Texas is implementing a new state law, Senate Bill 785, which mandates that all municipalities with zoning must permit new HUD-code manufactured homes by right in at least one residential district. This change is expected to affect nearly 400 cities, requiring them to update their local codes. Nacogdoches, Texas, has become an early example, with its City Council unanimously creating a new residential district that permits manufactured homes, including those in the Millard's Apple Park subdivision which was originally platted in 2002 to accommodate both traditional and manufactured housing.
The shift in Nacogdoches aims to address a significant gap between local incomes and housing costs. The median home listing in August was approximately $325,500, while the median household income was $39,281. This disparity makes homeownership difficult, as fewer than 40% of households own their homes. The rental market also offers little relief, with median asking rents at $962 per month, a 13% increase over three years. Manufactured housing is seen as a potential solution, with new single-section homes averaging $87,300 and multi-section homes averaging $151,500 in 2025, excluding land and taxes. Installed on foundations, these homes can cost between 35% and 73% less than comparable site-built homes.
Texas has historically been a leader in manufactured housing, receiving 17,458 manufactured homes in 2025 alone, more than any other state. However, a complex web of local regulations has often hindered their widespread adoption. The new state law aims to standardize access, but its implementation has revealed limitations.
Local Control and Compliance Challenges
While SB 785 requires cities to allow manufactured homes, earlier versions of the bill that proposed broader inclusion across substantial land areas and prohibited city-wide bans did not survive intact. The final law requires the designated district to apply to "an area of land" without specifying a minimum size. In Nacogdoches, only Millard's Apple Park was rezoned, leaving other potential areas dependent on property owners initiating rezoning requests. City officials noted that beyond the 69 lots in Apple Park, there might be no other properties requesting the change, a situation that falls short of the city's projected need for 1,300 new housing units in the next five years.
Bellmead, a city near Waco, presents a more restrictive approach. It established a new district for manufactured housing but requires a contiguous tract of at least five acres for rezoning. This stipulation has made it difficult for individuals like Amber Haliburton, who sought to build on her family's property, to proceed. City staff indicated the new district was primarily intended to facilitate development projects rather than address individual lots, raising questions about whether the regulation effectively opens the door for widespread manufactured housing.
Broader Implications for Housing Affordability
The outcome of these implementation challenges in Texas is being closely watched, as other states are also exploring zoning reforms to expand manufactured housing. Some states have adopted more comprehensive measures, requiring manufactured homes in wider areas of single-family zones. The resistance to manufactured housing often stems from an outdated perception that these homes are a lesser investment. However, research from Realtor.com indicates that manufactured homes, both with and without land, have appreciated in value, with homes sold with land appreciating 70.1% from 2019 to early 2026, compared to 58.6% for single-family homes.