sources of future growth
Landy says UMH’s waiting list, in addition to the 10,000 units currently rented and the 4-million-unit shortage of affordable housing, points to the need to do much more. “The question is how do we do this without negatively impacting earnings?”
One way UMH is addressing this is through its joint venture with Nuveen, which has resulted in the development of two manufactured housing communities in Florida, with another under construction in Pennsylvania. UMH is a 40% partner in the joint venture, receives a management fee from Nuveen, and has the first option to purchase the assets if profitable.
Landy explains that UMH has also created an Opportunity Zone Fund to build homes in economically or demographically distressed areas. UMH currently owns two communities in Georgia and South Carolina through the fund.
“Opportunity zones will allow us to develop and rehabilitate more communities,” says Landy. To that end, UMH is actively working with Senator Cory Booker (D-N.J.) and Senator Tim Scott (R-S.C.) to advance legislation that will ensure that affordable manufactured housing in Opportunity Zones Any investment should be conducted in. There will be exemption from capital gains tax for 10 years. He added, “We’ve been doing a lot of work on this and we believe we have bipartisan support so that it can be passed when the government considers tax legislation again.”
Other avenues of development come from UMH’s 3,000 acres of vacant land. Landy says one option for this land is solar installation, or self-storage facilities. He says UMH constantly assesses its vacant land to determine its highest and best use. For example, the REIT owns vacant land adjacent to the Trout National – Reserve Golf Course under construction in Vineland, New Jersey. “Maybe we will be able to joint venture that land with a major home builder. We are working on that but nothing is complete at this point,” he said.
With its 55-year history of providing affordable, quality built housing, UMH has a long track record of success and much to focus on in the years to come. “We’re doing what every business wants to do, which is to be a low-cost producer of a product with incredible demand. “Affordable factory-built homes for sale or rent are that product, and we are very proud to be a part of it,” says Landy.
