▶ 0:10:09Without 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 five legislative days to submit extraneous materials to the chair for inclusion in the record. I now recognize myself for four minutes for an opening statement.
▶ 0:10:33First and foremost, I'd 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 examine 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 quote unquote workforce housing.
▶ 0:10:55According to data from the National Association of Homebuilders, the median cost of constructing a new single family home in 2024 was $428,215. For many Americans, a home build at that cost is simply not affordable. We have government programs that focus on housing subsidies for low and very lowincome people. We have market rate developments that are able to meet some of the demand for higher income people.
▶ 0:11:20What we need is housing that can meet the needs of all the people that fall somewhere in between those two worlds. Maybe it's 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's 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'm sure all of us have seen the dire need for housing supply that meets the need of this population in all of our districts.
▶ 0:11:51I know some of you uh may look at this problem and clamor for greater subsidies or more market intervention by the federal government, but the reality is we don't 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 Whether it's manufactured homes, modular homes, or homes constructed using 3D printing, we need to explore all the options out there that can get housing built
▶ 0:12:21that 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 HUD code and as a result manufactured housing issues go directly through this committee's jurisdiction.
▶ 0:12:49Two 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 home ownership through manufactured housing act would remove the requirement that manufactured homes be built on a permanent chassis. Number two, I have a draft bill noticed to the hearing that would give HUD the authority to reject or approve manufacturing standards proposed by other regulators affecting manufactured homes.
▶ 0:13:19These proposals could go a long way towards removing some of the federal barriers that prevent greater utilization of manufactured homes. However, additional barriers exist that are worth exploring for 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.
▶ 0:13:44I'm excited to dig deeper into each of these issues today and I look forward to our witnesses testimony. The chair the chair now recognizes the ranking member of the subcommittee, Mr. Clever, for four minutes for an opening statement. Thank you, Mr. Chairman, and thank you for calling this hearing hearing. Uh, 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.
▶ 0:14:14Housing costs have increased faster than household income and access to affordable housing and home ownership options for American families has decreased. Unproduction of house housing impacts every corner of the uh nation. This also includes rural areas and smaller cities who need affordable housing to attract businesses and ensure that residents can live affordably.
▶ 0:14:38The 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's 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.
▶ 0:15:08One example of housing innovation under consideration today is manufactured housing. I've spoken with the manufactured housing institute, and I'm 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.
▶ 0:15:37The next generation of manufacturing housing, manufactured housing is more affordable. It is faster to construct, and it could 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.
▶ 0:16:06But 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.
▶ 0:16:28The irony is that Congress is incoherently discussing how to increase affordable housing supply while discussing the elimination of key housing programs. This includes a 44% cut 44% cut to HUD, including programs that directly support and and adop the adoption of housing innovation and supply. Additionally, tariffs, I agree with the Wall Street Journal, make building all types of housing more expensive.
▶ 0:16:55Democrats will continue to defend federal programs and put forward solutions to housing crisis. Senator Warren, Senator Waro, and I have introduced the American Housing and Economic Mobility Act, which would build nearly three million new housing units. I believe it is also the best interest of the country to find bipartisan agreement where possible, and I've appreciated the engagement of the chair of the legisl of this legislation on a bipartisan interest. I look forward to today's hearing. Thank you very much, Mr. Chairman.
▶ 0:17:24The chair recognizes the chairman of the full committee, Mr. Hill, for one minute. I thank Chairman Flood. It's no secret that parts of America are facing severe housing supply challenges. Recent estimates uh 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 hometown of Little Rock, the median home price is up 11% just over the last year.
▶ 0:17:52This rapid price increase, combined with inflation's impact on financing costs, is putting home ownership out of reach for many hardworking American families. And that's what makes Chairman Flood's hearing today so important. We've 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.
▶ 0:18:20I thank Chairman Flood, Ranking Member Clever for their leadership on this issue. Look forward to our panel today and yield back the balance of my time. The chair now recognizes the ranking member of the full committee, Miss Waters, for one Thank you very much, Mr. Chairman. Families across America are reeling from a growing housing and homelessness crisis. So, it's very important we discuss expanding affordable housing through manufactured housing. And I want to thank Mr.
▶ 0:18:48Clever for his leadership and the work that he's 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 affordable housed. Meanwhile, new homes are projected to be $11,000 more expensive with Trump's dumb tariffs.
▶ 0:19:17If Republicans are serious, Democrats are ready to work on building affordable manufactured housing that is climate resistant uh resilient and shielded from predatory private investors. We're 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. Clever. Gentle lady, I yield back. Gentle lady yields back. Uh good morning to everyone.
▶ 0:19:47Today we welcome the testimony of Mr. Bill Boore, president and C CEO of Cavco Industries and chairman manufactured housing institute. Uh Mr. Eric Schaefer is with us today, chief business development officer of Fading West. Dr. 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.
▶ 0:20:16Colton Lewis Flu, 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 five minutes to give an oral presentation of your testimony. Without objection, your written statements will be made part of the record. Mr. Boore, you are now recognized for five minutes for your oral remarks. Thank you, Chairman Flood, Ranking Member Clever, and members of the subcommittee. I'm Bill Boore, CEO of Cavco Industries. We're the third largest US producer of factory-built homes.
▶ 0:20:46Last year, we built nearly 20,000 homes, and 31 factories. We have 79 retail stores, a mortgage lending company, and 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 home ownership for millions of Americans. Our homes are built to a federal building code that ensures quality, safety, and weather resiliency.
▶ 0:21:17This year, our industry expects to build over 100,000 homes, accounting for 10% 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's without taxpayer subsidies.
▶ 0:21:45First, 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.
▶ 0:22:04As 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 afford affordability.
▶ 0:22:28Our 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.
▶ 0:22:55Congress has attempted to overcome local and state zoning issues per per that purposely exclude manufactured homes. In 2000, Congress expanded HUD's preeemption authority over local requirements, saying it should be quote broadly and liberally construed. MHI believes it's past time for HUD to update its 1997 policy statement, and Congress should direct them to do so.
▶ 0:23:20We 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.
▶ 0:23:45Eliminating 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 house financing options for manufactured homes. Affordable financing is critical to making home ownership accessible. Congress should direct FHA, Fanny May, and Freddy Mack to support buyers of manufactured homes through targeted actions.
▶ 0:24:14First, expand cross mod lending programs. These programs should include single section homes that meet all the other criteria of crossmod homes. The only thing that limits the single section home for being included is its size. It's 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.
▶ 0:24:44Create effective homeonly loan programs. Despite years of discussion, Fanny May, Freddy Mack, and Jenny May 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's a practical necessity for millions of American families.
▶ 0:25:09The mer the manufactured housing industry is not asking for subsidies or preferential treatment. We're asking for sensible, clear regulations, fair access to locations that need affordable housing and inclusion in federal home buyer financing programs so we can do what we do best, build affordable, highquality homes for American families. Thank you for the opportunity to testify. Thank you, Mr. Boore, Mr.
▶ 0:25:37Schaefer, you are now recognized for five minutes for your oral remarks. Thank you, Chairman Flood, and Ranking Member Clever of the Subcommittee on Housing um and insurance for the opportunity to testify today on your hearing of housing innovation in America. I speak today to advocate uh as an advocate for innovative solutions to our nation's persistent affordable housing crisis by using off-site modular construction.
▶ 0:26:04The 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 I am Eric Schaefer, chief business development officer of Fading West, located in Buunava Vista, Colorado.
▶ 0:26:26Fading West began in 2016 with what we thought was going to be a one-time workforce housing project called The Farm located in Buunav Vista before we ended up building our own factory almost four years ago. We found that modular manufacturing carries significant advantages over stickuilt construction.
▶ 0:26:48I am here today because Fading West and the modular manufacturing industry firmly believes the US Congress can have a role in helping the nation's home building industry to continue to innovate and thereby be a partner in resolving the housing shortages across country. Off-site modular construction offers a compelling alternative.
▶ 0:27:13This method involves manufacturing individual houses housing modules in a controlled factory setting. These modules complete with electrical wiring, plumbing, interior finishes are then transported and assembled on site. So 90% of the home ends up being built in the factory.
▶ 0:27:31Fading 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% less expensive by reducing waste from 30% to less than 5%.
▶ 0:27:54And by standardizing processes and products similar to a car manufacturer, we increase volume, which brings down cost. We can complete homes 50 to 70% quicker than traditional construction. A typical Fading West home is built in less than eight working days in our factory and then completed at the site in less than 30 days.
▶ 0:28:19So from start to finish, a new home can be completed in less than 40 days compared to the greater than nine months for traditional construction. Last September and October, Fading West built 80 homes, actually over 80 homes in our Colorado factory.
▶ 0:28:37Um, put them on trucks and truck them to Seattle and then barged them to Maui where homes were completed for families affected by the Lahina So by January of this year, all families had moved in. From the start of production to completion, the whole process took less than four months. Fading West recently partnered with Veil Valley Habitat for Humanity to build 16 homes for teachers.
▶ 0:29:07Built the usual way, Habitat would have only been able to complete either two or three homes instead of 16. It took Fading West one month to build uh the homes in the factory, allowing the teachers to move in for the beginning of this school year. These are just a couple of success proof of concept projects that have been completed using modular. To fully leverage um the potential of off-site modular construction, we need your support.
▶ 0:29:38This 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 Polus 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.
▶ 0:30:02Number two, invest in research and development to support modular design materials and new construction techniques. And third, to provide grants and lowinterest loans to the supply side, using federal funds to help build modular manufacturing facilities to increase housing supply instead of just sub subsidizing the demand side projects. Off-site modular construction is not just a trend.
