[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
EXPANDING CHOICE AND INCREASING SUPPLY:
HOUSING INNOVATION IN AMERICA
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HOUSING AND INSURANCE
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
MAY 14, 2025
__________
Serial No. 119-22
Printed for the use of the Committee on Financial Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-502 PDF WASHINGTON : 2026
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HOUSE COMMITTEE ON FINANCIAL SERVICES
FRENCH HILL, Arkansas, Chairman
BILL HUIZENGA, Michigan, Vice MAXINE WATERS, California, Ranking
Chairman Member
FRANK D. LUCAS, Oklahoma SYLVIA R. GARCIA, Texas, Vice
PETE SESSIONS, Texas Ranking Member
ANN WAGNER, Missouri NYDIA M. VELAZQUEZ, New York
ANDY BARR, Kentucky BRAD SHERMAN, California
ROGER WILLIAMS, Texas GREGORY W. MEEKS, New York
TOM EMMER, Minnesota DAVID SCOTT, Georgia
BARRY LOUDERMILK, Georgia STEPHEN F. LYNCH, Massachusetts
WARREN DAVIDSON, Ohio AL GREEN, Texas
JOHN W. ROSE, Tennessee EMANUEL CLEAVER, Missouri
BRYAN STEIL, Wisconsin JAMES A. HIMES, Connecticut
WILLIAM R. TIMMONS, IV, South BILL FOSTER, Illinois
Carolina JOYCE BEATTY, Ohio
MARLIN STUTZMAN, Indiana JUAN VARGAS, California
RALPH NORMAN, South Carolina JOSH GOTTHEIMER, New Jersey
DANIEL MEUSER, Pennsylvania VICENTE GONZALEZ, Texas
YOUNG KIM, California SEAN CASTEN, Illinois
BYRON DONALDS, Florida AYANNA PRESSLEY, Massachusetts
ANDREW R. GARBARINO, New York RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin RITCHIE TORRES, New York
MIKE FLOOD, Nebraska NIKEMA WILLIAMS, Georgia
MICHAEL LAWLER, New York BRITTANY PETTERSEN, Colorado
MONICA DE LA CRUZ, Texas CLEO FIELDS, Louisiana
ANDREW OGLES, Tennessee JANELLE BYNUM, Oregon
ZACHARY NUNN, Iowa SAM LICCARDO, California
LISA MCCLAIN, Michigan
MARIA SALAZAR, Florida
TROY DOWNING, Montana
MIKE HARIDOPOLOS, Florida
TIM MOORE, North Carolina
Ben Johnson, Staff Director
------
SUBCOMMITTEE ON HOUSING AND INSURANCE
MIKE FLOOD, Nebraska, Chairman
MONICA DE LA CRUZ, Texas, Vice EMANUEL CLEAVER, Missouri, Ranking
Chairwoman Member
JOHN W. ROSE, Tennessee NYDIA M. VELAZQUEZ, New York
WILLIAM R. TIMMONS, IV, South RASHIDA TLAIB, Michigan
Carolina AYANNA PRESSLEY, Massachusetts
RALPH NORMAN, South Carolina RITCHIE TORRES, New York
ANDREW R. GARBARINO, New York SYLVIA R. GARCIA, Texas
SCOTT FITZGERALD, Wisconsin NIKEMA WILLIAMS, Georgia
MICHAEL LAWLER, New York BRITTANY PETTERSEN, Colorado
MARIA SALAZAR, Florida JANELLE BYNUM, Oregon
TROY DOWNING, Montana
C O N T E N T S
----------
May 14, 2024
Page
OPENING STATEMENTS
Hon. Mike Flood, Chairman of the Subcommittee on Housing and
Insurance, a U.S. Representative from Nebraska................. 1
Hon. Emanuel Cleaver, Ranking Member of the Subcommittee on
Housing and Insurance, a U.S. Representative from Missouri..... 2
STATEMENTS
Hon. French Hill, Chairman of the Committee on Financial
Services, a U.S. Representative from Arkansas.................. 4
Hon. Maxine Waters, Ranking Member of the Committee on Financial
Services, a U.S. Representative from California................ 4
WITNESSES
Mr. Bill Boor, President and Chief Executive Officer, Cavco
Industries, Testifying on behalf of the Manufactured Housing
Institute (MHI) as Chairman of the Board....................... 5
Prepared statement........................................... 7
Mr. Eric Schaefer, Chief Business Development Officer, Fading
West........................................................... 20
Prepared statement........................................... 22
Dr. Andrew P. McCoy, PH.D., Director of the Virginia Center for
Housing Research (VCHR), Professor in the Department of
Building Construction, and Associate Director of the Myers
Lawson School of Construction (MLSoC), Virginia Tech University 30
Prepared statement........................................... 32
Mr. Colten Lewis Fleu, Senior Attorney, Mountain State Justice,
Inc............................................................ 38
Prepared statement........................................... 40
APPENDIX
MATERIAL SUBMITTED FOR THE RECORD
Hon. Mike Flood:
Rural Voices for Conservation Coalition (RVCC)............... 80
Hon. Maxine Waters:
The Private Equity Stakeholder Project (PESP)................ 82
Next Step Network............................................ 105
Hon. Sam Liccardo:
Cavco Industries............................................. 110
The Lincoln Institute for Land Policy............................ 112
RESPONSES TO QUESTIONS FOR THE RECORD
Written responses to questions for the record from Mr. Bill Boor
Representative Emanuel Cleaver............................... 115
Representative Maxine Waters................................. 118
Written responses to questions for the record from Mr. Colten
Lewis Fleu
Representative Emanuel Cleaver............................... 121
Representative Maxine Waters................................. 123
Written responses to questions for the record from Dr. Andrew P.
McCoy
Representative Maxine Waters................................. 124
LEGISLATION
H.R. ----, a bill to require approval from the Secretary of
Housing and Urban Development for any Federal manufactured home
and safety standards, and for other purposes................... 125
H.R. ----, the Expansion of Attainable Homeownership Through
Manufactured Housing Act of 2025............................... 128
EXPANDING CHOICE AND INCREASING
SUPPLY: HOUSING INNOVATION IN AMERICA
----------
Wednesday, May 14, 2025
U.S. House of Representatives,
Subcommittee on Housing and Insurance,
Committee on Financial Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:01 a.m., in
room 2128, Rayburn House Office Building, Hon. Mike Flood
[chairman of the subcommittee] presiding.
Present: Representatives Flood, Hill, Rose, Timmons,
Garbarino, Fitzgerald, Lawler, De La Cruz, Salazar, Downing,
Cleaver, Waters, Velazquez, Tlaib, Pressley, Torres, Garcia,
Williams of Georgia, and Bynum.
Also present: Representative Liccardo.
Chairman Flood. Well, good morning, everybody. I am pleased
to call to order the Housing and Insurance Subcommittee.
Without objection, the chair is authorized to call a recess
of the subcommittee at any time.
The title of today's hearing is, ``Expanding Choice and
Increasing Supply: Housing Innovation in America.''
Without objection, all members will have 5 legislative days
to submit extraneous materials to the chair for inclusion in
the record.
I will now recognize myself for 4 minutes for an opening
statement.
OPENING STATEMENT OF HON. MIKE FLOOD, CHAIRMAN OF THE
SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE
FROM NEBRASKA
First and foremost, I would like to thank all of our
witnesses for being with us today, and I very much look forward
to hearing your testimony on the topic of innovation in
housing. In our March hearing, we examined the broader issue of
housing supply and its shortage. That problem takes many forms,
but one aspect that I have observed in my district is an
absence of what is referred to as ``workforce housing.''
According to data from the National Association of Home
Builders, the median cost of constructing a new single-family
home in 2024 was $428,215. For many Americans, a home built at
that cost is simply not affordable. We have government programs
that focus on housing subsidies for low-and very low-income
people. We have market rate developments that are able to meet
some of the demand for higher income people. What we need is
housing that can meet the needs of all the people that fall
somewhere in between those two worlds.
Maybe it is someone who has been working in a factory for
years, saving up so that they can make the transition from
renting to owning a home. Maybe it is a young person that is
new to the workforce and dreams of financial stability and
freedom that comes from having a place to call your own.
Whatever their situation, I am sure all of us have seen the
dire need for housing supply that meets the needs of this
population in all of our districts. I know some of you may look
at this problem and clamor for greater subsidies or more market
intervention by the Federal Government, but the reality is we
do not need more subsidies. We just need more homes at prices
people can afford. In this hearing, we will examine how
different building technology and home types can contribute to
a solution that meets the demand from this population. Whether
it is manufactured homes, modular homes, or homes constructed
using 3D printing, we need to explore all the options out there
that can get housing built that is affordable to more
Americans.
In addition to better understanding how these technologies
work and the potential savings they may provide, I hope this
hearing will give us an opportunity to explore what barriers
can become a hindrance to manufactured housing and modular
housing development across the country. Manufactured housing
is, by definition, built to a Housing and Urban Development
(HUD) code, and, as a result, manufactured housing issues go
directly through this committee's jurisdiction. Two bills
noticed for this hearing specifically address current barriers
to greater adoption of manufactured housing across the country.
Number one, Congressman John Rose's expansion of attainable
homeownership through the Manufactured Housing Act would remove
the requirement that manufactured homes be built on a permanent
chassis. Number two, I have a draft bill notice to the hearing
that would give HUD the authority to reject or approve
manufacturing standards proposed by other regulators affecting
manufactured homes.
These proposals could go a long way toward removing some of
the Federal barriers that prevent greater utilization of
manufactured homes. However, additional barriers exist that are
worth exploring further. Zoning and land use policies at the
State and local level, challenges with financing mortgages, and
a general lack of understanding of these housing types can all
contribute to challenges in their utilization in areas across
the country. I am excited to dig deeper into each of these
issues today, and I look forward to our witnesses' testimony.
The chair now recognizes the ranking member of the
subcommittee, Mr. Cleaver, for 4 minutes for an opening
statement.
OPENING STATEMENT OF HON. EMANUEL CLEAVER, RANKING MEMBER OF
THE SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S.
REPRESENTATIVE FROM MISSOURI
Mr. Cleaver. Thank you, Mr. Chairman, and thank you for
calling this hearing.
The United States faces a severe housing shortage. In fact,
it may well be our number one domestic issue. Since the year
2000, growth in housing demand has far exceeded growth in
housing supply. Housing costs have increased faster than
household income, and access to affordable housing and
homeownership options for American families has decreased.
Underproduction of housing impacts every corner of the Nation.
This also includes rural areas and smaller cities who need
affordable housing to attract businesses and ensure that
residents can live affordably. The combination of a national
supply shortage and the escalating cost of home construction is
raising awareness of new construction processes, materials, and
technologies that can deliver housing in an affordable way. I
support housing that is safe, I support housing that is decent,
and I support housing that is affordable. Safe, decent and
affordable housing, by nature, includes basic resident
protections to ensure that housing does not become unsafe,
indecent, and radically unaffordable.
One example of housing innovation under consideration today
is manufactured housing. I have spoken with the Manufactured
Housing Institute, and I am very, very interested in how we can
work together to expand safe, decent, and affordable housing
options that protect residents. More than 20 million Americans
live in manufactured housing. Manufactured housing is typically
used by low-income families, seniors on limited incomes, people
with disabilities, and those living in rural areas and small
towns. The next generation of manufactured housing is more
affordable. It is faster to construct, and it can be built to
be energy efficient with little waste due to factory precision.
There is value in reducing barriers to the adoption of many
forms of affordable housing innovation in a responsible way.
That includes in urban areas, like Kansas City, Missouri, which
I represent, and like Little Rock, represented by the chair of
this committee. Let me be clear, President Trump has put
forward a skinny budget that would defund Federal housing
programs and threaten millions of Americans with housing
instability in the middle of a housing crisis. No amount of
innovation will offset the impact of the President's skinny
budget if implemented or harmful executive actions. It is not a
skinny budget. It is a starvation budget.
The irony is that Congress is incoherently discussing how
to increase the affordable housing supply while discussing the
elimination of key housing programs. This includes a 44 percent
cut--44 percent cut--to HUD, including programs that directly
support the adoption of housing innovation and supply.
Additionally, tariffs, I agree with the Wall Street Journal,
make building all types of housing more expensive. Democrats
will continue to defend Federal programs and put forward
solutions to the housing crisis. Senator Warren, Senator
Warnock, and I have introduced the American Housing and
Economic Mobility Act, which would build nearly 3 million new
housing units.
I believe it is also in the best interest of the country to
find bipartisan agreement where possible, and I have
appreciated the engagement of the chair of this legislation on
a bipartisan interest. I look forward to today's hearing. Thank
you very much, Mr. Chairman.
Chairman Flood. The chair recognizes the chairman of the
full committee, Mr. Hill, for 1 minute.
STATEMENT OF HON. FRENCH HILL, CHAIRMAN OF THE COMMITTEE ON
FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM ARKANSAS
Chairman Hill. Thank you, Chairman Flood. It is no secret
that parts of America are facing severe housing supply
challenges. Recent estimates place this shortfall ranging from
2.3 to nearly 7 million housing units, which has contributed to
a sharp increase in home prices. Specifically, in my home town
of Little Rock, the median home price is up 11 percent just
over the last year. This rapid price increase, combined with
inflation's impact on financing costs, is putting homeownership
out of reach for many hardworking American families, and that
is what makes Chairman Flood's hearing today so important. We
have got an opportunity to explore solutions to these housing
challenges and provide consumers more choice. By embracing
innovative housing solutions and removing barriers to outdated
regulations, land use restrictions, and other financial
barriers, we can make a difference. I thank Chairman Flood,
Ranking Member Cleaver for their leadership on this issue. I
look forward to our panel today, and I yield back the balance
of my time.
