David R. Henderson  

Why Trailers Instead of Manufactured Homes?

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It's the regulations.

In a comment on my post, "Tocqueville's Trailers," MingoV writes:

Small manufactured houses make more sense than mobile homes. Here's why:
1. Almost no owner moves a mobile home, so the costs of frame/chassis, axles, wheels, hitch, lights, etc. are wasted.
2. Mobile homes have mediocre insulation, so those living in hot or cold climes pay a lot to keep temperatures livable.
3. Mobile homes are noisy. Rain and wind, traffic, sirens, loud neighbors, etc. are continual noise problems.
4. Mobile homes have low resale values compared to comparable manufactured houses.

Commenter awp has the correct response:
The frame/chassis, axles, wheels, hitch, lights, etc. are what let you avoid the building permitting process and are thus very valuable.

What this shows is the high cost of regulation. To avoid being subject to the permitting process, people buy trailers. I would bet that the vast majority of them would prefer to buy manufactured homes, for all the reasons MingoV lists. If I'm right, then, for those people, these costs that MingoV cites, minus the added cost, if any, of a comparable manufactured home, are a minimum estimate of the cost of regulation. Which means that the cost of regulation is very high.

Incidentally, the article does allude to that issue. The author. Lisa Margonelli, writes:

Like a number of trailer parks, Pismo Dunes started as a camper park in the 1970s. Some of those campers stayed in place, and concrete blocks surrounded their wheels as they became layered with porches, awnings, sunrooms, and carports. Some have been replaced with new factory-built homes that resemble townhouses--but still have wheels hidden underneath, because Pismo Dunes is still technically an RV park.

Comments and Sharing

CATEGORIES: Regulation

COMMENTS (14 to date)
Daublin writes:

Now imagine the nice politician who notices this and tries to do something about it. If word doesn't get out, he'd be creamed by any special interests involved in designing and building homes the expensive way. If word does get out, he'd be painted as the great defender of trailer trash.

To be honest, as the linked article gets at, I don't see why it would be bad to be a defender of trailer trash. I would think a good pol could spin it as defending the poor and weak.

I can report what I knew fairly well 20 years ago as it pertained to North Carolina.

House-trailers were regulated by a different body of standards than the North Carolina Building Code. There were government standards for house trailers, but from a different source, managed by a different bureaucracy. If a house trailer had that stamp of approval then I believe it could be moved onto a plot and connected to utilities, if local ordinances allowed house trailers.

The connection to utilities, most crucially to electric power, is the strongest tool of enforcement used, in many places, by the state. You can build a structure on your land, and perhaps no government authority will come to challenge you about it, even though the building code ostensibly regulates all structures (as defined). Most outbuildings are built contrary to code; but enforcement is spotty and commonly neglected. But if you want to have electricity, and are willing to pay for electricity, the local government-franchised electric company will not hook you up unless they get a nod from the building inspections department. This nod of approval from the building inspections department was called a "certificate of occupancy". In order to get a certificate of occupancy you had to pass a long list of prior requirements, including typically a sequence of about six inspections at various stages of construction.

Around 20 years ago there were manufacturers of modular housing who tried to get a foothold in places like North Carolina. But one story I heard went like this: Someone built a modular house. It was constructed of factory-assembled wall units, complete with framing, wiring, insulation, interior and exterior surfaces. When they tried to get electricity, so applied for a certificate of occupancy, so an electrical inspector arrived who needed to see the wiring in the walls (called the rough-in wiring) before the walls were covered with interior surface (drywall). The applicant was required to remove the interior surface of the walls so the electrical inspector could see the wires. As you may surmise, there was not at that time a separate body of regulation for modular houses. Modular houses were regulated by the same code and bureaucracy as stick-built houses.

There has been trend in which local governments forbade the placement of more house trailers within certain areas. I believe Hillsborough, North Carolina, where I lived, passed an ordinance forbidding all new placements of house trailers within town limits.

Roger writes:

David, you cite a great example of how regulation often harms the poor disproportionately. This is true for housing, transportation services (jitneys and cabs), childcare, healthcare, and security services as shown in an NCPA report:


The lives of poor could be greatly improved if we would just them them trade more freely and let others who are not poor more freely trade with them. They don't need a hand up; they need the handshake that seals a deal between two equals.

David writes:

Relative "high cost of regulation." Are the costs of regulation higher or lower than the costs of low insulation, HVAC, noise pollution, etc? That becomes a personal and individual choice.

[This commenter is not David Henderson--Econlib Ed.]

Bryan Willman writes:

Where I grew up in Iowa, and where I now live near Seattle, mobile-homes are only allowed in mobile-home parks - and the powers-that-be would like to get rid of them.

Their biggest foothold is probably in rural areas where there's less "planning pressure" against them.

It's worth noting that most local jurisdictions and school districts are heavily dependent on property taxes, and sometimes on sales taxes, and are therefore constantly trying to create a base of very high value dwellings and high retail flow retail stores. And then giving lip service to low-cost housing and the need for manufacturing jobs. You'd have to restructure the tax code in major ways to restrain this.

