Consumers Union launches Manufactured Housing Project

Consumers Union (Texas) has received a two-year grant from the Ford Foundation to conduct research and testing on manufactured housing and manufactured housing loans. The purpose of the project is to develop independent research to see if manufactured housing homeownership actually results in the accumulation of assets among low-income families.

Manufactured home sales now account for one in three new home sales in Texas, and three out of four new home sales in some counties. Over 1.2 million Texans currently live in manufactured housing. These residents have a median household income of under $30,000 annually.

Meanwhile, the manufactured housing industry continues to aggressively seek to direct government housing program funds to manufactured housing. The Consumers Union project will attempt to answer the question: Is manufactured housing an asset building strategy for low income families that federal and state housing agencies should support as a solution to affordable housing?

Currently, Kevin Jewell, Project Analyst, and other members of the research team are looking at thousands of complaints filed with three separate state agencies that oversee the Texas manufactured housing industry, as well as data from the American Housing Survey and appraisal data from Texas counties. Reports and news releases on various aspects of the project findings will be issued periodically, starting in November.


Manufactured home project will be first of its kind in U.S.


The statistics are compelling. One third of all new housing sold in Texas - and one-fifth in the U.S. -- is manufactured housing. In certain Texas counties, the figure is as high as three out of every four new housing units sold.

Surprising? Hardly. Rising real estate prices have forced an increasing number of low-income families, particularly in the southern U.S., into the manufactured housing market. In Texas, manufactured houses - commonly known as mobile homes -- are currently the leading alternative for low-income homebuyers.

The Ford Foundation recently recognized the prevalence of this type of housing by funding a $300,000, two-year Consumers Union project that for the first time will independently answer a key question: Does a manufactured home gain or lose value with the passage of time? In other words, is it an appreciating asset like a site-built home or a depreciating asset like a car? Or, why does it appreciate in some cases and depreciate in others?

The answers to these questions could have huge implications for local and national housing officials and community development groups, as well as for millions of homebuyers in the country. In 1999, the average price of a manufactured home in the U.S. was $43,600, compared to the average cost of a site-built home at $153,425, excluding land price.

"Most people think they depreciate, but the industry has published report after report saying they appreciate," said Kevin Jewell, newly hired to spearhead the grant-funded project. "Ford is interested in this project in part because they want to know if federal and state housing agencies should use this as a solution to affordable housing shortages."

Up to this point, research in this area has been largely sponsored or financed by the manufactured housing industry. The credibility of the Consumers Union project will make its results stand out to decision-makers.

In addition to data on home value, the project will also analyze thousands of complaints on manufactured homes submitted over a five-year period to the Texas Department of Housing and Community Affairs, as well as complaints submitted to the Office of Consumer Credit Commissioner and the Attorney General of Texas.

CU is hardly a newcomer to the issue, having worked on manufactured housing for at least a quarter of a century. Most recently in 1997, CU published a consumer booklet on homeowner's tips that will soon be updated and translated into Spanish. Consumer Reports also published an article in September 1998 warning consumers of possible pitfalls in the purchase of a manufactured home.

This year, CU's Texas office won passage of legislation that for the first time guarantees owners of manufactured homes who lease land in mobile home parks certain key rights afforded to other tenants in Texas.

Consumers Union's national product testing center in Yonkers, N.Y., will also be involved in the project, testing some home components and appliances, including washers, dryers and ranges, that are included often in the purchase of a manufactured home.

A 1997 graduate of Brown University, Jewell previously worked as an analyst for a Boston-based economic consulting firm.

The project will be under the general direction of Reggie James, CU's Southwest Regional Office director, and Rob Schneider, a CU senior staff attorney.

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