Raising the Floor, Raising the Roof
Raising Our Expectations for Manufactured Housing
Consumers Union Southwest Regional Office

May 2003

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Executive Summary

Report

Solutions and Recommendations

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Downtown Housing Improvement Corp.

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ONE SMALL DEVELOPER'S EXPERIENCE:
DOWNTOWN HOUSING IMPROVEMENT CORP.

The Downtown Housing Improvement Corporation, Inc. (DHIC) placed a three-bedroom, two-bath, 1,500-square-foot home in an existing neighborhood in Raleigh, North Carolina. DHIC hoped to demonstrate that HUD code homes could be successfully integrated into existing neighborhoods and provide quality affordable housing. Earlier, the North Carolina Manufactured Housing Institute had led an effort to change the City of Raleigh's zoning laws to allow HUD code housing in neighborhoods other then those designated areas for manufactured housing parks.

According to Gregg Warren, Executive Director of DHIC, the design was highly appropriate for the neighborhood. Pitched roofs, porches and storage areas were added at a cost of $25,000 to $30,000 to meet the neighborhood aesthetics. Even with these additions, the cost of the home remained 10 to 12 percent below that of a comparable site-built home - about $81 per square foot, including the lot. The home ultimately sold for $123,000. Warren noted that it took longer to complete the homes because they spent two years getting the city to amend its zoning ordinance; once everything was in place, development took about three to four weeks.
Warren stated, "We were disappointed that there were not more cost savings." Zoning concerns related to manufactured housing still remain a politically-charged issue in Raleigh, especially with neighborhood groups. Warren noted that given continued neighborhood concerns, the minimal cost savings, and questions about appreciation, DHIC is not going to pursue manufactured housing in Raleigh in the near future. However, DHIC might consider this approach in other areas with less opposition to manufactured housing.

Lessons learned:

• Manufactured housing developments are easy targets for NIMBY attacks on affordable housing.
  
• Cost savings may be limited if the homes require significant upgrades for neighborhood compatibility.