Manufactured Housing: Five years of sectoral engagement

1
Manufactured Housing Five years of sectoral
engagement

• Prepared for the
• NeighborWorks Symposium
• Atlanta, GA
• February 2007
• George McCarthy
• The Ford Foundation

2
What Ill Say

• Review Sectoral Approach
• Look at progress on key goals
• Celebrate success
• Identify challenges
• Think about next five years

3
Sectoral initiative definition

• Targets a particular market sector or segment
  within an industry
• Intervenes by becoming a valued actor within the
  industry and engages that sector or segment
• Exists for the primary purpose of assisting
  disadvantaged actors in the sector to succeed
  and
• Creates, over time, systemic change within the
  sector.

4
MHSI Outcomes

• Systemic change
• MH viewed as normal good, identical to site built
  homes in performance
• Access to purchase and finance of MH improved
  without significant deterioration of cost
  advantages
• Public, and public sector, view MH as desirable
  addition to local housing stock.

5
The sector goals (2002)

• Find creative uses of MH and drive the industry
  to respond with the products
• Develop effective replacement strategies for
  older pre-HUD code homes
• Foster site control for owners in investor
  owned parksMHP conversion to ROCs
• Develop high quality lending for purchase,
  resale, and home improvement
• Establish better state level policies

6
1. Creative uses

• Numerous, but niche-y?
• Noji Gardens et al
• Pepperidge Woods
• Mills at Carthage
• Oakland Community Housing
• Frontier Housing
• Has the industry responded with the products?
  Not yet.

7
The industry

• Still operating at about 30 of capacity
• Few new ideas, not much appetite for innovation
• Little confidence in NPOs and their ability to
  reach meaningful scale

8
2. Replacement strategies

• Pre-HUD code homes still represent 30 of
  existing stock (2MM units)
• Replacement not at sufficient scale to be a niche
• Key to eliminating negative public perception of
  sector

9
3. Park Conversions

• NHCLF
• 2002 50 parks converted to ROCs
• 2008 100 parks converted to ROCs
• ROC-USA providing T/A and other support to park
  conversions in 20 states
• OFN/CFED/ROC-USA 25 million national park
  preservation fund

10
4. High quality lending

• 2002 Two largest lenders in sector bankrupt
  GSEs exiting market almost no bank activity
• 2007 Several partners demonstrating effective
  lending for purchase, resale, home improvement,
  and refinance
• GSEs experimenting in two markets

11
Lenders

• GSEs at risk of not meeting affordable lending
  mandates
• CRA lenders looking for goals rich mortgages
• Lenders impatient with volume of NPO activity
• Little action in re-sale market

12
5. The policy environment

• 2002 dominance of chattel financing and
  treatment of MH as personal property (78)
• 2007 dominance of mortgage financing and
  treatment of MH as real estate
• 2002 no uniform siting standards
• 2007 HUD consensus code in effect

13
Public Sector

• Epidemic of park closures in high cost markets
  (FL, OR, CA, WA)
• In WA, seven separate proposals in front of
  legislature last week
• In Sarasota, FL, county is working with NPO to
  preserve parks
• Stronger interest among good HFAs in engaging
  with sector

14
Successes

• ROCs spreading with activity in 20 states NH
  FL MN NM CA OR WA CO DE ID NY WI NV
  NJ VT MS NC GA OK AR
• New MH development by NPOs in 12 states NH WA
  CA KY LA MS OH GA WI NM AZ ME
• Mortgage lending facilitated by NPOs in 6
  states NH VT NM KY WA NC

15
MHSI resources

• Leadership development Meredith Institute, IM
  Home, partnerships with NWA
• Resource development Creating sustainable,
  long-term funding established through IM Home
  and national capital fund.
• Outcome and impact measures currently on the
  drawing board.

16
Next five years

• OFN/CFED/ROC-USA preservation fund
• 100MM revolving fund working in 50 states,
  supporting 500 conversions/yr
• secondary market for sub-debt
• ROC-USA linking ROCs nationally ongoing T/A
  ancillary services
• Mtg lending available (w/site cntl) on same terms
  as site built

17
Reasonable 5yr goals?

• Capacity to convert/preserve 500 investor owned
  MH communities per year to ROCs (25k units)
• Development of 10-20k new units per year by NPOs
  using MH
• Replacement of 20k dilapidated units with new
  homes per year
• Retail mortgage volume 1.5BB/yr through NPOs