As construction costs soar, funding for multifamily affordable housing remains relatively stagnant. The result is that multifamily affordable housing developers are increasingly pinched, forced to find creative ways to reduce already-tight construction budgets. Too often this causes delays and adversely affects the quality of the end-product. Meanwhile, the factory-built modular housing market is growing more sophisticated and efficient.
It is estimated that the average modular multifamily project can save anywhere from 5% to 10% of overall construction cost relative to a traditionally framed building, not to mention the time savings of up to 40%. Yet, to-date, the modular industry has primarily served market-rate developers.
The fact is that there are a number of financing, logistical, and permitting challenges that make modular affordable housing more difficult to achieve than modular market rate housing. Addressing these challenges has the opportunity to increase the affordable housing pipeline and address the affordability crisis.