The president of the Manufactured Housing Institute this week challenged the findings and conculsions of a recent Federal Trade Commission report that says warranty service problems plague the mobile home industry.
Walter L. Benning, defending the record of mobile homes, contended that the FTC report is based on "totally unvalidated" letters received from 2,000 consumers between 1972 and 1976.
"There are 5 million mobile homes in America and they based their case on 2,000 letters," Benning said. "We discovered 500 of those letters were complaints about motor homes (recreational vehicles), not mobile homes."
Noting that the report recommends new federal regulations for the industry, Benning said such a move would add an unnecessary level of bureaucracy that eventually would be passed on to consumers in the form of highest costs.
FTC staff member and presiding officer Raymond L. Rhine said this week that the report is an interim one that still must be reviewed by the staff attorneys and the public. He said he stands by its findings. Rhine said the report was based on thousands of letters from consumers, consumer group, and such people are state attorneys general and their assistants, as well as testimony at hearings. "We looked for a pattern among those complaints," Rhine said.
Benning's remarks were made at a press conference held this week in Washington on the mall in a huge, sunny yellow and white striped tent across the street from the Air and Space Museum. The press conference was held to tout the growing mobile home industry as America's answer to the shortage of housing for moderate-income families.
It also was held to help sound the death knell for the term "mobile home" -- one that usually conjures up images ot tin and tacky boxes on wheels huddled together in parks that most single-family homeowners don't want near them. The term the industry wants to replace it is "manufacutred housing," too new a phrase to conjure up any image.
Statistics from the industry show that less than 2 percent of the country's manufactured homes are moved once they are set up on their sites. Hence, they aruge, "mobile homes" and "trailer" don't apply anymore.
For the occasion, three assembly-line houses were driven in from Indiana, more than 700 miles away. The most opulent was a three-bedroom, two-bath mobile home with a shingle roof, a wood-burning fireplace, and a beamed cathedral ceiling. It cost $28,900, including the furniture and installation costs. Carpeted and spacious, it might not satisfy a restorer looking for old-world, Victorian charm, but it wasn't very different from homes in some moderate-income subdivisions in Washington's outer suburbs.
And for many, it may be the only house afforable in the 1980s.
Rep. Les AuCoin (D-Ore.), who chaired the House Banking committee's task force on homeownership, said at the press conference, "We are fundamentally up against an affordability crisis." Single-family home prices averaged $59,00 last year and are expected to average $90,000 by 1990, he said. "Only three out of every 10 Americans can buy into housing."
Along with changes in look and style have come differences in the profile of the mobile-home buyer. According to Benning, a third of mobile homes now sold go to families buying their first home, headed by a person 24 to 27 years old, married, with one child. Another third are sold to people over 55, in past years the largest group of buyers.
A family buying a typical mobile home, with a $2,000 down payment and conventional financing for 20 years, would have a mortgage payment of about $326 a month, Benning estimated.
Industry officials and insurers said resale value also appears to have increased in recent years. California trailers have gone up the most in price, but appreciation is now 10 percent a year in states like New Jersey, Florida, and Arizona, according to the executive vice president of the country's largest mobile home insurer.
Industry officials noted that housing legislation currently in congressional conference would increase the terms of FHA financing from 23 to 28 years. The number of FHA- and VA-insured loans for the purchase of mobile homes has increased dramatically this year, Benning said.
In most states, mobile homes now are assessed as real property rather than personal property, requiring owners to pay property taxes that can be deducted from their income taxes, according to Jack Wynn of the Manufactured Housing Institute. He said the industry is working with states to try to make the adjustment as painless and inexpensive as possible for people who bought their homes as personal property and now find themselves getting real estate tax bills.
Lisa Drake, the institute's consumer affairs advisor, noted that about 49 percent of factory-built homes now go into planned developments of parks, and the rest are set up on individual lots. Most mobile homes are about 14 feet wide and 70 feet long, she said and about five of the single-section homes can be placed on one acre of land. These days, you can even get split-level and two-story mobile homes, she said.
Normally, she added, putting up base siding and landscaping around a mobile home would add about 15 percent to the purchase price. If a full basement is added, it would cost an extra 25 percent. Delivery and set-up usually are included in the purchase price, she said.
Congress created the first mandatory building code and enforcement program for mobile homes in 1974, and in 1976, HUD adopted construction standards and regulations. Based on 1978 statistics, mobile home accounted for 81 percent of all new single-family homes with price tags under $35,000. Last year retail sales reached $4.30 billion. The industry estimates that more than 10 million Americans live in mobile homes, with an average selling price of $15,925.