The 1970s brought us Van Halen and Smokey and the Bandit. But it also ushered in a new era in the mobile home industry. In this final segment of a three-part series on mobile home trivia, we’re going to look at how the industry changed dramatically in the 1970s and changed it’s focus to affordable housing and lower-priced production via HUD’s new involvement in the industry – all through some little-known trivia. This episode ties the two earlier ones together and brings you up to date on the history of the industry through some fun facts and figures.
The Beatles, the Jackson Five, Stevie Wonder, the Carpenters, Simon and Garfunkel, all great groups from the 1970s, but unfortunately the 1970s weren't as good for the mobile home and mobile home park industries. This is Frank Rolfe with Mobile Home Park Mastery podcast. We're in the third and final of our three-part installment on mobile home trivia, and now we're talking about the 1970s all the way to current, we're talking all about how the industry went from glamor in the 50s and 60s to affordable housing in the 70s and beyond.
Now, let's talk for a moment about one big shift the industry underwent in the 70s, and that was the advent of HUD taking over manufacturing. We all watch those tiny home programs on TV, and we're always amazed, at least I am, at how nice a product those people can build. Really interesting stuff. Just some wood and a hammer, and some nails and they can create some housing that's very attractive, very small in footprint, and that you can often look at the program and say, "You know, I could even envision living in that myself." But what happens when the federal government takes over the industry and says, "No, now you guys have to do it our way, our engineering, our specs."
Well, that's what happened in the industry in 1976. Prior to '76, there were hundreds of mobile home manufacturers in the US, often hobbyists who were building one or two mobile homes per year in their garage or some exterior building. In fact, Popular Mechanics Magazine frequently had articles, tips on building these new mobile home things, which many people are finding is a very lucrative hobby and a way of doing self-expression coupled with paying the bills. But by 1976, HUD ended all that and said, "No, from now on, we call the shots, we control the factories, we control the designs."
Then, the industry started more on a path of affordable housing, because that's kind of the direction that HUD set it in, but maybe it's also kind of the direction it needed to go. Now, those older homes prior to HUD's involvement were very, very heavy. If you look at the weight of a 1970s home, prior to '76 versus after '76, you'll see that the early 70s homes all weighed significantly more than the newer ones, so what you had happening was the government was trying to help to make these things more efficient and less expensive, and that of course translated down to the product itself becoming more of an affordable housing product than it had ever been before.
Now, you can often guess on mobile homes the size and the age of the mobile home based on the length and the roof line. The length is simple. 36 feet is a one bedroom, 46 feet is a two bedroom or more, and a 56 foot is typically a three bedroom. On the roof line, you had the old flat roof homes, which was from the 60s and the 70s, early 70s, and then by the late 70s into the 80s, we segue into the round roof home, and then by the late 80s into the 90s, the pitched roof home, which is what you're used to seeing today on those lots. But there weren't a whole lot of other variations.
The industry lost a lot of its creativity post '76 when HUD took it over, so all the interesting designs that you see in many mobile home parks, of all the different variety, the two-story mobile homes and all the different things, those all ended pretty much with the advent of HUD. So when HUD came on the scene, kind of things changed more to just a standard, which really was obviously more based on affordable housing. Now, the price per square foot of mobile homes has always been very, very low, but it's just gotten lower over time based on other relative housing costs.
As we talked about in an earlier program, there was a home back in the 1940s that actually cost only 50% of a new stick build home, so that's very expensive. Today, the price per square foot of a mobile home is about $34 per square foot. It's way over $100 per square foot for a stick build home, and that doesn't even include the value of the lot. So clearly, the industry from a financial perspective started to segue in the 70s more into affordable housing with the goal of being less expensive than the other housing out there.
