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Mobile homes, partially manufactured "kit" homes, and owner-built homes : an analysis of three low-cost… Perong, Susan Ilene 1984

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MOBILE HOMES, PARTIALLY MANUFACTURED  "KIT" HOMES,  AND OWNER-BUILT HOMES—AN ANALYSIS OF THREE LOW-COST ALTERNATIVES FOR NEW HOUSING, IN RURAL AREAS By SUSAN ILENE PERONG B.A., Sonoma S t a t e U n i v e r s i t y , 1979 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE  REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS  in  THE  FACULTY OF GRADUATE STUDIES  School of Community and Regional P l a n n i n g  We accept t h i s t h e s i s as conforming to the ^required standard  THE  UNIVERSITY OF BRITISH COLUMBIA A p r i l 1984  ©  Susan I l e n e Perong, 1984  In p r e s e n t i n g  t h i s t h e s i s i n p a r t i a l f u l f i l l m e n t of  requirements f o r an advanced degree at the  the  University  of  B r i t i s h Columbia, I agree t h a t the  L i b r a r y s h a l l make i t  f r e e l y a v a i l a b l e for reference  study.  and  I further  agree  that p e r m i s s i o n f o r e x t e n s i v e copying of t h i s t h e s i s f o r s c h o l a r l y purposes may ment or by h i s or her  be granted by the head of my representatives.  I t i s understood  t h a t copying or p u b l i c a t i o n of t h i s t h e s i s f o r gain  s h a l l not  be allowed without my  Department of The U n i v e r s i t y of B r i t i s h Columbia 1956 Main M a l l Vancouver, 'Canada V6T 1Y3  depart-  written  financial  permission.  ABSTRACT T h i s t h e s i s i n v e s t i g a t e s the mobile home dominance of the low-cost housing market i n r u r a l a r e a s .  The scope  was l i m i t e d t o new housing c h o i c e s a v a i l a b l e t o a r u r a l r e s i d e n t owning or i n t e n d i n g t o purchase Three p o t e n t i a l l y utilize  lower-cost housing a l t e r n a t i v e s t h a t  l a b o r - s a v i n g procedures were s e l e c t e d f o r examina-  t i o n and a n a l y s i s :  (1) the t o t a l l y manufactured  home," (2) the p a r t i a l l y manufactured and  an e x i s t i n g l o t .  (3) the s e l f - h e l p  "mobile  p r e - c u t " k i t home,"  "owner-built home."  An e x t e n s i v e l i t e r a t u r e s e a r c h and analyses of a l l three o p t i o n s was conducted ,\ with s p e c i a l advantages/disadvantages  of each o p t i o n and the problems  unique t o each a l t e r n a t i v e . homes was extremely and a survey  focus on the  As academic l i t e r a t u r e on k i t  l i m i t e d , i n t e r v i e w s (seven  ( t h i r t y - e i g h t manufacturers)  order t o c o l l e c t d i r e c t data.  manufacturers)  were conducted i n  Although the i n t e r v i e w / s u r v e y  procedure was too small t o be c o n s i d e r e d a s c i e n t i f i c it  study,  d i d p r o v i d e the d i r e c t i n f o r m a t i o n needed t o complete the  analyses of the k i t home i n d u s t r y ' s p o t e n t i a l t o p r o v i d e low-cost r u r a l housing and a l s o aided i n the i d e n t i f i c a t i o n of i n d u s t r y - s p e c i f i c o b s t a c l e s . The  study and a n a l y s i s confirmed the f a c t  that  r u r a l housing i s d i s t i n c t from urban, with i t s unique  r u r a l f i n a n c i n g and d e l i v e r y mechanism problems. d i s t i n c t i o n has r e s u l t e d i n the US and Canadian  This federal  governments d e v e l o p i n g s e v e r a l mobile h o m e / c o n t r a c t o r - b u i l t housing programs f o r the r u r a l , In  l e s s a f f l u e n t home purchaser.  a d d i t i o n , the study confirmed t h a t owner-buildingi;in a l l  forms i s common and w e l l s u i t e d t o r u r a l areas, and t h a t the k i t home i n d u s t r y (which combines the advantages of manufact u r i n g with the l a b o r - s a v i n g of owner-building) i n the middle-/high-income  homebuilding  flourishes  r u r a l market.  a d d i t i o n , the survey and a n a l y s i s demonstrated  In  the f o l l o w i n g :  - The k i t home i n d u s t r y has the p o t e n t i a l t o p r o v i d e lowc o s t housing f o r the l e s s a f f l u e n t r u r a l r e s i d e n t and i s c u r r e n t l y doing so on a l i m i t e d  scale.  - T h i s d i v e r s e and v a r i e d i n d u s t r y i s faced with s e v e r a l i n d u s t r y - s p e c i f i c o b s t a c l e s ( i . e . , marketing and bank/ governmental  opposition to owner-building).  - An o p p o r t u n i t y e x i s t s t o reduce the owner-building r i s k by u t i l i z i n g ary  the k i t manufacturer  as an i n t e r m e d i -  with i t s unique and e x t e n s i v e d e a l e r / c o n t r a c t o r  networks and owner-builder  i n s t r u c t i o n programs.  This  i n v o l v e s the use of owner/manufacturer c o n t r a c t s and completion guarantees;  thus, the r i s k i s shared  between the lender ( f e d e r a l or bank), manufacturer, and owner-builder. T h i s t h e s i s c h a l l e n g e s the e x i s t i n g f e d e r a l and financial  i n s t i t u t i o n a l anti-owner  b u i l d i n g p o l i c y that  ignores k i t home p o t e n t i a l t o be a c o s t - e f f e c t i v e  housing  iv alternative  f o r the l e s s a f f l u e n t r u r a l r e s i d e n t .  general c o n c l u s i o n of the a n a l y s i s  The  i s t h a t the mobile home  dominance of the lowest c o s t new housing market i n r u r a l areas i s not due t o i t being the o n l y low-cost o p t i o n a v a i l a b l e , but predominately due t o i t p o s s e s s i n g a d i s t i n c t financing  advantage.  Financial  and governmental  institu-  t i o n a l o b s t a c l e s a g a i n s t owner-building o n l y impact the p a r t i a l l y manufactured  " k i t " home and s e l f - h e l p o p t i o n s ,  making them l e s s a v a i l a b l e home purchaser.  t o the l e s s a f f l u e n t  potential  The r e s u l t i s the dominance of the mobile  home i n the lowest c o s t r u r a l market.  TABLE OF CONTENTS LIST OF TABLES  . .  viii  LIST OF FIGURES  xi  INTRODUCTION  1  Limitations  3  Thesis Structure . . . . .  4  PART I .  OPTIONS FOR LOW-COST HOUSING  Chapter I.  RURAL HOUSING SITUATION  . . . . . . . . . . .  8  Rural Housing Problems D i s t i n c t from Urban  10  The Rural P o p u l a t i o n  11  Rural Housing Options  and Choice  Governmental/Institutional  15  Approaches  t o t h e Rural Housing S i t u a t i o n C o n c l u s i o n and Government Obstacles II.  18 . . . .  THE MOBILE HOME  34  A S u c c e s s f u l Low-Cost Housing Option General Mobile  25  . . . .  34  C h a r a c t e r i s t i c s of Homes  39  Development o f the Mobile  Home  45  Advantages  51  Disadvantages  55 v  1  vi III.  PARTIALLY MANUFACTURED HOUSING  61  S u c c e s s f u l Option f o r A f f l u e n t Yet Often U n a v a i l a b l e f o r Middle- and Lower-Income F a m i l i e s  61  Types and C h a r a c t e r i s t i c s of P a r t i a l l y Manufactured Housing  IV.  V.  62  Advantages  74  Disadvantages  79  OWNER-BUILDING/SELF-HELP  HOUSING—A  PHILOSOPHY AND A PRACTICAL REALITY  85  General C h a r a c t e r i s t i c s  85  Philosophy of S e l f - H e l p Owner-Building . . .  89  Practical  92  Application  PARTIALLY MANUFACTURED KIT HOME PLUS SELF-HELP  . . . . . . . . . .  101  K i t Home as Low-Cost Housing  101  K i t Home R o o t s - - U n f i n i s h e d S h e l l House  . . . . . . .  K i t Home P o t e n t i a l as Low-Cost Housing VI.  OBSTACLES TO LOW-COST HOMEOWNERSHIP  107 115  Financing  116  Lack of Government Support  117  L o c a l Government R e g u l a t i o n s  128  O b s t a c l e s t o the Mobile Home'  130  Obstacles t o P a r t i a l l y  Manufactured  Housing and S e l f - H e l p PART I I . VII.  . . .  104  134  INTERVIEW AND SURVEY RESULTS  INTRODUCTION TO PART I I  154  Need f o r Interview and Survey  154  Interview Q u e s t i o n n a i r e  156  I n t r o d u c t i o n t o Survey  160  vii VIII.  IX.  CHARACTERISTICS OF KIT HOME MANUFACTURERS  164  K i t Type  165  Years i n Business  168  Owner-Building P a r t i c i p a t i o n  170  Kit Price  176  Location  180  Income o f Customers  181  Financing  184  . . .  KIT HOME POTENTIAL TO PROVIDE LOW-COST HOUSING IN RURAL AREAS  192  Interview R e s u l t s  193  Survey Responses  X.  . .  Industry P o t e n t i a l f o r I n c r e a s i n g the Number of Low-Income Customers OBSTACLES TO THE DEVELOPMENT OF THE KIT HOME INDUSTRY  . . .  195  . . . .  207 211  I n t r o d u c t i o n and L i m i t a t i o n s  211  Interview R e s u l t s  213  . . .  Survey R e s u l t s XI.  .  215  CONCLUSIONS, FINDINGS, AND RECOMMENDATIONS \  General  Conclusions  256 256  S p e c i f i c Findings  263  Recommendations  268  BIBLIOGRAPHY .  273  APPENDIX  282  LIST OF TABLES 1.  T o t a l E x i s t i n g Housing U n i t s i n US  2.  Mobile Home Shipments Starts  44  and Housing  (US)  44  3.  Q u e s t i o n n a i r e Responses  158  4.  K i t Type  167  5.  Years i n Business  169  6.  Percentage F u l l Owner-Builders  171  7.  Percentage P a r t i a l Owner-Builders  172  8.  Percentage Not H i r i n g General C o n t r a c t o r s . . ; .  172  9.  Percentage Customers  Not Involved  with C o n s t r u c t i o n  173  10.  Owner-Building Involvement  174  11.  L e v e l of Owner-Building Involvement  175  12.  K i t Type and Owner-Building  176  13.  K i t P r i c e Range  177  14.  P r i c e by K i t M a t e r i a l s Included  179  15.  Factory Location  181  16.  Income of Customers  182  17.  Income C a t e g o r i e s  182  18.  K i t Type and Income  184  19.  Manufacturer/Dealers O f f e r i n g Financing Aid  186  20.  Type of F i n a n c i n g A i d  186  21.  Percentage Cash Only Customers viii  187  ix 22.  F i n a n c i n g Requirements—Minimum  Down  189  23.  Lowest-Income Customer  196  24.  Income of Customer  198  25.  Firms S e l l i n g t o Customers with under $20,000 Income  198  26.  Owner-Building and Income  200  27.  P r i c e and Income  202  28.  K i t P r i c e and Owner-Building P a r t i c i p a t i o n  29.  F i n a n c i n g A i d and F i n a n c i n g Type  30.  Owner-Building and F i n a n c i n g Type  31.  K i t Home S e l l i n g Success  216  32.  K i t Type and S e l l i n g Success  218  33.  Years i n Business  219  34.  S e l l i n g Success and Years i n Business  220  35.  Years and Percentage S e l l i n g Success  220  36.  S e l l i n g Success and Income of Customers  222  37.  S e l l i n g Success and K i t P r i c e  223  38.  S e l l i n g Success and Owner-Building  224  39.  Selling  225  40.  S e l l i n g Success and Type of F i n a n c i n g  227  41.  S e l l i n g Success and Source of F i n a n c i n g  228  42.  Owner-Building and Type of F i n a n c i n g A i d . . . .  229  43.  O b s t a c l e Ratings  236  44.  No Government F i n a n c i n g A i d  239  45.  No Government A i d t o Owner-Builders  239  46.  L o c a l Government O p p o s i t i o n  240  47.  B u i l d i n g Approval Delays  240  . . .  .  Success and F i n a n c i n g A i d  203 205 , 207  48.  P r o p e r t y Tax  242  49.  No Government F i n a n c i n g A i d  244  50.  No Government A i d t o Owner-Builders  51.  L o c a l Government O p p o s i t i o n by Type  245  52.  B u i l d i n g Approval Delays  246  53.  Overhead/Marketing  247  54.  Income and O b s t a c l e s  Costs  . . . . . . .  244  253  LIST OF FIGURES 1.  T y p i c a l Mobile Home on R u r a l L o t  36  2.  " T r a d i t i o n a l Home" Mobile i n C a l i f o r n i a  38  3.  Mobile Home S o l d Off Lots i n Rural B r i t i s h Columbia Town  40  V a c a t i o n Mobile Home from Lot Near Yreka, C a l i f o r n i a  42  Low Q u a l i t y Wartime Mobile Home i n Montana . . .  47  Modern Mobile Home w i t h Newer T r a d i t i o n a l M a t e r i a l s Example from C a l i f o r n i a  50  T y p i c a l Pre-Cut K i t Home from B r i t i s h Columbia Near Radium Hot Springs  63  Lumber Yard S t i c k Frame K i t Home from Tacoma, Washington  64  4. 5. 6. ,7. 8. 9.  P r e f a b r i c a t e d Pre-Cut Home by Boise Cascade  i n Montana  .  67  10.  Log K i t i n B r i t i s h Columbia  69  11.  Montana Hand-Hewn Log Cabin  70  12.  Log K i t under C o n s t r u c t i o n i n Montana  71  13.  Custom-Appearing Pre-Cut K i t Home from B r i t i s h Columbia An Incomplete Log Home near Vernon, B r i t i s h Columbia  14. 15. 16.  . . . . .  77 81  A | Owner-Built/| Mobile Home from R u r a l B r i t i s h Columbia  87  A Non-Kit Owner-Built Home from B r i t i s h Columbia  88  xi  xii 17.  B r i t i s h Columbia  Pre-Cut Modestly  P r i c e d K i t Home  102  18.  Model Home i n S e a t t l e , Washington  19.  Mobile Home D i s p l a y L o t i n B r i t i s h Columbia Near Vernon A l t e r n a t i v e L i f e - S t y l e Non-Code Owner-Built Rural Home ( C a l i f o r n i a )  258  Low-Cost S t i c k Frame K i t Advertisement from C a l i f o r n i a Lumber Yard Sales Flyer  265  20. 21.  147 148  ACKNOWLEDGMENTS I would l i k e t o thank P r o f . Brahm Wiesman and P r o f . David Hulchanski  f o r a l l t h e i r a s s i s t a n c e i n making  this thesis possible. My deepest  thanks a l s o must go t o my parents,  Harold and M a r j o r i e Perong, f o r t h e i r  support and encourage-  ment and t o my sons, Jonathan and M i c h a e l , who stood by me through  i tall.  xiii  INTRODUCTION T h i s t h e s i s examines the new c o n s t r u c t i o n housing s i t u a t i o n , the b u i l d i n g c h o i c e s , disadvantages of the v a r i o u s the  choices  rural  and the advantages/  from the p e r s p e c t i v e of  low- and moderate-income home buyer. The  mobile home, a t o t a l l y f a c t o r y - c o n s t r u c t e d  home,  moved t o the owner's s i t e , dominates the low-cost new housing market i n many r u r a l areas.  T h i s dominance has been  assumed due t o i t s low c o s t and growing p u b l i c acceptance as a f r u g a l , s e n s i b l e housing o p t i o n .  One of the major reasons  the mobile home i s l e s s c o s t l y i s due t o f a c t o r y manufacturing which permits s u b s t a n t i a l savings Factory  i n materials  and l a b o r .  manufacturing i s not l i m i t e d t o the mobile and  modular home i n d u s t r y .  P a r t i a l manufacturing, p r e - c u t t i n g ,  or p a r t i a l p r e f a b r i c a t i o n of components has been a v a i l a b l e s i n c e before  the mobile home emerged on the scene.  conventional  s t i c k - b u i l t homes are c o n s t r u c t e d  p r e f a b r i c a t e d or pre-cut materials  components.  may occur i f the owner c o n t r i b u t e s  without some  S u b s t a n t i a l savings i n  and h i r e d labor can be obtained  t u r e d components, but an even g r e a t e r  by using manufac-  p o t e n t i a l f o r savings  "sweat e q u i t y " and  b u i l d s a s u b s t a n t i a l p o r t i o n of the house without hired  labor. 1  Few  outside  The success of the mobile home as a low-cost r u r a l housing o p t i o n i s w e l l known. manufactured  The p r e - c u t or p a r t i a l l y  home has not experienced the same r a t e of  success i n the low-cost/low-income  ranges.  examine the o b s t a c l e s t o the development and the p a r t i a l l y manufactured  house.  This t h e s i s  of the mobile home  The focus w i l l be on  d i f f e r e n c e s t h a t impact a f f o r d a b i l i t y , e s p e c i a l l y mental and f i n a n c i a l  will  govern-  (bank) i n s t i t u t i o n a l o b s t a c l e s t h a t  could be changed. P r e l i m i n a r y s t u d i e s r e v e a l t h a t the owner-builder, p a r t i a l l y manufactured  home buyer must meet higher r e q u i r e -  ments f o r f i n a n c i n g and r e c e i v e s l i t t l e b e n e f i t from most US and Canadian government s u b s i d y / f i n a n c i n g programs.  The  mobile home i n d u s t r y i n the e a r l y years experienced numerous s i m i l a r o b s t a c l e s but overcame most of them and the i n d u s t r y developed i n t o a s u c c e s s f u l low-cost housing o p t i o n .  The  mobile home i n d u s t r y i s c o n c e n t r a t e d and powerful with a few l a r g e manufacturers dominating the market. manufactured  and p r e - c u t housing i n d u s t r y i s dominated by  many small low-budget  companies without p o l i t i c a l  l a r g e r e s e r v e s of c a p i t a l .  influence o  Many o b s t a c l e s t o the development  of the p a r t i a l l y manufactured, be overcome.  The p a r t i a l l y  p r e - c u t i n d u s t r y have y e t t o  The m a j o r i t y of p a r t i a l l y manufactured p r e - c u t  home purchasers (according t o l i t e r a t u r e and survey) a r e not low-income.  Few poor f a m i l i e s can a f f o r d t o purchase a k i t  home as few manufacturers o f f e r f i n a n c i n g and cash upon d e l i v e r y of the k i t i s the common p r a c t i c e .  Banks and  governments frown on l e n d i n g  l a r g e sums of cash f o r a p i l e  of lumber and components, e s p e c i a l l y t o a low-income home builder.  In the e a r l y years,  into s i m i l a r obstacles  the mobile home i n d u s t r y r a n  but f i n a n c i n g today i s w i t h i n the  reach of a l a r g e r segment of the p o p u l a t i o n recent  due t o r e l a t i v e l  changes. T h i s t h e s i s w i l l examine and d i s c u s s the v a r i o u s  obstacles  t h a t a f f e c t the success of s e v e r a l d i f f e r e n t types  of lower-cost  r u r a l housing with p a r t i c u l a r focus on the  i n f r e q u e n t l y s t u d i e d p a r t i a l l y manufactured " k i t " home industry. Limitations T h i s t h e s i s w i l l deal only with the economic r e a l i t y of what type house an i n d i v i d u a l may be able t o afford. for  A general  assumption w i l l be made t h a t the market  low-cost housing i s l a r g e and personal  preference  t a s t e and  a r e not the major reasons f o r the success of one  o p t i o n over another.  No i n v e s t i g a t i o n i n t o t a s t e and  housing type p r e f e r e n c e s  of r u r a l  r e s i d e n t s w i l l be made.  A general  low-/moderate-income assumption i s made t h a t  the success of one o p t i o n over another i s due t o the availability distinct The  of t h a t o p t i o n and not due t o the s e l e c t  preferences  of the " l e s s a f f l u e n t " r u r a l  resident.  higher-income r u r a l r e s i d e n t s s e l e c t from a wide  v a r i e t y of new housing c o n s t r u c t i o n , o p t i o n s . predominate over another.  One does not  Some s e l e c t mobile homes; others  have custom s t i c k - b u i l t houses c o n s t r u c t e d by c o n t r a c t o r s or purchase a standard  " t r a c t " house; and s t i l l  b u i l d t h e i r own home, o f t e n using a " k i t . "  others e l e c t t o While some  options may not be a v a i l a b l e t o a l e s s a f f l u e n t home purchaser  due t o c o s t , there may be other f a c t o r s r e l a t e d t o  a f f o r d a b i l i t y involved.  Some of these other f a c t o r s w i l l be  i d e n t i f i e d and i n v e s t i g a t e d i n t h i s Thesis The  thesis.  Structure  t h e s i s i s d i v i d e d i n t o two major p a r t s .  d i s c u s s e s s e v e r a l lower-cost c o s t - s a v i n g procedures. d i s c u s s e d together  Part I  new c o n s t r u c t i o n options and  E x i s t i n g l i t e r a t u r e i s explored and  with i n t e r v i e w and o b s e r v a t i o n data.  In  Chapter I, which serves as an i n t r o d u c t i o n t o Part I , the r u r a l housing  s i t u a t i o n i n general  i s examined.  The many  problems unique t o r u r a l r e s i d e n t s , p o p u l a t i o n c h a r a c t e r i s t i c s , governmental/bank approaches t o r u r a l housing, and housing  choice are d i s c u s s e d i n ah attempt t o understand  the r u r a l housing The  s i t u a t i o n from an o v e r a l l  next four chapters  c o n s t r u c t i o n housing  perspective.  examine the v a r i o u s new  o p t i o n s and c o s t - s a v i n g  procedures.  Chapter I I examines the mobile home as a low-cost option.  In t h i s chapter,  the h i s t o r y , c h a r a c t e r i s t i c s , and  advantages/disadvantages a r e examined.  Chapter I I I explores  the many forms of p a r t i a l l y manufactured housing the pre-cut timber forms.  housing  including  k i t , and t h e i p r e f a b r i c a t e d and modular  S e v e r a l advantages and disadvantages are d i s c u s s e d  and  evaluated.  In Chapter IV the owner-builder  technique i s s t u d i e d as a philosophy  cost-saving  and p r a c t i c a l  Some i n t e r v i e w data a r e i n c l u d e d i n t h i s chapter relate to existing practices.  reality.  as they  Chapter V attempts t o  combine the m a t e r i a l s / l a b o r c o s t - s a v i n g p r o p e r t i e s of f a c t o r y manufacturing with s e l f - h e l p i n order  the c o s t - s a v i n g technique of  t o evaluate  the " k i t " or p a r t i a l l y  manufactured house's p o t e n t i a l t o provide when the owner c o n t r i b u t e s chapter  Financing,  l a c k of government  l o c a l government r i g i d i t y and o p p o s i t i o n , e t c .  are d i s c u s s e d housing  The f i n a l  i n Part I , Chapter VI, d e a l s with the many o b s t a c l e  to low-cost homeownership. support,  "sweat e q u i t y . "  low-cost housing  i n general  and s p e c i f i c a l l y as they impact  choice. The  f i r s t p a r t examines i n depth the e x i s t i n g y e t  l i m i t e d l i t e r a t u r e on manufactured and p a r t i a l l y manufact u r e d housing i n c l u d i n g t h e pre-cut p r e f a b r i c a t e d and modular forms.  timber k i t , and  As the k i t home, p a r t i a l l  manufactured housing f i e l d has r e c e i v e d l i t t l e from academic c i r c l e s , a d d i t i o n a l r e s e a r c h thorough examination and d i s c u s s i o n . took two forms--interview  is critical  The d i r e c t  and survey.  to a  research  S e v e r a l k i t home  d e a l e r s and manufacturers were i n t e r v i e w e d survey q u e s t i o n n a i r e  attention  before the  was developed.  P a r t I I e x p l a i n s the i n t e r v i e w / s u r v e y d i s c u s s e s the r e s u l t s .  process and  Chapter VII (the f i r s t chapter i n  Part I I ) i s an i n t r o d u c t o r y chapter  simply  e x p l a i n i n g the •  i n t e r v i e w / s u r v e y procedure  and methods.  Chapters V I I I and  IX d i s c u s s the survey r e s u l t s as the k i t home i n d u s t r y ' s c h a r a c t e r i s t i c s and p o t e n t i a l t o provide low-cost housing are examined.  rural  Chapter X e v a l u a t e s the survey  r e s u l t s t o f u r t h e r i d e n t i f y and d i s c u s s k i t home o b s t a c l e s . T h i s chapter combines the l i t e r a t u r e , survey, and i n t e r v i e w r e s u l t s i n order t o f u r t h e r analyze o b s t a c l e s t o the development of the k i t home i n d u s t r y as a popular option f o r less a f f l u e n t r u r a l  residents.  housing  7  PART I OPTIONS FOR LOW-COST HOUSING  CHAPTER I RURAL HOUSING SITUATION Rural housing problems have always been d i f f e r e n t i n c h a r a c t e r than urban housing problems.  Rural areas have  s u b s t a n t i a l l y lagged behind urban areas i n housing q u a l i t y and there'have been a l a r g e r percentage of substandard dwellings.  In urban areas substandard d w e l l i n g s tend  e v e n t u a l l y t o be r e p l a c e d as land values i n c r e a s e , making i t p r o f i t a b l e t o r e h a b i l i t a t e or r e p l a c e a substandard structure.  Rural areas have l e s s land cost  influences  and aged s t r u c t u r e s tend t o remain u n t i l they e i t h e r burn or fall  down.  The poor and unemployed handicapped  areas o f t e n l i v e i n many of these substandard which were b u i l t b e f o r e b u i l d i n g codes.  structures  I t i s not unusual  t o f i n d homes i n r u r a l towns that have no indoor or  i n rural  plumbing  electricity. Many s t u d i e s have examined the r u r a l  housing  s i t u a t i o n i n both the US and Canada. There are n e a r l y three times as many r u r a l housing u n i t s l a c k i n g complete plumbing as urban u n i t s . . . . . . . While r u r a l r e n t a l u n i t s account f o r o n l y 26% of the occupied u n i t s , they c o n s t i t u t e 55% of the d e f i c i e n t , overcrowded and e x c e s s i v e c o s t r u r a l housing.1  8  9 The HUD r e p o r t by the 1978 Task Force on Rural Housing  goes on t o e x p l a i n why the r u r a l housing  i n the US has not improved  situation  i n s p i t e of governmental  policy  and programs. With r e s p e c t t o housing, the g e n e r a l c o n c l u s i o n of the Task Force i s t h a t a v a i l a b l e r e s o u r c e s e i t h e r have not been p r o v i d e d e f f i c i e n t l y or a t a l l , due t o (1) d e f i c i e n c i e s i n the d e l i v e r y system, and (2) a f a i l u r e t o make f u l l and i m a g i n a t i v e use of e x i s t i n g a u t h o r i t y and resources.... . . . The f a i l u r e t o d e l i v e r a v a i l a b l e resources has been compounded by the d e l i b e r a t e t e r m i n a t i o n by a p r i o r A d m i n i s t r a t i o n of programs which were s e r v i n g these areas and communities s u c c e s s f u l l y , such as programs under the United S t a t e s Housing A c t of 1937, c o n s i s t i n g of p u b l i c housing and s e c t i o n 23 (now s e c t i o n 8) l e a s i n g programs, and the N a t i o n a l Housing Act S e c t i o n 235 program.2 Government programs have been developed  t o "solve  the r u r a l housing problem" but the success i n the US has been marginal a t b e s t . titled  In a 1968 A g r i c u l t u r a l Economic Report  Status of Rural Housing  i n the United S t a t e s , the  f o l l o w i n g comment was made: "Rural housing has improved c o n s i d e r a b l y s i n c e 1960 but housing occupied by the r u r a l 3 poor may not have improved The Canadian the US e x p e r i e n c e .  very much."  r u r a l housing s i t u a t i o n i s s i m i l a r t o The many boom and bust towns c r e a t e  unique housing problems.  Government i n t e r v e n t i o n i n the  r u r a l housing market has s u b s t a n t i a l l y i n c r e a s e d over the l a s t decade although Canada lagged behind the US i n i n i t i a t i n g r u r a l housing s t r a t e g i e s . Canada has lagged behind the example of European c o u n t r i e s , o f Great B r i t a i n , and of the United S t a t e s i n p r o v i d i n g g r e a t e r governmental a s s i s t a n c e f o r housing as a matter of w e l f a r e and p u b l i c concern  10 . . • . s p e c i a l a t t e n t i o n , i n the advance p r e p a r a t i o n of plans should be given t o a low r e n t a l housing and farm housing, i n which t h i s country has had l i t t l e or no experience t o date.4 Rural Housing Problems D i s t i n c t from Urban Financing There i s a g r e a t e r d i f f i c u l t y i n o b t a i n i n g mortgage f i n a n c i n g e i t h e r with or without rural  governmental a s s i s t a n c e i n  areas.  The c r e d i t gap i n r u r a l America has been long r e c o g n i z e d and numerous s t u d i e s of mortgage f i n a n c e i n l o c a l areas c o n f i r m t h a t the terms on which home f i n a n c i n g i s a v a i l a b l e tend t o be more demanding i n r u r a l areas and s m a l l e r t o w n s — i n v o l v i n g l a r g e r down payments, s h o r t e r loan terms and higher i n t e r e s t r a t e s . 5 I t i s easy t o understand why more people do not become owner-builders. R e s t r i c t i v e codes, d i s c r i m i n a t o r y f e d e r a l mortgage i n s u r i n g p r a c t i c e s , and the general t r e n d toward s p e c i a l i z a t i o n of c o n s t r u c t i o n tasks have a l l c o n t r i b u t e d t o a c l i m a t e unfavorable t o the man who may have thought about b u i l d i n g h i s own home.6 Urban Bias i n Government Housing Support There i s a l s o major evidence  t h a t government  programs show p r e j u d i c e f o r urban c e n t e r s over r u r a l T h i s has been d i s c u s s e d i n Congress and p o l i c y  areas.  firmly  s t a t e d a g a i n s t such p r a c t i c e s , but the b i a s i n the US i s apparent. I t i s the c o n c l u s i o n of the Task Force t h a t the Department can do more w i t h i n our e x i s t i n g l e g i s l a t i o n and r e g u l a t i o n s t o meet the needs of r u r a l and nonm e t r o p o l i t a n areas. . . . The Task Force r e c o g n i z e s that p a r t of the problem faced by small c i t i e s and r u r a l communities when they d e a l with HUD r e l a t e s t o the r e c o g n i t i o n of t h e i r needs by HUD o f f i c i a l s and the p r i o r i t i e s t h a t those o f f i c i a l s p l a c e on d e a l i n g with these c l i e n t s . ?  11 There have been attempts  t o develop programs  t a r g e t e d a t the r u r a l poor and problems faced by small c i t i e s , but o f t e n the requirements o f HUD and Farmer's Home A d m i n i s t r a t i o n a r e too r i g i d . Both HUD and t h e Department of A g r i c u l t u r e ' s Farmer's Home A d m i n i s t r a t i o n have programs t o meet the housing needs o f small c i t i e s and have attempted t o make some of these programs complement each o t h e r . I t i s c l e a r , however, t h a t both Departments must continue t h e i r e f f o r t s t o c l o s e the gaps i n t h e i r program coverage and t o a l l e v i a t e hardships caused by v a r i o u s program requirements and d e l i v e r y mechanisms.8 Lower Incomes There a r e many problems of housing f i n a n c i n g and support unique t o r u r a l a r e a s .  In general,'incomes a r e  lower i n r u r a l areas and t h e r e i s a l a r g e r segment of " t r u l y " poor and s o c i a l a s s i s t a n c e r e c i p i e n t s .  This  income d i f f e r e n c e was p o i n t e d out i n The Small Town i n A m e r i c a — A Guide f o r Study and Community Development by Swanson and Cohen. On a number o f i n d i c a t o r s , small towns income l e v e l s are s u b s t a n t i a l l y lower than the n a t i o n a l average. The poverty o f America's small towns i s f u r t h e r demonstrated by the s u b s t a n t i a l number of i t s poor who a r e aged o r d i s a b l e d , dependent on s o c i a l s e c u r i t y and p u b l i c a s s i s t a n c e f o r support. By and l a r g e , small towns a r e poorer, c o n t a i n more blue c o l l a r workers, and s u f f e r i n f e r i o r housing c o n d i t i o n s . 9 In both m e t r o p o l i t a n and nonmetropolitan areas, the percentage o f poverty decreases . . . but the p o v e r t y rate, i n nonmetropolitan small c i t i e s i s double t h a t o f m e t r o p o l i t a n small c i t i e s . 1 0 The Rural P o p u l a t i o n Before r u r a l housing problems, mental  approaches  c h o i c e , o r govern-  can be d i s c u s s e d a t l e n g t h , i t i s  12 important t o have an i d e a of whom the housing i s f o r .  Rural  r e s i d e n t s are a very d i v e r s e group but many myths seem t o p r e v a i l about who l i v e s i n the " s t i c k s , " and why.  A short  d i s c u s s i o n e x p l o r i n g the r u r a l or small town r e s i d e n t i s necessary t o d i s p e l some predominant myths. One major myth accepted by some i s t h a t a l l small towns and r u r a l areas are b a s i c a l l y a l i k e . the t r u t h .  T h i s i s f a r from  Some areas a r e growing w h i l e others  are d e c l i n i n g .  Areas d i f f e r i n the types of economic a c t i v i t y and predominance of i n s t i t u t i o n s .  Swanson and Cohen, i n The Small Town  i n A m e r i c a — A Guide f o r Study and Community Development, categorize  types of communities on the b a s i s of economic  characteristics. At a s p e c u l a t i v e l e v e l , c e r t a i n economic c h a r a c t e r i s t i c s are a s s o c i a t e d with p a r t i c u l a r types of communities i n the typology of small towns: a. The "absorbed" community p r o g r e s s i n g as a r e s u l t of (or perhaps d e s p i t e ) i t s p e n e t r a t i o n by the o u t s i d e world i s c h a r a c t e r i z e d by i n c r e a s i n g p r o p o r t i o n s of white c o l l a r employment, r e f l e c t i n g b e t t e r s a l a r i e s and higher s k i l l levels. b. The "abused" community i s more l i k e l y t o be c h a r a c t e r i z e d by an i n c r e a s i n g p r o p o r t i o n of w e l f a r e r e c i p i e n t s , unemployed and others who are not i n c l u d e d i n on the b e n e f i t s of the l a r g e r s o c i e t y , but a r e s t i l l dependent on e x t e r n a l sources f o r support. c. The " s e l f - r e l i a n t " town, l i k e the "absorbed," i s predominately white c o l l a r , but i t s s t a b i l i t y p r o t e c t s i t from the f l u c t u a t i o n s and problems t h a t a f f e c t the absorbed town. d. The "ignored" community, r a t h e r than being loaded with dependent people, i s u s u a l l y charact e r i z e d by s t a b l e blue c o l l a r i n d u s t r i e s which s u r v i v e l a r g e l y without f e e l i n g the impact of the l a r g e r s o c i e t y . H  13 In  "Issues and Approaches of Rural Community  Planning i n Canada," Qadeer d i s c u s s e s the d i f f e r e n c e s i n institutional  balance.  Another dimension among which communities d i f f e r i s the mix and r e l a t i v e i n f l u e n c e of v a r i o u s s o c i a l i n s t i t u tions. Major s o c i a l i n s t i t u t i o n s i n Canada, e.g., f a m i l y , government, church, work, e t c . have become s t a n d a r d i z e d . . . .In a small community a l l i n s t i t u t i o n s may not be r e p r e s e n t e d to the same degree, and each one of them may not have the p r o p o r t i o n a t e i n f l u e n c e . . . . . . . One community may have an over r e p r e s e n t a t i o n of governmental i n s t i t u t i o n s (e.g., m i l i t a r y b a s e s ) , and another may i n c l u d e small p r o p o r t i o n s from the whole spectrum (e.g., a g r i c u l t u r a l - c u m - m a r k e t c e n t e r s ) . T h i s i s the b a s i s f o r d i f f e r e n t i a t i o n of r u r a l communit i e s , and c o n t r i b u t e s t o the wide d i v e r s i t y . . . . . . . As a group, r u r a l communities bear c l o s e resemblance t o urban areas, but, i n d i v i d u a l l y they are d i f f e r e n t i a t e d by the v a r y i n g mix of s o c i a l i n s t i t u t i o n s . 12 Qadeer a l s o d i s c u s s e s the importance  of the economic  base of a community and notes the change from farming t o manufacturing, mining, t o u r i s m , e t c . i n many r u r a l areas. In today's Canada, farming i s one of many a c t i v i t i e s c h a r a c t e r i z i n g r u r a l communities--mining, manufacturing, tourism, r e t i r e e s ' and commuters' r e s i d e n c e s being the others.13 Another common b e l i e f about r u r a l areas i s t h a t growth i s f r e q u e n t l y caused by the m i g r a t i o n of retirees  and  the growing  "back t o the e a r t h " t y p e s .  affluent  I f one examines  r u r a l areas one can f r e q u e n t l y see a c l e a r  t r e n d f o r the c h i l d r e n of r u r a l r e s i d e n t s t o take l o c a l jobs i n s t e a d of f l o c k i n g i n the p a s t . fields.  They now  In "The New  t o the c i t i e s as they have done  take jobs i n v a r i o u s blue c o l l a r  Non-Metropolitan Growth; Where Do  Blue C o l l a r Residents F i t In?" Houstoun notes t h a t the  14 blue c o l l a r r e s i d e n t i s o f t e n ignored i n growing communities. There i s indeed a ma'rket f o r r u r a l i s o l a t i o n e x p e c i a l l y to those with second homes. . . . On the other hand, there i s a l s o an apparent market f o r development i n which the e s s e n t i a l a c t i v i t y s i t e s of d a i l y l i f e are more c o n v e n i e n t l y and l e s s e x p e n s i v e l y arranged and which o f f e r s f a m i l y members g r e a t e r o p p o r t u n i t y f o r shared community experiences than i s t y p i c a l of the overwhelming p r o p o r t i o n of r e c e n t growth. . . . We can miss t h a t second m a r k e t — i n d e e d we may r e g u l a t e i t out of e x i s t e n c e — i f we pay e x c e s s i v e a t t e n t i o n t o the m i g r a t i n g a f f l u e n t and ignore the l a r g e r needs of blue c o l l a r , Rural America.14 Thus, new  r e s i d e n t s t o r u r a l areas are a l s o  blue c o l l a r workers who  frequently  come f o r the good jobs and not f o r a  "higher q u a l i t y of l i f e s t y l e " or r u r a l  s t y l e of l i v i n g .  Small town and r u r a l r e s i d e n t s are not an homogenous group. S o c i e t y tends t o l a b e l a person on the b a s i s of e d u c a t i o n , income, or employment.  Some people p r e f e r to c a t e g o r i z e  i n d i v i d u a l s as b e l o n g i n g t o a c l a s s or s p e c i f i c group.  One can f i n d a l l groups r e p r e s e n t e d i n the r u r a l  regions and small towns. six  social  Swanson and Cohen l i s t Warner's  l e v e l s of c l a s s e s : 1. Upper-upper: the l o c a l s o c i a l " a r i s t o c r a t s , " members of f a m i l i e s with long h i s t o r i e s of wealth and s o c i a l standing. . . . 2. : Lower-upper: another wealthy group, i n some i n d i v i d u a l cases, even w e a l t h i e r than members of the upper-upper c l a s s , but l a c k i n g the p r o p e r l y d i s t i n g u i s h e d backgrounds n e c e s s a r y . . . . 3. Upper-middle: mostly businessmen and p r o f e s s i o n a l s . 4. Lower-middle: white c o l l a r c l e r k s and small b u s i n e s s men . 5. Upper-lower: working men and small tradesmen. 6. Lower-lower: those a s s o c i a t e d with lower incomes and poverty l i f e s t y l e s . 1 5  !5 Rural Housing Options and Choice Regardless of t h e i r c l a s s o r type of work, a l l r e s i d e n t s need housing t h a t they can a f f o r d . have a wide s e l e c t i o n of housing o p t i o n s .  The a f f l u e n t  They can buy an  e x i s t i n g home i n or out of town or i f no homes s u i t them they can h i r e a c o n t r a c t o r and b u i l d a custom home.  They  can choose between b u i l d i n g a s t i c k - b u i l t home, a l o g home, a dome house, or a mobile home. The  lower-income  r u r a l r e s i d e n t may not have as  many c h o i c e s as h i s low income prevents him x  the home of h i s dreams.  from  selecting  He may only be able t o a f f o r d t o  r e n t ; but even t h i s i s a major problem  i n rural  as t h e r e may be few r e n t a l s a v a i l a b l e . buy an e x i s t i n g house the d i f f i c u l t i e s  areas  I f he attempts t o i n obtaining  may be v a s t , even g r e a t e r than f o r the urban poor. Task Force r e p o r t e d the d i f f i c u l t y  financing A 1977  i n o b t a i n i n g mortgages  f o r f i r s t - t i m e home buyers i n r u r a l areas. A comparison of median terms f o r f i r s t mortgages on s i n g l e f a m i l y homes shows t h a t non-metro areas have a 0.9% higher i n t e r e s t r a t e , 3.1 years s h o r t e r term to m a t u r i t y and $18,100 lower loan amount and a 0.5% higher down payment.16 There a r e a l s o few condominiums, townhouses, or m u l t i - f a m i l y d w e l l i n g s i n r u r a l areas.  Often the only  c h o i c e i s a s i n g l e wide mobile home on a small l o t i n a less desirable area. importance  Turner and F i c h t e r d i s c u s s the  of c h o i c e i n housing o p t i o n s .  In order t o make the best use of s c a r c e housing r e s o u r c e s , most of which are i n any case possessed by the people themselves each household must have an  16 adequate c h o i c e of a l t e r n a t i v e l o c a t i o n s , of a l t e r n a t i v e forms of tenure and, of course, of a l t e r n a t i v e s t r u c t u r e s and ways of b u i l d i n g and using them. People who do not have these freedoms i n housing are g e n e r a l l y unable t o use housing as a v e h i c l e f o r t h e i r e x i s t e n t i a l ends. I f they cannot hope t o get the combination they need, they w i l l tend t o minimize the housing a c t i o n by doing and paying as l i t t l e as p o s s i b l e . 1 7 Mobile homes a r e a major low-cost o p t i o n f o r new housing i n r u r a l areas.  They o f f e r an a l t e r n a t i v e t o the o l d e r housing  and are c u r r e n t l y meeting  a critical  low-cost housing need  i n r u r a l areas f o r both the home buyer and r e n t e r . There a r e lower-cost o p t i o n s f o r c o n s t r u c t i o n of new d w e l l i n g s i n r u r a l areas.  The same c o s t - s a v i n g , l a b o r -  saving techniques used by the mobile home i n d u s t r y are used by the " s h e l l home" manufacturer.  Components are c u t and  c o n s t r u c t e d i n a s s e m b l y - l i n e f a s h i o n and m a t e r i a l s are purchased  i n bulk.  While the mobile or manufactured  house  leaves the f a c t o r y i n one or two p i e c e s , the p r e - c u t or panel house leaves the f a c t o r y i n many p i e c e s . manufacturers  and d e a l e r s w i l l  buyer, most o f f e r  c o n s t r u c t the s h e l l  "logs o n l y " or "no l a b o r " s h e l l  The c o s t - s a v i n g s of p r e - c u t manufacturing p l u s sweat e q u i t y can be c o n s i d e r a b l e . 1,000  While some  packages.  and bulk buying,  Some small 800-  square f o o t panel k i t s can be purchased  $10,000 and c o n s t r u c t e d t o s h e l l  f o r the  f o r under  stage i n a few weeks by  an u n t r a i n e d owner-builder p l u s a f r i e n d or two. T h i s p a r t i a l l y manufactured,  pre-cut, owner-built  house o f f e r s a t i m e / c o s t savings t h a t combines the technol o g i c a l advances of the mobile home without l o s i n g the  17 "sweat e q u i t y " c o s t - s a v i n g advantages.  It i s s t i l l  common  to b u i l d a house from s c r a t c h and many low-income ownerb u i l d e r s do j u s t t h a t . purchase manufactured  Some s e l f - h e l p housing  components f o r t h e i r houses and  b u i l d them i n an a s s e m b l y - l i n e f a s h i o n . does not prevent a l l c o s t / t i m e advantages the two advantages  groups  can be blended.  .Owner-building of manufacturing;  The owner-building  o p t i o n i n i t s v a r i o u s forms i s c l e a l r y a c o s t - s a v i n g o p t i o n c o m p e t i t i v e t o the mobile home. Cooperatives are a l s o low-cost approaches housing.  to  U n f o r t u n a t e l y , r u r a l areas have not b e n e f i t e d  from t h i s o p t i o n , as the a d m i n i s t r a t i v e e x p e r t i s e i s weak i n most nonurban areas.  Most housing a c t i v i s t o r g a n i z a t i o n s  are l o c a t e d i n l a r g e r towns and c i t i e s .  Columbia  Housing  A d v i s o r y i s a n o n p r o f i t housing o r g a n i z a t i o n based i n Vancouver,  B r i t i s h Columbia,  t h a t helps groups o r g a n i z e  the c o n s t r u c t i o n of c o o p e r a t i v e housing.  This technical  e x p e r t i s e i s u s u a l l y not present i n s m a l l e r towns.  Rural  areas are u s u a l l y more landownership-conscious and most wish t o own  p r o p e r t y which i s l e s s expensive than  land  i n the l a r g e c i t y .  N o n p r o f i t and p u b l i c low-income housing  has been attempted  i n r u r a l areas with s u b s t a n t i a l s u c c e s s .  Many s e n i o r c i t i z e n housing complexes and a s m a l l e r number of f a m i l y u n i t s have been b u i l t the US and Canada. have demonstrated  i n r u r a l small towns i n  The p u b l i c housing p r o j e c t s  statistically  t h a t they reach the lowest income segment,  the " t r u l y poor," yet they are o f t e n the most d i s l i k e d programs  18 Approximately 40% o f t h e c o u n t i e s i n the country do not have any p u b l i c housing, and those c o u n t i e s are predomin a t e l y r u r a l . . . l o c a l governments hold a veto power over the r i g h t of c i t i e s t o enjoy f e d e r a l s u b s i d i e s f o r good housing and many of them have e x e r c i s e d i t l i k e the Russians a t the United Nation's S e c u r i t y C o u n c i l meeting.18 D i s c r e t i o n a r y power a t the d i s p o s a l of t h e County Supervisor can be a r e a l a s s e t i f the s u p e r v i s o r i s motivated t o use t h e r e g u l a t i o n s t o make the maximum use of a v a i l a b l e funds t o serve the poor. . . . The great advantage o f the FmHA loan program i s t h e p o t e n t i a l f o r humane c o n s i d e r a t i o n of each i n d i v i d u a l c l i e n t , as opposed t o t h e b u r e a u c r a t i c procedures of the FHA where the c l i e n t never sees o r d e a l s with the bureaucrat who turns him down. However, t h i s same d i s c r e t i o n a r y power can t o t a l l y undermine the purpose of the program when i n the hands o f one not sympathetic t o the poor, t h e b l a c k s or those needing s p e c i a l c o n s i d e r a t i o n . 1 9 Government/Institutional Approaches to the Rural Housing S i t u a t i o n When examining c o s t and a f f o r d a b i l i t y , i t i s necessary t o examine t h e major f a c t o r s t h a t a f f e c t a lowincome r e s i d e n t ' s a b i l i t y t o purchase a home. the product i s a c r i t i c a l  The p r i c e of  f a c t o r , y e t p r i c e or c o s t i s  o f t e n l e s s important than the a b i l i t y t o o b t a i n f i n a n c i n g . A home can be low-priced  y e t not a f f o r d a b l e t o  a lower-income customer due t o f i n a n c i n g o b s t a c l e s .  The  Department of Housing and Urban Development .(HUDl" i n the US and Canada Mortgage and Housing C o r p o r a t i o n  (CMHC) i n Canada  were c r e a t e d t o d e a l with the many f i n a n c i n g b a r r i e r s and obstacles  i n v o l v e d with homeownership.  many changes have taken p l a c e .  Since t h a t time  Both HUD and CMHC have  experimented with new programs; some have succeeded others have f a i l e d .  Neither  while  agency i s as f i n a n c i a l l y  19 sound as before and there i s r e l u c t a n c e t o t r y anything new. The  focus i s t o hang on t o what e x i s t s and hope f o r funding  increases.  I t i s i n t h i s p e r i o d of HUD/CMHC s t a g n a t i o n and  " f i s c a l r e s t r a i n t " t h a t the p a r t i a l l y manufactured i n d u s t r y developed.  housing  T e c h n o l o g i c a l improvements r e s u l t e d i n  s i g n i f i c a n t c o s t savings  and made owner-building  "self-help"  e a s i e r than ever b e f o r e , y e t the f i n a n c i n g and governmental i n s t i t u t i o n s have been slow t o accept and p e r c e i v e d  " r i s k y " low-cost  housing  In order t o b e t t e r understand t i o n a l o b s t a c l e s t o a l l types  t h i s r e l a t i v e l y new option. governmental/institu-  of low-income housing,  it is  b e n e f i c i a l t o examine a few HUD/CMHC programs, t h e i r h i s t o r y , and  changes t h a t have taken p l a c e w i t h i n these The  programs.  US and Canadian government programs began with  an emphasis on mortgage f i n a n c i n g and l a t e r moved t o p u b l i c housing  and subsidy programs.  Mortgage f i n a n c i n g  e x i s t s but t o a much l e s s s i g n i f i c a n t degree.  still  "Since 1960,  there has been a d e c l i n e i n t h e number of loans  insured.  From 1960-1966 the number o f r u r a l homes i n s u r e d d e c l i n e d from 30 ,190  t o 17,130.  1,20  For more than ten years Housing A d m i n i s t r a t i o n  (FHA)  i n the US, the F e d e r a l  has been i n s u r i n g a s m a l l e r  share o f t h e homes f i n a n c e d by p r i v a t e i n s t i t u t i o n s . The purpose o f t h i s program was t o encourage lenders t o provide long term mortgages f o r home buyers by v i r t u a l l y e l i m i n a t i n g the r i s k , t o s t i m u l a t e the b u i l d i n g i n d u s t r y and thus c r e a t e jobs by i n c r e a s i n g the demand f o r new housing c o n s t r u c t i o n . I t was not a program designed t o c r e a t e housing f o r low income persons, but has c e r t a i n l y a s s i s t e d many f a m i l i e s t o secure b e t t e r housing which otherwise would have been unavailable.21  20 The mortgage insurance  program was a l s o the e a r l y  focus o f the Farmers Home A d m i n i s t r a t i o n  (FmHA), except t h a t  a  d i r e c t l e n d i n g t o farmers was a v a i l a b l e i n case a p r i v a t e lender was u n a v a i l a b l e .  L a t e r nonfarm d w e l l i n g s  were  added t o the program. I t was not u n t i l 1961 t h a t Farmers Home was g i v e n a u t h o r i t y t o make loans f o r non-farm d w e l l i n g s . In t h a t and the f o l l o w i n g years T i t l e V was amended t o p r o v i d e a d d i t i o n a l a u t h o r i t i e s r e l a t i v e t o farm l a b o r housing and t e c h n i c a l a s s i s t a n c e grants and seed money loans f o r s e l f - h e l p housing.22 In the US the v a r i o u s FmHA programs provided  a large  number o f r u r a l r e s i d e n t s with a home loan t h a t they c o u l d not have obtained  elsewhere.  As the ownership program grew, FmHA  expanded i n t o r e h a b i l i t a t i o n and c o o p e r a t i v e s  which o f t e n  offered subsidies. The Farmers Home A d m i n i s t r a t i o n a l s o makes d i r e c t o r i n s u r e d loans t o buy, b u i l d , r e p a i r o r improve r e n t a l housing and c o o p e r a t i v e l y owned housing f o r r u r a l r e s i d e n t s with low incomes and f o r s e n i o r c i t i z e n s with low or moderate income.23 L a t e r subsidy  programs i n the form of home i n t e r e s t  w r i t e down loans and r e n t a l a s s i s t a n c e were added. r e c e n t l y has the FmHA been permitted tance,  t o provide  Only  rental assis-  although HUD has had a s i m i l a r program f o r y e a r s .  Rental A s s i s t a n c e Program T h i s program p r o v i d e s r e n t a l a s s i s t a n c e t o lowincome r u r a l f a m i l i e s and s e n i o r s who a r e l i v i n g i n FmHA-funded p r o j e c t s , and whose a d j u s t e d annual income i s l e s s than $10,000.24 FmHA a l s o has an a c t i v e s e c t i o n 502 Homeownership and R e h a b i l i t a t i o n Loan Program which provides  loans t o i n d i -  v i d u a l s "of low and moderate income t o buy, b u i l d , o r r e p a i r a home.  I t i s one o f the most a c t i v e i n r u r a l  areas.  21 The  FmHA i s a l s o i n v o l v e d t o a small degree with  s e l f - h e l p housing.  T h i s program i s f a i r l y recent and i t i s  o f t e n l e f t t o the whims of the l o c a l FmHA a d m i n i s t r a t o r whether t o implement i t o r n o t . F i n a l l y , the s e l f - h e l p approach t o housing i s u t i l i z e d to a much g r e a t e r extent by FmHA than by HUD. Farmers Home A d m i n i s t r a t i o n not only allows the borrower t o u t i l i z e h i s own l a b o r i n the c o n s t r u c t i o n of h i s house under c e r t a i n circumstances, but s i n c e 1968, has had a u t h o r i t y t o p r o v i d e t e c h n i c a l a s s i s t a n c e grants t o nonp r o f i t o r g a n i z a t i o n s t o a s s i s t f a m i l i e s i n using t h i s process on a c o o p e r a t i v e b a s i s . While the use o f s e l f - h e l p i n combination with FHA i n s u r e d mortgages i s p o s s i b l e , i t i s r a r e l y done, and only r e c e n t l y has HUD begun t o use i t s own t e c h n i c a l a s s i s t a n c e grants f o r s e l f - h e l p sponsors.25 In the US, HUD i s a c t i v e l y i n v o l v e d with housing.  The S e c t i o n 8 r e n t a l subsidy program i s a c t i v e i n  many small r u r a l towns t h a t have housing administer  rural  the programs.  authorities to  A l s o , many small towns have HUD  p u b l i c housing  u n i t s ( o f t e n s e n i o r s only) and the many farm-  worker housing  programs a r e a c t i v e i n r u r a l areas where l a r g e  numbers o f farmworkers l i v e .  In the US, the Small  Block Grant Program o f t e n r e s u l t s i n s i g n i f i c a n t being designated  f o r housing  rehabilitation.  City  funds  There a r e  many f e d e r a l l e v e l programs t h a t attempt t o address the r u r a l housing (VA)  problem i n the US.  Veterans A d m i n i s t r a t i o n  i s f r e q u e n t l y i n v o l v e d i n the f i n a n c i n g o f homes. The A d m i n i s t r a t o r o f Veterans A f f a i r s i s a u t h o r i z e d to designate q u a l i f y i n g r u r a l areas, small c i t i e s , and towns as "housing c r e d i t shortage" areas and make d i r e c t loans t o these areas from the d i r e c t loan r e v o l v i n g fund i f he f i n d s t h a t p r i v a t e c r e d i t i s not g e n e r a l l y a v a i l a b l e f o r making guaranteed loans.26  While there are a v a r i e t y of programs meant t o address the r u r a l housing s i t u a t i o n , the need i s not being met and many lpw-income f a m i l i e s wishing t o own a home or r e c e i v e a r e n t subsidy are unable to b e n e f i t from the e x i s t ing  programs.  The subsidy programs have long w a i t i n g l i s t s  0E0 makes a s t r o n g statement of  r e g a r d i n g the impact  US government programs upon the r u r a l housing  situation.  In r e v i e w i n g the o r i g i n s and e v o l u t i o n of F e d e r a l housing a s s i s t a n c e , we f i n d a h i s t o r y of n e g l e c t , hypocracy, and f a i l u r e . When a F e d e r a l housing p o l i c y was e s t a b l i s h e d i n t h i s country i n the 1930's n e a r l y 50 years l a t e r than many Western European n a t i o n s , our i n i t i a l e f f o r t s were t a i l o r e d more to the i n t e r e s t s and requirements of the p r i v a t e housing i n d u s t r y (bankers, b u i l d e r s , and l a b o r ) , than t o the needs of people.27 The Canadian  programs have f o l l o w e d a s i m i l a r  housing f i n a n c i n g t o housing subsidy course.  -CMHC i s  a c t i v e i n c o o p e r a t i v e and p u b l i c housing, e s p e c i a l l y i n p r o v i n c e s l i k e O n t a r i o where the p r o v i n c e i s committed t o low-cost housing.  There are a wide v a r i e t y of housing  subsidy and loan programs i n Canada as w e l l . Housing  The N a t i v e  Program can i n v o l v e a subsidy as h i g h as $90,000 28  over the l i f e of the l o a n .  Self-Help i s s t i l l  not  a c c e p t a b l e although r e c e n t l y the Log Home Industry has been s u c c e s s f u l i n l o b b y i n g CMHC f o r g r e a t e r acceptance of  their  product. One of the most a c t i v e r u r a l  ownership  programs i n Canada i s the Rural and Native Program.  Housing  The o r i g i n a l program was designed as a j o i n t r  p r o v i n c e / f e d e r a l program t o p r o v i d e  homeownership  o p p o r t u n i t i e s f o r people of Indian a n c e s t r y l o c a t e d i n remote areas. Since 1965 s p e c i a l agreements had been entered i n t o . . . . Occupancy charges would be based on a r e n t t o income s c a l e and ownership would be earned over 15 y e a r s . . . . There were not s i g n i f i c a n t numbers of u n i t s produced r e l a t i v e t o the need.29 In 1974 t h e program was expanded with a goal of 50,000 u n i t s t o be produced over a f i v e - y e a r p e r i o d . Of these, 20,000 were t o be designated f o r non-Native low-income  families.  The year 1978 brought f i s c a l r e s t r a i n t and budget limits.  C u r r e n t l y the Rural and Native Housing Program  operates i n c o n j u n c t i o n with s e v e r a l other r u r a l programs i n c l u d i n g the Rural R e h a b i l i t a t i o n  housing  Assistance  Program (RRAP) and the Emergency Repair Program (ERP), where loans and subsidy a s s i s t a n c e a r e made f o r home improvement o f s e r i o u s l y inadequate housing. There are s e v e r a l r e n t a l a s s i s t a n c e programs t h a t are a v a i l a b l e throughout Canada.  