Today we have news that Alfonso Jackson will resign from his position as Secretary of the Department of Housing and Urban Development. While there could be some debate if HUD Secretary is the leading housing figure in the federal government, there is less so that this person is the most important in regard to manufactured housing.

As Secretary, Jackson and his successor have the ability to set standards for the mobile home industry in the United States. Yes, modular homes are not under the purview of this figure — they are regulated at the state level. But, mobile homes are and the regulatory vision that they work beneath matters.

This page has earlier asked what might constitute an ideal agenda for community development within manufactured. This is an opportunity to ask a slightly different question. What should the next Secretary do to preserve the interests of manufactured housing residents? Are there distinct policies that would serve the industry as well?

I will put forward a few. Please send me some of your own.

Tax credits. The 1990s saw a reorientation of site built housing around decentralized development paid for with funding through capital raised by the sale of federal tax credits. Both the low income housing tax credit and the historic preservation tax credit changed the course of housing. Now we have housing that is paid for by government funds, but designed with more local input. Things look better, they work better.

The same capacity should be given to non profits that want to work with manufactured housing. HUD would have to work with the IRS to make it happen. Even a small wrinkle of funding could leverage a lot of activity.

The Energy Policy Act of 2005 included tax credits for Energy Star manufactured homes. The 2007 Energy Bill has not yet passed the Senate. That bill would have to renew those credits. The next Secretary should be an advocate for the renewal of those credits for manufactured housing.

Insurance: Something needs to be done. A lot of mobile homes are built in areas where climate change (or something else, maybe it is Horton, if you do not believe in climate change) is wreaking havoc. In Florida, premiums are getting too high for homeowners. With respect to parks, Section 207 insurance did not insure any mortgages for parks or park rehabilitation last year.

Debt for Park Acquisition: We need more pools of money to buy land that have zoning for mobile home parks. That money should be accessible to non-profits and to resident co-operatives. This could work through State Housing Finance Agencies, or directly via HUD. The debt should be collateralized on land.

This could be coupled with some kind of support (tax credits or capital gains tax incentives) to park owners who sell their properties to resident or non-profit groups.

Real Property: HUD should develop national guidelines for getting mobile homes re-titled as real property. We have a variety of rules in states. That would make sense if regulatory authority was mainly at the state level. It’s not. We need to create a means for getting more mobile homes certified as real property because that will lower finance costs and make the product more accessible to more people. Some states provide the designation when a home gets a long-term lease on the land underneath it. Imagine how much easier it would be to securitize real property loans on mobile homes with a uniform lease structure.

Katrina: Now that the Hurricanes have passed and the cleanup continues, HUD needs to be leading the policy debate, not FEMA. For better or worse, the problems of travel trailers in the Gulf have become a weight on all efforts to repair the perceptions of manufactured housing. The industry suffers a lot of harm to its reputation by ceding housing policy on this high-profile event to the first responders.

Those are just a few. Send me a few of your proposals.

I have been involved in helping to plan a conference for regional housing and planning officials in North Carolina. The conference aims to introduce about 100 government and nonprofit professionals into how to revitalize the manufactured housing in the four or five counties within their planning area.

Although there are a lot of places where we could have begun, what everyone wanted to know was how to navigate through the process of getting mobile homes transformed into real property. This is a thorny issue, because by their very nature “mobile” homes are not affixed to the land and thus they are not real property.

That said, mobile homes usually don’t move around that much. In practice, a mobile home is rarely moved. Residents who own their mobile homes but rent lots in parks are among the least transitory of any renters. In fact, it can be difficult to move a mobile home. In one of the counties where these planners came from (Robeson County, North Carolina), it is not legal to move pre Hud Code homes into the County.

In North Carolina, mobile homes sold by a dealer are given a Certificate of Title by the Department of Motor Vehicle. When a mobile home is sold, that Certificate of Title is transferred to the new owner.

Of course, it can be more complicated. If the home is placed on a lot directly by the manufacturer, then no Certificate of Title is issued. Instead, the home gets a Certificate of Origin. The owner can then apply for a Certificate of Title. The Certificate of Title guarantees that the home will be treated as personal property. In general, that would not seem positive. At the same time, the Certificate of Title should make it smoother if the owner wants to sell his home.

