Economy Cutting five words from this law could make houses cheaper

[Islam Imamate]

There exists an almost absurdly simple fix that could help ease the housing crisis. It would cost the government nothing, require deleting just five words from a 50-year-old federal law, and has enjoyed quiet support from housing researchers and leaders for decades.

The target is an obscure regulation that requires every manufactured home to be built on a “permanent chassis” — a steel trailer frame that can attach to wheels. The idea was that the chassis was necessary — even after the home was installed and the wheels taken off — because manufactured houses, which trace their roots to World War II trailers, could theoretically be moved. Yet by the mid-1970s, most never left their original site, and the chassis remained unused, notable only as a design feature that made the homes stick out.

Getting rid of this “permanent chassis” mandate could make manufactured homes — already home to 21 million Americans, most of whom earn under $50,000 a year — more attractive, more socially accepted, and even more affordable than they already are.

Roughly 100,000 new manufactured homes are produced each year, but production is down sharply from the 1970s, just before the rule took effect. With 152 existing factories already capable of producing these types of homes, industry leaders say striking the chassis requirement could help scale up manufacturing by hundreds of thousands of houses, especially if paired with zoning reforms.

The policy tweak could offer real relief for the housing crunch, especially for first-time buyers and older adults looking to downsize.

Although the change seemed simple to implement, lawmakers failed to amend the mandate for over three decades. There wasn’t overwhelming opposition to the proposal, but just enough resistance to nudge politicians toward issues more likely to boost their political capital. But as the housing crisis has intensified nationwide, pressure on Congress to use one of its few direct tools to boost housing supply has become harder to ignore.

Advocates of eliminating the chassis rule think victory might finally be in reach: The Senate Banking Committee is expected to take up the issue in a hearing later this month, as part of a housing package sponsored by Tim Scott, the committee’s Republican chair.

The permanent chassis rule and its history offer a window into how smart ideas that could solve real problems can still languish for decades in the fog of federal process. But it also shows what it takes to move even obvious reforms from inertia to action.

Nearly 40 years ago, policy experts began to notice a troubling trend: For the first time since the Great Depression, homeownership rates were dropping and home prices were going up, partly due to higher interest rates. In 1990, the typical first-time homebuyer earned about $23,400 annually — enough to afford a home up to $59,600, according to the Los Angeles Times, citing data from the National Association of Realtors. But the median price of a new single-family home was roughly $129,900, and existing homes weren’t much cheaper, with a median price of $97,500.

But there was a bright spot: manufactured homes. Built in factories on assembly lines, these homes benefit from standardized materials, streamlined labor, and weather-controlled conditions, making them significantly less expensive than traditional site-built housing.

Though long associated with dingy mobile trailers, by the late 20th century many manufactured houses were nearly indistinguishable from site-built ones, offering full kitchens, pitched roofs, and front porches. Nearly 13 million people lived in them.

Consumers buying manufactured homes “are demonstrating a preference for new construction that is less spacious, has a simpler design with fewer amenities, and uses less expensive materials,” read one HUD-commissioned report from 1998. “Any perception that consumers today would not be interested in new conventionally-built starter homes with very basic designs and fewer ‘extras’ is mistaken.”

Yet despite evident consumer demand, the chassis mandate held the sector back. It made production more expensive, restricted architecture flexibility, and gave state and local governments a pretext to exclude the homes through zoning.

The permanent chassis feature allowed cities to more easily ban the housing in a given area for being “mobile” structures, even when they were permanently installed.

Yet many advocates believe that the chassis rule was included as sabotage by the powerful National Association of Home Builders, which saw manufactured housing as a fast-growing rival to its site-built homes.

“They put it in the original law in 1974 because they were worried about a competitive disadvantage and it’s lived there ever since,” said Lesli Gooch, the head of the Manufactured Housing Institute, the largest trade group for the industry.

Regardless of whether one believes the site-built housing industry was originally responsible for hobbling manufactured housing with the chassis rule, it’s indisputable that NAHB was one of the most ardent champions for keeping it there.

Manufactured housing has never lacked a compelling economic case — but today, it’s become far harder to dismiss. Factory-built homes stand out as one of the most obvious ways to move the needle on affordability—and one of the few housing tools within the federal government’s reach. That it doesn’t deepen the deficit is an added plus.

On the state level, advocates have recently been successful at pushing for new laws banning exclusionary zoning of manufactured housing. Last year Maine, Maryland, New Hampshire, and Rhode Island passed such protections, and Kentucky followed suit this year

Sean Roberts, the CEO of Villa, a company that produces factory-built accessory dwelling units, says removing the permanent chassis rule will result in more homes getting built across the board. “People could afford the homes more easily. Kind of everybody wins, you know, there’s not a whole lot of downside to it,” he said. “So we’re very supportive of it, and we see it as being a really positive thing.”

