A Shortcut the Industry and Consumers Can Ill Afford

MHARR logoThe Manufactured Housing Consensus Committee (MHCC), at its October 2010 meeting, tabled a HUD-MHI (Manufactured Housing Institute) proposal for an “as needed” federal fire sprinkler standard (one that supposedly would apply where sprinklers are voluntarily installed by the manufacturer or required for all homes by state or local law). Actually, sprinklers in manufactured homes should not even be an issue, and HUD, judging by recent comments, being unwilling to implement the enhanced preemption of the 2000 reform law, would be just as happy to stay out of the matter. But it is being drawn into this fray to appease a few larger companies that – spooked by local sprinkler standards in some Western states – are pushing this “as needed” shortcut. Predictably, however, it will come back to haunt the industry and its consumers. As explained below, therefore, the MHCC should deep-six this flawed shortcut.

Sprinklers are not a new issue. The merits and demerits of a federal sprinkler standard have been debated off and on for years. In the meantime, some localities, concentrated in the West, have adopted sprinkler ordinances for all residential structures. Manufacturers have typically dealt with these ordinances on a jurisdiction-by-jurisdiction basis. But now, the issue of local sprinkler requirements – particularly in the West – is somewhat more pressing, due to the inclusion of a sprinkler provision in the 2009 International Residential Code (IRC). As a result, a few HUD Code manufacturers with production in the West have sought a “magic bullet” – the “as needed” federal standard — to make the problem go away, even though the vast majority of the states and localities that have considered the IRC provision have rejected it.

While the concerns of these companies are legitimate, an “as needed” federal standard is a leap of faith at best and, at worst, an invitation for disaster that the industry and its consumers — particularly now, with production at historic lows and financing extremely scarce – can ill afford. These companies, by pushing for such a standard, show that they either do not understand the likely consequences of their actions, or that they do understand the consequences of their actions, but do not care and are willing to saddle the entire industry and all of its consumers with an unnecessary but extremely costly mandate.

Since it was founded 25 years ago, MHARR has consistently resisted a federal fire sprinkler requirement on two basic grounds. First, the HUD standards already effectively address the issue of fire safety and should preempt any state or local sprinkler standards. Second, the manufactured housing industry, because of its long history of weak, goalong- to-get-along national representation, has continually been targeted by special interests trying to legislate demand for products such as sprinklers (much the same as the industry is being targeted by “energy” special interests — an issue that MHARR will address soon). This despite the fact that manufactured homes are already safe under the existing HUD standards and sprinklers would be an unnecessary cost burden for consumers. Nevertheless, those same special interests seek to use manufactured housing as a “wedge” market to advance the adoption of sprinkler (and other) mandates for all types of housing with one stroke of the pen, and this must be aggressively resisted.

There is ample evidence to support these positions. Sprinkler advocates want sprinkler systems to be mandated for all residential structures. By securing a sprinkler mandate for manufactured housing (representing well over 100,000 units in a good year), those interests could then make a stronger argument to states and localities that sprinklers should similarly be required for site-built and other homes that serve more affluent segments of the housing market. A key flaw in this argument, however, as the facts show, is that HUD Code housing is already safe, without costly sprinklers, or incurring the potential infrastructure costs of such systems, including the cost of upgrading or replacing water systems in manufactured housing communities, or providing an adequate water source for locations without municipal water connections. And a balance between safety and cost is a mandatory requirement of the 2000 reform law for all HUD Code standards.

Regarding safety, in a 1985 study, Foremost Insurance Company, the nation’s largest insurer of manufactured homes — the people who pay for fire-related losses — found that the incidence of fires in manufactured homes is half that of site-built homes. And undoubtedly, with improved materials and modem technology, today’s manufactured homes are even safer. Indeed, this is demonstrated by the U.S. Fire Administration (USFA) which, in the 2004 edition of its annual report, “Fire in the United States” (the last edition that specifically addresses manufactured housing), observed that over a tenyear period (1992-2001): “The HUD standard [has] clearly made an impact … [with] large downward trends in fires (48 percent), deaths (57 percent), injuries (5 1 percent) and property loss (50 percent)…” From this, USFA concluded that “the reasons for these sharp declines … should be investigated … to determine whether lessons from improvements in the manufacture of mobile properties could be applied to other types of residences…” So, not only do the HUD standards work, the techniques used to accomplish that fire safety under the existing HUD standards, according to USFA, should be applied to other types of homes.

On preemption, HUD itself ruled in 1989 – under the preemption language of the original 1974 manufactured housing law — that “automatic fire sprinkler systems … address the same aspect of performance as ,H.U.D.’s “standards, fire safety, Therefore, HUD’s standards preempt.” If anything, the 2000 reform law, which specifically declares that federal preemption should be “broadly and liberally” construed, should strengthen this position. Yet, twenty years later, with better homes and much stronger preemption language HUD, today, refuses to preempt sprinklers based on its current standards.

The first step and first challenge for the industry, therefore, should be to press HUD, under the enhanced preemption of the 2000 reform law, to declare that state and local sprinkler mandates are federally preempted based on the current HUD Code fire safety standards. If HUD refuses, the next best result would be for HUD to do nothing on sprinklers. This would allow the industry to continue fighting at the state and local level, together with other segments of the housing industry, which uniformly oppose the IRC sprinkler mandate. Or, in states with localities that have already adopted sprinkler requirements, the industry would be free to press for state sprinkler laws that preempt local variations, such as the law adopted in Oregon and the proposed law in California.

Either one of these scenarios would be better than an “as needed” federal standard that would: (1) inevitably grow and expand to apply to all manufactured homes, either through HUD interpretation, pressure from special interests, or court action; (2) subject manufacturers to highly prescriptive criteria and drastically increase costs; (3) subject manufacturers to Subpart I with respect to sprinklers; and (4) would not even preempt state or local installation and testing requirements, because those parts of the “as needed” federal standard would be under the federal installation standards which HUD claims, because of the re-codification of installation, are not preemptive in any event.

In MARRR’s view, an “as needed” federal sprinkler standard is a bad idea — a shortcut sought by a few that the industry and its consumers cannot afford and that could lead to harmful unintended consequences.

MHARR is a Washington D.C.-based national trade association representing the views and interests ofproducers of federally-regulated manufactured housing.

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