Everything must be tried to build more housing in New York City and that includes modular housing.
A major reason there’s not enough housing is that construction costs are way too high. Estimates are that the cost of building new units here is double what it is in other parts of New York State, and significantly higher than in other big cities.
Of course, some of that is the unalterable nature of the beast: building vertically costs more than building horizontally, and old, dense urban environments like ours are inherently complicated places in which to do work. But some of the driving forces behind high construction costs can be combated — including by trying harder to build what’s called modular housing.
Modular means creating housing — either constituent parts or even entire units — in a factory, then fitting them together on site. The innovation can save money because assembly-line methods are much faster and more efficient; because weather rarely interferes with timelines; because less material gets wasted; and because it’s easier to call on the specialized labor needed at any given time.
A 2023 analysis by a big consulting firm found that modular can cut construction timelines by 20% to 50% and costs by 20%. Yet despite the savings, fewer than 4% of existing U.S. housing production relies on these techniques, compared to 45% in some northern European countries and 15% in Japan.
That said, modular multi-family housing, especially multi-story housing like what New York generally needs to produce, hasn’t yet proven its mettle in the real world here. We’ve been though at least one cycle of hype and bursting bubbles. About 10 years ago, a tower being built as part of the Atlantic Yards development started out as a highly touted modular construction experiment. Delays and quality problems plagued the project. Modular’s first big close-up in New York City turned out to be pretty ugly.
Fortunately, leaders aren’t giving up on the idea. The recently passed state budget allocates $50 million to “services and expenses of the modular and starter homes program to fund the development of starter and modular homes.”
If all of this gets spent in the suburbs and upstate — where housing also needs to be built faster and at lower cost — that wouldn’t be a total loss. But some significant share should go toward demonstrating the ability to do modular right in the five boroughs.
Production of almost every product New Yorkers and Americans use daily has been revolutionized over the last 50 years. Housing — the thing that costs us the most, by a lot — has been resistant to innovation. That’s partly because piles of laws and regulations hamper it, partly because entrenched interests resist it.
All those who want a more affordable New York should open their eyes and ears to every reasonable idea that has the promise of making it easier to build more apartments faster and for less money. If we’re smart, in 10 or 20 or 30 years, we’ll see construction in New York City that increasingly relies on modular building methods, producing high-quality, attractive buildings at lower cost.
New York elected officials who rail at rising rents and a 1.4% vacancy rate can keep shaking their fists at the sky and demanding more and more blood-from-stone public subsidies to create affordable housing at exorbitant costs, or they can get to innovating.
