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Commissioners Strike at Root of Affordable Housing Crisis

By Leslee Kulba- The Buncombe County Commissioners took action that should increase the amount of affordable housing stock.

This goes against the common practice of local governments, telling the public they are ameliorating the affordable housing crisis when they first force tax increases with new programs, loans, and disbursements in the name of affordable housing; and secondly continue to raise costs of compliance in the housing industry with ever-constricting regulation.

The commissioners agreed to allow manufactured homes in R-1, R-2, and Beaverdam zonings. The ordinance only applies to new construction. Existing structures will be grandfathered-in until which time they are replaced or undergo renovations costing at least half the value of the existing structure. Mobile home parks will not be allowed, as R-1 allows one residential unit per lot; R-2, two.

The new homes must be doublewide or larger, and they must bear the HUD label certifying they were built after 1976 and in accordance with federal standards. Commissioner Joe Belcher, now retired from a career in manufactured housing, said Buncombe County was only catching up with what has been done elsewhere.
But of course those homes must be regulated.

First of all, new singlewides will not be allowed. The homes cannot be mobile, either. All wheels, tongues, and vehicular signals must be removed; and the homes must be on a permanent foundation, which could trigger county codes for footers, building height, ventilation, and more.

While those requirements raise the cost of the homes, the commissioners view them as consumer protection. Commissioner Al Whitesides, a former banker, explained modular homes on a permanent foundation would be considered real and not personal property; so, if cared for, they would appreciate instead of depreciating. They would also be eligible for HUD/FHA loans and insurance.

To address aesthetics and concerns that modular homes will bring down the tone of their neighborhoods and depreciate surrounding property values, the county is requiring them to be skirted. Allowable skirting materials are stone, brick, architectural or rusticated block, or others approved on a case-by-case basis. Vinyl, metal, foam, and wood are prohibited, simply because values for homes with those kinds of skirting are depreciating. Exceptions would be granted where state or federal regulations control, as in floodplains.

Chair Brownie Newman said an argument he had heard was that people getting loans for manufactured housing were often paying exorbitant interest rates; for example, 8% instead of 1.5%. So, what looks like affordable housing on the surface, turns out not to be. He asked if the county could do anything to interdict predatory lending.

Whitesides explained the interest rates were so high because people purchasing manufactured housing were starting out, were struggling, or maybe had had some “bumps in the road.” They did not have the same credit ratings as those mortgaging a $300,000 home. Belcher added that the Dodd-Frank Act, passed in 2010, made predatory lending a crime. The law, he said, was very complex and a headache for people in many industries, but it was working well to protect consumers.

Additionally, Belcher said Freddie Mac and Fannie Mae “lend aggressively” in the manufactured home industry. Their Duty to Serve program requires them to lend to “very low-, low- and moderate-income families.” To help the program work, the manufactured home industry developed a special product, MH Advantage, which looks just like a stick-built home and qualifies for 30-year, fixed-rate financing, subject to an applicant’s ability to pay.

After Whitesides said manufactured housing was now surviving hurricanes in Florida and Texas better than traditional housing, Commissioner Amanda Edwards said that was not the case at all in Eastern North Carolina, where she had been working with the Red Cross. To that, Whitesides, who was familiar with the real estate markets she referenced, said the devastated homes had been built to old standards.

After noting recovery and media attention follow concentrated devastation, Belcher said advances in the industry now enable multi-section manufactured homes to be anchored into sand so 120mph winds won’t move them. “They’re legitimate concerns,” he consoled, “but they’re old concerns. Those ships have sailed a long time ago. People that are afraid of allowing someone to have the home of their choice tend to have those questions and concerns, and they need to be answered, and they have been.”

During public comment, Dorothy Styles also challenged anxietites about manufactured housing lowering property values. “There are other people who need protection from, not their property value going down, but their property value going up…. I know you’ll probably never do this, but if over here you’ve got a zone for no trailers, then over here you need a zone for no rich-man houses so that we’re protected from losing our property because we can’t afford our taxes. We can’t afford to be farmers because we can’t afford to pay our taxes.”

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