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INSIGHT

The Chassis Is Gone, but the Lot Is Still the Problem

HUD's push to modernize manufactured housing can take real cost out of the box, yet zoning, foundations, and finished lots will decide whether it adds supply.

October 11, 2026

What changed this week

Realtor.com reported on Wednesday that HUD unveiled an action plan to speed up manufactured housing production. It builds on the 21st Century Road to Housing Act, which dropped the old requirement that these homes ride on a permanent steel chassis. HUD is also amending its code to allow multistory manufactured homes, weighing a performance based standard for multifamily factory built buildings, and writing new rules for foundations, anchoring, and connections. According to Realtor.com, losing the chassis alone is estimated to save about $10,000 per unit.

For scale, the Census Bureau's Manufactured Housing Survey put the average sales price of a new manufactured home at $134,800 in April 2026. That is a dealer price for the home. The lot, the utility taps, the road, and the site work are a separate bill, and in most of the markets we track that separate bill is where affordability actually dies.

The factory was never the bottleneck

I welcome this plan. Pulling the chassis out means these homes sit on permanent foundations and start to look, appraise, and finance more like site built houses, which is the only way the product escapes its stigma at scale. But a cheaper box does not create a buildable lot. Every one of these homes still needs land zoned to accept it, water and sewer capacity, and a permit to set it.

The developer Realtor.com interviewed, Michael Tillman of PTM Partners in Florida, named the problem directly: there is no uniform zoning, and every city treats manufactured housing differently. HUD can modernize Parts 3280 and 3285 of its code. Nothing in the plan, as reported, rezones a single acre. Land and entitlement remain the real constraint, and this is a factory policy, not a land policy.

Where we see opportunity

The best fit is employer anchored workforce housing. CRE Daily reported that Bayer plans a $2.2 billion pharmaceutical campus on about 200 acres in New Albany, Ohio, with roughly 600 permanent jobs when it opens in 2034. Columbus sits on the LandBriefing watchlist with low zoning risk, and an opening date that far out gives landowners near that corridor time to entitle sites for factory built product at workforce price points before the jobs arrive.

The Southern Squeeze is the second fit. Tillman told Realtor.com his modular multifamily targets households earning 80% to 120% of area median income, exactly the band priced out across much of the Sun Belt. Huntsville, a buy rated market on our watchlist with medium zoning risk, is the kind of place where faster, cheaper vertical construction could restore an entry rung, provided counties allow it on standard residential lots.

Mountain and gateway towns may benefit most. In places on Mountain Watch like Truckee, Ketchum, and Steamboat Springs, scarce construction labor and short building seasons drive costs as much as land does. Multistory factory built housing, delivered and set quickly, is a credible tool for local workforce housing if towns write codes that welcome it.

Where it breaks down

Rates come first. CRE Daily's market snapshot showed the 10 year Treasury at about 5.28% at the October 7 close. Land development and construction loans price off that environment, so a $10,000 savings in the box can be eaten by a few extra months of carry on horizontal infrastructure. Tampa stays on our caution list for that reason: cheaper homes do not fix the carrying costs that put it there.

Execution is second. New code text, factory certification, and design approvals all take rulemaking time, and new entrants will need capital and a track record before lenders treat the product as mainstream. Local opposition is third, and it is the one no federal agency controls.

What we are watching next

HUD's proposed foundation and multifamily standards, whether any state or county on our watchlist allows manufactured homes by right on single family lots, monthly Manufactured Housing Survey shipments and prices, and permit activity around New Albany. Data over emotion: the factory just got cheaper, and the land that is already entitled for this product just got more valuable.

Workforce housing and employer anchored development sit at the center of how we think about land at Kaufman & Company. You can see the full platform and the companies behind it at thekaufmanco.com.

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Daniel Kaufman, Founder and CEO, Kaufman & Company

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