Study Explores Potential of Factory-Built Housing

A study prepared by WSP USA for the U.S. Environmental Protection Agency provides insight into the benefits and constraints of modular factory-built affordable housing.

As developers explore modular and factory-built housing (FBH) as a practical option for multifamily dwellings, a new study is providing valuable insight into the benefits and constraints of this emerging construction method.

On behalf of the U.S. Environmental Protection Agency (EPA), WSP USA prepared a 30-page report, Modular Construction for Multifamily Affordable Housing, which describes a range of FBH manufacturing methods, summarizes recent industry developments, details advantages and disadvantages, elevates best practices and provides ways forward for industry stakeholders.

“The report finds promising benefits that could make FBH a solution for many communities,” said Chris Edmonds, who served as WSP’s project manager for the report. “There are also various risks in this emerging market that need to be understood, managed and mitigated.”

The study, prepared by WSP's Built Ecology team for the EPA’s Office of Brownfields and Land Revitalization (OBLR), was released in March at the Urban Land Institute’s Housing the Bay Summit.

“This report is available to the public for the use of all stakeholders interested in factory-built housing and affordable multifamily housing construction on infill sites,” said Narada Golden, WSP principal-in-charge for the report. “OBLR seeks to further land revitalization by providing grants and technical assistance to communities to safely clean up and reuse brownfields.”

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©DAVID BAKER ARCHITECTS

Union Flats in Union City, California, is being designed by David Baker Architects using factory-manufactured housing units.

Risk/Reward

One of the biggest benefits of using off-site construction sites to build modular multi-family dwellings is its lower cost. Manufacturers report cost savings of 20 percent, as well as time savings of 40-50 percent. “Savings on construction materials cost, on-site labor, and abated interest is a key motivation for the growing anticipation of this building technology,” Edmonds said.

FBH also provides developers with a reduction in wasted materials, improved construction safety and predictability, assembly line quality control, and reduced strain on the construction site neighborhood.

“FBH does not require additional or special considerations for environmental site remediation, nor does it impact the way environmental remediation would be carried out,” Edmonds added. “Therefore, FBH is at least as appropriate for brownfield sites as conventional site-built construction, and likely would provide developers new sites for consideration by virtue of its lower costs.”

However, he noted that these benefits do come with some risks.

“While perceived risk is somewhat exaggerated, risk nonetheless exists,” Edmonds said. “FBH has technical limitations due to site size, shape and context; economic limitations of the immature business model; and social limitations related to stigma and labor politics.”

In addition to laying out the current status of the market, the paper identifies challenges and ways forward for financing and building codes and permits; how these can be challenging for FBH projects; and strategies stakeholders can apply in order to move forward.

“FBH is not the silver bullet, and no project is wholly without risk,” Golden said. “Plus, it can take decades of repetition for new technology to become a standard in the construction industry. While the differences between modular and conventional construction may appear risky for some projects, the possibility of cost and resource reduction may be well worth the risk.”

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©ADOBE STOCK

The EPA report was prepared for two organizations in Oakland, California: the Association of Bay Area Governments and the East Bay Asian Local Development Corporation.

Dispelling Myths

The WSP team conducted background research, literature review, expert interviews and expert focus groups to prepare the report. Throughout the project, the firm provided updates and received feedback from the EPA to ensure each topic was fully explored and covered.

The report was prepared for two Oakland-based organizations—the Association of Bay Area Governments (ABAG) and the East Bay Asian Local Development Corporation (EBALDC)— but the paper was intended for developers in all U.S. markets interested in multifamily affordable housing that are considering modular construction.

“ABAG and EBALDC sought to understand the feasibility of developing affordable, factory-built housing on infill brownfield sites within the Bay Area,” Edmonds said. “WSP integrated the advice and expertise we learned from industry insiders in the Bay Area, who volunteered their time and contributions.”

The study also considers the perspectives of stakeholders whose support is needed for a successful modular project: customers and their neighbors, building code officials, local and state government policy makers, architects, contractors, labor unions and the general public.

“The paper aims to dispel myths, but also instill caution where appropriate, so that stakeholders consider the option with realistic expectations,” Golden said.

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©FULL STACK MODULAR

Brooklyn’s 61 Dean Street apartment complex, manufactured by Full Stack Modular, is an example of successful factory-built housing.

Paving the Way

The goal of the project was to build upon existing momentum among FBH advocates to make progress against the barriers that have been holding the technology back.

“We hope that this study inspires large affordable housing developers to move forward with FBH projects giving manufacturers the stability they need to operate and paving the way for smaller, more risk adverse developers to follow,” Golden said. “The paper also aims to encourage policymakers and building code officials to develop tools that streamline the lengthy and technical permitting and code compliance process.”

Both Golden and Edmonds are excited about the potential for FBH outlined in the report, and grateful for the opportunity to work with EPA on the study.

“WSP prides itself on being as curious as we are rigorous,” Edmonds said. “This project stands in a long line of technical assistance research we have conducted related to green building and sustainable development for the EPA.”

For more information about WSP Built Ecology services, visit our website using this link: BUILT ECOLOGY

[To subscribe to Insights, contact the editorial staff at insights@wsp.com.]

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©2018 WSP USA

The report, Modular Construction for Multifamily Affordable Housing, outlines the advantages and disadvantages of factory-built housing. Click here to download the full report.

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