Dr. Ben Carson
Secretary of Housing and Urban Development
Manufactured Housing Conference Remarks
New Orleans, Louisiana, Hyatt Regency Hotel, May 7, 2019
As prepared for delivery. The speaker may add or subtract comments during his presentation.
Thank you, Joe [Stegmayer, MHI Chairman], for those kind words. And thank you to MHI for inviting me to join you this morning. On behalf of HUD, it is a privilege to share my vision for addressing Americaâ€™s affordable housing challenges â€“ and the role of manufactured housing â€“ with so many leaders and pioneers of the industry here today.
Under President Trumpâ€™s leadership, our nation is witnessing historic highs in employment, job creation, and economic growth. The financial optimism of everyday Americans has surged to an 18-year high, and is nearing an all-time record. For those families who have access to affordable housing, they are facing their bright futures with confidence.
And yet a serious challenge still persists: millions of hardworking Americans who seek affordable rents or sustainable homeownership simply cannot get their foot in the door. We have reached the point where many of our nationâ€™s teachers, nurses, police officers, and firefighters struggle to live in or around the communities they serve.
What they face is a critical shortage in our countryâ€™s supply of affordable homes.
This is not just a housing crisis â€“ it has a human face. Homes are at the heart of building strong families, strong communities, and ultimately, a strong country.
HUDâ€™s mission is to ensure all Americans have access to safe, quality, and affordable housing. And we believe that manufactured housing has a promising role to play â€“ especially in the area of quality affordable housing.
For that reason, one year ago, I announced that HUD was in position to usher in a â€śnew era of cooperation and collaboration between our Department and the manufactured housing industry.â€ť
Today, Iâ€™d like to share HUDâ€™s current vision for how we are diagnosing affordable housing challenges, and how manufactured housing is an active ingredient in the medication we are prescribing for a stronger America.
Our nationâ€™s shortage of affordable housing is ultimately an issue of supply and demand. With millions of people in need, high demand is already guaranteed. Thatâ€™s why HUD has focused our strategy on increasing supply â€“ namely, by promoting initiatives, programs, techniques, and technologies that produce more affordable homes.
Since the key constraint on supply is the cost of new construction and development, the solution to the problem is to change the cost side of the equation.
Manufactured housing has emerged out of the limestone and stepped into the limelight, to address precisely this need.
According to MHI reports, the average cost per square foot of a manufactured home is nearly half that of a site-built home â€“ $49 [dollars] per square foot, as opposed to $107 [dollars]. These dramatic cost savings in construction enable responsible citizens to secure housing that may be considerably less expensive than renting or purchasing a site-built home.
And yet, even at this lower price, manufactured homes appreciate in value at a rate similar to site-built homes, according to the Federal Housing Finance Agency Housing Price Index. Sustainable homeownership is the number one builder of financial capital for most American families. For example, the average net worth of a renter is $5,000 [dollars], while the average net worth of a homeowner is $200,000 [dollars]. Thatâ€™s an extraordinary 40-fold difference. But with comparable home appreciation rates to site-built homes, manufactured homes exhibit their own extraordinary potential to be a wealth creation tool for ordinary, everyday American families.
Beyond the matter of price, there are also flexible ownership models, such as land-lease manufactured home communities, that could have the potential to combine affordability with a sense of neighborhood and lifestyle.
These factors â€“ asset-building and community-building â€“ are important to HUDâ€™s mission to be more than a place that simply houses people, but a place that actually lifts people out of poverty and helps them become self-sufficient.
Manufactured Housing and Low-Income Communities
This industry is already having a tremendous impact on serving those communities who are most in need.
Today, more than 20 million Americans live in manufactured housing, which makes up approximately 10 percent of single-family residences. As a result, manufactured housing has become the largest source of unsubsidized affordable homes in the nation â€“which saves taxpayer dollars.
By housing families that average between $30,000 to $50,000 [dollars] per year in income, manufactured homes also allow more people and families to pursue an American Dream that may have once felt out of reach.
While lives are helped through new homes, livelihoods are helped through new jobs. More than 40,000 citizens are employed in this sector, from all walks of life. And the Administration is especially impressed by the use of American suppliers in American manufacturing plants.
That is how innovation turns into opportunity.
Which brings me to the topic of Opportunity Zones.
Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act to stimulate economic development and job creation by incentivizing long-term capital investments in low-income neighborhoods. They are also a potent tool to combat the shortage of affordable housing.
HUD expects that Opportunity Zones will be a catalyst for transformational real estate development in communities that are economically distressed. Thirty-five million Americans now live in such designated areas, in all 50 states. There, millions of housing units are needed, in both urban and rural areas.
I would encourage the industry participants here today to consider the role of Opportunity Zones in the context of local development plans, and how manufactured housing stakeholders may be included. As bursts of activity for new buildings and construction are unlocked by this powerful tax incentive, communities within Opportunity Zones are likely to experience significant growth and changing needs. When newly empowered residents pursue their path to self-sufficiency, such areas may generate strong local demand for affordable housing solutions â€“ which manufactured homes are particularly well-positioned to provide.
