Manufactured Housing as an Affordable Housing Solution
In Delaware, manufactured housing is a sector that has historically represented a form of affordable housing of choice for people.
However, the affordability of manufactured housing has increasingly been challenged by factors such as land prices, form of tenure, and financing.
On one hand, advances in design, construction, quality, and cost savings (over site‐built housing) make manufactured housing an unsubsidized, affordable housing choice for thousands of Delawareans. On the other, the highly vulnerable nature of manufactured home households and communities – due to leased land, reduced bargaining power, lack of stability, documented abuse, poor or uncoordinated regulation, the relative immobility of the product once set, and higher-value land options – makes manufactured housing in Delaware a precarious source of affordable housing, especially as homeownership for low‐income households (typically below 80% of AMI).
A 2008 study by the Delaware State Housing Authority (DSHA) found average income for owners of manufactured homes to be “well below income for all owner‐occupied housing units ‐ $39,110 compared to $68,167 in the 2000 Census” and average income of households renting manufactured homes also below “incomes of all renter households, at $30,269 compared to $38,246 in 2000.” The study estimated 41,000 manufactured housing units here, 10% of the state’s housing stock and home to approximately 70,000 Delawareans. At that time, manufactured housing in Sussex County then comprised over 60% of the manufactured homes in the state. The map below displays recent census data on manufactured housing (American Community Survey, 2007-2011) for Delaware.
Records from the Delaware Manufactured Home Relocation Authority indicate at least 23,000, or 56% of the manufactured homes in the state are on leased land (compared to national figures of 30 to 35%). Households in manufactured housing are predominantly white (85% in Delaware as of 2005 ‐ 2007), more likely to be in smaller households, and slightly more likely to be older households. As of the 2000 Census, 41% of householders in manufactured homes in Delaware were over 55. Manufactured housing exists predominantly in the more rural areas of each of the three counties.
Titling and Financing
In Delaware, title to a manufactured home is initially in the form of a certificate issued by the Delaware Department of Motor Vehicles. As a result, manufactured homes are not considered real property until the home has been set on a permanent foundation on fee simple land, whereupon the certificate is surrendered.
This results in manufactured home being treated as “chattel” property in most cases and ineligible for conventional home financing. A large proportion of manufactured homes reside on leased land in investor-owned communities (IOCs). The owners of these homes, in addition to the titling and financing issues, suffer from the insecurity of land rent increases.
Recently, manufactured home communities in Delaware have begun exploring the concept of resident-owned communities (ROCs), with the first ROC in Delaware having successfully been started at Minquadale Village in New Castle County. ROCs are organized cooperatively through bylaws and articles of incorporation, with each homeowner receiving a certificate of membership.