Modular Housing
Housing built as finished three-dimensional sections in a factory, then trucked to the site and joined on a permanent foundation, generally to the same state or local building code as a site-built home.
What Is Modular Housing?
Modular housing is housing built mostly in a factory as finished, box-like sections called modules. The modules are trucked to the building site, lifted into place, and joined together on a permanent foundation. The U.S. Census Bureau, which tracks how new homes are built, defines modular construction in just these terms. It counts modular homes as ordinary housing units, separate from “HUD-code” manufactured homes.
Modular is one form of off-site construction. Other forms include panelized homes, where flat wall panels and roof trusses are shipped for assembly on site.
How Modular Housing Works
While crews prepare the foundation and utilities on site, a factory builds the modules in parallel. Framing, wiring, plumbing, insulation, and many finishes go in indoors. Once delivered, the modules are set by crane, connected, and finished. The same approach can produce a single house, a row of townhouses, or a multistory apartment building of stacked modules.
Because the two phases overlap, schedules can be shorter. A 2017 Terner Center paper said off-site multifamily construction can cut production time by up to 50% and construction costs by up to 20%. It also noted that few off-site factories were then operating in the United States.
Modular vs. Manufactured Housing
Both are factory-built, but federal rules treat them differently. Under 24 CFR § 3282.12, a factory-built structure is excluded from the federal manufactured housing law if its manufacturer certifies three things: it is designed only for a site-built permanent foundation, it is not designed to be moved once installed, and it is built to a nationally recognized building code or an equivalent state or local modular code.
| Modular | Manufactured | |
|---|---|---|
| Governing code | State or local building code | Federal HUD Code |
| Chassis | Towing hitch and running gear are removed before installation | Built on a permanent chassis |
| Foundation | Permanent, site-built | Varies; may be placed on a permanent foundation |
| Census classification | Counted as a regular housing unit | Counted separately as a manufactured home |
Why It Matters for Workforce Housing
Modular construction can help where skilled trades are scarce or building seasons are short, and it suits repeated designs such as small cottages. Savings are not automatic, however. Transport distance, factory deposits, crane and site costs, and local permitting all affect the bottom line. A modular home is affordable to a given household only if its price or rent is set, and sometimes restricted, to match. For more, see Factory-Built Housing: Modular and Manufactured.
Sources
- U.S. Census Bureau — Survey of Construction: Definitions (Construction Method) (opens in a new tab)
- 24 CFR § 3282.12 — Excluded structures: modular homes (Cornell LII) (opens in a new tab)
- Terner Center for Housing Innovation — Building Affordability by Building Affordably (March 2017) (opens in a new tab)
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