Chairman Flood. The chair now recognizes the ranking member
of the full committee, Ms. Waters, for 1 minute.
STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM
CALIFORNIA
Ms. Waters. Thank you very much, Mr. Chairman. Families
across America are reeling from our growing housing and
homelessness crisis, so it is very important we discuss
expanding affordable housing through manufactured housing, and
I want to thank Mr. Cleaver for his leadership and the work
that he has been doing on this issue, but as usual, Republicans
are talking out of both sides of their mouths. They say they
want affordable housing but support Trump's proposed budget
that would cut $26 billion in rental assistance programs and
defund key Federal housing programs that keep families in
affordable housing. Meanwhile, new homes are projected to be
$11,000 more expensive with Trump's dumb tariffs.
If Republicans are serious, Democrats are ready to work on
building affordable manufactured housing that is climate
resilient and shielded from predatory private investors. We are
also ready to advance real solutions like my bill, the Housing
Crisis Response Act, which would invest 150 billion to end the
housing crisis for good. Thank you, Mr. Chairman. Thank you,
Mr. Cleaver.
Chairman Flood. The gentlelady----
Ms. Waters. I yield back.
Chairman Flood. The gentlelady yields back. Good morning to
everyone. Today, we welcome the testimony of Mr. Bill Boor,
President and CEO of Cavco Industries, and Chairman of the
Manufactured Housing Institute. Mr. Eric Schaefer is with us
today, Chief Business Development Officer of Fading West;
Doctor Andrew P. McCoy, the Director of the Virginia Center for
Housing Research, Professor in the Department of Building
Construction, and Associate Director of the Myers Lawson School
of Construction at Virginia Tech. We also welcome today Mr.
Colten Lewis Fleu, Senior Attorney at Mountain State Justice,
Incorporated.
We thank each of you for taking the time to be here. Each
of you will be recognized for 5 minutes to give an oral
presentation of your testimony. Without objection, your written
statements will be made part of the record.
Mr. Boor, you are now recognized for 5 minutes for your
oral remarks.
STATEMENT OF BILL BOOR, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
CAVCO INDUSTRIES, TESTIFYING ON BEHALF OF THE MANUFACTURED
HOUSING INSTITUTE AS CHAIRMAN OF THE BOARD
Mr. Boor. Thank you, Chairman Flood, Ranking Member
Cleaver, and members of the subcommittee. I am Bill Boor, CEO
of Cavco Industries. We are the third largest U.S. producer of
factory-built homes. Last year, we built nearly 20,000 homes in
31 factories. We have 79 retail stores, a mortgage lending
company, and an insurance company, all focused on manufactured
housing. I also serve as Chairman of the Board of the
Manufactured Housing Institute, the national trade association
representing all segments of our industry.
Manufactured housing is the most affordable path to
homeownership for millions of Americans. Our homes are built to
a Federal building code that ensures quality, safety, and
weather resiliency. This year, our industry expects to build
over 100,000 homes, accounting for 10 percent of all new
single-family home starts. These homes are built by 36 American
companies and delivered nationwide. This committee can help us
keep costs low, encourage innovation, and expand financing
options. My testimony today focuses on actionable steps
Congress can take to increase the supply of affordable housing,
and that is without taxpayer subsidies.
First, clarify HUD's authority as sole regulator of
manufactured housing. For over 50 years, HUD has been the sole
Federal regulator of manufactured home design, construction,
and installation, ensuring consistent, performance-based
national standards that prioritize quality, safety, durability,
and affordability. As the primary example of confusion created
by a lack of regulatory clarity, the Department of Energy,
under a 2007 law, attempted to impose energy standards on
manufactured housing without recognizing how our homes are
built in a factory and transported to site. The result, if
implemented, would be a conflicting set of energy standards
that undermine both HUD's role and housing affordability. Our
industry has a proven track record of improving energy
efficiency and is committed to continued progress, but that
progress must come through HUD's established regulatory
framework. Congress should pass legislation to reaffirm HUD's
sole authority over all Federal construction standards for
manufactured homes.
Relatedly, HUD and Congress should work to overcome local
zoning and regulatory barriers to manufactured homes. Congress
has attempted to overcome local and State zoning issues that
purposely exclude manufactured homes. In 2000, Congress
expanded HUD's preemption authority over local requirements,
saying it should be ``broadly and liberally construed''.
Manufactured Housing Institute (MHI) believes it is past time
for HUD to update its 1997 policy statement, and Congress
should direct them to do so. We are not asking for advantages
relative to other forms of housing, just a level playing field,
so we can expand the supply of affordable homes.
Next, modernize the chassis requirement for manufactured
homes. Federal law requires manufactured homes to be built on a
permanent chassis. This is an outdated standard rooted in the
era of mobile homes. Today's manufactured homes are rarely
moved once installed. Eliminating the chassis requirement would
allow our industry to design homes with a lower profile that
would improve curb appeal, and it would enable development of
multi-story designs and other innovations.
Next, expand how financing options for manufactured homes.
Affordable financing is critical to making homeownership
accessible. Congress should direct Federal Housing
Administration (FHA), Fannie Mae, and Freddie Mac to support
buyers of manufactured homes through targeted actions. First,
expand cross-model lending programs. These programs should
include single-section homes that meet all the other criteria
of cross-mod homes. The only thing that limits the single-
section home from being included is its size. It is basically
an oversight. Next, ensure fair access to commercial loans for
community operators. Commercial financing should be available
to all community operators, not just nonprofits. Privately
operated communities have a long track record of success with
high resident satisfaction. Create effective home-only loan
programs. Despite years of discussion, Fannie Mae, Freddie Mac,
and Ginnie Mae have failed to create a secondary market for
home-only loans. Congress should require meaningful action to
make these loans accessible and affordable. Access to
affordable financing is not just a policy goal, it is a
practical necessity for millions of American families.
The manufactured housing industry is not asking for
subsidies or preferential treatment. We are asking for
sensible, clear regulations, fair access to locations that need
affordable housing, and inclusion in Federal homebuyer
financing programs so we can do what we do best, build
affordable, high-quality homes for American families. Thank you
for the opportunity to testify.
[Prepared statement of Mr. Boor follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. Thank you, Mr. Boor. Mr. Schaefer, you are
now recognized for 5 minutes for your oral remarks.
STATEMENT OF ERIC SCHAEFER, CHIEF BUSINESS DEVELOPMENT OFFICER,
FADING WEST
Mr. Schaefer. Thank you, Chairman Flood and Ranking Member
Cleaver of the Subcommittee on Housing and Insurance, for the
opportunity to testify today on your hearing of housing
innovation in America. I speak today as an advocate for
innovative solutions to our Nation's persistent affordable
housing crisis by using offsite modular construction. The
hearing is timely given the lack of affordable housing across
the country caused by workforce shortages, supply chain
disruptions, coupled with inflation, entitlement burdens, and
design approval challenges.
I am Eric Schaefer, Chief Business Development Officer of
Fading West, located in Buena Vista, Colorado. Fading West
began in 2016 with what we thought was going to be a one-time
workforce housing project called The Farm, located in Buena
Vista, before we ended up building our own factory almost 4
years ago. We found that modular manufacturing carries
significant advantages over stick-built construction. I am here
today because Fading West and the modular manufacturing
industry firmly believes the U.S. Congress can have a role in
helping the Nation's homebuilding industry to continue to
innovate and, thereby, be a partner in resolving the housing
shortages across the country.
Off-site modular construction offers a compelling
alternative. This method involves manufacturing individual
housing modules in a controlled factory setting. These modules,
complete with electrical wiring, plumbing, interior finishes,
are then transported and assembled onsite; so, 90 percent of
the home ends up being built in the factory. Fading West has
integrated the entire construction value stream by combining
real estate development, modular manufacturing, and the general
contracting to reduce waste and improve quality and speed. We
can build homes 10 to 20 percent less expensive by reducing
waste from 30 percent to less than 5 percent, and by
standardizing processes and products similar to a car
manufacturer. We increase volume, which brings down cost. We
can complete homes 50 to 70 percent quicker than traditional
construction. A typical Fading West home is built in less than
8 working days in our factory and then completed at the site in
less than 30 days. From start to finish, a new home can be
completed in less than 40 days, compared to the greater than 9
months for traditional construction.
Last September and October, Fading West built 80 homes,
actually over 80 homes, in our Colorado factory, put them on
trucks and trucked them to Seattle, and then barged them to
Maui, where homes were completed for families affected by the
Lahaina fires; so, by January of this year, all families had
moved in. From the start of production to completion, the whole
process took less than 4 months. Fading West recently partnered
with Vail Valley Habitat for Humanity to build 16 homes for
teachers. Built the usual way, Habitat would have only been
able to complete either two or three homes instead of 16. It
took Fading West 1 month to build the homes in the factory,
allowing the teachers to move in for the beginning of this
school year.
These are just a couple of successful proof-of-concept
projects that have been completed using modular. To fully
leverage the potential of offsite modular construction, we need
your support. This includes, first, as a long-term solution,
mandate the harmonization of regional building codes to
streamline the housing construction regulatory process. An
example of this, last week, Governor Polis of Colorado signed a
regional codes bill to reduce the number of building codes
around our State, dropping it from 300 down to under 10. Number
two, invest in research and development to support modular
design, materials, and new construction techniques. Third, to
provide grants and low-interest loans to the supply side, using
Federal funds to help build modular manufacturing facilities to
increase housing supply instead of just subsidizing the demand
side projects.
Off-site modular construction is not just a trend. It is a
viable and innovative solution that can significantly impact
the affordable housing crisis. By embracing this approach, we
can build more homes faster and at a lower cost and with a
higher quality. Let us work together to unlock the potential of
modular construction and provide safe, decent, and affordable
housing for all Americans. Thank you for the opportunity to
testify before the subcommittee, and I look forward to
answering your questions.
[Prepared statement of Mr. Schaefer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. Thank you. Dr. McCoy, you are now
recognized for 5 minutes for your oral remarks.
STATEMENT OF DR. ANDREW P. McCOY, PH.D., DIRECTOR OF THE
VIRGINIA CENTER FOR HOUSING RESEARCH (VCHR), PROFESSOR IN THE
DEPARTMENT OF BULDING CONSTRUCTION, AND ASSOCIATE DIRECTOR OF
THE MYERS LAWSON SCHOOL OF CONSTRUCTION (MLSoC), VIRGINIA TECH
UNIVERSITY
Dr. McCoy. I want to first thank Chairman Flood and Ranking
Member Cleaver and the subcommittee for inviting me here today.
It is an honor to be here and discuss the role of housing
innovation and driving the past and future of our industry.
The space race was one of the biggest boons of the 20th
century to housing technology. It advanced materials like
insulation that we now take for granted. In the 21st century,
industrialized construction methods will build faster with
greater precision and less waste. Artificial intelligence will
automate and accelerate processes while reducing delays,
errors, and costs. Smart materials will transform the parts of
housing. Emerging innovations, like digital twins, real-time
construction monitoring, and data processing, will offer
predictive control and assurance for quality costs, operations,
and maintenance. Importantly, these technologies will not
remove the need for people. They will expand opportunities for
skilled work, increase accessibility, and empower a new
generation of construction professionals with tools, support,
and control.
In many ways, home-building technologies are a public
event. The processes of U.S. home building are visible to the
public every day. Innovation creates benefits for consumers,
and the knowledge created by one firm creates value for other
firms and their customers. Our policy dilemma is that the
Nation is not reaping economic and social returns from
innovation when the industry is not innovating as much as
possible. We tend to think of housing as an economic indicator
while we need to see housing innovation as an economic driver.
Over time, several milestones have influenced the role of
technology in the housing industry. The U.S. Government
actively began supporting housing advances in technology
through the housing policy in 1949s American Housing Act. In
1970, the Housing and Urban Development Act provided additional
authority to improve the physical quality of housing through
technological change, effectively mandating housing technology
as public policy. Examples of public programs that concentrated
on housing innovation nationally include the 1962 Civilian
Industrial Technology Program, the late 1960s Operation
Breakthrough Program, and the 1990s Partnership for Advancing
Technology in Housing, or PATH. Lessons learned include the
need for public-private partnerships, the impacts of local
regulation and fragmentation, and the need for more funding
options specific to this industry.
More recently, the 2008 financial downturn led to a
dispersion of trades away from construction and resulted in a
decade of underproducing new homes. The percentage of new
construction, which provides the majority of housing's economic
impacts--jobs, materials, services--only recently recovered.
Over the last decade, labor shortages, a lack of available
land, cost inflation, supply disruptions, and rising financial
costs have resulted in few options for the median home buyer.
As we heard earlier, the National Association of Home Builders
estimates that 103.5 million households, or 77 percent of U.S.
households, are not able to afford the $428,000 cost of a
median-priced home. Attention now has shifted to innovation. By
example of the Commonwealth of Virginia, local agencies and
governments are implementing zoning reforms, funding options,
and regulatory reform that reduce barriers to innovation. The
Virginia Housing Development Authority (VHDA) has particularly
leaned in. For example, their qualified allocation plan scoring
incorporates points for developers who use innovation in their
low-income housing tax credit developments, making them more
competitive. VHDA has also created community innovation grants
up to $500,000 that de-risk the adoption process for builders
willing to try new technologies.
Our 3D concrete printing program has recently benefited.
