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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Organizing Tenants Sidebar

ONE SMALL DEVELOPER'S EXPERIENCE:
MARSHALL HEIGHTS COMMUNITY DEVELOPMENT ORGANIZATION

The Marshall Heights Community Development Organization (Marshall Heights) joined the Manufactured Housing Institute's Urban Design Project, placing two manufactured homes in Northeast Washington, D.C. The homes - one a ranch home and the other a two story over a basement - were completed in 1997 and 1998. Marshall Heights developed these homes primarily for affordable home ownership. Michael Crescenzo, Senior Vice President for Housing and Economic Development, said the design was good for the neighborhood and the project homes were the best homes in the NE neighborhood of D.C. He noted a reduction in the cost per unit between zero to nine percent as compared to comparable site-built homes in the area. While it only took three to four months to complete the project once they had started land development, the preliminary planning added another two months.

Neighborhood real estate has appreciated in value. Crescenzo stated, "In general in this neighborhood home prices are appreciating; two doors down from one of the manufactured homes, a stick-built home sold for $8,000 more than the manufactured home."

Crescenzo relayed some concerns with the manufacturer's warranty. ".It was hard to get the manufacturer to come back . especially for one of the homes, both for design and manufacturer issues. [With] the two-story home we had greater difficulty. The manufacturer had not built a two-story home, nor with a basement, since manufactured housing is rarely built over a basement. It probably would be easier the next time." According to Crescenzo, Marshall Heights completed the one-story in 1997, and sold it for $115,000. The two-story sold for $125,000. Unfortunately, the lot for the two-story home cost $20,000 more than expected, and the developers spent and additional $9,000 to remove a dilapidated house from it. After these unexpected costs, they lost $25,000 on the house. In the end, Marshall Heights probably will not develop another manufactured housing project - not because of the product, but because they believe they need to place at least 25 (and more likely 50-70) units to make it worthwhile.

Lessons learned:

• Single units lose out on efficiencies of scale, especially when faced with the learning curve of a first project using manufactured homes.
  
• Unexpected costs can eliminate cost savings.