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How can American manufacturing be reinvented to thrive in an era of globalization?


Trailer Park Blues

The absurd, economy-killing rules towns have passed against mobile homes.

A tree grows between two new single wide mobile homes in Williston, North Dakota, in February.
A tree grows between two new manufactured homes in Williston, N.D., in February.

Photo by Daniel Acker/Bloomberg via Getty Images.

This month, Slate is exploring how to reinvent American manufacturing. We'd like to hear your best ideas for that. Please submit them here.

The cornerstone of the global manufacturing economy is durable goods: the airplanes, trucks, cars, refrigerators, laundry machines, and dinner tables that people buy with the expectation that they’ll keep using them for a long time. The lifespan of these goods makes consumers willing to pay substantial sums for quality if quality can truly be assured, in turn compelling producers to invest in excellence. Many of these goods sit inside what’s in a sense the most durable of all the durable goods—your house. And yet houses generally aren’t “manufactured” along with the items that contain them. Construction is, instead, an entirely separate category of production, with houses built to spec on site by local crews.

There is, of course, nothing wrong with artisanal production methods. But there’s a reason that most businesses turn to mass production most of the time. It’s much more efficient, allowing cheaper goods for consumers and higher wages for workers. And houses, though generally built on site, only rarely have the kind of quality advantage we associate with bespoke production. The typical home is a more-or-less standard-issue design, typically on a street full of very similar houses that all look like they could have rolled off the assembly line. But while the technology exists to build houses in factories and then deliver them to the location, it remains marginalized in American life by negative attitudes and legal impediments.

Known to most as mobile homes, the industry prefers the term manufactured homes and  argues that the old phrase and the stigma attached to it should be reserved for houses built before the adoption of the 1974 Manufactured Home Construction and Safety Standards code that provides a uniform national standard for such dwellings.

One reason why America appeared to lose so many manufacturing jobs in the aughts while gaining construction jobs is that America started producing fewer manufactured homes and more bespoke single-family homes. According to Census Bureau data, as of the first half of 2000, the country regularly added 300,000 or more manufactured homes per year to our stock of houses. During the so-called “housing boom” years, that number steadily dwindled. Indeed, Bill McBride has shown that a large amount of the extra homebuilding of those years simply reflected single-family home construction crowding out apartments and mobile homes rather than a big increase in the number of dwellings available. Financial innovation in the field of mortgage securitization made it possible to offer reasonably priced loans to people who wouldn’t previously have qualified for them. Innovation in mortgage brokering also created opportunities to make profits by signing people up for mortgage products they didn’t properly understand or benefit from.

Now that that’s proven disastrous, it’s time to return to developing affordable housing the old-fashioned way: finding more efficient, cost-effective ways to make the houses, rather than more efficient ways to make the loans.

In dense cities, that means building apartments. Unfortunately, construction of large multifamily structures is too often ruled out by local zoning ordinances. In less dense areas, manufactured homes are ideal but, again, zoning rules get in the way. The original Department of Housing and Urban Development code for manufactured houses was intended, in part, to halt discrimination against mobile homes by preventing states from ginning up alternate safety standards to exclude them. But zoning has always been left to the discretion of state and local law, and this is where most discrimination takes place. According to a report from the National Consumer Law Center, just six states—California, Idaho, Kansas, Nevada, Ohio, and Washington—require towns to allow manufactured homes in areas zoned for single-family residences. An additional nine states don’t allow a jurisdiction to completely prohibit manufactured houses from its boundaries but do allow them to be excluded from particular places. Exclusionary zoning practices are quite diverse. Alongside simple bans on the use of manufactured homes as infill in existing areas, such homes are often subjected to discriminatory treatment. That includes taxation at higher rates (as personal property rather than at lower residential rates), design rules requiring slanted roofs, and rules requiring large lots.  

This is a shame. After adjusting for land costs, manufactured houses cost about half per square foot what conventional houses cost. And manufactured houses are improving rapidly. A HUD-sponsored 2011 report from the Virginia Teach Center for Housing Research notes that thanks to “increased use of multi-section units and recent innovations in manufactured house building technology, particularly integrated floor and chassis systems,” the quality gap with site-built housing is narrowing. Allowing more deployment of manufactured housing would increase investment in the sector and further improve quality perhaps to the point where—like with furniture or clothing—the factory-built option became the standard choice.

The Virginia Tech team is somewhat defeatist about the prospect of persuading neighbors to welcome manufactured homes onto their blocks and suggests that in practice setting aside blocs of land as manufactured home parks is the most viable way to increase their presence. In a practical sense, that may well be true. But ghettoizing manufactured housing will also further stigmatize it and promote negative associations that have only an incidental relationship to the actual housing stock. For the longer term, it’s important to press on the general theme that people should be allowed to install safe, affordable dwellings on land they own if that’s what they want to do.

Understanding this as a manufacturing issue as well as an affordable-housing one might help induce more state governments to follow the lead of the six that have established the right to install a manufactured house. Traditional construction in the United States features a notable lack of productivity gains relative to the economy as a whole or the manufacturing sector in particular, in part because it’s unable to take advantage of the scale and standardization that make factories such economic dynamos. Shifting more house-building activity out of the stagnant construction sector and into the more productive, more innovative manufacturing sector is a potential engine of substantial prosperity on the building side as well as the consumer side. Any approach to bolstering American manufacturing has to wrestle with the question of what kind of manufactured goods is it that we actually need more of. But with some tweaks to our zoning, we can take a vast category of consumption—the need for a dwelling—and turn it into a broad new field for manufacturing prowess.

This month, Slate is exploring how to reinvent American manufacturing. We'd like to hear your best ideas for that. Please submit them here.

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