Your client is a developer of residential housing who would like to build manufactured housing on several vacant lots he purchased in a residential subdivision. The city recently blocked his plans, telling him that the zoning ordinance does not allow manufactured housing in residential zoning districts. He has asked for your advice.
Your client’s rejection raises a housing affordability problem. An increasing number of families are priced out of the housing market, and not enough affordable housing is available to meet their housing needs. Manufactured housing adds to the affordable housing supply but often is blocked by restrictive zoning, as your client learned.
Manufactured housing is affordable because it has a major cost advantage. Cost is reduced by smaller size, faster building times, minimal waste problems, and protection from weather delays during construction. Estimates of cost savings vary, but manufactured housing is estimated to cost as much as one-third to 50 percent less than housing built on the site when structure, transport, installation, land, and site development costs are considered. See Jon Gorey, How Manufactured Housing Could Help Solve the National Affordability Crisis, Land Lines 36 (Jan. 2023), https://tinyurl.com/ycxr6n4m.
This Land Use Update explains the zoning problems of manufactured housing and recommends changes in the zoning system that can make manufactured housing more available.
Manufactured Housing and the Zoning Problem
Negative assumptions about manufactured housing trigger restrictive zoning and support court decisions that uphold these restrictions. Restrictive zoning often is based on outdated objections to the appearance of manufactured housing, which is assumed to be a trailer on wheels with metal sides and a flat roof. This image is false today. Well-designed manufactured housing is attractive single-family and multi-family housing that is comparable in quality and appearance to housing built on the site.
Other negative assumptions support restrictive zoning. One is that manufactured housing is poorly constructed. This assumption also is false. Manufactured housing is made of high-quality materials required by building standards mandated by the National Manufactured Home Construction and Safety Standards Act of 1974, 42 U.S.C. § 5403, which is administered by the US Department of Housing and Urban Development.
Another assumption is that manufactured housing has a negative effect on the value of neighboring property. This assumption is especially concerning because zoning statutes require “reasonable consideration” of the “character of a district” in zoning regulations. A local government could reject zoning for manufactured housing because its negative impact on property values affects the character of a district, but studies show that well-maintained manufactured housing built to national standards does not harm the value of the neighboring property.
Restrictive zoning also is based on objections to the occupants of manufactured housing, who have lower incomes and tend to be younger or older than residents of housing built on the site. These objections are not valid. The occupants of manufactured housing are a respectable segment of the housing market. Lower incomes and differences in age are not legitimate reasons for zoning restrictions.
Restrictions in local zoning codes can create major zoning barriers. The national construction and safety law does not help. It preempts state and local building codes but does not preempt local zoning. State legislation authorizes the adoption of zoning ordinances that organize land uses into zoning districts but, with very few exceptions, does not regulate their content. Local governments decide how zoning should control manufactured housing. Only a few states prohibit local restrictions on manufactured housing.
Unequal treatment of manufactured housing through restrictive zoning is a major problem because zoning ordinances can include a wide variety of restrictions that treat manufactured housing unequally. They include exclusion from single-family residential districts where single-family housing built on the site is allowed, a special exception requirement in residential zoning districts, and design standards that can increase costs.
Unequal treatment through zoning can violate the constitutional equal protection clause, but courts seldom hold that the unequal zoning treatment of manufactured housing is unconstitutional. Zoning is social and economic legislation that receives rational-basis judicial review and requires only a legitimate governmental purpose to make it constitutional. Courts hold that zoning restrictions on manufactured housing serve a legitimate governmental purpose by relying on discredited negative assumptions. A federal district court, for example, justified zoning restrictions on manufactured housing by accepting perceptions by residents of the community that manufactured housing is incompatible with traditional homes, threatens the tax base, or depreciates the market values of traditional housing. Colorado Manufactured Housing Ass’n v. City of Salida, 977 F. Supp. 1080, 1085 (D. Colo. 1997).
State zoning statutes can prohibit unequal treatment, and some do. A simple statutory prohibition authorizes the adoption of zoning requirements for manufactured housing only if they apply to all housing. This statute prohibits a zoning ordinance that excludes manufactured housing, but not housing built on the site, from residential zoning districts. Legislation can explicitly deal with the exclusion problem by providing that “manufactured housing is a permitted use in all single-family and multifamily zoning districts.” A zoning ordinance should include a similar provision.
