Because of the multitude of moving parts involved, construction projects are some of the most challenging projects a person can ever manage. New constructions are typically based on highly detailed projections with very narrow margins for error. Slight alterations in the assumptions that a building is based on can grossly alter a developer’s ability to deliver the project on time, within cost, and to the right quality.
But as we see today, there are massive disruptions in the housing market, and it is often unpredictable and rapid changes in the demand and supply of new homes, as well as severe supply chain issues. All these make it even harder to see new projects to completion. Yet it is not that consumers do not want new housing. It is just that the environment for delivering those new projects is changing drastically.
Today, more than ever, developers struggle to provide new housing at prices buyers can afford and still be able to make profits on those developments. These changes are pushing us towards new ways of approaching construction projects. What are your options as a developer looking to maximize profits without cutting corners while ensuring projects meet timelines and budgets?
Modular construction: a different approach to multifamily developments
Modular construction is a building method that moves the primary construction activities, which used to be done on-site, to an off-site factory. Most construction projects already have some level of off-site components, HVAC ductwork, window systems, mechanical systems, and roof trusses. What modular construction does is take most of the work – the building envelope – off-site.
The modules for the building are finished in a factory before being trucked to the building site. Once there, they are craned into their position in the building. This Lego-type construction method might feel strange for property developers who are accustomed to doing their construction by hand. What are the benefits of modular construction over traditional construction methods?
Here are four key reasons to use modular construction in your next multifamily development:
1. Time-saving
Instead of a sequential schedule where site development happens before building construction – as is traditionally done – modular construction lets you do both simultaneously. With modular construction, you use an overlapping construction schedule that saves time.
You have two work sites where work is concurrently being done on your project; the building is fabricated at the factory while the foundation work goes on at the site. With the modular method, as soon as the building foundation is finished, the entire building can be installed within one week, and you can start work on the interior.
2. Affordability and cost-savings
First, the time-saving benefit of using modular means you can shave weeks, or even months, off your construction schedule. As King George Management explains, a multifamily development built with modular construction starts to generate revenue – cash flow – much earlier than one made with traditional methods.
Second, modular construction solves a common problem faced by property developers. Due to cost uncertainty, developers are often forced to provide buyers with conflicting prices at the start and completion of their projects. But with the cost certainty that comes with the modular method, you can avoid this problem. This method typically results in a budget decrease of more than 10%.
3. Reduced waste and lean manufacturing
Modular construction cuts down on waste. Using traditional methods, waste is generated by various products and processes; excess inventory; delays and work stoppages; overproduction of materials; defects that require reworking, etc. This is in addition to noise and emissions emanating from the site.
In modular construction, every detail is predetermined, every drop of paint, an inch of wood, or the tiniest screw. The result is that a site build generates between 20%-30% of waste; modular construction creates 2% of waste. Modular construction has a better overall impact on the environment; it is more sustainable because less waste goes to landfills.
4. Quality and safety
A factory environment limits the number of variables that affect the quality of the building. It doesn’t use different builders or tradespeople in a constantly changing environment; the same team doing the same things over and over delivers better results.
Modular construction is also subject to the same building codes as traditional construction methods. But modular construction works to surpass the building code when conventional methods try to build to code.
Modular construction also eliminates many of the safety issues that exist with site builds. Since all the building floors are made on the factory floor, falls or scaffolding accidents are virtually eliminated. These are where a lot of the safety issues in site construction happen.
Should you use modular construction for your next multifamily development? It is highly recommended. Based on the above, there is no reason why you should not consider this innovative construction method.
However, if you want to get a detailed assessment of your multifamily project to be sure that this method is the right fit for you or want more details about modular construction, contact us today.
