News – NCSG

Modular house that has been placed on the National Mall with the U.S. Congress building in the background. Title that says "Report: Factory-Built Housing in Maryland"

Factory-Built Housing in Maryland

Written by Rebecca Garman, Doctoral Student and National Center for Smart Growth Graduate Assistant

Introduction

Manufactured and modular housing – also called “factory-built housing” – offer a promising strategy to address the housing affordability crisis. Industrialized production offers time savings, favorable economies of scale, and gains in quality and energy efficiency, and the resultant cost efficiencies can translate to greater affordability for residents [1, 2, 3]. Given Maryland’s significant housing shortfall to accommodate projected growth, accelerating the production and development of factory-built housing can help address this gap.

However, these benefits can be offset by regulatory barriers and entrenched attitudes that deter the manufacture, construction, and placement of factory-built housing in communities. The State of Maryland passed the Housing Expansion and Affordability Act (HB 538) in 2024, which prohibits county and city governments from denying the placement and construction of a new manufactured home or modular dwelling in single family residential zones. [5] The Act presents an opportunity to produce more housing units by streamlining localized land use controls around the placement of factory-built housing, which currently cause delays and confusion in the development process.

However, there are lingering issues that present challenges to unlocking greater uses of factory housing in Maryland. Utilizing public data and qualitative interviews with representatives from industry groups, manufacturers, and developers, this study explores how barriers emerge throughout the lifecycle of factory-built housing – from manufacturing and design, through transportation, development, and permitting – that can make it challenging to produce these housing units at scale. Given that one of the most significant obstacles in producing more factory-built housing in Maryland is local land use and zoning, the report also includes policy audit analysis of the county ordinances and zoning codes in seven counties in the state. The paper concludes with a discussion of notable practices and lessons learned from other states.

Regulatory Landscape for Factory-Built Housing

While both manufactured and modular homes may be produced in-part or fully in a factory setting and transported to a site for installation, they are defined and regulated by different levels of government. The National Manufactured Housing Construction and Safety Standards Act of 1974 defined manufactured housing and provided a nationwide building code for these homes, whereas modular homes are defined and regulated by the State of Maryland and are subject to state and local building codes. [1] There is no national modular building code, and an estimated 38 states, including Maryland, have state-specific modular building standards and programs. [6, 7]

Chart with definitions and regs, factory and building conditions, and building codes for manufactured housing versus Modular Housing.

Figure 1: Distinctions between manufactured and modular housing.

Manufacturing and Developing Factory-Built Homes in Maryland

Maryland is served by a regional network of factory-built manufacturers. Maryland does not have any manufacturing plants, but nearby Pennsylvania and Virginia have 12 and 1 plants, respectively, as of mid-2024. [8] There is a limited supply of modular manufacturing facilities in that provide full-service modular home construction in Maryland. Nearby states have a variety of modular housing facilities, as well as prefabricated parts producers and/or trade-related services. This clustering can partly be attributed to lower land costs in nearby states, as well as real and perceived market demand.

Transportation and shipping are important dimensions of this regionalized manufacturing ecosystem. More localized transport results in downstream savings for the developer, which factors into the final sale price. Sufficient demand is also essential to meet the required economies of scale to ensure the manufacturing facility is appropriately staffed and productive. However, Maryland has seen little uptake of factory-built housing, compared to other states. Over the last ten years, manufactured housing shipments have remained relatively static. Maryland has tended to have some of the lowest numbers of shipments within the region, except for the District of Columbia.

Line graph that includes data for Maryland, Pennsylvania, Virginia, DC, Delaware, and West Virginia

Figure 2: Annual Shipments of Manufactured Housing Units to Maryland and Nearby States, 2014-2024. Credit: NCSG analysis of the US Census Bureau’s Annual Manufactured Housing Survey.

Given these dynamics, as well as the long-term opportunities to increase jobs and material outputs, Maryland should foster an ecosystem of producers and servicers of industrialized construction. In the meantime, Maryland can and should take a regional perspective by planning for greater production opportunities; encouraging a greater local uptake of factory-built housing; and collaborating with the growing network of organizations, academic institutions, and industry partners in supporting the incubation of industrialized construction facilities, services, and jobs.

