What’s next for prefab housing? The ROAD to Housing Act and the future of factory-built homes

The ROAD to Housing Act: A Potential Game Changer

A Breakthrough Amidst Washington Gridlock

In a year marked by gridlock and turmoil in Washington, one bill represents a potentially huge step forward for housing innovation. Introduced by Senator Tim Scott (R-SC), the ROAD to Housing Act proposes a deceptively simple reform: eliminating the federal requirement that all HUD Code manufactured homes include a permanent steel chassis.

At first glance, this might seem like a small technical fix. But in practice, it could reshape the landscape for factory-built housing in America.

Manufactured vs. Modular: Why the Chassis Matters

Key Differences Between Manufactured and Modular Homes

To understand the impact of the ROAD Act, we need to look backwards. While manufactured and modular homes are both forms of prefabricated or factory-built housing, in the US, the two terms have distinct definitions and regulatory pathways:

• Manufactured homes are built to a federal code overseen by HUD (not-so-creatively labeled the “HUD Code” in industry parlance) which preempts all state and local building codes. They’re built on a permanent steel trailer frame and are technically classified as personal property (like a car) unless they’re permanently affixed to land and titled as real property (i.e., real estate).

• Modular homes, on the other hand, are built to the same local codes as site-built homes and are inspected by state or local authorities. With the exception of tiny homes - which are usually built on a trailer chassis (but are not HUD Code compliant) - and other fringe applications, modular homes are placed on permanent foundations and financed with traditional mortgages.

The Impact of the Dual System

This dual system has profound consequences. Manufactured housing remains the largest source of unsubsidized affordable housing in the country, with more than 8.4 million units nationwide. The HUD Code has enabled this scale by standardizing quality, streamlining inspections, and preempting local building codes, which reduces regulatory hurdles and speeds up production across states. It also ensures rigorous safety and energy standards, as modern manufactured homes are a far cry from the “mobile homes” built before the Code’s 1974 ratification. 

The Chassis Requirement and Its Challenges

But the chassis requirement - which was codified by the 1974 ratification of the Manufactured Home Construction and Safety Standards Act