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Winter 2004 Practicing Planner Copyright by American Planning Association
By Jerry Weitz, AICP Manufactured homes, formerly called "house trailers" and "mobile homes" and now often referred to as "factory-built" housing, are considered more affordable than site-built housing. Manufactured housing is often severely restricted by local zoning regulations and, as a result, it is largely limited to mostly rural areas. Whether working in rural or urban communities, practicing planners should recognize that manufactured housing can contribute to affordable housing objectives. This article provides an overview of manufactured housing. It introduces the term "manufactured home" and provides a brief history of the industry and technological trends. After summarizing federal laws and regulations, the article discusses the affordability of manufactured housing as well as associated legal and fiscal issues. Attention is paid to the policy considerations, including an emphasis on the American Planning Association's policy guide on factory-built housing. Introduction Manufactured homes are built in a factory and shipped as virtually complete houses or in sections that can be quickly assembled with minimal labor. Before 1980, they were called "mobile homes," a term that is still widely used — including the U.S. Census Bureau in the 2000 census — even though they are now better known as "manufactured housing." "Manufactured home" is defined in federal regulations as follows:
Manufactured homes differ from modular or industrialized housing. Manufactured homes, and modular and industrial homes, are all factory-built housing, but modular and industrialized housing are certified as meeting the state or local building code. For purposes of building code approval, modular housing is equivalent to stick-built housing, and some builders use factory-built modular units in constructing conventional homes (Advisory Commission on Regulatory Barriers to Affordable Housing 1991). Another key difference is that manufactured housing must be attached to a permanent chassis to which wheels are attached to tow the house to its site (Housing Assistance Council 1996). Manufactured housing is heavily restricted in urban and suburban areas and significantly limited in some rural areas (Juergensmeyer and Roberts 1998). Why? Local regulations are adopted in response to concerns by the owners of stick-built homes who fear the installation of manufactured homes will lower their property values. There are also some widespread social biases against the less affluent households who reside in manufactured homes, due to their possible status as renters, transients, and minorities. Hence, there is sometimes a tendency for communities to preserve homogeneity, and their local land-use regulations reflect that objective. Local officials are also sometimes concerned about the potential impacts of manufactured housing on public or social services in the community, or the fiscal impacts such developments create. History The house trailer came into existence in the 1910s, and commercial production began in the 1920s. The Housing Assistance Council (1996) notes that in 1908, Sears, Roebuck and Company began selling complete kits (pre-cut homes) in its catalog and sold about 100,000 of them until 1939. They were originally designed to travel, and they were used primarily for vacation purposes. Thousands of trailer camps were developed for travelers in the 1920s, some by municipalities who wanted to encourage tourism (Baar 1992). By the 1930s, use of house trailers became common, as many people searched for work in other places during the Great Depression (Jackson 1985). After World War II, the U.S. government purchased tens of thousands of trailers for workers and began to build prefabricated homes without wheels near weapons factories. It also forbade their sale to the general public. It was not until the mid-1950s that the term "mobile home" replaced the term "trailer." By that time, "mobile home" referred to a modern industrialized residence with almost all the features of a stick-built home. By the late 1950s, the Federal Housing Administration recognized mobile homes as a type of housing suitable for mortgage insurance (Jackson 1985), though it was not until 1969 that the administration was authorized to offer mortgage insurance on mobile homes and mobile home lots (Beamish et al. 2001). Mobile homes were increased in width from 10 feet in the 1950s to 12 feet and then 14 feet in the 1960s. Manufacturers began to add fireplaces, skylights, and other architectural embellishments. In 1967, two "single-wides" were attached side by side to form the first "double-wide." Production levels soared in the late 1960s and 1970s to 300,000 to 400,000 mobile homes per year, approximately 20 percent of all housing starts (Baar 1992). By 1979, single-wide mobile homes were as wide as 17 feet and 60 feet long or longer. The larger sizes of mobile homes made them increasingly attractive to retired persons with fixed incomes (Jackson 1985). The industry went through a period of decline and bottomed out in 1990, when production levels reached a low of 170,713 units, but it has grown