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Industry Meets with Maryland Department of Housing and Community Development

Original Comment

A few weeks ago, representatives from the modular home industry met with officials from the Maryland Department of Housing and Community Development including Secretary Ken Holt. MHBA Executive Director Tom Hardiman, Ken Semler of Express Modular, Harris Woodward of Finishwerks, and Rick Wenner of PFS participated in the meeting for the modular industry.

The purpose of the meeting was to discuss ways to improve efficiency and to streamline the process for approvals in Maryland. The main goal of the industry was to better ensure that modular builders have “parity” to site builders in terms of regulation.

When the state adopted the building codes without amending the sprinkler system requirement for single-family homes, the Industrialized Building Program immediately fell under those requirements. However, the counties had the option to delay adoption of the new codes, and in particular that requirement, and did so. The result was that for a three-year period, the modular industry had to include sprinkler systems in homes in counties that did not require it yet, while site builders did not. The impact was added cost for modular homes and a significant loss of revenue for the industry.

Today, all homes are required to have sprinkler systems. The industry wants to make sure that in the future if new provisions are required by the code or regulation, the adoption or exceptions are more closely matched between the state and counties. Secretary Holt ensured the industry that the State wanted to work together and that the program would allow such variances on requirements in which the counties opted out.

We also discussed ways to streamline requirements for sprinkler system installations and potential delays caused by the Department’s review of third-party approved plans deemed to contain code deviations.

Division Director Allen Cartwright informed the group of the State’s plans to create an online submittal process (similar to the State of Florida) and expects that system to come online in 2017. This would allow the builder, manufacturer, ATF, and agency to better track the progress of a project. The Department also inquired about offering an expedited approval process at a higher fee if the industry would be interested. While it remains unclear what that fee would be and how much more quickly the plans could get approved, the industry expressed interest in this option.

In all, the industry felt that the meeting was productive and the agreed upon changes could speed up the overall process by about two weeks with possibly more efficiencies gained if the online system and expedited process are implemented.

Started on April 12, 2017 by Kellie McDonnell

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Industry Gathers in Boston

Original Comment



I want to personally thank the twenty plus industry representatives who endured downtown Boston traffic to meet with me this week. We discussed many issues happening in Massachusetts, and I gained valuable insight and guidance from local builders.

We also talked about MHBA’s Consumer Awareness Program and some other recent success stories. Members enthusiastically offered their opinions and insights into our marketing efforts and ideas on how the association could grow.

I was particularly pleased with the level of passion and commitment to work together that I heard from many of the builders and manufacturers. The following day, I testified at the public hearing for the 9th Edition of the proposed new Massachusetts Building Code. Most of the comments I heard focused either on the inclusion of sprinkler systems in one and two family homes or the inclusion in the energy codes of electric vehicle and solar panel wiring readiness. It seems as if our building codes have gotten away from providing a minimum level of safety and entered into the world of personal behavior modification.

Rather than discuss the specific code changes, I felt it was important to send a broader message to the board. I have included that testimony here. Oral testimony for BBRS Public hearing on March 7, 2017:

Mr. Chairman, members of the BBRS board, thank you for allowing me to speak today.
My name is Tom Hardiman and I am the director of both the Modular Building Institute and the Modular Home Builders Association, representing the commercial and residential modular building community.

Yesterday I had the opportunity to meet with about twenty modular home builders, manufacturers, and developers to discuss not only the issues we are having in Massachusetts, but the opportunities for growth here.

We feel that the modular industry can help the state address important social issues such as affordable housing and homelessness as well as reduce the amount of construction waste that ends up in our landfills. We feel that the industry can build high quality, energy efficient homes and buildings and do so in a safe and controlled working environment.

However, to do this, we need a set of fair and predictable rules and regulations. We are here today to commit to working with the BBRS and the program to ensure public safety while also providing a path towards greater economic opportunities for Massachusetts businesses and workers.

We also need a program director. We do not feel that this program can operate efficiently without filling the current vacancy. Given the enormous growth potential in this state, it is necessary to have a fully staffed and fully functioning program.

Our goal is to work with the BBRS and within the program to demonstrate why we believe “Modular Means More.”

Again, I thank you for the opportunity to speak here today.

Started on March 8, 2017 by Tom Hardiman

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2017 Building Trends - Don't Forget the Gen Xer

Original Comment



The past decade has seen transformative technological advancements in society, powered by shifts in connectivity. At the same time, home building business and operations are stuck somewhere in yesteryear. As millennials begin to enter the market as home buyers, the “must-haves” they demand may finally spark innovation. There’s pressure on builders to build better, faster, smarter, and more efficiently. See story here.



But don't forget the Gen X generation. Members of Gen X are increasingly the typical buyers of newly built single-family homes. For homes built from 2010 to 2015, approximately four out of 10 were purchased by a member of Generation X. And this share will rise in the coming years. See story here.

Started on March 7, 2017 by Kellie McDonnell

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Some more interesting information on Generation X financial position

http://www.businessinsider.com/the-financial-state-of-gen-x-and-gen-y-2014-7


http://www.pewtrusts.org/en/about/news-room/press-releases/2014/09/18/pew-finds-generation-x-facing-an-insecure-financial-future

Updated on March 7, 2017 by Steve Lefler
Tiny Homes Cracking The Code

Original Comment

At the most recent ICC code development hearings, the tiny house construction appendix received the necessary 2/3 majority vote required for inclusion in the 2018 International Residential Code (IRC). As an appendix to the code, it is not an enforceable part of the code unless specifically adopted by a jurisdiction. However, the appendix provides useful information for code officials to reference and a stepping stone for future inclusion.

The appendix specifically defines the term “small house” as a building containing one dwelling unit and having a floor area of not more than 500 square feet. The appendix goes on to list several exceptions to the IRC for “small houses” including exceptions to the minimum ceiling heights, floor area, door sizes, and hallways.

We previous penned an article stating that tiny homes were not modular homes yet and specifically referenced certain exceptions to the IRC would have to be made. With the passage of this appendix, it seems as if some of the groundwork is being laid for tiny home compliance. Find our original article here.

Started on February 27, 2017 by Kellie McDonnell

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Where in the U.S. Are the Most New Homes Being Constructed?

Original Comment



Frazzled home buyers can breathe a (little) sigh of relief—particularly if they live in the Northeast.

In a sign of more new homes to come, builders secured 4.6% more permits to construct brand-new homes from December to January, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Permits were 8.2% higher than in January 2016.



http://www.realtor.com/news/real-estate-news/more-new-home-construction-on-the-way/

Started on February 17, 2017 by Kellie McDonnell

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Tiny Houses Are Not Modular Homes....Yet

Original Comment

I recently attended a meeting with the Georgia Department of Community Affairs Industrialized Buildings Advisory Committee (IBAC). One of the main agenda topics was the regulation of tiny homes, roughly defined as a dwelling under 500 square feet.

Tiny homes have recently emerged and have grown in popularity in part due to two cable shows featuring people wanting to downsize and change lifestyles. What rarely gets mentioned on these shows however, are the codes or standards the home is built to and the zoning challenges.

For example, many tiny homes are built on a chassis and have wheels for ease of mobility. Typically, a “mobile home” like this would fall under the federal HUD code. However, HUD specifically exempts homes under 400 sf.

