The Great Divide is a series about inequality.

Few stereotypes are as well entrenched — and wrongheaded — as the perception of mobile homes as the marginal housing choice of the destitute and downtrodden.

Although most of today’s mobile homes aren’t truly mobile and many are situated in pleasant, tree-lined communities, these outdated assumptions prevent us from embracing an important affordable housing option. They also prevent low-income owners from reaping financial rewards from their most valuable assets — their homes.

In America today, about 18 million people live in factory-built “manufactured homes.” They are disproportionately low-income, with a median annual household income of $30,000. That makes manufactured housing the largest source of unsubsidized affordable housing in the nation. When well built and maintained, mobile homes can appreciate in value like any home and are half the price of standard “site-built” homes.

Unfortunately, antiquated policies, perpetuated by powerful financial interests, prevent residents from experiencing the benefits of homeownership.



For starters, although more than 70 percent of manufactured housing residents own their homes, many, including most of those who live in private communities, do not own the land beneath them. They rent the land from often unscrupulous landlords, who can raise rents, fail to maintain properties or sell the land to developers. Older homes are often too fragile to move, and moving costs (which can easily exceed $6,000, according to moving industry estimates) are prohibitive for low-income families.

In Fort Collins, Colo., for example, after developers purchased two manufactured-housing communities, longtime residents were forced to move and find housing in a city where monthly rents average about $1,000. At Seaview Trailer Court on Long Beach Peninsula in Washington, where an absent landlord failed to keep up the property or pay the bills, residents are waiting to find out whether their park will be sold by the lending company.

Financing options for manufactured homes also provide few of the protections and benefits typical of standard homes. Most are legally classified as personal property, like a car, rather than as real estate, which makes it difficult for buyers to obtain lower-cost and less risky mortgages. Many owners pay credit card-like interest rates on home loans, which leads to high default rates. Two of the biggest lenders, Vanderbilt Mortgage and Finance and 21st Mortgage, are owned by Berkshire Hathaway, which also owns the largest manufactured-home builder, Clayton Homes.

Reform is desperately needed. Federal laws need to open the way to fairer financing options. State and local policies should break down zoning barriers that prevent cities from embracing manufactured housing. And more homeowners in manufactured housing communities should have the opportunity to purchase the land.

For now, most of the change is coming through innovative partnerships between nonprofit and public groups.

Last year, residents of a manufactured-housing community in Oak Harbor, Wash., formed a cooperative to purchase the land beneath their homes when it came up for sale. The nonprofit Northwest Cooperative Development Center, a partner of my organization, helped orchestrate the purchase; low-cost financing was provided by the Washington State Housing Finance Commission and ROC USA (where I am board chairwoman). Each resident pays a monthly fee of $330 to cover the mortgage, taxes and incidentals — only $20 more than what they previously paid in rent — while also gaining financial security and an ownership stake of even greater value.

Laws that would allow residents of other manufactured-housing communities to take similar steps and purchase the land are on the books in 18 states. But very few function as advertised. Most don’t give residents adequate notice to organize and complete the purchase, for example.

Strict zoning laws also limit where these homes can be located — essentially shutting them out of many urban areas where they could be put to good use. Today’s well-made manufactured homes, which are generally indistinguishable from regular homes, could offer a viable alternative to public housing in blighted cities like Detroit.

City governments, however, need to be willing to act. In California, Oakland took advantage of state zoning reforms in the 1980s to place manufactured housing on city infill lots. Since then, many of the homes have sold for more than four times their original value. A bill before the New York State Senate would mandate that localities treat manufactured homes like any other housing when it comes to zoning restrictions.

Change is slow because so much of the industry is dominated by a few key players content with the status quo. To open up competition in the market, more small lenders need to be encouraged to provide loans. That will happen only if they have the backing of Fannie Mae and Freddie Mac, which should be compelled to buy loans for manufactured homes just as they routinely purchase loans for traditional homes.

At the federal level, the Dodd-Frank Act, by defining how much a lender can charge in closing fees and interest rates on personal property loans, led to some helpful lending regulations for manufactured homes. However, interest rates remain far higher than on typical mortgages, and industry players are currently pushing for legislation in the Senate that would compromise even these reforms.

Local efforts to help residents when parks close also face resistance. In March, the Anne Arundel County Council in Maryland defeated legislation that would have required park owners to pay residents 10 months of rent (about $5,000) to defray moving costs when a park is sold and redeveloped. The bill failed, in part, because of concerns that it would hurt developers.

Given the minimal oversight and limited ability of residents to fight back, manufactured housing has been a great deal for investors. But it should be a good deal for homeowners, too.

Andrea Levere is the president of CFED (the Corporation for Enterprise Development) and the board chairwoman of ROC USA (Resident Owned Communities USA).