Homeownership is a vital component to a stable society and a thriving economy. It is a well-known presumption that owning a home gives an individual a stake in his or her society. For example, according to a recent study by scholars at the University of Chicago and Harvard University, homeowners are 10 percent more likely than renters to work to s olve local problems. Another consideration is that homeownership is also the most common form of savings for the average working family. A home is typically the largest investment most families have.
Manufactured Housing: An Increasing Trend
In recent years, however, with rapid increases in home and land prices, Americans have increasingly accepted and adopted the concept of manufactured housing as part of the dream of owning their own home. Manufactured housing is a cost-effective and reasonable quality alternative to the more standard site-built home, the average price of which has been more than $100,000 for more than 10 years (even excluding the price of the lot). U.S. Census Bureau figures list the 1996 average manufactured housing cost per square foot as between $25 and $30, compared to $59 per square foot for the typical site-built home. These lower costs have made homeownership a possibility for a wider range of people .
This trend has been particularly strong in the Southeast. The top seven states in new manufactured housing deliveries between 1992 and 1996 were all in the Southeast. Leading the way was North Carolina, where nearly a third of all new homes constructed in the state between 1992 and 1996 were manufactured homes. The percentages are even higher in S outh Carolina (40 percent), Alabama (45 percent), Mississippi (49 percent), and West Virginia (56 percent).
At the same time manufactured housing sales have increased in recent years, a wide-ranging, low-intensity conflict has raged throughout North Carolina and the region regarding the siting, appearance, and design of these factory-built homes. Widely held beliefs that manufactured housing reduces the value of surrounding site-built homes, while the u nits themselves do not appreciate in value over time, have caused numerous cities, towns, and counties to place severe restrictions on where manufactured housing units may be located.
In our report MISSING RUNGS II: MANUFACTURED HOUSING AND HOMEOWNERSHIP IN NORTH CAROLINA, we undertook two tasks: first, to survey North Carolina local governments to discern the types of restrictions and regulations placed on manufactured housing, and second, to create a model to explain homeownership rates in those local jurisdictions, North Car olina’s counties and municipalities.
From our survey of 199 North Carolina county and municipal planning directors, we discovered that on many levels counties and municipalities approach manufactured housing differently. Counties are typically less restrictive towards manufactured housing than are municipalities. There were several areas where the two types of local governments diffe red dramatically:
- A slim majority of counties that responded did not have appearance restrictions, while of the municipalities that responded there was a 4:1 ratio of cities and towns with such restrictions compared to those cities and towns that did not;
- A strong majority, 62.5%, of counties that responded, did not have dimensions standards, while an even stronger majority, 69.2%, of responding municipalities did have these restrictions;
- Counties that responded were more likely to exclude manufactured housing from a smaller portion of the jurisdiction compared to the municipalities that responded, which were more likely to exclude manufactured housing from a significant portion of the jurisdiction’s land area;
- Finally, a plurality of county respondents, 37.8%, described their jurisdictions as generally encouraging to manufactured housing, while a plurality of municipal respondents, 43.6%, described their jurisdictions as generally restrictive of manufactured housing.
The bottom line is quite clear: counties and municipalities differ in their response to manufactured housing, with counties tending to restrict manufactured homes less than municipalities.
The Relationship Between Manufactured Housing and Homeownership
The second task of this report, to construct a model to explain homeownership rates across the state, also achieved important results. The model created by the authors explained 78% of the variance in homeownership rates from one county to another. Included in the model was the proportion of the county’s housing stock that was manufactured housing. This one variable has a strong relation to the homeownership rate.A 10% increase in manufactured housing as a proportion of the hous ing stock is correlated with a 2.5% increase in the homeownership rate.
Again, the bottom line is clear: the more common manufactured housing is, relatively speaking, the greater the homeownership rate.
To increase homeownership rates in a jurisdiction, a positive characteristic of a local economy, local governments should, if not outright encourage, at least avoid discouraging the availability of manufactured housing as a residential alternative to North Carolina’s working families. One step along that road is to avoid the types of restrictions uncovered by the survey of North Carolina planning directors.
The encouragement of homeownership in a local jurisdiction is a positive policy prescription to improve our society and our economy, and local governments should not overlook the potential damage they do when they expand restrictions on manufactured housing that have little to do with health and safety of their citizens.