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Component Manufacturing dverti$ dverti $ er
By Gary Fleisher
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Don’t Forget! You Saw it in the
Adverti$$er
September 2020 #12254 Page #100
The Future of Modular Construction in (Post-)COVID-19
hortly after COVID-19 became the most debilitating thing that has happened to the US economy in recent history, modular construction stepped up to fill the demand for temporary medical facilities.
Many modules were built to meet that need, but here we are just 5 months later and that market has all but collapsed as the pandemic response evolves. Because of tough restrictions put in place by Federal and State Governments, including travel restrictions, the hospitality industry not only stopped placing orders for new hotels, many of the ones already booked for production were put on hold or cancelled entirely. That leaves multifamily and single family housing as the two remaining stars of modular construction and both of those are having some unique problems. You’ve probably poked your head out of your “Shelter in Place” cave by now and have seen new modular factories popping up like dandelions west of the Mississippi River. These new factories are building multifamily projects for developers trying to fill the need for affordable and low income housing. I talked with several factory owners who say the demand is there but there could be a dark cloud on the horizon. President Trump said on August 10 that he’s looking at unilaterally taking steps to stop tenant evictions. Without a flow of rental income from existing projects, many developers are contemplating putting new projects on hold. The factory owners also said single family modular home production is strong but with lumber prices rising almost daily, they are finding the homes they sold to their builders just 2 months ago may be in the red before they even go to the production line. Those rising costs have devastated the affordable single family modular home side of the business. The one bright spot here is the growing acceptance of modular ADUs by both consumers and local governments who are quickly adding zoning regulations to allow them in R1 neighborhoods. Continued next page
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