Can Modular Homes Solve America’s Housing Shortage?

Overshadowed by the pandemic, politics, and social strife in the U.S. is a massive housing shortage. Housing demand exceeds supply by an estimated 2.5 million units — largely thanks to restrictive building codes and steep material costs.

Although new-home construction has risen in recent years, fueled by low borrowing costs, the housing crunch continues. With policymakers struggling to solve the issue, construction companies are getting creative. To achieve efficiencies of scale, many companies, including an innovative New York upstart — are going modular.

What are Modular Homes?

What sets modular homes apart from their traditional counterparts is the way they’re manufactured. Unlike homes built entirely on-site, modular homes are prepared in a factory. Each section is machined using a set of templates and standard materials before being shipped to the builder. All the builder has to do is put the pieces together and fuse the individual sections to the foundation.

Bringing the modular home process into the 21st century is a company called Praxis Modular, a technology-forward modular housing firm based in New York City. Praxis Modular uses robotics and artificial intelligence to create affordable, modern modular structures out of wood and steel — materials that will last.

According to Jon Stouffer, Praxis Modular’s president, the industry is an evolution of the mobile home industry. “What began as a hybrid of the manufactured housing market, with low rooflines and single-story wood frame buildings, has grown into so much more.”

In most jurisdictions, Stouffer says, Praxis Modular can design and build wood-framed buildings up to five stories. Using light-gauge steel, it can build modular structures up to 14 stories. Iron-infused designs can expand the footprint of modular buildings even further.

“These aren’t just homes, either,” Stouffer points out. “From hotels to student housing to condos to emergency structures — you name it, really — modular structures are taking over all corners of the real estate market.”

How Modular Homes are Made

To explain why modular homes are gaining in popularity — Stouffer likens the modular home-building process to the automobile assembly line: A century ago, Henry Ford famously used assembly lines and interchangeable parts to build better vehicles more efficiently.

Now, modular home-building is efficient and customizable, thanks to modern technology. “We can customize any plan to the level of the intended user,” Stouffer says. “We use computer-aided design to overlay the mechanical, engineering, and plumbing systems from floor to floor.”

Praxis Modular offers a variety of templates buyers can choose from. Plus, these templates can be tweaked to add windows, or change their location, add a door or even adjust the home’s square footage. The ability to add or subtract features makes it possible to build the perfect single-family home — or save costs building duplexes and other investment properties.

These custom modular structures can be built in a fraction of the time of traditional homes. Compared to construction firms using traditional means and methods, Praxis Modular can build from start to ship — in less than two weeks.

Although most homebuyers are happy to move in sooner, the pace of modular construction isn’t the only reason it’s gaining steam. Just as important to builders and buyers nowadays — is sustainability.

To Go Green, Go Modular

Visit a traditional construction site, and you’ll see just how wasteful and resource-intensive the home building process can be. As environmental regulations and resource limitations grow, modular homes are likely to get a boost.

Praxis Modular’s production processes reduce waste. Materials like copper wiring are cut to the minimum required length. Scrap wood is pressed into pellets for fuel. “Any waste is minimal and often used in other types of products,” Stouffer says.

Another environmental advantage of modular design is its additive potential. Modular components can be added to an existing structure. Rather than be used to build an entirely new home, they can become the basis for an attached garage or extra bedroom.

For remodeling as well as new construction, modular homes are the future. Sealing that future are two tech companies that have bet big on modular design.

The Future Is Modular

Owing to the sustainability, cost, and production speed of modular homes, Google recently spent $30 million to build 300 modular homes in the Bay Area. Microsoft spent a whopping $500 million to do the same in the Seattle area.

Especially in major metropolitan areas, modular homes are likely to become commonplace. “As housing prices grow father out of reach for millions of Americans,” explains Michael Hendrix, policy director at the Manhattan Institute, “the smaller budgets and faster building times of modular housing could be an affordability game-changer.”

Modular housing may not be the norm yet. But if Stouffer and Hendrix are correct, it soon will be.

Image Credit: ketut subiyanto; pexels

Deanna Ritchie

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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