Who's Gonna Build FEMA's Homes? Cavco?

With the hurricanes within the last month, Harvey and Irma, many homes in the Texas and Florida areas are damaged and destroyed. About 185,000 homes have been damaged in Texas, as estimated by the Texas Division of Emergency Management, and an additional 40,000 have been completely destroyed, as estimated by Forbes. With 40,000 homes needed (in Texas alone), questions have arisen about where these homes are going to come from. Currently the Federal Emergency Management Agency (FEMA) has 1,700 mobile homes in stock – but that’s it! FEMA recently requested 4,500 modular homes from various manufacturers to provide emergency housing for Texans.

FEMA officials also noted that mobile homes will be employed as a last resort, now following the model of paying for hotel and apartment stays as a means for temporary housing. "To put a mobile home or travel trailer out there is a significant expense — it really is the option of last resort," said Mark Miscak, an emergency management consultant and former director in FEMA's recovery division.

It seems as if FEMA is trying to stay away from modular homes, possibly due to the lawsuits that occurred after the 2005 hurricanes Katrina and Rita where several of the FEMA units were found to contain high levels of cancer-causing formaldehyde. However, there are still 40,000 homes that are destroyed – and FEMA can have contractors prioritize repairs over building new homes but repairing mold and water damage for these 40,000 homes isn’t going to do much, except recreate a similar scenario of that happened a decade ago.

Regardless, Cavco Industries, a leading building of manufactured and modular homes, will probably be a large source of the mobile homes to be built. With 4 factories in Texas and 2 in Florida (along with another in Mississippi and one in Georgia), Cavco owns a good portion of the manufactured housing output in the Southeastern region (~25% in Texas alone!). With that, all Cavco’s factories are located outside the hurricane danger zones, meaning all are still in operation.

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