Manufactured homes appear to be making a comeback

Mobile homes and the parks where they reside often get a bad rap for being old and ramshackle.

But manufactured housing has come a long way.

You might drive by a new Phoenixarea manufactured home with a garage, porch and pitched roof and not realize it’s a descendant of the trailer.

And don’t forget, trendy tiny homes fit into this category as well. Most tiny homes are built on an assembly line.

Factory-built houses, including trailers and mobile homes, are far more popular and prevalent in the Valley than in many other major metro areas.

Nearly 85,000 manufactured homes dot the Phoenix area, and many are the least expensive housing option in the Valley for residents.

But the typically unsubsidized affordable housing is starting to dwindle, particularly in popular Valley infill locations.

Rising home prices and rents during the past few years have made the parks more popular with residents, but it’s also made the land more popular with developers who want to build more expensive housing.

A movement is underway in metro Phoenix to add manufactured homes to existing neighborhoods and create new affordable communities that aren’t on the fringes.

“Manufactured homes have evolved so far and can be an important part of the answer to our affordable housing dilemma,” said real-estate analyst Mark Stapp, director of the master of real-estate development program at Arizona State University. “But there’s still a silly notion about the quality of the homes. How we can get past that is what we need to work on.”

A room full of Arizona housing advocates, developers, lenders and realestate agents recently turned out for a conference about changing the thinking on affordable manufactured housing.

The event was put together by Stapp with ASU’s W.P. Carey School of Business, the Arizona Department of Housing and the Arizona Department of Real Estate.

Carol Ditmore, director of the

state’s housing department, said that although some people are still skeptical about manufacturing housing, there’s a great opportunity to make it an affordable option in Arizona’s new-home subdivisions and infill projects.

A new manufactured home, including the lot, can cost about $100,000 less than a house built on the lot, according to industry estimates.

“The most efficient way to build a home is in a factory,” Kevin Clayton, CEO of the U.S. biggest manufactured house builder Clayton Homes, said. “We don’t build cars outside.”

Clayton, whose company is owned by Warren Buffet’s Berkshire Hathaway, said that only about two 30-gallon containers of waste are hauled away after manufacturing a home.

The manufactured-housing industry is looking for a better way for people to differentiate new modern factory-built homes from the trailers of the ’50s and ’60s.

Instead of prefabricated, the industry is considering calling them “prefabulous,” Clayton said.

New manufactured homes don’t look like the rectangular tin trailers from half a century ago, but the houses still get opposition from neighbors.

“There’s some public perception carryover to new manufactured housing,” said Alan Stephenson, Phoenix’s planning and development director. “Some love it, and some not so much.”

In 2010, Phoenix changed its guidelines to make it easier to bring manufactured homes to communities.

But higher land costs and zoning still make manufactured homes more expensive for infill projects, said real-estate attorney Manjula Vaz with Gammage & Burnham.

Also, she said cities want higherdensity infill housing, particularly next to light rail, and manufactured home parks are not necessarily high density or what the cities want.

Financing has also been a problem for manufactured housing. But mortgage giants Fannie Mae and Freddie Mac said they will start backing loans for the homes if they have characteristics like regular houses built on site.

Clayton said to meet those guidelines, homes should have garages, covered porches, drywall, wood cabinets, pitched roofs and high energy efficiency.

Those features and the new loans could make the houses more popular because it will be easier to buy and resell them. That means homeowners can build equity.

A record $250 million has been spent by investors on at least 45 metro Phoenix mobile-home parks so far this year. The parks are both new and old, and most are located near freeways or the light rail.

That’s more than double the money investors poured into buying Valley mobile-home parks during all of 2015, the second-biggest year ever for sales.

I crunched the real-estate data for that story this year and was invited to speak about it at the recent conference.

I found investors like older mobilehome parks for two reasons.

Manufactured homes parks are stable and even recession-proof investments. The average monthly cost to live in a mobile home in the Valley is $618, compared with almost $1,000 to rent an apartment.

And land most of the older parks are located on is rapidly growing in value. In 2015, residents of south Scottsdale’s Wheel Inn Ranch RV and Mobile Home Park received eviction notices after it was sold for $3.6 million and then renovated into a higher-end RV park.

The park that opened in 1958 was sold again this year to homebuilder Taylor Morrison for almost $8 million.

The number of trailers, mobile homes and manufactured houses in metro Phoenix has fallen by more than 5,000 since 2000, while the area’s population has soared.

But the demand for the affordable homes hasn’t waned.

Go to nearly any manufacturinghousing community located within in the central Valley, and you will find a waiting list for new residents.

Most of metro Phoenix’s much more expensive new apartments don’t have waiting lists.