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Executive Summary
Report
Solutions and Recommendations
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Downtown Housing Improvement Corp.
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Terminology
Manufactured
homes are often called mobile homes or trailers. The industry encourages
the use of the term "manufactured home" for units built after
1976, but only 12 percent of residents have adopted this terminology.*
In this report, we follow common practice and use the terms interchangeably.
In all cases, however, we are discussing homes built to the pre-emptive
federal building code sometimes referred to as the "HUD Code"
because the federal Department of Housing and Urban Development (HUD)
administers the program. Although some of the issues surrounding manufactured
homes also apply to "modular homes," which are also built in
a factory but to a state administered building code, this report does
not directly address these homes.
*Manufactured Homes: The Market Facts,"
Foremost Insurance Group, 2002.
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A
BRIEF INTRODUCTION
In many communities
manufactured housing provides a substantial proportion of the affordable
housing stock. Over the last decade, much of the South and Southwest has
seen double-digit growth in manufactured housing.(1)
Mobile homes, trailers, singlewides, doublewides, manufactured housing
- consumers use many names to refer to this product, but they generally
mean the same thing: homes that are built in a factory on a steel chassis,
then pulled on a road to a site where they are installed. Before 1976,
these homes generally escaped building code regulation because they were
classified as vehicles. Since then they have been built to a pre-emptive
federal building code. But manufactured housing is more than a specialized
building code. The industry still carries with it practices learned and
laws developed in its evolution from the travel trailer. While its assembly
line efficiencies can lower the cost of housing for low income families,
high pressure sales and high cost financing can undermine its promise.
For further reading about the history of the manufactured housing industry
see:
"Wheel
Estate: The Rise and Decline of Mobile Homes" by Allan D. Wallis
(1991)
"Mobile Homes, The Low-Cost Housing Hoax" by the Center for
Auto Safety (1975)
QUESTIONS REMAIN FOR NON-PROFITS
Community development
corporations, community develop-ment lenders, low-income housing advocates
and non-profit
housing developers must evaluate manufactured housing for use in low income
housing development. Policymakers look to these groups as leaders and
informational resources when making decisions regarding housing policy.
Homeownership counselors must answer consumer questions about manufactured
housing and help consumers struggling to get out of manufactured home
purchases gone bad. Unfortunately many practitioners admit they do not
know as much as they would like about manufactured housing, even though
issues related to this industry arise regularly in their work.(2)
Clearly manufactured housing can provide shelter, but does
it provide the same asset accumulating potential as ownership of a site
built home?
As we will see in this report, the answer depends on many factors. In
theory, where a home is built (in a factory or on site) should not matter.
In practice, many factors make it more difficult for consumers to successfully
navigate the purchase and end up with an investment that will be safe,
durable and valuable over the long term.
We hope this report
- and the references listed at the end of each section - will help you
think about how your organization can best use manufactured housing to
meet its goals; help consumers navigate the pitfalls that exist; and help
reform the industry for the benefit of everyone.
Further reading about non-profits and Manufactured housing see:
Apgar, Calder, Collins
and Duda. "An Examination of Manufactured Housing as a Community
and Asset-Building Strategy," Neighborhood Reinvestment Corporation
September 2002.
"A Community Guide to Factory Built Housing," Partnership for
Advancing Technology in Housing, 2001.
ADVANTAGES
AND PROMISES
Manufactured homes
are enticing. The modern factory environment promises to make housing
an inexpen-
sive commodity, create shelter quickly and efficiently, and give low income
families amenities they might not afford otherwise. Developers looking
to expand the stock of affordable housing in their community may be attracted
by the speed and reduced production cost of manufactured homes.
A manufactured house is built in the factory in a matter of days, and
depending on factory backlog, can be delivered and installed in a matter
of weeks from the initial order. At wholesale, manufactured homes can
be less expensive than site built homes, although some of the cost savings
can be the result of using lower quality materials. For developers considering
manufactured homes, some sources promise 26 to 32 percent cost reductions,
while others warn not to rely on such promises if you desire a comparable
quality product.(3) Cost savings are likely
to be maximized in areas with high labor costs and stretched building
capacity. Regardless of production costs, faster building time in a factory
also reduces time sensitive development and finance costs.
The homes can be delivered over a large area - even across state lines
- because of the federal building code. This facilitates new construction
in areas without much construction capacity and is often a strong impetus
for use of manufactured homes in rural areas.
Consumers are attracted by the same advantages as developers, but are
also likely to be enticed by a quick sales process, low up-front costs,
flashy amenities and a perception of easier financing. Home ownership
counselors helping consumers navigate this process should be aware of
these lures. Manufactured home advertising often targets low-to-middle-income
consumers, offering an alternative to renting with "low money down
and low monthly payments."
Further Reading:
"Urban
Design Project," Manufactured Housing Institute, April 2001.
"Understanding Today's Manufactured Housing," Manufactured Housing
Institute, undated.
An additional resource may be your local manufacturer, as most are more
than willing to give factory tours to interested parties.
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Notes:
1 "Taking
Stock: Rural People, Poverty, and Housing at the Turn of the 21st Century,"
Housing Assistance Council,
2002, p. 25.
2 Apgar, Calder, Collins and Duda. "An Examination of Manufactured
Housing as a Community and Asset-Building
Strategy," Neighborhood Reinvestment Corporation, September 2002,
pg. 26.
3 "Factory and Site Built Housing: a Comparison for the 21st Century,"
October 1998, NAHB, pp. 98-99.
Steve Hullibarger. "Developing with Manufactured Homes," Manufactured
Housing Institute, 2001, p. 9.
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