Manufactured Housing: Efforts Needed to Enhance Program Effectiveness and Ensure Funding Stability

In response to this recommendation, as of March 2018, HUD awarded a new administering organization of the Manufactured Housing Consensus Committee (MHCC) in June 2014. Although MHCC has held in-person, teleconference, and subcommittee meetings in 2015 and 2016 and has some planned for 2018, updates to construction and safety standards have continued to not be done in a timely manner. However, HUD officials outlined recent steps to develop a plan to implement more timely changes. First, HUD has included an option in its contract with the administering organization to conduct economic analyses for proposed changes, when deemed helpful by HUD. Second, HUD officials stated they have engaged in efforts to streamline the regulatory process for manufactured home construction and safety standards by exploring the possibility of implementing an expedited approval process within HUD. Third, as part of the overall HUD effort to review regulations, officials stated that they are currently conducting a review of current and planned federal regulations for manufactured housing with the goal to facilitate the affordability of manufactured housing and to promote durable, safe, and cost effective construction techniques for manufactured homes. Fourth, in response to Executive Order 13771 on "Reducing Regulation and Controlling Regulatory Costs,'' and Executive Order 13777 entitled, ''Enforcing the Regulatory Reform Agenda," HUD sought public comment in January 2018 to determine outdated, ineffective, or excessively burdensome regulations related to the manufactured housing program. The comment period ended in February 2018. HUD received approximately 151 comments, which are currently under review. HUD does not anticipate moving forward with any manufactured housing regulations until it completes its review. By taking steps to develop and implement a plan for updating manufactured home construction and safety standards, HUD can begin to address needed updates in a timely manner.

HUD has taken the following steps to address this recommendation. First, the Office of Manufactured Housing Programs maintains that it has significantly increased its diligence in its oversight of inspections and enforcement-related activity. HUD states that its Office of Manufactured Housing Programs has created master logs tracking various inspection and enforcement-related activity and the office has taken follow-up actions to resolve recommendations from completed audits, and ensure documentation of enforcement outcomes. These logs track program actions related to inspection findings, which helps to identify systemic issues and other production-related issues by manufacturers, according to HUD. By taking steps to strengthen the oversight of inspections and enforcement-related activities, HUD is helping to ensure that issues identified during the inspection and enforcement processes are being resolved and that federal construction and safety standards for manufactured homes are uniformly and effectively applied. Second, HUD reported that it accepted and approved a Transition Plan from its monitoring contractor providing inspection services. As we reported in July 2014, HUD's monitoring contractor for the Manufactured Housing Program did not provide a required deliverable, a Transition Plan, for the completed contract period from July 2011 through July 2012. The Transition Plan was intended to provide a plan for transferring all data and property associated with the contract to HUD or to a new contractor should HUD decide to assume the activities of the contract or transfer them to another contractor. After sending a draft of our report to the agency for comment, HUD accepted a Transition Plan from its monitoring contractor in May 2014. Although the plan was provided after the contract period, a completed transition plan helps to strengthen the oversight of inspections and enforcement-related activities by outlining provisions for sufficient staffing, transition of data and records, and transition of contracted services. Third, HUD stated that the Office of Manufactured Housing Programs has developed and implemented a tracking log to collect and evaluate information on the content of complaints received and to ensure prompt follow through to address or resolve the complaint issues. HUD provided copies of these logs. Moreover, HUD explained that less than 10 percent of manufactured home production occurs in the 15 states in which it has jurisdiction, which impacts the complaint volume that HUD receives directly. HUD further explained that 35 states have state-approved administrative entities that are responsible for conducting periodic checks on manufactured home plant records and managing and processing complaints in these states. HUD is only notified of complaints in these states if a serious defect or imminent safety hazard is involved or if manufactured home plants in more than one state are involved. By implementing a systemic complaint log, HUD has taken steps to assess the quality of performance over time, including identifying and correcting deficiencies within established timeframes.

On August 13, 2014, the Department of Housing and Urban Development (HUD) published a final rule that increased its revenues for the Program by implementing a user fee increase from $39 per manufactured home unit to approximately $100 per unit. The final rule became effective in September 2014. As of March 2018, HUD stated the label fee is adequately funding the program within congressionally authorized and appropriated levels. Further, HUD maintains that the label fee is reviewed by the Office of Manufactured Housing Programs on a regular basis to ensure that label fee revenue can continue to adequately fund the program.