Container-Based Construction: The Next Frontier in Affordable Housing

SG Blocks CEO & Chairman Paul Galvin talks about how using shipping containers as a primary building material can accelerate much-needed affordable housing construction.
Paul Galvin, CEO & Chairman, SG Blocks. Image courtesy of SG Blocks
Paul Galvin, CEO & Chairman, SG Blocks. Image courtesy of SG Blocks

Constantly rising construction costs, the increasing need for affordable housing units across the country, coupled with the lack of developable land in some regions as well as environmental concerns are driving an array of innovations in affordable housing. Recent Berkadia research showed that developers are beginning to consider modular and manufactured housing a viable alternative to conventional construction. And with rent control legislation impacting affordability in so many ways—including decreasing supply—developers are progressively considering other means to build affordable housing properties faster and cheaper.     

PODCAST: Getting Creative With Affordable Housing Lending

SG Blocks CEO & Chairman Paul Galvin has more than two decades of experience in developing and managing real estate assets. Since 2007, he has been promoting creative ways to alleviate the nationwide affordable housing crisis. And with homelessness rising 2.7 percent from 2018 to 2019—according to the U.S. Department of Housing and Urban Development—feasible alternatives are badly needed. In an interview with Multi-Housing News, Galvin explains the advantages of container-based construction in the multifamily industry. This form of construction is successfully being used for student housing projects as well.

How can container-based constructions mitigate the affordable housing crisis?

Galvin: Container-based construction can help alleviate our affordable housing crisis significantly in three simple ways: It is more affordable, sustainable and efficient than traditional forms of construction. I’d venture to say it’s our next frontier in affordable housing alternatives. Our homes are delivered up to 50 percent faster than traditional homes due to off-site completion.

How hard is it to turn a container into a structure that is not only functional, but also blends in with the architecture of other buildings in a certain area?

Galvin: The shipping containers come in a standard size and are easily stackable. They’re also highly durable, which is increasingly important as we deal with more frequent extreme weather events. Container homes can be clad with any siding that you can use to cover a wood home so they appear aesthetically at home in residential neighborhoods.

Container-based housing project. Image courtesy of SG Blocks
Container-based housing project. Image courtesy of SG Blocks

Container-based construction is faster and costs are undoubtedly lower than traditional forms of construction. How much can a housing developer save?

Galvin: A housing developer can save substantially with container-based construction since it lowers the costs of planning, engineering and construction. The economic benefits to the developer include: lower construction costs, half-time delivery and earlier occupancy for the tenant or owner.

How about maintenance costs?

Galvin: Containers are made from a highly oxidized steel that provides much of its strength and durability. Containers are naturally hurricane- and earthquake-resistant. Maintaining a container home is similar to a wood home.

What are the environmental advantages of using shipping containers in residential construction?

Galvin: Repurposing existing shipping containers into new living and working environments helps offset a building’s carbon footprint and uses less natural resources because the very basis for the product is a recycled material. What’s more, these repurposed shipping containers, which are maritime-grade structures, offer a higher quality of building. Composed of highly resilient steel, the containers meet or exceed most building specifications and are LEED-certifiable.

How much do you expect modular construction to impact the affordable housing market going forward?

Galvin: Enormously. We’re already seeing its effect across the country and we expect it to accelerate from here, particularly as municipalities seek solutions to mitigate the affordable housing crisis, which in essence is a construction crisis due to the enormous cost to build traditionally and its quality failings.