▶ 0:30:30It 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. Thank you, Dr. McCoy.
▶ 0:30:59You are now recognized for five minutes for your oral remarks. I want to first thank Chairman Flood and Ranking Member Clever and the subcommittee for inviting me here today. It is an honor to be here and discuss the role of housing innovation in 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.
▶ 0:31:23In 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.
▶ 0:31:52Importantly, 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 way, home building technologies are a public event. The processes of US 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.
▶ 0:32:20Our 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 US government actively began supporting housing advances in technology through the housing policy in 1949's American Housing Act.
▶ 0:32:50In 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 and late 1960s Operation Breakthrough Program and the 1990s partnership for advancing technology and housing or PATH.
▶ 0:33:16Lessons 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.
▶ 0:33:44Over 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 Homebuilders estimates 103.5 million households or 77% of US households are not able to afford the $428,000 cost of a medianpriced home. Attention now has shifted to innovation.
▶ 0:34:10By 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 has partic 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.
▶ 0:34:34VHDA has also created community innovation grants up to $500,000 that derisk the adoption process for builders willing to try new technologies. Our 3D concrete printing program has recently benefited uh producing four uh workforce housing homes and uh 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.
▶ 0:35:02The city of Danville and Southside Virginia recently changed zoning to allow for manufactured and modular housing units to reduce costs and provide options. Also, Governor Yncan's permitting dashboard at the Department of Envir environmental quality is an example of streamlining and speeding up process. Nevertheless, the cumulative results is persistent under production. The path forward will require coordinated partnerships and investment, regulatory modernization, workforce development, innovative financing, and cross- sector collaboration.
▶ 0:35:32Construction technology is especially compelling right now because it doesn't 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, and repetitive tasks, and digital project coordination. For example, a framing a framer using layout tools with augmented reality can complete work faster and with fewer errors.
▶ 0:36:02The goal isn't 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 gentleman to a public opportunity. Thank you. Thank you very much. Mr. Flu, you are now recognized for five minutes for your oral remarks.
▶ 0:36:24Chairman Flood, Ranking Member Clever, members of the subcommittee, on behalf of Mountain State Justice, thank you for inviting me to testify today regarding manufactured housing. I'm a senior attorney at 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.
▶ 0:36:54We 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 home ownership in the nation. We maintain that level of home ownership while possessing the 49th lowest average household income.
▶ 0:37:19It's no coincidence that West Virginiaians occupy manufactured housing at more than twice the national average. These homeowners are overwhelmingly focused 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.
▶ 0:37:50But please remember this. Manufactured homes are fundamentally different than stickuilt 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-b buildinging tool. It's a fact we urge you to keep in mind as you look to expand access to this important housing.
▶ 0:38:20The first case I want to share involves a lease land community, a mobile home park. specifically five mobile home parks totaling more than 640 home sites in Mercer County, West Virginia that was bought by a hedge fund for investment. For quick background, Mercer County is in the coal fields of southern West Virginia. The median household income is under $48,000 a year, yet 70% of the housing units in the county are still owner occupied. One of these owner occupied houses belong to Mr. and Mrs. P.
▶ 0:38:49Six 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 Miss 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.
▶ 0:39:14Miss V, who had been living on one of these lots with her 14 for 14 years, was providing aroundthe-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% for Mr. and Mrs.
▶ 0:39:41P $300 a month to 525. 120% for Miss R. She went from $225 a month to $4.95. 133% for Miss 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.
▶ 0:40:12There 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 set on rented land without any assurance of security. In my written remarks, I also share the story of Mr. and Mrs.
▶ 0:40:35A, 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, uh the potential for exploitation of buyers, again, overwhelmingly the elderly, the disabled, and veteran communities.
▶ 0:40:57expanding manufactured housing market needs greater GSSE backing of loans to ensure sustainable financing, including for those living in older homes um 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. Thank you, Mr. Flu. I now recogni recognize myself for five minutes for questions.
▶ 0:41:26But 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 Haggartown, Maryland. The developer was working in partnership with Freddy Mack. Each one of these homes was built on fe simple owned individual lots. From what I had heard, these homes didn't fit the mold of what I imagined a manufactured home community would look like. It was not the manufactured homes of the 1970s.
▶ 0:41:56These 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 relatives to stickuilt homes. There were curbs, there were gutters, there were trees, uh 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.
▶ 0:42:27They weren't big or glamorous, but they were nice, solid homes that you would not have known they were manufactured homes if you weren't told. In fact, I was so sure that I wasn't looking in 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.
▶ 0:42:52While they won't fix everything, I do think there's potential here for some of the development types to be part of a broader housing supply solution in this country. Mr. Boore, 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? Thank you, Chairman Flood. Um, and I appreciate the story. We're proud of the homes we're building. So, thanks for that.
▶ 0:43:22Um, a lot of it's what I tried to outline. I mean, I think this I think expanding affordable housing is really a game of expanding the playing field under the HUD code. And so, doing things like removing the chassis allows us to innovate. And that innovation will lead to us developing project products for example that can go into urban infill which is an area our industry traditionally has not penetrated.
▶ 0:43:45And so those kind of things the uh the financing that we talked about if we can get home only financing through the GSSE that reduces the monthly cost for a buyer and makes more homes affordable. So that's a huge opportunity.
▶ 0:44:02um at the other end of the extreme or the other extreme the some of the cross mod homes we're doing are probably similar to what you saw and 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 don't qualify under crossmod and so that seems like an oversight to me I'd like to see that changed all these things grow the playing field grow the opportunity for us to innovate and will allow us to
▶ 0:44:33um provide more homes for families. 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 stickuilt home? Yeah, thank you, Chairman Flood. So, what we are seeing again, it's speed to market. So, um we have 18 workstations in our factory. So, again, imagine a Toyota car factory. The boxes move from station to station.
▶ 0:45:02About 90% 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. Um so high quality, energy efficient. Um to your point earlier, architecturally interesting. We want to build homes that people who are moving into them are proud to live in them. And then the on-site work is dramatically reduced. It is set on a permanent foundation. as I said and then about 30 days until the final CO.
▶ 0:45:33So, um the savings come kind of in two or three ways. First, it is the speed. So, the um and before you go there, I have one more question for Mr. Bore before my time runs out. I don't mean to cut you off, but uh Mr. Bore, what are the risks to affordability if and access if other federal agencies like Department of Energy impose conflicting standards without HUD's coordination or oversight? Yeah, at a high level, I think the issue is those agencies don't always understand our process.
▶ 0:45:58So they're myopically going after a given improvement that they're viewing and yet HUD has a more robust holistic process that considers those energy exam advancements in this case but relative to affordability. The DOE rules would drive the cost up considerably for our home buyers. Thank you very much. And Mr. Shaver, since I I apologize again for having cut you off, I would ask that you uh respond to the rest of my question for the record so that I can make it part of the record for this hearing. Absolutely.
▶ 0:46:26So again, how unfortunately I have to cut myself off again because I only have five minutes. So but I appreciate you very much. Thank you. Uh the gentleman from Missouri, Mr. Clever, is now recognized for five minutes. Thank you, Mr. Chairman. I kind of want to follow up in in that same direction. Uh I'd like for uh Mr. Flu, if you would. You you're familiar with the CDBG and the home program.
▶ 0:46:49I I believe uh the the these are critically important um programs and uh they are the two largest federal sources of flexible funding used by states and federal and local governments to preserve uh rehabilitate and in some cases actually develop manufacturing housing.
▶ 0:47:12These uh pro programs uh support infrastructure upgrades, housing rehabilitation, land acquisition, and uh a number of other critical improvements in uh manufactured housing communities. Now, these programs have been targeted unfortunately and for me painfully uh despite uh their role in addressing affordability and improving conditions in underserved areas.
▶ 0:47:38Uh, do you see, as I do, uh, the the the negative impact these programs being cut would have on what I think most of us in this room are interested in trying to to to develop? Thank you, Ranking Member Clever. I do see that I do agree with the ranking member. Um, I'd actually urge that these programs should be expanded and uh funds should be available uh to more communities to improve the conditions. Thank you.
▶ 0:48:07uh the the the ability I think of us to get something done will depend on our ability to work jointly and and I think uh there is as I hope you can see some uh support for uh the the new innovative ways in which we can reduce cost uh to build uh decent housing for our our constituents.
▶ 0:48:32uh when uh renters are evicted, they they typically uh leave the unit behind. Uh in contrast, uh manufactured homeowners face a a far more complex situation, probably legal uh maneuvering uh would be involved, but they must either sell their home or relocate to another site.
▶ 0:48:58uh and during COVID 19 uh the market for manufactured homes declined sharply uh in uh the case where the manufactured homeowners cannot find buyers. They have little resources and may just leave the home uh in some kind of a residential area or in a park.
▶ 0:49:17Uh in uh many states these manufactured uh homes are considered abandoned property after 30 days to which landlords can take over the titles and uh lease them uh to new tenants. Uh what kind of protection to to any of you? Uh what kind of protection should we uh uh develop to protect those homeowners?
▶ 0:49:46If I may, Raiking Member Cleaver, uh, unfortunately, I think that that problem that you've identified is a state law issue. Um, you know, what we see besides just the abandoned property, we see storage fees, 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.
▶ 0:50:12So they leave behind and they end up forfeiting the largest asset that they own oftent times. Um but 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 in other words uh Congress has to uh come together and agree to uh what Chairman Ford and I say. They must do what we said.
