Friday, January 26, 2018

HUD Regulations to be Slashed While States Continue to Tighten Them for the Modular Industry

While you were eating dinner last night, HUD announced a “wholesale review” of manufactured housing regulations stating that this is the one housing industry that can meet the affordable housing crisis.

The manufactured housing industry should thank Warren Buffet’s interest in Clayton Homes for this ‘wholesale’ downsizing of regs. What better way for manufactured housing to grow than to push HUD for lesser regs and at the same time have a way for people to finance them through Buffet's mortgage companies which recently also saw a softening of mortgage requirements for their industry. I really have no problem with what is happening in the manufactured housing world.

My problem is who is fighting to see the same thing happens in the modular housing industry where state regulators bottle up plan reviews, write new internal regulations that make no sense, deny home plans for even the smallest infractions of their precious backroom regs and fight the modular housing industry on more fronts than ever before. You can only ship through one state at certain times, unnecessary width restrictions in another, a backlog in another so long that customers actually put off building a modular home. What the hell is wrong with us? The state offices that stop an entire industry that is needed more today than ever before is usually manned by one or two people. Have we allowed them to become so powerful that we now have one of our national associations, the MHBA, spending an enormous amount of time searching weekly through every state’s pending laws and regulations looking for ones that will tighten the noose just a little more. My solution is quite simple. Turn the single family side of our industry over to HUD who will write a few new regulations just for us and then allow the third party inspection agencies to stamp the plans without state approvals just like a manufactured home, saving months of a couple people in a small office at the state level holding up plan reviews just to justify their jobs. Here is the opening statement for the new proposal to cut regulations for HUD manufactured homes:

Public comment sought in effort to identify regulations that stifle affordable housing and job creation
WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) today announced a top-to-bottom review of its manufactured housing rules as part of a broader effort to identify regulations that may be ineffective, overly burdensome, or excessively costly given the critical need for affordable housing. For the next 30 days, HUD is accepting public comments to identify existing or planned manufactured housing regulatory actions to assess their actual and potential compliance costs and whether those costs are justified against the backdrop of the nation's shortage of affordable housing. Read HUD's notice.

Shortly after taking office, the President issued Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), directing federal agencies to identify or streamline regulations that are wasteful, inefficient or unnecessary. HUD Secretary Ben Carson quickly followed the President's Executive Order by charging the Department's Regulatory Review Task Force to identify HUD's existing rules that may inhibit job creation or impose costs that exceed the public benefit.

Manufactured housing plays a vital role in meeting the nation's affordable housing needs, providing nearly 10 percent of the total single-family housing stock. It's estimated that more than 22 million American households reside in manufactured housing, particularly in rural areas where this form of housing represents an even greater share of occupied homes. The manufactured housing industry is also an important economic engine, accounting for approximately 35,000 jobs nationwide.

HUD's regulation of manufactured housing fulfills a critical role to ensure a fair and efficient market that supplies affordable housing for households of modest incomes and protecting consumers. HUD may adopt, revise, and interpret its manufactured housing rules based upon the public's comments it receives and the recommendations of the Manufactured Housing Consensus Committee, a statutory federal advisory committee comprised of producers or retailers of manufactured housing as well as consumers, residents and public officials.

CLICK HERE to read the HUD notice.


Builder Bob said...

Gary, you've done it now. You've got to stop pointing out the obvious to people that don't want to see it. But I do agree with you above having the third party inspectors determine if a modular house can be sent to a state without local and start agencies looking for ways to justify their existence.

Tom Hardiman said...

Gary, Gary, Gary...

You use the words "simple" "HUD" and "a few new regulations" in your solution. Are you familiar with our government? I literally just posted an article related to this to MHBA's discussion forum.

The manufactured housing industry does have the benefit of just one federal agency writing their regulations - regs that supercede state and local regs I might add.

But turning our modular home industry over to HUD is a disastrous idea. We are currently fighting to allow IRC modular homes in the same neighborhoods as comparable site built homes. No one seems to argue that locals have the right to discriminate where manufactured homes can be located. It's hard enough now educating people on the differences between IRC modular and HUD code manufactured housing. Do you think this would help?

Yes MHBA spends a crazy amount of time dealing with state agencies. In fact, that work typically lands on my desk so I know precisely how much work it is.

If manufacturers and builders want HUD style regulations, then build HUD code homes. As for those who still want to build IRC modular homes, MHBA will continue to fight for a level playing field.

Coach said...

You are so right about not wanting modular housing in the current HUD regs. That would be disastrous. What I want for our industry is a pathway to approval similar to HUD homes but based on the IRC regulations. That pathway could fall under the Dept of HUD if the Fed and states would agree.

Site builders enjoy far less stringent regs than modular. Why can't someone level the playing field instead of always trying to react to whatever the whim of state regulators are for the day.

Tom Hardiman said...

You are asking states to agree to eliminate their own agencies and jobs. Its like asking Congress to approve term limits. I understand the frustration - live in it every day.

While was all wait for these agencies to get on the same page, one thing we are working on that will help is a model "modular administrative program" (or MAP). We are working with the ICC on this as an ICC Guideline to be used by the states. We can't hope for complete uniformity, but this resource will at least provide a baseline and a tool to help standardize the processes from state to state.

Sam Fagan said...

I hate to point out to Tom that Obamacare regulations were 1,000+ pages and it became law in the country without anybody reading let alone understanding it.

If the Fed and the states can do that why can't something as simple as modular housing reform get passed? The answer is quite simple. We don't have a billion dollars to throw at it to line the pockets of politicians.

Anonymous said...

Your always going have a problem with one state doing their thing and one doing it still another way and disregarding ...any so called overall federal regs! Each state(states rights guys) must be dealt with individually. Like it or not.
I once tried to sell my yankee based homes based solely on a federal approved reg, simply.. as is federally approved designs and specs to a charming FHA-HUD Director in Atlanta.. never forgot it..he said "no son not in my state.. otherwise that's may be fine son, but this here were the United States of do it my/our Georgia-way son and well all getalong just fine..change it!"
Frankly guys the are more states with their own perceived and yes real problems that need be addressed..indivually!

Josh Margulies said...

Such fretting! The demand for affordable housing is strong. The Kids need houses. They will get the best they can. As factory shit gets lax so will modular. These are the consequences of an environment that has seen dramatic shift
in attitudes toward regulation.