Mobile Boxes of Ticky-Tacky

...In fact, mobile homes were ignored by Washington's housing bureaucrats until the Nixon Administration found itself falling far behind in its housing production goals, originally set at twenty-six million units between 1968 and 1978...

...As reflected in the cost of one FHA program for single-family homes, residential land costs have been increasing at an annual rate of eleven per cent in recent years...

...thirty-eight per cent with furniture...

...The principal attraction of the mobile home is its low initial cost...

...A law isn't going to help them...

...A boyish, twenty-one-year-old father of two explains why he and his family live in a crowded mobile home park near Washington, D.C.: "It was about the cheapest housing we could find...

...We're tired of being pushed around...

...Mobile homes were tossed into the cumulative figures in an attempt to make the housing picture look less bleak...

...It's,not difficult to sympathize with the Milwaukee protesters...

...Other mobile home bills are already bogged down in House committees and the Senate...

...I'd like to have a house but I can't afford it just yet...

...According to Senator William Brock, Tennessee Republican, it costs as much to insure the average $6,000 mobile home as to insure a $40,000 conventional home...

...The mobile home industry may receive yet another backhanded Federal assist if President Nixon terminates the housing subsidy programs he has already suspended and implements instead a program of housing allowances to families...

...The results of that will probably be that lenders will get out of the home mortgage field even faster than they are now...

...Of the 361 owners of new mobile homes who responded to the survey, seventy per cent said they experienced major or minor problems with their doors during the first year of ownership...

...Most of us are home borrowers with large mortgages, as was the case with this delegation of people protesting that the escalator clause in their mortgages had been invoked and that their interest rates were being yanked up...

...The high fire and wind losses result in high insurance rates for mobile homes...

...during that period, mobile home shipments fell only once, in the semi-recession of 1970...

...Two of the industry's methods for cutting costs—use of cheap materials and low-cost, unskilled labor—often result in shoddy homes...

...But in many places, enforcement of the code is minimal, and several state enforcement agencies have complained that certain provisions of the code are weak and ambiguous...

...According to the Department of Housing and Urban Development (HUD) studies, mobile home factory workers received an average hourly wage of only $3.10 in 1972, far less than the $6.05 per hour paid to contract construction workers that year...

...As recently as 1973, when a tight mortgage money market caused conventional housing starts to decline by fourteen per cent from 1972's record high, mobile home shipments were up by more than five per cent...

...Another liability of mobile homes' classification as consumer credit: Under the Uniform Commercial Code, a mobile home owner can have his home repossessed if he is only a few weeks late with a payment...

...Even if the lender does repossess and sell a mobile home, his loss is considerably less than if he must repossess and sell a car...

...It's very hard to make people lend money at what they know will be a loss...

...More than three and a half million of these elongated metal boxes on wheels are home-sweet-home to eight million Americans...

...You can pass a law, however, forbidding future mortgages to carry inflation escalator clauses...

...State Farm's underwriting department states: "Observations made over the years of both claims and underwriting personnel seem to indicate that fire losses in mobile homes tend to be total [losses] unless detected immediately, without regard to age...

...The results of that probably won't be too happy either...

...In his 1970 housing report to Congress, President Nixon announced that he was departing from the original game plan by including mobile homes in total production figures...

...While there is great diversity among the nation's more than 300 mobile home manufacturers, it is the larger, publicly held corporations which have captured Wall Street's fancy...

...With incomes too small to allow purchase of a conventional home, many such families choose mobile homes, at least as interim shelter...

...In 1960, mobile homes accounted for less than eight per cent of new private housing starts...

...Ironically, there is little organized opposition to some type of Federal regulation...

...The general mismanagement of the economy during the Vietnam war, which contributed to a rapid rise in the cost of conventional housing, gave an inadvertent assist to the mobile home industry...

...The mobile home industry was better able to stave off inflationary increases than were the on-site builders for three reasons...

...The death rate of occupants is apparently also significantly higher...

...Forbes has ranked the largest and second largest mobile home manufacturers as the profit leaders among U.S...

...sixty-seven per cent had trouble with plumbing...

...A mere 2.5 per cent of the total $11 billion in mobile home loans outstanding in mid-1973 were FHA and VA insured...

