This story is part of the Salt Lake Tribune’s ongoing commitment to finding solutions to Utah’s biggest challenges through the work of the Innovation Lab.
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Carolyn and Brett Matesen bought a small single family home in the Ballpark area of Salt Lake City about five years ago.
While the house was small, the lot was large and they wanted to build an additional residential unit (ADU) on the lot. When they retired, they would live in it and be able to rent out the front building for extra income.
Instead of building another home on the property, they purchased a prefabricated unit from Stack Homes, a Utah-based company that sells and installs modular homes.
After a lengthy process of obtaining city permits, the Matesens received an elegant one-bedroom living space with sliding glass doors and spacious kitchen counters in their backyard.
Plans changed slightly and they decided to rent the back house to a friend who has been living in Salt Lake City for a long time.
“We cut them well below market price,” Carolyn said. “And she has a great place to live and we’ll have someone there that we trust when we’re gone.”
In these times of division and polarization, people of all political persuasions agree on one thing: we need more housing. Across Utah, rents have skyrocketed and home ownership has become a mere fantasy for the middle class.
Some solutions are in the works. At the city level, there are community land trusts. During the last legislature, the state launched a new assistance program for first-time home buyers. Building Salt Lake recently reported plans to convert an office building into affordable housing in Salt Lake City, and another nonprofit plans to convert an old recreation center and baseball field into apartments and townhouses.
But as state homelessness coordinator Wayne Niederhauser noted in a recent presentation to lawmakers, Utah has a shortfall of 77,140 ultra-affordable housing units.
There is no one-size-fits-all solution and it will take years, if not decades, to build adequate housing. But could move-in units like the ones the Matesens bought help increase Utah’s housing stock? To find out, the Tribune spoke to real estate experts.
An old idea is new again
Prefab houses are nothing new. In the late 1960s and early 1970s, the US Department of Housing and Urban Development launched Operation Breakthrough to meet the pent-up housing needs of the baby boomer generation.
George Romney, father of Utah Senator Mitt Romney, was secretary of HUD at the time, explained Ryan Smith, director of the School of Architecture at the University of Arizona and author of “Prefab Architecture: A Guide to Modular Design and Construction.”
Romney’s experience in the Michigan auto industry led him to ask, “Why can’t we use all of the shipbuilding and tank-building factories to produce housing?” Smith said.
During this time, the standards for prefabricated houses were set. “It took the mobile home industry at the time, elevating quality and setting performance standards,” Smith said.
The Nixon administration ended Operation Breakthrough, Smith said, but the prefabricated housing code set by HUD survived the initiative.
Today, one in eleven new single-family homes is prefab, Smith said. But compared to other countries like Japan or Sweden, the off-site home building industry in the United States lags behind.
However, there is growing interest that prefab homes have the potential to speed up the home building process and deliver a more affordable product.
“New real estate inventory available online is generally less accessible to a novice homebuyer,” said Chadwick Reed, director of programs and growth at Ivory Innovations.
Reed recently co-authored a study examining prefab homes and found they could cost as little as 35% to 73% of the “on-site built equivalents.”
Despite the lower cost of prefab housing, there are many obstacles to overcome – from stigma to financing to zoning regulations. People often think of single- or double-width “trailer homes,” and locals may be fighting to prevent prefab construction in their neighborhoods.
“Many zoning ordinances and local codes prohibit prefabricated housing,” Reed said.
To combat this stigma, the prefab industry has developed a new product called “CrossMod,” Reed explained. “It looks very much like a site-built home,” Reed said, “to the untrained eye it’s indistinguishable.”
CrossMod units feature garages, permanent foundations, porches, and other details that make them look like any other suburban home.
Reed said few individual households buy prefabs (they look for homes and neighborhoods that already exist). For new housing units to really take off, developers may need to buy in.
A product that appeals to the individual
While prefabs could help meet the need for affordable housing and demand for single-family homes, other types of prefabs could help enable more competitive rents.
“Offsite construction, industrialized construction, is a means of not only building affordable housing,” Smith said, “but also building all types of housing faster and in a more controlled environment with higher quality.”
Modular homes like the one the Matesens bought could prove more popular in cities looking to densify. Modular homes are not built using HUD code. Thanks to its presence in magazines like Dwell (which runs an entire newsletter on prefabricated housing), modular structures don’t have to be overcome with the same stigma. Imagine angular buildings that can still be transported in the back of a semi-truck, but with design elements that appeal to the affluent and middle class.
Stack Homes, which has just opened a new factory in West Jordan, specializes in well-built, eco-friendly modular homes of various sizes.
On the day of the company’s grand opening, Sumner Douglas, CEO of Stack Homes, showed his product in various stages of construction, stopping at a steel frame. “This frame,” Douglas said, “we printed it in 30 minutes, we printed the structure in 30 minutes, and then it actually has a laser system that shoots at the floor.”
Inputting architecture files and 3D printing technology, they are able to produce the steel frame with minimal waste.
Printing the structure improves quality control, according to Douglas, and also speeds up the construction process. Though it’s automated, Douglas says they can still make adjustments based on where the house is going.
“And we’re able to really change the basic snow load conditions,” Douglas explained, “which makes it very applicable to a lot of different locations, especially rural areas, hard-to-reach places or places like Jackson Hole where there’s a very There is heavy snow load.” Limited labor pool.” Places where a struggling workforce desperately needs a new home.
Stack Homes has sold 45% of its homes in Utah and built 22 homes for Modal Living, another Utah-based modular home company.
Douglas founded the company just as states across the West were beginning to legalize side housing. Stack has sold homes in Wyoming, Idaho, Colorado, Oregon and Nevada. “I felt like ADUs were a really good solution to a lot of our problems,” Douglas said.
The 640-square-foot model is popular in downtown Salt Lake City, Douglas said.
The aim is to produce 620 houses per year in the new factory. Currently, buying an ADU from Stack Homes is no cheaper than building an ADU from scratch. The base price for the 60-square-foot, one-bedroom Ridgeline is $245,000.
Non-HUD-regulated off-site construction could someday be cheaper, Smith said. “But you have to build up the infrastructure of a factory and knowledge, and that takes time. So in the beginning it probably won’t be like that, but in time it will be like that.”
Modular homes may not be able to compete in terms of cost. But time savings, fixed prices and a tight labor market could give them a head start over traditional construction.
Additionally, there are other hurdles to building ADUs that prefab buildings could help overcome – in a city where the construction industry is booming, it might be difficult to find a contractor for a small ADU project.
Jörg Rügemer, a professor in the University of Utah’s School of Architecture, said that Utah needs to focus on two key factors to reduce housing costs: zoning and size.
“One of the most important cost-cutting strategies is to really rethink the amount of space that we have,” Rügemer said. Additional housing units like the ones the Matesens bought could help. “It’s another way to provide small, efficient housing on existing lots,” he said.
The Salt Lake City City Council passed changes last spring that would make it easier to build ADUs, but furor over a proposed development in Upper Avenues that would also include mother-in-law units shows that the mindset isn’t quite there has changed in their favor .
“I think if the real estate crisis gets so bad that we simply have no other choice,” said Rügemer, “then maybe things will change.”
Editor’s Note • The Clark and Christine Ivory Foundation is a donor to the Salt Lake Tribune’s Innovation Lab.