Pride of place—How builders shape their communities

Many Americans find themselves forced to make big sacrifices to own a home. What can builders and developers do to make more homes affordable for more people?
Creating more affordable single-family homes requires some creative solutions. (Photo: Liderina, Dreamstime.com)

Developers may be interested in modular communities because they can turn the project around quicker than they would a stick-built community. Since production takes place in a climate-controlled factory, fewer materials are lost to changes in weather, and homes can be built year-round. Finished homes are built to the same International Residential Code as site-built homes and appraise for the same value as a comparable home.

“For somebody looking to do development, I think modular should be a no-brainer as far as wanting to do it from a cost standpoint. If they’re trying to achieve that affordable housing, this is their best option to do it,” Christy said.

Even so, the site work involved in setting a modular home is often underestimated by developers. Christy says he gets four or five calls a month from people asking about building affordable modular homes.

[Related: Designing an affordable net-zero community]

“At the end of the day, their goal is to make a profit, so they run their numbers,” he said. “Most of the time, the cost is higher than they expect—not because of the modular portion of it, but because of everything that goes in with the city requirements and county requirements. … Once you add in all the site work, sometimes that cost becomes more expensive for investors and people who want to do projects like that.”

For example, the modular home might only cost $90 to $100 a square foot, he said, but that’s without sewer, tap or foundation fees. “Everything in the state of Colorado has to go on a foundation, so you’ve got wells and septics and connection of utilities … that continue to add to the cost.”

Counties may require parking lots and landscaping, garages or exterior design standards to match surrounding communities.

“You start adding all these things up and next thing you know, the cost comes closer to $190 to $200 for a total project,” Christy said.

Christy acknowledged that a modular home is probably not a solution for most first-time homebuyers.

“They’re going to have to figure out where they want to live, and obviously cost of land will be different depending on where they want to go,” he explained. “If they’re looking to spend $450,000, I might say, ‘You need to find a piece of land that costs probably minimum $75,000, and then you’re going to have about $350,000 leftover for a house.’”

Most of his customers are building Airbnb units, mother-in-law suites or retirement homes, he said: “people taking advantage of the equity in their homes, retiring and taking that money and building the retirement home in the mountains.”

When building a custom home, “regardless of whether you choose to build it as minimalist as possible, or make it as fancy as you possibly can, modular is going to be a better way to go from a cost-saving standpoint,” Christy said. “But to say it’s an answer to affordable housing, I think, would be a stretch.”

Danielle Andrus

Editor, Colorado Builder Magazine

Danielle Andrus has 284 posts and counting. See all posts by Danielle Andrus

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