It's also worth keeping in mind that various government and "save the Earth" types, for economic (tax dollars on infrastructure) and imagined eco reasons favor high density. While essentially everybody else opposes it, sometimes violently. (An explosion over this is due in Seattle metro in the near future.) See the seattle times article about "pod housing"...

In short, the real majority and real insiders DO NOT WANT cheap housing. They just want the issue of people being priced out to go away.

MingoV writes:

I checked various local government's permit requirements for manufactured homes. Some were onerous while others were simple. In most cases it was much easier to get a permit if the lot had access to city water and sewer. Manufactured homes on lots that require a private well and a septic tank or cesspool usually need approval from multiple agencies.

In my travels I have noticed varying distributions of manufactured homes: from none to many. It seems that permit difficulties explain, in large part, the distribution differences. (An aside: The rural county I grew up in has a straightforward permit system for mobile homes or manufactured homes on a private lot, even a lot without city services. Perhaps the poverty in that county makes a difference.)

Jardinero1 writes:

Items 2 and 3 are entirely untrue about contemporary mobile homes. They are extremely well insulated and quiet. Go look at one some time.

Item 4 is true of any dwelling. All dwellings depreciate in value. The upside to a mobile home is that, purchased new, it is a quarter to half the square foot price of new conventional housing and you can cart it to a landfill when it is fully depreciated.

MingoV writes:
Items 2 and 3 are entirely untrue about contemporary mobile homes. They are extremely well insulated and quiet. Go look at one some time.

I've been in plenty of trailers, none of which was well insulated or quiet. I suspect Jardinero1 refers to top-of-the-line modern trailers. Mobile home production surged in the 1970s and 1980s, and many occupied mobile homes are more than 25 years old. Most of those were sold in southern states, where insulation is not as important, and builders used thinner layers of insulation to increase living space.

Henry G. Manne writes:

Everyone seems to be missing an 800 pound gorilla sitting right in this room. When I was in the Air Force 60 years ago, honorably discharged servicemen or women could get a mobile home moved and established (all hookup expenses, permits, etc.) paid for by the military. Nothing would be contributed towards the building or purchase of a manufactured home. The very common practice was for an about-to-be-discharged service person to buy a mobile home which would be delivered and installed wherever the dischargee had his or her permanent residence. I would be extremely surprised if this perk did not still exist in exactly the form it existed 60 years ago, and I would be surprised if this did not explain a large part of the apparent mobile home "preference," though undoubtedly regulation has also played a large role.

David R. Henderson writes:

@Henry G. Manne,
Thanks for that. I'm honored to have you as a commenter. BTW, I told your son at the Armen Alchian memorial that one thing I'll always remember positively about you is that the first time I met you, at the U. of Rochester in 1974, you were objecting to having to go through metal detectors at airports. You were the first adult I heard object in other than a grumbling, ain't it awful sense.

Steve Sailer writes:

People want regulations to keep up the price of housing so that poor people can't afford to move in next door.

Tracy W writes:

Are the costs of regulation higher or lower than the costs of low insulation, HVAC, noise pollution, etc? That becomes a personal and individual choice.

Yes, and the people who live in mobile homes generally are the ones who find the costs of regulation higher than the costs of low insulation, HVAC, noise pollution, etc, and vice-versa for the people who live in permanent homes.

But just because the choice is personal, that doesn't mean that the size of the regulatory costs is personal. That's imposed by government.

michael pettengill writes:

I don't know where you live, not David Henderson or anyone else, but if someone bought the lots around your house, along with the houses, and torn down the houses and put in concrete slabs, ran water, sewer, and electric to each slab, and set out to fill every one of those lots with "RVs" with 10 feet between them, tell me you would not have called the zoning, building code enforcement, before the houses were finished being crushed for hauling away.

I'm an immigrant to NH, living in suburban two acre minimum zoning, and my old Yankee anti-Obama anti-government neighbors have been fighting a neighbor (successfully) who has tried to turn a detached garage into a divorced daughter apartment or a professional artist studio or an accountant office - it is already built as a permitted as a four car garage with a second floor of climate controlled storage within zoning. What is not allowed under zoning two dwelling or a home business.

One neighbor would be living in a trailer if the cost of a stick built ranch weren't cheaper in 1960 - they exist around town where the roads were better then. But our road is well paved and now heavily traveled because of all the development the road leads to, so the objections aren't to increased traffic.

This local battle over property rights makes it completely clear that "government" is We the People of South Merrimack. From their point of view, they are defending their property rights. Me, I believe in democracy, and if We the People want to restrict what We the People can do with our land equally, I'll consent to their restrictions.

Have you gone to zoning board hearings to argue in favor of exceptions to zoning rules, or argued in favor of changing residential to mixed industry?

Rebecca Havener writes:

[Comment removed for supplying false email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog and EconTalk.--Econlib Ed.]

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