Part-3, The Congressional Purpose

Statement from the Author:

When referencing the Congress throughout this series, it should be known to the readers that to my knowledge, U.S. Representative Barney Frank (D-MA) and U.S. Senator Paul Wellstone (D-MN) are the only two Congressmen that attempted to either, make changes to this legislation to make it better for consumers, or to stop this legislation from being passed into law. The industry's political influence (money) was too much to overcome.

After this Amendment to Title 42, Chapter 70, "The Manufactured Home Construction and XXXXX Standard", this Act is in affect, three distinctly different pieces of legislation, with completely different goals. The three goals are:
1) To allow for the government to advertise manufactured housing to the public,
2) To make higher value, longer-term, easy to get loans available for manufactured housing.
3) To change the Act from consumer safety legislation into affordable housing legislation.

The first piece of legislation consists of enumerated purpose (1), which is unrelated to the finding, the other purposes, and any of the text contained within any section of the Act. It is completely outside of the scope of the reason for promulgating federal construction standards for manufactured housing. This legislation provides only a purpose, and who is charged with carrying it out. This in affect makes it apiece of stand-alone legislation, with nothing to guide, limit, define, or control to what extent the federal agency responsible for carrying it out may go.

The second piece of legislation consists of the Congressional finding, enumerated purpose (2), and definitions specific to the finding and this purpose, but unrelated to anything else in this Act. It has two short paragraphs presented to be provisions, but these can be more accurately described as a detailed version of enumerated purpose (2), than legal code. The provisions and the definitions for the finding and the purpose are contained within the section of this Act titled "Development, Research, Testing, and Training". This finding, its purpose, its provisions, and its definitions are in affect a piece of stand-alone legislation.

The third element is unrelated to the Congressional finding and enumerated purposes (1) and (2). It consists of enumerated purposes (3) through (8), and is the only part of this newly amended Act that has any relationship to the title of the Act, and provides a framework and reason for promulgating federal construction standards for this type of housing.

For this reason, the discussion of the purposes of this Act will take place addressing the enumerated purposes, as they are related to each separate piece of legislation. All text in italics is from some source of information, and is presented as it is written in these sources.

Marketing is defined as, "The area of study concerned with the promotion and selling of products and services". Remember this as you read the discussion that follows.

The First Act of Congress

In affect, Congress has given HUD the authority to legislate whatever laws are necessary, under the premise of regulation, to carry out this purpose.

Restating enumerated purpose (1), it reads:

Comment: Black's Law Dictionary defines "facilitate" as - "To make the commission of a crime easier". This is fitting given what Congress is allowing for or directing with this purpose, however, it is apparent that Congress is referring to the doctrinal meaning of the term, which is "to make easy".

Enumerated purpose (1) has been written to give it the appearance of being an internal matter for HUD (within). Since the provisions provide no guidance, instruction, or who is responsible for carrying out this purpose, there would always be an unanswered legal question as to who was had legal authority to carry out this purpose. Hence, the reason for including the phrase "within the Department of HUD" is for Congress to make it known who has the authority for carrying out this purpose.

As can already be seen, this purpose is about modifying the perceptions of someone about the safety, durability, and quality of this product. As this discussion progresses, it will be apparent that the reason for this purpose is to allow for a government marketing campaign to be carried out on behalf of a private industry, for the purpose of modifying the beliefs of consumers in the higher-end new home market.

While the finding is not directly related to this purpose, it does provide insight into who is the intended target of this marketing campaign. The finding states "all" Americans, which includes low-income, middle income, and high-income Americans. The manufactured housing industry already has market control of the low-end market for new homes, and cannot grow, or can grow very little in this area. The manufactured housing industry currently has a very small share of the higher-end market. The high-end new home market provides for fertile grounds of credit worthy consumers who can afford to pay higher prices for new homes. This makes it the ideal area for this industry to focus its attention. If manufactured housing is an indispensable (vital) to the Nation (the nation), as Congress states in the finding, then it would be necessary for the manufactured housing to be an indispensable part of the whole new home market, and it is not. In general, this industry has only about 25% of the overall new home market and this makes this product dispensable to, or unneeded by, the majority of Americans, which is contrary to Congress's finding that it is indispensable to all Americans.

Changing the beliefs of all Americans about the safety, durability, and quality will be necessary if this industry is to expand its share, with any significance, of the overall new home market. HUD has been developing a market strategy for this industry's expansion into the higher-end new home market, long before this legislation was passed.

The following statements have been taken from a 1999 HUD publication, which is a study concerned with promoting manufactured homes in the higher-end new home market. Even though HUD attempts to present it as something else, it is what it is. (Pinning a tail on a duck and calling it a dog does not make the duck a dog.)

