Faster, cheaper, better: How factory-built homes could help Utah’s housing crisis

In Guerdon’s 135,000-square-foot factory near the Boise Airport, a worker carrying a nail gun walks on the ceiling of the first — or maybe the fifth — story of what will eventually be an apartment complex in Los Angeles.

Instead of walking on temporary scaffolding several stories up, he’s hooked into a safety harness and can move along permanent scaffolding.

Modular construction, or housing built in sections off-site — generally in a factory — then transported to a site for delivery, is being turned to as a solution from Hawaii and Alaska to Staten Island to California as the affordable housing crisis worsens nationwide.

Workforce housing in Big Sky was built at the factory before being trucked to Montana. The Canyon Lodge and employee housing in Yellowstone National Park, too.

It takes them about 7 ½ days to build an 850-square-foot module, Guerdon CEO Tommy Rakes said during a tour of the factory in December. And they do it all in a climate-controlled environment, he said, without causing months of noise that would disturb neighbors and lane closures that would affect traffic.

Lad Dawson, the now-retired founder of Guerdon, says the process is faster, cheaper and better than site-built construction. Like any assembly line, he explains, everything is done on ground level and inspected multiple times.

“Why would you build anything other than modular? It’s the ideal scenario,” Rakes said.

Utah is becoming friendlier to modular construction as officials look for ways to build more housing and ease the state’s affordability crisis.

Last year, the Utah Legislature passed SB168, adopting a statewide building code for modular units. That bill included standards set by the International Code Council and the Modular Building Institute.

Rep. Stephen Whyte, who sponsored the now-law on the House floor, said it presented a “historic” opportunity to increase modular building in Utah.

“Modular housing is a new type of construction that can help with reducing the expenses up to, some say, 20% to 30%,” the Mapleton Republican said during a committee hearing.

Cameron Diehl, executive director of the Utah League of Cities and Towns, said modular constructionrepresents “untapped potential” for the state and that there have been “some really good success stories” elsewhere.

And during a housing summit last year, Gov. Spencer Cox discussed modular building techniques as a potential route to lower the cost of housing, saying the state should be enabling mass-produced, factory-built housing to reduce construction costs and churn out new homes more quickly.

‘Just a different product’

Rakes said he’s been battling misconceptions about modular housing his entire career, stressing it isn’t what most people think.

“A lot of people associate it with mobile homes,” Dawson said. “It’s just a different product.”

State code as modified by SB168 even clarifies that modular housing “is not a factory-built house, manufactured home, or mobile home.”

There’s “extraordinary workmanship in the construction,” Dawson said, and the modules are built to the exact same code as site-built housing, and with the exact same materials.

One of the biggest differences, Rakes said, is that they build from the inside out, starting with the floors and moving through about two dozen more stations where the workers specialize in building walls, windows, ceilings and other components.

Vikas Enti, the co-founder and CEO of Massachusetts-based modular home builder Reframe Systems, said housing construction “feels like trying to build a ship inside a bottle,” and others start with the bottle first.

“We build walls and windows first,” Enti said, and can “bend gravity” while doing so by building on the ground level instead of up in the air.

Once the modules are built – whether for single-family housing like Reframe Systems builds or multi-family buildings and hotels like Guerdon constructs – they’re driven to the site where a massive crane hoists the pre-built home onto its foundation.

To survive that, they’re built like tanks, said Paul Dille, director of marketing at Guerdon.

The installation feels a little bit like Legos for grown-ups, said Mitch Hovaldt, Guerdon’s director of design and product development.

Fewer neighborhood effects

About 70% of the work on the modules that eventually come together as a building is done in the factory, Hovaldt said, meaning there’s much less time spent on site.

Housing construction can begin while other crews are still prepping the site where the home will eventually rest.

“At one point, there’s just this foundation, and then in two weeks, the building is set,” he said.

Though modular housing can’t eliminate construction impact, Dawson, the retired founder, said, it does reduce it.

And that’s a boon for neighbors, leaders from both companies told The Salt Lake Tribune.

“No one wants construction,” Enti, with Reframe Systems, said. “They want the outcome.”

‘Computers aren’t built in the rain’

There are “lots of evident advantages” to modules, Rakes said, particularly due to their construction in a controlled environment.

“Computers aren’t built out in the rain. Automobiles aren’t built in the rain,” Rakes said. “Why are [housing] projects built in the rain?”

States are able to approve plans after third-party review, and the third party does inspections within the factory, he said – in addition to a checklist and internal quality assurance at each station throughout the home-building assembly line.

There’s no chance of “drive-by inspections,” Hovaldt said.

Building off-site eliminates a large amount of cost in the field, where labor is often limited, he said, and lengthens the build season.

It also delivers the project faster, Hovaldt said – they can get a certificate of occupancy nine to 18 months quicker.

That means getting revenue earlier, Dawson said, and is key for places like California where there’s a large market for affordable housing. Because it was taking developers too long to build, it was getting too expensive there, he said, but Guerdon has now built a track record there and has delivered more than 100 affordable projects.

Modular housing also offers major savings in mountain resort areas, Dawson said, especially in Colorado.

And there are benefits for residents, too, he said, since the units are “noticeably quieter” between walls and ceilings.

Rakes explained that’s because there’s extra space outside the walls and above the ceilings in units.

‘We can’t just expect to go back’

Modular housing is already in Utah, said Kam Valgardson, but the state is “way behind the national scene.” Valgardon is general manager at Irontown Modular, a Spanish Fork builder.

“We have been building in this state for decades,” Valgardson told lawmakers during a committee hearing on SB168 last year.

Though “modular has been kind of a dirty word in housing,” he said, Irontown has sent homes to Big Sky and Truckee – and they’re the kind of quality you see showcased in Parade of Homes.

SB168 gave a clear path forward for modular housing to become more mainstream, he said.

Developers along the Wasatch Front, Denver, Montana, and Boise are starting to see the benefits of modular as it becomes more well-known and as housing costs remain high, Dawson said.

That’s inevitable as housing construction on site isn’t what it used to be, Enti said.

“It, unfortunately, has evolved to be inefficient,” he said.

Developers usually depend on 20 to 29 subcontractors, he said, and even though they’re good at their individual trades, it leads to fragmentation.

The trades also aren’t staffing up evenly or at pace, he said, and contractors and tradespeople who exited during the 2008 housing crash haven’t been replaced by new players.

“We just can’t expect to go back to the way things were,” Enti said.

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