steadily since then (Beamish et al. 2001). National Industry and Technology Trends By 1979 there were more than 10 million mobile home dwellings in the United States, a number that excludes "motor homes" (e.g., Winnebago), modular homes, and prefabricated houses (Jackson 1985). By 1990, some 12.5 million Americans lived in manufactured housing. Fewer than 10 percent of manufactured homes were found in central cities as of 1990, and two of every three manufactured housing units were relegated to rural areas (Advisory Commission on Regulatory Barriers to Affordable Housing 1991). As of 1994, an estimated 15.4 million people — seven percent of all Americans — lived in more than seven million manufactured homes (National Commission on Manufactured Housing 1994). In 1999 one-third of all new single-family homes sold were factory-built. Manufactured homes have dominated the factory-built housing segment, which also includes panelized homes and modular homes, growing from 68 percent in 1995 to 73 percent in 1999 (American Planning Association 2001). In 1999 348,671 manufactured homes were shipped from 323 manufacturing facilities, representing 20.7 percent of all new single-family housing starts that year. Multi-section homes accounted for nearly two-thirds of that total (Beamish et al. 2001). About 31 percent of these new manufactured homes were purchased by someone age 50 or older (American Association of Retired Persons 2001). In 2000, 22 million Americans (about eight percent of the U.S. population) lived full-time in 10 million manufactured homes. In 2001, the industry shipped 193,120 homes from 275 manufacturing facilities. Multi-section shipments in 2001 outpaced single-section shipments and comprised 74.7 percent of total shipments. In 2000, multi-section shipments accounted for 70.1 percent of the total. According to the U.S. Census Bureau, 2001 figures show that 67 percent of new manufactured homes were located on private property, and 33 percent of new manufactured homes were located on leased land (Manufactured Housing Institute web page). There are approximately three million manufactured homes on leased land (Genz 2001). Two out of every 10 new home starts are manufactured housing. About seven out of every 10 manufactured homes in place are single-section homes (Beamish et al 2001). Two-story prefabricated homes have now caught on in places like Seattle and Newport Beach, California (Associated Press 2001). Federal Law and Regulations The National Mobile Home Construction and Safety Standards Act of 1974 (42 U.S.C.A. § 5403(d)) expressly prohibits states from enacting safety standards that differ from federal ones. After lobbying by the Manufactured Housing Institute, which was until 1975 known as the Mobile Home Manufacturers Association, lawmakers passed the Housing and Community Development Act of 1980 (Public Law 96-399) which substituted "manufactured housing" for the term "mobile home" in all relevant sections of federal legislation (American Planning Association 2001; Beamish et al. 2001; Gailey 1987; Wallis 1991). The law directed the secretary of the Department of Housing and Urban Development (HUD) to establish appropriate manufactured home construction and safety standards. The Federal Manufactured Home Construction and Safety Standards went into effect June 15, 1976 (24 CFR 3280, Revised as of April 1, 2001) (Manufactured Housing Institute 2002). Manufactured homes have become safer and more durable since the enactment of the HUD Code in 1976, and their appearance has improved significantly (American Planning Association 2001). The HUD code preempts state and local building code approval by state and local governments. However, it does not preempt ordinances that exclude manufactured housing on the basis that they may diminish property values (Juergensmeyer and Roberts 1998). It is also acknowledged by HUD that the federal legislation and code do not limit the authority of local governments to regulate the location of manufactured housing, as long as they do not do so based on compliance or noncompliance with stricter construction, safety, and energy standards. Once a manufactured home has been sited, that is as far as the HUD Code goes. State or local building codes apply to additions, alterations, or repairs to the sited home. Activities subject to state or local codes include attaching a garage to the home, the installation of decks around the home, or any alterations to the interior of the home (Manufactured Housing Institute web page). Further innovations and improvements to the quality of manufactured homes can be anticipated. The Manufactured Home Improvement Act of 2000 (PL 106-569) was enacted in December 2000. That law establishes a consensus committee composed of members from the industry, users, general interest groups, and public officials. The committee is empowered to recommend to the HUD Secretary the adoption, revision, and interpretation of the federal manufacturing and safety standards, procedures, enforcement, and scope and conduct of monitoring. The act also addresses installation standards, affordable homeowner finance and protection issues, and federal preemption, and it is intended to encourage innovative and cost-effective