One of the things that cannot be said enough about the process of bringing reform to the manufactured housing industry is that it takes the willingness to have imagination. People can get locked into seeing the empirical evidence that dots the landscape — think run down parks, broken promises, and the like — and decide that manufactured housing has fundamental constraints.

That is an easy conclusion. A lot of the folklore of the South, from a Drive-By Truckers lyric to a Rick Bragg memoir, relies on the mobile home park as an important reference point. Sometimes its a reference for fallen dreams, but not always.

Bragg, for one, has some most ennobling words to say about life in a “trailer park.”

“Before the water went bad, most people in the trailer park never thought of their aluminum-skinned houses as a mobile home, only home. Hard against the rows of sugar cane, not far from the big chemical plants that light up the evening sky, the trailers in the Myrtle Grove park were dented but decent..In the late afternoon, the smell of real food –- smothered steak and stewed turkey necks –- drifts across the community of about 50 homes…Everyone seems to drift outside as the afternoon cools, as the wind blows in off the cane fields. Grandmothers tend small children, and about 3 p.m. a big yellow bus sends a throng of them running for the trailers that are pocked and warped but, here and there, freshly painted. Porches have been built on some.

That story portrays how mobile homes are first and foremost “homes” and places that deserve concern.

The point of this entry is that people get frustrated with what they see in the present, and decide that the sector is the cause of a problem.

That is the wrong conclusion. The fact remains that unless our society becomes willing to dramatically increase its commitment to housing, there will be a shortage for many. Manufacutred housing is popular, if only because people are deciding that it is the best choice that they can find.

Moreover, we know that better housing can come from within manufactured housing.

The innovations in New Hampshire are one example. There, low and moderate income people are using the manufactured home as part of a reorganization of the system of ownership. The result is a more stable and secure form of housing.

Then there are things like the new gated mobile home communities that are popping up in sunny climates, often meant to appeal to well-heeled retires. Here is a story about several in Texas, where amenities like a clubhouse, pool, a jacuzzi, and a basketball court. Residents still lease their lots.

The point is that message matters. And this is not an unimportant detail. No one really speaks for the entirety of the industry. There are trade groups, but each is often likely to side with one of the sub-groups within the industry — be it the manufacturers, the dealers, or the residents themselves. Sometimes people get together for a message, as in to use the words “mobile home,” instead of trailer, but is there evidence of systemic leadership in a broader sense?

Even HUD, challenged to regulate the industry, seems to step away from leading on mobile homes. How did FEMA manage to become the agency most people associate with mobile homes? (think of one word — Katrina)

It is hard to concentrate at work today, what with the developing crisis in the financial markets. Fannie Mae and Freddie Mac, the nation’s largest purchases of home mortgage securities, are spiraling downwards. What will be done about it? Will the regulators abandon their free market posture? Will Freddie be taken over? How would it be done? The questions go on and on.

People should be worried. The experts are not lying about the interconnected nature of our economy. Yes, have a very healthy economy in many ways. We have the rule of law, we have an exceptionally talented workforce, we have universities and hospitals and many beneficial institutions. Nonetheless, our mortgage market acts as one of the pillars of all that activity. Fannie and Freddie are the corner beams that keep it all together.

One way to imagine what it would be like, without them, is to look at manufactured housing. Neither agency has been active in buying securities made from manufactured housing loans. Yes, there are some programs where Fannie and Freddie participate. Those tend to be through special relationships, or for limited types of ownership arrangements. For example, the GSEs will buy homes with land owned by the same person as the unit.

That doesn’t do much for the millions of American households that live in land-lease arrangements. These are known often as “trailer parks.” A few private firms do buy the asset backed securities made from loans on manufactured housing. US Bank is a big player in this market, as is Wells Fargo, and Berkshire Hathaway. It might be comforting that the institutions who choose to invest in manufactured housing abs also happen to institutions that are emerging as “survivors” in the current crisis. Its a market without GSE participation, but with some corporate demand.

That is not much different from what could be on the horizon for single family site built homes in the United States if Fannie and Freddie collapse. Now, that’s a dire scenario and it hasn’t happened yet. Nor do any of our leaders appeared to be inclined to let it happen.

Nonetheless, the impacts that such a de facto policy of non-participation by the GSEs in manufactured housing paint a compelling motive for action. Manufactured housing is often criticized as a “depreciating asset.” One of the chief reasons for that is the lack of liquidity for loans made on used mobile homes. Its a cash market, sort of like the market for condominiums in Argentina.

And that drives down prices. If you live in a $300,000, maybe after Freddie goes down, you live in a $200,000 house. Oh, and you have a $15,000 ($1.5 trillion/number of U.S. households) mortgage on your share of that GSE debt that the government just assumed on your behalf.

The title of my book is “This is My Home.” The words sprung from something that a woman living in a nice single wide in Durham told me. She was angry. A local community development official asserted that she did not live in a house, as her “home” was in fact in a land-lease park. “This is my home,” she said.

Her assertion would seem to be self-validating. If she says her singlewide is her home, then it is. Yet the law finds a more nuanced perspective. The Supreme Court has often become the arbiter of disputes about this very topic.

Search Warrants and Mobile Homes

The Fourth Amendment says that police have to get a search warrant to search your “home.”

That is not true if they want to search an automobile. The motor vehicle exception creates a different standard for Fourth Amendment protections when the police want to search a car. Police can search a car, or any mobile vehicle, if they have probable cause. The logic, expressed in Carroll v. United States (1925), was that the mobility of a car creates an urgency that makes the procedural endeavor of getting a warrant an undue burden.