So if its built offsite in a factory, it would be considered a modular home, right? Well, no. Not if it’s on wheels. So if it’s not permanently affixed to real property and under 400 sf, where does it fall? And that is the current challenge faced by this emerging cottage industry (pardon the pun). More often than not, tiny homes are built to meet or exceed the same standard as a recreational vehicle.

The Georgia IBAC struggled with this exact same question – how do we regulate a home that doesn’t meet the International Residential Code (IRC)? While this decision was moved to the next meeting of the IBAC, there were many indications of where it’s headed.

In order for a tiny home to be regulated under a state program like Georgia’s and receive an insignia from the agency, it cannot be a tiny home on wheels (THOW). It must be affixed to real estate. According to Will Johnson, CEO of Tiny House Atlanta, about 75% of the potential customers of tiny homes are looking for one permanently affixed to a specific plot of land, rather than the mobile option.

In addition to the “permanency” requirement, manufacturers of tiny houses will have to significantly redesign some units in order to comply with the IRC. For starters, the 2012 IRC defines a dwelling unit as having at least one habitable room not less than 120 sf. That minimum requirement was lowered to 70sf in the 2015 IRC, an indication that perhaps the general public is trending towards smaller homes. There is also the issue of ceiling height and stair geometry. Many tiny houses have bed lofts above the living space with minimal clearance above. This would not meet the code as there has to be a minimum of 5 feet between the floor and the ceiling or that space cannot count towards the minimum room size requirement. The code also requires that each dwelling unit have a water closet, lavatory and bath (or shower), as well as a kitchen with a separate sink. And if those lofts had stairs leading up to them, the rise/run requirements in the code might call for the stairs to take up a majority of the living space. And, unless this house is going on the lot behind your current home, it’s not an accessory structure as defined by code either.

None of this is to say that tiny houses cannot meet the IRC – they can. It will just take a bit of creative designing and perhaps some exceptions to the code in future versions. As it is written now however, it would be impossible for the tiniest of tiny houses to comply given these requirements.

Beyond the code requirements, tiny houses still face many local zoning restrictions. For example, many localities have minimum size requirements for dwellings. However, we are seeing more zoning boards approve “tiny house developments” where several of these units are placed to form a tiny house community. There are also talks that HUD may reduce or eliminate its 400 sf minimum requirements, opening up the possibility of federal regulations for this niche.

So, while it’s a super-cool idea, make sure your tiny home complies with your local codes and zoning requirements before you run out and buy one.

Started on August 5, 2016 by Tom Hardiman

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Tiny Homes move a step closer to code recognition.
At the recent ICC hearings, the tiny home movement made big advances towards recognition in the International Residential Codes with the passage of a proposal to include tiny homes as an appendix in the 2018 IRC. The proposal is still in the ballot phase and must be approved by two-thirds of the voting members of the ICC before it gets approved – a tall hurdle to clear. The appendix makes certain exceptions and exemptions from the IRC for tiny homes, defined as 400 sf or less. Whether this proposal received final approval in this cycle or not, we expect the tiny house movement to continue to gain momentum and traction.

Updated on November 18, 2016 by Kellie McDonnell

Steve,
This is a great post! The industry is struggling with the tiny house concept and coding. It is being viewed differently state by state. This has a huge impact on granny pods/elder cottages, another growth opportunity for the modular industry! Look forward to more on the subject.

Regards,
Ken

Updated on August 5, 2016 by Ken Semler
Modular Home Builders Association's Annual Membership Meeting Shows How Modular Means More

Original Comment

The Modular Home Builders Association (MHBA) held its Annual Membership Meeting October 19-20 in Harrisburg, Pennsylvania.

The annual membership meeting provided professionals in residential modular construction a forum to network, exchange ideas, learn from experts, discuss issues, and grow professionally. Attendees participated in a discussion on MHBA’s Consumer Awareness Program led by Mike Zangardi of Ritz-Craft Homes and Ken Semler of Express Modular. Outgoing Chair Pat Fricchione of Simplex Homes and incoming Chair Robert Bender of Commodore Corporation led a discussion of what’s to come in 2017, including upcoming marketing efforts and promotional materials.

Tom Hardiman, Executive Director of MHBA, provided an outlook of government affairs in the modular industry, giving insight into federal, state, and local ordinances that could have a significant impact on the industry.

“There have been over 20,000 federal and state regulations introduced in the last 6 months. MHBA’s role is to prevent over regulation and push back when government gets too aggressive,” Tom said.

Harris Woodward of Finish Werks gave a presentation on high performance homes and how the modular industry is best poised to capture this market.

Special recognition was given to MHBA outgoing board member, Mike Clementoni from Muncy Homes, Inc., for his years of commitment and dedication to MHBA and the modular industry.

The event closed out with the announcement of the 2016 Modular Home of the Year. Congratulations to Zarrilli Homes from New Jersey! Their custom beach house was created as the perfect home for a large family to come together. With an open floor plan and custom finishes, this beach house is the perfect setting for a weekend away. See more photos at http://bit.ly/2016_HOY

Started on November 9, 2016 by Kellie McDonnell

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Not Welcome Here!

Original Comment

From time to time, we hear about local officials who want to ban or prohibit all new modular homes from entering their towns. Such is the most recent case in O'Fallon Illinois (population 29,000).

Apparently City leaders are not happy with the looks and site orientation of a recent modular home. Their solution? Ban all new modular homes going forward. Now, that's about as uninspiring and brain-dead solution as I've ever heard. You can still build a home that looks identical to a double-wide, you just have to build it on site, I suppose.

The Planning Commission has a public hearing on the matter next Monday June 27th. MHBA has already contacted the City's Development Director and expressed our concerns and let them know that these types of bans will not be allowed to go unchallenged!

Maybe local officials will see the light on this one and redirect their misplaced biases.

Started on June 22, 2016 by Tom Hardiman

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A win, but not a victory. The O'Fallon City Council voted 11-1 to approve an AMENDED ordinance aimed at curbing modular home construction in the City. The original ordinance called for an outright ban of all new modular homes. MHBA hired an attorney and rattled enough cages to get the city leaders to at least amend the ordinance.

Any new modular home will now require a special permit upon being approved via their "planned use" requirements. This is by no means the desired outcome we sought, but a marginal win compared to the outright ban.

MHBA is considering its next steps including legal action against the City.

Updated on July 6, 2016 by Tom Hardiman

well done tom

Updated on June 30, 2016 by Joshua Margulies
Ways a Modular Home Can Save You Money

Original Comment

So you are in the market for a new home and heard that a modular home might be a less expensive option? Given that modular homes are built with the same materials and built to the same codes as conventional site built homes it would seem that the costs would also be the same. Generally speaking, the costs are comparable, but there are a few ways that a modular home can save you money.

Construction Loan – During the construction phase of your home, typically you will have a construction loan. Payments (or draws) are taken from this loan to pay contractors, subcontractors and materials, with the borrower (home owner) paying the monthly interest payment. Once construction is completed, the construction loan will be paid off with your permanent mortgage loan. One of the key advantages of modular construction is the shorter construction schedule. Construction of your home is occurring at the same time as the foundation work. When the foundation is completed, it is generally only a matter of weeks before your home is set. It is not uncommon for a modular home to be completed two to three months sooner than a comparable site built home, saving you the interest payments for those months. The amount you save here depends on the principal amount, the interest rate and the draw schedule. For illustrative purposes, the monthly interest payment on a $200,000 loan at 5% is $833.33.

