Issue link: https://read.dmtmag.com/i/708576
AUGUST 2016 23 THE JOURNAL No. 13 on Get It Quick Page The U.S. Department of Energy (DOE), on Friday, June 17, 2016 published its proposed "en- ergy" rule for HUD Code manufactured housing in the Federal Register (copy attached). The pro- posed rule, if adopted in its present form, would needlessly add thousands of dollars to the cost of a new manufactured home, driving millions of Americans out of the manufactured housing mar- ket, according to economic studies, while devas- tating the HUD Code industry – and particularly its smaller businesses – at a time when the indus- try is still seeking to recover from historic produc- tion lows reached in 2009. Industry members and consumers of affordable housing, accordingly, cannot allow this toxic proposed rule to be imple- mented, as it would decimate the balance of the affordable housing market and the availability of truly affordable housing for moderate and lower- income American families. The rule itself is the product of a scandalous , sham rulemaking process at DOE, which began with the 2011 selective leak of a proposed rule to the Manufactured Housing Institute (MHI) and other parties in interest; false DOE denials of a se- lective leak; and a 2013 directive by the Office of Management and Budget (OMB) -- consistent with MHARR demands -- to start the rulemaking process over from the beginning. What followed, however -- as revealed by documents obtained by MHARR through the Freedom of Information Act (FOIA) -- was not a fresh start on a new rule, but instead a process of closed-door coordination and collaboration between DOE, MHI and "envi- ronmental" special interest groups to use "negoti- ated rulemaking" to railroad a proposed rule through an obscure DOE "appliance standards" committee, with "a minimum of meetings," while DOE awarded multiple lucrative contracts to MHI-connected "research" entities to, among other, things, tout DOE manufactured housing energy regulation and break-down industry oppo- sition to any ultimate DOE rule. As if this reprehensible process were not bad enough, the pattern of DOE manipulation is still continuing. Faced with the prospect of stiff and growing opposition from consumers and industry members, DOE, in a tactic often used by federal agencies in Washington, D.C., provided an ad- vance, pre-publication copy of the proposed rule to MHI, at least 22 days before the official publi- cation of the proposed rule in the Federal Register in an attempt to preemptively diminish and soften that opposition. Unfortunately for both DOE and MHI, however, the resulting May 27, 2016 MHI "Housing Alert" not only fails to address critical questions about the DOE proposed rule, but ac- tually raises more questions than it answers. Substantively, the proposed rule is a drastic one-size-fits-all big government "solution" to a "problem" that does not exist. The rule, based on DOE Manufactured Housing Working Group data, would add an average of at least $2,226 to the retail cost of a single-section manufactured home and $3,109 to the retail cost of a multi-sec- tion home. According to further information de- veloped by MHARR, that average cost would actually be closer to $4,000 for each single-section home and nearly $6,000 for a multi-section HUD Code home. And these amounts are certain to be exceeded, because they do not include or reflect testing, enforcement and regulatory compliance costs, which were never considered by the DOE Working Group and are not included in the pro- posed rule. Manufactured homes, though, as demon- strated by U.S. Census bureau data, are already energy efficient, with median monthly energy costs that, for fuel oil and natural gas, are lower than the monthly median for site-built homes or, in the case of electricity, are closely comparable to the median monthly cost for a site-built home. The DOE rule, therefore, is effectively a re- gressive, discriminatory tax on America's manu- factured housing consumers that will fall the hardest on those at the lower end of the economic spectrum who rely on the afford- ability of manufactured housing the most, while excluding mil- lions from the Ameri- can Dream of home ownership altogether (at a time when home ownership rates have declined to historic lows). At the same time, it will force those remaining in the mar- ket to spend thousands of dollars on energy measures (already available from industry builders on an optional basis) that they might not otherwise choose to purchase of their own free-will, while offering phantom "sav- ings" they likely will never recoup over the time that they own their home. Indeed, the proposed rule would mandate energy measures that are not cur- rently required even for million-dollar site-built homes in the vast majority of states. Along with consumers, this horrendous pro- posed rule will have its greatest negative impact on smaller HUD Code industry businesses. The industry's largest corporate conglomerates have al- ready shown (through various energy-related "re- bates" and special offers) that they have the resources and inclination to cushion or even elim- inate the up-front cost impact of any ultimate DOE rule for their own consumers, while smaller manufacturers, retailers and communities will feel the full brunt of the massive costs of the proposed rule, as it becomes even harder to qualify poten- tial purchasers for already-limited consumer fi- nancing. Thus, the industry's largest corporate conglomerates – and their national representative MHI – have not only "gone along" with DOE, but appear to have worked publicly and behind the scenes to advance government action that will dis- proportionately harm smaller com- petitors. 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