October 26, 2015 documented testimony to the House Financial Services Committee on "Innovative Approaches to Address Housing Affordability:" "By providing inherently affordable home ownership for individuals and families, rather than a form of direct or indirect government 'assistance,' or residence in publicly-owned hous- ing, manufactured homes … offer the 'individuality, the human dig- nity, the respect for individual rights [and] de- votion to individual responsibility' that President [Lyndon] Johnson envisioned at the signing cer- emony for the legislation that created HUD" fifty years ago. And, for sure, the need for decent, afford- able home ownership in the United States has never been greater. Census Bureau data shows that the rate of home ownership in the United States fell to a 20-year low in 2014. At the same time, a February 2015 HUD "Worst Case Hous- ing Needs" report found that nearly eight million lower-income American households in 2013 ei- ther "paid more than half their monthly incomes for rent, [or] lived in severely substandard hous- ing, or both," nearly 50% higher than in 2003. These wretched statistics -- along with the unprecedented contraction in industry produc- tion since the turn of the century -- only make more damning the failure of the HUD manufac- tured housing program (ironically excused, sup- ported, or even enabled by part of the industry) to carry out a fundamental element of the mis- sion assigned to it by Congress in the Manufac- tured Housing Improvement Act of 2000. The HUD program, with authority over the nation's most affordable housing, should be play- ing a dynamic role in facilitating the availability of affordable manufactured homes for consumers and the acceptance of manufactured housing for all purposes within HUD as commanded by the 2000 reform law. With those twin "facilitation" directives, the 2000 law (a unique law passed by Congress unanimously) fundamentally altered the one-dimensional focus of the original 1974 fed- eral law. As congressional proponents of the 2000 reform law put it in a 2003 letter to HUD, "the 2000 Act … transformed the [1974] Act from solely being a con- sumer protection law to also being an affordable housing law." To look at the actions of current program officials, however, and read the "reflections" of post-2000 program "leaders," one would think that the 2000 law – with its broader focus on ad- vancing manufactured housing -- had never been adopted. The entire focus of the HUD program -- after four decades – remains on more and more needless regulation, with more and more com- petition and market-killing regulatory compliance costs (which disproportionately impact smaller industry businesses), even though by all avail- able objective metrics, the consumer safety ele- ment of the program has already been fully achieved. Put differently, nearly two decades after the 2000 reform law, the HUD program and its "leaders" are stuck in a "time warp" where noth- ing has changed in decades. How else to explain the fact that nearly every "reflection" in HUD's MH Reflections, involves increased and ex- panded regulation, with not one word about: (1) actions that HUD is taking (or could take) to ad- vance manufactured housing as an affordable housing solution; or (2) how smaller industry businesses in particular are being strangled by lay- ers of baseless new regulation that undermine their ability to compete, to enter or remain in new emerging markets, or even place homes in large swaths of the country, while HUD is either complicit or stands by and does nothing? \ 21