Modular Apartments- Why? What am I missing here?

Question

We are looking at putting together a simple, repeatable, improvable, standardized, simplified, optimized, economized multifamily project designed to be modular. A 13' 8" by 30' or 40' module built at a set location as the base for a multifamily module. Yes- we know about OS, or Guerdon or Katerra or Palomar or Blokable. I am not concerned about saving Seattle's $350 a foot price for their apartments (low end). I am looking for the Model T of apartments. The same building, the same layout, the same fixtures, the same sq footage, the same parking lot, the same on site detention. Every building rolling out the same in the name of affordability. Yes- these units are smaller- they have to be to ship via truck. Stagger them so you do not have an ugly flat relieve reminiscent of a beautiful mobile home- yes. Design them around the dimensions which work best with the simplifying assembly- yes. If your site is not flat and a minimum of 1 acre- then go and find another solution. We need turnkey 3 story buildings that can be built like Henery Ford would. These units built in a factory- Stacked on site and put together in 5-8 months instead of the 12+ months we seen in the past. Price to build should be all in at $125,000-$150,000 per door or $120-$150 per foot. I am NOT talking about building these in Portland, Seattle, Lake Oswego (Sorry @Jay Hinrichs;)) or Vancouver. We have thousands of great renters wanting affordable housing either through market rate, affordable, hero (I do not like this term), work force, section 8 (soon to be rebranded). Responsible capitalism can provide all of this and more, plus jobs, plus growth, plus stability. There is so much opportunity here. Let's sit down and share the solution- the worst we could do is provide amazing housing for all those people that make America great.

Ok- I am getting off my soap box. I seriously think that a solid, repeatable design could change our current paradigm. Everyone of the "Modular" apartment projects I have seen is about as efficient as a hand built Ferrari. How would Henry Ford provide housing for the common man?

Please feel free to roast me or maybe even add to the solution.

Sincerely

Chris Blackburn

Clutch Industries, NWRInc, Clutch Bowling, Inookusa.com

Salem, OR

Ok- I am getting off my soap box.   I seriously think that a solid, repeatable design could change our current paradigm.  Everyone of the "Modular" apartment projects I have seen is about as efficient as a hand built Ferrari.  How would Henry Ford provide housing for the common man?

Please feel free to roast me or maybe even add to the solution.

Sincerely

Chris Blackburn

Clutch Industries, NWRInc, Clutch Bowling, Inookusa.com

Salem, OR

Evan Polaski · Answer

@Chris Blackburn, my only thought about this is that modular a) has not caught on in a mass scale, so prices are still high.  b) real estate is not totally the same as a car, community councils have a say in designs, city planners have a say in density, zoning, permitting, building codes, topography, utility work, etc.  I am not a modular guy, or even a commercial developer, but I would imagine the reason we don't see this is because there are too many variables in real estate.

Chris Blackburn · Answer

@Chris K.  @Spencer Gray @Evan Polaski @Adrian Chu    We will be putting together a panelized version of this product.    I am excited to see how a panel system will change some of our timelines.  Essentially I want to have this put together like clock work on site- I will work with the MEPs to refine and improve.  All the subs will do a Pre-Architectural meeting to help our architect understand how to simplify and streamline the process.  This will include designing exterior/interior walls with minimum cuts (if any).  Again- if we can refine the 18 plex- design and re-use it over and over-  The architect will not have to "Design from ground up", the trades will already know the build costs to the penny.  Timelines can be measured, improved and metricized.  Incentives can be added for speed.  Since we are using steel stud- our current lumber cost crisis is lessened.  I want this to be super boring building  (SBB).  Like watching a Ford factory run.   Maybe I need to put together a group that is interested in trying the same.

Adrian Chu · Answer

I don't know enough about modular building, but from what I know, it's quite expensive.  As far as I know, the easiest way to accomplish something close is to do a manufactured home park...

