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This is a presentation I gave at the University of Riverside, * Edward J. Blakely Center for Sustainable Suburban Development, Randall E. Lewis Seminar Series.

This is a presentation I gave at the University of Riverside, * Edward J. Blakely Center for Sustainable Suburban Development, Randall E. Lewis Seminar Series.

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  • Hello Everyone! Thank you Richard for that nice introduction! I am honored to be here today! For those of you that don’t know me or haven’t seen me speak before, I would like to tell you just a little bit about the association I work for and what we do.
  • The California Manufactured Housing Institute is the nation’s oldest industry professional and trade association. We were founded in 1937 as the Trailer Coach Association, and have been through two transitions since. In 1986 we amended our by-laws and became CMHI representing all segments of our industry. Many of our members have been involved in the industry and the association for over 50 years. Our membership is comprised of Manufacturers; Retailers; Lenders and other Financial Services; Suppliers; and Developers and Community Owners. Our members produce, sell, install and service over 80% of the new factory constructed homes sold today in California. The other 20% comes from various sources, such as, border towns of states surrounding California; out of state, non-member manufacturers; some realtors and; some government entities. Our Mission is ……… But, most importantly, we at CMHI are your primary resource for information about factory constructed housing and the codes that govern us.
  • As Director of Local Government Relations, I work to provide valuable information and assistance, whenever appropriate, to all municipalities throughout California. As you can imagine, I depend on the membership to keep me apprised of happenings in their communities, as well as, our in-houses processes. I strive to provide assistance to local governments, and CMHI members that will encourage the development of affordable housing, promote compatibility with surrounding homes, and make home ownership more than just a dream for California families.
  • Today we are going to briefly examine how factory constructed housing can be an option for affordable housing for developers and municipalities . We well go into a little more detail on ………………. But, first, I feel it is important that provide you with the basic differences in the types of factory constructed housing.
  • A Manufactured Home is…………….commonly referred to as the HUD Code. By an act of Congress in 1974, the U.S. Department of Housing and Urban Development (HUD) was designated as the government agency to oversee the Federal Manufactured Housing Program. Extra Info: All manufactured homes built for sale in the United States after June 15, 1976, must conform to the Federal Manufactured Home Construction and Safety Standards established by HUD. The federal standard covers the following basic parts of the home's construction: planning considerations, (including ceiling heights, light, ventilation, and exit facilities); fire safety, (smoke detection systems, pop-out egress windows and flame spread limitations); body and frame testing, (such as structural load tests and test procedures for roof trusses); thermal protection; plumbing systems; electrical systems; and transportation, (covering such things as design of the house to withstand damage due to vibration and buckling on the highway when being transported).
  • A Factory-built home is…………….. Interestingly, California is the ONLY state in the nation to refer to them as factory-built. All other’s refer to them as “modular.” In fact Nationally, ”factory-built” refers to the off-site constructed housing industry as a whole. As you can imagine it can be confusing to Californian’s. In California, we refer to the industry here as “factory constructed.” Extra info: California Law : The laws governing the Factory-built Housing Program are in the Health and Safety Code, Division 13, Part 6, Commencing with Section 19960. Part 6 is entitled the "California Factory-Built Housing Law." California Regulations : The Department's regulations adopted to interpret, clarify, or otherwise carry out the law are contained in the California Code of Regulations, Title 25, Division 1, Chapter 3, Subchapter 1, commencing with Section 3000. These regulations address such issues as: Requirements for Department insignia of approval, plan check and inspections Fees for Department insignia and services Design and fabrication requirements for factory-built housing Installation plan requirements Application requirements, qualification criteria and monitoring of approved city, county, and third party agencies (including local governments) providing inspection and design approval services.
  • A mobilehome……………….
  • What about foundations?
