Are Modular Administrative Programs Killing Our Industry’s Primary Advantage?
OK, I will elaborate.
By now, most of you are aware that in the United States, our industry is primarily regulated at the state level rather than the local level, as is the case with site-built projects. This is because much of the construction occurs at an offsite fabrication facility and when the modules or components arrive onsite for installation, there are concealed elements (i.e. wiring and plumbing concealed behind the walls). This makes it difficult for local code officials to inspect for code compliance without destructive inspections. As such, we have a process to reviewing and approving modules and components in the factory to ensure they are deemed to meet the local codes where they are being shipped.
Thirty-five states have such an administrative program, while fifteen states rely on the local code officials to determine compliance. In Canada, only Alberta has such a program. Our challenge as an industry is that from state to state, these programs lack consistency, with very few exceptions. Legally speaking, our industry is referred to as: manufactured buildings in Massachusetts, industrialized buildings in many states, modular buildings, and factory-built housing in some states. But the terminology inconsistency is manageable.
What is more challenging are the various means and methods the approval process can occur. Most of the states with a program allow the use of third-party inspection agencies. This relieves some of the personnel and administrative burdens on the agency and most often results in quicker turnaround times for plan approvals. Conversely, states with rules that do not allow the use of third parties rely on their own in-house staff to review and approval all modular plans. And in many cases, these same people are often overseeing other programs such as the manufactured homes regulations.
As the industry grows, we have seen that the state administrative programs are not growing with us. In fact, many of these programs are currently understaffed creating a bottleneck and backlog delaying projects in some cases by months! It should come as no surprise that states that do not allow third party approvals are also the states with the slowest turnaround times. This is not to say the current staff in these states are doing a bad job – they are just understaffed and overworked! And the bureaucratic rules are binding their hands.
I’m not usually one to publicly call people out, but we must get these states to move towards allowing third parties for approvals. New York, Michigan, Maryland, and Washington are at the top of the list in terms of slower than average turn-around times. While Virginia, Texas, and California are among the programs with quicker approvals. If a state is taking more than eight weeks for approvals (which isn’t great by the way), something needs to change. Delaying a project by a month could potentially kill a deal for a multifamily developer, or hotel franchisee, or a school!
Getting all the states to agree to a single standard set of regulations used to be an unrealistic dream. But now, we have the new ICC/MBI 1205 ANSI standard that was created specifically to address the issues raised in this post. The genesis of this standard began about a decade ago when I cut and pasted the best language from the best programs into a document we called the “Model Administrative Program” or MAP. The MAP was the starting point for the ICC’s standards development working group and ultimately (after many edits, additions, and deletions) resulted in this new standard. Modular program officials from four states were engaged and instrumental in creating this standard, including representatives from Virginia, Maryland, Michigan, and Texas.
We tried, unsuccessfully, to get these ICC standards referenced in the ICC’s building code in the most recently code development cycle. One would think that would be an easy lift, but it wasn’t! So now we shift our focus to working directly with these states to move them to adopt these new standards. If your state does not allow third party approvals, expect a call from MBI!
Started on September 30, 2021 by Tom Hardiman