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Modular Housing and Mainstream Real Estate

Modular homes aren’t new, but the concept is becoming more popular as affordable housing continues to be a substantial issue for North Americans.

With supply shortages across the country, the most obvious solution would be to build more homes. However, a hefty combination of economic trends, policy decisions, and demographic complexities have made it extremely tough for cities to tackle the affordable housing issue. Homeownership is not even something many middle-class workers can dream about; it’s just not realistic. However, modular housing could change this austere reality.

Modular houses, condos and buildings are structures that are built off-site in a manufacturing plant. The homes are built in sections (or modules) that are transported by trucks to the housing or building site once the sections are complete. The modules are lifted by a crane onto a permanent foundation, and builders complete the construction, just like they would for a traditional home.

Select cities are looking at these structures as part of a solution for homeless individuals. Vancouver, Seattle, Los Angeles and Toronto have all launched modular housing projects aimed at giving people without a home somewhere stable and comfortable to live. But these homes have the potential to do much more.

Families who are having trouble finding a home that fits their needs and their budget could explore modular housing. These factory-built homes are customizable, they can be completed in a matter of months, and they can be cheaper than a traditional home. That’s because most of the construction is completed indoors. Builders don’t have to deal with weather delays, and they can get the job done more quickly and efficiently. Furthermore, materials can be ordered in bulk, and the home buyer only pays for what they use. Leftover materials can be used for another home. The quality of the structure tends to be better when homes are designed this way, and materials may be more sustainable too.

According to HomeAdvisor, a 1,800-square-foot modular home costs around $240,000 to build. However, that cost does not include the expense of purchasing the land, or additional fees such as delivery or installation. Custom designs cost more (think $400,000 – $500,000). By comparison, the cost to build a custom stick-built home starts at around $350,000, and can easily climb to well over $1 million. Where you live will largely dictate how much it costs to build a new home.

Securing land may be the biggest challenge for people looking to invest in a modular home, though these homes can be built on top of basements and crawlspaces. if they can overcome that hurdle, the results can be overwhelmingly positive. Just take a look at this beautiful modular summer home built in Amagansett, New York.

Modular design is slowly being applied to larger structures such as condos, office buildings, student housing, and even hotels, for the same reasons that it has been applied to single-family home development. From site preparation to occupancy, multi-residential buildings could take as little as four months to complete. Traditionally, condos can take years to build, so modular construction could be a real game-changer when it comes to housing availability in dense urban areas.

There’s one more major advantage of using a modular building model for larger residential buildings, and that is labor costs.

The shift to factory-made units typically means safer working conditions and less waste. But, fewer subcontractors and construction workers are needed as well. Typically, a developer will hire a general contractor, and that contractor will hire a subcontractor (and the subcontractor might hire another subcontractor). This is a costly and inefficient system. To make matters worse, construction labor is incredibly expensive because there is a shortage of both skilled and unskilled labor in the construction market.

Modular housing minimizes the cycle of redundancy, putting most or all of the work under the control of a single company. It also standardizes the production process, even though every building will have a unique design, making condo construction more automated and less tedious.

The global modular and prefabricated building market accounted for approximately $150 billion in 2019. That number is expected to rise to roughly $288 billion by 2029. Developers are always looking for ways to cut construction costs and reduce construction time, and modular development helps alleviate both of those pain points.

Growing awareness about the advantages of modular homes, combined with the continual need for sustainable, affordable housing, will almost certainly propel the growth of the global modular market. Modular homes are greener, less expensive, and less complicated. While there will always be a market for traditional homes and buildings, don’t be surprised if you see a condo being hauled in pieces through your downtown core to its final destination.

Kim Brown is a writer with Condo Control Central.