Materials/Waste - The U.S. Environmental Protection Agency estimated that a staggering 164 million tons of building-related waste was generated annually in the United States. According to the National Association of Home Builders (NAHB) construction of a typical 2,000-square-foot home generally produces about 8,000 pounds of waste. That's four tons of waste going to our landfills for every new homes built! A home built in a factory controlled setting yields far better results. NAHB's study concluded that on average, 4 pounds of waste is generated per square foot of new home construction (4lbs/sf). The typical modular manufacturer generates about half a much waste during the construction process.

On a modular home site, you do not see the row of dumpsters filled with drywall, lumber, and excess building materials like you do on nearly every conventional site. Excess lumber on a modular home is either used for additional wall bracing while the home is being constructed in the factory, or stored and used for a future home. Additionally, it is much easier and cost effective for the modular manufacturer to separate and recycle items that often land in the same dumpster on site. As a result, the hard costs of waste disposal are reduced.

Waste Disposal Costs: This might equate to $300-$400 on a 2,000 square foot home. But there is also the upfront cost purchasing the material that was wasted. It is not at all uncommon for site built contractors to order a little extra for all materials delivered to the site. Why? Because they don't want to run short and have to stop the project and go order more.

Materials Cost: While material waste depends largely on which materials we are talking about, we will use a "waste" figure of 10%, meaning 10% of the materials you pay for do not end up in your home with a conventional builder. That can be a significant amount when you consider as much as 25% of the total cost of your home is materials expense. This is a 2-2.5% savings on your total cost alone!

Let's use that 2,000 square foot home as an example to show the savings:

Total home cost = $240,000
Construction loan = $200,000
Cost / sf = $120
Materials cost = $60,000
Materials waste cost = $6,000
Materials disposal cost = $400
Construction loan savings (2 months of interest) = $1,667
Total cost savings with modular = $8,067 = 3.4%

When you factor in workforce labor productivity (it takes fewer labor hours to construct a comparable size modular home), as well as overall energy efficiency of the modular home once occupied (due to higher quality control and tighter building envelop), it's easy to see how a modular home can end up saving you 5+% overall.

Obviously it is impossible to apply all of these assumptions to all modular homes, but this article does demonstrate the potential savings you can realize with your new modular home.

Started on May 27, 2016 by Tom Hardiman

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What is the HERS Index?

Original Comment

With all the talk about green rating systems, we thought we’d devote some time to trying to explain what some of these programs mean to the average home buyer.

“HERS” is the acronym for the Home Energy Rating System. The HERS index is a nationally recognized system for home a home’s energy efficiency is measured. The HERS program also sets the standard for home homes are inspected and scored.

The HERS index was created by an organization known as RESNET (the Residential Energy Services Network) in order to give homeowners and buyers a standard by which they could measure the energy efficiency of their home.

According to RESNET, the HERS score is similar to an automobile’s miles per gallon. Only for homes, a lower HERS score is better. Here’s how it works:

A certified Home Energy Rater assesses the energy efficiency of a home, assigning it a relative performance score. The lower the number, the more energy efficient the home.

The U.S. Department of Energy has determined that a typical resale home scores 130 on the HERS Index while a standard new home is awarded a rating of 100. So a home with a HERS Index Score of 50 is 50% more energy efficient than a standard new home while a home with a HERS Index Score of 130 is 30% less energy efficient than a standard new home.

There are advantages of the HERS score, according to Steve Baden, the executive director of RESNET. “Today’s new homes are much more efficient in comparison to homes built just a decade ago. These homes are more affordable to maintain, comfortable, and have a higher value”.

To learn more about HERS or RESNET, go to http://www.resnet.us/

Started on May 23, 2016 by Tom Hardiman

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A 3rd party HERS rater validates the building envelope from which the computer building energy efficient program calculates the score in design. A HERS rater inspects those items during construction to validate to the local Building inspector the reported work and the actual work was performed and is correct. Once a residential house is complete; a HERS rater conducts a Duct and Door Blower test to determine its passing score. Many fail since it is after the fact of finsihed construction. A local building Inspector looks to the HERS rater for energy efficiency independence.

NOTE:
Clean Power Plan Rule

Because EPA has encouraged states to use building energy efficiency, including the imposition of building codes, as a way to comply with these targets, NAHB has been engaged from the beginning, which has helped to significantly improve EPA’s treatment of energy efficiency in the final rule. Additionally, NAHB, along with several partnering associations, filed suit against EPA over the Clean Power Plan Rule.

Updated on May 23, 2016 by Steve Lefler
Black Model Ts

Original Comment

For the past several years, the modular home industry has accounted for about 2-3% of all new home starts in the United States. Amazingly, this figure has held steady for the past decade despite a big upturn in housing, followed by one of the biggest economic collapses in history. Three percent through it all.

This week I have the honor of participating on a panel to hear a defense of a dissertation by a PhD. candidate at Virginia Tech, one of the leading schools of architecture in the country. Bandar Alkahlan is seeking his Doctor of Philosophy in Architect and Design Research and is set to present his research to this panel. Alkahlan chose to write his dissertation on the modular home industry, specifically “Integrated Design and Manufacturing (IDM) Framework for the Modular Construction Industry.” In reading his dissertation, the decade-long market share figure was confirmed. But his research really brought to light many reasons why our market share remains stagnant.

A key take-away from the paper for me is that, perhaps our market share is stagnant because our research and innovation is stagnant. Don’t get me wrong, I still believe modular is a far superior process for home building than the traditional “sticks and bricks” approach. But even within our industry, we still build relatively the same way as we did twenty years ago.

Alkahlan interviewed thirteen industry participants and asked them a series of questions, one of which focused on how companies integrate information technology. The choices ranged from use of two dimensional CAD, in which all thirteen respondents indicated using, to 3D CAD (6 of 13 answering yes), to Computer Aided Manufacturing (CAM), where only one respondent answered yes. None of the thirteen respondents answered affirmatively to more advanced processed such as BIM and 3-D printing of components and none indicated that they invest in R&D. Granted, there hasn’t been much in the way of excess revenue lately to invest in these programs and processes. But hear me out.

Alkahlan makes a comparison to the auto industry. The assembly line was truly an innovative break-though and allowed Ford to mass produce thousands of Model Ts at an affordable price. (You can have any color you want, as long as it’s black). When the US auto industry failed to adopt new processes in the 1970s, the Japanese automakers gained considerable ground, and in some cases lapped our manufacturers. Today, the auto industry has largely moved away from the straight assembly line production process. Now various car components are manufactured at multiple locations and assembled in the factory, based on consumers’ choices.

I’ve often said that every major industry from communications, to the auto industry, to entertainment has evolved and improved in productivity and efficiency. Every industry except the construction industry. But all of those other industries embraced new products and processes along the way which accelerated their growth.

This mass production mentality (vs. mass customization) is just one of the key points in his dissertation. But it’s a point that I think the industry must address. Is it possible that we are only 3% of the market because we continue to build homes the way Henry Ford built model Ts? Well, at least we are not still building horse drawn carriages like the site built guys!