construction techniques (American Planning Association 2001). The U.S. Department of Housing and Urban Development (HUD) manages a program called Partnership for Advancing Technology in Housing (PATH). This program encourages new designs and amenities in manufactured housing, and it has sponsored a "new generation" house to encourage manufactured housing that will be acceptable to local communities (Beamish 2001). Affordable Housing Issues Manufactured homes are often less expensive than traditional stick-built homes of comparable size, and thus they have been recognized as a valuable affordable housing resource (Advisory Commission on Regulatory Barriers to Affordable Housing 1991; White 1992). Table 1 provides a cost comparison of manufactured homes versus site-built homes. The purchase price of manufactured homes increased by approximately 27 percent between 1994 and 2000, but the costs — though rising — compare favorably with site-built housing, which increased by 40 percent over the same time period. Table 1 Cost Comparison of Manufactured Versus Site-Built Homes
Note: Price of manufactured homes includes the installation of the home but excludes land costs. Price of site-built homes includes land cost (house and land sold as a package). Source: Manufactured Housing Institute 2002 Table 2 shows that the average size of all homes has been increasing incrementally since 1994, with the exception of single-section manufactured homes. The figures show that manufactured homes now average more than 1,500 square feet, quite a bit larger than the mobile homes of two or three decades ago. Table 2 Size Comparison of Manufactured Versus Site-Built Homes
Source: Manufactured Housing Institute 2002 Because the price of a home varies by size (i.e., costs and purchase prices increase as square footage increases), using a per square foot cost figure is the most appropriate way to compare the prices of manufactured housing versus stick-built housing (see Table 3). Table 3 Cost Per Square Foot Comparison of Manufactured Versus Site-Built Homes
Note: Cost includes installation of manufactured home and includes land price for new single-family site-built homes. Source: Manufactured Housing Institute 2002 The figures in Table 3 reveal that the average cost per square foot for all manufactured homes was considerably less than one-half of the average cost per square foot for site-built homes in 2000, as it has been in previous years. Manufactured homes hold considerable promise in meeting the homeownership needs of low- and moderate-income households, because a good-quality, single-section, 1,000-square-foot home costs about $26,000, including setup and installation (Genz 2001). Legal Issues Some 16 states as of 1990 explicitly prohibited local governments from discriminating against manufactured housing (Advisory Commission on Regulatory Barriers to Affordable Housing 1991; White 1992), and there are some 20 states now that have legislation aimed at discrimination against manufactured housing (Juergensmeyer and Roberts 1998; White 1996). Vermont has a statute that prohibits local ordinances that exclude prefabricated housing except on the same terms and conditions as stick-built housing. Several states mandate that manufactured housing must be allowed in all residential areas: Colorado, Iowa, Maine, New Jersey, Florida, Minnesota, Oregon, and New Hampshire (White 1992). Regulatory barriers to manufactured housing are frequently imposed by local governments. Local regulations sometimes mandate modifications that tend to offset the savings that prefabricated units can provide. It is also common for certain local governments to ban them entirely or restrict their location to specifically designated manufactured home parks (Advisory Commission on Regulatory Barriers to Affordable Housing 1991). Some local zoning regulations require that the pitch or slope of a roof be sharper and therefore higher than standard manufactured housing roofs. The industry is generally limited in the roof pitch that it can manufacture, because there are limited height clearances at highway underpasses. However, new "hinged roof" systems have been installed, resulting in roof pitches of up to 9:12 (Manufactured Housing Institute). Modifying the roof pitch of manufactured homes raises the cost and makes them less affordable (Advisory Commission on Regulatory Barriers to Affordable Housing 1991). Techniques that have been used to exclude manufactured home parks include: allowing only low densities (six units per acre or less), setting minimum acreage requirements too high, requiring conditional use permits, and requiring extensive park amenities (Baar 1992). Various local manufactured housing restrictions have been struck down as discriminatory: confinement of manufactured homes to parks (e.g., in Michigan, New Jersey, and Pennsylvania); exclusion of manufactured homes from all zoning districts (e.g., in Pennsylvania), and confining manufactured homes to unreasonably small areas of land (e.g., Pennsylvania and Michigan) (White 1992). Fiscal Issues The observation or perception that manufactured housing places a strain on municipal budgets is another reason for restrictive regulations of manufactured