▶ 0:50:43That's right. To fix this, everybody. Thank you. Uh I I'll yield back, Mr. Chairman. The gentleman yields back. The chairman of the full committee, the gentleman from Arkansas, Mr. Hill, is now recognized for five minutes. Thank you, Mr. Chairman. Again, thanks for the panel. Very good testimony. Mr. Boore.
▶ 0:51:04U really appreciate your testimony and I was particularly interested in uh the cost you outlined, the flexibility, the regulatory agenda you outlined. I hope that we can do something to propose that.
▶ 0:51:18I I was a staffer on the housing subcommittee in 1983 and we had the exact same So, technology has advanced and innovation has advanced, but apparently HUD and the regulatory system is stuck in the 70s on this matter. Would you agree with that? I think there's some very specific actions that could be taken and they don't seem that complex to me, but that's outside of this this uh city, I guess. Yeah.
▶ 0:51:47Well, I'd like your your views on the the idea of this remove the to have a chassis required to be in a manufactured home is a is a 50-year-old idea. It seems ridiculous to me, right? Considering particularly considering Mr. Schaefer's good testimony on modular construction generally. So, uh, tell me a couple of success stories in urban areas and multitory. Let me let you start, Bill, with you and comment on it and then turn to Mr.
▶ 0:52:16Schaefer success stories of manufactured housing in urban areas. Yeah, it's a it's really an untapped market opportunity. Our homes have traditionally gone into rural um areas because of the zoning challenges we talked about earlier. But where what we've seen is where affordability is the absolute worst. That's where municipalities are starting to lower the barriers. Um we've seen that in some small towns. Uh Martinsville, Virginia, we had a project that was aimed at home ownership for people with average incomes of $17 an hour.
▶ 0:52:47Um there was some uh a variety of agencies got involved in that. But then you take it to the other extreme, LA County has done a tremendous amount of work to open up the opportunity for factory-built solutions. In that case, um ADUs were one of the solutions that they've really grabbed onto. So, we've shown that our products can penetrate those and increase affordable housing in um traditionally or non-traditional Could you comment on that, too, please?
▶ 0:53:15Um yeah, a great example is in the town of Breen Ridge 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've been skiing there, you know exactly where that is. Um and land was donated um which allowed some affordability. Um of those 60 units, 1100 people applied for the lottery to get those those units.
▶ 0:53:43So you can just see the the incredible need for workforce housing, especially in ski and mountain towns. I wasn't I was taken by your testimony as well where you talked about the $93,000 in regulatory costs per unit meaning about 24% of the median home price in the country. That's mind-blowing to I think this committee. I hope it is. I hope that's should I mean I hope that's flabbergasting to people on this committee. Yeah.
▶ 0:54:09Uh one of my lines that I use quite often is the word affordable and housing should never be used in the same sentence. There's no such thing. Yeah. Uh and you also referenced and and and Bill did in his testimony as well, which is so much of this and we've heard this testimony for years is a state and local driven set of barriers. Those costs are mostly state and local. Uh the barriers to creative uses and density rates obviously in urban areas.
▶ 0:54:37Uh, 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 uh city or county that you think is outstanding on uh this issue that we could we could share? M. Yeah, Mr. Bore, go ahead and start. Well, I'd answer in a different way. I think that's the beauty of the HUD code.
▶ 0:55:06The 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. And one of the the uh actions I outlined was um Congress should point to HUD and say update your policy statement. Exert your preemptive authority so that there's a stronger statement from the federal government about not disallowing HUD code homes. Yeah. Anybody else want to talk about that? Mr. Yeah, I I can just comment.
▶ 0:55:35So there was over 300 building codes in our state. So again, to use the car analogy, that would mean a a Camry would be built 300 different ways. It would cost um if cars were were built or governed the same way that houses were. So what we've done in our state, and this was just signed last Thursday, was to reduce those codes to regional codes. Um so the culus areas will have a different building code obviously than the the Thank you very much. Very useful testimony.
▶ 0:56:05Yield back, Mr. Chairman. Gentleman yields back. The gentleoman from California, Mrs. Waters, who is also the ranking member of the full financial services committee, is now recognized for five minutes. Well, thank you very much. U Mr. flu. In your testimony, you noted that private investors acquire manufactured housing communities often fail to comply with state laws that require that they honor existing leases and provide advanced notice before increasing rents.
▶ 0:56:34This 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 lease protections and notice requirements are enforced in manufactured housing communities? Are you talking about preempting spake state laws and doing something from the federal level?
▶ 0:57:05What are you thinking about? Thank you for the question. Um, the way I would see federal law preempting state law, if you will, um, if the GSSE backed funding would expand and allow owners of homes that are not converted to real property, so they remain personal property loans.
▶ 0:57:24if the GSC's would provide funding for those loans and provide within that funding requirement uh certain rules and regulations which would have to be complied with uh by communities uh that would go some distance I think to setting a baseline and that makes good sense.
▶ 0:57:43Even 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. Uh 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.
▶ 0:58:12How have exclusionary zoning practices limited access to the use of manufactured housing? And how again can federal government help push communities to adopt zoning reforms? Congresswoman, I really am not qualified to to speak to your question. In West Virginia, we have very few zoning laws. Um, and so I I am not the the proper witness uh I think to answer your question.
▶ 0:58:41You're absolutely correct. Okay, this is something that our city councils and mayors have to deal with in zoning and it's a big political problem. Let me go on. Manufactured housing communities are often on the front lines of increasingly frequent climate disersious 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 resil resiliency standards.
▶ 0:59:11Others struggle uh to access 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 uh preservation of their home in these communities.
▶ 0:59:40I guess you would say that's what we should be thinking. We should have some answers to that, but maybe you can help us out with that. Well, I think you hit the nail on the head there. Um the the the discrimination between uh personal property homes and real property homes uh I I think everyone on this panel would would probably agree is really um a distinction that no longer is uh accurate.
▶ 1:00:08And um I think that the Congress and and um that the agencies should work toward uh an even playing field for all homeowners whether they own the land the home sets on or not. Well, thank you very much. I would just like to say to you and perhaps uh to the other witnesses here today, this is an issue that could get bipartisan support.
▶ 1:00:33But in doing that, we must have recognize the experiences we have had and clean it up and make sure that it's available and that the money is there. If we do that, I think we can move this issue and it's needed desperately in this country. We've got to get rid of homelessness and the unhoused people expect us to come up with answers, but let's not be shy about it.
▶ 1:00:55Let's get together and say we want the money, we want the assistance, we want the uh uh the care that should be given to manufactured housing just as it is expected for everybody in this country. So, I'm looking forward to us being able to do that. And I yield back the balance of my time. Gentle lady move uh 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 five minutes.
▶ 1:01:26Thank you, Chairman Flood, and 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 sixth district of Tennessee all the time about their difficulties locating affordable housing. I dare say my colleagues hear the same story.
▶ 1:01:52In 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 home ownership 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.
▶ 1:02:22Mr. Boore, I appreciate that the manufactured housing institute supports passage of the expansion of attainable home ownership 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? Absolutely. Thank you for the question.
▶ 1:02:43I think this this bill represents a a true expansion of the scope of housing that can be covered under the HUD code and we've talked about the advantages of the HUD code generally across the country. So, we will once this bill is passed, we will still have homes built on chassis because there's obviously a place for that. But now we've got the opportunity to innovate in ways where the home can be brought down. The curb appeal can be approved. We can go multi-story.
▶ 1:03:09We can do a lot of innovation that particularly will allow us to overcome some of the the uh hesitance about placing our homes in urban and suburban environments. 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.
▶ 1:03:31So, uh, you know, I think this gives us a chance to move forward and and realize the potential of what manufactured housing can do to increasing home ownership affordability. Uh, Mr. board. 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.
▶ 1:04:00Do 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? Yeah, there's a lot of work to be done. I think the first step is your bill and then we're going to and we've already started this process within the industry. We're going to have to sync up state law to that bill so that the financing um concerns can be alleviated.
▶ 1:04:27So there's a lot of work to be done afterwards, but you'll start the ball rolling. And do you believe that that state work can happen quickly enough to to usher along this uh transformation? I believe it'll be a snowball. I think there'll be some really quick easy wins there and once some states are doing it, other states are going to quickly conform. And Mr. Borer, I'm intrigued by the crossmod concept and product. Could you elaborate on what a crossmod home is and what the new single section crossmod product entails?
▶ 1:04:57Additionally, how can this housing innovation make home ownership more attainable for Americans? Yeah, crossmod is a term we use really to sync up with the Fanny and Freddy programs that say if a home meets certain criteria, it can be appraised against site build comps. And that's a big deal, right? that recognizes that the provider of money says that our homes from a quality perspective are equal to sightuilt homes which they are.
▶ 1:05:21So the issue that I raise which I think is a pretty straightforward fix is that right now those programs only cover um 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 I believe it's an oversight not to allow smaller homes that qualify under those criteria to also um qualify.
▶ 1:05:47And so I think it's a pretty straightforward change that'll expand the concept of crossmod home availability. And and Dr. McCoy, do do you feel that single section crossod has the potential to make home ownership attainable for more I'm not sure I can answer that from my um from my perspective, my expertise. Uh but I can also say that one of the things that we talk about with innovation is is that the residential construction industry is not necessarily very innovative.
▶ 1:06:18Um but when we look closely, we see that these are all innovations. Everything we're talking about is an improvement and it's something that can help with getting more housing to more people that need Well, thank you. My time's expired. I yield back. Mr. Chairman, gentleman yields back. The gentleoman from Massachusetts, Miss Presley, is now recognized for five minutes. Thank you, Mr. Chair. Housing is a fundamental human right.
