HUD Plan Could Make Manufactured Homes More Affordable

The U.S. Department of Housing and Urban Development is preparing changes designed to expand manufactured housing, lower construction costs and give builders more flexibility.

The effort follows the bipartisan 21st Century ROAD to Housing Act, which changed the federal definition of a manufactured home to allow construction with or without a permanent chassis.
 

What is changing?

A permanent chassis is the steel frame traditionally used as the base of a manufactured home. Removing that requirement could allow builders to use more design options and create homes that are easier to assemble, transport and install.

HUD plans to review and update rules involving:

• Structural design.

• Energy efficiency.

• Transportation and lifting.

• Foundations and anchoring.

• Home installation.

• Factory certification.

• Quality control.

• Multifamily and multistory construction.

The agency is expected to update the manufactured-housing construction and safety rules in Part 3280 and installation standards in Part 3285.
 

Could this lower home prices?

Removing the chassis requirement could reduce construction costs. Industry estimates suggest the change may save about $10,000 per home.

Manufactured and modular construction can also reduce building time because many components are produced in a factory and assembled at the site. That could help developers build:

• Starter homes.

• Workforce housing.

• Affordable apartments.

• Larger manufactured homes.

• Multistory modular developments.

However, lower construction costs do not guarantee lower selling prices. Land, permits, financing, transportation, utilities and local fees can still make a home expensive.
 

Why zoning matters

Federal rules determine how manufactured homes are built, but local governments usually control zoning and land use.

Cities and counties may have different rules for:

• Where manufactured homes can be placed.

• Foundation and installation requirements.

• Minimum lot sizes.

• Community design.

• Multifamily construction.

• Utility and road connections.

Developers say inconsistent zoning remains one of the biggest obstacles to expanding manufactured housing.
 

What happens next?

HUD must develop revised standards for homes built without permanent chassis. The agency will also consider how to approve new designs, certify factories and maintain safety standards.

The Congressional Research Service says the law also requires states to update their certification processes for the new manufactured-housing standards.

Builders will likely need to wait for the updated regulations before chassis-free designs can be widely produced and approved.
 

Bottom line

HUD’s new manufactured-housing plan is intended to increase housing supply and support more affordable homes.

Removing the permanent chassis requirement could cut costs and encourage new designs, but the impact will depend on updated HUD standards, local zoning rules and the cost of land and financing.

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