• <div class="header-image" style="background-image: url(/live/image/gid/4/2635_V6N3_Header.rev.1522162449.jpg);">​</div><div class="header-background-color"/>

The Unaffordable States of America

August 02, 2017
For too many of us, the American Dream has become a pipe dream. The nation is currently in the midst of an affordable housing crisis, where rents have skyrocketed while homeownership rates have plummeted.

A recent study found that for every 100 Extremely Low-Income families (those with incomes at or below 30% of the area median income), the market provided just 21 adequate, affordable, and available (AAA) units. [1] But it’s not just renters who are hurting. While the housing market has largely recovered from the Great Recession, the homeownership rate has not. Today’s homeownership rates are near historic lows, with prospects of owning a home particularly bleak among communities of color and minorities. [2]

Image: A Downpayment on the Divide: Steps to Ease Racial Inequality in Homeownership. Source: ProsperityNow.Image: A Downpayment on the Divide: Steps to Ease Racial Inequality in Homeownership. Source: ProsperityNow.

The Department of Housing and Urban Development (HUD) has (inadequately) housed America with programs ranging from public housing to issuing vouchers for use in the private market. Many programs have been relatively successful (see the section 8 program) while others have been less so (see the concentrated public housing-turned-ghettos built in the 1950s). Overall results have been mixed. Housing assistance programs do add another 24 AAA units to the market each year [3] but only around 1 in 4 families who qualify for assistance actually receives any. [4] And of course, these programs are always under the scrutiny of capricious governments, each new HUD budget vulnerable to cuts. The president’s proposed FY18 budget cut affordable housing programs by $7.7bn, which would have seen over a quarter of a million people lose their housing vouchers. [5]

Properly utilized, manufactured homes can complement conventional housing assistance programs. Manufactured homes are built off-site, making them cheaper and faster to produce. As of 2015, the average cost per square foot of a new manufactured home was $48, under half the $101 per square foot for a site-built home. Not only can a manufactured home be built in roughly one-fifth the time of a comparable site-built unit, but it will also generate 35-40% less waste in the process. [6] About 70,000 manufactured homes are produced each year, contributing around $2.6bn to the economy. [7] Contrary to popular belief, these homes are not rusted-out trailers. Since the passage of the National Manufactured Housing Construction and Safety Standards Act of 1974, manufactured housing has offered high quality, cost-effective housing to millions of Americans.

Manufactured homes are a naturally occurring source of affordable housing, meaning they aren’t typically subsidized by the taxpayer and yet remain affordable to many low-to moderate-income households. Nearly 18 million individuals live in manufactured housing [8], with a median household income of just over $28,000 per year. [9] Despite their affordability – approximately 70% of the nation’s housing stock priced below $150,000 is manufactured housing [10] – families living in modern manufactured homes will find their units have a comparable life-expectancy to site-built units. [11] Households that own the land beneath their home stand a good chance of their home appreciating, too. [12]

Image: Quick Facts: Trends and Information about the Manufactured Housing Industry 2016. Source: Manufactured Housing Institute.Image: Quick Facts: Trends and Information about the Manufactured Housing Industry 2016. Source: Manufactured Housing Institute.

If manufactured homes are cheaper, more environmentally friendly, and already offer an affordable source of housing to millions of Americans, why aren’t we using them more to tackle the affordable housing shortage? One of the largest flies in a fly-filled ointment is security of tenure. There are currently around 6.8 million manufactured homes in the U.S., 7% of the nation’s housing stock. But only 48% of manufactured home occupants own their home and the land beneath it. The remainder are vulnerable to arbitrary rent increases and eviction. Nowhere is this more of a problem than in the nation’s 50,000 land-lease communities, colloquially and inaccurately known as trailer parks and home to 2.9 million households. [13] When these communities don’t own the land beneath their homes, the consequences can be disastrous.

In St. Anthony’s, Minnesota, nearly 100 residents have been forced to relocate over the past year since the sale of their land-lease community, Lowry Grove. For 70 years, Lowry Grove offered affordable housing in an increasingly unaffordable city. [14] But on June 30th Lowry Grove shut its gates and St. Anthony’s became a little less affordable. Those evicted will face enormous financial burdens, only outweighed by the emotional pain associated with losing their homes. But society will pay too. Absent government support, the evicted are unlikely to find affordable homes nearby. Children will be pulled from schools, parents will lose jobs, and social services will be strained. [15] The D.C. based nonprofit Prosperity Now is already exploring researching the public and personal costs associated with the mass eviction of Lowry Grove.

