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Belfiore: A potential solution to the affordability challenge

Posted by   /  January 31, 2020  /  No Comments

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By Mike Sunnucks | Rose Law Group Reporter

Phoenix has a housing affordability challenge. It’s not alone rising rents and home prices are problematic in other regions.

But there is a potential innovative solution — manufactured housing.

Apartments rents increased 9 percent in metro Phoenix in 2019. That is the biggest rental increase among major U.S. cities, according to real estate firm Berkadia.

New home prices in metro Phoenix are up 17.5 percent since 2015, according to Belfiore Real Estate Consulting.

Rising home prices and rents are good for builders, developers and landlords bottom lines. But they challenge renters and home buyers and threaten to price moderate income households out of the market, said Jim Belfiore, president of Belfiore Real Estate Consulting.

Affordable housing was a top of mind topic at Belfiore’s AZ Dealmakers conference in Phoenix last week.  Metro Phoenix has long been able to tout less expensive costs (including real estate and housing) as it competes for jobs including against higher-cost markets such as California and Seattle.

Belfiore expects to see manufactured housing increasingly touted and offered as a potential solution for the affordability crunch.

“I think that is an idea that is set to take off,” Belfiore said.

Clayton Homes, for example, is interested in infill and other new housing developments aimed at the affordability crunch in Phoenix and other markets.

Research from Homes Direct found manufactured homes can cost half as much per square foot to develop a manufactured home as compared to traditional new single-family homes.

Belfiore said the quality of manufactured homes has improved and increased 30-year mortgages for manufactured homes will help spur demand and potential use for more affordable housing.

Belfiore said manufactured housing offers operational efficiencies via home being assembled in central locations (rather than on lots) that lower costs. “You have one place you can bring together all the labor,” he said.

The challenge will be to get city planners and elected officials to shed past perceptions and stereotypes about manufactured homes. “Manufactured homes today look nothing like that,” Belfiore said of past views of the housing products. “It looks more traditional.”

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