Luke Falcone_ The Case for the Core: Modular Cores and Housing in Los Angeles

The topics of homelessness and housing shortages in the city dominate politics and policy in Los Angeles today. Densifying populations, rising costs of living, and a lack of housing stock have left the greater Los Angeles Metro Area (as with nearly every major metro in the country) in a state of emergency. While this is a multifaceted problem that will require a coalesced network of solutions, there is no denying the fact that we simply need more units, and we need them quickly. Off site construction and prefabricated technologies are proving to be efficient ways for the mass production of homes and could be one of the fastest ways to close the housing gap. 

Approved by voters in 2016, Proposition HHH, a $1.2 billion dollar bond designed to jumpstart LA’s annual production of affordable units, flooded money into the supportive housing sector. Designed to fund 10,000 units, the response from both the city and developers thus far has been creditable, with nearly 112 projects (totalling in roughly 7,000 units) funded over 10 years—the first phase. While  these additional units, on top of the nearly 88,000 built since 2010, are a step in the right direction, Los Angeles County still has nearly 1.9 million households that are within the affordability gap—the space between what renters or buyers can afford and what is available in the marketplace . These households are most at risk for falling into homelessness. As of early 2020, nearly 70% of households in the City of Los Angeles “would have to stretch financially to obtain a standard-size unit in their current neighborhood.”

Prop HHH was hugely ambitious in its intentions, committing nearly $1.2 billion to developing new supportive housing units in the form of construction loans. However, the funds come with notable caveats that make construction costs more expensive: project labor agreements, high-energy efficiency standards, and accessibility requirements. Labor requirements, the most significant obstacle to housing production, mandate all work on site be paid prevailing wage and a significant percentage of jobs be hired out local residents. Prefabricated construction methodologies appear to be a solution to these costly requirements. Prefab is quick to deploy, highly regulatable, and has the potential to become significantly more cost effective over time.

For the average market rate build-out in Los Angeles County, the Corporation for Supportive Housing estimates the cost of a single unit to be around $350,000. By comparison, an Los Angeles Times analysis of permanent supportive housing projects (like those coming out of funding by California Tax Credit Allocation Committee) put the pricetag at nearly $420,000 per unit. Clearly, the cost of  local and prevailing wage labor acts to balloon costs for developers. Reducing the number of subcontractors that a general contract needs to hire can have substantial reductions in the financial burdens of a project, cutting hours on site, time spent coordinating, and waiting for different material deliveries. 

On a job site, the majority of expensive subcontractural work is implemented through service delivery to individual units: wet walls and service cores that provide heating and cooling, plumbing and electrical lines to units—all of which need to be inspected by a city certified building official. By prefabricating core building elements and systems off site, inspections can be expedited by visits to factories instead of on site. While Proposition HHH regulations note that all on site labor needs to be qualified prevailing wage, there are no stated regulations regarding off site labor. This means that production of units in factories does not have to be skilled labor at prevailing wage, opening the door to possibilities in regards to both  where and by whom the construction takes place. For example, some modular manufacturers could choose to employ previously incarcerated individuals who would otherwise struggle to find employment, either in LA County or in the surrounding industrial zones. Many companies are even testing different methods of robotic construction to assist prefab manufacturing.

Prefabricated technologies are by no means a new concept and are still working out some of their kinks, such as their environmental impact, since materials are shipped twice: first to a factory, where they are assembled, and then to their sites. However, carbon impact might be offset by increased efficiency and waste reduction. Architect Kent Larson and MIT built the Open_1 house, a prefab single family home in New Hampshire and produced only two trash cans worth of jobsite waste. One of the biggest hindrances to greater adoption of prefab construction is that current cost estimates suggest that prefabricated modular buildings are not competitive to traditional stick built construction methods. But as the market for these units continues to evolve and we see a decline in the numbers of our skilled labor force, there is a predictable reduction of cost with greater demand in the prefab sector. Building a service core and the resulting costs are currently one of the greatest hurdles that small developers face when entering the supportive housing market. Prefab construction methods can help to reduce this burden significantly, opening the floodgates for mass infill and housing construction at a much greater pace.

1 - “Housing Community Investment Department.” HCIDLA , City of Los Angeles, hcidla.lacity.org/prop-hhh.

2 - “HHH PROGRESS: HOUSING THE UNSHELTERED AND REBUILDING LIVES.” HCIDLA , City of Los Angeles, hcidla.lacity.org/prop-hhh

 3 - Bughin, Jacques, et al. “Affordable Housing in Los Angeles: Delivery More - and Doing It Faster.” McKinsey.com , McKinsey Global Institute, Nov. 2019, www.mckinsey.com/~/media/McKinsey/Industries/Public Sector/Our Insights/Affordable housing in LA delivering more and doing it faster/MGI-Affordable-housing-in-Los-Angeles-full-report.ashx.

4 -  Bughin, Jacques, et al

5 - “HHH PLA Documents.” HHH PLA Documents | Bureau of Contract Administration , City of Los Angeles, bca.lacity.org/HHH_PLA_Docs

6 - Smith, Doug. “Q&A: Proposition HHH Would Raise Funds to Build Homeless Housing in L.A.” Los Angeles Times , https://www.latimes.com/local/california/la-me-ln-prop-hhh-qa-20161017-snap-story.html.

7 - “Off-Site Construction: Inspection.” ICC , International Code Council, 5 Mar. 2020, www.iccsafe.org/advocacy/safety-toolkits/offsite-construction/.

8 -  “Proposition HHH: Permanent Supportive Housing Program Regulations.” City of Los Angeles Proposition HHH Permanent Supportive Housing Program Regulations, Policies, and Procedures 2018-2019 , 29 June 2018.

9 - Davidson, Paul. “With Construction Workers Scarce, Homebuilders Turn to Robots, Software.” USA Today , Gannett Satellite Information Network, 25 June 2018, www.usatoday.com/story/money/2018/06/25/builders-coping-construction-worker-shortage-making-houses-factories -robots/704109002/.

10 - Stover, Dawn. “The House of the Future: Building Blocks.” Popular Science , Nov. 2006, https://books.google.com/books?id=8F6_7FQYJwEC&pg=PA82&lpg=PA82&dq=core wall mit house_n&source=bl&ots=zKarNHg2mY&sig=ACfU3U3Lb9DGXBDbVogYpTc06nUdSQSgIA&hl=en&sa=X&ved =2ahUKEwiHoJ63xIboAhWKrJ4KHc-7DBgQ6AEwC3oECAwQAQ#v=onepage&q=core wall mit house_n&f=false.