Federal policy could help prevent more Lowry Groves from happening. Many states already require residents to be given the right of first refusal on the purchase of their manufactured home community if the owner decides to sell-up. But the Manufactured Housing Community Sustainability Act (H.R. 3296) introduced by Rep. Keith Ellison (D-MN) would go further, encouraging resident ownership by amending the tax code to provide a 75% federal credit on qualified gains to owners willing to sell to Resident-Owned Communities (ROCs). This ownership structure protects residents from rent increases and unfair eviction, improving residents’ security of tenure. [16] But currently only 2% of all manufactured home communities are resident or nonprofit owned, despite these communities’ proven success in New Hampshire, Vermont, and Massachusetts. [17]

Manufactured housing is a securer, more sustainable solution to the affordable housing crisis than many rental assistance programs. Give a family a voucher and they’ll be housed for as long as Congress appropriates funds for the purpose. Give a family a route to affordable homeownership and they’ll be housed for life. But to stand a chance of making manufactured housing a valuable tool in tackling the affordable housing crisis, we first need to advance legislation like Ellison’s promoting security of tenure for existing manufactured home residents. Only then will more households be able to securely harness the potential of manufactured homes in these increasingly Unaffordable States of America.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References

  [1] Getsinger, Liza, Lily Posey, Graham MacDonald, and Josh Leopold. “The Housing Affordability Gap for Extremely Low-Income Renters in 2014.” The Urban Institute (April, 2017). Available online at
http://www.urban.org/sites/default/files/publication/89921/gap_map_report.pdf

  [2] Chopra, Anju, Dedrick Asante-Muhammad, David Newville, and Doug Ryan. “A Downpayment on the Divide: Steps to Ease Racial Inequality in Homeownership.” ProsperityNow (March, 2017). Available online at
https://prosperitynow.org/resources/downpayment-divide-steps-ease-racial-inequality-homeownership

  [3] Getsinger. “Housing Affordability Gap.”

  [4] Desmond, Matthew. Evicted: Poverty and Profit in the American City. New York: Crown, 2016.

  [5] Anon., “Trump FY18 Budget Calls for Massive Cuts to Affordable Housing Programs.” The National Low Income Housing Coalition (May 22, 2017). Available online at http://nlihc.org/article/trump-fy18-budget-calls-massive-cuts-affordable-housing-programs

  [6] Ryan, Doug. “The Facts about Manufactured Housing: A Responsible Vehicle for Affordable Homeownership.” ProsperityNow (n.d.).

  [7] Anon., “Quick Facts: Trends and Information about the Manufactured Housing Industry.” Manufactured Housing Institute (2016). Available online at http://www.manufacturedhousing.org/wp-content/uploads/2016/11/1836temp.pdf

  [8] U.S. Census Bureau/ American FactFinder. “B25033: Total Population in Occupied Housing Units by Tenure by Units in Structure.” American Community Survey 5-Year Estimates (2011-2015).

  [9] U.S. Census Bureau/ American FactFinder. “C-09-AO: Income Characteristics – All Occupied Units (National).” American Community Survey (2013).

  [10] Walker, Kevin. “Steps Forward: Delivery of Competitive Manufactured Home Financing in Land-Lease Communities, Especially with Long Term Security of Tenure.” ProsperityNow (October, 2016).

  [11] Vermeer, Kimberly and Josephine Louie. “The Future of Manufactured Housing.” Joint Center for Housing Studies, Harvard University (January, 1997). Available online at http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/r97-1_vermeer_louie_futmanhousing.pdf

  [12] Jewell, Kevin. “Manufactured Housing Appreciation: Stereotypes and Data.” Consumers Union (April, 2003). Available online at https://consumersunion.org/pdf/mh/Appreciation.pdf

  [13] Walker. “Steps Forward.”

  [14] Mumford, Tracy. “The Last Week in Lowry Grove: Another Mobile Home Park Shutters.” Minnesota Public Radio News (28 June, 2017). Available online at https://www.mprnews.org/story/2017/06/28/lowry-grove-mobile-home-park-last-week-closing

  [15] Du, Susan. “Suit: Lowry Grove Residents Misled Public to Stop Sale of Mobile Home Park.” City Pages (5 June, 2017). Available online at http://www.citypages.com/news/suit-lowry-grove-residents-misled-public-to-stop-sale-of-mobile-home-park/425969984

  [16] Anon. “What is a ROC? How is it Different?” ROC USA. Available online at https://rocusa.org/whats-a-roc/what-is-a-roc-how-is-it-different/

  [17] Walker. “Steps Forward.”

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>