The U.S. Department of Housing and Urban Development is giving builders of manufactured houses a green light to include up to four dwellings within a structure as part of the most extensive update for the housing type from the agency in more than 30 years.
The move and other changes are expected to modernize manufactured housing in an effort to make it more appealing and expand the nation's affordable housing supply.
The agency said that companies can start building the multi-unit single-family homes immediately if they meet certain building standards, rather than waiting six months for the new regulation to go into effect. The rule change has the potential to increase manufactured housing installation in densely developed urban and suburban neighborhoods.
“This update of the HUD Code is long overdue and will help increase production while also ensuring modern designs to suit the needs of families,” the agency’s Acting Secretary Adrianne Todman said in a statement.
After reaching production of more than 350,000 homes annually in the late 1990s, manufactured housing dropped off to a recent rate of about 100,000 per year, according to data from Harvard University’s Joint Center for Housing Studies.
Municipal zoning restrictions that bar this type of housing from many areas and lingering negative perceptions of the product have played a major role in reducing production, the center said in a recent report. Tightened lending standards have also hampered people’s ability to buy manufactured homes.
Jim Trepinski, who manages a Cavco Industries factory that builds manufactured homes in Rocky Mount, Virginia, said his company obtained approval from HUD earlier this year for a pilot project to build duplexes in the state. The company has two duplex models, one with two floors comprising two sections attached together, and the other with a single section. HUD's announcement expands approval to all 50 states and adds the option of three to four units.
“It’s pretty exciting that HUD has opened the door for this to happen,” Trepinski told CoStar News. “It has the potential to have a significant impact on the crisis we have with affordable housing.”
Stigma
The stigma of poorly constructed manufactured housing being an eyesore should not apply to what companies are building today, he said, given that the materials builders use are comparable to regularly built homes on-site. In the current market, manufactured homes have a distinct advantage on price because they can be built much more efficiently and quickly, he added.
Manufactured houses are sometimes inaccurately equated with mobile homes, which were structures build before HUD started regulating that building type in the mid-1970s that weren't affixed to the ground as manufactures houses are.
Unlike regularly built housing or modular homes that must adhere to local and state building codes and pass inspections at the house site, manufactured housing is regulated by HUD in the factory where it is constructed. That allows substantial cost savings, Trepinski said.
Besides enabling up to four housing units in a manufactured home structure, HUD announced several other regulatory changes to allow more varied house designs like open-floor plans and homes with attics.
The updates to the "construction code for manufactured housing will support the industry in delivering homes with innovative designs and modern features, bringing attainable home ownership to more people across the country,” Lesli Gooch, CEO of industry trade group Manufactured Housing Institute, said in an emailed statement to CoStar News.