Chairman Price Statement at Manufactured Housing: Supporting America’s Largest Unsubsidized Affordable Housing Stock Hearing
Congressman David Price (D-NC), Chair of the Transportation, and Housing and Urban Development, and Related Agencies Subcommittee, delivered the following remarks at the Subcommittee's hearing on the Manufactured Housing: Supporting America’s Largest Unsubsidized Affordable Housing Stock:
We are here today to discuss the important role that manufactured housing plays in response to our nation’s affordable housing crisis and some challenges that face manufactured housing communities.
It will be helpful first to clear up some misconceptions about manufactured housing. Long gone are the trailer parks of yore, replaced by manufactured or mobile home parks that are no longer transient but often are established communities – spaces where children grow up and senior citizens find a stable place to live and interact.
And no longer are most manufactured homes “tornado magnets.” Modern day manufactured housing, built to the standards laid out in HUD’s regulatory framework—which we expect updates to—are actually safer and stronger than many houses built on-site.
These are not just temporary or disposable structures; they are homes to more than 3 million people in America. Many live in communities—or mobile home parks—where they often own the home itself, but not the land it sits on.
Though a higher prevalence of homes are located across the South and in Western states, manufactured homes exist across the country, in urban, suburban and rural areas alike. In my home state of North Carolina, manufactured homes account for almost 13 percent of the state’s housing stock.
Nationally, almost two-thirds of manufactured homes are owner-occupied, by working-class, elderly, and immigrant families looking to maintain a sense of place and community.
Nationwide, the median annual household income of manufactured home residents who own their homes is roughly half that of site-built homeowners. Over a quarter of these homeowners earn less than $20,000 annually.
While the cost to own or rent a manufactured home is lower than most homes built on site, residents of manufactured home communities face distinct threats to their homes and way of life.
The average community is over forty years old. Many of these communities face significant infrastructure and resilience challenges, struggles that are only made worse by rising threats of natural disasters and extreme weather events due to climate change.
Historic and continued disinvestment in infrastructure for these communities only serves to exacerbate financial pressures on owners and residents alike.
There is another, equally serious threat as well. In recent years, large financial and private equity firms have begun purchasing manufactured home communities, especially in high-growth areas, subsequently raising rents on land and associated fees. For many homeowners, including a substantial portion who live on fixed incomes, this can force them into impossible decisions.
Some have taken on additional tenants to handle rising costs, while others have to decide to prioritize paying rent for the lot their home sits on over payments for life-saving medications.
Those who cannot cut enough corners to make the rent payments find themselves forced to leave their community or even be evicted, including in the midst of the COVID-19 pandemic.
As the cost to move a manufactured home is thousands of dollars, and many cannot be moved without critical structural damages, there is often no choice but to sell the home.
And even here homeowners are dealt another blow. Because of the way that manufactured homes are titled in the vast majority of states, they depreciate in value even as the cost of the land underneath them rises.
Just like your new car loses value when you drive it off the lot, manufactured homes titled as personal property lose their value despite the fact that homes rarely move once initially placed, a legal holdover from the days of trailers.
Only in a few states—and with extra hurdles—are these homes able to be titled as real property, allowing manufactured homeowners the same financial benefit as site-built homeowners.
For homeowners in these communities, these pressures are all too real. Over the past few years, we’ve seen story after story of predatory takeovers of manufactured home communities by private investment firms seeking a means to a quick profit.
Manufactured home communities can be a source of fast money, but only when they become unaffordable to their residents—or are shuttered and rebuilt as strip malls or market rate housing. And of course that is a possibility: These tracts may be taken out of housing altogether, converted to more lucrative uses, and then residents displaced.
Federal policy has long shied away from the issues specific to mobile and manufactured homes, but I believe that is about to change.
A few weeks ago, Secretary Fudge relayed to this subcommittee some of the ways HUD and local jurisdictions have begun addressing manufactured homes. And just last week, the White House released a Housing Supply Action Plan that included specific proposals to expand the availability and preserve the affordability of manufactured homes as a major component of the needed increase in our housing supply.
The Federal Housing Finance Administration, as well, recently released the “Duty to Serve Underserved Markets” plans for 2022-2024 for Fannie Mae and Freddie Mac, which include guidance on financing options for manufactured housing. Still pending before the Congress in the Build Back Better bill is $500 million in additional CDBG funding dedicated to infrastructure improvements for manufactured housing communities.
There is still much work that needs to be done—and done quickly—alongside these policies to help preserve the affordability of manufactured homes and communities.
There is a task for local governments here, from managing land use to enforcing safety and sanitation standards, and a challenge to non-profits and community-minded developers as well. But our focus today is on federal policy – policy that despite the breadth and diversity of HUD’s portfolio, has often seen the manufactured housing sector fall through the cracks.
How can existing programs and funding streams be adapted – or should new ones be demonstrated or established – to empower manufactured home residents and communities, to incentivize the preservation of these communities and disincentivize displacement, to support rehabilitation and renovation where indicated, to keep properties and investors in the affordable housing sector?
We have an outstanding panel of witnesses today who can help us understand these challenges and areas of opportunity, and to speak to what aspects of federal policy and programs need to be modified and expanded so we can productively support the Americans who make manufactured housing their homes.
- Dr. George McCarthy, President and CEO, Lincoln Institute of Land Policy
- Michael Liu, Director, Miami-Dade County Public Housing and Community Development Department
- Clemente Mojica, President and CEO, Neighborhood Partnership Housing Services, Inc.
- Lance George, Director of Research and Information, Housing Assistance Council
- Mary O’Hara, Executive Vice President, ROC USA
I look forward to hearing from our witnesses this afternoon, and of course, collaborating with all my Subcommittee colleagues to produce an FY23 THUD bill we can all support.