The S e c t i o n 40 and 44  p u b l i c housing programs p r o v i d e needed s u b s i d i z e d s h e l t e r f o r thousands of Canadians.  rental  Over 7,897 u n i t s  i n B r i t i s h Columbia and n e a r l y 200,000 u n i t s throughout Canada  (1950-1982) have been s u b s i d i z e d . An a d d i t i o n a l  (1950-1982) 24,308 u n i t s throughout  Canada a r e s u b s i d i z e d by S e c t i o n 4 4 ( l ) a , Rent Supplement Program. The most common c u r r e n t new r e n t a l housing c o n s t r u c t e d with CMHC loan/subsidy i s the N o n p r o f i t and  24 Cooperative The  56.1  housing programs S e c t i o n s  program provides  15.1/34.18 and  c o n t r i b u t i o n s to p u b l i c  private nonprofit corporations  and  cooperatives  56.1.  and  which  operate r e n t a l housing programs f o r low-/moderate-iricome families/seniors. Under s e c t i o n s 15.1 and 34.18 loans f o r 100 percent of l e n d i n g value at s u b s i d i z e d i n t e r e s t r a t e s were extended t o n o n p r o f i t o r g a n i z a t i o n s formed e x c l u s i v e l y f o r c h a r i t a b l e purposes, p r o v i n c i a l l y or m u n i c i p a l l y owned n o n p r o f i t and c o o p e r a t i v e corporations.30 S e c t i o n 56.1  i s the c u r r e n t program t h a t accounts f o r  a m a j o r i t y of the s o c i a l housing programs a l l o c a t e d i n 1983.  T h i s program provides  contributions to public  private nonprofit cooperatives  which operate r e n t a l housing  p r o j e c t s f o r low-/moderate-ihcome f a m i l i e s . percent  and  "Up  to  100  of the approved c a p i t a l c o s t s of a p r o j e c t are  f i n a n c e d by p r i v a t e l e n d e r s , used t o bridge the gap  . . . The  assistance i s i n i t i a l l y  between economic r e n t and  market  r e n t . "-.31 4.  Rental  subsidy  i s the primary form of housing  a s s i s t a n c e i n Canada today, although d i r e c t involvement  and  l e n d i n g are c u r r e n t l y o c c u r r i n g s t i l l  under S e c t i o n  Rural and  to a l i m i t e d degree  Native  Housing Program, and  under S e c t i o n 40/44, P u b l i c Housing. to change and  budget r e s t r a i n t s and  The  40,  s i t u a t i o n continues  l i m i t s have been p l a c e d  r e c e n t l y on many programs. Canadian and  US programs are d i f f e r e n t , yet  current s i t u a t i o n i s s i m i l a r . s c a l e mortgage insurance  They both began with  to encourage housing  the large-  supply,  25 moved to massive p u b l i c l y c o n s t r u c t e d and  then turned  and  s u s i d i z e d housing,  to r e n t a l ( p r i v a t e l y constructed  a s s i s t a n c e as the primary form of housing  and  owned)  assistance.  Many r u r a l areas normally slow t o a d j u s t are c u r r e n t l y l o o k i n g at p u b l i c housing and  home purchase loan programs  as t h e i r major s o c i a l housing programs.  Rental  is  r u r a l areas.  j u s t beginning i n many small towns or  housing a u t h o r i t i e s i n the US  still  assistance  prefer to b u i l d  housing u n i t s r a t h e r than s u b s i d i z e e x i s t i n g r u r a l which are o f t e n o l d e r and  still  i n poor r e p a i r .  Some new  rentals  In some r u r a l  towns the Housing A u t h o r i t y managed p u b l i c housing u n i t s the only decent apartments i n town. Canada and for  use  remote  Conclusion T h i s s e c t i o n has  and  areas. Government  already  housing problems faced i n r u r a l  and  Obstacles  touched on many of  the  areas.  rural situation is different in  population  Market  For t h i s reason both  the US have maintained p u b l i c housing programs  i n r u r a l and  The  are  character  than the urban housing s i t u a t i o n .  Factors The  r u r a l market i s c h a r a c t e r i z e d by g r e a t e r  numbers  of o l d e r housing, p o o r l y maintained u n i t s t h a t are not r e a d i l y r e p l a c e d by commercial or i n d u s t r i a l Land p r i c e s i n small towns and  unchanged.  Rural  structures.  r u r a l areas r i s e  thus, neighborhoods e s t a b l i s h e d decades ago  as  slowly;  o f t e n remain  areas a l s o l a c k the major development  i n t e r e s t s t h a t p r o v i d e much suburban housing developments. Apartments and m u l t i - u n i t  developments are l e s s common  i n r u r a l areas as raw land p l u s a "shack" or mobile home i s p e r c e i v e d as more d e s i r a b l e affordable  and i s u s u a l l y  r e n t a l or ownership r a t e .  a v a i l a b l e a t an  The housing s i t u a t i o n  i s d i s t i n c t i n r u r a l areas, the problems are d i f f e r e n t , and so are the governmental approaches t o these problems. Financial  Factors  The  financing  of a l l types of homeownership i s  of major concern t o the p o t e n t i a l home buyer.  The loan  requirements and "small town" bank o r i e n t a t i o n o f t e n a r e major o b s t a c l e s  t o the l e s s a f f l u e n t p o t e n t i a l home purchase  Small town banks a r e l e s s l i k e l y t o r i s k l o s s i n the home mortgage f i e l d .  There are not the many f i n a n c i n g  choices  a v a i l a b l e t o a p o t e n t i a l r u r a l home buyer as there may be only one or two f i n a n c i a l i n s t i t u t i o n s conducting home mortgage business i n the r u r a l area.  Rural b u i l d i n g i s  c o n s i d e r e d a g r e a t e r r i s k , e s p e c i a l l y i n areas t h a t are dependent on a few key i n d u s t r i e s t h a t may c l o s e down or move t h e i r businesses where.  (and employment o p p o r t u n i t i e s )  else-  The banks p e r c e i v e the r u r a l housing market as  a g r e a t e r r i s k i n many areas much l i k e the "red  lining"  approach taken by some "urban" banks t h a t designate c e r t a i n less desirable  i n n e r c i t y neighborhoods as unmortgageable.  27 Governmental F a c t o r s The r u r a l housing s i t u a t i o n and p o p u l a t i o n a r e d i s t i n c t from t h e i r urban c o u n t e r p a r t s ; thus, the governmental  housing approaches  these approaches Few  genuine  are equally d i s t i n c t .  Many of  r e f l e c t s i m i l a r concerns of the banker.  low-income f a m i l i e s have access t o HUD or FmHA  homeownership programs i n the US.  The r i s k i s p e r c e i v e d t o  be too g r e a t . The two programs c u r r e n t l y producing the most housing, 235 and 236, a r e r e a c h i n g r e l a t i v e l y few low-income f a m i l i e s . . . . Low-income borrowers under FmHA s 502 program f a r e d l i t t l e b e t t e r (11.5 percent had incomes of l e s s than $4,000) ( c u r r e n t poverty l i n e ) . 3 2 1  Most of t h e major c r i t i c i s m s r e g a r d i n g the US government programs i n v o l v e t h e i r i n a c c e s s i b i l i t y t o the poor..  Most HUD and FmHA programs a i d the "moderate- and  middle-income" home purchaser but not those needing a i d the most. In r e v i e w i n g the o r i g i n s and e v o l u t i o n of F e d e r a l Housing A s s i s t a n c e , we f i n d a h i s t o r y of n e g l e c t , hypocracy, and f a i l u r e . . . . Our i n i t i a l e f f o r t s were t a i l o r e d more t o the i n t e r e s t s and requirements of the p r i v a t e housing i n d u s t r y (bankers, b u i l d e r s , and l a b o r ) than t o the needs of people. . . . A p u b l i c housing e f f o r t was s t a r t e d l a t e , was of secondary importance, was s u b j e c t e d t o the c r i p p l i n g i n f l u e n c e of l o c a l i n i t i a t i v e , and has been d e p r i v e d of s u f f i c i e n t funds and resources.3 Although t h i s s e c t i o n a p p l i e s t o the US and was w r i t t e n s e v e r a l years ago, the same s i t u a t i o n occurs Most home purchase  today.  HUD or FmHA programs do not reach the  lower-income groups and p u b l i c housing, r e n t subsidy, and housing r e h a b i l i t a t i o n programs are s i g n i f i c a n t l y  28 underfunded,  with lengthy w a i t i n g l i s t s .  Income support/  r e n t a l a s s i s t a n c e i s c o s t l y and i n times of r a p i d l y  rising  r e n t s and housing c o s t s i t i s d i f f i c u l t t o p r e d i c t anything but cutbacks.  The CMHC annual  w h i l e CMHC loans have dropped 1975  1982 r e p o r t i n d i c a t e s  that  from a high of $800 m i l l i o n i n  t o l e s s than $150 m i l l i o n i n 1982, s u b s i d i e s have  r i s e n from $100 m i l l i o n t o $600 m i l l i o n .  The CMHC data a l s o  i n d i c a t e t h a t i n the l a s t two years there has been a marked decrease i n the number of new u n i t s s u b s i d i z e d , y e t s u b s i d i e s (predominantly e x i s t i n g u n i t s ) have r i s e n from $300 m i l l i o n i n 1980 t o over $600 m i l l i o n i n 1 9 8 2 .  34  A s i m i l a r s i t u a t i o n has o c c u r r e d with the US r e n t a l a s s i s t a n c e programs, y e t the p o l i t i c a l  c l i m a t e has r e s u l t e d  i n fewer u n i t s being s u b s i d i z e d as w e l l as the a l t e r i n g of income requirements.  T h i s has r e s u l t e d i n fewer  people  q u a l i f y i n g f o r a s s i s t a n c e and a g r e a t e r percentage incomes o f the poor being used f o r housing.  o f the  Even with c u t -  backs, t h e s e c t i o n 8 r e n t subsidy program i s one o f the l a r g e s t housing budget items and i s growing  f a s t as market  housing c o s t s continue t o r i s e i n many areas. Two FmHA programs t h a t o f f e r g r e a t e r a c c e s s i b i l i t y t o the poor a r e the S e l f - H e l p Program and the Farm Labor Housing  Program.  Program cuts have o c c u r r e d i n both.  "The most g e n e r a l l y u s e f u l housing program i n r u r a l areas i s t h a t of t h e Farmers Home A d m i n i s t r a t i o n (FmHA) but i t s usef u l n e s s i n housing r e a l l y poor people i s l a r g e l y to s e l f - h e l p and the farm l a b o r housing program."  restricted 35  29 Both programs are r e l a t i v e l y small and c o n s i d e r a b l y underfunded  with regard t o the need.  Although  statistics  show that- HUD does make loans t o some owner-builders, t h e r e i s no l a r g e - s c a l e owner-builder program or p o l i c y .  Formally,  CMHC a l s o shys away from owner-building, although the Rural and Native Housing  Program does i n v o l v e l o c a l  crafts-  persons. The  f a c t t h a t the low-income home purchase  i s dominated by the mobile home i s w e l l known. homes have f l o u r i s h e d i n r u r a l  market  Mobile  areas.  Mobile homes a r e c u r r e n t l y f i l l i n g need f o r the l e s s a f f l u e n t r u r a l r e s i d e n t .  a s e r i o u s housing Some regard  t h i s as a necessary and d e s i r a b l e housing a l t e r n a t i v e , w h i l e others q u e s t i o n why other low-cost o p t i o n s such as " s h e l l houses"  which are completed  by an owner-builder are not  successful. ;  As long as the p r o v i s i o n of c r e d i t i s geared more t o the s e c u r i t y and i n t e r e s t s of p r i v a t e i n v e s t o r s than to the needs of consumers, and as long as the p r e v a i l i n g a t t i t u d e s h o l d t h a t f a m i l i e s should be denied access t o m i n i m a l l y adequate s h e l t e r u n t i l they have the c a p a c i t y t o purchase completely f u l l y standard homes by m i d d l e - c l a s s v a l u e s , i t i s u n l i k e l y t h a t the s h e l l house model w i l l be adopted. . . . . . . Zooming s a l e s of t r a i l e r s does not r e p r e s e n t p u b l i c acceptance or s a t i s f a c t i o n , i n most cases, but a simple l a c k of a b e t t e r a l t e r n a t i v e . 3 6 T h i s l a s t statement  r e f l e c t s the b e l i e f and judgment  of many i n the housing f i e l d .  Are mobile homes s u c c e s s f u l  due t o t h e i r appeal as one of many a l t e r n a t i v e s i n r u r a l areas or a r e they o f t e n the only low-cost  alternative  a v a i l a b l e t o the l e s s a f f l u e n t r u r a l home purchaser?  This  thesis  w i l l examine t h i s q u e s t i o n and many others i n an  attempt t o e v a l u a t e and understand situation, housing  the r u r a l  and the many o b s t a c l e s t o f r e e  o p t i o n s f o r the l e s s a f f l u e n t  housing  choice of new  home b u i l d e r - b u y e r .  31 Notes U.S. Department of Housing and Urban Development, Report of the Task Force on Rural and Ndn M e t r o p o l i t a n Areas (Washington, D.C.: Government P r i n t i n g O f f i c e , J u l y 1978), p. 2. 2 I b i d . , p. 6. 3 U.S. Department of A g r i c u l t u r e , Economic Research S e r v i c e , Status of Rural Housing i n the United S t a t e s , by Ronald Byrd, B e v e r l y L u c i a , and Ann Simmons (Washington, D.C.: Government P r i n t i n g O f f i c e , 1968), p. i i i . 4 Michael Dennis and Susan F i s h , Programs i n Search of P o l i c y Low Income Housing i n Canada (Toronto, O n t a r i o : Hukkert, 1972), p. 3. 5 U.S. O f f i c e of Economic Opportunity and Rural Housing, A Report on OEO's Rural Housing A c t i v i t i e s and Achievements, as I n d i c a t e d by Study of F i v e S e l e c t e d Rural Housing Development C o r p o r a t i o n s (Washington, D.C.: Government P r i n t i n g O f f i c e , n.d.), p. 23. John F. C. Turner and Robert F i c h t e r , eds., Freedom t o B u i l d , Dweller C o n t r o l of the Housing Process (New York: Macmillan, 1972), p. 3. 7 U.S. Department of Housing and Urban Development, p. 11. 8 U.S. Department of Housing and Urban Development, Developmental Needs of Small C i t i e s , by P a t r i c i a H a r r i s (Washington, D.C.: Government P r i n t i n g O f f i c e , n.d.), p. 14. 9 Bert Swanson and Richmond Cohen, The Small Town i n America--A Guide f o r Study and Community Development ( R e n s s e l a e r v i l l e , N.Y.: The I n s t i t u t e on Man and Science, 1976), p. 12. ^U.S. Department of Housing and Urban Development, Developmental Needs, p. 26. ^Swanson and Cohen, p. 11. 12 Mohammad Qadeer, "Issues and Approaches of Rural Community P l a n n i n g i n Canada," Plan Canada 19 (June 1979): 109. I b i d . , p. 106. 1 3  32 14  Lawrence Houston, "The New Non-Metropolitan Growth: Where Do Blue C o l l a r Residents F i t In?" Small Town 2 (March/April 1977). 15 Swanson and Cohen, p. 26. 16 U.S. Department of Housing and Urban Development, of the Task Force, p. 6. 17 Turner and F i c h t e r , p. 174. 18 U.S. O f f i c e o f Economic Opportunity and Rural Housing, p. 162. 19 Turner and F i c h t e r , p. 31. 20 U.S. Department of A g r i c u l t u r e , p. 8. 21 U.S. O f f i c e of Economic Opportunity and Rural Housing, p. 40. I b i d . , p. 43. Report  2 2  23 U.S.  Department of A g r i c u l t u r e ,  p. 9.  24 Kim Herman, Nina G u t i e r r e z , and C a r o l e Hammond, Housing Resource Handbook (Spokane: Washington C o a l i t i o n f o r R u r a l Housing, 1980), p. 9. 25 U.S. O f f i c e of Economic Opportunity and Rural Housing, p. 47. 26 U.S. Department of A g r i c u l t u r e , p. 8. 27 U.S. O f f i c e of Economic Opportunity and Rural Housing, p. 53. 28 Interview with David Hedman, U n i v e r s i t y of B r i t i s h Columbia, Vancouver, B.C., 1981. 29 Canada Mortgage and Housing C o r p o r a t i o n , unpubl i s h e d data, n.d. 3 0  Ibid,  p. 18.  31 I b i d . , p. 26 . 32 U.S. O f f i c e of Economic Opportunity and Rural Housing, p. 53. 33 -"ibid.  33 C a n a d a Mortgage and Housing C o r p o r a t i o n , l i s h e d data, n.d. 34  unpub-  35 U.S. O f f i c e of Economic Opportunity Housing, p. 166. 3 6  I b i d . , p. 196.  t  and Rural  CHAPTER I I THE MOBILE HOME Whether they are c a l l e d " t r a i l e r s h a c k s " (by c r i t i c s ) or "mobile homes" (by the i n d u s t r y ) , the f a s t e s t growing component of the n a t i o n ' s housing stock i s r e p r e s e n t e d by u n i t s t h a t are b u i l t on wheels, towed t o a s i t e , and then more-or-less permanently i n s t a l l e d t h e r e . . . . . . . Mobile homes are o f t e n regarded as a major housing r e s o u r c e f o r the lower income people and i t i s c e r t a i n l y t r u e t h a t they dominate the market f o r new s h e l t e r a t the lower end of the p r i c e s c a l e . 1 Mobile homes dot the c o u n t r y s i d e throughout P a c i f i c Northwest.  The  i n d u s t r y i s growing  has experienced widespread and B r i t i s h Columbia.  rapidly  success throughout  the and  Washington  To some, t h i s widespread  success of  the mobile home i s a menace and t h r e a t t o the country  life  s t a t u s quo, w h i l e t o others i t i s an answer to t h e i r dream f o r a s i n g l e - f a m i l y home and a p r a c t i c a l  lower-cost housing  option. A S u c c e s s f u l Low-Cost Housing  Option  Regardless of whether one c o n s i d e r s mobile homes the f u l f i l l m e n t of a dream or a nightmare h e l p i n g t o meet a c r i t i c a l  they are c u r r e n t l y  housing need i n r u r a l  areas.  For s e v e r a l y e a r s , t h e r e has been an enormous gap i n what r u r a l f a m i l i e s need and want i n a house and what i s a v a i l a b l e i n t h e i r p r i c e range.  The mobile home has helped f i l l  gap i n both Canada and the  US.  this  35 The f e d e r a l government and the t r a d i t i o n a l housing i n d u s t r y have been unable t o f i l l our country's need f o r low and moderate p r i c e d housing. The mobile home i n d u s t r y i s proud of i t s e f f o r t s t o h e l p meet t h a t need and t o a degree i t s p r i d e i s j u s t i f i e d . 2 The p r i n c i p a l t h e s i s of t h i s study i s t h a t socioeconomic and i n s t i t u t i o n a l systems i n f o r c e t o p r o t e c t the American i d e a l of a " t r a d i t i o n a l home" l i m i t e d the k i n d of housing produced which c r e a t e d a v o i d were accommodated e f f e c t i v e l y by the mobile home i n d u s t r y . 3 Although the mobile home may not look e x a c t l y l i k e a " t r a d i t i o n a l home," i t o f f e r s p r i v a c y and a chance t o have a yard i f i t i s p l a c e d on a r u r a l l o t (see F i g u r e 1). 1977 was  In a  housing survey taken of Washington S t a t e r e s i d e n t s , i t noted t h a t the mobile home on a l o t was a more h i g h l y  d e s i r e d from of housing than a townhouse, apartment, or mobile home on a r e n t e d space. I t seems t h a t people wanted t o l i v e i n a s i n g l e - f a m i l y home, and had l i t t l e i n t e r e s t i n l i v i n g i n a m u l t i - u n i t d w e l l i n g o r i n a mobile home on a rented space i n a mobile home park. . . . While the s i n g l e - f a m i l y home was c l e a r l y the most p r e f e r r e d type of housing, some c o n s i d e r a t i o n was a l s o g i v e n t o any type of home having some k i n d of yard o r l o t t h a t i s a l s o owned. Thus, yard ownership seems t o be very important t o people. . . . Since a l a r g e number of people i n our sample wanted t o move i n t o b e t t e r housing, i t i s important t o look a t the types of homes they p r e f e r . Respondents were asked to s e l e c t one of seven kinds of housing t h a t i s owned . . . buying a mobile home on a l o t you a l s o buy was p r e f e r r e d by 17%.4 In s p i t e of i t s p o s s i b l e n o n t r a d i t i o n a l  l o o k s , the  mobile home i s an a c c e p t a b l e o p t i o n t o the s i n g l e - f a m i l y home when i t i s p l a c e d on a p r i v a t e l o t .  Rabb d e s c r i b e d  her impression of the p h y s i c a l d i f f e r e n c e s between a mobile home and t h e t r a d i t i o n a l home. Mobile Homes a r e a l s o r e c t a n g u l a r i n shape but they l a c k most of the d e t a i l s t h a t are a s s o c i a t e d with  36  F i g u r e 1.  T y p i c a l Mobile Home on Rural i n B r i t i s h Columbia  Lot  37 a "home." Roofs g e n e r a l l y have a shallow p i t c h or are f l a t , and most a r e made o f aluminum or other metal, as i s the s i d i n g . Windows and doors a r e u s u a l l y small are r a r e l y have even fake s h u t t e r s ( a l s o of aluminum) . . . the p r o p o r t i o n of length t o width i n a s i n g l e wide makes i t look l i k e a shoe box.5 While the i n d u s t r y may take o b j e c t i o n to t h e i r homes d e s c r i b e d as l o o k i n g l i k e shoe boxes, Rabb's d e s c r i p t i o n i s quite accurate  of the mobile home i n d u s t r y as i t has  been i n the past and i s commonly p e r c e i v e d  today.  Changes  have taken p l a c e i n the i n d u s t r y e s p e c i a l l y with regard t o design  and m a t e r i a l , and many mobile homes today look much  l i k e the " t r a d i t i o n a l home" (Figure 2 ) . Mobile homes have almost r e p l a c e d the l o c a l t o r i n many areas, home.  as few can a f f o r d a custom  contrac-  stick-built  Now mobile homes and f a c t o r y k i t s which o f t e n e l i m i n a t e  the need f o r a c o n t r a c t o r dominate the new home market i n rural  areas.  For more than 250 years, the k i n g of U.S. housing has been the f r i e n d l y neighborhood l o c a l b u i l d e r and c o n t r a c t o r who has put up n e a r l y a l l new s i n g l e - f a m i l y houses i n the country. His product i s c a l l e d the s t i c k b u i l t house. In the past v i r t u a l l y h i s only competitor was the do i t y o u r s e l f American pioneer who put up h i s own houses, from l o g cabins t o Cape Cod bungalows.6 The  l o c a l c o n t r a c t o r cannot b u i l d homes f o r those  who cannot a f f o r d t h e i r high custom p r i c e s . can b u i l d a home from s c r a t c h . of home b u i l d i n g techniques  Financing  Not everyone  and the knowledge  have always been major  to the p o p u l a r i t y of t h i s s e l f - h e l p o p t i o n .  obstacles  The mobile home  grew because i t was l e s s expensive and i n many ways l e s s r e g u l a t e d than other  forms o f housing.  I t was t r e a t e d  Figure 2.  "Traditional California  Home" Mobile  in  39 differently mental  t h a n a " r e a l h o u s e " by f i n a n c i a l  institutions.  Classified  and g o v e r n -  as a v e h i c l e ,  forced  i n t o s e g r e g a t e d o r unzoned a r e a s , f i n a n c e d d i f f e r e n t l y , and p e r c e i v e d d i f f e r e n t l y ,  t h e m o b i l e home grew o u t s i d e o f  the c o n v e n t i o n a l housing market  ( F i g u r e 3).  My t h e s i s i s t h a t b e c a u s e m o b i l e homes w e r e i g n o r e d by t h e c o n v e n t i o n a l h o u s i n g i n s t i t u t i o n s w h i c h d i d n o t acknowledge t h e m o b i l e u n i t as a form o f h o u s i n g , m o b i l e i n d u s t r i a l i z e d h o u s i n g was p u s h e d f o r w a r d i n a market t h a t developed o u t s i d e t h e i n s t i t u t i o n a l network and t h e m o b i l e home i n d u s t r y c a p i t a l i z e d on t h e a d v a n tages i t o b t a i n e d from t h i s l a c k o f i n s t i t u t i o n a l c o n t r o l . . . . By c o m p a r i n g t h e m o b i l e home u n i t w i t h t h e i n s t i t u t i o n a l i z e d u n i t on t h e c o n v e n t i o n a l m a r k e t , t h e p r e f a b r i c a t e d home, i t c a n b e t t e r be s e e n how t h e m o b i l e home u n i t h a s g a i n e d a n a d v a n t a g e . Mobile i n d u s t r i a l i z e d u n i t s h a v e made g a i n s i n t h e h o u s i n g m a r k e t . . . . P r e f a b r i c a t e d h o u s i n g , on t h e o t h e r hand, i s s t i l l n o t a dynamic i n d i v i d u a l p r o d u c t . . . . . .• . L a c k o f a c k n o w l e d g e m e n t o f t h e m o b i l e u n i t w i t h i n t h e i n s t i t u t i o n a l network o f t h e housing market has f o s t e r e d t h e c o n s u m p t i o n o f t h i s u n i t o u t s i d e t h e c o n v e n t i o n a l h o u s i n g m a r k e t . . . . The m o b i l e i n d u s t r i a l i z e d u n i t , by f a l l i n g o u t o f t h e r a n g e o f i n s t i t u t i o n a l j u r i s d i c t i o n c o n t r o l l i n g t h e housing market, was p u t i n a p o s i t i v e p o s i t i o n w h i l e o t h e r i n d u s t r i a l i z e d housing being produced w i t h i n t h e l i m i t s o f t h e market, was a f f e c t e d n e g a t i v e l y . 7 General C h a r a c t e r i s t i c s of M o b i l e Homes M o b i l e home means a v e h i c u l a r p o r t a b l e s t r u c t u r e b u i l t o n a c h a s i s , d e s i g n e d t o be u s e d w i t h o r w i t h o u t p e r m a n e n t f o u n d a t i o n a s a d w e l l i n g when c o n n e c t e d to indicated u t i l i t i e s . 8 The N a t i o n a l A s s o c i a t i o n o f B u i l d i n g M a n u f a c t u r e r s (NABM) d e f i n e s t h e t h r e e forms o f manufactured h o u s i n g as f o l lows::: M o b i l e Homes: F a c t o r y - a s s e m b l e d n o n - p e r m a n e n t s t r u c t u r e s u s u a l l y 8' t o 14' i n w i d t h a n d 32" o r more i n l e n g t h b u i l t on a c h a s i s f o r h a u l i n g t o a s i t e w h e r e i t need n o t comply w i t h t h e p r e v a i l i n g b u i l d i n g code. U s u a l l y f i n a n c e d as c h a t t e l p r o p e r t y , t a x e d as a v e h i c l e or p e r s o n a l property.9  40  41 While mobile homes share many common c h a r a c t e r i s t i c s , they come i n many shapes and s i z e s .  The two major  t i v e types of u n i t s are the s i n g l e and double wide. wides, which u s u a l l y look more l i k e a c o n v e n t i o n a l have grown d r a m a t i c a l l y i n p o p u l a r i t y over the l a s t years but the s i n g l e wide u n i t s t i l l of  the market i n Washington  distincDouble house, few  commands almost h a l f  State.  Washington has a steady consumption of MH u n i t s , though i n r e c e n t years there has been a decrease i n u n i t s produced i n the s t a t e . There are 2 headquarters and 7 p l a n t s i n the s t a t e . . . . In 1979 11,038 u n i t s were shipped t o the s t a t e of which only 45% were s i n g l e wide. . . . Washington produces between 25-33% of the u n i t s i t consumes.10 In  a d d i t i o n t o the standard double or s i n g l e wide  u n i t , there are many "expandable" u n i t s which e n l a r g e rooms and may  improve the appearance.  "Perhaps the one way t o  make the e x t e r i o r more c l o s e l y resemble a t r a d i t i o n a l home i s to  use a t i p - o u t , s l i d e out, or t a g u n i t which w i l l break up  the  box l i k e appearance of the u n i t w h i l e adding a d d i t i o n a l .,11  space. Mobile homes a l s o d i f f e r i n the q u a l i t y and type of m a t e r i a l s used i n t h e i r c o n s t r u c t i o n .  "House-like" wood  e x t e r i o r s i d i n g i n s t e a d of aluminum i s becoming popular.  increasingly  Some mobile home d e a l e r s are o f f e r i n g two-story  mobile homes which look much l i k e a pre-cut v a c a t i o n home (Figure 4).  The mobile home can be j u s t about any type  house t h a t i s f a c t o r y b u i l t and on wheels.  Many  still  look as they d i d twenty years ago but consumer demand and new  technology have r e s u l t e d i n major changes i n m a t e r i a l s  F i g u r e 4.  V a c a t i o n Mobile Home from Lot Near Yreka, C a l i f o r n i a  43 and d e s i g n .  The mobile home s t i l l  must meet c e r t a i n  requirements and these requirements may determine i t s nature and o v e r a l l  appearance.  The mobile home has become a w e l l - e s t a b l i s h e d housing o p t i o n i n both urban and r u r a l areas.  No longer  i s i t t r u e t h a t mobile home owners are p r i m a r i l y migrants, s e n i o r s , or young m a r r i e d .  Many f a m i l i e s a r e s e l e c t i n g  the mobile home as t h e i r permanent home.  A .large  spectrum  of the p o p u l a t i o n i n a l l income l e v e l s chooses t o l i v e i n mobile homes today, and some would not c o n s i d e r l i v i n g i n anything e l s e . The mobile home i s most common i n r u r a l areas. C o n s i d e r i n g i t s r e l a t i v e l y new appearance as a permanent form of housing, i t accounts f o r a growing p o r t i o n o f the e x i s t i n g housing stock i n r u r a l North America.  The 1980  census data i n d i c a t e s the mobile home as a s u b s t a n t i a l type of housing i n r u r a l America and as not uncommon i n urban areas (see Table 1 ) . While mobile homes account f o r g r e a t e r than 1 i n 30 e x i s t i n g housing u n i t s i n urban areas, they account f o r almost 1 i n 9 i n r u r a l a r e a s .  When examining r e c e n t housing  a c t i v i t y , the mobile home accounts f o r a much l a r g e r percentage o f the new housing market.  The 1980 s t a t i s t i c a l  yearbook i n d i c a t e s t h a t t h e r e were 221,565 mobile home shipments  i n 1980 (see Table 2).  From Table  2  statistics  i n d i c a t i n g new housing a c t i v i t y i n the US, i t i s c l e a r  that  the mobile home i s i n c r e a s i n g i t s share of the new housing  44  TABLE 1 TOTAL EXISTING HOUSING UNITS IN US (1980) Total Housing All  Types  Mobile Homes  Total Urban  Total Rural  86,692,823  64,636,819  22,056,004  4,322,570  1,703,207  2,619,363  Source: U.S. Department of Housing and Urban Development, O f f i c e . o f Policy: Development and R e s e a r c h D i v i s i o n o f Housing and Demographic A n a l y s i s , 19 80 N a t i o n a l Housing Prod u c t i o n Report (Washington, D.C.: Government P r i n t i n g O f f i c e , February 1980 ) .  TABLE 2 MOBILE HOME SHIPMENTS AND HOUSING STARTS (US) 1980  1979  1978  1977  275,372  267,289  Mobile Home Shipments  221,565  .'277 , 372  (17%)  (16%)  % Mobile o f Market  (12%)  (13%)  Total Private Housing S t a r t s 1,292,000 1,745,000 2,202,000 1,987,000 Source: U.S. Department o f Housing and Urban Development, O f f i c e o f P o l i c y Development and Research, D i v i s i o n of Housing and Demographic A n a l y s i s , 1980 N a t i o n a l Housing Prod u c t i o n Report (Washington, D.C.: Government P r i n t i n g O f f i c e , February 1980).  45 market each year.  The m a j o r i t y of these new  u n i t s are  going t o nonurban a r e a s . The success of the mobile home o p t i o n i s w e l l known.  I t d i d not begin as a w e l l - e s t a b l i s h e d popular  'housing o p t i o n .  There have been many s t r u c t u r a l ,  industrial,  and i n s t i t u t i o n a l changes over the y e a r s . Development of the Mobile Home The e a r l i e s t t r a c e of mobile home e x i s t e n c e goes i  back t o before the 1930s when t r a v e l t r a i l e r s f i r s t on the market.  The f i r s t  few were made t o be p u l l e d  the f a m i l y car and had no bathing f a c i l i t i e s or conveniences.  behind  full  Soon the demand s h i f t e d t o another  t r a n s i e n t workers,  came  market-  whose numbers grew d u r i n g the d e p r e s s i o n .  V a r i o u s economic and s o c i a l changes c o n t r i b u t e d t o an i n c r e a s e i n the demand f o r mobile housing d u r i n g the p e r i o d 1930 t o 1940. More l e i s u r e time, longer vacat i o n s , and an i n c r e a s i n g d e s i r e t o t r a v e l on the p a r t of a l l economic groups were f a c t o r s r e s p o n s i b l e f o r a widening use of mobile homes. . . . Mobile homes helped s o l v e the housing problem f o r a l a r g e number of salesmen, e n t e r t a i n e r s , c o n s t r u c t i o n workers, farmhands, and other seasonal l a b o r e r s , most of whom were engaged i n occupations which n e c e s s i t a t e d t h e i r moving f r e q u e n t l y from one p a r t of the country t o another. During the 1930's, the d e p r e s s i o n f o r c e d many f a m i l i e s i n t o a nomadic way of l i f e as they sought employment o p p o r t u n i t i e s i n other geographic areas of the country.12 The  i n d u s t r y grew a t a steady pace with the  r e c r e a t i o n e n t h u s i a s t s and t r a n s i e n t workers purchasing the bulk of the t r a i l e r s .  The use of the mobile home as a  permanent d w e l l i n g began d u r i n g the war became c r i t i c a l , In  the US,  years when housing  e s p e c i a l l y i n the defense i n d u s t r y areas.  the f e d e r a l government purchased  l a r g e numbers  46 of mobile homes and general  there were few  s a l e s a v a i l a b l e to  the  public.  By 1943, more than 60 percent of the n a t i o n ' s 200,000 mobile homes were i n defense areas; the N a t i o n a l Housing Agency had purchased 35,000 of t h i s t o t a l . There were no s a l e s t o the general p u b l i c because p r i v a t e s a l e s had been f o r b i d d e n by e x e c u t i v e order. As the wartime demand f o r mobile homes i n c r e a s e d , the demand f o r c r i t i c a l m a t e r i a l s a l s o increased.13 Unfortunately,  the war  took the q u a l i t y out of most  housing as shortages of m a t e r i a l plagued the (Figure 5).  E s p e c i a l l y hard h i t was  industry  the mobile home i n d u s t r y ,  which r e q u i r e d more metal than c o n v e n t i o n a l  housing.  As a r e s u l t , the mobile home i n d u s t r y s u b s t i t u t e d wood c h a s i s f o r s t e e l , took t i r e s o f f and put them i n a pool f o r workers who were to move to other war p l a n t s , cut e l e c t r i c a l w i r i n g to one f o u r t h , r e p l a c e d plywood with s u b s t i t u t e s , and took canvas o f f the r o o f . . . . As a r e s u l t of these low c o n s t r u c t i o n standards, the wartime mobile home was c l e a r l y a substandard d w e l l i n g unit.14 The crisis.  The  general  postwar years saw  mobile homes again  p u b l i c and  continued  e s c a l a t e d d r a m a t i c a l l y i n the  i n two  distinct directions.  which had replaced  The  housing  became a v a i l a b l e t o  the i n d u s t r y began to grow.  "temporary housing" use and  an e s c a l a t i o n of the  But  the the  through the postwar years 1950s.  The  market grew  t r a v e l t r a i l e r market,  always dominated the mobile home s a l e s , was  soon  by the temporary housing market.  Soon i t was d i s c o v e r e d t h a t the l a r g e r t r a i l e r s could not only provide a form of t r a n s i e n t accommodation but a l s o a more economical form of housing than r e n t i n g or owning a c o n v e n t i o n a l d w e l l i n g . So, i n the 1950's, people i n the United States began i n c r e a s i n g l y to l i v e i n t r a i l e r s f o r f i n a n c i a l r a t h e r than m o b i l i t y reasons.15  48 The composition of the immediate postwar mobile home market through 1950 was v a s t l y d i f f e r e n t from t h a t which e x i s t e d p r i o r t o the war. In 1937 the v a c a t i o n market dominated mobile home s a l e s . By 1950 the s m a l l e r t r a v e l t r a i l e r u n i t s were dominating the v a c a t i o n market, s a t i s f y i n g the demand f o r mobile l i v i n g accommodations f o r r e c r e a t i o n a l purposes. Another r a d i c a l change by 1950 was the need f o r temporary housing, which accounted f o r 45 percent of mobile home s a l e s . P r i o r t o World War I I t h i s market was v i r t u a l l y nonexistent.16 Throughout grew.  the next decade the s i z e of the u n i t s  Highway improvements and new laws r e g a r d i n g  homes made wider u n i t s p o s s i b l e .  mobile  Mobile home "parks"  began t o develop and an e n t i r e new l i f e - s t y l e began. Mobile home u n i t s have been s t e a d i l y i n c r e a s i n g i n s i z e s i n c e they f i r s t appeared on the market. . . . In 1954 the i n d u s t r y i n t r o d u c e d the 10-wide model t o consumers and by 1969 i t accounted f o r 98 percent of p r o d u c t i o n . . . . In the year 1962, the 12-wide mobile home was i n t r o d u c e d by the i n d u s t r y manufacturers. . . . The 14-wide mobile home came i n t o mass p r o d u c t i o n > during 1979 and accounted f o r 2.3 percent of t o t a l shipments.I 7  As the u n i t s grew l a r g e r and t e c h n o l o g i c a l  advances  r e s u l t e d i n s t r u c t u r a l improvements, i t became necessary f o r the i n d u s t r y t o develop a common s e t of standards i n order t o p r o t e c t and improve  i t s reputation.  Many small manufac-  t u r e r s went under due t o the changes and t e c h n o l o g i c a l advances machinery  which r e q u i r e d and t o o l i n g .  l a r g e c a p i t a l expenditures i n The i n d u s t r y became c o n c e n t r a t e d  i n t o the hands of a few. In the mid 1930's, the i n d u s t r y c o n s i s t e d p r i m a r i l y of numerous small marginal producers. As p r e v i o u s l y s t a t e d , no a c c u r a t e f i g u r e s were maintained, but estimates range from 300 t o 2,000 manufacturers i n the i n d u s t r y . . . . As e a r l y as 1960, F. A. Boynton s t a t e d : " I t i s obvious t h a t the mobile home i n d u s t r y i s now e n t e r i n g an e n t i r e l y new phase." T h i s phase has been  49 a p t l y coined, "The Era of the B i g Few." ... In 1968, the ten l a r g e s t mobile home manufacturers i n u n i t s a l e s accounted f o r 43.3% of the t o t a l market.18 During the scene.  The  1970s, many new  focus was  materials  on developing  "home-like" appearance (Figure 6). hit  the market and  s i z e and  l o c a t i o n , and  style.  Low  but  F a l s e s h u t t e r s , changes i n window, even a few  two-story " c a b i n - s t y l e "  maintenance park l i v i n g and  home r e t i r e m e n t  The  focus was  not  an  easy-going  Golf course mobile  v i l l a g e s , community b u i l d i n g s , common  swimming p o o l s , and  1970s and  The  a l s o on the e n t i r e mobile home l i f e -  l i f e - s t y l e became the p r i o r i t i e s .  park image.  a more t r a d i t i o n a l  s y n t h e t i c rock or b r i c k  mobile homes a r r i v e d on the market. only on design  the  Many expandable u n i t s  wood s i d i n g and  f a c i n g became s t y l i s h .  came on  t e n n i s c o u r t s added t o the mobile home  Major park improvements occurred  the demand f o r double wides and  during  expandables grew.  consumers demanded b e t t e r parks as w e l l and  q u a l i t y u n i t s , and  the  higher  f o r the most p a r t they got what they  demanded. Four s i g n i f i c a n t trends are c u r r e n t l y t a k i n g place i n the housing i n d u s t r y . . . . Consumers are no longer emphasizing t h a t the p r i n c i p a l d e c i s i o n to make when purchasing a home i s as t o the b a s i c u n i t i t s e l f . They are, i n s t e a d , emphasizing the t o t a l environment, t h a t i s the e n t i r e community with i t s f a c i l i t i e s , atmosphere, q u a l i t y of neighbors, and even i t s p r o x i m i t y t o other communities.19 In observing the changes t h a t have taken p l a c e w i t h i n the i n d u s t r y i t s e l f , and i n the mobile home u n i t s , i t i s i n d i c a t e d t h a t the i n c r e a s e i n s i z e of u n i t s , the l a c k of i n c r e a s e i n c o s t of u n i t s , the more a l l i n c l u s i v e packages, the development of n a t i o n a l s t a n dards, and the development of b e t t e r parks have c o n t r i b u t e d to the a t t r a c t i o n t h a t the product has f o r the consumer.20  Figure  6.  Modern Mobile Home with Newer T r a d i t i o n a l M a t e r i a l s Example from California  51 Drury d i s c u s s e s the two  f u t u r e paths she saw f o r  the mobile home i n d u s t r y . To t h i s w r i t e r there seem to< be- two paths the i n d u s t r y can take. F i r s t , i t can continue t o move along the path of producing l a r g e r and l a r g e r u n i t s and aim f o r approval i n the c o n v e n t i o n a l housing market. I f the i n d u s t r y f o l l o w s t h i s path i t i s q u i t e l i k e l y t h a t i n the f u t u r e the mobile u n i t , i n the form we know i t today, w i l l disappear as a d i s t i n g u i s h a b l e form of housing. .. . . Once i t i s i n d i s t i n g u i s h a b l e from other housing i t w i l l come under the c o n t r o l s i n the housing market and w i l l l o s e i t s advantage. . . . The second path t h a t can be taken i n the f u t u r e , assuming t h a t the c l a s s i f i c a t i o n remains constant, i s t o continue producing a u n i t t h a t can be d e f i n e d as a v e h i c l e . . . . F o l l o w i n g t h i s second path i t might be p o s s i b l e f o r the development i n the United States of a major i n d u s t r i a l i z e d housing i n d u s t r y . 2 1 At the c u r r e n t time, the i n d u s t r y appears going not i n one d i r e c t i o n but going both ways. strong t r e n d toward  t o be There i s a  the mobile home becoming more l i k e a  t r a d i t i o n a l home with acceptance on a r u r a l  l o t , but at the  same time, the very i n e x p e n s i v e s i n g l e wide u n i t s  still  predominate  i n many small town mobile home "parks" and  small r u r a l  lots.  on  Advantages Mobile homes have s e v e r a l advantages over convent i o n a l housing.  They are cheaper  to purchase,  guaranteed  s t r u c t u r a l l y sound, easy t o set up, and convenient t o s e l e c t i n t h a t they are marketed o f f a l o t .  They have low  maintenance c o s t s and i n the US the v e h i c l e  identification  o f t e n exempts them from some t a x e s .  The park  life-style  i s d e s i r a b l e t o many, e s p e c i a l l y r e t i r e d people who need the s o c i a l a c t i v i t i e s and r e c r e a t i o n a l  may  facilities.  52 To s t i l l  others,  the mobile home may  simply  be the  only  alternative available. Cost When one  asks an i n d i v i d u a l mobile home owner,  why  he s e l e c t e d t h i s o p t i o n , the most common response i s  low  cost. Between 1970 and 1979 the median p r i c e f o r a new s i n g l e - f a m i l y home i n c r e a s e d from $23,400 to $71,000 and continues upward. To t h i s i n c r e a s e d purchase p r i c e i s added the i n c r e a s i n g f i n a n c i a l burden of higher mortgage r a t e s and energy c o s t s . Thus the c o s t of purchasing and l i v i n g i n a house has e s c a l a t e d beyond the f i n a n c i a l means of many low- to moderateincome would be homeowners.22 The  c o s t f a c t o r has  C e r t a i n l y the i n i t i a l when a p p r e c i a t i o n  been an i s s u e of great  c o s t i s l e s s but  i s entered  f i g u r e s are not as c l e a r l y  i n the  long  debate. run,  i n t o the c a l c u l a t i o n s , the favorable.  Mobile home ownership does not confer long-term economic b e n e f i t s as compared to ownership of a s i n g l e detached or condominium u n i t , s i n c e the mobile home d e p r e c i a t e s i n value r a t h e r than a p p r e c i a t i n g . 2 3 Recent trends depreciate  show that mobile homes no  as i n f l a t i o n has  housing d r a m a t i c a l l y . l i n k e d to the  pushed up the value  Appreciation  seems t o be  longer of a l l strongly  land c o s t s or s i t e of the mobile home park  r a t h e r than t o the q u a l i t y of the u n i t . r u r a l areas have i n c r e a s e d mobile home on a r u r a l  Land c o s t s i n  r a p i d l y i n recent  l o t may  years and  c l e a r l y be a b e t t e r  long-  term investment than a condominium or townhouse i n a town.  The  f a c t o r y process of b u i l d i n g i s extremely  a  small  53 c o s t - e f f e c t i v e , e s p e c i a l l y i n areas where weather  affects  construction. There i s simply no q u e s t i o n t h a t a good modern house can be made f a s t e r , b e t t e r , and a t a lower c o s t , under the w e a t h e r - p r o t e c t i n g roof of a modern house f a c t o r y . That i s the only l o g i c a l way t o make a house. C o n t i n u i n g t o b u i l d houses s t i c k by s t i c k , by hand, one at a time a t each b u i l d i n g s i t e , makes no more sense today than c a l l i n g on t h e horse and buggy t o l i c k a b i g c i t y ' s rush-hour t r a f f i c s n a r l s . 2 4 Another c r i t i c i s m of cost comparison of mobile home c o s t s and c o n v e n t i o n a l home c o s t s i s t h a t the mobile homes f r e q u e n t l y have v a r i o u s o p t i o n s and set-up c o s t s that are not accounted f o r i n the comparisons. added c o s t s f o r o p t i o n s i s a concern, a major  While advantage  of the mobile home i s f a s t d e l i v e r y and i n s t a n t set-up. "Lower c o s t , h i g h e r q u a l i t y , and f a s t e r d e l i v e r y are j u s t three of the advantages of a manufactured house, when i t i s compared w i t h buying a c o n v e n t i o n a l new house made by a 25 local  '  builder."  N a t i o n a l Standards of Construction Mobile homes i n the US must comply b u i l d i n g standards.  with n a t i o n a l  T h i s i s a major advantage  acceptance by the buyer and the community.  i n case of  Individual  homes pass i n s p e c t i o n i n the f a c t o r y and thus 1  time-consuming  l o c a l b u i l d i n g i n s p e c t i o n s are not necessary. The purpose of b u i l d i n g t o a c c e p t a b l e standards was t o ensure t h a t t h e completed u n i t was s a f e l y designed, t h a t adequate m a t e r i a l s had been used and t h a t h e a l t h and s a f e t y hazards had been e l i m i n a t e d . By i n t e r n a l l y developing a s e t of n a t i o n a l performance standards the i n d u s t r y i s capable of d e l i v e r i n g a mobile home u n i t  54 c o n s t r u c t e d by the same standards t o any l o c a t i o n i n the U n i t e d S t a t e s . Such n a t i o n a l standards are unique t o the mobile home i n d u s t r y because other segments of the housing i n d u s t r y a r e plagued by v a r y i n g l o c a l l a b o r and code r e g u l a t i o n s . 2 6 Marketing Marketing i s another major advantage unique t o the lot.  mobile home.  Dealers can s e l l  s e v e r a l homes o f f the  They a r e v i s i b l e and overhead i s low, while a  c o n v e n t i o n a l home b u i l d e r must s e l l  the house where i t  stands or pay a l a r g e sum of money t o have i t moved. way the cash o u t l a y can be s i g n i f i c a n t .  The p r a c t i c e of  s e l l i n g mobile homes through d e a l e r networks homes a d i s t i n c t marketing advantage  Either  g i v e s mobile  and b e n e f i t s the  p o t e n t i a l home buyer. Tax Savings i n Some Areas In many p l a c e s  (US) mobile homes a r e c l a s s i f i e d as  v e h i c l e s and taxed d i f f e r e n t l y than a t r a d i t i o n a l home. Changes are being made t o e q u a l i z e the tax share but i n most places, i n the US the mobile home s t i l l  has a d i s t i n c t  advantage. The u n i t s ' v e h i c u l a r d e f i n i t i o n has made i t immune t o many r e s t r i c t i o n s and c o n t r o l s . . . Had i n s t i t u t i o n a l c o n t r o l s been e x e r t e d on the mobile home i t might w e l l have been e l i m i n a t e d as have been most other i n n o v a t i v e t o t a l l y i n d u s t r i a l i z e d housing u n i t s i n the past.27 T h i s advantage  i s changing as communities  t h e i r t a x and r e g u l a t i o n s , but i t i s s t i l l  a perceived  advantage, e s p e c i a l l y i n r e t i r e m e n t communities mobile home parks.  alter  with l a r g e  55 I n c r e a s i n g l y , many i n d i v i d u a l s are s e l e c t i n g the park planned community f o r i t s l i f e - s t y l e T h i s i s e s p e c i a l l y t r u e i n "retirement"  advantages.  communities.  The  s o c i a l advantages are c l e a r l y a t t r a c t i v e t o many people. S e c u r i t y , low maintenance, and ties  ( g o l f course,  c l o s e access  to many  facili-  p o o l , t e n n i s c o u r t s ) are a t t r a c t i v e  t o many i n d i v i d u a l s . Financing Financing o b t a i n unless Canadian.  for conventional  homes i s d i f f i c u l t  one's income i s over $25,000 US or $30,000  One  must u s u a l l y a l s o have a l a r g e down payment,  yet because the i n i t i a l the payments may  c o s t of. the mobile home i s  be more f e a s i b l e .  mobile home may  for  become the only lower-cost  They have a l s o on o c c a s i o n  f e d e r a l or p r o v i n c i a l grants  low,  When bank or government  f i n a n c i n g a i d i s not a v a i l a b l e f o r c o n v e n t i o n a l  areas.  to  homes, the  option i n r u r a l  r e c e i v e d the same s t a t u s  or  loans.  When a mobile home r e s t s on a permanent foundation on p r i v a t e land i t i s t r e a t e d as an o r d i n a r y house f o r the purposes of the annual home owner grant ($170 i n 1971) under the P r o v i n c i a l Home Owner Grant Act f o r the ($500 on an o l d e r house and $1,000 on a "new" house) under the P r o v i n c i a l Home A c q u i s i t i o n Act).28 Disadvantages Appreciation Mobile homes t r a d i t i o n a l l y have had  a problem  with  d e p r e c i a t i o n , or the l a c k of a p p r e c i a t i o n , compared ;to other types of housing. c r i t i c i z e the acclaimed  T h i s f a c t o r has "low  caused many t o  c o s t " advantage.  Mobile  56 homes no longer seem t o d e p r e c i a t e but some may argue i n times of r i s i n g housing c o s t s they may f a i l i n v a l u e as r a p i d l y as c o n v e n t i o n a l housing. of  any house i s c r i t i c a l l y  that  to increase Appreciation  dependent on l o c a t i o n .  Thus,  i n r u r a l areas where land p r i c e s are r i s i n g a t a f a s t e r r a t e than b u i l d i n g c o s t s , the type of s t r u c t u r e may as c r i t i c a l  as where the home i s l o c a t e d .  not.be  T h i s i s extremely  t r u e i n f a s t - g r o w i n g areas or areas where growth r e s t r i c t i o n s , new zoning laws, or environmental r e g u l a t i o n s have r e c e n t l y taken  effect.  Mobile homes a r e the cheapest k i n d of home you can buy. You need fewer d o l l a r s t o buy a mobile home, but i t s c o s t , i f extended f o r the l i f e of the home, may be higher than expected.2 9 More and more mobile homes, e s p e c i a l l y those l o c a t e d on permanent foundations i n a t t r a c t i v e s e t t i n g s , do not d e p r e c i a t e markedly.30 The f a c t that, mobile homes d e p r e c i a t e i s a very powerful b a r r i e r t o i n d u s t r y growth. . . . S e v e r a l c o n d i t i o n s have c o n t r i b u t e d t o the poor " a p p r e c i a t i o n " of mobile homes. H i s t o r i c a l l y , mobile homes were not p l a c e d on "owned l a n d . " In some cases, zoning r e s t r i c t i o n s have prevented mobile homes from being p l a c e d w i t h i n neighborhoods which would a l l o w f o r a p p r e c i a t i o n . 3 1 A e s t h e t i c s and Appearance The c l a s s i c a l b o x - l i k e e x t e r i o r appearance of mobile homes has a l s o been a problem  and an o b s t a c l e t o  the growth and development of the mobile home market. The use of metal s i d i n g , porches, r a i l s ,  and other m a t e r i a l s  l e s s common t o other types o f housing causes the mobile home t o stand out as a d i s t i n c t i v e l y d i f f e r e n t home.  This  57 has o f t e n worked t o i t s disadvantage, e s p e c i a l l y i n g a i n i n g acceptance i n r u r a l  subdivisions.  Though many are l o c k e d i n t o the elongated "Pullman car" p a t t e r n , manufacturers are breaking out of t h i s monotony and o f f e r i n g r e f r e s h i n g l y new room layouts.32 U n f o r t u n a t e l y , too many mobile homes are s t i l l i n the looks department.33  losers  Poor R e g u l a t i o n of S a l e s Dealers Another major problem i s t h a t of the d i s h o n e s t fly-by-night dealer. a mobile home d e a l e r .  I t takes l i t t l e  investment t o become  Many do not know the business w e l l .  The wholesale and r e t a i l f i n a n c i n g and s e l l i n g techniques of a mobile home d e a l e r are s i m i l a r t o those of an automobile d e a l e r . The mobile home d e a l e r i s more independent, however, and h i s r e l a t i o n s h i p with the manufacturer i s not as c l o s e 'as t h a t of the auto d e a l e r with h i s manufacturer. Thus, the mobile home d e a l e r operates with fewer merchandising, f i n a n c i n g a i d s from the manufacturer, even though manufacturers f u r n i s h f l o o r - p l a n f i n a n c i n g i n some cases. Mobile home d e a l e r s are a l s o " f l o o r planned" with banks and s a l e s f i n a n c e companies who u s u a l l y advance t o the d e a l e r a p p r o x i mately 90 t o 100 per cent of the c o s t of each u n i t , i n c l u d i n g t r a n s p o r t a t i o n costs.34 U n f o r t u n a t e l y , t h e i n d u s t r y has always  attracted  a l e s s d e s i r a b l e element of d e a l e r s due t o the ease of g e t t i n g i n t o and out of the b u s i n e s s .  "The mobile home  i n d u s t r y i s plagued with an u n u s u a l l y l a r g e number of f l y by-night d e a l e r s , p a r t l y because  i t i s an easy business t o  35 enter and l e a v e . " The mobile home meets a c r i t i c a l housing need i n many areas.  I t i s not without problems  and disadvantages.  Each i n d i v i d u a l must make a c h o i c e with regard t o s p e c i f i c housing need. For many r u r a l r e s i d e n t s , the mobile home  58 meets a l l needs.  I t i s r e l a t i v e l y inexpensive, can be  q u i c k l y s e t up, and p r o v i d e s the l i v i n g environment s u i t a b l e f o r a v a r i e t y of l i f e - s t y l e s . Although housing  f o r some the*••mobile  needs and e x p e c t a t i o n s , others c o n s i d e r i t a  compromise.  Few i n d i v i d u a l s are able t o purchase the  "house of t h e i r dreams." prevent  home meets a l l t h e i r  total  Fianancial r e a l i t i e s usually  "dream f u l f i l l m e n t . "  While a mobile home  c l e a r l y meets most i n d i v i d u a l s ' needs, i t may not meet everyone's d e s i r e s . The  i n d u s t r y has changed markedly i n recent  and addressed Great  years  t h e i s s u e of market p r e f e r e n c e and t a s t e .  improvements have o c c u r r e d ; i n design and m a t e r i a l s .  These changes have made the mobile home d e s i r a b l e t o a wider income range. The a l s o gained  improvements i n appearance and s t r u c t u r e have the mobile home g r e a t e r acceptance with the  f i n a n c i a l and governmental i n s t i t u t i o n s . homes a r e no longer as d i f f i c u l t  Loans f o r mobile  to obtain.  The i n i t i a l  lower c o s t i s b e n e f i c i a l , e s p e c i a l l y d u r i n g p e r i o d s of high i n t e r e s t r a t e s .  A new modest-sized  mobile home may  c o s t as l i t t l e as $18,000. For many r u r a l r e s i d e n t s with a r u r a l l o t , the mobile home may c l e a r l y be t h e only f e a s i b l e  option,;regard-  l e s s of t h e i r p e r s o n a l c h o i c e , due t o i t s low c o s t , a v a i l a b i l i t y , and ease of f i n a n c i n g .  59 Notes U.S. O f f i c e of Economic O p p o r t u n i t y and Rural Housing, A Report on OEO's Rural Housing A c t i v i t i e s and Achievements, as I n d i c a t e d by Study of F i v e S e l e c t e d Rural Housing Development C o r p o r a t i o n s (Washington, D.C.: Government P r i n t i n g O f f i c e , n.d.), p. 94. 2 The Center f o r Auto S a f e t y , Mobile Homes, the Low Cost Housing Hoax (New York: Grossman, n.d.), p. x i i . 3 Margaret Drury, Mobile Homes—The Unrecognized R e v o l u t i o n i n American Housing (New York: Praeger, 1972), p. 11. 4 Kenneth Tremblay, J r . , Don Dillman, and Joyce Dillman, Housing S a t i s f a c t i o n and Preferences of Washington Residents, a 1977 Statewide Survey.(Bellingham: Washington State U n i v e r s i t y , C o l l e g e of A g r i c u l t u r e Research Center, 1977), p. 11. 5 J u d i t h Rabb and Bernard Rabb, Good S h e l t e r , a Guide t o M o b i l e , Modular and P r e f a b r i c a t e d Houses I n c l u d i n g Dome (New York: Quadrangle, 1975), p. 30. A.M. Watkins, The Complete Guide t o Factory-Made Housing (New York: E. P. Dutton, 1980), p. v i i . 7 Drury, p. 13 7. 