By Erica Spaid Patras and Aaron Clapper

In the midst of a national housing crisis, housing circles are abuzz with talk of modular housing as an affordable solution to meet the need for housing.

Here’s a quick 101 on factory-built housing to help us understand just what we’re talking about and its potential.

First Things First: Definitions are Important

Manufactured Housing

Manufactured housing is made entirely off-site and then placed on a lot. Like a car, it depreciates in value and has VIN number. Manufactured housing is often thought of as a mobile home and can sometimes be seen on a truck bed driving on the highway.

Modular Housing (also called pre-fabricated housing)

In modular housing, components of the house are made off-site in a factory and assembled on-site on a concrete slab. The house quality is comparable to stick built and designs can run the gamut from modern to traditional; entry-level to luxury.

Structural Insulated Panel (SIP) Housing

SIP housing is a subset of modular that uses highly insulated panels for top-notch energy efficiency.

Modular Housing’s Applicability in Ohio

Legality: Modular housing is allowed anywhere in Ohio as identified in the Ohio Revised Code (ORC 4781), provided it is placed on a slab and there’s no local ordinance against it. An informal survey of Ohio APA members reports that local ordinances against modular are rare.

Cost of Modular: According to HomeAdvisor, the base price for modular homes is about $40 – $80 per square foot. After adding other costs, including finishes, delivery and installation, the price range reaches closer to $100 – $200 per square foot, comparable to the $150-200 per square foot that is typical for stick-built construction. Ohio does not charge sales tax on modular homes, which affords them some additional cost savings.

Cost of SIP: Bare bones construction costs to frame and enclose a SIP house can be as low as $25-35 per square foot. However, this does not include finishing costs and low initial costs usually yield more onsite labor down the road because unless they are pre-drilled, the thick SIP walls require extra labor to install things like cabinets. Pre-drilling adds to the base cost of the panels and if the drilling is done after installation instead, additional costs with be accrued in the form of labor. Additionally, open floor plans add to the cost of SIP homes because installers must take additional steps to configure the “blocky” SIP panels to open floor plans.

While it seems possible to build a modest SIP at minimal cost, we have also found reports of SIPs being constructed for 20% more than stick builds. What is clear though is that over the life of the house, owners can expect to save 40-60% in utility costs compared to stick built houses.

Time savings: Modular housing also saves time on the job site. Most modular homes can go up in as little as two days to one week. Developers appreciate this time saved on the job site because there is less risk of product being lost or stolen. Though assembly is fast, modular homes do require pre-order lead time, which varies depending on pipeline.

Development Pipeline: Currently in the Midwest, the job pipelines of modular companies are as backed up as stick-build developers and companies are operating at capacity. This negates much of the potential time and cost savings associated with modular. The company pipeline issue is even tighter with SIP construction; at the time of this writing 15 companies in Ohio make SIP parts but only two companies construct it.