Brick by Brick
This regional community affairs program is about exploring solutions to complex problems in Southwest Ohio. This podcast is a companion piece to our larger project. Visit https://www.cetconnect.org/BrickbyBrick/ to learn more.
Brick by Brick
Thinking Inside the Box: Modular and Container Housing Solutions
Modular construction, built inside a climate-controlled factory and then trucked to a site for assembly, has been slow to catch on in the U.S. It makes up less than 4-percent of the housing stock, compared to 15-percent in Japan and 45-percent in Scandinavia. Is it the answer to increase the housing supply? And what about other ideas like container homes?
Interview guests: McKinsey & Company Senior Partner Jose Luis Blanco, Dayton City Manager Shelley Dickstein, Unibilt President Greg Barney and InnovaLab Ohio Chief Operating Officer Tamara Sullivan
Ann Thompson:
With an urgency to add more housing. What if we could cut down the time it takes to build it?
Tamara Sullivan:
It bothered me that at the early part of the 20th century, people could order their first home from a catalog and a hundred years later, we're still building houses exactly the same way.
Ann Thompson:
Modular and container homes offer alternatives, but are they as good as site-built homes?
Greg Barney:
I've had people go through our homes once they’re complete and say, oh, is this a modular?
Ann Thompson:
Modular multifamily construction is picking up, but modular single family is not. One reason is that it's hard for manufacturers to expand as neighboring states generally won't certify the construction container. Container homes also face red tape.
Shelley Dickstein:
State building code is catching up on the container homes, but they're not all the way there yet.
Ann Thompson:
Even so there's a lot of optimism. Container and factory built homes can also serve specific niches. Modular homes are going to Hawaii to house residents displaced by the 2023 fire and a new Columbus village aims to serve the unhoused, the formerly incarcerated and those recovering from drug addiction.
Harvey Hook:
We stopped. We paused and we looked to see what is the best home model that we believe that would embrace the dignity of the individuals we will be serving.
Ann Thompson:
On this episode, we examine modular and container homes, looking at the limitations, the longevity, and how they can lift a community. Let's get into it. This is Brick by Brick: Solutions for a thriving community.
Ame Clase:
Brick by Brick is made possible thanks to leading support from Debra and Robert Chavez, Greater Cincinnati Foundation and the George and Margaret McLane Foundation, with additional major support from The AES Ohio Foundation, Laurie Johnston and the Seasongood Good Government Foundation, Diane and Dave Moccia, The Robert and Jean Penny Endowment Fund of The Dayton Foundation, the Robert & Adelle Schiff Family Foundation, and more. Thank you.
Ann Thompson:
Hello and welcome to Brick by Brick, where we're highlighting solutions for a thriving community in Southwest Ohio. I'm your host Ann Thompson. Modular is the process of constructing a building inside a factory and then assembling sections of it on site. This is different from a mobile home, also called a manufactured home, which is already assembled by the time it gets to the site and doesn't need a permanent foundation. For this podcast, we're focusing on modular homes and then later we'll also talk about container homes. Again, modular is a home apartment or something else, built in a climate- controlled factory and then trucked to the site where it's assembled. Dayton City Manager, Shelley Dickstein, told Brick by Brick she recently saw a presentation for a Columbus modular project.
Shelley Dickstein:
And they are creating very large apartment complexes with their modular just by bringing in the boxes and adhering and affixing the boxes and all of that.
Ann Thompson:
A different company AVA says it can build a typical 100 unit apartment building in three weeks, but that's just to build it. Of course, you still have to factor in the onsite work like underground utilities. Last year, apartment developer Greystar bought a Pennsylvania factory to build modular apartment buildings and looks to finish them in 40 to 50% less time than traditional built. The global modular housing market is expected to grow from 104 billion this year to 141 billion. In the next five years. Many see modular as a way to quickly add more housing. The US is short four to 7 million homes in Cincinnati. We've heard the gap is around 30,000 and in Dayton it's more like 20,000. City Manager Dickstein says some modular homes were built along Patterson Road in Dayton years ago using a Vandalia factory.
