This session of Congress is shaping up to be one of the more important ones for community owners. Right off the bat, the long-awaited bankruptcy reform legislation was finally enacted into law. While much has been written in the mainstream media about the pros and cons of the new law, the MHI National Communities Council and its real estate industry allies were successful in gaining relief from the “automatic stay” provision in the current bankruptcy code. This, as you may know, was the provision that allowed a resident to avoid eviction by declaring bankruptcy—and was something that was often abused in the past. Now community owners will be able to recover their property for non-payment of rent, property endangerment, or illegal drug activity where a judgment of possession has been obtained against a resident before they file for bankruptcy protection.

The NCC is now getting ready for a major new legislative initiative. Before the end of the month, we’re expecting legislation to be introduced that will reform the FHA Title I insurance program for chattel financing. As you know, Title I financing was a major source of lending during the industry downturn in the early 1990s, accounting for nearly 30,000 loans in 1992. However, by last year, that number had shrunk to below 2,000 loans. Loan limits have not been increased since 1992 and other structural problems have left the program largely unused and unable to help the industry through the most recent recession. Reform will be a top priority for MHI and the NCC this year and a major focus of our legislative conference in Washington next month. I encourage everyone to attend the MHI Summer Meeting to help us kick off the legislation and seek cosponsors.

Community owners also need to review HUD’s proposed model installation standard for manufactured homes, which was just published. The final version of this standard will go into effect the end of this year and will be used to evaluate state installation standards and become the standard used in states that do not adopt their own. The standard does not make a distinction between homes sited in communities and on private property, so the cost of installations in communities will no doubt be impacted. Of major concern to community owners is a provision requiring all footings to be below frost level unless a monolithic slab designed to ASCE 32 is used. A copy of the proposal can be downloaded from the MHI website at www.manufacturedhousing.org. A related article on the installation standard can be found in this issue of Community Connections.

An issue that has been cropping up in several state legislatures is now surfacing in Congress. H.R. 798, the Methamphetamine Remediation Research Act of 2005, was approved in March by the House Science Committee. H.R. 798 would establish programs at the Environmental Protection Agency (EPA) and at the National Institute of Standards and Technology (NIST) to examine the health effects of methamphetamine production chemicals and to develop voluntary guidelines to help states establish remediation standards and programs to clean up the environmental consequences of the labs. We will be monitoring this legislation closely since “guidelines” often morph into regulations and this bill and others like it in Congress do not identify who should be responsible for the cleanup.

One of the stranger issues to come up in Congress this session that may impact community owners is transportation legislation (H.R. 3) which includes language that would permit limited state regulation of tow truck operators in an effort to curb so-called "predatory towing." The legislation permits states to require towing companies to have prior written authorization from the property owner to tow a vehicle without the consent of the vehicle’s owner and/or require the property owner to be present at the time the vehicle is towed from the property. The second part is what is of concern to community owners since managers could be forced to be on-site at any hour to authorize the towing of an illegally parked vehicle. The NCC and its real estate allies are now trying to get the language modified before final passage.

While I’m sure additional issues will be cropping up in Congress and the federal agencies this year, we need all community owners to be actively engaged by contacting your elected officials about issues that impact community owners. Again, I encourage you to attend the MHI Summer Meeting and Legislative Conference.

As always, feel free to contact me with your thoughts and concerns at nsmith@sskcommunities.com

Nathan Smith, PHC
Partner, SSK Communities
Chairman, MHI National Communities Council