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I didn't post the full article or even most of it so feel free to check it out.

The core point though is that an arbitrary requirement that "mobile" homes, a misnomer as most are never moved after being installed and are better described as manufactured homes, have a permanent steel chassis has held the industry back. It limits their design, makes manufactured homes more expensive to produce, and gives NIMBYs a pretense to exclude them through zoning since the steel chassis is what makes them legally "mobile homes" even though the great majority are never moved from their original location.

As the housing crisis has become a more urgent policy issue on the national agenda there's been an impetus to find any way to bring housing costs down and manufactured homes are increasingly seen as a cost effective option especially as a starter home or a way for retirees to downsize. By removing the steel chassis requirement and making them legally indistinct from site built homes they can bypass zoning restrictions and could eventually be eligible for traditional financing mechanisms.

What say you? Do you agree that this rule should be removed? More broadly, do you think manufactured homes can be part of the solution to the housing crisis? Should existing single family neighborhoods be rezoned to allow them with no distinction between manufactured homes and traditional site built ones? Should they be eligible for traditional 30 year gov't backed mortgages like site built homes?

 

[chardog]

Interestingly, it’s not that simple. I’ve met with someone in the industry to try to build on land that I was going to acquire and there’s backroom issues even if legal, like a hidden HOA. I was looking to build in Moreno Valley specifically, where KB homes mcmansions dominates, and the builder would not touch the city due to the local regulators.

Even if legal, if the city doesn’t want you there due to perception of cheapening the area, then it’s not happening.

These manufactured homes that I toured were really nice, and have standard walls, high ceilings, great layouts, not much to complain about. It was about 125K starting…. Compared to 300K+ to build from scratch.

 

[irish_thug]

They are perfectly legal in my area as long as they are on a proper foundation, but I'm out in the sticks. Municipal zoning by-laws are definitely going to be a hitching point. @chardog's point is accurate, but it's actually deeper than that. It's not perception of cheapening it will reduce the assessed value of that property vs. a more traditional style of home. Reduced value means property taxes would be lower, so the municipality gets less money.

I would be in favour of allowing them more widely, otherwise the next generation will only be able to achieve home ownership through inheritance.

 

[Islam Imamate]

Interestingly, it’s not that simple. I’ve met with someone in the industry to try to build on land that I was going to acquire and there’s backroom issues even if legal, like a hidden HOA. I was looking to build in Moreno Valley specifically, where KB homes mcmansions dominates, and the builder would not touch the city due to the local regulators.

Even if legal, if the city doesn’t want you there due to perception of cheapening the area, then it’s not happening.

These manufactured homes that I toured were really nice, and have standard walls, high ceilings, great layouts, not much to complain about. It was about 125K starting…. Compared to 300K+ to build from scratch.

This is why states are passing laws to disallow discriminating against manufactured homes.

To your point though, sometimes locals use less obvious means to block this kind of housing. Things like environmental and safety laws are abused by bad faith actors to prevent projects they're against for reasons entirely related to the safety and the environment.

This is where the so called Abundance policy movement comes in. From the article:

The buzzy “abundance” movement, fueled by Ezra Klein (a Vox co-founder) and Derek Thompson’s bestselling book, has also helped shift the politics around regulatory reform — including most recently in California, where Democratic Gov. Gavin Newsom signed legislation to weaken a state environmental law long blamed for blocking housing construction. And Barack Obama, who spoke about the need to build more housing at the Democratic National Convention last August, came out harder this month with a blunt assessment, telling donors that “I don’t want to know your ideology, because you can’t build anything. It does not matter.”

They are perfectly legal in my area as long as they are on a proper foundation, but I'm out in the sticks. Municipal zoning by-laws are definitely going to be a hitching point. @chardog's point is accurate, but it's actually deeper than that. It's not perception of cheapening it will reduce the assessed value of that property vs. a more traditional style of home. Reduced value means property taxes would be lower, so the municipality gets less money.

I would be in favour of allowing them more widely, otherwise the next generation will only be able to achieve home ownership through inheritance.

I'm skeptical that manufactured homes would actually reduce property values. I think that more often than not local homeowners believe that and they are a powerful constituency that local leaders fear upsetting. This is a big issue with housing in general, the haves blocking housing reform that would benefit the have-nots.

 

[Rob Battisti]

Seems fair.