The development of factory-built housing in Maryland is driven by market dynamics and influenced by state and local policy frameworks. From a market perspective, high land costs create major barriers to developing more factory-built housing at scale. Further, in many jurisdictions, zoning regulations may outright ban manufactured housing, whether in manufactured housing communities or on privately owned lots, which adds complications and expenses to projects to rezone or seek exceptions or variances. [2] Counties across the state have wildly different definitions and approaches for modular housing. Some have defined rules around modular homes, whereas others don’t address it.

These inconsistencies also highlight a clear need for capacity building and ongoing training and support for Maryland counties around factory-built housing. There is a tremendous opportunity for the state of Maryland to support local governments in updating their codes to be in alignment with HEAA. State leadership will be key in supporting counties’ move from planning and policy to implementation and build capacity and knowledge to ease barriers.

References

Dawkins, C. J. (2025). Local land use regulations and new mobile home concentration. Urban Studies. https://doi.org/10.1177/00420980251335564
Kaul, K. & Pang, D. (2022). The Role of Manufactured Housing in Increasing the Supply of Affordable Housing. The Urban Institute Accessed at https://www.urban.org/research/publication/role-manufactured-housing-increasing-supply-affordable-housing
Rumbach, A., Sullivan, E., Curran-Groome, W., Rosenow, A., & Cohen O. (2025). Building a Climate-Resilient Manufactured Housing Stock. The Urban Institute. Accessed at https://www.urban.org/research/publication/building-climate-resilient-manufactured-housing-stock
Maryland Department of Housing and Community Development. (2025). Turning the Key: Unlocking Maryland’s Potential. Accessed at https://dhcd.maryland.gov/TurningTheKey/Documents/HB538-FAQ.pdf Maryland
National Center for Smart Growth. (2025). 2025 State Housing Need Assessment Released. Accessed at https://www.umdsmartgrowth.org/news/2025-shna/
Modular Building Institute. (n.d.). Breaking Down the “Modular Building Code.” Accessed at https://www.modular.org/2020/02/03/breaking-down-the-modular-building-code/
ICC NTA. (2025). Ten Things to Know About Building with Modular/Off-Site Products. Accessed at https://www.icc-nta.org/ten-things-to-know-about-building-with-modular-off-site-products/#:~:text=State%20modular%20programs%20exist%20in,to%20construction%20of%20any%20type.
Maryland Department of Labor. (n.d.). Manufactured (Mobile) Homes and Modular Homes- Building Code Administration. Accessed at https://labor.maryland.gov/labor/build/buildmobilehud.shtml
Manufactured Housing Institute. (2024). Manufactured Home Plant List. Accessed at https://www.manufacturedhousing.org/wp-content/uploads/2024/09/Plant-List-7_3_24.pdf

Natalie RoachMay 01Comments Disabled

TOD Preemption Passes the Legislature

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TOD Preemption Passes the Legislature

Written by Nick Finio, Associate Director of the National Center for Smart Growth and Associate Research Professor at the University of Maryland, and Natalie Roach, Policy Associate at the National Center for Smart Growth.

At the close of the 2026 legislative session, the Maryland legislature passed the Transit and Housing Opportunity Act (HB 894). This bill was one of several successful elements of Gov. Moore’s housing package, and other pro-housing bills passed this year.

The Transit and Housing Opportunity Act has several main components which will impact the future of transit-oriented development across the state. With the bill, the state government wrests control over some aspects of land use from local governments near certain rail transit stations. Specifically, all WMATA heavy rail lines in MD, the MTA Purple Line, the Baltimore/MTA Light Rail and Metro, and the MARC Penn (between New Carrollton and Baltimore Penn Station) line are impacted. These lines are identified via a provision that a rail transit station must receive at least hourly service on average between 8am and 6pm on weekdays. Conceivably, in the future, other rail transit lines with currently less frequent service (e.g. the MARC Camden Line) could have frequency upgraded, and therefore be impacted by the bill.

Parking Minimums

The Act preempts local control of off-street parking requirements near rail transit by banning them in certain circumstances. Specifically, off-street parking minimums are now banned in new residential and mixed-use developments within 0.25 miles of rail stations. There is an exception carved out to this if the local government has performed a parking study.