Started on May 17, 2016 by Tom Hardiman

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Connecticut Transportation Bill Advances

Original Comment

House Bill 5548, addressing industry concerns regarding oversize shipments through Connecticut, recently passed the Committee on Public Safety by a 25-0 vote and was sent to the Hose floor with a recommendation that the bill "ought to pass."

The bill included MOST of MHBA's recommended language for amendments including allowing units over 14 ft wide and up to 16 ft wide to be shipped Monday through Friday during the day, identical to NY State's transportation requirements. The bill also treats modular homes the same as other industry oversize shipments reducing the possibility of discrimination.

MHBA wants to thank Ron Weaver of Ritz-Trans and Richard Wildermuth of CT Valley Homes for their legwork to get this bill to this point. We will continue to monitor the bill's progress and report back.

Started on April 1, 2016 by Tom Hardiman

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House Bill 5548 passed the Connecticut safety committee, then stalled out in the transportation committee, likely due to opposition from the State Department of Transportation.

MHBA reached out to the agency to follow up on our prior meeting and to once again request that they implement some of our recommended changes - changes that they currently have the authority to make without legislation.

The DOT replied to MHBA to say that they, in consultation with the State Police, considered our requests but did not feel the changes were necessary and they were not comfortable allowing oversize modular home shipments during the day - Nevermind that they allow oversize shipments from the pool and boating industries during the day!

MHBA pushed back one more time in an effort to gain some concessions in this effort. This time, the CT DOT agreed to change our oversize night shipments from the current Sunday-Wednesday schedule to a Monday-Thursday schedule. Our logic here is that the Sunday night shipment slots are not optimal, given the surroundings states' regulations that prohibit travel of oversize shipments after noon on Friday.

So while this, by no means, resolves our transportation woes in Connecticut, it is at least a small win in an on going effort to better synchronize Connecticut's transportation regulations with surrounding states. MHBA plans to continue working with the agency, the industry, and lawmakers over the summer to work on longer term solutions to this problem.

This initiative demonstrates the importance of a vigilant and on-going government affairs effort, as few issues are typically resolved with a quick and clean solution, and often require frequent pressure to make incremental improvements.

Updated on May 10, 2016 by Tom Hardiman
You know, the problem with this industry is….

Original Comment

No matter how many events or meetings I attend with modular home companies, eventually someone starts a conversation off with those words. I heard it a few times at a recent event in New Jersey but for some reason, this time it just didn’t resonate with me.

At the risk of sounding ironic, the problem with this industry is that we are too quick to point out the problems of this industry! Yes, we have issues and challenges to work on – but so does every other industry.

MHBA is about to launch a consumer awareness program that will be positive and professional. And I hope that positivity is contagious within the industry. We need to start talking about what is RIGHT with this industry!

-We build a better home that stick builders!
-FAR less waste ends up in the land fill!
-Our work environments are FAR more safe for our employees than stick builders!
-Our homes are MORE durable that then average stick built home!
-And our homes are MORE energy efficient than that average stick built home!

So for all you naysayers out there – knock it off! You are in a great industry and should be proud of your work.

Started on April 22, 2016 by Tom Hardiman

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here here! how we doing on that tom?

Updated on April 22, 2016 by Joshua Margulies
Consumer Awareness Program - FAQs

Original Comment

MHBA launched their Consumer Awareness Program (CAP) to more effectively educate potential home buyers. The questions and answers below will hopefully answer any initial questions you have about the program and the efforts that will stem from its creation. read the full press release here.

Does my company have to participate if we are members?
No, you may be a member of MHBA and enjoy all the benefits of being a member without participating in this program. While it is completely voluntary, we are strongly encouraging all manufacturers and builders to support this effort. There may be additional benefits that you will not receive, however that are above and beyond the MHBA membership benefits. This may include a special logo or designation for participating companies, articles or blogs about participating companies, and featured case studies on our website.

What will the funds be used for?
The money will be used for a focused marketing plan that will draw new homebuyers to the website to educate them about the industry. Funds will also be used to develop promotional/collateral materials such as videos and marketing templates for use by MHBA members.

How will funds be collected?
Funds will be remitted to MHBA on a monthly basis and reported as a separate line item on MHBA’s financial statements to better ensure transparency and accountability. MHBA has requested that all manufacturers add $10 for each box or module manufactured after April 1, 2016.

What kind of marketing will take place?
MHBA will develop online and print marketing collateral material to be used by the manufacturers and builders, and may include but not limited to videos, flyers, templates, and case studies. We will also update the website to educate potential modular home buyers.

How does this benefit members?

Members will be able to use the marketing materials developed through this campaign for their own regional marketing efforts. MHBA will also attract thousands of potential new home buyers to modularhousing.com where your company is listed in the directory and under the “member list.” If you are a builder member, you will also receive any requests for quotes that match your service area. Lastly, we expect the entire industry to benefit from a heightened awareness and positive message we deliver about modular homes.

Will company information be shared?
MHBA will not share any information individual company information collected each month. We will however, aggregate all the data and share that industry information with members.

Started on February 19, 2016 by Kellie McDonnell

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We have officially launched our Consumer Awareness Program (CAP) as of April 1st! We have reached out to all of our manufacturers for their support on this initiative. So far, the following MHBA manufacturer members are on board: Apex Homes, Excel, Manorwood, Muncy Homes, New Era Building Systems, Pennwest, Premier Builders, Ritz Craft, Simplex, Superior Builders, and Westchester Modular Homes. We are waiting to hear back from several others.

Additionally, several builders have shown their willingness to support this effort including: Express Modular, Finishwerks, Mariner Homes, and Zarilli Homes.

MHBA has started working with a PR firm to help craft and develop our message and campaign theme. This campaign will influence our website redesign and collateral marketing materials.

The campaign itself will run for a six month "pilot period" and be reassessed at our annual meeting in October. If you want more information or want to have your company listed as a participating member, email tom@modularhousing.com.

Updated on April 7, 2016 by Tom Hardiman
Update on Maryland Sprinkler Systems

Original Comment

Recently, House Bill 19 was introduced in the Maryland General Assembly by Delegate Christopher Adams and others. Contrary to some of the comments received about this bill, it DOES NOT repeal the requirement to install sprinkler systems in single family homes. In the past, counties had the option of opting out of this requirement, and several did. Unfortunately, the State Department of Housing and Community Development (DHCD) took the position that the county exemption did not apply to the statewide modular administrative program, meaning the industry was forced to include the systems despite what the county or customer wanted. The counties had a three-year window to opt out before they were required to comply. That window has now closed and as of today ALL homes built in the state are required to have sprinkler systems installed.

The bill introduced by Delegate Adams simply repeals the language that currently prohibits the counties from opting out, giving them the option to do so again. If passed as written, the modular industry will be facing the exact same discrimination and disadvantage as it did for the prior three years.

MHBA expressed these concerns to Delegate Adams, and MHBA Director Tom Hardiman had a lengthy conversation with the Delegate about the industry positon. It was clear that he was not trying to harm the industry, as he really did not understand it. He was simply trying to bring more power and control back to the local level.

