Scholar Series: Addressing the Housing Challenge

Long ago—six or seven decades—a couple of young men from the Midwest dreamed of better ways of building homes. Growing up in the days of Levitton, Lustron, Aladdin and National Homes, they saw that existing housing methods were obsolete and the potential boundless. Each of obtained good educations; one in engineering and the other in design.

Upon graduation, each gained some experience and each reached similar conclusions. The most efficient way to build homes was in factories and delivered them to site in sizes limited only by transport considerations. That is, industrialize the housing process, start to finish.

This was a widely shared vision, but just how to go about it? Ideas were everywhere; implementation scarce. Both decided mobile homes, the bastard offspring of travel trailers, had the greatest potential. There were already hundreds of factories producing what today would be called Tiny Houses having 250 to 600 square feet and delivering the fully furnished and equipped homes to rented plots across the nation. Most sites evolved from vacation spots called trailer parks, but increasing numbers featured permanent facilities for year-round living. Newer examples were called mobile home parks. A vast array of mobile home dealers existed who facilitated the connection between manufacturers and parks.

Those two guys, along with many others, came to see this fast-growing housing concept had three great advantages over other housing innovations.

  1. Homes were delivered complete
  2. To an existing Market
  3. With minimal regulation

The pair met as employees of a visionary mobile home manufacturer in Elkhart, Indiana; one in charge of product design and the other engineering.

That company soon became recognized as a leader in innovation and was approached by other forward thinkers. One, the largest home builder Canada, subcontracted the design, engineering and prototyping of CMHC approved double-wide homes for the Canadian market. When the project was completed, the two men were offered senior jobs in the Canadian startup.

Declining, they resigned their jobs and established a consulting office with a contract to design a the Canadian company’s factory. Soon the partners had more projects than they could handle, with a staff of a dozen or two.

In those days, governments were more innovative. President Lyndon Johnson, in his “War on Poverty” felt the nation faced a shortage of good low cost housing and directed HUD to establish a DARPA-like program that would entice major American corporations to mass produce housing. About 200 bid and 20 won contracts. Half the winners were our clients and none were mobile home manufacturers. HUD had not yet recognized mobile homes as housing, as they were not attached to land or fully compliant with HUD’s version of the National Building Code.

This was the opportunity of a lifetime to show what could be accomplished by industry. HUD promised to clear away the bureaucratic obstacles impeding factory construction and land development but wound up adding more. To make a long story short, HUD spent $70,000,000, not including untold sums by the “winners”. And every one of those “Project Breakthrough” endeavors … and the whole program failed. All the “winners” left the housing market.

Our company was well paid but broken hearted. The government may have learned nothing from that investment, but those mighty corporations wrote off their investments and abandoned ship. They learned a lot, and so did we.

HUD failed to clear away the obstacles facing industrialized housing, and added more. Project Breakthrough did not break through.

The lesson:

Housing innovation fails to the degree it is constrained by the rules, regulations and culture created by ages of stick building.

About that time, the early Seventies, the mobile home industry faced its first real crisis, brought on by an oversupply of homes, a lack of parks and a shabby reputation. A committee led by its association changed course. Without thinking through the ramifications, they made a short-range decision to address their perceived main problem; lack of long-term financing. The leaderless industry agreed to abide by HUD’s parochial Standards in exchange for the hope of long-term HUD backed home loans.

Very little such financing materialized, largely because HUD and conventional wisdom sees housing as a subset of the land, and mobile homes are, well mobile. Changing the name to “Manufactured Homes” and adopting HUD construction rules did little aside from increasing manufacturing cost and decreasing mobile home park construction. HUD’s intent was and is factory construction of conventional homes for conventional lots what the industry calls modulars. That sub-industry has been strangled from birth by regulatory bodies.

The leaderless mobile home industry’s stigma was created by too many irresponsible participants and it is still on the ropes. Factory built housing retains its boundless potential, seeking lost momentum while caught in turgid regulatory tides and a continuing lack of direction.

One major hurdle remains joining factory homes with suitable home sites. Failure to adequately address that issue helped create the stigma, which put the kibosh on new park construction. Savvy investors who recognize the potential find immediate opportunities in buying existing parks and managing them well. Plenty of homes are available to keep those scarce parks full of good homes and up-to-date, and the market potential remains boundless. The once hugely successful (and profitable) mobile home park industry should be key to leading the industry back to the momentum it once enjoyed, when it held half the new housing market.

The lack of decent home sites is the elephant in the room. Mobile home parks, old and new, hold the most promise of a bright future for industrialized housing. Technological construction and design innovations cannot succeed without places to site the product. Step one is to address the stigma by cleaning up the many existing mobile home parks act that did so much to create the ramshackle mobile home image.

Our nation lumbers from crisis to crisis with overpriced and obsolete housing, using ponderous building and regulatory methods from another age. It’s long past time for our industry to work together optimizing the most efficient system of medium-density housing ever found.

Robert "Bob" Vahsholtz was born in Kansas during the Great Depression. After graduating from Art Center College in Los Angeles he was drafted into the Army and ended up living in a small trailer he bought for $500 while stationed in Alaska. Living in that trailer in Fairbanks suggested the trailer industry showed potential. After his 1960 discharge Bob moved the family to Elkhart, Indiana where he worked for Richardson Homes as a designer and continued living in a mobile home; one of very few industry people who chose his own product over a conventional house. In 1966, Bob and a partner opened an industrialized housing design office. In 1971 they sold the practice to a subsidiary of Bethlehem Steel and moved to Delaware, Ohio where they designed, and operated a modular home factory for Bethlehem. In 1973, Bob and family returned to Elkhart and reconnected with a former Canadian client whose factory Bob’s firm designed. Starting in 1974, Bob ran that factory and designed their second in Quebec. That small company became Canada’s largest builder of mobile homes. In 1988, Bob retired to acreage on California’s Central Coast and later the Washington Peninsula where he enjoys writing, travelling and spending time with family.