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| Manufactured homes offer some of the most affordable options on the market, particularly in rural and exurban areas. Courtesy of Villa Homes |
A major shift in housing policy could soon reshape America’s most overlooked source of affordable homes and potentially cut costs for first-time buyers across the country.
In late July, the Senate Banking Committee unanimously passed a sweeping, bipartisan housing reform package. It marks the most ambitious federal housing policy push in over a decade. But buried in the broader legislation is a long-awaited change that could unlock a new era for one of the most cost-effective forms of homeownership: manufactured housing.
Specifically, the bill includes a provision to scrap a decades-old requirement that manufactured homes be built with a permanent steel trailer frame or “chassis.” While once essential for mobility, this component is now largely obsolete. Eliminating it could reduce costs, allow for more versatile home designs, and expand where these homes can be built.
As homeownership drifts further out of reach for many Americans particularly young families and rural residents the move could have outsized effects on affordability and availability.
Manufactured Homes Could Get a $10,000 Discount Overnight
Today’s manufactured homes bear little resemblance to the trailers of the past. Often factory-built and then installed permanently, they offer a blend of affordability, efficiency, and surprisingly high quality making them an essential part of the starter home market.
Ending the chassis requirement could be transformative, both economically and environmentally.
“On day one, chassis reform cuts $10,000 off a type of home that is already sold in the market in the hundreds of thousands,” said Alex Armlovich, a housing analyst at the Niskanen Center, a libertarian-leaning think tank. “There’s not a lot else Congress can do in one fell swoop to cut 10% off the price of any home.”
Sean Roberts, CEO of Villa Homes a manufacturer of prefab housing in California and Colorado said the chassis repeal would make it easier to build multi-story homes and eliminate material waste. “It’s arguably better for the environment, as well, because you’re using timber frame construction rather than steel,” he noted.
Roberts likens his company’s homes to the “Toyota Camry of housing” affordable, reliable, and well-engineered, if not exactly design darlings. “Very good quality,” he said, “but probably not winning architecture awards.”
Clayton Homes, one of the largest manufactured homebuilders in the U.S., also backed the reform, noting it would lower costs and spur innovation across the industry.
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| About 100,000 manufactured homes are produced a year — down from a peak of nearly 580,000 in 1973. Courtesy of Villa Homes |
A Small Industry With Big Potential
Factory-built homes have long been hampered by regulatory hurdles especially the federal HUD code, a set of national standards for manufactured housing dating back to 1974. One of its key rules, the permanent chassis requirement, has become a relic of a bygone era.
Initially, the code was meant to bring uniformity to the trailer and mobile home market. But critics now say some of its features were designed to stifle competition from factory-built housing and preserve the dominance of traditional “stick-built” homebuilders.
The manufactured housing industry has never fully recovered. In the early 1970s, it was producing nearly 580,000 units annually. Today, that number hovers around 100,000 less than 10% of total new housing starts.
Ironically, other industries have embraced factory-built efficiency. Cars, planes, and even commercial buildings are now mostly constructed in climate-controlled factories. But most U.S. homes are still built piece-by-piece outdoors, subject to weather delays, labor shortages, and rising material costs.
Pre-fabricated housing, advocates argue, could help reverse America’s housing productivity crisis allowing homes to be constructed faster, more affordably, and with fewer carbon emissions.
Last year, the Biden administration made a notable change to the HUD code by allowing up to four housing units per manufactured structure. Now, with Congress finally moving to modernize even more of the rules, experts say the sector could be poised for a comeback if other barriers can be cleared.
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| American home-building productivity has stagnated. Some believe manufactured homes could help. Courtesy of Villa Homes |
Big Hurdles Still Remain
While removing the chassis requirement is a major step forward, it won’t be enough on its own to revive manufactured housing.
“The reform could be a game-changer,” said Mark Erlich, a labor policy expert and author of The Way We Build: Restoring Dignity to Construction Work. “But it doesn’t solve every problem the industry faces.”
Manufactured homes still suffer from outdated public perceptions. Many Americans associate them with cheap “trailers” or poor build quality despite evidence that modern prefab homes often exceed local building standards.
There are also logistical and financial challenges: transporting finished homes remains costly, and financing options for manufactured housing can be limited. Investors have often shied away from the sector, and developers face restrictions in many local zoning codes.
Beyond regulation, Erlich said, changing consumer mindsets will be crucial. Design, functionality, and marketing must all evolve to bring manufactured homes into the mainstream. Without broader cultural acceptance, the industry could continue to punch below its weight.
Still, he acknowledges the potential. “We’ve got a housing crisis in this country,” he said. “And this feels sort of like nibbling at the edges but it’s a smart place to start nibbling.”
