Last year, James Shen, Chris Herbert and I co-authored a paper that showed that manufactured housing offers significantly reduced construction costs compared to conventional site-built homes. As home value growth continues to outpace income increases, the savings from these reduced costs could make homeownership substantially more attainable for low- and moderate-income households. However, in a subsequent paper from the Center, Chris and I, along with Alexander Hermann and Dan McCue, identified several barriers to the wider use of manufactured housing as a cost-saving solution. Our newest study, “Overcoming Barriers to Manufactured Housing: Promising Approaches from Five Case Studies,” investigates the work of a diverse group of developers from across the country and offers insights into how such barriers can be overcome.

While all of the cases featured in the new report focus on applications of manufactured housing in fee-simple, real-property development – where a new manufactured home is permanently affixed to its foundation, titled as real estate, and sold to a homebuyer – they vary widely in most other respects. The developers featured in the case studies include for-profit, nonprofit, and government entities, and their projects range in size and scope from single-unit infill to subdivision developments of hundreds of homes. The cases also vary geographically, with projects located on the east and west coasts of the US as well as in Texas and the upper Midwest. Although the selected cases do not reflect a representative sample of a broader population (cases were identified through interviews with prominent stakeholders from the manufactured housing industry), in drawing from such a diverse array of organizations and projects, we aimed to capture a complete picture of the challenges faced by developers using manufactured housing and the approaches used to overcome them.

Key Insights and Strategic Approaches

• Education and Advocacy Are Critical: A common theme across all case studies is the necessity of educating local officials and communities about modern manufactured homes. As discussed in our last paper, manufactured housing is widely stigmatized, and opposition to it is often rooted in misconceptions about the homes’ quality and aesthetics. Efforts to reshape perceptions and obtain special approvals are often arduous but are essential for success.

• Zoning Restrictions Require Flexibility: While advocacy campaigns can significantly sway how manufactured housing is perceived, we saw only one instance where project leaders were able to change zoning code to allow manufactured homes where they were previously prohibited. Notably, that project was city-led and still required a lengthy campaign to educate community members about manufactured housing before the change could be made.

  In one other project from the case studies, development was able to move forward in spite of a zoning restriction against “mobile homes” on the condition that the homes were sited on permanent foundations. But, in most other instances, developers simply avoided places where manufactured housing was explicitly prohibited, opting instead to build just outside of city limits or in a nearby community where no such prohibition existed. Only one of the groups interviewed – a California-based nonprofit – reported that zoning was not a consideration, as California has outlawed discrimination against manufactured homes.

• CrossMod™ Homes Have Particular Appeal: Whereas traditional manufactured homes are often built for niche applications like manufactured home parks or farm housing, CrossMod^TM manufactured homes were designed to provide an alternative to conventional, site-built single-family housing. Almost all of the projects featured in the case studies utilized CrossMod^TM homes. Though CrossMod^TM offers a smaller cost advantage than traditional manufactured homes relative to comparable site-built alternatives, the construction cost savings are still significant, and developers cited the homes' attractive aesthetics and eligibility for specialized mortgage financing as key appeals.
   
• Development Processes Are Unique: Although the CrossMod^TM product appears to present benefits over both traditional manufactured housing and comparable site-built homes, the process for developing these homes in a typical single-family neighborhood context will be new to most developers. Historically, manufactured homes have typically been sold through a dealership model, so even for developers, states require specific licensure in order to obtain homes directly from the factory. Siting homes, too, requires a license from the state, and while some developers may seek to obtain licensure internally, the process of finding approved contractors can be cumbersome.
   
• Time Savings May Come in Time: Since manufactured homes are built off-site and can be installed in a matter of weeks, they offer the potential for shortened project timelines relative to site-built housing. However, our case studies reveal that various challenges can decrease and even eliminate these time savings. While some slowdowns are unavoidable, inefficiencies related to a lack of familiarity with manufactured housing – on the part of community members and officials, inspectors and permitting offices, and the developers themselves – may diminish with subsequent projects. This learning curve also underscores the importance of beginning education and advocacy efforts early.

Looking Ahead: Implications for Policy and Practice

While manufactured homes rose to over 30 percent of all homes sold in the 1990s, sales fell drastically after a market crash at the turn of the millennium, and the industry has since generally failed to compete with conventional single-family homes. However, over the past several years, punctuated by the 2019 rollout of the CrossMod^TM category of homes, the industry has focused on reaching a larger share of American homebuyers. Modern manufactured homes offer homebuyers key benefits and aesthetic appeal that their predecessors lacked, as well as a significant cost advantage over site-built alternatives. In spite of this potential, shipments have remained relatively low.

The Center’s last report on manufactured housing identified and explored key barriers to its more widespread adoption for affordable homeownership. This newest report looks at several developers actively working in the field to examine how these barriers might be overcome. Our findings include several specific insights for both practitioners and policymakers, but at a high level, our case studies revealed a pressing need to continue and expand the educational efforts aimed at all stakeholders involved in housing development. We hope that policymakers, housing advocates, and developers alike will consider these findings to support and promote the adoption of manufactured housing.