Minnesota Manufactured Home Builder Shifts Production To Build Homes For Victims Of Hurricanes

Highland Manufacturing to build “one-bedroom express units.”

This is the busiest time of the year for Highland Manufacturing, the Worthington, Minnesota based modular and manufactured home builder. Highland will shift almost entirely from building homes for home purchasers to building houses for FEMA destined for victims of Hurricanes Harvey and Irma, as reported by West Central Tribune.

Daryl Muzio, general manager at Highland Manufacturing, got the call August 27th, after Hurricane Harvey hit the Texas gulf coast. He was told the Federal Emergency Management Agency (FEMA) had made a request for 4,500 housing units. By the following Friday, Muzio had already agreed to build more than 150 units.

“We’ll be building 167 through January,” said Travis Morrison, safety and continuous improvement foreman for Highland. “After that, another 130 per month.”

The Worthington factory’s 21 stations typically build two-and-a-half homes every day. However, on FEMA’s schedule, they’ll need to produce four on a daily basis.

The houses, called “one bedroom express units,” are small structures, eight feet wide by forty-eight feet long. They’re much more basic than Highland’s usual offerings, and the units are highly portable.

Highland’s parent company, Champion Home Builders, is one of the “big three” producers in the manufactured home industry, along with Clayton Homes and Cavco Industries. The three will build a majority of the homes FEMA has requested.

Highland builds custom manufactured homes for customers throughout the Midwest, including in Minnesota, Colorado, Nebraska, Wisconsin and more. The manufacturer will shut down nearly all of its usual business while the construction of FEMA homes is underway. So what’s wrong with that?

Will reduced capacity mean higher prices and longer wait time for buyers of manufactured homes?

FEMA has asked for 8,500 homes so far, but more than 560,000 hurricane victims have already requested housing assistance. With additional hurricane funding recently authorized by Congress, FEMA will likely ask for even more manufactured homes.

To put FEMA’s potential need for manufactured homes in perspective, the annual total production of housing units from all of the nation’s manufactured home builders combined has not exceeded 100,000 units per year within the last 8 years.

As these manufacturers gear up to produce only or mostly highly profitable FEMA units, the reduction in capacity could mean a lack of home availability from all manufactured home producers for their core customers, resulting in higher prices and extended wait times. The lack of supply will also adversely affect retailers by reducing their number of display models in inventory, as well as risking the loss of pending customers if they attempt renegotiating a previous price quotation.

The retailers are already getting the bad news, with some manufacturers recently announcing hefty price increases or surcharges that they will have to pass along to their customers. Retailers expect more price jolts as FEMA production proceeds.

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