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Executive Summary
Report
Solutions and Recommendations
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QUALITY,
DURABILITY, RENEWABILITY
Many people view
manufactured homes as low-quality housing. Battered and visibly dated
trailers dot our rural landscape while television brings us scenes of
splintered homes after tornadoes and hurricanes.
Our research indicates that there is a wide variation in the quality of
homes produced under the federal HUD code that governs their construction.
This code gives manufacturers significant leeway in construction methods
and materials. While many homes come with showy amenities like oversized
tubs, kitchen islands and built in stereos, the real distinctions lie
behind the walls. Variation in joist construction, sub-flooring material
and roof design - to name just a few important components - will have
much greater impact on the long-term durability of the home than brand
name sound systems. Wide variation in the market means purchasers cannot
count on quality construction, and have to carefully monitor and frequently
upgrade the components of their purchase if they want to buy a durable,
long-lasting product.
Low-quality manufactured homes create very real problems for their occupants.
Deaths in manufactured homes due to tornadoes occur at rates much higher
than in the site-built market. Choosing permanent installations and beefed
up construction can ameliorate this problem. Older mobile homes, especially
those built before 1976, tend to have higher energy costs and present
a higher risk of fire death to their residents.
After significant research, Consumers Union cannot yet answer many questions
about how long manufactured homes last. We can say that major repairs
and remodeling probably cost more than they would for site built construction.
Specialized construction techniques, components and engineering design
can make remodeling and rebuilding manufactured homes difficult. There
are no national guidelines or standards for remodeling manufactured homes,
and code requirements for alterations vary by state and locality. For
example, some localities require the entire house to be brought up to
local plumbing code if additions are made to the system after it leaves
the factory.(7) Additionally, homes altered
out of compliance of the HUD code lose eligibility for FHA financing insurance.(8)
Minor repairs may cost more as well. Wallpaper patterns permanently affixed
to wall panels frequently change, forcing consumers with superficial damage
to replace an entire set of panels or live with one mismatched piece.
That wallpaper may also be considered a vital vapor barrier and therefore
a structural component of the home. Some home components must be purchased
from specialty suppliers; for example secondary exterior doors are typically
smaller then standard doors in the site-built market. Conventional contractors
may also be unfamiliar with the materials and processes allowed under
building codes in this industry.
Solutions
Housing counselors
can educate consumers on how to understand and choose among the various
construction options in manufactured housing. Consumers Union's has published
a newly updated Tips on Mobile Homes that contains an extensive checklist
intended to help purchasers (developers and consumers) evaluate the construction
of a manufactured home. This checklist is also reprinted at the end of
this report.
Developers, with greater expertise in construction, can choose quality
construction materials and designs for the homes in their projects. Upgrades
can make the home more durable (e.g., deeper soffits protect windows from
water damage) and help it blend in with the neighborhood (e.g., steeper
roofs). Construction of new, high-quality affordable housing will also
address safety issues surrounding the current stock of substandard housing
by offering a low-cost alternative to residents.
Advocates can push for higher minimum construction standards, especially
in regard to wind safety, energy efficiency and durability. These standards
are developed by the federal government through HUD. Housing advocates
can ensure that when tradeoffs between cost and safety are being debated,
the health of the residents is adequately considered.
Further reading:
"Factory and Site-Built
Housing, A Comparison for the 21st Century," National Association
of Home Builders Research Center, 1998.
"Tips on mobile homes," Consumers Union, 2003.
SITE PREPARATION AND INSTALLATION
Although manufactured homes
receive a red plate certify-ing that they meet the HUD building code in
the fac-
tory, they are not truly complete and ready for habitation until the movers
deliver the home and install it.
Installation has often been viewed as the weak link in the manufactured
housing production process, and many problems consumers report with their
homes can be traced back to improper installation or site preparation.
Site preparation is the clearing, leveling, utilities installation and
drainage work that occurs before the home is brought to the site. Improper
site preparation can lead to shifting foundations and moisture accumulation
in the home, which can destroy its structural integrity.
Site preparation is often not regulated, and may be performed by a party
that is neither the retailer nor the manufacturer. This contractor (sometimes
the consumer) can end up being the scapegoat upon whom manufacturers and
retailers blame problems in order to avoid their warranty responsibilities.
Consumers who buy homes on their own may not understand the site preparation
requirements.
