TMHA Submits Comment Letter on White House Council Request for Information on Eliminating Regulatory Barriers to Affordable Housing

Friday, January 17, 2020 10:47:14 AM

This post contains the content of TMHA's comment letter submitted on January 17 in response to HUD's request for public comment on, "Federal, State, local, and Tribal laws, regulations, land use requirements, and administrative practices that artificially raise the costs of affordable housing development and contribute to shortages in housing supply."

 

January 17, 2020

 

Regulations Division

Office of General Counsel

Department of Housing and Urban Development

451 7th Street SW, Room 10276

Washington, DC 20410–0500

 

Re:       Docket No. FR–6187–N–01, White House Council on Eliminating Regulatory Barriers to Affordable Housing; Request for Information

 

Dear Secretary Carson,

 

The Texas Manufactured Housing Association (TMHA) appreciates the opportunity to provide comments in response to HUD’s request relating to, ”Federal, State, local, and Tribal laws, regulations, land use requirements, and administrative practices that artificially raise the costs of affordable housing development and contribute to shortages in housing supply.”

 

TMHA is the state-based trade association for the manufactured and factory-built housing industry in Texas.  Our industry employees thousands of Texans while historically accounting for at least 20 percent of the national market share for manufactured home shipments.

 

TMHA would like to echo our support for the comments provided by our national organization, the Manufactured Housing Institute. Additionally, we would like to call attention to several issues and offer possible solutions.  

 

HUD’s recent housing finance reform proposal included a focus on manufactured housing, with a separate section entitled, “Eliminating Regulatory Barriers to Affordable Housing Including Manufactured Housing.”  This proposal stated, “policies that exclude or dis-incentivize the utilization of manufactured homes can exacerbate housing affordability challenges because manufactured housing potentially offers a more affordable alternative to traditional site-built housing without compromising building safety and quality.”  Additionally, HUD specifically identified, “[u]nnecessary manufactured-housing regulations and restrictions,” as one of the 16 listed, “inherent barriers to fair housing choice,” in the recently proposed rule on Affirmatively Furthering Fair Housing.

 

Quite simply, our industry couldn’t agree more with these positions.

 

For many markets in the U.S., the ability to provide greater housing supply and consumer housing choices by including the option of manufactured housing is directly impeded by the barriers contemplated by this request for comment – namely local regulations, zoning prohibitions, and other land use restrictions that are specifically targeted to severely restrict or completely prohibit manufactured homes.

 

To create more affordable housing, consumers need greater access to housing supply and housing choice.  The removal of unnecessary local barriers targeting manufactured housing is critical to achieving both of these needs.

 

Our ability to produce and increase housing supply is not limited by materials, labor, facilities, or capital.  Our production limitations are dictated by external restrictions that do not allow us to access many markets. These locally imposed restrictions relegate our homes out of many urban, but also rural, markets or isolate our homes and homeowners in the least desirable, least appreciable areas of a city or county.

 

How can these barriers be eliminated? 

 

Our offered solution would be to specifically classify the most commonly used unsubstantiated local jurisdictions’ rational for restrictions on manufactured homes as automatically an “unnecessary,” and “irrational” local regulation or requirement. 

 

Alternatively, HUD could increase the level of scrutiny and substantiation burden on local governments when they propose manufactured home restrictions to force local jurisdictions to use empirically supported facts to justify their restrictions and if the facts presented are deemed lacking, provide grounds to challenge the local restrictions.

 

The current standard for legally justifying a local jurisdictions’ action restricting manufactured homes is to pass the “rational basis” test.  This standard is effectively such a low bar as to not have any actual modulating effect on local restrictions. 

           

The historical playbook for local restrictions on manufactured housing primarily rely on insufficient, factually unsupported, or inaccurate reasoning.  When local jurisdictions attempt to use these types of justifications, they should be prohibited in doing so by HUD determining that certain false claims are automatically deemed an unreasonable, unnecessary, and irrational justifications for any current or future restrictions. 

 

To start with, many local jurisdictions have based their prohibitions or limitations on manufactured housing based on “health and safety” concerns. However, the HUD-code is administered and heavily regulated federally and at the state level to ensure the homes we produce are structurally sound and safe. Any such claim attempting to justify manufactured home restrictions or regulations due to safety concerns, substandard housing, or prohibitions on the HUD-code over the locally adopted site-built building code, should be deemed by HUD to be automatically unreasonable and an unnecessary restriction.

