PITTSFORD, Vt. — At Factory Direct Homes here in central Vermont, Tony Flanders stepped through the front door of a gray double-wide mobile home and pointed at the living room window to his left.
“It’s all about insulation,” said Flanders, a housing consultant at the company, who was bundled in a dark-blue parka to withstand the frigid December temperatures.
But even this fancy double-wide couldn’t be sold in Vermont without a federal exemption, because it doesn’t meet state housing requirements. The mobile homes in which 22 million Americans live — also known as manufactured houses — are governed by federal requirements that haven’t changed in nearly 30 years.
Spurred by a court order, the Biden administration is proposing long-awaited updates to energy-efficiency standards for manufactured homes that it projects will save mobile-home owners thousands of dollars and prevent millions of tons of greenhouse gas emissions from entering the atmosphere in the coming decades. But the new standards, due in May, have also sparked a fierce debate about costs, equity and the future of manufactured housing.
The changes that the Biden administration has put forward include updates to insulation and windows, as well as heating and cooling systems.
Some say the Energy Department’s plan goes too far. “We believe in the importance of energy efficiency,” said Lesli Gooch, CEO of the Manufactured Housing Institute, a trade organization. “We just don’t think that this proposal is going to have the desired impact. And in fact, it’s going to have a negative impact on the supply of affordable, manufactured housing.”
“To us, the primary metric needs to be the upfront cost of the home,” added Mark Weiss, president of the Manufactured Housing Association for Regulatory Reform, another industry trade association. “Our concern is that these new requirements are going to make them substantially more costly.”
Others argue that energy savings and better quality homes with higher resale values would cover any extra costs. They would like to see the Energy Department set even stricter standards.
“There are a lot of low-income people in these homes and the impact on them is exactly the right question,” said Lowell Ungar, director of federal policy at the American Council for an Energy-Efficient Economy. “But putting them in homes in which they aren’t going to be able to afford the energy bills for the next few decades is not the solution to that problem.”
Many advocates, however, haven’t been waiting for government or industry fixes. They are already building workarounds — from weatherization initiatives and zero-energy modular homes to grant programs and improved mortgage products — that can help residents lower their utility costs and combat climate change.
Manufactured houses are built in a factory, hitched to a truck and shipped all over the country. The concept dates back to the traveling trailers that gained popularity throughout the early 1900s. By mid-century, they had became larger, more permanent and equipped with indoor toilets. In recent years, Americans have been buying about 100,000 manufactured homes annually.
Because it’s such an interstate business, manufactured housing has long been regulated federally. Congress gave that authority to the Department of Housing and Urban Development in 1974 and its code for manufactured housing went into effect two years later. The last significant update to the code took effect in 1994.
Manufactured homes use less overall energy because they are relatively small. And nearly a third of such houses shipped in the United States in 2020 were Energy Star certified — according to the Systems Building Research Alliance, a nonprofit research organization that supports the factory-built housing industry — including almost all the homes Flanders sells. Some go beyond Energy Star.
But even top-of-the line models don’t always meet the local code for site-built homes. And manufactured houses lag behind in other measures of efficiency as well.
In the most recent residential energy consumption survey by the U.S. Energy Information Administration in 2015, mobile home residents were more likely than single-family home residents to report having too many drafts in the winter and single-pane (versus double or triple pane) windows. And mobile homes consumed about 35 percent more energy per square foot than detached single-family homes.
Congress has been attempting to improve on the HUD standards for more than a decade. In 2007, it passed a law that gave the DOE until 2011 to release updated efficiency requirements for manufactured houses. But that never happened. Obama administration officials started the process but did not finish in time, and the Trump administration withdrew the proposal.
In 2017, the Sierra Club environmental organization sued the Trump administration to force the issue. The court ordered the DOE to finalize a rule by May 16, 2022, and it released a proposed rule last summer, along with updated data in the fall and a draft environmental impact statement this January.
While the DOE proposal considers various alternatives to the rule, it features a two-tiered strategy in which manufactured houses with a sales price of under $63,000 are subject to less stringent requirements. The department designed the lower level — Tier 1 — so that energy-efficiency improvements don’t raise the cost of a home by more than about $750, on average. It estimates that Tier 2 would increase the price of a home by about $3,900 to $5,300, depending on its size.
Energy savings would offset these costs in 3.5 to 11 years, the department calculates. And, over 30 years, the upgrades would cumulatively avoid 86.5 million metric tons of carbon dioxide emissions, which is equal to the annual operations of roughly 22 coal-fired power plants.
The government’s latest environmental impact statement is subject to public comments until Feb. 28 and is likely to draw a slew of responses.
“I hate Tier 1. I think it’s a real equity issue,” said Stacey Epperson, founder of Next Step Network, a sustainable housing nonprofit. “These cheaper homes are shipped into the poverty regions.”
Emanuel Levy, executive director of the Systems Building Research Alliance, compares the changes to auto-fuel efficiency standards. “What’s happening is as if the miles per gallon [in cars] were being raised to 100,” he said. “You’re cutting out the affordable buyers from the market.”
Part of the issue is how manufactured homes are financed.
Mobile-home-park residents often buy their houses but lease the land. And leased land isn’t always eligible for traditional mortgages, which can push home buyers into what are known as chattel loans. Those generally come with higher interest rates and shorter terms, making borrowing for home improvements such as energy-efficiency upgrades more expensive.
The DOE estimated that the cost increase of its proposed changes would result in around 1,500 fewer homes shipped each year due to buyers’ price sensitivity. But that’s not something Flanders, the Factory Direct Homes consultant, is particularly worried about.