housing. However, whatever financial strain suffered by local governments may in most cases be attributed to state tax codes, to the extent they treat manufactured homes as vehicles or personal property. There are significant problems with the treatment of manufactured homes as "personal" property rather than "real" property. More than eight out of 10 manufactured homes placed in 1998 were titled as personal property (i.e., "chattel"). When manufactured homes are considered personal property, there is no "wealth building" in owning them, and it is difficult to view them as an investment. Many tax systems automatically depreciate manufactured homes like vehicles, regardless of their actual market value (Genz 2001). Financing of personal property is costly, and buyers reportedly pay from two to five percentage points higher interest than conventional home buyers. When manufactured homes are considered personal property, it puts them outside the realm of conventional housing finance. Even when manufactured homes are placed on personally owned land, buyers often continue to use personal property loans to finance them. Personal property financing is not governed by the Real Estate Settlement Procedures Act, which requires disclosure of settlement costs and prohibits referral fees. The purchase prices can vary by $5,000 to $10,000 and more for identical units, and retailers commonly adjust home prices according to a customer's perceived ability to pay (Genz 2001). Since manufactured homes are rarely moved and difficult to move, it is generally not appropriate to classify them as personal property (Genz 2001). As of 1987, "at least 41 states now treat manufactured housing as real property if it is attached to a permanent foundation, intended to be occupied as a permanent residence, or is located on owner-occupied land, or some combination of those factors" (Gailey 1987). A few states consider all manufactured homes as real estate, regardless of who owns the land. If manufactured homes could all be recognized as real housing, then owners would have much better access to the national system of homeownership incentives and support (Genz 2001). Policy Considerations Manufactured housing has been viewed as an affordability-enhancing option for infill housing in urban neighborhoods (Advisory Commission on Regulatory Barriers to Affordable Housing 1991; Knack 1995). The American Planning Association (APA) (2001) has adopted a policy guide for factory-built housing. Major portions of that policy guide are described in this section. Click here to read the entire policy guide. APA recognizes that factory-built housing plays an increasing role in the provision of housing in all market segments in the United States. APA also urges consumers, planners, and governments at all levels to recognize factory-built housing as but one form of housing in a spectrum of housing choices offering distinct characteristics that meet the needs of many consumers. The policy guide recognizes that factory-built housing is a legitimate and acceptable alternative to traditional site-built housing. It declares that exclusion of factory-built housing prevents lower-income groups from obtaining housing and thus, such exclusion conflicts with APA's social equity policies. On the other hand, APA's policy guide recognizes that some forms of housing, like manufactured homes, may be less effective in meeting community character, preservation, sustainability, or aesthetic goals. It finds that manufactured housing, if not properly placed and sited, can conflict with established neighborhood development patterns. The policy guide suggests that design standards, uniformly applied to all forms of housing, can resolve these issues. Furthermore, APA's policy guide recognizes aging mobile home or "trailer" parks are an increasing problem, in that they often provide a substandard living environment or are in need of rehabilitation. Indeed, many manufactured home parks need particular attention, as too many are poorly managed and those who live there are often viewed as "trailer trash" (Beamish et al. 2001). The APA policy guide finds that many of these places were built prior to the adoption of the HUD code and local standards regulating land use. Where these places have deteriorated into substandard environments, the policy guide recommends that they be upgraded or eliminated using methods including, but not limited to, code enforcement, urban renewal, relocation assistance, utility extensions, and condemnation with appropriate compensation. One idea posed to improve manufactured home parks is for local nonprofit organizations and developers to partner to create new subdivisions with better amenities and qualities that will make them more suitable places to live (Beamish et al. 2001). The APA policy guide provides that where persons are displaced as a result of upgrading, relocation assistance should be offered (American Planning Association 2001). Manufactured home park residents are sometimes threatened with eviction by the proposed sale of their park, and a number of social and legal issues surround the rights of manufactured home park tenants (see, for example Baar 1992, who discusses these issues). Other Issues Old