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Housing Affordability

Issues in Manufactured Housing

Fact Sheet

Andrew Kochera, AARP Public Policy Institute

May 2001


Table of Contents:

Introduction

Manufactured homes are a major source of affordable housing for low- and moderate-income families. In 1999, about 6.8 million manufactured homes were occupied as a primary residence (6.6% of the nation's 103 million occupied housing units). Around 2.8 million (41 percent) of manufactured homes occupied as a primary residence were owned or rented by a person age 50 or older ("50-plus households").1 In addition, about 1 million manufactured homes were held as a second home in 1999; about two-thirds of these were owned by a person age 50 or older.2

Manufactured homes have become a major source of new housing in recent years. In 1999, 348,000 manufactured homes were purchased, representing about 19% of all new single-family housing.3 About 31% of these new manufactured homes were purchased by someone age 50 or older.

Nearly half of the owners of a manufactured home pay rent for the land on which the home sits, usually in a manufactured home park.

Manufactured Homes and Their Older Residents

Many Older, Single Residents

  • Of the 2.8 million 50-plus households living in a manufactured home in 1999, nearly 750,000 had a household head between 65 and 74 years of age, and around 620,000 were headed by a person age 75 or older.
  • About 46% of 50-plus households living in manufactured homes were married couple households, and 39% were single person households.

High Proportion Have Low-Income

  • The median income for 50-plus households in manufactured housing was around $20,000 (Figure 1), compared to around $34,000 for 50-plus residents of conventional single-family housing.
  • Although direct federal or state subsidies are seldom available for residents of manufactured homes, nearly 60% of 50-plus households in manufactured homes would meet the basic "low-income" eligibility standard for HUD's housing assistance programs.4
  • Limited financial resources make residents of manufactured housing particularly vulnerable to increases in park rents and unexpected home repair costs.
Income of Manufactured Home Households Age 50 and Older

Manufactured Homes Typically Smaller and Less Expensive

  • The median size of a manufactured home for 50-plus households was around 1,000 square feet in 1999, compared to 1,600 square feet for 50-plus households in conventional single-family housing.
  • Manufactured homes are less expensive than conventional single-family homes.5
  • The most commonly cited reason 50-plus purchasers chose a manufactured home was "financial" (30%), while the most commonly cited reason 50-plus purchasers chose a conventional single-family home was "room layout/design" (26%).6
Older Residents More Likely to Own and Live in the South
  • Ninety-one percent of 50-plus households living in a manufactured home are owners, compared to around 80 percent of 50-plus households living in a conventional single-family residence.
  • Fifty-two percent lived in the South, 23% in the West, 16% in the Midwest, and 9% in the Northeast. By comparison, only 36% of 50-plus owners of conventional single-family homes lived in the South.
  • Forty-seven percent of 50-plus owners of manufactured homes were located outside of metropolitan areas, compared to 27% of 50-plus owners of conventional single-family homes.
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Construction and Safety Standards

Manufactured homes are built in accordance with federal construction and safety standards that preempt local building codes. Thirty-five states have State Administrative Agencies that enforce the federal standards and handle consumer complaints. HUD has those responsibilities in the remaining states. But despite the standards and regulatory structure, consumers have continued to experience a number of problems with the construction and installation of their homes.

According to a 1999 AARP-sponsored survey of manufactured housing owners of all ages:

  • Nearly eight in ten (77%) owners reported having at least one problem with the construction, installation, or appliances of their new homes; 57% reported multiple problems.
  • Among the most common problems were interior fit and finish (37%), improper fit or leaks in doors/windows (35%), problems with general construction such as cracks or separation of walls (31%), and plumbing (30%).
  • Problems resulting from faulty installation accounted for one-fifth of the problems of most trouble or concern to the homeowner.
  • Although 95% of those surveyed said they had warranties, only one-third (35%) of those having major problems reported that the problems had been corrected under the warranty; the remainder were either not fixed at all (30%) or fixed at the homeowner's expense (31%).