Alternatively, the owner can seek to get the mobile home classified as real property. If the home already has a Certificate of Title, the owner can seek to get that form canceled. The owner must cancel the Certificate of Title if he or she owns the land under which the home will sit where the owner of the home is going to place the mobile home.

In order to be financed as real property, lenders often insist that the mobile home be placed on a real foundation. The wheels and hitch must be removed. In some cases, lenders want the owner of the home to be one and the same as the owner of the land.

Another confusing issue is the right of a person to act as a broker of a mobile home. When a home is classified as personal property, an independent sales person is registered as a dealer and licensed as a motor vehicle dealer by the Department of Motor Vehicle. When the mobile home is real property, a real estate license is required.

Alternatives

Other states have come up with some wrinkles.

In Arizona, a bill before the Legislature would change things. In legislation under consideration in this session, a home in a mobile home park can potentially acquire the status of real property. Granted, there are a few steps. First, the home must be relinquished of its wheels and hitches and effectively attached to the land. The resident does not have to own the land. Rather, the owner of the home must have a lease on the lot in the park for at least 20 years.

An obstacle

One problem to converting any manufactured home to real property is that furniture and other additional elements can not be included in a real property mortgage.

Sometimes I will hear a person pan manufactured housing on the grounds of its cost. That usually surprises me. Prices on manufactured housing are generally far below that of site built homes. In fact, it is one of the virtues that makes the sector attractive as a tool in community development. So I want to hear what they mean when someone makes that claim.

Those voices usually point out that hidden costs bring the overall price up. Prices on hookups, on transportation, on finance, et al. There are other arguments, too, that hint at “costs.” For example, that the sales prices on older homes fall to an extent because of perception, or that inadequate infrastructure, which often exists where mobile homes are zoned, curbs appreciation.

I don’t know if those opinions can be validated or rejected. Most likely, there are some elements of truth in what they represent. But, I have witnessed one place where “prices” for mobile homes are exactly the same as for site-built homes — in impact fees.

In Orange County, North Carolina, a site-built attached multi-family home and a singlewide both bear a $1,420 impact fee. A single family detached home and a doublewide manufactured home both bear a $3,000 impact fee. In the Chapel Hill-Carrboro, the same fees are $1,979 and $4,407, respectively.

A 2004 St. Petersburg Times story profiled a family that was waiting to move into a donated double wide while a father sought $1,036 of the $4,810 in impact fees required by residents of Pasco County, Florida. Those fees can be higher if a mobile home is attached to Pasco County water and sewer.

The fees seem particularly high when the underlying market value of a home might only be twenty or thirty thousand dollars.

The logic behind impact fees is to force development to bear the costs, both financial and economic, that it brings to a community. It is an alternative to raising taxes on all property owners.

Those costs include the marginal increases in demand for roads, schools, hospitals, water, sewerage as well as subsequent traffic and fire protection that can be attributed to the new development. Governments can collect the fees prior to issuing a certificate of occupancy on a new home, or a change of occupancy on an existing structure.

The social costs brought about by families living in mobile homes are no different than those created by families living in single family detached housing.

For-profit developers, realtors, and other groups are known to fight impact fees. In Durham County, North Carolina, developers were able to block impact fees. Chatham, Cabarrus, Stanley as well as Orange Counties are among North Carolina counties that have passed impact fees of some kind after they were supported in a recent North Carolina legal ruling.  Durham County is home to this blog, and next door to Orange County.

Nevertheless, the tax burden is regressive — it falls equally upon both the poor and the rich. While impact fees are an effective means of taxing the actors who create social costs, they constrict a community’s flexibility to incorporate concerns about equitable housing opportunities into its plans.

That is what is so interesting about a new law being proposed in Florida right now. House Bill 699, introduced by Rep. Gary Aubuchon (R-Cape Coral) encourages Florida counties to roll back their impact fees. The carrot for such a maneuver is that they will gain access to $75 million in funding for affordable housing.

Aubuchon modeled his bill after a similarly incentivized program in Charlotte County, Florida. Any manufactured home built after 1994 is eligible, provided that the owner of the home also owns the land underneath the unit. Specifically, a county would have to reduce its existing impact fees by 25 percent for a period of 18 months. The bill would take effect after July 1st.