8 Canada, The Report of an Inquiry Conducted f o r the Government of the Province of B r i t i s h Columbia, Mobile Homes—Problems and P r o s p e c t s , by Michael Audain ( V i c t o r i a , B.C.: Queen's P r i n t e r , November 1975), p. 10. 9 Rabb and Rabb, p. 7. •^Thomas N u t t - P o w e l l , Michael F u r l o n g , and C h r i s t o p h e r P i n k i n g t o n , The S t a t e s and Manufactured Housing (N.p.: 1980), p. 206. ''•'''Rabb and Rabb, p. 40. 12 Harold Davidson, Housing Demand: Mobile, Modular or Conventional (New York: Van Nostrand, 1973), p. 14. 13 I b i d . , p. 11. 14 , Ibid. T  •^Canada, p. 7.  60 16  Davidson, p. 22. Ibid.  ^ I b i d . , p. 27. 19 I b i d . , p. 72. Drury, p. 8. I b i d . , p. 140. 22 Nutt-Powell, F u r l o n g , and P i n k i n g t o n , p. n . 23 United Community S e r v i c e o f the Greater Vancouver Area, P o l i c y and Research Department, Mobile Home L i v i n g i n the Lower Mainland (Vancouver, B.C.: United Community S e r v i c e o f the G r e a t e r Vancouver Area, January 1971), p. 23. 24 Watkms, p. v n . 25 I b i d . , p. 3. 26 Davidson, p. 43. 2 1  2 7  D r u r y , p.  120.  28 B r i t i s h Columbia, Department of I n d u s t r i a l Development, Trade and Commerce Economics and S t a t i s t i c s Branch, Mobile Homes i n B r i t i s h Columbia: A Socio-Economic Study, March 1971, p. 11. 29 Rabb and Rabb, p. 30. 30 Watkins, p. 76. 31 Owens/Corning F i b e r g l a s s , B a r r i e r s t o Greater Sales Growth, An I n v e s t i g a t i o n of Consumer S h e l t e r D e c i s i o n Making As I t Impacts the Mobile Home Industry. 32 Watkins, p. 76. 33 I b i d . , p. 7 4. 34 35 The Center p. f o50. r Auto S a f e t y , p. 26. Davidson,  CHAPTER I I I PARTIALLY MANUFACTURED HOUSING S u c c e s s f u l Option f o r A f f l u e n t Yet Often U n a v a i l a b l e f o r Middleand Lower-Income F a m i l i e s The non-mobile manufactured  housing has grown  s t e a d i l y f o r s e v e r a l years i n i t s many forms.  This alterna-  t i v e t o the mobile home has not been s t u d i e d i n depth as a d i s t i n c t l y d i f f e r e n t c l a s s of housing.  Non-mobile manufac-  t u r e d housing i s o f f e r e d i n many types and p r i c e ranges. i s p o s s i b l e f o r a p o t e n t i a l k i t home buyer t o purchase  It  a kit  and put i t t o g e t h e r with some h i r e d l a b o r f o r approximately the same c o s t as a s i m i l a r l y s i z e d mobile home. T h i s chapter w i l l d i s c u s s the v a r i o u s forms of p a r t i a l l y manufactured types of housing.  " k i t " homes as d i s t i n c t from other  Advantages and disadvantages w i l l be  s t u d i e d i n order t o compare t h i s housing o p t i o n t o the mobile home and e v a l u a t e i t s p o t e n t i a l as a v i a b l e  housing  o p t i o n f o r the p r o s p e c t i v e low-/moderate-income r u r a l new home buyer.  " I t ' s a c c u r a t e t o say t h a t f a c t o r y made houses  now account f o r more than h a l f of a l l new s i n g l e - f a m i l y houses now b u i l t and s o l d i n the United States."''' The mobile home r e p r e s e n t s a l a r g e segment of the manufactured  housing i n d u s t r y but there are many other  62 types,  i n c l u d i n g p r e f a b r i c a t e d and modular.  timber, l o g , dome, p a n a l i z e d ,  s u b s t a n t i a l l y t o the  (Figure 7 ) . Few new homes today are  completely s t i c k - b u i l t .  Prefabricated stairways,  doors, and windows a r e used e x t e n s i v e l y by most home b u i l d e r s . being  pre-cut  and component homes may be  l e s s v i s i b l e y e t they c o n t r i b u t e r u r a l housing market  These  trusses, "traditional"  " P r e f a b r i c a t e d p a r t s and components were  used i n most o f a l l other  new housing being  b u i l t each  2 year by l o c a l b u i l d e r s and  developers."  Types and C h a r a c t e r i s t i c s of P a r t i a l l y Manufactured Housing The and  manufactured house comes i n many v a r i o u s  shapes  s i z e s (Figure 8 ) . Some are almost completely f a c t o r y -  b u i l t , r e q u i r i n g l i t t l e o n - s i t e labor other  homes are merely pre-cut  erected o n - s i t e .  (modular), w h i l e  lumber t h a t must be t o t a l l y  Regardless of the degree of f a c t o r y  c o n s t r u c t i o n , the manufactured home i s very popular i n r u r a l areas where there The  opportunity  i s a shortage of s k i l l e d f o r true savings  labor.  on the c o s t of a  p r e f a b r i c a t e d manufactured house occurs when the owner c o n t r i b u t e s h i s own l a b o r and e l e c t s .to c o n s t r u c t h i s home. Savings a l s o can be made, n a t u r a l l y , by b u i l d i n g your own year round home from a f a c t o r y package or k i t . B u i l d i n g any home i s no easy chore. Don't k i d y o u r s e l f about t h i s . I t takes work. But i t ' s c o n s i d e r a b l y l e s s of a mountain t o t a c k l e than b u i l d i n g a s t i c k b u i l t house.3  F i g u r e 7.  T y p i c a l Pre-Cut K i t Home from B r i t i s h Columbia Near Radium Hot Springs  64  F i g u r e 8.  Lumber Yard S t i c k Frame K i t Home from Tacoma, Washington  65 Modular A modular house i s almost t o t a l l y c o n s t r u c t e d i n the factory.  The house i s c o n s t r u c t e d i n s e v e r a l p i e c e s which  are then hooked together o n - s i t e . no  Some c o n s i d e r there t o be  " r e a l " d i f f e r e n c e between modular and mobile homes.  Canadian mobile homes a r e c o n s i d e r e d by some t o be i d e n t i c a l to  US modular homes, but most authors  to  be d i s t i n c t from the mobile.  c o n s i d e r the modular  Rabb and Rabb d e s c r i b e the  d i f f e r e n c e from t h e i r p e r s p e c t i v e . Modular homes are i n dead center o f the i n d u s t r y i n terms of q u a l i t y and c o s t . They are c o m p e t i t i v e with double-wide mobiles and s m a l l e r p r e f a b r i c a t e d homes. The higher end o f the mobile range of modulars, w h i l e the more expensive modulars are c o m p e t i t i v e with the l e s s expensive p r e f a b r i c a t e d homes.4 U n l i k e mobile homes, v i r t u a l l y a l l of which have metal s i d i n g and almost f l a t r o o f s , and r a r e l y have even fake s h u t t e r s as standard equipment, modular homes are very c l o s e i n m a t e r i a l s , appearance and c o n s t r u c t i o n to s t i c k b u i l t homes. . . . . . . A modular home must be p l a c e d on e i t h e r a f u l l basement lower l e v e l or crawl space, because a l l u t i l i t y connections are beneath the f l o o r . 5 Davidson d e s c r i b e s the t y p i c a l modular home from h i s perspective. Plumbing, w i r i n g , and c a r p e t s are i n s t a l l e d a t the p l a n t , and the plumbing and w i r i n g are connected a t the s i t e . A crane l i f t s the modules from t r u c k s onto a c o n c r e t e s l a b foundation on which two or more s e c t i o n s are a t t a c h e d by on s i t e labor.6 Rabb and Rabb a l s o d e f i n e a modular home. Modular homes: A permanent s t r u c t u r e c o n s i s t i n g of one or more modules assembled i n a f a c t o r y i n a c c o r dance with a b u i l d i n g code, and q u a l i f i e d t o be f i n a n c e d and taxed as r e a l p r o p e r t y when p l a c e d on a permanent foundation.7  66  The d i v i d i n g l i n e between modular and mobile homes i s not d i s t i n c t .  Many c o n s i d e r  composed of h e a v i e r  "traditional"  i n s t e a d of p a n e l i n g . separately  a home modular i f i t i s materials  l i k e sheetrock  The modular market, i f c l a s s i f i e d  from the mobile home, i s q u i t e s m a l l .  Its  p o p u l a r i t y i s growing but has run i n t o many stumbling blocks  ( e s p e c i a l l y i n the US) t h a t have made i t l e s s popular  than the mobile home.  "The 196 9 modular home market of  approximately 10,000 u n i t s i s small when compared t o the p r e f a b r i c a t e d housing market of 240,000 u n i t s or the mobile home market o f over 4 0 0 , 0 0 0 . " Rabb and Rabb c o n s i d e r and p r e f a b r i c a t e d Prefabricated  C l e a r l y , Davidson and  the modular home between the mobile  or k i t homes.  Housing  P r e f a b r i c a t e d homes make up the bulk of the nonmobile manufactured sizes  (Figure  home t h u s l y :  9).  housing.  They come i n many shapes and  Rabb and Rabb d e f i n e the p r e f a b r i c a t e d  "Prefabricated  homes: Factory-assembled com-  ponents t o be shipped t o a s i t e f o r assembly  t o form a  9  b u i l d i n g or house s t r u c t u r e . "  They f u r t h e r s t a t e  that  " i n the housing i n d u s t r y a p r e f a b r i c a t e d home i s one b u i l t by a c o n s t r u c t i o n and pre-assembly  technique t h a t i n v o l v e s the p r e c u t t i n g i n a f a c t o r y of some o r a l l p a r t s of a  house. There a r e many types of p r e f a b r i c a t e d homes. The log  home k i t i s the most common and one of the h i g h e s t i n  67  68 m a t e r i a l c o s t , but i t i s f a i r l y easy t o e r e c t . k i t home buyers (Figure  Many l o g  e l e c t t o b u i l d t h e i r own (survey r e s u l t s )  10). Log k i t s .  f l o o r plans  Log homes come i n g r e a t v a r i a t i o n s and  (Figure 11).  Some f i r m s o f f e r a l l components  f o r the complete home; others have "logs o n l y " packages. few manufacturers  offer  providing labor.  Most p r o v i d e h e l p or a s s i s t a n c e f o r  " u n f i n i s h e d s h e l l " packages, thus  owner-builders, who may account sales.  A  f o r over 50 percent of t h e i r  A l o g home, l i k e most p r e - c u t , p r e f a b r i c a t e d  packages, goes t o g e t h e r l i k e a g i a n t p u z z l e . f o r an owner-builder from s c r a t c h .  I t i s easier  t o c o n s t r u c t a package than t o b u i l d  Some small homes may r e q u i r e a s k i l l e d  of three l e s s than one week t o complete. take the owner-builder  longer than a year.  crew  Other k i t s may The l o g home  i n d u s t r y o f f e r s the g r e a t e s t f l e x i b i l i t y and d e s i g n v a r i a tion.  Every manufacturer  t i o n techniques.  has h i s own designs and c o n s t r u c -  Some k i t s are easy t o assemble; others  are more d i f f i c u l t .  T h i s v a r i a t i o n i s a major a t t r a c t i o n  of the l o g home ( F i g u r e 1 2 ) . Dome k i t s .  One. dome kit: manufacturer's  e n t i t l e d Monterey Domes Geodesic  brochure,  Homes f o r L i v i n g ,  states:  Monterey Domes o f f e r s a range of models from under 1,000 square f e e t t o over 4,000 square f e e t — a n d everyt h i n g i n between. Of course, t h a t ' s j u s t f o r s t a r t e r s . By j o i n i n g one dome t o another, you can c r e a t e what i s c a l l e d a geodesic c l u s t e r . With e x t e n s i o n s , dormer windows, s k y l i g h t s and other a v a i l a b l e o p t i o n s , you can  F i g u r e 10.  Log K i t i n B r i t i s h  Columbia  70  F i g u r e 11.  Montana Hand-Hewn Log Cabin  71  72 have j u s t about any e f f e c t or a e s t h e t i c mood you're looking f o r . I t h i n k y o u ' l l f i n d t h a t the design p o s s i b i l i t i e s are almost l i m i t l e s s . i l Dome manufacturers  normally have a l e g a l patent on  t h e i r p a r t i c u l a r connector mechanism where the studs meet t o form the geometric  frame.  Normally  i n c l u d e d i n the k i t a r e  the p r e - c u t studs and plywood p a n e l s .  I t i s not unusual f o r  the b a s i c dome package t o c o s t under $10,000. an extremely  low-cost housing o p t i o n .  A dome can be  I t i s favored by  those who p r e f e r not t o f i n a n c e a home.and have a few thousand  d o l l a r s t o complete the b a s i c s h e l l .  e a s i l y be completed  i n stages, as the w a l l s i n s i d e do not  need to be l o a d - b e a r i n g . i t s unique  The dome can  Some owners p r e f e r the dome f o r  design arid would not c o n s i d e r b u i l d i n g a square  home. P a n e l i z e d homes. utilizing  Most p a n e l i z e d homes a r e c o n s t r u c t e d  the t r a d i t i o n a l stud frame technique.  The panels  are c o n s t r u c t e d i n a f a c t o r y and t r u c k e d t o the s i t e where they are e r e c t e d on the f o u n d a t i o n . manufacturer  U s u a l l y the panel  has a crew t o e r e c t the s h e l l .  Any type of  s t r u c t u r e can be b u i l t u s i n g the panel technique.  A few  l o g home f i r m s a l s o o f f e r l o g panel packages so there i s no c l e a r d i v i d i n g  line.  There are other hexagon, round, and exotic-shaped home packages on the market which u t i l i z e panel and p r e - c u t construction techniques. sites.  One manufacturer  Many are designed  f o r unusual  s t a t e s : "Toppider can grow where  73 o t h e r homes c o u l d n o t l i v e .  Topsider  rises  from a p e d e s t a l  base and branches s t r o n g l i m b s t h a t form t h e p l a t f o r m f o r your 12 e i g h t - s i d e d panorama o f t h e w o r l d a r o u n d y o u . " The  m a n u f a c t u r e d h o u s e comes i n many s h a p e s a n d s i z e s .  M o s t homes b u i l t t o d a y  are at least  p a r t i a l l y manufactured.  P r e - c u t k i t s a r e m o s t common i n r u r a l a r e a s , b u t t h e y a r e o f t e n n o t as v i s i b l e as mobile  homes.  Marketing M o s t p r e f a b r i c a t e d a n d m o d u l a r homes a r e m a r k e t e d through  advertisements  and a l i m i t e d  d e a l e r network.  M o d u l a r homes a r e o c c a s i o n a l l y b u i l t b y m o b i l e t u r e r s and marketed s l i g h t l y d i f f e r e n t l y . p r e f a b r i c a t e d manufacturer limited  area.  operates  home m a n u f a c -  Frequently the  on a s m a l l s c a l e i n a  Rabb a n d Rabb s t a t e t h a t " p r e f a b r i c a t e d homes  a r e s o l d much l i k e o t h e r f o r m s o f m a n u f a c t u r e d Manufacturers  a d v e r t i s e t h e i r products  housing.  i n newspapers and 13  magazines and a s k you t o w r i t e f o r t h e i r c a t a l o g s . " T r a n s p o r t a t i o n c o s t s c a n be v e r y h i g h f o r a m o d u l a r home, a n d f r e q u e n t l y , m o d u l a r home m a n u f a c t u r e r s p r e f a b r i c a t e d home m a n u f a c t u r e r s )  (like  f i n d t h a t t h e i r home i s  n o t c o m p e t i t i v e i f moved more t h a n a f e w h u n d r e d m i l e s . An  exception t o t h i s rule  p r e f a b r i c a t e d home c a l l e d  i s a new e x p e r i m e n t a l  low-cost  "Lifehouse," recently  developed  as t h e a n s w e r t o t h e h o u s i n g  crisis.  Taiwan, and a l l components f i t i n t o container.  I t i s being b u i l t i n a standard  shipping  74 We're not b u i l d i n g anything but a d w e l l i n g t h a t can be s o l d f o r the p r i c e of a m i d - p r i c e d s p o r t s c a r . . . . . . . The purpose o f the f i r s t house, s a i d Stevenson's engineer, Shig Shiwota, was t o t e s t the concept t h a t a l l the p a r t s o f the house c o u l d be packaged i n the standard s h i p p i n g c o n t a i n e r . . . . . . . When the c o n t a i n e r i s s e t on a p i e r foundat i o n , much l i k e t h a t used f o r a mobile home, i t s s i d e s f o l d down t o become the f l o o r of the L i f e h o u s e and i t s s t e e l beam frame becomes the s t r u c t u r a l support f o r the loft. . . . . . . I n t e r i o r and e x t e r i o r w a l l s are i n s i d e a l r e a d y framed, i n s u l a t e d and covered with sheathing. . . . They s l i d e i n t o p l a c e over a t r a c k and are b o l t e d together at the edges. . . K i t c h e n and bathroom, the f i r s t items packed i n t o the c o n t a i n e r , are l e f t as they stand, ready t o use.14 L i f e h o u s e i s unusual experimental housing  level.  popular and can be extremely  but i t i s not alone i n the Domes have a l s o been very low i n c o s t .  To begin w i t h , i n the b u i l d i n g of a Monterey Dome you save a t l e a s t t h i r t y percent on the c o s t of m a t e r i a l s and l a b o r . There are two b a s i c reasons f o r t h i s : f i r s t , the geodesic concept e l i m i n a t e s the need f o r expensive, l o a d - b e a r i n g support w a l l s . Secondly, one or two people with v i r t u a l l y no b u i l d i n g s k i l l s can e r e c t t h e i r dome package i n a matter of a few days. Weigh; these two t o g e t h e r , and you begin t o see why more and more people are choosing our geodesic homes as a l o g i c a l s o l u t i o n to t h e i r housing needs.15 Advantages Cost L i k e mobile homes, the s t r o n g e s t advantage t o manufactured housing when compared t o s t i c k - b u i l t i s the low c o s t .  housing  The more f a c t o r y c o n s t r u c t i o n , the g r e a t e r  the s a v i n g s ; thus, modular homes g e n e r a l l y are l e s s  costly  than p r e f a b r i c a t e d u n i t s which r e q u i r e more o n - s i t e l a b o r . More e f f i c i e n t b u i l d i n g techniques are needed t o p r o v i d e housing w i t h i n the p r i c e range of lower-income f a m i l i e s , as s t a t e d e a r l i e r . One p o s s i b l e approach i s t o b u i l d  m o d u l a r homes. Then a g r e a t e r p e r c e n t a g e o f u n s k i l l e d l a b o r c a n be u t i l i z e d a n d m o d u l a r homes c a n be p r o d u c e d much f a s t e r t h a n c o n v e n t i o n a l h o u s i n g t h r o u g h t h e u s e of m a s s - p r o d u c t i o n t e c h n i q u e s . 1 6 The  r a w m a t e r i a l s c a n be p u r c h a s e d  s a v i n g s p a s s e d on t o t h e c o n s u m e r . m o b i l e home.  i n b u l k and t h e  This i s also true f o r the  The g r e a t e s t s a v i n g s a r e p o s s i b l e w i t h a  p r e f a b r i c a t e d home o n l y i f t h e owner s e l e c t s t o c o m p l e t e the  construction without costly hired s k i l l e d  labor.  kit  home p u b l i c a t i o n , t h e m a n u f a c t u r e r q u o t e d  customers'  comments on owner  I n one  building:  I h a d n o t e v e n b u i l t a d o g h o u s e , b u t i t was a b r e e z e t o e r e c t . . . . We s a v e d on t h e c o n s t r u c t i o n c o s t s a s we, a c o u p l e o f s e n i o r c i t i z e n ' s , d i d t h e work o u r s e l v e s . . . . We d i d most o f t h e c o n s t r u c t i o n o u r s e l v e s a n d we w e r e v e r y i m p r e s s e d t h e way e v e r y t h i n g f i t t o g e t h e r . 1 7 The  p a r t i a l l y manufactured,  d i s t i n c t advantages rural  areas.  p r e - c u t home h a s many  o v e r s t i c k - b u i l t homes, e s p e c i a l l y i n  Rabb a n d Rabb c o n d e n s e t h e s e a d v a n t a g e s  short statement:  "Why M a n u f a c t u r e d  Housing?  into a  . . . t h r e e good  r e a s o n s — m o n e y , t i m e and v a r i e t y . " ^ 1  The  greatest v a r i e t y usually occurs with the pre-cut,  p r e f a b r i c a t e d home, w h i l e t h e l a r g e s t t i m e s a v i n g s o c c u r s w i t h t h e modular of  home.  Money s a v i n g s d e p e n d s on t h e amount  l a b o r a n owner w i s h e s t o c o n t r i b u t e , a n d on t h e l o n g - t e r m  costs including appreciation.  A g a i n , Rabb a n d Rabb  state:  "Prefabricated housing o f f e r s the greatest v a r i a t i o n i n p l a n n i n g , w h i l e m o b i l e and) m o d u l a r flexibility."  1 9  homes o f f e r t h e l e a s t  They go on t o s a y t h a t  own home i s a l i t t l e  "building  your  like painting a s e l f - p o r t r a i t — t h e  home  76 and  i t s site will  r e f l e c t your p e r s o n a l i t y , your way of  , • v „20 life." • V a r i e t y and Choice i n S t y l e and M a t e r i a l s V a r i a t i o n i s an important a t t r a c t i o n t o many i n d i viduals.  B u i l d i n g one's "dream house" i s the i d e a l t o  many people.  S e t t l i n g f o r a b o x - l i k e mobile or modular  home may not be s a t i s f a c t o r y . prefabricated  With the pre-cut  or p a n e l i z e d  home, custom designs a r e p o s s i b l e  (Figure 13).  Rooms can be changed t o s u i t the p a r t i c u l a r needs and t a s t e s of the owner.  T h i s f a c t o r i s a major advantage  of the p r e f a b r i c a t e d manufactured home.  The k i t home  i n d u s t r y o f f e r s a wide v a r i e t y of s t y l e s , d e s i g n s , and  construction  materials,  types t o s u i t a l l t a s t e s .  Q u a l i t y of M a t e r i a l s Pre-Cut I n t e r n a t i o n a l homes can comply with the Uniform B u i l d i n g Code, meet or exceed a l l i n s u l a t i o n r e q u i r e ments f o r h e a t i n g loads and energy consumption, and c a r r y I n t e r n a t i o n a l Congress o f B u i l d i n g O f f i c i a l s ICBO Approval No. 3215.21 The  l o g and dome p r e f a b r i c a t e d manufacturers boast  of the q u a l i t y and s t r e n g t h house i s strong  of t h e i r homes.  by v i r t u e of i t s shape.  The dome  The l o g or cedar  lock-wood home i s s t r o n g by v i r t u e of the heavy stacked timber used f o r w a l l s .  Both dome and l o g home manufacturers  s t a t e t h a t t h e i r homes can withstand high winds and e a r t h quakes b e t t e r than c o n v e n t i o n a l  housing.  F i g u r e 13.  Custom-Appearing Pre-Cut K i t Home from B r i t i s h Columbia  78 Financing The  f i n a n c i n g o f a k i t or modular home may be e a s i e r  than t h a t of a s t i c k - b u i l t  (nondeveloper) custom home.  The  manufacturer may o f f e r some a s s i s t a n c e i n o b t a i n i n g the best r a t e s or suggest a bank t h a t i s f a m i l i a r with the q u a l i t y of h i s homes. Contracts,  O c c a s i o n a l l y , manufacturers may do more. where manufacturers guaranteed the completion of  a k i t , used t o be common.  Now only a few manufacturers  a d v e r t i s e any d i r e c t a s s i s t a n c e e i t h e r by guarantees or d i r e c t loan.  Most o f f e r h i n t s and a few have good agreements  with a s p e c i f i c bank. "Financing:  One manufacturer's brochure s t a t e s :  We w i l l a s s i s t you i n a r r a n g i n g  f i n a n c i n g - - i n c l u d i n g an i t e m i z e d project.  your  construction  c o s t estimate f o r your  1 , 2 2  C u r r e n t l y the s i t u a t i o n has d e t e r i o r a t e d and many banks have withdrawn t h e i r previous  support.  T i g h t money i s  a f f e c t i n g everyone and t h e s i t u a t i o n i s not as easy as i t was when the f o l l o w i n g statement i n a k i t c a t a l o g was  published:  "Once you own a p i e c e o f land, i t ' s o f t e n a l l the e q u i t y you 23 need t o swing a mortgage commitment or c o n s t r u c t i o n  loan."  Ease of C o n s t r u c t i o n — A Giant Puzzle The  k i t house, whether pre-cut  or i n panel  sections,  has many advantages t h a t make i t an a t t r a c t i v e o p t i o n f o r lower-cost inexpensive  housing i n r u r a l areas.  While u s u a l l y not as  as a mobile home, the c o s t of a k i t can be c u t  s u b s t a n t i a l l y e s p e c i a l l y i f the owner c o n t r i b u t e s  the l a b o r  79 and  hires l i t t l e  s k i l l e d help.  The ease of c o n s t r u c t i o n of  a k i t or modular home i s a major a t t r a c t i o n .  Because time  i s spent on c u t t i n g and l a b e l i n g the m a t e r i a l s  accurately,  high s k i l l s a r e not u s u a l l y r e q u i r e d t o e r e c t the b a s i c s h e l l o f the home.  The owner-builder may only need t o  h i r e help f o r the foundation plumbing a s p e c t s ,  and f o r the e l e c t r i c a l and  but most c o n s t r u c t i o n tasks a r e p o s s i b l e  f o r the layman. Appreciation In Chapter I I , the short-term/long-term c o s t s were evaluated  i n l i g h t of the low a p p r e c i a t i o n r a t e s of the  mobile home.  While long-term c o s t s may be g r e a t e r f o r  mobile homes due t o l e s s a p p r e c i a t i o n than f o r s t i c k - b u i l t homes, the other manufactured housing types markedly.  Most pre-cut  appreciate  k i t s look l i k e custom designed  homes, a r e very a t t r a c t i v e , and do w e l l i n the market one  wish t o s e l l  should  the home. Disadvantages  Don't b i t e o f f more than you can chew. B u i l d i n g a house from a f a c t o r y package or k i t , can put you leagues ahead of the game, compared with b u i l d i n g a s t i c k b u i l t house s t a r t i n g from s c r a t c h , as mentioned e a r l i e r . But i t ' s s t i l l not c h i l d ' s p l a y , even f o r a s k i l l e d d o - i t y o u r s e l f person. P u t t i n g up a whole house i s the d o - i t - y o u r s e l f e q u i v a l e n t o f c l i m b i n g the Matterhorn, the supreme peak.24 R e s p o n s i b i l i t y t o Follow through with C o n s t r u c t i o n One  o f the major drawbacks of the k i t p r e f a b r i c a t e d  home, when compared t o the mobile home, i s t h a t the owner  80 must take some c o n s t r u c t i o n r e s p o n s i b i l i t y i f the product i s t o remain  low-cost.  I f the owner-builder  attempts  to do much of the work (which i s necessary t o keep c o s t s low), he i s t a k i n g on a major t a s k .  B u i l d i n g a house,  even from a k i t , i s a l a r g e job and r e q u i r e s much e f f o r t .  It  takes d e d i c a t i o n , time, and hard work ( F i g u r e 14). I f one h i r e s u n s k i l l e d l a b o r , one runs the r i s k of or incompetent guarantees  construction practices.  unguaranteed  Manufacturers'  do not cover poor c o n s t r u c t i o n techniques.  "Unless you're a t r i p l e t h r e a t c o n s t r u c t i o n man, some of the work ( e x c a v a t i o n and f o u n d a t i o n , h e a t i n g , plumbing, and other such tough chores) probably should be subcontracted t o professionals.  In s h o r t , be r e a l i s t i c about your  The owner-builder who wishes  capability."  t o 'build a p r e - c u t or  panel home must a l s o take r e s p o n s i b i l i t y f o r h i r i n g  skilled  help when necessary. Sales Problems Another  major problem  the high bankruptcy  o f modular and k i t homes i s  r a t e of manufacturers.  c h a r a c t e r i z e d by many small manufacturers.  The i n d u s t r y i s With the changing  economic s i t u a t i o n and market c o n d i t i o n s , many companies go bankrupt.  Only a few companies have been around  twenty y e a r s .  f o r over  One should be c a r e f u l t o s e l e c t a r e p u t a b l e  f i r m with years of experience and a v a l i d guarantee. on d e l i v e r y , not b e f o r e , i s a l s o a s a f e p o l i c y .  Cash  Rabb and  Rabb comment: "During the course of our r e s e a r c h we saw the  F i g u r e 14.  An Incomplete Log Home near Vernon, B r i t i s h Columbia  82 extent  t o which the i n d u s t r y i t s e l f  firms i n i t i a l l y  contacted  economic  A number of  have gone under and given the •  present  i s i n flux.  ..2 6  prognosis.  In s p i t e of disadvantages, the p r e f a b r i c a t e d home has  become an extremely popular housing o p t i o n i n h i g h e r -  income ranges. income b r a c k e t s .  I t i s a t t r a c t i v e t o a l l age l e v e l s and The k i t s range i n c o s t from under $10,000  t o over $70,000 f o r an e l a b o r a t e  pre-cut  cedar package. A l l  p r e f a b r i c a t e d homes r e q u i r e o n - s i t e labor t o c o n s t r u c t the home.  A few manufacturers w i l l e r e c t the home f o r an  added f e e o r may recommend a l o c a l c o n t r a c t o r .  Many owners  s e l e c t t o save on l a b o r c o s t s by b u i l d i n g the home themselves or perhaps with a few f r i e n d s .  This, savings  i s one of the  major advantages of the p r e f a b r i c a t e d home but i t a l s o involves greater  r i s k and r e s p o n s i b i l i t y .  83 Notes ^A. M. Watkins, The Complete Guide to Factory-Made (New York: E. P. Dutton, 1980), p. 9.  Housing  2 I b i d . , p. v n . I b i d . , p. 23. J u d i t h Rabb and Bernard Rabb, Good S h e l t e r , a Guide t o Mobile, Modular and P r e f a b r i c a t e d Houses I n c l u d i n g Dome (New York: Quadrangle, 1975), p. 62. 3  4  5  I b i d . , p. 78.  Harold Davidson, Housing Demand: M o b i l e , Modular o r Conventional (New York: Van Nostrand, 1973), p. 95. 7 Rabb and Rabb, p. 7. g  Davidson, p. 95. 9 Rabb and Rabb, p. 7. I b i d . , p. 78. ^Monterey Domes, Inc., Monterey Domes Geodesic Homes f o r L i v i n g ( R i v e r s i d e , Ca.: Monterey Domes, Inc., n.d.), p. 28. (Brochure.) 12 • T o p s i d e r Homes, The Home That Is a V a c a t i o n 1 0  1  ( Y a d k i n v i l l e , N.C.: T o p s i d e r Homes, n.d.). 13  R a b b and Rabb, p. 87.  1 4  Los  Angeles Times,  15 Monterey  (Brochure.)  December 1982, p. 4.  Domes, Inc., pp. 28-29.  •^Davidson, p. 95. 17 Justus Homes, A d v e r t i s i n g Wash.: J u s t u s Homes, n.d.). 18 Rabb and Rabb, p. 7. 19  p u b l i c a t i o n (Tacoma,  I b i d . , p. 2. I b i d . , p. 1. Pre-Cut I n t e r n a t i o n a l . K i t home brochure v i l l e , Wash.: Pre-Cut I n t e r n a t i o n a l , n.d.).  (Woodm-  84 22  Ibid.  23 Frank C o f f e e , The Complete K i t House C a t a l o g (N.p.: n.p., n.d.). 24 . Watkins, p. 147. Ibid. 2g Rabb and Rabb, p. 7.  CHAPTER IV OWNER-BUILDING/SELF-HELP HOUSING—A PHILOSOPHY AND A PRACTICAL REALITY General  Characteristics  With few e x c e p t i o n s , the p a r t i a l l y  manufactured  p r e f a b r i c a t e d home i s o n l y low-cost i f a t l e a s t a p o r t i o n of the l a b o r t o c o n s t r u c t the house i s f r e e .  T h i s means  t h a t one must c o n s i d e r not o n l y c o n t r i b u t i n g one's own labor but a l s o the l a b o r of f r i e n d s and f a m i l y .  Most  lower-income purchasers of k i t homes e l e c t t o do a substantial  p o r t i o n of the l a b o r themselves  have become popular a g a i n .  and "barn  Examination  raisings"  of the owner-builder  experience i s necessary i n order t o i n v e s t i g a t e  owner-build-  i n g i n g e n e r a l , and owner-building together with p r e f a b r i cated housing as a v i a b l e low-cost housing o p t i o n i n r u r a l areas.  T h i s chapter w i l l examine the b e n e f i t s ,  disadvan-  tages, p h i l o s o p h y , and r e a l i t y of owner-building. Turner and F i c h t e r s t a t e t h a t "approximately a t h i r d of the world's  people house themselves  with t h e i r own hands,  sometimes i n the absence of government and p r o f e s s i o n a l i n t e r v e n t i o n , sometimes i n s p i t e of i t . " f a c t t h a t many people throughout  1  I t i s an accepted  the world b u i l d t h e i r own  homes due t o c o s t and f i n a n c i n g l i m i t a t i o n s . 85  The  86 complexities and  and  s p e c i a l i z a t i o n of c o n s t r u c t i o n  practices  l a c k of b u i l d i n g knowledge among the p u b l i c have made  s e l f - h e l p l e s s popular today.  While c e r t a i n l y l e s s predomi-  nate today, the s e l f - h e l p o p t i o n has i n g r a i n e d i n r u r a l Canada and  the US.  today p r e f e r t o b u i l d t h e i r own other  choices  remained deeply Many r u r a l  dwelling  residents  even i f o f f e r e d  ( c o n t r a c t o r - b u i l t , s u b d i v i s i o n s , mobile  homes, townhouses) w i t h i n t h e i r means.  They are even  b u i l d i n g s t r u c t u r e s around t h e i r mobile homes (thus,  one  h a l f mobile home, one  15).  h a l f owner-built  home) (Figure  A study by J . V i s h e r of r u r a l r e s i d e n t s  l i v i n g i n subdi-  v i s i o n s s t a t e d simply,  l i k e to b u i l d t h e i r  "Rural  residents  2 own  homes." S e l f - h e l p owner-building i s common i n r u r a l  (Figure 16).  areas  Urban r e s i d e n t s do not s e l e c t t h i s o p t i o n  as  f r e q u e n t l y as r u r a l r e s i d e n t s . In recent years the u n f i n i s h e d but h a b i t a b l e home i n d u s t r y has absorbed a s i g n i f i c a n t share of the housing market. The demand f o r u n f i n i s h e d but h a b i t a b l e homes i s l a r g e l y concentrated i n small towns and r u r a l areas. Indeed, the c u r r e n t survey suggests, most p o i n t e d l y , t h a t incomplete houses c o n s t i t u t e an ^ important source of new housing i n r u r a l communities. More than one-half of the houses surveyed (53.2 percent) were found i n r u r a l areas. Another 43.9 percent of the sample houses were l o c a t e d i n urban f r i n g e areas which surrounded small towns.4 The  r u r a l predominance of owner-builders  have many e x p l a n a t i o n s .  The  r u r a l r e s i d e n t may  accustomed t o doing f o r h i m s e l f , frequently d i f f i c u l t to f i n d .  as s k i l l e d  A higher  could be more  labor i s  degree of  seasonal  87  88  89 work o f t e n e x i s t s i n r u r a l areas, thus p r o v i d i n g r e s i d e n t s the time needed f o r s e l f - h e l p .  rural  The l a c k of  f i n a n c i n g a i d may a l s o p l a y a major r o l e i n the s e l e c t i o n of the owner-builder o p t i o n . c o n t r o l s i n r u r a l areas  Less r i g i d  (i.e.,  developmental  zoning, b u i l d i n g standards,  s i t e p r e p a r a t i o n requirements, e t c . ) may make owner-building more f e a s i b l e .  Many f a c t o r s and combinations account f o r  rural self-help popularity.  Some of these f a c t o r s may be  i n t r i n s i c b e n e f i t s and not e a s i l y measured. the advantages  Turner d i s c u s s e s  of s e l f - h e l p from an i n t r i n s i c values and  satisfaction perspective. Philosophy of S e l f - H e l p Owner-Building The main motive f o r p e r s o n a l l y committing o n e s e l f t o the always e x a c t i n g and o f t e n exhausting job of organi z i n g and managing, l e t alone s e l f - b u i l d i n g , may be the b o d i l y need f o r s o c i a l l y a c c e p t a b l e s h e l t e r , but "higher" needs f o r c r e a t i v e e x p r e s s i o n and p e r s o n a l i d e n t i t y a r e , i n most cases, a l s o present and f o r many important. . . . . . . 1 am sure t h a t i t i s t h i s e x i s t e n t i a l wholen e s s — t h e simultaneous s a t i s f a c t i o n of the u n i v e r s a l need f o r b e l o n g i n g t o a p a r t i c u l a r s o c i e t y and the h i g h l y d i f f e r e n t i a t e d and p e r s o n a l need f o r s e l f e x p r e s s i o n — t h a t g i v e s housing i t s s p e c i a l meaning when done a t the l e v e l of p e r s o n a l and community a c t i o n . Although t h e r e may be no a n a l y t i c a l way t o prove i t , i t i s obvious t o me t h a t both economy and c o n v i v i a l i t y can come about only through p e r s o n a l r e s p o n s i b i l i t y . 5 The f u l f i l l m e n t of these deeper needs, while not measurable,  may p l a y a s i g n i f i c a n t r o l e i n the success of  the s e l f - h e l p housing o p t i o n . accomplishment  The p r i d e i n one's own  and a sense of s e l f - f u l f i l l m e n t are  definitely benefits.  Turner and F i c h t e r d i s c u s s these  90 needs and c h a s t i s e the government f o r e x e r c i s i n g too much c o n t r o l over housing, thus denying the i n d i v i d u a l an e f f e c t i v e and e f f i c i e n t pathway t o s e l f - f u l f i l l m e n t . e x e r c i s i n g too much c o n t r o l over housing,  By  governmental  i n s t i t u t i o n s have denied the i n d i v i d u a l an important v e h i c l e for  s e l f - e x p r e s s i o n and have c r e a t e d f r u s t r a t i o n a t the  lower-income  l e v e l where c h o i c e s are so l i m i t e d .  In order t o make the best use of s c a r c e housing r e s o u r c e s , most of which are i n any case possessed by the people themselves, each household must have an adequate c h o i c e of a l t e r n a t i v e l o c a t i o n s , of a l t e r n a t i v e forms of tenure and, of course, of a l t e r n a t i v e s t r u c t u r e s and ways of b u i l d i n g and u s i n g them. People who do not have these freedoms i n housing a r e g e n e r a l l y unable t o use housing as a v e h i c l e f o r t h e i r e x i s t e n t i a l ends. I f they cannot hope t o get the combination they need, they w i l l tend t o minimize t h e i r housing a c t i o n by doing and paying as l i t t l e as p o s s i b l e . 6 A l a c k o r l o s s of autonomy, r e s u l t i n g i n a dependency on other persons or i n s t i t u t i o n s f o r those n e c e s s i t i e s one i s w i l l i n g and capable of p r o v i d i n g f o r o n e s e l f , can be i n t o l e r a b l e f r u s t r a t i n g i n any c o n t e x t . For p h y s i c a l and mental w e l l - b e i n g , every man, woman and c h i l d must be a b l e t o e x e r c i s e h i s o r her i n d i v i d u a l i n i t i a t i v e : and housing, f o r the poor and the wealthy a l i k e , i s a major o p p o r t u n i t y . 7 The need f o r p e r s o n a l c o n t r o l and independence i s important i n most a s p e c t s of l i f e . a major problem,  governments f r e q u e n t l y may i n s i s t on a  high l e v e l of c o n t r o l . have many hidden  In attempting t o s o l v e  T h i s high l e v e l of c o n t r o l may  costs.  When d w e l l e r s c o n t r o l the major d e c i s i o n s and are f r e e t o make t h e i r own c o n t r i b u t i o n s t o the d e s i g n , c o n s t r u c t i o n or management o f . t h e i r housing, both the process and the environment produced s t i m u l a t e i n d i v i d u a l and s o c i a l w e l l - b e i n g . When people have no c o n t r o l over, nor r e s p o n s i b i l i t y f o r , . k e y d e c i s i o n i n the housing p r o c e s s , on the other hand, d w e l l i n g  environments may i n s t e a d become a b a r r i e r t o personal f u l f i l l m e n t and a burden on the economy.8 The  f a i l u r e o f governments t o support  the owner-  b u i l d e r and encourage the i n d i v i d u a l t o b u i l d h i s own home i s w e l l known. I t i s easy t o understand why more people do not become owner-builders. R e s t r i c t i v e codes, d i s c r i m i n a t o r y f e d e r a l mortgage i n s u r i n g p r a c t i c e s , and the general t r e n d toward s p e c i a l i z a t i o n o f c o n s t r u c t i o n tasks have a l l c o n t r i b u t e d t o a climate, unfavorable to the man who may have thought about b u i l d i n g h i s own home.9 The years has  t r e n d i n government a c t i v i t y during the l a s t few  been toward i n c r e a s e d c o n t r o l .  t i o n s and more " s t i c k s "  Increased  regula-  ( p e n a l t i e s ) than " c a r r o t s " ( i n c e n -  t i v e s ) have been the r u l e i n both the US and Canada. t r a d i t i o n a l mortgage support r i g i d and l e s s widely  The  programs have become more  used as f e d e r a l programs s h i f t e d  l e n d i n g and mortgage insurance  t o subsidy.  s o c i a l housing programs have continued  from  Cutbacks i n  over the l a s t decade.  HUD a t one time supported s e l f - h e l p housing but withdrew t h e i r support The completely  a f t e r a short time.  b e n e f i t s of s e l f - h e l p housing have not been explored.  Many b e n e f i t s are not e a s i l y  to a c o s t b e n e f i t a n a l y s i s .  The concept of housing as a  v e h i c l e of s e l f - e x p r e s s i o n and s e l f - f u l f i l l m e n t discussed  adaptable  i s rarely  i n CMHC or HUD p u b l i c a t i o n s .  People do not only need t o o b t a i n t h i n g s . I think they need,above a l l , the freedom t o make t h i n g s — t h i n g s among which they can l i v e . To g i v e shape t o them a c c o r d i n g t o t h e i r own f e e l i n g s , t h e i r own t a s t e s , t h e i r own imagination.10  92 Practical Application Whatcom and S k a g i t County FmHA S e l f - H e l p Example The Farmers Home A d m i n i s t r a t i o n , an agency o f the U.S. Department o f A g r i c u l t u r e , o f f e r s a number of programs which p r o v i d e grants and low-cost loans t o improve housing i n r u r a l areas. Potential recipients i n c l u d e r u r a l r e s i d e n t s , government e n t i t i e s , and both n o n p r o f i t and p r o f i t - m o t i v a t e d sponsors. . . . U n l i k e HUD programs which g e n e r a l l y operate through banks and other approved l e n d i n g i n s t i t u t i o n s , FmHA i t s e l f a c t s as the lender, making loans d i r e c t l y t o qualified applicants.H Farmers Home A d m i n i s t r a t i o n ,  an agency formed  to a i d farmers i n f i n a n c i n g needed land and s u p p l i e s , runs a housing program f o r r u r a l areas.  One of t h e i r programs  combines d i r e c t l e n d i n g with a form o f s e l f - h e l p housing. S e c t i o n 523 p r o v i d e s grants t o p u b l i c and n o n p r o f i t groups t o enable low-income r u r a l r e s i d e n t s t o b u i l d t h e i r own homes. The houses a r e f i n a n c e d under FmHA's S e c t i o n 502 program, with S e c t i o n 523 p r o v i d i n g administ r a t i v e money t o the sponsor f o r h i r i n g counselors and c o n s t r u c t i o n s u p e r v i s o r s . Grants a r e made f o r two years with funds advanced as needed, and a r e budgeted f o r 30-day p e r i o d s . S e l f - h e l p sponsors, p u b l i c agenc i e s , and p r i v a t e n o n p r o f i t o r g a n i z a t i o n s a r e a l s o e l i g i b l e t o apply f o r s i t e loans under Sections 523 and 524.12 These t e c h n i c a l a s s i s t a n c e grants many s e l f - h e l p housing o r g a n i z a t i o n s being the US .  have r e s u l t e d i n formed throughout  One small group e x i s t s i n Whatcom County, Washing-  ton. The  program r e q u i r e s t h a t the low-income f a m i l i e s  work i n groups under s u p e r v i s i o n .  Each f a m i l y must put i n  at l e a s t t h i r t y hours per week o f labor p l u s meetings and l e c t u r e s .  attending  One major r u l e o f the program i s  t h a t no f a m i l y can move i n u n t i l a l l homes a r e completed.  The  Whatcom program i s h i g h l y s e l e c t i v e .  only meet the r i g i d  F a m i l i e s must not  f e d e r a l income g u i d e l i n e s but must pass  an i n t e r v i e w procedure where only those deemed most  likely  t o succeed a r e accepted. The Farmers Home A d m i n i s t r a t i o n ' s loan g u i d e l i n e s set the f o l l o w i n g c r i t e r i a f o r p a r t i c i p a n t s [1980 standards]: -They must be a married couple or a couple o f people, or a s i n g l e person (with or without c h i l d r e n ) who does not a l r e a d y own an adequate home. -Each f a m i l y ' s gross income minus f i v e percent and minus $300 f o r each c h i l d must be between $7,100 and $11,200 per year. Each f a m i l y must a l s o have l e s s than $5,000 i n a s s e t s (not i n c l u d i n g household goods). -Each must have reasonably good c r e d i t but be unable t o get c o n v e n t i o n a l f i n a n c i n g . . . . . . . I t i s s t r e s s e d t h a t t h i s i s not a grant, but an i n t e r e s t subsidized loan. The loans f o r the c u r r e n t p r o j e c t here a r e f o r about $30,000 i n c l u d i n g land and cost, o f the m a t e r i a l s . Value o f the completed homes i s about $40,000. . . . Most o f t h e f a m i l i e s i n v o l v e d with the program are younger couples.13 The has  Whatcom County s e l f - h e l p housing  organization  aided many f a m i l i e s t o b u i l d t h e i r own homes.  have b u i l t s e v e r a l designs u t i l i z i n g construction.  stick-frame  The c o n s t r u c t i o n s u p e r v i s o r s ,  of the s e l f - h e l p program, a r e i n charge. l i m i t e d freedom i n the design  on-site  employees  Each f a m i l y has  and m a t e r i a l s  o r g a n i z a t i o n operates on a low budget.  They  selected.  The  The c o o r d i n a t o r ' s  s a l a r y i s modest and the c o n s t r u c t i o n s u p e r v i s o r ' s  is a  near i n s u l t f o r such hard work. The  choice  i n designs i s l i m i t e d .  nearby S k a g i t County, r e p o r t e d the  l o c a l FmHA.  He r e p o r t e d  Tim Rosenham, of  problems i n working with  that h i s i n n o v a t i v e  two-story  94 e n e r g y - e f f i c i e n t home, w h i l e modestly p r i c e d looked too expensive  and  FmHA was  he d i s c o n t i n u e t h a t d e s i g n . was  unhappy.  ($40,000), They i n s i s t e d  The Whatcom s e l f - h e l p group  a l s o i n s t r u c t e d to d i s c o n t i n u e t h e i r popular  model, as i t was  two-story  too n i c e .  Tim Rosenham, a s k i l l e d a r c h i t e c t , d i d not FmHA's views.  share  He a l s o f e l t t h a t the b e n e f i t s were more  than f i n a n c i a l .  1  I t i s a system t h a t not only allows people to more e a s i l y a f f o r d a home of t h e i r own i n i n f l a t i o n a r y times, but c r e a t e s a c l o s e - k n i t community among ., neighbors, s a i d Tim Rosenham. . . . . . . I t ' s l i k e an o l d time barn r a i s i n g , suggested Frank Donato, c o n t r a c t o r . 1 4 Most c o n s i d e r the b e n e f i t s of s e l f - h e l p overwhelming, as low-income i n d i v i d u a l s improve t h e i r s k i l l s and s e l f - c o n f i d e n c e and  self-fulfillment.  The  gain  f a m i l y i s rewarded  m a t e r i a l l y a l s o , as the value of the home upon  completion  u s u a l l y exceeds the loan amount by about $10,000. The  S k a g i t grant proposal was  d e t a i l e d and gave  documentation to some of the problems as w e l l as the triumphs.  I t made frequent r e f e r e n c e to a past h i s t o r y of  incompetence and mismanagement. . . . funding of i t s f i r s t t e c h n i c a l a s s i s t a n c e grant of February 28, 1978. From t h a t time u n t i l November 1978,, the parent o r g a n i z a t i o n was rocked with management d i f f i c u l t i e s which r e s u l t e d i n the SSHH d i r e c t o r A r t Gordon being c a s h i e r e d and the present d i r e c t o r Tim Rosenham being h i r e d . . . . We c r e a t e d f i s c a l p o l i c i e s which preserved the o r g a n i z a t i o n ' s solvency and p a i d overdue c r e d i t o r s . . . . when t h i s grant p e r i o d began only 1.3 e q u i v a l e n t houses had been produced r e s u l t i n g i n a T.A. c o s t per u n i t of over $30,000. . . . Since then, four new groups have at l e a s t s t a r t e d c o n s t r u c t i o n and the cumulative T.A. c o s t per u n i t has decreased  to about $8,500 per u n i t , i n c l u d i n g the unproductive f i r s t h a l f of the grant. We have learned t h a t the way t o reduce T.A. c o s t per u n i t i s t o b u i l d houses.15 Management problems d i d occur, y e t w i t h i n one year they were d e a l t w i t h .  I t i s u n l i k e l y t h a t incompetent FmHA  a d m i n i s t r a t o r s are f i r e d as e a s i l y . rocky beginning,  In s p i t e of the admitted  Tim Rosenham again made r e f e r e n c e t o the  i n t r i n s i c advantage of b u i l d i n g one's own home: "We were s u c c e s s f u l i n c l o s i n g on seven s c a t t e r e d s i t e s i n Anacortes and a b e a u t i f u l group of four on Samish I s l a n d p l u s one i n Bow.  The i n t r i n s i c m o t i v a t i o n of working on t h e i r own house 16  was i n c r e a s e d by working on t h e i r own l a n d . " The  problem of s e a r c h i n g  r e s t r i c t i o n s and l o c a l approval  f o r land t h a t met FmHA was d i s c u s s e d .  "The land  search was u l t i m a t e l y s u c c e s s f u l i n s p i t e of needing county variance  f o r the Samish l o t s and i n s p i t e of s e v e r a l a b o r t i v e  t r a n s a c t i o n s i n Anacortes."''" The  7  S k a g i t s e l f - h e l p program claimed  t o make use of  some o n - s i t e c o s t / t i m e - s a v i n g techniques. C o n s t r u c t i o n procedures were improved by f i r s t g i v i n g more a u t h o r i t y t o the c o n s t r u c t i o n S u p e r v i s o r s , who i n t u r n have i n s t i t u t e d "assembly-line" techniques, s t a n d a r d i z e d d e t a i l s , and pre-cut roof components t o speed b u i l d i n g . 1 8 N e i t h e r the Whatcom County or the S k a g i t programs operated  on any l a r g e s c a l e .  under t e n f u l l - and p a r t - t i m e was approximately  T h e i r s t a f f i n g was  personnel,  $100,000 per year.  self-help  and t h e i r budget  When I i n t e r v i e w e d  C a r o l Hammond, d i r e c t o r of the Whatcom s e l f - h e l p program, and TinviRdsenham about i n c r e a s i n g the number of houses  b u i l t each year, they mentioned problems with coping administrating  such l a r g e numbers.  The  e f f o r t on a  l e v e l with i n s t r u c t i n g , i n t e r v i e w i n g , meetings, and  with personal  counseling,  paperwork would r e q u i r e l a r g e s t a f f i n g i n c r e a s e s .  The  Whatcom s e l f - h e l p housing o r g a n i z a t i o n d i d not even have a s e c r e t a r y ; the d i r e c t o r d i d a l l the t y p i n g . both agencies operated much l i k e any  I t appeared t h a t  small business, a l l  working toward a s i n g l e goal,:'• with each s t a f f member doing a b i t of  everything. When d i s c u s s i n g problems, both Hammond and  Rosenham  mentioned d i f f i c u l t i e s with FmHA.  One  designed homes had  too good-looking.  been considered  local administrators  were i n s i s t i n g i t be  C a r o l Hammond s t a t e d they had the d e c i s i o n , but it.  of t h e i r custom  Tim  decided  Rosenham was  FmHA  discontinued.  to go along  considering  with  fighting  Apparently, FmHA wanted one-story rambler, cheaper-  l o o k i n g homes, not m i d d l e - c l a s s - a p p e a r i n g innovation.  Hammond s t a t e d t h a t she had  mise i n order  architectural chosen to compro-  to s u r v i v e : "Mark a g a i n s t us  . . . finest 19  i n the n a t i o n  . . .we're not as important as the program."  She  a l s o s t a t e d t h a t the pressure  the  local  level.  p o l i t i c a l pressure  Past  o f t e n comes from above  problems with f r a u d and  f e a r of  i f the homes were p e r c e i v e d  as more  than b a s i c s h e l t e r , were the major reasons given d i f f i c u l t y with FmHA.  She  seemed understanding of  p o s i t i o n of the l o c a l FmHA a d m i n i s t r a t o r s , considering  f o r the  the c u r r e n t a d m i n i s t r a t i o n  the  especially  i n Washington,  D.C.  97 Rosenham, a t a l e n t e d a r c h i t e c t , f e l t  FmHA was t o o ^ i n f l e x i b l e .  He had designed a low-cost e n e r g y - e f f i c i e n t home t h a t d i d not  look cheap.  competitions  While there have been numerous design  and m i l l i o n s of f e d e r a l d o l l a r s (HUD) spent f o r  such low-cost i n n o v a t i o n , appreciate The  the l o c a l FmHA apparently  i t a t the g r a s s r o o t s  d i d not  level.  s e l f - h e l p program, while s m a l l , i s p l a y i n g a  p a r t i n h e l p i n g some r e n t e r s become homeowners and o b t a i n adequate housing.  I t does demand something i n r e t u r n and  c e r t a i n l y the program i s not f o r everyone.  Tim Rosenham  commented on the f a c t t h a t s e l f - h e l p i s not f o r a l l f a m i l i e s , as i t was a s t r a i n i n g e x p e r i e n c e . c l o s e or s p l i t .  . . . Production  " F a m i l i e s e i t h e r get of houses i s not p o s s i b l e  20 without motivated f a m i l i e s . " While a d m i t t i n g  the s t r a i n , he remarked t h a t those  who complete the program u s u a l l y are more motivated and capable people a f t e r t h e i r e x p e r i e n c e .  He s t a t e d t h a t i t 21  tended t o " c a t a p u l t people from low income i n t o middle." Hammond had s i m i l a r f e e l i n g s f o r the program. t h a t l e s s than 10 percent i n t o the program.  She s t a t e d  of the a p p l i c a n t s are accepted  They spend much time screening and 22  r e c r u i t i n g and "turn a l o t of people away." about s i x out of every f i f t y a p p l i c a n t s .  They accept  She a l s o r e c a l l e d  times when the s t r e s s broke up f a m i l i e s , but s t a t e d  that  the b e n e f i t s f o r most f a m i l i e s were l a r g e . The  Whatcom FmHA program seems t o have had much  success i n housing•low-income f a m i l i e s .  Their t o t a l  impact  98 upon the housing market i n Whatcom, although s m a l l , has made a d i f f e r e n c e i n the l i v e s of s e v e r a l low-income f a m i l i e s . S e l f - h e l p has many c o s t - s a v i n g and i n t r i n s i c tages.  advan-  The s u c c e s s f u l Whatcom and S k a g i t experiences  have demonstrated  this fact.  S e l f - h e l p can take many  forms and i s not l i m i t e d t o a s p e c i f i c housing s t y l e . next s e c t i o n w i l l  examine the p a r t i a l l y  The  manufactured/pre-cut  k i t house u t i l i z i n g o w n e r - b u i l d i n g , s e l f - h e l p , c o s t - s a v i n g techniques.  99 Notes John F. C. Turner and Robert F i c h t e r , eds., Freedom to B u i l d , Dweller C o n t r o l of the Housing Process (New York: Macmillan, 1972), p. v i i i . 2 J a c q u e l i n e V i s c h e r , Rural R e s i d e n t i a l S u b d i v i s i o n s i n B r i t i s h Columbia ( V i c t o r i a , B.C.: M i n i s t r y of M u n i c i p a l A f f a i r s , 1981), p. 91. 3 U.S. Department of Housing and Urban Development, Housing and Home Finance Agency, O f f i c e of Program P o l i c y , The U n f i n i s h e d but H a b i t a b l e Home, by W i l l i a m Shenkel (Washington, D.C.: Government P r i n t i n g O f f i c e , 1965), p. 1. I b i d . , p. i i i . 5 John F. C. Turner, Housing by People Towards Autonomy i n B u i d l i n g Environments (New York: Pantheon, p. x x i i i . 4  1976),  Turner and F i c h t e r , p. 174. 7  I b i d . , p. 247.  I b i d . , p. x x x m . 9 I b i d . , p. 3. I b i d . , p. 827. ^ K i m Herman, Nina G u t i e r r e z , and C a r o l e Hammond, Housing Resource Handbook (Spokane: Washington C o a l i t i o n f o r Rural Housing, 1980), p. 7. 1 0  I b i d . , p. 6. 13. B r i a n C a n t w e l l , " S e l f - H e l p Housing G i v i n g F a m i l i e s C o n t r o l over L i v e s , Says D i r e c t o r , " The Argus (Mt. Vernon, Washington), February 21, 1980. Ibid. 15 S k a g i t County S e l f - H e l p Housing, A Grant P r o p o s a l , 1981-1983 (Mt. Vernon, Wash.: Skagit County S e l f - H e l p Housing, n.d.). Ibid. 1 7  Ibid.  1 8  Ibid.  \ 1 q  Interview with C a r o l e Hammond, Whatcom County, Everson, Washington, 1981. 20 Interview with Tim Rosenham, S k a g i t S e l f - H e l p , Mt. Vernon, Washington, 1981. Ibid.  22 Hammond.  100  CHAPTER V PARTIALLY MANUFACTURERED KIT HOME PLUS SELF-HELP Anyone who s t i l l b u i l d s one from s c r a t c h not from a f a c t o r y package should have h i s head examined.! Kit  Home as Low-Cost Housing  In r u r a l areas where land i s inexpensive home and r e n o v a t i o n  and e x i s t i n g  f i n a n c i n g d i f f i c u l t t o o b t a i n , the k i t  home may be one answer f o r a low-cost house.  The previous  chapters on s e l f - h e l p and k i t homes o u t l i n e d s e v e r a l potential  advantages f o r a lower-income f a m i l y i f one s e l e c t s  to become an owner-builder. e r e c t s the k i t with l i t t l e  The i n i t i a l  cash o u t l a y i f one  h i r e d labor can be kept low  e s p e c i a l l y with the l e s s e l a b o r a t e  kits.  I f the amount  needed t o borrow i s kept low, a lower-income i n d i v i d u a l should  have a b e t t e r chance t o q u a l i f y f o r a home loan.  Some 1,000 square f o o t sell for  ( s i z e of FmHA approved house) k i t s  f o r under $15,000 (Figure 17).  I f one adds $5,000  a d d i t i o n a l i n t e r i o r m a t e r i a l s and $5,000 f o r h i r e d  l a b o r , one c o u l d have a custom designed home f o r $25,000, or roughly  the p r i c e of many US mobile homes. If  one purchased the land f o r $10,000 and p l a c e d  $5,000 down (not c u r r e n t l y p o s s i b l e ) , the monthly payments 101  102  103 on a standard t h i r t y - y e a r mortgage c o u l d be around  $350 per  month, or approximately the c o s t of r e n t i n g an o l d e r home i n many r u r a l a r e a s .  