Prefab Trends Improve Housing Affordability

When it comes to selecting housing that works for your income level, a common rule of thumb is to never pay above 30% of your after-tax salary. This is considered a comfortable level of lifestyle affordability.

However, in many U.S. metro cities such as Los Angeles, over 30% of people are spending more than 50% of their income for a place to live. With increasing luxury high-rise designs, rising property taxes and expensive construction projects, affordable downtown living fades into the far distance. Middle-income families are forced to move out into the suburbs, creating more suburban sprawl and unhappy traffic time.

Offsite construction, or prefabrication, presents a cheap and easy alternative. The process easily saves an average of 42% of building time and up to 30% of the typical construction cost. This innovative construction technique presents an attractive solution to provide many residents with affordable downtown housing.

HOW OFFSITE DESIGN WORKS:

Prefabrication is known as the process of building structures offsite and then transporting the complete products. It’s also referred to as “modular construction,” using “modules.” The Khaleej Times refers to it as a “win-win strategy.” All of the building components can be manufactured offsite into a complete piece. This includes columns, beams, core design, wall panels and slabs, staircases, windows, doors and entire bathrooms. All of this is done using a separate place, a controlled setting and the calm found away from noisy construction sites.

Away from the project sites, construction crews can more easily use an assembly line and other automated processes to streamline the build. Especially for mid-level buyers, this cost-effective alternative design process could help boost declining housing markets.

This process works great for ultra-compact apartment designs. Imagine building residential high-rises using modules like Lego blocks. At 32-stories, one of the tallest modular buildings has already been constructed in Brooklyn, NY. Each module was built with structural steel and composed offsite at a production facility. Pieces are then transported to the primary construction site for a smoother, cheaper and faster project completion.

WHERE PREFABRICATION HAS BEEN SUCCESSFUL:

 One notable developer in Austin, TX came up with a 208-square-foot apartment design after spending a year living in a dumpster. Widely known as the “Dumpster Professor,” Jeff Wilson won the innovation award for his micro-apartment. Aiming to solve the housing availability crises, Wilson co-founded KASITA housing, which produces small, affordable spaces. These modular designs are unusually energy-efficient and easy to maintain, which allows for more life.

KASITA micro homes include just over 300-square-feet and 10.5 foot ceilings. The design includes a bathroom, kitchenette, study, lounge a queen-sized bed that can be tucked away. Additionally, it has all the basic necessities for kitchen, showering and laundry. These designs are highly practical and can be utilized anywhere from your backyard to a central city location.

WHY CONSTRUCTION NEEDS IT:

While the economy booms and new projects flood in, construction costs are actually rising. Within commercial construction, there’s a forecast an 8.2 percent annual cost increase.

Labor availability, material costs and interest rates are just a few pricey issues driving up project costs. The expensive building leads to more increased consumer costs, especially for residential designs.

There’s a growing issue known as the “Skills Gap,” which leads to increased labor costs. Whether its negative stigma association or the belief that there’s no money in the industry, labor worker availability has seen a decline, with a predicted 4.5 cost increase. The 5.8 million open skill trade jobs, proves the need for workers. Combine that with rising steels prices and increased Federal Reserve borrowing costs, and you’re left with a big price problem. 

LACK OF FAMILIARITY LEADS TO SKEPTICISM:

Prefabricated housing provides an excellent solution for substantial energy, time and cost savings. Since the innovative design is still new to the industry, developers struggle with complex contracts and difficulty obtaining funding. The lack of familiarity leads to some loaning skepticism. However, with an enlarged perspective to the possibilities, innovative developers can work around obstacles while pushing for progress and a brighter housing future.