Issue link: https://read.dmtmag.com/i/106888
MHARR VIEWPOINT Time for a Removable Chassis Option -- Part One BY DANNY GHORBANI With manufactured housing production stalled after more than a decade-long decline, it's time to consider bold new approaches that could reinvigorate and expand the market for affordable manufactured homes. Those approaches, though, will need to tackle – headon – the forces that have been suppressing industry growth. And that means taking stock of the market, the industry's regulatory environment, the HUD Code industry's competitors and the industry itself. There are multiple reasons (analyzed in past editions of the MHARR Viewpoint) why today's manufactured housing, despite its unique combination of quality, affordability and consumer protection, is not even on the radar at HUD, is largely absent from the nation's housing opportunity and mortgage financing programs, and is subject to chronic (and in some cases worsening) discrimination in financing, insurance, zoning, placement and others areas. A prime source of this discrimination -- that can intimidate potential new homebuyers while it hurts current homeowners -- are limitations in the federal law and HUD standards governing the industry, that have been skillfully exploited by HUD Code industry competitors and perpetuated by regulators. The baseless and outdated negative "perception" of manufactured housing held (and in some cases nurtured) by government officials and others, should have been replaced long ago by the image of today's modern, technologically-advanced manufactured homes, if everything else were equal. But everything is not equal, because current federal law (despite Congress' best efforts to secure the status of manufactured homes as "housing") places an unnecessary and unjustifiable restriction on the FEBRUARY 2013 14 THE JOURNAL ability of the industry to reach its full potential, as well as the opportunities available to consumers to realize the full range of benefits and advantages offered by affordable manufactured housing. All of this, however, could be changed by one consumer option that would break the ice and provide the industry with a beachhead in the broader housing market – i.e., a class of topof-the-line homes, as an addition to and not as a replacement for traditional designs and models, including a purchaserdetermined removable chassis option that would compete directly with – and beat -- other types of housing. And there is no legitimate reason why such an option should not be available given that the current restriction is purely policy-based and unrelated to the proven technological feasibility and cost-savings of a removable chassis. With the ability to offer a class of purchaseroption removable-chassis homes, the industry could substantially expand its share of the housing market, competing directly with other types of similarly-sized homes. As long as it remains a restricted player in the market, though, limited by an artificial and unnecessary restriction to the same role that it filled 50, 60 or more years ago, the industry will be prevented – by an extraneous force – from achieving the market presence and credibility that it needs to grow and become a full participant in every aspect of the nation's housing programs, at complete parity with other segments of the industry. Of course, the HUD Code industry's competitors know that the across-the-board chassis requirement is a major Achilles Heel for manufactured housing, which is why they've done everything in their power -- for decades - to maintain it. This led to two lawsuits in the late 1980s seeking its elimination. While these legal actions ultimately did not overturn the permanent chassis requirement, MHARR and another industry organization followed the court's advice and took the matter back to Congress. As a result, language to delete the permanent chassis requirement was considered, debated and ultimately included in one of the earliest bills in the House of Representatives to reform and modernize the federal manufactured housing law – the 1990s-era "Hiler Amendment," named for its chief sponsor, then-Rep. John Hiler (IN-3). Naturally, the chassis provision drew opposition from both regulators and HUD Code industry competitors in Washington, D.C. and was not included in parallel Senate legislation. And while -- according to industry allies -- the removable chassis option in the House bill could have been saved in a Conference Committee to reconcile the two bills, it was effectively doomed when, in addition to the outside opposition, it became embroiled in internal industry politics. Ultimately, the Hiler Amendment died without final action and the industry wound up waiting another ten years to secure other reforms through the Manufactured Housing Improvement Act of 2000. When the 2000 law was developed, though, the industry was experiencing strong growth. As a result, it did not press for a removable chassis option. But that was then and this is now. With regulators continuing to drag their feet on the full