...Half the owners reported that they had difficulty getting the manufacturer to repair defects...

...No significant moves have been taken to end this financial fleecing of mobile home buyers, but several state legislatures, Congressmen, and the industry itself have pressed for adoption of mobile home construction codes and minimum warranties...

...Although they are used as housing, mobile homes are financed like cars on high-cost installment loans of seven to ten years' duration...

...Their unhappy experiences raise serious questions as to whether the mobile home should be allowed to become the nation's major source of single-family housing...

...While the rates of delinquent payments and resposses-sion are slightly higher for mobile homes than for auto loans, they are less than for FHA-insured mortgages...

...After we get that law passed we're going to make those pirates roll back their increases...

...Therefore, the rate of destruction of mobile homes by high winds is more than thirty times greater than that of conventional homes, considering that there are many more conventional than mobile homes...

...State fire marshals and insurance companies report that both property damage and the loss of life are far greater in mobile homes than in conventional houses...

...Although the mobile home industry has made significant safety improvements in recent years—requiring exit windows in bedrooms and smoke detectors—manufacturers still construct their homes from materials which provide highly combustible fuel for any fire...

...Despite these alarming statistics, mobile home sales continue to grow apace, principally because: 1) the homes answer an urgent need for low-cost housing that is ignored by government subsidy programs and the conventional housing industry, and 2) returns on mobile home stocks and retail loans have been so phenomenal that the industry has been able to attract investors and lenders even in times when the supply of mortgage money has dried up and conventional housing starts are declining...

...thirty-two per cent with heating systems...

...The results of that study will appear in "Mobile Homes: the Low-Cost Housing Hoax," to be published by Grossman in July...

...During fiscal years 1969 and 1970, construction of conventionally built and rehabilitated units totaled only three million, seventeen per cent fewer than had been targeted...

...According to the American Bankers Association, banks' average credit dollar losses in 1972 (the net dollar loss to a bank after a given item is repossessed and sold) were six cents of every $100 lent directly to purchasers of mobile homes and twelve cents of every $100 lent through dealers for mobile homes, compared to thirty-six cents of every $100 lent through dealers for automobiles and forty-three cents of every $100 lent by banks for consumer goods in general...

...We were rushed for time, this had everything we needed, and it's just a temporary thing...

...State Farm Insurance Companies, insurers of some 77,000 mobile homes, report an average 1972 fire loss of $1,385 for mobile homes, compared to $890 for conventionals...

...Third, the price of residential land, a major contributor to spiraling costs of new conventional homes, is not included in the sales of mobile homes...

...Only the Government can stop this and it won't...

...Home owner is, of course, a misleading term...

...Contributing factors, says the Commission, are "their small size, close proximity of heaters and kitchens to sleeping areas, the concentration of combustible materials, lack of adequate escape doors in many cases, and a higher combustibility of interior finishes than in most site-built homes...

...Meanwhile, high mortgage interest of 8.5 to nine per cent and mandatory down payments of up to twenty-five per cent are pricing more Americans out of the conventional housing market and forcing them to consider buying mobile homes...

...A typical example: a customer buys $1,000 worth of credit life and physical damage insurance on his mobile home...

...These call for Federal mobile home standards established and enforced by HUD, mandatory recall of homes with safety defects, and criminal penalties for corporate leaders who knowingly violate the Federal standards...

...First, the wages of its semi-skilled, nonunion workers are far lower and did not increase as quickly as did those of skilled construction workers...

...Lenders will have to up their interest rates in anticipation of future inflation so that people will be paying twelve or fifteen per cent on their house loans...

...Since 1961, mobile home shipments (sales figures are not available) have increased an average of eighteen per cent a year, compared to an average annual growth rate of 6.4 per cent in the starts of private housing...

...The use of cheap materials sharply increases fire hazards...

...a National Weather Service clima-tologist stationed in Missouri found that of nine windstorm deaths in that state in 1971, seven occurred in mobile homes...

...Both companies— Skyline Corporation and Fleetwood Enterprises—far outpaced all competitors in terms of return on both stockholders' equity and total capital...

