Kelly says bipartisan housing bill could boost supply, affordability

State lawmakers in Arizona have spent years trying to combat the state’s housing crisis through a mix of zoning reforms and local deregulation. Now, federal officials are getting involved.

The U.S. Senate passed broad housing reform legislation on an 89-10 bipartisan vote. The bill is designed to increase the country’s housing supply and drive down prices as homeownership becomes less attainable for more and more Americans.

“We need more housing stock out there,” Arizona Sen. Mark Kelly, a Democrat, said during a recent trip to a manufactured-home facility in Phoenix. “People need to be able to buy and afford homes, and if there's a bigger supply, the home should become more affordable.”

Kelly and Sen. Ruben Gallego, his fellow Arizona Democrat, both voted for the bill.

Manufactured homes

Part of the bill could make manufactured homes, those built in a factory instead of on site, more affordable.

The legislation would remove a federal requirement that manufacturers build those homes with a permanent steel frame for transport, called a chassis, even though many of those manufactured dwellings are placed on a permanent foundation.

Kelly, who toured a CAVCO home manufacturing facility in Phoenix, said factory-built homes could provide a more affordable option for people priced out of the housing market, including his 30-year-old daughter.

He said they recently visited the home in Maryland they lived in during Kelly’s time in the Navy.

“She said, ‘Dad, I don't understand. Like, how could you afford that house in that neighborhood when you were my age?’” Kelly said. “That is not a reality for young people today.”

The average manufactured home costs $123,300, according to the Manufactured Housing Institute. The average home price in Arizona is nearly $421,000, according to Zillow.

CAVCO CEO Bill Boor said removing the chassis can save $3,000 to $5,000, though some of those savings will be offset by increased lumber and set-up costs.

“I think there will be savings, but it won’t be the full cost of the chassis,” he said.

There are other impacts, too.

Kelly asked CAVCO executives why they don’t build two- and three-story manufactured homes that could be a better fit in more densely populated communities, like a neighborhood in a city’s downtown.

Boor said removing the chassis would make that option possible.

“It's not an engineering thing,” Boor told Kelly. “Get rid of the chassis, and, then again, it's just breaking down those barriers to put in an urban environment.”

Not done yet

The Senate version of the housing bill must still go back through the U.S. House for approval, where its future is uncertain.

That’s because there are several key differences between the House and Senate version of the bill, including the inclusion of a ban on investor ownership of homes.

The Senate version of the legislation would ban an investor who owns 350 homes from buying more, with some exceptions.

Even if a version of the bill passes Congress, it's still unclear whether President Donald Trump would sign it. He had promised not to sign any legislation until lawmakers pass the SAVE Act, the Republican-backed election bill that is still working its way through the Senate.

Democrats at the Arizona Legislature proposed a similar plan to limit institutional ownership of homes with some Republican support, though a bill sponsored by a GOP lawmaker has not advanced this year.