Installation is the placement of the house on a foundation. Manufactured
homes can be installed on a variety of foundations, ranging from concrete
blocks tied down with metal straps to poured concrete basements. A home
is only as solid as its foundation, and improper installation can lead
to continuous problems with the home. A federal law requires states to
institute manufactured home installation inspection programs by 2005,
but quality of the implementation will vary by state. For example, the
state of Texas currently only inspects a fraction of newly installed homes.
Solutions:
Non-profit developers can use
their expertise to determine the best site preparation and foundation
types for their region of the country, as well as ensure that their homes
receive an independent review from a qualified inspector after they have
been installed.
Home-buying counselors should prepare consumers to take time researching
the important site preparation and installation steps that lead to a durable
home. Consumers should carefully choose a site and a site preparation
contractor - as well as a foundation type - early in the purchase process.
Advocates can push for the implementation of rigorous installation inspection
programs in their state as well as the adoption at the federal level of
tough minimum standards. While federal law currently regulates construction,
installation standards vary state by state. Installation inspections for
all homes help protect against wind damage and foundation problems. State
laws that require dealers or manufacturers to be responsible for proper
installation and site preparation can also help close the loop and ensure
that the industry takes responsibility for its final product.
Further reading:
"Guide to Foundation
and Support Systems for Manufactured Homes," Partnership for Advancing
Technology in Housing, 2002.
"Permanent Foundations Guide for Manufactured Housing," Department
of Housing and Urban Development, September 1996.(9)
Bill White. "The NCLC Guide to Mobile Homes," National Consumer
Law Center, 2002. (This book has an excellent chapter on identifying problems
in an installation.)
WARRANTY
SERVICE
Even after installation, most
manufactured homes require some work due to damage caused in transit or
factory
errors. Unfortunately, lenders often pay the dealer before the dealer
has completed this warranty work, leaving the dealer with little incentive
to finish the work in a timely manner. By contrast, a conventional home
is usually complete on its final lot when it is sold, and if work is needed,
contractors are not paid in full by the mortgage company until the home
receives a final inspection.
When retailers drag their feet on warranty service, consumers never quite
get the beautiful new home they purchased, which drives down the value
of the home and strips the family of equity. Used homes are often sold
with minimal or no warranties, leaving consumers in even more of a bind
if troubles arise during the installation.
High on consumers complaint lists are so-called "cosmetic items"
such as cracks in the wall, sloppy trim work, damaged floor coverings
and sticky doors and windows. Many of these items affect the economic
value of the home but are not covered by federal building codes and state
mandated warranties that focus on safety and upfront affordability rather
than economic loss.
Widespread use of mandatory arbitration agreements limits consumers' options
for redress if the retailer or manufacturer shirks their warranty duties.
HUD and state agencies have the authority to enforce warranty service,
but these agencies may not have the will or resources to do the job right.
Solutions:
Developers who have an ongoing
relationship with a manufacturer may be in a better position to extract
proper warranty service for their clients. Nevertheless, developers should
be sure to carefully negotiate the warranty on manufactured homes, and
be certain that both the manufacturer and the developer agree on the level
of workmanship expected and the type of defects covered by the warranty.
Homeownership counselors can instruct consumers purchasing a home how
to compare warranties from different manufacturers and inform them of
their rights under those warranties. Consumers should also learn how to
document maintenance of their homes as well as any problems they encounter.
This documentation can help maximize their chances of getting redress
for warranty claims. Homeowners should also budget for repairs in the
home that will not be covered under warranty.
Advocates can work to limit the use of mandatory binding arbitration agreements
that limit consumers' access to the courts, as well as pressure state
agencies and HUD to respond to consumer warranty complaints.
Further reading:
"Paper Tiger, Hidden
Dragon: Poor Warranty Service and Worse Enforcement leave Manufactured
Home Owners in the Lurch," Consumers Union, November 2002(10)
"National Survey of Mobile Home Owners," AARP, 1999.(11)
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Notes:
7 N.A.D.A. Manufactured Housing Appraisal Guide. January 2001, p. 17A;
Interview with Bill White, author of
"The NCLC Guide to Mobile Homes," March 30, 2003.8 Interview
with Edward Cervenka, Texas Department of
Housing and Community Affairs, March 30, 2003.
9 Available via http://www.huduser.org/publications/destech/permfound.html.
10 Accessible via internet at www.consumersunion.org/mh.
11 Accessible via internet at research.aarp.org/consume/mobile.html.
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