One of themes we constantly discuss with clients is the potential to use modular home in their development processes. As such, we thought it would be fun to do an up-to-date overview of some of the pros and cons of multi-family modular construction as referenced by a popular site we follow.
KEY FACTS
Modular
homes account for the biggest share of the prefab segment, but not all prefab
homes are modular. For the purposes of this discussion, modular housing refers
to a volumetric modular building which is built in an off-site factory,
transported to the site and often craned into position.
Modular
is definitely a lot better product because it is a lot more customizable. And
while modular homes can cost around 15 percent to 20 percent more than a purely
manufactured home, the opportunity for customization is a key selling point for
residents.
PITFALLS
1) Coordination
with job site: is not infrequent that the modular units do not fit perfectly
with the completed preparatory work on the property.
2) Additional
costs: Yet because apartment unit dimensions usually extend beyond 12 feet,
that poses logistical issues. Trucking costs—fuel, weatherproofing material,
insurance among them—are often enough to price builders out of modular entirely.
3) Financing:
a general lack of understanding from banks who tend to be a bit leery about
financing.
Overview: Modular housing offers a step in the right direction toward increasing housing availability and promoting housing affordability. Still, it appears to have a long way to go before it reaches its full potential, and opinions vary widely as to whether modular is the ideal form of prefabrication and to date, the savings in offsite construction don't overcome the potential pitfalls. Hopefully, this will change in the coming years. Perhaps government subsidies / tax incentives could make up for the pitfalls, but that remains to be seen.
For more information on Snohomish Commercial Real Estate, consider contacting a Snohomish Commercial Real Estate broker.
Our Firm
Weitz Commercial
Scott Weitz
Scott@Weitzcommercial.com
t: 206.306.4034
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