Mass Production Can Ease Housing Woes

By John Hood

RALEIGH — I agree with homebuilders, would-be homebuyers, business executives, trade associations, legislative leaders, and Gov. Josh Stein that one of North Carolina’s biggest challenges is the lack of affordable housing across broad swaths of our state.

“In high growth regions, rising development costs and insufficient supply have intensified affordability pressures,” the Stein administration observed in a recent strategic plan, “while in rural and disaster-impacted communities, limited housing stock and infrastructure gaps continue to impede recovery and long-term economic competitiveness.”

True enough. But I wonder how many state leaders would agree with one of my favorite ideas: expanding the use of manufactured and modular housing.

Just as mass production has driven down the cost the cost of food, clothing, furnishings, vehicles, electronics, and other goods, homes built largely or entirely within factories would meet the needs of many North Carolinians without recourse to elaborate planning schemes or massive taxpayer subsidy.

This is no theoretical matter. Manufactured homes already play a substantial role in housing affordability. They account for about 13% of North Carolina’s current housing stock, with the share soaring to a quarter or higher in some of our rural counties. Yes, some are aging “trailers” with cramped quarters and limited amenities. But modern (post-1976) versions are attractive homes with efficient layouts and modern conveniences nearly indistinguishable from stick-built starter homes of similar size and capacity.

As for modular houses, they are transported to or assembled on permanent foundations and designed to comply with state building codes. Although manufactured houses can also be permanently sited, what distinguishes them from modular ones is that the former meet federal rather than state standards.

Mass production can slash the cost of producing homes by 50% or more per square foot. While the final differential isn’t always this large, because of the price of land and other fixed costs — a recent Harvard University study found that a double-wide on a median quarter-acre lot was 70% of the cost of a comparable site-built house — manufactured and modular housing are economical choices for many customers and ought to be easier for North Carolinians to acquire and live in.

State law does not allow counties or municipalities to impose regulations based on the age or perceived value of housing units. But North Carolina localities can use zoning and other means to restrict where factory-built housing can be sited. Many do so, confining them to what are still dismissively described as “mobile-home parks.” Localities can also regulate “appearance” so onerously that many manufactured homes are, for all practical purposes, excluded. Many parcels of land are also under covenants that restrict factory-built homes.

I don’t favor legislative action to nullify private contracts. But I do think the General Assembly should protect the rights of current and prospective homeowners from local regulators. What some snooty neighbors or heavy-handed planners may view with disdain, North Carolinians of modest means — young couples, seasonal workers, downsizing seniors, etc. — may well view with relief, pleasure, even excitement.

“Manufactured homes have a huge potential for expansion if the zoning and financing were improved,” wrote Laurie Goodman in a 2023 paper in Business Economics. “These homes can be built off-site which makes it much more economic in terms of labor costs; the factories can be run 24 hours a day with no forced time off due to bad weather.”

Some argue that factory-built homes may work as residences but not as means of accumulating wealth. I don’t think housing ought to be a household’s primary nest egg. But the truth is that when manufactured homes are permanently sited and the owners have title to the land as well as the structure, they tend to appreciate at about the same rate as other homes.

When my colleagues and I opened the doors of the John Locke Foundation in 1990, one of the think tank’s first recommendations was that North Carolina be more welcoming to factory-built housing. It was a good idea then. Now it is an imperative.

John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).