  • Our latest estimates and the statistics we see indicate that there are approximately 1.4 million families living in factory constructed housing. As of December 2005, there were approximately 4815 land-leased communities with about 367,361 spaces. But what about locally? According to the California Department of Finance, as of January 2006, Riverside county had 89,947 units and San Bernardino has 85,936. We are sure that these figures are low. After speaking with the Department, we determined this data is gathered from a questionnaire given to the cities throughout California and it refers to manufactured homes that are registered as personal property only. Once home are converted to real estate, they are no longer registered, thus would not be accounted for. Today, approximately 65 - 70% of new homes sold are placed out side of land/leased communities. And 32% were installed and financed as real estate. An insignificant, unknown number were sold for cash and installed as real estate. Only about 3% of all factory constructed homes in California are “factory-built.” The majority are manufactured homes. This is primarily as a result of the non-discriminatory zoning we have for manufactured homes in California. Based on construction performance and safety standards manufactured homes have been added to Section 17951(d) of the Health and Safety Code thereby allowing MH “to be accepted as an equivalent to the State Building Code Standards . As such, a manufactured home is accepted on any lot that a single family home can be built. There are provisions in the codes that provides for standards of architectural compatibility and that is what we want for our homeowners. In your hand outs there is information regarding these codes and standards.
  • OUR TOP TEN MARKETS IN 2006: As you can see Riverside and San Bernardino Counties rank I and 2, respectively. Why? Because we still have the land! Our local jurisdictions are familiar with factory constructed housing and have witnessed our architectural transitions over the years.
  • We’ve come along way since 1937! From temporary shelter to……
  • This happens to be a model home set up at one of our retailer locations in Lake Elsinore. I invite you to stop by and tour the home when you are in the area.
  • We’ve come from an industry that was primarily land leases communities, commonly referred to as mobilehome parks to placement on private property throughout the State.
  • The beautiful two-story unit in the picture on the lower right is in San Diego County. And , by the way, this is a manufactured home that was built here in Corona!
  • This home is in Escondido. It is a factory-built home, modular if you will, delivered here form a factory in Arizona.
  • Our manufacturers can meet the demands of developers and home owners when it comes to architectural design. As you can see by these two projects. Manufactured housing was utilized to redevelop these two very different areas. The top project is in Bellflower. This was a redevelopment of an older trailer court. I have provided you with a publication that speaks to this in detail. The other, was built as part of a new subdivision in Napa.
  • This complex was also built in Napa as affordable housing units!
  • These homes are in Cahill Park in San Jose. Their design was compatible with the other ‘row” homes in the surrounding community.
  • As you can see, we have designs available to suit any neighborhood! From cottage to southwest.
  • The one on the upper left is a four-section, two-story home and the one on the right is a two-section home on a ranch in No. California. These are very popular in mountain communities.
  • So what exactly is affordable housing? As I see it, there are at least two definitions. I am going to refer to them as the “narrow” and the broad definitions. According to all the affordable housing experts and program managers, “ Housing is considered………………….” Current Housing Element Law states, “…………………….”
  • But, in my opinion, the previous definitions can be confusing and often apply to a specific market. To me, and I think many homeowners, affordable housing is “…………..” Factory Constructed housing can satisfy both definitions. For the narrow definition, price points available……………. For the broad definition…….affordability will vary on place and circumstance. What I consider affordable for me and my husband, may be out of reach for you or vice versa. The average price of a manufactured home built this year is $114,561. That is for a the average two-section, 3 bedroom, 2 bath, 1414 sq foot home. It doesn’t include the price of the land, fees, on-site construction costs, etc. The sale price does include normal set-up and delivery. In addition, prices vary by market, just like site built homes do. For many, that is very affordable!
  • Here is an example on a project that was done in Oakland. Both slides on the right are pictures of a project done by Oakland Community Housing, Inc. which is the redevelopment agency for the City of Oakland. Four section townhomes were built over site-built garages, creating three story town homes. Each individual unit was then sold as “affordable” housing and qualified for subsidies as such. Sale price? $459,000 to $494,000. Affordable for Oakland! The bottom home is part of a four home development built in East Oakland in a highly commercialized area with a lot of blight. OCHI actually built a street. What was amazing to me was the response on the neighbors. One neighbor came over to tell me that since the homes went in his wife has buying new curtains and he had to paint the house. He was especially proud of the flowers that he had planted. These homes sold for $390,000. Two of the buyers held section 8 vouchers!
