Welcome to our August Newsletter!

August 2024 | Newsletter Full Edition

The Design With Skill monthly newsletter is in your inbox to share our knowledge and expertise as you get to know us and our work. In this edition we talk about some the challenges we've encountered in the past with Modular Design, and more importantly - How we dealt with them! 
 

WE WERE FEATURED IN FORBES! 

Take a look at this installation we visited!

We're thrilled to share that Samantha Hill, our founder and managing principal, was recently interviewed by Forbes regarding the challenges and opportunities of offsite and modular construction. The article, titled "Offsite Housing Faces Challenges Before Solving The Housing Crisis," highlights Samantha's insights into the complexities of modular construction, particularly in the context of California's regulatory landscape.

Bureaucratic Limitations

Modular multifamily construction faces a unique set of challenges when fitting into an existing multi-layered regulatory system.  For instance, in California modular housing is now regulated by the state agency Housing and Community Development known as HCD.  This agency is responsible for processing and enforcing building permit approval of the modular housing components in a project, defined as Factory Built Housing ‘FBH’.   The remaining on-site construction is regulated and enforced by another agency or authority based on the type of project.  Unfortunately, this can be a very arduous and complicated process. The management and navigation of this complex permitting system adds a significant amount of time, dedication, and often requires expertise from the design and development team, which adds costs to a project.  

Furthermore, politics can play a significant role in the development of modular construction policies. Labor disputes, such as prevailing wage requirements, for factory-built housing can be difficult to apply or implement.  As with any heavily regulated industry, various agencies and regulatory bodies for modular permitting and construction are often at odds with one another in an attempt to meet local vs. state or regional needs.  Navigating these political challenges requires calculated strategies.

Permitting and Inspection Issues

In addition to the complex bureaucratic oversight that a modular project must navigate, the actual permitting process on a modular housing project can be exhaustive. Often a third-party plan check reviewer and an inspector will need to be hired for the modular scope. Since modular on-site installation is a relatively unique process compared to more traditional construction types, the inspectors need expertise and experience to ensure things like fireproofing between units and structural tie-downs are adequately installed.

Building and Fire Code Limitations

Current building codes are modeled for traditional construction systems – wood stick-built, concrete, and steel.  The codes are slowly starting to address modular construction.  For instance, fire safety height limitations are restricting for modular projects due to the redundancy of the unit structure.   Since a modular unit needs to be transported as a stable structural ‘box’, stacked units have double thickness at floors and walls.  Building codes have been slow to address the inherent differences of modular construction.

Code compliance of the modular units is often not applicable or compliant in all states. This means that modular manufacturers must either design to the most restrictive, and often most expensive, code requirements or they will have to limit their market to specific areas. As an example, California has more stringent disabled access requirements than other states. This means the bathroom designs are often larger with more elements or complicated design in California.

 Transportation

Trucks.  Probably one of the most influential components of a modular construction project.  Units are designed based on the dimensional limits of a truck bed.   Also, height and weight limits must be considered when planning transportation of the units directly from a factory or port. 

Transportation costs can add a significant amount of money to a modular project. Manufacturing facilities overseas often incur expensive tariffs, such as China factories.

Advanced planning the delivery of the units is critical to determine the most cost-effective route.  Otherwise, transportation costs can make a project financially infeasible.

Labor

There are additional trade coordination and systems overlap on a modular project.   Traditional on-site systems and utilities must connect. For instance, fire sprinklers must be installed in the modular units in the factory but must tie into the onsite circulation areas or other non-modular program areas.

There is significant overlap between the modular and on-site construction work, so a clear delineation of roles and responsibilities must be established at the beginning of a project. 

Education

There is a lot of misinformation and misunderstanding of the modular construction process by general contractors, subcontractors, professional services consultants, such as engineers and architects, local municipalities, insurers, lenders, and many other parties involved in a modular development.  Often traditional construction method standards are erroneously applied to a modular project that increases costs and schedules. 

Cost budgeting misunderstandings from inexperienced general contractors that do not fully understand the responsibility of each party on a modular project; over budgeting is a common contingency method to avoid unknown and unfamiliar risks. 

Additional Costs 

Modular construction is not necessarily cheaper than traditional construction methods, However, the value lies in the reduced construction schedule. In some cases, up to six to eight months can be saved by going modular.  However, the full development and construction team needs to collaborate early and effectively to ensure the reduced schedule is achieved. 

Insurance coverage is a challenge. From the design side, professional services firms have a lot of trouble getting appropriate insurance coverage for modular. Most insurance companies see modular as a product and not a service, very similar to car  manufacturing. However, a lot of design is required by the development team outside of the modular company producing the unit.

Market

Another challenge for developers is the instability of the modular market. There are a lot of new modular companies that have formed within the past decade. Each one being unique in the product they offer and not all having the financial backing or bonding to ensure a successful delivery of their products or to limit risks in the event they go out of business. This can create a nightmare scenario for developers that have invested significant amounts of time and money into a modular project, only to have it die because of a modular company's insufficient business model or limited knowledge of the process or limited capabilities to deliver the products they claim to make.

The end users also need to be considered.  There are inherent dimension limits that impact a modular design.  As the housing market demand changes, modular design limitations may go out of fashion or loose popularity.

Design

When it comes to modular housing, two design approaches dominate: whole units and the kit of parts. Each presents its own set of design challenges and limitations.

The kit of parts approach centers on modular units for specific program elements, such as kitchens or bathrooms. While this method allows for faster construction and easier transport, it necessitates more on-site coordination, complicating the design process. In contrast, whole units reduce the need for on-site adjustments but impose significant constraints on design flexibility and require more complex off-site fabrication.

Modular design faces inherent limitations due to transportation constraints, particularly the size of truck beds. These constraints impact several aspects of design:

• Corridors and balconies often need to be constructed on-site, increasing the complexity of installation and assembly.

• The width of a modular unit typically accommodates only a single room, such as a bedroom or living room. This limitation necessitates joining multiple units in the field, driving up costs.

• Stacking units results in structural redundancy, an issue often unaddressed by existing zoning codes, leading to height restrictions based on a standardized 10’-0” floor-to-floor height.

• The structural framing systems used in modular construction impose additional design limitations, particularly in reducing openings to meet shear and torsional requirements.

Furthermore, modular companies vary widely in the design options and elements they offer. Some provide exterior envelopes, attached balconies, or corridors during installation, while others focus on different aspects, such as fully furnished units or basic shells. The lack of standardization across the industry adds another layer of complexity to modular design, a challenge that remains significant as the industry evolves.