Thursday, June 6, 2019

Is HUD’s Ben Carson About to Change New Home Construction in the US?

From June 1st to June 5th HUD’s Innovative Housing Showcase on the National Mall in Washington, DC showcased manufactured housing as the answer to solving America’s Affordable Housing problem.

What is totally surprising about this very large and successful event was the National Association of Home Builder’s co-sponsorship of the event. The NAHB and its members have never truly embraced anything even closely related to HUD code manufactured housing but there they were standing shoulder to shoulder with the Secretary of HUD, Ben Carson, promoting manufactured housing.

HUD homes by Skyline Champion and Clayton were displayed on one side of the Mall while innovative housing companies like Boxabl were on the other side. No IRC modular home was on the Mall.

I just learned today the NAHB waited until just a few weeks before the event to begin seeking out a factory to put a modular house on display which made it almost impossible to have enough time to respond.

But an even bigger announcement was made without a whimper from those attending the event. Dr Ben Carson talked about the need for HUD homes being allowed in all neighborhoods in the US to ease the need for affordable housing. He specifically addressed the “Not in my neighborhood” crowd which quickly brings to mind the The Fair Housing Act of 1968 which prohibited discrimination concerning the sale, rental and financing of housing based on race, religion, national origin or sex.

Could it be interpreted to include discrimination against certain types of housing like HUD in R1 Zoning? Could HUD show cause for the Fair Housing Act to be modified to include manufactured homes? Well, it does seem like he might be heading that way.

However there is a second major change to housing possibly coming our way if he does open up every neighborhood in the US to HUD code housing.

If HUD manufacturers can move into every neighborhood and bypass almost all the IRC regulations imposed on modular housing, why can’t the modular housing factories begin switching to HUD Code and eliminate all those individual state and local code reviews?

The modular factories could continue to build the exact same house they are building right now with all the IRC regs they currently use, which are higher than HUD minimum codes, and shave weeks, if not months off delivery time without having state plan reviewers picking apart each and every house plan just to protect their jobs.

It would also save the new home buyer thousands and thousands of dollars in plan review fees.

Here’s an interesting scenario. Suppose a large HUD home manufacturer with factories across the US were to begin buying regional tract builders and all their developed and undeveloped lots across the country. They might continue building the way the tract builders have always been building just waiting for something like a change to what can actually be put into those developments. Something like a new interpretation to the Fair Housing Act.

Then this company would introduce a line of upscale HUD code homes and begin sending them into their newly acquired developments. Keep the lot prices the same, raise the price of the HUD product slightly and if possible finance these new homes themselves and you just might have the biggest change in single family housing to ever hit the US.

And to think the NAHB co-hosted the event where Ben Carson put forth this new idea that could make all that possible.

How interesting is that?


Anonymous said...

Anyone notice a pattern here? Someone has been adding lot inventory across the South.

Anonymous said...

Leave it up to the Modcoach to find a conspiracy.

Anonymous said...

Bring the popcorn. This could be fun to watch a lobbying wrestlemania pitting local governments, NAHB, and the Manufactured Homes in the halls of Congress.

Anonymous said...

What?, congress and the beltway boys involved in housing? That in itself, is the problem. I do commend President Nixon and George Romney on their progress to make housing safer and more affordable. It was too bad their brainchild "operation breakthrough" failed. It might be good go bad to look at why? Sounds like change is in the wind. We need new voices or true innovation will get quashed.

Coach said...

For those that may have never heard of Operation BREAKTHROUGH, check out this article on the HUD website.

Steve L said...

Your comment
Here’s an interesting scenario. Suppose a large HUD home manufacturer with factories across the US were to begin buying regional tract builders and all their developed and undeveloped lots across the country.

Sounds familiar
You know Kevin Clayton is Builder's Magazine "Builder of the Year" and has purchased over 9 local builders to obtain developed lots in several midwest states

Anonymous said...

Seems like even the HUD insiders are not fans of the new class of manufactured homes:

Put simply, DTS (Duty to Serve) was never designed to be a corporate welfare program for the industry’s largest conglomerates. But that is exactly what it’s becoming, as a result of its botched implementation by Fannie Mae and Freddie Mac (with a “wink and a nod” from their federal regulator, the Federal Housing Finance Agency – FHFA), and its diversion away from the mainstream, affordable manufactured homes produced by all HUD Code industry manufacturers, in favor of high-dollar, hybrid-type homes that are produced by only one or, at most, just a handful of manufacturers. As usual, the winners in this fiasco (thus far) are certain well-heeled, well-connected industry conglomerates that play to the pre-existing prejudices of Fannie and Freddie, while the “losers” are the rest of the HUD Code industry and the millions of lower and moderate-income American families that could otherwise be helped by DTS to purchase and own a home of their own.