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The modular housing industry traces its lineage to Sears Roebuck home kits and Henry Ford assembly lines, though true factory-built, housing code-approved homes are just 60 years old. The industry's best days lie ahead.

One reason for modular's potential growth is because of the construction industry's crying need for more workers. Fewer employees are needed to assemble homes and commercial modular units on site than are required to stick-build them. Consequently, some developers are introducing factory-built components in housing developments. Though modular homes constitute just 3-4 percent of new housing, the Modular Building Institute aims to capture 5 percent of the commercial-residential market by 2020.

There are other advantages to pre-manufacturing buildings. The factory-built structures are at least as strong, or stronger, than stick-built buildings: In Hurricane Andrew in Florida 25 years ago, modular homes performed much better than conventional housing. Furthermore, residential units can be erected more quickly and with less concern about the vagaries of weather. They also typically are more energy efficient because of tighter factory assembly methods.

With all of modular's intrinsic efficiency, why isn't it claiming a larger share of the market? For one thing, delivery of pre-assembled pods is restricted by bridge clearances and sharp turns along trucking routes. Sometimes a unit literally can't get there from here. Plus, the bigger the house or commercial building, the more modular units needed, and construction costs increase with every delivery.

Still, the construction industry desperately needs to reduce inefficiencies and modular can help do that. The industry also must integrate modern technologies into new construction—all the wireless stuff that gives new home-shopping the feel of new car shopping, with shoppers as interested in the electronics in the walls as in the walls themselves. And where is installation of wireless systems most efficiently accomplished? In a factory.

In some countries—notably, Sweden—30 and 40 percent of homes incorporate prefabricated techniques. That may be harbinger for this country. Modular's construction efficiency—that is, productivity with minimal waste—bodes well for its future.—CEG Blogger

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