Modular Industry in Best Position to Take Over Mid-Rise Housing

Since 2010, the number of households that rent has grown from 32%
to 36% with the addition of 4,000,000 new renters. Mid and high-income renters
saw the biggest increase.

A VBC 3over1 project in Philly

With construction slowing down due to COVID-19 and lawmakers debating
the pros and cons of rent forgiveness for those that lost their jobs during the
crisis, rental housing developers are starting to play a wait and see game
before building new projects.

Many housing developers already own the land they were prepared to
build on which is some advantage and renters continue to cluster near public
transportation and services to avoid having to own cars, the land available
will continue to be more scarce and expensive.

PFS Corporation

Viking Carrier

Mariotti Building Products

The push for lower rental affordable housing will continue to be as
allusive as the pot of gold at the end of the rainbow. Land prices and more
restrictive regulations will push the raw land costs higher and higher.

Adding to the affordability problem after the COVID-19 crisis are
the continuing shortage of skilled labor and climbing material costs. The
question then becomes how will housing developers meet the need for more rental
housing when this crisis abates.

One answer is building more units per project. Today more then 65%
of affordable housing projects are large projects of 5 over 1, 50-200-unit
types. These can be built more economically than any other type of affordable
housing project coming in between $150-225 per sq. ft.

Many stick-built, mid-rise projects across the country are stalled as labor shortages and strict local labor requirements drive construction costs above $250 per square foot without corresponding increases in rents.

This is where modular construction steps in to be the ideal way to
build these projects.

I am continually surprised that many land developers still have
not investigated converting their new projects to modular. Instead, they choose
to look for subcontractors from within a dwindling supply, buy materials at
market pricing and have all the parts and pieces delivered directly to the
jobsite and watch as their projected finish date keeps slipping further into
the future costing them thousands of dollars a day.

Since the vast majority of these 5over1 apartment buildings
feature only a couple of different floor plans per project, building them as
modules on a production line 75-80% complete, delivered, craned into place and then
finished by a local subcontractors will keep costs within budget and time to
completion on schedule.

There are several great resources for affordable housing
developers to research for more information on how modular construction can
help keep profits and timelines on target.

A great source for all things modular is the commercial oriented
Modular Building Institute (MBI) with members around the world. They were a
leading partner in publishing the DODGE Data and Analytics report “Prefabricationand Modular Construction in 2020”, a must read for any housing developer
looking at modular for answers to their construction needs.

For
a more in depth look at what is available right now, look no further than the
Modular Mobilization Coalition formed to make the design, production and
delivery of medical units a more standardized and faster approach to help
during the COVID-19 crisis. Their network of 30 factories across the US is also
working to help affordable housing developers with 5over1 projects.

Spearheaded
by VBC’s Vaughan Buckley and Momentum Innovation’s Colby Swanson and supported
by the NAHB, its Building Systems Council and MBI, they have brought modular
factories together to increase capacity where needed.

Housing
developers can also have a more personal “one on one” conversation about 3over1
and 5over1 housing projects with Ken Semler, owner of Impresa Modular by visiting his website. As one of the most heavily
involved people in all things modular, his expertise is sought out for projects
of all sizes.

Adding
to this list are the many online conferences and webinars being delivered
almost every day by organizations like Housing Innovation Alliance.

If
you are an affordable housing developer and haven’t yet looked closely at the
advantages offered by modular construction, I must ask, “what’s stopping you?”

Gary Fleisher is a housing veteran, editor/writer of Modular Home
Builder blog and Modular Construction Industry Observer and Information
Gatherer

Contact modcoach@gmail.com