Manufactured Housing

Background

Manufactured housing refers to prefabricated homes that are produced in a factory and then assembled at the building site. It provides a major source of unsubsidized but affordable housing for households with low and moderate incomes. Sixty percent of people age 50 and over living in manufactured homes have low incomes. Though, typically they receive no direct housing subsidy.

Manufactured housing plays a critical role in serving the housing needs of older Americans. People age 65 and older owned or rented some 1.8 million of these units in 2013. Without this option, many would find it difficult to afford housing.

While manufactured housing tends to be more affordable, owners face other financial challenges. Financing, utilities, maintenance, and repair costs can cause hardship. Improving manufactured housing construction and safety standards would help reduce maintenance and repair costs.

Unlike most traditional homeowners, owners of manufactured housing often do not own the underlying land. They may have to move when the land is sold, or changes uses. Manufactured homeowners could form resident associations to improve their bargaining power. But they sometimes fear retaliation from community owners for doing so. Consequences can include eviction. Community owners or landowners have other leverage over unit owners. They can deny a potential buyer the right to keep a home in its location. This lack of protection limits unit owners in their ability to exercise control over their homes. In areas with high-value housing markets, manufactured home developments can be particularly vulnerable to conversion to other uses, which risks displacement of current residents (who are often challenged to find equally affordable housing elsewhere in the vicinity).

Manufactured homes built before 1976 are generally considered to be substandard and can face both energy-efficiency and safety issues. Funds from the Weatherization Assistance Program can be used to improve energy efficiency in manufactured housing (see Assistance Programs in Chapter 10, Utilities: Telecommunications, Energy, and Other Services).

MANUFACTURED HOUSING: Policy

Resident ownership of communities

In this policy: State

States should help residents of manufactured home communities purchase their community land. They should also help them establish some form of resident-controlled ownership, including codifying the first right of purchase or providing tax incentives for purchase by residents of parks that are for sale.

Manufactured housing as real property: States should pass laws similar to the Uniform Law Commission’s Uniform Manufactured Housing Act to ensure a fair process for considering certain manufactured housing to be real property.

Rent stabilization: States should permit local governments to initiate and enforce rent stabilization programs in manufactured housing communities.

Funding assistance for closures: States should establish funding assistance to help owners of manufactured homes who must relocate due to a manufactured home community’s closure or sale.

Financing

In this policy: FederalState

Policymakers should improve financing options for manufactured housing. Options should include allowing manufactured housing to be treated as real estate regardless of land ownership through the greater use of conventional mortgage financing with more competitive rates and consumer protections.

Consumer protection

In this policy: FederalState

Policymakers should ensure consumer protections for all manufactured homeowners.

States should enforce antitrust statutes regarding retailer tie-ins and restraints of trade.

States should license manufacturers (both in- and out-of-state) and establish manufactured home recovery funds to assist with warranty repairs if a manufacturer goes out of business or refuses to provide warranty service.

Replacement of dilapidated homes: Policymakers should establish programs to facilitate the replacement of dilapidated and substandard manufactured homes with new, energy-efficient homes for households with low incomes.

Bankruptcy protection: Congress should pass legislation to protect the owners of manufactured homes who face bankruptcy proceedings because of debt obligations that exceed the current market value of the collateral.