Ronald A. Wirtz - Editor, fedgazette
Published July 1, 2005 | July 2005 issue
Manufactured housing is different things to different people. People who live in it call it home. Many others are glad not to have to call it home.
It is in this social context that a seemingly fruitful relationship has remained fallow. Manufactured housing has long been a go-to option for low-income households. But as prices for homes and land continue to rise, and as concerns over affordable housing get pushed to the top of the policy radar, you won't hear most anyone call manufactured housing a policy "solution." Indeed, land-use regulations and other pressures are making it more, not less, difficult to site manufactured housing, and preserving existing units—like in manufactured home parks—is proving difficult.
The reason for this, it seems, is unabashedly straightforward, according to numerous sources. Manufactured housing isn't part of the affordable housing lexicon mostly because of the mental images tightly attached to these homes and the type of people living in them.
"Hillbillies, that's who lives in those," said Chad Evans, president of Centennial Homes of Aberdeen, S.D., the largest seller of manufactured homes in South Dakota, summarizing the stereotypes his company has to labor under. "Everyone's for affordable housing, but not in my backyard."
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Despite significant strides in design and quality in today's manufactured homes, most people still have a mental image of the industry that's stuck in the 1970s, mostly because old, dilapidated homes are so conspicuous. New models blend into neighborhoods and the general landscape better, "and people don't notice" that they are manufactured homes, said Chris Stinebert, president of the Manufactured Housing Institute (MHI). "The stereotype persists because so many of the older products are still out there. We get credit for all the bad ones, but we don't get credit for any of the new ones."
Low-income households give the industry plenty of credit with their checkbooks. A 2001 report by the Joint Center for Housing Studies at Harvard University said manufactured housing played "a particularly important role" in satisfying housing demand among low-income buyers. Fully one-quarter of low-income home buyers nationwide purchased manufactured homes in 1997 (not to mention 15 percent of middle-income buyers and even 5 percent of high-income buyers).
According to a 2002 report by the Department of Housing and Urban Development, median income for manufactured homeowners was less than $27,000—barely half that of all owner-occupied households. Yet despite the low income, owners of manufactured housing nonetheless found affordable housing. In 2001, the median manufactured household spent 18 percent of its income on housing—exactly the same percentage as "stick-built" households, and significantly lower than the 29 percent of renter households. Among renter and stick-built households, 70 percent and 61 percent, respectively, spent more than $500 per month on housing; just 39 percent of manufactured homeowners did so.
Manufactured housing has long had a niche among rural home buyers. For one, building contractors can be tough to find in rural areas, and long drives for labor and materials tend to increase cost without increasing a home's quality. Land uses are also less restrictive in rural areas, making it easier to find a suitable site for a new manufactured home.
"That's a (buying) niche that's still going to come to us," Evans said of rural buyers. But the dependence on this market "is probably changing ... subdivisions is where this industry is going to grow the greatest."
But that growth won't come easily. According to a 2002 report by the Neighborhood Reinvestment Corporation, manufactured housing "often meets strong resistance from neighborhoods and towns," and municipal land-use policies "tend to limit the ability of both individuals and developers to place manufactured homes in many urban and suburban locations." Like other affordable housing developments, the report stated, the rationale opposing manufactured housing "may not be explained by any economic rationale, but is rather grounded in stubborn social perceptions of low-income families and communities."
Carolyn Braun is the planning director for the city of Anoka, Minn., and president of the Minnesota chapter of the American Planning Association. When it comes to zoning for manufactured housing, the letter of law says "you're supposed to treat it as any other dwelling," she said. The spirit of zoning law is considerably different. "There are tricks of the trade for those who would rather not have [manufactured housing]" in their community, she said.
Braun reeled off a list of common zoning requirements that don't specifically bar manufactured housing, but might as well. For example, municipal code often requires homes be 20 feet wide in an effort to keep out single-wide homes, which are typically narrower. Steeper roof pitches and basements were "another way to prevent them," Braun said.
In some cases, efforts to block manufactured housing have motivated the industry to innovate and upgrade its product. For example, steeper-pitch roof requirements pushed the industry to design a roof that could be collapsed to go under highway overpasses, allowing pitches of most any steepness. "Roof pitches are not an issue anymore," said Mark Brunner, head of the Minnesota Manufactured Housing Association (MMHA).
But some problems—like people's perceptions—can't be redesigned out of existence, at least not quickly. "I do think there is community prejudice around manufactured housing and who lives there," said Paul Williams, senior program director in the Twin Cities office of the Local Initiatives Support Corp. (LISC), a nonprofit that provides financial, technical and other services to community development corporations.
Communities use zoning as a subtle stand-in for their housing preferences, Williams said. "It's got to have three bedrooms, two baths, certain square footage, garage and all that kind of stuff." As minimum expectations of the average home increase, "it's more expensive to build affordable housing."
Braun agreed, and said it has the effect of removing much of the incentive for buying a manufactured home in the first place. In urban areas, "once you apply (minimum standard) regulations and the cost of the lot, you might as well put up a stick-built," said Braun, from Anoka. "When you're done, is it that affordable?"
Evans, of Centennial Homes, noted that larger cities in the state won't allow manufactured homes in city limits despite the fact that federal housing code (which governs manufactured homes) supercedes all state or local regulations. But rather than fight a city zoning officer or planning commission, owners of manufactured homes simply go elsewhere. Braun agreed. "What happens is most people can't afford to contest it."
But lawsuits are starting to appear nationwide challenging such local restrictions, according to Evans. As a member of the state industry association, Evans said the organization is "just waiting for a customer that's ornery enough" for the association to back in challenging local land-use regulations.
