Modular and manufactured homes may be housing shortage solution

SHERIDAN — One Sheridan builder is debunking misconceptions about the modular home — an option experts inside Wyoming and out support as a potential solution to nationwide housing shortages.

Jake Lockhart, owner of Sheridan Homes, sells modular homes that are built indoors, but are set on a permanent foundation once they arrive on site. His modular homes meet International Residential Codes like other stick-built homes and can have all the same luxury finishes as a home built on-site. Once complete, the houses are indistinguishable from a stick-built home.

“People think (modular homes) come on a trailer and stay on a trailer. We take the home off the trailer, and it’s all wood underneath. There is no metal, and it’s placed on a permanent foundation,” Lockhart explained.

Sheridan Homes sells both modular and mobile homes, but there are distinct differences between the two. For instance, mobile homes meet Housing and Urban Development codes instead of IRC codes.

“I don’t sell many of those,” Lockhart said. “Both are built on an assembly line in a warehouse … but modular homes keep their value, whereas mobile homes carry a VIN number, and they devalue almost like a vehicle.”

The term “modular” really describes the building process, Lockhart said.

Modular homes should not fall into a different class than stick-built homes, he said, simply because they’re built off-site.

In fact, he said modular homes built inside don’t suffer from weatherization  because they are built in a controlled environment and are sturdy enough to withstand travel at 70 miles per hour on an interstate. They can also be cheaper and faster to build than a home on-site, he said.

“Aesthetically, you can make a modular house look just like a regular stick-built house. You can add on a garage. You can put dormers up,” Lockhart said.

National research: More manufactured homes could ease the housing shortage

A national housing shortage has caused home prices to soar, and the Pew Charitable Trusts and Harvard Joint Center for Housing Studies has come out with several reports recommending communities remove barriers preventing manufactured housing from being built.

In the report, manufactured housing is referred to as "modern mobile homes," likely different from modular homes set on a foundation.

But according to both organizations' research, purchasing a new manufactured home could save a homebuyer between $50,000 and $100,000 or more, compared with a comparably sized site- or stick-built house.

Even considering manufactured homes must be shipped and installed on a lot, they still cost 35% to 73% as much as construction of a traditional home, not including the land costs, according to the HJCHS. The research also shows manufactured housing remains “largely unavailable” in 845 counties nationwide, or more than a quarter of all counties in the nation.

Sheridan County is ranked alongside other counties with the lowest manufactured housing share combined with the highest home prices.

Updates to local zoning to allow for manufactured homes, and reducing permitting barriers could “significantly expand access to attainable homes,” the report says.

But misperceptions about the safety, quality and style of manufactured housing represent another key barrier that keeps it from being used more often.

“In reality, modern manufactured homes can have high-end finishes and pitched roofs that look very much like site-built single-family homes,” the Pew report states.

WCDA recommendations and what’s happening in Sheridan

Manufactured housing has been proposed as a solution to Wyoming’s housing shortage by the Wyoming Community Development Authority’s Statewide Strategic Housing Action Plan. The plan includes recommendations like incentives for local governments to revise zoning codes to allow for accessory dwelling units, manufactured homes, duplexes, triplexes and homes on smaller lot sizes.

The draft report also recommends removing barriers to titling manufactured homes as real property. Current Wyoming law “creates barriers to titling manufactured housing as real property,” which means financing is more expensive.

“Manufactured housing (is) an important source of lower-cost housing, and it's a good way for a lot of people to get into the housing market,” Kimberly Burnett, a consultant with Abt Associates, a firm working with the WCDA on the plan, said in October.

City of Sheridan Administrator Stuart McRae said that, from his research, modular homes are built to IRC standards and don't have a frame attached, manufactured homes are built to HUD standards with a frame attached, and mobile homes are built to HUD standards with a frame attached.

City code allows for manufactured homes built to HUD standards to go into any zones that are used in Sheridan. R-4 zones are reserved for mobile homes, and manufactured homes in other areas must conform to specified standards outlined in city codes.

Regarding the WCDA’s work, McRae said he's attended public online outreach, and the City could benefit from the ideas outlined in the plan.

Generally, they fall into categories: state level change, local government change and private entities' involvement in the housing market. Changes to statutes will have to be resolved by the state, and covenants that allow for manufactured housing "must be accepted by the private sector," McRae said.

At the local government level, Sheridan’s ordinances “are very accommodating for building,” but there is always room for improvement, McRae said.

“We continue to explore various options that can help in that regard,” he said.

Lockhart said there are barriers in Sheridan when it comes to the homes he sells, but city code is generally not one of them.

However, HOA covenants that prohibit manufactured, or modular, homes can be an issue. Another major barrier is land cost: If a Sheridan resident wanted to set a modular home on a foundation in city limits, finding an affordable lot on which to do so would be challenging.

“I do set houses within the city, but it’s hard,” Lockhart said. “A lot of my business is also ranchers, farmers and people in rural areas where it is hard to find a contractor to build.”

Sheridan Homes places houses across Wyoming and into southern Montana, North Dakota and South Dakota. Rural places often lack covenants and land prices can be cheaper, Lockhart said.

Sheridan Homes’ average per-square-foot price, which includes delivering the home to clients, setting it on their foundation and stitching together the interior and exterior, is about $180. That quote does not include dirtwork, foundation or electrical and plumbing hook up.

“Modular can be a much more affordable option for people,” Lockhart said.

Many of the WCDA’s other proposals are already happening in Sheridan, from the northeast water transmission line to work being done for a future west beltway. Those infrastructure initiatives will lend themselves for increased development, McRae said, as well as work on the Weston Village subdivision.

“One of the most important principles that the WCDA report championed was local control. Local municipalities are where the best solutions will come from, and I know we are committed to solving this issue,” McRae said.

This story was published on December 14, 2024.