Could Manufactured Homes Make California Housing More Affordable?

Could mobile homes-–yes, manufactured housing—help make California housing more affordable?

Of course, they could.

Sadly, factory-built homes aren’t a significant part of the state’s housing policy discussions despite offering eye-catching savings.

The following are excerpts from an analysis of the state of manufactured housing in the Golden State by Jonathan Lansner/Orange County Register ([email protected])

Let me explain the cost angle with the help of my trusty spreadsheet, which reviewed some stats from the Census Bureau compiled by Lending Tree about the current stock of manufactured housing. And just so you know, this housing hasn’t been officially called “mobile homes”  since 1976, when the federal government set higher construction and installation standards for this residential niche.

California has 508,589 manufactured homes, No.4 among the states. But considering the state’s vast size, that’s only 3.5% of the 14.5 million California residences–the 14th smallest share in the nation.

The obvious lure is the price tag. A typical California manufactured home is valued at $110,200. Yes, that’s the fourth highest in the nation, but it’s dwarfed by the $648,100 value for a California single-family home, which is No. 1 in the U.S.

“It’s the highest value in housing there is,” says Jess Maxcy, CEO of the California Manufactured Housing Institute, A Riverside-based trade group.

He also notes that Californians buy more traditional homes priced above $1 million than they do those priced under $500,000.

“Still, we build housing for the lowest cost,”  Maxcy says.

Maxcy, who started in the industry 60 years ago, has a collection of shock-value stats about this pricing gap.

He highlights the average price of a new California manufactured home this summer. These residences have 1,455 to 1,560 square feet of move-in-ready living space and cost an average of $177,000–land not included.

One problem for Maxcy’s industry is that there are only seven factories building these homes in California, down from roughly 50 at the industry’s peak production in the 1960s. So any surge in demand would be hard to satisfy, and Maxcy adds there’s “zero interest” in adding new California manufacturing capacity.

Manufactured homes may be just a sliver of home construction, but they serve a key niche–folks who otherwise couldn’t afford to own.

Nationally, there was 9% of single-family construction last year, says a report from the Urban Institute. In California, the 3,344 manufactured homes equaled 5% of the new home market.

But this housing, the institute wrote, “plays a dominant role in the low-price segment of the market. New site-built production in this segment is largely nonexistent, and affordability constraints are especially acute. With the right mix of zoning reforms and financing improvements, a meaningful supply of manufactured homes can be added to the affordable housing supply in the coming years.”

The lack of policymaker interest in manufactured homes is symbolic to Maxcy of a larger problem within the hunt for affordable housing, Nobody’s thinking about cheaper construction.

In all the policy meetings he’s participated in over his lengthy career, Maxcy says, “they never discuss how to reduce the cost of building homes. The idea is always how to subsidize the project. So, where’s the incentive to lower costs?

 

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