Shelley Dickstein:
Those were Unibilt and they were the first modular homes that were done in the city. We haven't done a lot out in the neighborhoods yet, and I think largely it's because we don't have a developer that is coming with them because usually there's a developer that comes with that product, right? And we haven't had interest yet in the city for that perspective.
Ann Thompson:
Developers tell Brick by Brick as stick-built homes takes an average of six to nine months. A modular home in Ohio, once it's connected to electricity and plumbing on site, is about two and a half months. Some national numbers put modular housing only two months faster than stick-built including permits, but Cincinnati developer, Tamara Sullivan sees modular housing as a solution for vacant urban lots. Her company InnovaLab, Ohio bought an Evanston lot from The Port where she plans to put a duplex. It doesn't have a subsidy.
Tamara Sullivan:
It's going to be a market rate. House We’ll probably go on the market between 350,000 and 375,000. That still sounds like an awful lot for a home, but it's a 1600 square foot home that's got three bedrooms, two and a half baths. The cost to build is lower. The speed to get them to the market is much faster.
Ann Thompson:
One problem she's running into is the need to get approvals for each design if she builds in other cities. Sullivan is working with the state of Ohio for that.
Tamara Sullivan:
What we need is a pattern book, and I'm working on that as well where we have a number of models that are already approved by the state. That part takes time. The key to success there is replication.
Ann Thompson:
In Detroit InnovaLab started putting modular homes on lots in 2017. Last month it showed off seven in the North Corktown neighborhood. The homes will eventually be sold through a newly created community land trust. One way to get a better understanding of modular homes is to go inside a factory that builds them Brick by brick drove to Unibilt, north of Dayton, the largest modular home producer in Ohio to see what goes on inside the sprawling factory. President Greg Barney showed us around.
Ann Thompson:
How many homes are in here?
Greg Barney:
We have about anywhere from 25 to 30 modules in here at one time, and then we have the completed ones in the yard waiting for delivery.
Ann Thompson:
Our first stop is the very beginning, a building where they cut the wood with a pre-programmed saw.
Greg Barney:
So this is what we call our saw shop. Probably 95 to better percentage of our lumber is cut in this shop. Our component saw we cut as much as we can. A component saw it slides up and down these rails for different dimensions. We can feed deck package through here in about 15, 20 minutes.
Ann Thompson:
When people take tours of this plant, what are they most surprised about?
Greg Barney:
Oh boy. I mean it's different elements. I just think we're building in more of an assembly line process and I think some people come with the perception. We've got this big building, we're just have the house sitting in one spot and we're just building it right there.
Ann Thompson:
That couldn't be further from the truth. Cranes move the structure from one station to the next. For example, at one place workers do framing another, they put an insulation, they do electrical at another stage and so on. Barney says it's not cheaper than a site-built home. The main advantage here is everything is built inside in a controlled environment.
Greg Barney:
We always say, do you buy a car? Do they dump a pile of parts out in your driveway and they assemble it in your driveway? No, and now with a home you're buying, it's the most expensive purchase you'll make in your lifetime, and when they site build, they dump a pile of lumber in the drive in the mud and it gets rained on and so forth.
Ann Thompson:
Do the future homeowners ever come to check on the progress of their house?
Greg Barney:
Oh yeah. Yeah. I mean we encourage 'em to. I mean, we've had customers. I remember one gentleman that worked here in town. He would come here at least four days a week. It was lunchtime, from the time it started to the time the house was finished.
One thing I didn't mention in the saw shop, so our overall waste is considerably less than you have on a job site. Even our saw dust, we saw the conveyor belt in there. It gets picked up by gentleman, has a cattle barn or livestock barn or something. We recycle our off cuts on our wood which is used for blocking or we don't use for blocking goes into the dumpster and a guy that makes mulch, he allows us the dump and he blends it into his mulch.
Ann Thompson:
Unibilt also recycles its vinyl siding, wire shelving and cardboard. One thing to point out is the single story ranch isn't the only type of modular home you can build. Developers can stack any number of these boxes on top or beside each other to create multifamily housing and apartment buildings. Think Legos.
