The Prefab Revolution Is Heating Up — Is It Time for You to Dive In?

From commercial, mixed-use and multi-family buildings to hotels and single-family homes, what once conjured up images of quonset huts, portable classrooms and mobile homes is now one of the hottest building trends. All forms of prefabrication, including panelization and modular construction are taking off across the country as builders and owners look for ways to lower costs and increase quality. But in a time of rising material costs and a shortage of skilled labor, is prefabrication the answer to our prayers?

Well, yes and no. 

Like any other building method, prefabrication has pros and cons, and it’s not a one-size-fits-all solution that works in every situation. With that said, let’s take a look at the upside it offers for both builders and homebuyers.

According to builders who have embraced prefabrication, the biggest benefit is the time savings it offers. According to Brian Abramson, co-founder of Method Homes, a pre-designed and custom prefab home builder in Seattle, prefabrication allows Method to build a home 60 percent faster than traditional stick building. And a National Association of Home Builders (NAHB) case study of 36 projects built after Superstorm Sandy showed that building modular homes increased construction speed by 31 percent over conventional methods.

Prefab homes are also great for buyers who is search of a house with a modern design aesthetic without a lot of customization. Most prefab builders offer a limited number of models with a modest array of custom options, and the number of change orders are limited, helping to both speed up the building process and cut costs. And since the prefab process transfers most of the actual construction from the job site to the factory, quality control is improved and weather delays are limited. It also cuts down on the amount of labor needed on the jobsite. Since most prefab home panels generally arrive plumbed and wired, with features like cabinets, windows and doors pre-installed, the workers on site become more like assemblers than builders.

In many ways, prefab homes are also much greener than conventional ones. Building in a factory under controlled conditions helps create a tighter, more energy-efficient building envelope with less waste. It also requires fewer harsh chemicals, such as those used to  remove mold and fungus from wood building materials exposed to rain. This, along with the use of products such as low or no-VOC paints and finishes, above-code insulation, FSC-certified hardwood floors, dual-flush toilets, low-flow fixtures and pre-wiring for solar leads to a home more energy-efficient home with better indoor air quality.

In fact, prefabrication is helping builders create highly energy-efficient Passive Houses — a boon for builders in states like California, which has a net-zero mandate going into effect next year. Prefabrication makes it much easier to create well insulated high-performance panels in a factory that are then bolted together and sealed on site.

“We’re taking advantage of best practices in the manufacturing industry as well as automobile and boat design, test, and fabrication,” says Sean Ritchey, co-founder of upstate New York-based Threshold Builders, which introduced its panelized system in early 2018. The company has panelized the hydrothermal envelope, foundation, walls, and roof, constructing them from standard off-the-shelf components such as wood studs and cellulose insulation.

“We can make a home passive for about 1 to 2 percent more than code-built, a price premium that can pay itself back in just a few years,” says Ritchey. “Using a 20-year financial model, Passive House is going to save the homeowner a shocking amount of money in this Northeast cold climate, because it’s so efficient.”

The environmental benefits of prefab homes aren’t the only feature that appeals to today’s home buyers — especially millennials. The fact that they allow for a creative, hyper-modern design aesthetic doesn’t hurt either. According to Joseph Tanney, co-founder of Resolution: 4 Architecture in New York City, the launching pad for modern prefab homes arrived in 2002-03, when Dwell magazine held a competition for architects to design a $200,000 prefab house.

“Prefab construction became the holy grail of design,” says Tanney, whose firm won the 2002 Dwell magazine competition. “The idea was that it would be the answer for modern, affordable, mass-produced housing.

Yet despite all of its benefits, as Tanney points out, “We’ve seen far fewer prefab factories than what we expected.”

Not surprisingly, the number one reason is cost. With relatively few factories — even ones that are using robot laborers — prefab construction is still relatively expensive.

“If you think you’re going to save money building prefab, you might be surprised once all the costs are added up,” says Matthew Coates, president and principal architect of Coates Design Architects, a sustainable design and green building firm on Bainbridge Island, Washington.

“Our airtightness numbers have dramatically improved since we’ve moved to panelization,” Ritchey adds. “The shop lends itself to better quality control than a construction site, since we’re designing the whole building as a system. But you have to invest in the facilities and equipment like framing tables to switch to an off-site construction set-up, which is pretty expensive.”

Consequently, the cost of a prefab home for a buyers is still on par with a conventional stick-built one. Lots require a great deal of preparation (excavation, foundation work, utility connections, etc.) before the panels arrive and assembly begins. There’s also the cost of transporting the panels — which can be an arduous process — and assembly, including the use of a crane to lift the modules off the semi-trucks and onto the foundation, connecting the panels to the foundation and each other and sealing the entire building. Then there are additional features such as decks and exterior stairs, and finishing work such as painting. All told, these costs generally add 30 to 70 percent to a prefab home’s price.

Finally, there’s the simple fact that when it comes to change, AEC professionals are notoriously slow adopters, preferring to let others climb the steep learning curve first before taking the risk themselves. With that said, given the challenges builders are currently facing — and the ones lurking on the horizon — it’s not far fetched to say that before long, prefabrication will be the predominant form of construction.

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