▶ 1:06:45Housing and affordability is the number one issue I hear about from my constituents, adding insult to injury. Uh Trump is proposing a cut to rental aid assistance by 40%, essentially ending section 8 and has already cancelled contracts that support affordable housing. Trump is putting profits over people, worsening our housing crisis, and we need Congress to tackle zoning reform.
▶ 1:07:09Exclusionary zoning is a national problem and has a deep history in my D 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. Red lining, disinvestment, and segregation concentrated poverty in some neighborhoods while hoarding wealth in others. And today, that legacy lives on.
▶ 1:07:34Zoning 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 in more than six months in the city of Boston. And there's abundant research showing exclusionary zoning perpetuates housing scarcity, economic segregation, unequal school systems, and desperate health outcomes.
▶ 1:08:05Dr. McCoy, I'd like to begin with you for folks watching this hearing who uh may not be seeped in in housing policy. Can you explain the difference between single family zoning and multifamily zoning and how does that difference affect the overall supply and affordability of Thank you for the question. Um, well, I'm I came prepared to talk about technology, but I can uh do my best to uh try to to expand a little bit on what you're asking.
▶ 1:08:33Uh single family zoning would typically be uh restricted to certain size um of a footprint of the building on a lot and would restrict uh certain uses of that building um and would uh ensure that uh anyone who purchased that building was restricted to that over time.
▶ 1:08:54Multif family typically is something that we're going to use in a more dense uh uh situation where we need to have multiple units on top of each other or uh organized on the on the site. And of course, it has its own uh different uses that it's restricted to. Thank you. In Boston, more than 80% of residential land is still zoned exclusively for single family homes or lowdensity housing.
▶ 1:09:22And we know that zoning has never been neutral. Uh Mr. Flu, in your legal advocacy work, 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 Thank you, Congresswoman. Again, I I'm not the best witness to answer questions regarding zoning because in my state, we have so few zoning laws.
▶ 1:09:52Um, I certainly uh recognize the conditions that the congresswoman's identified and I see those perpetuated in my own state not by zoning laws but by convention. Uh, but I I I can't address the question Right. Then well, let me pose a question to to all of our witnesses today. Um, please raise your hand.
▶ 1:10:15if you believe Congress should consider tying certain federal housing infrastructure funds to local zoning reform. All right, let let the record reflect that all four of our witnesses raised their hand and I agree. Congress can't wait any longer. We need to lift bans on multif family housing, reduce minimum lot sizes, and modernize outdated code that limits supply.
▶ 1:10:39Because if we're going to invest federal dollars into housing and infrastructure, we need to ensure those dollars aren't being undermined by local rules that drive prices up. I yield back. Gentle lady yields back. The gentleman from New York, Mr. Lawler, is now recognized for five minutes. Thanks, Mr. Chairman. One of the most common concerns I hear from my constituents is affordability of housing.
▶ 1:11:04With 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.
▶ 1:11:28Last year, I reintroduced I introduced uh 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're treating pre uh fabricated homes in order to incentivize construction and reduce uh unaffordability. Dr. McCoy, what role do prefabricated homes play in addressing housing shortfalls in our uh developed nations around the globe?
▶ 1:12:00In our developed nations around the globe. Yeah. Um well, thank you for the question. So, 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've lost some capacity especially in terms of manufactured housing that we can bring back. Right. So in terms of pre-fabricated options, it is growing and we've seen a lot of growth in this. Um Mr. Schaefer can can attest to that.
▶ 1:12:27Um and it's a very uh viable option for how we can get housing on the ground quickly. So in in comparison to countries like Sweden and Japan uh in particular when you look at America's housing market what limitations do you see uh to the industry reaching max capacity and and scale on the regulatory and economic levels? I see. Okay.
▶ 1:12:52I'm not uh certain of the uh type of regulations for example that you have in Japan versus Sweden. Um I think in some ways uh what we've seen is a perception problem and that's something that we really need to work on and make a national priority is how do we create a p uh uh work against the perception that somehow uh the buildings that are built as modular or um are not built on site for example uh that they have less quality in some way which is not true from my experience
▶ 1:13:22and from our studies. 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? Um, uh, thank you, Congressman, for your question. Yeah. Um, I would say first of all, again, as we've mentioned, it's almost $100,000 just in entitlement fees to get to the point where you can build a home. So, um, we're already starting from behind.
▶ 1:13:53Um so streamlining those less building codes per state um go to regional codes what that would allow us then is to build faster and if you build faster then the cost comes down right uh and what other government barriers might exist at a local state or federal level that prevent modular housing uh from reaching their full Um I would say um again the the higher density some of the things that we've already heard that would
▶ 1:14:23um change things. If the lot sizes are smaller then you can get uh more homes. Let's say for instance in the farm development that we did we were able to get 10 homes per acre which then drop the price of the homes because we did fiveplexes and single family homes down to the 80 to 120 area median income. So, um, shrinking density or increasing density would be a tremendous help. Thanks. I yield back. Gentleman yields back. The gentleman from New York, Mr.
▶ 1:14:53Torres, is now recognized for 5 minutes. Uh, thank you, Mr. Chair. Um, Mr. Bor, you began your testimony with the following statement. Quote, "We're not here today asking for subsidies." And then toward the end of your opening statement, you proceeded to ask for an expansion of the 22F 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're bearing the risk, and we're subsidizing that risk.
▶ 1:15:21So, it feels like subsidies for me, but not for thee. You testify 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? Could you explain roll into the ter that category? I'm sorry.
▶ 1:15:40Do you believe the Trump tariffs raise the cost of housing construction materials which in turn raise the cost of housing construction which in turn raises the cost of housing itself to the extent our costs are increased which uh you know I will say that we import materials that go into our homes, electrical components um we we ship homes with appliances that come from overseas. So the extent tariffs increase and inflate those products that drives up costs for sure. And and I can't deny or wouldn't deny.
▶ 1:16:09I would completely agree that um months it was it was absent from your testimony. But if we're 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's manufacturing housing shortages. We should work on all these problems. I'm an evangelist for the housing abundance movement and a proponent for housing innovation, land use reform, modular construction. The more innovation, the more reasonable regulatory reform, the marrier.
▶ 1:16:40But housing in housing innovation is a supplement too, not a substitute for housing investment. And if you're advocating for housing disinvestment, you're not part of the solution. You're part of the problem. Mr. Flu, is it fair to say that housing is a priority for most Americans? Absolutely. Yeah. So, housing is a priority for the American people, but it's not a priority for Congress. The HUD budget is over $70 billion. The overall federal budget is 7 trillion.
▶ 1:17:09Housing is a mere 1% of the overall federal budget. And Donald Trump wants to take that meager 1% and cut it in half at a time when America's facing the deepest affordability crisis since the Great Depression. And Donald Trump is not only seeking to cut housing assistance in half, he's also seeking to impose a two-year limit on the housing assistance he's cutting in half. And as you know, most heads of households and public housing and section 8 are working people.
▶ 1:17:40These 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. How many can you raise your hand if you know many working people who can afford $3,000 a month? Median rent in Brooklyn is around 4,000. Median rent in the in Manhattan is 4 to 5,000. So if you impose a 2-year limit on rental assistance, what do you think will happen to the working people who live in hut assisted housing? Mr.
▶ 1:18:09Flu, do you want to take a guess as to what will happen? A lot of people would lose uh their homes, right? So instead of the working poor, we would have the working 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. Flu, which is more expensive both economically and socially, housing or homelessness? Congressman, I firmly believe that homelessness is more expensive by orders of magnitude.
▶ 1:18:40Right? So in Donald Trump's America, if you're a working-class person, you might lose your public housing or section 8 causing you to pay more for housing. You might lose your SNAP, causing you to pay more for food. You might lose your Medicaid causing you to pay more out of pocket for healthcare. And you're not only paying more for food and housing and health care, but you're also paying more for everyday goods and services because of the Trump tariffs, which by the way is raising the cost of housing.
▶ 1:19:04So again, I'm all for housing innovation, but housing investment is indispensable to addressing the affordability crisis in America. Does anyone disagree with anything I just said? See, there's a consensus. There's bipartisanship in Um, modular construction. To what extent can modular construction cut the cost of construction? Do we have estimates on time savings, cost savings? Uh, just from experience for us, it's between 10 and 20%.
▶ 1:19:34Okay. And is that national or is that in particular places? I can only speak for what we're experiencing in Colorado. Got it. Okay. So, look, I I feel like it's not either or. We need more innovation and more investment and I hope we can build a bipartisan consensus for both. I yield back. Gentleman yields back. The gentleman from South Carolina, Mr. Timmons, is now recognized for 5 minutes. Thank you, Mr. Chairman. I want to thank the witnesses for being here today. The US housing market has long faced a significant supply gap, particularly for low and moderate income families.
▶ 1:20:04While traditional sightbuilt homes have largely dominated, innovative solutions like manufactured, modular, and 3D printed homes present a promising path to expand affordable housing options. I'm 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.
▶ 1:20:31McCoy, 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 Um, thank you for the question. Do you mind just repeating the very end of that because when the door opened, I missed. How do you believe this technology can revolutionize the way we approach home construction, especially in terms of affordability and efficiency? Excellent. Well, thank you so much. So, we've been doing a lot of 3D printing. uh it it speeds up the process.
▶ 1:21:00It's very customizable. Um it also can augment current processes that we see. So we have different parts of the home that uh it can augment that. But also what we're really looking at is um how do we uh modernize the construction workforce so they understand how to work with machines as well. And I think that's something that we've seen in modular and manufacturing that they've already started to attempt to understand. We need to understand how we can modernize our workforce in the process.