Coming up on Brick by Brick, an estimated 1 million people worldwide live in container homes, a Fairfield Ohio factory hopes to put them on the map here.
Sandra Whitley:
Step inside and see what a finished container actually looks like and look at all this space it actually gives you.
Ann Thompson:
Plus a tiny house modular development in Columbus as Brick by Brick continues.
Ame Clase:
Brick by Brick is made possible thanks to the generous support of so many, including Rosmary & Mark Schlachter, The Camden Foundation, Patti & Fred Heldman, DeeDee & Gary West, The Stephen H. Wilder Foundation, Judith & Thomas Thompson, a donation in memory of Frank and Margaret Linhardt, and more. Thank you. We couldn't do this work without you.
Emiko Moore:
Hey, it’s Emiko Moore from Brick by Brick. Our new podcast is about finding solutions that will allow our communities to thrive. What does a vibrant and engaging neighborhood look like to you? Maybe it has more restaurants, coffee shops and art galleries, more multi-generational park activities or a livelier music scene. We want to know, please go to the Brick by Brick show page on cetconnect.org or thinktv.org. Just click on the green audience button and tell us what a thriving community looks like to you. You can also email us at Brick by Brick at publicmediaconnect.org. Imagine big and wide, get creative. We can't wait to hear from you and thanks.
Ann Thompson:
Welcome back to Brick by Brick. The growth of augmented reality and virtual reality is helping an increasing number of consumers visualize how they could live in a shipping container. Brick by Brick's, Hernz Laguerre Jr. Went inside a container home and is here to tell us more about it. Hey, Hernz.
Hernz Laguerre Jr.:
Hey, yeah, I consider Container Homes a unique approach to housing because of how functionally different they are to your concrete home or your average stick build. I spoke with the owner of a budding container home business and she makes her argument of why container homes are better than your average home.
We are used to seeing shipping containers as a motor transporting goods by sea or land. They're also used as storage, but they could be used as the next means for building affordable housing.
Sandra Whitley:
I want to show you a little bit about shipping container homes and the versatility, cost effectiveness and stability that they offer homeowners outside of your traditional stick frame houses.
Hernz Laguerre Jr.:
That's Sandra Whitley. She'll be giving us a tour of her model container home located right outside the Warren County Career Center in Lebanon, Ohio. Sandra is the founder and CEO of House in a Box LLC, a development company that specializes in transforming containers and into homes.
Sandra Whitley:
Step inside and see what a finished container actually looks like and look at all this space. It actually gives you
Hernz Laguerre Jr.:
This single container is a couple of feet longer than two Jeep Wagoneers parked from taillight to headlight and it's about the height of an NBA regulated basketball hoop. Doesn't seem like it could fit the essentials of a home to me, but Sandra proved me wrong.
Sandra Whitley:
We've got full size everything in here. As you walk in, you're going to first come into your living room or your living space. The first finish we did is a shiplap finish and you have a front entrance and a rear entrance and as you walk through, you'll come into your kitchen, which comes with full size appliances. You have pocket doors to the next room. You'll come into your full-size bathroom. Behind that, you'll have your stackable washer and dryer or you can put 'em side by side and as you walk through into the bedroom, you'll see that it fits a full queen size bed.
Hernz Laguerre Jr.:
With the container home. There is also an opportunity for some major cost savings.
Sandra Whitley:
We are at the Warren County Career Center. The average home price in this county is over $400,000. Rent is over 2,000. That's the average for this. If say it was a rental, 600, 750 bucks because the cost of this unit alone is only $45,000,
Hernz Laguerre Jr.:
What would you say a container home has that a shick build doesn't have?
Sandra Whitley:
Versatility. So I can take this 40 foot container, I could take another 40 foot container and put it perpendicular to it or parallel with it either way, and I can run 'em and I can just keep going in all different directions. The only thing I need is a support under each corner, whereas a stick build home, if I'm going to want to build weird stuff, I got to have a lot of support on that because wood can only go a certain dimension before it starts to bow.
Hernz Laguerre Jr.:
And it's built to withstand the elements.
