Soaring prices put purchasing homes out of reach for most people, but building new housing is slow and expensive.
So far, most solutions to this housing crisis have focused on subsidizing prospective buyers. But what if there were a way to make housing cheaper at every step of the process: cheaper to build, cheaper to buy, and still affordable for the next resident?
In San Bernardino, a sunny California city located about 60 miles east of Los Angeles, a first-of-its-kind experiment is underway to test these ideas on a single plot of land. Think of it as an affordable housing policy trifecta: three different strategies to bring down housing costs — all at once.
The first innovation is to streamline manufacturing. About 90 percent of homes are built on the land they rest on, but in San Bernardino, manufacturers assembled a modest house — 1,462 square feet, three bedrooms — in a factory before transporting it to its final destination on Ramona Avenue.
The existence of a new moderately sized single-family house is itself a coup when most new homes far exceed 2,000 square feet. Back in the 1940s, nearly 70 percent of new homes were 1,400 square feet or less. Today, that number hovers around 10 percent because rising land and construction costs — along with arduous permitting regulations and a preference for larger projects from lenders and investors — have made smaller homes nearly impossible to build using traditional production techniques.
In the case of San Bernardino, not only are smaller houses less expensive for residents, but factory manufacturing lowers the price by allowing developers to complete projects more quickly. Manufactured homes cost 45 percent less per square foot than their “site-built” counterparts, according to Freddie Mac.
The second innovation is an 800-square-foot accessory dwelling unit located on the same plot of land, about 20 feet away from the house. The matching cream-colored unit provides two more bedrooms and bathrooms to another family, below market rate.
The third innovation: the land itself is owned by an affordable housing development group, which is using a community land trust to ensure that both the manufactured house and the ADU remain reasonably priced for generations.
Dora Davila, a 42-year-old medical lab technician born and raised in San Bernardino, recently moved with her three children to the new manufactured home on Ramona Avenue.
“We were looking at mobile home parks but, the thing is, none of them had a yard and I wanted space for my kids,” she said.
Andy Lopez, the project manager, says their goal is to combat misperceptions of manufactured housing, and to “show the community how attractive factory-built housing has become.”
In August, the U.S. Department of Housing and Urban Development announced it would be expanding the types of housing units that could be built under its code, paving the way for manufactured duplexes, triplexes, and fourplexes.
Palm Springs, Calif., is a well-known travel destination and a luxurious retirement spot, drawing wealthy retirees from other expensive cities who have helped drive up housing prices to well above a million dollars on average.
But the average household income in Palm Springs is just about $67,000, making it very difficult for those who work in the city’s hospitality and tourism industries to buy homes.
A big barrier to expanding this model is the restrictive zoning codes written long ago to exclude factory-built homes from most areas. Another challenge can be finding enough special licensed contractors qualified to assemble manufactured homes to national standards.
Some people may be less enthusiastic about buying a house on a community land trust, since it would deny them the chance to maximize the money they could earn as their house increases in value. However, while community land trusts cap the amount of profit a homeowner can generate, owners still get to keep whatever they pay down on the mortgage when they sell.
Rachel Cohen is a senior policy reporter at Vox who focuses on US social policy.