The p o t e n t i a l f o r the k i t home p l u s  s e l f - h e l p t o p r o v i d e lower-income housing appears In  realistic.  t h i s chapter the k i t home, i n combination  with  s e l f - h e l p b u i l d i n g , i s examined i n order t o determine i f t h e r e i s a p o t e n t i a l f o r t h i s combination low-cost housing needs i n r u r a l There i s l i t t l e kit  t o meet the  areas.  academic l i t e r a t u r e t h a t d i s c u s s e s  homes, although many make r e f e r e n c e t o the general  need f o r i n c r e a s e d use of t e c h n o l o g i c a l advances i n housing. The United S t a t e s today--at a time when housing more than ever i s needed—does not e x p l o i t e x i s t i n g b u i l d i n g technology t o the f u l l e s t . The technology i s a v a i l a b l e , but the c o n s t r a i n t s are an o b s t a c l e . The l a t t e r can only be overcome by a determined, concerted e f f o r t by a l l elements of the b u i l d i n g i n d u s t r y . 2 The combination  of k i t home p l u s owner-building  has  grown s t e a d i l y f o r the l a s t few y e a r s . Census f i g u r e s t e l l the s t o r y - - a s t o r y no one has p a i d much a t t e n t i o n t o . Owner-builders are p r e s e n t l y r e s p o n s i b l e f o r approximately 20 percent of the new s i n g l e - f a m i l y d w e l l i n g s c o n s t r u c t e d a n n u a l l y i n the United S t a t e s and 12 percent of a l l housing begun each year.3 There are hundreds of k i t home manufacturers throughout  the US and Canada producing k i t s f o r many owner-  builders.  Although not a l l t h e i r customers choose to save  and c o n t r i b u t e s u b s t a n t i a l sweat e q u i t y , most customers are i n v o l v e d with c o n s t r u c t i o n t o a g r e a t e r extent than i f the home was  entirely  contractor-built.  104 ' '  K i t Home Roots--Unfinished S h e l l House  ;Some k i t manufacturers o f f e r an u n f i n i s h e d  shell  house o p t i o n t h a t has grown i n p o p u l a r i t y over the l a s t few years.  Many panel manufacturers s e l l  only t h i s 'option,  as e r e c t i n g the k i t r e q u i r e s s p e c i a l i z e d equipment. a panel  manufactured k i t home, a crew u s u a l l y can e r e c t  the weatherproof s h e l l  i n days, not weeks.  are s e t j i n p l a c e a t one time.  Entire walls  T h i s method has grown i n  p o p u l a r i t y l a t e l y with some l o g manufacturers. logUwall  With  The heavy  s e c t i o n s with windows i n p l a c e are l i f t e d  the foundation.  onto  T h i s manufactured k i t s h e l l house resembles  the 1960 u n f i n i s h e d house, only l a r g e r c o s t savings a r e p o s s i b l e with g r e a t e r manufacturing. 1960  L i k e the e a r l i e r  u n f i n i s h e d house, the owner-builder i s l e f t t o complete  the work h i m s e l f . Before stick  k i t homes came on the scene the u n f i n i s h e d  home was popular.  o f f e r e d many standard  Several  models.  l a r g e c o n t r a c t i n g companies  E a r l y i n the i n d u s t r y ' s  h i s t o r y the manufacturers would purchase most m a t e r i a l s i n the owner's l o c a l area and t o t a l l y c o n s t r u c t the home on-site. U n f i n i s h e d houses, though h i g h l y s t a n d a r d i z e d , t y p i c a l l y are not p r e f a b r i c a t e d houses. . . . For the most p a r t u n f i n i s h e d housing companies h i r e l o c a l c o n t r a c t o r s and s u b c o n t r a c t o r s , m a i n t a i n i n g r e g i o n a l warehouses or o r d e r i n g m a t e r i a l s from l o c a l sources.4 The  owner was then expected t o purchase the remain-  ing m a t e r i a l s  l o c a l l y as w e l l as c o n t r i b u t e h i s own sweat  105 e q u i t y to complete the house. u n f i n i s h e d house i n 1965 often builder-aided  was  The the  a t t r a c t i v e n e s s of  low i n i t i a l  cost  the  and  financing.  U n f i n i s h e d but h a b i t a b l e homes, the c o n s t r u c t i o n of which can be completed by the purchasers, have enabled many f a m i l i e s of l i m i t e d incomes t o become homeowners. . . . By p r o v i d i n g "sweat e q u i t y " i n i t i a l out of pocket c o s t s of housing are reduced and lower income f a m i l i e s , who might not otherwise have been able to do so have obtained home-ownership. . . . A p e c u l i a r i t y of the u n f i n i s h e d but h a b i t a b l e housing i n d u s t r y concerns the p r a c t i c e of using " b u i l d e r recourse paper." Lenders s h i f t e d mortgage r i s k s to the b u i l d e r by r e q u i r i n g b u i l d e r endorsement on loans granted t o u n f i n i s h e d house purchasers.5 !  The the  lender,  u n f i n i s h e d house i s considered  a higher  risk  by  yet f o r years the b u i l d e r guarantee system  allowed, many lower-income r u r a l f a m i l i e s t o b u i l d a home. To the lender, the p r o b a b i l i t y of a l o s s i f f o r e c l o s u r e becomes necessary, i s i n c r e a s e d f o r u n f i n i s h e d houses l a c k i n g plumbing, h e a t i n g , f i n i s h e d i n t e r i o r s , or other e s s e n t i a l i n t e r i o r c o n s t r u c t i o n . Hence, not only must the r e l a t i v e c o s t of a l t e r n a t i v e f i n a n c i n g methods be considered but a l s o to be considered are f i n a n c i n g plans t h a t encourage completion of c o n s t r u c tion^ The  u n f i n i s h e d housing i n d u s t r y f l o u r i s h e d f o r  s e v e r a l years and more b u i l d e r s entered  the  business.  The u n f i n i s h e d housing i n d u s t r y i s h i g h l y c o m p e t i t i v e . Yet i n the c u r r e n t study, f i v e b u i l d e r s s o l d a p p r o x i mately 40% of the houses s t u d i e d . . . ...-:.As: new/builders entered the i n d u s t r y and competition i n c r e a s e d mortgage terms were lengthened t o a maximum of 12 years. The r e l a t i v e l y low down payment r e s u l t i n g mostly from the lower c o s t of an u n f i n i s h e d house l e d t o i n c r e a s e d sales.7 ;  ;Soon the bubble b u r s t as b u i l d e r s took g r e a t e r greater r i s k s .  Many low-income c l i e n t s could not f i n d  funds f o r a d d i t i o n a l m a t e r i a l s  t o complete the house..  and the  106 The banks and f i n a n c i a l i n s t i t u t i o n s o f f e r i n g guarantee  loans withdrew t h e i r support.  builder  The mobile home  grew i n . p o p u l a r i t y and u n f i n i s h e d houses s h i f t e d t o a "higher"-income requirements.  c l i e n t e l e t h a t c o u l d meet s t i f f e r U n f i n i s h e d houses a r e s t i l l  financing  popular i n  i  r u r a l areas and packages are o f f e r e d by many l o c a l lumber  |yards, and some k i t home manufacturers.  contractors,  The i n d u s t r y  has changed and i t i s f a r more d i f f i c u l t t o o b t a i n a loan than i t i w a s twenty  years ago.  The HUD backing f o r u n f i n i s h e d  I  houses Was s h o r t - l i v e d and today HUD and CMHC s t a y away from anything except completed  houses.  experiemntal program i n New Brunswick  CMHC d i d conduct an but problems arose  and no o v e r a l l program ever got o f f t h e ground. NHA  The c u r r e n t  i n s p e c t i o n procedure makes any type of s e l f - h e l p housing  l e s s f e a s i b l e i n Canada. meeting  the s t i f f  C o n t r a c t o r s have d i f f i c u l t y  requirements i n order t o q u a l i f y f o r  mortgage i n s u r a n c e ; t h e owner-builder has l i t t l e  chance.  According t o t h e l o c a l Vancouver CMHC manager, only about two a p p l i c a t i o n s f o r mortgage insurance a r e r e c e i v e d a n n u a l l y from owner-builders.  The u n f i n i s h e d housing i n d u s t r y i s not  as popular as i t was i n the 1960s, and the t o t a l l y manufact u r e d house (mobile and modular) has taken over much of the market. ; When t h e banks and the government  institutions  deserted the u n f i n i s h e d house, i t became a l e s s o p t i o n f o r the lower-income  feasible  groups.  The k i t home i n d u s t r y i n many ways i s the modern v e r s i o n o f the u n f i n i s h e d home.  Although many manufacturers  107 do not become i n v o l v e d i n the c o n s t r u c t i o n of the k i t s , some o f f e r s h e l l - l a b o r i n c l u d e d packages, where the owner is  l e f t t o complete the k i t u n f i n i s h e d house. ! N  K i t Home P o t e n t i a l as Low-Cost Housing  Whether the u n f i n i s h e d house i s from a k i t or  s t i c k - b u i l t from a l o c a l  contractor,  the f i n a n c i n g problems  w i l l be s i g n i f i c a n t f o r l e s s a f f l u e n t home buyers.  The  s e l f - h e l p p l u s k i t home appears t o be able t o meet the low-cost housing needs i n r u r a l areas.  Some low-income  f a m i l i e s a r e able t o overcome the o b s t a c l e s and o b t a i n f i n a n c i n g t o complete the house themselves.  An i n t e r v i e w  with two k i t home manufacturers i n Washington State  provided  more d e t a i l e d answers t o the low- and moderate-income f i n a n c i n g problem.  Both used t h e i r own type c o n t r a c t o r  f i n a n c i n g t o permit l e s s a f f l u e n t owner-builders t o o b t a i n interim financing.  One made p r i v a t e agreements with the  buyer t o c a r r y some of the loan. was  In t h i s case the bank  not aware of the agreement nor of the f a c t t h a t the :  owner was c o n s t r u c t i n g the home h i m s e l f .  The k i t manufac-  t u r e r guaranteed the work and completion of the home and made p r i v a t e c o n t r a c t u r a l arrangements with the customer. In another case a l e n d i n g i n s t i t u t i o n r e q u i r e d the k i t home manufacturer t o provide guarantee completion. contractor contract.  t e c h n i c a l a s s i s t a n c e and  I t i n v o l v e d an "above t a b l e " The manufacturer was a well-known  i  high l i n e company with  substantial assets.  108 O b v i o u s l y , some middle- and  lower-income owner-  b u i l d e r s have c u r r e n t access t o some k i t s but s t i l l one h a l f the k i t home manufacturers  over  surveyed r e p o r t e d they  never s o l d homes t o i n d i v i d u a l s e a r n i n g under $20,000 per year.  Many f i n a n c i a l and governmental  encouraged other  i n s t i t u t i o n s have not  owner-building i n k i t , u n f i n i s h e d s h e l l ,  or  forms. To some, the combination of manufactured  p l u s s e l f - h e l p might seem c o n t r a d i c t o r y .  Why  housing  pay t o have  i  someoneipre-cut the lumber or p a r t i a l l y c o n s t r u c t the home when one can do t h i s task alone? manufactured  When questioned  about  k i t homes, both Tim Rosenham and C a r o l Hammond,  of Whatcom and S k a g i t s e l f - h e l p homes, had thought never conducted  a detailed analysis.  of i t but  The Whatcom p r o j e c t  used p r e - c u t studs and t r u s s e s and the S k a g i t system to u t i l i z i n g o n - s i t e a s s e m b l y - l i n e t e c h n i q u e s . seemed i n t e r e s t e d i n combining  admitted  Neither  t h e i r programs with an  e x i s t i n g or custom designed f a c t o r y p r e - c u t k i t which c o u l d be c o n s t r u c t e d much more q u i c k l y .  They both c o n s i d e r e d the  c o s t t o be too h i g h , yet most people who own  homes h i r e some s k i l l e d  labor.  The  do b u i l d  their  FmHA program does  permit the i n d i v i d u a l groups to s e l e c t what l a b o r t o h i r e . Usually t h i s involved h i r i n g .skilled technical assistance to m e e t . s p e c i f i c codes ( i . e . , e l e c t r i c a l , plumbing, tion, etc.).  Even the most ardent owner-builder  founda-  hesitates  doing a l l the work h i m s e l f , e s p e c i a l l y i n areas t h a t must Most owner-builders are not s k i l l e d be done j u s t r i g h t .  109 i  i n e v e r y t h i n g and cannot a f f o r d the time to l e a r n i t a l l , although they can o c c a s i o n a l l y r e l y on s k i l l e d f r i e n d s or ;  relatives for expertise. 'To h i r e l a b o r t o cut or p r e f a b r i c a t e a home may  seem  more c o s t l y but f r e q u e n t l y i t i s not much more when one c o n s i d e r s the f a c t t h a t most k i t manufacturers purchase m a t e r i a l s f a r cheaper than the owner-builder could o b t a i n them.  possibly  The time savings i n v o l v e d to e r e c t the house  u s u a l l y more than makes up f o r the added c o s t .  While  s i t u a t i o n s v a r y i n d i f f e r e n t areas, the l o c a l lumber yard i s r a r e l y the cheapest source of lumber and m a t e r i a l s i f one wants them i n any q u a n t i t y .  Even i f one i s lucky and  o b t a i n s ia d i s c o u n t and lowest b i d , one must be c a r e f u l of the q u a l i t y and understand the v a r i o u s grades of and ranges w i t h i n the grades. may  lumber  With a k i t , the purchaser  r e c e i v e an automatic d i s c o u n t due t o higher volume.  manufacturer a l s o may  The  purchase the lumber d i r e c t l y from the  m i l l or ;logging f i r m and then m i l l s the lumber by c o n t r a c t or by employee l a b o r . The Chisum concept i s based on mass p r o d u c t i o n techniques. I t uses the Chisum Log M i l l t h a t t u r n s logs t o d e s i r e d s i z e s and c u t s . . . . From s t a r t t o f i n i s h , four men can process enough logs f o r an average s i z e , two-bedroom home i n a s i n g l e day.8 ,If the k i t home manufacturer m i l l s and p r e - c u t s the l o g s , the t o t a l as one may  lumber  "package" may  not be as expensive  assume due t o the l a c k of "middlemen p r o f i t s . "  These savings vary from manufacturer to manufacturer and are h i g h l y dependent  on many v a r i a b l e s .  I t i s important t o  110 i n q u i r e about lumber q u a l i t y , grade, and source b e f o r e . purchasing any k i t or bulk lumber from a s u p p l i e r . The time savings o f f e r e d may owner-builder. may  The owner-builder's p e r s o n a l circumstances  determine whether time i s an important f a c t o r .  owner-builder r e n t i n g elsewhere? high i n t e r e s t r a t e ? if  not be important t o the  Has he borrowed  Is the money a t a  Can the owner-builder earn high wages  the time i s spent elsewhere?  Every c o n t r a c t o r knows  t h a t each month delayed t r a n s l a t e s i n t o a c o s t and  this  time c o s t should be taken i n t o c o n s i d e r a t i o n when e v a l u a t i n g the owner-building k i t home p o t e n t i a l . 'If one examines the e x i s t i n g FmHA program, one  can  see an o p p o r t u n i t y f o r s a v i n g on m a t e r i a l s and time by c u t t i n g down the l e n g t h of time from s t a r t t o completion. If the c o n s t r u c t i o n c o o r d i n a t o r , funded with a f e d e r a l grant, works with each group from s t a r t t o completion (nine t o twelve months), and he earns $20,000 per year c o n s t r u c t i n g ten homes, the c o s t per home f o r h i s labor i s about $2,000.  I f t h i s time i s cut t o s i x months, t h e o r e t i -  c a l l y he c o u l d run two groups and the savings would be about $1,000 per home.  T h i s does not count the i n d i v i d u a l ' s  time saved nor does i t take i n t o c o n s i d e r a t i o n the t r a i n i n g and c o n s t r u c t i o n a s s i s t a n c e most k i t home manufacturers offer.  The n i n e - t o twelve-month commitment i s a long time  to devote t h i r t y hours per week t o one p r o j e c t .  If t h i s  time could be cut i n h a l f , i t might make the commitment e a s i e r so more f a m i l i e s could p a r t i c i p a t e .  A large  Ill percentage of the low-income f a m i l i e s i n the country a r e the e l d e r l y , and s i n g l e parents.  Many members of these two  groups may not have the h e a l t h or time f o r such a commitment. Turner p o i n t s out t h a t c h o i c e i s an important housing.  Every  factor i n  f a m i l y ' s needs are d i f f e r e n t and the use of  k i t s might provide more o p p o r t u n i t y  f o r s e l e c t i o n o f the  design and the time each f a m i l y wishes t o commit. can be purchased f o r l e s s than $15,000 o f f e r custom design  Many k i t s  and most manufacturers  s e r v i c e s i f one of t h e i r designs  s u i t an i n d i v i d u a l ' s t a s t e .  does not  Another p o t e n t i a l s o l u t i o n  might be t o purchase a modular home and p l a c e i t on a "sweat e q u i t y " c o n s t r u c t e d  foundation.  T h i s v a r i a t i o n of  the s e l f - h e l p program might r e s u l t i n homes being i n only a few weeks.  completed  T h i s s h o r t c u t o b v i o u s l y would not  be as rewarding an experience,  nor provide as much sweat  e q u i t y , but f o r a r e t i r e d couple  in i l l  r e s a l e value might be l e s s important.  h e a l t h , e q u i t y and The p o t e n t i a l f o r  s e l f - h e l p p l u s p a r t i a l manufacturing r e q u i r e s f u r t h e r study.  No one s e l f - h e l p f i r m could p o s s i b l y conduct a  study on t h e i r small budget but FmHA should address the t o p i c as i t i n v o l v e s meeting the o b j e c t i v e s of t h e i r program and  could r e s u l t i n a r e d u c t i o n i n t h e i r c o s t per u n i t . The  k i t home i n d u s t r y r e p o r t s t h a t many of t h e i r  customers a r e b u i l d i n g t h e i r own homes. over having  The c o s t  savings  the k i t c o n s t r u c t e d by a c o n t r a c t o r can be  $10,000-$20,000  on an a v e r a g e - s i z e d  home.  Many k i t s  of the ease of c o n s t r u c t i n g t h e i r houses and time  boast  estimates  112 range from a few weeks to a few months.  Many k i t s can  be  assembled to s h e l l stage i n three weeks with the owner and  a few  friends.  some Justus  The  f o l l o w i n g are some comments from  Home k i t owners:  I had not even b u i l t a doghouse before, but i t was a breeze to e r e c t . . . . The c l e a r d i r e c t i o n s and generous advice enabled me t o s o r t my thumbs from my f i n g e r s . The summer of '72 was a fun one f o r me, my f a m i l y and friends. We a l l helped i n the c o n s t r u c t i o n and we s t i l l t a l k about the good times we had p u t t i n g i t together. --Dick & Mary Hermens . . . We saved on the c o n s t r u c t i o n c o s t s as we, a couple of s e n i o r c i t i z e n s , d i d the work o u r s e l v e s , the course was l a i d on J u l y 11 and we moved i n November .11. For two people t h a t was p r e t t y good. — I r a and Ema Man. . . . We d i d most of the c o n s t r u c t i o n o u r s e l v e s and were very impressed with the way e v e r y t h i n g f i t t o g e t h e r . . . . The d e a l e r was j u s t g r e a t . He helped us i n every way he c o u l d . --Frank & Wilma P i c c o l i ^ Monterey Dome a l s o makes mention of the ease of p u t t i n g kits  the  together. Two people--and oftentimes j u s t o n e — c a n b u i l d a complete Monterey Dome s h e l l from s t a r t to f i n i s h . Many do. Of course, the more f r i e n d s or f a m i l y you have around t o help, the more fun f o r everyone. . . . . . . The home t h a t comes to you i n a package, organized, compact, complete . . . t h a t ' s the way your Monterey Dome's B a s i c Package i s d e l i v e r e d to you. All the components are p r e c u t , p r e d r i l l e d and ready t o assemble simply and q u i c k l y . Plus e v e r y t h i n g has been c o l o r coded t o take the guesswork out of b u i l d i n g your new home.10 S i m i l a r s a l e s p i t c h e s are expressed by  Precut  and Pan Adobe Homes. The e n t i r e home package i s p r e c i s i o n precut at the f a c t o r y , part-numbered f o r easy assembly, and shipped complete to the b u i l d i n g s i t e f o r c o n s t r u c t i o n . 1 1 Pan Adobe has p r o f e s s i o n a l c o n s t r u c t i o n s u p e r v i s o r s and crews a v a i l a b l e to e r e c t the Pan Adobe b u i l d i n g package, to p r o v i d e t e c h n i c a l a s s i s t a n c e on s i t e c o n s t r u c t i o n or to help i n any way needed.12  113 The  k i t home p a r t i a l l y manufactured house plus  owner-building  s e l f - h e l p teachnique  can o f f e r  savings to a p o t e n t i a l r u r a l home buyer.  considerable  The amount of  savings depends on many market v a r i a b l e s and choices s i t e , s t y l e of house) t h a t the owner-builder One  must q u e s t i o n why,  (i.e.,  makes.  i f s e l f - h e l p plus k i t homes  o f f e r great s a v i n g s , g r e a t e r numbers of i n d i v i d u a l s do take advantage of them.  There may  t h i s q u e s t i o n , some q u i t e Owner-building, bility,  r i s k , time,  obvious.  k i t or otherwise,  involves responsi-  and energy t h a t many c o n s i d e r u n d e s i r a b l e .  In s p i t e of t h i s major disadvantage,  contrac-  many a f f l u e n t  f a m i l i e s c u r r e n t l y e l e c t to b u i l d t h e i r own r e l a t i v e l y few  not  be s e v e r a l answers to  I t i s e a s i e r t o t u r n a l l the work over to a general tor.  the  k i t , yet  l e s s a f f l u e n t f a m i l i e s s e l e c t the same  option. One few  needs to e v a l u a t e f u r t h e r why  l e s s a f f l u e n t owner-builders  there are  of k i t homes.  chapter, which examines the many o b s t a c l e s to low-income housing,  w i l l address  these  The  next  low-cost/  questions.  i  relatively  114 Notes A . M. Watkins, The Complete Guide t o Factory-Made (New York: E. Pi Dutton, 1980), p. 62.  1  Housing  2 . A l b e r t G. H. D i e t z and Laurence S. C u t l e r , B u i l d i n g Systems f o r Housing (Cambridge, Mass.: MIT Press, 1971), p. 2. 3 John F. C. Turner and Robert F i c h t e r , eds., Freedom to B u i l d , Dweller C o n t r o l of the Housing Process (New York: Macmillan, 1972), p. 4. 4 U.S. Department of Housing and Urban Development, Housing and Home Finance Agency, O f f i c e of Program P o l i c y , The U n f i n i s h e d but H a b i t a b l e Home, by W i l l i a m Shenkel (Washington, D.C.: Government P r i n t i n g O f f i c e , 1965), p. 4. I b i d . , P- 3. 5  6  I b i d . , P- i v .  7  I b i d . , P- 3.  p  Chisum I n d u s t r i e s , The Chisum Log M i l l (Grand I s l a n d : n.d.). (Brochure.) 9 Justus Homes, A d v e r t i s i n g p u b l i c a t i o n . (Tac.oma, Wash.: Justus Homes, n.d.). •^Monterey Domes, Inc., Monterey Domes Geodesic Homes f o r L i v i n g ( R i v e r s i d e , Ca.: Monterey Domes, Inc., n.d.), p. 20. (Brochure.) •'•pre-Cut I n t e r n a t i o n a l , k i t home brochure (Woodinv i l l e , Wash.: Pre-Cut I n t e r n a t i o n a l , n.d.). 1  12 Pan Adobe Cedar Homes. Wash.: n.d. ) .  Pan Adobe brochure  (Renton,  CHAPTER VI OBSTACLES TO LOW-COST HOMEOWNERSHIP According t o Webster, an o b s t a c l e i s "something that stands i n the way or opposes, OBSTRUCTION." There a r e many o b s t a c l e s t o the development of low-cost homeownership.  Homeownership i s one of the most  d e s i r e d p o s s e s s i o n s of the t w e n t i e t h - c e n t u r y North family.  American  Because the modern home i s more e l a b o r a t e i n  s t r u c t u r e and m a t e r i a l s than a mud hut or grass shack, i t i s a c o s t l y major c o n s t r u c t i o n t a s k . In a s p e c i a l i z e d complex s o c i e t y c o n s t r u c t i o n s k i l l s are not a c q u i r e d by a l l members; thus, people must be h i r e d at a high c o s t t o perform  specialized tasks.  Land c o s t s  can c o n t r i b u t e s u b s t a n t i a l l y t o the high c o s t of housing i n many areas depending upon the s i t u a t i o n .  B u i l d i n g a low-  c o s t s t r u c t u r e t h a t meets the needs, e x p e c t a t i o n s , and d e s i r e s of the p o t e n t i a l t w e n t i e t h - c e n t u r y consumer has been one of the major c h a l l e n g e s of the housing i n d u s t r y . Many o b s t a c l e s stand i n the way of low-cost i n general and many s p e c i f i c o b s t a c l e s impact mobile  or k i t home purchaser.  The f i r s t  the p o t e n t i a l  s e c t i o n of t h i s  chapter examines o b s t a c l e s t o low-cost housing 115  housing  i n general,  116 while the second s e c t i o n w i l l low-cost mobile, k i t , and  examine the o b s t a c l e s  owner-built  to  homes i n s p e c i f i c .  Financing One keeping any  of the most commonly reported new  i n the  to  or o l d housing low-cost i s the c o s t of  borrowing money. tially  obstacles  Financing  l a s t few  r a t e s have i n c r e a s e d  years.  Davidson d i s c u s s e d  substancomponents  i n v o l v e d with housing cost.. The a b i l i t y to provide new approaches to low-cost housing i m p l i e s more economical methodology i n one or more of four major component areas: technology, c o n s t r u c t i o n , land c o s t , and f i n a n c i n g . . . . Within these four components f i n a n c i n g alone may account f o r from 50 to 70 percent of the t o t a l c o s t , depending on i n t e r e s t terms and length of mortgage c o n t r a c t . . . . Thus any program f o r low-cost housing should c o n t a i n p r o v i s i o n s f o r reducing f i n a n c i n g c o s t s , land c o s t s , and c o n s t r u c t i o n cost. Apparently any workable program must i n v o l v e the government, as no p r i v a t e b u i l d e r has the a b i l i t y to control a l l [aspects].! High home p r i c e s together  with high  f i n a n c i n g c o s t s have  d r i v e n homeownership out of range f o r many r u r a l and residents.  A study conducted i n the  urban  l a t e 1970s of housing  problems i n Washington State documented a problem not unique to the State of Washington. Using the average p r i c e of a s i n g l e - f a m i l y house of $68,250 and the 25 percent of income r u l e f o r housing payments, an i n t e r e s t r a t e of 12,percent would r e q u i r e a mortgage payment of $560 or an annual income of $26,880. Only 22 percent of the households i n the State had incomes exceeding $26,000 i n 1976 or the income r e q u i r e d t o purchase such a house i n 1979. . . . Each year a d d i t i o n a l low and moderate income households enter the housing needs category. Available programs are only a v a i l a b l e t o help a small p o r t i o n of the t o t a l need.2  117 The high c o s t o f housing and f i n a n c i n g i s important i n terms o f a f f o r d a b i l i t y but t h e a v a i l a b i l i t y of f i n a n c i n g i s a l s o important i n r u r a l areas which o f t e n r e l y on l o c a l small town banks, and savings and loan a s s o c i a t i o n s f o r t h e i r home and farm l o a n s . loans a l s o p r o v i d e c a p i t a l  These sources f o r r e s i d e n t i a l f o r l a r g e farms,  industries,  and businesses i n t h e l o c a l area and o f t e n cannot p r o v i d e for s i g n i f i c a n t r e s i d e n t i a l  loan need.  The c o s t and a v a i l a b i l i t y of f i n a n c i n g a r e two of the most important f a c t o r s among t h e many which were p e r t i nent t o the r e s i d e n t i a l c o n s t r u c t i o n i n d u s t r y d u r i n g the past few y e a r s . The housing i n d u s t r y r e l i e s h e a v i l y on c r e d i t , and r e s i d e n t i a l mortgage debt i s an important component o f t h e f i n a n c i a l s t r u c t u r e o f t h e i n d u s t r y . 3 T h e ' a v a i l a b i l i t y of f i n a n c i n g was one of the major reasons given f o r the government i n t e r v e n t i o n i n t o the housing market.  The e a r l y CMHC and HUD programs focused on  f i n a n c i n g the many homes f o r r e t u r n i n g WW I I v e t e r a n s . Those e a r l y programs s t i m u l a t e d the housing market and made i t p o s s i b l e f o r thousands to purchase  o f r e t u r n i n g WW I I veterans  t h e i r f i r s t home. Lack of Government  The  Support  l a c k o f government support t o low-cost  housing  can take many forms but most i n v o l v e t h e l a c k of some form of f i n a n c i a l support.  The f e d e r a l government i n both  Canada and t h e US has been i n v o l v e d d i r e c t l y i n low-cost housing, f o r n e a r l y h a l f a century.  Before CMHC and HUD  were c r e a t e d other housing and land purchase p o l i c y and  118 programs a i d e d r u r a l  residents  i n t h e i r attempts  t o own l a n d  and b u i l d a home. There have always urban  been d i f f e r e n c e s between r u r a l a n d  h o u s i n g , a n d g o v e r n m e n t h o u s i n g p o l i c y was l a t e r  adapted  t o accommodate t h e d i f f e r e n c e s .  R u r a l a r e a s d i f f e r i n a number o f f u n d a m e n t a l ways. They lack t h ep r i v a t e entrepreneurial housing a c t i v i t y that i s found i n t h e c i t i e s and suburbs. T h i s i s due t o t h e absence o f b u i l d e r s , d e v e l o p e r s , a r c h i t e c t s , commercial l e n d i n g i n s t i t u t i o n s and s a v i n g s and loans which a r e r e q u i r e d f o r a n a c t i v e h o u s i n g i n d u s t r y . . . . The l a c k of p r i v a t e s e c t o r a c t i v i t y r e s u l t s i n t h e need f o r g r e a t e r p u b l i c s e c t o r l e a d e r s h i p and p a r t i c i p a t i o n , b u t r u r a l areas a l s o l a c k t h e p u b l i c and n o n - p r o f i t d e l i v e r y mechanisms t h a t a r e r e q u i r e d . . . . F o r example, l o c a l o f f i c i a l s a r e o f t e n p a r t - t i m e and i n e x p e r i e n c e d , and s m a l l town government budgets cannot s u p p o r t t h e q u a l i t y and number o f p r o f e s s i o n a l s t a f f p e o p l e t h a t a r e n e c e s s a r y t o p l a n , a p p l y f o r and conduct programs o f h o u s i n g and community development a s s i s t a n c e . . . . As a r e s u l t , r u r a l h o u s i n g d e l i v e r y i s a t b e s t , random a n d fragmented; a t worst i t i s nonexistent.4 I n t h e US, t h e FmHA became i n v o l v e d w i t h h o u s i n g a r e a s when i t was d e t e r m i n e d were l e s s u t i l i z e d  i n rural  t h a t e x i s t i n g HUD p r o g r a m s  a n d l e s s s u i t a b l e f o r r u r a l A m e r i c a due  t o t h e l a c k o f " p u b l i c and p r i v a t e " d e l i v e r y mechanisms mentioned  i n t h e p u b l i c a t i o n above.  The FmHA p r o g r a m s  a r e p r a i s e d by many b u t , a s a l l g o v e r n m e n t s u p p o r t  systems,  t h e y have drawbacks. As f o r t h e F a r m e r s Home A d m i n i s t r a t i o n p r o g r a m , i t m i g h t be n o t e d t h a t u n t i l r e c e n t l y l o c a l a g e n t s w e r e r e q u i r e d t o be g r a d u a t e s i n a g r i c u l t u r e , e v e n t h o u g h t h e y may h a v e h a d n o t h i n g t o do w i t h i t a f t e r j o i n i n g FmHA. T h e s e a g e n t s o f t e n h a v e l e s s e x p e r i e n c e i n housing and h o u s i n g r e l a t e d concerns than t h e j o b demands.5 Another  c r i t i c i s m o f FmHA i n o v l v e s i t s l a c k o f a v i a b l e  l a r g e - s c a l e housing r e h a b i l i t a t i o n program, a l t h o u g h  119 substandard housing i s c l e a r l y more predominant i n r u r a l areas.  " I t s S e c t i o n 504 home r e p a i r program can be  regarded  as a poor e q u i v a l e n t of the r e h a b i l i t a t i o n loan and grant program which HUD and  1965  a d m i n i s t e r s under p r o v i s i o n s of the  legislation."  County FmHA agent two c r i t i c i s m s .  1964  An i n t e r v i e w with the Whatcom  i n charge of housing confirmed the The agent  last  I spoke with had no t r a i n i n g i n  housing and knew n o t h i n g of demand or needs a n a l y s i s . estimate of substandard housing i n Whatcom County as cated i n a r e c e n t Whatcom County housing survey need f o r housing r e h a b i l i t a t i o n t o be i n the yet the agent meeting  The indi-  indicated  thousands,  I spoke with seemed c e r t a i n t h a t they were  the need with nine r e h a b i l i t a t i o n s under S e c t i o n 504  i n the e n t i r e county.  Statewide estimates c o n f i r m t h i s  fact. From estimates.completed i n December 1979, r u r a l areas of the S t a t e on the average have a higher i n c i d e n c e of substandard housing u n i t s than urban i n c o r p o r a t e d areas. . . . As s t a t e d below, i t i s estimated t h a t the o v e r a l l average percent of the t o t a l number of substandard u n i t s i s 14.6 percent statewide i n r u r a l areas.7 The FmHA home purchase many impoverished the only new  program has had a major impact i n  r u r a l areas.  In some small r u r a l towns  homes b u i l t are through the FmHA s h e a v i l y  s u b s i d i z e d 502  1  program.  T h i s program p r o v i d e s d i r e c t loans to i n d i v i d u a l s of low t o moderate income t o buy, b u i l d , r e p a i r , renovate or r e l o c a t e a home. . . . The i n t e r e s t r a t e v a r i e s a c c o r d i n g t o the a p p l i c a n t ' s a d j u s t e d f a m i l y income; f o r f a m i l i e s with incomes below $11,200 the i n t e r e s t r a t e can be as low as 1%; f o r those e a r n i n g between $11,200 and $15,600, the market i n t e r e s t r a t e a p p l i e s . . . . Loans may be made f o r 100% of the c o s t  120 ( e l i m i n a t i n g the need f o r a down payment) but the a p p l i c a n t must be able t o meet the monthly payments with 20% of h i s or her adjusted income and must be unable t o o b t a i n conventional f i n a n c i n g a t reasonable rates. Maximum loan repayment i s 33 years.8 Rent supplement programs a r e r a t h e r recent low-cost housing s u b s i d i e s .  a d d i t i o n s to  They were developed as an  answer t o the p u b l i c housing c r i t i c i s m s . housing program i s a c t i v e i n many  HUD's S e c t i o n 8  areas.  In 1965, t h e passage of the r e n t supplement program added f o r the f i r s t time, subsidy f o r o p e r a t i n g p r i v a t e rental projects. The program was designed t o make up the d i f f e r e n c e between what tenants c o u l d a f f o r d t o pay f o r a u n i t and the c o s t of o p e r a t i n g and m a i n t a i n i n g i t , i . e . , i t s u b s i d i z e d p a r t of the c o s t of o p e r a t i n g a p r o j e c t i n a d d i t i o n t o debt r e t i r e m e n t . 9. P u b l i c housing has been long c r i t i c i z e d  as an u n d e s i r a b l e  way t o house low-income r e s i d e n t s , y e t i n r u r a l areas the horror  s t o r i e s a r e uncommon.  In many r u r a l areas the  n i c e s t apartments i n town a r e new s e n i o r c i t i z e n p u b l i c housing complexes.  Many housing a u t h o r i t i e s manage v a r i o u s  s e n i o r c i t i z e n and low-income f a m i l y u n i t s , y e t other r u r a l areas have l i t t l e  due t o l o c a l  opposition.  T h i s ( o p p o s i t i o n t o p u b l i c housing) i s an o l d s t o r y . Some communities do not e s t a b l i s h p u b l i c housing a u t h o r i t i e s ; some e s t a b l i s h them t o s a t i s f y p u b l i c demand and then simply f a i l t o a c t , sometimes f o r many years; others b u i l d a handful of u n i t s and r e s t on t h e i r labors.10 Turner and many others  b l a s t p u b l i c housing as being  imper-  s o n a l , c o l d , and unhealthy f o r people, y e t the Canadian and  r u r a l American experience with the v a r i o u s  nonprofit  forms of  and p u b l i c housing have d i s p l a y e d c e r t a i n h o r r o r  s t o r i e s as untrue.  OEO d i s c u s s e s  the b i a s a g a i n s t  public  housing, e s p e c i a l l y the b i a s on the p a r t of many l o c a l officials.  121 Those who have been working i n the r u r a l housing f i e l d f o r a p e r i o d of time should have l i t t l e d i f f i c u l t y i n r e c a l l i n g the b i a s a g a i n s t p u b l i c housing which was i m p l i c i t i n most t h i n k i n g and a c t i o n . The p r i c e which the f r i e n d s of p u b l i c housing had p a i d which emerged i n the form of packing box a r c h i t e c t u r e , crowded grounds e t c . , coupled with the tendency of l o c a l governments t o operate Jim Crow housing or m i l i t a r y b a r r a c k s , and the i n c r e a s i n g war which p r i v a t e e n t e r p r i s e had waged a g a i n s t p u b l i c housing propaganda-wise had l e f t i t with few f r i e n d s . The search was f o r b e t t e r , depending on your v i e w p o i n t . P r i v a t e i n t e r e s t s wanted a r i p o f f f o r a i d i n g i n the s o l u t i o n . . . . . . . Approximately 40% of the c o u n t i e s i n the country do not have any p u b l i c housing, and those c o u n t i e s are predominately r u r a l . This s i t u a t i o n s p r i n g s from another b a s i c d e f e c t i n the program: I t i s F e d e r a l l y f i n a n c e d , but can be brought i n t o being only by a s t a t e or by a l o c a l government under the guidance of s t a t e law. L o c a l governments h o l d a veto power over the r i g h t of c i t i z e n s t o enjoy f e d e r a l s u b s i d i e s f o r good housing and many of them have e x e r c i s e d i t l i k e the Russians a t a United Nations Security Council meeting.H F r e q u e n t l y , l o c a l governments w i l l not even c o n s i d e r p u b l i c housing as an o p t i o n because  of p u b l i c o p i n i o n  a g a i n s t i t and the b e l i e f t h a t i t might a t t r a c t more "welfar bums" t o the community. it  I f they do accept p u b l i c housing,  i s u s u a l l y s e n i o r c i t i z e n housing and low-income f a m i l i e s  are not welcome.  Even i f a l o c a l o f f i c i a l  or planner  wants some low-income housing, the neighborhood major o b j e c t i o n t o i t s placement  may  raise a  i n t h e i r area.  P u b l i c housing, l i k e S e c t i o n 8 r e n t subsidy, a i d s the t r u l y poor i n r u r a l areas  ( i . e . , those on w e l f a r e  or l i v i n g on d i s a b i l i t y or s o c i a l s e c u r i t y  exclusively).  Although these programs a i d the lowest-income handicapped,  seniors,  and f a m i l i e s , they o f t e n r e c e i v e the sharpest  c r i t i c i s m and have r e c e i v e d s u b s t a n t i a l cutbacks i n the  US.  122 In Canada v a r i o u s c o o p e r a t i v e and n o n p r o f i t housing  systems  have changed the image o f low-income p u b l i c housing, y e t the impact  i n r u r a l areas i s small compared t o the need.  The Farmworker Housing Housing  Program (US) and Native  Program (Canada) are two other h e a v i l y s u b s i d i z e d  programs.  L i k e p u b l i c housing and r e n t subsidy programs,  the f e d e r a l government pays d i r e c t l y f o r a low-income f a m i l y ' s housing  cost.  One advantage of p u b l i c housing over S e c t i o n 8 or the v a r i o u s homeownership subsidy programs i s t h a t the d w e l l i n g u n i t ' s ownership  i s r e t a i n e d by the government and  i s a v a i l a b l e f o r use by many f a m i l i e s .  With i n f l a t i o n ,  this  i s a l e s s c o s t l y way t o house the poor over the long run i f managed p r o p e r l y .  Over time, the u n i t s a r e f r e e and c l e a r  and the subsidy i s s u b s t a n t i a l l y reduced; thus, the government p r o v i d e s housing f o r a low-income f a m i l y a t one t e n t h the c o s t of a new S e c t i o n 8 r e n t supplement u n i t .  Yet  the p u b l i c housing programs have r e c e i v e d s u b s t a n t i a l cutbacks and a r e not u t i l i z e d  i n many areas.  In r u r a l areas S e l f - H e l p and Farmworker/Native Housing  programs p r o v i d e very inexpensive homeownership.  Some Farmworker housing i s r e n t a l and a form of " p u b l i c housing," y e t other housing i s home purchase.  The FmHA  S e c t i o n 502 homeownership program i s used together with S e l f - H e l p t e c h n i c a l a s s i s t a n c e and other s p e c i a l i z e d homeownership  programs t o p r o v i d e low-cost housing f o r lower-  income f a m i l i e s .  The problems and o b s t a c l e s encountered  123 by t h i s p r o g r a m h a v e a l r e a d y b e e n d i s c u s s e d b u t o b s t a c l e s are b a s i c a l l y  the  same f o r a l l t y p e s  s u b s i d i z e d homeownership programs. far  g r e a t e r need f o r t h e s e  and  the need i s g r o w i n g .  subsidized b u i l d i n g going  T h e r e i s now  m a r k e t i n most r u r a l a r e a s . were d e v e l o p e d t h e  substantial.  0E0  funding  enough  When most o f t h e s e  o v e r t h e n e x t few  d e b t f o r e x i s t i n g h o m e o w n e r s h i p and is  not  a allows  federally  t o e v e n make a d e n t i n  l o n g - r a n g e p l a n was  increases i n funding  of h e a v i l y  There i s s i m p l y  programs than the  on  the  discusses  the  programs  for substantial decades.  rental  The  subsidy  t h e i m p a c t o f two  current  commitment HUD  programs.  1  The s i g n i f i c a n t p a r t o f t h e A c t , f o r p u r p o s e s h e r e , S e c t i o n s 235 ( h o m e o w n e r s h i p a s s i s t a n c e ) and 236 ( r e n t a l h o u s i n g a s s i s t a n c e ) . Under t h e s e p r o g r a m s , t h e D e p a r t ment o f H o u s i n g and U r b a n D e v e l o p m e n t ( w h i c h a b s o r b e d FHA when i t was c r e a t e d i n 1965) i s a u t h o r i z e d t o make a s s i s t a n c e p a y m e n t s on b e h a l f o f t h e b o r r o w e r t o t h e p r i v a t e l e n d e r w h i c h have the e f f e c t of l o w e r i n g the i n t e r e s t r a t e . . . . A l t h o u g h t h i s s u b s i d y mechanism has l i t t l e i n i t i a l b u d g e t a r y i m p a c t , i t s l o n g e r r a n g e i m p a c t i s s u b s t a n t i a l . . . . The maximum amount o f i n t e r e s t t h a t t h e g o v e r n m e n t has o b l i g a t e d i t s e l f t o pay f o r f u t u r e i n t e r e s t p a y m e n t s on l o a n s i n s u r e d f r o m 1968-1971 i s a b o u t $36 b i l l i o n . 1 2 In the middle of the high  optimistic goals, Richard presidency was  and  decade i n the  N i x o n was  t h e V i e t n a m War  immediate cutbacks  subsidy  expenditures  e l e c t e d to the  escalated.  w h i c h have c o n t i n u e d  The  and  US  result  f o r the  last  US.  T h r o u g h o u t , FmHA's m a j o r p r o g r a m has b e e n i t s homeowners h i p l o a n a u t h o r i t y u n d e r s e c t i o n 502. Initially, t h e s e w e r e d i r e c t l o a n s , d e p e n d e n t on a p p r o p r i a t e funds. As i t became i n c r e a s i n g l y d i f f i c u l t t o m a i n t a i n a f a c a d e o f d o m e s t i c c o n c e r n and s i m u l t a n e o u s l y c a r r y on  the war i n Vietnam without r a i s i n g taxes, there was pressure to manipulate the budget. . . . The administ r a t i o n cut back on requests f o r d i r e c t loan funds.13 Canadian housing  p o l i c y has been more dependent  upon the p r o v i n c i a l p a r t i c i p a t i o n .  Ontario received a  s u b s t a n t i a l p o r t i o n of the s o c i a l housing  funds due  to  a c t i v e p a r t i c i p a t i o n , yet B r i t i s h Columbia only had major low-cost was  housing  d u r i n g the NDP  years when s o c i a l  housing  a major g o a l . The most s t r i k i n g c o n t r a s t between the US and Canada has a l r e a d y been m e n t i o n e d — t h a t i s the c r i t i c a l r o l e played by Canada's p r o v i n c i a l governments i n the development of programs and i n the a l l o c a t i o n of fund The p r o v i n c i a l government i s very much the middle man.14 The  B r i t i s h Columbia NDP  government commissioned  task f o r c e t h a t came back with a "Comprehensive S o c i a l Housing P o l i c y f o r B r i t i s h  Columbia."  There i s p r e s e n t l y a shortage of some 20,000 housing u n i t s i n the p r o v i n c e . By 1981 an a d d i t i o n a l 1/4 m i l l i o n w i l l be r e q u i r e d because of a r a p i d l y growing p o p u l a t i o n , and high r a t e s of household formation. T h i s w i l l mean adding 46,000 housing u n i t s per year. C o n s i d e r i n g t h a t only 26,000 s t a r t s are expected i n 1975 and t h a t the r e c o r d high was 37,627 i n 1973, i t i s u n l i k e l y t h a t the r e q u i r e d number of houses w i l l be produced. In order to meet these t a r g e t s , i n c r e a s e d government a c t i v i t y i n housing p r o d u c t i o n w i l l be needed.15 The massive subsidy programs d r a i n e d CMHC's and HUD's budgets. and housing  For y e a r s , i n t e r e s t r a t e s were c o n t r o l l e d  f i n a n c e was  under the i n f l u e n c e , i f not  c o n t r o l of the f e d e r a l government i n both Canada and  the the  US. Today the housing  subsidy goals have been s c a l e d  down under a f e e l i n g of g r e a t e r f i s c a l  responsibility.  125 Many programs have been e l i m i n a t e d and most have been s u b s t a n t i a l l y cut back i n terms of u n i t s b u i l t or s u b s i dized.  The f e d e r a l government i s again being viewed by  many as not b e l o n g i n g i n the housing market. Candidates from a l l p o l i t i c a l p a r t i e s were running on p l a t f o r m s i n v e n t i n g f r e s h o l d saws t h a t the best government i s the l e a s t government; t h a t the government t h a t governs l e a s t governs b e s t ; t h a t we should expect l e s s from governments, and maybe even t h a t we deserve l e s s . . . . A g a i n s t t h i s background many people seemed t o l o s e s i g h t of the poor, the aged, the m i n o r i t i e s and the people who l i v e i n out of the way p l a c e s , up the " h o l l e r s " i n Kentucky, deep i n the M i s s i s s i p p i . . . people who have s u f f e r e d from ignorance and n e g l e c t and i n many cases e x p l o i t a t i o n , o f t e n due t o the absence of government p r o t e c t i o n . 1 6 The r e s u l t of l i t t l e government a c t i v i t y and high p r i c e s and i n t e r e s t r a t e s has been a r e t u r n t o housing s i t u a t i o n s s i m i l a r t o the l a t e 1940s when there were h i g h prices, d i f f i c u l t i e s boom" :demand.  f i n a n c i n g , and l a r g e postwar "baby  The f e d e r a l government had not as y e t made  a s u b s t a n t i a l impact on the market. In s h o r t , t h e r e i s no q u e s t i o n t h a t the United States possesses the f i n a n c i a l and t o t a l resources t o p r o v i d e a decent home and s u i t a b l e l i v i n g environment f o r every American f a m i l y . There i s c e r t a i n l y no q u e s t i o n t h a t i t has the " i n g e n u i t y " t o do so. But there i s grave doubt, a t l e a s t i n my mind, t h a t i t has the d e t e r m i n a t i o n of s p i r i t , t o do so. . . . I n d i f f e r e n c e to the p l i g h t of the m i s e r a b l y housed predominates.17 The c u r r e n t governmental s i t u a t i o n i s a major o b s t a c l e to low-cost housing.  The deep per u n i t / f a m i l y  s u b s i d i e s and tremendous e x i s t i n g debt make i t u n l i k e l y t h a t the deep subsidy programs can continue as more and more f a m i l i e s need housing a i d and as fewer and fewer f a m i l i e s can a f f o r d a home without a i d .  126 Contained i n t h i s r e p o r t i s a b r i e f a n a l y s i s and d e s c r i p t i o n of the c u r r e n t problems i n housing i n the S t a t e . Due t o a combination of r i s i n g p r i c e s , increasing construction costs, soaring i n t e r e s t rates and c o n t i n u i n g p o p u l a t i o n i n c r e a s e s , housing problems have become more severe over the past year. . . . The s e v e r i t y i s r e f l e c t e d i n the growing number of low and moderate income f a m i l i e s who are f i n d i n g i t d i f f i c u l t to maintain a sound f i n a n c i a l p o s i t i o n and a t the same time continue t o l i v e i n a f f o r d a b l e s h e l t e r . Even a growing number of middle income households f i n d i t d i f f i c u l t t o make a l l the necessary s a c r i f i c e s i n order t o l i v e i n s u i t a b l e housing. . . . In 1965, middle income f a m i l i e s ($5,000-$9,999) accounted f o r 53 percent of a l l new homes purchased. By 1976, the middle income \$10,000-$19,000) buyers' share of the market had d e c l i n e d t o 38 p e r c e n t . During the same p e r i o d , the lower income buyers' p o r t i o n of -the market went from 17 percent of a l l buyers t o 4 percent i n 1976.18 I t i s u n l i k e l y t h a t the c u r r e n t governmental  pro-  grams, u n l e s s supported with massive f u n d i n g i n c r e a s e s , could make a major impact i n p r o v i d i n g housing f o r lowincome f a m i l i e s as the need i n d i c a t e s . mental  While the govern-  f i n a n c i a l supports h e l p a few people each year,  many more are not helped a t a l l and cannot a f f o r d a home. Other answers are needed where the goals are r e a l i s t i c and e x e r t some s t a b i l i z i n g impact as o c c u r r e d i n the 1950s and 1960s. tial  The c u r r e n t US a d m i n i s t r a t i o n has made substan-  c u t s i n the housing budget.  While subsidy programs,  S e c t i o n 8, and p u b l i c h o u s i n g . ( e t c . ) s t i l l form, the w a i t i n g l i s t s are long.  e x i s t i n some  The FmHA S e l f - H e l p  programs r e q u i r e a forty-hour-per-week commitment and are l i m i t e d t o those w i t h i n a narrow income range. the a p p l i c a n t s , o n l y a few f a m i l i e s are s e l e c t e d .  From  Many government programs have been c u t back by narrowing the income range e l i g i b l e f o r c l i e n t tion.  participa-  The.home purchase programs have g e n e r a l l y accomplish  t h i s by a l l o w i n g p r i c e s and i n f l a t i o n t o r a i s e the minimum income r e q u i r e d t o q u a l i f y f o r a loan y e t not r a i s e the maximum income allowed t o p a r t i c i p a t e i n the program. At times t h i s range has been l e s s than $2,000, f o r example, $10,000 minimum and $12,000 maximum.  This  substantially  reduced the number o f people who could p o t e n t i a l l y  qualify.  Another r e l a t e d way the government o b s t r u c t s p a r t i c i p a t i o n i n a subsidy program i s by making many unnecessary c o s t l y requirements.  FmHA w i l l not fund very  small houses or expandable homes, although many low-lowincome couples or s i n g l e s may be very happy beginning t h e i r homeownership experience i n a small home t h a t can be expanded as t h e i r incomes and f a m i l i e s grow.  Many  s e n i o r s on l i m i t e d income might a l s o p r e f e r a small house to a p u b l i c housing apartment because they can r e t a i n their  pets.  FmHA a l s o w i l l not deal with "expandable" houses. For example, many r u r a l f a m i l i e s which a r e small c o u l d l i v e comfortably i n a 400 square f o o t house without plumbing and running water which c o u l d be b u i l t f o r a p r i c e they c o u l d a f f o r d t o pay, but FmHA w i l l [not allow i t ] . 1 9 The FmHA S e l f - H e l p program housing loan requirements a r e extremely r i g i d .  The d i r e c t o r o f the Skagit program  e x p l a i n e d how f r u s t r a t i n g i t can be t o meet the ownerb u i l d e r ' s need f o r p e r s o n a l touches and meet FmHA  128 requirements  f o r p l a i n but sturdy homes.  Tim Rosenham  e x p l a i n e d a s i t u a t i o n where a group wished in  a small doorway entrance.  to lay r e a l  The c o s t would be  tile  about  the same as f o r other m a t e r i a l s , yet t h e , p r o p o s a l  was  unacceptable. Requirements over l o t s i z e , and sidewalk and  street  width a l s o have added t o the c o s t of many r u r a l homes and i n nonurban areas such requirements may CMHC i s s i m i l a r l y r i g i d housing. t h a t HUD  Although  frills.  i n materials required for subsidized  standards s t i l l  has moved toward  dated November 3, 1983,  be unnecessary  e x i s t , there i s evidence  some r e s t r a i n t .  HUD  In a f a c t  sheet  states:  HUD has reduced i t s Minimum Property Standards (MPS) by 60 percent and made i t p o s s i b l e f o r an estimated $60 m i l l i o n per year t o be saved by housing b u i l t t o such standards., . . . . HUD has e l i m i n a t e d s u b d i v i s i o n and environmental reviews where a j u r i s d i c t i o n has a l o c a l Area C e r t i f i c a t i o n process underway.20 L o c a l Government R e g u l a t i o n s L o c a l government o b s t a c l e s have a l s o added t o the c o s t of housing i n many a r e a s .  One  cannot read an  a r t i c l e i n a l o g or k i t home magazine without seeing a defense of l o g homes' i n s u l a t i o n v a l u e or a r e f e r e n c e t o meeting  l o c a l codes.  B u i l d e r s and Buyers  One  ad i n the Log Home Guide f o r  states,  we have never encountered  "Our  e n g i n e e r i n g i s the b e s t :  a b u i l d i n g code we  c o u l d not  21 meet."  The  l o c a l government requirements  vary, which  causes c o n f u s i o n and makes s t a n d a r d i z a t i o n d i f f i c u l t i n the housing i n d u s t r y and a l s o adds t o the c o s t .  129 Most r e g u l a t o r y and p r o c e s s i n g b a r r i e r s t o a f f o r d a b l e housing e x i s t a t the l o c a l l e v e l i n some 19,000 m u n i c i p a l i t i e s around the country i n the form of l o c a l l y e s t a b l i s h e d and a d m i n i s t e r e d s u b d i v i s i o n r e g u l a t i o n s and zoning o r d i n a n c e s . . . . S t u d i e s show t h a t housing c o s t s can be reduced as much as 25 percent through a c t i o n s i n j u s t f o u r areas over which States and l o c a l i t i e s have c o n t r o l : Removing o v e r l y r e s t r i c t i v e b u i l d i n g and land use r e g u l a t i o n s t h a t prevent the use of proven, c o s t saving i n n o v a t i o n s i n b u i l d i n g techniques and s i t e p l a n n i n g and development; A s s u r i n g adequate s u p p l i e s of a f f o r d a b l e land for building; Stream l i n i n g p r o c e s s i n g procedures t h a t cause c o s t l y c o n s t r u c t i o n d e l a y s ; and Designing homes which r e f l e c t changing f a m i l y s i z e s and owner l i f e s t y l e s . 2 2 Another  similar publication stated  as a s u b s t a n t i a l o b s t a c l e t o low-cost  regulation  housing.  R e g u l a t i o n r e l i e f . i s seen as a key f a c t o r i n housing affordability. Noting that Government r e g u l a t i o n can account f o r as much as 25 percent of the s e l l i n g . p r i c e of a house . . .23 Trends  seem t o be away from c o s t l y c o n t r o l s a t  the l o c a l l e v e l .  S e v e r a l communities have i n t r o d u c e d  a new p o s i t i o n c a l l e d a permit e x p e d i t o r . A person who t r a c k s the developer's b u i l d i n g permit a p p l i c a t i o n through the p r o c e s s i n g system . . . the e x p e d i t o r makes sure t h a t the a p p l i c a t i o n process goes smoothly and approvals (or d i s a p p r o v a l s ) are achieved i n a t i m e l y manner.24 Changes a r e t a k i n g p l a c e t o reduce the c o s t of housing on the l o c a l  l e v e l but they are slow t o reach  many r u r a l areas with e x i s t i n g out-of-date zoning and subdivision ordinances.  Many of these l o c a l l e v e l  insti-  t u t i o n a l o b s t a c l e s a f f e c t a l l types of housing, while other r u l e s , r e g u l a t i o n s , and c o n t r o l s a f f e c t only one type of housing.  130 The  mobile home i s one type of housing t h a t has  been t r e a t e d d i f f e r e n t l y and s p e c i a l by both the f i n a n c i a l and  governmental i n s t i t u t i o n s .  