Meet the new generation of manufactured houses

MARY LOUISE KELLY, HOST:

When you think of a community of manufactured homes, you might picture a trailer park. But manufactured homes have changed a lot in recent years. Today, they may have steeper roofs. They may have a porch. They look much like a traditional single-family home.

HECTOR CARDENAS: It's big. It's spacious. I could tell that it was made at a very high caliber.

KELLY: Hector Cardenas just bought one of these new manufactured homes in a development in Petersburg, Va. He paid a quarter million dollars for it. And he says the relatively cheaper price compared to a stick-built home was a big factor in his decision.

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CARDENAS: The pricing was, like, I think the best part. With these inflated interest rates in the market right now, to be able to find the house of this caliber for the set price, it's - I don't think you could beat it.

KELLY: Well, a number of cities around America are taking a new look at manufactured homes as a solution to the nation's housing shortage. Adele Peters wrote about it for Fast Company. She's with us now. Hey, there.

ADELE PETERS: Hi. Great to talk to you.

KELLY: OK, so I mentioned this new generation of manufactured homes. They look a lot more like a traditional single-family home. Are there other ways they are redefining our notion of what a mobile home can be?

PETERS: Yeah. I think the appearance is a big factor here, and I think people also may have some outdated ideas about the quality of manufactured homes. And that has really changed over the years as well. These are regulated by federal building codes now, unlike any other type of housing, actually, and that sets certain quality standards. And I think studies have shown that these are - these can be just as durable as a traditionally built home as well.

KELLY: There's also a move to sell them with land - with the land they're sitting on, right? Like, they're tied into the foundation?

PETERS: Yeah, exactly. And historically, I think people have often bought a manufactured home and then rented land, and that meant that they had to rely on more expensive loans - a personal loan rather than a mortgage. But because they're more often sold with land now, that does mean that people can access mortgages. And lenders like Fannie Mae and Freddie Mac are also beginning to offer more favorable mortgages, especially for the newer type of manufactured homes that have certain features that do make them more like a traditional home.

KELLY: And why are they so much cheaper than a traditional home if, as you're telling me, the quality is actually quite different from what it was in years past, and you may get land with it, too?

PETERS: Because manufactured homes are made in a factory, some of the process can be automated, and construction is more efficient. The work can also happen when the weather is bad and construction isn't happening outside. But the biggest advantage this type of housing has is that, because it's federally regulated, unlike other types of housing, and it doesn't have to meet a different building code in every different community, it's possible to make these at a bigger scale. That really brings down the cost of supplies and production, and builders can also avoid some costs, like local permitting.

KELLY: Do we know if they hold their value? I'm thinking of - a lot of people buy a home and think, this is going to be an investment. I'm going to pass it down to my kids, maybe to my kids' kids. Do they hold their value the way a traditional home would?

PETERS: I think there may be some differences in quality between different types of manufactured home. But the studies that I've seen have suggested that these can actually hold their value, and the modern version of a manufactured home could be a good investment.

KELLY: And based on your reporting, what kind of people are buying them? I mean, it's still a home. You mentioned mortgages. People still would need to take out a loan in some cases for this, so it's not the lowest-income buyers who are flocking to them.

PETERS: Yeah, it does really depend. One city in Maryland, called Hagerstown, is getting, actually, an entire neighborhood of 240 manufactured homes, and those are aimed at people earning a moderate income. The population there has really been growing, but the supply of housing hasn't kept up. And this is a way to add more houses at a lower price, but maybe not, you know, the most affordable house. And in another example, though, in Jackson, Miss., a city pilot is trying to add more manufactured homes to vacant lots. And that really is aiming at buyers who have a pretty low budget - so less than $200,000. And that's just getting started there, but I think that shows a lot of promise.

KELLY: And speak more to that side of it - to why this is attractive to city planners.

PETERS: I think some communities are embracing this because traditional construction just isn't meeting demand. The housing shortage right now is huge. By one estimate, the U.S. needs to build more than 3 million new homes, and those aren't getting built quickly enough. We're especially not building enough affordable housing. And I think developers often say that the economics just don't work for building small, affordable homes, even though there's clear demand for them. But manufactured homes can significantly bring down that cost of construction. So at least in some areas, like Jackson, Miss., where the cost of land is not too expensive, they can help make it possible to build houses at a price point that wouldn't have worked otherwise.

KELLY: That's Adele Peters, senior writer at Fast Company. Her piece is called "The Housing Solution 'Hidden In Plain Sight' That Maryland And Mississippi Are Embracing." Thank you.

PETERS: Thanks so much for having me. Transcript provided by NPR, Copyright NPR.