Mobile home parks exist. Usually not the best places to live. Nothing wrong with buying 10+ acres and popping on 50 of these mobile homes, err permanent structure homes, on there.

Not going to solve the housing crisis, but tiny homes and manufactured homes have their place.

These exist in Texas pretty abundantly.

Don’t know how this solves the issue faster or better than apartments or townhouses(high density housing) though.

You’d have the same sqft with better amenities for cheaper that way.

 

[PhitePhan]

 

[Islam Imamate]

Seems fair.

Mobile home parks exist. Usually not the best places to live. Nothing wrong with buying 10+ acres and popping on 50 of these mobile homes, err permanent structure homes, on there.

Part of the point of getting rid of the permanent chassis requirement is so that manufactured homes aren't just relegated to "mobile" home parks.

Not going to solve the housing crisis, but tiny homes and manufactured homes have their place.

I doubt any one thing will but this could be a key piece of the puzzle. Removing the chassis requirement could lead to higher volumes in sales which could reduce the price further as factories can better take advantage of economy of scale at higher volumes.

The article fits into why modular homes, which are also built in factories but in parts and assembled on site rather than completely built like manufactured homes, never really delivered on their promise of cheaper homes. The issue is lack of necessary volumes to take advantage of the factory assembly and a trend towards customized modular homes marketed toward the wealthy.

These exist in Texas pretty abundantly.

Don’t know how this solves the issue faster or better than apartments or townhouses(high density housing) though.

You’d have the same sqft with better amenities for cheaper that way.

This is more for people who own their land and want to buy a house more cheaply. It'll likely be more common in suburbs closer to the periphery than the city center where apartments are more common.

It's never a good idea to buy a manufactured home if you don't own the land it's installed on. Either buy your own land or rent it out.

 

[Mr Holmes]

Keep those things in the trailer parks where they belong.

 

[Islam Imamate]

Keep those things in the trailer parks where they belong.

Why?

 

[USA!USA!]

All for making homes more affordable. It is outrageous currently. You are an old elitist fuck if you don't acknowledge the struggles of the younger generations.

 

[Islam Imamate]

All for making homes more affordable. It is outrageous currently. You are an old elitist fuck if you don't acknowledge the struggles of the younger generations.

I agree with your sentiment here but tou voted in favor of the second option whereby manufactured homes are treated as distinct from site built homes and subject to zoning restrictions, why is that?

 

[USA!USA!]

I agree with your sentiment here but tou voted in favor of the second option whereby manufactured homes are treated as distinct from site built homes and subject to zoning restrictions, why is that?

I clicked the wrong one accidentally. Changed it.

 

[Rob Battisti]

Part of the point of getting rid of the permanent chassis requirement is so that manufactured homes aren't just relegated to "mobile" home parks.

I doubt any one thing will but this could be a key piece of the puzzle. Removing the chassis requirement could lead to higher volumes in sales which could reduce the price further as factories can better take advantage of economy of scale at higher volumes.

The article fits into why modular homes, which are also built in factories but in parts and assembled on site rather than completely built like manufactured homes, never really delivered on their promise of cheaper homes. The issue is lack of necessary volumes to take advantage of the factory assembly and a trend towards customized modular homes marketed toward the wealthy.

This is more for people who own their land and want to buy a house more cheaply. It'll likely be more common in suburbs closer to the periphery than the city center where apartments are more common.

It's never a good idea to buy a manufactured home if you don't own the land it's installed on. Either buy your own land or rent it out.

Multi quote isn’t working for me so I apologize.

Who in the world owns land but doesn’t have a house on it who also doesn’t have enough money and would need to have a modular home?

The numbers required to overcome the fabrication issue aren’t going to be made up with this change. This is a chicken or the egg situation. Making the change doesn’t lower the price in of itself. So sales aren’t going to increase thereby making the fabrication cheaper.

You realize there are apartment complexes in the suburbs, right? They aren’t mutually exclusive.

I’m fine with the change, but it doesn’t seem like it would change anything in the short or long term to be honest.

 

[Islam Imamate]

Multi quote isn’t working for me so I apologize.

Who in the world owns land but doesn’t have a house on it who also doesn’t have enough money and would need to have a modular home?

IIRC don't you have a plot of land you're going to build a house on? If so then just imagine someone like yourself with less money and land who would settle for a manufactured home.

Other examples would be people who live in more rural areas and have larger properties and might want to add another home for an adult child or an older parent. If you drive through the more rural areas of the South is not uncommon to see more than one manufactured home on the same property.

Heck a lot typical SFHs with somewhat larger yards could probably fit a smaller manufactured home as an ADU.