First, HUD is implying that low-end consumers lack the intelligence to determine whether a builder's corner cutting, excuse me, I meant cost effective measures, have resulted in a reduction in the quality of their home purchase. As usual, they under-estimated the intelligence of the low-end consumers, or more accurately, they do not care what low-end consumers know, or do not know. HUD considers them a non-political threat to the agency.

Second, there is no such thing as standard HUD-code cost cutting measures, and it is ludicrous and deceptive for HUD to make such a statement. The Federal standards are to date still performance standards. Performance standards establish minimum requirements for the design, installation, and acceptance testing of every aspect of manufactured home construction. Design options are provided in the code text; however, the home design is not prescribed. Rather the manufacturer is given the responsibility to develop a rational design to meet the stated goal. Section 3280.303 of the HUD-Code states:

It is clear from 3280.303 that it is the manufacturer's responsibility to provide proof that what they have designed and/or the methods used to construct the home will insure a product to the first purchaser that performs to the requirements of the standards. Thereby, the Federal standards cannot  prescribe to the manufacturer the design or the methods used to construct a manufactured home. 

These techniques are standard Manufacturer cost-cutting measures, not standard HUD-Code cost cutting measures as HUD implies in its statement. This is a fictitious phrase intended to misdirect your attention away from who is responsible for the use of these cost-cutting measures.

There is no other debate more important and this question must be answered, but HUD, as always when it comes to manufactured housing, does not want to discuss it. If in fact these cost cutting measures do reduce the quality, safety, and durability of this product, then for the government to claim otherwise on behalf of a private industry would be to participate in a fraud against the American people.

In the business world, such untrue claims would eventually bring some kind of action by the government to stop it, or a civil legal action from some outside entity to stop these deceptive practices. However, if the government is making untrue claims to the public on behalf of a private industry, it will be extremely costly and difficult to stop, if it can be stopped at all.

As the above is presented by HUD, it implies that these cost-cutting techniques deliver equivalent quality to site built housing. Therefore, if a competitor portrays to a customer that these measures make this product's quality inferior to their product, this would in fact be a false claim or an unfair business practice. Title 15 USC, Chapter 2, already provides the government with the authority to take legal action to stop such unfair or deceptive practices. All this industry and its business partners at HUD need to do is bring it to the attention of the Federal Trade Commission.

Congress states in its finding that manufactured housing is indispensable to the nation; therefore, it is safe to assume that the government would consider it in the public interest to take action against those who are using deceptive practices to "undermine consumer confidence in the manufactured housing product".

There could not be a more effective way of achieving this stated purpose than by exposing to the public, the lies that are being told by this industry's competitors. The manufactured housing industry could simply present their evidence, which according to 3280.303, the manufacturers should have, to prove that these claims by their competitors are untrue. A finding in favor of this industry by the Federal Trade Commission would call for stiff penalties against their competitors and would be a marketing coup for this industry. They could use such a finding to show consumers that these cost-effective measures do not cause a reduction in the quality of the manufactured housing product. Why do you suppose this option was passed over in favor of having HUD promote this product to the public? Perhaps it is because a finding against this industry would be in the hands of an agency other than HUD; thereby HUD would be unable to prohibit its release to the public. This would certainly not be productive towards the objective of changing Americans beliefs about this product.

While this is written to create the appearance of justification for HUD's involvement in the private market place, it is just an appearance since as already discussed, the HUD-Code cannot prescribe the use of these cost-effective measures, and therefore the HUD-Code cannot cause this prejudice. 

In addition, what most people do not know, or realize is that this industry chooses to build to the HUD-Code. The original Act provided the manufacturers with a simple way to use the option of building a product under any recognized building code they wanted; they just could not call it a "manufactured" or "mobile home". All they had to do was certify such intentions before they began construction, and they were no longer subject to the provisions of the Manufactured Housing Act, or the federal standards for manufactured housing. It is the industry's failure to take responsibility for their product's performance, once in the hands of the first purchaser, and the government's failure to enforce the federal standards that has led to this prejudice, not the HUD-Code. Ultimately, regardless of the government's failure to do its job, it was still the manufacturer's responsibility to fully comply with the federal standards; therefore, they carry the full weight of responsibility for this prejudice.

In marketing, one must establish first what the objective is, and then what obstacles need to be overcome to achieve the objective (the study). The government's objective in this case is for the industry is to grow at its higher-cost end. The obstacle is customers who may perceive some of the standard HUD-code (manufacturer) cost cutting measures as resulting in a reduction of quality. To overcome the obstacle and achieve the objective, it is necessary to facilitate the acceptance of the quality, durability, safety, and affordability of manufactured housing (enumerated purpose (1)).

In the next part, we will discuss The Second Act of Congress