Part V: Modular ADUs - Why Off-Site Construction is Changing the Game

Written By: John Phillips

This is the fifth installment of a monthly series about one of the hottest topics in real estate: Accessory Dwelling Units. ADUs have gotten a lot of attention recently as a housing option. John Phillips of Verdant Living has written the series. The series has been written to educate the general public.

ADUs – detached accessory or additional dwelling units, also called mini homes - are a wonderful Idea. They use an existing piece of residential real estate and create a separate living space. They are often used for intergenerational housing (aging parents, twenty somethings just starting out, etc.) and have long term value as rental property and add to the value of the real estate.

This article is about modular construction, which is how the construction industry refers to buildings assembled in a manufacturing plant (off site). The buildings are assembled (following the relevant building codes) into large boxes (the modules), delivered to the site on trucks, and put in place with a crane. ADUs are ideal for modular construction because they are only one or two boxes.

Full disclosure: This article was written by John Phillips. His company, Verdant Living, handles only modular ADUs, assembled by Champion Homes in their York, Nebraska facility.

Modular construction has many advantages over traditional “stick built”:

• Cost – can be 20% less than traditional building techniques

• Speed – up to 40% faster, the building can be assembled while site work is completed (this seems to understate the time savings for ADU construction).

• Quality – assembled in factory controlled environments

• Less disruption – most construction is off site, so far less in a backyard

• Weather independence – assembly is indoors

• Environmentally friendly – less waste, smaller carbon footprint

• Less hassle – far less construction in the backyard, fewer contractors on site (4 as opposed to 19)

  
  

And much more. Gary Fleisher, a leading observer of and consultant to the modular sector, posted 25 reasons modular is a great choice (and 25 hurdles it needs to overcome) on his website at https://modularhomesourcepro.com/solving-the-affordable-housing-crisis-the-promise-and-pitfalls-of-modular-and-prefabricated-housing/

There are so many advantages. Why would anyone not use modular construction? A couple of reasons

One big practical reason is site access. There needs to be a way for delivery using a crane, although other delivery methods are possible, crane delivery is typical.

Another reason is personal/emotional. If the buyer has specific design preferences or needs, they may wish to hire an architect, work through the design process, review and meet local requirements (maybe requiring special approval), hire a contractor, help organize the construction project including coordinating subcontractors, and take the additional time necessary for the project (estimates are often as long as two years), and, of course, incur significant extra expense. The result can be very good, but requires money, time, and patience.

The purchasing experience for a modular unit is different (at least buying from Champion Homes through Verdant Living). It is more like buying a car. Choose a model. Choose the finishes. Choose accessories (they are delivered with appliances). It is delivered and installed on a foundation. So, much simpler than “stick built” on site, however, there is still a lot to get done. Local government approvals, permits, inspections. Site work, including utilities and the foundation. Any on site work needed to complete the project.

A note of caution: as with any significant purchase, and buying a mini home is a major one, the purchaser should choose the modular manufacturer carefully, and make sure the site work and installation is handled by a reputable general contractor (often supplied by the manufacturer’s local representative).

To help those interested in ADUs, Verdant Living has published a buyers guide, buyersguidecolradoadus.com. A good place to begin is the Verdant Living website, verdantliving.us, or contact John Phillips 303-717-1962. 

I want to thank the following people for their input: Gary Fleisher, Modular Home Source Pro, Aaron Trometter and Doug Tollin, Champion Homes, Steve Payne, and Vantem.

Next month: A recap of the six part series and some key takeaways

FAQ's

1. What is an Accessory Dwelling Unit (ADU)? An ADU is a small, independent residential dwelling unit located on the same lot as a primary home. They are also known as granny flats, in-law suites, or mini homes, and can be attached or detached structures.
   

2. Why are ADUs ideal for modular construction? ADUs are ideal because their small size often consists of only one or two modules (boxes). This makes them easy to construct quickly in a factory, transport, and install with a crane, greatly simplifying the project.
   

3. How much faster is modular construction than traditional stick-built construction? Modular construction can be up to 40% faster than traditional stick-built methods because the building's assembly occurs offsite simultaneously while the foundation and site work are being completed.
   

4. Is modular construction cheaper than traditional building methods? Yes, modular construction often results in lower total costs, with construction costs potentially being 20% less than traditional building techniques due to less material waste and efficiencies gained in the factory setting.
   

5. What is the primary use of ADUs in intergenerational housing? ADUs are often used to house aging parents or young adult children. They allow families to live in close proximity for mutual support while maintaining separate, private living spaces.