Rethinking Homeownership

by Jamie Hammons

I just re-read the Time magazine article from September 6, 2010 on "Rethinking Homeownership." Not along the lines that the writer proposes, but isn't that what we (the MH industry) need people to do? The cover of the magazine says, "Rethinking Homeownership," but the actual title of the article is, "The Case Against Homeownership." Big difference! Nowhere in the article does the author factor in MH as part of the housing equation. I thought it would be fun to examine some of the points made and questions raised with a manufactured home frame of mind.

Time Point: "Homeownership has provided stability to tens of millions of families and anchored a labor-intensive sector of the economy."

Time Counterpoint: "In the bubble years, lending standards slipped dramatically, allowing many Americans to put far too much of their income into paying for their housing."

JH: No argument on the lending standards statement. As for the "too much of income for housing", what about us? Because of the cost-effectiveness of manufacturing, we provide the features of site-built at a price much closer to that of renting.

Time Point: During the Great Depression, Presidents Hoover & Roosevelt signed a series of laws to get banks lending again, including the legislation creating FHA and Fannie Mae, who created a new sort of loan, the 30-year fixed rate mortgage. "At a time when 25% of workers were jobless and one-third of the lost jobs were in construction and related trades, kick-starting housing was a smart piece of economic stimulus."

JH: I agree, and applaud Georgia Senator Johnny Isakson for his consistent efforts in promoting housing as the most valuable tool available for quickly restoring the nation's economy. The "trickle-down" effect of the housing industry on our entire economy has been eye-opening even to a guy my age. When housing and construction started to tank, it was immediately felt by the trucking industry, the retailers, distributors and manufacturers of capital goods, especially products for the home, and therefore the companies that provide products and services to them. It is imperative that we constantly remind our elected leaders of the multiplier effect of every job created by housing. And especially in the case of manufactured housing, we are talking AMERICAN jobs.

Time Point: "In 2001 the Congressional Budget Office estimated that only half the benefit of the government's implicit backing of mortgages through Fannie Mae and Freddie Mac was passed along to borrowers in the form of lower rates. The other half went to the companies {GSE's} shareholders and to the banks as higher profits."

JH: Damn. Just damn.

Time Point: "On paper, putting nearly all your liquid assets into a single piece of property may look foolish, but in practice it often works out beautifully, with the mortgage paid off just before retirement, leaving a couple with a cheap place to live."

JH: This plays right in to our wheelhouse! I have two streams of thought on this point. (1) Nowhere is this truer than with the middle class and lower income working people that make up the largest segment of our target market of consumers. Not only is their budget for housing likely a larger percentage of their take-home pay, but they are also more likely to want to continue to live in retirement where they have been living for years. I believe that the long-held concept that owning your home is the first step to creating personal wealth is especially true for our target demographic. (2) Attitudes are changing. As the baby boomers retire over the next decade, we're going to see a growing number of people looking to downsize their home as part of their retirement strategy. We can build that house faster and more energy-efficient!

Time Point: "…children of homeowners stay in school longer than children of renters and … daughters of homeowners are less likely to become teenage mothers" and "…homeowners are more likely to vote in elections and be involved in community organizations."

Time Counterpoint: "Just because two qualities show up at the same time doesn't mean one is causing the other."

JH: Ok, but if that's the best counterpoint that can be made, I don't see how we, and more importantly local government officials, can ignore those correlations. Homeownership provides stability in neighborhoods and communities. And the school dropout rate and teenage pregnancy rates are higher in the social and economic demographics that make up a large part of our consumer base. Speaking of local governments …

Time Point: "Harvard economist {Edward} Glaeser has looked at how local governments, often spurred on by existing homeowners, restrict housing type…. People who don't buy stand-alone houses - for the most part, renters - are not welcome…. "In many parts of the country," says Glaeser, "renters are zoned out." The article also states that, "Some demographers predict that the attitude that most areas should be the exclusive province of {stand-alone} homes on big tracts of land will change as Baby Boomers tire of four-bedroom houses with lawns to mow and big property tax bills."

JH: This one is simple - just substitute "site-built" for "stand-alone" and "manufactured home" for "renters" and you have described another of our industry's biggest challenges. Our homes today are the best-built in the history of our industry, and we simply have to do a better job of image-building and educating our public officials. I believe that such efforts need to be first and foremost aimed at the aforementioned Baby Boomers for two reasons. One, as previously stated above, they represent a huge potential growth demographic for our industry. And two, because I believe they make up a majority number of the county commissioners and city council members out there, and most of them grew up referring to our homes as "the T-word." If we are to revitalize our industry, we are going to have to reinvent ourselves in the eyes of many, starting with the Boomers.

Another thing I noticed when reading the article for the second time is that there is another relevant group that the author didn't acknowledge in her research and comments - single people. She repeatedly mentions couples and families. Does "families" include the millions of single-parent, single-wage-earner homes out there? What about all the people who are widowed, divorced or choose to live alone - how do they fit into the current homeownership situation? Our homes are the best value and best option available for millions of one-income homebuyers. If, that is, they can have one built and placed where they want to live.

If you haven't read the entire article in Time, I recommend that you do so; especially if any of the points listed above made you stop and think. There is good information throughout the article, but some of the points did not relate as well to MH, and I know that Tony wants me to stay on task. Thanks for allowing me to share my thoughts and observations! ##

Jamie Hammons is the President of the Georgia Manufactured Housing Association. You can contact him at: Phone: 770.955.4522 Fax: 770.955.5575 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it