Ramsey Cohen, Director of Industry, Community Affairs, Clayton
The American dream of homeownership is being challenged today with the rising costs associated with basic supply and demand issues. Demand for housing, especially affordable housing, is outpacing supply in terms of inventory and labor.
“Now is the time for cities across America to get serious about addressing the home affordability crisis.”
Developers of site-built homes face many challenges when trying to deliver affordable housing. Many towns and communities limit the development and construction of new affordable housing through outdated restrictive zoning laws. These zoning laws often mean new housing developments must go through rigorous review by local zoning boards and meet strict building codes. These added steps can be time-consuming and costly while also fruitless in the end. As a result, those interested in investing in the development of affordable housing can be discouraged from pursuing these opportunities.
A viable solution for many homebuyers is off-site built housing, also known as manufactured or modular homes. Off-site built homes provide an affordable alternative to site-built homes. A neighborhood of these homes can look and feel like any site-built development – permanent foundations, garages, pitched roofs and more. They provide the buyer many of the same amenities as site-built homes including energy-efficient upgrades, smart technology and personalization options. What’s the difference? The homes are built in climate-controlled facilities more efficiently, typically using less material and at more affordable prices.
One thing that is true for many cities across America is that off-site built, single-family homes are not allowed. This means that some of the most affordable housing - manufactured homes - are simply not allowed to be part of the solution. There are many builders, investors, developers, and organizations ready to offer a manufactured housing solution to help address the growing affordable housing problem.
Off-site home builders are working to keep up with record high demands, there is a robust existing infrastructure in the industry due to a variety of builders and retailers found across all U.S. markets.
What does this mean in actual dollars for homebuyers? As reported in the Wall Street Journal®, median home prices topped $350,000 for the first time in May 2021, showcasing the need for truly affordable housing. According to Clayton Homes® data, the average cost of an off-site built home with land in 2021 was less than $190,000, allowing off-site home builders to supply new homes at attainable prices not seen in any other form of housing. For many people today, the price of site-built construction is simply out of reach.
Now is the time for cities across America to get serious about addressing the home affordability crisis. Instead of trying to stop affordable housing developments, city officials must begin to think creatively and seek innovative solutions to encourage more development. One solution is allowing off-site built housing to be part of the affordable housing solution. By working with developers, cities can re-evaluate their zoning laws and remove exclusionary requirements that will open opportunities for an entire industry to help solve the affordable housing crisis.
The off-site built housing industry is ready to invest and develop quality neighborhoods as soon as zoning laws become more favorable to developers of affordable housing. Working together, our cities and this practical, under-utilized housing industry can help more Americans realize the dream of homeownership.
According to the Manufactured Housing Institute®, in December 2021, the annual projected shipments were more than 105,000 off-site built homes, constructed in 139 home building facilities nationwide.