MHBA stated to the Delegate that MHBA opposes the bill as written and had three options 1) Lobby for an outright repeal of the sprinkler system requirement state wide. This is a much larger and more contentious issue and pits the industry directly against the State Fire Marshal, firefighters, and other “safety” advocates. 2) Lobby to kill this bill. This is a much easier strategy and will ensure that everyone must continue to install sprinkler systems. While not ideal, it at least ensures a level playing field. 3) Add language to the bill to ensure that any exemptions for counties are fairly applied across all types of home construction by adding the words “including modular homes.” This will likely trigger the DHCD to work with MHBA to modify the regulations to ensure a level playing field.

MHBA plans to continue working with Delegate Adams to get language included in this bill in case it does pass. However, there is no companion bill running concurrently in the Senate, a sign that the bill will have a difficult chance of passage. We also will not be upset if the bill fails to pass, as again, we will at least be on equal footing with stick builders. Lastly, we plan to approach DHCD again and request a top to bottom review of the entire program after the legislative sessions ends.

Started on February 19, 2016 by Tom Hardiman

Additional Comments (Click here to add or read additional comments)

House Bill 19 as amended received an "unfavorable" report from the Environment and Transportation Committee. MHBA has been monitoring this legislation and lobbied to have language included that ensured that, if passed, counties that opted out of the sprinkler system provisions also included of modular homes in those counties.

The bill was amended to include this subsection: "If a local amendment conflicts with the Standards, the local amendment prevails in the local jurisdiction."

MHBA's position on this bill has been 1) if it passes, it should apply to ALL new home construction in these counties, or 2) it shouldn't pass and everyone would continue to have to install the systems. It appears as if the bill's language covers our industry on both scenarios.

Updated on March 24, 2016 by Tom Hardiman

In California, Since 2009 CA. (WUI) Wildfire Urban Initiative was enacted requiring all new residential construction to have fire suppression systems consisting of commercial fire sprinklers, an alarm bell and waste valve to clean out system. The construction of the home includes fire resistant materials like windows, eaves and siding. It adds about $9000 to the cost to build a home to this standard and reduces the cost of fire insurance.

What California really needs is an exterior roof system for wild fire prevention.

Updated on February 19, 2016 by Steve Lefler
New York Bill to Replace Older “Mobile” Homes with Modular

Original Comment

NY SB 6954 was recently introduced by Senator Elizabeth Little to “establish the rural mobile home replacement program.” From the legislative findings:

In rural areas affordable housing is often a mobile home. Many of these mobile homes are older and dilapidated with rusted, leaking metal roofs, holes in flooring, leaky metal-framed windows with interior take-out storms. No matter the amount of rehabilitation investment, the end result is unsatisfactory in terms of longevity, energy efficiency and affordability. The legislature therefore finds that, in rural areas of the state, a program should be established to fund the replacement of mobile homes with new affordable and energy efficient modular or stick-built homes.

This program will fund the replacement of mobile homes with new affordable and energy efficient modular or stick-built homes. The use of stick- built homes has a multiplier effect for the area as local contractors, labor and building materials are used. Eligible applicants must attend and complete a homeownership training program for which includes household budgeting, home maintenance, predatory lending and post-purchase counseling. This program is an important component of replenishing the affordable housing stock in rural areas.

The total payment pursuant to any one grant contract shall not exceed seventy-five thousand dollars and the contract shall provide for completion of the program within a reasonable period, as specified therein, not to exceed four years.

MHBA will monitor this bill closely but it is at least encouraging that some lawmakers know the difference!

Started on March 10, 2016 by Tom Hardiman

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A Role to Play

Original Comment

Just about every sports cliché you can think of came to my mind last week when I attended a facilitated a meeting of twenty or so modular home builders. The “roundtable,” organized by Gary Fleisher provided a forum for builders to vent their frustrations but more importantly share their ideas on how to grow the industry.

As expected, one of the core themes of the meeting was the need to change the perception of modular among the average home buyer. What was not expected was just how ready willing and able the builders were to make this happen – NOW!

My key take away from the meeting was that the modular home industry is a team and we all have to work together to improve it, but that we all have roles that we are good at, and should focus on doing our part well. For example, Gary played a key role in pointing out some of the shortcomings in the industry, making people aware of these issues and pulling together a meeting to discuss them. Many builders felt that the manufacturers’ role should be to focus on their manufacturing processes to provide the builders with the most efficient, quality product at the best price possible. It’s not necessarily the manufacturer’s role to take the lead in marketing or in lead generation, although no one suggested that the manufacturers stop doing their part in this regard. There was also some conversation and concern that the manufacturers were not innovating and pushing the envelope enough in terms of new technologies, products, and processes.

The builders felt that it was their role to be the primary face of customer service and to take the lead on local marketing efforts. Some expresses frustration that from time to time, a potential customer talks with a factory rep who provides that customer with pricing information.

All this leads me to the role that the builders (and manufacturers, I might add) feel that MHBA should play. I was honored to be asked to facilitate this meeting and I see this task of helping to change the perception of modular homes as one of the biggest challenges and opportunities in my professional career. MHBA can serve as the conduit to collect marketing funds through the manufacturer network, coordinate the marketing message, develop marketing resources for the builders, help manage and facilitate the marketing committee activities, and provide positive information about modular homes to the end users to help educate them.

There were other discussions regarding recruitment, training, and orientation of new builders, as well as better understanding the relationship between the builder and manufacturer in this post-recession economy. This industry no doubt will have its critics and will no doubt experience some big challenges ahead. But if we all understand our respective roles and do them well, this team will ultimately succeed!

Started on February 1, 2016 by Tom Hardiman

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Three Little Words

Original Comment

As we get closer to Valentine’s Day, I want to remind you of the importance of three little words that can make a big difference. No, I’m not talking about “I love you” although those three words are quite powerful. I’m talking about “or modular units.”

Last week, I was sent a notice from the Missouri Public Service Commission announcing an upcoming workshop to discuss proposed changes to the Manufactured Housing and Modular Unit Program. Like many other states, Missouri has one agency that oversees both the HUD code manufactured housing industry as well as the IRC and IBC residential and commercial modular industries.

There was obviously some work being done behind the scenes, because when the announcement came out in early January, it included a whole array of proposed changes as well as two entirely new chapters to the program. In all, the changes impacted eight chapters of the program (Chapters 120-127). While some of the chapters were specific to manufactured housing, and thus, not areas we want to address, many other smaller changes were being proposed for residential and commercial modular applications.

These proposed changes were being driven by an internal audit on the program, which found that under its prior leadership, the program had a little too much discretion into determining who paid certain fees and who faced certain penalties. The additional driver behind the changes were problems that surfaced as a result of improper installation practices, as well as federal requirements on the manufactured housing side. For example, an entire new chapter (Chapter 125) is being proposed specifically to address tie down systems in manufactured housing. A second chapter (Chapter 126) addresses the new licensing requirements for installers of manufactured housing. But therein lies the issue. Buried within pages of regulations and contained within a chapter that seemingly has no impact on the modular industry were these three words: “or modular units.” To put this in context, the section in question was spelling out new requirements for installers of manufactured housing "OR MODULAR UNITS".

Those three little words impact the entire modular industry and any home or commercial modular unit installed in the state. We obviously plan to raise the question as to why modular was included in this chapter seemingly aimed at manufactured housing and plan to submit our comments addressing these three little words.

