Why developers are turning to modular for sustainability and resilience
In response to drastic economic changes and environmental challenges, industries are quickly realizing the benefits of investing in sustainable practices that can positively impact their business operations. Modular construction offers home developers the opportunity to adopt sustainable construction practices while reverting to traditional cost increases – making it the ideal solution for industry leaders looking for greater resilience in the face of unpredictable material and labor costs, changing regulatory requirements, and the destructive consequences of increasingly extreme weather.
These green building benefits that come with modular construction do not come with the dreaded green cost premium – even though recent research shows that developers are willing to pay an average price 10% more on construction costs if it enables their company to switch to a more circular and sustainable business model. As a result, modular construction has become the most effective solution for meeting developers’ needs for sustainability and business integrity, while avoiding expensive premiums that slow down value for investors and home buyers in today’s tight credit market.
As it stands, the best way to get closer to a circular, make-use-reuse housing economy is to build more sustainable, climate-resilient buildings. Over the coming decades, this will require our industry to invest in the development of truly recyclable building materials. But in the immediate meantime, housing developers must invest in technologies, such as modular construction, to dramatically extend the resilience and lifespan of their buildings.
Modular construction methods ensure sustainability and resilience
Traditional construction methods, based on the linear economy of ‘take, make, throw away’, cause significant loss of resources, including excessive energy consumption, and waste 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 typically chosen for their strength and durability, but which often exacerbate environmental problems. This can be seen in the CO2 emissions impact of concrete production, for which it is responsible 8% of the world’s carbon dioxide emissions, and steel, which is responsible 7% of global CO2 emissions.
It is not surprising that even after these durable materials are used to create a traditional home, the resulting structure struggles to withstand extreme weather conditions, as evidenced by recent damage from storms such as Hurricane Helene and Milton in the southeastern United States. States. Researchers suggest that three of the most damaging hurricanes are now in the US times more often than 100 years ago, developers will need to quickly address the lack of physical resilience caused by these energy-inefficient, traditional construction methods.
Modular construction, on the other hand, allows housing developers to build stronger structures built to exacting standards, allowing buildings to survive hurricanes and earthquakes to a much higher degree. But in addition to superior structural integrity, Modular’s factory-built construction methods also support the reduction of waste – because structures can be built much faster and more efficiently within a closed factory environment. This type of environment saves on energy consumption and has been shown to reduce construction time by up to 30% 50%. It also allows builders and developers to use energy-efficient materials that are constructed to be airtight and thermally efficient. The result is a home that is not only structurally sounder and can withstand extreme weather conditions, but can also meet the stringent requirements of the U.S. Department of Energy. Zero Energy Ready Homes (ZERH) standards, for long-term net-zero emissions benefits that help tackle climate-related weather at its source.
Financial resilience as a result of modular construction
In addition to physical resilience, the use of modular construction methods allows real estate developers to build green without the green premium. This mitigates the impact of traditional housing costs – including rising construction prices, interest rates and the implications of fluctuating construction policies – while delivering a more energy-efficient and climate-resilient product. Specifically, switching to factory construction from on-site construction methods can reduce construction costs by as much as 20% 20%. This is a result of the indoor factory environment of modular construction – where weather delays do not exist and labor costs are reduced thanks to more efficient workflows, technology and the modular ability to tap into a younger and emerging workforce that traditional construction cannot access.
But perhaps even more importantly, by using the green materials that modular construction offers, developers can open their businesses to new project financing options, such as ‘green’ financing. Green bondsfor example, are intended to raise money for climate and environmental projects, and they enable sustainably minded investors to fill the gap left by traditional investors. This is critical for many developers who face higher development costs and reduced availability of traditional bank financing.
With modular construction methods that reduce overall project costs through savings on labor and materials, combined with access to improved financing options, developers can achieve the financial resilience they need to innovate toward a circular economy.
Looking ahead
Housing developers and construction workers have a golden opportunity to embrace innovation and sustainability through modular construction. This construction method not only delivers faster, more cost-efficient and more sustainable homes, but also meets the demand for sustainable, climate-resilient homes that will bring us one step closer to a circular economy. By adopting modular methods, the housing sector can meet growing demand, without excessive waste, and secure a resilient 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 staff and its owners.
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