Modular and Affordable are two words that should be symbiotic but in reality, they don’t meet the definition of one helping the other.
That’s because it doesn’t matter how you approach the affordable housing market the law of Supply and Demand enters the picture. The need for affordable housing in this country continues to grow and with all the new migrants showing up every day, the demand isn’t being met with an adequate supply.
Secondly, modular can’t determine the cost of what is affordable housing in every location in the country.
If you want housing to be affordable, you need to build more of it. And when housing demand increases because of economic growth, prices surge upward unless supply can keep pace. It isn’t the demand’s fault if supply lags.
Even if every modular factory in the world began building affordable housing for the US, they couldn’t meet our present demand. And demand for housing in a lot of cases means subsidized housing by state and Federal agencies but this is where the heavy foot of Federal, State and local governments enter to picture. Between over-regulating the affordable housing market, especially if it is modular construction, the constraints to build more housing becomes very restrictive.
Local government continues to look to increase restrictions in zoning at the same time HUD is fighting to open all residential zoning to manufactured housing.
Then you have very powerful people within every single community in the US that use that power to stop growth. NIMBY!
State and local governing bodies are also faced with rising infrastructure costs if they want to have affordable housing projects and also the cost of actually building them.
There are also rising costs associated with meeting tougher building codes that have been proven to add almost 30% to the cost of new housing. Tighter air infiltration regulations, more energy-saving devices and the cost of going carbon-free plus the enormous amount of impact fees for public utilities, additional schools and conservation efforts that hurt affordable housing are affecting affordable housing.
These costs are added to the modular, manufactured and offsite construction industries driving the FOB prices higher. This is not the meaning of being symbiotic.
If this cycle of needing more affordable housing while at the same time strangling the efforts to accomplish it continues, the only thing that happens is rising costs which push the very people that need affordable housing to look for alternative shelter.
That is one reason many communities are amending zoning laws to allow ADUs and even Tiny Houses on lots that already have a single-family homes. ADUs and Tiny Houses don’t have to meet those tough building codes that IRC-regulated modular homes have to meet.
There are many commercial modular factories that want to build multi-story affordable housing projects and have done so for years. Their business was built on that type of project but even if they doubled their capacity by going with two shifts, they couldn’t keep up with demand.
Site builders using panelized construction are also hitting many of the same barriers as modular construction plus a few that are unique to them. The shortage of skilled labor is the most obvious.
That slows down the advantage panelized construction gave the developer in the first place. Finishing a project after the bare walls, trusses and roof sheathing are in place brings the project to the mercy of available labor.
Establishing a symbiotic relationship between the need for affordable and low-income housing and the power of modular construction could take a lot of that work and should be a priority.
Someone needs to step up and begin trying to develop it. But WHO is the big question.
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
Gary Fleisher, Editor in Chief of Offsite Construction Magazine
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