Modular and panel construction – often positioned as a tool to expand the supply of affordable housing – is also gaining momentum in the luxury, custom-build market.
At The SHIFT, a space-making conference hosted by Tavistock Development Company earlier this month in Orlando, Florida, Plant Prefab Founder and CEO Steve Glenn said off-site methods can help builders deliver custom homes faster and with fewer interoperability issues, especially in high-cost, labor-stressed markets.
Plant Prefab manufactures townhouses, student housing, apartments and hospitality projects, but Glenn said single-family homes in high-demand urban and suburban areas and resort communities make up the bulk of the company’s work.
Why modular and panel works well in custom home building
Plant Prefab, based in California, uses both modular and panel construction. Glenn said combining the two is ideal for custom projects because many areas where luxury homes are built have high labor costs and limited skilled labor.
“There’s this incredible market disconnect,” Glenn said. “The places where custom projects are happening – urban sprawl, mountain home communities and second home communities – all share the same characteristics of high land and labor costs and labor shortages.”
Plant Prefab operates a 270,000-square-foot factory in Tejon Ranch, California, which the company says can produce more than 3 million square feet annually. Each project begins with a detailed digital production model that includes architectural, structural and mechanical plans.
That advanced integration is designed to reduce on-site conflicts and material waste. Plant Prefab’s latest business sustainability report states that this process reduces waste per square foot of production by approximately 40%.
Plant Prefab also points to energy-efficient systems and fire-resistant materials in its construction – positioning the company as a potential rebuilding partner in the fire-ravaged parts of California.
In a factory, automated machines cut, label and assemble parts that are then sent to work areas. Glenn said the ability to assemble modular elements and panels helps the company maintain customized projects while improving predictability.
Glenn said modular construction allows site work and construction to run in parallel, with schedule savings of 25% to 50%. But he added that modules can force design compromises in some buildings, while paneled sections can offer more flexibility.
Plant Prefab works with developers and architects to modify plans for ease of fabrication and off-site assembly, without sacrificing design intent, Glenn said.
“There will always be a place for architects in custom buildings, especially in cities, and we want to make that work,” Glenn said. “So we’re working with architects to think about how they can make their design in a way that reflects their intent, but slowly.”
Glenn also said that prefab can reduce surprises in the field and reduce the frequency of change orders. Plant Prefab issued three change orders last year that were not driven by customers, he said.
A competitive niche
Despite advantages such as speed and predictability, off-site options remain a small slice of the US single-family market. National Association of Home Builders estimates that modular and panel construction will account for 3% of single-family home construction in 2023 and 2024.
Glenn said the biggest obstacle was economics.
“Historically, our cost of land, labor and materials has been much lower than in Japan, Scandinavia, Germany and other European countries,” he said.
He also revealed a wave of efforts to support businesses that failed to scale. Katerra, which spent more than $2 billion in six years, filed for bankruptcy in 2021.
Still, Glenn said the market is big enough for companies that choose the right route and use it.
“A lot of money came in to start some work,” said Glenn. “Like in any new market. A bunch of people come in. One group won’t be successful, but some will do poorly.”
