“The goal of owning a home remains ubiquitous among younger households, with a 2021 Fannie Mae survey finding that more than nine out of ten households under the age of 45 expressed an interest in someday owning a home.” That’s according to a new report entitled “A Review of Barriers to Greater Use of Manufactured Housing for Entry-Level Homeownership” published on 1.23.2024. It is good to ‘know’ that over 90 percent of households under 45 want to buy a home at some point in their lives. It is also good to know why those younger, middle aged, or older singles, couples, families, and other households aren’t buying a manufactured home at the same rate that was previously enjoyed by the manufactured home industry during the 1970s through the 1990s. The research review explored below indicates the authors of new report want to get to the bottom of such issues. That could potentially be useful for tens of thousands of manufactured home industry professionals. Per their document attached and quoted in this initial flash report: “Any opinions expressed in this paper are those of the author(s) and not those of the Joint Center for Housing Studies of Harvard University (JCHS).” Those named authors are Christopher Herbert, Alexander Hermann, Daniel McCue, and Chadwick Reed. “Support for this research [by those authors at Joint Center for Housing Studies of Harvard University] was provided [by a grant] by The Pew Charitable Trusts” which as regular readers of MHProNews may recall has published other research in recent years about various aspects of the HUD Code manufactured home industry.
“The goal of owning a home remains ubiquitous among younger households, with a 2021 Fannie Mae survey finding that more than nine out of ten households under the age of 45 expressed an interest in someday owning a home.” “…although the desire to own a home may be widespread, the ability to afford a home is under increasing pressure from the outsized gains in home prices during the pandemic, coupled with the enormous rise in mortgage interest rates since early 2022. According to The State of the Nation’s Housing 2023, over the course of the year ending March 2023, these twin pressures increased the income needed to buy the median-priced US home to $117,000, an increase of 20 percent. This drastic single-year jump reduced the number of renters (who comprise most would-be homebuyers) able to qualify for the median home by 32 percent, representing 2.4 million households.”
The opening paragraph above ought to be reasons for the manufactured housing industry to be soaring. The powers that be in manufactured housing ought to know it. Pure academics ought to be interested in the ‘who-what-when-where-why- and what’ behind manufactured housing’s poor 21st century performance compared to the 20th century. Academics and serious researchers should be curious about the causal factors and the possible solutions to the manufactured housing industry’s underperformance too.
So, it is no surprise that the Havard JCHS researchers Herbert, Hermann, McCue, and Reed cite the operative question (shown below) that MHProNews and MHLivingNews repeatedly has raised. Even though several of the sources for that study are known readers here, they gave no acknowledgement of that often-asked question (is failure to properly give credit or cite sources a Harvard 2.0 thing?).
Per the Harvard authors: “This raises the question: Given today’s strong demand for affordable, entry-level homeownership, why has manufactured housing not become more widely available?”
Herbert, Hermann, McCue, and Reed said: “The goal of this paper is to address this question by assessing what is known about the barriers to greater use of manufactured housing for entry-level homeownership, with an eye toward informing what efforts are needed to overcome these obstacles.”
Among the highlights?
“Recent assessments of the potential for manufactured housing to meet the need for more affordable housing all tout the fact that manufactured homes are often now of much higher quality, have greater aesthetic appeal, and are more energy-efficient (Gorey, 2023).” (Page 17 of 56-page document). Please, some go tell the U.S. Department of Energy (DOE), the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Finance Agency (FHFA), and other segments of federal, state, and local governments. Perhaps that is what the Harvard JCHS-labeled report will do?
From the Abstract on page 1.
Manufactured housing holds promise as an affordable form of housing that could expand homeownership opportunities for low- and moderate-income households. The report reviews the available literature to assess the principal barriers to greater adoption of manufactured housing, including lingering negative perceptions of the quality of the homes despite notable improvements in quality over time; zoning and other land use regulations that limit the ability to site these homes in many communities; market conditions that erode the cost advantage of manufactured homes; the unique nature of the supply chain for these homes that makes it difficult for consumers to obtain homes in many urban areas; and limits on access to affordable financing. The findings point to the need for multipronged efforts to overcome these barriers, given their interrelated nature. An assessment of market conditions at the county level identifies hundreds of counties where manufactured housing has great potential to provide affordable housing options for millions of renters who represent potential homebuyers, including a number of large urban counties where these homes are now relatively rare.”
In that ‘assessment’ of what is known about barriers to manufactured housing, who did they researchers turn to for insights?
