HEM November/December 1994 - Home Energy Magazine Online November/December 1994

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Home Energy Magazine Online November/December 1994

TRENDS
What Price Mobile Homes?

Mobile home buyers are generally willing to pay for energy efficiency through higher housing prices if the costs translate into reduced heating bills in the long run. That is a key finding of a study recently conducted at Pacific Northwest Laboratory (PNL).

The study's conclusion--that the manufactured housing market is much less sensitive to price increases than was previously thought--is significant, because in establishing efficiency standards, codes, and conservation programs, planners need to understand how consumers will respond to prices. Rigid energy-efficiency standards tend to increase a home's purchase price, after all.

The study, "Key Elements Affecting Manufactured Home Household Investments in Energy Efficiency: An Empirical Analysis," found that increasing housing prices would lead to only a slight decrease in consumer demand.

Previous research by the Manufactured Housing Institute (MHI) indicated that manufactured-home buyers are very sensitive to price, but PNL's study found that claim to be overstated. The PNL study updated both MHI's data and its approach, and found only one-third of the drop in demand that MHI concluded would result from a 10% increase in manufactured-housing prices.

The study also looked at the amount consumers are willing to pay for energy efficiency in mobile homes. The study found that buyers in the Pacific Northwest, on average, are willing to pay $2,150 for energy-efficiency measures that reduce electric heating costs by 50%. The specific amount people were willing to pay for energy efficiency varied widely.

Another surprise finding was that the average length of mobile home ownership is more than 15 years, longer than was previously assumed. This seems to remove any impediment to investment in conservation measures by buyers due to short occupancy durations and risk of stranded investments by buyers, the study's authors concluded.

For more information, contact Allen Lee, Staff Scientist, PNL, 500 N.E. Multnomah, Suite 650, Portland, Oregon, 97232. Tel:(503)230-7584; Fax:(503)230-5792.

-- Cyril Penn

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