Sandra Whitley:
So because of their weight and their structure, a shipping container is made to go across the seas stacked on top of each other in hurricane weather and typhoon weather. Any kind of weather that the sea is going to offer it, a shipping container will take up to, I believe it's 120 to 140 mile an hour winds for you ever even going to move this thing.
Hernz Laguerre Jr.:
And because of the uniform dimensions of containers, container homes are modular, meaning Sandra could make similar style homes in addition to the custom builds that she currently makes for her clients. However, she has a different goal for her business.
Sandra Whitley:
My ultimate goal is to help veterans. I am an Air Force veteran and I would like to be able to build these for veterans. I see what's coming out of our military. I've got family that went through things and I want to do what I can do my part. I can't do your mental part. I can't fix your body that got damaged over there, but I can make you live in a comfortable place that's accessible.
Hernz Laguerre Jr.:
What would you say are some of your biggest hurdles when constructing a container?
Sandra Whitley:
Government.
Hernz Laguerre Jr.:
How so?
Sandra Whitley:
The government is our biggest hurdle. Getting that homeowner to talk to that county and say, Hey, I want to buy this land. I want to put a shipping container home on it. Nope, you can't have it. But once they talk to me and I say, no, it's not just a metal box they're putting out there. We're building it permanent to the ground, educating those offices.
Hernz Laguerre Jr.:
Dayton is an Ohio city that allows container homes, but there are a lot of regulations. City Manager, Shelley Dickstein is excited for their potential in Dayton, but admits the codes need to be revisited.
Shelley Dickstein:
State building code is catching up on the container homes, but they're not all the way there yet. So for Ohio, as the state building code gets completely caught, caught up, when they have all of that done, then they'll be able to, the container homes will be able to kind of take off.
Hernz Laguerre Jr.:
In Ohio we're dealing with a housing and supply issue all over the country. Do you think container homes could help fill that supply?
Sandra Whitley:
Without a doubt. If you're newly married, you're just out of college and your entry level, how are you affording a $2,000 a month rent when a mortgage on that same size house is a thousand dollars? If you're starting out in life, you shouldn't have to struggle.
Ann Thompson:
Thanks Hernz. I really liked the motivation for Sandra starting this company and I'm wondering what stood out to you the most about container homes and also do you see this as a viable solution to helping with the housing supply?
Hernz Laguerre Jr.:
I'll be honest with you, Ann. Sandra made me a believer about container homes, the cost effectiveness, the versatility, the fact that it's storm resistant with that rising cost of building materials for homes, maybe we could look to container homes as an alternative material. However, the biggest hurdle is zoning. Sandra said there are counties that are still hesitant with allowing container homes. Also a concern is making sure they blend in with the community. You could put a roof shutters, a whole facade to dress up a container home and make it look like a normal home, but that kind of defeats the purpose. The money that you would spend for those things is the money that you're saving because you don't have to use those things for a container home.
Ann Thompson:
A lot of considerations. Thanks for tha.t
Hernz Laguerre Jr.:
Hearns. No problem.
Ann Thompson:
The average cost to build a container home is 40,000 to $60,000, but they can go for as little as 25,000 with an average monthly maintenance cost of a hundred dollars. Unlike a modular home, you can move a container home to a different location at some expense.
It may be hard to get financing to buy a container home. The same goes for manufactured or mobile homes. Many lenders don't offer conventional loans for them. However, Fannie Mae does have something called MH advantage for first-time home buyers, qualifying borrowers can finance up to 97%. This information and other facts are on our website, cetconnect.org and think tv.org if you want to check it out.
The global management consulting firm, McKinsey & Company says the modular construction industry needs to remodel itself. Less than 4% of current US housing stock was built using modular techniques compared to 15% in Japan and 45% in Scandinavia. McKinsey Senior Partner Jose Luis Blanco, studied the issue and says there are several things holding the industry back. One criticism is it treats buildings more like products than projects, and in some cases those products are over-designed. Thank you for being on Brick by Brick, Jose,
Jose Luis Blanco:
Thank you for having me. Ann,
Ann Thompson:
Can you elaborate?
