A primer on modular housing
Technology is combining with real estate property to create an exciting sector known as
‘Proptech’. This sector is witnessing many advancements that improve our built
environment, and particularly, in the way homes are built. This primer on modular
housing provides the top 10 reasons why your next home will be built in a factory.
But first, modular housing defined: A modular home is simply a home that is majority
built off-site, as opposed to on-site. These homes are often called factory-built, system-
built or prefab (short for prefabricated) homes. Modular and manufactured or mobile are
not the same. Manufactured and mobile homes are not placed on permanent
foundations, whereas modular are permanently affixed.
Modular is built to meet city, state, and federal building codes as opposed to simply HUD or motor vehicle agency requirements. Modular homes have come and gone in various forms through the years, and appear to be here for good this time around.
Now the top 10:
Cost Savings – Housing costs seem to be top of mind for many, and particularly for
millennials and generation Z as they are estimated to spend over one-half of their gross
earnings on rent during their first decade of work. Construction costs come down an
estimated 25% when built inside of a factory, delivering significant savings to buyers
and renters.
Time Savings – Today’s consumers expect things to happen quicker than in the past,
and waiting several years for a home to be built is not feasible today. The construction
time to build can be cut by 50% or more when moving indoors with automation and
assembly line methods.
Consumer Preferences – Millennials make up the largest buyer and renter segment and
are opting for smaller homes to coincide with their mobile lifestyles and smaller families.
This leaves more of their time and money towards experiences and freedom. Factories
are far more efficient at building smaller home units than traditional construction.
Sustainability – Along with the flexible lifestyles, more consumers are demanding
transparency and solutions towards living more responsibly. Factory built homes are
90% more sustainable and result in less construction waste while being built and lower
energy demands while in use. A factory line may have a dustbin of waste at the end of a
day, as opposed to a dumpster with on-site.
Quality – Building homes out of wooden 2 X 4’s with hammers and nails relies on
craftsmanship and often leads to a lot of cut corners. Machine automation delivers
greater than 1/32nd of an inch precision and is able to deliver quality throughout with
superior materials.
Workforce and Safety – A standard built home requires a local workforce with trades
and supply chain to complete every step of the construction process. However, people
are opting for safer and more rewarding work environments and have left the
construction trades. A factory improves safety conditions and returns workers to home
building with a more predictable working atmosphere.
Flexibility – A factory-built home is structurally sound and can be easily transported. It
can also be combined or stacked with other factory-built homes like lego pieces. This
creates a ‘forever home’ concept with flex space design and flex location. Although
these homes are fixed in place, they can be unbolted and removed if needed.
Design – Modular homes can be professionally designed and finished as costs are
spread throughout multiple units. What may be out of reach for traditional home buyers
to engage top design talent is more accessible with factory automation.
Strength – Modular homes can be built with a variety of materials, with stainless steel as
a preference. This is a renewable and recyclable material with superior strength to
alternative structural materials.
Globalization – Other countries have been on the cutting edge of innovation and have
fully embraced modular homes as the standard. This includes Japan, Sweden,
Singapore, and England. The US market will need to embrace this or expect new
entrants.
What do you think about modular and your next home coming from a factory?
-M