Can Modular Break the Mold?
Its use has tripled its share in less than a decade. We wanted to find out why.
Modular building, in multifamily and elsewhere, continues to gain steam. The market share for permanent modular construction has more than tripled between 2015 and 2023. The figure shot up from 2.14 percent of starts in North America to 6.64 percent, according to the Modular Building Institute. And in 2023, multifamily took the largest share of the modular pie, at 20 percent, according to the MBI.
Zooming out, it might seem like a tiny sliver. However, it’s a sliver of the whole new built environment, which is saying something.
Traditionally, these communities take shape from modules built in factories and then shipped to the construction site via trucks. They are then assembled, somewhat like Lego blocks. Rather than traditional construction, where site-preparation work needs to be completed before buildings can go vertical, modular construction allows both that and the foundation to wrap up while the modules are being manufactured, which saves time and money.
A rendering of Ltd. Southfields, a 330-unit modular apartment community in Elkton, Md., that is under development by Greystar. Construction commenced in August 2024, with completion expected in September 2025. Image courtesy of LS3P 
Construction is underway at Resia Golden Glades in Miami, with the first residents expected to move in by March 2025. Image courtesy of Resia 
Hampton Beachview, located in Hampton Beach, N.H., was started in December 2019 and completed, via modular construction, in August 2020, just eight months later. Windover Construction served as construction manager and general contractor. Image courtesy of Windover Construction 
Main Street Apartments is a workforce and affordable housing development near downtown Los Angeles. Designed by AO, the seven-story project, slated for completion in 2025, has 376 studio and one-bedroom units that were designed for modular construction. Image courtesy of AO/Mason Muratalla
In a quickly advancing industry, there’s room for nuances, of course. “Modular has become a very generic term,” said Ernesto Lopes, president & CEO of Resia. “A lot of people refer to the container-like modules or cubes as modular, but that’s not what we do. We do a hybrid.”
To sidestep some costs and logistic limitations, Resia uses what Lopez calls a “hybrid” method. “The exterior modules are built in concrete at the job site,” he mentioned. “But off-site, we build all the bathrooms, kitchens, certain prefab walls and other elements that will go inside the concrete shell that we built.”
READ ALSO: Modular Design Methods: 3 Ways Developers Are Adapting
One such community is the 420-unit Resia Golden Glades in Miami, which went vertical in March 2024 and is expecting its first move-ins just 12 months later. Despite the tight timeline and building process, residents will still enjoy upscale finishes and amenities fitting the property’s profile.
The pros of modular construction…
The method has its perks for both developers and owners. One is shorter construction schedules—30 to 50 percent faster, according to Andy Mest, Greystar managing director of development, construction and modular manufacturing. This makes for a prime motivator, but modular offers multiple other benefits, according to the MBI:
- It’s greener. Building in a factory reduces waste and makes recycling easier.
- It’s safer. The controlled factory environment reduces the risk of accidents.
- It can be cheaper. It eliminates many of the variables of building on-site, such as the availability of labor. What’s more, with projects coming online quicker, construction loans can have shorter terms.
- There’s less disruption. There are fewer vehicles at the job site, and safety and security are enhanced.
- Quality control is improved. “I would take a drywall finish from a factory every day of the week and twice on Sunday compared to a site drywall finish,” said Derrick Seitz, project executive for Windover Construction. “People are not working on stilts, and you get much better quality.”
Owners also reap some rewards because of operational efficiencies. Stronger quality control through factory construction translates to fewer repairs down the road, experts say. And when repairs do happen, standardized design makes them faster and easier.
Perhaps the biggest advantage to an owner, however, is the possibility of insurance savings. “We build in concrete—a bunker,” said Resia’s Lopes. “Our buildings have proven to be more resilient to storms, and the life cycle of a concrete structure is a lot longer than a wood cycle. We can educate insurance underwriters on how much more resilient the building is, so we’ve been able to reduce insurance costs significantly, which reduces operating expenses.”
… and the cons of modular construction
Of course, it’s not all sunshine and rainbows.
While standardized design and manufacturing has its big pluses, the very same standardization also means less opportunity to customize. Still, there is some degree of customization, Lopes noted, offering completed Resia buildings as examples. In Florida, the exterior is typically stucco. In Atlanta, the company uses bricks. In Texas, it’s stone.
Then there’s the geography of it. Because modules go to job sites via truck, the method might not make economic sense if the location is more than 300 miles from the factory, according to Nickolos Gomez, principal & director of modular design and construction at architectural firm AO. Similarly, remote or hilly sites might present access challenges for the large and heavy loads.
Developers also need to know that modular construction can mean additional permitting. In many places, there’s a state-level inspection alongside the ones performed on-site by the local jurisdiction, Greystar’s Mest pointed out.
