Modular Could Ease Labor, Demand Woes

A square is always a rhombus, but a rhombus isn’t always a square.

Similarly, while modular construction is attractive, it doesn’t always fit in the space of the conventional square.

It would be ideal to think that modular factories could be set up and crank out units to meet the seemingly impossible level of demand facing multifamily. Whatever realistic elements of that exist, there are certainly some constraints.

“Although I’m not suggesting modular as a complete solution [to the demand], I’m very excited about it because I see the potential of it,” says Daniel Gehman, studio director at Humphreys & Partners.

“Each developer has a slightly different core belief in why they want to do modular,” adds. “It takes a lot of discipline to design modular. But it’s mostly about size; you can’t just tweak them.”

Gehman has worked on several modular construction projects based in California, including the largest in the country, the Domain in San Jose. His learning improves with each project, helping advance the industry as a whole.

He explains that the best formula is to have all the elements of the design match up in a way that gives the boxes the flexibility of a maximize size, or that equates to the minimum number of the maximum size box. Gehman recently designed a project in Oakwood, Calif., for which he squeezed the units to come up with the ideal space, resulting in a two-bedroom unit that’s less than 800 square feet.

Surprisingly, the design efforts behind these project isn’t about cost savings, Gehman says. In the case of one project Gehman is working on, the developer is creating affordable housing projects with fewer than 50 units each on small lots and wants the repeatability of modular.

That repeatability is critical for the developer to come up with the necessary scale to make the design work for a number of different sites. For that reason, Gehman is designing a plug-and-play modular design with a modified breezeway on a foundation wall system. The design results in a pod of 12 units with one stairway, which allows the developer the flexibility to mix and match unit types.

“Everything is built as a modular unit for these projects, even the clubhouse,” says Gehman. “It’s not a cost-saving measure for them. It’s for repeatability, quality control, and predictability. Modular really does that and is stunningly consistent.

“It gives you a kit of parts [with known sizes]. When [the team gets] to the next site, they [just] roll out the next version. It makes it easy to do several in sequence,” he explains.

Benefits of Modular
Lack of access to labor is a major issue facing multifamily at the moment. Finding and keeping labor in place is becoming an ever-increasing expense for developers. And developers find that working with unions isn’t an easy or cost-effective solution. All of these factors make modular construction an even more attractive option.

Gehman points out that in California and Nevada, producing the modules and shipping them to site can cost more than stick building, but developers are still attracted to it to avoid unions.

Last year, the Urban Land Institute posted a different perspective on union involvement with modular construction.

Jay Bradshaw, who represents members of the Carpenters Union, perceives growth in modular to be a promising opportunity for better and different workforce training and employment for members of his and other unions. The Carpenters Union is one of the few unions that has directly engaged with modular development, but Bradshaw believes that as the techniques are adopted more unions will engage as well.

And although there aren’t large cost savings, with the time savings of modular construction, the risk of carrying cost is reduced. With dense projects, the design and order to fabricate the boxes happens very early in the process. As the boxes are being fabricated, the slab is being poured. The day the slab is cured, the boxes can be delivered and the structure built much more quickly than in conventional construction.

Chris Schmidt, regional business development at Guerdon Modular Buildings, says this system helps developers gain control of the payment process, along with speeding it up.

“Guerdon has established an escrow account process for payments as modules come off the assembly line and are approved for payment only when the owner representative approves the production at the plant,” Schmidt says. “In the end, because of the speed of modular,the carry cost is reduced. Then you open the doors [of the development] sooner and start making a return sooner.”

Other benefits of modular construction include the fact that although the method may be more expensive, it pays for itself because it’s higher-quality than stick-built. Gehman points out that it’s also a much more sustainable process. The vast majority of things that create waste on-site in stick building are done in a factory setting in modular construction, where the waste can be recycled. There are far fewer jobsite trips, less noise, and less interference with the surrounding environment, as well.

Design and Demand Growing
Any design constraints modular may pose haven’t stopped its progress, because demand is opening the market and forcing innovation.

Gehman recently worked with Silver Creek, formerly a mobile/trailer home manufacturer that has retooled to develop multifamily product.

“We need disruptors who can come up with a technology and more robotics in the plant,” Gehman says. “Demand is far exceeding the ability of the fabricators to produce it, which means they’re raising their prices and, therefore, it can’t get legs. It’s a pretty big deal, if you’re going to set up a plant to build box modules, you have to have a lot of demand and sustain that demand.”

Right now, innovation on the factory floor is moderated.

“Plans for automation are evolving in different formats,” Schmidt says. “One of modular’s major advantages over site construction is our deep workforce of skilled labor. There are some things you simply can’t, and wouldn’t, want to automate. Our focus currently is to assist our workforce in making their jobs easier, safer, and more productive. Anything we can automate to help in that manner is worth looking at.”

What Does the Future Hold?
Modular may already seem like a future concept. But wider acceptance will lead to more capacity and greater design adaptability, as well as price stability, which will be critical in the coming months.

Schmidt notes that the team at Guerdon is being pushed by the general contractors who are struggling to find good quality subtrades. The GCs are looking for efficiencies from the modular process that can help them accomplish more with fewer laborers.

“These companies have pushed past the old paradigm of a module box and are stretching the limits to redefine what a modular project looks like,” Schmidt says. “They often say, ‘We don’t want it to look all boxy.’ Once we show them our portfolio, they quickly realize, they can design outside the box.”

Maybe moving beyond rhombus or square.