PRELUDE

The National Manufactured Housing Construction and Safety Standards Act, passed by Congress in 1974, required the Secretary of Housing and Urban Development (HUD) to report to the President for transmittal to Congress on July 1st every other year a comprehensive report on the administration of the Act for the two proceeding years (Section 626).

This report to Congress by HUD has never been comprehensive, in fact it has been consistently lacking in substantial information required by the Act, and most often, past due, the last report being dated October 1996 for calendar years 1991 through 1994. In addition, since the last report, HUD has purposefully ceased to gather data and information for the next report under the notion that the "Federal Reports Elimination and Sunset Act of 1995" (31 USC 1113 note) renders this provision of the Act "ineffective". As a result, Congress has been unduly kept in the dark regarding the "State of Affairs". We, the consumers, therefore, find it necessary and appropriate to keep informed, especially in light of the pending legislation (SB 1452 and HR 1776) before you that eliminates the Report to Congress.

The report to Congress required by Section 626 of the Act speaks to several key pieces of information including, the level of compliance with all applicable Federal manufactured home standards; a statement of enforcement actions including judicial decisions, settlements, defect notifications and pending litigation commenced; the extent to which technical and consumer-oriented information was made available to manufactured home owners and prospective buyers; and finally, recommendations for additional or revised legislation, as the Secretary deems necessary to promote the improvement of manufactured housing construction and safety and to strengthen the national program.

Needless to say, past reports provided little or none of this information which appears to us to be essential to your decision to drastically change the Act as proposed by the industry. Much of the information is not available to us because HUD has historically held it proprietary and secret, contrary to the Act's clear directive that such performance and defect information be made public (Sec 614(c)(5)(g). Therefore, we can only report on the effects of this Program on the home buying public and suggest that they information which we know exists within the Department to support our report, cannot be withheld from the duly authorized Committees of Congress (Act, Sec 607(b); 614(h).

This paper contains, references and analysis to show:

• That the National Manufactured Home Construction and Safety Standards Act has been, since 1976, substantially ineffective in assuring the first purchaser of a home that conforms to the federal standards and is free of safety defects.
• That the full purposes, intent and objectives of Congress have, in significant ways, been arbitrarily applied, interpreted and ignored by the U.S. Department of Housing and Urban Development (HUD) so as to significantly contribute to the Program's ineffectiveness. This is most evident and consequential when considering Congressional intent to assure that the federal standards apply though on-site completion of each new home.
• That the ineffectiveness of the Program stems Mostly from HUD's faulty implementation, lack of leadership and a lack of political will; Much to do with HUD's interpretation of the Act into regulation and policy; Some to do with the SAA states collective inability to consistently and uniformly enforce the federal standards; but Little, if anything to do with the Act which is being considered by Congress in HR 1776 and SB 1452 for substantial amendment.
• That HUD's support for the industry sponsored and heavily-financed legislation is motivated by the joint (HUD and industry) need to "Legitimize" the ineffective manner of Program implementation which has become the norm at the expense of thousands upon thousands of homeowners.
• That affordability cannot mean first cost only. It must be defined to include quality, durability, safety and performance. Promotion of a particular type of housing (i.e. manufactured housing) over other factory built housing, based on a flawed perception of affordability, is inappropriate and unconscionable role for Congress and a Federal agency.
• That the manufacturer is responsible for assuring that each new home conforms to the federal standards and is free of any safety defect, through completion of the sale to the first purchaser. Therefore, there is inherently no need for "dispute resolution".
• That the program effectiveness must equate to homes which consistently meet standards for quality, safety, durability and performance. Without performance, the continuance of this national uniform construction code, which obligates every state and local official through preemption, cannot be justified. Measurement of effectiveness can only be accomplished by a highly respected, objective, third party agency.

The underlined portion of the below is a measure to judge for yourself if the various actions taken by HUD/FHA, which are detailed in this report were justified by HUD/FHA.

To proceed without due caution and circumspection, of a lawful act which might produce death.

Circumspection means, careful to consider all related circumstances before acting, judging, or deciding; cautious; careful.

It will be up to each individual member of Congress to decide at the conclusion of this report if the Secretary of HUD acted appropriately in carry out their Congressional Act, and whether or not they acted to protect the public from unreasonable risk of injury or death.

The FHA Commissioner actually plays a bigger part in the current state of affairs than does the Secretary of HUD, even though the Secretary is ultimately responsible. Therefore, FHA will always be mentioned as being equal to HUD in this report.

There have been no orders issued in the last 6 years by HUD/FHA that have benefited the manufactured home consumer, unless you consider providing cheap housing to be the goal of this program. If this is the goal, then the consumer can get this without the Federal Standards and regulations that present it as being something other than cheap. Congressional members should be aware that the energy efficient standards mandated by Congress in 1993 also appear to have been undermined by regulatory orders issued by HUD/FHA and a report is currently in the works on this subject.

Cheap means of little value or poor quality; virtually worthless.
Affordable means to manage to bear or bear the cost of without serious loss or detriment.

This can be accomplished without a federal program and if this is what is required, then so be it. However, there are alternatives to repeal of the Act and these suggestions are at the end of this report. The old saying, "better late than never" can apply to this Act. The Act, as it is, contains what is necessary to deliver what was promised in 1974.