Like many American cities, Hagerstown, Maryland, has a housing shortage. As the population has grown, construction hasn’t kept pace. But a new development in the city is helping add more than 200 new homes by turning to an overlooked solution: manufactured housing.

Right now, in part because of outdated ideas of what manufactured housing is, many cities restrict where it can be built. “There’s been a lot of stigma,” says Rachel Siegel, who works on housing policy at the Pew Charitable Trusts. “People think about the old dilapidated mobile home of yore, and as a result, manufactured housing has been zoned out. It’s relegated to the outskirts—parks and communities that are sometimes in flood zones or undesirable parts of town. And so the stigma gets perpetuated.”

But newer manufactured homes are designed to look more like traditional stick-built housing. They can be constructed to high standards. Though residents often had to lease land for the homes in the past—putting them at risk of rent spikes—increasingly, the homes are being built on foundations and sold with land when zoning allows. And they can be a way for communities to add small, more affordable homes that otherwise wouldn’t be economical to build.

“Homebuilders today aren’t building what used to be entry-level homes—the margin’s too small for human labor and materials and the cost of land and entitlements,” says Stacey Epperson, the founder of Next Step, a nonprofit that champions manufactured housing. In the middle of the last century, the majority of new houses were 1,400 square feet or less. Now only around 8% are. Despite pent-up demand for small, affordable homes, they’re hard to find. That’s on top of the fact that the U.S. has an overall housing shortage of millions of homes.

Based on average incomes, Epperson says, many Americans can only afford to pay around $225,000 for a house. But the median house now costs more than $430,000, and newly built homes cost even more. “I have to ask myself, what’s the one place left that can build a house for a price that the average American family can afford, and that’s manufactured housing, right?” she says. “I call it a solution hidden in plain sight. It’s changed dramatically over time, with the increase in quality and energy efficiency. Public perception has not caught up with where it is today.”

The first “travel trailers” were built in the 1920s for camping, but then soon found use as housing during the Great Depression, when more permanent camps started to form. (From the beginning, they had plenty of critics: one 1937 article called trailer parks “crooked rookeries of itinerant flophouses.”) Hundreds of thousands more were built in World War II to house defense production workers.

In the beginning, the homes had poor insulation and shoddy materials, and often required expensive repairs. They also had a high risk of fires. By the 1970s, Congress passed a new safety law for manufactured homes, and the Department of Housing and Urban Development started to regulate the buildings, making it the only type of housing that has a federal building code. (The government calls the regulated homes “manufactured homes,” while those built before the rules are called “mobile homes.”) The quality and energy efficiency improved. More recently, a new category of manufactured homes called CrossMod has gone a step farther. CrossMod homes are designed to look more like traditional houses, with features like steeper roofs, attached porches, and deeper eaves.

Because the homes can be built to a federal building standard—unlike other houses, which have to meet a mishmash of local building codes—it enables making them at a larger scale, with efficiencies in both purchasing materials and production. So-called modular houses, which are also made in factories, can’t achieve the same economies of scale because they have to meet each individual local code. In both cases, using factories allows for more automation, and construction in bad weather, which also helps lower costs.

A recent study from Harvard’s Joint Center for Housing Studies that compared the cost of manufactured homes to conventional houses—the same number of bedrooms and bathrooms and similar finishes—found that manufactured homes were far less expensive. The most expensive manufactured home, the CrossMod, costs more than a quarter less than a comparable site-built house. Double-wide and single-wide manufactured homes cost even less. “It’s naturally affordable,” says Siegel says. “It doesn’t need to be subsidized.” The cost of land matters, though; the cost advantage is greatest in areas where land is relatively affordable.

“It’s important to understand that manufactured housing isn’t the right solution for every place,” she says. “We’re in D.C. Manufactured housing would not be a solution here because homes should be built more densely than that. But anywhere a single-family home can be built and would be the right type of housing for that area, a manufactured home could be used as a substitute and be much more affordable and faster to build.”

In Hagerstown, the new homes are aimed at moderate-income families, with prices in the $300,000s, including the land. “What we see is that consistently we’re able to beat new single-family home construction” on cost, says Tom Heinemann, principal at MH Advisors, one of the partners behind the project. The highest-end home in the new development, with four bedrooms, is around $30,000 less expensive than a comparable newly built traditional home in the area.

Because the houses are going into a new neighborhood, rather than filling in existing empty lots, the development had the additional cost of building infrastructure including a road, sidewalks, and utilities. The homes also have covered front porches, backyards, access to nature trails, and a variety of finishes. “It was important to us that each home looked different, and that each home did not look like a traditional manufactured home,” says Heinemann. “The goal was to make the community as beautiful as possible while also being cost-effective. Even with all that, we are still significantly cheaper than site-built homes.”

In Petersburg, Virginia, his firm is working on a project with a different model: adding manufactured homes to dozens of vacant lots purchased from the city. In the community, with a low-income, majority-Black population, houses often sell for less than $200,000. It wouldn’t be financially feasible to build new traditional homes at such a low cost, but manufactured homes are “a tool for revitalizing cities that have depressed property values,” Heinemann says. The new houses will be low-income rentals; the project is also converting an abandoned school in the neighborhood to apartments for seniors.

Right now, manufactured homes make up only a tiny percentage of new housing units built each year. But that could begin to change with new options for financing. Fannie Mae now offers standard mortgages for higher-end manufactured homes, something that buyers couldn’t get in the past. Because buyers previously had to rely on expensive personal loans, it suppressed demand.

And a handful of cities, like Hagerstown, are beginning to rethink where manufactured homes can be built. In some places, it’s easier than others. In Hagerstown, “when we told the planning office that these homes are set on permanent foundations, have higher build quality, and are eligible for 30-year fixed-rate conventional mortgages, they’re like, ‘Oh, that’s good for us. It’s clearly not a mobile home, and those rules don’t apply,'” Heinemann says.

In Jackson, Mississippi, the city recently launched a pilot project to help demonstrate how manufactured homes could bring affordable housing to vacant lots. The city planning department “realized that what you see in homelessness and crime and the degrading of our community is actually a symptom of poor planning,” Chloe Dotson, Jackson’s director of planning, said in a video about the pilot. Allowing a new type of construction could begin to address some of the historic injustices that made homes unaffordable for so many people. Zoning didn’t allow manufactured homes in city limits; it took around two years of education to convince the city council to change the rules.

The pilot includes a model home that residents can tour, and the city will help interested families build homes of their own. Just seeing one of the new homes in person can change attitudes, says Siegel. “Once a person walks through it, then they sort of have that ‘aha’ moment,” she says. As projects in places like Hagerstown and Jackson get built, and “people see the homes and see how much more affordable they are, I expect that that’s going to help other localities start to say yes and to change their zoning laws to make them more accessible,” she says.