The White Buffalo apartments, Fort Worth, Texas, whose units are designed with efficient and modular kitchen and bath layouts.
The White Buffalo apartments, Fort Worth, Texas, whose units are designed with efficient and modular kitchen and bath layouts. 

As the economy has stabilized in the past few years, the high-end multifamily housing market has experienced strong growth. Meanwhile, however, a latent demand for affordability has emerged as an untapped market that’s been underserved for years.

Increasingly, developers are looking to affordable projects, which are more appealing to lenders when they reach the cap on the high-density/high-rent projects that had been ruling many markets. The balance between high-rent and more-affordable apartments is also affected by land costs, construction and labor costs, and development speed.

Cost-consciousness is increasingly important as conventional construction costs remain steady despite the industry slowdown. In fact, contractors reviewing work over the past several years have seen construction costs go up on multifamily construction by about $10 per square foot per year. Shaving time off the construction schedule saves money on the construction loan and extra months of interest while getting to revenue generation sooner.

One hedge against labor and construction costs as well as schedule overruns is modular production. In addition to increasing the speed and reducing the cost of construction, modular building provides consistent quality and shortens the design time by providing a kit of parts design teams can work with rather than needing to design everything from the ground up.

Transitioning to the Modular Mind-Set
Changing the speed and method of construction requires changing the mind-set of the design and construction teams. Savvy design is directly tied to how well the teams understand the manufacturing process. In short, to succeed with modular, the teams must rethink how they put things together.

The key is to take the best ideas in terms of both exterior and interior spaces and figure out how to execute those ideas in the factory rather than build them piece by piece in the field. Each individual component requires its own set of considerations: from interiors, including bathrooms and kitchens, to the common spaces, including elevators and stairs, to exteriors, including cladding and framing.

Modular construction doesn't have to equal a lack of high-end amenities. LBJ Station in Dallas offers residents a resort-style pool featuring several in-pool seating areas for lounging that lends a luxury feel.
Modular construction doesn’t have to equal a lack of high-end amenities. LBJ Station in Dallas offers residents a resort-style pool featuring several in-pool seating areas for lounging that lends a luxury feel. 

The modular construction trend started with the same philosophy as micro-unit prototypes that emerged a decade ago. At that time, architects and designers sought to make small units for infill projects that also happened to be great places to live. The key to making these smaller spaces more appealing was proper proportions and correct lighting.

Layouts that were shallower from corridor to glass allowed for more daylight across the window width, opening up the room. The smaller size also allowed more room in the budget for upgraded finishes, resulting in a small but well-appointed space. For residents, the smaller, more-affordable units provided access to urban neighborhoods that otherwise might have been beyond their budgets.

Helping Renters Caught in the Middle
Since the recession, there’s been a gap in mid-level housing development while developers focused on affordable, subsidized housing and high-density, luxury projects in urban areas with higher rents. People whose incomes are too high to qualify for subsidies have more-limited options, which presents an opportunity for modular designs that drive costs down and fill the gap with quality housing at affordable prices.

When they’re designing multi-unit housing, developers look at the bottom line: Higher rents are the biggest driver, and if nicer fixtures command higher rents, there’s no reason to downgrade. The only way to alter this calculus, then, is to change how the apartment itself is built. Modular building provides the means to do so.

There have been movements in the past toward greater efficiency that have helped the individual construction trades from a built-product standpoint but not a labor standpoint, so the developer didn’t realize the savings. But with manufactured components, efficiency reaches a whole new level.

Trending to the Future
Changes to the overall structure of the community, with demographic shifts, can have a ripple effect. New projects generate work in places that haven’t seen development in the recent past, helping to revitalize a neighborhood.

Redevelopment spurs communities to initiate improvement efforts and attracts new residents. In this way, modular components ultimately can redefine multifamily living by providing quality housing with more-reasonable rents, thereby attracting more tenants and giving the entire town a boost.

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