But I say this to bring up a bigger point. Often times we get caught up in the excitement and exposure generated by tantalizing headlines and emotional opinions in our industry. Anyone with a phone can now make videos, blogs, and offer commentary on how to improve the industry, and in many cases they offer good advice. But who is going to do the real work of reviewing hundreds of pages of regulations to make sure a state agency doesn’t sneak in language that will drive up your costs and delay your next project? These are often defensive strategies aimed at making sure the business climate doesn’t get worse than it is, and often we view these tactics in a less than favorable light. I can’t tell you how many times I have heard that “we need to be more proactive on our government affairs issues.” And I agree, we do.

One of the most exciting plays in all of sports is the “Hail Mary” pass at the end of the game. For those few seconds you watch as the outcome of the game hinges in the balance. But how often does that strategy result in victory? More often than not, it’s a solid defense that keeps you in the game. And no one plays defense better than us! To get more information on this specific issue or on other issues we are working on for the industry, email tom@modularhousing.com.

Started on January 18, 2016 by Tom Hardiman

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Regional Outlook Webinars Scheduled

Original Comment

MHBA will be hosting a series of Regional Outlook webinars on January 25-26. These webinars will cover the economic forecast for 2016 as well as issues and events in the various regions. These webinars are free for MHBA members ($99 for non members). Go to our events page to register.

Started on January 5, 2016 by Tom Hardiman

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New Federal Spending Bill Winners and Losers

Original Comment

Good news for home builders and energy credits; Bad news for strippers!

With the passage of the two-year federal $1.15 trillion spending bill earlier this month, Congress and the Administrative avoided another federal government shutdown. The bill, as usual, was loaded with a variety of amendments, some good, some not so good.

Winners:

Builders using solar energy – a tax credit set to expire at the end of 2016 had the solar energy industry scrambling to meet the deadline to qualify. The budget bill extended the credit for an additional five years, providing additional incentives for home builders. The legislation allows solar power companies to keep claiming federal tax credits at 30% of the price of a solar array. The credits, which apply to home solar kits as well as big commercial installations, will be good through 2019.

Wind – Tax credits for wind projects were extended, but not as long as solar incentives. Newly built wind turbines will be able to claim a credit of 2.3 cents for each kilowatt-hour of electricity they generate under the legislation. That credit will be in effect through the end of 2016, then fall each year until it expires in 2020.

Energy tax credits – The federal bill also includes a two-year extension of the $2,000 per dwelling unit known as Section 45L, the new energy-efficient home tax credit for eligible homes acquired by the end of 2016.

Oil Exporters – The bill lifted the 40- year old ban on exporting crude oil, seen as a win for places like North Dakota.

However, incumbent politicians are likely the biggest winners in this bill, inserting provisions to help protect their own jobs. The spending deal would bar the Internal Revenue Service from completing controversial new regulations to define and potentially crack down on the political activities of non-profit groups. The bill also would prohibit the Securities and Exchange Commission from trying to force public companies to disclose their political activities to shareholders and the public.

Losers:

Tax payers - There is no official estimate of the tax-cut package, but its cost may turn out to be in the range of $900 billion over the coming decade, reversing many of the recent gains in lowering the deficit. And many of the spending increases contained within the $1.1 trillion spending bill are financed by budget gimmicks that produce questionable savings, like double-counting savings from Social Security changes and assuming inflated revenues from sales of oil from the Strategic Petroleum Reserve.

Individual freedom - Perhaps the biggest losers in this bill are the American people and the freedoms we enjoy. The legislation provides incentives for companies to share data on hacking threats with the government without fear of facing customer lawsuits. None of this is worrisome, if you trust the federal government to protect this data and not misuse it! According to Senator Diane Feinstein (D-CA), “It's a first-step bill," it permits information sharing that is by companies with other companies and with the federal government, as long as they strip private information."

And speaking of stripping: Section 8131 of the new bill expressly prohibits civilian and military employees of the Defense Department from using government credit cards to pay for entertainment related to gambling and “topless or nude entertainers.”

Started on December 21, 2015 by Tom Hardiman

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Social Media Overload?

Original Comment

As a middle aged man, I never thought I would be spending so much time on various social media marketing sites. It is abundantly clear that a great deal of business and networking occurs online and every company needs to maintain a presence. But where? And how? And who has the time!?! For a while, it seemed as if there was a new social format every month and the marketing gurus claimed you had to be on this one or that one, or all of the above.

As a national organization with no state chapters, it is even more important for MHBA to have a strong online presence and to continually provide relevant information. MHBA currently has a Facebook page with nearly 3,000 likes, a Linkedin Group with 3,285 connections, a Twitter account with 598 followers, and a Pinterest page with a little over 300 followers. But the latest buzz is about Houzz – which to me is a somewhat more business friendly version of Facebook. We recently launched our Houzz site and we’re working on building up its content and followers.

But suppose you are a small builder and just can’t stay on top of all this stuff. Well, MHBA offers a way for your company to have a positive presence online, on Facebook, Linkedin, and Houzz all with one email to us.

When you enter our Modular Home of the Month, if selected your home will be featured on MHBA’s homepage as well as highlighted on our Facebook, Linkedin, and now Houzz sites. We conservatively estimate that over 10,000 people will see your awesome work. And the best part? It’s free!

So what’s the catch, you ask? Simple. We are only going to promote modular homes that were manufactured and built by our MHBA members. If you are a member, this is the best no-cost marketing you’ll find anywhere. If you are not a member, join! In addition to monitoring state level regulations on your behalf, you just may pick up some business. To be clear, this should not be your entire corporate marketing effort. But MHBA’s Home of the Month is an extremely efficient way to improve your online presence. Click the link on the topics page of this forum to find out how to submit your home of the month.

Started on December 11, 2015 by Tom Hardiman

Additional Comments (Click here to add or read additional comments)

Tom,

Getting attention for our industry is challenging. MHBA is on the right course with Home of the Month. How about a gallery page featuring many selections too? It is about attracting eyeballs at many websites. The good news is modular is gaining media attention. The traditional builders are seeing photos and speed of construction as an avenue to explore and their loss of construction workers.
The less than 20 unit production home builders are limited from promoting with new media. The reality is once they are on the job site and the home is built only a selected few visitors can visit the site due to geographical limitations.
The DOE with Zero Energy Ready home label is also having a difficult time in getting their message out and attracting builders to join. They have begun a campaign TOUR

http://energy.gov/eere/buildings/doe-tour-zero

to promote their branded homes with participating builders.

I was unable to participate in this TOUR since my Net Zero modular home was built prior to this campaign launch. Most builders cannot participate since the home is sold and need homeowner approval to show and gain access. It is a challenge for all. I invite inquiring folks as often as I can to my house however geographical excuses reign supreme. I result to a flyer of our Case Studies with results mostly through e mail.

MHBA should work closely with the DOE since modular can compete as it is faster, lower cost and more likely to succeed in meeting their Zero Energy requirements than site built.

