Sources of Future Growth
Landy says that UMH’s waiting lists, on top of the 10,000 units it currently rents and the 4-million-unit shortage of affordable housing all point to the need to do a lot more. “The question becomes, how do we do it without negatively impacting earnings?”
One way UMH is tackling that is through its joint venture with Nuveen, which has already resulted in the development of two manufactured housing communities in Florida, with another under construction in Pennsylvania. UMH is a 40% partner in the JV, receives management fees from Nuveen, and has the first option to purchase the property once it becomes profitable.
UMH has also created an opportunity zone fund to create homes in economically or demographically distressed areas, Landy explains. UMH currently owns two communities in Georgia and South Carolina through the fund.
“Opportunity zones will allow us to develop and rehabilitate more communities,” Landy says. To that end, UMH has been actively working with Sen. Cory Booker (D-N.J.) and Sen. Tim Scott (R-S.C.) to advance legislation that would ensure that any investment in affordable manufactured housing in an opportunity zone held for 10 years would be capital gains tax exempt. “We’ve been working on it quite a bit and believe we have bipartisan support so that when the government again looks at the tax laws, this might get passed,” he adds.
Other avenues for growth come from UMH’s 3,000 acres of vacant land holdings. One option for this land is solar installations, or self-storage facilities, Landy says. He adds that UMH constantly assesses its vacant land to determine its highest and best use. For instance, the REIT owns vacant land adjacent to the Trout National – The Reserve golf course under construction in Vineland, New Jersey. “Maybe we’ll be able to joint venture that land with a major home builder. We’re working on that but nothing’s complete at this point,” he notes.
With its 55-year history of providing affordable, quality manufactured housing, UMH has a long track record of success and plenty to focus on in the years ahead. “We’re doing what every business wants to do, which is to be the low-cost producer of a product that’s in incredible demand. Affordable factory-built homes for sale or rent is that product, and we’re very proud to be a part of it,” Landy says.