Producing four workforce homes and starting on an additional
10, Virginia's Department of Housing and Community Development
also recently modified parts of the building code to facilitate
the use of modular housing, getting out of the way and making
these technologies more accessible to the market. The city of
Danville and Southside Virginia recently changed the zoning to
allow for manufactured and modular housing units to reduce
costs and provide options. Also, Governor Youngkin's permitting
dashboard at the Department of Environmental Quality is an
example of streamlining and speeding up process. Nevertheless,
the cumulative result is persistent underproduction. The path
forward will require coordinated partnerships and investment,
regulatory modernization, workforce development, innovative
financing, and cross-sector collaboration.
Construction technology is especially compelling right now
because it does not replace human workers, it amplifies them.
Let me say that again. Construction technology is especially
compelling right now because it does not replace human workers,
it amplifies them, innovations like augmented reality for
training robotic assistance of repetitive tasks and digital
project coordination. For example, a framer using layout tools
with augmented reality can complete work faster and with fewer
errors. The goal is not to automate people out of housing, but
to build better industry around them. It is time to harness
these tools for progress in the housing industry. In doing so,
home-building technologies could expand from a public event----
Chairman Flood. The gentlemen's time has expired.
Dr. McCoy [continuing]. to a public opportunity. Thank you.
[Prepared statement of Dr. McCoy follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. Thank you very much. Mr. Fleu, you are now
recognized for 5 minutes for your oral remarks.
STATEMENT OF MR. COLTEN LEWIS FLEU, SENIOR ATTORNEY, MOUNTAIN
STATE JUSTICE, INC.
Mr. Fleu. Chairman Flood, Ranking Member Cleaver, members
of the subcommittee, on behalf of Mountain State Justice, thank
you for inviting me to testify today regarding manufactured
housing. I am a Senior Attorney at Mountain State Justice
(MSJ), a nonprofit legal services provider in West Virginia. We
exclusively represent low-income people at no cost to them.
Since 1996, we have served thousands of homeowners of
manufactured housing in danger of losing their homes or losing
their homes and their land from predatory lending practices. We
also represent these homeowners living in unsafe and unhealthy
environments due to conditions of their home or damages from
natural disasters. This testimony is also on behalf of the
National Consumer Law Center and its low-income clients.
In West Virginia, we are proud to have the highest rate of
homeownership in the Nation. We maintain that level of
homeownership while possessing the 49th lowest average
household income. It is no coincidence that West Virginians
occupy manufactured housing at more than twice the national
average. These homeowners are overwhelmingly folks on fixed
incomes--the elderly, veterans, and the disabled. Those not on
fixed incomes are working families struggling to make ends
meet, yet these homeowners face widespread abuses in loan
financing and systemic problems with community conditions. I
want to share a couple of these folks' stories with you and
some recommendations gleaned from my experience, but please
remember this; manufactured homes are fundamentally different
than stick-built homes. Manufactured homes, also called mobile
homes, are not so mobile. They have a finite lifespan and
moving them can be cost-prohibitive if they can be moved at
all. Manufactured homes depreciate like cars. Manufactured
homes are a vital source of housing, but they are not a wealth-
building tool. It is a fact we urge you to keep in mind as you
look to expand access to this important housing.
The first case I want to share involves a leased land
community, a mobile home park, specifically five mobile home
parks totaling more than 640 home sites in Mercer County, West
Virginia. It was bought by a hedge fund for investment. For a
quick background, Mercer County is in the coalfields of
Southern West Virginia. The median household income is under
$48,000 a year, yet 70 percent of the housing units in the
county are still owner occupied. One of these owner-occupied
houses belonged to Mr. and Mrs. P. Six years ago, they cashed
out their meager savings, bought a home for $30,000, and moved
into one of these 640 lots. The entire time they were there,
they paid $300 a month for rent and got by with their Social
Security income. Other residents of these communities include
Ms. R and her husband, who ran a small business, averaged about
$42,000 a year in take-home pay, paid $225 a month in lot rent.
Ms. V, who had been living in one of these lots for 14 years
was providing around-the-clock care for her adult disabled son
and was paid through the Medicaid Waiver program. She also paid
$225 a month for lot rent.
But when the hedge fund consolidated its new investments,
it issued notices of rent increases, just 60 days' warning and
time to hit just before Christmas. The rent increases were
steep: 75 percent for Mr. and Mrs. P, $300 a month to $525; 120
percent for Ms. R--she went from $225 a month to $495; 133
percent for Ms. V and her disabled son, an increase from $225 a
month to $525. Each one of these families were told to pay the
new amount or there would be an eviction filed, and at the same
time, the landlord neglected the community upkeep, leading to
conditions such as a septic tank overflow onto community land.
There is no happy ending to this story had the hedge fund
provider provided proper notice to the residents. Most States
have no specific protections for lot rent increases or neglect
in community conditions. Like Mr. and Mrs. P, the residents
invest tens of thousands of dollars in these homes that sit on
rented land without any assurance of security.
In my written remarks, I also share the story of Mr. and
Mrs. A, who fell victim to a bait-and-switch financing scheme,
trapping them in a loan that they could not afford and
jeopardizing the loss of both their home and their land.
Without meaningful competition among lenders for manufactured
home purchases, the potential for exploitation of buyers,
again, overwhelmingly the elderly, the disabled, and veteran
communities. Expanding manufactured housing market needs
greater government-sponsored enterprise (GSE) backing of loans
to ensure sustainable financing, including for those living in
older homes and in manufactured communities. These programs
also must include tenant protections to protect both residents
and lenders.
Thank you for the opportunity again to speak with you
today, and I welcome any questions.
[Prepared statement of Mr. Fleu follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. Thank you Mr. Fleu. I now recognize myself
for 5 minutes for questions, but before I start my questions to
our witnesses, I want to recall a quick story that helps frame
my interest in manufactured housing in particular.
Last year, I heard about a new development of manufactured
homes in Hagerstown, Maryland. The developer was working in
partnership with Freddie Mac. Each one of these homes was built
on fee-simple-owned individual lots. From what I had heard,
these homes did not fit the mold of what I imagined a
manufactured home community would look like. It was not the
manufactured homes of the 1970s. These were the kind of homes
that a small family could be proud of, and yet, they were going
on the market for fairly low cost relative to stick-built
homes. There were curbs. There were gutters. There were trees.
There were driveways.
Interested, I organized a group of Nebraskans and all the
housing groups I could think of to go see the development. We
chartered a bus. We went up to Maryland with the Nebraska
Investment Finance Authority, local builders, and local
nonprofits to check out the development. Sure enough, the homes
looked as advertised. They were not big or glamorous, but they
were nice, solid homes that you would not have known they were
manufactured homes if you were not told. In fact, I was so sure
that I was not looking at a manufactured home, I got underneath
one of the homes, and I saw the chassis. I could imagine a
young couple moving into one of those homes to start a family,
and I could imagine them beaming with pride. Kids running
around in the neighborhood next to a playground the first day
they get the keys to their new house. Well, they will not fix
everything. I do think there is potential here for some of
these development types to be part of a broader housing supply
solution in this country.
Mr. Boor, manufactured housing is built to a national
standard under the HUD code. How can Congress and HUD better
leverage this existing code to expand the use of manufactured
homes in federally funded affordable housing projects?
Mr. Boor. Thank you, Chairman Flood, and I appreciate the
story. We are proud of the homes we are building, so thanks for
that.
A lot of it is what I tried to outline. I mean, I think
expanding affordable housing is really a game of expanding the
playing field under the HUD code. Doing things like removing
the chassis allows us to innovate, and that innovation will
lead to us developing products, for example, that can go into
urban infill, which is an area our industry traditionally has
not penetrated. Those kinds of things, the financing that we
talked about, if we can get home-only financing through the
GSEs, that reduces the monthly cost for a buyer and makes more
homes affordable. That is a huge opportunity. At the other
extreme, some of the cross-mod homes we are doing are probably
similar to what you saw. Currently, for no reason I can
understand multi-section homes that meet that criteria fit, but
single-section homes that are just smaller still meeting the
criteria do not qualify under cross-mod, and so that seems like
an oversight to me. I would like to see that changed. All of
these things grow the playing field, grow the opportunity for
us to innovate, and will allow us to provide more homes for
families.
Chairman Flood. Thank you very much. Mr. Schaefer, can you
describe how modular manufacturing can reduce home costs, and
roughly how much savings could a home buyer expect to see with
a modular home relative to a stick-built home?
Mr. Schaefer. Yes. Thank you, Chairman Flood. What we are
seeing again, it is speed to market. We have 18 workstations in
our factory, so again, imagine a Toyota car factory. The box is
moved from station to station to station. About 90 percent of
the home is built in the factory, so these are very high-
quality, built to the international building code. These are
put on permanent foundations, so high quality, energy
efficient, to your point earlier, architecturally interesting.
We want to build homes that people who are moving into them are
proud to live in them. Then the onsite work is dramatically
reduced. It is set on a permanent foundation, as I said, and
then about 30 days until the final Certificate of Occupancy
(CO), so the savings come kind of in two or three ways. First,
it is the speed, so the----
Chairman Flood. Before you go there, I have one more
question for Mr. Boor before my time runs out. I do not mean to
cut you off, but----
Mr. Schaefer. Yes.
Chairman Flood. Mr. Boor, what are the risks to
affordability of access if other Federal agencies, like
Department of Energy, impose conflicting standards without
HUD's coordination or oversight?
Mr. Boor. Yes. At a high level, I think the issue is those
agencies do not always understand our process, so they are
myopically going after a given improvement that they are
viewing. Yet, HUD has a more robust, holistic process that
considers those energy advancements in this case, but relative
to affordability, the Department of Energy (DOE) rules would
drive the costs up considerably for our homebuyers.
Chairman Flood. Thank you very much, and Mr. Schaefer, I
apologize again for having cut you off. I would ask that you
respond to the rest of my question for the record so that I can
make it part of the record for this hearing.
Mr. Schaefer. Absolutely. Again, how we----
Chairman Flood. Unfortunately, I have to cut myself off
again because I only have 5 minutes, but I appreciate you very
much. Thank you. The gentleman from Missouri, Mr. Cleaver, is
now recognized for 5 minutes.
Mr. Cleaver. Thank you, Mr. Chairman. I kind of want to
follow up in that same direction. Mr. Fleu, if you would, you
are familiar with the Community Development Block Grant (CDBG)
and the Home program, I believe. These are critically important
programs, and they are the two largest Federal sources of
flexible funding used by States and Federal and local
governments to preserve, rehabilitate, and, in some cases,
actually develop manufacturing housing. These programs support
infrastructure upgrades, housing rehabilitation, land
acquisition, and a number of other critical improvements in
manufactured housing communities.
Now, these programs have been targeted, unfortunately and
for me, painfully, despite their role in addressing
affordability and improving conditions in underserved areas. Do
you see, as I do, the negative impact of these programs being
cut would have on what I think most of us in this room are
interested in trying to develop?
Mr. Fleu. Thank you, Ranking Member Cleaver. I do see that.
I do agree with the ranking member. I would actually urge that
these programs should be expanded and funds should be available
to more communities to improve the conditions.
Mr. Cleaver. Thank you. The ability, I think, of us to get
something done will depend on our ability to work jointly, and
I think there is, as I hope you can see, some bipartisan
support for the new, innovative ways in which we can reduce
costs to build decent housing for our constituents. When
renters are evicted, they typically leave the unit behind. In
contrast, manufactured homeowners face a far more complex
situation, probably legal maneuvering would be involved, but
they must either sell their home or relocate to another site,
and during coronavirus disease 2019 (COVID-19), the market for
manufactured homes declined sharply. In the case where the
manufactured homeowners cannot find buyers, they have little
resources and may just leave the home in some kind of a
residential area or in a park. In many States, these
manufactured homes are considered abandoned property after 30
days, to which landlords can take over the titles and lease
them to new tenants. To any of you, what kind of protection
should we develop to protect those homeowners?
Mr. Fleu. If I may, Ranking Member Cleaver, unfortunately,
I think that problem that you have identified is a State law
issue. Besides just the abandoned property, we see storage fees
assessed when the resident has to leave their home, and the
eviction process in West Virginia is no different for an owner
of a manufactured home in a rented land community than from an
apartment. They leave behind and they end up forfeiting the
largest asset that they own oftentimes. Unfortunately, as I
say, these eviction laws, landlord-tenant laws, are usually
State law issues, and so it will take really a 50-State
strategy, I believe.
Mr. Cleaver. In other words, Congress has to come together
and agree to what Chairman Flood and I say. They must do what
we said----
Mr. Fleu. That is right.
Mr. Cleaver [continuing]. to fix this. Everybody?
[Nonverbal response.]
Mr. Cleaver. Thank you. I yield back, Mr. Chairman.
Chairman Flood. The gentleman yields back. The chairman of
the full committee, the gentleman from Arkansas, Mr. Hill, is
now recognized for 5 minutes.
Chairman Hill. Thank you, Mr. Chairman. Again, thanks to
the panel. Very good testimony.
Mr. Boor, really appreciate your testimony, and I was
particularly interested in the cost you outlined, the
flexibility of the regulatory agenda you outlined. I hope that
we can do something to propose that. I was a staffer on the
Housing Subcommittee in 1983, and we had the exact same
testimony. Technology has advanced and innovation has advanced,
but apparently, HUD and the regulatory system is stuck in the
1970s on this matter. Would you agree with that?
Mr. Boor. I think there are some very specific actions that
could be taken, and they do not seem that complex to me, but
that is outside of this city, I guess.
Chairman Hill. Yes. I would like your views on the idea of
this removal. To have a chassis required to be in a
manufactured home is a 50-year-old idea. It seems ridiculous to
me----
Mr. Boor. Right.
Chairman Hill [continuing]. particularly considering Mr.
