Monday, June 3, 2019

HUD's Dr Ben Carson Has Good News and Not So Good News for the Modular Housing Industry

Secretary of Housing and Urban Development Ben Carson spoke at this week’s Innovative Housing Showcase in Washington, D.C. sponsored by the National Association of Home Builders.

Dr. Ben Carson, Sec of HUD

Many of the event’s sponsors had displays on the National Mall including full houses from Cavco, Skyline Champion and Boxabl. New innovations on how to heat, cool and connect more efficiently to utilities were on display.

But what caught my attention was Dr Carson’s interview on FOX where he said he wants to make manufactured housing the key to affordable housing by pushing for new zoning regulations to allow HUD code homes into more R1 and R2 neighborhoods across the US.

Carson believes this new technology can remove some of the “many zoning barriers based on outdated thinking.”

“That's one of the reasons that we're having this display, so not only that people can see this and disabuse them of the notions that manufactured housing are trailers and trailer parks and seeing what actually can happen here,” said Carson.

The houses are loaded with technology infrastructure, including plumbing, electricity and sewage without disrupting the “surface topography or the other structures around that.” They are also bolted down to cement foundations to add resiliency during natural disasters.

“I'm standing inside of a manufactured home right now -- it's a beautiful place,” said Carson. “[It] has a living room area, three bedrooms, kitchen, couple of bathrooms. And yet you know the cost of this is 30 to 40 percent less than a site built home.”

I wrote a “wake up” article over a year ago telling everyone in the IRC modular home industry this could be a possibility. Well folks, today’s speech sure sounded like not only is he championing HUD housing as affordable, he wants to see them allowed everywhere.

He even addressed the “Not in My Neighborhood” people telling them they will like the new look of manufactured housing.

For the HUD manufacturers this is a great thing as I honestly share his interest in what is happening in today’s manufactured houses. What I don’t understand is why true IRC modular home factories and builders must fight with every state and local code official just to get them approved while HUD’s new relaxed codes just might see them sailing into the same neighborhoods without a whimper from state and local code officials.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.


Bill Hart said...

The Clayton's are comin, the Clayton's are comin! And it's called their CHOICE homes, remember!..just as Gary was telling you about specs wise and including the financing and appraisal accommodations Buffett et als lobbied for...what a year ago....

Ron D'Ambra said...

1-They did a decent explanation during this presentation in separating a manufactured home from a modular home, BUT, as we know a manufactured HUD home can also and is placed on a permanent foundation, per the HUD code, contrary to their reference and lack of information. They should have specified the difference in locations; Scattered lot v. a manufactured home park, where a transportable manufactured home would apply and exist.
2-The use of the word “cheaper” used several times throughout the article tends to add the misnomer that the product is “cheaper” in a third party referenced to its building process, protocol and value. Instead I would have much preferred they referenced the “cost” of the home as “less expensive” then a site built home, since the articles body is making reference to the comparison of a Modular home v. a Site Built home. One consolation is they did state “site built” instead of “stick built”, since all homes are stick built, the difference is where they “are” built.
3-Next, it troubles me that they catagory a Modular home with “Pre-fab” kit? A pre-fab is more of a “panelized” kit home, and is not inspected in stages during the construction process of the plant built modular home. Instead, the “sections” are constructed on-site to manufacture a completed project, subject to “on-site” stage inspections from the county and/or state officials.
4-The reference to make a point of saying for a modular you must “own the land”, is a novice point, any home you have built and/or constructed, it is to your best interest to “own the land”, so what is the point of this ambiguous statement? Part of the bank’s loan requirement and protocol would be to own the land, regardless of the home being a modular or site built home project.
5-Referencing the investment value for resale the article again uses the term “pre-fab” instead of the industry correct Modular home.
6-Regarding ‘the pay as you go”, is nothing more than a construction loan, and its protocol same as a “site built” home, again a very ambiguous reference as one “to be noted”, as a deciding factor in considering purchasing a modular home.
I think the subjects staff writer had decent intentions as to her efforts to make for a pleasurable and informative article, unfortunately, Candice Braun Davison should have sought the advice and assistance from an knowledgeable industry associate, for verbiage and references to different factors and benefits regarding a modular home, especially when compared to a “site-built” home, or simply considered another topic.
There is an old saying in show business when referencing exposure, “don’t bother reading any contents of the article, good, bad or indifferent, as long as they spell your name right, that is all that matters”, unfortunately buying a home is reality and not a motion picture or Broadway play.
I agree with you, the theme of this article tends to compromise the integrity and value of a modular home and its building practice. A potential home buyer or prospect, after reading the article may leave them with uncertainty as to the real value of a modular home, further pondering “is there more to come than the face value of the article as it relates to the comparison of a site built home to a modular home purchase?
As the articles closing statement makes reference to purchasing a modular home as a non-traditional home, that statement could be the deciding factor for persuading the reader to discard any notion to consider building and owning a modular home, and that is simply an injustice to what a modular home and far advanced our industry has come and established its presence in todays housing market.

Todd Kesseler/ USModular Inc. said...

100% agree, well said Ron

Kris said...

Good response Ron. I am trying to find an affordable MODULAR Dealer that services SW Oregon. I had several people tell me Mods are the same as manufactured. I stressed the differences. More education needs to go out!