Issue link: https://read.dmtmag.com/i/486601
APRIL 2015 12 THE JOURNAL HUD Program Budget Exposes Fundamental Policy Flaws on Affordable Housing MHARR VIEWPOINT BY MARK WEISS According to the old saying, "a picture is worth a thousand words." Well, numbers can also provide much-needed clarity where it is oth- erwise lacking. And such is the case with the proposed Fiscal Year (FY) 2016 budget for the HUD manufactured housing program -- partic- ularly when analyzed in conjunction with a few other sets of numbers. To start with, consider the fact that according to just-released U.S. Census Bureau data, the rate of homeownership in the United States – in 2014 – fell to a 20-year low. Further, according to a February 2015 HUD report to Congress entitled "Worst Case Housing Needs," nearly 8 million lower-income Ameri- can households in 2013 either "paid more than half their monthly incomes for rent, [or] lived in severely substandard housing, or both" – nearly 50% more than the number of households experiencing such "worst case" housing needs in 2003. Next, consider that according to U.S. Cen- sus Bureau statistics and HUD studies (e.g., a 2004 HUD Study entitled "Is Manufactured Housing a Good Alternative for Low Income Families?") the mean monthly housing cost of a consumer-owned manufactured home is consis- tently and substantially less than the cost of either renting or purchasing any other type of home – making HUD Code manufactured homes the na- tion's most affordable housing. Lastly, consider that although HUD, in FY 2015, sought $9.7 billion in spending authority for its Section 8 Project-Based Rental Assistance program alone, manufactured housing – regu- lated by HUD itself -- was not even mentioned in HUD's 2010-2015 Strategic Plan as an afford- able housing resource, and is not mentioned at all in HUD's 2014-2018 Strategic Plan, released in April 2014. Nor is this off-handed treatment of manufac- tured housing by HUD some kind of irregularity, as shown by the July 2014 report of the Govern- ment Accountability Office (GAO) on HUD's implementation of the Manufactured Housing Improvement Act of 2000. That report specifi- cally faults HUD and the Federal Housing Administration (FHA) for failing to develop – or even research – changes in the FHA Title I and Title II manufactured housing programs that could help increase the afford- ability and availability of manufac- tured homes for more Americans, noting that according to one HUD of- ficial, it was "not among the[ir] highest priori- ties." The numbers, therefore, show that despite a tremendous sustained need for affordable hous- ing across "all regions of the country and … all racial and ethnic groups … in cities, suburbs [and] rural areas," according to the HUD "Worst Case Housing Needs" report, and the ob- vious potential of manufactured housing to solve the nation's most pressing, most critical and most intractable housing problems (not to mention the everyday affordable housing needs of ordinary hard-working Americans), affordable, non-sub- sidized manufactured housing that HUD itself regulates, remains almost completely absent from the Department's strategic vision. And this gap, if anything, continues to intensify – with negative consequences for consumers and the industry -- despite Congress' bi-partisan directive in the 2000 reform law, for HUD to "facilitate the availability of affordable manufactured homes and … increase homeownership for all Americans." So, while HUD, as the nation's housing agency, is confronted with a serious affordable housing crisis – with homeownership rates for every age group of Americans, except those 65 and older, now at their lowest point since records began in 1982 – it has the solution right under its nose in the form of HUD-regulated manufac- tured housing. Yet, the Department not only ig- nores that solution, relegating manufactured housing to a policy "no-mans' land," buried in its "risk management" office, it goes out of its way, consistently, to needlessly increase the cost of manufactured housing – and eliminate even more po- tential buyers from the mar- ket – with baseless new layers of regulation and "make- work" mandates. These mandates do nothing for con- sumers, but substantially in- crease billing for the program monitoring contractor and regulatory compliance costs for manufacturers. Examples abound, but expanded, highly subjective, in-plant regulation and paperwork-intensive monthly Subpart I record "reviews" are just two areas where con- tractor activity and compliance costs have been ratcheted-up without basis or justification. To all of this, add the flurry of regulatory memoranda from the HUD program office in the Fall of 2014 that sought to limit the use of man- ufactured homes (e.g., attached garages and multi-family designs) with threats of enforcement action against manufacturers for homes that are compliant with the HUD Code when they leave the factory, and it seems that advancing the availability of affordable manufactured homes – and their technological development – is the fur- thest thing from HUD's mind. And while these restrictions (implemented by the program Administrator based on analysis by the monitoring contractor), were quickly and decisively rejected by the Manufactured Housing Consensus Committee (MHCC) at its Decem- ber 2014 meeting, as urged by MHARR, that action has not stopped HUD from proposing to spend even more on baseless regulation in its FY 2016 program budget (while seeking authority – once again – to change its label fee without rule- making, as currently required). Under this budget, direct and indirect payments to the pro- gram monitoring contractor would increase to