Their acknowledgement spells it out. Paragraph breaks below are added in what follows by MHProNews, but the text itself is as stated by in the report: “A Review of Barriers to Greater Use of Manufactured Housing for Entry-Level Homeownership.”
This report was funded by a grant from The Pew Charitable Trusts. The Center and the report authors gratefully acknowledge the thoughtful review and feedback provided by Rachel Siegel, Alex Horowitz, and their colleagues at The Pew Charitable Trusts throughout the process of developing the report.
We are also grateful for the insights provided in discussions with the research team on the state of the manufactured home market by the following individuals and organizations: Chris Nicely of ManufacturedHomes.com; Stacey Epperson and Grant Beck of the Next Step Network; Jim Gray and Maya Hamberg of the Lincoln Institute of Land Policy; Tom Hodges and Ramsey Cohen of Clayton Homes; Tatyana Zahalak, Will Stoker, Sidra Goldwater, and Lena Flanagan of Fannie Mae; Corey Aber, Simone Beaty, Sara Hoffmann, Lariece Brown, and Dennis Smith of Freddie Mac; Lesli Gooch, Josh Adams, and Megan Booth of the Manufactured Housing Institute; Doug Ryan of Prosperity Now; and Dave Anderson of the National Manufactured Home Owners Association.
The authors also wish to thank Jim Gray, Laurie Goodman, and Esther Sullivan, who reviewed an earlier draft of this report. All errors and omissions remain the responsibility of the authors.”
Like it or not, those individuals and organizations have their fingerprints on what followed from Harvard’s JCHS and authors Herbert, Hermann, McCue, and Reed. More on some of those individuals and organizations further below. More on “errors and omissions” – as in “All errors and omissions remain the responsibility of the authors” will be explored in this flash report too.
A WORD search of the document revealed the following. In no particular order of importance are the following keyword searches of the 56-page document.
- CrossModTM is mentioned 6 times, or about as many mentions as Fannie Mae supposedly might finance of that more costly type of manufactured home during the course of 6 months. If that seems disproportionate to mention CrossMods so often given what the authors admit is a weak performance of the product (see that below too) a further look of various topics in WORD searches reveals that the attention given to CrossMods arguably is out of whack.
- CHOICEHomeTM is mentioned once. That is Freddie Mac’s version of CrossMods. One mention is more than what the FHFA annual report over the course of some years said Freddie Mac has actually closed; meaning there were years were ZERO such loans were reportedly originated by that Government Sponsored Enterprise.
- Some builders of HUD Code homes also build so-called “tiny houses” which apparently have far greater sales results than CrossMods do. Legacy Housing, for example, has pushed tiny homes or tiny houses. But the research below mentions “tiny” zero times. What, isn’t MHI member Legacy Housing part of the insiders’ club? Think about this: CrossMods have “no traction” per an insider to MHProNews, but “tiny” homes which is selling multiple times the rate of their more costly factory-built housing cousins gets no mention at all?
- The Manufactured Housing Improvement Act of 2000 (MHIA) is mentioned once (Page 13). That ought to be a red-flag, but facts are what they are. During the President and CEO Chris Stinebert era at MHI, it discussion about the implementation of the MHIA was routine fare. While the MHIA is still mentioned from time to time by MHI leaders, it is apparently not discussed by MHI at the rate that it once was.
- The word “preemption” – as in “enhanced preemption” under the MHIA or “federal preemption” since the HUD Code went into effect is not used. Zero mentions of preemption, which is odd considering that the Harvard JCHS authors claimed that they wanted to “point to the need for multipronged efforts to overcome these barriers” to more manufactured housing use. Congress offered that solution almost a quarter of a century ago. Why didn’t the report authors want to find out what went wrong? Note that Congressional Representative Maxine Waters (CA-D) is not named in this research, though she has been involved in several key questions about manufactured housing challenges with respect to financing and zoning barriers. How important a miss is that? Zoning is mentioned as a barrier some 34 times in the report. For some context, this is the reply Bing AI powered Copilot gave in response to that question.
> “In the context of that research into barriers for the increased use of manufactured housing, zoning regulations was repeatedly mentioned, about 34 times per an MS WORD search. Can you explain how important the use of the Manufactured Housing Improvement Act of 2000’s so-called enhanced preemption provision could be to solving that challenging?”
In about 209 words, Bing’s Copilot said what 56-pages of Harvard JCHS labeled research somehow missed? More on that in the items that Copilot linked reports, which included the Manufactured Housing Association for Regulatory Reform (MHARR) and MHProNews, but didn’t include MHI, or any of the others acknowledged in their research.
