North America’s housing crunch is squeezing renters and homeowners alike–especially residents living on limited incomes. Government officials know they must accelerate the construction of new, affordable homes and housing developments in order to meet unprecedented demand and keep their cities livable.
Unfortunately, slow building permit approval processes are pushing new construction projects out months or even years, and restrictive zoning laws are making it harder for officials to greenlight creative solutions.
To combat this, there are a number of actions governments can take - and that are already underway - to cut the development red tape and stretch construction dollars further, faster. But surprisingly, one of the easiest (and quickest) ways to boost housing stock is rarely talked about: manufactured housing.
Manufactured homes are built in a factory and then transported in sections and assembled on site. That’s true of all prefabricated or “prefab” homes, but manufactured homes are built on a steel chassis and don’t require a foundation, which means they can be moved again after they are assembled.
Manufactured homes used to be known as mobile homes. That changed in 1976, when the U.S. Department of Housing and Urban Development (HUD) developed its federal Manufactured Home Construction and Safety Standards to ensure a higher level of quality and safety. (The term “mobile homes” is now considered outdated.)
People sometimes also confuse the term “modular home” with “manufactured home.” Modular homes are also prefabricated, but they are transported to the build site in much smaller sections, and are designed to rest on a permanent foundation. Other types of prefab homes include precut and panelized. Each of these types of homes have their share of pros and cons (as do site-built homes!), but none is as well-suited to solving the housing crisis as manufactured housing.
Manufactured homes are not without their drawbacks. However, they offer some unique benefits that make them worth serious consideration in the quest to rapidly deliver quality affordable housing:
Benefits of Adopting Manufactured Housing at Scale
Factory-built homes are typically cheaper to build than site-built homes. That’s especially true with manufactured homes because they are limited in size, scope, and design. According to MHI, the average cost to build a site-built home in the U.S. is $107 per square foot, while the average manufactured home cost is $49.
These cost savings may be attributed to reduced labor costs, increased quality control at the factory site, and the ability to buy larger quantities of construction materials for bulk prices. And, since the houses are built indoors, weather isn’t a factor as it is for site-built houses. Labor is more efficient and predictable and materials are less likely to be damaged.
A manufactured home can be built in as little as six days! Even when taking into account the permit approvals process, delivery, and installation, the timeline is generally less than three months. That’s about half the average build time of a site-built home, according to Fannie Mae’s Multifamily Economics and Research Group (MRG).
The speed of installation is a result of manufactured homes’ economies of scale and scope. They are available in three sizes, are never more than one story, and easy to replicate quickly. Because they are built in a controlled environment, they are also less prone to construction delays due to weather.
People like to say that you can pay for good, fast, or cheap, but never all three at the same time. Manufactured homes put the old adage to the test. Built to federal HUD standards, they are as safe as site-built homes–in some cases, safer. After Hurricane Andrew lashed Florida in 1992, HUD’s revised standards for manufactured homes ensured that none built after 1994 were destroyed by subsequent hurricane-force winds.
Newer manufactured homes can also be built to be energy efficient without adding significant additional costs. That’s important, because the majority of people living in manufactured homes live on limited incomes, meaning that their energy costs need to be as low and predictable as possible.
Since manufactured homes are built in pieces in a controlled environment, their components are easier to inspect. Plus, since the majority of homes’ layouts are replicas of previous builds, the permit approvals process should theoretically go quicker since the plans have already been approved. It’s kind of like copying and pasting a home over and over - the regulatory legwork has already been done once, so thereafter approvals shouldn’t take as long. Especially with the right building permitting solution in place to move things along.
Accelerating the Adoption of Manufactured Housing
Most people agree that factory-built homes provide substantial cost savings over site-built homes. So why do we see such low adoption of these types of houses? While manufactured homes offer many benefits over site-built homes, they make up just ten percent of the single-family housing market in the U.S.
According to the Urban Institute, barriers include few (if any) attractive financing options, lower home appreciation values, and restrictive zoning. Fortunately, governments can head off some of these issues as follows:
Breaking the Barriers to Affordable Housing
In a recent article from HUD's Office of Policy Development and Research, Nicole Stoenner of the Oregon Housing and Community Services notes that manufactured housing is a “critical naturally occurring affordable homeownership opportunity for Oregonians in communities large and small.”
As governments seek to make high-quality housing available to all of their residents, manufactured homes present a promising–if largely untapped–opportunity.
For more on how to deploy online permitting processes to accelerate affordable housing, get in touch!