Manufactured housing can also play a role in HUDâ€™s mission to promote healthy homes.
After many decades as a pediatric neurosurgeon â€“ tasked with caring for the welfare of children â€“ safety is a paramount concern for me in any housing solution.
As HUD Secretary, I have instituted a broad array of initiatives designed to promote healthy homes and to eliminate environmental hazards. For example, last December, HUD awarded nearly $140 million [dollars] in grant funding to 48 state and local government agencies to help protect families from lead-based paint and other threats.
For me, this is a personal issue. At an early age, I learned first-hand the hazards of an unsafe home. My mother raised my brother and me by herself from the time I was eight years old. While she struggled with single motherhood, our problems multiplied when we moved to a tenement in Boston. There, we shared a roof with rats, roaches and a host of other risks.
While my brother and I emerged with our health intact, many families do not. Thatâ€™s why, as HUD Secretary, I advocate for new techniques and new technologies that can ameliorate these menaces. In manufactured housing, innovations in construction techniques have the potential to facilitate building in a less wasteful, and more environmentally sound way. Innovations in construction materials could create components that are higher performing, less prone to mold, wind or water damage, and more resistant to deterioration.
Those are the ingredients of a healthier home.
Such advantages are even more visible in the face of natural disasters.
Natural disasters do not just devastate housing capital â€“ they devastate human capital, through lives interrupted, school days missed, and communities fragmented under strain. As a result, last year, HUD allocated more than $35 billion [dollars] in funding to 16 state and local governments, to help Americaâ€™s hardest hit regions. These grants represented the largest single amount of disaster recovery assistance in HUDâ€™s history.
Manufactured housing can help mitigate this kind of damage through the use of environmentally resilient construction materials, as well as by providing an affordable and permanent housing solution for lower-income survivors.
On a recent visit to Alabama, I was shown a site that was demolished by massive tornadoes â€“ and the only homes in the area that successfully weathered the storm were manufactured houses. It was a silent testament to their resilience. It is also possible that HUDâ€™s work with industry leaders to update wind Standards for manufactured housing in 1994 could have helped to limit damage and potentially save lives.
This city, New Orleans, is all too familiar with the pain natural disasters can cause. If manufactured homes can alleviate some of those harms in the future, the next hurricane may leave much less devastation, and much more hope, in its wake.
Innovative Housing Showcase
Iâ€™d now like to cover two of the obstacles to adoption, and how HUD is trying to help.
The first obstacle is that manufactured housing is often overlooked because it is misunderstood. Many times, when people hear the words â€śmanufactured house,â€ť their first image is an old trailer that lacks the modern amenities and features of a site-built home. This image is a false faĂ§ade.
The fact that manufactured homes can be so beautifully done â€“ and in fact are often indistinguishable from site-built homes â€“ is manufactured housingâ€™s best kept secret. Well, HUD believes that secret should be shared.
Thatâ€™s why we are proud to help educate both the American public and policymakers by featuring manufactured homes at HUDâ€™s inaugural Innovative Housing Showcase, which will be held this June on the National Mall in Washington, D.C.
During the Showcase, MHI will be participating and working with its members to present at least two manufactured homes to be prominently displayed in the heart of our Nationâ€™s capital, viewable to thousands of onlookers during the five-day event.
Deregulation; Removing Regulatory Burdens
The second obstacle is the presence of regulatory roadblocks that still stand in the way.
HUD recognizes the importance of removing undue bureaucratic burdens on the industry while striving to maintain the quality, safety, durability, and affordability of manufactured homes. As a result, we have placed an increased emphasis on clarifying our regulations, including by undertaking a full-scale review of our manufactured housing program to ensure we preserve the proper amount of oversight without stifling the industry.
We are also currently evaluating our Office of Policy Development and Researchâ€™s recent recommendation to expedite the manufactured home code-making process within HUD â€“ which could better help HUD Standards keep pace with new industry innovations and techniques.
To advance these efforts, I am grateful for the many insights MHI has provided to HUD in the form of its available reports, educational materials, and constructive dialogue.
Last week, I spoke before the Manufactured Housing Consensus Committee, who makes the initial recommendations for proposed changes to our HUD-code provisions, setting in motion the approval process for updating regulations. The committee has an aggressive agenda and must be efficient to reach consensus and close out many of the more than 300 log and deregulatory items outstanding.
Thatâ€™s why, to provide more help, Iâ€™ve brought on more staff at HUD for the manufactured housing and regulatory affairs offices. These new team members have extensive backgrounds and experience in the field. They are ready to work with committee members not just when visiting plants, State Administrative Agencies, third-party inspection agencies, or addressing consumer complaints, but on a holistic basis â€“ to assist with getting HUD code updated and more hard-working Americans housed.
In closing, manufactured housing is a vital part of HUDâ€™s prescription to make safe, quality, desirable, affordable homes available to millions of hard-working Americans.
The foundations of a better tomorrow are built with the new techniques and new technologies of today. And for manufactured housing, that time is now.
I look forward to continuing our work together in the months ahead, and delivering that brighter future to the hearts and homes of the American people we proudly serve.
Thank you, and God Bless.