Manufactured Housing and Opportunity Zones: A Practical Strategy for Expanding Housing Supply by Aaron Potter

UMH Properties, Inc Aaron Potter, VP of Sustainability and Urban Development Manufactured Housing and Opportunity Zones: A Practical Strategy for Expanding Housing Supply Aaron Potter America’s housing crisis, driven by a persistent lack of supply, has finally received broad national recognition. After years of warnings from policymakers, researchers, community advocates and private market participants, there is now growing consensus that the country must build more housing. But awareness alone will not solve the problem. Housing underproduction is not only a social challenge; it is a constraint on economic growth, labor mobility and productivity. Housing is one of the largest sectors of the U.S. economy, accounting for roughly 16 percent of GDP and trillions of dollars in annual economic activity. When housing production is constrained, the effects extend beyond real estate markets. Businesses struggle to hire. Workers cannot relocate to new opportunities. Local tax bases weaken, and communities lose the economic activity that follows new household formation. Construction also has powerful multiplier effects; building 1,000 single-family homes supports approximately 2,900 jobs and generates more than $110 million in tax revenue. Solving this challenge will require both public and private sector execution. There will not be one single answer to the housing shortage. Progress will come from combining the best available tools, including capital, policy, land, infrastructure, construction innovation and disciplined execution. One solution that deserves more attention is the combination of HUD Code manufactured housing in professionally managed land-lease communities with capital from Qualified Opportunity Zone Funds. Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act to encourage long-term investment in economically distressed communities. These areas often need not only capital but also the housing and social infrastructure required to attract employers, support workers and strengthen local economies. Manufactured housing communities are uniquely positioned to meet that need because they can deliver quality, attainable housing more efficiently than traditional site-built construction. In 2025, Opportunity Zones received renewed momentum through the One Big Beautiful Bill Act. One improvement is that investors may now defer capital gains for five years from the date of investment in an Opportunity Zone Fund. Rural Opportunity Zone investments may also receive a 30 percent capital gains tax reduction after a five-year holding period, compared with 10 percent for non-rural Opportunity Zone investments. In addition, rural Opportunity Zone investments may qualify for a lower substantial improvement requirement, needing investment equal to 50 percent of the adjusted basis rather than 100 percent. These incentives are especially powerful when paired with HUD Code manufactured housing. Manufactured homes are built in controlled factory environments to strict federal standards, reducing weather delays, improving quality consistency, limiting material waste and shortening delivery timelines. In areas where the need for workforce housing is urgent, speed matters. Affordability matters. Predictability matters. Manufactured housing provides all three. The land-lease community model strengthens this solution. By separating the ownership of the home from the ownership of the land and infrastructure, land-lease communities can reduce the resident’s entry cost while still providing access to a professionally managed neighborhood. Compared with scattered-site development or residentowned communities, professionally managed land-lease communities are often better positioned to raise capital, improve infrastructure, maintain standards, add homes efficiently and coordinate with municipalities. This matters in Opportunity Zones, where the challenge is not only preserving affordability, but creating new housing supply at scale. UMH’s operating model demonstrates this point. The company expands housing supply by placing homes within existing communities supported by infrastructure and professional management. In 2025, UMH added approximately 700 rental homes and sold 360 homes. With an average home price of approximately $150,000 and average monthly rent of approximately $1,044, UMH provides a housing option that is increasingly unavailable in traditional markets. Manufactured housing in Opportunity Zones should not be viewed only as a tax strategy. It should be viewed as a housing production strategy and a social impact strategy. The environmental benefits are also meaningful. Factory-built housing can reduce material waste, consolidate labor, limit site disturbance and make more efficient use of infrastructure. Land-lease communities can also support more efficient land use than many low-density housing alternatives, particularly when new homes are added to existing communities. At a time when housing affordability, infrastructure costs and environmental responsibility are increasingly connected, manufactured housing offers a practical and scalable response. UMH has already applied this strategy. In 2022, the company formed an Opportunity Zone Fund to develop and redevelop manufactured housing communities in qualified Opportunity Zones. The Fund owns Garden View Estates in Orangeburg, South Carolina and Mighty Oak in Albany, Georgia. Although the Fund still has more than 140 sites to occupy, excluding interest and depreciation, it generated a net profit of $639,000 in 2025. The broader point is simple. Manufactured housing in Opportunity Zones should not be viewed only as a tax strategy. It should be viewed as a housing production strategy and a social impact strategy. These communities need attainable housing, and manufactured housing provides one of the most practical ways to deliver it. When paired with long-term Opportunity Zone capital, the model can bring investment to underappreciated markets, support workforce mobility, expand local tax bases, and create value for residents, municipalities, investors and employers. UMH recently highlighted the local impact of its Opportunity Zone Fund in a video featuring James McQuilla, President of the Orangeburg County Chamber of Commerce. Speaking about the importance of housing to economic development, McQuilla stated, “Housing is necessary first ... it’s pretty hard to recruit industry when there is no housing.” The housing crisis will not be solved by policy alone or by private capital alone. It will be solved by aligning public incentives with proven private sector execution. Manufactured housing in Opportunity Zones is exactly that kind of alignment.