manufactured housing units, when abandoned, become eyesores and can fuel the negative impressions the public may have about manufactured housing. A large number of homes are aging or dilapidated, and there are no plans available to remodel, renovate, or refurbish such homes. Attention must be given to how and where mobile homes and older manufactured homes can be disposed of. Communities need to plan what they will do with discarded units and how they might reuse them or recycle their parts (Beamish et al. 2001). Conclusion Manufactured homes are still largely a rural choice, and they are located primarily in rural areas of the United States. The traditional bases of excluding manufactured homes — that they are unsafe, unattractive, and detrimental to property values — are less compelling today. The manufactured housing industry has had a difficult time getting over negative perceptions. Manufactured houses are rarely "mobile" anymore — only about one in a hundred are moved once they are put in place. Safety has increased via federal legislation, and the exterior design of manufactured homes is becoming more like conventional houses in appearance. This article has reviewed national and state trends in the "wheel estate" industry (Wallis 1991) and has highlighted affordable housing, land-use, and legal issues associated with manufactured housing. Practicing planners need to be aware of these trends and issues, and they will likely have to confront them in their own communities, if they have not done so already. Bibliography Advisory Commission on Regulatory Barriers to Affordable Housing. 1991. "Not In My Back Yard:" Removing Barriers to Affordable Housing. Washington, D.C.: Advisory Commission on Regulatory Barriers to Affordable Housing. American Association of Retired Persons. 2001. Issues in Manufactured Housing. http://research.aarp.org/il/fs16r_housing.html. American Planning Association. 2001. Policy Guide on Factory Built Housing. Chicago: American Planning Association. www.planning.org. Baar, Kenneth K. 1992. "The Right to Sell the 'Im'mobile Manufactured Home in Its Rent Controlled Space in the 'Im'mobile Home Park: Valid Regulation or Unconstitutional Taking?" The Urban Lawyer 24, 1: 157-221. Bair, Frederick H. 1965. Local Regulation of Mobile Home Parks, Travel Trailer Parks and Related Facilities. Chicago: Mobile Homes Research Foundation. Beamish, Julia O., Rosemary C. Goss, Jorge H. Atiles, and Youngjoo Kim. 2001. "Not a Trailer Anymore: Perceptions of Manufactured Housing." Housing Policy Debate 12, 2: 373-392. Gailey, Ben. 1987. "Mobile Homes and Manufactured Homes." Rathkopf's The Law of Zoning and Planning. Volume 2, Chapter 19, Release # 27. New York: Clark Boardman. Genz, Richard. 2001. "Why Advocates Need to Rethink Manufactured Housing." Housing Policy Debate 12, 2: 393-414. Housing Assistance Council. 1996. Manufactured Housing in Nonmetropolitan
Areas: A Data Review. Jackson, Kenneth T. 1985. Crabgrass Frontier: The Suburbanization of the United States. New York: Oxford University Press. Jaffe, M. June 1983. "Mobile Homes in Single Family Neighborhoods." Land Use Law & Zoning Digest 35, 6. Juergensmeyer, Julian Conrad, and Thomas E. Roberts. 1998. Land Use Planning and Control Law. St. Paul: West Group. Knack. Ruth. August 1995. House-in-a-Box. Planning 61, 8: 10-13. Manufactured Housing Global Network. http://mobilehome.com/update/subscribe.html. Manufactured Housing Institute. 2002. Understanding Today's Manufactured Housing. www.manufacturedhousing.org/understanding_today/images/MHI-understanding_today.pdf. Manufactured Housing Research Alliance National Commission on Manufactured Housing. August 1994. Final Report.
Washington, D.C.: Department of Housing and Urban Development. HUD User Publications: Owens, W. Joseph. 1995. Who's Buying Manufactured Homes? Urban Land 55, 1: 21-23. Sanders, Welford. 1993. Manufactured Housing Site Development Guide. Planning Advisory Service Report No. 445. Chicago: American Planning Association. _____. 1998. Manufactured Housing: Regulation, Design Innovations, and Development Options. Planning Advisory Service Report No. 478. Chicago: American Planning Association. Shen, Guaqiang, and Richard A. Stephenson. 1997. The Impact of Manufactured Housing on Adjacent Site-Built Residential Properties in North Carolina. Raleigh: North Carolina Manufactured Housing Association. Urban Research Monitor. January/February 2002. "Can Manufactured Housing Be Accepted as Affordable Housing?" Urban Research Monitor 6, 6: 1-2. U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Vermeer, Kimberly, and Josephine Louie. 1995. The Future of Manufactured Housing. Cambridge, MA: Harvard University, Joint Center for Housing Studies. Wallis, Alan. 1991. Wheel Estate: The Rise and Decline of Mobile Homes. Baltimore: Johns Hopkins University Press. White, S. Mark. 1992. Affordable Housing: Proactive & Reactive Planning Strategies. Planning Advisory Service Report No. 441. Chicago: American Planning Association. White, S. Mark. 1996. State and Federal Planning Legislation and Manufactured Housing: New Opportunities for Affordable, Single-Family Shelter. The Urban Lawyer 28: 263. |
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