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Tornado shelters and the manufactured home parks market

Abstract

Manufactured or mobile homes represent a fast growing portion of the housing market but are particularly vulnerable to tornadoes. In the US over 40% of tornado fatalities occur in mobile homes even though they comprise about 8% of US housing units. We examine the market for tornado shelters in manufactured home parks in Oklahoma. Almost 60% of parks in the state have shelters, with 90% of the shelters underground. Parks with shelters are not concentrated in urban areas but spread across the state, with parks with shelters in 32 counties. We find that rents for lots in parks with shelters are 5–8% higher, which generates sufficient revenue to approximately pay for shelters, but the point estimate is statistically significant in only one specification.

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Notes

  1. These calculations assume that the cost of a shelter is $2,000 per household and uses a discount rate of 3%.

  2. Our analysis is based on shelters as reported in the MHAO survey; the authors did not independently verify shelter status or quality.

  3. The 2000 Census definitions of these MSAs were used. The Oklahoma City MSA contained Canadian, Cleveland, Logan, McClain, Oklahoma, and Pottawattomie counties and the Tulsa MSA contained Creek, Osage, Rogers, Tulsa, and Wagoner counties. Oklahoma also has two much smaller MSAs, Lawton and Enid, but we consider only the two largest metro areas.

  4. The towns were Cookson (two parks without shelters), Guymon (2), and Talequah (3), all with 2000 Census populations under 15,000.

  5. Ewing and Kruse do find a secondary income effect as the mean willingness to pay was significantly higher at a suburban Parade of Homes site than at an urban site.

  6. We also investigated whether above and underground shelters affect lot rent differently. If above ground shelters vary greatly in quality, this may reduce the overall impact of the Shelters variable. In regressions not reported here but available from the authors, an underground shelter increased rent by about 3% per month but the effect was not statistically significant, while above ground shelters produced a statistically significant (at the 10% level in a two-tailed test) 23% increase in rent. The implied premium for above ground shelters is over $25 per month, or over $300 per year, but is based on only 13 parks.

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Acknowledgment

We thank the Institute for Catastrophic Loss Reduction for financial support, Deanna Fields of the Manufactured Housing Association of Oklahoma for sharing the results of their survey of parks in Oklahoma, and Bill Ridley for research assistance.

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Correspondence to Daniel Sutter.

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Simmons, K.M., Sutter, D. Tornado shelters and the manufactured home parks market. Nat Hazards 43, 365–378 (2007). https://doi.org/10.1007/s11069-007-9123-4

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  • DOI: https://doi.org/10.1007/s11069-007-9123-4

Keywords

  • Tornadoes
  • Manufactured homes
  • Mitigation
  • Shelters
  • Hedonic prices