▶ 1:21:29So, I'm not sure I'm exactly answering your question, but uh there are a lot of different options that we can Let me ask you a different way. So, permitting and regulation are huge challenge. Timing and getting all your subs in in order and getting the inspectors out and all that stuff. When a computer is doing it, when it's predetermined, I would imagine that that time and in the lack of necessarily inspections and permitting, there's not a lot of variables in subcontractors. You don't need to say is the framing right?
▶ 1:21:56If a computer's doing it, would that be a huge benefit to uh the construction process? Well, it yes it would if we can get there right. So right now we have different authorities holding uh jurisdiction that we need to um educate and so we need to have processes that can streamline those those processes make sure that we agree to um their safety and you know and quality and and then I think we can move forward. Sure. Thank you. Uh Mr.
▶ 1:22:21Schaefer, 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? Uh, thank you for the question again. Um, this is not my area of expertise. The one thing I will say about 3D printing, I think it's in the early stages, right? So, we have 18 stations in our factory. A 3D printer would only um help with stations one and two.
▶ 1:22:49So this is an emerging um um possibility and and the hope is that it will be one piece of the puzzle uh in the future. Sure. Thank you, Dr. McCoy. Across the world, are other countries um further advanced than we are in adopting 3D printing? Well, that's a very good question. Thank you for the question. Um they are moving forward quickly and so we are doing what we can to keep up.
▶ 1:23:16uh mostly the work has been done in 3D concrete printing when it comes to buildings. We do have some polymerbased printing um but typically that's not for the entire building right for the walls and the structure. So a lot of the work we've been doing has been in trying to understand new materials for this process understand how the code systems would work code processes would work how we can integrate with existing processes as well. Sure thank you for that. Um, I want to shift attention to another innovative solution in housing that chairman flood discussed earlier. Single section cross mod homes.
▶ 1:23:47These homes combine the efficiency and speed of modern manufactured housing with the look and features of traditional sightbuilt homes such as higher roof pitches, front porches, and permanent foundations. Crossod homes finance and appraise like sightbuilt homes. And according to FHFA house price index, they have appreciated at rates similar to traditional homes since 2020. Uh, this innovation presents a real opportunity to increase attainable single family housing without sacrificing quality or long-term value. Uh, Mr.
▶ 1:24:16Boore, can you discuss how this innovation can help expand home ownership opportunities for a broader range of Americans, particularly in terms of affordability, financing, and long-term value retention? Yeah, I mean, we've talked about the uh challenge of having starter anything that you would call priced in a starter home category. I think crossmod homes are really the thing that can fill in that void because it's so much less expensive and yet the quality and aesthetics are comparable with what people would expect from a sightuilt uh sight built home starter home.
▶ 1:24:46So it's really filling a gap that home builders are vacating by not being able to hit those price points. Sure. Thank you for that. Mr. Chairman, I'm out of time. I yield back. Gentleman yields back. The gentleoman from Texas, Miss Garcia, is now recognized for five minutes. Thank you, Mr. chairman, and thank you so much for bringing attention to the housing crisis. Um, you know, I I I think we can all agree that there is a housing crisis, not just in some states, but throughout America. Uh, and I know, Mr.
▶ 1:25:14Chairman, we had another uh subcommittee hearing where we had the uh head of the homebuilders here, and he responded to some questions I had specifically that I have today for Mr. Boore and Mr. Shaver, who are the for-profit builders here. Um, what impact will the terrace have on your construction? I know you, Mr. Boy, you were asked that question by Mr. Torres, but you kind of hedged there a little bit. Uh, so specifically, and I need us a percent. I don't need a whole explanation for it.
▶ 1:25:44What percent do you anticipate the increase cost in your building due to the tariffs? I think I was volunteered to go first on this one. Um, I asked you first, so yes. Okay. And I just need a number. I don't need an explanation. Well, the difficulty is that the terrorists keep moving on us as you know. So, lot of uncertainty problem with a terrorist on our structure and it's one thing today and another thing tomorrow but today what is the impact in our cost structure?
▶ 1:26:13I would tell you it would be in the low single digits on the cost side. What number sir? I don't have a specific number below 5%. I'm sorry. Below 5% based on Below 5% based on the tariffs that exist today. All right. Uh do you you do you do use uh some steel products do you not? Yes. Because those comes from Canada and I know that was a big concern for the homebuilders the lumber and the the steel products from Canada. Yes.
▶ 1:26:40And I believe those have been reversed back to the pre the pre-existing tariff. Well they're unplaused because of the NAFTA but they'll come back trust me. Correct. Uh what about the modular homes? Uh Mr. um Schaefer. Yeah. So our homes uh thank you for the question are built with lumber. So that would be the one that we would be watching. So and what percent would that be? Sir, I just need a number. 5%. 5%. Well, would it surprise both of you that the homebuilder said about 25 to 40% just tariffs?
▶ 1:27:09Now, you also use a lot of labor and there will be a shortage of labor with the increased deportations and immigration enforcement. Uh what percent would that impact you? And and Mr. uh Schaefer, you'll go first this time. Thank you for the question. Yeah. Um, we have not had a shortage of labor. We have aboutund factory. Zero. Zero. You will have no impact. No impact. You have all the workers in the world. Correct. That's very nice.
▶ 1:27:35You're probably the only sector I've ever talked to uh that has responded in that way. Uh, and Mr. Boore. Yeah. I'd appreciate one minute to just talk that the one thing about the difference you're hearing from I just need a number because I've only got I would agree with the 0% on labor because we're hiring unskilled labor and we're training it. So you this that the terrorists don't impact you much immigration none at all. We have not seen an impact on labor.
▶ 1:28:01Well, would it surprise you to know that the homebuilders said 30% based on immigration uh uh uh deportations and Yeah. I what I wanted to point out is that our process question let me move on. Uh sir I want to go to Mr. Flu and Mr. Flu thank you for your work. I was a legal aate lawyer myself and my favorite t-shirt was one that said housing for profits for people not for profits. I was in the housing section.
▶ 1:28:30I used to have it until I had this horrible accident in Mexico and my van blew up and everything in it. So I'd lost a t-shirt. Um, but I wanted to ask you a question about extreme heat, uh, hurricane events, weather events, uh, and the risk, uh, to to manufactured homes. So, can you talk just a little bit about that? I'm from Houston.
▶ 1:28:52We have a lot of hurricanes and we always just see, uh, we don't have that many manufactured homes in Houston, but, there are pockets of around Houston that are semi-ural uh, that do. Thank you for the question. Uh I can speak to the issue briefly. Um as everyone knows, these homes uh that we're talking about that are on non-permanent foundations on peers are secured primarily through the hurricane straps, metal strapping uh ultimately secured to the ground by like a large screw.
▶ 1:29:21And uh 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. Uh there's been a lot of um news about the the storms that hit North Carolina and the issues that they've had with the homes. Uh, but the other thing that I would like to mention, um, and maybe I'm dealing with mainly older homes, but when these homes become water logged, um, when they suffer from a natural disaster event, it's not like you call in ServePro and they vacuum out your basement.
▶ 1:29:52These homes suffer for the rest of their existence through mold issues, uh, from other deterioration. And, um, I I think it's a very important issue that you've identified, right? So, it would be a mistake to to dismantle or um do away with FEMA. It would be a mistake. Thank you. I yield back. Gentleoman yields back. The gentleoman from Texas, Miss Da Cruz, is now recognized for five minutes.
▶ 1:30:19Thank you, uh, chairman, and thank you to the witnesses for being here today. Um, I am from deep south Texas, the tip of Texas. It's a largely Hispanic community and a community that has a humble average income for families. So, uh, low cost in housing is something very important to me.
▶ 1:30:43Affordability is important to me and, um, I'm excited that the work that we're doing here in this committee is to find meaningful solutions to end the housing crisis. I'm especially interested in ending um homelessness for veterans as well. And this is why I'm proud to have a bill that helps address this for disabled veterans, which is HR225, Disabled Veterans Housing Support Act.
▶ 1:31:14As I said, it passed successfully out of the House and well, 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.
▶ 1:31:40And um while I was listening to her discussion today, I realized how important manufactured homes are to solving affordability and housing in our nation. Um especially given all the advancement in construction, 3D printing, 3D building is very uh interesting. Quality, making sure that it's quality. Texas is home to the most total shipments of manufactured homes.
▶ 1:32:09And while manufactured homes are less expensive, they've seen a percentage cost uh increase much like our standard brick brick homes. Um Mr. Mr. Boore, 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? Yeah. the the price that that matters to the people you're talking about is their monthly cost.
▶ 1:32:39And there are some very clear actions to be taken on the financing side, encouraging directing the GSSE's in particular and FHA to develop programs. They've talked about for a long time for home only financing. I'd imagine in your area, I know because we're in those markets, that there are a lot of people there that are buying home only and they need that kind of loan. The GSC's really don't support that at all.
▶ 1:33:04And 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. So GSC's you said they they don't support the manufactured home buyer under their duty to serve programs. They've talked about pilot programs and other efforts to get into this section or segment and yet we've really seen very little activity.
▶ 1:33:31So 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. And there have you said they were developing programs. Is this something that is it a funding issue for them? Why do you think that GSC's have not supported manufactured housing?
▶ 1:34:00Yeah, I'm hesitant to to speculate on the reasons. I think it's a small market for them and I think that you know what they would tell you is they don't have data about the riskreward, but in the public market with investors, they are pretty attracted to the riskreward, but 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. That's been very helpful. Thank you. I appreciate that.
