New housing law could reinvent the mobile home
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Perhaps the most consequential piece of the new landmark housing legislation involves an astonishingly simple change to a 50-year-old federal law.
- Manufactured houses, or mobile homes, no longer must have a permanent chassis, the steel under-frame used to transport the house and then left attached.
Why it matters: The U.S. desperately needs more affordable starter houses for low- and middle-income folks currently priced out of the market, and some builders and housing advocates say this little tweak could help do the trick.
Follow the money: Manufactured homes can cost from 27% to 65% less than comparable houses built on site, according to an estimate from the Niskanen Center.
- Builders save $5,000-$10,000 if they can reuse the chassis, per the libertarian think tank's report.
- Considering that a new manufactured home recently averaged about $135,000, that could be meaningful savings for buyers — if manufacturers pass it along.
How it works: While most U.S. homes are "stick-built" on site, manufactured homes get built in factories.
- There are economies of scale — standardized materials, centralized purchasing, controlled weather conditions and a stable workforce (crucial at a time when construction labor is in short supply due to the immigration crackdown).
Zoom out: Proponents say there's more to it. Shedding the bulky steel structure under a house opens up a whole new array of design opportunities for these often stigmatized homes.
- The change could make multi-story manufactured homes, lower-to-the-ground designs and basement installations easier and less costly — amping up their appeal.
Zoom in: "You start to see the opportunity for product innovation, for urban and suburban markets," William Boor, the CEO of home manufacturer Cavco Industries, said about the proposed change on an earnings call last year.
What they're saying: "I think we're going to see a lot of clever ways that people decide to use these homes," says Joel Berner, a senior economist at Realtor.com.
- For example, it could make manufactured housing a more practical option for accessory dwelling units, or ADUs, which more states and cities are allowing as they face housing shortages.
- "This isn't just like a, 'put a trailer home in a trailer park' kind of deal," Berner adds that his backyard in Austin, Texas, is zoned for an ADU. His in-laws might be moving closer, and "that might be the most cost-effective option for me."
Yes, but: There are still roadblocks ahead. Many local zoning laws restrict the placement of manufactured housing, partly due to the stigma.
- "There's a lot of work that has to happen at the state level once the federal definition is improved," Boor said last year.
- HUD still has to write the standards to adopt the change, and states have one to two years to align their laws.
Catch up quick: The mobile home industry expanded after World War II as the U.S. government used trailer homes to house returning soldiers.
- They grew more popular from there, but lax and conflicting building standards were a problem.
- In 1974, Congress passed the National Mobile Home Construction and Safety Standards Act, giving the U.S. Department of Housing and Urban Development (HUD) authority to regulate. The resulting HUD code is a rare federal construction code.
Where it stands: If the idea was to ensure that mobile homes could be easily moved around — that rationale's long been moot.
- Fewer than 5% ever move from their original placement, per research in a widely cited HUD report from 2011.
State of play: Manufactured housing proponents have been trying to get rid of the requirement for decades, as this thorough Vox piece explains.
- The surge in home prices in the pandemic era and resulting housing supply crunch finally gave the cause new energy.
- The provision is part of the 21st Century Road to Housing Act that passed with huge bipartisan support.
- Analysts at TD Cowen say the chassis requirement — along with changes to federal loan limits for manufactured housing — might be its most important feature.