v a r i o u s types of housing w i l l compare the v a r i o u s  In the next s e c t i o n the be explored  i n order t o  i n s t i t u t i o n a l obstacles  that a f f e c t  s p e c i f i c types of home c o n s t r u c t i o n techniques and types of housing. Obstacles  t o the Mobile Home  The c o s t o f new c o n v e n t i o n a l housing has i n c r e a s e d d r a m a t i c a l l y i n recent years . . . t h i s s i t u a t i o n would seem t o enhance t h e p o s i t i o n of the mobile home i n d u s t r y s i n c e mobile homes are among the most a f f o r d a b l e forms of s h e l t e r a v a i l a b l e today. . . . Yet, t o date, mobile home shipments have not i n c r e a s e d i n a manner c o n s i s t e n t with the s c e n a r i o suggested. In f a c t , shipments have not even.kept pace.25 The titled  above q u o t a t i o n  " B a r r i e r s t o Greater  i s from an i n d u s t r y Sales Growth."  report  I t discussed  the reasons the i n d u s t r y was not f l o u r i s h i n g as expected. I t s t u d i e d many areas and p e r c e i v e d  obstacles  opment of the mobile home i n d u s t r y u t i l i z i n g obtained  from a l a r g e survey.  All  information  Problems i n c l u d e  appearance, a p p r e c i a t i o n , r e p u t a t i o n , l o c a t i o n , and dishonest  t o the d e v e l -  zoning,  financing (currently),  fly-by-night dealers/distributors.  of these problems a f f e c t the mobile home market i n  a negative  manner.  L o c a l Government One  of t h e most common problems encountered by  i n d i v i d u a l s wishing t o purchase a mobile home i s the governmental r e s t r i c t i o n s and c o n t r o l s over t h i s type of housing.  131 Zoning, a common r e s t r i c t i o n , i s not the o n l y c o n t r o l , but o u t s i d e of f i n a n c i n g a i d (non-aid), i t probably has the g r e a t e s t impact.  Many communities have  a c t u a l l y banned mobile homes from r e s i d e n t i a l  subdivisions.  O c c a s i o n a l l y they have p r o v i d e d f o r them i n parks or s p e c i a l areas. Zoning r e g u l a t i o n s have been a g r e a t d e t e r r e n t t o mobile home s i t e development. L o c a l o f f i c i a l s and many l o c a l c i t i z e n s have been opposed t o t h i s type of development. Many zoning boards and p l a n n i n g commiss i o n s as w e l l as town boards and c i t y c o u n c i l s have c o n v e n t i o n a l home b u i l d e r s and r e a l e s t a t e brokers i n t h e i r membership who see mobile homes as a c o m p e t i t i v e t h r e a t t o t h e i r business i n t e r e s t s . 2 6 The r e s i s t a n c e t o mobile homes i s not l i m i t e d t o the l o c a l governmental  l e v e l s but i s a l s o present a t the  s t a t e l e v e l through omission of mobile homes as p a r t of s t a t e or p r o v i n c i a l p o l i c y and p l a n n i n g . Based on review of submitted housing p o l i c i e s and f u r t h e r i n f o r m a t i o n o b t a i n e d i n telephone i n t e r v i e w s , we conclude t h a t the f a i l u r e t o mention MH i n formal housing p o l i c y i s based on an ignorance on the p a r t of housing planners and p o l i c y makers of MH. This ignorance p e r s i s t s i n p a r t because of an unconscious b i a s i n f a v o r of s i t e - b u i l t housing, a b i a s supported by the d a i l y encounter with t h i s form of housing.27 T h i s r e s i s t a n c e t o the mobile home a f f e c t s the demand i n n e g a t i v e and p o s i t i v e ways. been excluded from some r e s i d e n t i a l  Because i t has  s u b d i v i s i o n s i n many  areas, i t d i d not get caught up i n the lengthy codes and approval process developers and t r a d i t i o n a l b u i l d e r s must go through.  Because i t r e c e i v e d s p e c i a l  s t a t u s , has  n a t i o n a l b u i l d i n g codes, and r e c e i v e s s p e c i a l  privileges  (parks, lower r e q u i r e m e n t s ) , i t has f l o u r i s h e d .  For  132 example, the d e n s i t y requirements, setbacks, and road clearance  (etc.) requirements are not as s t r i c t i n mobile  home parks as f o r other s u b d i v i s i o n s . i s p l a c e d on a r u r a l  When a mobile home  l o t the s i t e p r e p a r a t i o n approvals  go through formal procedures but the numerous b u i l d i n g i n s p e c t i o n s a r e avoided. A more f r e q u e n t l y encountered problem than no space t o p l a c e a mobile home i s the problem of poor- and low-quality s i t e s .  Often the land made a v a i l a b l e f o r park  l o c a t i o n s i s l e s s than d e s i r a b l e and t h i s a f f e c t s the mobile home market. Financing In both the US and Canada the best f i n a n c i n g occurs only i f the mobile home i s p l a c e d on a f o u n d a t i o n where i t can be f i n a n c e d on a longer-term l o w e r - i n t e r e s t loan.  This  can o n l y occur i n s p e c i f i c areas as i t i s p r o h i b i t e d i n many small towns. Many banks and savings and loan a s s o c i a t i o n s c o n s i d e r mobile homes as v e h i c l e s r a t h e r than as houses, because they a r e e a s i l y moved, have a s h o r t e r l i f e span than a permanently i n s t a l l e d b e t t e r b u i l t home on a f o u n d a t i o n , and because they d e p r e c i a t e with time. As a r e s u l t , l e n d i n g i n s t i t u t i o n s g e n e r a l l y grant p e r s o n a l loans r a t h e r than long-term mortgages t o mobile home purchasers.28 Many of the f i n a n c i n g o b s t a c l e s have been overcome as the mobile home has gained acceptance as a secure investment.  The p e r c e p t u a l r e p u t a t i o n problem  encountered  i n the e a r l y years of the mobile home has also' been overcome i n most areas.  The i n d u s t r y has changed and adapted .to  133 consumer t a s t e s and a l t e r e d the t r a d i t i o n a l mobile home appearance by u s i n g more c o n v e n t i o n a l m a t e r i a l s . Mobile homes have now made a major breakthrough. New house developments i n a growing number of r e s i d e n t i a l areas are being b u i l t with mobile-home houses, though only experts can u s u a l l y t e l l t h a t they are mobile homes. They're made with c o n v e n t i o n a l wood-siding w a l l s , a s p h a l t s h i n g l e r o o f s , c o n v e n t i o n a l windows and doors, and v i r t u a l l y e v e r y t h i n g i n s i d e conforms with standard home b u i l d i n g p r a c t i c e s . 2 9 The n a t i o n a l l e v e l of b u i l d i n g standards f o r manufactured  homes has meant t h a t the c o s t l y l o c a l  delays are reduced.  level  Many areas have r e c o g n i z e d the need  f o r mobile homes and the r o l e they p l a y i n the community. They have gained widespread  acceptance.  HUD opened up  i t s purchase programs t o i n c l u d e them. Most of the s p e c i f i c o b s t a c l e s t o the mobile home housing have been overcome.  The high i n t e r e s t r a t e s and  d i f f i c u l t y of f i n a n c i n g a f f e c t a l l types of housing.  It i s  i n t e r e s t i n g t o note an o b s t a c l e mentioned i n Davidson's t h e s i s on mobile homes t h a t e v a l u a t e s the balance between mobile homes and s u b s i d i z e d housing. The i n c r e a s e d government s u b s i d i z a t i o n of c o n v e n t i o n a l housing u n i t s should r e s u l t i n i n c r e a s e d demand f o r these u n i t s and continue t o a c t as a depressant t o the demand f o r mobile housing u n i t s . T h i s , a f a c t o r which w i l l determine the f u t u r e demand f o r mobile homes, i s the p r o j e c t e d s t r e n g t h of p r i v a t e c o n v e n t i o n a l housing demand. . . . A key i s s u e i n housing markets has s h i f t e d from the a v a i l a b i l i t y and terms of f i n a n c i n g t o the c o s t of housing. Based on a comparative a n a l y s i s o f the c o s t s of a l t e r n a t i v e c o n s t r u c t i o n methods, mobile homes do not p r o v i d e a l l of the answers. However, they do r e p r e s e n t a form of housing which can be h e l p f u l i n s o l v i n g lower-cost housing problems.30 The mobile home type o f housing i s o f t e n the only low-cost o p t i o n o u t s i d e of the s u b s i d i z e d housing  available  i n r u r a l areas.  When the programs are meeting  the demand  f o r low-cost housing then the demand f o r the mobile home d e c l i n e s , but when the programs are cut back or token then the mobile homes may  be the o n l y o p t i o n .  In the next s e c t i o n the s p e c i f i c o b s t a c l e s t o other types of manufactured  housing w i l l be examined.  O b s t a c l e s t o P a r t i a l l y Manufactured Housing and S e l f - H e l p When d i s c u s s i n g the o b s t a c l e s t o the other types of p r e - c u t and p a r t i a l l y manufactured  housing i t i s important  to i n c l u d e o b s t a c l e s t h a t impact a l l s e l f - h e l p ownerb u i l d e r s , as most k i t home manufacturers  s e l l a substantial  percentage of t h e i r product t o p a r t i a l or f u l l builders.  owner-  In t h i s s e c t i o n on o b s t a c l e s the problems  encountered by k i t manufacturers  and owner-builders w i l l  be d i s c u s s e d . Financing F i n a n c i n g i s a major o b s t a c l e t o any I t i s a l s o a problem built  owner-builder.  f o r c o n t r a c t o r - b u i l t homes t h a t are  from k i t s , as l o c a l banks may  be r e l u c t a n t t o lend  on a p i l e of lumber p r e - c u t hundreds of m i l e s away. the mobile home, t h e r e are no n a t i o n a l b u i l d i n g  Unlike  codes;  thus, each k i t must meet l o c a l area s p e c i f i c a t i o n s .  With  a p r e - c u t product t h i s can i n v o l v e c o s t l y a l t e r a t i o n d e l a y s and g r e a t e r f i n a n c i a l r i s k ; thus, banks may  frown on l e n d i n g  f o r a k i t home u n l e s s they are f a m i l i a r with the manufact u r e r and the c o n t r a c t o r e r e c t i n g the k i t .  135 An i n d i v i d u a l wishing t o e r e c t the k i t himself run i n t o s u b s t a n t i a l problems o b t a i n i n g a loan. l a r g e amount of cash, the o b s t a c l e s  may  Without a  f o r f i n a n c i n g can be  substantial. Banks, as a r u l e , observe geographic boundaries i n making loans. . . . I f you don't have the cash t o b u i l d you g e n e r a l l y need two types of loans: a c o n s t r u c t i o n l o a n , and, l a t e r , a permanent mortgage on the completed house. Long term mortgages on u n b u i l t houses are r a r e . A p i l e of pre-cut lumber i s not the best c o l l a t e r a l . . . . To apply f o r a standard construct i o n loan, you must own your p r o p e r t y f r e e and c l e a r and must submit t o the bank d e t a i l e d plans and c o s t estimates. For loan a p p r o v a l , you may be r e q u i r e d t o employ the s e r v i c e s o f a l i c e n s e d general c o n t r a c t o r , who would be committed by c o n t r a c t t o b u i l d the house. . . . T h i s makes i t somewhat more d i f f i c u l t f o r an owner t o do much of h i s own work. Since the c o n t r a c t o r w i l l be r e s p o n s i b l e f o r s a t i s f a c t o r y completion of the work, the amount of the loan must r e f l e c t the c o s t of having the c o n t r a c t o r do a l l the work.31 Another major problem i s e s t i m a t i n g of the c o n s t r u c t e d of the l a b o r .  the t o t a l  cost  house i f one expects t o do most or a l l  One k i t home manufacturer advised  potential  customers of the estimated c o s t o f a c o n t r a c t o r b u i l t k i t . "A r u l e of thumb f o r e s t i m a t i n g c o s t i s add t o your b a s i c options,  the completed  'turn key  1  'package p r i c e ' the c o s t of  double the amount and add your s t a t e taxes and  freight."  3 2  T h i s turnkey estimate may exceed the c o s t of a c t u a l c o n s t r u c t i o n by $10,000-$20,000 i f the owner plans t o c o n t r i b u t e h i s own l a b o r . it  T h i s i s a major problem when  comes t o q u a l i f y i n g f o r a l o a n .  this.  There are ways around  For example, two manufacturers had agreed t o assume  some r i s k and admitted i n an i n t e r v i e w t h a t they had  136 devised an "owner-builder  c o n t r a c t , " but t h i s i s not widely  advertised. Another problem f a c i n g some owner-builders time normally given f o r home completion. u s u a l l y shortens t h i s time, many cannot  i s the  While a k i t complete a home  w i t h i n the r e q u i r e d time without o u t s i d e h e l p . The owner b u i l d e r i s a l s o f r u s t r a t e d by the p r a c t i c e of p r i v a t e f i n a n c i n g i n s t i t u t i o n s . . . interm f i n a n c i n g i s u s u a l l y g i v e n f o r a one year p e r i o d , and then o n l y a f t e r the foundation has been l a i d . C o n s t r u c t i o n loans a r e o f t e n g i v e n o n l y t o commercial c o n t r a c t o r s and insurance companies f r e q u e n t l y w i l l insure only l i c e n s e d builders.33 34 A survey of graduates  of owner-builder  schools,  most of whom b u i l t t h e i r homes from s c r a t c h , r e v e a l e d t h a t i n t e r e s t r a t e s , f i n a n c i n g problems, bank m i s g i v i n g s about owner-builders, and the high c o s t of m a t e r i a l s accounted  f o r f o u r of the top f i v e h u r d l e s .  T h i s survey was conducted of owner-builders owner-building  among a s e l e c t group  who chose t o a t t e n d one of the many  schools o p e r a t i n g i n the US.  Most owner-  b u i l d i n g schools teach how t o b u i l d a home from s c r a t c h , not from a k i t ; thus, o n l y 13 percent o f the respondents used  kits. From the f i g u r e s presented i n the a r t i c l e , i t  i s not p o s s i b l e t o estimate a percentage who experienced  of i n d i v i d u a l s  f i n a n c i n g and bank d i f f i c u l t i e s ,  m a j o r i t y of the respondents  as the  i n d i c a t e d cash and savings or  loans from r e l a t i v e s as t h e i r sources of f i n a n c i n g .  137 Nearly t h r e e out of four (74 percent) used e i t h e r cash or savings t o cover a s i g n i f i c a n t p o r t i o n of their costs. Fewer than h a l f of them (44 percent) used f i n a n c i n g from any form of l e n d i n g i n s t i t u t i o n . . , . Approximately one q u a r t e r (24 percent) put the b i t e on f a m i l y or f r i e n d s f o r l o a n s . . . . median income f o r our respondents i s s l i g h t l y higher [than US median]; $26,000 . . . 24 percent p u l l down l e s s than $15,000.35 From the i n f o r m a t i o n p r o v i d e d i n t h e a r t i c l e , obvious t h a t c o s t , f i n a n c i n g , bank, and i n t e r e s t  i t is  rate  o b s t a c l e s are s i g n i f i c a n t f o r those who need money. I t would be i n t e r e s t i n g t o c r o s s t a b u l a t e the income, f i n a n c i n g , and o b s t a c l e data t o e v a l u a t e the s i g n i f i c a n c e t o those needing major f i n a n c i n g , as the m a j o r i t y of respondents obviously d i d not. From the data presented, owner-building appears t o be a c c e s s i b l e t o lower-income f a m i l i e s . r e c e i v e d , approximately  From the responses  24 percent of the f a m i l i e s c o u l d be  c l a s s i f i e d as low-income but the a r t i c l e d i d not i n d i c a t e how many of those low-income f a m i l i e s needed f i n a n c i n g and d i d not have s i g n i f i c a n t cash savings o r a i d from family. In s p i t e of the f a c t t h a t the m a j o r i t y of respondents were .middle- or high-income with s u b s t a n t i a l  cash,  four of f i v e of the t o p - r a t e d o b s t a c l e s were c o s t - or financing-related.  From the data presented i n the a r t i c l e ,  there i s s t r o n g i n d i c a t i o n t h a t c o s t and f i n a n c i n g are major problems t o owner-builders. The a r t i c l e a l s o r e p o r t e d that one q u a r t e r of the responding owner-builders had incomes that were a t l e v e l s  138 t h a t c o u l d q u a l i f y them f o r f e d e r a l housing subsidy and a s s i s t a n c e , y e t l e s s than 2.5 percent r e p o r t e d u t i l i z i n g any US f e d e r a l f i n a n c i n g o r subsidy program. T h i s survey i n d i c a t e s support f o r t h e l i t e r a t u r e ' s p o s i t i o n t h a t lower-income  owner-builders face s u b s t a n t i a l  f i n a n c i a l and governmental  o b s t a c l e s , y e t a l s o documents  the p o s i t i o n t h a t many overcome those o b s t a c l e s . F e d e r a l / S t a t e Government One s t a t i s t i c seems p a r t i c u l a r l y s i g n i f i c a n t , s i n c e i t r e f l e c t s t h e r o l e t h e f e d e r a l government p l a y s i n g u i d i n g n a t i o n a l e n e r g i e s . While the F e d e r a l Housing A d m i n i s t r a t i o n (FHA) and the Veterans A d m i n i s t r a t i o n (VA) a s s i s t the purchase of one out of every t h r e e developer b u i l t homes by o f f e r i n g mortgage i n s u r a n c e , they perform t h i s s e r v i c e f o r o n l y one out o f seventeen owner b u i l t homes.36 If one examines t h e survey r e s u l t s i n New S h e l t e r and compares them t o t h e statements above, one can observe t h a t the US f e d e r a l p o s i t i o n on owner-building has not changed s u b s t a n t i a l l y s i n c e 1968.  In an i n t e r v i e w on  March 12, 1982, a t the Vancouver CMHC o f f i c e , Mr. F u l l e r s t a t e d t h a t s e l f - h e l p housing "never was accepted or turned out t o be f e a s i b l e , " but he added t h a t CMHC w i l l an owner-builder on o c c a s i o n .  underwrite  He continued e x p l a i n i n g  t h a t any CMHC loan must have NHA standards. . . . Have an amature doing i t . . . i n f r a c t i o n s h i g h e r . "  He knew  of no l o g o r other type k i t s t h a t have met NHA acceptance. In h i s o p i n i o n , the company d i d n o t wish t o bother with NHA acceptance.  He a l s o s t a t e d t h a t i t would take 14"  logs t o meet i n s u l a t i o n requirements; and that he "doubts  more than two  [ k i t manufacturers] have our acceptance."  Since the i n t e r v i e w , CMHC has become more f l e x i b l e  139 37  and  there i s some i n d i c a t i o n t h a t l o g homes have gained acceptance. The governmental are  b a r r i e r s i n both the US and Canada  a p p a r e n t l y not i n t e n t i o n a l but are caused by the s t r u c -  t u r e of the i n d i v i d u a l programs. the p a r t i a l l y manufactured  L i k e the mobile home,  home i s not yet seen separate  from c o n v e n t i o n a l housing and i s o f t e n i g n o r e d .  Self-help  i s a l s o simply i g n o r e d and not accepted as a s e r i o u s o p t i o n a l a r g e number of people wish t o s e l e c t . HUD h o s t i l i t y t o s e l f - h e l p i s not so much a matter of d e l i b e r a t e p o l i c y as i t i s program s t r u c t u r e . HUD i s programmed t o serve r e a l t o r s , b u i l d e r s , t i t l e s e a r c h e r s , a p p r a i s e r s and c o n s u l t a n t s . . . . i t ' s , s u r r o u n d e d by an industry. Most s e l f - h e l p sponsors simply are not l a r g e enough t o support the s c a l e HUD p r e f e r s . HUD would r a t h e r be making 235 commitments i n b l o c k s of hundreds. Some HUD f i e l d people say f r a n k l y t h a t they do not wish t o be bothered with fewer than 70 u n i t s at a time.3 8 The t r a d i t i o n a l FHA "203" mortgage i n s u r a n c e programs l i k e w i s e make no mention of owner-builders or s e l f h e l p , although loans are made under i t , as t e s t i f i e d to by s t a t i s t i c s and f e d e r a l o f f i c i a l s . T h i s i s appare n t l y a matter of accommodation, s i n c e there i s nothing i n the s t a t u t e s or r e g u l a t i o n s a u t h o r i z i n g such l o a n s . The owner-builder i s t h e r e f o r e a t the mercy of the l o c a l FHA o f f i c e . 3 9 Only one f e d e r a l program o f f e r s f i n a n c i a l a s s i s t a n c e to low and moderate-income owner-builders: The Department of A g r i c u l t u r e ' s S e c t i o n 502 program. The a u t h o r i z a t i o n of funds f o r 1972 under t h i s program r e q u i r e s t h a t a t l e a s t 50 percent of the loans be made t o low income f a m i l i e s . However, the FmHA i s unable t o say how many owner-builders have been a s s i s t e d under Section 502. 40  140 The o n l y f e d e r a l governmental for  i n s t i t u t i o n a l program  s e l f - h e l p i s t h e program the Whatcom and S k a g i t s e l f -  h e l p programs operate under. tial  The requirements a r e substan-  and much i s l e f t t o the judgment and values o f t h e  i n d i v i d u a l FmHA o f f i c e . The o n l y program (FmHA 523) of t e c h n i c a l and f i n a n c i a l a s s i s t a n c e t o s e l f - h e l p housing i s l i m i t e d t o o r g a n i z e d r u r a l s e l f - h e l p g r o u p s — t h e i n d i v i d u a l owner-builder a c t i n g on h i s own does n o t q u a l i f y . As f o r f i n a n c i a l a s s i s t a n c e t o s e l f - h e l p e f f o r t s t o be p r o v i d e d by HUD, we have seen t h a t the Department has been u n w i l l i n g o r unable t o f o l l o w C o n g r e s s i o n a l d i r e c t i v e s . 4 1 Many FmHA l o c a l areas have no s e l f - h e l p program. The few who do a r e c o n s t a n t l y on the d e f e n s i v e , and a r e f o r c e d t o j u s t i f y t h e i r e x i s t e n c e and cope with the ambiguous program requirements of l o c a l o f f i c i a l s . r e h a b i l i t a t i o n , an e s p e c i a l l y c r i t i c a l Whatcom County, does not e x i s t . set  up t o a i d lower-income  'Self-help i n  area o f need i n  The FmHA program was  f a m i l i e s t o a f f o r d t h e i r own  r u r a l home but most employees r e s p o n s i b l e f o r a d m i n i s t e r i n g these programs know l i t t l e  about  housing.  I spoke with agents i n the Whatcom County FmHA office. of  The i n d i v i d u a l i n charge o f housing knew nothing  demand o r needs a n a l y s i s and f e l t t h a t the nine r e h a b i l i -  t a t e d homes i n Whatcom County they had a i d e d i n r e h a b i l i t a t i n g had met the need f o r housing r e h a b i l i t a t i o n i n the county. Studies conducted by l o c a l housing a n a l y s t s i n d i c a t e d the numbers o f substandard u n i t s i n the thousands. When I spoke t o C a r o l Hammond (Whatcom S e l f - H e l p ) and Tim Rosenham ( S k a g i t ) e a r l y i n 1981, both  indicated  141 difficulties  with FmHA.  Rosenham (an a r c h i t e c t ) had designed  an i n n o v a t i v e e n e r g y - e f f i c i e n t home f o r h i s s e l f - h e l p program.  He i n d i c a t e d f r u s t r a t i o n i n t h a t the l o c a l FmHA  o f f i c e had i n s t r u c t e d him t o stop b u i l d i n g houses t h a t did  not "look" low-income.  Hammond was a l s o impressed  Rosenham's d e s i g n and presented i t t o the FmHA.  with  The grant  proposal makes r e f e r e n c e t o i t : "A new design came from Tim Rosenham, a r c h i t e c t w i t h S k a g i t S e l f Help Program, and 42 we presented i t t o FmHA." Apparently Hammond a l s o was i n s t r u c t e d t o cease b u i l d i n g the m i d d l e - c l a s s - l o o k i n g two-story house. complied but Rosenham decided t o f i g h t . Help o r g a n i z a t i o n i s s t i l l  She  The Whatcom S e l f -  f u n c t i o n i n g and the houses  just  beginning i n 1981 a r e now complete.  The Whatcom agency  i s not an extravagant o r g a n i z a t i o n .  S a l a r i e s a r e low and  the work i s hard. We a r e a p p l y i n g f o r our second t e c h n i c a l a s s i s t a n c e grant t o enable us t o continue t o operate our s e l f - h e l p housing program. We propose t o remain a small o r g a n i z a t i o n with a s t a f f o f f o u r t o s i x , with two groups i n c o n s t r u c t i o n a t any g i v e n time. We w i l l i n c r e a s e our p r o d u c t i v i t y t o 38 houses i n a two year p e r i o d by implementing a long range p l a n . . . . We ask t h a t s a l a r y f o r the C o n s t r u c t i o n C o o r d i n a t o r be approved a t $15,000. . . . Washington State Department o f Employment S e c u r i t y shows the average wage f o r a s i m i l a r p o s i t i o n t o be $32 ,000 or more.. . . . We a r e very f o r t u n a t e t h a t John Borman i s w i l l i n g t o work with us f o r such low pay. H i s s k i l l s a r e e x c e l l e n t and we hope t o be able t o keep him. A r a i s e o f $15,000 would help.43 The k i t and modular homes have not been s u c c e s s f u l i n g a i n i n g government subsidy money, e s p e c i a l l y f o r ownerbuilders.  In the e a r l y 1970s help e x i s t e d f o r " s h e l l  142 houses" but o u t s i d e no c u r r e n t  of the formal FmHA " s e l f - h e l p " program  subsidy program e x i s t s .  Many k i t home manufac-  t u r e r s are not e n t h u s i a s t i c about working with FHA but many are w i l l i n g to g i v e i t a t r y . interview  i n Whatcom County with a small  or FmHA  During a J u l y  log home manufac-  t u r e r , the agent i n d i c a t e d a w i l l i n g n e s s to work with but  s t a t e d t h a t they never had  before.  1983  FHA  S e v e r a l dome  manufacturers have a l s o t r i e d t o o b t a i n a p p r o v a l s , as i t helps i n overcoming l o c a l code acceptance. As domes grow more popular, the n i t t y - g r i t t y of codes and f i n a n c i n g i s e a s i e r to deal with, e s p e c i a l l y s i n c e some domes are approved by the FHA and the VA. Still they do present the problems commonly encountered with any new and d i f f e r e n t kind of housing.44 The  greatest  problem c u r r e n t l y f a c i n g the i n d i v i d u a l  wishing to purchase a manufactured home i s f i n a n c i n g the  l a c k of governmental a i d or backing.  developer u s u a l l y w i l l FmHA, or VA  A local builder  have an e a s i e r time o b t a i n i n g  or  FHA,  approval f o r t h e i r s t i c k - b u i l t home than an  i n d i v i d u a l wishing to b u i l d a modular or k i t home. and  and  F i c h t e r question  the  Turner  l o g i c of the r o l e of government.  If there were no longer-term f i n a n c i n g a l t e r n a t i v e s , t h i s s o r t of d i s c r i m i n a t i o n might w e l l reduce ownerb u i l d i n g to the n e g l i g i b l e l e v e l of a c t i v i t y i t i s o f t e n assumed t o be. Yet commercial banks and savings and loan a s s o c i a t i o n s have supported owner-builders when the f e d e r a l government would not. One i s compelled to ask why i f p r i v a t e commercial l e n d i n g i n s t i t u t i o n s do not c o n s i d e r the owner-builder an i n o r d i n a t e r i s k , the major p u b l i c servant of housing need apparently does.45 Federal i n d u s t r y and  government o b s t a c l e s  s e l f - h e l p cost-saving  plague the k i t home  option,  yet both  function  143 without  federal assistance.  Undoubtedly there would be  more k i t homes a v a i l a b l e f o r lower-income p o t e n t i a l homeowners i f these f e d e r a l o b s t a c l e s were overcome and support r a t h e r than o b s t r u c t i o n was the r u l e . The c u r r e n t a t t i t u d e toward s e l f - h e l p and k i t homes has not changed s i n c e the e a r l i e r u n f i n i s h e d house f i a s c o twenty years ago.  K i t homes and s e l f - h e l p are p e r c e i v e d as  i n v o l v i n g r i s k and a r i s k t h a t the f e d e r a l governments i n Canada and t h e US do not wish t o take. L o c a l Government A major o b s t a c l e f r e q u e n t l y d i s c u s s e d i n k i t home brochures  i s the problem with l o c a l b u i l d i n g codes and  regulations.  Although most k i t s are c o n s t r u c t e d t o meet  the accepted b u i l d i n g standards, each l o c a l area can p l a c e a d d i t i o n a l r e s t r i c t i o n s on the manufacturer. advertisements  Many k i t home  make r e f e r e n c e t o t h e i r k i t s meeting codes  i n a l l areas and the help they can p r o v i d e i n o b t a i n i n g approvals. Pre-Cut I n t e r n a t i o n a l Homes can comply with the Uniform B u i l d i n g Code, meet or exceed a l l i n s u l a t i o n r e q u i r e ments f o r h e a t i n g loads and energy consumption. . . . We w i l l prepare plans f o r the b u i l d i n g department. A f t e r you apply f o r a permit we w i l l answer any q u e s t i o n s the p l a n checker may have.46 The  l a c k of n a t i o n a l  level building  standards  has complicated the manufactured housing i n d u s t r y .  Standards  vary widely and many k i t homes do not employ t r a d i t i o n a l c o n s t r u c t i o n methods; thus, the p l a n checking procedure  i s o f t e n delayed.  approval  The l a c k of u n i f i e d  building  144 standards  l i k e the mobile  home has been demonstrated to be a  s i g n i f i c a n t o b s t a c l e to the k i t home i n d u s t r y developing beyond the l o c a l  l e v e l home town small b u s i n e s s .  A c o n v e n t i o n a l house i s f i x e d to a given l o c a t i o n , and each housing market has i t s own p a r t i c u l a r set of characteristics. A b u i l d e r i s c o n f r o n t e d with a v a r i e t y of l o c a l b u i l d i n g codes and zoning ordinances which prevent s t a n d a r d i z a t i o n of c o n s t r u c t i o n s . Regulations d i f f e r between n e i g h b o r i n g m u n i c i p a l i t i e s , and t h e r e are l o c a l v a r i a t i o n s as to l a b o r markets. . . . Convent i o n a l mortgage f i n a n c i n g i s r e s t r i c t e d to the l o c a l j u r i s d i c t i o n of the l e n d i n g bank because knowledge of the l o c a l market i s compulsory to sound l e n d i n g p r a c t i c e s . Thus, because of the degree of l o c a l i z a t i o n , b u i l d e r s experience major d i f f i c u l t i e s i n moving from one market to another.47 The major problem i n meeting codes f o r the l o g homes has been the c o n t r o v e r s y over the energy e f f i c i e n c y of t h e i r wood w a l l s . continues.  Arguments over the thermal mass advantages  Many l o g homes do not meet l o c a l  energy e f f i c i e n c y .  T h i s has r e s u l t e d i n many  developing v a r i o u s i n s u l a t i o n techniques.  l e v e l codes f o r manufacturers  A New  Hampshire  manufacturer o f f e r s an i n s u l a t i o n package as an o p t i o n . S o l i d Wall r e c e n t l y i n t r o d u c e d i t s "Sentry Home" which uses 4" x 6" logs f o r the e x t e r i o r w a l l . The e x t e r i o r i s then covered with s o l i d Thermax i n s u l a t i o n completely enveloping the b u i l d i n g . 4 8 In order t o meet the requirements of s e v e r a l c o u n t r i e s , Maisons. d ' A u t r e f o i s [Quebec f i r m ] has developed t h r e e approaches to t h e i r l o g b u i l d i n g system.49 While l o g homes have widespread acceptance  as  s t r u c t u r a l l y sound homes, other k i t home manufacturers had g r e a t e r d i f f i c u l t y .  have  The dome r e c e i v e d some r e s i s t a n c e  from l o c a l i n s p e c t o r s and d e s i g n committees.  145 A l l T i m b e r l i n e domes and connector systems have been analyzed f o r s t r e s s on a computer. They comply with the Uniform B u i l d i n g Code (1979 e d i t i o n ) , the American N a t i o n a l Standards I n s t i t u t e (ANSI) and the N a t i o n a l S p e c i f i c a t i o n f o r Wood C o n s t r u c t i o n . Each k i t i n c l u d e s a s e t of assembly plans and e n g i n e e r i n g c a l c u l a t i o n s , both approved and stamped by our s t r u c t u r a l engineer. These w i l l be h e l p f u l t o your l o c a l b u i l d i n g department i f they are u n f a m i l i a r with domes.50 With experimental types of b u i l d i n g c o n s t r u c t i o n , there may  a l s o be problems r e g a r d i n g the new  and l o c a l union o p p o s i t i o n t o new  techniques  ideas.  "Local c r a f t  have i n many i n s t a n c e s r e f u s e d t o handle  factory-built  unions  housing without f i r s t making c o s t l y changes a t the home site." L o c a l l e v e l support or r e s i s t a n c e can make a g r e a t d e a l of d i f f e r e n c e with any type of housing. mobile home has overcome many l o c a l areas, the p a r t i a l l y manufactured difficulty.  While  the  level barriers in rural  house s t i l l  Harry Wexler, i n Housing  may  have  and L o c a l Government,  e l a b o r a t e s on the power of l o c a l government. L o c a l government o f f i c i a l s i n f l u e n c e the housing process through t h e i r d e c i s i o n s i n such areas as p l a n n i n g , zoning, housing and b u i l d i n g codes, s u b d i v i s i o n , r e n t c o n t r o l , p r o p e r t y taxes, loans and g r a n t s . Through d e l i b e r a t e and c o o r d i n a t e d d e c i s i o n making, l o c a l government can encourage the c o n s t r u c t i o n of new housing u n i t s , promote p a r t i c u l a r kinds of d w e l l i n g u n i t s t o meet the needs of s p e c i a l groups, such as the poor and the e l d e r l y housing a c t i v i t y i n t o s p e c i f i c neighborhoods. Likewise l o c a l government can discourage the r a t e of new housing a c t i v i t y through r e s t r i c t i v e regulations.52  Marketing U n l i k e mobile homes, the p a r t i a l l y  manufactured  housing i n d u s t r y i s dominated by numerous s m a l l - s c a l e  146 companies. networks  Only a few l a r g e r f i r m s have s u b s t a n t i a l  or advertise n a t i o n a l l y .  dealer  Consequently, most  manufacturers s e l l homes o n l y w i t h i n a small r a d i u s of their factory.  Consumer awareness of the v a r i o u s k i t types  and o p t i o n s i s a major problem.  A few f i r m s do a d v e r t i s e  n a t i o n a l l y o r throughout the world, but most i n d i v i d u a l s know l i t t l e o f the k i t home i n d u s t r y . U n l i k e the mobile home, the houses are l e s s  distinct  as compared t o c o n v e n t i o n a l l y b u i l t homes and they are not e a s i l y r o l l e d onto a p a r k i n g l o t f o r p a r t - t i m e p u b l i c viewing.  Mobile homes have a d e f i n i t e marketing edge.  The wholesale and r e t a i l f i n a n c i n g and s e l l i n g t e c h niques of a mobile home d e a l e r are s i m i l a r t o those of an automobile d e a l e r . The mobile home d e a l e r i s more independent, however, and h i s r e l a i t o n s h i p with the manufacturer i s not as c l o s e as t h a t of the auto d e a l e r with h i s manufacturer. . . . Thus the mobile home d e a l e r operates with fewer merchandising and f i n a n c i n g a i d s from the manufacturer, even though manufacturers f u r n i s h f l o o r - p l a n f i n a n c i n g i n some cases. Mobile home d e a l e r s a r e a l s o " f l o o r planned" with banks and s a l e s f i n a n c e companies who u s u a l l y advance t o the d e a l e r approximately 90 t o 100 percent of the c o s t of each u n i t , i n c l u d i n g t r a n s p o r t a t i o n costs.53 K i t home d i s p l a y areas do e x i s t but they are u s u a l l y always permanent and c o s t l y t o m a i n t a i n (Figure 18). Most k i t home manufacturers can o n l y a f f o r d t o p l a c e one model i n one l o c a t i o n and t h i s f r e q u e n t l y doubles as an o f f i c e or home. Mobile home l o t s are i n almost every small town i n r u r a l areas (Figure 19). Major manufacturers i n the US l i k e Fleetwood may have thousands d i s p l a y throughout t h e country.  of homes on v i s i b l e This increased  visibility  gure 18.  Model Home i n S e a t t l e , Washington  F i g u r e 19.  Mobile Home D i s p l a y Lot i n B r i t i s h Columbia Near Vernon  g i v e s mobile homes a d i s t i n c t advantage Marketing and v i s i b i l i t y  obstacles  over k i t homes.  occur i n most types of  k i t homes. In the next s e c t i o n , the survey r e s u l t s w i l l be analyzed t o f u r t h e r understand the k i t home i n d u s t r y and obstacles  t o i t s development.  150 Notes ''"Harold Davidson, Housing Demand: Mobile, Modular or Conventional (New York: Van Nostrand, 1973), p. 107. 2 Washington, Housing: The Problems i n Washington S t a t e (Olympia: Washington State P l a n n i n g and Community A f f a i r s Agency, L o c a l Government S e r v i c e s D i v i s i o n , 1980), p. 1. 3 Davidson, p. 73. 4 U.S. Housing A s s i s t a n c e C o u n c i l , Looking f o r a Home (Washington, D.C.: Government P r i n t i n g O f f i c e , n.d.), p. 1. 5 John F. C. Turner, Housing by People Towards Autonomy i n B u i l d i n g Environments (New York: Pantheon, 1976), p. 31. U.S. O f f i c e o f Economic Opportunity and Rural Housing, A Report on OEO's R u r a l Housing A c t i v i t i e s and Achievements, as I n d i c a t e d by Study o f F i v e S e l e c t e d R u r a l Housing Development C o r p o r a t i o n s (Washington, D . C : Government P r i n t i n g O f f i c e , n.d.), p. 47. 7 Washington, p. 21. 8 I n t e r r e l i g i o u s C o a l i t i o n f o r Housing (ICH), Housing Costs and Housing Needs, by Alexander Greendale and Stanley F. Knock (New York: Praeger, 1976), p. 8. 9 U.S. O f f i c e o f Economic O p p o r t u n i t y and Rural Housing, p. 42. " ^ I b i d . , p. 165 . "'""'"Ibid. , p. 162. 12 I b i d . , p. 38. 13 I b i d . , p. 45. 14 Canada Mortgage and Housing C o r p o r a t i o n . R e v i t a l i z ing North American Neighborhoods: A Comparison o f Canadian and US Programs f o r Neighborhood P r e s e r v a t i o n and Housing R e h a b i l i t a t i o n , NHA P u b l i c a t i o n 5237 (Ottawa, O n t a r i o : CMHC, 19 79), p. 14. " ^ B r i t i s h Columbia, Interdepartmental Study Team on Housing and Rents, A Comprehensive S o c i a l Housing P o l i c y f o r B r i t i s h Columbia, by Emily P a r a d i s e Achtenberg, Peter Larmour, and P a t r i c i a S t r e i c h ( V i c t o r i a , B.C.: n.d.), p. 1.  151 16  U.S.  Housing A s s i s t a n c e C o u n c i l , p. 1.  17 Joseph F r i e d , Housing C r i s i s - - U S A (New York: Praeger, 1971 ) , p. • 1. 18 Washington, p. 2. 19 U.S. O f f i c e of Economic Opportunity and Rural Housing, p. 176. 20 U.S. Department o f Housing and Urban Development, Fact Sheet, November 3, 1983. 21 Log Home Guide f o r B u i l d e r s and Buyers.(Gardenvale, Quebec: Muir, 1983). 22 U.S. Department o f Housing and Urban Development, The J o i n t Venture f o r A f f o r d a b l e Housing, HUD-624-PDR(2) (Washington, D . C : Government P r i n t i n g O f f i c e , 1983). 23 U.S. Department of Housing and Urban Development, A f f o r d a b l e Housing, HUD-623-PDR( 3) (Washington, D . C : Government P r i n t i n g O f f i c e , June 1983). 24 U.S. Department of Housing and Urban Development, P u t t i n g the Roof on Housing Costs (Washington, D . C : Government P r i n t i n g O f f i c e , n.d.). 25 Owens/Corning F i b e r g l a s s , B a r r i e r s t o Greater Sales Growth, An I n v e s t i g a t i o n of Consumer S h e l t e r Decision-Making As I t Impacts the Mobile Home Industry, p. 1. 26 Davidson, p. 45. ' 27 Thomas N u t t - P o w e l l , Michael F u r l o n g , and C h r i s t o p h e r P i n k i n g t o n , The S t a t e s and Manufactured Housing (N.p.: June 1980 ) , p. 8. 28 J u d i t h Rabb and Bernard Rabb, Good S h e l t e r , a Guide t o M o b i l e , Modular and P r e f a b r i c a t e d Houses I n c l u d i n g Dome (New York: Quadrangle, 1975), p. 61. 29 Watkins, p. 70. 30 Davidson, p. 239. F r a n k C o f f e e , The Complete K i t House C a t a l o g (N.p.: n.p., n.d.), p. 170. P a n Adobe Cedar Homes, Pan Adobe brochure (Renton, Wash.: n.d.). 3 1  3 2  J o h n F. C. Turner and Robert F i c h t e r , eds., Freedom t o B u i l d , Dweller C o n t r o l o f the Housing Process (New" York: Macmillan, 1972), p. 34. 3 3  34 Roger Rawlings, "Anyone Can B u i l d a Home," Rodales New S h e l t e r , A p r i l 1983, p. 22. Ibid. 36 Turner and F i c h t e r . 37 Telephone i n t e r v i e w with Mr. F u l l e r , Canada Mortgage and Housing C o r p o r a t i o n , Vancouver, B.C., March 12, 1982. 38 Turner and F i c h t e r , p. 26. 39  I b i d . , P- 23.  40  I b i d . , P- 26.  41  I b i d . , P- 28.  42 Whatcom County, "Whatcom S e l f - H e l p Housing" (Linden, Wash.: Whatcom County, 1980), p. 2. (Unpublished grant.) Ibid. 44 Watkins, p. 69. 45 . Turner and F i c h t e r , p. 5. 46 Pre-Cut I n t e r n a t i o n a l , k i t home brochure (Woodinv i l l e , Wash.: Pre-Cut I n t e r n a t i o n a l , n.d.). 47 Harold A l a n Davidson, "An A n a l y s i s o f the Demand f o r Mobile Homes with I m p l i c a t i o n s f o r the F i n a n c i a l S t r u c t u r e of the Mobile Home I n d u s t r y through 1975," unpublished d i s s e r t a t i o n , U n i v e r s i t y of Southern C a l i f o r n i a , Los Angeles, 1974. 48 Log Home Guide f o r B u i l d e r s and Buyers (Gardenvale, Quebec: Muir, 1983), p. 135. I b i d . , p. 110. 4 9  50 T i m b e r l i n e Geodesic Homes, n.d.  (Brochure.)  51 Davidson, p. 100. 52 Harry Wexler and R i c h a r d Peck, Housing and L o c a l Government; A Research Guide f o r P o l i c y Makers and Planners (Lexington, Mass.: Lexington Boooks, 1975), p. 7. 53 Davidson, p. 50.  153  PART I I INTERVIEW AND SURVEY RESULTS  CHAPTER V I I INTRODUCTION TO PART I I Need f o r Interview and Survey The  i n f o r m a t i o n on k i t homes provided i n Chapter V  came predominantly  from k i t home d i r e c t o r i e s , s a l e s  t u r e , and magazine a r t i c l e s .  litera-  Academic r e s e a r c h i s extremely  l i m i t e d and one can f i n d o n l y minor r e f e r e n c e t o the i n d u s t r y i n most academic documents on housing. Books by Rabb and by Watkins d e s c r i b e d the v a r i o u s types of k i t homes and t h e i r advantages. l i s t e d v a r i o u s k i t home manufacturers the US and Canada.  Only Davidson's  the p a r t i a l l y manufactured  Both  publications  i n business  throughout  t h e s i s and book analyzed  home's p o t e n t i a l t o p r o v i d e  low-cost housing, although t h e focus o f the t h e s i s was on mobile homes.  C u r r e n t l y the k i t home has not been s t u d i e d  i n depth as a d i s t i n c t i v e type of housing with p o t e n t i a l t o meet low-cost housing need.  The s e l f - h e l p housing process  and the mobile home have been s t u d i e d i n s e v e r a l academic p u b l i c a t i o n s but s e l f - h e l p p l u s p a r t i a l  manufacturing  (pre-cut) housing has been s t u d i e d l i t t l e as an answer t o the c u r r e n t housing shortage and high c o s t s i t u a t i o n . When conducting the l i t e r a t u r e review and study of 154  155 all  aspects of low-cost housing, i t became obvious  a d d i t i o n a l i n f o r m a t i o n would be necessary t o f u l l y  that analyze  the k i t home s i t u a t i o n and i t s p o t e n t i a l t o provide low-cost housing i n r u r a l a r e a s .  S e l f - h e l p and mobile homes have  demonstrated t h e i r c o s t - s a v i n g p o t e n t i a l .  The  partially  manufactured home combined with the s e l f - h e l p process has yet t o become a well-known e s t a b l i s h e d c o s t - s a v i n g housing o p t i o n .  Because k i t homes have not been s t u d i e d  i n depth, i t was  necessary as p a r t of t h i s study t o o b t a i n  d i r e c t data i n order t o analyze t h e i r p o t e n t i a l f o r low-cost housing.  A f t e r c o n s i d e r a b l e l i t e r a t u r e review,  s h o r t v i s i t s t o k i t home manufacturers,  several  and examination  of  m a t e r i a l r e c e i v e d form over f i f t y k i t home manufacturers, s p e c i f i c p o t e n t i a l i n t e r v i e w . q u e s t i o n s were developed. The p o t e n t i a l q u e s t i o n s were g e n e r a l and l a r g e v a r i e t y of responses and Seven c o m p a n i e s l o c a t e d (  l e f t room f o r a  discussion. i n the P a c i f i c Northwest  were s e l e c t e d f o r the i n t e r v i e w s .  Three were l a r g e and  w e l l known, while the other t h r e e were of moderate s i z e . All  the companies had a t l e a s t one d i s p l a y v i l l a g e  many s o l d k i t s through d e a l e r networks l o c a t e d  and  throughout  the P a c i f i c Northwest. The k i t home d e a l e r s i n t e r v i e w e d s o l d a v a r i e t y of p r o d u c t s .  Although no two products were a l i k e ,  s o l d s i m i l a r type homes.  several  The k i t homes c o u l d be d i v i d e d  i n t o f o u r major c a t e g o r i e s :  156 Type  *# of Dealers  S t i c k - B u i l t Frame K i t *  2  R u s t i c Log*  1  S o l i d Wall Pre-Cut Timber  4  Modular  1  *One manufacturer s o l d Frame and.Log  kits.  The i n t e r v i e w s were conducted a t the l o c a t i o n o f business, f r e q u e n t l y i n s i d e the k i t home.  The i n d i v i d u a l s  i n t e r v i e w e d were aware of the purpose f o r the r e s e a r c h .  The  same b a s i c nine q u e s t i o n s were asked of each manufacturer and lengthy e x p l a n a t i o n s encouraged as the purpose of the i n t e r v i e w s was t o f u r t h e r understand the i n d u s t r y and not t o simply t e s t sample  survey q u e s t i o n s . Interview Q u e s t i o n n a i r e  The f o l l o w i n g q u e s t i o n s were asked: 1.  How many homes have you s o l d t h i s year?  2.  Where i s your f a c t o r y ?  3.  What i s the lowest-income customer you have  had who o b t a i n e d a loan? 4.  What f i n a n c i n g arrangements  do you have?  5.  Do you have any approval problems?  6.  What a r e the b e n e f i t s of your home over the  mobile home? 7.  What i s your l o w e s t - p r i c e d home?  8.  Have you ever b u i l t a home with FmHA .- HUD,  or another s u b s i d i z e d program?  157 9.  What a r e the o b s t a c l e s t o your  The responses  varied  business?  (see Table 3 ) .  Some k i t home  d e a l e r s had no i d e a what the income or f i n a n c i n g  arrange-  ments of t h e i r customers were, as they o f f e r e d no help with f i n a n c i n g except  to' suggest p o s s i b l e sources  savings and l o a n s , e t c . ) .  (banks,  These d e a l e r s s t a t e d t h a t t h e i r  terms were cash only." The d i s c u s s i o n about o b s t a c l e s seemed t o focus on f i n a n c i n g and problems s e c u r i n g f i n a n c i n g f o r c u r r e n t customers as compared t o past s i t u a t i o n s . 'admitted  Some  manufacturers  l o s i n g customers due t o the new requirements.  A .  few companies had d e v i s e d owner-building c o n t r a c t s or made arrangements with a l o c a l bank, but others e x p l a i n e d t h a t former bank arrangements were c a n c e l l e d r e c e n t l y and the s a l e s were cash o n l y . admitted t o s e l l i n g  A l l k i t home manufacturers  interviewed  fewer homes t h i s year than l a s t , or t o  r e d u c t i o n i n business growth.  VA, FHA, and FmHA loan  programs were not used i n g r e a t numbers by any of the d e a l e r s i n t e r v i e w e d but t h r e e admitted o c c a s i o n a l l y to customers u s i n g FHA or VA. b u i l d e r were a l s o d i s c u s s e d . s o l d t o owner-builders.  selling  The problems of the ownerOnly the modular d e a l e r never  Dealers A and F ( r u s t i c l o g and  s t i c k ) had s e v e r a l stages of packages a v a i l a b l e f o r purchase and both seemed t o encourage customers t o purchase the e r e c t e d s h e l l which i s comparable with the u n f i n i s h e d house stage.  Two other manufacturers  ( s o l i d w a l l ) appeared t o  push owner-building and o f f e r e d e x t e n s i v e  owner-builder  TABLE 3 QUESTIONNAIRE RESPONSES Question Number  :-.A  B  C  K i t Home Manufacturer D E  1.  p  50 Wa.  30-40 Wa  20 Wa.  2.  None Orders  Bellevue  Tacoma  3.  P  $20,000  Convent. No s h e l l loans.  F  G  10 Wa.  50 Wa.  p  Woodville  Bellevue  Tacoma  $25,000  $18,000  $15,000  Convent. 1/3 down No ownerbuilders .  Convent. 20% down i f cont. built.  Convent. 15% down ownerbuilder contract.  Convent. 50-60% cash.  Convent. 17-1/2% 7 years.  Convent. only.  No  No  No  No  No  No  No  6. .  Quality Appreciate  Cannot compare  Quality Low-cost maintenance  Aesthetic Last longer  Cannot compare  Resale Energyefficient  Appreciate Construct technique  7.  $11,600 shell erected  $8,500 s h e l l not erected  $21,900 shell erected  $7,000 s h e l l not erected  $20,000 shell erected  $14,875 shell erected  $33,950 entire complete house  4.  '. 5 .  Tacoma  p  p  Ul  oo  TABLE 3--Continued Question Number  B  C  K i t Home Manufacturer D E  No  No  Few VA Federal Land Bank  Financing  Lumber strike  Economy  Few VA and FHA  FHA and VA  No  Financing Bank requests  Financing Financing Int. . rate Bank not support ownerbuilder  No  160 t r a i n i n g s c h o o l s and support.  One boasted t h a t t h e i r k i t  was designed f o r the owner-builder. No two manufacturers conducted  o f f e r e d the same product nor  business i n the same way.  Although the formal  i n t e r v i e w was of o n l y seven P a c i f i c Northwest d e a l e r / manufacturers,  an a d d i t i o n a l  s i x were contacted b e f o r e and  a f t e r the i n t e r v i e w s , i n c l u d i n g one l a r g e dome d e a l e r i n California. While the i n t e r v i e w data was h e l p f u l , a l a r g e r sample of the i n d u s t r y was necessary f o r f u r t h e r  analysis.  I n t r o d u c t i o n t o Survey U n l i k e the i n t e r v i e w q u e s t i o n s , the survey was designed t o o b t a i n exact, measurable data so the r e s u l t s could be t a b u l a t e d u s i n g the S t a t i s t i c a l Package f o r the S o c i a l Sciences (SPSS).  The answers requested were predom-  i n a t e l y i n the form of m u l t i p l e c h o i c e , yes/no,  or n u m e r i c a l .  Only a few q u e s t i o n s requested a d e s c r i p t i o n or e x p l a n a t i o n . S i x t e e n b a s i c q u e s t i o n s were asked but many r e q u i r e d m u l t i p l e responses.  I t was estimated t h a t the survey  would take l e s s than f i v e minutes t o complete. were grouped  The q u e s t i o n s  i n t o three c a t e g o r i e s — G e n e r a l Information,  Owner-Building/Financing, and O b s t a c l e / B u s i n e s s S i t u a t i o n (see  Appendix). Most surveys were r e t u r n e d complete  but some p a r t i -  c i p a n t s d i d not respond t o many of the f i n a n c i n g q u e s t i o n s due t o t h e i r l a c k of knowledge of the f i n a n c i a l of cash o n l y  customers.  situation  161 In t h i s s e c t i o n responses w i l l be presented and d i s c u s s e d i n three c h a p t e r s .  Chapter; VIII w i l l present the  b a s i c survey r e s u l t s r e g a r d i n g the c h a r a c t e r i s t i c s of the k i t home i n d u s t r y .  Information on k i t type, years i n  business, owner-building,  f i n a n c i n g a i d , p r i c e , income o f  customers, and l o c a t i o n w i l l be presented i n order t o understand  the i n d u s t r y and i t s v a r i a t i o n s .  No two k i t manufacturers d i s t i n c t product.  are a l i k e , each s e l l s a  Some s p e c i a l i z e i n s e l l i n g t o owner-  b u i l d e r s ; some are i n v o l v e d i n f i n a n c i n g ; others o n l y s e l l t o customers w i l l i n g t o pay cash or t o o b t a i n t h e i r own f i n a n c i n g . Chapter  IX w i l l d i s c u s s the k i t home's p o t e n t i a l  t o provide low-cost housing  i n r u r a l areas.  The responses  w i l l be c r o s s t a b u l a t e d and analyzed i n order t o determine if  the i n d u s t r y has the p o t e n t i a l t o p r o v i d e  housing i n r u r a l a r e a s .  low-cost  The l i t e r a t u r e i n d i c a t e d the  p o t e n t i a l of p a r t i a l manufacturing to provide a low-cost house.  plus  owner-building  The survey r e s u l t s are  analyzed t o determine i f low-income f a m i l i e s a r e c u r r e n t l y customers and i f the p r i c e of e x i s t i n g k i t s i s low enough f o r a p o t e n t i a l owner-builder  with income l e v e l below t h a t  normally r e q u i r e d f o r new or e x i s t i n g home purchase. In Chapters X and XI, the o b s t a c l e s t o the development of the k i t home i n d u s t r y w i l l be d i s c u s s e d again and responses  t o the o b s t a c l e q u e s t i o n analyzed.  The focus  w i l l be on i n s t i t u t i o n a l and i n d u s t r y s p e c i f i c o b s t a c l e s .  162 There are l i m i t a t i o n s i n v o l v e d when asking manufacturers/ d e a l e r s i n s t e a d of p o t e n t i a l or e x i s t i n g customers.  The  survey i n New S h e l t e r magazine"*" asked q u e s t i o n s r e g a r d i n g o b s t a c l e s t o owner-builders and these responses w i l l be compared t o survey r e s u l t s . i s t h a t no attempt  One l i m i t a t i o n of both surveys  has been made t o survey those who would  l i k e . t o become k i t home owner-builders but a r e unable t o overcome the many o b s t a c l e s .  These people, although  diffi-  c u l t t o l o c a t e , may p r o v i d e the best source f o r i n f o r m a t i o n on t h e many " o b s t a c l e s " t o low-cost k i t home ownership.  163 Notes  New  Roger Rawlings, "Anyone Can B u i l d a Home," Rodales S h e l t e r , A p r i l 1983, p. .22.  CHAPTER V I I I CHARACTERISTICS OF KIT HOME MANUFACTURERS K i t homes come i n many shapes and s i z e s ; no two k i t home manufacturers o f f e r the same product nor conduct business i n the same manner.  Because each product i s  d i s t i n c t , the survey q u e s t i o n n a i r e questions  was designed t o ask b a s i c  t h a t would r e f l e c t these d i f f e r e n c e s as w e l l as .  identify similarities. information 1.  The purpose i n o b t a i n i n g  this  i s twofold: To o b t a i n b a s i c background i n f o r m a t i o n  the i n d u s t r y as a whole i n order  about  t o achieve a g r e a t e r  understanding of how i t f u n c t i o n s . 2.  To i n v e s t i g a t e , analyze the i n d u s t r y , and  propose p o t e n t i a l reasons f o r s p e c i f i c responses.  To a i d  i n the f u r t h e r deeper a n a l y s i s of the i n d u s t r y , how i t f u n c t i o n s , and why. T h i s s e c t i o n w i l l present  the r e s u l t s as r e p o r t e d  i n the survey with some a n a l y s i s and comparisons with l i t e r a t u r e and i n t e r v i e w r e s u l t s .  D e t a i l e d a n a l y s i s of  the responses as they p e r t a i n t o the p o t e n t i a l f o r the i n d u s t r y t o provide  low-cost housing and d i s c u s s i o n of  the problems and o b s t a c l e s discussed  i n later  t o i n d u s t r y development w i l l be  chapters. 164  165 This section w i l l e i g h t s p e c i f i c areas. type, years  examine the r e s u l t s r e p o r t e d i n  The responses t o questions  i n business,  p r i c e , owner-builder  on k i t  participation,  l o c a t i o n , income of customers, and f i n a n c i n g w i l l be discussed success  i n t h i s chapter.  Responses p e r t a i n i n g t o s e l l i n g  and i n d u s t r y o b s t a c l e s w i l l  be d i s c u s s e d  i n the  s e c t i o n on o b s t a c l e s . Kit  Type  K i t s come i n many shapes and s i z e s , and exact c a t e g o r i z a t i o n of k i t type i s not always p o s s i b l e . are combinations of two or more b u i l d i n g s t y l e s .  Some There i s  a wide v a r i a t i o n i n methods of c o n s t r u c t i o n and m a t e r i a l s used i n the k i t home i n d u s t r y .  Some manufacturers are  c o n s t r u c t i n g l o g homes i n w a l l panel  s e c t i o n s and using a  crane t o h o i s t e n t i r e w a l l s e c t i o n s onto the foundations. Such a manufacturer would have a d i f f i c u l t time c a t e g o r i z i n g his  type home. In s p i t e of the l i m i t a t i o n s , i t i s important t o  have some d e s c r i p t i o n of the type k i t home the manufacturer sells.  