6. Affirmatively Furthering Fair Housing or AFFH are not mentioned in this Harvard JCHS labeled research. Yet MHARR has repeatedly pointed out how that legal notion could be used to overcome zoning barriers for the benefit of minorities and all people of modest means.
7. The U.S. Department of Energy (DOE) is mentioned zero times. What? Doesn’t the implementation of the DOE energy rule matter?
8. The words “inventory” and “backlog” have zero mentions. That should seem odd considering the fact that retailers and producers – meaning, Manufactured Housing Institute (MHI) linked sources – have repeatedly pointed to how those supposedly contributed to a drag from 2022 going into 2023 that diminished production last year. That sharp drop in production in 2023 vs. 2022 is acknowledged in the Harvard report.
9. There were no mentions of words like litigation, lawsuits, antitrust, monopoly, or monopolization. That seems odd, considering that Doug Ryan with Prosperity Now is among those cited in the acknowledgements. Ryan accused MHI and Clayton Homes of undermining manufactured home lending to foster monopolization. Also notable is that Ryan’s name is only used once in the document, and that is in the acknowledgements.
10. The “moat” is not mentioned (zero times) in the document. That is odd considering that Kevin Clayton infamously mentioned the moat several times during a near hour long video with pro-Berkshire Hathaway interviewer Robert Miles. Clayton Homes General Counsel Tom Hodges, mentioned in the acknowledgements (shown above), has also spoken specifically about the “moat.” So too has Berkshire Hathaway Chairman Warren Buffett, which ought to be the apparent fountainhead for the coining and use of that term as deployed by Clayton and other Berkshire Hathaway linked brands.
11. Duty to Serve is mentioned twice. The first time is rather interesting.
Quoting starting near the end of page 32:
…as part of their Duty to Serve obligations, both Fannie Mae and Freddie Mac are required to undertake efforts to expand financing for manufactured housing. As part of these efforts, both agencies have created lending programs to make traditional mortgages more readily available for manufactured housing. Notable among these efforts are loan programs aimed at CrossModTM homes, which generally require the homes to be affixed to a permanent foundation, consist of multiple sections, and have certain structural elements (porches, garages, and dormers) that more closely resemble site-built homes. Importantly, these programs also allow site-built homes to be used as comparables for appraisal purposes that make it easier to get approved. However, lending volumes through these programs remain low, in part reflecting the small scale of production of these types of homes.
 See the following websites for more information on these lending programs:
 See the reports on activities at https://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/DTS-2022Enterprise-Quarterly-and-Annual-Reports.aspx.”
So, as MHProNews and our MHLivingNews sister-site have repeatedly pointed out, the program is a market failure in terms of volume. The phrasing by the Harvard report author’s is rather odd: “lending volumes through these programs remain low, in part reflecting the small scale of production of these types of homes.” Because MHI complained in writing about the way that appraisals were often not being handled by using “comparables” with conventional housing when other CrossMod comparables are not available, they have essentially blown part of their own narratives.
The fact that Harvard’s report authors linked the FHFA about CrossMods without citing hard data ought to be troubling. Yes, it might prove embarrassing for MHI, Clayton, Fannie, Freddie, and other cheerleaders for the thus far market failed program. But it should also raise the question: how serious are these authors at getting to root causes when they don’t look at all of the contributing factors? The next point (#11) will further illustrate that point.
12. There are no mentions using a WORD search of “sabotage” or Schmitz. James A. “Jim” Schmitz and some Minneapolis Federal Reserve research colleagues have done several reports and articles on the topic of how what they call ‘sabotage monopoly’ tactics have been used to undermine the manufactured home industry. Surely, Pew, Harvard, MHI, Clayton, et al find the Minneapolis Federal Reserve credible, don’t they? The U.S. Senate has heard testimony about their research on how sabotage monopoly tactics. Schmitz and his colleagues have made evidence-based allegations of how sabotaging monopoly tactics have been used to styme manufactured housing. A Bing search on this date using “sabotage monopoly” in quotes (which forces a search engine to produce a more focused or precise result) yielded 146,000 results. The number one result is on the Minneapolis Federal Reserve website and includes the following.
