Washington, D.C., November 26, 2014 – The Manufactured Housing Association for Regulatory Reform (MHARR), in a November 25, 2014 communication to the Secretary of the U.S. Department of Energy (DOE), has called upon the Secretary to reject a fundamentally flawed manufactured housing energy conservation standards proposal developed by a DOE “Working Group” acting under the auspices of DOE’s Appliance Standards and Rulemaking Advisory Committee (ASRAC). In addition to asking the Secretary to reject the Working Group proposal, the MHARR communication (copy attached) urges the Secretary to halt further DOE action on this matter and return the relevant section of the underlying law to Congress for reconsideration and reform in order to avoid litigation that could tie this matter up for years to come.
As a member of the ASRAC Working Group, MHARR voted against adoption of the Working Group proposal based on inherent defects in the law mandating such standards – section 413 of the Energy Independence and Security Act of 2007 (EISA) — and an irretrievably tainted rulemaking process at DOE, pledging to oppose any proposed or final rule based on that proposal at all stages and in all available forums.
The manufactured housing energy “standards” demanded by EISA – and proposed by the Working Group — are effectively a large, regressive, discriminatory tax on America’s manufactured housing consumers. If enacted, this de factotax will exclude millions of moderate and lower-income families from the housing market altogether, while forcing those that are left to spend thousands of dollars for energy conservation features they would not otherwise purchase in a free market, as shown by decades of industry experience (even though enhanced energy packages have always been available from manufacturers on an optional basis). With manufactured housing energy costs under the current HUD standards already less than or equal to those for other types of homes as shown by U.S. Census Bureau data, the EISA manufactured housing energy “tax” would hurt consumers – especially moderate and lower-income American families already struggling to get purchase financing in a difficult market – for the sake of advancing a special interest agenda.
A further inherent deficiency in the EISA law – that has thus far remained below the radar – is that it effectively carves-out a significant area of HUD’s comprehensive regulatory jurisdiction over manufactured housing, splitting standards and enforcement authority between two federal agencies, DOE and HUD. Thus, manufacturers faced with one federal construction and safety regulator now could ultimately have to answer to two separate federal regulatory agencies, operating under different laws, different criteria, different policies, different interpretations and different program “cultures.”
Even worse, the DOE rulemaking process for EISA manufactured housing energy standards – now in its seventh year — has been irretrievably tainted by the “impermissible” selective leak of a DOE “draft” proposed rule to various parties in interest (including the Manufactured Housing Institute) and undisclosed contacts which led the Office of Management and Budget (OMB) to reject the draft rule and order DOE to start over (as requested by MHARR in 2013). Instead of a fresh start, however, DOE, at the urging of the same groups that had received the “impermissibly disclosed” draft rule, conducted a grossly inadequate, truncated, and arbitrarily limited “negotiated rulemaking” with a committee dominated by the same groups.
Unfortunately for manufactured housing consumers and the industry itself, the upshot of this tainted process would be an increase in the consumer purchase price of a single-section manufactured home averaging $2,170.00 — as calculated by the DOE Working Group — with cost recovery times for some energy measures ranging from 12-88 years. To further analyze and address these costs, MHARR conducted its own analysis, which shows that the Working Group proposal would require significant design and structural changes in manufactured homes, especially in northern areas, with retail-level price increases in current HUD thermal Zone 3, above current base models, reaching as high as $4,700.00 for a single-section home and as much as $6,200.00 for a double-section home. All of these figures, however, are significantly understated, as neither the Working Group nor the MHARR calculations include dollar amounts for testing, enforcement, or regulatory compliance costs.
In Washington, D.C. MHARR President-Elect, Mark Weiss, stated, “Most surprising, is why part of the manufactured housing industry is supporting such costly proposals given the current state of the manufactured housing market and the continuing regulatory-driven erosion in the availability of manufactured home purchase-money financing. While providing little or no relevant information to industry members, the other national industry group touts the Working Group proposal as ‘a win-win for [manufactured] homebuyers and the environment.’” While definitely a victory for environmental special interests seeking ever-greater regulation, adoption of the DOE Working Group proposal would provide no realistic benefits to consumers while threatening major harm to the HUD Code manufactured housing industry — making manufactured homes less accessible to the moderate and lower-income American families who have long relied on them as the nation’s most affordable non-subsidized housing.”