C l a s s i f i c a t i o n t i t l e s were developed by examining  the l i t e r a t u r e provided turers.  by over t w e n t y - f i v e  The c l a s s i f i c a t i o n t i t l e s of l o g , panel,  s t i c k , modular, and panel developed. 1. ture.  k i t home manufac-  and pre-cut  pre-cut  combination were  The t i t l e s c o u l d be d e f i n e d as f o l l o w s : Log. A l o g house i s a s o l i d  timber w a l l s t r u c -  The l o g c o u l d be hand-hewn or p r e c i s i o n machine-cut.  166 The width of the w a l l v a r i e s from three t o f o u r t e e n inches depending on the manufacturer. of s e c u r i n g the l o g s . for a weather-tight a l l manufacturers  There are•numerous methods  Some are groved,  fit.  copped, or s l o t t e d  Most l a r g e logs are spiked but  have t h e i r own method they f e e l i s  superior. 2.  Panel.  A panel k i t home u s u a l l y means t h a t the  house i s c o n s t r u c t e d by c u t t i n g and manufacturing the w a l l i n l a r g e panel s e c t i o n s which a r e then trucked t o the s i t e and e r e c t e d s w i f t l y , u s u a l l y with the use of a crane and  l a r g e team.  s o l i d wall 3.  A panel house can be frame ( s t i c k ) or  timber. Pre-Cut  Stick.  A pre-cut s t i c k house r e f e r s t o  a frame type of c o n s t r u c t i o n where the studs and plywood are pre-cut but not e r e c t e d i n the f a c t o r y . manufacturers  Some dome  d e s c r i b e themselves as s e l l i n g pre-cut  homes as the domes have two by f o u r ' s , connectors, plywood, and i n s u l a t i o n i n a package.  stick  pre-cut  There are not too  many c o n v e n t i o n a l p r e - c u t s t i c k packages; most have  unusual  shapes. 4.  Panel and Pre-Cut  Combination.  T h i s k i t type i s  simply a k i t t h a t combines p r e - c u t t i n g and panel  techniques.  T h i s i s a growing method of c o n s t r u c t i o n , as some p o r t i o n s of the house are p r e - c u t while other w a l l s e c t i o n s a r e e a s i e r t o c o n s t r u c t i n a f a c t o r y and are trucked t o the s i t e i n large panels.  167 5.  Modular.  These manufacturers p r e f a b r i c a t e the  e n t i r e house i n s e c t i o n s then s e t the* home on an ownercompleted f o u n d a t i o n . One  category was l e f t t i t l e d  "Other" f o r those  t h a t were unable t o d e s c r i b e t h e i r k i t using the above titles.  Only one manufacturer  as "Other"  surveyed c l a s s i f i e d h i s k i t  (see Table 4 ) . TABLE 4 KIT TYPE Kit  Type  Number  Log  17  Modular  4  Panel  4  Pre-Cut  Stick  3  Pre-Cut and Panel  10  Other  Seventeen  1  of the t h i r t y - n i n e k i t manufacturers  d e f i n e d t h e i r k i t s as l o g . as i t takes l i t t l e  This i s the expected response,  c a p i t a l t o s e t up a l o g k i t home manu-  f a c t u r i n g o p e r a t i o n and t h e r e are many s m a l l - s c a l e l o g k i t home manufacturers throughout North  America.  While n u m e r i c a l l y the l o g home k i t manufacturers are s t r o n g , they a r e u s u a l l y small companies producing l e s s than 100 homes per year.  In c o n t r a s t , the modular home b u i l d e r s  168 are u s u a l l y l a r g e - s c a l e operators r e q u i r i n g major t u r e s i n c a p i t a l and equipment.  expendi-  Many mobile home manufac-  t u r e r s produce a modular l i n e .  One modular home manufacturer  s t a t e d t h a t they s o l d 3,100 homes l a s t year  nationwide.  One pre-cut s t i c k manufacturer was a l s o a l a r g e company and r e p o r t e d s e l l i n g 2,000 homes t h i s year alone.  They had been  i n business t h i r t y - f i v e y e a r s ; 98 percent of t h e i r homes were d e a l e r - f i n a n c e d . The k i t type response panel/pre-cut manufacturers  was expected,  as l o g and  a r e the predominant types of  k i t home d e a l e r s i n the country.  Many pre-cut s t i c k manufac-  t u r e r s frame the w a l l s i n f a c t o r i e s ; t r u e pre-cut s t i c k manufacturers  thus, there are few  i n business today  although  the few t h a t e x i s t are o f t e n l a r g e and w e l l e s t a b l i s h e d . Years  i n Business  A q u e s t i o n on the survey asked manufacturer had been i n b u s i n e s s .  how many years the  This information i s  u s e f u l i n order t o e v a l u a t e how w e l l newer companies are doing compared t o o l d e r companies, which w i l l be d i s c u s s e d i n the o b s t a c l e chapter. Many k i t manufacturers  responding  business more than t w e n t y - f i v e years mean age of the t h i r t y - e i g h t  had been i n  (see Table 5 ) . The  cases responding was e i g h t e e n .  Only t h r e e companies r e p o r t e d t h a t they had been i n business l e s s than seven y e a r s .  169 TABLE 5 YEARS IN BUSINESS Years i n Business  Number  0- 6  3  7-14  17  15-22  5  20-29  5  30-39  ^  7  The i n d u s t r y seems t o be r a p i d l y expanding.  A boom  f o r the i n d u s t r y seems t o have o c c u r r e d d u r i n g the p e r i o d 1962-1974.  Seventeen companies began a t t h i s time.  A  surge i n f e d e r a l money o c c u r r e d d u r i n g t h i s p e r i o d and s o c i a l housing programs f l o u r i s h e d .  Cutbacks o c c u r r e d i n  the US i n 1974 due t o the need t o put l a r g e sums of f e d e r a l money i n t o the Vietnam War e f f o r t .  Few companies responding  t o the survey r e p o r t e d t h a t they had begun s i n c e these cutbacks o c c u r r e d .  The l a s t few years have been d i f f i c u l t  f o r the housing i n d u s t r y . When c r o s s t a b u l a t i n g the years i n business with k i t type, t h e r e i s a tendency f o r the newer companies t o be panel and p a n e l / p r e - c u t type k i t s , w h i l e most p r e - c u t s t i c k f i r m s have been i n business over t h i r t y y e a r s . Panel and p a n e l / p r e - c u t techniques are new, w h i l e s t i c k b u i l d i n g techniques were developed more than f i f t y  years  ago (although improvements have been made s i n c e t h e n ) .  170 All  modular homes responding t o the survey i n d i c a t e d  that  they began i n business seven t o twenty-one years ago, while there seemed as many l o n g - e s t a b l i s h e d l o g companies as new. Owner-Building The turers s e l l  Participation  l i t e r a t u r e i n d i c a t e d t h a t most k i t home manufact o the owner-builder market.  survey asked whether the manufacturer the p o t e n t i a l owner-builder.  A q u e s t i o n on the  offered instruction to  T h i r t y - t w o of t h i r t y - e i g h t  dealer/manufacturers i n d i c a t e d t h a t they o f f e r e d to  owner-builders.  instruction  The s i x who d i d not, correspond with  the f i g u r e of the s i x who i n d i c a t e d t h a t they s o l d o n l y complete  houses. The next q u e s t i o n p e r t a i n i n g t o owner-building on  the survey asked what percentage  of customers were  full  owner-builders, p a r t i a l owner-builders, owners a c t i n g as general c o n t r a c t o r s , and those with no involvement i n construction. F u l l Owner B u i l d e r s Responses v a r i e d w i d e l y .  Some manufacturer/dealers  i n d i c a t e d none of t h e i r customers s e l e c t e d t h i s o p t i o n , w h i l e o t h e r s s t a t e d t h a t 75 percent of t h e i r customers were f u l l  owner-builders  (see Table 6 ) .  In order t o e a s i l y  e v a l u a t e the responses, i t i s necessary t o break them i n t o five  groups.  TABLE 6 PRECENTAGE FULL % Customers F u l l  OWNER-BUILDERS  Owner-Builders  # Firms  Under 5%  Full all  4  5-14%  14  15-29%  9  30-49%  3  50-74%  4  75% +  3  owner-building was d e f i n e d as a customer doing  or most of the c o n s t r u c t i o n of the home.  The mean was  24.59% or approximately o n e - f o u r t h of the customers i n d u s t r y wide are f u l l Partial  owner-builders.  Owner-Builders Again, the range was wide f o r customers choosing t o  do some of the work themselves. 0 percent t o 70 percent approximately  The responses ranged  from  (see Table 7 ) . The mean, again, was  25 p e r c e n t .  The responses were broken down  i n t o c a t e g o r i e s and the r e s u l t s are shown i n Table 7. Owners A c t i n g as General Contractors A way t o save on the c o s t of a custom house i s t o h i r e a l l the l a b o r and oversee the c o n s t r u c t i o n . The r e s u l t s t o the q u e s t i o n of what percentage  of customers a c t  172 TABLE 7 PERCENTAGE PARTIAL OWNER-BUILDERS % Customers Part  # Firms  Owner-Builders  Under 5%  ' 5  5-14%  8  15-29%  11  30-49%  7  50-74%  6  75% +  0  TABLE 8 PERCENTAGE NOT HIRING GENERAL CONTRACTORS % Customers A c t i n g as General C o n t r a c t o r s  # Firms  Under 5%  5  5-14%  15  15-29%  5  30-49%  3  50-74%  6  75% +  .  1  as g e n e r a l c o n t r a c t o r s ranged from 0,percent t o 80 percent (see  Table 8 ) . The mean was 21 p e r c e n t .  Customers Not Involved in Construction The  l a s t category asked what percentage of customers  had no involvement with c o n s t r u c t i o n  (see Table 9 ) .  TABLE 9 PERCENTAGE CUSTOMERS NOT INVOLVED WITH CONSTRUCTION % Customers Not Involved with Construction  # Firms  Under 5%  5  5-14%  3  15-29%  10  30-49%  3  50-74%  3  75% +  5  The mean was 27 percent; thus, l e s s than one t h i r d of the customers  of the manufacturers  surveyed  stated  t h a t they had no involvement with the c o n s t r u c t i o n of their  home. Only four manufacturers  s o l d homes t o o w n e r - b u i l d e r s . t h a t o f f e r e d o n l y complete  r e p o r t e d t h a t they never These were the companies  packages (modular,  Owner-building was common with t h i r t y - f i v e  stick).  f i r m s responding.  174 The means f o r f u l 1. owners-builders, p a r t i a l  owner-builders,  owners a c t i n g as g e n e r a l c o n t r a c t o r s , and owners with no b u i l d i n g involvement  are shown i n Table  10.  TABLE 10 OWNER-BUILDER INVOLVEMENT Customer Full  Involvement  Mean  Owner-Builders  Partial  (%)  25  Owner-Builders  25  Owners A c t i n g as General Contractors  21  Owners Not Involved with Construction  27  Other  4  I t should be noted t h a t s i x manufacturers t h a t they s o l d o n l y complete  houses;  thus, the  reported  percentages  f o r the t r u e k i t house t h a t i s a v a i l a b l e f o r the ownerb u i l d e r would be s l i g h t l y h i g h e r . Although these f i g u r e s are estimates of the o v e r a l l responses, there was  wide v a r i a t i o n .  Some manufacturers  seemed t o s p e c i a l i z e i n s e l l i n g t o owner-builders  while  others seemed t o o n l y t o l e r a t e i t with very few of t h e i r customers s e l e c t i n g t h i s o p t i o n .  In order t o c r o s s t a b u l a t e  the owner-building i n f o r m a t i o n with other responses necessary t o c a t e g o r i z e the manufacturers customer p a r t i c i p a t i o n i n c o n s t r u c t i o n . b u i l d i n g q u e s t i o n responses  ( f u l l and  i t was  on the b a s i s of The two owner-  partial  175 owner-builders) were combined, a c c o r d i n g t o the f o l l o w i n g specifics: X = % F u l l Owner-Builders + % Part Owner-Builders If X = 75% or more  Category 1  If X = between 50% and 75%  Category 2  If X = l e s s than 50%.  Category 3  Ten k i t home manufacturers s t a t e d t h a t over 7 5 percent of t h e i r customers p a r t i c i p a t e d i n the c o n s t r u c t i o n of t h e i r k i t home i n order t o save on c o n s t r u c t i o n c o s t s (see Table 11). TABLE 11 LEVEL OF OWNER-BUILDING INVOLVEMENT Category  L e v e l of Owner-Building  1  75% or more  2  50-74%  3  Under 50%  # Firms 10 8 18  With the i n f o r m a t i o n on owner-building now i n c a t e g o r i e s , i t can be c r o s s t a b u l a t e d with other responses. K i t Type and  Owner-Building  Owner-building p a r t i c i p a t i o n i s not the same with all  types of k i t home manufacturers  (see Table 12).  A l l panel and modular manufacturers r e p o r t e d t h a t fewer than one h a l f of t h e i r customers p a r t i c i p a t e d i n the  176 c o n s t r u c t i o n of t h e i r homes. manufacturers  The l o g and p r e - c u t s t i c k  r e p o r t e d the l a r g e s t number of customers  b u i l d i n g t h e i r own home but there were many other  differ-  ences between the v a r i o u s types of k i t s . TABLE 12 KIT TYPE AND OWNER-BUILDING Category  K i t Type  1  Category 2  Category 3  Pre-Cut Log  35%  23.5%  35%  Panel  25%  0.0%  75%  50%  0.0%  50%  Modular  25%  0 . 0%  75%  Panel and Pre-Cut  10%  40.0%  50%  100%  0.0%  0%  Pre-Cut  Stick  Other  Owner-building income responses  will  be c r o s s t a b u l a t e d with p r i c e and  i n l a t e r s e c t i o n s , when the k i t home  i n d u s t r y ' s p o t e n t i a l t o p r o v i d e low-cost housing i s a n a l y z e d . Owner-building  p a r t i c i p a t i o n and s e l l i n g success w i l l  also  be compared when the o b s t a c l e s t o the development of the industry are discussed. Kit  Price  The k i t p r i c e q u e s t i o n was s t r u c t u r e d s i m i l a r t o the owner-building q u e s t i o n .  Manufacturer/dealers were asked t o  177 estimate the percentage  of t h e i r k i t s t h a t s o l d i n the  v a r i o u s p r i c e ranges.  The means f o r the p r i c e c a t e g o r i e s  are l i s t e d i n Table 13. TABLE 13 KIT PRICE RANGE Mean (%)  Price  In  Under $10,000  11  $10,000-$20,000  23  $20,000-$30,000  27  $30,000-$40,000  22  $40,000+  18  a l l cases the range was wide.  Many companies d i d  not o f f e r any k i t homes p r i c e d below $10,000, w h i l e others did  not s e l l  any k i t homes p r i c e d above $20,000.  I t i s important  t o note t h a t each  o f f e r s a d i s t i n c t l y separate product. facturers s e l l  manufacturer  Some k i t home manu-  logs o n l y packages while others o f f e r a  completely b u i l t s t i c k frame house.  Most k i t manufacturers  o f f e r s h e l l packages but many may o f f e r k i t s a t v a r i o u s stages of completion.  For example, one may f i n d s e v e r a l  p r i c e s f o r k i t homes a t v a r i o u s stages of completion and d i f f e r e n t q u a n t i t i e s of m a t e r i a l s i n c l u d e d .  One such  company a d v e r t i s e d one home with three p r i c e s , as follows:  178 Aloha Model (1,200 sq. f t . ) E x t e r i o r w a l l s only  $ 9,500  E x t e r i o r w a l l s , roof  $15,000  Exterior walls, interior w a l l s , r o o f , windows, doors, f l o o r  $23,000  I t i s important  to examine what the k i t i n c l u d e s i n  order to e v a l u a t e whether the k i t i s low-priced or c o n t a i n s fewer m a t e r i a l s . the q.uestion  Of the t h i r t y - f i v e responding  s t a t e d they  to  "What does your k i t i n c l u d e ? " twenty-one  d e s c r i b e d t h e i r k i t as e x t e r i o r s h e l l finishing).  simply  (no c a b i n e t s , plumbing,  F i v e d e s c r i b e d t h e i r k i t s as w a l l s o n l y , s o l d only the walls.and  r o o f , and  two  s i x described  t h e i r home as a "complete house." I t i s important  to keep i n mind t h i s f a c t o r of  v a r i a t i o n s i n q u a n t i t y of m a t e r i a l s provided  by the  individual  manufacturers when comparing p r i c e i n f o r m a t i o n between manufacturers. Because of the wide range of responses and  the  d i f f i c u l t y of working with  f i v e d i f f e r e n t price categories  and many responses,  necessary  i t was  to re-code the  f o r the purposes of c r o s s t a b u l a t i o n with other The  f o l l o w i n g formula  was  devised  data  responses.  f o r the purpose  of s e g r e g a t i n g  the manufacturers who  s o l d low-priced homes  from those who  s o l d h i g h e r - p r i c e d k i t s which p o t e n t i a l l y  might be too expensive f o r lower-income f a m i l i e s due use of higher q u a l i t y m a t e r i a l s . from the two  questions  The  information  to the  obtained  on percentage of homes s o l d under  $10,000 and $10,000-$20,000 were combined t o form  one  response p r i c e . P r i c e = % Homes s o l d under If P r i c e i s g r e a t e r than 4 0%  $20,000 # Firms = Category 1  12  If P r i c e i s between 10% and 40%  = Category 2  13  I f P r i c e i s l e s s than 10%  = Category 3  14  E a r l i e r examination of brochures, l i t e r a t u r e , i n t e r v i e w s r e v e a l e d t h a t the k i t p r i c e i s h e a v i l y upon what i s i n c l u d e d i n the k i t package. t i o n was  and  dependent  The p r i c e i n f o r m a -  c r o s s t a b u l a t e d with i n f o r m a t i o n concerning what the  k i t included. questions.  Not a l l of the manufacturers responded  t o both  Table 14 i l l u s t r a t e s the r e s u l t s . TABLE 14 PRICE BY KIT MATERIALS INCLUDED  Category 1  Category 2  5 Shell  8 Shell  4 Exterior walls  1 Exterior walls  1 Complete house  2 Complete house  Category 3 8 Shell  3 Complete house  2 Roof and w a l l s  As expected, t h e r e i s a tendency f o r the p r i c e t o r i s e as more m a t e r i a l s are i n c l u d e d .  The w a l l s o n l y lower-  p r i c e d package probably i s not a low-cost k i t house a f t e r other m a t e r i a l s are i n c l u d e d and purchased.  Even  after  180 e l i m i n a t i n g the four w a l l s only k i t home manufacturers from the  l o w e r - p r i c e d Category 1, f i v e k i t home manufacturers  and one modular  k i t manufacturer c o u l d be c l a s s i f i e d as  s e l l i n g predominately l o w - p r i c e d k i t s . Examination of i n d i v i d u a l responses i n d i c a t e s t h a t t h r e e dome manufacturers s o l d s h e l l packages a l l p r i c e d below $10,000.  One polydome manufacturer  stated  t h a t 70 percent of the k i t s s o l d were p r i c e d under All  $10,000.  four dome manufacturers appeared t o o f f e r low-cost  k i t s p r i c e d low enough f o r the lower-income market.  Although  some k i t s a r e p r i c e d very low, p r i c e alone does not determine affordability.  F i n a n c i n g p l a y s an important r o l e i n the  a b i l i t y t o a f f o r d any home; thus, i t may be p o s s i b l e f o r a home t o be l o w - p r i c e d y e t u n a v a i l a b l e t o those i n lowerincome b r a c k e t s . Location The survey was sent only t o manufacturers b e l i e v e d to be s e l l i n g homes i n Washington  or B r i t i s h  Columbia;  thus, most f a c t o r i e s were l o c a t e d i n t h e western United States  (see Table 15). L o c a t i o n i n f o r m a t i o n i s used l a t e r  whether c e r t a i n i n s t i t u t i o n a l  obstacles  to evaluate  ( l o c a l codes) are  c o n s i d e r e d more s e r i o u s i n c e r t a i n areas and i f some firms are  having a d i f f i c u l t  areas of t h e c o u n t r y .  time s e l l i n g homes i n s p e c i f i c  181 TABLE 15 FACTORY LOCATION Number  Location Washington  2  British  Columbia  3  Western  US  Midwestern Southern  17 US  4 3  US  Northeastern  2  US  Canada  3  US and Canada  4  Income of Customers The  income q u e s t i o n i s important  i n order t o d e t e r -  mine i f lower- and middle-income f a m i l i e s have access t o k i t homes.  The  income q u e s t i o n was  phrased  p r i c e and owner-building q u e s t i o n . were given and the manufacturers percentage  s i m i l a r t o the  S e v e r a l income c a t e g o r i e s  were asked t o estimate what  of customers were i n the v a r i o u s c a t e g o r i e s .  A c c o r d i n g t o the data contained i n Table 16, a p p r o x i mately  22 percent of the customers of k i t home  earn under $20,000.  manufacturers  K i t homes are being purchased  and middle-income f a m i l i e s i n s p i t e of the  by  low-  financing  difficulties. In order t o compare income responses responses,  i t was  necessary t o re-code  income  with other responses  182 TABLE 16 INCOME OF CUSTOMERS Income  Mean (%)  Under $12,000  4.1  $12-15,000  6.0  $15-20,000  12.0  $20-25,000  12.0  $25-30,000  17.0  $30-35,000  14.0  $35,000 +  35.0  TABLE 17 INCOME CATEGORIES  Category  # Firms  Percentage of Customers E a r n i n g $20,000 or Less  1  7.  25%  2  3  10-24%  3  3  Under 10%  4  17  0%  is:  i n t o four c a t e g o r i e s . By adding t o t a l s from the f i r s t one can o b t a i n the t o t a l percentage incomes under $20,000 per year.  three income l e v e l s  of customers with  Manufacturer/dealers  then be c a t e g o r i z e d on the b a s i s of what percentage t h e i r customers are l e s s a f f l u e n t  of  (see Table 17).  While o v e r a l l the i n d u s t r y i s s e l l i n g k i t s t o and middle-income f a m i l i e s , many manufacturers sell  can  low-  do not  any k i t s t o f a m i l i e s e a r n i n g l e s s than $20,000 per  year.  T h i s corresponds with the i n t e r v i e w data which  i n d i c a t e d t h a t some f i r m s c o n s i d e r themselves f i r m s and make no attempt  to s e l l  high l i n e  homes t o l e s s  affluent  families. K i t Type and Income of Customer With the income responses re-coded it  into categories,  i s p o s s i b l e t o compare i t with other responses.  I t can  be compared with k i t type t o see i f c e r t a i n types of k i t s are more a v a i l a b l e t o lower-income Many manufacturers  groups.  d i d not know the income of t h e i r  customers and the sample was  not as complete  as other  responses, but i t i s obvious t h a t most k i t types s e l l some lower- and middle-income owner-builders I t may  to  (Table 18).  be t r u e t h a t the higher l i n e , more e l a b o r a t e k i t s  are o n l y a v a i l a b l e t o upper-middle-  and high-income f a m i l i e  but some of the more b a s i c k i t s of a l l types are being purchased  by a few  less affluent  families.  184  TABLE 18 KIT TYPE AND INCOME Income Category  Log  Panel  Pre-Cut Stick  Modular  Panel/ Pre-Cut  1  2  0  1  1  2  2  3  0  0  0  0  3  1  0  0  0  2  4  10  •1  2  0  4  In  the next chapter, income data w i l l be c r o s s -  t a b u l a t e d with o w n e r - b u i l d i n g , f i n a n c i n g , and p r i c e responses i n order t o f u r t h e r analyze the low-cost housing p o t e n t i a l of  the p a r t i a l l y manufactured  house.  Financing F i n a n c i n g i s o f t e n more c r i t i c a l than p r i c e when determining whether a lower-income home.  The q u e s t i o n s on f i n a n c i n g took four b a s i c  The f i r s t  forms.  q u e s t i o n asked whether the manufacturer/dealer  o f f e r e d any f i n a n c i n g a i d . to  f a m i l y can a f f o r d a  Then the manufacturer was asked  c i r c l e the type ( c o n t r a c t o r c o n t r a c t s , d i r e c t  bank arrangement,  h i n t s or r e f e r r a l s ,  lending,  etc.).  The next q u e s t i o n asked what percentage of customers pay cash (not f i n a n c e d ) f o r t h e i r home.  Then the manufac-  t u r e r was asked t o i n d i c a t e what percentage of customers f i n a n c e d t h e i r home through v a r i o u s sources (banks, savings and l o a n s , mortgage companies,  FHA). The l a s t q u e s t i o n  185 asked what the t y p i c a l minimum down payment was f o r a loan on one of t h e i r homes. The  responses v a r i e d widely.  Many companies o f f e r  no f i n a n c i n g a i d except perhaps t o suggest a bank. manufacturers knew where the customers obtained and  had helped  o b t a i n the f i n a n c i n g .  Still  be s p e c i f i c , as no records were kept.  Other  the loan,  others  c o u l d not  I t i s important t o  understand these l i m i t a t i o n s when e v a l u a t i n g the s p e c i f i c data. Financing A i d Many k i t home manufacturers o f f e r some form of a i d i n o b t a i n i n g f i n a n c i n g (Table 19). Some may j u s t g i v e h i n t s or suggestions Table  where a customer might secure  a loan (see  20). Others become d i r e c t l y i n v o l v e d and make  arrangements with  s p e c i f i c banks t o handle t h e i r customers  at f a v o r a b l e terms. ment with d i r e c t  Four manufacturers i n d i c a t e d i n v o l v e -  l e n d i n g or c o n t r a c t o r c o n t r a c t s where the  manufacturer assumed some r i s k .  Some c o n t r a c t o r  contracts  i n v o l v e the bank and the customer makes a c o n t r a c t with the manufacturer t o complete the house.  I f the house i s not  completed w i t h i n a s p e c i f i e d time p e r i o d , the d e a l e r may complete the home f o r a s e t p r i c e . interviewed  Some manufacturers  admitted u s i n g c o n t r a c t o r c o n t r a c t s on o c c a s i o n  but i n d i c a t e d t h a t they d i d not i n v o l v e the l e n d i n g  institu-  t i o n and were a c t u a l l y a c t i n g under the t a b l e i n t h a t the bank d i d not know the owner was c o n s t r u c t i n g the home.  One  186  TABLE 19 MANUFACTURER/DEALERS OFFERING FINANCING AID Financing Aid Offered  Number of Manufacturer/Dealers  Yes  16  No  22  TABLE 2 0 TYPE OF FINANCING  AID  Type of F i n a n c i n g A i d  Manufacturer/Dealers  Contractor Contracts  3  D i r e c t Lending  1  Bank Arrangement  8  Hints, Referrals  6  Other  1  187 k i t manufacturer  s t a t e d t h a t they d i r e c t l y f i n a n c e d the  c o s t of the l o g k i t .  The customer was  d i r e c t l y t o the manufacturer.  making payments  T h i s type of d i r e c t l e n d i n g  does not seem common, as o n l y one manufacturer  i n the  survey i n d i c a t e d p a r t i c i p a t i n g i n a d i r e c t l e n d i n g c a p a c i t y . Customers Paying Cash The q u e s t i o n r e g a r d i n g the percentage paying cash a l s o showed wide v a r i a t i o n .  Two  of customers manufacturers  s t a t e d no customers e v e r - p a i d cash and nine i n d i c a t e d  that  all  into  s a l e s were cash o n l y .  intervals  The responses were d i v i d e d  (see Table 21). TABLE 21 PERCENTAGE CASH ONLY CUSTOMERS % Customers Paying Cash  # Firms  0;  5  2-15  7  16-40  5  41-60  9  61-99  3  C  100  The mean of the responses  9  i s 46.89 percent, which  i n d i c a t e d t h a t n e a r l y one h a l f of the customers of k i t home manufacturers financing.  pay cash f o r the k i t and do not o b t a i n any  When compared t o new  c o n t r a c t o r - b u i l t homes,  188 t h i s figure i s high.  There i s a wide range i n responses  from the v a r i o u s manufacturers. seem t o s e l l  Ten k i t home manufacturers  few homes on a cash b a s i s , yet nine other  manufacturers  i n d i c a t e d t h a t t h e i r customers  T h i s seems u n l i k e l y ; perhaps  a l l p a i d cash.  the manufacturer  misunderstood  the q u e s t i o n and thought t h a t "cash o n l y " meant t h a t the customer  d i d not o b t a i n f i n a n c i n g from them.  I t i s important  t o note p o s s i b l e m i s i n t e r p r e t a t i o n s when a n a l y z i n g data.  If  the nine m i s i n t e r p r e t e d the q u e s t i o n and those nine are e l i m i n a t e d from the responses, one can estimate with reasona b l e accuracy t h a t approximately one t h i r d of those p u r c h a s i n g k i t homes pay cash e i t h e r because f i n a n c e the k i t or because  they have no need t o  they are unable t o f i n a n c e the  k i t and are f o r c e d t o l i q u i d a t e a l l ' a s s e t s , borrow money from relatives, etc. Minimum Down Payment Required The next two  survey q u e s t i o n s requested more s p e c i f i c  i n f o r m a t i o n on where customers the approximate payment.  obtained financing  and  amount of cash p l a c e d as a t y p i c a l down  As d i s c u s s e d i n p r e v i o u s c h a p t e r s , i t i s important  t o note t h a t some manufacturers  i n d i c a t e d t h a t they never  became i n v o l v e d with f i n a n c i n g and had l i t t l e knowledge of where or how  t h e i r customers  Many manufacturers approximate  p a i d f o r the k i t .  d i d not even know what the  minimum down payment would be.  Eleven manufac-  t u r e r s i n d i c a t e d t h a t they had no i d e a what a bank's  189 minimum down requirements  might be (Table 22). TABLE 2-2  FINANCING REQUIREMENTS—MINIMUM Minimum Down Required  DOWN # Firms  0%  1  5%  1  10%  2  20%  12  25%  6  30%  6  L e f t blank or don't know  11  The t y p i c a l down payment r e q u i r e d appears between 20 percent and 25 p e r c e n t .  t o be  The manufacturer  stating  t h a t the minimum down payment r e q u i r e d was 0 percent was the pre-cut s t i c k l a r g e - s c a l e manufacturer of the homes purchased.  who f i n a n c e d 98 percent  T h i s manufacturer  also reported  t h a t they had been i n business t h i r t y - f i v e years and s o l d approximately  2,000 homes each year.  s u c c e s s f u l , and reknown manufacturer  T h i s 0 percent down, r e p o r t e d t h a t he s o l d  more than one t h i r d of h i s homes t o f a m i l i e s e a r n i n g under $20,000 per year. and  The three manufacturers  r e p o r t i n g 5 percent  10 percent down as the minimum r e q u i r e d a l l i n d i c a t e d  t h a t a few o f t h e i r customers used VA l o a n s .  One s o l d  modular, complete homes o n l y , while the other two i n d i c a t e d  190 t h a t t h e i r panel k i t s were o c c a s i o n a l l y completed by owner-builders. The t y p i c a l down payment f o r a r e g u l a r bank, savings and loan, or mortgage company loan appears t o be between 20 percent and 30 p e r c e n t , which  i s higher than r e q u i r e d f o r  most new home s u b d i v i s i o n purchases y e t s i m i l a r t o the down payment r e q u i r e d f o r some mobile homes. Financing  Source  The source of f i n a n c i n g q u e s t i o n requested i n f o r m a t i o n on what percentage of customers s p e c i f i c source.  o b t a i n e d f i n a n c i n g from a  Many manufacturers d i d not know the  source of customers'  funds and l e f t  t h i s q u e s t i o n blank.  Some j u s t l e f t check marks, b r a c k e t s i n d i c a t i n g source but no percentages, and o t h e r s misunderstood the q u e s t i o n and the  percentages d i d not add up t o 100 p e r c e n t . Because o f t h e q u e s t i o n a b l e accuracy, the r e s u l t s t o  the of  source of f i n a n c i n g q u e s t i o n cannot be examined i n terms means.  Examination of i n d i v i d u a l responses i n d i c a t e s  that  a m a j o r i t y of k i t homes are f i n a n c e d through a v a r i e t y of c o n v e n t i o n a l sources but a few i n d i v i d u a l  manufacturers  (eleven) i n d i c a t e d that most of t h e i r customers  utilized  one s p e c i f i c category ( u s u a l l y mortgage company or savings and l o a n ) , which  leads one t o suspect t h a t some manufacturers  have made arrangements handle t h e i r l o a n s .  with s p e c i f i c  lending i n s t i t u t i o n s t o  An examination of. the f i n a n c i n g a i d  q u e s t i o n r e v e a l s t h a t seven of the eleven manufacturers  191 i n d i c a t e d they o f f e r e d  f i n a n c i n g a i d i n the form of a  bank arrangement. Financing  can p l a y a key r o l e i n a f f o r d a b i l i t y . The  l i t e r a t u r e supported the b e l i e f t h a t f i n a n c i n g  i s often  more important than c o s t of the home i n determining whether a low- or middle-income f a m i l y can a f f o r d a home. In the next s e c t i o n , responses t o the p r i c e , ownerb u i l d i n g , income of customer, f i n a n c i n g , and s e l l i n g  success  w i l l be f u r t h e r analyzed i n order t o e v a l u a t e the k i t home's p o t e n t i a l t o p r o v i d e low-cost housing i n r u r a l a r e a s .  CHAPTER IX KIT HOME POTENTIAL TO PROVIDE LOW-COST HOUSING IN RURAL AREAS Chapter V i n P a r t I d i s c u s s e d the S e l f - H e l p P l u s K i t Home as a p o t e n t i a l f o r low-cost housing i n r u r a l areas.  L i t e r a t u r e was examined i n order t o analyze whether  the k i t home p l u s s e l f - h e l p c o u l d p o t e n t i a l l y o f f e r a s e r i o u s c o s t - s a v i n g s housing o p t i o n .  The l i t e r a t u r e  i n d i c a t e d c o s t savings i n both s e l f - h e l p techniques and p a r t i a l manufacturing.  Combining the two would  rationally  seem a s u b s t a n t i a l c o s t savings f o r the p o t e n t i a l home buyer.  This section w i l l  rural  examine the i n t e r v i e w and  survey r e s u l t s i n order t o analyze whether the k i t home i n d u s t r y i s c u r r e n t l y p r o v i d i n g low-cost housing f o r l e s s a f f l u e n t f a m i l i e s or has the p o t e n t i a l t o do so. Examination o f the owner-builder survey r e s u l t s from the 1983 New S h e l t e r magazine"*" i n d i c a t e s that lowincome owner-builders are c o n s t r u c t i n g low-cost homes i n r u r a l areas.  Over 24 percent of the respondents  t h a t they earned under $15,000 per year.  When  indicated comparing  the r e p o r t e d average c o s t of the o w n e r - b u i l t home with i t s completed  r e s a l e v a l u e , the estimated c o s t savings was  g r e a t e r than 38 p e r c e n t .  With the l i m i t e d i n f o r m a t i o n 192  193 presented i n the a r t i c l e , tial  i t is difficult  t o analyze-poten-  f o r k i t s p l u s s e l f - h e l p t o provide low-cost  housing,  as i t would be necessary t o c r o s s t a b u l a t e s e v e r a l I t i s apparent  responses.  from the r e s u l t s presented t h a t some lower-  income owner-builders  ( k i t and n o n - k i t ) are b u i l d i n g homes,  but whether they can b u i l d the home without a s u b s t a n t i a l cash o u t l a y (loan from r e l a t i v e s , cash s a v i n g s , e t c . ) i s not p o s s i b l e t o determine  from the i n f o r m a t i o n p r o v i d e d . Interview R e s u l t s  The  i n t e r v i e w q u e s t i o n s , u n l i k e the New  Shelter  q u e s t i o n s , were designed t o o b t a i n b a s i c  affordability  data.  do not become  U n f o r t u n a t e l y , many manufacturers  i n v o l v e d with f i n a n c i n g and were unable t o answer the many i n c o m e / f i n a n c i n g q u e s t i o n s . F i v e of the seven k i t home respondents mately the lowest-income Two  c l i e n t t o q u a l i f y f o r loan a p p r o v a l .  of the f i v e s t a t e d t h a t they had s o l d homes to f a m i l i e s  earning below $20,000.  One  even i n d i c a t e d they had s o l d a  few homes t o those e a r n i n g about below.  The  c l i e n t was  loans.  Whether the $15,000 income  able t o c o n s t r u c t the home without a c o n t r a c t o r  not r e c a l l e d by the manufacturer,  FHA/VA requirements, was  $15,000 per year but not  $15,000 income c l i e n t s had been s u c c e s s f u l i n  o b t a i n i n g VA or FHA  was  knew a p p r o x i -  i t i s unlikely.  but c o n s i d e r i n g the This  c l e a r t o p o i n t out t h a t f i n a n c i n g was  and t h a t p o t e n t i a l customers must own  manufacturer the major  problem  the l o t before any  f i n a n c i n g c o u l d be c o n s i d e r e d .  The manufacturer  interviewed  i n d i c a t e d t h a t the f i r m was f o r t u n a t e i n o b t a i n i n g  favorable  terms from one s p e c i f i c bank: "There i s a i d i n f i n a n c i n g people do not r e a l i z e . financing."  . . . [Few] know of c r e a t i v e  The f i r m o f f e r e d a 622 square f o o t cabin  p r i c e d $8,000-$10,000 f o r the s h e l l k i t as t h e i r p r i c e d k i t t h a t c o s t s approximately structed.  lowest-  $20,000 t o t a l l y  con-  Although s m a l l , t h i s c a b i n was c l e a r l y w i t h i n the  a f f o r d a b l e range of many lower-income small f a m i l i e s i f f i n a n c i n g c o u l d be o b t a i n e d . The  o n l y other  i n t e r v i e w e d manufacturer  t h a t homes were s o l d t o customers earning was a well-known higher  indicating  l e s s than $20,000  l i n e k i t home manufacturer who had  d e v i s e d an owner c o n t r a c t .  He s t a t e d t h a t the company had  h i r e d an a t t o r n e y t o d r a f t the c o n t r a c t and s t a t e d ,  "if  don't get i t done, have r i g h t t o i n t e r c e p t , b u i l d home and pay  f o r i t . . . and they can buy i t f o r $55,000."  The  l o w e s t - p r i c e d s h e l l k i t o f f e r e d was $7,000, with the c o s t of the completed house approximately  $20,000.  They s t a t e d  t h a t customers r a r e l y q u a l i f i e d f o r FHA or VA loans. The  k i t home manufacturers i n t e r v i e w e d were s e l e c t e d  at random and most were higher visible.  l i n e , w e l l known, and  Four i n d i c a t e d t h a t they o f f e r e d a t l e a s t one  s m a l l , l e s s e l a b o r a t e k i t t h a t c o u l d be c o n s t r u c t e d f o r under $30,000.  One manufacturer o f f e r e d a f u l l y  constructed  modular home f o r $33,000 and two other high l i n e manufact u r e r s i n d i c a t e d t h a t t h e i r s m a l l e r home could be  195 constructed  by the owner-builder f o r s l i g h t l y over $30,000.  When d i s c u s s i n g o b s t a c l e s  and problems t o the  development of the i n d u s t r y , most s t a t e d f i n a n c i n g t i e s were the major problem.  difficul-  Not one of the manufacturers  i n d i c a t e d t h a t t h e i r customers o f t e n u t i l i z e d VA, FHA, or any  s u b s i d i z e d FmHA o r HUD f i n a n c i n g or a s s i s t a n c e .  manufacturers s t a t e d t h a t they never had a customer  Two obtain  f i n a n c i n g through any government program. Interview  Income Responses  The  i n t e r v i e w responses i n d i c a t e t h a t some l e s s  a f f l u e n t f a m i l i e s were able t o purchase k i t homes but not i n any  great numbers (Table  23). Most k i t manufacturers  o f f e r e d a t l e a s t one low-priced  model t h a t would be a f f o r d -  able t o the l e s s a f f l u e n t home b u i l d e r .  One might conclude  from the responses t h a t although some l e s s a f f l u e n t homeowners have been able t o g a i n access t o k i t s , there  have  not been the numbers one might expect c o n s i d e r i n g the low c o s t of some k i t homes. Survey Responses The  survey questions  were a l s o designed t o o b t a i n  c o s t and a f f o r d a b i l i t y data. a m a i l - i n s t y l e , the questions and  variation.  Because the survey was of left  l e s s room f o r d i s c u s s i o n  Many d i f f e r e n t types of i n f o r m a t i o n  requested i n order  were  t o analyze the k i t home i n d u s t r y ' s  p o t e n t i a l t o provide  low-cost housing.  Questions on income  of customers, p r i c e , f i n a n c i n g , and owner-building  196  TABLE 2 3 LOWEST-INCOME Manufacturer  CUSTOMER  Lowest-Income C l i e n t  A  Unknown  B  $20,000  C  $25,000  D  $18,000  E  $15,000  F  Unknown  G  Unknown  197 c o s t - s a v i n g p a r t i c i p a t i o n were asked i n order t o determine if  lower-income home b u i l d e r s c u r r e n t l y had access t o the  k i t homes or i f the c o s t was low enough t h a t they c o u l d have access i f f i n a n c i n g and other o b s t a c l e s were a l l e v i a t e d . In order t o completely understand c r o s s t a b u l a t i o n s were necessary.  the responses,  Over f i v e q u e s t i o n s on the  survey form r e f e r r e d t o f i n a n c i n g , two p e r t a i n e d t o ownerb u i l d i n g , and two requested p r i c e and income data.  The  income of customer data are important i n order t o determine whether the k i t home i n d u s t r y i s c u r r e n t l y p r o v i d i n g homes f o r lower-income  customers.  In t h i s s e c t i o n , income w i l l be compared with f i n a n c i n g , p r i c e , and owner-building responses  i n order t o  analyze the k i t home's p o t e n t i a l t o p r o v i d e low-cost From the responses  housing.  i n Table 24, i t i s c l e a r t h a t the m a j o r i t y  of k i t home customers earn over $20,000 per year but the responses  i n d i c a t e a l s o t h a t there i s wide v a r i a t i o n w i t h i n  the i n d u s t r y .  In the l a s t s e c t i o n , the i n d u s t r i e s were  c a t e g o r i z e d depending  on the percentage  of customers who  earned under $20,000 (Table 2 3 ) . I t i s c l e a r t h a t many f i r m s do not s e l l any homes to l e s s a f f l u e n t i n d i v i d u a l s .  In t h i s chapter s e v e r a l  responses w i l l be examined i n order t o f u r t h e r  understand  and analyze the k i t home i n d u s t r y ' s p o t e n t i a l t o p r o v i d e low-cost housing and e x p l a i n why more lower-income f a m i l i e s are not purchasing k i t homes.  For example:  198  TABLE 2 4 INCOME OF CUSTOMER Income of Customer  Mean (%)  Under $12,000  4.1  $12,000-$15,000  6.0  $15,000-$20,000  12.0  $20,000-$25,000  12.0  TABLE 2 5 FIRMS SELLING TO CUSTOMERS WITH UNDER $20,000 INCOME  Category  # Firms  % Customers with Income under $20,000  .1  7  2 5% or more  2  3  10-25%  3  3  1-10%  4  17  0%  199 .1.  Do the many f i r m s not c u r r e n t l y s e l l i n g t o  lower-income 2. or  f a m i l i e s have the p o t e n t i a l t o do so? Is c o s t / a f f o r d a b i l i t y of the product the only f a c t o r  a r e there other d i f f e r e n c e s ? 3.  What a r e the noncost d i f f e r e n c e s between those  f i r m s s e l l i n g t o many l e s s a f f l u e n t f a m i l i e s and those never s e l l i n g t o anyone e a r n i n g l e s s than $20,000? 4.  What might  the government/industry  k i t homes more a c c e s s i b l e t o lower-income  do t o make  families?  In order t o d i s c u s s and examine some of these q u e s t i o n s , i t i s necessary t o c r o s s t a b u l a t e the income q u e s t i o n with other responses.  Many q u e s t i o n s cannot be  answered f u l l y or with c e r t a i n t y , but by comparing the d i f f e r e n c e s i n responses between those c u r r e n t l y to  selling  l e s s a f f l u e n t f a m i l i e s and those not s e l l i n g any homes  to the lower-income Owner-Builder  groups, some f a c t o r s can be  identified.  and Income  One f a c t o r t h a t might permit more l e s s  affluent  f a m i l i e s t o own homes i s by b u i l d i n g the home without expensive o u t s i d e l a b o r .  One would expect that the f i r m s  r e p o r t i n g the h i g h e s t percentage of low-income would a l s o i n d i c a t e high owner-builder  customers  participation.  Examination of the c r o s s t a b u l a t i o n r e s u l t s of owner-building and income r e v e a l s the expected response. manufacturers  F i v e of seven  s e l l i n g the l a r g e s t percentage of homes t o  less a f f l u e n t families also reported s e l l i n g a large percentage of homes t o owner-builders  (Table 26).  200 TABLE 2 6 OWNER-BUILDING AND INCOME Homes Sold t o Owner-Builders  Customers Earning Less Than $20 ,000 25%10-24% 0-10% 0% 5  0  0  4  50-75%  1  1  1  3  Less than 50%  1  1  2  8  75%  .i •  One  c o u l d conclude t h a t i n order  turers to s e l l  f o r many manufac-  k i t s t o the l e s s a f f l u e n t customers,  they  would need t o r e l y on the c o s t - s a v i n g p r o p e r t i e s of ownerbuilding. those  I t should a l s o be noted t h a t while a m a j o r i t y of  f i r m s s e l l i n g t o l e s s a f f l u e n t customers a l s o r e p o r t e d  high owner-building  p a r t i c i p a t i o n , the i n v e r s e c o r r e l a t i o n  d i d not h o l d t r u e .  I f one examines those  over 75 percent  nine f i r m s  of t h e i r k i t s t o owner-builders,  four  r e p o r t e d t h a t they never s o l d t o customers e a r n i n g $20,000. and  T h i s would be expected and supports  survey  selling  l e s s than  the i n t e r v i e w  r e s u l t s which demonstrated t h a t there i s a  strong high l i n e k i t home i n d u s t r y marketing t o c l i e n t s who p r e f e r t o b u i l d t h e i r own home f o r more than c o s t  considera-  tions. The product  a b i l i t y f o r a f i r m t o be able t o o f f e r the  t o lower-income c l i e n t s seems r e l a t e d t o t h e i r  a b i l i t y t o o f f e r owner-building One  as a c o s t - s a v i n g  might s p e c u l a t e t h a t by encouraging access  option.  t o the  201 owner-building o p t i o n i n the  industry,  more lower-income  f a m i l i e s would have access to k i t homes. owner-building are residents and  are  resolving  large;  to  f i n a n c i a l o b s t a c l e s to low-income  significant. the  Obstacles  By  a d d r e s s i n g these two  d i f f i c u l t i e s , one  issues  might expect more  lower-income f a m i l i e s to have access to homeownership. Income and  Price  Another c o s t  f a c t o r r e l a t e d t o k i t home p o t e n t i a l  to p r o v i d e low-cost housing i s k i t p r i c e . previous section too it  heavily can  on k i t p r i c e as an  be u s e f u l  k i t s can  be  d i s c u s s e d the  Although  l i m i t a t i o n s of  the  relying  i n d i c a t o r of a low-cost home,  i n a n a l y z i n g whether some l o w e r - p r i c e d  suitable  f o r low-cost housing.  Over 71 percent of the manufacturers r e p o r t i n g they s o l d the  that  l o w e s t - p r i c e d k i t s a l s o s o l d more k i t s to  less affluent families.  The  r e s u l t s demonstrate a c o r r e l a -  t i o n between those s e l l i n g low-priced k i t s and to more lower-income f a m i l i e s .  Of  the  those s e l l i n g  seven f i r m s  reporting  that they s o l d more than 25 percent of t h e i r homes to  less  a f f l u e n t f a m i l i e s , f i v e r e p o r t e d s e l l i n g most of t h e i r k i t s at p r i c e s below $20,000 (see manufacturers s t a t e d  that  few  Table 27).  The  other two  of t h e i r k i t s were p r i c e d  below $20,000.  Because p r i c e i s dependent on what i s  included  k i t , a k i t c o u l d be  i n the  $20,000 i f more m a t e r i a l s or labor modular home).  low-priced and were i n c l u d e d  over (i.e.,  kit  202 TABLE 2 7 PRICE AND INCOME; Customers E a r n i n g Less Than $20,000 0% 10-24% 1-10% 25%  Homes P r i c e d Under $20,000 60%  5  0  0  3  40-59%  0  0  1  0  23-39%  0  0  0  1  10-24%  1  2  1  6  Less than 10%  1  1  1  7  Like  the owner-builder responses, not a l l the  manufacturers r e p o r t i n g  t h e i r k i t s t o be low-priced  homes t o low-income f a m i l i e s . that yet  sold  Perhaps the three f i r m s  s o l d 60 percent p l u s of t h e i r k i t s p r i c e d below $20,000, s o l d no k i t s t o l e s s a f f l u e n t f a m i l i e s , were s e l l i n g  logs only packages and i n c l u d e d of the d e s c r i p t i o n firms indicates  less materials.  of m a t e r i a l s i n c l u d e d  that  Examination  from the three  two d e s c r i b e d the k i t as w a l l s o n l y .  Only one d e s c r i b e d the k i t as s h e l l . Although the p r i c e i n f o r m a t i o n does have l i m i t a t i o n s , it  appears t h a t  that  t h e r e a r e l o w - p r i c e d k i t s i n the market  are c u r r e n t l y  being purchased by l e s s a f f l u e n t  families.  K i t P r i c e and Owner-Building A further  comparison of k i t p r i c e by owner-building  p a r t i c i p a t i o n confirms the c o n c l u s i o n that  less  affluent  203 customers are c u r r e n t l y purchasing l o w - p r i c e d k i t homes t h a t they are c o n s t r u c t i n g themselves. Seven of t e n manufacturers predominantly majority  s t a t i n g t h a t they s o l d  l o w - p r i c e d k i t s a l s o s t a t e d t h a t they s o l d a  (75 percent p l u s ) of t h e i r k i t s t o owner-builders  (Table 28). Of t h i r t e e n manufacturers  reporting that  less  than 10 percent of t h e i r homes were l o w - p r i c e d , t e n r e p o r t e d t h a t l e s s than one h a l f of t h e i r homes were purchased by owner-builders. TABLE 2 8 KIT PRICE AND OWNER-BUILDING  Homes P r i c e d Under $20,000  PARTICIPATION Customers Who- Are Owner-Builders.' 75% 50-74% 50%  60% +  7  2  1  40-59%  0  1  1  25-39%  0  0  1  10-24%  2  3  5  10% o r l e s s  1  2  10  One might conclude t h a t f i r m s s p e c i a l i z i n g i n low-priced k i t s s e l l predominantly  t o owner-builders and  s e l l more homes t o l e s s a f f l u e n t homeowners.  T h i s supports  the l i t e r a t u r e and i n t e r v i e w data t h a t i n d i c a t e s there i s a  potential  affluent  f o r l o w - p r i c e d k i t s t o be purchased  owner-builders.  by l e s s  204 The survey r e s u l t s i n d i c a t e t h a t the i n d u s t r y as a whole has the p o t e n t i a l of p r o v i d i n g a low-cost k i t home t h a t can be c o n s t r u c t e d by the l e s s a f f l u e n t  owner-builder.  At the c u r r e n t time some f i r m s are s e l l i n g low-priced k i t s t o low-income owner-builders, w h i l e others a r e n o t . While some f i r m s may produce a high q u a l i t y ,  extravagant  k i t that i s t r u l y too expensive f o r l e s s a f f l u e n t  potential  customers, f i n a n c i n g may be a major determining f a c t o r i n affordability.  Cost of m a t e r i a l s i s important but the  a b i l i t y to obtain financing f o r less affluent  owner-builders  may be the most important f a c t o r i n the i n d u s t r y c o n t i n u i n g or improving i n i t s a b i l i t y t o p r o v i d e low-cost housing t o less affluent  owner-builders.  Income and F i n a n c i n g Type The  f i n a n c i n g type i n f o r m a t i o n i s i n a percentage  format and the responses a r e d i f f i c u l t t o c r o s s t a b u l a t e . In examining the responses o f the f i v e manufacturers  that  sold  many k i t s t o lower-income f a m i l i e s , i t was found t h a t four admitted using FHA, VA, F e d e r a l Land Bank, or d e a l e r financing.  Two i n d i c a t e d t h a t over 80 percent o f business  was through d e a l e r f i n a n c i n g or F e d e r a l Land Bank, while the other two i n d i c a t e d t h a t 20 percent o f t h e i r business was through FHA. Of the manufacturers  s t a t i n g t h a t they never s o l d  k i t s t o those e a r n i n g under $20,000 per year,  fifteen  responded t o both the income and f i n a n c i n g type q u e s t i o n s .  205 Nine of t h e f i f t e e n utilized etc.).  nonconventional Only  customers and  s t a t e d t h a t t h e i r customers sources  s i x of the f i f t e e n  ever u t i l i z e d  never  (FHA, VA, FmHA, d e a l e r , indicated that their  these nonconventional  sources  f o u r o f t h e s i x f i r m s s t a t e d t h a t t h e s e s o u r c e s were  utilized  by fewer  than 5 percent of t h e i r  The p o t e n t i a l  forselling  t o lower-income  seems t o be r e l a t e d t o a f i r m ' s a b i l i t y tional  to offer  customers nonconven-  sources o f f i n a n c i n g . Firms  i n v o l v e d w i t h f i n a n c i n g a i d f o r customers  a l s o more l i k e l y  t o use nonconventional  i n order t o a i d t h e i r customers I f more n o n c o n v e n t i o n a l or used  customers.  were  sources of f i n a n c i n g  obtain financing  ( T a b l e 29).  s o u r c e s o f f i n a n c i n g were a v a i l a b l e  by t h e k i t home c u s t o m e r s ,  i ti s likely  w o u l d be more l e s s a f f l u e n t c u s t o m e r s .  that there  I t i s necessary t o  explore the type of f i n a n c i n g question f u r t h e r i n order t o a n a l y z e p o s s i b l e e x p l a n a t i o n s why more m a n u f a c t u r e r s use n o n c o n v e n t i o n a l  sources of f i n a n c i n g f o rt h e i r  do n o t customers.  TABLE 2 9 FINANCING A I D AND FINANCING TYPE  Offer Financing Aid? Yes No  '" 85%+ Dealer 1  Source  of Financing  85%+ Conventional  15%+ FHA, VA, FhMA, Fed.: L a n d Bank  9  5  10  1  206 Source of F i n a n c i n g and Owner-Building I t has a l r e a d y been e s t a b l i s h e d t h a t f i r m s o f f e r i n g more nonconventional  f i n a n c i n g o p t i o n s t o t h e i r customers  are s e l l i n g more k i t homes t o lower-income f a m i l i e s . Examination  o f owner-building and source of f i n a n c i n g  responses can e s t a b l i s h d i f f e r e n c e s i n f i n a n c i n g  source  (type) between those f i r m s s e l l i n g predominately  t o owner-  b u i l d e r s and those f i r m s s e l l i n g t o customers h i r i n g contractors. Of the s i x f i r m s u t i l i z i n g nonconventional of f i n a n c i n g , t o a s i g n i f i c a n t degree,  sources  f o u r were high  owner-builder p a r t i c i p a t i o n f i r m s (Table 30).  The r e s u l t s  i n d i c a t e t h a t some, f i r m s t h a t ,sel1 predominately  t o owner- •  b u i l d e r s are a b l e t o o b t a i n c o n v e n t i o n a l and: nonconventional sources of f i n a n c i n g f o r t h e i r customers. to determine  There i s no way  i f any FHA, VA, o r FmHA loans were made t o  owner-builders.  Most r e g u l a t i o n s i n d i c a t e t h a t t h i s i s  not p o s s i b l e but the i n t e r v i e w data r e v e a l e d many c r e a t i v e ways around  the "owner-builders not welcome" bank and  government r u l e s , and the survey r e s u l t s demonstrate  that  at l e a s t a few customers and f i r m s are a b l e t o overcome the o b s t a c l e s .  I t should be noted t h a t although e i g h t  f i r m s responded  t o the owner-building and f i n a n c i n g  type  q u e s t i o n s , s i x h i g h owner-huilding f i r m s i n d i c a t e d t h a t they d i d not know the source of customer f i n a n c i n g and were u n i n v o l v e d with f i n a n c i n g i n any c a p a c i t y .  207 TABLE 3 0 OWNER-BUILDING  Homes Sold t o Owner-Builders  Firms  AND FINANCING TYPE  F i n a n c i n g Type (Source 85%+ 15%+ Dealer85%+ FHA, VA, Financed Conventional FmHA, e t c  75%  8  1  50-75%  5  -  5  10  -  8  Under 50%  4  3  2  Industry P o t e n t i a l f o r I n c r e a s i n g the Number of Low-Income Customers Many f i r m s not c u r r e n t l y s e l l i n g t o low-income f a m i l i e s appear t o have the p o t e n t i a l i f c r e a t i v e f i n a n c i n g and  g r e a t e r owner-building  i s encouraged.  There are some  k i t homes t h a t a r e more expensive than others due t o the use of higher  quality materials.  These f i r m s may not  be able t o o f f e r a k i t a t a p r i c e low enough t o be a f f o r d a b l e t o the lowest-income customer. f u r t h e r study and a n a l y s i s .  T h i s i s an area t h a t  requires  The c o s t of m a t e r i a l s i s  an important component i n the c o s t of a completed home but  l a b o r c o s t s t o c o n s t r u c t the home and a v a i l a b i l i t y  and  c o s t of f i n a n c i n g may be more c r i t i c a l . Firms t h a t encourage and a s s i s t  owner-building,  a s s i s t customers i n o b t a i n i n g f i n a n c i n g , and have developed cost-saving pre-cutting/manufacturing  techniques a r e  c u r r e n t l y o f f e r i n g k i t homes t o l e s s a f f l u e n t f a m i l i e s . Some f i r m s i n the i n d u s t r y do not encourage or a s s i s t  208 customers i n owner-building.  Many firms f a i l  to aid,  o f f e r a s s i s t a n c e , o r encourage owner-builders i n o b t a i n i n g nonconventional or f a v o r a b l e  term f i n a n c i n g .  I f greater  numbers of f i r m s would or could become i n v o l v e d with f i n a n c i n g and owner-building, i t i s l i k e l y t h a t  greater  numbers of low-income f a m i l i e s c o u l d purchase and c o n s t r u c t k i t homes. Institutional  Involvement  To p l a c e the t o t a l r e s p o n s i b i l i t y f o r f i n a n c i n g and encouraging owner-building on the i n d u s t r y does not seem fair.  The i n d u s t r y i s r e s p o n s i b l e  and can make changes i n  c o s t s t h a t a f f e c t the p r i c e of t h e i r product.  Improvements  i n manufacturing techniques t h a t i n c r e a s e e f f i c i e n c y i s a major goal of the i n d u s t r y .  