Subcommittee on Housing and Transportation

Hearing on S.1452 - "The Manufactured Housing Improvement Act"

Prepared Testimony of the Honorable Evan Bayh (D-IN)
United States Senator

9:30a.m., Tuesday, October 5, 1999

I would like to begin my testimony by thanking Chairman Allard and the Members of the Housing and Transportation Subcommittee for inviting me to appear before you this morning to testify on this important piece of housing legislation - legislation which is long overdue. I am pleased to be an original co-sponsor of S. 1452, the Manufactured Housing Improvement Act of 1999.

I am supportive of this legislation because I have seen first hand the benefit of manufactured housing. Indiana is a major center of this industry. Indiana continues to enjoy a high concentration of manufactured housing plants, retailers, suppliers and lenders which have made significant contributions to our local economy in terms of jobs and affordable housing. The manufactured housing industry employs more than 20,000 Hoosiers and has a total economic impact in my state of nearly $3 billion per year.

At an average cost of $43,000 per unit, excluding land, manufactured housing is the fastest growing sector of the housing industry. One in every four new single family homes sold in the United States is a manufactured home. Manufactured housing provides many American families with the opportunity not only to own their own homes, but to live in safe, comfortable housing. Manufactured housing has evolved significantly in the last twenty-five years - it's no longer the stereotypical mobile home. In fact, the vast majority of manufactured homes installed today are never moved once they have been sited. Improvements in construction have led to the development of aesthetically pleasing homes. Most manufactured homes built today are manufactured to resemble traditional site-built homes and are enjoyed by an array of Americans, including first time homebuyers, senior citizens, and single parent families. It is this transformation in appearance and performance from the trailers and mobile homes of yesteryear to the truly attractive homes which are produced today that accounts for their growing appeal and success.

Senator Shelby's legislation seeks to improve the Manufactured Housing Program and this approach compliments the Department of Housing and Urban Development's efforts to improve services and get its house in order through its comprehensive Management 2020 Reform Plan. The Manufactured Housing Program at HUD, which oversees the industry, has faced many administrative challenges in the last decade. Lack of resources has prevented the program from keeping up with the changing needs of manufactured housing. While the industry has voluntarily implemented numerous code changes in recent years, many requests by them for HUD to review standards or regulations currently await action by the agency or have taken many years to process, because of inadequate resources at the Department. Recommendations made over several years to HUD haven't been acted on - due in part to the loss of two thirds of its staff over the past decade. While staff size has diminished over the past decade, the industry has grown 100%. With the rapid growth in housing technology, it is imperative that HUD not only address these standards but do so in a timely fashion, allowing the industry to remain competitive while providing homeowners with the most advanced housing technology.

Senator Shelby's legislation will remedy this situation by modernizing the program by implementing procedures in which all proposed construction and safety standards are addressed and considered in a reasonable time frame. This bill will establish a private sector consensus committee composed of homebuyers, industry experts, consumer groups, public officials, academicians, engineers and technical experts. The committee would make recommendations to HUD and the recommendations would be published in the Federal Register for public comment. This legislation requires that action be taken on any consensus committee recommendations within one year after it has been proposed to the Secretary. This is an important provision. It requires the Secretary to act, but protects consumers by authorizing the Secretary to reject any proposal which is deemed to be adverse to consumers.

These improvements to the Manufactured Housing Program will not alter either the authority of the Housing Secretary, or the current structure of the HUD inspection system. The Secretary will retain full and final authority to accept, reject, or modify the consensus committee recommendations or interpretations. The Secretary will continue to have the authority to propose standards, regulations and interpretations, as well as the full authority to reject consensus committee appointments.

As representatives of the Federal Government, we should do all we can to ensure that the construction and safety standards and the related regulations are updated on a timely basis. This can be done with enactment of the Manufactured Housing Improvement Act. The consensus committee approach embodied in this bill represents a common sense solution to updating the manufactured housing code and regulations in a timely manner- at absolutely no cost to the federal taxpayer.

Through the use of industry labeling fees, this legislation provides economic resources to the Secretary for the hiring of additional HUD program staff. The costs of operating this program and the re-staffing of the manufactured housing program will continue to be borne by the manufactured housing industry, not the taxpayer. It is noteworthy that the industry is willing to bear this expense in order to improve the efficiency of the regulatory system.

In closing, Mr. Chairman, this legislation is a reform that we in Congress should be embracing. Today's manufactured homes provide the opportunity for homeownership to millions of Americans who otherwise could not realize the American dream of owning and enjoying their own home. In an era of diminishing Federal resources for housing our citizens, today's manufactured homes offer non-subsidized homes that people can afford. At a time when more than 5.3 million Americans are paying more than 50 percent of their incomes on rent, it is essential that we enhance the affordable housing options that are available. I encourage you to help move this legislation through Congress as expeditiously as possible. As a full Committee Member, I will do everything that I can to help you move this legislation through the Senate in the 106th Congress. I thank the Members of the Committee for holding this important hearing, and again, compliment Senator Shelby for his initiative in this area.

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