A Primer on the HUD Code, Part II: Amending the Code

Industry News A PRIMER ON THE HUD CODE

Part II: Amending the Code

by Devin Leary-Hanebrink

IIn Part I of this two-part piece a few months ago, we laid the foundation for the HUD Code amendment process by summarizing the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended, and introducing the Manufactured Home Consensus Committee(MHCC). This column will focus on the HUD Code and the process for amending it, from an “initiating event,” the submission of a proposal to the MHCC for review, to final rulemaking.

The HUD Code

All manufactured homes are built to comply with federal standards established and maintained by HUD and the MHCC. These standards, which implement the objectives of the 1974 Act, are collectively known as the HUD Code. However, the HUD Code is more than a building code; it includes model installation standards, procedural and enforcement regulations, certification and testing provisions, and a dispute resolution program, among other requirements.

Given its component parts, the HUD Code is more comprehensive than the 1974 Act and more robust than a typical building code. Further, while it is true the 1974 Act has undergone few revisions since inception, the HUD Code is frequently updated — roughly a half-dozen times over the last decade alone. Admittedly, not every update is a comprehensive revision. For example, roughly eight years span the time between publication of the “second set” and “third set” of HUD Code amendments. However, during that time, HUD »

and the MHCC updated the requirements for ground anchor installations, introduced Subpart M, amended the RV exemption, and revised the formaldehyde notice requirement. Most recently, with the “third set” final rule, manufactured housing officially transitioned to the 2021 HUD Code, which is more current than virtually any other contemporary building code or standard adopted by a U.S. jurisdiction.

Gathering Proposals to Update the HUD Code

Like any standard-setting organization (SSO), HUD is not only responsible for reviewing proposals to update the HUD Code but also for establishing the framework and cadence of review. Generally, a SSO will update its codes and standards every three, four, or five years. For example, the International Code Council updates its family of International Codes on a three-year cycle and the National Fire Protection Association updates its standards every three to five years. However, instead of a three, four, or five-year cycle, HUD has implemented a rather ambitious two-year plan.

Technically, there is no statute or regulation that specifies how frequently the HUD Code must be updated. The 1974 Act only requires HUD to convene the MHCC not less than once during each two-year period to consider revisions. HUD has interpreted this as requiring it to solicit and collect proposals for revising the HUD Code, and then assemble the MHCC as frequently as necessary, but no less than once every two years. However, unlike SSOs, which strictly adhere to their development cycles, just because HUD and the MHCC review proposals on a two-year cycle does not mean the HUD Code is amended every two years. Sometimes it is updated more—or less—frequently. Currently, HUD and the MHCC are in the middle of their 2020-2021 cycle. The submission deadline was June 30, 2020; proposals to amend the HUD Code received after the cutoff will be reviewed as part of the 2022-2023 cycle.

Preparing a Federal Register Notice to Update the HUD Code

After the close of a review cycle, the next step is assembling the MHCC. However, to ensure the public has ample opportunity to participate, HUD must publish »

advance notice of every MHCC meeting in the Federal Register. (At publication, the MHCC most recently met via teleconference on June 10, 2021). During these meetings, the MHCC will review outstanding proposals, approve, modify, or reject each one, and then prepare for HUD a report summarizing its recommendations.

HUD will review the MHCC’s recommendations and work with its Office of General Counsel (OGC) to develop them into a proposed rule for publication in the Federal Register. As part of this step, HUD is also responsible for ensuring the rule complies with several federal requirements, including the Administrative Procedure Act (APA), Regulatory Flexibility Act, and the Paperwork Reduction Act. Further, the proposed rule must be reviewed by the Office of Management and Budget (OMB), the largest office within the Executive Office of the President. OMB will confirm that the proposal is consistent with the Administration’s broader policy directives. Given that HUD is a United States federal executive department and the HUD Secretary is nominated by the President, rarely — if ever — will a rule be published without OMB approval.

Once approved by OMB, the proposed rule is then published in the Federal Register and open for public comment, which usually runs for 30-60 days. After the window closes, HUD will review any comments received and, at its discretion, incorporate or reject them, with an explanation of its decision. (HUD might even withdraw or abandon its efforts, as it did with its interpretive bulletin regarding frost-free foundations). Assuming HUD moves forward with its proposal, it will prepare a final rule for OMB review. After another round of approvals, the final rule will be published in the Federal Register with a future effective date for the new requirements.

The ‘Third Set’ Final Rule

HUD’s “third set” final rule illustrates the complexities of the regulatory change process. In January 2020, HUD published its proposed rule, which started the clock on a 60-day comment period. However, given that HUD’s “second set” final rule was published in late 2013, the “third set” proposed rule is actually the culmination of no fewer than six years of MHCC recommendations over three HUD Code review cycles.

HUD ultimately received over 40 public comments, which is a lot for a manufactured housing initiative. (Although, for perspective, it is not uncommon for other federal rulemaking initiatives to receive hundreds of comments). It then spent the next nine months reviewing these comments and coordinating with its OGC to develop a final rule that incorporated the public’s feedback. Next, HUD had to secure a second OMB approval to make sure

Unfortunately, critics have latched onto this, turning it into a common refrain: the HUD Code is never updated. While it may not be updated as routinely as other codes and standards, inconsistency is not a proxy for inferiority.

-Devin Leary-Hanebrink

everything was still aligned with the Administration’s objectives. Finally, on January 12, 2021, a year after publishing its proposed rule — and seven years since it published its “second set” final rule — HUD published its “third set” final rule. Six months later, on July 12, 2021, the final rule went into effect.

In conclusion, the HUD Code is not an antiquated system that trails behind other codes and standards in terms of safety and technical proficiency. Instead, amending it is a deliberately methodical process. By HUD’s own estimation, it takes 10 steps (and usually a few years) to get from an “initiating event” to publication of a final rule. Unfortunately, critics have latched onto this, turning it into a common refrain: the HUD Code is never updated. While it may not be updated as routinely as other codes and standards, inconsistency is not a proxy for inferiority. MHV

Devin Leary-Hanebrink practices with McGlinchey Stafford PLLC. He helps clients navigate the alphabet soup of state and federal government agencies that regulate a wide range of industries, including banking, consumer financial services, housing, and construction. McGlinchey Stafford PLLC is a multi-service law firm with a national presence, serving clients from offices in Alabama, California, Florida, Louisiana, Massachusetts, Mississippi, New York, Ohio, Tennessee, Texas, and Washington, D.C.

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