  • The City of Loma Linda Redevelopment Agency worked with one of our retailer/developer members and a factory from Arizona to hit the price points they needed for these three homes. Working together, these homes, valued at over $300,000, sold for $160,000 and qualified for affordable housing finance subsidy programs provided by the City. As you can see, affordability has many faces!
  • Where does quality fit in with affordability? Simply stated, Quality is…..Manufacturers of all kinds, autos, to washing machines have standards. When the product is built within these standards, the quality product requirement is met! Subjectivity comes into play when we speak to amenities, and most manufacturers have various models to meet consumers needs. Webster's defines quality control as…….. All manufactured homes have rigid quality control programs and must meet the standards established by the Manufactured Home Construction and Safety Standards establish by HUD. Better known as “the HUD Code (section 3280) . All California factories meet or exceed these standards. The State of California recognizes this and legislatively established that a manufactured home built to HUD standards is considered equivalent to the California Building Code for construction and safety standards as I mentioned before. As such, manufactured homes shall be accepted on any parcel that a single family home can be constructed. Factory-built homes also are constructed under the supervision of HCD to comply with California building codes before certification and shipment from the factory. We have non-discriminatory zoning.
  • CBIA…… Factory constructed housing helps fulfill this need.
  • So, if factory constructed housing provides high-value, quality homes, as does site built, why are they less expensive? Henry Ford figured out a long time ago that he could build cars in an assembly plant a lot cheaper than in his garage. That holds true for factory constructed housing as well. And for many of the same reasons! Affordability factors include…..
  • And what about “Green”? ……. According to……
  • SO are factory constructed homes “Green”? ABSOLUTELY…for many reasons, these are just a few! Factory constructed……
  • All of this being said, high-value, quality, affordability, architectural design options and so forth…………….we do have our challenges in the market place. Much the same as site builders, we face…. Public misperception – Many people don’t know what today’s manufactured home looks like. They have not seen the product and once installed properly on private property is indistinguishable from site built. Unfortunately, media focus (as is the case in many industries) often focuses on the negative side. It is our job to market the positive side. It is unfortunate that the press is more interested in a stabbing at a mobilehome park than a developer building affordable housing for a community utilizing today’s factory constructed homes. I have spoken with many site builders about this challenge and they comment that affordable housing as a whole has a negative bias and they are often facing similar challenges in public perception and opinion. Local governments are often confused by our industries non-discriminatory zoning and architectural compatibility allowances. We work with local governments on a continual basis, primarily as a resource, but also to assist them in their training of staff and officials. Many of our factories welcome officials and the public to tour their facilities.
  • Another of our challenges is to provide a “turn-key” home. Because of our delivery system – a home is built in a factory, sold through a retailer or developer, site prep is done by a contractor (who may or not be the retailer or developer) installed by a contractor, who may or not be the same contractor that did the site work, landscaped by some one else and finally closed by escrow – our product can be confusing to the newcomer to our industry. However, those that do it, do it well! Attractive Financing - We have many financing options for the homebuyer. But, we face our challenges there as well. The good news – in today’s market – everyone is challenged! Our loans are not sub-prime loans! That is important to note. However, in some cases, they will not be at par with site built home loans and may not seem competitive at first glance. Price points of the home usually offset this additional loan expense. This is primarily noted with National lenders faced with problems in other states. Local lenders typically are more competitive.
  • In Summary, we believe…………………….

Blakely2007 Presentation Transcript

  • 1. Factory Constructed Homes: An Option for Affordable Housing September 20, 2007 California Manufactured Housing Institute Billie A. Tribbett Director, Local Government Relations
  • 2. Who is CMHI?
    • California Manufactured Housing Institute
      • Oldest Professional and Industry Trade Association in the Nation
    • Our Mission is…
      • “To advance the availability and ownership of quality, high value homes, marketed by licensed retailers, by promoting the purchase of factory constructed housing and the development of desirable sites and communities in California”
    • Your primary resource for information!
