Can modular construction help the housing crisis?

Modular construction has advantages that could be the key to solving the housing crisis, but only if industry challenges are overcome. The housing crisis has surged over the past couple of years while construction companies struggle to keep up. A persistent labor shortage is leaving many teams too understaffed to meet demand with traditional construction.

The modular construction process may offer the perfect solution, filling in the gaps that are holding back housing construction.

The impact of the housing crisis

Solving the housing crisis is a crucial and nuanced issue. As of late 2021, the U.S. is short over five million homes, with a particularly acute shortage in single-family homes. The shortage has driven home prices up significantly, making it far more difficult for middle- and lower-income families to afford to buy homes.

So, the real housing crisis is a shortage of affordable, quality housing. Solving that shortage is not a matter of building more homes, but rather building them in a more accessible way.

Many wonder why construction companies cannot simply build more houses. After all, if there were more houses on the market, prices would go down. The reality is that even without supply chain issues, most construction companies today are understaffed. They can work at maximum productivity and it still won’t be enough to catch up to demand.

The labor shortage creates a production ceiling for new housing that can’t be increased without either more workers or new methods.

The housing shortage is also simply not a case of people wanting to “upgrade” their living arrangements. Renting an apartment is just as expensive as buying a home in many areas. There are not enough places to live for the growing number of families in the U.S. The lack of affordable housing is leaving more and more families wondering about their foreclosure rights, backup living arrangements, and plans for having children.

Resolving the housing crisis is about maintaining the health and quality of family life in the U.S. Alternate approaches to construction are the best solution available today.

The advantages of modular construction

Industry leaders are pitching a variety of solutions to the housing crisis. Why is modular construction unique among them? For example, 3D-printed construction is innovative and rapid, but modular construction is much more established and far more widely available.

Modular building offers a core set of advantages over other building methods that ideally position it to meet today’s challenges.

1. Affordability
One of the most well-known advantages of modular construction is its affordability compared to traditional construction. Unfortunately, every form of construction is more expensive than usual due to the supply chain crisis. Modular construction minimizes price increases, though.

This is accomplished by streamlining the production process and minimizing waste. Since modular construction mass produces the components of each structure, each piece can be made using the minimum amount of material possible without compromising quality.

Additionally, modular construction companies don’t need to spend extra money on backup materials since they know exactly how much they will need.

2. Accessibility
The nature of modular construction makes it more accessible than traditional construction, especially for lower-income buyers. Modular construction has a significantly shorter on-site build time than traditional construction. Most of the actual construction happens off-site in a factory.

This means construction companies can assemble a modular home much faster than a traditionally built home. As a result, they are able to complete more homes in less time, despite the labor shortage.

Additionally, modular construction is highly versatile. A core set of mass-produced components can be used to create a variety of custom home designs. In fact, modular home construction has its roots in the dawn of the American suburb boom following World War II. Families could custom-order houses in new suburban developments that could be built rapidly thanks to prefabricated construction methods.

Today, this rapid build time could help understaffed construction companies close the housing shortage gap.

3. Sustainability
Sustainability is becoming an increasingly important concern for consumers. Construction is no exception to this trend, either. Searches for sustainable goods have increased by 71 percent since 2016, indicating growing demand for companies of all types to be more environmentally friendly.

Interestingly, the same qualities that make modular construction more affordable and accessible also make it better for the environment. Raw materials and construction process waste are both minimized since components are mass-produced. The environment around the construction site experiences less disruption, as well, due to the short, streamlined assembly process.

4. Workplace benefits
It is important to consider the safety and well-being of construction workers during the housing crisis. The pressure to fill the housing shortage falls squarely on the shoulders of the construction workers who are responsible for building all of these new homes. Modular construction offers a safer, more desirable working situation than traditional construction.

Experts have pointed out that since modular construction occurs mainly off-site, working conditions can easily be controlled. This allows for much more consistent safety standards. A modular construction factory also dodges the risks posed by adverse weather conditions. This controlled environment also ensures higher-quality building components, resulting in safer finished products.

Even when components do need to be moved on-site for assembly, the process is less intensive than traditional construction. Since these working conditions are less strenuous and dangerous than traditional construction, applying modular construction to the housing shortage could help attract more employees to the construction industry.

Potential challenges for modular construction

For modular construction to meet the needs of the housing shortage, a few key issues need to be addressed. Even industry supporters acknowledge that modular construction is not living up to its full potential today. The same issues that are impacting traditional construction are also holding back modular construction.

Industry leaders have cited the supply chain crisis as a major challenge for modular construction. It is increasing the price of materials so much that modular construction is losing its affordability edge over traditional construction.

Modular construction remains significantly faster than traditional construction, though. The addition of new production facilities around the U.S. will also help the modular construction industry. With facilities closer to build sites, construction times and costs can be minimized as much as possible while increasing availability.

Solving the housing crisis one piece at a time

The housing market and the construction industry will take time to recover and catch up to demand. Alternative building strategies can help speed this process along, though. Modular construction has the potential to become the new normal for housing construction due to its sheer efficiency.

Even if home prices cannot be reduced right away, modular construction can get more homes built faster than traditional construction. Over time, this will bring down the cost of new homes as supply catches up to demand. Adopting modular construction today is crucial to repairing the housing crisis, one piece and one home at a time.