...Don Klasic, Nevada's deputy attorney general, reports: "The major complaint is over shoddy construction . . . Secondly, mobile home owners complain that there is a lack of responsibility regarding repair...

...Even the mobile home industry says it would prefer a single Federal standard to myriad state codes...

...With such a record, large mobile home manufacturers have had little trouble finding investors eager to underwrite their expansion...

...By that I mean, you can't cut into the middle of the chain of victims of bad money and say, "Okay, you, you're the one we're going to make pay for this inflation...

...Financed at the going rate of 12.5 per cent over ten years, the insurance premium would cost him an additional $750 in financing charges...

...And while conventional housing starts have declined several times Lynda McDonnell is a free-lance writer currently based in Minnesota...

...Oregon, one of the few states to maintain separate statistics on mobile home fires, found that the fatality rate for mobile home fires from 1965 to 1972 was 2.3 times greater than for conventional homes...

...Because mobile homes are lightweight and of a long, narrow shape, and are usually propped up on stacks of cinder blocks rather than attached to solid foundations, they are peculiarly susceptible to damage or destruction by high winds...

...It doesn't matter who the "you" is—whether he is the lender or the buyer or the worker or the factory owner—because all the people who have to pay out good money, and get in bad money, are the victims of inflation...

...But many mobile home owners find it virtually impossible to secure one of these low-cost loans...

...In 1970, the median income of these mobile home families was $7,000, considerably less than the American median of nearly $10,000 that year...

...The cost of these cheaper materials has increased relatively slowly...

...There are Federally sponsored FHA and VA lending programs which guarantee mobile home loans issued at interest rates of eight and twelve per cent respectively, both rates lower than the going conventional rates...

...ON THE ESCALATOR Recently in Madison, Wisconsin, the state capitol was visited by 2,500 angry home owners from Milwaukee and Racine...

...The result is that the consumer is batted back and forth between dealer and manufacturer with neither one taking the responsibility for repairs...

...But Watergate, inflation, and fuel shortages are monopolizing the attention of Congress...

...For the past year she worked with the Center for Auto Safety, a public interest group in Washington, D.C., as director of an investigative study of mobile homes...

...Second, mobile home producers often substitute cheaper materials than are used in conventional homes...

...You buy a house with the expectation that your payments will be so-and-so-much...

...corporations over the past five years...

...In its 1973 report, the National Commission on Fire Prevention and Control stated: "Mobile homes are the fastest-burning of all homes...

...In the offices of many state attorneys general, mobile homes are being recognized as a significant consumer problem...

...The mobile home manufacturer then states it is not his responsibility, but that of the dealer...

...NICHOLAS VON HOFFMAN (Mr...

...The delay in Federal standards can only mean that many of the 650,000 mobile homes sold this year will be unsafe and poorly constructed...

...According to Red Cross statistics for 1972, 464 mobile homes were destroyed by tornadoes, windstorms, and hurricanes while only 311 conventional homes were destroyed...

...But this is a wicked time for the non-millionaire...

...Apparently, little if any housing legislation, and nothing pertaining to mobile homes, will be passed this session...

...While the average cost of a new conventional home increased by fifty-one per cent between 1963 and 1972—from $18,000 to $27,200 including land—the average cost of a new mobile home increased by only twenty-two per cent over the same period—from $5,700 to $7,000...

...About seventy per cent of all mobile homes are sold to young families and retirees...

...sixty-five per cent with waterproofing...

...There is in addition an often high monthly rental cost to mount the home in a trailer park and tie in utilities and plumbing...

...Thousands of them are old, rusting trailers scattered through the backwoods of rural counties, but larger, flashier, and more contemporary aluminum mobile homes stand in symmetrical rows in acres of mobile home parks, housing newlyweds in Indiana and retirees in Florida...

...Mary Sieboldt of Milwaukee was quoted as saying, "What we want out of our legislature is a complete ban on escalator clauses in home mortgage contracts...

...For example, the chipboard flooring (wood flakes and chips glued together into a board) used in most mobile homes costs about one-third the price of plywood used as flooring in conventional homes...

...Four mobile home manufacturers are on Fortune's list of the top 500 American corporations...

...von Hoffman frequently comments on the CBS News radio production, "Spectrum...

