House Financial Services Subcommittee Holds Hearing on Housing Supply and Innovation

The U.S. House Financial Services Subcommittee on Housing and Insurance held a hearing on May 14, “Expanding Choice and Increasing Supply: Housing Innovation in America.” Witnesses were Mr. Bill Boor, President and CEO, Cavco Industries, testifying on behalf of the Manufactured Housing Institute as Chairman of the Board; Mr. Eric Schaefer, Chief Business Development Officer, Fading West; Dr. Andrew P. McCoy, PhD, professor and director of the Virginia Center for Housing Research (VCHR) at Virginia Tech University; and Mr. Colten Lewis Fleu, Senior Attorney, Mountain State Justice, Inc. 

The hearing focused on manufactured housing and other innovative, off-site construction methods, including modular housing and 3-D printed houses, barriers to implementing modular housing, and how modular housing and other innovations could help address the nation’s severe shortage of affordable, accessible homes. Several Democratic subcommittee members raised concerns about recent proposed cuts to housing programs in the President’s “skinny budget” that will further exacerbate the affordable housing crisis, emphasizing that while innovation positive, we need robust, fully funded federal housing programs to help low-income Americans have stable, affordable, accessible housing. Democratic members and Mr. Fleu also highlighted the issue of private equity firms and hedge funds purchasing manufactured housing communities and then imposing drastic rent increases on residents, who are often living on fixed incomes.   

The witnesses shared examples of the benefits of manufactured, modular, and 3-D printed housing, including significantly faster production compared to site-built housing, and less construction waste. They also shared challenges, including local zoning laws excluding manufactured housing; outdated construction requirements, such as the requirement for a permanent chassis on manufacture homes; and a lack of affordable financing options. In many cases, especially with older or smaller homes, manufactured homes are considered personal property and therefore not eligible for home mortgages, which have lower interest rates than personal property loans. The witnesses brought up the need for changes at the Government Sponsored Entities (GSEs – Fannie Mae and Freddie Mac) to expand financing to include more types of manufactured housing. Mr. Fleu also stated that any GSE commercial financing for manufactured housing communities needs to require tenant protections.  

Manufactured housing is an important source of affordable housing for millions of Americans, especially people with low incomes and those living in rural areas. Expanding manufactured housing and other off-site construction can be a piece of the puzzle to address the affordable housing crisis, but sustained, significant federal investments in affordable housing and homelessness programs will be required to address the housing needs of people with the lowest incomes.  

Information about the hearing, witness list, and a link to watch a replay of the hearing can be found here.