Now, we talked in last week's program about Elvis living in mobile home parks and we talked about Lucy and Ricky living in a mobile home park, but today, there are still celebrities who live in mobile homes and in mobile home parks. Probably the best known of these is Pam Anderson off Baywatch who lived for years in a double wide in Malibu. There's two mobile home parks in Malibu, Point Doom and Paradise Cove, one of which burned in the fires here this past year, but nevertheless, Pam Anderson, not at the peak of her career but later on, after she was divorced from Tommy Lee, lived in the mobile home park in Malibu.
But also, even today, Kid Rock, unbelievably Kid Rock lives in a double wide right now in Michigan. He got divorced, and he ended up in this double wide. It's not really a very fancy double wide. If you look it up online, it's a regular double wide that's just kind of sheathed in this old barn lumber. He seems to be very happy there. He has nothing but good things to say about it, but nevertheless, the folks who are living in the mobile homes and the mobile home parks today are not maybe A-level stars as it was back in the 50s and 60s with Elvis and Lucy and Ricky.
Now, there are other people who grew up in mobile homes during the 1970s and the 80s. Some of these you may know and some you may not. Everyone knows that Eminem did, because we all saw the movie 8 Mile. Now, I will tell you that the mobile home park shown in 8 Mile is a complete fantasy. I found the actual mobile home park Eminem lived in. I Google researched it, and then I went and drove it when I was in Detroit. It's actually more of a retirement park, resembles in no way the one shown in the movie. Obviously to try and help his persona of being a tough cutting edge rapper, they changed it significantly.
His neighbors in reality back when he grew up would've been more retired couples, but three other people you may not be aware of, Ryan Gosling grew up in a mobile home. Also, Hilary Swank, no one knows that, grew up in a mobile home, and then finally Demi Moore grew up in a mobile home, so there were still people living in mobile homes in the 70s and the 80s who are still Hollywood royalty today, but still it didn't have quite the prestige it did back in the 50s and the 60s.
Also, let's talk for a moment about mobile home park production or mobile home production. No one really knows the data prior to 1976 because until the government stepped in, no one really tracked it very much, but starting in '76, it was a fairly steady production of mobile homes in the 100 to 200,000 range. Now, there had been peaks and valleys though, but none happened in the 70s or in more recent times. The peak number ever shipped, and these are the number of new units built and shipped, the peak number of all time 372,843 were shipped in 1998, but the low point happened about 10 years later. 2009 only 49,789 units shipped, so that is quite, quite a reduction.
In fact, it's about an 80% off reduction, so what happened there? How did it go down? Well, again, as the industry became affordable housing, it became far more dependent on credit. Many people who bought the early mobile homes did so with cash or with very short-term loans that they arranged from their own bank. However, in modern era, as it became more affordable housing, the loans all were channeled with very low amounts down through different lenders. There was what was called the Great Channel Collapse, in about the year 2000. What happened is, they started doing no income doc, zero down mobile home loans.
Yes, the same thing that sank the single family industry back in 2007, and ushered in the great recession, we did it in the mobile home industry far earlier so we were ahead of our time, and as a result, you had all these highly highly leveraged customers and they started being repossessed [inaudible 00:08:04] starting in the 2000s. Since they did so poorly, there was so much loan loss, banks effectively stopped making the loans and that's why the numbers plunged. In fact, of that 49,789 in 2009, by far the bulk, about 75% of those at the all-time low were homes that were going on private land, not even into mobile home parks because the mobile home park customers at that point were not even really financeable.
Now, let's talk for a minute about some trivia on states and how many ... what percent of the population lives in mobile homes. I'm going to tell you the top 10 states that have the highest percent of residents living in mobile homes. Number one, South Carolina, 18%. That's right. 18% of everyone in the state of South Carolina lives in a mobile home. It's kind of sad because the Miss America contestant from South Carolina back in the 2000s got in a lot of trouble for saying in the interviews at Miss America that it was 20%. People were just aghast that she would ever say such a thing, but then in the end it turned out she was pretty much correct. It was 18%. People just didn't like being exposed as having the highest percentage of residents living in mobile homes there in South Carolina.