▶ 1:34:26I know I don't have very much time left, but um I we talked about financing. I'm I'm very curious about the 3D building, so I'll just ask Mr. McCoy or Mr. Schaefer about the 3D building and uh modernizing workforce you said is very important to make sure that we have the workforce to be able to produce this. Can you speak briefly to Um thank you for the question.
▶ 1:34:55Yes, it this is a critical aspect is getting more uh workers into this industry. Right now we have a labor shortage considerable. Uh I I've heard today that uh maybe that might not be in the factories and so we're seeing that definitely in construction sites and across the industry in many different ways. So getting more people excited, changing the perception of this industry, um I think it will go a long way.
▶ 1:35:17and then talking to younger generations about how exciting all the different opportunities are, the different technologies that we're working with, it will go a long way to u making this a great economy building uh industry. Thank you. Thank you. I yield back. Gentleoman yields back. The gentleoman from Georgia, Miss Williams, is now recognized for five minutes.
▶ 1:35:37Thank you, Chairman Flood and Rinky Member Clever and to all of our witnesses for having this discussion today because y'all I understand that manufacturer housing can be an important tool in our toolkit to help ensure that everyone no matter their zip code has a roof over their head. In fact, I've benefited from this. So, see, I grew up in rural Alabama and I grew up in a home that had no indoor plumbing and no running water.
▶ 1:36:01So, 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, but I now live in downtown Atlanta, y'all. And so, I represent a district that this just isn't possible.
▶ 1:36:18I listen 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 wouldn't do anything for most of the constituents that I represent in the heart of the city of Atlanta. And there because there's simply no place that the people of Atlanta can have a manufactured home. But y'all, they need housing, too.
▶ 1:36:44because we have all agreed that affordable housing is a crisis in this country. So, my constituents have been quite vocal about this one-sizefits-all solution that is being forced on them, and I'm their voice in Congress. So, I have an obligation to speak up on their behalf. They're begging my colleagues to not gut HUD. They're begging my colleagues to not get rid of affordable housing programs.
▶ 1:37:10and they're 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 skyrocketing housing costs. Because here's the truth of the matter, y'all. While this combo today would help a small segment of the country, my constituents would be left behind and still struggling.
▶ 1:37:34Why else would my Republican colleagues focus this week on kicking people off of health care, raising costs with reckless tariffs, or gutting SNAP benefits for the most vulnerable families? And y'all, this too is personal for me because I benefited from SNAP growing up. Well, it was called food stamps at the time when I grew up in the 80s and 90s when I was raised by my grandparents.
▶ 1:37:57But I wouldn't be here in Congress today serving the people that I represent if it were if the Trump administration and my colleagues had their way with a lot of the policies that we're forcing on the American people today. So, 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.
▶ 1:38:27Boore, this is a very simple question. Don't need all the details and 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's the stuff that we build homes with, y'all. Mr. Boore, simple question. Will Trump's tariff taxes make prices for new homes increase or decrease?
▶ 1:38:58Increase or decrease, Mr. Boore? We talked earlier. It's probably increase or decrease, Mr. Boore. Price increase. Increase. That's right. Mr. Mr. Boore, 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, y'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.
▶ 1:39:28These programs are lifelines used to help states and local communities to preserve and rehabilitate homes in lowincome communities. Unfortunately, my Republican colleagues all voted against it. And President Trump has proposed eliminating these entirely. As if an $11,000 tax increase wasn't enough for struggling families, my Republican colleagues shall they just want to keep it going. Mr. flu.
▶ 1:39:54If Republicans got their way and eliminated these programs, what would happen to the average price of affordable housing across the country? Thank you, Congresswoman. First of all, I'm here in a nonpartisan capacity, but to answer your question, they would soar. But the facts are the facts, Mr. Flu. And you're right, they would soar. But now, it's not going to solve everything, y'all.
▶ 1:40:17But 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, y'all. We are not even coastal. There's nothing costlier than a damaged home that can't be repaired. And Mr. Flu, my time is up, but I have more questions for all of our witnesses that I will submit for the record, m Mr. Chairman, and I yel back. Gentleoman yields back.
▶ 1:40:47The gentleoman from Florida, Miss Salazar, is now recognized for five minutes. Thank you, Mr. Chairman. Mr. Chairman Flood, for putting together this very important and uh interesting hearing and uh my first question is for any of you who would like to answer. I um 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.
▶ 1:41:17But the problem is that one of the biggest issues facing the constituent, the regular Miami resident, is housing costs. I've never really understood why this is. When I've spoken with the developers, they say that the land is too expensive and they cannot buy the land and then make their money because they are in the private sector, not like us that we are in the public serving the public.
▶ 1:41:39So, um, the modular homes, do you think that maybe that could help this problem, uh, because it's not it's I'm talking about the land costs, but then you have to put on top of that the construction expense. So, any of you that would like to tell me, give me some hope about Miami and the overall housing costs coming down. Who's familiar with Florida? I'll take a swing.
▶ 1:42:07Um, yeah, I think the land cost issue is somewhat of a given. And so what you've got to look for is density. I mean, this whole problem is a supply side problem. This is not about um throwing money at higher cost homes. It's about supply. And so if we can get more housing units on that expensive land, then we win, right? More supply. And so I think the pessimism about what manufactured housing can do in urban environments is unwarranted.
▶ 1:42:32We've innovated with duplexes and other solutions that get more units on the same piece of land. So, I think it's a supply problem and that's a solution. All right. Any other comments? Any suggestions? If you would be talking right now to one of the developers that do want to provide what you just explained, what would you say to them? Well, first I'd point out I'd talk about density, but I'd also point out that uh order of magnitude, the cost of placing our units is about 30% less than the cost of a site built.
▶ 1:43:01And so if they want to lower their cost to try to hit affordable price points, density and manufactured solutions. So that would entail to change zoning laws as well. Correct. Change the zoning and allow us to innovate with products that fit in those environments. And 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 Yeah, that's like creating land. This is not something in economy. Creating what again? Excuse me.
▶ 1:43:30creating creating land is what I would say and that's creating land that's 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 uh or a mother-in-law type unit in the backyard you've placed another unit in a dense area which grows the supply and lowers the cost of housing. Sure. And then why is then that happening more often in Florida? Do you have any idea? I think they're slow to take it up.
▶ 1:43:57I think if you looked at LA as an example, LA has really grabbed onto this idea and removed the barriers. Could you just give me a picture of what the accessory dwelling unit looks like? Yeah, they're typically much smaller. Uh what we see a lot in LA County that I've used an example is uh people leveling their garage and on that footprint detached garage on that footprint putting you know a 400 to 500 self-contained living unit and that with a kitchen and a d a kitchen and a bathroom everything that a little home entails and that
▶ 1:44:27unit can be rented to the school teachers and the nurses and the fire people that can't afford to live in those areas that they serve. And now again, you've lowered the incremental cost of rent and increased housing support. And how much does a 500 square feet uh unit accessory dwelling unit may cost? Basic one might be, and I'm winging it here, but basic one might be 50 to $60,000 and they can be as nice as you want to make them. Wow. Great. How do we access that? Give me two.
▶ 1:44:59How do we Oh, how do you get meaning? It's I think it's a very innovative idea. I had not heard about it, but I would definitely would like to know more so we can share this this new concept with the rest of the developers that are desperate. We're developing the case studies in some municipalities. It's a great solution. Thank you. Okay, I yield back. Thanks. Gentleman yields back. The gentleoman from Michigan, Miss Talib, is now recognized for five minutes. Thank you, Mr. Chair.
▶ 1:45:25Um we know that when private equity firms purchased uh manufacturing um housing communities, residents can face new regulations um as we know uh higher rents and even displacement or eviction. Uh in Michigan, one in 10 manufacturing um housing communities are owned by private equity uh firms. Private equity firms uh have purchased manufactured um housing communities in my own district uh called Crestwood Estates and Dearborn Heights is one of them.
▶ 1:45:54Um, and one of the residents and Crestwood Estates had reached out. She's a seasoned resident. Um, in March, she she called us, reached out, and after her community um was purchased by a private equity firm, um, her rent went 65%. Um, that's before the water, sewage, trash, and other fees were added on.
▶ 1:46:19Uh she told me that some of her neighbors have lived there for 20 or 30 years, but now most of us can't even afford to live here anymore and they have no place to go. Uh Mr. Flu, in in your testimony, you noted that residents of manufactured uh housing communities are overwhelmingly people on fixed income uh like like the res my resident that I mentioned. Can you touch base on many of our seasoned residents?
▶ 1:46:44Um, and ironically, for some reason, a lot of my veteran neighbors really like living in manufactured home communities, as you probably know. Um, and, uh, and we have a lot of residents living with disabilities on fixed income that also, in particular, um, um, face financial disruptions and so forth. So, you know, can you talk a little bit about what those impacts look like post private equity firms um, buying out these um, manufactured communities? Thank Thank you for the question, Congresswoman.
▶ 1:47:14What those impacts look like are are frankly pitiful. Um, you see people that have lived in communities for decades, as you've mentioned, that find themselves uh homeless. You find people that have lived in communities for decades that start having all kinds of health issues because of the stress uh that this uh increased rent has put on them.
▶ 1:47:39you find people that have enjoyed community for years and and interacted with their neighbors that no longer uh feel that sense of community because people have left uh the conditions have deteriorated etc. Um if I if I may, I I would suggest that one of the issues with private equity would be providing incentives uh for sellers to sell to residents and incentives for residents to uh purchase their own communities and convert. I love that. We actually been talking about it.
