Maine mobile home manufacturers lose out in federal program

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The Sun Journal
By: Leslie H. Dixon
September 1, 2010

A $3 million federally subsidized Maine Housing program intended to replace pre-1976 mobile homes has received bids from several Maine companies, but more than half of the housing units will probably be built out of state.

This summer, Maine Housing issued two request for proposals -- one calling for bids from manufacturers of single-wide manufactured homes that are HUD and Energy Star certified and another for modular homes for larger families that do not require HUD certification.

The intent, state officials said, is to help reduce the state's large stock of pre-1976, energy inefficient mobile homes.

The proposal requirements said the bid had to come from a builder of manufactured homes, not a retailer, who was HUD certified.

The problem is, said some in the manufactured housing industry, there are no HUD certified manufactured home builders in Maine.

"Unfortunately we really don't have a choice," said MaineHousing Deputy Director Adam Krea of the bidding requirement.

Krea said only one bid was received for the manufactured homes by the Aug. 16 deadline. The bid came from a retailer who uses a manufacturer from Pennsylvania. He said Tuesday that the agency is not sure what will happen with that bid yet, since it's from a retailer.

Four bids were received for the modular home construction, which is not HUD certified. They included three companies from Maine, two of whom build modular homes and one who uses a manufacturer from Canada. A fourth bid came from a Massachusetts company.

The contracts are expected to be awarded in the next several weeks, Krea said.

"We had thought of bidding on them, but the bid had to come from manufacturers," said Peter Hinkley of Country Lane Homes on Sabattus Street in Lewiston. The 26-year-old business partners with builders of Skyline manufactured homes in Vermont, who decided not to submit a proposal for several reasons.

"They would not bid on it. They want to protect their dealer network. They don't want to sell directly to the owner," said Hinkley, who said customers want the reliability of retailers who can promptly address their needs and the manufacturer understands that.

Additionally, Hinkley said the stringent Maine Housing energy efficiency requirements that went above HUD code and EnergyStar efficiency measures, resulted in some problems they and their manufacturer felt could not be overcome under the bid specifications.

For example, he said, an increase in roof insulation would have required a 6/12-inch roof pitch that could not legally be transported over Maine roads. Hinkley said he questioned Maine Housing and was told there would be some flexibility if builders could come up with alternatives, but he did not get a response until the Friday before the bids were due.

Hinkley said Maine Housing's additional energy savings requirements were new, would cost additional money and were as yet untested as to how effective they would be.

"The reason the homes were speced out a different way, is that manufacturers needed to decide whether they could build them," said Krea of the homes that will replace those of some families enrolled in the Low Income Heating Assistance Program.

Krea said that Maine Housing had a study commissioned to see what the savings would be on manufactured homes if the homes was built to HUD code or Energy Star rated. While the Energy Star had a slightly higher savings than the HUD certified home, Maine Housing thought the savings should be even better, he said.

Krea said that according to the study, a pre-1976 mobile home with about 1,033 square feet would cost about $4,130 to heat with oil at $3 per gallon and electricity at 15 cents per kilowatt hour.

Using EnergyStar ratings in new construction, the homeowner's energy bill would be reduced to $2,550, he said. With the Maine Housing increased energy savings specs, the utility cost was further reduced to $1,890.

Krea said the agency spent many hours talking with industry leaders to resolve some of their concerns before the request for proposals went out. But because there are no certified HUD builders of manufactured homes in Maine, Krea said the agency felt they needed to require only manufacturers place bids. But, he stressed, the requirement came with the stipulation that Maine retailers and subcontractors be used for all the site work from setting the home to disposing of the old one.

The change was made this year after determining that there were no HUD certified builders of manufactures homes in Maine during the first round of the program two years ago.

The problem, said some, is that there was at least one HUD certified builder in Maine, Burlington Homes of Oxford - but they were forced out of business just a few weeks before the first requests for proposals were out out to bid in 2008.

"It was in four to six weeks of the date they closed. They were HUD certified in Maine," said Karen Brown-Mohr, executive director of the Maine Manufactured Housing Association.

The factory, which was owned by Burlington Associates, closed down in early 2008 due to lack of business and the poor economy after 14 years in operation leaving some 70 workers unemployed.

Brown-Mohr said the association met with MaineHousing several times to ensure that as much preference was given to the Maine builders as possible.

"We wanted to make sure that half the homes were built in Maine," said Brown-Mohr.

It is likely a Maine company will be awarded the bid for construction of modular homes because they do not have to meet HUD code for modular homes, unlike manufactured homes.

In Oxford, Keiser Homes, a nationally-known modular home builder of single-family, multi-family and commercial buildings throughout New England, bid on the modular home but not the manufactured home proposal because they are not HUD certified, said Josh Saunders.

"Housing for Maine people and energy standards proposed for Maine housing was something we think played to our strengths and point to products with more high energy efficiency than standard housing," said Saunders, who said he believed the energy standards proposed by Maine Housing showed off Keiser's strengths in energy efficient building.

It is unclear yet how many homes will be replaced under the Maine Housing program until the bids are reviewed, said Krea. About 40 pre-1976 manufactured homes were replaced in the first round of the program over the last two years. Krea said the average cost to replace the home and do all the site work is about $57,000.

"We have $3 million to spend," he said.

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