Number two, New Mexico, 17% of everyone in New Mexico lives in a mobile home. West Virginia, 15%. Mississippi, 15%. Alabama comes in at 14% of the population living in mobile homes, as does North Carolina at 14%, as does Louisiana at 14%. Then you have the 13% states, there's three of those: Arkansas, Wyoming and Kentucky. Now, if you overlay this list of states with the highest number of people living in mobile homes, you will also find these are also the states that represent oftentimes lower incomes and other greater needs for such items as payday lending and auto loans and used car loans and such, so effectively, it again helps support the argument that mobile homes have today become more a version of affordable housing.
Now, also remember that back in the glory days, back in the 50s and the 60s, there was only 2% of Americans living in mobile homes, but in these 10 states, you have roughly around 7 to almost 10 times that number. So what's happening there is you have instead of this kind of a elite group of highly educated people trying this new form of housing, which at that time was fairly expensive, now it's fallen down to more a mass market product for people who actually are not making perhaps as high an income.
Now, the industry has also changed in other ways in the 70s and the 80s. Just the very look at the product itself has become much more [inaudible 00:10:51]. If you look in the current homes, they're looking more glamorous than they did in times past, but by the 80s and even the 90s, a lot of the features from the 50s and 60s, all the architectural features were gone. No longer were they trying to build kitchens that were more upgraded with special countertops and things like that, and the bathrooms often had a garden tub and a shower. Today, things are just more for general living, more relaxed, more casual, and definitely, again, more for an affordable housing product than it more of a glamour product.
So the actual product itself changed dramatically, and instead of having mobile home prototypes built by Frank Lloyd Wright and Raymond Loewy, today they're coming from designers, but back in the 70s, there was an article on one of the great big manufacturers. Basically, what would happen is, the president of the manufacturing plant himself would go out and simply pick the colors each year without any testing, any designer's involvement. He would just go out and pick out literally some colors that humored him, and that would become the lineup for that year. So really, the whole attitude just changed dramatically in the 1970s.
Now, one thing that's interesting is that Clayton today produces about 48,000 homes per year out of 40 different factories, and in fact, they represent 47.7% of all mobile homes built in the US. So, as the industry has changed, one big thing that's changed is the dominance of one manufacturer, namely Clayton. As we talked about last week, Jim Clayton brought out his first sales lot in '66, but at that time, he was kind of a small player in the business and was really more interested in those more upper end glamour models. Today, however, Clayton is pretty much focused on the meat and potatoes of the industry, which is in fact affordable housing. They do an excellent job at it.
Prior to Warren Buffett's purchase through Berkshire, Hathaway and Clayton, you did not have the high level of design elements that you have today. In fact, if you've not been to a mobile home show in recent times, there's two a year, one in Louisville and one in Tunica, I urge you to do so because you'll be very impressed by the product today. They're doing a terrific job with it but again, it's not the glamour product of the 50s and the 60s. So basically, by the 70s all the way through today, the industry had finally become more of an affordable housing alternative.
Now, it does a great job of that. It's the only form of detached affordable housing in the United States, price points that nobody else can compete with, so it definitely has a very major role in America, but the product has definitely changed over the era. So, I hope you enjoyed this in our third part of our three-part series on mobile home trivia. We talked about the origins in the 30s and the 40s, the glamour era of the 50s and 60s, and then more of the affordable housing era of today. It's a fascinating industry with a fascinating history.
If you're ever near Elkhart, Indiana, I recommend you go to the MH RV Hall of Fame and Museum. You can see all these early models, from the 30s all the way not quite to current. It shuts off at about 1960, but nevertheless, you'll see the progression of what is very, very much a part of American culture, an American icon in the making. Again, this is Frank Rolfe with Mobile Home Park Mastery podcast series. Hope you enjoyed this. Talk to you again soon.