as 118th Congress begins, returning to Washington’s divided government. The American people will expect bipartisan initiative and real results from Washington. One of the main areas of opportunity is home ownership of affordable manufactured homes.
Last year was a difficult year for the housing and mortgage market. We experienced the first decline in home prices in many years, partly because mortgage rates nearly doubled from about 3.5% a year ago to about 7% today.
Federal policymakers should be aware of the fact that manufactured homes are the most affordable homeownership option available to low- and middle-income Americans. The median income for the purchaser of manufactured homes is about $50,000, while the median income for the purchaser of homes built on site is over $100,000. Manufactured homes are often cheaper to own than rent.
There are actions federal agencies can take to help. Last May, the Department of Energy (DOE) announced a manufactured home energy standard that will add thousands of dollars to the average price of new homes, due to take effect this May. These criteria are HUDs, Through HUD Code, it has exclusive statutory authority over manufactured home construction and safety standards nationwide.
The annual home ownership costs of the new DOE requirements far exceed the annual energy savings, and the HUD Manufacturing Housing Consensus Commission found that some of the standards don’t work. DOE should delay the effective date, but work with HUD to create a more balanced standard.
FHAMore, fannie mae When freddie mac can help. Personal property loans, which make up the majority of manufactured home loans, are loans for manufactured homes located in manufactured home communities, other rental properties, or non-loan secured property. But while the FHA, Fanny, and Freddie together account for more than two-thirds of all new mortgages nationwide, last year he financed only three (FHA) privately owned homes. was only manufacturing houses.
These three mortgage programs could also take steps to improve the accuracy of rating so-called cross-mod homes, which offer more amenities at a more affordable price.
Congress can help. Manufacture House Communities (also known as Laundry’s Communities) are an important model for providing affordable manufacturing homes, with half of all new Manufacture Houses currently is placed in
UMH propertiesis the national owner of 134 manufactured housing communities in 10 states, with approximately 25,600 developed residential areas, and is the leader in national efforts to protect communities where affordable manufactured housing is installed. Standing at the forefront.
A key component of our national affordable homeownership strategy must be maintaining aging manufactured communities. Many are in need of major repairs are owned by sole proprietors who do not have the capital necessary to carry out much-needed renovations.
Our National Strategy for Promoting Affordability of Homeownership encourages qualified manufactured community owners with the capital resources to purchase aging communities, deferred maintenance and We need to encourage infrastructure to run and maintain communities for the low and moderate homeowners who live there.
The prototype is a community of 300 manufacturing homeowners and renters in a community called Holiday Village in Tennessee, which UMH Properties purchased in 2013. At the time we bought it, many of the houses were abandoned, the streets were in dire condition, the sewers were collapsing, the water pipes were corroding and collapsing, and the playgrounds were abandoned and dangerous.
UMH has made the significant capital investment needed to fix these issues and sustain the community. Rents rose only nominally over the next nine years, but this matched the cost of the work to renovate the community and was still very affordable. UMH invests more than $70 million annually in new rental housing and capital improvements to improve these manufactured housing communities and restore them as desirable places to live.
Recently, we have successfully used Opportunity Zones to raise capital for these important investments. This is a 2017 program that creates investment tax incentives in areas designated by local authorities as economically depressed.
Opportunity Zone tax incentives provide investors with tax deferral and relief from the recognition of capital gains reinvested in economically depressed Opportunity Zones within 180 days. This program was a success.
Building on that track record, bipartisan sponsors Sen. Cory Booker (D-NJ) and Sen. Tim Scott (R-South Carolina) introduced legislation in the last Congress — S.4065, “Act on Opportunity Zone Transparency, Expansion and Improvement” — Extend the program and make small changes that reflect lessons learned from previous programs. Congress should prioritize the adoption of such legislation this year.
This legislative package should be expanded to include targeted fine-tuning to encourage investment in manufactured housing communities by allowing a 10-year step-up basis approved in the Opportunity Zones Act. However, there is no requirement that the invested funds be a reinvestment of capital earnings in the last 180 days. This will open up a significant new source of capital for building and maintaining affordable manufactured home ownership.
This change will allow UMH and affordable manufactured housing community owners/operators to do more to build new communities and restore and preserve dilapidated ones. increase. The affordable homeownership opportunity created by this change is affordable workforce housing for new employees hired for jobs created by the Opportunity Zone, a primary goal of the Opportunity Zone. Strengthen economic development that is
This is a goal that Republicans and Democrats alike can agree on.
Sam Landy is President and CEO of UMH Properties, which owns and operates 134 manufactured residential communities across the United States.
This column does not necessarily reflect the opinion of the editorial staff of Housingwire and its owners.
To contact the author of this article:
Sam Landry [email protected]
To contact the editor responsible for this article:
Sarah Wheeler [email protected]