Schaefer's good testimony on modular construction, generally.
Tell me a couple of success stories in urban areas in multi-
story, at least let us just start, Bill, with you and comment
on it and then turn to Mr. Schaefer.
Mr. Boor. Success stories of manufactured housing in urban
areas?
Chairman Hill. Yes, exactly.
Mr. Boor. Yes. It is really an untapped market opportunity.
Our homes have traditionally gone into rural areas because of
the zoning challenges we talked about earlier. What we have
seen is where affordability is the absolute worst, that is
where municipalities are starting to lower the barriers. We
have seen that in some small towns. Martinsville, Virginia, we
had a project that was aimed at homeownership for people with
average incomes of $17 an hour. A variety of agencies got
involved in that, but then you take it to the other extreme.
L.A. County has done a tremendous amount of work to open up the
opportunity for factory-built solutions. In that case,
affordable dwelling units (ADUs) were one of the solutions that
they have really grabbed on to. We have shown that our products
can penetrate those and increase affordable housing in
traditionally or nontraditional markets. It usually takes----
Chairman Hill. Thank you. Mr. Schaefer, could you comment
on that, too, please?
Mr. Schaefer. Yes. A great example is in the town of
Breckenridge, who acted as the developer for this project.
There was nowhere for the workforce to live, so we built 60
apartment units just a block from Main Street. If you have been
skiing there, you know exactly where that is, and land was
donated, which allowed some affordability of those 60 units.
One thousand and one hundred people applied for the lottery to
get those units. So, you can just see the incredible need for
workforce housing, especially in ski and mountain towns.
Chairman Hill. I was taken by your testimony as well where
you talked about $93,000 in regulatory costs per unit, meaning
about 24 percent of the median home price in the country. That
is mind blowing to, I think, this committee. I hope it is. I
mean, I hope that is flabbergasting to people in this
committee.
Mr. Schaefer. Yes. One of my lines that I use quite often
is the word, ``affordable'' and ``housing,'' should never be
used in the same sentence. There is no such thing.
Chairman Hill. Yes, and you also referenced, and Bill did
in his testimony as well, which is, so much of this and we have
heard this testimony for years, is a State-and local-driven set
of barriers. Those costs are mostly State and local, the
barriers to creative uses and density rates, obviously in urban
areas and that comes from, you say in your testimony, 43,096
jurisdictions that all have different building codes, different
zoning requirements, different not in my backyard. Is there a
model city or county that you think is outstanding on this
issue that we could share? Yes, Mr. Boor, go ahead and start.
Mr. Boor. I would answer it in a different way. I think
that is the beauty of the HUD code. The HUD code provides a
Federal code that, in concept, if we meet that Federal code, we
can place those homes anywhere, and HUD has preemptive
authority. One of the actions I outlined was Congress should
point to HUD and say update your policy statement, exert your
preemptive authority so that there is a stronger statement from
the Federal Government about not disallowing HUD code homes.
Chairman Hill. Yes. Anybody else want to talk about that?
Mr. Schaefer.
Mr. Schaefer. Yes, I can just comment. There were over 300
building codes in our State. Again, to use the car analogy,
that would mean a Camry would be built 300 different ways. It
would cost $200,000 if cars were governed the same way that
houses were. What we have done in our State, and this was just
signed last Thursday, was to reduce those codes to regional
codes; so, the coldest areas will have a different building
code, obviously, than the plains----
Chairman Hill. Thank you very much. Very useful testimony.
I yield back, Mr. Chairman.
Chairman Flood. The gentleman yields back. The gentlewoman
from California, Ms. Waters, who is also the ranking member of
the full Financial Services Committee, is now recognized for 5
minutes.
Ms. Waters. Thank you very much. Mr. Fleu. In your
testimony, you noted that private investors acquiring
manufactured housing communities often fail to comply with
State laws that require that they honor existing leases and
provide advance notice before increasing rents. This violation
leaves residents vulnerable to sudden cost increases and
housing instability. Can you speak more about how common these
violations are and what tools, whether regulatory or
legislative, are needed to ensure that these protections and
notice requirements are enforced in manufactured housing
communities? Are you talking about preempting State laws and
doing something from the Federal level? What are you thinking
about?
Mr. Fleu. Thank you for the question. The way I would see
Federal law preempting State law, if you will, if the GSE-
backed funding would expand and allow owners of homes that are
not converted to real property, so they remain personal
property loans. If the GSEs would provide funding for those
loans and provide within that funding requirement, certain
rules and regulations which would have to be complied with by
communities, that would go some distance, I think, to setting a
baseline standard.
Ms. Waters. That makes good sense. Even as communities
across the country struggle with severe housing shortages,
local governments continue to use discriminatory zoning and
land use regulations to block the development of placement of
manufactured homes. These restrictions are often rooted in
outdated and stigmatizing beliefs about manufactured housing
and the people who live in it, making it nearly impossible to
expand this affordable housing option in many areas. How have
exclusionary zoning practices limit access to the use of
manufactured housing, and how, again, can Federal Government
help push communities to adopt zoning reforms?
Mr. Fleu. Congresswoman, I really am not qualified to speak
to your question. In West Virginia, we have very few zoning
laws, and so I am not the proper witness, I think, to answer
your question.
Ms. Waters. You are absolutely correct. This is something
that our city councils and mayors have to deal with in zoning,
and it is a big political problem. Let me go on.
Manufactured housing communities are often on the front
lines of increasingly frequent climate disasters, such as
hurricanes, floods, and wildfires, yet they face some of the
biggest barriers to recovery. Many live in homes that are
decades old and not built to resiliency standards. Others
struggle to access Federal Emergency Management Agency (FEMA)
assistance due to land tenure issues or documentation barriers.
Too often, these residents are left behind when Federal
recovery funds are distributed. What changes are needed within
FEMA and HUD to ensure manufactured housing residents receive
equitable disaster assistance and that Federal investments
prioritize resilience and preservation of their homes in these
communities? I guess you would say that is what we should be
thinking about. We should have some answers to that, but maybe
you can help us out with that.
Mr. Fleu. I think you hit the nail on the head there. The
discrimination between personal property homes and real
property homes, I think everyone on this panel would probably
agree is really a distinction that no longer is accurate, and I
think that Congress and the Agency should work toward an even
playing field for all homeowners, whether they own the land the
home sits on or not.
Ms. Waters. Thank you very much. I would just like to say
to you, and perhaps to the other witnesses here today, this is
an issue that could get bipartisan support. In doing that, we
must recognize the experiences we have had and clean it up and
make sure that it is available and that the money is there. If
we do that, I think we can move this issue, and it is needed
desperately in this country. We have to get rid of
homelessness, and the unhoused people, expect us to come up
with answers but let us not be shy about it. Let us get
together and say we want the money, we want the assistance, we
want the care that should be given to manufactured housing,
just as it is expected for everybody in this country. I am
looking forward to us being able to do that, and I yield back
the balance of my time.
Chairman Flood. The gentlelady yields back. The gentleman
from Tennessee, Mr. Rose, who is arguably our subject matter
expert on the majority side and passionate about manufactured
housing, is now recognized for 5 minutes.
Mr. Rose. Thank you, Chairman Flood, and thank you, Ranking
Member Cleaver, for holding this important hearing, and thank
you to all of our witnesses for taking time out of your
schedules to be with us today.
It is no secret that we are facing a serious housing
shortage in this country. I hear from my constituents back in
the 6th District of Tennessee all the time about their
difficulties locating affordable housing. I daresay my
colleagues hear the same story. In many areas of our Nation,
starter homes simply do not exist at an affordable price. So I
applaud Chairman Flood's leadership and focus on increasing the
housing supply, and I appreciate that a discussion draft of my
bill, the Expansion of Attainable Homeownership through
Manufactured Housing Act of 2025, has been attached to this
hearing. My bill would remove the statutory requirement that
all manufactured homes be built on a permanent chassis.
Mr. Boor, I appreciate that the Manufactured Housing
Institute supports passage of the Expansion of Attainable
Homeownership Through Manufactured Housing Act of 2025. Can you
discuss why it is so important to remove the statutory
requirement that manufactured homes be built on a permanent
chassis?
Mr. Boor. Absolutely. Thank you for the question. I think
this bill represents a true expansion of the scope of housing
that can be covered under the HUD code, and we have talked
about the advantages of the HUD code generally across the
country. Once this bill is passed, we will still have homes
built on chassis because there is obviously a place for that,
but now we have the opportunity to innovate in ways where the
home can be brought down. The curb appeal can be approved. We
can go multistory. We can do a lot of innovation that,
particularly, will allow us to overcome some of the hesitance
about placing our homes in urban and suburban environments.
Mr. Rose. I completely agree, and I think Ranking Member
Waters was correct when she said that removing the stigma
attached to manufactured housing is a big part of the task in
front of us; so, I think this gives us a chance to move forward
and realize the potential of what manufactured housing can do
to increasing homeownership affordability.
Mr. Boor, my office has worked extensively with the
Manufactured Housing Institute on the bill that is attached to
today's hearing to remove the permanent chassis requirement.
One of the issues that we have focused on is ensuring that this
bill does not impact the financing of manufactured homes. Do
you believe that the bill attached to this hearing strikes the
right balance of ensuring removal of the permanent chassis
requirement while also making sure that the financing of
manufactured homes is not adversely affected?
Mr. Boor. Yes, there is a lot of work to be done. I think
the first step is your bill, and we have already started this
process within the industry. We are going to have to sync up
State law to that bill so that the financing concerns can be
alleviated. There is a lot of work to be done afterwards, but
you will start the ball rolling.
Mr. Rose. Do you believe that State work can happen quickly
enough to usher along this transformation?
Mr. Boor. I believe it will be a snowball. I think there
will be some really quick, easy wins there, and once some
States are doing it, other States are going to quickly conform.
Mr. Rose. Mr. Boor, I am intrigued by the cross-mod concept
and product. Could you elaborate on what a cross-mod home is
and what the new single section cross-mod product entails?
Additionally, how can this housing innovation make
homeownership more attainable for Americans?
Mr. Boor. Yes. ``Cross-mod'' is a term we use, really, to
sync up with the Fannie and Freddie programs that say, if a
home meets certain criteria, it can be appraised against site-
built comps, and that is a big deal, right? That recognizes
that the provider of money says that our homes, from a quality
perspective, are equal to site-built homes, which they are. The
issue that I raised, which I think is a pretty straightforward
fix, is that right now, those programs only insure homes that
are multi-section. These homes have certain characteristics
from the factory, and they also have certain characteristics at
the site to qualify for this financing, and I believe it is an
oversight not to allow smaller homes that qualify under this
criterion to also qualify. So, I think it is a pretty
straightforward change that will expand the concept of cross-
mod home availability.
Mr. Rose. Dr. McCoy, do you feel that single-section cross-
mod has the potential to make homeownership attainable for more
Americans?
Dr. McCoy. I am not sure I can answer that from my
perspective and my expertise, but I can also say that one of
the things that we talk about with innovation is that the
residential construction industry is not necessarily very
innovative, but when we look closely, we see that these are all
innovations. Everything we are talking about is an improvement,
and it is something that can help with getting more housing to
more people that need it.
Mr. Rose. Thank you. My time has expired. I yield back, Mr.
Chairman.
Chairman Flood. The gentleman yields back. The gentlewoman
from Massachusetts, Ms. Pressley, is now recognized for 5
minutes.
Ms. Pressley. Thank you, Mr. Chair. Housing is a
fundamental human right. Housing and affordability are the
number one issue I hear about from my constituents. Adding
insult to injury, Trump is proposing a cut to rental aid
assistance by 40 percent, essentially ending Section 8, and has
already canceled contracts that support affordable housing.
Trump is putting profits over people, worsening our housing
crisis, and we need Congress to tackle zoning reform.
Exclusionary zoning is a national problem and has a deep
history in my district, the Massachusetts 7th, and, in fact, in
the early 20th century, Boston adopted zoning codes that
explicitly restricted where Black and immigrant families could
live. Redlining, disinvestment, and segregation concentrated
poverty in some neighborhoods while hoarding wealth in others,
and today, that legacy lives on. Zoning regulations in Boston
are so contradictory and complex, in fact, that what would take
a day and less than $100 to be approved in another city takes
$10,000 and more than 6 months in the city of Boston. There is
abundant research showing exclusionary zoning perpetuates
housing scarcity, economic segregation, unequal school systems,
and disparate health outcomes.
Dr. McCoy, I would like to begin with you. For folks
watching this hearing who may not be steeped in housing policy,
can you explain the difference between single-family zoning and
multi-family zoning, and how does that difference affect the
overall supply and affordability of housing?
Dr. McCoy. Thank you for the question. I came prepared to
talk about technology, but I can do my best to try to expand a
little bit on what you are asking. Single-family zoning would
typically be restricted to a certain size of a footprint of the
building on a lot and would restrict certain uses of that
building and would ensure that anyone who purchased that
building was restricted to that over time. Multifamily
typically is something that we are going to use in a denser
situation where we need to have multiple units on top of each
other or organized on the site, and, of course, it has its own
different uses that it is restricted to.
Ms. Pressley. Thank you. In Boston, more than 80 percent of
residential land is still zoned exclusively for single-family
homes or low-density housing, and we know that zoning has never
been neutral. Mr. Fleu, in your legal advocacy work, can you
elaborate on how zoning has been used historically as a
mechanism of segregation and displacement, and what role you
see Congress playing in reversing that legacy while still
respecting local governance?