  • 3. Director, Local Government Relations
    • Industry Liaison with…
      • California’s 536 cities and counties
      • Housing and Community Development (HCD)
      • Caltrans and CHP
      • Local Governments and Agencies
    • Our Process…
      • Ideally proactive
      • Daily newspaper and “Google” monitoring
      • Review local gov’t meeting agendas and minutes
  • 4. How Factory Constructed Housing Can Help You !
    • Support Local Government Interests
      • Alternative for city planners while considering their Housing Element
      • Lower construction costs
        • Typically 10 – 20 % lower that site constructed
      • Faster completion dates
      • Help meet “Green” standards in municipalities
  • 5. Basic Differences: Manufactured Homes vs. Factory-Built (Modular) Housing
    • A Manufactured Home is built to a preemptive federal health, safety and construction code….
    • The HUD Code
  • 6. Differences…
    • A Factory-built Home is built to the:
    • California Building Standards Code and regulations pursuant to Section 19990 of the California Code of Regulation Title 24
  • 7. Differences…
    • A Mobilehome was built to the California Mobile Home Code in place at its time of production…
        • Primarily a systems code - not a performance and safety code
        • No single family mobilehomes have been built in California since June 15, 1976
  • 8. What about Foundations?
    • Factory-Built Homes are always installed on a permanent foundation and titled as real property
    • Manufactured Homes can be installed on a support system and titled as personal property (chattel) or on a permanent foundation and titled as either personal property or real property
  • 9. 2006 Statistical Estimates
    • 1.4 million homeowners
        • Nearly 650,000 factory constructed homes
        • Approx. 300,000 manufactured homes
        • Balance primarily mobilehomes built prior to 1976
    • 367,361 land/leased lots
        • 4,815 manufactured home communities (parks)
    • Registered as personal property
        • Riverside County – 89,947 units
        • San Bernardino County – 85,936 units
    • Placed outside of land/leased communities –
        • Approx 70% of new sales
        • 31% installed and financed as real estate
            • *sources – California Manufactured Housing Institute
            • California Department of Finance
  • 10. 2006 Top Ten California Counties by New Home Placement
    • RIVERSIDE 1,136
    • SAN BERNARDINO 870
    • SAN DIEGO 755
    • LOS ANGELES 572
    • ORANGE 511
    • KERN 495
    • SANTA CLARA 291
    • VENTURA 232
    • SAN LUIS OBISPO 221
    • SANTA CRUZ 219
    • * Source - Sawtooth Research Group
  • 11. Factory Constructed Housing through the Years –Transitions
    • Temporary Shelter to …
  • 12. Transitions…
    • Permanent Housing…
  • 13. Transitions…
    • Land Leased Communities to
    • Private property…
  • 14. Transitions…
    • Single – Section to…
    • Multi – Section to…
    • Two Story...
  • 15. Transitions…
    • Now, we add Factory-built !!!
  • 16. Various Designs Suited for Smaller Inner-City Lots
    • Two Story:
      • For narrow lots
      • “ Trailer park” conversions
    • Two Story:
      • Standard Lot
      • In-fill and PUD’s
  • 17. Designs….
    • Multi – Family:
      • Density
      • Affordable housing!
  • 18. Designs…
    • Town Homes:
      • Density
      • Affordability
      • Architectural Compatibility
  • 19. Designs…
    • Architectural Compatibility:
      • From Cottage to Southwest and many others
  • 20. More designs….
    • Including Mountain Lodge homes…
  • 21. What is Affordable Housing?
    • Narrow Definition –
        • “Housing is considered affordable when a monthly mortgage or rent payment is no more than 30 percent of income. So defining affordable housing requires a consideration of both income and housing costs.”
        • California housing element law defines four income categories based on the percentage of an area's median income:
          • Very low-income 0 - 50 %
          • Low-income 50 - 80 %
          • Moderate-income 80 - 120 %
          • Above moderate-income 120 +%
            • * Source - :California Health and Safety Code Section 50052.5 and 50053; National Low Income Housing Coalition
  • 22. Affordability….
    • Broad Definition –
        • “ Anyplace that I can afford, on the money that I make, that I can call home .”
    • Factory constructed housing can satisfy both definitions!
