Issue link: https://read.dmtmag.com/i/84809
MHI FOCUS Roundtable Themes Point to Rebound and Revitalization BY Richard "Dick" Jennison TheManufacturedHousing Institute (MHI) participated in the 21st International Network- ing Roundtable, held this year in San Diego, Calif. where I took the opportunity to educate the approximately 250 members of the land- lease community sector of the manufactured housing industry on the work thatMHI under- takes each day representing industry interests in Washington, D.C. I also outlined the benefits and importance of the National Communities Council, the only national organization devoted to advancing the interests of manufactured home community owners, managers, develop- ers, lenders, brokers and service suppliers. Such forums as this also provideme an excellent opportunity to hear from industry members first-hand and to clarify and reinforceMHI po- sitions on key industry issues. Hosted by Community Investor, GFAMan- agement, Inc., and PMN Publishing, the an- nual gathering of the land-lease manufactured home communities industry drew approximately 250 attendees from27 states to discuss the state of land-lease communities. Reinforcing the sentiments of other manu- factured housing industry events over the past 12 months, the meeting featured three key themes: 1) a renewed or new confidence in the role and value of land-lease manufactured home communities; 2) innovation on the part ofmanufactured home builders in terms of new, creative designs for homes built specifically for placement in land-lease communities, as well as new financing programs designed to assist communities to retain residents and boost oc- cupancy rates; and 3) the continuing need for dialogue between financial lenders/analysts and community owners on how to accurately valu- ate land-lease communities. On the first point – renewed or new confi- dence in land-lease communities – it was both somewhat surprising and encouraging to hear OCTOBER 2012 20 THE JOURNAL more than two dozen investors declare their strong interests in acquiring land-lease commu- nities across all regions of the country. Such confidence reflects the broader confidence in the manufactured housing industry I have wit- nessed over the past sixmonths I have served as MHI President and CEO. This level of enthu- siasm and confidence will be critical in main- taining and rebuilding land-leasemanufactured home communities as a viable housing option for low- andmiddle-incomeAmerican families. As to the issue of innovation bymanufactur- ers in home designs, there were numerous "business development officers" from major manufacturers who were there with the sole focus of reaching out to community owners to showcase their new series of manufactured homes designed specifically to accommodate the smaller lot sizes of older land-lease communi- ties. And from what I heard and saw, there ef- forts were greatly appreciated by the community owners who are looking for ways of upgrading and filling their communities with homes that appeal to a broader audience. With many older manufactured home communities now ap- proaching 50 years old, providing new homes for these communities becomes a major factor in restoring the viability and accessibility of these communities as an important housing op- tion. Another key factor in maintaining manufac- tured home communities is helping community owners and managers keep their occupancy rates strong and ensure the financial viability of communities. Several new financing programs designed to build partnerships between the fi- nancial services sector and community owners, such as the c.a.s.h. Lending Programfrom21st Mortgage Corp., were highlighted and gener- ated a significant interest on the part of the community owners. In general, these programs invest by providing communities with new homes as well as aggressive financing alterna- tives for home buyers. In return, community operators dedicate a portion of the rental rev- enue generated by the new home, in some cases with the rental revenue being assigned against a portion of the new homeowner's loan balance. The result is that the financing company is as- sured that the loan will be paid and the com- munity owner can attract and retain new residents and new rental income. Again, this ability to fill communities with new residents and new homes is vitally impor- tant in maintaining the viability of land-lease communities. And based on the level of ques- tioning and interest shown during the meeting, these innovative financing programs are just be- ginning and hold great opportunity for building meaningful partnerships that will benefit land- lease communities. Yet themeeting was not without some points of debate. There was continuing concern voiced over how financial analysts and investors valuate land-lease communities, with many community owners encouraging analysts and in- vestors to rethink their valuation formulas and approaches. While this "friction" is not ideal, the point is that this issue was openly discussed and methods for resolving it are "on the table." Open communication and debate are the proper way to creating valuation methods that serve both the investors' and owners' interest. All of these meeting themes – even the need for ongoing dialogue – reinforce the positive outlook for our industry that I hear and see every day, both from our industry colleagues and from people interested in being part of our industry renewal. With approximately half of today's manufactured housing industry's in- creasing production being single-section homes – and most of them likely destined for land- lease communities – there are positive signs that land-lease manufactured home communities