Harvey’s Dilemma: Should Builders Work To Produce FEMA’s MHUs, Or Keep Customers Happy?

Fortunately, America’s manufactured home builders can do both.

Last week, in the aftermath of the Hurricane Harvey’s devastation, the Federal Management Agency (FEMA) asked America’s manufactured home builders to initially produce 4,500 manufactured home units (MHUs) to help address the temporary housing needs of Harvey’s victims.

This appeal for thousands of new MHUs is anticipated to be the first in a wave of additional requests that will be required to satisfy the needs of in the long term recovery efforts in southeastern Texas.

The number of MHUs that will ultimately be needed will far exceed the 4,000 units already built and delivered by the manufactured industry – or provided from retailer inventory within the last 18 months. During the 2016 Louisiana flood disaster,  many of these existing MHUs were utilized by FEMA as temporary housing for victims of the 2016 Louisiana flood disaster.

The manufactured housing industry stepped up to the challenge in previously declared disasters and will do so again in the extended recovery in Texas and Louisiana.

“We are prepared to help in any way we can,” said Joe Stegmaier, CEO of Cavco Industries, the second largest producer of manufactured homes in the nation.

Also pledging to assist those in need, the Manufactured Housing Institute (MHI) stated, “Our industry stands ready to help.”  

The Texas Manufactured Home Association (TMHA) has pledged to help both in the immediate future and long time efforts to come.

Fortunately, the state of Texas is the top producer of manufactured homes in the nation with 21 operating home building facilities. In fact, manufactured home builders and retailers in the Lone Star State dwarf the production, shipment and sales of any other geographical region in the country.

The manufactured housing industry in Texas has the capacity to produce the number of manufactured home units that may be required by FEMA. However, some manufacturers are facing a dilemma of their own. While many manufacturers are happy to help, others are forced to make a difficult decision – whether or not it is in their company’s interest to be a participating builder of FEMA manufactured housing units.

Manufactured home builders produce manufactured homes that are sold and distributed by either company owned retail centers or authorized independent retailers.

It is likely that there will be some manufacturers who will hesitate to delegate their production capacity to the FEMA request. These companies will have to decide how to balance the production of MHUs against the need to maintain their core customers.

The following are concerns that some manufactured home producers will undoubtedly consider before accepting the request to build FEMA manufactured home units:

• It is common for FEMA to also purchase inventory directly from retailer display centers. If the manufacturer is dedicating production for FEMA manufactured homes it is unlikely that company will be able to supply replacement display homes for the retailer in a reasonable time frame. The retailer most likely would be forced to purchase display models from a competitor not participating in building homes for FEMA.

• Some manufacturers will attempt to integrate FEMA units into the production pipeline with retail customer sold units. This could have a tendency to delay the production and shipment of the customer’s home, generating adverse repercussions for the buyer and the retailer.

• The special home construction specifications required by FEMA that are considerably different than other manufactured homes could also contribute to inefficient production resulting in delays of retail sold deliveries.

As is typical, the manufactured home industry is dedicated to assisting those in need of support, and who have suffered the loss of their primary home in the wake of the horrific storm.