Mr. Fleu. Thank you, Congresswoman. Again, I am not the
best witness to answer questions regarding zoning because in my
State, we have so few zoning laws. I certainly recognize the
conditions that the Congresswoman has identified, and I see
those perpetuated in my own State, not by zoning laws, but by
convention, but I cannot address the question specifically.
Ms. Pressley. All right then. Let me pose a question to all
of our witnesses today. Please raise your hand if you believe
Congress should consider tying certain Federal housing
infrastructure funds to local zoning reform.
[Hands raised.]
Ms. Pressley. All right. Let the record reflect that all
four of our witnesses raised their hand, and I agree. Congress
cannot wait any longer. We need to lift bans on multifamily
housing, reduce minimum lot sizes, and modernize outdated code
that limits supply, because if we are going to invest Federal
dollars into housing and infrastructure, we need to ensure
those dollars are not being undermined by local rules that
drive prices up. I yield back.
Chairman Flood. The gentlelady yields back. The gentleman
from New York, Mr. Lawler, is now recognized for 5 minutes.
Mr. Lawler. Thank you, Mr. Chairman. One of the most common
concerns I hear from my constituents is affordability of
housing. With mortgage rates near their highest since the turn
of the millennium, a limited housing supply in many
communities, and broader affordability concerns across the last
several years, it is perhaps the most difficult time to
purchase a home in our region's history. At the heart of this
crisis is supply. We are millions of units underbuilt in this
country and simply not building enough, and certainly not fast
enough. Last year, I introduced the Revitalizing America's
Housing Act, which calls for a wide-ranging series of
bipartisan reforms and policies that would, amongst other
goals, reframe how we are treating prefabricated homes in order
to incentivize construction and reduce unaffordability. Dr.
McCoy, what role do prefabricated homes play in addressing
housing shortfalls in our developed nations around the globe?
Dr. McCoy. In developed nations around the globe?
Mr. Lawler. Yes.
Dr. McCoy. Thank you for the question. I guess what I would
answer is, I advocate for a deep bench on this. We need many
different options. We have a lot of capacity in this country,
and we have lost some capacity, especially in terms of
manufactured housing that we can bring back, right? In terms of
prefabricated options, it is growing, and we have seen a lot of
growth in this. Mr. Schaefer can attest to that, and it is a
very viable option for how we can get housing on the ground
quickly.
Mr. Lawler. In comparison to countries like Sweden and
Japan, in particular, when you look at America's housing
market, what limitations do you see to the industry reaching
max capacity and scale on the regulatory and economic levels?
Dr. McCoy. I am not certain of the type of regulations, for
example, that you have in Japan versus Sweden. I think in some
ways, what we have seen is a perception problem, and that is
something that we really need to work on and make a national
priority is how do we work against the perception that somehow
the buildings that are built is modular or are not built
onsite, for example, that they have less quality in some way,
which is not true from my experience and from our studies.
Mr. Lawler. Mr. Schaefer, what role does building code
complexity add to our current housing supply gap, and how could
the greater use and acceptance of prefabricated homes help
reduce that gap?
Mr. Schaefer. Thank you, Congressman, for your question.
Yes, I would say, first of all, again, as we have mentioned, it
is almost $100,000 just in entitlement fees to get to the point
where you can build a home; so, we are already starting from
behind. So streamlining those, let building codes per State go
to regional codes, what that would allow us, then, is to build
faster, and if you build faster, then the cost comes down.
Mr. Lawler. What other government barriers might exist at
the local, State, or Federal level that prevent modular housing
from reaching their full potential?
Mr. Schaefer. I would say, again, the higher density. Some
of the things that we have already heard that would change
things if the lot sizes were smaller, then you can get more
homes. Let us say, for instance, in the farm development that
we did, we were able to get 10 homes per acre, which then
dropped the price of the homes because we did five-plexes and
single-family homes down to the $80 to $120 area median income.
So, shrinking density or increasing density would be a
tremendous help.
Mr. Lawler. Thanks. I yield back.
Chairman Flood. The gentleman yields back. The gentleman
from New York, Mr. Torres, is now recognized for 5 minutes.
Mr. Torres. Thank you, Mr. Chair. Mr. Boor, you began your
testimony with the following statement, ``We are not here today
asking for subsidies,'' and then toward the end of your opening
statement, you proceeded to ask for an expansion of the 223(f)
HUD loan program, which kind of sounds like a subsidy to me
because it means the government would have to take on the risk.
We are bearing the risk, and we are subsidizing that risk, so
it feels like subsidies for me, but not for thee. Are you
testifying that public policy and regulation can be a barrier
to cost effective, affordable housing construction? I share
that view. Do you believe the Trump tariffs fall into that
category?
Mr. Boor. Could you explain the role into that category? I
am sorry.
Mr. Torres. Do you believe the Trump tariffs raised the
cost of housing construction materials, which, in turn, raised
the cost of housing construction, which, in turn, raises the
cost of housing itself?
Mr. Boor. To the extent our costs are increased, I will say
that we import materials that go into our homes and electrical
components. We ship homes with appliances that come from
overseas. To the extent tariffs increase and inflate those
products, that drives up costs for sure, and I would not deny.
I would completely agree that----
Mr. Torres. It was absent----
Mr. Boor [continuing]. monthly costs----
Mr. Torres [continuing]. from your testimony but if we are
going to speak about barriers to cost-effective, affordable
housing construction, the elephant in the room is the Trump
tariff regime, which is not manufacturing housing. It is
manufacturing housing shortages.
Mr. Boor. We should work on all these problems.
Mr. Torres. I am an evangelist for the housing abundance
movement and a proponent for housing innovation, land use
reform, and modular construction. The more innovation, the more
reasonable regulatory reform, the merrier, but housing and
housing innovation is a supplement to, not a substitute for,
housing investment. If you are advocating for housing
disinvestment, you are not part of the solution, you are part
of the problem. Mr. Fleu, is it fair to say that housing is a
priority for most Americans?
Mr. Fleu. Absolutely.
Mr. Torres. Housing is a priority for the American people,
but it is not a priority for Congress. The HUD budget is over
$70 billion. The overall Federal budget is $7 trillion. Housing
is a mere 1 percent of the overall Federal budget, and Donald
Trump wants to take that meager 1 percent and cut it in half at
a time when America is facing the deepest affordability crisis
since the Great Depression. Donald Trump is not only seeking to
cut housing assistance in half, but he is also seeking to
impose a 2-year limit on the housing assistance he is cutting
in half.
As you know, most heads of households in public housing and
Section 8 are working people. These are not undeserving poor
people who are gaming the system. These are working people,
like my mother, who cannot afford market rate rent. The median
rent in New York City is upward of $3,000. Can you raise your
hand if you know many working people who can afford $3,000 a
month?
[No response.]
Mr. Torres. Median rent in Brooklyn is around $4,000.
Median rent in Manhattan is $4,000 to $5,000. If you impose a
2-year limit on rental assistance, what do you think will
happen to the working people who live in HUD-assisted housing?
Mr. Fleu, do you want to take a guess as to what will happen?
Mr. Fleu. A lot of people would lose their homes.
Mr. Torres. Right. Instead of the working poor, we would
have the working homeless and so, the policy choice before us
is not a choice between the cost of housing and no cost at all.
It is the choice between the cost of housing and the cost of
homelessness. Mr. Fleu, which is more expensive both
economically and socially, housing or homelessness?
Mr. Fleu. Congressman, I firmly believe that homelessness
is more expensive.
Mr. Torres. By orders of magnitude, right? In Donald
Trump's America, if you are a working-class person, you might
lose your public housing or Section 8, causing you to pay more
for housing. You might lose your Supplemental Nutrition
Assistance Program (SNAP), causing you to pay more for food.
You might lose your Medicaid, causing you to pay more out of
pocket for healthcare. You are not only paying more for food
and housing and healthcare, but you are also paying more for
everyday goods and services because of the Trump tariffs,
which, by the way, is raising the cost of housing. Again, I am
all for housing innovation, but housing investment is
indispensable to addressing the affordability crisis in
America. Does anyone disagree with anything I just said?
[No response.]
Mr. Torres. There is a consensus. There is bipartisanship
in America. Modular construction, to what extent can modular
construction cut the cost of construction? Do we have estimates
on time savings, cost savings?
Mr. Schaefer. Just from experience, for us, it is between
10 and 20 percent.
Mr. Torres. Okay, and is that national or is that in
particular places?
Mr. Schaefer. I can only speak for what we are experiencing
in Colorado.
Mr. Torres. Got it. Look, I feel like it is not either/or.
We need more innovation and more investment, and I hope we can
build a bipartisan consensus for both. I yield back.
Chairman Flood. The gentleman yields back. The gentleman
from South Carolina, Mr. Timmons, is now recognized for 5
minutes.
Mr. Timmons. Thank you, Mr. Chairman. I want to thank the
witnesses for being here today.
The U.S. housing market has long faced a significant supply
gap, particularly for low-and moderate-income families, while
traditional site-built homes have largely dominated. Innovative
solutions like manufactured, modular, and 3D-printed homes
present a promising path to expanding affordable housing
options. I am always fascinated by how technology can be
harnessed to solve some of our country's most pressing
challenges. To address the growing housing shortage, it is
crucial that Congress explore out-of-the-box solutions,
including emerging technologies, to ensure that all Americans
have access to safe, affordable housing.
Dr. McCoy, 3D-printed homes represent a significant
technological innovation in the housing industry. How do you
believe this technology can revolutionize the way we approach
home construction, especially in terms of affordability and
efficiency?
Dr. McCoy. Thank you for the question. Do you mind just
repeating the very end of that, ``because when the door
opened?'' I missed it.
Mr. Timmons. How do you believe this technology can
revolutionize the way we approach----
Dr. McCoy. 3D printing.
Mr. Timmons [continuing]. home construction, especially in
terms of affordability and efficiency?
Dr. McCoy. Excellent. Thank you so much. We have been doing
a lot of 3D printing. It speeds up the process. It is very
customizable. It also can augment current processes that we
see. We have different parts of the home that it can augment
that, but also, what we are really looking at is how do we
modernize the construction workforce, so they understand how to
work with machines as well. I think that is something that we
have seen in modular and manufacturing that they have already
started to attempt to understand. We need to understand how we
can modernize our workforce in the process. I am not sure I am
exactly answering your question, but there are a lot of
different options that we can----
Mr. Timmons. Let me ask you a different way. Permitting and
regulation are a huge challenge, timing and getting all your
subs in order and getting the inspectors out, and all that
stuff. When a computer is doing it, when it is predetermined, I
would imagine that time, and the lack thereof, necessarily,
inspections and permitting, there are not a lot of variables in
subcontractors. You do not need to say is the framing right if
a computer is doing it. Would that be a huge benefit to the
construction process?
Dr. McCoy. Yes it would, if we can get there, right? Right
now, we have different authorities holding jurisdiction that we
need to educate, and so we need to have processes that can
streamline those processes, make sure that we agree to their
safety and quality, and then I think we can move forward.
Mr. Timmons. Sure. Thank you. Mr. Schaefer, understanding
that only a few hundred 3D-printed homes were built last year,
how long do you believe it will take before this technology can
realistically scale up and begin making a meaningful impact on
our Nation's housing crisis?
Mr. Schaefer. Thank you for the question. Again, this is
not my area of expertise. The one thing I will say about 3D
printing, I think it is in the early stages, right? We have 18
stations in our factory. A 3D printer would only help with
stations one and two; so, this is an emerging possibility, and
the hope is that it will be one piece of the puzzle in the
future.
Mr. Timmons. Sure. Thank you. Dr. McCoy, across the world,
are other countries further advanced than we are in adopting 3D
printing?
Dr. McCoy. That is a very good question. Thank you for the
question. They are moving forward quickly, and so we are doing
what we can to keep up. Mostly, the work has been done in 3D
concrete printing when it comes to buildings. We do have some
polymer-based printing, but typically, that is not for the
entire building, right, for the walls and the structure. A lot
of the work we have been doing has been in trying to understand
new materials for this process, understand how the code
processes would work, how we can integrate with existing
processes as well.
Mr. Timmons. Sure. Thank you for that. I want to shift
attention to another innovative solution in housing that
Chairman Flood discussed earlier: single section cross-mod
homes. These homes combine the efficiency and speed of modern
manufactured housing with the look and features of traditional
site-built homes, such as higher roof pitches, front porches,
and permanent foundations. Cross-mod homes finance and appraise
like site-built homes, and according to Federal Housing Finance
Agency (FHFA) House Price Index, they have appreciated at rates
similar to traditional homes since 2020. This innovation
presents a real opportunity to increase attainable single-
family housing without sacrificing quality or long-term value.
Mr. Boor, can you discuss how this innovation can help expand
homeownership opportunities for a broader range of Americans,
particularly in terms of terms of affordability, financing, and
long-term value retention?
Mr. Boor. Yes. I mean, we have talked about anything that
you would call priced in a starter home category. I think
cross-mod homes are really the thing that can fill in that void
because it is so much less expensive, and yet the quality and
aesthetics are comparable with what people would expect from a
site-built starter home. It is really filling a gap that home
builders are vacating by not being able to hit those price
points.
Mr. Timmons. Sure. Thank you for that. Mr. Chairman, I am
out of time. I yield back.
Chairman Flood. The gentleman yields back. The gentlewoman
from Texas, Ms. Garcia, is now recognized for 5 minutes.
