The decline of modular housing developments in the west built after the Hawaiian wildfires.
Fades west
Owning a home is one of the pillars of America’s dreams. However, the nationwide housing affordability crisis has been headed by a noble median price for single-family homes above $422,000, and while the 30-year fixed mortgage rate has fallen, it is still relatively high, with the nationwide housing shortage of around 4 million units.
Modular Homebuilder Westing West plans to become part of the solution to this broad dilemma. Founded in 2016 in Buena Vista, Colorado, the company assembles modular homes within its 110,000 square feet factory. Compared to traditional on-site stick build structures, Fading West claims that its lean manufacturing principles reduce costs by up to 20%, providing a finished home in half the time.
“Our innovation is that we are not construction workers, but manufacturers,” said Eric Schaefer, Chief Business Development Director at Fading West. “Modulars have been around for a long time,” he said.
The industry has a century-old history and has grown again in recent years, but it lacks a low base compared to the national housing real estate statistics.
“What we consider ourselves as a destroyer is our value engineering, speed, high quality and architectural interesting design,” Schaefer said.
For example, the atypical case is Lahaina, Maui, a historic Hawaiian city that was devastated by a wildfire in August 2023. In partnership with the Federal Emergency Management Agency, state and local officials and New York City construction company DXA Studio, Wading West produced 82 brightly colored modular homes in two months, running two-hour shifts a day. The house was trucked to Seattle and then shipped to Lahaina. Production took less than five months from construction to completion.
The one, two-bedroom, three-bedroom home, designed by DXA’s LIV connection spinoff, ranged between $165,000 and $227,000 each, according to FEMA paid them. According to an agency spokesperson, the Kirohana Project plans to ultimately form 167 modular units.
From disaster relief responses to affordable housing crisis across the country
Using modular housing for disaster relief victims was the first to decay the West. “We operated with a very small desire,” Schafer said. The company will start as a developer and create homes that workers in small mountains and rural towns near Buena Vista can reach, including Colorado ski resorts such as Breckenridge, Copper Mountain and Vail. “We have realized that it is impossible to build affordable new homes due to the lack of general contractors and subcontractors in the area,” Schaefer said, adding that long snowy winters are another obstacle to outdoor construction.
Initially, the declined community-themed cluster of modular houses, based on the West West, was built by other companies. But a few years later, founder and CEO Charlie Chupp decided to rethink his business model to increase the demand for affordable housing not only locally but also nationwide. So in 2021, we built a state-of-the-art factory with funding from four private investors and state loans.
The size of a two and a half football field, the U-shaped facility has 18 workstations, each with a different building task. The modular process begins with floors, walls and roofs, followed by electricity and plumbing, followed by insulation and drywall, and finally cabinets and countertops.
“The house is built on air casters so you can move up a few inches from the ground. Workers push the unit from station to station every four hours,” Schaefer said.
It usually takes about 7 days to complete a 10 tonne home each.
Fading West currently employs 110 non-union factory workers, employing 50 management staff and general contractors in addition to high quality ranging from $20 to $20 per hour. “Other modular companies are not our competition,” Schafer said. “It’s a traditional home builder. We’re still a $50 million business, but in the building world we’re considered a small company.”
According to Schaefer, only about 3% to 5% of new detached homes in Colorado are built at factories. But interest in this approach has spread, and New York Gov. Kathy Hochul announced this week a plan that will feature modular homes as key to increasing affordable housing supply across the state.
Nationally, gaining market share remains a difficult battle. Based on data from the Census Bureau last year, the modular structure of a detached house in a typical year accounts for 1-3% of all start. “That number has been pretty constant over the last decade or so,” said Devin Perry, assistant vice president at NAHB, which focuses on system builders including Modular. In the 2007-08 time slot, it was 7-8%. The decline “reflects the rest of the post-bubble housing industry,” Perry said. “Modular manufacturing bases have been consolidated and reduced, so few factories supply modular housing.”
A view of the home on a farm fades West’s first development project near the factory in Buena Vista, Colorado.
Fades west
It is worth describing a somewhat confusing classification of structures that make up offsite constructed structures. There are two different categories: manufacturing and modular. Manufactured homes (aka mobile homes or trailers) are built to a single national code managed by the U.S. Housing and Urban Development Agency.
Modular homes are built on the same codes used by traditional onsite home builders, including international building codes and state and local codes, according to the Modular HomeBuilders Association, a sister organization to Tom Hardiman, executive director of the Modular Building Institute. MBI represents the manufacturer of multi-family homes and commercial buildings, including hospitals, schools, office buildings and hotels.
Modular embodies only a small portion of the US overall home construction in all of its designations, but addresses many of the country’s issues affecting housing when compared to buildings on-site. They are more affordable and are built more quickly by skilled workers in a safe, controlled indoor environment. They reduce waste by almost 25% and reduce weather-related damage to the materials. “We’re committed to providing a range of services to our customers,” said Jordon Rogove, partner and co-founder of DXA Studio.
Michael Neil, a leading research associate and equity scholar at the Urban Institute, who studied the sector, agrees with this view, saying modular housings can achieve affordable products through production models. “The buildings, especially those built on the site on the detached side, have not experienced much productivity gains in tally over the past decades,” Neal said.
This approach can also solve the lack of reliable workforce experienced by traditional home builders. The modular factory tackles that challenge by having a full-time, local, well-paid workforce that is not limited by outdoor weather conditions. “Maybe modulars will reach affordable housing,” Neil said.
Schafer talks about the affordable housing mission, saying, “it’s just like a startup in four years’ time,” which is declining to the west. “What makes sense is that this is for homes for teachers, police officers, firefighters and a fairly wide range of homeowners — in the wider arena,” he added.
To that end, projects were launched in Wyoming, Utah, Montana, Texas and New Mexico. But despairing the West is not about building revenue measures and linking them to disaster relief missions that have been pioneered in Hawaii.
The company partners with Home/Town Development, a group of Los Angeles design, building, development and real estate leaders to provide a variety of permanent modular homes to victims of wildfires in Pallisard and Altadena in the Pacific. Fading West has a multi-million dollar, 3,000 square feet, five-bedroom home, and a more affordable 1,200 square meters two-bedroom model design.
A modular business model is that at its foundation, you can build a home to suit the desires and budgets of a homeowner. “Think of these as LEGO blocks,” Schafer said.