Jose Luis Blanco:
This is actually a very end-to-end continuum process that needs to be perfect from the beginning to the end. And what I mean by that is you need to basically get the right design that people want to buy. You need to guide enough pipeline of that design for you to basically set up a manufacturing facility and don't change that kind of manufacturing change every two, three weeks and three, you need to basically seamlessly deliver that on the field and being erected and construct it in a way that maximizes the value of that compression of time. I'm actually an optimist in this kind of journey where I'm seeing much more of the past 24, 36 months that I've seen ever before.
Ann Thompson:
Yeah, that's good that there are improvements being made. You had pointed out that in some cases there's inefficient installation and insufficient capital.
Jose Luis Blanco:
The way companies actually operate is different than many other construction companies operate right now. I mean there's much more upfront capital that is actually being required from these companies that actually do multiple construction than typical construction company that builds on site. You actually purchase your materials upfront. You need to do a lot of R and D upfront. You basically need to do that kind of installation upfront. And the end reality is if you actually don't get paid so to speak until the full asset is being installed on site, then there's a little bit of like a cashflow problem when it comes down to these companies, right, and actually specifically in companies that are trying to scale, that's actually a clear issue that over time we've seen. The other thing that you pointed out beyond capital is actually an efficient installation. I mean you need to basically train the crews.
You need to train the trades in terms of how do you basically install your system. Remember when we talk about model of construction, we talk about this just one thing, but modular construction can mean panels, 2D panels that need to be assembled and actually on onsite it can be 3D volumetric elements that need to be erected installed on site. And those 3D volumetric elements can be steel frame, they can be like timber base and they have different shapes, different approaches. The bolts, the joints are different. So there's a question about how do you also on a local basis develop a set of installers, companies that actually work with these modular firms that are able to speed and are able to recognize that kind of like approach and basically install it as fast as they can. That takes time and it basically takes discipline as well.
Ann Thompson:
You say you're more optimistic about modular than you were a couple of years ago. I'm wondering if you were speaking to the industry, what would you tell them in terms of how modular housing should be used and if you're a factory building it, what do you need to do better?
Jose Luis Blanco:
So first of all, I think that the first message for me is we're not talking about something that is a novelty anymore. This is a status quo and should be a status quo. That should be, if not the most common way in which we build one of the most common ways in what we build. That's number one. I think number two is this is not a zero sum game. Everyone wins, specific in an environment where we have a real shortage of homes where people feel the pressure around affordability and when we have a real shortage of trades. So there's a win-win for everyone to basically embrace these new methods. And then the third one is actually probably we need to be starting talking a little bit about modular in a way that is probably more positive to basically finally get rid of some of these kind stereotypes from the past around aesthetics, around quality, et cetera, et cetera. So those are the three things that I probably I would just put out there as the message is to continue to basically advance towards a much more modular future, if you will. Again, even that language I don't like. So a better construction in the future, right?
Ann Thompson:
We've only scratched the surface. We have a link to your article at cetconnect.org and thinktv.org. Thanks for being on Brick by Brick, Jose.
Jose Luis Blanco:
Thank you so much. Ann.
Ann Thompson:
We pivot to talk about a unique modular development in Columbus that features tiny homes. A similar plan is in the pipeline for Dayton. The Columbus development is called Vista Village and features 41 homes that are only 420 square feet with a bed, bath, kitchen, a living room, and even a porch. The organization's Harvey Hook talked about it last year at the Columbus Rotary Club.
Harvey Hook:
Our model will serve those who are homeless today and those who are on the precipice of being homeless tomorrow. Those on the precipice of being homeless tomorrow are teenagers and young adults aging out of foster care.
Ann Thompson:
The homes will also serve men and women returning from incarceration, veterans, and those involved in substance abuse recovery. Hook says part of the goal is to normalize Vista Village as much as possible.
Harvey Hook:
Many times our social service sector treats addresses the needs of these individuals in their own silos. We believe that the ultimate goal is to transition to employment independent functioning in the broader community in 18 to 24 months. Why not begin that socialization?