In an earlier response to problems such as these, the congressionally mandated 1994 National Commission on Manufactured Housing made recommendations to modernize the Manufactured Housing Construction and Safety Standards Act of 1974. Among the Commission's recommendations were:

  • HUD should create a balanced consensus committee to update relevant federal construction and safety standards
  • HUD should develop a national installation standard (states encouraged to adopt installation standards, but must meet minimum national standards)
  • HUD should develop a multi-year warranty standard for industry that would include installation and transportation
  • HUD and state administrative agencies should adopt a dispute resolution system to determine responsibility for repairs of defects
  • States should provide for recovery funds in case the manufacturer or retailer refuses to make repairs or goes out of business.

Though many of the reforms of the Commission have yet to be addressed, progress was made with the passage of The American Homeownership and Economic Opportunity Act of 2000. This Act created a 21-member consensus committee to recommend revisions to the manufactured housing standards. The committee will include equal representation of industry, consumers, and the public. The Act calls for the committee to develop minimum national standards for the installation of manufactured homes, and allows states to develop their own stricter installation standards. In addition, states are given five years to adopt a dispute resolution system among manufacturers, retailers, and installers regarding the responsibility for the repair of defects reported by consumers within one year of installation. If a state does not adopt a dispute resolution system during that time, HUD will administer its own system.

Practices in Manufactured Home Parks

Manufactured homes are commonly referred to as mobile homes. However, the term 'mobile home' is misleading; most manufactured homes are not moved again once they leave the dealer's lot. Manufactured homes are expensive to move and may suffer significant damage if moved. Further, it is often difficult for residents of manufactured home parks to find alternative rental space. For these reasons, manufactured homeowners who rent their lots in manufactured home parks find it very difficult to move when a landlord engages in unfair practices. Around 44% of manufactured homeowners age 50 and older reside in a manufactured home park.

Unfair landlord practices may include:

  • frequent and excessive rent increases
  • inadequate park maintenance
  • dealer tie-ins (requiring resident to buy from a specific dealer)
  • unreasonable park rules (restrictions on guests, for sale signs, etc.)
  • the loss of rental spaces due to the sale of parks
  • lack of written and/or long-term lease
  • retaliation for consumer complaints through increased rent or decreased services.

Many states have various legal protections for residents of manufactured home parks, but these vary widely, and at least 15 states have no manufactured home park statutes at all. In response to this, AARP contracted with the National Consumer Law Center to develop a model statute. The Manufactured Homeowners' Bill of Rights incorporates a five-year renewable lease requirement that allows parties to agree to rent levels, including increases over the five-year term. The model statute would also prohibit "tie-ins" and other unfair practices, remedy park maintenance problems by requiring a warrant of habitability, require relocation assistance in the event of park closure, and provide a right of first refusal to residents if the park is sold.

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Footnotes

1 Source: HUD's 1999 American Housing Survey. In addition to these heads of households, many more older persons reside in a manufactured home as a spouse, parent, etc. In all, about 4.4 million persons age 50 or older live in a manufactured home.
2 Held for seasonal use, occasional use, or designated as "usual residence elsewhere" in the 1999 American Housing Survey. This is approximated by the 1995 American Housing Survey as 'recreational use' second homes, which is also the last year the age of second homeowners is available.
3 According to the Census Bureau's Construction Division, in 1999 approximately 1.3 million conventional single-family units were completed, and 297,000 manufactured housing units were placed for residential use.
4 HUD defines low-income as below 80% of the area's median family income, with adjustments for family size.
5 Census Bureau construction reports show that the median price of a manufactured home was $44,000 in 1999, compared to $160,000 for a new single-family home. But these are not truly comparable, because the conventional single-family price includes the value of the lot, whereas the reported manufactured home price does not.
6 PPI analysis of older movers in the past five years in HUD's 1999 American Housing Survey.

Written by Andrew Kochera, AARP Public Policy Institute
Revised from earlier edition by George Gaberlavage, December 1995.
May 2001
©2001 AARP
May be copied only for noncommercial purposes and with attribution; permission required for all other purposes.
Public Policy Institute, AARP, 601 E Street, NW, Washington, DC 20049

Pub ID: FS16R