The numbers required to overcome the fabrication issue aren’t going to be made up with this change. This is a chicken or the egg situation. Making the change doesn’t lower the price in of itself. So sales aren’t going to increase thereby making the fabrication cheaper.

It will lower the price because now they won't have to add the permanent steel chassis. More demand would hopefully mean the price goes down per unit. But even as is manufactured homes are cheaper than site built ones.

You realize there are apartment complexes in the suburbs, right? They aren’t mutually exclusive.

Never said they were mutually exclusive, just think that manufactured homes would be more popular in the suburbs and outskirts of the city while apartments would be in the city but there will be exceptions in both directions.

Then again you're against both aren’t you?

I’m fine with the change, but it doesn’t seem like it would change anything in the short or long term to be honest.

Certainly some of the people cited in the article would disagree so where do you think they're wrong?

 

[Rob Battisti]

IIRC don't you have a plot of land you're going to build a house on? If so then just imagine someone like yourself with less money and land who would settle for a manufactured home.

Other examples would be people who live in more rural areas and have larger properties and might want to add another home for an adult child or an older parent. If you drive through the more rural areas of the South is not uncommon to see more than one manufactured home on the same property.

Heck a lot typical SFHs with somewhat larger yards could probably fit a smaller manufactured home as an ADU.

It will lower the price because now they won't have to add the permanent steel chassis. More demand would hopefully mean the price goes down per unit. But even as is manufactured homes are cheaper than site built ones.

Never said they were mutually exclusive, just think that manufactured homes would be more popular in the suburbs and outskirts of the city while apartments would be in the city but there will be exceptions in both directions.

Then again you're against both aren’t you?

Certainly some of the people cited in the article would disagree so where do you think they're wrong?

Listen, I appreciate how much you want to add homes. You just keep finding these weird edge cases that only impact such an incredibly small population as to make literally no difference to the situation.

I don’t yet have that land, but when I will, the lot will be hundreds of thousands of dollars. You can’t just buy land for cheap and buy a cheap home. Your land tax idea would be in direct opposition to this as well.

Anyway, I’m not opposed to this, it just does nothing.

So 200k new manufactured homes could be 5-10k less if this happened. Wow.

I’m all for this.

I’m almost entirely sure that you have no idea what the suburbs are like. You live in the sticks.

I live in the suburbs. Around the corner are about 1k apartments between 4-5 apartment complexes. This is within 2 miles of suburban neighborhoods.

There are multiple townhouse complexes.

I’m not against any of this. I’d prefer to not have all apartment complexes but it’s not a big deal. This is mostly a traffic issue.

I truly think that you keep thinking real life works differently than it does. That in a neighborhood there are open lots that people would buy and then put a manufactured home on if only it was 5k less.

Land is bought by developers and they maximize their return with SFHs. That’s how it works.

I have no problem with this proposal and am confident that it wouldn’t really make that much of an impact at all in terms of housing prices across the board.

 

[TeTe]

Seems fair.

Mobile home parks exist. Usually not the best places to live. Nothing wrong with buying 10+ acres and popping on 50 of these mobile homes, err permanent structure homes, on there.

Not going to solve the housing crisis, but tiny homes and manufactured homes have their place.

These exist in Texas pretty abundantly.

Don’t know how this solves the issue faster or better than apartments or townhouses(high density housing) though.

You’d have the same sqft with better amenities for cheaper that way.

In San Diego people pay more to lease the land they're sitting on than the mobile home itself.

 

[Rob Battisti]

In San Diego people pay more to lease the land they're sitting on than the mobile home itself.

100%

I have no issue with this idea, but I just have doubts as to it really helping.

 

[LeonardoBjj]

Seems fair.

Mobile home parks exist. Usually not the best places to live. Nothing wrong with buying 10+ acres and popping on 50 of these mobile homes, err permanent structure homes, on there.

Not going to solve the housing crisis, but tiny homes and manufactured homes have their place.

These exist in Texas pretty abundantly.

Don’t know how this solves the issue faster or better than apartments or townhouses(high density housing) though.

You’d have the same sqft with better amenities for cheaper that way.

- We dont have those here. Never seen one close.

 

[Rob Battisti]

- We dont have those here. Never seen one close.

I mean, you have a lot of other stuff we don’t have though. Just think of slums but in separate houses

 

[LeonardoBjj]

I mean, you have a lot of other stuff we don’t have though. Just think of slums but in separate houses

- I'm not criticizing. But a smal motorhome here is so expensive, that i dont see a poorf person afording one.

Just think of slums but in separate houses

- The ones i've seem on tv have more sanitary than some slums here.