The a b i l i t y t o o f f e r a competi-  t i v e , q u a l i t y product i s an i n d u s t r y r e s p o n s i b i l i t y . Changes i n sales/marketing  techniques t h a t can reduce  c o s t s and k i t p r i c e s a r e an i n d u s t r y r e s p o n s i b i l i t y . Encouraging o w n e r - b u i l d i n g i s something the i n d u s t r y can develop and c o n t r o l , but making changes i n f i n a n c i n g a v a i l a b l e t o customers i n v o l v e s f a c t o r s o f t e n beyond the c o n t r o l of an i n d i v i d u a l manufacturer. Banks and governmental i n s t i t u t i o n s make the r u l e s with regard  to financing.  I t i s t r u e t n a t some manufac-  t u r e r s are able t o bend or break a few r u l e s . a few l e n d i n g  i n s t i t u t i o n s are c u r r e n t l y making  In a d d i t i o n , exceptions  to the "owner-builders not welcome" t r a d i t i o n , and some  209 manufacturers are able t o o b t a i n f a v o r a b l e f i n a n c i n g f o r t h e i r l e s s a f f l u e n t customers.  But f i n a n c i n g a v a i l a b i l i t y  and terms are not under the c o n t r o l of an i n d i v i d u a l manufacturer. Lending i n s t i t u t i o n s and the government  are p r i m a r i l y  r e s p o n s i b l e f o r the terms and a v a i l a b i l i t y of f i n a n c i n g . i n d i v i d u a l manufacturer with e f f o r t may  An  be able to improve  or i n f l u e n c e the l o c a l s i t u a t i o n f o r h i s business but change i n any major form r e q u i r e s i n s t i t u t i o n a l  change.  In the next s e c t i o n , the problems and o b s t a c l e s t o the development of the k i t home i n d u s t r y w i l l be f u r t h e r u s i n g the survey r e s u l t s .  explored  210 Notes  New  Roger Rawlings, "Anyone Can B u i l d a Home," Rodales S h e l t e r , A p r i l 1983, p. 22.  CHAPTER X OBSTACLES TO THE DEVELOPMENT OF THE KIT HOME INDUSTRY I n t r o d u c t i o n and L i m i t a t i o n s The  l a s t s e c t i o n d i s c u s s e d the k i t home i n d u s t r y ' s  p o t e n t i a l to provide areas.  a low-cost housing a l t e r n a t i v e i n r u r a l  In a n a l y z i n g v a r i o u s responses t o the survey, i t i s  obvious t h a t the i n d u s t r y i s not problem-free or without many o b s t a c l e s t o overcome. There are always o b s t a c l e s t o the development of any i n d u s t r y and the k i t home i n d u s t r y i s not unique i n f a c i n g i n s t i t u t i o n a l obstacles. general  The c o n s t r u c t i o n i n d u s t r y i n  has been e x p e r i e n c i n g  slumps i n a q u a r t e r  century.  one of the most d i f f i c u l t I n t e r e s t r a t e s continue t o  remain high and housing s t a r t s are not what they could be i n s p i t e of the i n c r e a s e d need t o house the "baby boom" generation. Although the many problems and o b s t a c l e s t o the development o f the k i t home i n d u s t r y are s i m i l a r t o the housing i n d u s t r y i n g e n e r a l ,  some s p e c i f i c o b s t a c l e s may  impact the k i t home i n d u s t r y s p e c i f i c a l l y due t o the c h a r a c t e r i s t i c s of the i n d u s t r y .  In t h i s  chapter,  problems and o b s t a c l e s t o t h e development of the k i t home  212 i n d u s t r y w i l l be d i s c u s s e d with p a r t i c u l a r emphasis on those obstacles that are i n d u s t r y - s p e c i f i c . The p r e v i o u s chapter on o b s t a c l e s d i s c u s s e d the problems based on i n f o r m a t i o n r e c e i v e d from the l i t e r a t u r e . In t h i s chapter, the i n t e r v i e w and survey r e s u l t s are analyzed as they r e l a t e t o problems and o b s t a c l e s the industry faces. The  survey q u e s t i o n n a i r e d i r e c t l y requested  informa-  t i o n on i n d u s t r y o b s t a c l e s as p e r c e i v e d by the k i t manufacturer.  T h i s i n f o r m a t i o n i s important and u s e f u l but not  without l i m i t a t i o n s .  Anytime one addresses q u e s t i o n s about  problems t o one c l o s e l y i n v o l v e d with the s i t u a t i o n , p e r c e p t i o n s of the problem  and ideas on p o s s i b l e  solutions  differ. U s u a l l y , k i t home manufacturers economists  are neither  nor experts i n how the housing market o p e r a t e s .  T h e i r p e r c e p t i o n i s l i m i t e d t o t h e i r experiences and t h e i r l e v e l of understanding of the housing r o l e i n that process. manufacturer's  process and t h e i r  P o l i t i c s can p l a y a r o l e , as can a  world view.  An i n d i v i d u a l ' s p e r s o n a l b e l i e f  of how s o c i e t y should f u n c t i o n i n the i d e a l can p l a y a major r o l e i n t h e p e r c e p t i o n o f the problems and s e l e c t i o n of the s o l u t i o n .  For example, i f an i n d i v i d u a l  or d e a l e r b e l i e v e s everyone  manufacturer  should pay cash f o r t h e i r home  and b u i l d i t without f i n a n c i n g any c o s t , one might expect t h i s manufacturer/dealer  t o c o n s i d e r i n t e r e s t r a t e s , no  government f i n a n c i n g a i d , mortgage requirements, e t c .  213 unimportant  i n s p i t e of the f a c t t h a t , with these o b s t a c l e s  m i t i g a t e d and overcome, the manufacturer/dealer would  sell  more k i t homes. Many of the o b s t a c l e questions i n v o l v e d p o l i t i c s , world view, and v a l u e s of how the world i n d u s t r y ) should f u n c t i o n .  (and k i t home  Because of the l i m i t a t i o n of  d i r e c t q u e s t i o n s , other responses on the survey w i l l be d i s c u s s e d and analyzed.  The responses p e r t a i n i n g t o s e l l i n g  success, income of customers,  owner-building, and f i n a n c i n g  w i l l be c r o s s t a b u l a t e d and examined i n order t o f u r t h e r analyze and o u t l i n e p o t e n t i a l o b s t a c l e s t o the k i t home industry. Interview R e s u l t s Of the seven manufacturers  interviewed, f i v e  indi-  cated f i n a n c i n g as the major o b s t a c l e t o t h e i r b u s i n e s s . One  commented t h a t i t was "not l i k e i t was one year ago";  another stated."Banks  w i l l not lend f o r s h e l l . "  Many  blamed the s i t u a t i o n on high i n t e r e s t r a t e s and banks not l e n d i n g on s h e l l homes, w h i l e o t h e r s s t a t e d t h a t the s l u g g i s h economy was the primary problem. Only one mentioned a "cedar s t r i k e , " w h i l e h i g h l i n e k i t manufacturer  another  s t a t e d t h a t t h e i r product was a  more expensive higher q u a l i t y home t h a t p l a c e d them a t a disadvantage  i n the market.  The l a t t e r manufacturer  stated  t h a t they never s o l d t o lower-income owner-builders. When asked i f t h e i r customers ever u t i l i z e d FmHA, HUD, or other s u b s i d i z e d programs, most ( f i v e ) s t a t e d  that  214 they had f i n a n c e d a few homes through VA, FHA, or the F e d e r a l Land Bank.  One s t a t e d t h a t the reason f o r not  u t i l i z i n g these programs was t h a t they only s o l d c o n s t r u c t e d s h e l l homes and t h a t the programs c o u l d only be u t i l i z e d with complete turnkey houses. When asked q u e s t i o n s r e g a r d i n g f i n a n c i n g , a l l seven responded t h a t most customers needing f i n a n c i n g c o n v e n t i o n a l sources.  utilized  One manufacturer s t a t e d t h a t i n the  past, s h e l l home f i n a n c i n g was e a s i e r : "Before f i n a n c e s h e l l through American the s h e l l  Savings & Loan, were f i n a n c i n g  . . . not anymore."  Another h i g h e r - p r i c e d k i t  home manufacturer s t a t e d t h a t the banks r e q u i r e d  "1/3 down  . . . 16 3/4 . . . want l o t p a i d o f f . . . not a l l o w t o do i t y o u r s e l f u n l e s s few s u b c o n t r a c t o r s . " Most manufacturers i n d i c a t e d t h a t many customers p a i d with cash and d i d not u t i l i z e any c o n s t r u c t i o n  financing.  When asked about l o c a l government approval problems, all  seven responded t h a t they had no problems meeting or  exceeding codes.  When asked, the manufacturers seemed  r e l u c t a n t t o d i s c u s s how many homes had been s o l d t h i s year. Two s t a t e d t h a t they d i d not know, while other estimates ranged from t e n t o s i x t y homes s o l d from t h e i r dealership/factory.  particular  One commented q u i t e h o n e s t l y t h a t  " [ b u s i n e s s ] has been down l a s t two y e a r s . "  T h i s was  c l e a r l y the most s e n s i t i v e q u e s t i o n and the one most were uncomfortable answering.  The manufacturer who responded  so openly about the d i f f i c u l t i e s the l a s t few years had a  215  l a r g e k i t home d i s p l a y and i s no longer i n business a t the same l o c a t i o n . The  Most l i k e l y , he went out of b u s i n e s s .  interview results c l e a r l y indicate  problems with f i n a n c i n g the homes.  Many k i t s were low-  p r i c e d ; most o f f e r e d s h e l l k i t s under $ 2 0 , 0 0 0 , as $ 8 , 5 0 0 . square  substantial  some as low 1,000-2,000  Most f i r m s s t a t e d t h a t t h e i r b a s i c  f o o t home c o u l d be c o n s t r u c t e d on the owner-builder's  l o t f o r w e l l under $ 4 0 , 0 0 0 , or approximately as some FmHA s e l f - h e l p owner-built homes. d i d not appear t o be the major o b s t a c l e .  Cost of m a t e r i a l s F i n a n c i n g and the  l a c k of bank and government (FmHA, HUD, e t c . ) and a s s i s t a n c e t o the owner-builders  the same c o s t  acceptance  appeared t o be the  most s i g n i f i c a n t i n d u s t r y - s p e c i f i c o b s t a c l e . The  i n t e r v i e w q u e s t i o n s were not as s p e c i f i c and  comprehensive as t h e survey q u e s t i o n s .  Although  the i n t e r -  view r e s u l t s a l l o w f o r i d e n t i f i c a t i o n and a n a l y s i s of the major o b s t a c l e s , the survey r e s u l t s permit f u r t h e r d e t a i l e d analysis.  In the next s e c t i o n , the responses  to several  questions w i l l be examined i n order t o f u r t h e r i d e n t i f y p o t e n t i a l o b s t a c l e s t o the k i t home i n d u s t r y , which can l a t e r be compared t o the survey o p i n i o n q u e s t i o n n a i r e . Survey R e s u l t s One  method t o analyze k i t home o b s t a c l e s i s t o  examine the responses  t o the o b j e c t i v e questions on the  survey t h a t r e l a t e t o s e l l i n g were asked  success.  Manufacturers  t o i n d i c a t e the s i t u a t i o n of t h e i r  compared t o the l a s t few y e a r s .  business  216 Selling  Success The  f o l l o w i n g q u e s t i o n was  asked of manufacturers:  "What i s the c u r r e n t s i t u a t i o n of your company compared with the l a s t few  years?"  Responses i n d i c a t e t h a t , i n  g e n e r a l , about h a l f (48 percent) of the companies are p o o r l y compared with the l a s t few  years  (Table  31).  doing This  i s not s u r p r i s i n g c o n s i d e r i n g the o v e r a l l c o n d i t i o n of housing i n d u s t r y .  What i s somewhat s u r p r i s i n g i s the  the fact  that more than o n e - t h i r d of the companies r e p o r t i n g are a c t u a l l y s e l l i n g more homes. TABLE 31 KIT  HOME SELLING SUCCESS  Response  # Firms  Same  Percent  6  16  S e l l i n g More  14  36  S e l l i n g Fewer  12  32  6  16  Hurting  Greatly  Some f i r m s must be doing coming the many o b s t a c l e s . success  T h i s i n f o r m a t i o n on  can be c r o s s t a b u l a t e d and  i n order t o f u r t h e r analyze causing  and  i n any  industry.  responses  understand what might fail.  combinations impact The  over-  selling  compared t o other  some f i r m s to succeed while others Many v a r i a b l e s and  success  something r i g h t and  examination of  selling  specific  be  f a c t o r s l i k e k i t type, owner-building  participation,  f i n a n c i n g a i d , low versus high income of customers, p r i c e , e t c . can be h e l p f u l , but the l i m i t a t i o n s must a l s o be realized.  Many f a c t o r s impact  success i n any business and  many of these f a c t o r s a r e not d i s c u s s e d i n the survey. business e f f i c i e n c y , marketing and r e p u t a t i o n a l l impact  techniques, q u a l i t y  Because of  of many f a c t o r s t h a t i n v o l v e s e l l i n g success, i t  i s u n l i k e l y t h a t any one f a c t o r can impact equally.  control,  s e l l i n g success, y e t the survey  d i d not request i n f o r m a t i o n on these t o p i c s . the impact  For  a l l companies  One would not expect a l l companies t o be s u c c e s s f u  or u n s u c c e s s f u l due t o one s p e c i f i c  factor.  S e l l i n g success i n f o r m a t i o n was c r o s s t a b u l a t e d with most of the other responses.  S i g n i f i c a n t d i f f e r e n c e s were  found between those f i r m s doing w e l l and those f i r m s doing poorly i n several categories. K i t type and s e l l i n g success.  The type of a k i t a  manufacturer s e l l s can a f f e c t many aspects of b u s i n e s s . panel and p r e - c u t companies appear t o be s e l l i n g  The  fewer homes  and many of t h i s type were r e p o r t e d t o be i n t r o u b l e (Table 32). The p r e - c u t , modular, and panel appear t o be doing f a i r l y w e l l . manufacturers  manufacturers  Roughly h a l f the l o g  a r e doing w e l l or "OK."  Type does appear t o  a f f e c t s e l l i n g success, although i n a l l c a t e g o r i e s , some f i r m s were doing w e l l while others were doing p o o r l y .  218 TABLE 3 2 KIT TYPE AND SELLING SUCCESS  K i t Type  About Same (%)  Selling More (%]\  17.6  35.3  41.2  0  75.0  0  25.0  66.7  0  0  33.0  0  66.7  33.3  0  10.0  30.0  30.0  30.0  Pre-Cut Log Panel Pre-Cut  Stick  Modular Panel and Pre--Cut  -  Other  -  Selling Fewer (%)  Hurting Greatly(%) 5.9  -  100.0  Years i n business and s e l l i n g success.  The number  of years a company has been i n business seemed t o be an important f a c t o r when compared t o s e l l i n g success. examining  the f r e q u e n c i e s , i t i s apparent  companies responded  When  t h a t few new  t o the survey.  Only t h r e e f i r m s responding t o the survey they had been i n business l e s s than seven years  indicated  (Table 33).  One p o s s i b l e e x p l a n a t i o n f o r t h i s low response might be t h a t the new manufacturers  are so l i t t l e  on any of the e s t a b l i s h e d l i s t s mailing l i s t .  known t h a t they were not  used t o compose the survey  T h i s i s one p o s s i b i l i t y , but of the 100  manufacturer/dealers sent surveys, n e a r l y one-fourth were returned address."  "address unknown" or "moved, l e f t no forwarding One survey was r e t u r n e d with a l e t t e r  the r e c e n t bankruptcy  explaining  of a newer l o g home manufacturer i n  219 Colorado.  Other e x p l a n a t i o n s f o r the l a c k of success with  "new k i t s " seem more l i k e l y .  Of the seven  manufacturers  f o r m a l l y i n t e r v i e w e d , t h r e e were f a i r l y new d e a l e r s h i p s . Only one of the three s t i l l year l a t e r .  appeared  t o be i n business one  The i n d u s t r y i s h i g h l y c o m p e t i t i v e and the  i n t e r v i e w r e s u l t s i n d i c a t e t h a t the l a s t few years have not been good f o r the i n d u s t r y as a whole. TABLE 3 3 YEARS IN BUSINESS Years i n Business  # Firms  0- 6  3  7-14  17  15-22  5.  20-29  5  30-39  7  A boom f o r the i n d u s t r y seems to have o c c u r r e d d u r i n g the p e r i o d 1962-1974. during t h i s p e r i o d .  Seventeen companies began  I n t e r e s t i n g l y , t h i s corresponds  with  the surge i n f e d e r a l money i n t o housing programs and the h e a l t h y economic p e r i o d when housing s t a r t s i n c r e a s e d each year.  In 1974 i n the US, E x - P r e s i d e n t Nixon c u t or  e l i m i n a t e d most of the s o c i a l housing subsidy and f i n a n c e programs t h a t had made i t p o s s i b l e f o r so many t o become homeowners.  Only t h r e e of the t h i r t y - s e v e n  companies  220 responded t h a t they had been i n business s i n c e these cutbacks came i n t o e x i s t e n c e .  Of the three newer companies,  only one r e p o r t e d s e l l i n g more t h i s year than  last  (Table 34), but i t had o n l y been i n business two y e a r s . TABLE 3 4 SELLING SUCCESS AND Years i n Business  Selling  YEARS IN BUSINESS  More  Selling  Fewer  Hurting  2  1  -  4  -  1  -  6  -  -  1  The l a s t few years does not appear t o have been a good time t o enter the k i t home i n d u s t r y .  After  eliminating  the three newest companies, one can see t h a t the newer (seven t o twenty years) companies r e p o r t e d t h a t they were doing s l i g h t l y b e t t e r than the o l d e r w e l l - e s t a b l i s h e d companies  (Table 35). TABLE 3 5 YEARS AND  Years i n Business  PERCENTAGE SELLING SUCCESS  ; reselling Same (%)  :  Selling More (%)  Selling Fewer (%)  Hurting Greatly(%)  Over 20 years  20  20  40  20  Under 20 years  14  45  28  14  7 t o 14 years  17  52  23  5  221 With so l i t t l e data a v a i l a b l e , i t i s d i f f i c u l t speculate  why  newer companies ( e s p e c i a l l y seven t o  years.) are doing b e t t e r .  c l o s e down, while o l d e r ,  w e l l - e s t a b l i s h e d companies have g r e a t e r to stay i n business d u r i n g  resources  group, and  (capital)  hard times.  I t i s i n t e r e s t i n g to note t h a t the  other  fourteen  Perhaps newer companies doing  p o o r l y are more l i k e l y to f o l d and  fourteen-year-old  to  seven- to  companies are doing b e t t e r than  any  t h i s c o u l d e x p l a i n t h e i r l a r g e numbers.  These companies began t h e i r business when c r e d i t and money flowed e a s i l y and  federal  c o s t - c u t t i n g t e c h n o l o g i c a l advances  i n housing were a l s o r e c e n t l y developed. Reasons f o r k i t home success with these seven- to fourteen-year-old  companies and  the f a i l u r e of the newest  companies can only be s p e c u l a t i v e at best. does k i t type,  these f a c t o r s do b r i n g up i n t e r e s t i n g i n d u s t r y  c h a r a c t e r i s t i c s and industry obstacles firms t o  allow and  f o r d i s c u s s i o n of p o t e n t i a l  problems t h a t may  have caused newer  fold. S e l l i n g success and  be  However, as  income of customers.  l o g i c a l to expect those f i r m s able to s e l l  income f a m i l i e s t o be s e l l i n g more homes. demonstrate t h a t a b i l i t y to s e l l u s u a l l y means g r e a t e r  sales.  manufacturers able t o s e l l  The  The  I t would  t o lowerresults  to less a f f l u e n t f a m i l i e s majority  of k i t home  t h e i r k i t s to the under $20,000  income group were s e l l i n g more homes (Table  36).  Of  seven  222 TABLE 3 6 SELLING SUCCESS AND INCOME OF CUSTOMERS Homes S o l d t o Customers Earning under $20,000  Selling Same  Selling More  Selling Fewer  Hurting Greatly  24% or more  2  4  1  0  10-24%  2  0  1  0  1-10%  0  0  0  3  0%  2  6  8  1  manufacturers affluent  selling  25 percent of t h e i r  k i t s to less  f a m i l i e s , only one was s e l l i n g fewer homes. Selling  price to affect  success and k i t  price.  s e l l i n g success.  t u r e r s able t o o f f e r  the l e a s t  One would expect k i t  One might expect manufac-  expensive homes t o be s e l l i n g  more homes. A s l i g h t m a j o r i t y of k i t manufacturers 60 percent of t h e i r  selling  over  k i t s p r i c e d under $20,000 w e r e . s e l l i n g  more homes, while 28 percent of manufacturers  selling  less  than 10 percent of homes p r i c e d below $20,000 r e p o r t e d t h a t they were s e l l i n g more homes selling  (Table 37).- Four  manufacturers  l o w - p r i c e d k i t s r e p o r t e d s e l l i n g fewer homes.  would expect t h i s by other f a c t o r s  result,  as k i t p r i c e i s o f t e n  One  determined  ( i . e . , m a t e r i a l s i n c l u d e d , average  s i z e of.  k i t home s o l d , consumer p r e f e r e n c e ) and low k i t p r i c e does not always i n d i c a t e a p o t e n t i a l l y  low-cost house.  The  earlier  c r o s s t a b u l a t i o n demonstrated t h a t two of the manufac  t u r e r s i n d i c a t i n g t h a t they s o l d mostly low-cost k i t s were only s e l l i n g w a l l s , and t h a t with other m a t e r i a l s those k i t s would not be i n c l u d e d  included,  i n the low-priced  category.  TABLE 3 7 SELLING SUCCESS AND KIT PRICE Homes Sold P r i c e d Under $20,000  Selling Same  Selling More  Selling Fewer  Hurting Greatly  6 0% or more  1  5  4  0  25-60%  0  2  0  0  10-25%  3.  3  3  1  Under 10%  2  4  5  3  Selling  success and  owner-building.  expect t h a t manufacturers s e l l i n g a g r e a t e r  One might number of k i t s  to owner-builders c o u l d be doing s l i g h t l y b e t t e r as the c o s t savings  i n v o l v e d might allow a g r e a t e r  number of  f a m i l i e s t o own homes. K i t home companies t h a t s e l l  a greater  number  of homes t o owner-builders seem t o be doing s l i g h t l y Not  one company  i n the 7 5 percent  t h a t they were h u r t i n g g r e a t l y Selling and  literature  o r above category  were the most s i g n i f i c a n t  reported  (Table 38).  success and f i n a n c i n g . study r e v e a l e d  better.  Preliminary  that financing  obstacle  analysis  difficulties  f o r the k i t home i n d u s t r y  224  TABLE 3 8 SELLING SUCCESS AND OWNER-BUILDING Selling Same (%)  Selling" More (%)  75% o r more  20  40  40  50-75%  25  37  12.5  25  Under 50%  12  35  35  17.6  Homes Sold t o Owner-Builders  Selling Fewer (•'%)  Hurting G r e a t l y (%) 0  225 to overcome. reluctance  Part of the reason f o r t h i s d i f f i c u l t y  i s the  of f i n a n c i n g i n s t i t u t i o n s (bank and government)  to support owner-builders, who comprise customers of k i t home manufacturers. difficulties  over h a l f the  The other f i n a n c i n g  ( i n t e r e s t r a t e s , s l u g g i s h economy) were l e s s  s p e c i f i c t o the i n d u s t r y and encountered i n d u s t r y as a whole.  by the housing  I t i s i n t e r e s t i n g t o examine whether  there are d i f f e r e n c e s between the f i n a n c i n g a i d and type responses and s e l l i n g  success.  S e l l i n g success and f i n a n c i n g a i d .  Since f i n a n c i n g  has been demonstrated t o be a s i g n i f i c a n t o b s t a c l e  t o the  i n d u s t r y , one might expect t h a t firms o f f e r i n g f i n a n c i n g assistance  t o be s e l l i n g more homes.  The two responses,  s e l l i n g success and f i n a n c i n g a i d , were c r o s s t a b u l a t e d .  The  r e s u l t s are shown i n Table 39. TABLE 3 9 SELLING SUCCESS AND FINANCING AID Offer  financing aid?  Selling Same  Selling More  Yes  4  8  • 5  2  No  2  6  8  4  Selling Fewer  Hurting Greatly  Although not a l l firms s t a t i n g t h a t they o f f e r e d f i n a n c i n g a i d were doing w e l l , more companies o f f e r i n g some type of f i n a n c i n g a s s i s t a n c e  were doing b e t t e r as a whole  226 than those f i r m s f a i l i n g t o become i n v o l v e d with  financing  of the k i t s . S i x t y percent  of f i r m s o f f e r i n g f i n a n c i n g a i d were  s e l l i n g the same or more, while only 40 percent not i n v o l v e d with  f i n a n c i n g were doing w e l l .  of those  Of the firms  r e p o r t i n g t h a t they were h u r t i n g g r e a t l y , two-thirds  stated  they o f f e r e d no a s s i s t a n c e with f i n a n c i n g . S e l l i n g success  and type of f i n a n c i n g .  f i n a n c i n g a i d the nineteen provided  firms o f f e r i n g  can be examined i n order  of f i n a n c i n g a s s i s t a n c e  The type of  assistance  t o determine i f the type  ( i . e . , contractor contracts, direct  l e n d i n g , bank arrangement, or h i n t s and r e f e r r a l s ) can affect selling  success.  Since the respondents o f t e n i n d i c a t e d more than one type of f i n a n c i n g a i d i n most c a t e g o r i e s , there were more items checked than there were f i r m s . responses of the three devised  When examining the  f i r m s i n d i c a t i n g t h a t they had  some type of c o n t r a c t o r c o n t r a c t , a l l three i n d i c a t e d  t h a t they were s e l l i n g more homes (Table 40). c a t e g o r i e s of f i n a n c i n g type, more while others r e p o r t e d  In the other  some f i r m s r e p o r t e d  selling  less.  selling  The c a t e g o r i e s  "Other" and " D i r e c t Lending" d i d not have enough respondents f o r one t o draw a c o n c l u s i o n .  Both f i r m s t h a t were  doing  p o o r l y i n d i c a t e d they o f f e r e d only bank arrangements, and h i n t s and r e f e r r a l s . or d i r e c t l e n d i n g .  Neither  offered a contractor  contract  One i n d i c a t e d t h a t the s i t u a t i o n was  227 changing too r a p i d l y when requested t o e l a b o r a t e type of a i d .  Perhaps the bank arrangement, and  r e f e r r a l s categories f i r m s may "  on  hints  were too vague f o r a n a l y s i s .  o f f e r good bank deals w h i l e others may i s a good bank; Mr.  Jones was  the and  Some simply  say,  able t o o b t a i n  a  loan." TABLE 4 0 SELLING SUCCESS AND Type of Financing Aid  TYPE OF  FINANCING  Selling Same  Selling More  Selling Fewer  Hurting Greatly  0  3  0  0  D i r e c t Lending  1  0  1  0  Bank Arrangement  1  4  2  2  Hints  2  6  3  2  -  1  -  -  Contractor  and  Contracts  Referrals  Other  Regardless of the some a s s i s t a n c e  type of  financing aid  offered,  appears t o be b e t t e r than no a s s i s t a n c e ,  the more types the b e t t e r .  Contractor  contracts  and  appear to  be very s u c c e s s f u l , but  some firms o f f e r i n g only bank  arrangements, h i n t s and  r e f e r r a l s , and  d i r e c t lending  also  i n d i c a t e d t h a t they were doing w e l l . S e l l i n g success and  source of f i n a n c i n g .  As  expected, the source of f i n a n c i n g appears to a f f e c t  selling  success.  firms  In the  l a s t s e c t i o n , i t was  apparent t h a t  228 o f f e r i n g nonconventional  sources of f i n a n c i n g were s e l l i n g  to a l a r g e r number of l e s s a f f l u e n t f a m i l i e s . e x c e p t i o n , f i r m s u s i n g nonconventional were s e l l i n g more homes or the same.  With one  sources of f i n a n c i n g The m a j o r i t y of  f i r m s r e l y i n g h e a v i l y on c o n v e n t i o n a l sources i n d i c a t e d they were s e l l i n g  fewer homes or h u r t i n g g r e a t l y  that  (Table 41).  Only f i v e of e i g h t e e n f i r m s r e l y i n g on c o n v e n t i o n a l sources alone were doing w e l l . TABLE 41 SELLING SUCCESS AND SOURCE OF Selling More  Selling Fewer  Hurting Greatly  1  -  -  -  85% + Conventional  -  5  9  4  15% + FHA, VA, Fed. Land Bank, FmHA  2  3  1  —  Loan 80%  Source  Selling Same  FINANCING  Dealer  Owner-building  and  type of f i n a n c i n g a i d .  Seven of  twelve h i g h owner-builder p a r t i c i p a t i o n f i r m s s t a t e d they o f f e r e d no f i n a n c i n g a s s i s t a n c e (Table 42).  that  Of the  f i v e o f f e r i n g some type of f i n a n c i n g a i d , only one r e p o r t e d t o be s e l l i n g fewer homes t h i s year, while three i n d i c a t e d t h a t they were s e l l i n g more.  Of the seven s t a t i n g  that  they o f f e r e d no h e l p with f i n a n c i n g , t h r e e s t a t e d t h a t they were s e l l i n g fewer homes t h i s year. category, s i x of t e n manufacturers  In the 50-74 percent o f f e r e d no f i n a n c i n g  TABLE <%2 OWNER-BUILDING AND TYPE OF FINANCING AID  % Owner-Builders  # Firms  Contractor Contracts  Type o f F i n a n c i n g A i d Direct Bank H i n t s and Lending Arrangements Referrals  . None  75% or more  12  1  1  1  3  7  50-74%  10  -  -  3  2  6  Less than 50%  13  3  -  3  7  4  Note: Some manufacturers  o f f e r more than one type of h e l p .  230 assistance. selling  Four of the s i x i n d i c a t e d t h a t they were  fewer homes or h u r t i n g g r e a t l y .  Of the four  i n d i c a t i n g t h a t they o f f e r e d f i n a n c i n g a s s i s t a n c e , one  was s e l l i n g fewer homes.  only  In the under 50 percent  owner-builder category, most (nine of t h i r t e e n ) k i t home manufacturers i n d i c a t e d t h a t they o f f e r e d some f i n a n c i n g aid.  Of the four not o f f e r i n g any a i d , three  indicated  t h a t they were s e l l i n g fewer homes or h u r t i n g g r e a t l y . The majority  r e s u l t s i n d i c a t e t h a t the firms that s e l l a  of t h e i r homes t o owner-builders a l s o o f f e r l e s s  f i n a n c i n g a s s i s t a n c e t o t h e i r customers. t u r n impacts t h e i r s e l l i n g success.  This factor i n  The high  owner-building  f i r m s t h a t do manage t o o f f e r a i d with f i n a n c i n g a l s o seem t o be doing w e l l . Results  i n d i c a t e that firms s e l l i n g a greater  number of t h e i r k i t s t o owner-builders do s l i g h t l y on the whole i n b u s i n e s s , f i n a n c i n g a i d a r e doing  better  but f i r m s that a l s o o f f e r best.  A l a r g e number of k i t home manufacturers t h a t s e l l predominately t o owner-builders tended not t o o f f e r any  a s s i s t a n c e with customers o b t a i n i n g  financing.  Slightly  more than h a l f of the high owner-builder p a r t i c i p a t i o n companies o f f e r e d no a i d with f i n a n c i n g , w h i l e l e s s than 30 percent  of the f i r m s s e l l i n g  fewer k i t s t o owner-builders  f a i l e d to offer financing aid. There may be s e v e r a l explanations owner-buidling-oriented  f o r so many  k i t manufacturers t o n e g l e c t  231 financing assistance  f o r t h e i r customers.  Perhaps many of  t h e i r customers do not need f i n a n c i n g , as the k i t p r i c e i s so low and without h i r i n g  labor the c o s t i s kept low enough  t o make f i n a n c i n g unnecessary.  The survey r e s u l t s demon-  s t r a t e d t h a t many customers needed t o f i n a n c e some of the c o s t of m a t e r i a l s .  C e r t a i n l y the l e s s a f f l u e n t owner-  b u i l d e r would need some c o s t s t o be f i n a n c e d .  I t i s also  p o s s i b l e t h a t the predominant owner-builder firms were l e s s able t o o f f e r a s s i s t a n c e t o t h e i r customers, as banks and  f i n a n c i a l i n s t i t u t i o n s would not work with them as  e a s i l y as they would work with a manufacturer o f f e r i n g a l a b o r - i n c l u d e d package or with a c o n t r a c t o r construction.  i n charge of  I t has been e s t a b l i s h e d t h a t owner-builders  run i n t o s u b s t a n t i a l o b s t a c l e s when a p p l y i n g  f o r a loan.  I t would be l o g i c a l f o r manufacturers attempting t o arrange deals with banks on b e h a l f  of t h e i r owner-building customers  to run i n t o s u b s t a n t i a l o b s t a c l e s .  They would  have g r e a t e r bank o p p o s i t i o n than those f i r m s  likely selling  to owners h i r i n g bonded p r o f e s s i o n a l s t o complete the home. The  r e s u l t s of the a n a l y s i s demonstrate t h a t many  f a c t o r s impact s e l l i n g success but most a r e r e l a t e d t o affordability.  Financing  obstacles  are the i n d u s t r y ' s  major concern, p a r t i c u l a r l y f i n a n c i n g d i f f i c u l t i e s f o r owner-builders.  Some f i r m s have been able t o overcome  i n s t i t u t i o n a l b i a s a g a i n s t owner-builders by o f f e r i n g f i n a n c i n g a s s i s t a n c e t o customers.  These firms have been  able t o s e l l the k i t homes t o a wider income range and thus  232 do  better  that is  i n business.  institutional  The a n a l y s i s o f r e s p o n s e s  opposition  a significant obstacle  t o owner-building  t o t h e k i t home  indicated  financing  industry.  In t h e next p o r t i o n o f t h i s c h a p t e r , t h e manufact u r e r s ' r e s p o n s e s t o q u e s t i o n s about problems and o b s t a c l e s will  be d i s c u s s e d  Obstacle  and  evaluated.  Questionnaire A short  list  of ten p o t e n t i a l obstacles  to the  d e v e l o p m e n t o f t h e k i t home i n d u s t r y was d e v e l o p e d .  Each  m a n u f a c t u r e r was r e q u e s t e d t o i n d i c a t e t h e i m p o r t a n c e o f each o b s t a c l e The  by p l a c i n g a n d "X" i n t h e a p p r o p r i a t e  instructions stated  several  potential obstacles  of your i n d u s t r y . an  "The f o l l o w i n g l i s t  states  o r problems t o t h e development  Please rate t h e i r  'X' i n t h e a p p r o p r i a t e  listed,  simply:  column.  column."  i m p o r t a n c e by p l a c i n g The o b s t a c l e s  were t h e n  as f o l l o w s . Most Important  Interest rates Lack o f government financing aid Lack o f government s u p p o r t t o ownerbuilders Mortgage requirements L o c a l government opposition Building approval/delay U n s t a b l e lumber p r i c e s High overhead costs Marketing costs/ problems Property t a x costs  Important  Not Important  233 The f i r s t  four o b s t a c l e s  Lower i n t e r e s t r a t e s ,  involve basic a f f o r d a b i l i t y .  l e s s r e s t r i c t i v e mortgage requirements,  government f i n a n c i n g a i d , and support t o owner-builders would mean more people could  a f f o r d t o purchase the k i t s .  Three of the four a f f e c t a l l aspects of the housing c o n s t r u c tion industry.  The l a c k of government support t o owner-  builders i s a potential obstacle industry.  unique t o the k i t home  The d i f f e r e n t treatment owner-builders  from lending  i n s t i t u t i o n s and f e d e r a l f i n a n c i n g  can make k i t homes even l e s s a f f o r d a b l e than a h i g h e r - p r i c e d  receive  programs  t o some i n d i v i d u a l s  c o n t r a c t o r - b u i l t home.  L o c a l government o p p o s i t i o n  and b u i l d i n g approval  delays a l s o a f f e c t the c o n t r a c t o r - b u i l t l a r g e - s c a l e sion industry  subdivi-  but a p p r o v a l s of a c o n t r a c t o r - b u i l t house a r e  u s u a l l y handled i n d i f f e r e n t ways than an o w n e r - b u i l t home. Individual  custom designed homes may b a f f l e l o c a l  checkers and cause d e l a y s .  plan  Many k i t homes u t i l i z e unconven-  t i o n a l and unique b u i l d i n g techniques ( i . e . , dome, l o g ) and some l o c a l b u i l d i n g requirements  ( i . e . , energy e f f i c i e n c y )  and design c o n t r o l s make approval more d i f f i c u l t . Unstable lumber p r i c e s a f f e c t a l l aspects of the building construction t u r e r normally w i l l  industry.  Although a k i t home manufac-  guarantee a k i t p r i c e a t the time of  s a l e , he may purchase the lumber a t a l a t e r date i n order to m i l l and p r e - c u t the timber t o the k i t s p e c i f i e d . Unstable lumber p r i c e s can e l i m i n a t e profit entirely.  the k i t manufacturer's  234 High overhead industry.  and marketing  K i t home manufacturers  c o s t s can plague any  u s u a l l y have g r e a t e r  d i f f i c u l t y exposing t h e i r product t o the p u b l i c . cannot  s e t up a temporary  model v i l l a g e and then  They roll  the homes away when s o l d as a mobile home d e a l e r can. Many customers purchase overhead  homes they never see. Many marketing and  c o s t s and problems are unique t o the k i t home  industry. Property tax c o s t s were mentioned i n some of the readings.  In some areas a low-cost k i t , o w n e r - b u i l t home  i s assessed upon completion as custom designed. work t o the owner-builder's disadvantage.  T h i s can  For example, i f  an owner-builder purchases a $20,000 k i t t o p l a c e on a $10,000 l o t and e l e c t s t o c o n s t r u c t the house with p a i d l a b o r , i t i s p o s s i b l e t o have a completed $40,000.  little  house f o r  The house c o u l d be worth, upon completion, twice  t h i s f i g u r e and i f assessed a t t h i s l e v e l the taxes c o u l d be p r o h i b i t i v e t o a lower-income f a m i l y .  While the owner-  b u i l d e r may have an expensive house and p r o f i t upon s e l l i n g it,  the high p r o p e r t y taxes i n the meantime c o u l d p l a c e a  s t r a i n on h i s a b i l i t y t o r e t a i n the house.  In such  circum-  stances a $30,000-$40,000 mobile home could be more a p p e a l i n g to a low-income f a m i l y . General r e s u l t s . responded  Nearly a l l the survey p a r t i c i p a n t s  t o the q u e s t i o n s on o b s t a c l e s .  The responses  v a r i e d w i d e l y , as they r e p r e s e n t e d the b e l i e f s , o p i n i o n s ,  235 and  judgments of i n d i v i d u a l s .  Every o b s t a c l e was p e r c e i v e d  as "most important" and "not important" by a t l e a s t one manufacturer. for  An attempt  t o i n v e s t i g a t e some of the "why's"  the wide d i v e r s i t y w i l l be explored A l l but one manufacturer  later.  (97 percent) c o n s i d e r e d  i n t e r e s t r a t e s t o be an o b s t a c l e (Table 43). requirements  Mortgage  (80 percent) and b u i l d i n g approval delays (76  percent) are the next two p e r c e i v e d important o b s t a c l e s . High property taxes were o n l y p e r c e i v e d as o b s t a c l e s by 36 percent of the manufacturers,  which would be the expected  response as most r u r a l areas have low tax r a t e s . more than h a l f of the manufacturers aid  Slightly  f e l t t h a t no government  t o owner-builders, l o c a l government o p p o s i t i o n , and  unstable lumber p r i c e s were important o b s t a c l e s . overhead  and marketing  manufacturers.  High  o b s t a c l e s were r e p o r t e d by most  In a l l c a t e g o r i e s , a minimum of three  (8 percent) manufacturers  i n d i c a t e d an o b s t a c l e as "most  important." There were wide v a r i a t i o n s i n the responses.  Only  the i n t e r e s t r a t e o b s t a c l e r e c e i v e d o v e r t r e c o g n i t i o n by most k i t home m a n u f a c t u r e r / d e a l e r s . at  In a l l other c a t e g o r i e s ,  l e a s t 20 percent of the manufacturers  o b s t a c l e was  "not important."  f e l t t h a t the  I f one statement  c o u l d be  made r e g a r d i n g the o v e r a l l r e s u l t s , i t would be t h a t the industry, i s not homogeneous.  Each manufacturer  or d e a l e r  i s a separate i n d i v i d u a l conducting h i s business i n a d i s t i n c t l y i n d i v i d u a l manner, i n a d i s t i n c t  l o c a t i o n , and  236  TABLE 4 3 OBSTACLE RATINGS  Obstacle  Most Important  I n t e r e s t Eates  87% (34)  Lack of government financing a i d  Moderately Important 10% (4)  Not Important 3% (1)  8% (3)  34% (13)  58% (22)  Lack of government support t o ownerbuilders  14% (5)  38% (14)  48% (18)  Mortgage requirements  31% (11)  49% (17)  20% 17)  L o c a l government opposition  16% (6)  35% (13)  49% (18)  Building approval/ delays  22% (8)  54% (20)  24% (9)  7% (3)  47% (8)  46% (17)  High overhead c o s t s  28% (10)  28% (10)  44% (16)  Marketing c o s t s / problems  24% (9)  43% (16)  32% (12)  Property tax c o s t s  14% (5)  22% (8)  64% (23)  Unstable lumber prices  237 under a v a r i e t y of circumstances and c o n d i t i o n s  (institu-  t i o n a l or o t h e r w i s e ) . G e n e r a l i t i e s and c o n c l u s i o n s are d i f f i c u l t t o make with only the " o v e r a l l " r e s u l t s .  A g r e a t e r depth o f a n a l y s i s  i s necessary t o understand the responses and the wide variations. Examination of the responses from manufacturers l o c a t e d i n d i f f e r e n t areas may e x p l a i n some of the d i f f e r ences.  Some problems c o u l d be more s e r i o u s i n s p e c i f i c  regions.  One would a l s o expect some d i f f e r e n c e s due t o  k i t type.  Log home manufacturers could be expected t o  have d i f f e r e n t concerns and problems than dome manufacturers. Manufacturers s e l l i n g predominately t o owner-builders or lower-income  f a m i l i e s may a l s o p e r c e i v e some problems and  o b s t a c l e s as more s e r i o u s than those s e l l i n g t o customers hire contractors.  While the survey d i d not i n q u i r e  who  about  p o l i t i c a l p h i l o s o p h y of v a l u e s , i t d i d i n q u i r e about k i t type, l o c a t i o n , income of customers, percentage of customers who are owner-builders, and k i t p r i c e .  T h i s i n f o r m a t i o n can  be compared and c r o s s t a b u l a t e d with the responses t o the o b s t a c l e q u e s t i o n i n order t o note d i f f e r e n c e s . Several c r o s s t a b u l a t i o n s were performed by the S t a t i s t i c a l Package f o r S o c i a l Sciences (SPSS), and the responses noted.  Many d i f f e r e n c e s were r e v e a l e d as the  responses from k i t manufacturers l o c a t e d i n d i f f e r e n t areas and s e l l i n g d i f f e r e n t types of k i t s t o d i f f e r e n t types of customers.  238 Regional d i f f e r e n c e s .  Most manufacturers  the i n t e r e s t r a t e o b s t a c l e important factory location.  considered  r e g a r d l e s s of the  The no government f i n a n c i n g r a t e o b s t a c l e  involved p o l i t i c a l philosophy.  Not one of the  manufacturers  i n c o n s e r v a t i v e Washington or the Midwest c o n s i d e r e d the l a c k of government f i n a n c i n g a i d important, Northeastern manufacturers  c o n s i d e r e d the no government  f i n a n c i n g a i d "most important" Northeast  y e t h a l f of the  (Table 44).  Since the  i s known l i b e r a l t e r r i t o r y and Washington State  and the Midwest c o n s e r v a t i v e , t h i s q u e s t i o n probably does not r e f l e c t anything except p o l i t i c a l philosophy and world view.  I f p o l i t i c s were not i n v o l v e d with t h i s q u e s t i o n ,  one would not expect  l o c a t i o n a l d i f f e r e n c e s as the l a c k of  government f i n a n c i n g a i d should a f f e c t everyone. The lack of government a i d t o owner-builders  showed  s i m i l a r r e g i o n a l d i f f e r e n c e s (Table 45), and p o l i t i c a l philosophy may be the major f a c t o r f o r these d i f f e r e n c e s . One would expect the l a c k of f e d e r a l government a i d to owner-builders  t o a f f e c t a l l areas e q u a l l y .  Mortgage requirements  were r a t e d an o b s t a c l e by  twelve of the t h i r t e e n responding  Western US  manufacturers.  No s i g n i f i c a n t r e g i o n a l d i f f e r e n c e s were noted.  T h i s was  not the case with the more l o c a l o b s t a c l e s such as l o c a l government o p p o s i t i o n (Table 46) and b u i l d i n g delays  approval  (Table 47) . The responses  show d e f i n i t e r e g i o n a l d i f f e r e n c e s .  Over 7 5 percent of the manufacturers  i n the Western US  239  TABLE 4 4 NO GOVERNMENT FINANCING AID Most Important  Location Washington B r i t . Columbia Western US Midwest South Northeast Canada National Total  Important  3 3.3%  Not  100.0% 33.3% 50.0% 100.0% 66.6% 50.0% 66.6% 50.0%  33. 3% 50.0%  33.3% 50.0%  33 • 3% 50.0% 34.0%  8.0%  Important  58. 0%  TABLE 4 5 NO GOVERNMENT AID TO OWNER-BUILDERS Location  Most Important  Washington B r i t . Columbia Western US Midwest South Northeast Canada National  66.7% 16.0% 50.0% -  Total  Important 50.0%  Not Important  —  45.0% 50.0% 3 3.3% 33.3% 25.0%  50.0% 33 . 3% 39.0% 50.0% 66.7% 50.0% 66. 7% 75.0%  14.0%  38.0%  48.0%  240  TABLE 4 6 LOCAL GOVERNMENT OPPOSITION Location Washington B r i t . Columbia Western US Midwest South Northeast Canada National  Most Important  Important  33.03% 33.3% -  Not Important  33.3% 46.7% 75.0% 50.0% -  100.0% 66.7% 20.0% 25.0% 100.0% 50.0% 66.7% 100.0%  TABLE 4 7 BUILDING APPROVAL DELAYS Location Washington B r i t . Columbia Western US Midwest South Northeast Canada National  Most Important  33.3% 75.0% -  Important 50.0% 66.7% 46 .7% 66. 7% 100.0% 100.0% 50.0%  Not  Important 50.0% 33.3% 20.0% 25.0% 33.3% 50.0%  241 (except Washington) r e p o r t e d major d e l a y s . delays present problems  B u i l d i n g approval  t o the m a j o r i t y of manufacturers i n  most areas but they seem t o pose the g r e a t e s t problem t o manufacturers i n the Northeast, Canada, and t o a l e s s  signif-  i c a n t degree, the Midwest. Other o b s t a c l e s showed r e g i o n a l  differences.  Unstable lumber p r i c e s seemed t o be of the g r e a t e s t concern i n Canada and the l e a s t concern t o manufacturer/dealers i n the Northeastern US.  Both Washington S t a t e manufacturers  responding t o the q u e s t i o n , r a t e d i t as "important." F a c t o r y l o c a t i o n i s not the same as source of  lumber,  which might be more d i r e c t l y r e l a t e d t o lumber p r i c e instability. Overhead  and marketing problems  v a r i a t i o n s as w e l l .  showed r e g i o n a l  A l l manufacturers i n B r i t i s h  Columbia  and the Midwest r a t e d overhead and marketing c o s t s an obstacle.  Not one manufacturer/dealer i n the South  consid-  ered overhead an o b s t a c l e but 66 percent c o n s i d e r e d marketing c o s t s a problem.  Marketing c o s t s were c o n s i d e r e d an  o b s t a c l e by both Washington manufacturers. Property taxes vary r e g i o n a l l y . was  not p e r c e i v e d a major problem o v e r a l l  While t h i s  obstacle  (36 percent  r a t e d i t i m p o r t a n t ) , 66 percent of the n o n - B r i t i s h  Columbia  Canadian manufacturers c o n s i d e r e d i t a problem and 40 percent of the Western US manufacturers r a t e d i t an o b s t a c l e (Table 48).  Of the f i v e manufacturers r a t i n g i t very important,  one was  i n B r i t i s h Columbia,  two i n the Western US, and  two  242 were l o c a t e d i n the Midwest.  None of the Southern manufac-  t u r e r s c o n s i d e r e d p r o p e r t y tax a problem. TABLE 48 PROPERTY TAX  Important  Not Important  50.0%  50.0%  33.3%  -  66 .7%  Western US  13.3%  26.7%  60.0%  Midwest  50.0%  -  50.0%  Very Important  Location Washington British  Columbia  -  South Northeast Canada National  14.0%  Total  100.0%  -  100.0%  66.7%  33. 3%  -  100.0%  22.0%  64.0%  Obviously, t h i s small sample does not o f f e r  abso-  l u t e proof that some o b s t a c l e s are more s i g n i f i c a n t i n c e r t a i n areas than i n o t h e r s . taxes and r i s i n g  I t i s known that high p r o p e r t y  land v a l u e s a r e a s i g n i f i c a n t problem i n  C a l i f o r n i a , y e t not as great a problem i n Alabama.  High  c o s t s of l a b o r and d i s t a n c e t o markets may e x p l a i n the g r e a t e r problems of overhead and marketing f o r Midwest and B r i t i s h Columbia  firms.  One can only s p e c u l a t e why r e g i o n a l  d i f f e r e n c e s appeared t o a f f e c t the responses.  With such a  small sample and so many v a r i a t i o n s , one cannot draw  243 a b s o l u t e c o n c l u s i o n s but the survey r e s u l t s do pose some i n t e r e s t i n g q u e s t i o n s t h a t perhaps c o u l d be i n v e s t i g a t e d f u r t h e r i n another study. Type. are  While l o c a t i o n a l v a r i a t i o n s i n o b s t a c l e s  i n t e r e s t i n g t o note, t h e r e a r e many other p o t e n t i a l  f a c t o r s t h a t may a f f e c t the responses. may a f f e c t s p e c i f i c types of k i t s .  D i f f e r e n t problems  Information on k i t  type was combined and the o b s t a c l e responses compared. The i n t e r e s t r a t e o b s t a c l e r a t e d high with most kit  home t y p e s .  Only one manufacturer among t h i r t y - n i n e  r a t e d i t unimportant, and he was a modular home manufacturer.  A l l panel and p r e - c u t s t i c k manufacturers and  over 80 percent of the l o g and panel and p r e - c u t combination manufacturers f e l t i t was the most important o b s t a c l e . The no government f i n a n c i n g a i d o b s t a c l e was f e l t the  l e a s t important by the panel manufacturers--75  percent  f e l t i t was not a problem, but t h e r e were o n l y four respondents (Table 49).  Of the t h r e e manufacturers r a t i n g no  government f i n a n c i n g a i d as most important, two were l o g manufacturers and one was a panel and p r e - c u t combination manufacturer. Table 50 i l l u s t r a t e s responses from manufacturer/ d e a l e r s with r e g a r d t o the q u e s t i o n of no government a i d to owner-builders. Mortgage requirements were seen as an o b s t a c l e to  most k i t home manufacturers.  A l l pre-cut s t i c k  manufacturers r a t e d i t most important.  244  TABLE 4 9 NO GOVERNMENT FINANCING AID  K i t Type Pre-Cut Log Panel Pre-Cut  Stick  Modular Panel and Pre-Cut Combination  Most Important  Important  Not Important  11.8%  29.4%  58.8%  -  25.0%  75.0%  -  50.0%  50.0%  -  50.0%  50.0%  10.0%  30.0%  60.0%  —  Other  100.0%  _  TABLE 50 NO GOVERNMENT AID TO OWNER-BUILDERS  K i t Type Pre-Cut Log  Important  Not Important  11.8%  41.2%  47.1%  33 - 3 %  66.6%  —  Panel Pre-Cut  Most Important  Stick  Modular Panel and Pre-Cut Combination  50.0%  -  50.0%  -  25.0%  75.0%  20.0%  40.0%  40.0%  245 L o c a l government o p p o s i t i o n only posed a problem t o one modular manufacturer  (Table 51).  panel and p r e - c u t combinations  Over 60 percent of the  (mostly dome) manufacturers  r e p o r t e d l o c a l government o p p o s i t i o n a problem.  A majority  of the l o g home manufacturers a l s o r e p o r t e d t h i s as a significant  obstacle. TABLE 51 LOCAL GOVERNMENT OPPOSITION BY TYPE Most Important  Important  Not Important  17.6%  35. 5%  47.1%  -  33. 3%  66.7%  -  50.0%  66.7%  Modular  25 .0%  -  75.0%  Panel and Pre-Cut Combination  10.0%  50.0%  40.0%  K i t Type Pre-Cut Log Panel Pre-Cut  Stick  Other  100.0%  The the  problems i n v o l v e d with b u i l d i n g approval posed  g r e a t e s t o b s t a c l e to the panel and p r e - c u t combination  (mostly dome) manufacturers  (Table 52).  Of the panel and  pre-cut combination manufacturers, 90 percent r e p o r t e d b u i l d i n g approval d e l a y s as an important o b s t a c l e .  It  should be noted t h a t a s t r o n g m a j o r i t y of l o g home and modular home manufacturers a l s o r e p o r t e d b u i l d i n g approval delays as s i g n i f i c a n t .  246 TABLE 5 2 BUILDING APPROVAL DELAYS Most Important  Important  Not Important  Pre-Cut Log  11.8%  52.9%  35.6%  Panel  33.3%  66.7%  -  -  50.0%  50.0%  -  75.0%  25.0%  50.0%  40.0%  10.0%  K i t Type  Pre-Cut  Stick  Modular Panel and Pre-Cut Combination  Unstable lumber p o l i c i e s seem t o a f f e c t the m a j o r i t y of a l l k i t home types except the modular homes; 75 percent of the modular home manufacturers r e p o r t e d lumber p r i c e s as not important.  I f p r i o r d i s c u s s i o n about the marketing  b e n e f i t s of the k i t homes versus modular or mobile homes proves t r u e , one would expect modular manufacturers t o r a t e overhead as not important. r e v e a l e d t h i s t o be t r u e .  An examination of the responses A l l the modular home manufacturers  r a t e d overhead and marketing c o s t s as not important (Table 53).  In c o n t r a s t , the m a j o r i t y of a l l the k i t type manufac-  t u r e r s r e p o r t e d marketing c o s t s as important and the m a j o r i t y of a l l but panel manufacturers r a t e d high overhead as an important o b s t a c l e .  The breakdown f o r overhead  marketing c o s t s i s shown i n Table 53.  I t should be noted  t h a t a l l p r e - c u t and panel manufacturers had marketing problems.  and  247 TABLE 5 3 OVERHEAD/MARKETING COSTS  Very Important  Important  Not Important  P r e - C u t Log  23. 5 / 1 7 . 6%  35. 3 / 4 7 . 1%  41 . 2 / 3 5 . 5%  Panel  33. 3 / 3 3 . 3%  0. 0 / 3 3 . 3%  66 . 7 / 3 3 . 3%  50. 0 / 6 6 . 7%  50 . 0 / 3 3 . 3%  Kit  Type  Pre-Cut  Stick  Modular P a n e l and P r e - C u t Combination  The  0. 0 /  0. 0%  0. 0 /  0. 0%  44. 4 / 4 4 . 4%  do n o t  have  of  mobile  to maintain c o s t l y  home l o t . o r  i n a lumber y a r d and t h e n  Kit  lots  dealers  nationwide.  be a k i t  significant  kit  have  the  on a m o b i l e p l a c e d on is  the  required.  advantage  of  a  p r o d u c t on h u n d r e d s  to  perceived  the  also  but the  not  perceived  as  m a j o r i t y of manufacturers  As e x p e c t e d , of  it  as  not  one  an o b s t a c l e .  of  the  to  Both  40 p e r c e n t  of  the  log,  a for modular  stick  i n d i c a t e d p r o p e r t y t a x e s were  over  of  home—obstacle.  p r o b l e m was  homes.  home m a n u f a c t u r e r s obstacle,  modular  obstacle  types of  expenditure  displaying their  p r o p e r t y tax  manufacturers  an  do n o t  later  villages.  The m a r k e t i n g / o v e r h e a d p r o b l e m seems  home—not The  all  Little capital  Manufac-  home model  homes c a n be p l a c e d e a s i l y  home m a n u f a c t u r e r s  network of  kit  0. 0%  frequently  home d e a l e r s .  their  lot.  22 . 2 /  33. 3 / 5 5 . 6%  Examples o f  customer's  100 . 0 / 1 0 0 .0'  0. 0%  m o d u l a r homes a r e t r a n s p o r t e d and  marketed t h r o u g h a network turers  0. 0 /  not  and p a n e l  248 and p r e - c u t combination manufacturers s t a t e d t h a t p r o p e r t y taxes were an important o b s t a c l e to the development of their  industry. Four manufacturers of l o g or panel (pre-cut) homes  responded  that the p r o p e r t y tax o b s t a c l e was a very  important  obstacle.  The d i f f e r e n c e s between v a r i o u s k i t types and l o c a t i o n a r e o n l y two of the many f a c t o r s that c o u l d e x p l a i n the wide v a r i a t i o n s i n the p e r c e p t i o n of v a r i o u s obstacles.  I t has been d i s c u s s e d p r e v i o u s l y t h a t some  manufacturers appeared t o s e l l  "low end," l e s s expensive  k i t s w h i l e o t h e r s s p e c i a l i z e d i n the higher q u a l i t y ,  fancier  homes. Some manufacturers s e l l f a m i l i e s and d i s p l a y e d l i t t l e  few homes t o lower-income  i n t e r e s t i n t h e i r product  becoming a low-cost housing a l t e r n a t i v e . Information on income of customers was o b t a i n e d from the manufacturers.  and k i t p r i c e  Responses of the  h i g h e r - p r i c e d / h i g h e r - i n c o m e manufacturers were compared with those s p e c i a l i z i n g i n l o w e r - p r i c e d k i t s and/or a l a r g e r percentage of k i t s t o lower-income  selling  families.  It  i s apparent t h a t the p e r c e p t i o n of o b s t a c l e s and problems  of  the lower-priced/lower-income manufacturers a r e d i f f e r e n t  from those s e l l i n g top l i n e , h i g h - c o s t homes t o upperincome f a m i l i e s . An examination of the responses t o the o b s t a c l e q u e s t i o n r e v e a l e d the f o l l o w i n g :  249 Category 1 Low-Priced Most Not Important Important  Category 5 High-Priced Most Not Important Important  90%  10?  100%  0%  Lack of Government A i d  60%  40?  56%  46%  Lack of Government A i d t o Owner  60%  40?  