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."