The past year has proven that bipartisan housing policy is still possible, even in a deeply divided Washington. On Friday, January 9, the House passed H.R. 5184, the Affordable HOMES Act, a bipartisan bill that would return sole authority for setting the energy efficiency standards for manufactured housing to the U.S. Department of Housing and Urban Development (HUD). At the same time, the White House is preparing to release a policy agenda to increase homeownership. There are plenty of policy options available, and I hope they will all be carefully considered and many of them adopted. But bipartisan policy doesn’t mean everyone agrees to everything.
Too often, housers have been like people pleasers who insist on making everyone happy and then wonder why they aren’t. There’s a good reason for that. When we stop people pleasing, people are not pleased. Compromise requires concessions, often difficult ones. A case in point last week is the Affordable HOMES Act, which passed the House by a bipartisan vote of 263 to 147, with 57 Democrats voting in favor and no Republicans opposing.
Earlier last week, NHC convened a meeting with the Republican and Democratic co-leads of the bill, Representatives Erin Houchin (R-Ind.) and Jake Auchincloss (D-Mass.) and senior affordable housing leaders to discuss the legislation. The bill rescinds the Department of Energy (DOE)’s manufactured housing energy efficiency regulations published May 31, 2022, and eliminates DOE’s authority to issue similar regulations. DOE may still provide recommendations to HUD regarding revisions to energy conservation standards for manufactured housing. However, DOE cannot unilaterally act to increase the cost of the most affordable housing in America, at the expense of those who need it most, especially when the return on this cost is so small.
This is why NHC and nine other housing groups wrote to House leaders in support of the Affordable HOMES Act. We were joined by the Atlanta Neighborhood Development Partnership, California Community Reinvestment Corporation (CCRC), CBC Mortgage Agency and the Chenoa Fund, Community Solutions, Homeownership Council of America, Inclusive Abundance Action, Manufactured Housing Institute, Mortgage Bankers Association, and UnidosUS.
I am aware that some environmental organizations oppose this bill on policy and procedure, and that some housing groups have been asked to join them in opposing the bill. I respect their position. For NHC, this is about boosting affordable supply and deferring to housing experts at HUD, where significant energy efficiency improvements have already been adopted. Manufactured housing serves lower-income households, is faster to develop and install, and has a lower carbon footprint to construct than site-built housing. In 2022, HUD’s Manufactured Housing Consensus Committee (MHCC) during the Biden administration was concerned that many of the requirements in the DOE rule are not workable in practice and would drive up housing costs. For example, the DOE standards include HVAC requirements that rely on site-built standards which are not applicable to manufactured housing. We support higher energy standards, such as those recommended by the MHCC in 2022. They should be developed by the experts who understand housing and with affordability, accessibility, and supply needs in mind.
The DOE regulation is a classic example of regulatory overreach detailed in Ezra Klein and Derek Thompson’s recent bestseller Abundance, which I wrote about in November. They blame a governmental obsession with procedure rather than with outcomes. Some environmental groups oppose the bill because it puts HUD back in charge of a housing policy that they believe has climate implications, and undoes the DOE’s 2022 rule that has yet to go into effect.
Some Energy and Commerce Committee Democrats object because it moves jurisdiction of the issue out of their committee. But there is a reasonable question about the materiality of the environmental impact.
While it is true that increased energy efficiency can lower costs for consumers over the long-term, the upfront costs are a significant barrier for many consumers, especially considering that manufactured housing is generally the most affordable option for lower-income homebuyers. In addition to finding that the DOE rule would raise upfront costs, and that those would not be off-set by energy savings in a reasonable timeframe—if at all—some experts also found that the final rule could lead to 17,030 to 51,010 fewer manufactured home sales over ten years (see exhibit 1 page 6 here). That’s why NHC joined HUD in urging the White House to reject the 2022 DOE rule, but we did not prevail. Implementation of the rule has been delayed, first by the Biden Administration, and now by the Trump Administration. At a time when our nation needs more affordable housing of all kinds, unworkable standards, increased costs, and regulatory confusion only serves to hamper progress in meeting our nation’s affordable housing supply needs.
While energy efficiency is an important goal, prioritization should be placed on the highest contributors, and policies should be designed in a way that do not place an undue burden on the households least able to afford the premium. Ultimately, consumers should have the right to manage their energy costs and savings based on affordability and their own financial circumstances. In fact, some newer manufactured homes even qualify for ENERGY STAR® certification, which demonstrates that they meet rigorous national energy-efficiency standards similar to those for site-built ENERGY STAR® homes. No one should be denied homeownership because they can’t afford the highest level of energy efficiency, especially when the alternative may be an older rental unit that is much more expensive to heat and cool.
If we are going to make a difference on our affordable housing crisis, we are going to have to make compromises, but we shouldn’t do it on behalf of people who can’t afford it and have no say in the decision. On this issue – and others – housing affordability and supply should come first.