Issue link: https://read.dmtmag.com/i/506676
MAY 2015 12 THE JOURNAL Debunking Myths about 'Eliminating the Federal Manufactured Housing Law' MHARR VIEWPOINT BY MARK WEISS Winston Churchill once famously said that "democracy is the worst form of government, ex- cept for all … other forms that have been tried." The same could be said of federal regulation and superintendence of the manufactured housing in- dustry. With HUD's woefully deficient implementa- tion of the letter – let alone intent -- of the land- mark Manufactured Housing Improvement Act of 2000, and with manufactured housing and, more importantly, lower and moderate-income consumers of manufactured housing seemingly mired in second-class status (or worse) at HUD, a cottage industry has sprung-up promoting rosy visions of what life would be like for manufac- tured housing without the federal manufactured housing law and the HUD program. Like most "grass is greener" scenarios, however, the "vi- sion" evaporates when confronted with the hard facts. To begin with, it's worthwhile to consider just who would benefit from such a change and who would end up on the short end of the stick. The answers -- as confirmed by the facts detailed below – are not difficult to figure-out. The main beneficiaries of a return to state and local regula- tion of the manufactured housing industry (each with their own enablers within the industry) would be the industry's primary competitors – site-builders, modular builders and realtors – who have sought for years to either end or un- dermine the competitive advantages that the in- dustry enjoys under federal law. Other "winners" from such a change would include: (1) national building code developers, who have long sought to impose their own proprietary codes on the manufactured housing market; (2) the special in- terests that influence and promote such codes – such as the "green" energy special interest groups that have been pushing to impose the Interna- tional Energy Conservation Code (IECC) and other mandates on the industry; and (3) the cur- rent federal monitoring contractor and other sim- ilar contractors that make a good living from HUD program contracts and subcontracts, but would generate even more revenue providing a range of services to multiple states and localities. The negative consequences of such a change, by contrast, would fall hardest on the manufactured housing industry itself – especially smaller and medium-sized businesses with a rela- tively smaller production base over which to amortize the costs of com- plying with a myriad of state and local mandates – together with homebuyers, and particularly lower and moderate-income American families. As far as the specific claims of federal law de- tractors are concerned, one thing should be clear. An end to federal-level regulation would not result in anything like the "de-regulation" of the manufactured housing industry. It would simply trade one type of regulation for another, as a termination of preemptive federal regulation would immediately expose all aspects of manu- factured home construction, installation and uti- lization to comprehensive regulation by states and localities, and possibly both. Most "elimination" proponents, while acknowledging this reality, have pointed to a number of factors to make their case. Among other things, they maintain that: • Support for manufactured housing "seems to be a diminishing asset" for HUD; • High-volume chattel financing to support sales is not supported by the Government Sponsored Enterprises (GSEs); • Manufactured homes over time have become less "mobile" and more permanent; • State or local building departments could "easily" transition to regulation of manufac- tured homes; and • State or local regulation would lead to greater acceptance of manufactured homes bearing greater similarity to site-built homes. They could just as easily add that much if not most of the industry's troubles at the federal level over the course of decades -- and particularly re- garding the first point above – are a self-fulfilling prophecy growing out of the weakness of a major segment of the industry. At the same time, the absence of inde- pendent national-level col- lective representation for the industry's post-production sector has provided a degree of false credence for these op- ponents of the Title VI federal program, through a lack of effective advocacy on critical local-level issues including home placement, zoning, local acceptance, non-discriminatory consumer fi- nancing, product promotion and advancing the image of the industry's high-quality homes. In the final analysis, though, while there are nuggets of truth in each of the foregoing asser- tions, the problem is that none of them account for the absolute necessity of preserving the inher- ent affordability of manufactured housing that has been at the heart of the manufactured housing market and federal regulation since its inception forty years ago. Federal regulation of the manufactured hous- ing industry is unique within the field of residen- tial construction in that it flows from the express recognition -- enshrined in law by Congress; es- tablished by Congress as national housing policy; and found in no other building code -- that man- ufactured homes are, and must remain, afford- able housing available to all Americans. These national housing policies, in turn, are reflected, advanced and upheld in the federal manufactured housing law, the HUD Code and HUD regula- tions, through provisions designed to ensure: (1) Effective federal preemption; (2) Uniform, performance-based standards that balance reasonable protection with cost to the consumer; and (3) Uniform enforcement through a viable