The Steve Miller Band had it right – as if our industry â€“ Manufactured Housing â€“ wasnâ€™t taking a hard enough beating lately, HCD recently sent Manufacturers, Dealers and Wholesalers a â€œNOTICE OF PROPOSED EMERGENCY ACTIONâ€. On June 18, 2008, the Department notified all interested parties that it sought to implement new construction standards for manufactured homes (and other factory housing â€“ collectively referred to as â€œMHâ€) that would supersede certain aspects of the HUD-Code for manufactured home construction.
First, a little history. In 1974, the Federal Government designated HUD as the government agency to oversee the Federal Manufactured Housing Program. Under that authority HUD implemented a series of laws designed to unify, or standardize the construction of Manufactured Housing across the country. Some regional variances were allowed to provide for extreme conditions, such as high wind speed, snow load and climate; but for the most part a manufactured home built in California could be installed in any state in the country. The rationale for this unified â€œHUD-Codeâ€ for construction was to streamline the industry by allowing factories to build for fewer regional variations, while protecting consumers by ensuring that all MH met a minimum set of performance-based construction standards. This set of laws is known as the Manufactured Home Construction and Safety Standards (â€œHUD-Codeâ€), and until 2000 very little had changed in these standards. In 2000, P.L. 106-569, also known as the Manufactured Housing Improvement Act (the â€œ2000 Actâ€) was enacted which amended the MHCSS. The 2000 Act also contains language which clarifies the original intent of Congress that Federal law preempt in the area of Manufactured Home Construction and Safety Standards, by providing that â€œFederal preemption . . . shall be broadly and liberally construed to ensure that disparate State or local requirements or standards do not affect the uniformity and comprehensiveness of the standards promulgated under this section . . .â€ 42 U.S.C. Â§ 5402(d).
Unfortunately, even in light of the new preemption language contained in the 2000 Act, HUD and many states, counties and cities have taken the position that the HUD-Code only preempts construction and safety aspects actually covered in the Code. Therefore, locally enacted standards in many instances are not actually preempted by the HUD-Code. An example of where HUD, the State and many other jurisdictions have concluded that the HUD-Code isnâ€™t preemptive are fire-sprinklers. At last count, 19 cities in the State require fire sprinkler systems in MH. HUD has concluded that the requirement is not preempted by the HUD-Code because they are â€œfire suppression devicesâ€, not covered by Section 3280.201, which governs only â€œfire hazardsâ€ and â€œearly detection devices.â€
Why is this history lesson important â€“ the Notice you may have received could dramatically impact your business. The action HCD proposed and passed is the emergency implementation of a new set of â€œexterior fire resistive construction standardsâ€ for new AND USED manufactured homes to be installed in â€œWildland Urban Interface Areasâ€ (www.fire.ca.gov). The State has imposed a portion of the construction standards from the California Building Code (for site construction â€“ Part 2, Chapter 7A) on the construction/retrofit of MH. Chapter 7A covers construction standards and materials for items such as Roofs, Attic Ventilation, Exterior Walls (including windows and doors), Decking, Floors and Under-Floor Protection.
Anyone considering installation of a new or used manufactured home on land â€“ private lot or land-lease community â€“ in an area designated by the State Fire Marshall as a â€œFire Hazard Severity Zoneâ€ (â€œFHSZâ€), these new requirements apply to any MH not already permitted and installed by July 10, 2008. Existing dealer lot inventory will have to comply with these requirements or be installed only in areas not designated as a FHSZ after July 10. Given that the Department implemented this on an emergency basis â€“ in 21 days â€“ without significant public comment or discussion, the financial implications could be significant. There are presently millions of dollars of new MH inventory on dealersâ€™ lots, none of which comply with the new Regulations. As such, those lot inventory homes will either have to be installed in non-FHSZs, or retrofitted. Factories are also scrambling to understand what the new law means to them, and how they can build homes that comply with the new California construction standards.
A question raised by many industry players is whether or not the State can adopt these construction standards in light of the Federal preemption in the area. As stated above, the HUD-Code has already been deemed not to occupy the entire field of MH construction, in spite of the clarifying language of the 2000 Act. In cooperation with CMHI, the Department posed that same question to HUD when faced with several jurisdictions who were trying to impose their own exterior fire resistive construction standards on MH. In early 2008, HUD issued a letter to the Department stating that exterior fire resistive construction standards are not specifically addressed in the HUD-Code, and therefore HUD opined that they were not preempted by federal law.
In spite of the surprise nature of these new regulations, ultimately, the change is one that will benefit the industry as a whole. In the short term, the effect on inventory and sales could be dramatic. Over time the emergency regulations will accomplish two things. First, our industry will be seen as being progressive and part of the solution. As I write this article, there are more than 1,000 wild fires burning in California. The economic impact of these fires greatly overshadows the burden of new regulations on our industry. The Department explained it to me like this; it would be hard to explain to a family whose life was destroyed by a fire that ignited an MH why we chose not to be a part of the solution. Second, since the implementation of Chapter 7A, jurisdictions around the State have been implementing their own brand of exterior fire resistive construction standards on MH. The MH industry, as set forth at the beginning of this article, thrives on standardization. While it is difficult for one state to adopt a substantial construction standard, it would be far worse to have 58 counties and 478 incorporated cities all with different construction standards for exterior fire resistive construction. The State, in concert with CMHI worked to develop a set of Statewide, preemptive construction standards to avoid the chaos that would have erupted in the industry if jurisdictions were allowed to implement their own regulations. We face a lot of challenges as an industry, including anti-closure ordinances, anti-conversion ordinances and growing resident activism, but these new regulations in the long run should not serve as an impediment to our business.
David L. Gibbs is an attorney with The Gibbs Law firm, APC. The firmâ€™s practice focuses on issues related to manufactured housing, including community subdivision, pre-purchase diligence and analysis as well as advising community owners on operational, financial and enforcement issues. The firm also represents manufactured home dealers in a wide range of issues. David L. Gibbs also holds a California real estate brokerâ€™s license. The firm continues to offer a wide range of real estate and business related services as it has done for 34 years from its offices in San Clemente. Mr. Gibbs can be reached at (949) 492-3350.