He said his customers are already choosing whatever efficiency upgrades are available, and that regulation could push reluctant manufacturers to go even further with their offerings.
An updated code could also help weed out lower-efficiency or lesser-quality manufactured homes on the market. Although Flanders says he avoids selling those models because they can lead to service calls and unsatisfied customers, he still has to compete against them.
“There are still dealers that are really unscrupulous … They’re just trying to get the houses pumped out and make some money,” he said. “We’re not on a level playing field.”
Peter Schneider is a senior consultant with the Vermont Energy Investment Corporation (VEIC), a nonprofit that designs and administers decarbonization and energy-efficiency programs around North America, including in Vermont. He first started trying to make manufactured housing more efficient after Tropical Storm Irene hit Vermont in 2011. Among the damaged property were 438 manufactured houses — 129 of which required complete demolition.
When it came time to rebuild, Schneider wanted to find replacement homes that at least met local building and efficiency standards. “I called all over,” said Schneider, who tried companies in New York, Pennsylvania and as far away as Indiana. He had no luck.
New York was in a similar predicament with its Parks of the Future Program. “We had real trouble finding anyone who could produce energy-efficient manufactured homes,” said Dina Levy, senior vice president at the New York State division of homes and community renewal.
“There’s really an unwillingness in this industry to build anything beyond what they’re required to build,” Schneider said. “They’ve been stuck building these homes that meet a standard that was developed nearly 30 years ago.”
But Schneider, Levy and others have been finding ways around this roadblock. “We are forced to be creative,” he said.
For folks already living in a manufactured home, Schneider suggested an energy-efficiency audit as a great first step. An audit helps homeowners identify areas for possible improvement — whether that’s switching to higher efficiency lightbulbs, doing more regular heating system maintenance or installing better air-sealing and insulation.
The DOE estimates that weatherization assistance programs can save homeowners hundreds of dollars annually. And there are often subsidies available for those who are income-qualified.
An energy audit makes sense for those in newer manufactured homes as well, said Schneider, who is trying to develop a formalized program for retrofitting new Energy Star-certified manufactured homes to meet local code. Manufactured-home shoppers should also consider a new modular mobile home.
Modular and manufactured homes are both built in a factory and are very similar housing types. “Visually, manufactured and modular homes don’t appear that different from one another,” according to an article on the website of factory-built home builder Clayton. “The main difference between manufactured and modular homes is the codes they are built to.”
Because modular homes must meet local, rather than HUD codes, they are generally more energy efficient. When Schneider couldn’t find a manufactured-home company that would meet Vermont code, he turned to a modular-home company for help. The result was what are called “VerMods.” With 10-inch thick walls, triple-pane windows and roof-mounted solar panels, they go far beyond local code and are designed to create as much energy as they use. There are now a couple hundred of them around the state.
“This is where we need to go in terms of decarbonization,” said Schneider, standing outside a VerMod park in Vergennes, Vt., the sun beaming down. There are no fossil-fuel connections on-site.
In New York, Levy’s program is going the modular route as well. The State of New York Mortgage Agency also developed a lending program that allows purchasers of manufactured or modular homes to qualify for traditional financing, even on leased land. The purchase limit is $50,000 higher for those buying at least Energy Star model homes.
And efficiency can certainly be more expensive upfront. VerMods cost as much as $200,000 — which can be more than twice the price of the Energy Star manufactured homes that Flanders sells. Grants and other incentives help subsidize a large portion of the difference. But the broader hope, Schneider said, is that paying less in utilities allows people to put more toward mortgages that build equity.
As of 2021, VEIC calculated that the owners of an Energy Star manufactured home in Vermont would pay about $747 a month in housing costs: $500 in mortgage and $247 in utilities. A zero-energy modular owner would pay around $696 a month, but only $25 of that would be utilities.
Anne Martell, a VerMod owner in Huntington, Vt., said she hardly ever gets an energy bill. “We don’t have an electricity bill until around January or February,” said Martell of the cold winter months. In total, she says she pays about $500 a month toward the mortgage and $300 per year in utilities. “It’s great.”
Schneider emphasizes that the VerMods can also help insulate their owners from future increases in energy prices. “The last people who need to be victims of our energy prices doubling overnight because of something are our disadvantaged communities or our more vulnerable homeowners,” he said.
Not everyone is happy with their VerMod. Flanders says he’s had customers who left VerMods after the homes proved less affordable than expected. But he’s supportive of the modular concept generally. The modular houses he sells cost about $40,000 more than a similarly sized Energy Star-certified manufactured house. And, despite the added costs, he said that in the past decade, modular has gone from making up less than 10 percent of his business to roughly half.
The VerMods experiment has drawn interest from across the country. Schneider says his organization is working on zero-energy home projects with groups in Massachusetts, Maine, Colorado and Delaware, among other locales.
But some trailer parks only allow manufactured homes rather than modular ones. So the ultimate solution, Schneider said, is still to get manufactured-home builders to move beyond where they are right now — a process he hopes federal regulators can kick-start.
“We are demonstrating a path for builders,” he said. “But we need to bring the standard up so it’s equivalent with our standard for modular and site-built homes.”
Flanders said he wants his manufactured-home customers to have more of the same choices as those purchasing modular homes. For example, the inch of foam insulation around the outside of modular houses not only cuts down on energy use but, he says, increases the longevity, durability and ultimately value of the home. It’s well worth the several thousand dollars, he said, but the manufactured-house companies he works with don’t offer that upgrade.
“Stuff like that makes common sense,” Flanders said. “You can never have enough insulation.”