Updated on December 11, 2015 by Steve Lefler
Coming Together

Original Comment

I wanted to recap a few important industry meetings held last week to capture what I feel is the spirit of the industry coming together. On Tuesday, the industry met with the Maryland DHCD officials as well as officials from the State Fire Marshal's Office. In that meeting, we had two manufacturers, two builders, and two sprinkler contractors discussing how to better streamline the approval process for modular home sprinkler system installations. It was a very positive and productive meeting with the state indicating a willingness to modify their process to accommodate our concerns. We plan to follow up with our formal request in writing this week. We also discussed the upcoming legislative session in Maryland and the need to monitor any effort that allows site built contractors to continue building homes in the state without this requirement while modular continues to do so - everyone should be all in, or all out for this requirement.

From there, it was off to Lewisburg, PA for a manufacturers' round table coordinated by Gary Fleisher of Modcoach fame. Over twenty representatives from fifteen different manufacturers participated in the two and a half hour dialogue. I want to thank Gary for allowing me to moderate this session as the comments and insight gained will be invaluable in helping to shape our 2016 agenda.

The manufacturers in the room represented approximately 80% of the single family modular home production in the Mid Atlantic and Northeast and were not shy about sharing their opinions. There was some discussion about continuing to fight over-burdensome regulations and some points made about stronger efforts to attract and train more builders. But overwhelmingly, the conversation focused on how the manufacturers could work together better to collectively promote the industry. MHBA plans to provide some framework to this conversation by staffing and facilitating a marketing task force that was created. The goal will be to develop an industry wide campaign that will include a fair and equitable funding mechanism allowing everyone the opportunity to support this effort.

As we work out the details of this marketing campaign, expect to hear from us to solicit your opinions and ideas.

Started on December 7, 2015 by Tom Hardiman

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To all,
Look to CA "Wild Urban Interface" law established for State building codes since 2011, all new residential construction must have Fire Sprinklers due to consistent fires. I have built several homes. In a factory environment the process is simple just has an added cost of $5000. Would you like photos of how we performed this task?

Updated on December 7, 2015 by Steve Lefler
Travelling at the Speed of Ignorance

Original Comment

Did you ever notice how quickly rumors and misinformation can spread and how long it takes to get the corrected version of the story out there. Media outlets report “Breaking News” when they have few of the facts in hand, and only correct or retract much later and with much less fanfare as the original misleading story.

Unfortunately, many segments of our society are quick to believe stories that fit their preconceived notions of what the “facts” are instead of actually doing the research themselves. Such is the case in Cape Coral Florida where over 2,000 local citizens have formed a group called “Cape Coral Resident Against Modular Homes." Before I go further, let me emphasize that I am not calling the good people of Cape Coral ignorant. I am however suggesting that they do not have all of their facts straight with regards to modular homes.

The issue started when a local builder delivered sections of a modular home to install in a neighborhood and the locals became a little uneasy. Led by a group of realtors who told the locals that property values were sure to drop if they keep allowing these “modular” into their community, a grassroots movement was born. I have no firsthand knowledge of this particular builder or the home he is building other than images and stories I found online. The poor builder is saying all the right things; it’s just that no one is listening. This home will be built to the same codes as a stick built home, it will look just as good, or better than all the other homes in the neighborhood, etc.

"People just don't want them next to them," said Jay LaGace, a local real estate agent. "I know as a real estate agent I'm going to have a very difficult time selling a house right next to one of these." Without knowing anything else about this man, I know from this quote that he is misinformed about modular homes.

And that’s where MHBA comes in. Our organization is working hard to reach out to code officials, developers, and potential home owners to better educate them about our industry. For example Cape Coral residents did you know:

-Walt Disney World’s Polynesian Resort and Contemporary Resort were both built using modular construction. Yep, good enough for your kids and the tourism industry, but not in your neighborhood?

-After Hurricane Andrew devastated parts of Florida in 1992, FEMA issued a report on how different types of homes fared. In that report FEMA found that “overall, relatively minimal structural damage was noted in modular housing developments. The module-to module combination of the units appears to have provided an inherently rigid system that performed much better than conventional residential framing.” MODULAR PERFORMED MUCH BETTER THAN CONVENTIONAL RESIDENTIAL FRAMING! It’s true, here’s a link to the actual report if you want to read it yourself:

http://www.modular.org/marketing/documents/FEMA_HurricaneAndrew_Report.pdf

Incidentally, the FEMA report also found that HUD-code “manufactured homes possessed poor ability to withstand the high wind loads generated by Hurricane Andrew," pointing out a key difference between modular and manufactured homes.

The anti-modular coalition is also being followed by the local construction association – the Cape Coral Construction industry Association. So we thought we’d try to help this local modular builder by offering to go to Cape Coral ourselves and give a presentation directly to this construction association, or the coalition itself, in an effort to dispel some of these modular misconceptions.

We invite the people of Cape Coral to do their research and get all the facts on modular homes before discriminating against them based on their preconceived (and erroneous) notions.

Started on November 20, 2015 by Tom Hardiman

Additional Comments (Click here to add or read additional comments)

Okay... Coral Gables is one of the first HOA's in the country. The zoning may have in their CCR's no manufactured homes. In people's mind the perception is factory built modular is the same animal. Especially in your comment about it appears on the site un-announced to the surrounding neighbors. It is understood to be inferior from the the Southeast regions impression of the trailer stigma it is pure NIMBY.
A local Florida site builder has every intent to pass on the fear mongering...if modular is ever to likely gain a foothold if established, he loses his business's future and has new competition which he is not going to participate, I think site builders are a mafia organization under the disguise of the CCCIA.

Asking find citizens of CC to research modular? You need a full attack on modular home publicity seeking a local Miami marketing agency

Updated on November 20, 2015 by Steve Lefler
Tides Turning in the Bay State?

Original Comment

About a year ago, a group of modular manufacturers and contractors, both residential and commercial, spent the better part of a day with the director of the Manufactured Housing Program listening to proposed updates and expressing our concerns over some of the regulations. The industry was task with helping to review, revise and re-write the regulations that would ultimately become the 9th Edition of the building code.

The industry responded by submitting over thirty separate comments including relatively minor clarification comments as well as more substantive comments. A the time we were informed that the time-line for the proposed new edition would be short (i.e. the next few months). After six months, it seemed as if the state had just been giving lip service to wanting our input and no real changes were in the works. That was until last week when the Massachusetts Board of Building Regulation and Standards (BBRS) approved the draft version of the 9th Edition, the first step in the adoption process. Upon reviewing the draft, we were pleased to see that at least twenty-five of the industry comments were included, many verbatim. Among the proposed changes was the deletion of fifteen requirements currently listed in the quality control manual. Many of these requirements were redundant, unnecessary, and had little to do with quality control. Another change was clarification on how to treat existing relocatable buildings differently than newly constructed units.

While its a little too early to celebrate, it is impossible not to point out a few major changes that have occurred in the state in just the past few years. It was not long ago that the modular industry was dealing with horrendous, negative, and false press as a result of one modular home that caught fire and one overly-zealous volunteer fire chief who found his fame and glory in defaming our industry. After pushing back on these false attacks, the industry was able to build some credibility (and perhaps some sympathy) from other BBRS members. But more importantly, we found a modular program administrator in Steve Kennealy who was willing to sit down with the industry he oversees and talk through the issues openly and honestly.

