A confluence of issues are coming together to increase acceptance of modular housing, says Bob Koch, AIA, chairman of Fugleberg Koch Architects, headquartered in Winter Park, Fla. Koch has been involved in designing modular buildings for over 20 years, and also has modular housing manufactured to his firm’s specifications. “I see an aligning of the stars that is creating credibility for manufactured housing in the building and lending community,” Koch reports. The adoption of national, rather than regional, building codes, centralized permitting and the declining influence of labor unions, among other factors, open up a whole new world of opportunity for manufactured housing approaches.

“By and large, manufactured housing offers a higher quality than site-built housing,” Koch believes, because it uses specialized labor as well as robotics and heavier fastening equipment, all working indoors without weather challenges. Given today’s shrinking labor pool and rising construction costs, Koch points out, manufactured housing can be a cost-effective, three-shift industry if needed to quickly meet deadlines and demand. He says modular housing can be built up to 60 percent faster than site-built units. This speed and efficiency can also reduce carrying costs and open up revenue streams sooner.

Finally, Koch points out, it’s possible to also add architectural design elements like porches and higher-pitched roofs to impart detail and character to manufactured housing.

Another company actively involved in the modular housing sector is Champion Enterprises Inc. (NYSE:CHB) , headquartered in Auburn Hills, Mich. Champion is the country’s largest builder of modular homes, operating 32 manufacturing facilities in North America and the United Kingdom. It produces both wood- and steel-framed factory-built modular homes. Champion Enterprises works with over 3,000 independent retailers, builders and developers.

“Modular building is not a different type of building but a different type of building process,” explains Kevin Flaherty, vice president of sales and marketing for Genesis Homes, a division of Champion. Some people incorrectly confuse modular home construction with mobile homes, Flaherty notes, despite the fact that they conform to very different building standards and utilize dissimilar foundation systems. Modular home construction complies with all standard residential building codes just like homes built entirely on site.
Modular Homes are built as components in one or multiple sections, which are then delivered to a building site. These modules can come in a wide range of stages of completion, ranging from a structural shell to a fully outfitted living unit. A licensed local builder prepares the site with a permanent foundation or basement. The builder than connects utilities and completes the home under standards enforced by state and local agencies. As an example, roofs and siding are added, porches and garages are built, etc.

In fact, due to the fact that each modular unit has to be built to withstand the rigors of transportation and being picked up by crane to be lifted into place, experts say modular construction generally creates a stronger product. Furthermore, Flaherty points out, the modular approach to building offers a number of environmentally friendly advantages. A large amount of waste material is recycled in the factory, he reports, and with modular building methods, “we can utilize far longer lengths of lumber. As a result, walls and floors contain fewer seams, Flaherty says. Modular homes are typically tighter and thus more energy efficient than standard construction. Overall, Flaherty adds, “Modular construction is a more efficient way of building.”

Rather than having numerous trucks drive to job sites with repeated deliveries of materials, large deliveries of materials and people instead drive to one central spot. Furthermore, he notes, his company’s modular construction generates about 2 pounds of waste per square foot constructed, compared to 4.4 pounds of waste, according to a 1996 study sponsored by the National Association of Home Builders. Plus, Flaherty says, studies have cited a dramatically reduced level of CO2 emissions—up to 62 percent fewer—with modular construction.

“We have high expectations for this market,” Flaherty reports, “even though we understand it’ll be hard for some people to embrace a new approach since every successful developer has a time-tested process that has worked. It takes an innovative builder to let go of that and try a modular approach but once a builder visits a factory to watch how a modular building is assembled, they tend to be impressed by the production process.”

Recently, Champion made a five-year commitment to support design studios affiliated with the University of Notre Dame School of Architecture’s Center for Building Communities (CBC). This is a new interdisciplinary research center addressing community design needs around the country with a special emphasis on modular construction since modular can quickly help strengthen communities with both affordable and market-rate housing solutions.

Military precision

Since 2005, Genesis Homes, a member of the Champion family of homebuilders, has been supplying modular multifamily housing for the Fort Lewis U.S. Armed Forces base, located in Pierce County, Wash. It is the largest military permanent housing project using modular construction undertaken thus far in the U.S., Flaherty says, and one of the first times that modular construction has been used for permanent military housing.

