Good trades render modular construction unnecessary, thus, modular construction is only needed in the absence of good trades (like remote sites and tourist destinations). Lack of good trades is a societal failure, not a justification for modular as a panacea. In calgary we have good trades (and a simply massive construction sector) and modular isn’t catching on despite decades of hype. If modular was better, the big boys would have latched onto it years ago and it would by now dominate production. If the big boys don’t do it, the reason is it doesn’t make dollars so it doesn’t make sense. Of course what does make sense is mini prefab items, like trusses, and cabinets and flooring, and possibly prebuilt wall sections. All the work is done elsewhere and the workers on site assemble finished goods to save time and be more specialized. This stuff has all been perfected ruthlessly in a competitive market. modular housing isn’t a solution for what really ails society, affordability. Modular housing costs more than site built because of the overhead of the factory and the inability of the factory to overcome its inherent disadvantage, shipping, craning, and constraints of roads and wires, and that the type of housing demanded doesn’t fit well on a trailer nor within the confines of the existing city and development rules. Modular housing doesn’t benefit from factory scale as promised, because while everyone who wants a truck can use a ford f150 (millions made, all slightly different but identical major systems with interchangeable parts), everyone who wants a house doesn’t want a mass produced model with different paint and gadgetry packages. So housing doesn’t scale in a factory the way it would need to, if we wanted to lower costs. Some modular builders position themselves as premium alternatives, benefiting from climate controlled production, customized architecture, or they use extremely expensive equipment and go after net zero or European style quality This is the antithesis of mainstreaming new supply that could ever make a dent in demand. These models are likely to have walls of glass, integrated appliances and $1000 faucets, so the factory can create margins in its very high cost per square foot product that will be very expensive relative to site built competitors.
This brings us back to the central issue of affordability. Housing isn’t affordable because the individual components add up to what they add up to and can’t readily be economized, even when built smaller. And the land trades like a hard asset in an era of currency debasement, adding massive cost. Governments are such feckless creatures they simply add extra useless waste and fees and tolls and grifts upon the builder, eroding affordability further. The banks then take their share by lending money into the atmosphere and collecting interest upon what they created, this is a huge cost category today now that the easy money days are behind us. One small solution would be really cheap loans to builders, but that isn’t politically feasible as it is easily twisted in the media as handouts to the wealthy capitalists. However, society wants cheaper housing at scale, the most likely suspects to innovate into lower cost higher supply housing is by definition wealthy capitalists creating huge disruptive companies (like a Tesla), not governments, and not boutique artisans. So we come full circle to the conclusion that Modular isn’t the answer (yet, and maybe never) and there is no answer except less government taxes and involvement, less banks influence over the sector, and more innovative builders.