 

The next lines of pre-textual arguments against manufactured homes typically fall within one of the following: “general prejudice against all forms of low-cost housing; the perception that manufactured home residents constitute a transient population with weak ties to the community; low aesthetic appeal of the traditional trailer park community design; perceptions that manufactured housing is substandard and unsafe; perceptions that manufactured housing appreciates more slowly than traditional site built homes and negatively influences adjacent housing prices.”

 

However, these arguments were concluded by HUD in 2011 as being baseless and that, “[e]vidence suggests that nearly all of these claims are unwarranted and not based on empirical reality.”[1]  And yet, local jurisdictions still turn to these unsubstantiated claims to justify manufactured home restrictions. 

 

As a result, these local barriers serve as a direct constraint on our ability to offer greater housing supply and housing choice.  And these barriers will continue to hinder our ability to offer increased housing supply and housing choice unless a change occurs.

 

Our suggestion to HUD would be to define as “unnecessary” and “irrational” any local jurisdiction’s justification for restricting or prohibiting manufactured homes based on the following:

 

  • Health, safety, or substandard housing concerns regarding manufactured homes compared to other forms of single-family housing;

 

  • General prohibitions against the HUD-code or by process of elimination only allowing homes built to locally adopting building codes, such as the International Residential Code;

 

  • Justification that manufactured homes cost less to produce;

 

  • Justification that buyers of manufactured homes are stereotypically less tied to the community;

 

  • Justification on aesthetic or architectural standards applicable only against manufactured homes;

 

  • Justification that manufactured homes either depreciate or appreciate more slowly than site-built homes;

 

  • Justification that allowing manufactured homes will have an adverse impact on property and/or tax values; and

 

  • Justification that an equivalency exists for homeowners who want to live in a manufactured home within a city but can simply move outside of the local jurisdiction, which fails to recognize the increased costs associated with rural utility infrastructure such as digging water wells and septic tanks or the burdens of being further removed from jobs, schools, and public transportation.

 

We would further encourage HUD to consider a preemptive assertion over any local ordinance or zoning prohibition for HUD-code homes that are eligible to receive any of the government backed or guaranteed loans, or any program that satisfies the Government Sponsored Entities’ lending requirements.  It stands to reason that homes already deemed acceptable by the Federal Government to lend on, such as any home eligible for FHA, VA, USDA, or GSE financing, should be similarly accepted with all other comparable site-built housing that can receive similar federally supported financing options.

 

While we know we can help ameliorate many housing supply and choice challenges in the nation’s more urban settings if given the opportunity, we also acknowledge that manufactured homes serve a critical role in rural affordable housing as well.  As such, we would ask HUD to consider placing specific safeguards against local jurisdictions’ unwarranted prohibitions or limitations towards manufactured homes in rural markets.  There are a myriad of “rural” definitions HUD could draw from, including from some of HUD’s own programs, that can serve as the backbone for a new policy that preserves housing supply and affordability in our rural markets.

 

And finally, we would ask, at a minimum, for HUD to continue to identify and define “unnecessary” barriers to manufactured housing and pass the list of unnecessary restrictions towards manufactured housing and affordable housing supply to the states’ level.  HUD could provide “safe harbor” recommendations or model state legislative language with recommendations, and possibly incentives, that these provisions are adopted at a state level.  This would provide additional motivation in some areas of the country to follow the path recommended by HUD and impose state-level local jurisdiction safeguards against unnecessary manufactured home restrictions.  This approach would allow those who choose to pass state-level legislation the ability to offer new solutions, test new ideas, innovate, and prove by way of example that when barriers are removed, housing supply, choice, and affordability can thrive.

 

Our industry stands ready to help meet the critical national challenge of increasing housing supply and choice.  But currently the bottle-neck limiting our ability to help address these issues rests at the local government levels. The only way to achieve different results from the current reality we all acknowledge is lacking, is to enact fundamental change.  We implore HUD to consider bold action and effectuate the change we need.

 

 

 

Sincerely,

DJ Pendleton, J.D.

Executive Director,

Texas Manufactured Housing Association

           

 

[1] https://www.huduser.gov/portal/publications/mfghsg_HUD_2011.pdf