Idaho, Northwest benefit from modular, affordable housing

Modular housing industry leaders tout the industry as providing affordable housing, which, lately, is being provided beyond Idaho’s borders as well.

Manufacturing companies Autovol, in Nampa, and Caldwell’s indieDwell are said to be consistently producing units slated for projects primarily in California, but also Denver, Colorado and Seattle, Washington, among other places. Caldwell’s indieDwell highlighted four projects underway in Idaho:

• 12 two-bedroom one-bathroom modular units of workforce housing called “Thompson Court” in McCall
• A 14-unit subdivision called “Caritas Commons” in Boise; these are deed restricted four-bedroom two-bathroom units LEAP Housing will market at $220,000
• A one-bedroom Accessory Dwelling Unit on the Boise Bench
• A Boise duplex with two three-bedroom, two-bathroom units estimated to be built for $243,000, not including the garage

While it’s no secret stakeholders are concerned about Idaho’s housing affordability and inventory, modular housing industry leaders are calling on local and state government to address the concerns — such as with incentives for affordable housing and updating residential zoning larger than R-1 — so their businesses can offer more to Idaho.

Chris Blanchard, sales and marketing manager for indieDwell, feels modular housing manufacturers can rapidly rehouse people, but when it comes to addressing an inventory shortage and the increased in-migration into Idaho, “I think we can definitely impact that, we just have to be creative,” such as by activating “dead spaces” or “redeploying spaces” (such as along rail lines).

Blanchard, along with Autovol’s founder and CEO Rick Murdock, and Doug Pill, CEO and president of Prefab Logic, recently shared industry insights and news, and took questions during a virtual event hosted by Urban Land Institute. Just under 50 people attended, including representatives from Boise Metro Chamber, City of Boise, Capital City Development Corp., Canyon County-Development Services Department, Coeur d’Alene Area Economic Development Corporation, Idaho Housing and Finance Association and Northwest Real Estate Capital Corporation.

“What’s the magic number of how high costs have to be to make modular worth it? I don’t know if there’s a true answer to that,” Murdock said during the Q & A portion of the event, and he added it depends on factors like the area and cost housing.

Looking at the California market, “we are lowering costs by about $100 per square foot (including shipping,” according to Murdock, and probably reducing project completion time by 30%-40%.

The modular housing industry has been noticeably expanding over the past couple of years, and Blanchard credits several factors aligning: advancements in technology, a strong foundation of industry leaders, locations where labor costs are outrageously expensive or where there is almost no labor force, such as in more rural areas.

The labor force

Autovol just finished its first project as of March 3, and it’s headed to California. Murdock said the company’s goal this year is to build 600 modules, increasing that year-end goal to 1,000 in 2022, and the ultimate capacity at 2,000 in 2024.

Autovol currently employs about 117 people, and the company is looking at adding 40-50 in the near future, with 350 being the ultimate goal.

One benefit to modular, Murdock added, is that manufacturers can work off-site and continuously build, while traditional construction has a “short season.”

“Idaho still has available labor, and relatively inexpensive, compared to other markets (such as California Colorado, where) land and labor costs are just extraordinary,” Blanchard said. “In the Treasure Valley, we haven’t quite hit that tipping point where it makes sense to do a ton of modular.”

The technology

After conducting a modular feasibility for prospective clients, Prefab Logic offers a four-phase “sprint model” in the designing of the modular units: put the structural concept into architectural virtual reality, account for the nuts-and-bolts (such as mechanical and plumbing elements), put the project forward for state or third-party approval, then produce a “shop drawing.”

Once stakeholders walk through and give the stamp of approval on a constructed unit, the intent is to not stop the assembly for the remaining units. Every pipe and fixture fitting should be modeled and accounted for. All costs for materials should be accounted for as well. This differs from traditional building cycles, which address these topics on-site once construction has started.

“That seamless integration — structural design, plumbing, fire, etc. — is what we’re looking for,” Pill said during the presentation.

Educating stakeholders

When asked what drawbacks the industry still faces are, Pill responded with not only a need to share the benefits and intentions of modular housing, but also a need to educate stakeholders, from project developers and owner to the architects, general contractors and engineers.

“They have to have an appetite to do things differently,” Pill told Idaho Business Review after the presentation. And, they will have to learn how their roles will be affected.

Financial institutions will also have to understand the cost structure of modular housing projects is different as well, Blanchard added, with nearly all costs accounted for early in the process.

The current desire is about 50 modular units per project, Pill said, and Murdock added that it’s not a lack of desire to do smaller projects that dictates that average, but the need to consistently keep the manufacturing processes going. It’s a challenge to “slip in” smaller units.

“As our vertical construction costs continue to escalate, modular becomes more of a reality,” Pill said.

“There’s no place that’s not struggling with housing affordability,” Murdock said.

Gerald Hunter, president of the Idaho Housing and Finance Association, said he is excited about the potential modular housing has for not only the Treasure Valley, but also “in many other markets across the country.”

Hunter also said he was particularly excited about Autovol’s use of robotics in the manufacturing process.

“I think that’s a really interesting step, trying to address an industry in efficiency and improvements,” Hunter said. “This a landmark move and I applaud them for what they’re trying to accomplish.”

As a stakeholder in affordable housing, and having been involved with several of indieDwell’s recent local affordable housing projects, Hunter said he feels modular housing is “a really great thing to see happen,” and he hopes “over time, we will see (more) benefits.”