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E very crisis also represents an opportunity. The crisis of affordable housing is no different.
The opportunity within the housing crisis is to provide an alternative to site-built housing, which is so completely dependent upon the availability and reliability of such costly labor. The alternative is volumetric modular construction.
The main culprit of the housing crisis is construction costs that continue to rise much faster than the incomes of potential residents, thereby putting housing increasingly out of reach for the Missing Middle––the men and women who do the heavy lifting in our country and really make the country work. Construction costs have risen because of rising labor costs. Labor costs are not going to decline because the labor force has been hollowing itself out for more than a decade; and not replacing itself with younger workers. The decreasing supply of construction workers inevitably leads to higher construction costs; and so it has. In nearly every area of the country, construction labor costs have become so high that developers can build housing only for the top 1 percent of the market, leaving the rest of the market to fend for itself.
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As a one-stop shop for volumetric modular construction, we can control risk, reliably satisfy time requirements of our customers, and deliver codecompliant housing much faster and with significant cost savings over traditional site-built construction
Volumetric modular construction was invented in Europe at the end of World War II. Europe had to rebuild its bombed-out infrastructure, but without the labor of the 20 million Europeans who had died in the War. The solution to this labor shortage was volumetric modular construction. Eighty years on, the volumetric modular construction industry in Europe is world-class, attracting customers throughout the continent, as well as the U.S.
Atlanta-based Impact Housing Group has adopted volumetric modular construction as the housing delivery system to address the affordable housing crisis in the US. As part of that strategy, Impact Housing has become a fully-integrated, onestop shop to provide housing that people can afford. One-stop shop means Impact’s customers have only one negotiation for the manufacture, delivery, set, and site work. Otherwise, a prospective customer for volumetric modular housing would have four separate negotiations manufacture, transportation, crane/set, and site work. The prospect of negotiating and coordinating four separate vendors is too intimidating and inefficient to be attractive or scalable.
Impact Housing is already producing affordable housing at Impact’s first modular facility in south Georgia. The plant is building 25 houses per month, principally for single-family home developers in Florida. Impact also has a second, larger facility under construction in South Carolina, which will be producing affordable housing in July 2023.
The South Carolina facility will be able to produce 80 single-family homes per month, or 60 multifamily units per month. As with the Georgia facility, the market area for the South Carolina facility is within a 450-mile radius of the facility. That coverage area opens up markets for affordable housing throughout Alabama, Georgia, Kentucky, Tennessee, South Carolina, and North Carolina.
Impact Housing’s business strategy is to have a national footprint of volumetric modular facilities within five years. The crisis of affordable housing is not limited to a specific geography of the country, so Impact intends to provide affordable housing wherever the need is.
At the end of the day, if on-site construction could provide housing that people could afford, it would. Site-built construction is not providing affordable housing because its labor costs are already too high for affordable housing, and labor costs are only going to increase as the construction labor force continues to shrink. Volumetric modular solution is the most reliable and achievable solution to the affordable housing crisis, and Impact Housing is at the forefront of solving that crisis.