Mixed-Use Development

In perhaps the most striking piece of the legislation, the state Act has preempted some local control of land use within one half mile of a rail station. Zoning regulations within the half mile buffer now “shall allow mixed-use development on land designated for residential use or appropriate commercial use for mixed-use development.” This preemption is designed to catalyze development of mixed-use development, which the bill defines as “any combination of a residential use with a recreational, office, dining, or retail use.”

The Act notably exempts areas currently zoned as single-family residential. Despite this exemption, the Act will impact numerous parcels currently zoned for only multifamily residential use near transit stations throughout the State. The Act will also impact any parcels currently zoned for light-industrial uses.

For example, near the University of Maryland, the City of College Park in Prince George’s County has numerous residential parcels zoned RMF-20 within the ½ mile buffer of the College Park Metro station on the green line. This zoning currently only allows residential multifamily development. Density, setbacks, and other regulations on new development on these parcels is still controlled by Prince George’s County, but any new development must allow a mix of residential and commercial uses. Conceivably, small apartment buildings on these lots could now have ground floor shops and restaurants in future development or redevelopment scenarios.

State-Owned Land

The Act also treats certain parcels of state-owned, and WMATA-owned, land that are “contiguous” to rail transit stations uniquely. The parcels must currently be “in use for a transportation purpose,” which we interpret to include parking lots, roads, kiss-and-ride lots, and potentially other uses. On these parcels, local governments may not impose any limitations or restrictions on land use classifications (e.g. zoning). Further, local governments cannot impose any restrictions on height or setbacks (or any “similar requirements” per the bill) for new developments. These provisions are subject to one caveat: the land and development project must be part of an approved transit-oriented development plan coordinated by MDOT and the local government.

For example, WMATA owns several parcels immediately contiguous to the Shady Grove WMATA station on the Red Line in Montgomery County. These parcels have existing height and other requirements that are set by the County’s zoning code, which could now potentially be overridden, underneath a new TOD plan for the area. Numerous other examples exist at rail stations across the state – either on WMATA owned or State-owned land. To understand how this framework could be applied across the state, look to the recent efforts by MDOT to develop a TOD strategy for Baltimore and a specific metro station parking lot in Baltimore City.

TOD Designation

HB 894 also continues to build out the newly updated Maryland transit-oriented development (TOD) designation process. In 2023, the Equitable and Inclusive Transit-Oriented Development Enhancement Act (HB12/SB151) launched the new process for TOD Designation. This included establishing an online application process, a 10 year expiration date on TOD designated sites, and making the Sustainable Growth Subcabinet responsible for issuing approvals. HB12 kickstarted a new focus on TOD designation at the state level. HB 894 expands the benefits of designation; with this Act, sites designated under the program (that meet specific requirements) are automatically considered Enterprise Zones.

The TOD designation is a valuable tool for growing a transit-oriented community. The goal of the program is to facilitate transit-oriented development in key areas and reward localities that are working to advance TOD. When a site is given a TOD designation, it gains access to MDOT’s TOD Capital Grant and Revolving Loan Fund. It also gives projects within site boundaries priority in state applications; the Low Income Housing Tax Credit program under the Maryland Department of Housing and Community Development’s (DHCD) and requests to lease or purchase office or laboratory space with the Department of General Services and MDOT both rewards extra points to applications within TOD designated sites.

There are currently 18 TOD designated sites in the state of Maryland. This updated process will allow for a new wave of locations across the state to be designated as TOD sites and receive the consequent benefits. There are many communities near transit that would benefit from a TOD designation. For example, only one station along the incoming Purple Line – New Carrollton – has received a state TOD designation. As the Purple Line brings changes to the neighborhoods it runs through, access to additional funding and prioritization from the state would allow localities to ensure benefits for Purple Line communities and to work towards an equitable, multimodal future.

Conclusion

In one fell swoop, the state legislature and governor have dramatically increased the potential for TOD near rail transit across the state. In future work, NCSG hopes to quantify the potential impacts of this bill. You can explore how this bill will potentially impact land across the state, especially state owned land, via NCSG’s web mapping tool that was released in 2025.

Natalie RoachApr 30Comments Disabled

The Geography of Affordability: LIHTC and Submarkets

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The Geography of Affordability: LIHTC and Submarkets

By Kathryn Howell, Executive Director of the National Center for Smart Growth and Associate Professor of Urban and Regional Studies and Planning at the University of Maryland, and Finn Meggitt, National Center for Smart Growth Graduate Assistant.