Still, that doesn't necessarily explain why affordable and manufactured housing interests remain virtual strangers. Indeed, one might think that zoning restrictions on manufactured housing would incite more, not less, attention from advocacy organizations. Nonprofits and government at all levels are deeply involved in housing markets for low- and moderate-income households. But virtually all of it is geared toward site-built homes or rental units—evident in the simple fact that no public or nonprofit initiatives for new affordable housing units were found that specifically targeted or utilized manufactured (HUD-code) housing units.
"I don't think there's a lot of discussion about manufactured housing as one of the solutions" to affordable housing problems, said Williams, from Twin Cities LISC. A 2001 paper by Richard Genz, published by the Fannie Mae Foundation, stated tersely, "National organizations working on affordable housing, development banking, community reinvestment and rural development are conspicuously quiet about manufactured housing. ... Where affordable housing developers, advocates or lenders gather, the mention of manufactured housing is likely to evoke derision."
Stinebert, from MHI, said his organization and the industry in general have little contact with affordable housing advocates. "It's an uphill battle with them." Despite the grinding debate over the housing needs of low-income families, particularly in bigger cities, "It's so difficult to go into an urban environment and talk about manufactured housing ... which would be a perfect option," Stinebert said.
Mark Brunner, from MMHA, said he's spent considerable time with affordable housing advocates. "In greater Minnesota, they really welcome manufactured homes" to meet the housing needs of local workers and others. In urban areas, he said, the priority focuses more on a "subsidized approach" to affordable housing-buying down the cost of rent or a site-built home that's too expensive for households to afford on their own, rather than try to keep the price tag itself down.
"Perception is the biggest hang-up. (Housing advocates) are thinking of a home they've seen in a manufactured home park, and it doesn't fit what they envision" for new affordable housing units, Brunner said. "It's really political, beneath the radar."
About the only place where affordable housing and manufactured housing interests intersect is in manufactured home parks—somewhat ironic, given that public perceptions of these places tends to be even more myopic. More commonly known as trailer parks, dozens and even hundreds of homeowners typically lease the land under their homes.
But manufactured home parks are coming under pressure from landowners who see bigger profits in other land uses. That is a direct threat to a significant supply of truly affordable housing. "The heart of the affordable housing issue is manufactured home parks," said Margaret Kaplan, an attorney with the Housing Preservation Project, a nonprofit law firm in St. Paul working to preserve and expand affordable housing. The organization has become something of an expert on manufactured home parks over the last three years, helping tenants either fight park closure or simply receive due process and compensation for being uprooted.
For the very-low income, Kaplan said, their best ownership option "is in the park ... the economics are vastly different." Lot sizes are small, and there are few zoning requirements to push up the cost of a home. Indeed, parks are about the only places in metro regions where a buyer can even place a single-wide unit anymore. In Minnesota, there are 50,000 manufactured homes in parks, about one-third of them in the Twin Cities region, according to Kaplan. "This is a critical source of affordable housing."
And it's being threatened, but few have bothered to notice or get involved. The challenge facing park tenants is twofold. First, the land is typically more valuable as some other use—subdivided and sold for stick-built houses, for example—than as a manufactured home park. This is particularly the case in urban areas, where land is at a premium, and some communities are only too happy to see parks go to so-called higher uses.
Every year a couple of parks are targeted for closure in Minnesota—four last year, and three so far this year, according to Kaplan, most recently a 70-unit park in Bloomington. Ironically, for those parks that do close, many long-time tenants have few places to go because most parks don't accept homes more than 10 years old.
Compounding matters is the fact that "nobody's building new parks," Kaplan said, in part because of high land costs, but also because of ingrained stereotypes about the quality of both the housing and its tenants. One industry source pointed out that it's not uncommon to read about a homicide "in a mobile home"—a location detail that a reader would never see if the act occurred in a stick-built home.
Kaplan noted that even the Academy-Award-winning Million Dollar Baby gave an unflattering portrayal of life in a manufactured home park. "Again and again, people's perceptions of (manufactured home parks) are reinforced," she said. "We've encountered this (negative) reaction even among the nonprofit community, who consider this type of housing to be substandard," said Kaplan. The perception of many "is that it's just full of released felons."
The problem is one of basic familiarity. "People just don't see manufactured home parks. They tend to drive by and notice they exist," said Kaplan. That lack of familiarity extends to affordable housing advocates in government and the nonprofit community. "I think [manufactured housing] is an unknown quantity" for many in affordable housing circles, Kaplan said. "There's a lot of unknowns for government and nonprofits because they haven't been involved before. ... People see risk in the unknown."
At least some of the blame also falls on the industry itself. Though it appears to be making strides in becoming more consumer-friendly at the retail level, the industry still suffers from a snake-oil, used-car reputation (see "Dealer, heal thyself").
But probably worse, the industry is doing precious little to systematically combat the prevailing image of manufactured housing—a rotting, 1970s home in a trailer park—despite the fact that its products are becoming more and more like the stick-built home next door.
"Our industry has done a poor job of marketing," said Evans, from Centennial Homes. Individual dealers have success almost in spite of the industry's reputation. "For us, there is no better form of advertising than that (existing) customer. We get a lot of referrals."
Stinebert, from MHI, said the industry needs "an image building program" to counteract "so much misinformation." But that industry push doesn't appear to be right around the corner. "The industry has to come up with the money to do it," he said.
The marketing lesson the industry seems to miss, according to Braun, the Anoka city planner, is that "people are in different (types of) housing for all sorts of reasons." People living in manufactured housing are familiar and come in every stripe-elderly, singles, "young kids who can't afford the $250,000 house," she said. "It's your kid or your cousin. They really don't talk about that."