Microhousing and Panelized Construction: A Match Made for Affordability

For-sale housing inventory may be up nearly 20 percent from a year ago, but affordability is still down. Households earning $75,000 to $100,000 year—those considered upper-middle-income buyers—are finding only about one in five homes within financial reach, according to the National Association of Realtors (NAR).

In 2019, those same buyers could afford nearly half of the houses on the market, and NAR currently estimates a shortage of 416,000 units priced below $255,000, the number it says would balance the market. Things are even tougher for potential lower-income buyers.
Microhousing, from multistory apartment buildings to backyard accessory dwelling units (ADUs), appears to be an effective way to keep construction costs in check while boosting housing stock near vibrant urban centers and the cultural, social, and economic benefits they bring.

All forms of microhousing are experiencing growth across the country. For example, Two-thirds of Seattle’s multifamily construction pipeline involves units of 441 square feet or smaller. In Boston, that figure is 56%, and it’s 43% in New York City, 29% in San Francisco, 23% in Norfolk, and 20% in Minneapolis.

The next challenge is building a whole lot of microhousing quickly, efficiently, and cost-effectively. To that end, builders are increasingly embracing off-site construction methods, with panelized construction increasingly the go-to option.

The Benefits of Off-Site Production

Panelized and other off-site approaches to housing production involve delivering the majority of project’s vertical construction, such as walls, floors, and roof trusses, in climate-controlled factory environments with tight quality control.

The components are based on flexible plan sets and then shipped flat for assembly and finishing onsite. Such projects typical max out at three stories and about 20 townhome or apartment units. 

A panelized approach has several advantages. In addition to 30-40% gains in production cycle time, these approaches routinely result in 83% less waste and up to 43% less carbon emissions while reducing building material use by 17%. The result is an overall cost savings of 10-45% and home that are typically more energy efficient than either full-volumetric modular (near-complete units or cassettes) or stick-built homes.

Panelized construction builds take less time from contract to completion than volumetric modular, which tends to apply to larger-scale projects. The panels may differ depending on such factors as MEP routing, penetrations, and preinstalled windows, but their overall consistency and simplicity make for fast, reliable in-factory builds.

Builders can exploit that predictability to do onsite grading, foundation, and plumbing, electrical, and sewage-related prep work knowing that the panels will arrive as scheduled.

With the panels flat-packed, shipping involves fewer truck rolls than volumetric modular and takes up minimal storage space once onsite, making panelized construction well-suited to urban microhousing projects. Pre-established configurations and standard plan sets smooth planning as well as permitting processes.

Addressing Skilled Labor Shortages 

Panelized construction also delivers workforce efficiencies. With fewer workers at a jobsite and shorter construction timelines, it’s safer, quieter, and less disruptive to neighbors.

Many trades have worked panelized jobs for years, and they’re typically cross-trained to do not only the assembly, but also the application of siding, plumbing hookups, cabinetry installation, and, in some cases, roofing and drywalling. 

That experience enables easier scheduling and project management; it also makes for a more favorable weighted-average labor rate, as well-understood materials and inputs plus predictable construction processes minimize the need for costlier specialist tradespeople.

Given the cost, performance, and construction-related advantages that panelized construction in particular delivers for competitively priced modular microhousing development, it’s no surprise that builders of such projects are turning to it more often.

There are many, many small, affordable homes to be built, and there’s no time—much less money—to waste.