Ms. Garcia. Thank you, Mr. Chairman, and thank you so much
for bringing attention to the housing crisis. I think we can
all agree that there is a housing crisis, not just in some
States, but throughout America. I know, Mr. Chairman, we had
another subcommittee hearing where we had the head of the
homebuilders here, and he responded to some questions I had
specifically that I have today for Mr. Boor and Mr. Schaefer,
who are the for-profit builders here. What impact will the
tariffs have on your construction? I know, Mr. Boor, you were
asked that question by Mr. Torres, but you kind of hedged there
a little bit, so specifically, and all I need is a percent. I
do not need a whole explanation for it. What percent do you
anticipate the increased cost in your building due to the
tariffs?
Mr. Boor. I think I was volunteered to go first on this
one.
Ms. Garcia. I asked you first, so yes.
Mr. Boor. Okay.
Ms. Garcia. I just need a number. I do not need an
explanation.
Mr. Boor. The difficulty is that the tariffs keep moving on
us, as you know, so it is part of uncertainty on this----
Ms. Garcia. That is part of the problem with the----
Mr. Boor. Right, on our cost structure----
Ms. Garcia [continuing]. with the tariffs is it is
unpredictable, and it is one thing today and another thing
tomorrow, but today, what is the impact?
Mr. Boor. In our cost structure, I would tell you it would
be in the low-single digits on the cost side.
Ms. Garcia. What number, sir?
Mr. Boor. I do not have a specific number. Below 5 percent.
Ms. Garcia. I am sorry?
Mr. Boor. Below 5 percent, based on the tariffs----
Ms. Garcia. Below 5 percent?
Mr. Boor [continuing]. Based on the tariffs that exist
today.
Ms. Garcia. All right. You do use some steel products, do
you not?
Mr. Boor. Yes.
Ms. Garcia. Because those comes from Canada, and I know
that was a big concern for the home builders, the lumber and
the steel products from Canada.
Mr. Boor. Yes, and I believe those have been reversed back
to the preexisting tariffs.
Ms. Garcia. They are on pause because of the North American
Free Trade Agreement (NAFTA), but they will come back.
Mr. Boor. Correct.
Ms. Garcia. Trust me.
Mr. Boor. Correct.
Ms. Garcia. What about the modular homes, Mr. Schaefer?
Mr. Schaefer. Yes. Our homes--thank you for the question--
are built with lumber, so that would be the one that we would
be watching. So----
Ms. Garcia. What percent would that be, sir? I just need a
number.
Mr. Schaefer. Five percent.
Ms. Garcia. Five percent. Would it surprise both of you
that the home builder said about 25 to 40 percent, just
tariffs? Now, you also use a lot of labor, and there will be a
shortage of labor with the increased deportations and
immigration enforcement. What percent would that impact, and,
Mr. Schaefer, you will go first this time.
Mr. Schaefer. Thank you for the question. Yes, we have not
had a shortage of labor. We have about 110 folks in our
factories.
Ms. Garcia. I just need a number, sir.
Mr. Schaefer. Zero.
Ms. Garcia. Zero? You will have no impact?
Mr. Schaefer. No impact.
Ms. Garcia. You have all the workers in the world.
Mr. Schaefer. Correct.
Ms. Garcia. That is very nice. You are probably the only
sector I have ever talked to that has responded in that way,
and Mr. Boor?
Mr. Boor. I would appreciate 1 minute to just talk, that
the one thing about the difference you are hearing for now----
Ms. Garcia. Sir, I just need a number because I have only
got 2 more minutes left.
Mr. Boor. I would agree with the zero percent on labor
because we are hiring unskilled labor, and we are training
them.
Ms. Garcia. So the tariffs do not impact you much?
Immigration? None at all?
Mr. Boor. We have not seen an impact on labor of any----
Ms. Garcia. Would it surprise you to know that the
homebuilders had 30 percent based on immigration deportations,
and that was----
Mr. Boor. What I wanted to point out is that our
processes----
Ms. Garcia. Sir, I did not ask you a question. Let me move
on. Sir, I want to go to Mr. Fleu, and, Mr. Fleu, thank you for
your work. I was a legal aid lawyer myself, and my favorite tee
shirt was one that said, ``Housing for People, Not for
Profits.'' I was in the housing section. I used to have it
until I had this horrible accident in Mexico, and my van blew
up and everything in it; so, I lost the tee shirt. I wanted to
ask you a question about extreme heat, hurricane events,
weather events, and the risk to manufactured homes. Can you
talk just a little bit about that? I am from Houston. We have a
lot of hurricanes, and we do not have that many manufactured
homes in Houston, but there are pockets around Houston that are
semi-rural that do.
Mr. Fleu. Thank you for the question. I can speak to the
issue briefly. As everyone knows, these homes that we are
talking about that are on non-permanent foundations on piers
are secured primarily through the hurricane straps, metal
strapping, ultimately secured to the ground by a large screw.
What we see, not just in high-wind events, but in high-water
events, we see a lot of flash flooding events in West Virginia.
There has been a lot of news about the storms that hit North
Carolina and the issues that they have had with the homes. The
other thing that I would like to mention, and maybe I am
dealing with mainly older homes, but when these homes become
waterlogged when they suffer from a natural disaster event, it
is not like you call in Servpro, and they vacuum out your
basement. These homes suffer for the rest of their existence
through mold issues from other deterioration, and I think it is
a very important issue that you have identified.
Ms. Garcia. Right. It would be a mistake to dismantle or do
away with FEMA.
Mr. Fleu. It would be a mistake.
Ms. Garcia. Thank you. I yield back.
Chairman Flood. The gentlewoman yields back. The
gentlewoman from Texas, Ms. De La Cruz, is now recognized for 5
minutes.
Ms. De La Cruz. Thank you, chairman, and thank you to the
witnesses for being here today.
I am from deep South Texas, the tip of Texas. It is a
largely Hispanic community and a community that has a humble
average income for families; so, low cost in housing is
something very, very important to me. Affordability is
important to me, and I am excited that the work that we are
doing here in this committee is to find meaningful solutions to
end the housing crisis. I am especially interested in ending
homelessness for veterans as well, and this is why I am proud
to have a bill that helps address this for disabled veterans,
which is H.R. 225, the Disabled Veterans Housing Support Act.
As I said, it passed successfully out of the of the House and
will, God willing, pass out of the Senate, as well.
That being said, when we worked on this bill, what we found
was that there are simple legislation changes that can be made
that can be bipartisan and make tremendous impact on a
community, in this case, veterans. While I was listening to her
discussion today, I realized how important manufactured homes
are to solving affordability and housing in our Nation,
especially given all the advancements in construction. 3D
printing, 3D building is very interesting, quality, making sure
that it is quality. Texas is home to the most total shipments
of manufactured homes, and while manufactured homes are less
expensive, they have seen a percentage cost increase, much like
our standard brick homes.
Mr. Boor, what do you think are key Federal changes that we
can make to reduce the price of manufactured housing for Texans
and for all Americans?
Mr. Boor. Yes. The price that matters to the people you are
talking about is their monthly cost, and there are some very
clear actions to be taken on the financing side, encouraging
directing the GSEs, in particular, and FHA to develop programs
they have talked about for a long time for home-only financing.
I would imagine in your area--I know, because we are in those
markets--that there are a lot of people there that are buying
home only, and they need that kind of loan. The GSEs really do
not support that at all, and if they did, the cost of those
loans would come down, and the monthly cost, which matters to
those people, would be reduced. A lot of people are right on
the outside of affordability, and that makes a big difference.
Ms. De La Cruz. So GSEs, you said they do not support the
manufactured home buyer?
Mr. Boor. No. Under their duty-to-serve programs, they have
talked about pilot programs and other efforts to get into this
segment, and yet, we have really seen very little activity, so
it would be a huge impact on people being able to get in. There
are so many people just outside of affordability. If you get
that efficiency, that secondary market for home-only loans,
their monthly cost comes down, and they can afford it.
Ms. De La Cruz. You said they were developing programs. Is
it a funding issue for them? Why do you think the GSEs have not
supported manufactured housing?
Mr. Boor. Yes. I am hesitant to speculate on the reasons. I
think it is a small market for them. What they would tell you
is they do not have data about the risk reward, but in the
public market with investors, they are pretty attracted to the
risk reward. I think a secondary market would bring that
interest rate down and again, have a huge impact on the number
of families that could afford a home.
Ms. De La Cruz. That has been very helpful. Thank you. I
appreciate that. I know I do not have very much time left, but
we talked about financing. I am very curious about the 3D
building. I will just ask Dr. McCoy or Mr. Schaefer about the
3D building, and modernizing workforce. You said, it is very
important to make sure that we have the workforce to be able to
produce this. Can you speak briefly to this?
Dr. McCoy. Thank you for the question. Yes, this is a
critical aspect of getting more workers into this industry.
Right now, we have a labor shortage, considerable. I have heard
today that maybe that might not be in the factories, and so we
are seeing that definitely in construction sites and across the
industry in many different ways. Getting more people excited,
changing the perception of this industry, I think it will go a
long way and then talking to younger generations about how
exciting all of the different opportunities are, the different
technologies that we are working with, it will go a long way to
making this a great economy-building industry.
Ms. De La Cruz. Thank you. Thank you. I yield back.
Chairman Flood. The gentlewoman yields back. The
gentlewoman from Georgia, Ms. Williams, is now recognized for 5
minutes.
Ms. Williams of Georgia. Thank you, Chairman Flood and
Ranking Member Cleaver, and to all of our witnesses for having
this discussion today because you all, I understand that
manufactured housing can be an important tool in our tool kit
to help ensure that everyone, no matter their zip code, has a
roof over their head. In fact, I have benefited from this. See,
I grew up in rural Alabama, and I grew up in a home that had no
indoor plumbing and no running water. I remember when my Aunt
Pat purchased a manufactured home, and it was the first home
that I lived in that had indoor plumbing and running water. I
now live in downtown Atlanta, you all, and so I represent a
district that this just is not possible.
I listened to my colleagues on the other side of the aisle,
and I can tell that this hearing, while it would benefit many
of my relatives, many people that I grew up with in rural
Alabama, it would not do anything for most of the constituents
that I represent in the heart of the city of Atlanta because
there is simply no place that the people of Atlanta can have a
manufactured home. You all, they need housing, too, because we
have all agreed that affordable housing is a crisis in this
country. My constituents have been quite vocal about this one-
size-fits-all solution that is being forced on them, and I am
their voice in Congress. So I have an obligation to speak up on
their behalf. They are begging my colleagues to not gut HUD.
They are begging my colleagues to not get rid of affordable
housing programs and they are asking for us to do something
that will benefit so many Americans that are struggling, to
meet them where they are and deal with Trump and his
administration's skyrocketing housing costs, because here is
the truth of the matter, you all.
While this convo today would help a small segment of the
country; my constituents would be left behind and still
struggling. Why else would my Republican colleagues focus this
week on kicking people off of healthcare, raising costs with
reckless tariffs, or gutting SNAP benefits for the most
vulnerable families? You all, this, too, is personal for me
because I benefited from SNAP growing up. It was called food
stamps at the time when I grew up in the 1980s and 1990s when I
was raised by my grandparents, but I would not be here in
Congress today, serving the people that I represent, if the
Trump Administration and my colleagues had their way with a lot
of the policies that we are forcing on the American people
today. What I know is that we have a job to do, and if my
colleagues really care about affordable housing for all
Americans, they will work with us to ensure that housing is
affordable for the lowest-income families.
Mr. Boor, this is a very simple question. Do not need all
the details in background. My Republican colleagues say they
want to make manufactured homes and homes in general cheaper,
which is a noble idea, but President Trump is putting tariff
taxes on steel and aluminum coming from some of our biggest
trade partners, like Canada and Mexico. That is the stuff that
we build homes with, you all. Mr. Boor, simple question, will
Trump's tariff taxes make prices for new homes increase or
decrease? Increase or decrease, Mr. Boor?
Mr. Boor. We talked earlier. It is probably the same single
digit----
Ms. Williams of Georgia. Just increase or decrease, Mr.
Boor.
Mr. Boor. Price increase.
Ms. Williams of Georgia. Increase. That is right. Mr. Boor,
recent data from Home Builders shows that Trump's tariff taxes
are adding almost $11,000 to the cost of an average home, but
the good news is, you all, is that I actually have solutions to
bring costs down. In fact, a few weeks back in a committee
markup, I offered an amendment that will increase funding for
the Community Block Grant and Home Investment Partnerships
programs. These programs are lifelines used to help States and
local communities to preserve and rehabilitate homes and low-
income communities. Unfortunately, my Republican colleagues all
voted against it, and President Trump has proposed eliminating
these programs entirely. As if an $11,000 tax increase was not
enough for struggling families, my Republican colleagues, you
all, they just want to keep it going.
Mr. Fleu, if Republicans got their way and eliminated these
programs, what would happen to the average price of affordable
housing across the Country?
Mr. Fleu. Thank you, Congresswoman. First of all, I am here
in a nonpartisan capacity, but to answer your question, they
would soar.
Ms. Williams of Georgia. The facts are the facts, Mr. Fleu,
and you are right, they would soar, but now, it is not going to
solve everything, you all. If Republicans are serious about
making manufactured homes part of the solution, which they
absolutely should be, we need to make sure that these homes are
built to last and insured. Just last year, my district was hit
with two hurricanes, and I live in Atlanta, you all. We are not
even coastal. There is nothing costlier than a damaged home
that cannot be repaired. Mr. Fleu, my time is up, but I have
more questions for all of our witnesses that I will submit for
the record, Mr. Chairman, and I yield back.
Chairman Flood. The gentlewoman yields back. The
gentlewoman from Florida, Ms. Salazar, is now recognized for 5
minutes.
