Alex Pettee, CFA
Manufactured Housing: The Answer To The Affordable Housing Crisis?
The lingering underinvestment in residential housing continues to put upward pressure on housing costs. Manufactured Housing fundamentals reflect a significant shortage of affordable housing.
Manufactured Housing REITs have outperformed the broader REIT index for six straight years, and are on pace to push it to seven. Same-Store NOI growth topped 7% in 2018.
Rising construction costs, not speculation, have been responsible for much of the post-recession rise in home values and rents. Manufactured housing remains cheap largely because of lower construction costs.
The affordability of manufactured housing, which is held to relatively more relaxed building standards, reflects the unintended costs of overly burdensome building codes, pushing up housing costs across the country.
Beyond the sector-leading internal growth, external growth through acquisitions and site expansions provide an added boost. While competition has heated up, these REITs command a superior cost of capital.