A recent article from the Competitive Enterprise Institute makes a simple, almost surgical argument: remove the federal requirement that every HUD Code manufactured home must be built on a permanent steel chassis. At first glance, it sounds like just another regulatory tweak. But if this change actually happens, it could quietly reshape the entire factory-built housing landscape.
The discussion stems from the Housing for the 21st Century Act, which includes a provision to eliminate the long-standing federal mandate requiring manufactured homes to be constructed on a permanent steel chassis. This rule dates back to the 1974 Mobile Home Construction and Safety Standards Act, when homes were expected to be mobile and needed a structural frame for transport. Today, however, more than 90% of manufactured homes never move after installation, making the requirement feel outdated to many advocates.
Supporters of removing the mandate argue that the chassis has become a costly relic. Estimates suggest eliminating it could reduce the price of a manufactured home by $5,000 to $10,000 per unit—real money in a market desperately searching for affordability. The steel also limits design flexibility and, in some cases, gives local zoning boards an excuse to exclude manufactured housing because it still carries the stigma of being “mobile,” even when it isn’t.
And that’s where this conversation stops being about steel and starts being about something much bigger.
The Quiet Convergence of HUD and IRC
If you remove the permanent chassis, what exactly separates a HUD Code manufactured home from an IRC-based modular home?
Right now, the industry lines are clear. Manufactured housing lives under the federal HUD Code. Modular homes are built to state and local IRC building codes. One rolls onto a site on steel; the other rides a carrier and crane. One is seen as permanent housing. The other still carries decades of trailer-park baggage in the minds of zoning boards, lenders, and neighbors.
But take away that chassis requirement and suddenly the visual, structural, and even psychological differences begin to fade.
Homes could be designed with permanent foundations in mind from the beginning. Architectural flexibility expands. The stigma weakens. Financing, insurance, and appraisal conversations start to look more alike. Over time, consumers may not even care which code the home was built under—as long as it looks good, performs well, and costs less.
And that’s when things get interesting.
A Competitive Shake-Up
For decades, modular manufacturers have leaned on one major advantage: perception. They have argued that their product is “real housing,” built to the same codes as site-built homes. Manufactured housing, despite its incredible affordability and factory efficiency, has been forced to carry the weight of outdated regulations and outdated public perception.
If Congress removes the chassis rule, manufactured housing becomes more competitive almost overnight.
Factories could explore hybrid approaches. Design engineers could borrow from both worlds. Builders and developers might begin comparing modular and manufactured based on speed, scalability, and cost—not code labels. Investors might start seeing both as part of the same industrialized housing ecosystem.
This will blur the lines in ways the industry hasn’t seen since the early 1970s, when factory-built housing once represented a much larger share of the market.
The Unintended Consequences Nobody Is Talking About
Here’s the part that should make every factory owner, builder, and investor sit up and take notice.
When lines blur, markets shift.
Some modular companies may find themselves competing directly with manufactured producers on cost. Some manufactured producers may begin moving upmarket. Suppliers, lenders, and regulators will need to rethink categories that have been frozen for decades.
And zoning officials? They may struggle to explain why they’re banning one factory-built home but allowing another that looks identical.
The irony is that this may accomplish something that years of industry lobbying, marketing, and education never could. It may slowly dissolve the artificial walls that have divided offsite construction into competing camps.
The Bigger Picture
For years, we’ve talked about offsite construction as if it were one industry. In reality, it has been a collection of silos—manufactured, modular, panelized, and components—each fighting for legitimacy, financing, and market share.
Removing the steel chassis mandate won’t solve the housing crisis. It won’t eliminate zoning barriers. It won’t magically create millions of homes.
But it could be one of those quiet regulatory shifts that changes how the entire industry evolves.
Because when you cut the steel, you don’t just cut cost.
You cut boundaries.
And once those boundaries start to disappear, the future of factory-built housing may look very different from the past.
.
With more than 10,000 published articles on modular and offsite construction, Gary Fleisher remains one of the most trusted voices in the industry.
.
CLICK HERE to read the latest edition
Contact Gary Fleisher