The Bill is now in committee.

People may not realize it, but one of the emerging trends in factory-built housing is the use of new building technologies to produce more environmentally sustainable homes.

A leading builder in this effort is Palm Harbor. Last year, the US Environmental Protection Agency made Palm Harbor Homes (PHHM) its Energy Star Partner of the Year.

Energy Star is a rating system. It is one of several green building standards. Others include United States Green Building Council’s LEED and the National Association of Home Builder’s Green Building Guidelines. Energy Star homes generally save each household between $200 and $400 per year on utility costs. Since about 500,000 homes already meet the Energy Star standard, EPA estimates that this new building trend accounts for savings that mitigate the carbon impact of as much as 25 million cars.
Palm Harbor’s homes feature energy efficient heat pumps and energy saving design features. The company has built its efficiency around the EnerGMiser system. This is a series of design features that collectively lower costs.

• A SEER-rated 13 High Efficiency air conditioner
• programmable thermostats
• graduated air delivery
• sealed duct systems
• mini blinds on windows

The EPA’s standard in giving an Energy Star rating is for homes to reduce their energy demands by about 30 percent. Palm Harbor estimates that its homes cut utility costs by between 20 and 40 percent.

Palm Harbor has spent some effort measuring the energy saving impacts of its homes.

In 1994, Duke Energy did a study of a Palm Harbor home. The study estimated that its energy efficient features would save a household $40,000 over course of the next 20 years, according to Gary Neff from Palm Harbor.

More recently, the Department of Energy and Palm Harbor have spent several years working together on an energy experiment at North Carolina A&T University. The test features two homes located in Greensboro, North Carolina. One home is built to Palm Harbor’s energy saving specs, while the other is built to 1993 HUD code energy standards. The 1528 square foot homes are not occupied, but timers control the use of appliances and lights as well as heating and cooling.

Below is a picture of one of Palm Harbor’s custom modular homes — the Cambria. It is 2,640 square feet with four bedrooms and 2.5 baths. It comes set up with air conditioning, plumbing, Moen faucets, 9 foot ceilings, and ceramic floors for $205,000.

The results of the NC A&T study show that the energy efficient design standards save a lot of energy — at least 33 percent for most of the year and as much as 70 percent in the winter. Overall, the combined heating, cooling, and water loads in the two homes differed by 55 percent.

Homes like the Cambria are important. The ability of the industry to maintain a place in the mind of consumers concerned over energy and sustainability could grow in significance.

As well, the Cambria represents the kind of higher-end product that contradicts the negative perceptions that sometimes cloud factory-built housing. This is a home built with top specs, in a direct-to-the consumer sales format, with a warranty.

It would be a mistake, too, to link only the high-end custom made modular homes with green building. Many manufactured housing builders offer Energy Star homes at much lower price points. The New Hampshire Community Loan Fund provides singlewide HUD code manufactured homes that meet Energy Star standards at its Pepperidge Woods site in Barrington, New Hampshire. Those homes come with membership in a cooperative that controls the land where the homes are located, in a region with very high land costs, and yet the prices are under $165,000.

The City of La Grange, Missouri has adopted a new ordinance to address the problems surrounding its many abandoned mobile homes.

Ordinance 514 stipulates that any mobile home left unoccupied for 60 consecutive days will be deemed abandoned and subject to seizure.

La Grange’s Council approved the ordinance on Dec. 10th, 2007.

The preamble in the bill recognize three forces to justify their actions:

• abandoned mobile homes decrease the value of surrounding properties
• they are often the locus for drug activity
• they are detrimental to public health and morals

La Grange is a city of about 1000 people located north of Quincy, Illinois.  It borders the Western Bank of the Mississippi River.  A few famous things about La Grange: the city has a new youth center and a casino.

In the 2000 Census, mobile homes made up 110 of the city’s 523 housing units.  There were 86 vacant housing units.  Among those 86 vacant homes, 28 were mobile homes and 39 were detached single family homes.

It is not clear if a follow up bill will be drafted to address the potential moral and public health consequences of abandoned stick built housing.