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Executive Summary
Report
Solutions and Recommendations
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SOLUTIONS
AND RECOMMENDATIONS
A Recap by Role
Developers
Developers who wish to develop affordable housing units may be interested
in using manufactured homes in their development. Depending on your group's
priority, manufactured housing may serve your goals. Some organizations
prioritize providing shelter, some building equity for families, while
others prioritize developing the local economy through job and housing
creation.
Groups that focus on community development may find that shipping jobs
out of the local community to low-paying manufacturing plants in other
areas conflicts with their goals of job creation. Manufactured home developments
primarily create jobs in the community in which the factory is located,
rather than the community in which the homes are installed. These jobs,
moreover, tend to pay less than conventional housing construction. In
2001, residential construction production workers earned an average of
$16.67 an hour while mobile home production workers earned an average
of $11.92 an hour.(18)
However, developers focused on creating affordable housing for low income
families - especially those in a strong local economy with a high priced
housing market - may gladly trade off local jobs for the promise of cost
savings in the final home. Our research indicates that equity can be built
in manufactured homes, if everything is done correctly. Developers can
leverage their technical expertise to make sure that everything is done
correctly - from financing to site prep and warranty service.
The dealer process is the weak link for consumers. Non-profit developers
committed to producing large-scale affordable housing developments might
find it in their best interest to develop the expertise that would allow
them to bypass the conventional retailer processes altogether. The developer
could then provide turn-key homes - designed for maximum durability, permanently
installed, and eligible for conventional mortgages - to their clients
without the high-pressure sales pitch. Ambitious nonprofits can even consider
manufacturing homes.
Smaller non-profits that desire to do only a few units may not be ready
to take on the job responsibilities of a retailer. Managing installation
contractors and coordinating the process does require expertise and time.
These groups can, nonetheless, act as uber-consumers, negotiating the
process and ensuring the deals are designed to maximize equity building
opportunities for their clients. This can be done by minimizing financing
costs, designing home and site preparation specifications to maximize
durability, and ensuring that manufacturer warranty obligations are fulfilled
after the sale.
Non-profit developers with an interest in the cost and speed savings offered
by the manufactured home factory built technology may also wish to explore
modular housing. Modular homes are built in a factory similarly to manufactured
homes, but are built to local building codes and are not designed to be
moved after their initial installation. We have not performed an in-depth
assessment of this industry, but it may offer many of the same advantages
that attract developers to the manufactured home industry. Many manufactured
home manufacturers have recently expanded into the modular business.
Further reading:
Steve
Hullibarger. "Developing with Manufactured Homes," Manufactured
Housing Institute, 2001.
"The Manufactured Housing Institute's Urban Design Project,"
Manufactured Housing Project, April 2001.
"Home Builders' Guide to Manufactured Housing," Department of
Housing and Urban Development, May 2000.
Lenders
One of the biggest problems
haunting the manufactured housing industry is the lack of reasonable,
stable financing. Community based lenders need to get involved, to offer
products that fill the need of this industry and compete with the high
priced lending products that currently exist in the market, while containing
the checks and safeguards for consumers and lenders alike that exist in
the conventional market.
Refinancing of high priced chattel loans and financing for co-op conversions
of parks are other opportunities for action.
Further Reading:
Richard
Genz. "Mortgage Lending for Manufactured Homes: Maine State housing
Authority's Experiment,"
Housing and Community Insight / Neighborhood Reinvestment Corporation,
September 2002.
Counselors
Many organizations offer homeownership
education and counseling to families considering purchasing a home. Unfortunately,
the concerns of manufactured home purchasers are often not addressed in
these programs.
Many homebuyers in existing homeownership classes may be considering manufactured
homes and should be given the opportunity to learn about the pros and
cons of this housing choice. Additionally, outreach to potential buyers
is important, as high pressure dealers can get a family locked into a
contract in a matter of days (if not hours), reducing the opportunity
for them to look for help in navigating the process. Counselors who wish
to help a large number of consumers need to compete head on with dealer
marketing.
Consumers Union and other organizations have prepared materials for counselors
to use to help consumers make smart choices among the many options they
have in the purchase process. With help, borrowers can avoid predatory
lending and "too good to be true" offers. Home quality varies
widely, but there are good sources of information by Consumers Union and
others to help choose a safe, durable home. Consumers need to learn their
options for siting a home and their rights after purchase regarding warranty
service. Consumers should not have to rely on dealers to navigate the
process.
Further reading:
"Tips
on Mobile Homes," Consumers Union, updated May 2003.
"A Consumer's Guide to Manufactured Housing," The North Carolina
Low Income Housing Coalition, 2003.
"Buying a Manufactured Home," (An educational video) Community
Reinvestment Association of North Carolina, 2003.
John Grissim "The Complete Buyers Guide to Manufactured Homes and
Land," Rainshadow Publications, 2003.
Kevin Burnside "Buying an Manufactured Home," Van der Plas Publications,
2002.
Of the commercial books, "The Complete Buyers Guide" is longer
and has a deeper treatment of the issues, while "Buying a Manufactured
Home" is shorter and more accessible.
Advocates
There is a pressing need for advocacy on behalf of manufactured home purchasers
and owners in this country. Non-profit developers and housing counselors
only have the capacity to help a fraction of the purchasers of manufactured
homes. Fundamental reforms are needed at all levels of this market before
it will consistently provide homes that are safe, durable, and build equity
for their purchasers.
Advocacy attention is needed to:
- Reform the sales and financing
market by putting in place consumer protections in line with the conventional
market.
- Tighten enforcement of
existing laws and regulation.
- Ensure consumers have an
informed voice at state and federal regulatory proceedings deciding
installation and construction practices.
- Increase protections for
the rights of tenants who rent their land.
- Organize manufactured homeowners
to advocate for their own rights.
This is a housing issue whose problems needs to be on the radar of housing
advocates.
Further Reading:
See
the recommended reading under each specific issue above. As well, the
following sources contain general recommendations for action in the industry:
"Manufactured Housing in North Carolina: Current Issues and Future
Opportunities," N.C. Low Income Housing Coalition, 2002.
"Attorney General's Recommendations Relating to Manufactured Housing,"
Oregon Office of the Attorney General, March 30, 2001.
"Final Report," National Commission on Manufactured Housing,
March 1994.
Conclusion
Manufactured homes represent
shelter and investment for millions of American families. Participants
in the community development and low-income housing fields can help these
famillies navigate the unique problems presented by this housing option.
Problems, ranging from sales practices to installation and warranty problems,
can all too easily strip equity from the families who purchase them. These
problems must be addressed before manufactured housing can be counted
on to provide safe, durable and asset-building housing to the public.
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Notes:
18 "Average Hourly Earnings of Production Workers," Bureau
of Labor Statistics series EEU31245106. Also, the
mobile home industry is slightly less seasonal then the residential industry;
winter employment over the last 25 years
was 93% of summer employment, while in the residential construction market,
winter employment drops on average to
87% of summer levels. The manufactured home industry is virtually non-unionized,
and injuries per worker are reported
to OSHA at over 250% of the rates of the residential construction sector.
(Bureau of Labor Statistics, Occupational
injuries and illnesses: Series SHU20152011 and SHU30245111).
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