Does Modular Cost Less?

John Phillips says modular construction can lower costs, but the savings depend on the project.

Key cost comparison

• He compared a one-bedroom ADU built stick-built with one built in a factory.
• The comparison used the building itself, from the top of the foundation up.
• Site costs, permits, and foundation costs were not included in the main comparison.
• The modular unit was about 35% less expensive on this basis.
• The modular unit was 600 sq ft.
• The stick-built ADU was 576 sq ft.
• The modular unit included middle-of-the-road options, not the cheapest finishes.
• Including total project costs, the savings in this ADU example would be about 8%.

What the author found

Phillips says he did not find a strong empirical study comparing similar modular and stick-built buildings. He asked people with industry experience, and they believed modular can lower construction costs by at least 10%, with the warning that savings are not automatic.

Why modular may cost less

• Factory production can reduce labor variability.
• Weather delays can be reduced.
• Material handling can be more efficient.
• Construction waste can be lower, especially on site.
• Project costs can be more predictable.

Limits of the comparison

Phillips emphasizes that building cost is not the same as total project cost. Site work, permits, and foundation costs can reduce the apparent savings.

Other examples

He says a non-ADU project in the Colorado mountains stalled because construction costs were high. When modular was considered, the project became possible.

Why cost may not be the main driver

Phillips argues that buyers often care more about total value than price alone. He says personalized design and other preferences can matter more than cost, especially for ADUs in the Denver area.

Named organizations and companies

• West Denver Renaissance Collaborative
• Denver Housing
• Champion Homes
• Off Site Dirt Network
• Impresa Modular
• Vantem Homes
• Tinymod
• Verdant Living

FAQ points from the article

• Modular construction is not always cheaper than traditional building.
• The biggest savings often come from factory efficiency and reduced delays.
• Cost is not always the main reason people choose modular construction.