Introduction

The Low Income Housing Tax Credit (LIHTC) is the primary source of subsidy for affordable rental housing in the United States (Schwartz 2015). LIHTC uses the sale of credits – translating to reductions in tax liability – to attract capital investments in affordable properties for both new construction and preservation. In exchange, the building remains affordable for 30 years. Tax credits are federally funded, but competitively awarded by state governments based on priorities such as location, sustainability, preservation or type of developer through the Qualified Allocation Plan (QAP).

Unlike programs such as Housing Choice Vouchers or Public Housing that calculate rents based on the income of the household, LIHTC rents are generally set at 60% of the regional median income, meaning that households earning less than half of the regional income need additional forms of subsidy such as vouchers to access these buildings (Ilic 2026). Nationally, the quantity of available housing for households below 50% of area median income falls significantly short of the need. At that level of income, there are only 54 affordable homes for every 100 households who need them, while that number is 88 for households below 80% of AMI (NLIHC 2025). Locally, in Washington, DC, Maryland and Virginia, for example, there are fewer than 37 affordable and available homes for every 100 households earning less than 30% of AMI. For every 100 households earning less than half of the median income, there are 52 (Virginia) 58 (Maryland) and 64 (DC).

These gaps are exacerbated by the geography at which rents are determined. LIHTC rents are determined by median income levels at the level of the Metropolitan Statistical Area (MSA), which for the Washington DC, MSA extends from the Pennsylvania border in Frederick County, MD to Spotsylvania County in Virginia, and also includes a County in West Virginia. The constituent counties and cities of the DC MSA encompass a broad range of housing markets and income levels. Within jurisdictions, housing operates at the submarket level, and the rents that might be considered below market in Long Branch in Montgomery County would be very different than those several miles away in Chevy Chase or Bethesda (Teresa and Howell 2021). Further, they include all household incomes, rather than just renters, who have lower median income than homeowners.

Using census data and HUD income limits, this research brief examines the submarket rents of communities across the DC region to better understand: What does affordability look like for the Low Income Housing Tax Credit? Where can buildings with LIHTC rents make the strongest impact? Where are LIHTC rents above market for their locations? We find broadly that more than half of LIHTC buildings in the DC region are located in neighborhoods where LIHTC allowable rents outpace tract-level median rents, while just 25% of LIHTC buildings are located in areas where the median rents are higher than LIHTC rents.

The Geography of Affordability

Maximum allowable rents for the Low Income Housing Tax Credit (LIHTC) are based on regional median incomes for all households and are published annually, reflecting regional changes in income. LIHTC rents are close to market rents across the region. Figure 1 shows the change in rents since 2009 for two-bedroom rentals in the region. While median market rents have increased by 58% since 2009 (unadjusted for inflation), LIHTC rents have increased by 47%. The gap between the LIHTC price ceiling and the market rate price has shifted since the aftermath of the Great Recession, with the price ceiling for LIHTC’s units being market rate in 2009, but market rate units became 15.7% more expensive in 2013, 20.5% more expensive in 2018, and shrank to only being 10.7% more expensive in 2023.

The relative affordability of Low Income Housing Tax Credit (LIHTC) rents vary across the DC Metropolitan Region. Because LIHTC rents are based on the median income across the metropolitan statistical area, the rents do not reflect either the local (e.g. County or City) income or housing market conditions. For example, figure 2 illustrates that the LIHTC price ceiling is 14.2% higher than median rents in Frederick County and 7.9% higher than in Prince George’s County. On the other hand, the LIHTC price ceiling is around 19% lower than median rents in Loudoun County and Alexandria, 35.9% lower than in Arlington, and 23.3% lower than in DC. Finally, LIHTC rents are closer to the median in Prince William County & Manassas, Montgomery County, and Fairfax County, with the LIHTC price ceiling being 5.0%, 10.6%, and 14.4% higher than in the three respective counties.

