In response to major economic changes and environmental concerns, businesses are quickly realizing the benefits of investing in sustainable practices that can positively impact their business performance. Modular construction gives housing developers the opportunity to engage in sustainable construction practices while dialing back traditional cost escalations – making it the right solution for industry leaders seeking greater resilience in the face of unpredictable material and labor costs, changing regulatory requirements, and the damaging impacts of increased extreme weather.
These green building benefits associated with modular construction do not come with the payment of horrendous green costs – even though recent studies show that developers are willing to pay an average of 10% more in building costs if it allows their business to transition to a more circular and sustainable one. business model. As a result, modular construction has become the most efficient solution to address developers’ needs for sustainability and business integrity, while avoiding expensive premiums that limit the value of real estate investors and buyers in today’s tight mortgage market.
As it stands, the best way to approach a circular housing economy is to “make and reuse”, building long-lasting, climate-resilient buildings. Over the next few decades, this will require our industry to invest in the development of truly recyclable building materials. But in the meantime, housing developers must invest in technology, such as modular construction, to significantly increase the durability and life of their buildings.
Modular construction methods provide stability and durability
Traditional construction methods, based on a straightforward “take-make-dispose” economy, cause significant resource losses, including excessive energy consumption, and wastage during production and at the end of the product’s life. This is partly due to the use of materials such as concrete, steel, and wood, which are often chosen for strength and durability but often increase environmental challenges. This can be seen in the carbon emissions impact of concrete production, which accounts for 8% of global carbon dioxide emissions, and steel, which accounts for 7% of global CO2 emissions.
Unsurprisingly, even after these durable materials are used to build a traditional home, the resulting structure struggles to withstand extreme weather conditions, as evidenced by the recent damage caused by hurricanes like Hurricanes Helene and Milton across the Southeastern United States. With researchers suggesting that the most damaging US hurricanes are now three times more frequent than in the past 100 years, developers will need to quickly address the lack of physical resilience produced by these inefficient, traditional building methods.
Modular construction, in contrast, allows housing developers to build strong structures made of tough standards that allow buildings to survive hurricanes and earthquakes at very high rates. But beyond the high structural integrity, modular factory-built construction methods also support waste reduction – as buildings can be built more quickly and efficiently within a closed factory setting. This type of environment saves energy and has been shown to reduce construction times by 50%. It also allows builders and developers to use energy-efficient materials that are designed to be airtight and thermally efficient. The result is a home that is not only structurally sound and able to withstand extreme weather conditions, but a home that can meet the US Department of Energy’s stringent Zero Energy Ready Homes (ZERH) standards, for long-term net-zero emissions. benefits that help deal with climate related weather at its source.
Financial stability due to the adoption of modular construction
Aside from physical durability, using conventional construction methods allows real estate developers to build green without a green premium. This reverses the impact of typical housing costs – including rising construction prices, interest, and the effects of changing building policies – all while delivering an energy-efficient and climate-resilient product. Switching to factory construction from site construction methods can specifically reduce construction costs by up to 20%. This is the result of an indoor modular construction factory setup – where weather delays are non-existent and labor costs are reduced due to more efficient workflows, technology, and modularity is able to tap into pools of new and emerging workers.
But perhaps more importantly – by using the green materials offered by modular construction, developers can open their businesses to new channels of project financing such as “green” financing. Green bonds, for example, are set to raise money for climate and environmental projects, and enable sustainable investors to fill the gap that traditional investors have left behind. This is important for many developers who have found themselves struggling with high development costs and the declining availability of conventional bank financing.
With standard construction methods that reduce overall project costs by saving labor and materials, combined with access to advanced financing options, developers can achieve the financial stability they need to create a circular economy.
Looking ahead
Home developers and residential construction workers have a great opportunity to embrace innovation and sustainability with modular construction. This construction method not only brings fast, affordable, long-lasting housing, but also meets the need for sustainable, climate-resistant buildings that will bring us one step closer to a circular economy. Through common practices, the housing industry can meet growing demand, without excessive waste, and secure a sustainable future where both developers and communities thrive.
Chris Anderson is the CEO of Vantem.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
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