▶ 1:48:08Um, so for people listening uh to this committee, uh I know we're not the most popular committee today, but um one of the things we've been talking about in my on our team is the resident owned communities uh of having kind of a approach of um uh resident owned having the homeowner have a share um in in you know the governing of it, the oversight and so forth and having some way to even vote on some of the conditions of the facility.
▶ 1:48:36And I'm glad you mentioned so if you can talk about the benefits and again this is new to many people in the public called resident owned communities uh a little bit. I know in the past you've heard us um and I know ranking members heard you know cooperatives structured as cooperatives and things like that but can you for if my mom or your mom was in this room how would you explain that and and the benefits of it? Sure. It's the difference between an apartment building and a condo. That's right. um by allowing residents to actually purchase the communities they live in.
▶ 1:49:06The homes are better upkept, the conditions in the communities themselves are generally uh more improved uh upkept uh the the upkeep is is improved. Um but but like you say, it gives an ownership. It gives basically a real piece of land that goes with the home and it 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're basically powerless with regards to decision.
▶ 1:49:36In your testimony, you actually mentioned the abusive financial practices faced by uh purchasers of manufactured homes. And I know in the past the FB had exposed such those practices and pursued bad actors. However, I know the current administration's not interested in doing that. Uh, in my opinion, I I don't see that being something of a commitment. Does does the weakening of consumer protections mean that borrowers like my constituent uh seeking to purchase that they're exposed to some of these fraudulent schemes? Absolutely.
▶ 1:50:05And the the weakening of consumer protections is a snowball effect. One bad actor breeds another bad actor breeds another. Yeah. Mr. Mr. Flu, you should have seen, and I don't know, chairman, I I should have brought the article. One of our manufacturing homes owned by a private equity firm. Um, they just had no water access because he didn't pay it. The the management company, I mean, it's private equity firm, but they have that one person. He didn't pay it. They didn't have water. I don't know.
▶ 1:50:33I just I just feel like these are some of our most vulnerable, and we should do more. Thank you. Gentleoman yields back. The gentleman from Wisconsin, Mr. Fitzgerald is now recognized for 5 minutes. Thank you, Chairman. Mr. Board, 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. I build her a separate place or how would that work? Who's going to deliver that message, too? Is what?
▶ 1:50:59Um the next generation housing initiative in Washington County, Wisconsin is a locally driven effort to expand uh affordable home owner home ownership for middle-income families by developing thousand new owner occupied homes by 2032. Uh it's 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.
▶ 1:51:28It sets clear affordability targets requiring 40% of homes to be sold under $340,000 and all under $420,000. So obviously what we're focused on is reducing the development costs, expanding housing options, and the initiative also promotes zoning reforms that allow for smaller lots uh and diverse housing types like dup duplexes and town houses.
▶ 1:51:54uh it is uh an example of a public private advisory group that can uh not only implement this but oversee this. So uh Mr. Schaefer, I think you're familiar with the concept. I'm going to ask you from your vantage point uh and working closely with developers and government local governments and nonprofits. I know you've seen a lot of changes uh to the uh and and maneuvering on some of those uh challenges to building affordability.
▶ 1:52:24So um have you seen programs similar to this throughout the nation starting to develop? Um or do and do you think this uh something similar could be kind of scaled down maybe and used at the federal level? I was wondering what your thoughts are on that. Thank you for your question and um what you just described is um basically what we've been doing um throughout the state of Colorado.
▶ 1:52:49So um it is u municipalities and the state tackling this missing middle. So 80 to 120% of the AMI which you um described on this particular project. So yes, higher density town homes um are a part of 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 um which it sounds like you're doing.
▶ 1:53:18So 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. Um the only one that I might add um is again you are focusing on the demand side. Um the one piece we are challenging folks to is to look at the supply side.
▶ 1:53:43So building one factory in the state of Wisconsin could provide 500 affordable homes per year. Um so um with everything that you just mentioned in this initiative, we would just want to add that to it. Very good. Thank you so much, Mr. Boore. Um, governmentmandated caps and regulations on single family rentals reduce the supply of housing.
▶ 1:54:07That's kind of been discussed, I know, this morning, but studies have shown minimum lot size requirements, restrictions, a multifamily housing developments, and the lengthy permitting process, which we've, if you're a member of Congress, you hear every time you're in the district and you talk to somebody that's a builder themselves. So, do you believe that there's an increase in the number of single family rental homes that are available and and how could this improve overall housing affordability?
▶ 1:54:36I guess what's the effect on the pricing? Yeah, there's a huge need for rental solutions as well. And I think the challenge, and this relates to your earlier question, the challenge is not only on the financing and funding side, it's also getting entitlement to do these expansions. communities whether they're rental or land lease provide homes for a lot of people in this c country and they're very satisfied with their living situation.
▶ 1:55:00Um and then to further your point I think some of the um you know low or 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's because of those kinds of restrictions that you're mentioning. Thank you, chairman. I yield back. Gentleman yields back. The gentleoman from Oregon, Miss Binham, is now recognized for five minutes. Thank you, Mr.
▶ 1:55:30Chair. Mr. Flu, uh, in my home state of Oregon, I've noticed how private equity firms have significantly increased investments in manufactured housing communities. And so from your work, have you seen any impact on the cost to renters when entire manufactured housing communities are purchased on a systematic scale?
▶ 1:55:51And and one point to note, we in the state have suffered from um 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's why this is really important to us. Thank you for the question.
▶ 1:56:10Uh a as explained a little further in my written uh testimony that was submitted, uh I've never seen a private equity or a hedge fund buy a manufactured housing community and not increase rents as the first thing they do. Um unfortunately, that's often coupled with a decrease in investment in the community, allowing infrastructure uh to to deteriorate and uh conditions, living conditions to worsen.
▶ 1:56:37My second question for you, um, 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 doortodoor one time and um, seniors were pretty upset because a row of the homes had been condemned because they were um, noted by the county as being very close to falling into the river.
▶ 1:57:05And 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 for them. So for your um 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?
▶ 1:57:34And and one more quick point on this. When I asked a question earlier in in a committee about um capital, the the response was that you know we should be agnostic to the type of capital that comes in to do a particular job. Okay, that's fair. Uh that was in respect to um young people being able to buy their first home. I think what the challenge now is that we have a legislative um opportunity here.
▶ 1:58:02we have a policy decision to make irrespective of the money but what should we be doing what should we be thinking about to make that policy decision thank you um I'll answer the that last question uh but to to sort of go back to the first question uh when you have people in fixed incomes when you have vulnerable communities lowincome communities um you know the the MHI uh they they released a study that says the average increase uh year-over-year in manufactured housing communities land least communities
▶ 1:58:346.5% I believe the cola last year or for this year is 2.5%. So there's just no way that someone that's on fixed benefits can keep up and keep a house keep a roof over their head. Um, answering your your last question, I think that the government can incentivize.
▶ 1:58:54I think again we're all talking about the need for further expansion of GSSE backed loans, but I think part and parcel of that expansion must come with rules from those GSC's uh that require certain treatment, certain benefits to the residents of these communities. Thank you. I guess in closing, uh, Mr. Flu, thank you for your testimony.
▶ 1:59:15I'm 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've just mentioned, are hit with rent hikes that they can't afford. And I think that um this is happening without transparency and Congress needs to provide some level of guard rails so that we shore up the market, make sure that it continues to be there. um and especially as we try to replace housing um in areas where wildfires have have really hit home.
▶ 1:59:45So, I'm committed to working with my colleagues on both sides of the aisle to ensure that we get a safe, affordable, and steady um housing stock. So, I don't think our home should be necessarily an opportunity for um just a outright profit. It is a source of you know um intergenerational wealth for for many families just keeping a roof over their head. But I think this is more about dignity and opportunity for families. So, thank you, Mr. Chair. I yield back. Gentlewoman yields back.
▶ 2:00:14The gentleman from California, Mr. Licardo, is now recognized for five minutes. Thank you, Mr. Chair, and thank you for allowing me to wave on. Uh, I'd like to think I'm becoming an honorary member of the subcommittee. Uh, thank you, and I appreciate your willingness to to hold this important meeting. Uh, because innovation in the housing industry is critical. Uh I think uh I've certainly seen that in my time as as a mayor in the city of San Jose. We actually have more mobile home residents than any other city in the country.
▶ 2:00:42Uh and we relied heavily on pre-fabricated modular housing uh for many solutions and frankly we need much more. I I I do share Mr. Torres's view though that the public is being presented with a false choice between innovation and sensible housing safety net programs. Uh and we desperately need both. uh we do need innovation, construction, development.
▶ 2:01:04We also know that the the actions that are even been taken or being contemplated to decimate uh section 8, for example, uh requiring uh two-year limitations, for example, cutting already thousands of families off program. Section 8 already fails to serve about threequarters of American families that qualify for it by income.
▶ 2:01:25Uh and so the devastation we're going to see uh from the the the cuts there and and and that that and other similar programs, the tariffs on uh on Canadian lumber and Chinese steel, none of these are making our efforts to combat the housing crisis any easier.
▶ 2:01:41Uh, and my concern is that as millions of Americans will suffer from both these cuts and poor economic strategies, uh, we're going to see more people pushed out on the street and communities are going to take a generation to, uh, recover because we know that arsonists can move much faster than homebuilders can. So, I would urge Congress to move carefully, very carefully, and dismantling these critical safety net programs.