The Special Exception Problem
All zoning statutes authorize the creation of a local zoning board, which is authorized to grant special exceptions from restrictions in a zoning ordinance. A special exception is a land use that can be permitted in a zoning district but that requires administrative approval to decide whether it should be allowed, such as a daycare center in a residential district. The zoning statute gives local governments the unrestricted authority to decide which land uses will require a special exception, and they decide on the standards for the approval of special exceptions. The difficulty is that designation as a special exception provides an opportunity to discriminate against manufactured housing through arbitrary denials.
There is no rational basis for distinguishing manufactured from site-built housing, and local governments do not have a rational basis for requiring a special exception for manufactured housing in a residential zoning district. Because deciding on a requirement for a special exception is a legislative decision, however, most courts likely will uphold the designation of a special exception for manufactured housing in a residential zoning district.
The standards that local governments usually adopt for the review of special exceptions give a zoning board considerable discretion to decide whether a special exception should be approved. Compatibility with land uses in the adjacent area is a common discretionary requirement, and compatibility is an important factor a zoning board should take into account when it decides whether to approve a land use as a special exception in a zoning district. Here is an example of zoning ordinance language: “The special exception shall be compatible and consistent with the character of the zoning district and the area immediately adjacent to the special exception.” Courts hold that this standard is not constitutionally vague, but “compatibility” is not definable, and “character” is a proxy for exclusion.
Subjective standards like compatibility and character allow courts to accept biased assumptions to uphold the denial of a special exception for manufactured housing. One court, for example, upheld a rejection for five manufactured homes in a subdivision of 26 site-built and predominantly single-family brick homes. It held that “the aggregate placement of manufactured homes was not compatible with the character of the existing neighborhood, which is one that is well-established and consists of modest, well-kept homes where all but one are brick-and-frame structures.” There also was concern about housing quality and the effect on property values. Rolling Pines Ltd. Partnership v. City of Little Rock, 40 S.W.3d 828, 834 (Ark. 2001).
The zoning statute and the zoning ordinance should prohibit special exceptions for manufactured housing in residential districts. If a special exception is required, the zoning ordinance should not include standards that apply only to manufactured housing. Special exception standards should be clear and objective. Compatibility, for example, should be defined by objective factors, such as land use and density.
Another problem is that administrative procedures for zoning decisions are basic in most states and do not require an adequate administrative record. An administrative process that includes a disciplined hearing, findings of fact, and reasons for the decision is essential.
Design Standards for Manufactured Housing
Residential design standards are an aesthetic land use regulation that most courts hold constitutional when the standards are not vague. Modern manufactured housing is well-designed but must comply with residential design standards that are included in a zoning ordinance.
Design standards come in two forms. A zoning ordinance can require discretionary design review, usually by an architectural board, to decide whether a residential design complies with the standards contained in the ordinance, such as standards for building façade articulation. As an alternative, the zoning ordinance can include mandatory design standards that apply without design review, such as a standard that requires a minimum roof pitch.
Problems can be created by mandatory design standards that apply only to manufactured housing, such as a standard that prohibits flat roofs and vinyl siding. Standards such as these are not defensible aesthetically and can add substantially to building costs. Discretionary design standards that apply only to manufactured housing also can cause problems, such as a standard that “exterior material shall be of a color, material, scale comparable with those existing in residential site-built, single-family construction.” This standard confers significant discretion on the architectural review board, and comparability is not definable. Courts have upheld design standards such as these that apply only to manufactured housing, but they are prohibited in states that have unequal treatment statutes.
Design standards adopted for all residential housing in a municipality apply to manufactured housing and also can be problematic. A customized residential design standard is an example. It can require an architectural review board to approve customized designs for floor plans, building façades, building mass, building orientation, building materials, architectural features, and color. Manufactured housing is produced in a limited number of design formats, and customized design may be impossible and costly.
Reform is needed. Local governments should not adopt discriminatory design standards for manufactured housing that are impracticable to meet and that can increase costs. Design standards should be clear and objective and should respect the design opportunities that manufactured housing can accommodate. Procedures for design review require improvement. Timely decision-making based on a record created by a disciplined hearing is essential.
Design issues can be managed by adopting a special residential zoning district that is limited to manufactured housing. Development can occur on individual lots or in subdivisions, and design standards can be limited to design requirements that manufactured housing can meet.