Modular Pre-Purchasing

To scale and encourage the widespread adoption of modular construction methods through pre-purchasing agreements and regional consortia, local and state leaders should consider the following actions:

Assess the Current Modular Ecosystem in Your Community: Many communities have facilities where prefabricated elements including windows, doors, trusses, panelized wood framing, timber and steel framing, precast concrete systems, curtainwall, and structural insulated panels are regularly incorporated into traditional construction techniques. These existing operations could potentially expand to produce additional building systems at scale with sufficient demand. For example, in a city with a need for and policies to support six-story mid-rise residential infill construction, demand may be pooled to incentivize a steel, timber, or mass timber supplier to produce the structural core of the buildings. In some jurisdictions, dwelling components like bathrooms could be prefabricated and delivered to the site ready for integration, but suppliers may need active participation by local government leaders to organize the necessary commitments from local developers.

Create a Regulatory Environment which Facilitates Modular Construction: Local leaders should update zoning laws to accommodate modular construction in more areas, including mixed-use and infill sites. They will also need to standardize and clarify building codes specific to modular homes to prevent delays and inconsistencies. They could also potentially implement a fast-track permitting process for modular home projects. While the International Code Council’s modular codes have created greater harmony in industry, broader structural reforms to building codes are necessary for modular to reach its full capacity and impact the housing crisis at scale.

Incentivize Suppliers to Site or Expand New Factories: The economic benefits of modular construction diminish with transportation distance, making local production facilities essential. Communities can offer incentives such as tax abatements or programs like Cleveland’s SRF to attract manufacturers. Before pursuing this strategy, localities should confirm sufficient demand to justify the substantial capital investment ($40-$50 million) required for factory development.

Support Workforce Development and Engagement with Labor: Meet the housing demand using any means of construction will require significant investment in workforce development. Where modular factories exist and where new ones will be built, cities and municipalities can pool a new, modern workforce and work with labor representatives to find new ways of working with manufacturing partners.