Figure 3 illustrates this issue at a more granular level. The map shows the difference between the price ceiling of a LIHTC two-bedroom unit and what the median gross rent is for a two-bedroom unit by census tract. For example, the darkest red color on the map shows census tracts where the median gross rent for a two-bedroom unit is 32.2% to 50.0% of the maximum rent for a two bedroom unit in a LIHTC property. Meanwhile the blue areas show where the LIHTC rents are below market. There are four areas with high concentrations of LIHTC units, and they are each very different markets. There is a high concentration around Columbia Heights (DC) where LIHTC units are substantially cheaper than market rate units. However, in Southeast of DC, most of Prince George’s County, the international corridor in Montgomery County, and in parts of Arlington outside the Rosslyn-Ballston Corridor, LIHTC price ceilings are at or above market rate for the tracts in which they are located.

Looking deeper, we find that LIHTC buildings are actually concentrated in neighborhoods where the allowable rents are higher than the local market rents. Figure 4 shows the number of LIHTC units in the region by the percentage difference between tract level median rents and LIHTC rents for a two bedroom apartment. More than half (55%) of LIHTC units in the region are located in tracts where median rents are lower than LIHTC allowable rents, while only 5.6% are located in areas where the tract rents are more than 150% of LIHTC rents.

Implications

This research has critical implications for the long-term stability and utility of LIHTC buildings, the ways we allocate affordable housing funds, and the tools we use to fund affordable housing. From a real estate perspective, LIHTC buildings located in below market communities cannot rely on rent increases that may be possible in areas where market rents are increasing. In other words, in a weak market context, building owners could potentially have to offer rents that do not match their expenses to avoid high vacancies. Because building owners are typically paying mortgages based on assumptions of particular rents, downturns can destabilize LIHTC buildings in this context.

From a policy perspective, this poses critical questions about where we prioritize the construction of LIHTC buildings. LIHTC buildings may have the greatest impact in areas where their rents offer access to homes in high-cost communities for renters who have incomes below the median. However, these areas also pose challenges for acquisition, zoning and construction due to elevated per unit costs and exclusionary land use practices. Moreover, public resistance to affordable housing in high-income and predominantly white communities can cause significant delays, which can make the project no longer viable or prevent it entirely. At the same time, subsidized housing in already affordable communities can offer quality housing alternatives for households who wish to remain in their neighborhoods to retain community ties.

This challenge elevates the need to think about how and for whom we subsidize affordable housing – and what additional tools we need to make housing affordable at the state, local and federal levels. Recently, local legislatures and advocates in places like Washington, DC have proposed requiring the use of sub-regional or local incomes to set rents, the issue could also be addressed by changing the income targeting, which could be done by requiring or incentivizing the targeting of lower incomes using the Qualified Allocation Plan (QAP). At the same time, requiring lower rents may require additional subsidy to meet the underwriting needs of the project. While many developers layer subsidies such as Place-Based Section 8 vouchers and tenants do the same with tenant-based vouchers to make the building accessible to lower income households, we face an acute shortage of subsidized housing funds across the board, with more than 75% of households who qualify for it unable to access it, and this shortage hits households earning less than half of the regional median income – who are disproportionately people of color – the hardest. In other words, without additional sources of local, state and federal funding for housing, we will face an ongoing trade off between the volume of housing we build and the affordability at which we build it.

References

Ilic, Gorana. 2026. “‘It’s a Math Problem’: The Tension Between the LIHTC Program and Efforts to Promote Tenants’ Housing Security.” Housing Policy Debate, March 11, 1–23. https://doi.org/10.1080/10511482.2026.2630732.

IPUMS USA (2023). Microdata [Data set]. United States Census Bureau. https://usa.ipums.org/usa/

National Historic Geographic Information Systems. (2025). County-Level Census Data [Data set]. US Census Bureau. https://www.nhgis.org/

Schwartz, Alex F. 2015. Housing Policy in the United States. Routledge.

Teresa, Benjamin F., and Kathryn L. Howell. 2021. “Eviction and Segmented Housing Markets in Richmond, Virginia.” Housing Policy Debate 31 (3–5): 627–46. https://doi.org/10.1080/10511482.2020.1839937.

United States Department of Housing and Urban Development Office of Policy and Research. (2025). Multifamily Tax Subsidy (MTSP) Income Limits [Data set]. United States Department of Housing and Urban Development Office of Policy and Research.. http://huduser.gov/portal/datasets/mtsp.html

Natalie RoachApr 17Comments Disabled

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