Well, what about a mobile home? It turns out it is not so simple. In California v. Carney (1985), the justices held that travel trailers deserve to be classified akin to cars. The decision has been interpreted to be relevant for situations involving boats, airplanes, and campers as well. Carney says that when a person living in a motor home is wanted for a felony, the police can enter his or her home at will.

In South Dakota v. Opperman (1976), the Court spelled it out further. It held that people have a lower expectation of privacy when they choose to live in a motor home

That means that people living in travel trailers (or boat houses, or airplanes, or cars) cannot expect that police will need a search warrant to enter their abode.

People living in mobile homes that no longer have wheels or a means of motorized transport are accorded a higher level of protection, however.

Mobile home residents have an advocate in Justice John Paul Stevens. He saw the inequity in the law for people who live in “mobile” homes. Justice Stevens insisted, in a dissenting opinion in U.S. v. Ross (1982), Stevens writes that officers should be able to recognize when a vehicle is actually a “living quarters.” In such an instance, he says, it deserves a higher level of protection, even if it doesn’t look like a castle. The residents have the right to expect privacy over their quarters. He points to a decision, United States v. Chadwick (1977), that found that although luggage is mobile, it should be accorded protection from unreasonable searches.

All of this is meant to provide another wrinkle in the many ways that the law currently undermines people living in manufactured housing.

Sometimes I talk to local officials who are concerned about the housing crisis, but do not feel that they can do much to support their own neighborhoods. Next week, in fact, I’ll be traveling down to the southeastern corner of North Carolina to speak to county and city government staff about this very topic.

Their concerns are two fold. They want to do something to increase the supply of quality affordable housing. But they are also weary about all of the abandoned mobile homes in their backyards. It is hard to say which is a greater concern. If you talk to police or solid waste officers, it is definitely the latter. If you speak to someone in zoning or in community development, though, it might be either way.

The truth is that a County government can do a lot to make a difference.

Financing

Loan-to-value limits obstruct the ability of residents and non-profits to acquire mobile home parks. Providing financing for mobile home park acquisition is a very cost-efficient means for Counties to increase the supply of affordable housing in their environs.

Santa Cruz County, in California, is one example. Santa Cruz operates its own mobile home park purchase program. It provides financing to both resident-owned and non-profit owned groups that want to acquire mobile home parks. They can also provide financing for these groups after an acquisition, in the event that they want to invest in improvements to infrastructure in their park.

This financing is vital. In today’s market, as perhaps never before, it takes a substantial down payment in order to acquire a park. To the extent that mobile home park residents skew towards a population group with lower levels of wealth, then putting together 20 or 30 percent down is a significant obstacle. Even when a park is operating at almost 100 percent vacancy and producing significant cash flows, most banks will still want to limit the loan-to values to 80 percent.

Access to this kind of financing makes a different for non-profit groups, too. It is fine for a non-profit to put some capital into an acquisition. Nonetheless, it doesn’t help. When more capital must be allocated, the mission of a non-profit is necessarily constrained. It reduces the ability of that non-profit to do the next project.

Counties are also wise to provide financing support for infrastructure upgrades. Let’s not forget the likely inequality: most neighborhoods with single-family site built housing get their infrastructure through bond financing. It is really the least that a County can do.

Counties should seek a lien against the land when they make these loans. The results are impressive, though. Consider the cost-efficiency of a County that provides 20 percent of the acquisition funding for a $3 million park with 150 units. That is $4000 in debt per unit. With a lien against the land, the risk is far less.

Abandoned mobile homes

This is a problem that comes up over and over when I visit rural counties. Last week, I spoke to a planner in Vance County, North Carolina who needed a fix for an entire park that was full of abandoned homes. The park is next door to the County’s new development of affordable single family housing. It makes for quite an eyesore.

In North Carolina, we have passed a bill that provides about $300,000 in funding for counties to remove abandoned mobile homes. It is some money, but more is needed to clean up the 40,000 abandoned units that currently exist across the state.

The legal issues are tougher. It is one thing to condemn a property on land in the possession of the building’s owner. It is different when ownership is split. If the owner of the trailer is a finance company in New York, then even serving papers is beyond the ability of a County tax agent.

Yesterday, voters in California said that they support curbs on the authority of public entities to use eminent domain, but that they want to keep rent control rules in place.

The decision is a blow to landlords and others who supported Proposition 98. The ballot measure would have phased out rent control not just in apartments, but also in mobile home parks across the state. Prop 98 wasn’t just defeated — it only got a “yes” from 39 percent of voters.

Proposition 99 passed with 62.5 percent of ballots cast. Moreover, only Colusa County voters rejected the measure.

There were some trends in turnout against 98. In Yolo County, where Woodland has passed a strong set of protections for renters in mobile home parks, 98 got 30.7 percent of votes while 99 got 57.1 percent.

In large urban areas, it was much the same story. Alameda (30.4 for 98, 66.7 for 99), Los Angeles (31.5 for 98, 63.6 for 99), and most notably San Francisco (25.3 for 98, 71.3 for 99) all split heavily against dropping rent control while still supporting eminent domain restrictions.

Just as we live in a country of blue and red states, California’s counties diverged on the measures in ways that show great geographic linkages. Inland counties were much more likely to support 98.

The only county with a coast that voted in favor of 98 was Del Norte, and by a slim 51 percent margin.

If both measures had earned more than half of all votes, as was possible, then the measure with more votes would have been enacted.