Dillon Marshall · Answer

Boxabl › home

Web results

BOXABL – Affordable Accessory Dwelling Units & Granny Flats. Came across this company a while back. Talkin all the things you are talking about. Competitive, repeatable, easy shipping. And cost-effective at 50 thousand .

Chris Blackburn · Answer

Well-  We are moving to a panelized system for right now.  Currently working with a eSIP made with steel studs.   We have a home we are designing to build out first to get a feel for the product.  Next is a 6 plex then a 18 plex.  Ultimately we will be building the same 18 plex over and over.  The theory is that the exterior structure will be fully assembled with in 20 days after foundation panels are set- ready for trusses.   Since I am moving toward a syndication model- I will start adding more details in the process.   We have over 300 doors lined up to build over the next 3 years.   The goal is 1000 doors in 5-7 years in the Willamette Valley.   All the projects are 36 to 120 doors.  We are only working with flat ground sites with minimal offsite improvements (Road/water/storm/sewer).  I will update more with the panel company (that I am super excited about)  They can put a house up in a day- they did a 12 unit subdivision that was had delivery in the AM of the panels and trusses arriving for all 12 by the end of the day.

Chris K. · Answer

@Chris Blackburn

Yes, so the finish level is different. But your design looks nice as well. If you decide to venture out to the Northeast, I'll be happy to make connections! Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Chris Blackburn · Answer

These are smaller units, but the finish is hard surface counter (quartz), PTAC (notice the ugly cord that should have been hardwired) LVT in the kitchen- (we would have done all LVT if we were keeping this)  We were only zoned for 17 units so the 18th unit was set for self storage units for extra income.  We did set the infrastructure for charging stations.  Here is a link to the photos:     https://www.google.com/maps/uv...   or if that does not work : https://tinyurl.com/wkxnmbz

Chris K. · Answer

@Chris Blackburn

Those are pretty good numbers! What is your SF pricing for the building alone? What's the finish level?

My guess is that the pricing difference has to do with the finish level. Again, there is no shortage of housing in our area. $800 to $900 a month will get you an "okay" 3BR to rental in a school district where multi-millionaires send their kids to school. We do have a ton of low-income housing in our area where people live there while waiting to win the Section 3 lottery. I don't know if the developers and eventual owners made money on those projects. But they have done one in decades. Not sure if that is because of a lack of profits or lack of grants/tax credits available.

Most new construction projects in my area for Class A/Class B Buildings even if they go modular. Those units rent for $1400 to $1500. Typical renters there are younger doctors/dentists/lawyers/CPAs, temporary workers for oil & gas industries, and non-tenured college professors.

We do have a nice development area where the modular buildings are selling for around $170 per SF. But that's after two former developers went bankrupt on the project. The first went bankrupt around 2008 and the next one went bankrupt about five years later. So the current owners/developers bought the entire development at a fire sale price. My understanding is that the original developers were looking to sell for around $250 per SF. That obviously didn't pan out.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Kathy Utiss · Answer

Besides what has been mentioned the other thing is some HOA's depending on the state don't allow modular homes. We have a lender in place to become a modular home reseller.  The nice thing about this lender is that since they are the lender they have many modular home companies to choose from.

The scenario we are working on the new build modular homes are 3,000 sq ft going for over $110 sq ft and are being built for less than 65% ltv. This includes the purchase of land, improvements, and homes.  The nice thing is land owner comes from a family of builders with over 160 lots.

I know the lender does multi-family, they even do modular Marriott Hotels. But to do large projects you need like $2m or a jv partner with it.

Spencer Gray · Answer

I like it!

I think modular construction will continue to be adopted in the multifamily industry. Your concept of the "model T" is spot on, and something that could be truly disruptive to the market. The problem is the spread between the demand for affordable (not subsidized but within the means of the average renter) housing and the cost of construction and modular could be a solution. Unfortunately, from my understanding modular isn't necessarily cheaper but is faster. I would imagine at scale the costs could begin to make sense.

Modular Apartments- Why? What am I missing here?

Most Popular Reply