Affordable manufactured housing versus unaffordable climate regulations

By Ben Lieberman of CEI.

"The Biden administration had a field day piling on one costly climate-related regulation after another, not knowing – or caring – that affordability would emerge as a much more pressing concern for Americans than climate change ever was. But now, the Trump administration and Congress have the opportunity to undo these ill-advised rules that are driving up costs for everything from utility bills to cars and light bulbs. We have already seen some progress, but there is much more to do. Next on the list should be Department of Energy (DOE) regulations targeting manufactured housing.

The housing affordability challenges are real, and government is a big part of the problem.  According to the National Association of Home Builders, regulations at all levels of government account for almost 25 percent of the cost of a new single-family home. This includes a growing contribution from federal climate measures, such as those raising the price of major home appliances like air conditioners and furnaces. Worst of all are rules that make the most affordable homes less affordable, thus threatening the dream of homeownership for low-income and younger households. That is why the 2022 DOE energy efficiency rule for manufactured housing warrants a second look. 

The DOE sets energy efficiency standards for manufactured housing. And, as with appliance standards, the agency has a knack for rules that raise up-front costs beyond what is likely to be recouped through energy savings. In this case, the agency admitted that the 2022 rule raised home prices up to $4,500, though manufacturers fear higher costs will outweigh any energy savings.

For perspective, estimates suggest that every $1,000 increase in a median-priced home disqualifies about 156,000 prospective homebuyers. And the effects may be more severe at the lower end of the home spectrum, including manufactured homes, which are the choice of the most price-sensitive buyers. Indeed, it is quite possible that the DOE rule alone is enough to place the dream of homeownership out of reach for hundreds of thousands of lower-income Americans.

As was often the case for the Biden DOE, climate change was a finger on the scale favoring its draconian energy limits on manufactured housing. In fact, the final rule mentions the social cost of carbon dioxide and other greenhouse gases a whopping 50 times. By the agency’s own estimates, the rule’s climate benefits fell short of the claimed consumer savings. Even so, they undoubtedly played a role in the agency’s decision to adopt such stringent standards, despite their effect on prices.   

Fortunately, the president and Congress have not ignored the regulatory plight facing manufactured homes and their prospective purchasers. President Trump’s March executive order titled Removing Regulatory Barriers to Affordable Home Construction, specifically mentions manufactured housing in its section urging regulatory reforms.

Both the House and Senate have passed bills addressing housing affordability, and both contain provisions specific to manufactured housing. Importantly, both bills eliminate the costly and unnecessary requirement that manufactured homes have a steel chassis, however they also fell short of repealing the DOE rule.

A separate House-passed bill, H.R. 5184, the Affordable HOMES Act, would have completely repealed the DOE rule, but it has not been taken up by the Senate. Total repeal deserves consideration if Congress is serious about addressing housing affordability."

How Measurement Choices Shape the Housing Debate—and the Charts in the President’s Economic Report

By Norbert J. Michel and Jerome Famularo of Cato. Excerpts:

"The Council of Economic Advisers’ 2026 Economic Report of the President tells a familiar story: The American dream of homeownership is slipping away. Chapter 6, in particular, leans heavily on a series of charts meant to show that housing has become less affordable, less attainable, and more distorted by regulation.

While it is true that regulation adds unnecessary costs and distortions to the housing market, much of this “unaffordability” narrative depends on how the data are presented. Change the framing, even slightly, and the story starts to look very different.

Take the report’s central claim that housing has become dramatically less affordable because home prices have outpaced income. That conclusion rests on a simple comparison of real house prices to real median income. Among other problems, this comparison ignores the fact that homes being built in recent years are not the same as those built in years past: They have more standard features and, most notably, are larger in size on average."

"A similar framing issue shows up in the report’s treatment of homeownership rates. By comparing 2000 to 2023, the report suggests a worrying decline, especially for younger Americans. But 2000 was not just any year—it had higher than average homeownership rates relative to other years.

Zoom out, and the trend looks much less alarming. For instance, the homeownership rate for Americans under age 35 is roughly in line with where it was throughout much of the 1990s. The overall rate shows a similar pattern. You can make the numbers look bad by picking convenient endpoints, but that doesn’t tell you much about the underlying trend (Figure 2)." 

 

"More broadly, federal policymakers are overly concerned with so-called housing shortages. 

In reality, as communities grow and people earn higher incomes, higher demand for housing can put upward pressure on prices. (Even if that demand comes mainly from “rich” people, it can put upward pressure on average housing prices.) Viewing this kind of price increase as a shortage or market failure is counterproductive. Over time, this demand tends to be met, keeping up with the needs of a growing population.

Either way, the supply of housing is not the sole determinant of house prices. Ignoring this lesson and implementing policies that merely focus on boosting supply (especially through federal subsidies, grants, tax credits, etc.) can lead to depressed home values and oversupply, just as implementing demand-boosting policies can distort markets. The best thing for the federal government to do is to stop interfering with the market.

Of course, certain policies make it more difficult and expensive for builders to meet new demand, and state and local officials should implement the best policies for their local growth conditions. To be clear, supply constraints and regulations matter. Zoning rules, permitting delays, and other restrictions make housing more costly. However, if rising housing costs partly reflect larger homes and higher incomes, then policies aimed at forcing down prices (such as mass deportations and bans on institutional investors) could have unintended consequences. 

