Mobile Home Rules Ignite Debate : Critics Claim Permanent Units Are Substandard Housing

WASHINGTON —  Home for a growing number of American families is a house that arrived on wheels, a trend that has led to bitter debate among mobile home manufacturers, federal regulators and conventional builders.

Critics say more and more mobile homes are being put on permanent foundations after they are transported to buyers, but are not subject to local building codes and other regulations applied to conventional “stick-built” houses.

When this happens, in the view of Richard F. Weidman, director of government affairs for the Vietnam Veterans of America, “They’re no longer mobile. They are substandard housing.”

Mobile homes are built to federal standards and are not subject to inspections by local and state governments after the homes leave the factory. Critics charge that local regulations for conventional homes are more rigorous than the federal rules for mobile homes.

Announced Change

Faced with the growing controversy, the Department of Housing and Urban Development last summer announced a rules change that would curb the practice of building mobile homes with chassis that can be taken off before installation on a foundation. The department, which regulates the industry, said officials have determined that mobile homes with removable chassis do not conform to the National Manufactured Housing Construction and Safety Standards. The 1974 legislation that created the standards also officially changed the name of mobile homes to manufactured housing.

“Dealers who sell a nonconforming home subject themselves to civil and criminal penalties,” James C. Nistler, a HUD deputy assistant secretary, warned in a letter to an industry trade group.

Buyers often want to remove the chassis to allow for construction of basements and to get the homes closer to the ground so they will “look more like a traditional, stick-built home,” according to a manufactured-housing industry spokesman.

Manufacturers’ groups have figures from numerous individual makers but have not made an industrywide study of the increase in the number of mobile homes placed on permanent foundations, according to a spokesman for the Manufactured Housing Institute. He estimated that permanently-based mobile homes constitute from 5% to 10% of the national total, compared to 1% or 25 five years ago. “In some markets, there has been a big increase, and for some companies, (homes on permanent foundations) make up 30% to 50% of their business.”

Major industry associations responded to HUD’s announcement of a rule change with two lawsuits. The cases, filed last month, asked courts to stop the department from putting the rules into effect Dec. 31 as scheduled.

Date Extended

HUD extended the effective date to Friday, and federal judges in the District of Columbia and South Bend, Ind., where the cases were filed, are expected to hold hearings this week.

The Manufactured Housing Institute, which brought the Indiana suit, and the Association for Regulatory Reform, which filed the action in Washington, charge that federal regulators have allowed manufacturers to produce homes with removable chassis for years. The government’s forbidding of the practice now will cost the industry millions of dollars and cause employee layoffs, plant closings and costly retooling, according to court documents.

Both suits complained that HUD announced its rule change without prior public notice and without providing an opportunity for public comment.

Sales of manufactured homes designed to have chassis taken off “have increased over the past 10 years and are expected to continue to increase,” Jerry C. Connors, president of the Arlington, Va.-based Manufactured Housing Institute, said in an affidavit for the Indiana case.

Several manufacturers report that sales of removable-chassis homes have grown until they now account for 15 to 33% of their business, according to the Indiana court documents. Nearly 300,000 manufactured homes were built in 1984, the last year for which statistics are available. Connors said manufacturers “have relied on HUD’s longstanding past practice of approving, recognizing and even advocating the removal of transportation platforms.”

Politics Charged

The institute’s lawsuit charges that the federal housing department changed its practice as “a direct result of political and competition-motivated pressure by the National Association of Home Builders,” which represents producers of “traditional site-built homes.”

A HUD spokesman said the agency “is not in a position to discuss the case,” because its attorneys expect to file court documents this week in the two suits. In an October letter to Rep. John Hiler (R-Ind.), however, a HUD official said the department “was unaware ... until recently” that some of the private companies licensed to inspect and approve manufacturers’ designs had been approving plans incorporating removable chassis.

After a complaint from a manufactured-housing company that it had been denied approval of a removable-chassis design while its competitors’ designs were approved, HUD launched an investigation. In August, HUD issued a letter saying no more such designs would be approved, the department official, then-Federal Housing commissioner Silvio J. DeBartolomeis, wrote in the letter to Hiler.

The federal construction and safety standards clearly define manufactured homes as those “built on a permanent chassis,” making the regulators’ move “a decision to enforce the law,” said Kent W. Colton, executive vice president of the home builders’ association. “If you’ve been going through a red light for 10 years and suddenly somebody says they’re going to start giving tickets, this should not be a shock,” Colton said. Conventional builders do not object to competition from the manufactured-housing industry but want “to make sure the rules are comparable,” he said.

State and Local Codes

State and local codes applied to site-built homes “are designed to assure a greater level of structural soundness” than the federal regulations governing mobile homes, Colton said.

Mobile home makers argue, however, that their industry “provides affordable housing that is safe and durable,” Connors said.