“Schmitz’s research renews and expands an analysis of monopoly practice that has long been dormant. While scholars decades ago recognized that monopolies existed in many forms beyond the corporation and engaged in anticompetitive practices beyond price hikes, the area has been overlooked until this revival.” The number 2 result per Bing’s standard search is here on MHProNews and is linked below. Harvard’s researchers are arguably remiss in failing to point out such aspects of why manufactured housing is underperforming.
13. Not to be missed is Daniel R. Mandelker. A word search reveals 11 mentions of his name. Two of them are below, which point to research papers the law professor has written.
- Mandelker, Daniel R. 2016. ““Zoning Barriers to Manufactured Housing.” The Urban Lawyer 48 (2): 233‒ 78.
- Mandelker, Daniel R. 2023. “Getting Zoning for Manufactured Housing Right.” Working Paper WP23DM1, Lincoln Institute of Land Policy.
What is not mentioned by Havard JCHS researchers Herbert, Hermann, McCue, and Reed about Mandelker was one of his key suggestions as to the needed remedy for the zoning barriers his research identified. Namely: that an organization is needed for manufactured housing that does advocacy and litigation.
Ouch, because that is what MHI is supposed to be doing, right? Isn’t that what is meant when they claim to be working for “all segments” of the manufactured housing industry? And in this initial flash report of Harvard’s “A Review of Barriers to Greater Use of Manufactured Housing for Entry-Level Homeownership” some of their authors and acknowledged parties’ hits and misses (“errors and omissions”) several realizations ought to occur. More on that further below.
14. There are no results for a word search for Manufactured Housing Association for Regulatory Reform (MHARR), Mark Weiss, Danny Ghorbani, Lisa Tyler (Ph.D.), or Scholastica Cororaton (Journal of Real Estate Studies entitled The Market for Manufactured Homes starting at page 48), among others who have done useful, important or even essential “must read” items about manufactured housing aimed at improving understanding and growth.
15. There is no mention of Samuel Strommen, legal researcher for Knudson Law, who pointedly called out Clayton Homes (BRK), 21st Mortgage Corporation (BRK), the Manufactured Housing Institute (MHI), Skyline Champion (SKY), and Cavco Industries (CVCO), among others for purported evidence of antitrust violations. In the light of the parade of national and a regional antitrust litigation that has hit several MHI members, Strommen’s seminal ‘outsider looking into’ manufactured housing research probed some of the same issues that Harvard, Pew, the Urban Institute (which long had Warren Buffett as a trustee and donor), and others mentioned in the acknowledgments.
16. There is no mention of “investor” or “earnings call” per a WORD search of their 56-page document. Yet, one of the most fascinating and routinely factual evidence laced source of information in manufactured housing often comes from corporate earnings calls. See several of those linked further below in our market recap for 1.24.2024.
17. There is no mention of William “Bill” Boor or Boor by the researchers. Yet, Boor testified to Congress on 7.14.2024 and specifically called for HUD to be pressed by Congress to use its enhanced preemption power.
18. “Negative consumer perceptions of manufactured housing are perhaps the most prevalent theme of studies examining the potential for greater adoption.” From that flows, say the researchers, many of the other problems the industry faces. Quoting: “As will be shown, all of these metrics reflect that the quality of manufactured homes has improved substantially over time. Although manufactured housing does, by most measures, rank slightly below site-built homes, the differences are generally not sufficient to warrant concerns about their impact on surrounding communities.” “Still, there remains the question of whether public opinion of these homes has lagged behind changes in quality over time. Finally, an additional theme examined in the literature is whether the research community itself is prone to bias in its view of manufactured housing, which has resulted in little research in this area that might improve attitudes toward manufactured housing.”
19. The apparent failure of MHI to enforce its own so-called Code of Ethical Conduct and antitrust guidelines are logically part of the problem. But when research review authors are acknowledging some of the very people who are involved in the manufactured home industry’s underperformance, how do they seriously hope to get to the truth of why the industry is underperforming during an affordable housing crisis?
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Manufactured housing should be soaring. But as Harvard once again documented, it is operating at a fraction of the level that it did in 1998, or for that matter, during essentially all of the 20th century. The population has grown. The share of the new single family housing market for manufactured housing has shrunk. That costs the U.S. about $2 trillion dollars annually in lost gross domestic product (GDP). Who says? Prominent MHI member Cavco Industries (CVCO) – see the reports linked below for more.
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There are dozens – hundreds or thousands, actually – of reports on MHLivingNews and/or MHProNews which shed light on why manufactured housing is underperforming during an affordable housing crisis. Some of what Harvard’s coauthors Christopher Herbert, Alexander Hermann, Daniel McCue, and Chadwick Reed is relevant and useful. But as the above flash review reflects, there does seem to be what could be described as “errors and omissions.” See the arguably relevant and related report regarding Freddie Mac, linked below. Their press release and this Harvard research recap were released at about the same time.
