The neglected mobile home: a way to bridge the housing gap

Allan Wallis

August 08, 1991|By Allan Wallis

WHAT DOES the United States have against mobile homes?

Mobile homes -- now called "manufactured housing" -- make up about a quarter of all the new single-family housing produced in the United States during the last 25 years.

These mass-produced dwellings that roll from factory to site on their own wheels cost 50 percent less per square foot of space to build than regular stationary homes.

Unlike site-built housing, they are constructed according to a mandatory federal safety and construction code.

Americans face a crisis of affordable housing.

A recent Census Bureau report estimates that only 9 percent of renters qualify for a home mortgage.

Moreover, rising rent costs make it ever harder for households to save for the down payment on a home.

Mobile homes can bridge the housing gap.

Why, then, despite these benefits and evidence of growing market acceptance, are there still barriers that prevent consumers from freely choosing mobile homes?

Consider the fact that if you buy a mobile home and land to put it on, your local government may not allow you to unite the two.

Legal justifications for restrictions range from safety to aesthetic and economic concerns. But at base they are rooted in class discrimination.

Mobile homes evoke images of overgrown front yards, herds of unkempt children, snarling mutts and rusted car frames.

It doesn't matter that this housing may be the only way firefighters, police officers and school teachers can afford to live in the communities where they work.

Federal and state agencies have been trying to remove regulatory barriers that discriminate against mobile homes.

NTC In July Secretary of Housing Jack Kemp released a report that called for removing local zoning and building regulations that prohibit the use of manufactured housing.

Nineteen state legislatures have established anti-discrimination standards that prohibit local governments from using their zoning powers to ban mobile homes.

But localities continue to circumvent these efforts.

Financing also stands in the way.

Because mobile homes are built away from sites, loans for their purchase are often at consumer rather than real estate rates -- making them 2 to 3 percentage points higher.

In 1983 the Federal Housing Authority was the first government agency to offer unified mortgages for combined site and mobile home purchases.

Though additional agencies now offer such financing, it is still relatively uncommon.

Less than 11 percent of the mobile homes purchased in 1989 were financed as real estate by the government.

Without comparable financing, mobile homes lose some of their cost advantage.

Why should Americans care?

There are few more cost-effective housing alternatives, and increasing housing choices benefits everyone in the housing market.

Creating opportunities for home ownership at the lower end of the housing market and providing an alternative for senior citizens who might want to move to smaller dwellings helps the housing market.

Consider that when people are unable to move from apartments to their own homes because the down payment is too high, they remain renters, swelling renters' ranks and driving up rental costs.

Similarly, when the elderly see the cost of new, smaller quarters, such as apartments, they opt to remain in their houses -- now too large for their needs -- thereby limiting housing opportunities for younger households.

What can be done to make mobile home ownership easier?

State governments should apply greater pressure to remove local regulatory barriers.

In addition, private and public lenders along with manufacturers need to work together to develop new types of mortgages and leases that reduce the cost of mobile-home financing.

Earlier in this century we dreamed of producing entire houses in factories, hoping to realize the same economy of scale that Henry Ford achieved with the automobile assembly line.

The true progeny of that dream exists and, like it or not, it is the mobile home.

Allan Wallis is author of "Wheel Estate: The Rise and Decline of Mobile Homes."

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