Urban Areas Paving the Way for Modular Construction to Address Housing Needs

There’s a shortage of affordable housing across the United States. The National Low Income Housing Coalition reports that “Only 37 affordable and available rental homes exist for every 100 extremely low-income renter households” across the country. Furthermore, the organization found that no state or major metropolitan area has an adequate supply of rental housing for its lowest income renters.

The lack of skilled labor to build new homes is exacerbating the shortage. According to Associated General Contractors (AGC), 80% of contractors were finding it difficult to hire enough skilled workers in 2019. And the pandemic appears to have made the problem even worse.

Without enough skilled labor, homes are more expensive to build and they can’t get built quickly enough — ultimately pushing up rental costs.

There is good news, though. Two cities — Chicago and Salt Lake City — are removing obstacles so modular construction can do more to help address their housing shortages.

Chicago

“The city of Chicago has a shortage of about 120,000 units of affordable housing,” says Grant Ullrich, the Managing Deputy Commissioner of Chicago’s Department of Buildings.

The lack of skilled labor contributes to the problem. “The skilled labor force is aging and there are fewer young people interested in construction as a career path,” Ullrich says.

To help address these housing needs, the city’s Department of Buildings and Department of Housing initiated Bill SB 1839, which is sponsored by Illinois State Senator, Mattie Hunter. The bill is currently making its way through the state approval process. No opposition is anticipated.

The goal is to remove unnecessary restrictions on modular construction across Illinois. Currently, the Illinois Department of Public Health has regulatory authority over modular construction statewide, which applies in addition to local building codes. For example, the state regulations include a high wind load standard, “which perhaps stems from when they were focused on the regulation of trailer homes that don’t have permanent foundations,” Ullrich says.

A recent project in Chicago involved three-unit apartment buildings, which met all the city’s structural standards. “But when the state-level standard was applied, it added between $5,000 and $10,000 to the cost per unit,” Ullrich says. These unnecessary costs mean that modular construction cannot fully realize its potential to help address the housing shortage.