Sure enough, recent research from the San Francisco Fed suggests that faster income growth, not supply constraints, explains much of the differences in house price trajectories across metro areas. This finding makes sense because, for the past few decades, Americans have been earning higher incomes. All else equal, this fact should help explain higher housing prices.

Ultimately, policymakers should be wary of solutions built on a misleading diagnosis. In housing, as in economics more broadly, how you measure the problem often determines how poorly you solve it."

ICE has not improved U.S. labor markets

From Tyler Cowen.

"We provide the first causal, national empirical analysis of the labor market impacts of heightened immigration enforcement during the second Trump administration. Enforcement increased everywhere, but, we take advantage of the fact that the increases have been uneven across geographic areas to classify areas as treated or control and then implement an event study and difference-in-differences design. Areas that experienced particularly large increases in the number of arrests also experienced a decrease in work among likely undocumented immigrants who remain in the U.S., compared to areas with smaller increases in arrests. We find no evidence of positive spillover effects to U.S.-born workers and U.S.-born workers who work in immigrant-heavy sectors are harmed.

That is from a new NBER working paper by Elizabeth Cox & Chloe N. East."

The "Great Awokening" Had a Strong Upper-Class Accent

From Marco M. Aviña.

Abstract 

"Recent scholarship hails rising racial liberalism among white liberals as a racial reckoning and even a “Great Awokening.” I find that affluent white liberals led these changes. I develop a status-signaling account in which members of this group, embedded in dense, politically homogeneous social environments, face competing reputational and gatekeeping incentives to express alignment with racial equality in principle but not in policy. I leverage the murder of George Floyd and the ensuing Black Lives Matter protests as a focusing event when anti-racist norms surged. Using regression-discontinuity-in-time and event-study designs on national public opinion surveys and local public meeting transcripts, I show that post-Floyd movement was concentrated among high-income white liberals, centered on symbolic engagement rather than material policy commitments—whether universalistic or group-targeted—and short-lived. Finally, I provide evidence consistent with this account: post-Floyd, an income gap emerges in implicit bias testing, a form of self-monitoring, but not in implicit bias scores, which are less amenable to impression management. These findings complicate narratives of racial progress and recast the “Great Awokening” as recognitional politics without commensurate redistribution, consistent with concerns about elite capture in identity politics."

Capitalism does a far better job than socialism of feeding people.

A tweet from Chris Freiman. 

 

Lessons for Anna Paulina Luna (on farm policy)

Why would a Florida Republican stand up for an overbearing California farm rule?

By Kimberley A. Strassel. Excerpt:

"Where to start unpacking? Several GOP offices tried to do just that in the forum. One office began by (politely) setting Ms. Luna’s office straight on basic facts: Under this fix, California can still regulate its own agricultural practices. Also, the Supreme Court in its Proposition 12 decision said several times that Congress has “considerable power to regulate interstate commerce and preempt contrary state laws.”

That office then patiently provided a refresher in Federalism 101, explaining why California’s initiative is the opposite of states’ rights, since it doesn’t concern itself with only California. It imposes its mandate on 49 other states, none of whose citizens had any vote, or any recourse, through California’s process. They might have added that California has been using this trick—flexing its markets to impose national rule, under the perversion of “states’ rights”—with increasing boldness for decades. Republicans are supposed to understand such basic stuff.

The same office also tried to impart basic economics. It noted that the producers most able to swallow California’s mandate costs are giant concerns, like “Chinese-owned Smithfield.” Those hardest hit are U.S. farms and ranches, which are being pushed out of the market. It provided Ms. Luna’s office with U.S. Department of Agriculture data, estimating that the cost for pork producers of complying is about $3,500 to $4,500 a sow, one reason 12% of small pork operations have exited since Proposition 12. It further noted the demonstrated rise in consumer prices (especially in California) since the initiative’s passage.

Ms. Luna’s staffer said he “appreciated” the “viewpoints”—before banging on anew about “state authority.” California voters have a right to decide what “consumer” products are sold in their state. They should have “choice.” Another catchy word, if again totally backward, since California eliminated everyone’s “choice”—and unnecessarily. As one GOP office noted, there is an easier, freer, less costly answer. California consumers can exercise choice via what they buy. Under Congress’s new fix, morally superior Californians are free to choose to buy only costly, grass-fed California-produced chops, leaving on the shelves all the cheaper, yummier pork for the hoi polloi."

Charges of a Covid Coverup

The Morens indictment reveals an effort to hide facts about the U.S. role

WSJ editorial. Excerpts:

"the facts in the indictment, which say he [David Morens] intentionally sought to obfuscate the NIH role in funding the nonprofit EcoHealth Alliance, which may have contributed to the virus leaking from a Chinese lab."

"The NIH last decade provided some $8 million in grants to EcoHealth, some of which funded the Wuhan Institute of Virology’s gain-of-function virus experiments."

"Between February and March 2020, Dr. Morens and a co-conspirator—whom press reports say is Mr. Daszak—co-authored articles arguing that the virus most likely emerged from the wild."

"On June 17, 2021, the indictment says, he warned Mr. Daszak and “others” that he had received a document production request by five Senators investigating the virus’s origins. Dr. Morens assured his correspondents that he had “retained very few documents on these matters.” Public officials are required by federal law and instructed to retain all such documents."