0% of national construction contractors that report skilled labor shortages Research from the National Center for Construction Education and Research (NCCER)

We help government to identify and draft policies that remove obstacles and attract offsite/modular development of affordable housing.

Encouraging private real estate developers to build affordable housing is a top priority of local, state, and federal governments.  Myriad attempts to increase housing production have neither eased the housing shortage nor lowered the cost of housing as a percentage of household income.  Incentive schemes like the low-income housing tax credit (LIHTC) and Opportunity Zones have provided impressive tax shelter opportunities for wealthy investors but, thus far, failed to meaningfully reverse the deepening supply shortages and cost burden that continue to plague the middle class.

There are incentives for affordable housing developers at every level of government, so incentives are the problem, OBSTACLES are.  We help government to identify and draft policies to fill gaps in the following policy areas:  

Housing can’t be built without funding: equity and debt.  The equity is raised from investors, based on projected return on investment (ROI); debt is borrowed from lenders based on meeting a minimum ROI with a maximum of tolerable risk.  The risk profile for offsite projects is difficult to calculate and to mitigate.

Inspection sequencing for new construction caters to onsite, stick-built, construction methods.  In most states, projects executed using offsite methods are inspected by both the local building and safety department AND a state-licensed engineering firm.

Only a licensed building contractor can legally construct affordable housing or any other major land improvement.  Years of experience executing building construction, onsite, using traditional methods is required to qualify for a contractors license.  This requirement limits the pool of available qualified skilled labor for onsite projects and complicates the qualification of skilled labor for offsite/modular construction in a factory environment.

Building codes are the basis of the plan check phase of government entitlement review.  Adoption of the International Building Code (IBC) as the core of state and municipal building standards ignores modern methods of construction (MMC) including volumetric modular, panelization, and even mixed-methods.  Not accounting for MMCs in the building code means that approved assemblies and the way they are constructed drives the availability and cost of building materials.

Planning departments are responsible for drawing the map of what goes where, expressed through the municipal General Plan and its derivative, zoning code.  Rigid zoning can constrain affordable housing construction, especially by means of offsite/modular methods.

Affordable housing developers reject 19 out of 20 projects they evaluate.  The primary evaluation tool is a specialized financial model commonly called a “proforma.”  The proforma calculates the present value of inbound and outbound cashflows as they are discounted over time.  The same amount of cash has less value in the future than it does in the present, the timing of cashflows matters; so, the heart and soul of the proforma is the discounted cashflow (DCF) analysis.

Short lead times are crucial to the success of offsite construction viability, but the approvals process for offsite is longer than for onsite, stick-built, projects.


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Dr. Musson’s doctoral research studies the obstacles to the adoption of offsite/modular construction as a strategy to increase housing production.


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