Publications

- April 1, 2019: Vol. 6, Number 4

5 Question: The trend toward factory-built homes and commercial buildings

by

John Rowland, president and co-founder of S²A Modular, is a second-generation homebuilder who moved from site-built homes to factory-built homes after learning the significant advantages of modular indoor construction for homes, as well as commercial structures.

What is the difference between mobile, manufactured and modular housing?

Mobile homes are manufactured structures. Those built prior to June 15, 1976, federal legislation commonly used substandard materials and manufacturing techniques that didn’t compare to site-built homes and buildings in the same time frame. Factory-manufactured structures built after that date are considered “manufactured homes” and are required to comply with all the same building standards and codes as site-built homes and buildings. Manufactured homes are built in a factory in one or two very large sections that are connected at the homesite. Once finished at the factory, they are transported to a site and permanently installed over a crawlspace under the home to accommodate many of the structural infrastructure that is normally built into a site-built home’s foundation. The homes are reasonably priced and often have very limited exterior design features usually found in newer modular or site-built homes.

Modular Homes are also manufactured homes, but they are built in parts called “modules” at a factory and they are almost completely finished with all interior and exterior features. Each module is designed to seamlessly integrate with its surrounding modules and exterior design of the building for simple and fast assembly at the homesite.

What are the advantages of manufactured housing?

There are tons of advantages, most notably cost savings and the speed of construction. The factory manufacturing process creates a 5 percent to 15 percent cost savings as a direct result of factory efficiencies, such as waste reduction and reduced construction delays due to inclement weather conditions. Cost savings are also realized in the speed it takes to build the home, which can help homebuyers and developers take advantage of reduced financing costs. In a site-built home, interest is incurred over the 12 month, or more, period it takes to build the home. Modular properties, however, only take three months to build, reducing the total number of interest payments, resulting in huge savings for both individual homeowners and developers. Manufactured homes are also higher quality and last longer than many traditional homes because of superior, precision construction techniques that are completed in a climate-controlled, state-of-the-art factory.

What about the quality of construction? Is it equivalent to traditional on-site built homes?

As previously mentioned, modular homes are constructed to be just as strong and, in most cases, stronger than site-built homes due to superior, precise construction techniques at the factory. The assembly of the modular components, the controlled construction environment and the way those components are tied into the foundation result in an overall structure that’s just as strong or even stronger than any other residential or commercial building. It’s important to note that the same materials are used in both traditional site-built homes and modular constructions, but again, due to the nature of manufactured construction techniques, factory-built homes will last longer over time. We have a clear advantage from the very beginning, as our kiln-dried lumber is never exposed to the outside elements, unlike in site-built construction. Additionally, factory homes are designed and constructed with durability in mind, as modules are built to withstand being lifted by crane and transported by tractor trailers.

Is manufactured construction also being used for commercial construction?

Absolutely. Construction factories can build commercial properties faster, less expensively and more efficiently than commercial construction companies, making factory-engineered properties a great option for commercial developers. Hotels, office buildings and retail stores are all being factory built, substantially faster than site-built constructions, which shortens the time between concept and grand opening. This also reduces finance charges and allows businesses to open their doors faster. Additionally, we have seen a lot of interest by developers building planned communities since large orders can be placed, and the buildings can be constructed and sold faster than site-built homes. Again, this reduces the cost of financing to increase the project’s overall ROI.

What do you anticipate the adoption rate of factory-built housing will be in 10 or 20 years, compared with today?

I would anticipate factory-built homes approaching 50 percent easily in the next 10 years. After the real estate market crashed in 2008, the development industry lost a large number of contractors and sub-contractors, which have never quite been replenished. In turn, this has caused a strain on the labor force for homebuilders in most markets. Builders and developers are realizing the efficiencies of prefabricated housing. With a substantially increased output, homebuilders are starting to recognize just how much they can increase output annually by utilizing factory-built housing.

 

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