Modular construction could provide affordable housing, lower costs across the board
By Guest Columnist CECIL PHILLIPS, president/CEO of Homeplace Solutions
I begin with the belief that if the market could build affordable housing, it would. However, the market is obviously not building affordable housing. Why not? The answer is: construction costs (principally labor costs) are just too high for affordable housing to be built – at least built conventionally.
Construction labor costs have skyrocketed because, during the Great Recession in 2008, millions of workers left the country (and now cannot get back in), while others left for jobs in other industries where they receive a regular paycheck and health benefits, neither of which they had in construction. As a result, the construction labor force has been “hollowed out,” with the average age of a U.S. construction worker now being 49 years. That number alone shows the construction labor force is not even replacing itself, leading to a shrinking supply and permanently increasing labor costs.
Continuing higher labor costs only make affordable housing even less attainable – unless we do something new and different. Fortunately, there is something new and different – advanced modular technology. Thanks in part to the Europeans, the systems and styles today are vastly improved, market ready and highly competitive.
Modular technology had its beginning in Europe at the end of World War II. After the war, Europe had to rebuild from the rubble, but Europe was confronted with a labor shortage caused by the millions of deaths during the War. In the face of that horrific labor shortage, the Europeans started experimenting with alternatives to labor-intensive, site-built construction. Europe developed a system for building inside a facility, out of the weather, and with less than 1/10 of the labor input traditionally required.
After 75 years of experience, European modular construction has become so well regarded for quality, appearance and market acceptance that Marriott is building a 26 story, all-modular hotel at a facility in Poland, and transferring the modules to a hotel site located in Manhattan on 6th Avenue. It will be the world’s tallest modular hotel. When you check in, you will not be able to tell the hotel is a modular one.
As the European experience proves, modular construction solves the weather issues associated with site-built construction. Modular units are assembled in an enclosed facility, so there are neither delays caused by bad weather nor the effects of bad weather such as rain warping the lumber or fostering mold. Inspection of the modules occurs in the facility, as well, so modular eliminates delays caused by on-site inspection and permitting.
Modern modular construction also must satisfy exactly the same state and local construction codes as traditional site-built construction. In other words, the same building codes and requirements that apply to single family and multifamily housing built on-site apply to modular construction, as well. As a result, “modular” is no longer a synonym for “mobile home,” “trailer” or “shoddy construction.”
Modular construction technology also addresses labor costs head-on. Unlike traditional on-site construction, modular construction does not require specialized workers from each trade. A worker in a modular facility need only know what to do when the module arrives at the workstation. For example, if the worker’s job is to install the shower/tub and the sink, the worker need not be a certified plumber, or understand the plumbing for the rest of the house or apartment. Furthermore, the modular worker can be trained for the job within two weeks, and begin to earn a solid, middle class wage right away.
Another sweet spot of modular technology is speed of delivery. An 1,840 square foot home with three bedrooms, two baths, 9-foot ceilings and an attached garage can be built in four days, shipped to the site in one day, and set on its foundation in four hours. Modular multifamily units can be delivered at the rate of four to six per day.
Traditional on-site construction will never be able to match modular’ s speed of delivery. In a world where customers want what they want, and want it right away (the “Amazon” effect), modular’ s ability to deliver a quality product four or five times faster than traditional construction will be a further disruptive factor. Modular saves time and money; and in construction, time is money.
When we are confronted with something that is not working, we have the opportunity and the obligation to try something different. Traditional construction is not working when it comes to delivering affordable housing. However, modular construction does work and can deliver affordable housing. It is time to move it forward.
Note to readers: Cecil Phillips chaired the board of Atlanta Housing Authority for 15 years. Home Place Solutions is a division of Place Properties. A video shows the installation of a home on Sunset Avenue, Vine City, on Jan. 21.