After successfully supplying 67 modular buildings that now house over 174 military families in “Discovery Village” at Fort Lewis and an additional 30 modular buildings, Genesis was awarded a third contract in early April of this year to supply 30 more modular buildings. Combined, these 60 modular buildings will house over 150 military families. All have been done in collaboration with Equity Residential (NYSE:EQR PRE) (NYSE:EQR PRD) (NYSE:EQR PRC) (NYSE:EQR PRN) (NYSE:EQR PRH) (NYSE:EQR) and Lincoln Property Co., and are built off site by Champion Homes of Oregon, based in Silverton, another division of Champion Homes.

Fort Lewis is one of the first four pilot projects for the Army’s Residential Communities Initiative (RCI) primary privatization program whose primary objective is to eliminate inadequate housing. The modular building process successfully improves the ability to provide updated housing for Army personnel and their families with minimal disruption to the base and neighborhood. By building the homes off site, Genesis reduces the amount of construction waste at the building site, resulting in a cleaner and safer neighborhood environment. The number of construction workers on base is also reduced, also producing less congestion and requiring fewer security clearances. Buildings go up faster and the only on-site construction work required is the construction of garages, and completion of roofing, siding and flooring which, in a unique move, Genesis is also handling.

Apartments designed for this project include upgraded features and open living spaces. Five types of building units are being supplied: one-story duplexes with three or four bedrooms, two-story duplexes with three or four bedrooms, and two-story triplexes with three bedrooms. Three-bedroom apartments average 1,760 square feet while four-bedroom units average 2,100 square feet.

“The building process has continually improved, especially the timing,” reports Boyd Lucas, executive development manager, Equity Residential. “We’ve been able to employ ‘value engineering,’ and that, combined with Genesis’ excellent delivery timing, has helped us achieve faster set-ups of buildings.”

Almost 6,000 miles away, a Champion partner company, Caledonian Building Systems, recently used steel-framed modular construction on an award-winning, 17-story project for a major United Kingdom developer called Berkeley First, a division of Homes. The ultimate client was Thames Valley University, which wanted to provide both student “flats” and workforce housing on a tight infill site in the west London neighborhood of Brentford. The project incorporates a mix of 839 student rooms with communal kitchens, 114 worker studios, 44 affordable one-bedroom apartments and 63 affordable two-bedroom apartments available for sale.

The 411 modules that form the Paragon mid rise took only 25 weeks to manufacture in Caledonian’s factory in Carlton-on-Trent, Nottinghamshire, England, about 120 miles away from London. Installation required just 50 working days. Following this, there was a period of 24 weeks for internal completion, service connections and external siding installation. Modular construction drastically slashed the building timetable and cut on-site waste by two-thirds. The end result is the United Kingdom’s highest self-supporting modular structure.

Modular housing in the U.K. is currently going through a rapid phase of increased popularity as both users and specifiers start to understand the benefits it can offer, says Sean Harley, operations director for Caledonian. “These benefits are fuelled by such issues as the growing environmental concerns, the skilled labor shortage and increasingly tight construction programs,” Harley reports.

“Feedback following the completion of the Paragon project has been very positive and a number of the major players in the U.K. are keen to explore the benefits of high-rise off-site manufacture. Our method of construction reduces risk and provides a higher degree of cost certainty to that of traditional construction,” Harley says. “Our real benefit is in terms of time savings, where we are typically between 30-40 percent quicker than traditional methods of construction and not as susceptible to changing weather conditions.”

In the U.K., Caledonian has already implemented the steel-framed modular system to build 4,000 bed spaces for the military market, 2,400 bed spaces for the residential marketplace and 1,200 bed spaces for the hotel market, among other end uses.

Paragon was not Caledonian’s first modular project in London. It has done a number of buildings on the city’s outskirts and recently completed a six-story multifamily project in central London, adjacent to the Kings Cross railway station. This consists of 17 apartments and six three-story townhouses.

“We expect to see an increasing number of modular projects in and around London over the next four to five years,” Harley adds, “as we move toward the 2012 Olympics and the associated regeneration that’s planned.”

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