...Mobile home manufacturers, struggling for years to shed their public image as housing's bastard offspring, were delighted by their inclusion in total housing production figures...

...a HUD study shows that other than lumber and plywood, the cost of most materials used in mobile homes has increased at a rate slower than the wholesale price index...

...After receiving more than 300 complaints about mobile homes, Ohio's Consumer Protection Division surveyed mobile home owners late in 1973 to determine how common certain construction problems are...

...Ronald Williams, president of Wilquest Inc., one of the few companies which finances mobile homes under the FHA program, testified before a Senate subcommittee in July 1973: "The money controllers are for the most part refusing to participate in the FHA program because they have a growing portfolio of mobile home loans yielding as much as thirteen and fourteen per cent interest...

...The higher earnings and lower losses on mobile home loans leave little question as to why many lenders who refuse to issue lower-cost mortgages are all too eager to grant mobile home loans...

...thirty per cent with appliances...

...Department of Commerce figures show that the wages of on-site construction workers have increased by forty-four per cent since 1967...

...So lenders won't lend, sellers won't sell, and it is going to get worse...

...The industry has promulgated a mobile home construction code now in effect in more than forty states...

...In the East you have people who are taking fifty and 100 per cent fuel increases—people paying more for the electricity to heat their houses than the mortgages to pay for them...

...Unlike holders of conventional mortgages, mobile home owners are not allowed a period of redemption in which to pay off the balance of their loans...

...But it cannot count on the Federal government for relief from the proven safety and quality deficiencies of mobile homes, at least not until housing is recognized as a major crisis worthy of the attention of Congress and the White House...

...and twenty-four per cent with wiring...

...Your whole budget is built around those house payments...

...Mobile home provisions hammered out by the Senate's Banking, Housing and Urban Affairs Committee are included in the Omnibus Housing Act passed by the Senate...

...It's a bad blow if they go up...

...during the sajne period, the wages of factory workers increased by only twenty-six per cent...

...The protesters want a law...

...The Housing Act has been sent on to the House Banking Committee where it is expected to die...

...And though mobile homes may be the cheapest housing around in terms of retail price, they are by far the most costly to finance...

...The mobile home market has grown without the aid of Federal subsidies, a fact the industry's captains like to stress...

...You can't pass a law that will retroactively make a contract illegal that is legal...

...But thousands of disgruntled mobile home owners have found that the mobile home is hardly a housing panacea...

...People can't afford that, so there will be a suggestion that we pass another law setting a ceiling on interest rates...

...With the average new conventional home selling for more than $30,000, including land, many Americans find that a mobile home—the retail price, including furniture and appliances but not land, averages $7,000—is the only housing they can afford to buy...

...The lesson here is that you can't stop inflation in mid-flight...

...Mrs...

...For example, many mobile home owners belatedly discover that the mobile home's low initial cost is often deceptive, since owners must pay substantial additional sums for expensive financing and insurance rates, frequent repairs and replacements, and rampant depreciation of the home's value—estimated at fifty per cent in five years...

...Because of spiraling conventional housing costs and periodic shortages of mortgage money, mobile homes, built with cheaper materials and labor than the conventional, site-built house and financed at considerably higher interest rates, are fast making inroads on a middle income market that once belonged to local home builders...

...When mobile home owners seek to have their warranties enforced (warranties of three months to one year are routinely supplied with mobile homes) or to have repairs done to their homes by the dealer, the dealer states that it is not his fault and sends them on to the mobile home manufacturer...

...These owners may also discover that mobile homes are subject to severe fire and wind damage...

...Along with their costly loans, mobile home buyers are often pressured by lenders and dealers to buy prepaid insurance policies for many years in advance and to finance the insurance costs along with the cost of the home itself...

...The 576,000 mobile homes shipped to dealers in 1972 represented almost twenty per cent of private housing starts, and forty per cent of the starts of new single-family housing...

...Middle-income America is becoming progressively more dependent on the mobile home as its major source of housing...

...For while bankers may refuse to finance conventional homes, they look kindly on financing mobile homes when purchasers are willing to pay interest rates of twelve to eighteen per cent...

...The delinquency rate on mobile homes was 2.75 in mid-1973 compared to five per cent on FHA mortgages...