Efforts to loosen zoning laws that would allow factory-built homes in more jurisdictions outside the rural U.S. is also another primary focus for affordable housing advocates.
“It’s absolutely critical that we do more urban infill, suburban new construction, subdivision development, even replacement of older homes in our cities with affordable stock,” Epperson said.
Vacant infill sites, particularly, present opportunities in many communities, thanks to existing infrastructure.
“We love doing infill sites, lots where potentially there was a house previously because oftentimes that means that the utilities are right there in the ground,” Stott said. “Land is kind of the great scarce resource, certainly around city areas.”
But while such opportunities already exist in some states, including California, which has rules preventing local municipalities from zoning out single-family manufactured housing, regulations and local resistance elsewhere around the country still present barriers to increasing the number of homes.
“What’s really a problem is that where there’s most opposition to new housing — tends to be infill housing in existing cities, where infrastructure is already present,” Loftin said.
And while it has the potential to provide a lower price point in many communities, there still are constraints on the extent of affordability modular and other manufactured homes can bring on large-scale projects, like subdivisions, compared to on-site, or stick-built, construction, according to Loftin.
The primary driver of costs up in some markets is transportation, particularly when located a long distance from the factory. “You have to move that house and get to a site and site it,” which can offset the cost reduction of construction.
“When I looked at if manufactured housing made sense in Santa Fe or Albuquerque, it never competed with stick building.”
Still, economic development is driving more cities to evaluate the possibilities of manufactured homes to serve their needs, particularly if they see potential disruption ahead in their housing markets requiring a quick boost to inventory, according to Epperson.
“We’ve had interest from some of the Rust Belt cities for infill, especially when they get a new announcement in jobs,” she said.
Any progress in changing local regulations should also likely lead to interest among developers to adding manufactured homes that can boost housing inventory. “Where we get interest tends to be from smaller cities, where developers can make that zoning change,” Epperson said.
Modular builders like Connect Homes are already creating strategies to tap into developer interest as it grows.
“We’ve spent the last couple years taking everything that we’ve learned from our previous experience building for single-family homeowners in order to create a system that’s more scalable, that provides less site work on site,” Stott said. Plans also include the creation of models that “can start as small as an ADU but can quickly scale up to kind of a townhome development.”
Factory-built construction appears to have support from the federal government, with the Biden administration regularly highlighting the role it can play in his affordable housing goals. Among the president’s stated housing aims are new financing mechanisms for manufactured homes as well as the expansion of construction-to-permanent loan options to reduce the housing shortage.
Source: nationalmortgagenews.com