Is Manufactured Housing a Good Alternative
for Low-Income Families? Evidence from the American Housing
Survey (December 2004, 78 p.)
Recent concerns over housing affordability for low-income
households appear to be difficult to resolve by developing
policy options that focus only on traditional single-family
owner-occupied dwellings and/or rental apartments. In terms
of developing a housing policy that would improve the quality
of housing for lower income families, it seems appropriate
to explore the merits of an often-ignored alternative, namely
manufactured housing.
In this respect, this paper employs the American Housing
Survey (AHS) between 1993 and 2001 to compare owned manufactured
housing to rental housing and traditional owned housing as
a tenure alternative for low-income households. This comparison
for the three tenure types is made along several dimensions.
Initially, a general comparison is made regarding the quality
ranking of the structures and neighborhoods, housing cost,
and housing affordability. Subsequently, regression models
are used to determine the factors that affect the households’
neighborhood and structural quality rankings and changes in
those rankings over time. Separate equations are estimated
for each tenure type. In addition, a model is estimated to
consider the factors affecting household mobility and the
extent to which these effects differ for the three tenure
types. Finally, the appreciation of conventional owned housing
is compared to the appreciation for owned manufactured housing
in two cases. These two cases are, first, where the structure
is owned but the land is leased, and second, when both the
land and structure are owned.
Our results contradict several preconceived notions regarding
manufactured housing. Specifically, there are four important
observations that are implied by the results. First, manufactured
housing is found to be a low-cost housing alternative. Importantly,
it is observed to have higher average quality rankings across
both the neighborhood and structural dimensions of housing
services than rental units. These results hold even when the
sample is stratified by metropolitan and non-metropolitan
location. As such, on average, manufactured housing appears
to be a “good value” for low income households.
Second, those factors that contribute to lower structural
quality or lower neighborhood quality, as well as changes
in those quality measures over time are similar between manufactured
housing and owned housing. These finding suggest that a properly
planned manufactured housing development will not automatically
deteriorate over time and communities do not have to develop
uniquely different policies to include manufactured housing
in the mix of units that make up the housing stock.
Third, the factors affecting household mobility across the
three tenure types are quite similar. Of particular importance
is the fact that like traditional owned units, and in direct
contrast to rental units, the longer a household resides in
manufactured housing at a specific location the less likely
they are to move while holding constant other factors that
influence household mobility. This finding suggests that having
owned manufactured housing in a neighborhood will not inherently
increase mobility among households living in manufactured
units and, therefore, lead to neighborhood instability as
associated with rental units.
Finally, while manufactured housing without land ownership
does not appear to be a particularly good investment, ownership
of land in conjunction with an owned manufactured unit generally
provides a positive return. These returns do appear to be
associated with relatively high variance. However, with manufactured
housing as a generally lower cost alternative to renting,
low income households might be expected to accumulate more
wealth (through savings and land value appreciation) while
in manufactured housing than in a rental unit. In sum, owned
manufactured housing appears to be a relatively attractive
option for housing low-income families in a manner that would
be beneficial to them and to the communities in which they
live.
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