▶ 2:02:10I want to get to the the heart here uh of what we're discussing here today. And I certainly saw the benefits of pre-fabricated modular housing, particularly with regard to ADUs, backyard homes. Uh we created programs partnering with manufactured home builders identifying a couple dozen pre-approved floor plans uh so that our planning department could enable homeowners to get a permit in a single day by going online and choosing one of the pre-approved plans.
▶ 2:02:39We saw the permits for ADUs backyard homes skyrocket 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 weren't getting shovels in the ground because they couldn't get the financing for modest income homeowners.
▶ 2:03:01There's just no simple tools uh to enable them if they don't have enough equity in their homes to be able to expand housing in their own neighborhoods uh where we know there's great opportunity for many cities like San Jose that want to provide that opportunity. Uh we're working on a bill now and I certainly welcome my colleagues who may be interested in in this to provide that opportunity essentially through a mandate to FHA.
▶ 2:03:22But I'd welcome any of our uh witnesses uh as to any opinions that you might have about what opportunities there are for innovation and financing particularly with Fanny or Freddy backed lending that could actually unlock this great opportunity we have with land in lots of cities throughout this country. uh we have ample land and not enough I'll jump in. I think you're right on the point.
▶ 2:03:49I mean, what what we've seen whether it's ADUs or duplexes, any of these solutions that can help particularly in more urban environments is that the the physical product innovation happens first and it's sometimes takes a long time for the financing to catch up with it. And I do think there's some direction that could be given to the government entities FHA, Freddy and Fanny to accelerate development of those programs. In some cases, I'll tell you like duplexes as an example.
▶ 2:04:15I get in discussions and they talk about the problems and what they don't know and then I say, "Well, do you do you fund sight build duplexes?" And right away they say, "Oh, yeah, we do that. What is the difference? These homes are not going to move. They're 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. Thank you. I agree.
▶ 2:04:46We're going to push. Um I I would point out and Mr. B, I appreciate your comments and I agree very much with their suggestion about the need for preemptive approaches around antiquated restrictions around chassis requirements and so forth. and I would support some preeemption, but I'm very concerned about preeemption and safety requirements. And I know your own company faced those very challenges as I understand as recently as last year uh with a $270,000 fine that was considered from from Department of Labor regarding safety.
▶ 2:05:14We do need minimum requirements around safety on construction and on occupation. I hope you agree. And you're talking about factory safety. That's right. Yeah. very proud of our record there where we're well below the industry average, but it's very important. I wouldn't disagree with you at all. All right. Well, I am I am concerned because I know CFCO certainly had its challenges. Gentleman's we certainly don't want to replicate that. Thank you very much. Gentleman yields back. The gentleman from Montana, Mr. Downing is now recognized for five minutes. Thank you, Chairman Flood.
▶ 2:05:44Uh Montana between 2018 2013 has seen just staggering increase in uh the median home price home values. It went almost 90% to 89.6%. And during that same time median household income uh increased by about 28%.
▶ 2:06:05So on one hand you've got almost 90% increase in in cost or value and you've you know got less than a 30% in in um uh in income. Obviously those numbers are are not not tracking. And you know the median home price in Livingston, Montana $640,000 or in Helena $600,000. And you know something I think about often is the American dream. Home ownership to me is is foundational.
▶ 2:06:34It's a cornerstone to the American dream. So, how do we, you know, how do we solve this problem? Obviously, we need to figure out ways of of getting people into homes, finding it cheaper. And I I' I've said this statistic on this committee before, but just I think this was from the homebuilders who estimate that every $1,000 extra that it costs to build a home, you're eliminating about $106,000 possible people that can buy that home. So, uh we we need to find solutions here. So, I'm going to um first turn to innovation.
▶ 2:07:04You I was a tech entrep entrepreneur and uh I am a firm believer that the United States needs to embrace and lead in innovation. Uh innovative solutions increase efficiencies, make products more affordable to everyone. So, I'm excited about the idea of of 3D printed homes. I'm excited about this. So, I'm going to start with um uh with Mr. McCoy. Uh you already spoke earlier today about the potential benefits of 3D printing technologies.
▶ 2:07:30Are there any other possible innovative solutions to increase the supply of affordable housing that uh might you not even be on our radar right now? Uh 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 uh permitting processes, planning processes.
▶ 2:07:54uh we can look at a lot of the different systems we're currently using and we can work towards more efficient processes in that that could speed up um our construction and scheduling of course and uh hopefully allow us to produce more units faster. Thank you. So that's one area. Uh I'm I'm going to move on to uh energy. You know, I'm I'm all for energy efficiency. I live in Montana. Energy efficiency is important. But uh this is going to be for Mr. Boore.
▶ 2:08:22So, um, what impact does the imposition of federal energy codes by the Department of Energy have on the cost and availability of manufactured, uh, housing in America? Yeah, that that attempted rule making um because it was somewhat ill advised and out of sequence with how we manufacture and transport homes, it was um poorly targeted.
▶ 2:08:46And we've estimated that, you know, there's a lot of variation in this estimate, but five to $6,000 of added cost for the consumer. Um, our industry has come forward and said we can get similar efficiency improvements in ways that work for us and it wouldn't drive that cost. And that's the importance of the HUD process. Well, thank you. Uh, I'm going to move on to Mr. Schaefer. You know, some places uh completely prohibit manufactured homes.
▶ 2:09:11Do you notice any difference in housing affordability in areas that allow manufactured homes versus those uh that do not? Thank you for the question. And um again, we deal or we build uh modular homes, not manufactured homes.
▶ 2:09:26Um, so I'm not sure I'm the right person to answer this, but um, again, for us, if if the uh, communities or the state allow for regional codes, it allows us to build faster, qu quicker, more efficiently, very similar in Colorado as it is in Montana. Thank you. Uh, Mr. Bore, any uh, do you agree or do you have any uh, anything to add there? Well, it's all about supply.
▶ 2:09:50I mean, your starting point about the the relative increase of housing and incomes in Montana proves the point that what we need is supply. So, um, turn us loose, give us a level playing field, and we'll increase the supply. Well, I I appreciate that. Um, so you kind of kind of building on that. Can you talk about how pre-fabricated homes can increase the supply of affordable housing in rural areas where there's not much development? Go back to Mr. Boore. Yeah.
▶ 2:10:19uh we traditionally have covered rural areas pretty effectively. I think the the next frontier and it's a big one is to get into suburban and rural and urban areas and that's where a combination of product innovation and zoning improvements would allow us to do a big job.
▶ 2:10:34So my last couple of seconds to the anybody on the panel anything um any other barriers that haven't been discussed today that prevent pre-fabricated homes from being Oh, it looks like I uh I I ran out of time, so I'm sorry to get that late. Uh Mr. Chair, I yield. Gentleman yields The chair now recognizes the good gentleman from New York, saving the best for last, Mr. Garbarino, is now recognized for five minutes.
▶ 2:11:02I don't think I've ever been called the best before, but thank you. Uh thank you, chairman. Thank you to the witnesses for being here. Uh recent data from the National Association of Realtors highlights a critical shortage of particular particularly for first-time home buyers in in the moderate income price range. Firsttime buyers decreased to 24% of the market share from last year marking the lowest share since 1981. Dr. McCoy, how could you innovate?
▶ 2:11:29How could innovative housing types like manufactured, modular, or 3D printed homes help address both the housing supply shortage and affordability challenges facing first-time home Thank you for the question. I I think I said this before, but um 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.
▶ 2:11:58I think that's part of what needs to happen to understand that we have a lot of options and if we can bring innovation uh some innovation that it was 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.
▶ 2:12:14One of the things that um was mentioned before a couple times that we haven't really talked about is if we can satisfy a certain segment of the market, we don't have what's called a crowding out effect where we might have people who can who are pay 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 don't find that people can afford.
▶ 2:12:38My colleague just before he was talking about how some municipalities and localities have put put in prohibitions uh 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? Well, uh in many ways I was I'm here to talk about technology, but I I I can reiterate some of what we've talked about and what we've seen in Virginia.
▶ 2:13:07We've seen a lot of really good programs that work on uh uh uh speeding up the processes around permitting. We've seen plan books where people can pick from a a book of plans and that really speeds up the process from a code standpoint. Um we also have seen a lot of uh state level grants that try to incentivize innovation through our housing finance agency. Any other witnesses want to take a stab at that? Any other ideas?
▶ 2:13:33Yeah, I talked in my testimony about strengthening HUD's policy statement on this. Congress has been clear about the preeemption authority of HUD and they need to strengthen their policy statement so they can work with local communities to overcome really the outdated view of factory-built housing and I think if we can push a little bit harder on the municipalities, we'll get more acceptance and it'll be success stories. It was actually my next question was about updating HUD policy. So that was great.
▶ 2:14:04Um, more uh, CAVCO was the first bill to unveil a duplex model after the HUD code was updated to allow for zero lot line and two to four 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's encountering as you bring this product to scale? Yeah, the early adopters.
▶ 2:14:30I mean, it's it's 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 um consumer funding or owner funding. But I think the uh frontier that we want to get to is where these can be solutions for urban infill. It's a great solution there.
▶ 2:14:55And the big hurdle again is financing and developing programs where owners can get consumer financing for these units. Wonderful. Thank you. Um, since you already asked my last question, I uh yield back. Thank you very much. The gentleman yields back. I'd like to thank all of our witnesses for your testimony today. Without objection, all members will have five legislative days to submit additional written questions for the witness to the chair. The questions will be forwarded to the witnesses for their responses.
▶ 2:15:24Witnesses, please respond no later than June 20, 2025. This hearing is adjourned.