This is the second installment of my look under the hood of the recently passed 21st Century ROAD to Housing Act, looking at what each provision actually does and trying to suss out its actual impact on housing supply.
Because of the changes to manufactured housing rules, I think we will indeed see more attractive manufactured home designs due to eliminating the chassis requirement. I've seen some of the new designs and they partially address one of the two main objections most folks have had with manufactured homes, that the old designs were "butt" ugly in terms of architectural aesthetics (long and narrow, with low pitched roofs, far from meeting any pleasing proportions and in no way complimenting other architectural styles). I think this is largely why a lot of towns exclude them from older neighborhoods with conventional homes. The new designs might fit right in, but I think we'll find that these designs will cost quite a bit more than a standard "single wide" or "double wide."
However, the second main objection, the quality of construction, will not be addressed by eliminating the chassis requirement. There is a reason that manufactured homes are cheaper than an equivalent site built or modular home and that is primarily because manufactured homes are built with cheaper, less durable materials, and the quality of the finish work is marginal at best. The first owner will enjoy a nice new home, but the second and third owners can be faced with trims and wall board issues, cabinets delaminating, siding and roofing problems, etc., requiring fixes that wouldn't normally occur so soon in the life of a common site built or modular home. These problems can be addressed if the manufactured home builders increase the quality of their products, but then the home will begin to approach the cost of a modular home.
Right now, in the Northeast, manufactured homes have experienced some of the highest increases in appraised value, not because of the quality of the home itself, but because of the shortage of houses to buy. Sales prices used to reflect the condition and quality of a home, but these are less of a factor now in what people are willing to pay for a home. This will change once the supply of homes increases, at which point a cheaply build home may see a drop in appraisal value as compared to conventional homes of the same vintage.
Manufactured homes do and will continue to play a vital role in our housing inventory, but customers need to be clear eyed about what they are purchasing.
It's impressive how well these big bills are written to touch everything and do nothing. I'm not sure why its so hard to take a few key issues and really give them runway and resources to make a dent.
Thanks for the thorough review and commentary. My takeaway is this bill doesn’t do anything; instead, it was a political schtick ahead of the midterms to try to tackle affordability.
Sounds like Congress didn’t bring smart, well informed industry experts to the table to share their thoughts. My core belief is always focus on incentives, reduce regulations, and let innovation thrive.
To what extent will this Act appreciably increase the number of houses inasmuch as there doesn't appear to be anything in the act to provide funding for any of the initiatives?
Merely illustrates that the bureaucracy is winning !! NONE of these specimens have ever handled a 2X4, nor built anyhting, while pretending to look after consumer interests. It is high time to make people/voters once again directly responsible for their own housing needs. Maybe absent the government we might be able to build stuff.
Because of the changes to manufactured housing rules, I think we will indeed see more attractive manufactured home designs due to eliminating the chassis requirement. I've seen some of the new designs and they partially address one of the two main objections most folks have had with manufactured homes, that the old designs were "butt" ugly in terms of architectural aesthetics (long and narrow, with low pitched roofs, far from meeting any pleasing proportions and in no way complimenting other architectural styles). I think this is largely why a lot of towns exclude them from older neighborhoods with conventional homes. The new designs might fit right in, but I think we'll find that these designs will cost quite a bit more than a standard "single wide" or "double wide."
However, the second main objection, the quality of construction, will not be addressed by eliminating the chassis requirement. There is a reason that manufactured homes are cheaper than an equivalent site built or modular home and that is primarily because manufactured homes are built with cheaper, less durable materials, and the quality of the finish work is marginal at best. The first owner will enjoy a nice new home, but the second and third owners can be faced with trims and wall board issues, cabinets delaminating, siding and roofing problems, etc., requiring fixes that wouldn't normally occur so soon in the life of a common site built or modular home. These problems can be addressed if the manufactured home builders increase the quality of their products, but then the home will begin to approach the cost of a modular home.
Right now, in the Northeast, manufactured homes have experienced some of the highest increases in appraised value, not because of the quality of the home itself, but because of the shortage of houses to buy. Sales prices used to reflect the condition and quality of a home, but these are less of a factor now in what people are willing to pay for a home. This will change once the supply of homes increases, at which point a cheaply build home may see a drop in appraisal value as compared to conventional homes of the same vintage.
Manufactured homes do and will continue to play a vital role in our housing inventory, but customers need to be clear eyed about what they are purchasing.
" manufactured homes are built with cheaper, less durable materials, and the quality of the finish work is marginal at best. "
Precisely ! Never mind ignoring the $ costs of proper site and foundation preparation, access to services.
It's impressive how well these big bills are written to touch everything and do nothing. I'm not sure why its so hard to take a few key issues and really give them runway and resources to make a dent.
Thanks for the thorough review and commentary. My takeaway is this bill doesn’t do anything; instead, it was a political schtick ahead of the midterms to try to tackle affordability.
Sounds like Congress didn’t bring smart, well informed industry experts to the table to share their thoughts. My core belief is always focus on incentives, reduce regulations, and let innovation thrive.
“How….?”
Probably insignificantly.
To what extent will this Act appreciably increase the number of houses inasmuch as there doesn't appear to be anything in the act to provide funding for any of the initiatives?
Interesting comprehensive article ....
BUT
Merely illustrates that the bureaucracy is winning !! NONE of these specimens have ever handled a 2X4, nor built anyhting, while pretending to look after consumer interests. It is high time to make people/voters once again directly responsible for their own housing needs. Maybe absent the government we might be able to build stuff.