Ann Thompson:
Unbilt, the modular home company Brick by Brick, toured is building the homes. There's even a community center to do laundry and receive wraparound services.
Remember, if you want to learn more about modular and container homes and housing in general, there are plenty of resources including web articles, video and audio stories and online extras. Go to cetconnect.org and thinktv.org and while you're there, click on one of our big green buttons to give some feedback or answer our current audience question. We'd really like to hear from you.
Modular and container homes are the topic for the day and we've gathered the team together for the takeaways and we welcome to the microphone Emiko Moore.
Emiko Moore:
Hey there
Ann Thompson:
And Hernz Laguerre Jr.
Hernz Laguerre Jr.:
Hey everyone.
Ann Thompson:
Emiko, what are you thinking?
Emiko Moore:
The big takeaway for me is the speed in which they can build these modular and container homes. When certification is not an issue for builders, time is money. There's labor costs and interest on loans. So if you can shave off anywhere from two months to several months of time per home, that potentially can save a lot. In addition, construction in a control environment, there is less impact by varying weather conditions and temperatures, which better protects the building materials
Ann Thompson:
And Hernz, you mentioned weather for container homes.
Hernz Laguerre Jr.:
She was saying that you could build container homes and with the proper foundation they can withstand high winds because they're airtight, they can withstand flooding to a certain point and how these homes were built for circumstances like that. I look at them not only as maybe a solution to the housing and supply, but an answer to combating natural disasters.
Ann Thompson:
Good point. In terms of modular, the question really is can you build modular housing quick enough to make a difference in the housing gap? Well, modular construction, industry observer and information gatherer Gary Fleischer says never. With over 800,000 projected new home starts for last year and modular home factories building just about two and a half percent. What it would take to just build 10% of that total, he says is incomprehensible. But on a more positive note, I do like to be positive commentator Jordon Rogove says, encouraging the passage of two bills making their way through Congress. That would alter the language of the HUD rule to include a wider array of modular and prefabricated structures. This would encourage innovation and competition.
Hernz Laguerre Jr.:
Awesome,
Emiko Moore:
And I really like to hear how Unibilt helps recycle and repurpose so many of the building materials, keeping them out of the landfill.
Ann Thompson:
That is what really attracts a lot of people to this is the sustainability idea. Thanks guys.
Hernz Laguerre Jr.:
No problem.
Emiko Moore:
Thank you.
Ann Thompson:
Thank you.
Coming up on the next episode of Brick by Brick, two city leaders are focused on one issue for a special Brick by Brick episode housing Solutions in Cincinnati and Dayton.
Shenise Turner-Sloss:
My hope is that I will have the support of the rest of the members so that we can get something passed. The housing trust fund is definitely needed.
Jeff Cramerding:
Putting 10.5 million in. We've got a number of housing projects in the pipeline.
Ann Thompson:
Hear what Dayton City Commissioner Shenise Turner- Sloss and Cincinnati Councilmember Jeff Cramerding, have to say about what the two cities are doing and what is still needed. That's the next Brick by Brick. That's our show. If you like what you hear, please rate and review our podcast. It makes it easier to find. We hope you learn something and if you did, please tell your friends and family about it. For Hernz Laguerre Jr and Emiko Moore, I'm Ann Thompson. We'll be back soon with more solutions. Take care.
Our show is produced, hosted an edited by me, Ann Thompson with reporting and story editing from Hernz Laguerre Jr. and Emiko Moore. Our Executive producer of Mark Lammers. Our show consultant is Gloria Skurski. Gabe Wimberly is our audio engineer and mixer. Zach Kramer runs the lights and cameras. Derrick Smith is our production specialist and Jason Garrison is our production manager. Kellie May heads up our marketing and promotions, along with Mike Shea and Bridgett Dillenburger. Elyssa Stefenson handles the website and Steve Wright is our designer. Bill Dean and Andres Kruza are the engineers for the show and our Chief Content Officer is Colin Scianamblo. Our music is from Universal Production Music. Brick by Brick: Solutions for a Thriving Community is a production of CET and ThinkTV, Southwest Ohio PBS member stations.