Watch for a follow up on this Harvard research document, there is much more that should be known about and from it. Watch too for our planned review of MHARR’s DOE energy rule related remarks. ##
Part II – is our Daily Business News on MHProNews stock market recap which features our business-daily at-a-glance update of over 2 dozen manufactured housing industry stocks.
This segment of the Daily Business News on MHProNews is the recap of yesterday evening’s market report, so that investors can see at glance the type of topics may have influenced other investors. Thus, our format includes our signature left (CNN Business) and right (Newsmax) ‘market moving’ headlines.
The macro market move graphics below provide context and comparisons for those invested in or tracking manufactured housing connected equities. Meaning, you can see ‘at a glance’ how manufactured housing connected firms do compared to other segments of the broader equities market.
In minutes a day readers can get a good sense of significant or major events while keeping up with the trends that are impacting manufactured housing connected investing.
Reminder: several of the graphics on MHProNews can be opened into a larger size. For instance: click the image and follow the prompts in your browser or device to OPEN In a New Window. Then, in several browsers/devices you can click the image and increase the size. Use the ‘x out’ (close window) escape or back key to return.
Headlines from left-of-center CNN Business – from 1.24.2024
- Amazon’s Ring to shutter video-sharing program popular with police
- Wall Street firm hit by cyberattack that has knocked systems offline
- Jan 13, 2024; Kansas City, Missouri, USA; Kansas City Chiefs running back Isiah Pacheco (10) runs the ball as Miami Dolphins linebacker Malik Reed (47) chases in a 2024 AFC wild card game at GEHA Field at Arrowhead Stadium.
- Peacock’s exclusive NFL playoff game drove ‘biggest subscriber acquisition moment ever measured,’ analytics firm says
- The first CosMc’s drive-thru is open on Dec. 8, 2023, in Bolingbrook. CosMc’s is the new takeout-only mini-chain by McDonald’s.
- CosMc’s first location had twice as much traffic last month than a typical McDonald’s
- The University of Pennsylvania campus in Philadelphia, Pennsylvania, US, on Friday, Dec. 8, 2023.
- House demands UPenn turn over trove of documents in antisemitism investigation
- A Microsoft store in New York, US, on Monday, June 17, 2023.
- Microsoft is worth more than $3 trillion. It’s the second company to ever break that threshold
- CRYSTAL RIVER, FLORIDA – DECEMBER 19: Image gallery includes Subway restaurant interior and exterior images, sandwiches images, sandwich artist images, other menu item images and lifestyle images on December 19, 2023 in Crystal River, Florida.
- Subway franchisees are underwhelmed by its new $6,000 slicers
- A screenshot from Japanese developer PocketPair’s game “Palworld”.
- ‘Palworld’ video game ignites furor as it becomes an overnight sensation
- January 12, 2021, London, UK: Royal Mail delivery worker Leila delivers mail in Balham, Wandsworth in London,.
- Royal Mail is on the brink. Cutting letter deliveries to 3 days a week could save it
- Empty tracks are seen at Berlin Central Station during a train drivers’ strike on January 24.
- German train drivers begin six-day strike, hitting travel and the economy
- It’s still too hard to be a working parent in America, Janet Yellen says
- Why over-optimistic investors may want to pump the brakes
- Bill Ackman buys stake in Tel Aviv stock exchange in ‘vote of confidence’ for Israeli economy
- Your 401(k), gas prices and homes: 3 surprising reasons to be happy
- In-N-Out has never closed a location, until now. It cites crime as the problem
- China tries to halt stock market rout by boosting lending and wooing foreign investors
- SAP is restructuring 8,000 jobs as it shifts focus to AI
- Australia sanctions Russian national accused of hacking in Medibank data leak
- ‘Barbie’ stars Ryan Gosling and America Ferrera don’t hold back after the Academy snubs Greta Gerwig and Margot Robbie
- GOP Rep. Virginia Foxx admonishes Harvard for ‘unacceptable’ response to antisemitism investigation
- Alaska Airlines CEO says company found loose bolts on ‘many’ Boeing Max 9s
- eBay is laying off 1,000 employees, about 9% of its staff
- TIME Magazine lays off 15% of unionized editorial staff, becoming latest news outlet to slash workforce