How refreshing it is to have a state administrator invite industry comments, and actually incorporate most of those comments into the regulations. If only a few other state program administrators would be so willing to improve their programs! But this is also a cautionary tale. Now that the state has taken it's leap of faith and incorporated our proposed changes, it is incumbent upon the industry to follow the rules! Any shortcuts, missing forms, or other "cost saving" measures will have a devastating long term effect on industry as the agency's trust will have been lost. It is this type of self policing that will ultimately lead to fewer restrictions, faster approvals, and timelier project completions.

We will continue to seek further improvements in this state program, as well as all others. But please do your part by following the exiting rules so that the industry is not saddled with additional ones. As they say, it ain't over til its over, but this is a huge step in the right direction for Massachusetts!

Started on November 16, 2015 by Tom Hardiman

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I was at the meeting Tom mentions. I was very impressed with how well Tom Hardiman and Steve Kennealy worked together and how open they were to our comments. I had never experienced anything like that in my previous 30 years. Thanks to both of you.

Updated on November 16, 2015 by Andy Gianino
MHBA IMPACT!

Original Comment

Overview – If you make a living in the modular home industry, you have issues with over-regulation. It may be difficult to assess the impact these regulations are having on your bottom line, but they are real and they are significant. The current efforts of MHBA listed below are targeting some of these excessive and anti-industry regulations to improve your business. If you are facing issues in other states, please email tom@modularhousing.com

Connecticut DOT - MHBA has retained the firm of Preti Strategies to work with the Department of Transportation and the State Troopers Office to improve driver safety and lessen these costs and requirements. MHBA is seeking relief in the following areas: 1) Drop requirement for state trooper escort altogether saving the industry about $1,200 per shipment. 2) If unsuccessful, seek to reduce the number of troopers needed from two to one, saving $600 per shipment. 3) Require trooper(s) escort only through construction zone instead of the full route through the state, coupled with an agreement from the state police to reduce the minimum number of billable hours from four to a lesser amount, saving the industry about $100 per hour per trooper. 4) Seek to get loads of 14 feet or less transported during the day. 5) Seek to add Thursday night transports in the pilot program, adding five more slots to the week. 6) Seek to allow shipments to enter Connecticut without police escort and utilize the scale house in Danbury (1.5 miles over line) as a staging area, vs. parking on the side of the road in New York at the border. MHBA lobbyist, Kris Erickson, has held calls with transport companies and manufacturers to get “buy in” on this strategy. With the retirement of a long term public employee responsible for issuing the permits, the industry is working to build new relationships with both the DOT and State Police.

North East Transportation Standardization – The Connecticut DOT issue has elevated the conversations about reviving efforts to standardize the transportation requirements in the Northeast. MHBA will take the lead in working with the state manufactured housing associations, the Building Systems Council and the Modular Building Institute to garner support for this effort. A preliminary conference call will be set to discuss this strategy.

Maryland - On 9/29/15, three industry members and the MHBA Director met with the Codes Administration staff of DHCD to express concerns about new procedures and forms. The meeting lasted over three hours with both sides sharing greater information about their concerns, challenges and limitations. Both the industry and the agency left with a better understanding of each other’s positions and agreed to continue meeting on a quarterly basis to continue the conversations. The meeting did generate the following results: 1) The agency agreed to a moratorium on “effective immediately” notices, preferring instead to communicate with the industry when certain requirements are not being met. 2) The industry agreed to communicate with its members the importance of submitting all required documents, as the failure to do so will result in even more requirements. Specifically, when a builder obtains the final letter signed by the sprinkler installer and the energy rater, the builder should forward that letter directly to the agency in addition to sending it back to the manufacturer. Additionally, the form MUST have the correct and full address. 3) The agency agreed to modify its process for documentation of the sprinkler system designs and install, allowing plans to be approved prior to final sprinkler designs. The agency head is drafting specific language to formalize this change. Looking ahead: The agency has agreed to a meeting later this year with the industry, the State Fire Marshal, and two sprinkler contractors to discuss the hardships created by this mandate.

Michigan Taxes – MHBA recently submitted comments on the draft Revenue Administrative Bulletin 2014-XX, entitled Use Tax Base of Tangible personal Property Affixed to Real Estate by a Manufacturer/Contractor or Other Contractor (the “Draft RAB”). The sales and use tax law in Michigan allows manufacturer/contractors to use a price base for calculating tax of either the direct and indirect production costs or the cost of material and labor. Typically, manufacturer/contractors who maintain an inventory for sale use the direct and indirect production costs, while those who do not, use materials cost of property and labor. The draft RAB is overly broad and effectively eliminates the ability of the manufacturer/contractor to use the cost of materials and labor as the use tax base of property affixed to real estate if any advertisement or graphic depiction of the potential finished product is made available. This means that the manufacturers will be force to calculate the direct AND indirect production costs when determining tax liability.

The state assumes that if you utilize a sale brochure for your floor plan models, you “maintain an inventory” of products available for sale and must calculate indirect production costs. Indirect cost include: indirect labor and production supervisory wages, including but not limited to: 1. basic wages; 2. overtime wages; 3. vacation and holiday pay; 4. sick leave pay; 5. shift differential; 6. fringe benefits; 7. payroll taxes; 8. payments to a supplemental unemployment benefit plan; 9. profit sharing, retirement and pension; 10. other payments incurred on behalf of employees whose labor is incident to and necessary for production or manufacturing operations or processes. Miscellaneous indirect costs such as: 1. indirect materials and supplies; 2. tools and equipment expensed and not capitalized; 3. costs of quality control and inspection; 4. depreciation and depletion incident to and necessary for production or manufacturing operations or processes (including buildings, machinery, and equipment); 5. other employee benefits (including workers compensation expenses); 6. costs attributable to strikes incident to production or manufacturing operations or processes; 7. rework labor incident to and necessary for production or manufacturing operations or processes; 8. scrap and spoilage incident to and necessary for production or manufacturing operations or processes; 9. administrative costs of production incident to and necessary for production or manufacturing operations or processes; 10. officers’ salaries incident to and necessary for production or manufacturing operations or processes; 11. insurance costs incident to and necessary for production or manufacturing operations or processes. Are you including these indirect costs in your tax calculations?

Pennsylvania – The PA Assembly recently introduced House Bill 1645 which, among many other items, “provides for definitions and for Uniform Construction Code Review and Advisory Council.”
MHBA’s chief concern is that the newly defined advisory council strips powers and duties away from the builder community in general and the modular home industry specifically. The modular home representative as well as the manufactured housing representative listed as members of the council are deleted under the proposed legislation. The council will now have one singular “residential contractor”, which MAY include a manufactured housing or modular home representative.

With all due respect to whoever is the residential representative, it is highly unlikely that one person can adequately express the concerns of the stick built community, manufactured housing, and modular home industries. This bill may not seem significant on its surface, but MHBA finds it very problematic. The sponsors of this bill are clearly signaling that the modular home industry is not important enough to merit our own voice on the council, despite over a dozen PA modular home manufacturers employing nearly 2,000 people! MHBA plans to reach out to the bill’s sponsors to ensure our seat remains intact and that our voice is heard on code adoption issues in the Keystone State.

Summary: MHBA may or may not be successful in all of these efforts, but we will be the advocate for the modular home industry nationwide and we will fight on behalf of your company.

Started on October 27, 2015 by Tom Hardiman

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