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SANTA ROSA, Calif. — The new houses going up on Acacia Lane look a lot like one-story versions of the taller houses on the other side of the street. The same California Craftsman look; almost identical plank siding; a similar tasteful yet cheery color palette.
But the new houses were built in a factory, then plopped down on this suburban street by a crane.
For decades, manufactured housing has mostly been limited to trailer parks and rural properties. Now, a few developers are pitching factory-built homes as the way of the future, trying to sell higher-quality homes in a new context: the typical American suburban subdivision.
"Because of labor, because of immigration, because it's so hard to build things on-site - you see some of these intractable problems of how very slow site-built has become. [So developers] only build very slow, luxury products," said Jenna Louie, the head of strategy and policy at the developer Villa. She walked around her company's neighborhood in progress recently, watching landscapers plant greenery around the new houses. "You can't build the way you've always built and hope to get different results," she said.
Stigmatized as low-quality, less-safe housing for the poor, factory-built housing was banned for decades by many towns and cities. But as soaring home prices prompt a search for affordable options, some policymakers have been willing to give manufactured homes a new look.
Villa's new neighborhood is one of a few dozen similar experiments across the country. The major manufacturer Clayton said it has sold more than 2,000 of its "cross-mod" homes, which are partially factory-built and partially site-built, to 23 subdivisions in 10 states.
"It's really only been in the past 10 years or so that you've really seen all the conditions in place," said Grant Beck, whose affordable-housing organization Next Steps provides consulting for manufactured-housing developers. "It's growing but still relatively new, this concept of doing a whole home subdivision of manufactured housing."
Beck said he hopes a recent mandate for the Department of Housing and Urban Development to write guidelines for cities on how to change their zoning rules to facilitate housing development will lead to the federal government telling towns to do away with prohibitions on manufactured housing, which would open up the market for far more neighborhoods like this.
Factory-built housing has some major drawbacks, including that it's harder to obtain a mortgage to buy one of these dwellings, since they've been treated by many state laws and bank policies as movable property, like a car, rather than as homes. But recent federal and state laws have tried to ease the path for manufactured housing.
The 21st Century Road to Housing Act, enacted last month, includes several provisions meant to spur the industry, including opening up financing opportunities. Virginia and Idaho passed legislation this year to allow factory-built houses on almost any lot where homes are allowed to be built, and other states have recently considered similar bills.
Manufactured-housing companies tout their products as the solution to the housing affordability crisis: "This is the most efficient, effective way to allow homeownership in the United States," said Joel Farkas, founder of Fruition Communities, which is selling manufactured homes in a 99-house neighborhood in Riverside, California, and planning a massive neighborhood of up to 8,000 manufactured homes in a Denver suburb. To reduce buyers' down payments, Farkas sells the houses but leases the land underneath, a model more similar to a trailer park than a traditional subdivision.
It hasn't been easy. "There's probably 50 or 60 barriers," Farkas said. The No. 1 roadblock, he said, is municipal regulations.
"They had a really bad reputation, and a lot of localities put in exclusionary zoning to prevent them from being used in neighborhoods," said Rachel Siegel, a housing analyst at the Pew Charitable Trusts who believes that modern manufactured homes are of a much higher quality than those of past decades and should be allowed in more places. "We see empty lots that just don't get filled. We see really old, unrepairable homes not get taken down and replaced because the cost to do a site-built home is just too high. ... There's almost no other way right now to build smaller homes that people can truly afford, that are new, outside of manufactured housing."
The cost of a new manufactured home soared in 2021 and 2022, just as the traditional housing market saw huge price spikes. But factory-built remains far cheaper. The most recent average price, according to the Federal Reserve, was $90,700. The highest-quality manufactured homes can run far more than that but still cost much less than comparable site-built homes.
At a recent event promoting state laws to facilitate manufactured-home development, Logan Hanes, executive director of the Kentucky Manufactured Housing Institute, listed off concerns that buyers have about factory-built homes: that they'll depreciate rather than increasing in resale value, that they're unsafe, that their energy efficiency is poor. The top manufacturers, including the three major industry players in the U.S., are building high-quality products that don't match older concerns, Hanes said. "I'm not one to shy away from our stigma - the stigma that our industry had, we earned."
In Santa Rosa, Villa's new neighborhood is going up in a high-cost-of-living community where the nearby homes are a mix of modest apartments and suburban McMansions. Villa doesn't trumpet the innovative nature of the neighborhood. Its banners promote "New Single-Family Homes," with pictures of wide front porches, wooden fences and children running across the grass, no mention of manufacturing. The houses, listed for sale at more than $600,000, won't be cheap, but they'll be less expensive than nearby homes of similar size.
The three-bedroom houses come from Clayton's factory in Sacramento in two pieces. One side has the living room and bedrooms. The other has the two bathrooms, the laundry room and the kitchen, with its tile backsplash, pendant lights and extra-wide refrigerator already installed.
These are "cross-mod" homes, a mix of modular and permanent, so they're tied down to a permanent foundation. Workers attach the left and right halves of the house to each other with drywall.
Heather Miksch, the chief operating officer of Villa, challenges visitors to look closely to try to find the seam where the two halves join; it barely shows. She notes that the recent federal housing legislation removed a decades-old requirement that manufactured homes be built on a permanent chassis so that they can be moved by truck. "It's really going to open up a lot of design flexibility for manufactured housing, including two-story options," Miksch said.
She gestured to the plots across from the homes already installed in Santa Rosa: Some of the remaining sites in the neighborhood are going to have manufactured two-story homes.
But even in states that allow manufactured housing by law, towns can make it impossible to build it in reality, Miksch said, by requiring new housing to meet design standards, like certain styles of roof, that are too heavy or expensive to ship from a factory.
In a paper published this week, advocates from the left-leaning policy group Groundwork Collaborative explored the history of the early-20th-century Sears home, ordered from a catalogue and delivered by mail, and proposed it as a model for a government-sponsored expansion of manufactured housing.
"There was a period of time where a lot of people were getting very high-quality housing sent to them," coauthor Emily DiVito said. The Sears homes weren't shipped pre-built; DiVito said the company mailed customers tens of thousands of pieces, from every nail to the toilets and doorknobs, with instructions for the average unskilled buyer to put it together themself.
DiVito views manufactured housing as a way to provide high-quality homes at low cost today but doesn't foresee much expansion in the market naturally, unless the federal government were to start buying up manufactured homes at a large enough scale to encourage companies to build the factories to make them. She noted that the number produced has been basically flat, around 100,000 a year.
"I don't think anything has changed in the last several years to suggest that the important but incremental growth of manufactured housing is likely to change and really kick off in a way that means the private market can meet a lot more of our housing needs," she said.
The private developers selling the housing keep saying their products are the way of the future, though.
Villa has sold more than 400 homes in recent years, many of them to fill single lots in California, including replacing homes destroyed by wildfires.
"I think we're going to see this accelerate for the next probably decade, at least. It's going to take a lot of state and local policy reform," Villa CEO Sean Roberts said. He sees those changes happening now. "Financing, regulation, land use, factory innovation: All these factors are coming together, and the market is going to do what a market should do."
He predicts that in the future, subdivisions built in a factory like the one he's building in Santa Rosa won't be so uncommon.
"The incentives really haven't been there for the last 50 years, or the regulatory infrastructure, or the consumer financing infrastructure. But that's all kind of in place now," he said. "This is a different moment in home building than it has been in decades."
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