57%  43%  Interest  Rate  Responses combined  t o the v a r i o u s  price categories  and grouped i n t o f i v e c a t e g o r i e s  were  based on the  percentage of homes ( k i t s ) s o l d t h a t were p r i c e d below $20,000. % of Homes Sold P r i c e d Below $20,000  Category  60% or more  1  40%-50%  2  26%-40%  3  10%-25%  4  Less than 10%  5  Low-Priced K i t s (10 mfg.) Not Important Important  High-Priced K i t s (12+ mfg.) Not Important Important  Mortgage Req.  75%  25%  75%  25%  L o c a l Government  70%  30%  58%  42%  B u i l d i n g Approval  90%  10%  66%  33%  Lumber P r i c e s  20%  80%  54%  46%  Overhead  66%  33%  41%  58%  Marketing Cost  78%  22%  54%  46%  Property Tax  44%  55%  25%  75%  250 Some d i f f e r e n c e s can be s p o t t e d between those s e l l i n g l o w e r - p r i c e d and h i g h - p r i c e d k i t s . government problems and b u i l d i n g approval the low-priced k i t s more than those homes.  Perhaps t h i s  materials  The l o c a l seem t o plague  s e l l i n g higher-priced  i s due t o the i n n o v a t i v e use of  ( i . e . , dome) or l e s s c o n v e n t i o n a l designs of  the l o w e r - p r i c e d k i t s .  Overhead marketing c o s t s and even  property tax a l s o seem t o plague the l o w e r - p r i c e d k i t manufacturers.  Perhaps they operate  a t a lower mark-up  l e v e l and thus do not have as much c a p i t a l priced  as the h i g h e r -  kits. Property taxes were a problem only with the h i g h e r -  p r i c e d k i t s , y e t the l o w e s t - p r i c e d k i t s r e p o r t e d i t a s i g n i f i c a n t : problem' for: almost one-half The  manufacturers.  l a c k of government f i n a n c i n g support and the  l a c k of support important  the  t o owner-builders  were s l i g h t l y more  t o the l o w e r - p r i c e d k i t manufacturer, but there  i s not a s i g n i f i c a n t response from those  difference.  One might expect  a greater  s e l l i n g l o w e r - p r i c e d k i t s , but low p r i c e  and high percentage of low-income customers are not h i g h l y correlated. do not s e l l  Some manufacturers s e l l i n g low-priced t o many lower-income i n d i v i d u a l s .  Of the manufacturers responding and  kits  t o both  questions  s e l l i n g the l a r g e s t percentage of lower-income homes,  three r e p o r t e d they never s o l d homes t o f a m i l i e s l e s s than  $20,000 per year.  earning  While f i v e of the e i g h t  manufacturers were i n the lowest-income category (25  251 percent or more o f b u s i n e s s t o those e a r n i n g l e s s than $20,000), t h r e e were l i s t e d i n the high-income  group  (0 percent homes s o l d t o those e a r n i n g l e s s than $20,000 annually). With t h r e e of the e i g h t manufacturers never homes (and perhaps  not c a r i n g t o ) t o lower-income  selling  individ-  u a l s , one would not expect a g r e a t response t o the government aid questions. An examination of the income group might  show a  g r e a t e r response t o t h i s q u e s t i o n , but one should remember "government a i d " i s a v o l a t i l e p o l i t i c a l  issue.  Even i f  g r e a t e r government support would mean more i n d i v i d u a l s c o u l d purchase k i t homes, many manufacturers might be opposed t o i t i n p r i n c i p l e . I t i s i n t e r e s t i n g t o note before c o n t i n u i n g with the income o b s t a c l e s c r o s s t a b u l a t i o n t h a t i n t e r e s t  rate  was p e r c e i v e d as l e s s an o b s t a c l e t o those s e l l i n g the lowest-priced k i t s .  O b v i o u s l y , the lower the k i t p r i c e ,  the l e s s money needed t o f i n a n c e .  I n t e r e s t r a t e s become  somewhat l e s s important with the low-cost k i t owner-builder housing o p t i o n . Income/obstacles  crosstabulation.  of the response t o the income of customers questions d i s p l a y e d the f o l l o w i n g  An examination and " o b s t a c l e s "  results.  Income Category  l ( l o w ) 2 5 percent or more of c u s t o mers earn l e s s than $20,000.  Income Category  4(high) 0 percent of customers purchasing k i t s earn l e s s than $20,000.  252 Even with the v o l a t i l e p o l i t i c s i n v o l v e d with the q u e s t i o n of government a i d , 86 percent of the low-income groups r e p o r t e d t h a t the l a c k of government a i d was a major o b s t a c l e t o the development of t h e i r  i n d u s t r y (Table 54).  In c o n t r a s t , o n l y 20 percent of manufacturers  i n the h i g h e s t -  income customer category c o n s i d e r e d government a i d a major obstacle. Responses concerned with the l a c k of government support t o owner-builders a l s o d i s p l a y e d d i s t i n c t  differ-  ences between the low- and high-income manufacturers, not as d i s t i n c t . f o u r t h of t h e i r  Of the manufacturers  although  s e l l i n g over one-  homes t o the lowest-income  customers,  71 percent r e p o r t e d the l a c k of government support t o owner-builders as an important o b s t a c l e to the development of t h e i r  businesses.  A m a j o r i t y of the companies never  s e l l i n g t o customers e a r n i n g l e s s  than $20,000 f e l t the  l a c k of government support t o owner-builders was not important.  Thus, government support i s more important t o  the companies s e l l i n g k i t s t o the low- and middle-income groups than t o those marketing  k i t s t o higher-income  groups  t h a t need no support. The higher-income the higher-income  group manufacturers  groups r e p o r t e d s i g n i f i c a n t  marketing t o problems with  the mortgage requirements, and u n s t a b l e lumber p r i c e s and marketing  costs.  The high l i n e k i t homes f r e q u e n t l y have  extravagant brochures and l a r g e model v i l l a g e s . k i t homes u s u a l l y have no v i l l a g e s  or models.  The lower Most high  253  TABLE 5 4 INCOME AND OBSTACLES  Interest  rate  Low-Income Category Imp. Not Imp.  High-Income Category Imp. Not Imp.  100%  100%  0%  0%  No government a i d  86%  14.3%  20%  75%  No government a i d t o owner-building  71%  28%  '44%  55%  Mortgage requirements  6 3%  36%  88%  22%  L o c a l government  58%  42%  50%  50%  B u i l d i n g department  71%  29%  75%  25%  Lumber p r i c e  29%  71%  59%  41%  Overhead  57%  43%  50%  50%  57%  43%  77%  23%  29%  71%  31%  69%  Marketing  cost  Property t a x  254 l i n e k i t homes a r e l u m b e r - i n t e n s i v e ( i . e . , cedar double w a l l 2-8" t h i c k ) , which might e x p l a i n the higher lumber price  response. Most of the other o b s t a c l e s — p r o p e r t y tax,  l o c a l government o p p o s i t i o n , and i n t e r e s t  overhead,  rate—were  p e r c e i v e d as o b s t a c l e s with approximately the same percentage of low-income as high-income  manufacturers.  The percentage o f low-income customers  had a major  impact on the p e r c e p t i o n of o b s t a c l e s of the problems faced by the v a r i o u s manufacturers. Kit customers  manufacturers  that s e l l  t o more  lower-income  appear t o have d i f f e r e n t problems than those who  sell  t o a higher-income  clientele.  sell  l o w e r - p r i c e d k i t s a l s o have d i f f e r e n t problems and  s e c u r i t y than those who s e l l  Manufacturers, t h a t  higher-priced  kits.  There a r e many other f a c t o r s t h a t can a f f e c t the problems a manufacturer or  may have i n marketing the k i t s  t h a t a f f e c t the p e r c e p t i o n of o b s t a c l e s .  Certainly  the s i t u a t i o n of business a f f e c t s o b s t a c l e p e r c e p t i o n . Companies i n poor shape would be expected t o r e p o r t g r e a t e r d i f f i c u l t i e s and would l i s t more problems and important o b s t a c l e s . For to  the purpose  of t h i s study, o n l y o b s t a c l e s  the development of k i t homes as a low-cost o p t i o n were  examined.  The p o t e n t i a l  low-cost i n d i c a t o r s — p r i c e and  income of c u s t o m e r s — a r e . i m p o r t a n t to  t o separate i n order  i s o l a t e problems and o b s t a c l e s t o the development of  255 the low-cost k i t i n d u s t r y .  L o c a t i o n a l and k i t v a r i a t i o n s  are important t o note a l s o , as problems may be r e g i o n a l i n nature and c o u l d be s o l v e d or m i t i g a t e d with r e g i o n a l solutions. Since the k i t home i n d u s t r y has the p o t e n t i a l t o i n c r e a s e the amount of low-cost housing i n r u r a l  areas,  the o b s t a c l e s t o t h i s i n d u s t r y should be noted and d i s c u s s e d by governmental  agencies developed  f o r the purpose of  i n c r e a s i n g and improving the housing c o n d i t i o n s of lowincome r u r a l r e s i d e n t s . agencies developed  I t i s i r o n i c t h a t the v a r i o u s  f o r t h e purpose  of improving  housing  c o n d i t i o n s do not examine the impact of t h e i r r e g u l a t i o n s and f i n a n c i n g requirements housing i n d u s t r y .  on s p e c i f i c elements  of the  Banks a l s o do not appear t o be a b l e  to deal with the non-turnkey  home.  to evaluate the r i s k s i t u a t i o n  F u r t h e r study i s needed  and i d e n t i f y ways t o reduce  r i s k t o the l e n d i n g i n s t i t u t i o n s , thus p e r m i t t i n g g r e a t e r numbers of n o n s u b s i d i z e d loans f o r l e s s a f f l u e n t builders i n rural  areas.  owner-  CHAPTER XI CONCLUSIONS, FINDINGS, AND  RECOMMENDATIONS  General Conclusions Rural areas of North America areas with r e s p e c t t o housing q u a l i t y c o n s t r u c t i o n d e l i v e r y mechanisms. housing problems. difficult build  still  l a g behind  and e f f e c t i v e  urban  new  Rural areas have unique  F i n a n c i n g a home i s f r e q u e n t l y more  i n r u r a l areas.  There are fewer c o n t r a c t o r s t h a t  l e s s expensive r u r a l s u b d i v i s i o n s which f r e q u e n t l y  o f f e r good low down payment f i n a n c i n g packages. and c o o p e r a t i v e s are r a r e .  Rural areas f r e q u e n t l y a l s o have  higher numbers of lower-income f a m i l i e s temporary  and odd  Condominiums  t h a t r e l y on s e a s o n a l /  jobs as t h e i r s o l e source of income.  Even  f o r those f o r t u n a t e enough t o f i n d steady employment, wages are o f t e n e x c e p t i o n a l l y low when compared t o urban  levels.  The demand f o r low-cost housing i s very h i g h i n many r u r a l areas. price of  The e x i s t i n g  housing market i s f r e q u e n t l y high i n  and low i n q u a l i t y — w h e n  one c o n s i d e r s the low c o s t  land e v i d e n t i n most r u r a l areas. There are few  areas.  low-cost housing o p t i o n s i n r u r a l  Choice i s l i m i t e d  and the low-cost housing o p t i o n s  have narrowed i n r e c e n t y e a r s .  Many l e s s a f f l u e n t  r e s i d e n t s p r e f e r t o b u i l d a new  home on t h e i r  256  own  rural  257 inexpensive s e l e c t e d l o t . While i t used t o be p o s s i b l e t o p l a c e a substandard  " t a r paper" shack on a r u r a l l o t ,  t h i s i s no longer p o s s i b l e i n most r u r a l r e g i o n s due t o c u r r e n t b u i l d i n g codes and enforcement mobile home has f i l l e d  (Figure 20).  The  t h i s gap f o r needed low-cost housing.  The manufacturing process a l l o w s f o r s u b s t a n t i a l savings i n m a t e r i a l s and l a b o r , which have brought the cost of a new home w i t h i n the reach of many l e s s a f f l u e n t r e s i d e n t s .  The  owner-building c o s t - s a v i n g process i s not new t o r u r a l areas and r e p r e s e n t s another major method by which the l e s s a f f l u e n t can a c h i e v e homeownership.  The combination of  manufacturing p l u s owner-building i s r e f l e c t e d i n the p a r t i a l l y manufactured  " k i t " home.  This pre-cut/  p r e f a b r i c a t e d o p t i o n has r e c e i v e d the l e a s t study and y e t may have the g r e a t e s t p o t e n t i a l i n the f u t u r e as technology improves  ,and t h e i n d u s t r y  matures.  The a n a l y s i s of these low-cost housing o p t i o n s and c o s t - s a v i n g processes was undertaken  i n order t o b e t t e r  understand and e v a l u a t e the new c o n s t r u c t i o n housing t i o n i n r u r a l areas.  situa-  Each o p t i o n i s d i s t i n c t and possesses  i d e n t i f i a b l e advantages  and disadvantages.  The mobile home i n d u s t r y o f f e r s i n s t a n t housing without g r e a t dependence upon the owner t o p a r t i c i p a t e in construction.  The mobile homes are s o l d o f f v i s i b l e  l o t s from which they a r e then moved onto the owner's s i t e . Mobile homes i n some areas have been s a i d t o d e p r e c i a t e or a p p r e c i a t e a t a l e s s e r degree than a "standard home."  258  F i g u r e 20.  A l t e r n a t i v e L i f e - S t y l e Non-Code Owner-Built Rural Home ( C a l i f o r n i a )  259 The  f i n a n c i n g of a mobile home used t o be d i f f i c u l t but  now i t i s much e a s i e r , as mobile homes have achieved widespread acceptance  from both the f i n a n c i a l and governmental  institutions. S e l f - h e l p alone without using a p a r t i a l l y manufact u r e d " k i t " can save thousands o f f the p r i c e of a r u r a l home.  S e l f - h e l p does i n v o l v e a great deal of time, know-  how, a b i l i t y , and cash  (or l i q u i d a s s e t s ) .  i n s t i t u t i o n s regard the owner-builder require s t i f f e r  f i n a n c i n g terms.  Most  financial  as a g r e a t e r r i s k and  Self-help requires s i g n i f -  i c a n t owner r e s p o n s i b i l i t y but the end product can be worth thousands more than the home c o s t s t o b u i l d .  There  a l s o may be g r e a t e r s a t i s f a c t i o n i n ownership and sense of accomplishment, but these i n t a n g i b l e s a r e d i f f i c u l t t o quantify. The p a r t i a l l y manufactured pre-cut " k i t " home i n combination  with owner-building can r e s u l t i n s i g n i f i c a n t  c o n s t r u c t i o n / t i m e savings and u s u a l l y r e q u i r e s l e s s c o n s t r u c tion a b i l i t y .  The g i a n t p u z z l e u s u a l l y goes together  q u i c k l y and time i s not spent on purchasing and c u t t i n g materials.  K i t homes u s u a l l y save thousands o f f the c o s t  of a c o n t r a c t o r - b u i l t home, y e t u s u a l l y look "custom" a f t e r completion. disadvantages  Most of the b e n e f i t s and many of the  a r e the same as the n o n - k i t owner-built home.  Banks and other l e n d i n g i n s t i t u t i o n s c o n s i d e r a l l ownerbuilding  ( k i t or non-kit) a substantial r i s k .  The k i t  home i n d u s t r y has y e t t o be r e c o g n i z e d as a d i s t i n c t  type  260 of housing.  U n l i k e the mobile home i n d u s t r y , where most  manufacturers  produce  thousands  of homes each year, the  k i t home i n d u s t r y i s c h a r a c t e r i z e d with hundreds of s m a l l scale  ( f i f t y homes per year) manufacturers.  d e a l e r s go bankrupt  each year and i t i s important t o  a k i t from a r e l i a b l e d e a l e r , as no f e d e r a l procedure e x i s t s .  purchase  licensing  U n l i k e the mobile home with the l a r g e  s a l e s l o t s i n most r u r a l are d i f f i c u l t  Many of these  to f i n d .  small towns, the k i t home d e a l e r s Few  r e p r e s e n t a t i v e s or d e a l e r s  handle more than one k i t l i n e .  One may  need t o s u b s c r i b e  to a k i t home p u b l i c a t i o n or w r i t e t o s e v e r a l  manufacturers  i n a d i r e c t o r y out of the l i b r a r y i n order t o o b t a i n addresses of l o c a l d e a l e r s , and view s e v e r a l  different  types of k i t s . There are many o b s t a c l e s t o the development of r u r a l housing.  Few  s o p h i s t i c a t e d development c o r p o r a t i o n s  do business i n r u r a l areas.  Many s k i l l e d tradesmen p r e f e r  to work on l a r g e - s c a l e p r o j e c t s i n the c i t y r a t h e r than piecemeal work i n the small towns.  do  Some banks i n r u r a l  areas o f t e n p r e f e r not t o t i e up l a r g e amounts of loan money on home loans and f i n a n c i n g f o r a l l types of r u r a l housing may purposes.  be d i f f i c u l t when money i s needed f o r other The  f e d e r a l housing p o l i c y  has always been  accused of having a d i s t i n c t p r e f e r e n c e f o r urban  areas.  The FmHA Program and the R u r a l and Native Housing  Programs  were s p e c i f i c a l l y addressed t o meet the needs of the rural situation.  Still,  r u r a l areas l a g behind  urban  unique  261 centers  i n q u a l i t y and choice of housing. Not  with regard  a l l types of r u r a l housing are t r e a t e d t o Federal  Housing Program funding.  mobile home o r i g i n a l l y r e c e i v e d  little  equally  While the  support from f e d e r a l  subsidy/home purchase/insurance programs, the s i t u a t i o n has now changed.  The i n d u s t r y changed (made p h y s i c a l / d e s i g n /  m a t e r i a l a l t e r a t i o n s ) and l o b b i e d hard t o o b t a i n f e d e r a l and  bank i n s t i t u t i o n a l acceptance.  perceived option.  The mobile home i s now  as a v i a b l e and acceptable The s e l f - h e l p c o s t - s a v i n g  low-cost housing  process and k i t home  o p t i o n have y e t t o achieve r e c o g n i t i o n and acceptance. Few  f e d e r a l housing programs i n v o l v e s e l f - h e l p i n any  form.  " K i t " homes are t r e a t e d as too great a r i s k i f  owner-building i s i n v o l v e d .  The k i t home i n d u s t r y has  yet t o o b t a i n r e c o g n i t i o n as a d i s t i n c t housing  option.  There are no n a t i o n a l b u i l d i n g standards, l i c e n s i n g , or inspection.  No s p e c i f i c housing program addresses the  k i t home s i t u a t i o n . and  The o b s t a c l e s  s e l f - h e l p cost-saving  process have y e t t o be overcome  on a l a r g e s c a l e so g r e a t e r r e s i d e n t s can a f f o r d t h i s If a goal options  t o the k i t home i n d u s t r y  numbers of l e s s a f f l u e n t r u r a l  option.  i s t o o f f e r the g r e a t e s t number of housing  and choices  a t a given p r i c e range, one must i n v e s -  t i g a t e what might be done t o change the s i t u a t i o n .  Examina-  t i o n of p o t e n t i a l s o l u t i o n s i n v o l v e change a t i n d u s t r i a l , f i n a n c i a l , and governmental l e v e l s . and  k i t home options  The owner-building  are s u c c e s s f u l with most higher-income  262 groups, y e t only a few l e s s a f f l u e n t f a m i l i e s appear t o be able t o become owner-builders.  Rural r e s i d e n t s i n general  l i k e t o b u i l d t h e i r own homes, y e t only a few l e s s  affluent  f a m i l i e s without cash appear t o be able t o accomplish t h i s task. In order t o suggest p o s s i b l e s o l u t i o n s , i t i s h e l p f u l t o examine those k i t home i n d u s t r i e s and l e s s a f f l u e n t owner-builders t h a t are overcoming  the o b s t a c l e s .  Some owner-builders have been s u c c e s s f u l i n o b t a i n i n g f i n a n c i n g by c o n c e a l i n g the f a c t from CMHC, FHA, FmHA, or l e n d i n g i n s t i t u t i o n s t h a t they are owner-builders, o f t e n with the k i t manufacturer's  assistance.  Some a l s o have  been able t o convince i n d i v i d u a l banks t o r e l a x standards and accept a g r e a t e r r i s k .  their  Some k i t home d e a l e r s  have made d e a l s with s p e c i f i c banks and assumed some of the d i r e c t r i s k . manufacturer  Guarantees  of completion and owner/  c o n t r a c t s do e x i s t and appear t o be s u c c e s s f u l .  The k i t home i n d u s t r y has demonstrated  that i t i s possible  f o r the r i s k t o be shared between the owner,  manufacturer,  and l e n d i n g i n s t i t u t i o n . The owner-building o p p o s i t i o n problem  does appear  to be a r e a l o b s t a c l e but many overcome t h i s o b s t a c l e . The k i t home i n d u s t r y ' s r o l e i n owner-building may p r o v i d e the major key t o overcoming "greater r i s k " problem.  the s e l f - h e l p o b s t a c l e and  I f arrangements can be worked  out between the k i t manufacturer, governmental  owner-builder, and  or f i n a n c i n g i n s t i t u t i o n i n a way t h a t  risk  263 t o the lender i s decreased, then t h i s major  stumbling  block may be overcome and " l a r g e r numbers of l e s s r u r a l r e s i d e n t s may have g r e a t e r housing Specific c housing  affluent  choice.  Findings  The Part I study and a n a l y s i s of the o v e r a l l  s i t u a t i o n r e s u l t e d i n s p e c i f i c problems and o b s t a c l e s  being c l e a r l y i d e n t i f i e d f o r the new c o n s t r u c t i o n options.  housing  Because the k i t home s i t u a t i o n has been s t u d i e d  so l i t t l e , and  rural  independent r e s e a r c h was necessary.  The survey  i n t e r v i e w procedures added a d d i t i o n a l i n f o r m a t i o n  that was e s s e n t i a l t o understand the o v e r a l l s i t u a t i o n and reach the general c o n c l u s i o n s o u t l i n e d . k i t home s p e c i f i c f i n d i n g s obtained  In t h i s  subsection,  through the survey/  i n t e r v i e w process w i l l be d i s c u s s e d . F i n d i n g #1 The k i t home i n d u s t r y has the p o t e n t i a l t o provide low-cost  housing  purchaser become an  f o r l e s s a f f l u e n t r u r a l r e s i d e n t s i f the  e l e c t s t o c o n t r i b u t e some "sweat e q u i t y " and owner-builder.  Although some k i t s are c l e a r l y  "high l i n e " and too  c o s t l y , most a r e p r i c e d w i t h i n the reach of the l e s s affluent.  I f the buyer e l e c t s t o c o n s t r u c t the house  with a modest amount of h i r e d l a b o r , many homes can be built forsignificantly  l e s s than a "low end" s i m i l a r l y  s i z e d c o n t r a c t o r - b u i l t s u b d i v i s i o n home. the k i t s e l e c t e d and amount of s k i l l e d  Depending upon  labor h i r e d , the  264 p r i c e may even be as low as a comparably s i z e d mobile home.  For example, some dome and low end s t i c k k i t s  sell  for  under $10,000 and the completed house may be b u i l t  for  as l i t t l e as $15,000-$20,000, not counting  preparation  costs  which apply  t o both the k i t and mobile homes (Figure 21).  Finding  s e p t i c , slab/foundation),: \  #2 The  low-  (utilities,  the l o t and  k i t home i n d u s t r y i s c u r r e n t l y s e l l i n g homes t o  and modest-income owner-builders. Although the survey r e s u l t s i n d i c a t e d that many k i t  manufacturers never s e l l  k i t s t o low- and moderate-income  (under $20,000) f a m i l i e s , some c u r r e n t l y s e l l k i t s t o f a m i l i e s earning  as low as $10,000 per year.  The way  that they manage t o overcome the f i n a n c i n g o b s t a c l e s i s extremely v a r i e d .  A few o f f e r d i r e c t loans.  owner c o n t r a c t s , w h i l e s t i l l  others  Others  involve  i n v o l v e above or below  board f i n a n c i n g arrangements or government a s s i s t a n c e . low-income k i t purchasers simply from r e l a t i v e s , or mortgage other land, farm equipment, e t c . ) .  Many  pay cash f o r k i t s , borrow e x i s t i n g assets  (i.e.,  Regardless of the method  used, many l e s s a f f l u e n t r u r a l r e s i d e n t s a r e b u i l d i n g k i t homes. F i n d i n g #3 There i s a wide v a r i e t y of k i t c o n s t r u c t i o n niques, s t y l e s , designs, methods of conducting  q u a l i t y of m a t e r i a l s  business.  tech-  used, and  265  BUILD-IT- YOURSELF &SAVE! Stop in any Diamond location for a FREE brochure on all our pre-cut Homes, Cabins & Garages.  ECONOSH EL 1040 SQ. FT.  T h i s s t r u c t u r e It e n g i n e e r e d for 2 0 l b . * 1 0 0 l b . live l o a d s . C h a n g e s a n d m o d i f i c a t i o n s a r e a v a i l a b l e at a d d i tional cost.  It's finally here! Yes, an affordable 2 bedroom starter home that includes all the quality material you'll need to close the house in; like premium resawn 5/8" reverse board and baft siding, insulated exterior doors, dual glaze energy efficient windows. 20 year fiberglass shingles (15 yr. comp shingles in Ore., Idaho & Washington), interior wads and an energy efficient Heatilator fireplace with an outside air fan kit. Note: Due to different lot elevations the slab foundation is not included'  ONLY * F i g u r e 21.  6  ,  5  9  9  Low-Cost S t i c k Frame K i t Advertisement from C a l i f o r n i a Lumber Yard Sales F l y e r  266 The k i t home i n d u s t r y i s not homogenous. are many types of k i t homes. a form of stacked timber.  There  Some are p r e - c u t l o g or  Others are c o n s t r u c t e d i n p a n e l s ,  while others a r e o f pole or s t i c k frame c o n s t r u c t i o n . The s e l e c t i o n of s t y l e s and designs equal or exceed o f f e r e d by custom b u i l d e r s .  those  There are round houses, domes,  hexagons, p e d e s t a l homes, m u l t i - s t o r y frame, and r u s t i c l o g homes.  Each manufacturer  has developed  a unique  and c o n s t r u c t i o n technique f o r the home.  style  Some o f f e r a  s e l e c t i o n of m a t e r i a l s (pine, cedar) and e x t e r i o r / i n t e r i o r finishing.  The c h o i c e i n designs i s l a r g e , with few  companies o f f e r i n g fewer than twenty d i f f e r e n t models and f l o o r plans.  Inexpensive  custom design s e r v i c e s are a l s o  u s u a l l y o f f e r e d f o r those wishing t o b u i l d t h e i r  "dream  home *." Each manufacturer manner.  conducts  business i n a d i s t i n c t  Some are i n v o l v e d with e x t e n s i v e a d v e r t i s i n g and  have a nationwide  d e a l e r network.  Others operate out of  the main f a c t o r y l o c a t i o n o n l y and have no e x t e n s i v e network to a i d i n c o n s t r u c t i o n or handle (financing, permits). building  l o c a l l e v e l problems  Most do o f f e r some type of owner-  ( o n - s i t e o r classroom)  i n s t r u c t i o n and f i n a n c i n g  a s s i s t a n c e even i f the a s s i s t a n c e i s o n l y a name of a good lender.  Some k i t manufacturers  have c o n s t r u c t i o n teams  t h a t w i l l p a r t i a l l y or completely c o n s t r u c t the home f o r a reasonable f e e and are i n a p o s i t i o n t o a i d the ownerb u i l d e r with any problems.  There are no standard  business  267 p r a c t i c e s i n the k i t home i n d u s t r y .  There are as many  methods of running a k i t home business as there a r e businesses.  Some s p e c i a l i z e i n s e l l i n g t o owner-builders  (the average i s 50 percent o f f e r extensive  owner-builder customers) and  instruction.  Others s p e c i a l i z e i n s e l l i n g  homes t o a f f l u e n t p r o f e s s i o n a l s who can a f f o r d t o h i r e a l l help. VA,  Few k i t manufacturers reported  CMHC, or other  f e d e r a l a s s i s t a n c e program, but there  were a few who r e p o r t e d federal financing.  using any FmHA, FHA,  s u b s t a n c i a l success i n o b t a i n i n g  Unique f i n a n c i n g a s s i s t a n c e  a t y p i c a l i n the i n d u s t r y .  i s not  Owner c o n t r a c t s , d e a l e r  construc-  t i o n f i n a n c i n g , and s p e c i a l bank arrangements do occur but many d e a l e r s o f f e r no d i r e c t a s s i s t a n c e . The  k i t home i n d u s t r y i s h i g h l y v a r i e d , with  experimentation and new ways of b u i l d i n g and doing business the norm. F i n d i n g #4 There are many o b s t a c l e s  t o the development of  the k i t home i n d u s t r y . The  most s i g n i f i c a n t problem t h a t the survey and  interview revealed  i n v o l v e d f i n a n c i n g the k i t home.  anti-self-help/owner-building  The  c l i m a t e on the p a r t of  f i n a n c i a l and governmental i n s t i t u t i o n s has c r e a t e d a major o b s t a c l e to k i t i n d u s t r y development.  Firms t h a t  are able t o s o l v e t h e i r f i n a n c i n g d i f f i c u l t i e s and s e l l t o a wider income range r e p o r t e d homes.  t h a t they were s e l l i n g more  268 Other o b s t a c l e s i n v o l v e d the marketing problems and  l o c a l government d i f f i c u l t i e s .  w a l l homes have had d i f f i c u l t y optimize energy e f f i c i e n c y .  Log and s o l i d  timber  with codes designed t o  Unusual  c o n s t r u c t i o n techniques  ( i . e . , dome, t r a p e z o i d ) are a l s o used t o a g r e a t e r extent i n the k i t home i n d u s t r y and t h i s o f t e n confuses the l o c a l i n s p e c t o r s / p l a n checkers.  The k i t homes cannot be r o l l e d  onto a l o t t e m p o r a r i l y and then moved t o the purchaser's site.  K i t v i l l a g e s are expensive t o maintain and the  investment can not be e a s i l y r e c a p t u r e d .  Few manufacturers  can a f f o r d t o d i s p l a y t h e i r homes i n more than one l o c a t i o n , and thus, fewer people are aware t h a t the f i r m The k i t home i n d u s t r y has many unique and problems.  exists. characteristics  The i n d u s t r y i s not homogenous and each  s p e c i f i c company addresses the d i f f i c u l t i e s i n a d i s t i n c t way.  of doing business  The next s e c t i o n o u t l i n e s some recommen-  d a t i o n s based on t h i s a n a l y s i s .  The recommendations are  only suggestions and p o s s i b l e s o l u t i o n s t o t h i s difficulties  industry's  i n terms of low-cost hou'sing p o t e n t i a l .  F u r t h e r study should f o l l o w b e f o r e any implementation i s attempted. Recommendations Industry 1.  Focus on customer  financing  difficulties.  Locate agreeable l e n d i n g i n s t i t u t i o n s and attempt with f e d e r a l programs i f p o s s i b l e .  t o work  Be w i l l i n g t o share  269 some of the r i s k of owner-building i n exchange f o r b e t t e r c o n s t r u c t i o n f i n a n c i n g terms.  Do not f e a r d i r e c t i n v o l v e -  ment and be p e r s i s t a n t i n s e l l i n g b e n e f i t s , and  reputation,  r e l i a b i l i t y to lenders. 2.  greater  Take steps  as an i n d u s t r y and u n i f y t o achieve  i n d u s t r i a l r e c o g n i t i o n and lobby f o r  change.that w i l l b e n e f i t a l l . manufacturing b e n e f i t s  bureaucratic  Focus on s e l l i n g , p a r t i a l  (lower c o s t , a d a p t a b i l i t y ) , and  not on one•technique's s u p e r i o r i t y over another.  Lobby  f o r f e d e r a l q u a l i t y standards and programs designed f o r owner-builders. 3.  Consider d i f f e r e n t marketing techniques such  as m u l t i - k i t d e a l e r r e p r e s e n t a t i o n  where more than one  k i t type i s s o l d by a p a r t i c u l a r d e a l e r .  Increase the  number and a c c e s s i b i l i t y of k i t home d i r e c t o r i e s , and i n c r e a s e the amount o f u n i f i e d p u b l i c i t y expeditions).  ( k i t home shows,  Consider making agreements with l o c a l  v i s i o n developers where k i t s are c o n s t r u c t e d  by the manufac-  t u r e r s and then s o l d with l o t i n a s u b d i v i s i o n . visibility,  subdi-  Greater  customer assurance of q u a l i t y , and r e c o g n i t i o n  as an e f f e c t i v e c o s t - s a v i n g  i n d u s t r y are keys t o s u c c e s s f u l  marketing. Financial Institutions 1.  Consider the owner-builder using a k i t separate  from the n o n - k i t  self-help builder.  Kits  standardize  q u a l i t y , c u t c o n s t r u c t i o n time, and r e q u i r e l e s s s p e c i a l i z e d  270 skill  to construct.  They should be a l e s s e r r i s k and  terms should r e f l e c t t h i s .  Consider packages t h a t  s h a r i n g the r i s k with the owner, manufacturer w i l l i n g t o guarantee 2.  (who may be  completion), and l e n d i n g i n s t i t u t i o n .  Formulate  a r a t i n g system  based on s p e c i f i c company performance Develop working  involve  or e v a l u a t i o n c h e c k l i s t and k i t r e s a l e v a l u e .  r e l a t i o n s h i p s with k i t manufacturers i n  s i m i l a r ways t o t h e d e v e l o p e r / c o n t r a c t o r and l e n d i n g institution  relationship.  F e d e r a l Governments 1.  Recognize  t h e k i t home i n d u s t r y as a d i s t i n c t  e n t i t y , d i f f e r e n t from the c o n t r a c t o r s u b d i v i s i o n and mobile home i n d u s t r i e s . 2.  Develop  u n i f i e d c o n s t r u c t i o n standards  (much  l i k e the mobile home) and i s s u e l i c e n s e s , c e r t i f i c a t e s of q u a l i t y , o r r a t i n g t o i n d i v i d u a l manufacturers. f a c t o r i e s f o r q u a l i t y and performance 3.  Inspect  assurances.  Design housing programs t h a t w i l l work with  this d i s t i n c t industry.  Accept t h e f a c t t h a t owner-building  i s an i n t e g r a l p a r t o f t h e i n d u s t r y and must be i n c o r p o r a t e d i n t o the program. a.  Consider a package t h a t allows t h e manufac-  t u r e r t o lower t h e r i s k by guaranteeing and working  as an i n t e r m e d i a r y .  agreement/contract  completion  For example, an  between FHA, VA, FmHA, CMHC ( e t c . ) ,  the owner, and t h e dealer/manufacturer c o u l d be  271 d e v i s e d , whereby i f the owner-builder q u i t and walked away from a half-completed  house, the manu-  f a c t u r e r would be r e s p o n s i b l e f o r l o c a t i n g another q u a l i f i e d owner-builder.  I f no q u a l i f i e d  party  c o u l d be found, the manufacturer could perhaps complete the home a t a preagreed s m a l l - s c a l e d f e e and  then be r e s p o n s i b l e f o r s e l l i n g the completed  house.  Any p r o f i t could perhaps be s p l i t between  the manufacturer and guarantor  (HUD, CMHC, FmHA),  thus c o v e r i n g the added expense and p o s s i b l e l o s s from other b.  " d e f a u l t e d " homes.  Consider  adapting  FmHA s e l f - h e l p t e c h n i c a l  a s s i s t a n c e grant program t o i n c l u d e k i t manufacturers, with t h e i r e x i s t i n g c o n t r a c t o r i n s t r u c t i o n networks. For example, many k i t home d e a l e r s h i p s have  extensive  c o n t r a c t o r a s s i s t a n c e networks f o r t h e i r ownerb u i l d i n g customers.  Some even provide  some t e c h n i c a l  a s s i s t a n c e i n the form of o n - s i t e t r a i n i n g and classroom  i n s t r u c t i o n which has some s i m i l a r i t i e s  to the FmHA s e l f - h e l p program.  These networks  p o t e n t i a l l y might be adapted t o a "group" s t r u c t u r e d program s i t u a t i o n a t a reasonable  c o s t per u n i t .  C e r t a i n l y not a l l manufacturers would p a r t i c i p a t e , as many c o n t r a c t o r / d e v e l o p e r s  refuse to deal  FHA, but i f the terms were f a i r and r e a l i s t i c  with i t is  l i k e l y t h a t some would become i n v o l v e d . The  two examples given r e q u i r e g r e a t e r  fiscal  272 a n a l y s i s but any program designed should work with (not  a g a i n s t ) the i n d u s t r y and i t s unique  teristics,  charac-  b e n e f i t s , and r i s k s .  These g e n e r a l c o n c l u s i o n s , s p e c i f i c f i n d i n g s , and recommendations are presented i n order t o s t i m u l a t e thought on how t o b e t t e r address the unique d i f f i c u l t i e s  faced i n  r u r a l areas. During the 1960s and 1970s, t h e n - c u r r e n t f e d e r a l housing p o l i c y and p r a c t i c e s were c h a l l e n g e d and change occurred.  New  g o a l s were s e t and expensive programs d e v i s e d .  Most of these programs have been s u b s t a n t i a l l y cut so very few b e n e f i t and most of the need goes unmet. are u n l i k e l y t o ever be met a t the c u r r e n t pace.  The g o a l s One  answer may  c e r t a i n l y be t o i n c r e a s e expenditures but another  answer may  l i e i n s e l e c t i n g l e s s c o s t l y more c o s t - e f f e c t i v e  programs t h a t achieve the d e s i r e d r e s u l t y e t b e n e f i t g r e a t e r numbers of needy i n d i v i d u a l s . t a t i o n and a n a l y s i s w i l l  I t i s hoped t h a t t h i s  presen-  i n some small way evoke c r e a t i v e  t h i n k i n g t o d e a l with the many complex r u r a l housing i s s u e s i n North America  today.  273  BIBLIOGRAPHY  BIBLIOGRAPHY B r i t i s h Columbia. Department of I n d u s t r i a l Development. Mobile Homes i n B r i t i s h C o l u m b i a — A Socioeconomic Study. V i c t o r i a , B.C.: B r i t i s h Columbia Department of I n d u s t r i a l Development, March 1971. B r i t i s h Columbia. Department of I n d u s t r i a l Development. Trade and Commerce Economics and S t a t i s t i c s Branch. Mobile Homes i n B r i t i s h Columbia: A Socio-Economic Study. March 1971. B r i t i s h Columbia. Interdepartmental Study Team on Housing and Rents. A Comprehensive S o c i a l Housing P o l i c y f o r B r i t i s h Columbia, by Emily P a r a d i s e Achtenberg, Peter Larmour, and P a t r i c i a S t r e i c h . Victoria, B. C. : n. d. Buyer, Glenn, and Rose, J . Hugh. John Wiley and Sons, n.d.  Farm Home.  New  York:  Canada. The Report of an I n q u i r y Conducted f o r the Government of the P r o v i n c e of B r i t i s h Columbia, Mobile Homes--Problems and P r o s p e c t s , by M i c h a e l Audain. V i c t o r i a , B.C.: Queen's P r i n t e r , November 1975. Canada. M i n i s t r y of T r e a s u r y . Economic and I n t e r governmental A f f a i r s . Mobile Homes i n O n t a r i o — C o n s t r u c t i o n C o s t s . Ottawa, O n t a r i o : M i n i s t r y of Treasury, Economic and Intergovernmental A f f a i r s , 1973. Canada Mortgage and Housing C o r p o r a t i o n . R e v i t a l i z i n g North American Neighborhoods: A Comparison of Canadian and US Programs f o r Neighborhood P r e s e r v a t i o n and Housing Rehabilitation. NHA P u b l i c a t i o n 5237. Ottawa, O n t a r i o : CMHC, 1979. Canada Mortgage data, n.d.  and Housing C o r p o r a t i o n .  Unpublished  Cantwell, Brian. " S e l f - H e l p Housing G i v i n g F a m i l i e s C o n t r o l over L i v e s , Says D i r e c t o r . " The Argus (Mt. Vernon, Washington), February 21, 1980. The Center f o r Auto S a f e t y . Mobile Homes, the Low Cost Housing Hoax. New York: Grossman, n.d. 274  275 Chandler, John Noel. "Shelter: Planning f o r Self-Help Housing." A r t s Canada, no. 208/209 (October/November 1976):31-34. Chisum I n d u s t r i e s . The Chisum Log M i l l . n.d. (Brochure.)  Grand  Island:  C l a r k , R i c h a r d . An I n t r o d u c t i o n t o the Whatcom County Housing Survey. Bellingham, Wash.: Whatcom County Opportunity C o u n c i l , 1977. C o f f e e , Frank. n.p., n.d.  The Complete K i t House C a t a l o g .  Davidson, H a r o l d . Conventional.  N.p.:  Housing Demand: Mobile, Modular or New York: Van Nostrand, 1973.  Davidson, Harold A l a n . "An A n a l y s i s of the Demand f o r Mobile Homes with I m p l i c a t i o n s f o r the F i n a n c i a l S t r u c t u r e of the Mobile Home I n d u s t r y through 1975." Unpublished d i s s e r t a t i o n , U n i v e r s i t y of Southern C a l i f o r n i a , Los Angeles, 1974. Dennis, M i c h a e l , and Fish,:oSusan. Programs i n Search of P o l i c y Low Income Housing i n Canada. Toronto, O n t a r i o : Hukkert, 1972. D i e t z , A l b e r t G. H., and C u t l e r , Laurence S. Building Systems f o r Housing. Cambridge, Mass.: MIT P r e s s , 1971. Drury, Margaret. Mobile Homes--The Unrecognized R e v o l u t i o n i n American Housing. New York: Praeger, 1972. Edmonton (Canada) P l a n n i n g Department. Mobile and Modular Housing i n Edmonton, a Demand Assessment. Edmonton, A l b e r t a : Edmonton P l a n n i n g Department, May 1978. F r i e d , Joseph. 1971.  Housing C r i s i s — U S A .  New  York:  Praeger,  F u l l e r , Mr. Canada Mortgage and Housing C o r p o r a t i o n . Telephone i n t e r v i e w , Vancouver, B.C., March 12, 1982. Hammond, C a r o l e . Whatcom County. Washington, 1981.  Interview, Everson,  Hedman, David. "Report on Rural and Native Housing P o l i c y and Program and B r i t i s h Columbia Remote Housing A s s o c i ation." Vancouver, B.C.: S p r i n g , 1979. (Xeroxed.) Hedman, David. U n i v e r s i t y of B r i t i s h Columbia. Vancouver, B.C., 19 81.  Interview,  276 Herman, Kim; G u t i e r r e z , Nina; and Hammond, C a r o l e . Housing Resource Handbook. Spokane: Washington C o a l i t i o n f o r Rural Housing, 1980. v  Housing A s s i s t a n c e C o u n c i l . Looking f o r a Home. D.C: Housing A s s i s t a n c e C o u n c i l , 1971.  Washington,  Houston, Lawrence. "The New Non-Metropolitan Growth: Where Do Blue C o l l a r Residents F i t In?" Small Town 2 (March/ A p r i l 1977 ) . I n t e r r e l i g i o u s C o a l i t i o n f o r Housing (ICH). Housing Costs and Housing Needs, by Alexander Greendale and S t a n l e y F. Knock. New York: Praeger, 1976. Justus Homes. A d v e r t i s i n g p u b l i c a t i o n . Justus Homes, n.d.  Tacoma, Wash.:  Log Home Guide f o r B u i l d e r s and Buyers. Muir, 1983.  Gardenvale, Quebec:  Los Angeles Times, December 1982, p. 4. Mann, E r i c a . "An I n n o v a t i v e Approach t o P l a n n i n g i n Rural . Areas: The S e l f - H e l p Layout." E k i s t i c s 46, no. 279 (n.d.);388-392. Marantz, Janet; Case, K a r l E., I I ; and Leonard, Herman B. D e s c r i m i n a t i o n i n Rural Housing. Lexington, Mass.: Lexington Books, 1976. Marcuse, P e t e r . "The Determinants of Housing P o l i c y . " Papers i n P l a n n i n g (PIP), v o l . 22, June 1980. Graduate School of A r c h i t e c t u r e and P l a n n i n g , Columbia U n i v e r s i t y . Matthews, Deonald, and Smith, Lawrence. Report on Canada Mortgage and Housing C o r p o r a t i o n . Ottawa, O n t a r i o : Task Force on CMHC; p u b l i s h e d under the a u t h o r i t y of the m i n i s t e r r e s p o n s i b l e f o r CMHC, October 1979. McGuigan, P e t e r . (1972):49-.  "No Wood i n C a i r o . "  H a b i t a t 22, no. 2  Monterey Domes, Inc. Monterey Domes Geodesic Homes f o r Living. R i v e r s i d e , Ca.: Monterey Domes, Inc., n.d. (Brochure.) N a t i v e C o u n c i l of Canada. B r i e f , Submitted t o the Honorable R. S. Bashford, PCMP, M i n i s t e r of S t a t e f o r Urban A f f a i r s , Board of D i r e c t o r s of the N a t i v e C o u n c i l of Canada. Ottawa, O n t a r i o : n.d.  277 Nutt-Powel1, Thomas; F u r l o n g , M i c h a e l ; and P i n k i n g t o n , Christopher. The S t a t e s and Manufactured Housing. N.p.: June 1980. Oklahoma :State U n i v e r s i t y of a g r i c u l t u r e and A p p l i e d S c i e n c e . Rural Housing i n G a r f i e l d County, Oklahoma, a Study of Process, Images and Values, by James Montgomery, Sara S u t t e r Smith, and Marie Nygen. S t i l l w a t e r : Oklahoma State U n i v e r s i t y of A g r i c u l t u r e and A p p l i e d S c i e n c e , School of Home Economics, Department of Housing and Design, August 1, 1959. Owens/Corning F i b e r g l a s s . B a r r i e r s t o Greater Sales Growth, An I n v e s t i g a t i o n of Consumer S h e l t e r Decision-Making As I t Impacts the Mobile Home I n d u s t r y . Pan Adobe Cedar Homes. n.d.  Pan Adobe brochure.  Renton, Wash.:  Parna, R. P.; Angel, S.; and DeGorda, J . H. Low Income H o u s i n g — T e c h n o l o g y and P o l i c y . V o l . 1: Proceedings of the I n t e r n a t i o n a l Conference on Low Income Housing-Technology and P o l i c y . Bangkok: A s i a n I n s t i t u t e of Technology, n.d. Pre-Cut I n t e r n a t i o n a l . K i t home brochure. Wash.: Pre-Cut I n t e r n a t i o n a l , n*.d.  Woodinville,  Qadeer, Mohammad. "Issues and Approaches of R u r a l Community Planning i n Canada." Plan Canada 19 (June 1979):106-121 . Rabb, J u d i t h , and Rabb, Bernard. Good S h e l t e r , a Guide t o Mobile, Modular and P r e f a b r i c a t e d Houses I n c l u d i n g Dome. New York: Quadrangle, 1975. Rawlings, Roger. "Anyone Can B u i l d a Home." S h e l t e r , A p r i l 1983, p. 22.  Rodales  New  Real E s t a t e C o r p o r a t i o n . Costs of Sprawl--Environmental and Economic Costs of A l t e r n a t i v e R e s i d e n t i a l Development P a t t e r n s a t the Urban F r i n g e . Prepared f o r CEO HUD, and EPA. Washington, D.C.: Government P r i n t i n g O f f i c e , A p r i l 1974. /f  R e m i l l a r d , Andrew. "Mobile Home Image: Study of Some Design D e t a i l s . " Unpublished t h e s i s , U n i v e r s i t y of B r i t i s h Columbia, Vancouver, 1975. Roberts, John, and Grey, George. Mobile Homes and Mobile Home Parks i n Dane County: A Report of Responses from Mobile Home R e s i d e n t s and L o c a l Government O f f i c i a l s . N.p.: n.p., February 1974.  278 Rosenham, Tim. Skagit S e l f - H e l p . Washington, 1981.  Interview, Mt. Vernon,  Ryan, M i c h a e l , and A s s o c i a t e s . "Rural and Remote Housing i n B r i t i s h Columbia: A Program E v a l u a t i o n . " Unpublished paper, n.d. Schoenauer, Norbert. "Fermont—A Design f o r S u b - A r c t i c Living." H a b i t a t 21, no. 3 (1978), p. 17. S k a g i t County S e l f - H e l p Housing. A Grant P r o p o s a l , 19811983. Mt. Vernon, Wash.: Skagit County S e l f - H e l p Housing, n.d. Sonoma County. Department of P l a n n i n g . " S t a f f Report." Prepared f o r the Sonoma County Planning Commission. Santa Rosa: March 19, 1981. (Xeroxed.) Swanson, B e r t , and Cohen, Richmond. The Small Town i n A m e r i c a — A Guide f o r Study and Community Development. R e n s s e l a e r v i l l e , N.Y.: The I n s t i t u t e on Man and S c i e n c e , 1976. T i m b e r l i n e Geodesic Homes, n.d.  (Brochure.)  Topsider Homes. The Home That Is a V a c a t i o n . N.C.: T o p s i d e r Homes, n.d. (Brochure.)  Yadkinville,  Tremblay, Kenneth, J r . ; D i l l m a n , Don; and D i l l m a n , Joyce. Housing S a t i s f a c t i o n and P r e f e r e n c e s of Washington R e s i d e n t s , a 1977 Statewide Survey. Bellingham: Washington S t a t e U n i v e r s i t y , C o l l e g e of A g r i c u l t u r e Research Center, 1977. Trend, M. G. Housing Allowance f o r the Poor. Colo.: Western P r e s s , 1978.  Boulder,  Turner, John F. C , and F i c h t e r , Robert, eds. Freedom to B u i l d , Dweller C o n t r o l of the Housing Process. New York: Macmillan, 1972. Turner, John F. C. Housing by People Towards Autonomy i n . B u i l d i n g Environments. New York: Pantheon, 1976. United Community S e r v i c e o f the Greater Vancouver Area. P o l i c y and Research Department. Mobile Home L i v i n g i n the Lower Mainland. Vancouver, B.C.: United Community S e r v i c e o f the Greater Vancouver Area, January 1971. U.S.  Department o f A g r i c u l t u r e . Economic Research S e r v i c e . Status o f R u r a l Housing i n the United S t a t e s , by Ronald Byrd, B e v e r l y L u c i a , and Ann Simmons. Washington, D . C : Government P r i n t i n g O f f i c e , 1968.  279 U.S. Department of A g r i c u l t u r e . Economic Resource S e r v i c e . Rural Housing: Trends and P r o s p e c t s , by Robert Freeman. Washington, D.C.: Government P r i n t i n g O f f i c e , 1970. U.S. Department of Housing and Urban Development. Affordable Housing. HUD-623-PDR(3). Washington, D.C.: Government P r i n t i n g O f f i c e , June 1983. U.S. Department of Housing and Urban Development. Annual Report, 1978. Washington, D.C.: Government P r i n t i n g O f f i c e , 1978. U.S. Department of Housing and Urban Development. Departmental Programs, 1978-80., Washington, D.C.: Government P r i n t i n g O f f i c e , 1980. U.S. Department of Housing and Urban Development. Developmental Needs of Small C i t i e s , by P a t r i c i a H a r r i s . Washington, D.C.: Government P r i n t i n g O f f i c e , n.d. U.S. Department of Housing and Urban Development. sheet. November 3, 1983.  Fact  U.S. Department of Housing and Urban Development. The J o i n t Venture f o r A f f o r d a b l e Housing. HUD-624-PDR(2). Washington, D.C.: Government P r i n t i n g O f f i c e , 1983. U.S. Department o f Housing and Urban Development. Putting the Roof on Housing C o s t s . Washington, D.C.: Government P r i n t i n g O f f i c e , n.d. U.S. Department of Housing and Urban Development. Report of the Task Force on Rural and Non-Metropolitan Areas. Washington, D.C.: Government P r i n t i n g O f f i c e , J u l y 1978. U.S. Department of Housing and Urban Development. Statistic a l Yearbook, 1973. Washington, D.C.: Government P r i n t i n g O f f i c e , 1971. U.S. Department o f Housing and Urban Development. Housing and Home Finance Agency, O f f i c e of Program P o l i c y . The U n f i n i s h e d but H a b i t a b l e Home, by W i l l i a m Shenkel. Washington, D.C.: Government P r i n t i n g O f f i c e , 1965. U.S. Department of Housing and Urban Development. Office of P o l i c y Development and Research, D i v i s i o n of Housing and Demographic A n a l y s i s . HUD Condominium/Cooperative Study. V o l . 1: N a t i o n a l E v a l u a t i o n , by C l a r a H i l l s . Washington, D.C.: Government P r i n t i n g O f f i c e , October 1975.  280 U.S.  Department of Housing and Urban Development. Office of P o l i c y Development and Research, D i v i s i o n of Housing and Demographic A n a l y s i s . 1980 N a t i o n a l Housing Product i o n Report. Washington, D.C.: Government P r i n t i n g O f f i c e , February 1980.  U.S.  Department of Housing and Urban Development. Office of P o l i c y Development and Research. Proceedings of the HUD N a t i o n a l Conference on Housing Costs: Reducing the Development Costs of Housing A c t i o n s f o r State and L o c a l Governments. Washington, D.C.: Government P r i n t i n g O f f i c e , 1979.  U.S.  Department of Housing and Urban Development. Office of P o l i c y Development and Research. The Tenth Annual Report on the N a t i o n a l Housing Goal. Washington, D.C.: Government P r i n t i n g O f f i c e , 1977.  U.S.  Department of Housing and Urban Development and U.S. Department of Commerce. Annual Housing Survey, Urban and Rural Housing C h a r a c t e r i s t i c s . Washington, D.C: Government P r i n t i n g O f f i c e , 1977.  U.S.  Housing A s s i s t a n c e C o u n c i l . Housing Programs f o r Rural America. Washington, D.C: Government P r i n t i n g O f f i c e , n.d.  U.S.  Housing A s s i s t a n c e C o u n c i l . Looking f o r a Home. Washington, D.C: Government P r i n t i n g O f f i c e , n.d.  U.S.  O f f i c e of Economic Opportunity and Rural Housing. A Report on OEO's Rural Housing A c t i v i t i e s and A c h i e v e ments, as I n d i c a t e d by Study of F i v e S e l e c t e d Rural Housing Development C o r p o r a t i o n s . Washington, D . C : Government P r i n t i n g O f f i c e , n.d.  Vischer, Jacqueline. Rural R e s i d e n t i a l S u b d i v i s i o n s i n B r i t i s h Columbia. V i c t o r i a , B.C.: M i n i s t r y of M u n i c i p a l A f f a i r s , 1981. Washington. Housing: The Problems i n Washington S t a t e . Olympia: Washington State Planning and Community A f f a i r s Agency, L o c a l Government S e r v i c e s D i v i s i o n , 1980. Washington. Department of Community Development, O f f i c e of the Governor. Demand f o r Housing Units i n the State of Washington, 1972-1980: An E s s e n t i a l Component of Housing Need. Olympia: Washington, Department of Community Development, 1973. Watkins, A. M. The Complete Guide t o Factory-Made Housing. New York: E. P. Dutton, 19 80.  281 Wexler, Harry, and Peck, R i c h a r d . Housing and L o c a l Government; A Research Guide f o r P o l i c y Makers and Planners. Lexington, Mass.: Lexington Books, 1975. Whatcom County. "Whatcom S e l f - H e l p Housing." Wash.: Whatcom County, 1980. (Unpublished  Linden, grant.)  Whatcom County C o u n c i l of Governments. O v e r a l l Economic Development Plan and Comprehensive Economic Development S t r a t e g y . Bellingham, Wash.: Whatcom County C o u n c i l of Governments, 1979. W i l l i a m s , H. A. "Small Towns Look t o the Future; S t r a t e g i e s f o r Growing Up Small." Sma11 Town 2 (July/August 1980). Wing, Kenneth, and M e l n i k e r , Nancy. E v a l u a t i o n of Maine's Improving Rural Homes P r o j e c t . Orono: U n i v e r s i t y of Maine, 1977. Wolman, Harold. Housing and Housing P o l i c y i n the U.S. and the U.K. Lexington, Mass.: Lexington Books, n.d.  APPENDIX  SAMPLE QUESTIONNAIRE General 1.  Information  Please c i r c l e the c a t e g o r y ( i e s ) k i t home. Pre-Gut Log  Panel  Pre-Cut S t i c k  Panel and Pre-Cut Comb. Please d e s c r i b e simply ( i . e . , roof, f l o o r s ) .  3.  t h a t best d e s c r i b e  Other  your  Modular  (list)  what i s i n c l u d e d i n your product  L o c a t i o n of f a c t o r y  O r i g i n of lumber_  Number of years i n business  Owner-Building/Financing 4.  Do you o f f e r i n s t r u c t i o n f o r those who wish t o c o n s t r u c t t h e i r own home? (Please c i r c l e . ) Yes  5.  Information  No  Many i n d i v i d u a l s wish t o do p a r t i f not a l l of the work i n c o n s t r u c t i n g t h e i r home. What percentage of your customers would you c l a s s i f y i n the f o l l o w i n g c a t e g o r i e s ? % F u l l owner-builders (do a l l or most of the construction % P a r t i a l owner-builders % Owners a c t i n g as general c o n t r a c t o r s % No involvement with c o n s t r u c t i o n , c o n t r a c t o r built % Other ( s t a t e ) • Do you o f f e r any f i n a n c i n g a i d ? Yes  circle)  No  I f yes, please Contractor  (Please  circle  contracts  Hints, r e f e r r a l s  type(s): D i r e c t lending  Bank arrangement  Other  Please e x p l a i n b r i e f l y the f i n a n c i n g arrangements or a i d : 283  284 7.  What percentage of your customers pay cash f o r your home? (not f i n a n c e d )  8.  How do the o t h e r s f i n a n c e t h e i r home? the percentage. % % % % % _% % % %  Please estimate  Dealer/mfg. f i n a n c e d Savings and loan Commercial banks Mutual savings banks Mortgage companies FHA VA Farmers Home Other ( l i s t )  What minimum down payment (percent) i s t y p i c a l loan on one of your homes? (please c i r c l e ) 5% 10.  10%  15%  20%  25%  30%  %  Under $10,000 $10,000-$20,000 $20,000-$30,000 $30,000-$40,000 $40,000 and over  Does t h i s p r i c e i n c l u d e labor? Yes  (Please  circle.)  No  What percentage of your customers, would you e s t i m a t e , are i n the f o l l o w i n g income c a t e g o r i e s ? % % % % % % %  12.  Other  Of the homes you've s o l d t h i s year, p l e a s e estimate how many you have s o l d i n each p r i c e range (FOB) ( K i t p r i c e ) % % % % %  11.  for a  Under $12,000 $12,000-$15,000 $15,000-$20,000 $20,000-$25,000 $25,000-$30,000 $30,000-$35,000 Over $3 5,000  The f o l l o w i n g l i s t s t a t e s s e v e r a l p o t e n t i a l o b s t a c l e s or problems t o the development of your i n d u s t r y . Please r a t e t h e i r importance by p l a c i n g an X i n the a p p r o p r i a t e column.  285 Most Important Interest  Moderately Important  Not Important  rates  Lack of government financing a i d Lack of government support t o owner-builders Mortgage  requirements  L o c a l government opposition Building approval/ delays Unstable lumber p r i c e s High overhead c o s t s Marketing  costs/problems  Property tax c o s t s Other 13.  (list) What i s the c u r r e n t s i t u a t i o n of your company compared with the l a s t few years? (Please c i r c l e . ) About the same. Hurting  S e l l i n g more.  Selling  fewer.  greatly.  14.  Approximate  number of homes s o l d t h i s year l a s t year  15.  Number of homes s o l d i n Washington S t a t e ( t h i s year) . Number of homes s o l d i n B r i t i s h Columbia year) .  16.  (this  Comments or suggestions which c o u l d a i d i n the growth and development of your i n d u s t r y . »  

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