        • Price points available from manufacturers to meet construction cost and sales price limits
        • Municipalities can purchase direct from manufacturers
        • Eligible for subsidized and insured financing programs
          • CalFHA, VA, FHA
          • Grants, HOME Funds
          • Forgivable loans
  • 23. Affordable Housing in Oakland! Above: Linden Street before and after Right : Completed “E” Street project
  • 24. Loma Linda Affordable Housing! Court Street Before Lind Avenue Before Lind Avenue After
  • 25. Quality and Affordability Factors
    • Quality is “ conformance to standards ”
    • Quality Control defined –
        • “ an aggregate of activities (as in design analysis and inspection for defects ) designed to ensure adequate quality, esp. in manufactured products”
    • Factory constructed homes provide quality,
    • high-value homes
  • 26. CBIA Chief Economist Alan Nevin Says…..
    • “ The problem is we need new homes in all price ranges, and given the constraints on housing and ever rising fees, it’s all but impossible to meet the need in the entry-level market, where our need’s the greatest! ”
  • 27. Why is Factory Constructed Housing Less Expensive than Site-built?
    • Affordability Factors –
        • Efficiency of the assembly line
            • Homes are built in a controlled environment
            • No weather delays
            • “ Scrap factor” –material usage
            • Labor is utilized more efficiently
            • Lower turnover rates = lower training costs
            • Enormous purchasing power
        • Reduction in the number of contractors
            • At the factory
            • On site
        • How much savings over site-built?
            • Manufactured homes: 20-30%
            • Factory-built: 10-20%
  • 28. What About Factory Constructed Housing and Building “Green?”
    • According to Global Green USA , there are five major elements in building green or building materials:
    • It Saves Energy –products that either reduce heating or cooling loads by design or orientation,
    • It Conserves Water – products that conserve water above and beyond legal requirements; or products that consume less water, such as native landscaping and drought-tolerant plantings.
    • It Contributes to a Safe Healthy Indoor Environment – products that don’t release significant pollutants into the building; such as non-toxic caulks and sealers, and CRI Green Label Carpet.
    • It Protects Natural Resources – products with recycled content; products made from agricultural waste material,
    • It Reduces Buildings’ Impact on the Community – products that mitigate the effects of chemical contamination, ground disturbance, or air pollution.
  • 29. How we build “Green”
    • Factory constructed homes are built in a controlled environment where materials, painting techniques and waste management are subject to state and federal regulations
    • Recycled products such as tires and axles are utilized, and homes can be built to meet Energy Star® standards.
    • Site work has a minimal environmental impact.
      • On-site and at the factory
      • Dust control
      • Minimal disruption to the site and neighborhood,
      • Removal of waste products, and
      • Landscaping and water usage is optimized
  • 30. Challenges to Factory Constructed Home Developers
    • Much the same as site-built developers –
        • Land acquisition costs
        • Development Impact Fees
        • Limited resources available to process paperwork
        • Attractive zoning for “communities”
    • Public misperception –
        • “Sins of the Father’s” – pre-HUD Code homes
        • Misplaced prejudices
        • Media focus on the negative
    • Local government misconceptions
  • 31. Challenges cont.
    • Unique Deliver Method –
        • Manufacturer, Dealer, Contractor, Installer
    • Attractive Financing –
        • FHA, VA, CHFA, Conv. Mortgages:
            • Available, but with restrictions for MH
            • Available with NO restrictions for factory-built
        • Personal Property (chattel) Financing:
            • Available, not California specific – low loan amounts
        • Construction Loans:
            • Different needs for factory constructed housing
            • Limited programs
            • Self-financing common
  • 32. In Summary….
    • Factory constructed housing is a viable option for developers and planners! They offer –
        • Lower construction costs
        • Architectural compatibility to surrounding homes
        • Multitude of designs to fit any lot size
        • Affordable by design and definition
        • High quality, high-value
        • A “Green” alternative for developers
        • Challenges – much the same as site builders
    • Questions???????
  • 33. California Manufactured Housing Institute
    • Please call or visit us at our website anytime!!!!
    • 10630 Town Center Drive, Suite 120
    • Rancho Cucamonga, CA 91730
    • 909-987-2599
    • [email_address]
    • www.cmhi.org