Ms. Salazar. Thank you, Mr. Chairman Flood, for putting
together this very important and interesting hearing, and my
first question is for any of you would like to answer. My name
is Maria Salazar. I represent the city of Miami. Miami is now
in fashion. Everyone wants to move to Miami. There are tall,
pretty, nice, expensive buildings being bought by the New
Yorkers, but the problem is that one of the biggest issues
facing the constituents, the regular Miami resident, is housing
costs. I have never really understood why this is. When I have
spoken with the developers, they say that the land is too
expensive and they cannot buy the land, then they make their
money because they are in the private sector, not like us that
we are in the public one serving the public.
So the modular homes, do you think that maybe that could
help this problem? I am talking about the land costs, but then
you have to put on top of that the construction expense. Any of
you that would like to tell me, give me some hope about Miami
and the overall housing costs coming down. Who is familiar with
Florida?
Mr. Boor. I will take a swing. Yes, I think the land cost
issue is somewhat of a given, and so what you have to look for
is density. I mean, this whole problem is a supply side
problem. This is not about throwing money at higher-cost homes.
It is about supply, and so if we can get more housing units on
that expensive land, then we win, right? More supply. So, I
think the pessimism about what manufactured housing can do in
urban environments is unwarranted. We have innovated with
duplexes and other solutions that get more units on the same
piece of land, so I think it is a supply problem, and that is
the solution.
Ms. Salazar. All right. Any other comments? Any
suggestions? If you were to be talking right now to one of the
developers that do want to provide what you just explained,
what would you say to them?
Mr. Boor. First, I would talk about density, but I would
also point out that order of magnitude, the cost of placing our
units is about 30 percent less than the cost of a site built,
and so if they want to lower their cost to try to hit
affordable price points, density and manufactured solutions.
Ms. Salazar. So that would entail to changing the zoning
laws, as well----
Mr. Boor. Correct.
Ms. Salazar [continuing]. with the dense----
Mr. Boor. Change the zoning and allow us to innovate with
products that fit in those environments.
Ms. Salazar. What about this other idea that I was hearing
about, the accessory dwelling units, which are similar to
little efficiencies? Could you explain a little bit more
because we have so many----
Mr. Boor. Yes, that is like creating land. This is not
something an economy----
Ms. Salazar. Creating what again?
Mr. Boor. Excuse me?
Ms. Salazar. Creating?
Mr. Boor. Creating land is what I would say, and that is
not a----
Ms. Salazar. Oh, creating land.
Mr. Boor. That is not a concept that an economist would
agree with me on, but people have backyards that are available,
and if they can put a rental or a mother-in-law-type unit in
the backyard, you have placed another unit in a dense area
which grows the supply and lowers the cost of housing.
Ms. Salazar. Sure, and then why is that not happening more
often in Florida? Do you have any idea?
Mr. Boor. I think they are slow to take it up. I think if
you looked at L.A., as an example, L.A. has really grabbed onto
this idea and removed the barriers.
Ms. Salazar. Could you just give me a picture of what the
accessory dwelling unit looks like?
Mr. Boor. Yes. They are typically much smaller. What we see
a lot in L.A. County that I have used an example is people
leveling their detached garage, on that footprint, putting a
400 to 500 self-contained living unit, and that could be
rented----
Ms. Salazar. All right. With a kitchen and a bathroom,
everything that a little home entails?
Mr. Boor [continuing]. Everything, and that unit can be
rented to the schoolteachers and the nurses and the fire people
that cannot afford to live in those areas that they serve, and
now, again, you have lowered the incremental cost of rent and
increased housing.
Ms. Salazar. How much does a 500-square-feet unit accessory
dwelling unit may cost?
Mr. Boor. One might be--and I am winging it here--but basic
one might be $50,000 to $60,000, and it can be as nice as you
want to make them.
Ms. Salazar. Wow. Great. How do we access that? Give me
two.
Mr. Boor. Oh, how do you get it----
Ms. Salazar. Meaning, I think it is a very innovative idea.
I had not heard about it, but I definitely would like to know
more so we can share this new concept with the rest of the
developers that are desperate.
Mr. Boor. We are developing the case studies in some
municipalities. It is a great solution.
Ms. Salazar. Thank you. I yield back. Thanks.
Chairman Flood. The gentlewoman yields back. The
gentlewoman from Michigan, Ms. Tlaib, is now recognized for 5
minutes.
Ms. Tlaib. Thank you, Mr. Chair. We know that when private
equity firms purchase manufacturing housing communities,
residents can face new regulations, as we know, higher rents,
and even displacement or eviction. In Michigan, 1 in 10
manufacturing housing communities are owned by private equity
firms. Private equity firms have purchased manufactured housing
communities in my own district called Crestwood Estates, and
Dearborn Heights is one of them, and one of the residents in
Crestwood Estates had reached out. She is a seasoned resident.
In March, she called us, reached out, and after her community
was purchased by a private equity firm, her rent went up 65
percent. That is before the water, sewage, trash, and other
fees were added on. She told me that some of her neighbors have
lived there for 20 or 30 years, but now most of us cannot even
afford to live here anymore, and they have no place to go.
Mr. Fleu, in your testimony, you noted that residents of
manufactured housing communities are overwhelmingly people on
fixed income, like my resident that I mentioned. Can you touch
base on many of our seasoned residents? Ironically, for some
reason, a lot of my veteran neighbors really like living in
manufactured home communities, as you probably know, and we
have a lot of residents living with disabilities on fixed
income that also, in particular, face financial disruptions and
so forth. Can you talk a little bit about what those impacts
look like post private equity firms buying out these
manufactured communities?
Mr. Fleu. Thank you for the question, Congresswoman. What
those impacts look like are, frankly, pitiful. You see people
that have lived in communities for decades, as you have
mentioned, that find themselves homeless. You find people that
have lived in communities for decades that start having all
kinds of health issues because of the stress that this
increased rent has put on them. You find people that have
enjoyed a community for years and interacted with their
neighbors that no longer feel that sense of community because
people have left, the conditions have deteriorated, et cetera.
If I may, I would suggest that one of the issues with private
equity would be providing incentives for sellers to sell to
residents and incentives for residents to purchase their own
communities and convert----
Ms. Tlaib. I love that. We actually been talking about it.
For people listening to this committee, I know we are not the
most popular committee today, but one of the things we have
been talking about on our team is the resident-owned
communities of having kind of an approach of resident-owned,
having the homeowner have a share in the governing of it, the
oversight and so forth, and having some way to even vote on
some of the conditions of the facility, and I am glad you
mentioned it. If you can talk about the benefits--and again,
this is new to many people in the public--called resident-owned
communities a little bit. I know in the past, you have heard
and I know the ranking member has heard, cooperatives
structured as cooperatives and things like that. If my mom or
your mom was in this room, how would you explain that and the
benefits of it?
Mr. Fleu. Sure. It is the difference between an apartment
building and a condo.
Ms. Tlaib. That is right.
Mr. Fleu. By allowing residents to actually purchase the
communities they live in, the homes are better upkept, the
conditions in the communities themselves are generally more
improved, the upkeep is improved, but like you say, it gives an
ownership. It gives, basically, a real piece of land that goes
with the home, and it allows people to have that pride of
ownership and to have that asset that they do not have when
they only own the home, but they are basically powerless with
regards to the decisions made about the----
Ms. Tlaib. In your testimony, you actually mentioned the
abusive financial practices faced by purchasers of manufactured
homes and I know in the past, Consumer Financial Protection
Bureau (CFPB) had exposed those practices and pursued bad
actors. However, I know the current administration is not
interested in doing that. In my opinion, I do not see that
being something of a commitment. Does the weakening of consumer
protections mean that borrowers, like my constituent seeking to
purchase, are exposed to some of these fraudulent schemes?
Mr. Fleu. Absolutely, and the weakening of consumer
protections is a snowball effect.
Ms. Tlaib. Uh-huh.
Mr. Fleu. One bad actor breeds another bad actor, breeds
another.
Ms. Tlaib. Yes, Mr. Fleu, you should have seen--I do not
know, chairman, I should have brought the article. One of our
manufacturing homes owned by a private equity firm, they just
had no water access because he did not pay it. I mean, it is
private equity firm, but they had that one person. He did not
pay it. They did not have water. I do not know, I just feel
like these are some of our most vulnerable, and we should do
more. Thank you.
Chairman Flood. The gentlewoman yields back. The gentleman
from Wisconsin, Mr. Fitzgerald, is now recognized for 5
minutes.
Mr. Fitzgerald. Thank you, Chairman. Mr. Boor, did I hear
you right when I first walked in, you said one of the answers
to the housing shortage is to move your mother-in-law out in
the backyard? Build her a separate place, or how would that
work? Who is going to deliver that message?
The Next Generation Housing Initiative in Washington
County, Wisconsin, is a locally driven effort to expand
affordable homeownership for middle-income families by
developing a thousand new owner-occupied homes by 2032. It is
backed by $10 million in county investment. The program
provides infrastructure subsidies to developers and down
payment assistance to buyers up to $20,000 per home. It sets
clear affordability targets, requiring 40 percent of homes to
be sold under $340,000, and all under $420,000. Obviously, what
we are focused on is reducing the development costs, expanding
housing options and the initiative also promotes zoning reforms
that allow for smaller lots and diverse housing types, like
duplexes and townhouses. It is an example of a public private
advisory group that cannot only implement this but oversee
this.
Mr. Schaefer, I think you are familiar with the concept. I
am going to ask you, from your vantage point and working
closely with developers and local governments and nonprofits, I
know you have seen a lot of changes and maneuvering on some of
those challenges to building affordability. Have you seen
programs similar to this throughout the Nation starting to
develop, or do you think something similar could be kind of
scaled down maybe, and used at the Federal level? I was
wondering what your thoughts are on that.
Mr. Schaefer. Thank you for your question, and what you
just described is, basically, what we have been doing
throughout the State of Colorado. It is municipalities and the
State tackling this missing middle, so 80 to 120 percent of the
area median income (AMI), which you described on this
particular project. Yes, higher-density townhomes are a part of
it. It could be duplexes, up to four or five or six plexes, and
then the public-private partnership piece, or you could add
philanthropic, as well, into that piece, which it sounds like
you are doing. These are going on throughout all the mountain
towns and really throughout the State of Colorado, very similar
to what you did, so you hit on all the main points.
The only one that I might add is, again, you are focusing
on the demand side. The one piece we are challenging folks to
is to look at the supply side. Building one factory in the
State of Wisconsin could provide 500 affordable homes per year.
With everything that you just mentioned in this initiative, we
would just want to add that to it.
Mr. Fitzgerald. Very good. Thank you so much. Mr. Boor,
government-mandated caps and regulations on single-family
rentals reduces supply of housing. It has kind of been
discussed, I know, this morning, but studies have shown minimum
lot size requirements restrictions on multifamily housing
developments and the lengthy permitting process, which, if you
are a Member of Congress, you hear every time you are in the
district and you talk to somebody that is a builder themselves.
Do you believe that there is an increase in the number of
single-family rental homes that are available, and how could
this improve overall housing affordability? I guess, what is
the effect on the pricing?
Mr. Boor. Yes. There is a huge need for rental solutions,
as well. I think the challenge, and this relates to your
earlier question. The challenge is not only on the financing
and funding side but it is also getting entitlement to do these
expansions. Communities, whether they are rental or land lease,
provide homes for a lot of people in this country, and they are
very satisfied with their living situation. To further your
point, I think some of the lot size requirements is one form of
zoning restriction that keeps manufactured housing out of urban
developments. We have not even cracked the opportunity of
infill with factory-built housing, and it is because of those
kinds of restrictions that you are mentioning.
Mr. Fitzgerald. Thank you. Chairman, I yield back.
Chairman Flood. The gentleman yields back. The gentlewoman
from Oregon, Ms. Bynum, is now recognized for 5 minutes.
Ms. Bynum. Thank you, Mr. Chair. Mr. Fleu, in my home State
of Oregon, I have noticed how private equity firms have
significantly increased investments in manufactured housing
communities. From your work, have you seen any impact on the
cost to renters when entire manufactured housing communities
are purchased on a systematic scale? One point to note, we in
the State have suffered from extraordinary wildfire events, and
so many families rely on the accessibility of being able to
move into a manufactured housing community pretty quickly. So
that is why this is really important to us.
Mr. Fleu. Thank you for the question. As explained a little
further in my written testimony that was submitted, I have
never seen private equity or a hedge fund buy a manufactured
housing community and not increase rents as the first thing
they do. Unfortunately, that is often coupled with a decrease
in investment in the community, allowing infrastructure to
deteriorate and living conditions to worsen.
Ms. Bynum. My second question for you. Manufactured housing
is the largest source of unsubsidized affordable housing stock,
and it represents an essential source of affordable housing,
particularly for seniors. I remember going door-to-door one
time, and seniors were pretty upset because a row of the homes
had been condemned because they were noted by the county as
being very close to falling into the river, and that was, of
course, a challenge for them, and I asked them if there was a
replacement, and they said no. So that was particularly
stressing for them.
From your perspective, what specific risks come from the
aggressive purchasing of manufactured housing communities,
particularly to vulnerable populations like seniors, veterans,
low-income families, and what actions, from a policy
standpoint, do you think Congress should take to mitigate these
risks? One more quick point on this, when I asked the question
earlier in a committee about capital, the response was that we
should be agnostic to the type of capital that comes in to do a
particular job. Okay. That is fair. That was in respect to
young people being able to buy their first home. I think the
challenge now is that we have a legislative opportunity here.
We have a policy decision to make, irrespective of the money,
but what should we be doing? What should we be thinking about
to making that policy decision?
