A plot of land in Southern California could be a game-changer for the housing crisis

Soaring prices put purchasing homes out of reach for most people, but building new housing is slow and expensive.
So far, most solutions to this housing crisis have focused on subsidizing prospective buyers. But what if there were a way to make housing cheaper at every step of the process: cheaper to build, cheaper to buy, and still affordable for the next resident?
In San Bernardino, a sunny California city located about 60 miles east of Los Angeles, a first-of-its-kind experiment is underway to test these ideas on a single plot of land. Think of it as an affordable housing policy trifecta: three different strategies to bring down housing costs — all at once.
The first innovation is to streamline manufacturing. About 90 percent of homes are built on the land they rest on, but in San Bernardino, manufacturers assembled a modest house — 1,462 square feet, three bedrooms — in a factory before transporting it to its final destination on Ramona Avenue.
The existence of a new moderately sized single-family house is itself a coup when most new homes far exceed 2,000 square feet. Back in the 1940s, nearly 70 percent of new homes were 1,400 square feet or less. Today, that number hovers around 10 percent because rising land and construction costs — along with arduous permitting regulations and a preference for larger projects from lenders and investors — have made smaller homes nearly impossible to build using traditional production techniques.
In the case of San Bernardino, not only are smaller houses less expensive for residents, but factory manufacturing further lowers the price by allowing developers to complete projects more quickly. Manufactured homes cost 45 percent less per square foot than their “site-built” counterparts, according to Freddie Mac.
The second innovation is an 800-square-foot accessory dwelling unit (ADU) located on the same plot of land, about 20 feet away from the house. The matching cream-colored unit provides two more bedrooms and bathrooms to another family, below market rate. In other words, the ADU increases affordable housing without requiring additional land, making more efficient use of the space.
The third innovation: the land itself is owned by a local affordable housing development group, which is using a community land trust to ensure that both the manufactured house and the ADU remain reasonably priced for generations. The community land trust, in effect, limits how much the homeowners could ever resell the property for when they’re ready to move on.
Dora Davila, a 42-year-old medical lab technician born and raised in San Bernardino, recently moved with her three children to the new manufactured home on Ramona Avenue. Her family had been living in an apartment, and despite months of searching, could find no houses available that were affordable.
“We were looking at mobile home parks but, the thing is, none of them had a yard and I wanted space for my kids,” she said.
Davila struck gold one day when she overheard a coworker talking about their sister, who had moved into the new ADU on Ramona Avenue this past winter. The developers were now looking for a family for the adjacent house. Davila immediately reached out to the housing development group, Neighborhood Partnership Housing Services, Inc.
“I was in the right place at the right time,” she told me. “It seemed too good to be true — there’s really no place that we could find something in our budget for our family.”
Neighborhood Partnership Housing Services had led a few other projects in southern California using factory-built housing, but never before on a community land trust. They broke ground in December 2022, and despite some construction delays, Andy Lopez, the project manager, suspects it would have taken at least nine more months to build on Ramona Avenue should they have tried to go the traditional site-built route. (It took about a year, but they’re estimating future projects could be completed in four to six months.)
Already, one other California city is looking to replicate the San Bernardino model, and federal housing officials are excited by the idea. The lower-priced houses are built to meet the construction standards set by the US Department of Housing and Urban Development (HUD), meaning they get special financing options, and can be produced more efficiently at scale.
“Manufactured homes built into the HUD code are special because they are the one truly reliable means we have of lowering construction costs for new homes,” said Dan Hardcastle, a special policy adviser at HUD.
In August, HUD announced it would be expanding the types of housing units that could be built under its code, paving the way for manufactured duplexes, triplexes, and fourplexes.
Lopez says their goal is to combat misperceptions of manufactured housing, and to “show the community how attractive factory-built housing has become.” They know there’s still a stigma; many believe factory-built homes are dingy, clunky trailers on wheels, not regular places that look like any other home in a traditional neighborhood.
Palm Springs, California is a well-known travel destination and a luxurious retirement spot, drawing wealthy retirees from other expensive cities who have helped drive up housing prices to well above a million dollars on average.
But the average household income in Palm Springs is just about $67,000, making it very difficult for those who work in the city’s hospitality and tourism industries to buy homes.
Ariel Tolefree-Williams is an affordable housing administrator for the city, hired in early 2023 to launch new projects. She learned about the community land trust/manufactured housing pilot happening about 55 miles northwest in San Bernardino and wondered if Palm Springs could offer up its own vacant land for this model. She got in touch with Neighborhood Partnership Housing Services, and now the city is moving forward with projects on three plots of city-owned land, subdivided to build six manufactured single-family homes. Each home will rest on a community land trust also owned by the city, and be sold for roughly $170,000 to $200,000, a much more doable price for prospective families. If the project is successful, then Palm Springs plans to build more homes on other vacant properties.
Tolefree-Williams said the projects allow the city to do something useful with its vacant single-family lots. Most housing developers are less interested in those, she explained, because they’re focused on bigger residential projects that can yield greater returns.
Some local residents initially objected when they heard manufactured homes were coming to Palm Springs. But Tolefree-Williams said concerns waned when constituents learned more about the building materials and the solar energy components. “We’re going to do a lot of community meetings and outreach in September to make sure folks understand it,” she added.
A big barrier to expanding this model is the restrictive zoning codes written long ago to exclude factory-built homes from most areas.
“There are a lot of communities around the country that place restrictions on manufactured housing,” said Hardcastle, the special policy adviser at HUD. “I think you’re seeing this take off in California because they just have such high costs for purchasing and constructing homes.”
In other words, the state’s desperation has created an openness to unconventional ideas. But even in California there can be reticence to trying new things.
“There can be a lot of hold-up with obtaining various permits from the city, partly because they don’t really understand manufactured housing placed on permanent land — they’re used to it going into a [trailer] park,” said Jesse Ibarra, the chief business officer of Neighborhood Partnership Housing Services. “So we’ve had to do a lot of education with the permitting process.”
Another challenge can be finding enough special licensed contractors (known as c47 contractors) qualified to assemble manufactured homes to national standards.
Some people may be less enthusiastic about buying a house on a community land trust, since it would deny them the chance to maximize the money they could earn as their house increases in value. However, while community land trusts cap the amount of profit a homeowner can generate, owners still get to keep whatever they pay down on the mortgage when they sell.
“Some people see it as glorified rentership, but most folks see it as a much better deal than renting,” said Ibarra. “It can be a stepping stone to a bigger home, and you can save that money instead of giving it all to a landlord.”
While this San Bernardino pilot is now underway, there are some remaining kinks to iron out.
Neighborhood Partnership Housing Services plans to collect rent for the first few years and then eventually sell at least the single-family house to Davila, once they recoup their development costs. Their task will be to figure out exactly how to structure the agreement. Would Davila, or whoever else lived in the single-family house, also own the adjacent ADU and then lease that out to whomever they like? Or should that be kept under Neighborhood Partnership Housing Services’s purview? Put differently, should the first-time homeowner also become a landlord, or is that too complicated? And how does the community land trust piece fit in, if there are two units on one parcel? “We’re figuring all that out now,” said Lopez, the project manager.
Davila understands she’s part of a housing experiment. She’s just happy to have a comfortable place her family can finally call home.
“The noise outside the windows, we don’t hear anything,” she said. “I haven’t slept this well in such a long time.”