Modular housing and the HUD code

Kimberly Burnett has a new piece at Niskanen on HUD's new best-practices guidance for states and localities, focusing on one key recommendation: regulate modular housing by harmonized and objective performance standards rather than prescribed construction methods. Modular is still only ~3% of US single-family homes against 28% in Japan, and we’ve lived through many modular “hype cycles” in the US. But factory-built manufactured housing using the national HUD code is still between 5% to 10% of single family housing completions in the US, suggesting a key binding constraint to modular methods is regulatory fragmentation: duplicative factory-and-site inspections, codes written for on-site assembly, and thousands of local building departments with no capacity to evaluate factory-built homes. National model code standards for modular homes, like ICC/MBI 1200 and 1205, are spreading but have not yet succeeded on the scale of Congress’ choice to directly preempt local building codes nationwide with the HUD Code in the 1970s.