Mr. Fleu. Thank you. I will answer that last question, but
to sort of go back to the first question, when you have people
on fixed incomes, when you have vulnerable communities, low-
income communities, the median household income (MHI), they
released a study that says the average increase year over year
in manufactured housing communities, land leased communities,
6.5 percent, I believe. The average increase for this year is
2.5 percent, so there is just no way that someone that is on
fixed benefits can keep up and keep a roof over their head.
Answering your last question, I think that the government can
incentivize. I think, again, we are all talking about the need
for further expansion of GSE-backed loans, but I think part and
parcel of that expansion must come with rules from those GSE
that require certain treatment, certain benefits to the
residents of these communities.
Ms. Bynum. Thank you. I guess in closing--Mr. Fleu, thank
you for your testimony--I am really concerned about threats to
affordable housing that could create these conditions where
seniors are pushed out of their communities and veterans on
fixed incomes, as you have just mentioned, are hit with rent
hikes that they cannot afford, and I think that this is
happening without transparency. Congress needs to provide some
level of guardrails so that we shore up the market, make sure
that it continues to be there, and especially as we try to
replace housing in areas where wildfires have really hit home.
I am committed to working with my colleagues on both sides of
the aisle to ensure that we get a safe, affordable, and steady
housing stock. I do not think our homes should be necessarily
an opportunity for just the outright profit. It is a source of
intergenerational wealth for many families, just keeping a roof
over their head, but I think this is more about dignity and
opportunity for families. Thank you, Mr. Chair. I yield back.
Chairman Flood. The gentlewoman yields back. The gentleman
from California, Mr. Liccardo, is now recognized for 5 minutes.
Mr. Liccardo. Thank you, Mr. Chair, and thank you for
allowing me to waive on. I would like to think I am becoming an
honorary member of the subcommittee. Thank you, and I
appreciate your willingness to hold this important meeting
because innovation in the housing industry is critical. I have
certainly seen that in my time as a mayor. In the city of San
Jose, we actually have more mobile home residents than any
other city in the country, and we relied heavily on
prefabricated modular housing for many solutions, and, frankly,
we need much more.
I do share Mr. Torres' view, though, that the public is
being presented with a false choice between innovation and
sensible housing safety net programs, and we desperately need
both. We do need innovation construction development. We also
know that the actions that either have been taken or being
contemplated to decimate Section 8, for example, requiring 2-
year limitations, for example, cutting already thousands of
families off the program. Section 8 already fails to serve
about three-quarters of American families that qualify for it
by income; so, the devastation we are going to see from the
cuts there, in that and other similar programs, the tariffs on
Canadian lumber and Chinese steel, none of these are making our
efforts to combat the housing crisis any easier.
My concern is that as millions of Americans will suffer
from both these cuts and poor economic strategies, we are going
to see more people pushed out in the street, and communities
are going to take a generation to recover because we know that
arsonists can move much faster than home builders can. I would
urge Congress to move carefully, very carefully, in dismantling
these critical safety net programs.
I want to get to the heart here of what we are discussing
here today, and I certainly saw the benefits of prefabricated
modular housing, particularly with regard to ADUs, backyard
homes. We created programs, partnering with manufactured home
builders, identifying a couple dozen preapproved floor plans so
that our planning department could enable homeowners to get a
permit in a single day by going online and choosing one of the
preapproved plans. We saw the permits for ADUs backyard homes
skyrocketed from about 15 a year back in 2015 to more than 800
by 2019. Huge opportunities. The problem was homeowners got the
permits, but what we were told over and over is that many of
them were not getting shovels in the ground because they could
not get the financing. For modest income homeowners, there is
just no simple tools to enable them if they do not have enough
equity in their homes to be able to expand housing in their own
neighborhoods where we know there is great opportunity for many
cities, like San Jose, that want to provide that opportunity.
We are working on a bill now, and I certainly welcome my
colleagues who may be interested in this, to provide that
opportunity, essentially, through a mandate to FHA. I would
welcome any of our witnesses as to any opinions that you might
have about what opportunities there are for innovation in
financing, particularly with Fannie-or Freddie-backed lending,
that could actually unlock this great opportunity we have with
land in lots of cities throughout this country. We have ample
land and not enough housing.
Mr. Boor. I will jump in. I think you are right on point. I
mean, what we have seen, whether it is ADUs or duplexes, any of
these solutions that can help particularly in more urban
environments, is that the physical product innovation happens
first, and it sometimes takes a long time for the financing to
catch up with it. I do think there is some direction that could
be given to the government entities--FHA, Freddie, and Fannie--
to accelerate development of those programs. In some cases, I
will tell you like duplexes, as an example, I get in
discussions, and they talk about the problems and what they do
not know and then I say, well, do you fund site-built duplexes,
and right away they say, oh yes, we do that. What is the
difference? These homes are not going to move. They are built
to the same quality, but there seems to be a difficulty of just
jumping over the mindset that somehow manufactured housing
should be treated differently in financing, and I think you
guys can encourage those entities to think differently and
move.
Mr. Liccardo. Thank you. I agree, and we are going to push.
I would point out, and, Mr. Boor, I appreciate your comments,
and I agree very much with your suggestion about the need for
preemptive approaches around antiquated restrictions, around
chassis requirements, and so forth, and I would support some
preemption, but I am very concerned about preemption and safety
requirements. I know your own company faced those very
challenges, as I understand, as recently as last year with a
$270,000 fine that was considered from the Department of Labor
regarding safety. We do need minimum requirements around
safety, on construction, and on occupation. I hope you agree.
Mr. Boor. You are talking about factory safety.
Mr. Liccardo. That is right.
Mr. Boor. Yes, very proud of our record there. We are well
below the industry average, but it is very important. I would
not disagree with you at all.
Mr. Liccardo. All right. I am concerned because I know
Cavco certainly had its challenges----
Chairman Flood. The gentleman's time has expired.
Mr. Liccardo [continuing]. and we certainly do not want to
replicate that. Thank you very much.
Chairman Flood. The gentleman yields back. The gentleman
from Montana, Mr. Downing, is now recognized for 5 minutes.
Mr. Downing. Thank you, Chairman Flood. Montana, between
2018 and 2013, has seen just staggering increase in the median
home values. It went almost 90 percent, 89.6 percent, and
during that same time, median household income increased by
about 28 percent. On one hand, you have almost a 90 percent
increase in cost or value, and you have less than a 30 percent
in income. Obviously, those numbers are not tracking. The
median home price in Livingston, Montana, is $640,000, or in
Helena, $600,000, and something I think about often is the
American dream. Homeownership, to me, is foundational. It is a
cornerstone to the American Dream.
So, how do we solve this problem? Obviously we need to
figure out ways of getting people into homes, finding it
cheaper, and I have said these statistics on this committee
before. I think this was from the homebuilders who estimate
that every $1,000 extra that it costs to build a home, you are
eliminating about 106,000 possible people that can buy that
home, so we need to find solutions here. I am going to first
turn to innovation. I was a tech entrepreneur, and I am a firm
believer that the United States needs to embrace and lead in
innovation, innovative solutions, increased efficiencies, make
products more affordable to everyone, so I am excited about the
idea of 3D printed homes. I am excited about this. I am going
to start with Dr. McCoy.
You already spoke earlier today about the potential
benefits of 3D printing technologies. Are there any other
possible innovative solutions to increase the supply of
affordable housing that might not even be on our radar right
now?
Dr. McCoy. Thank you for the question. Yes, I think if you
look at artificial intelligence right now, we have a lot of
opportunities to take antiquated records, permitting processes,
planning processes, we can look at a lot of the different
systems we are currently using, and we can work toward more
efficient processes in that. That could speed up our
construction and scheduling, of course, and hopefully, allow us
to produce more units faster.
Mr. Downing. Thank you.
Dr. McCoy. That is one area.
Mr. Downing. I am going to move on to energy. I am all for
energy efficiency. I live in Montana. Energy efficiency is
important. This can be for Mr. Boor. What impact does the
imposition of Federal energy codes by the Department of Energy
have on the cost and availability of manufactured housing in
America?
Mr. Boor. Yes, that attempted rulemaking, because it was
somewhat ill-advised and out of sequence with how we
manufacture and transport homes, it was poorly targeted, and we
have estimated that there is a lot of variation in assessment,
with $5,000 to $6,000 of added cost for the consumer. Our
industry has come forward and said we can get similar
efficiency improvements in ways that work for us and it would
not drive that cost, and that is the importance of the HUD
process.
Mr. Downing. Thank you. I am going to move on to Mr.
Schaefer. Some places completely prohibit manufactured homes.
Do you notice any difference in housing affordability in areas
that allow manufactured homes versus those that do not?
Mr. Schaefer. Thank you for the question, and, again, we
deal with or we build modular homes, not manufactured homes, so
I am not sure I am the right person to answer this. Again, for
us, if the communities or the State allow for regional codes
that allow us to build faster, quicker, more efficiently, very
similar in Colorado as it is in Montana.
Mr. Downing. Thank you. Mr. Boor, do you agree or do you
have anything to add there?
Mr. Boor. It is all about supply. I mean, your starting
point about the relative increase of housing and incomes in
Montana proves the point that what we need is supply. So turn
us loose, give us a level playing field, and we will increase
the supply.
Mr. Downing. I appreciate that. Kind of building on that,
can you talk about how prefabricated homes can increase the
supply of affordable housing in rural areas where there is not
much development? We can go back to Mr. Boor.
Mr. Boor. Yes, we traditionally have covered rural areas
pretty effectively. I think the next frontier, and it is a big
one, is to get into suburban and urban areas, and that is where
a combination of product innovation and zoning improvements
would allow us to do a big job.
Mr. Downing. My last couple of seconds, to anybody on the
panel, any other barriers that have not been discussed today
that prevent prefabricated homes from being utilized? It looks
like I ran out of time, so I am sorry to get that late. Mr.
Chair, I yield.
Chairman Flood. The gentleman yields back. The chair now
recognizes the good gentleman from New York, saving the best
for last. Mr. Garbarino is now recognized for 5 minutes.
Mr. Garbarino. I do not think I have ever been called the
best before, but thank you, Chairman. Thank you to the
witnesses for being here.
Recent data from the National Association of Realtors
highlights a critical shortage of housing, particularly for
first-time homebuyers and in the moderate income price range.
First-time buyers decreased to 24 percent of the market share
from last year, marking the lowest share since 1981. Dr. McCoy,
how could innovative housing types, like manufactured, modular,
or 3D-printed homes, help address both the housing supply
shortage and affordability challenges facing first-time
homebuyers?
Dr. McCoy. Thank you for the question. I think I said this
before, but, really, I would advocate for a deep bench. We
would have a lot of different tools that we can look at
different segments of the market and be able to satisfy
different parts of the market in different ways or different
local market conditions that we need to satisfy, and I think
that is part of what needs to happen to understand that we have
a lot of options. If we can bring some innovation that needs to
be brought back online, but also push innovation as much as
possible, then, hopefully, we can have many different tools for
many different options.
One of the things that was mentioned before, a couple of
times, that we have not really talked about is, if we can
satisfy a certain segment of the market, we do not have what is
called a crowding-out effect where we might have people who
are, basically, paying below what they can afford, and so you
can actually open up areas for people to have more housing as a
result in markets where you do not find that people can afford.
Mr. Garbarino. My colleague, just before, he was talking
about how some municipalities and localities have put in
prohibitions on these types of homes. What specific zoning
reforms or incentives, Dr. McCoy, should localities consider to
ensure these innovative housing solutions are fairly
incorporated into local land use plans?
Dr. McCoy. In many ways, I am here to talk about
technology, but I can reiterate some of what we have talked
about and what we have seen in Virginia. We have seen a lot of
really good programs that work on speeding up the processes
around permitting. We have seen plan books where people can
pick from a book of plans, and that really speeds up the
process from a code standpoint. We also have seen a lot of
State-level grants that try to incentivize innovation through
our housing finance agency.
Mr. Garbarino. Any other witnesses want to take a stab at
that? Any other ideas?
Mr. Boor. I talked to in my testimony about strengthening
HUD's policy statement on this. Congress has been clear about
the preemption authority of HUD, and they need to strengthen
their policy statements so they can work with local communities
to overcome, really, the outdated view of factory-built
housing. I think if we can push a little bit harder on the
municipalities, we will get more acceptance, and there will be
success stories.
Mr. Garbarino. Actually, my next question was about
updating HUD policies, so that was great. Mr. Boor, Cavco was
the first builder to unveil a duplex model after HUD code was
updated to allow for zero lot line and 2-to 4-unit manufactured
homes. Can you speak to how this innovation expands the range
of homes built to the Federal construction code and where you
see duplexes fitting into the market, and what barriers, if
any, your company is encountering as you bring this product to
scale?
Mr. Boor. Yes. I mean, it is a fantastic change, and HUD
supported us by changing their code to allow it. The early
adopters really are community operators that intend to rent
long term because they can get commercial funding for the
units. The hurdle seems to be to get consumer funding or owner
funding, but I think the frontier that we want to get to is
where these can be solutions for urban infill. It is a great
solution there, and the big hurdle, again, is financing and
developing programs where owners can get consumer financing for
these units.
Mr. Garbarino. Wonderful. Thank you. Since you already
answered my last question, I yield back. Thank you very much.
Chairman Flood. The gentleman yields back. I would like to
thank all of our witnesses for your testimony today.
Without objection, all members will have 5 legislative days
to submit additional written questions for the witness to the
chair. The questions will be forwarded to the witnesses for
their responses. Witnesses, please respond no later than June
20, 2025.
[The information referred to can be found in the appendix.]
Chairman Flood. This hearing is adjourned.
[Whereupon, at 12:05 p.m., the subcommittee was adjourned.]
APPENDIX
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