July 17, 2019

Report on Overcoming Barriers to Bringing Off-Site Construction to Scale

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Today, the Enterprise Policy Development & Research (PD&R) team released its new report on Overcoming Barriers to Bringing Off-Site Construction to Scale at Enterprise’s 10th annual Affordable Housing Design Leadership Institute (AHDLI) in Cleveland, Ohio. The housing industry has been eager to utilize innovative design, construction and production strategies, including off-site construction, accessory dwelling units and 3-D home printing, to substantially improve the cost-effectiveness and efficiency of the housing delivery system. This white paper, which focuses on off-site construction strategies, is the first in a series that looks at opportunities and challenges to innovate around construction, design and production to bring those innovations to scale to help expand the supply of affordable homes and address cost challenges.

This research bridges the interests of Enterprise’s Design Leadership and PD&R teams in identifying strategies to address affordable housing’s increasingly complex construction, policy and finance challenges. Over the past decade, the Enterprise AHDLI has convened developers, designers, city officials and policy makers to share best practices and exchange feedback on housing development proposals, capturing creative and innovative approaches to design, construction, policy and finance challenges. In addition, under PD&R’s Expanding the Supply of Affordable Homes research program, we have provided research and implementation support to improve housing affordability through policy and financial innovations, regulatory optimization and development/preservation cost-effectiveness. (Read our research reports on the Enterprise website)

The concept of using off-site construction techniques as a tool to boost the cost-effectiveness and productivity of the housing delivery system has been recurring in the industry for decades. Many efforts have sought to demonstrate how off-site construction promises to be a silver bullet, solely able to address all cost- and productivity-related challenges in housing development. Writing from a policy-driven perspective focused on regulatory and financing systems, we aim to shift the conversation toward understanding how off-site construction techniques can function within the housing delivery system. To that end, we explore:

  • Where the use of off-site construction techniques can boost the creation of subsidized housing and create cost savings for market-rate developers, which can help expand the supply of homes and ultimately enable homeowners and tenants to benefit from these benefits by lowering their housing costs, and
  • What kinds of changes to the regulatory and financing systems could scale the use of off-site construction.

We also identify the challenges that have long been constraining efforts to bring off-site construction techniques to scale and ways to overcome those challenges

New Reflections on Affordable Housing Design, Policy and Production: Overcoming Barriers to Bringing Off-Site Construction to Scale identifies challenges and opportunities to using prefabrication to expand the supply of affordable homes and address cost challenges. This white paper, informed by a series of interviews with stakeholders including developers, architects, fabricators and policymakers, focuses on four key elements: 1) Financing; 2) Design and Quality; 3) Regulations and Logistics; and 4) Construction Timeline and Cost.

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This research offers the following six key takeaways:

  • Off-site Construction is a Means to an End
  • Cost Savings are Possible but not Guaranteed
  • Innovative Solutions can Offset Perceived Financing Risks
  • Jurisdictions Should Consider Strategies to Expedite Approval Processes
  • Precision and Coordination are Key
  • More Analysis – and Partnerships – are Needed

The adoption of strategies that can help bring design, policy and production innovations to scale is a critical piece of the national affordable housing delivery system. With this research, we aim to facilitate a broad conversation among industry stakeholders on how these construction strategies can function effectively as part of the existing housing delivery system. Enterprise will continue to research and disseminate best practices on bringing innovations to scale to help expand the supply of affordable homes and address cost challenges. Be sure to check the Enterprise blog and our policy newsletters for more details on the upcoming pieces of this research initiative.

This research was made possible through the generous support of the JPMorgan Chase Foundation.


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