How Utah could build more homes, more quickly

This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.

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Carolyn and Brett Matesen purchased a small, single-family home in Salt Lake City’s Ballpark neighborhood about five years ago.

While the house was small, the lot was large and they wanted to put an accessory dwelling unit (ADU) on the property. They would live in it once they retired, enabling them to rent out the front house for extra income.

Rather than building another house on the lot, they purchased a prefabricated unit from Stack Homes, a Utah-based company that sells and installs modular homes.

After a lengthy process of securing permits from the city, the Matesens got a sleek, one bedroom living space with sliding glass doors and spacious kitchen counters in their backyard.

Plans changed slightly, and they decided to rent the back house to a friend who is a longtime Salt Lake City resident.

“We’re doing well below market rate for her,” Carolyn said. “And she has a great place to live and we’ll have somebody there that we trust when we’re gone.”

In these times of division and polarization, there’s one thing that people of all political persuasions agree on: We need more housing. Across Utah, rents have soared and home ownership has become a mere fantasy for the middle class.

A few solutions are in the works. At the city level, there are community land trusts. During the last legislative session, the state created a new first-time homebuyer assistance program. Building Salt Lake recently reported plans to convert an office building into affordable housing in Salt Lake City, and another nonprofit plans to turn an old recreation center and baseball field into apartments and townhomes.

But as State Homeless Coordinator Wayne Niederhauser recently noted in a presentation to lawmakers, there’s a deficit of 77,140 deeply affordable housing units in Utah.

There are no silver bullets and building enough housing is going to take years, if not decades to accomplish. But could ready-to-live-in units like the one the Matesens bought help boost Utah’s housing stock? The Tribune spoke with housing experts to find out.

An old idea is new again

Prefabricated homes aren’t new. In the late 1960s and early 1970s the U.S. Department of Housing and Urban Development launched Operation Breakthrough to try and meet the pent up demand for housing spurred by the baby boomer generation.

George Romney, father of Utah Sen. Mitt Romney, was secretary of HUD at the time, explained Ryan Smith, director of the School of Architecture at the University of Arizona and author of “Prefab Architecture: A Guide to Modular Design and Construction.”

Romney’s experience in the automobile manufacturing industry in Michigan led him to “ask the question, why can’t we reuse all the ship building and tank building factories to produce housing?” Smith said.

The standards for manufactured housing were set during that period. “It took what was before then the mobile home industry, and increased the quality and set performance standards around it,” Smith said.

The Nixon administration ended Operation Breakthrough, Smith said, but the manufactured housing code set by HUD outlived the initiative.

Today, 1-in-11 new single family homes is a manufactured home, Smith said. But compared to other countries like Japan or Sweden, the off-site homebuilding industry in the United States is lagging.

But there’s growing interest in manufactured housing’s potential to speed up the homebuilding process and deliver a cheaper product.

“New housing stock that is coming online is just generally less accessible to an entry level homebuyer,” said Chadwick Reed, head of programs and growth at Ivory Innovations.

Reed recently co-authored a study examining manufactured housing and found that it could cost just 35% to 73% of “site-built equivalents.”

Despite the lower costs, manufactured housing has many barriers to overcome — from stigma to financing to zoning codes. People often think of single or double-wide “trailer” homes and locals may fight to prevent manufactured housing in their neighborhood.

“A lot of zoning codes and local regulations prohibit manufactured housing,” Reed said.

To combat that stigma, the manufactured housing industry has come up with a new product called “CrossMod,” Reed explained. “It looks very much like a site-built home,” Reed said, “to the untrained eye, it’s indistinguishable.”

CrossMod units have garages, permanent foundations, porches and other details that make them look like every other suburban home.

Reed said few individual households shop for manufactured homes (they’re looking at homes and neighborhoods that already exist). For new manufactured housing units to truly take off it might require developers buying in.

A product that appeals to the individual

While manufactured homes could help meet the need for affordable housing and demand for single-family stock, other types of factory-built homes could help supply more market-rate rentals.

“Offsite construction, industrialized construction, is a means by which to build not only affordable housing,” Smith said, “but to build all kinds of housing faster and in a more controlled environment with higher quality.”

Modular homes like the one the Matesens purchased may prove more popular in cities looking to densify. Modular homes aren’t built according to HUD code. Thanks to exposure in magazines like Dwell (which has an entire newsletter dedicated to prefab homes), modular structures don’t have the same stigma to overcome. Think angular buildings that can still be transported on the back of a semi, but with design elements that appeal to the wealthy and middle class.

Stack Homes, which just opened a new factory in West Jordan, specializes in well-built, eco-friendly modular homes that come in a variety of sizes.

On the day of the company’s grand opening, Stack Homes CEO Sumner Douglas showed his product in various stages of construction, stopping first at a steel frame. “This frame,” Douglas said, “we printed this in 30 minutes, we printed the structure in 30 minutes, and then it actually has a laser system that shoots out on the floor.”

They input architectural files and with 3-D printing technology and are able to create the steel frame with minimal waste.

Printing the structure, Douglas said, improves the quality control and also speeds up the construction process. Although it’s automated, Douglas said they’re still able to make adjustments based on where the home is going.

“And we’re able to really change snow-load base conditions,” Douglas explained, “which makes it very applicable for a lot of different locations, especially rural locations, difficult locations to reach or locations like Jackson Hole where they have a very limited labor pool.” Places where a struggling workforce desperately needs new homes.

Stack Homes has sold 45% of its homes in Utah and built 22 homes for Modal Living, another Utah-based modular home company.

Douglas founded the company as states across the West started legalizing accessory dwelling units. Stack has sold homes in Wyoming, Idaho, Colorado, Oregon and Nevada. “I felt like ADUs were a really good solution to a lot of problems that we have,” Douglas said.

The 640-square-foot model has been popular in downtown Salt Lake City, Douglas said.

The goal is to produce 620 houses per year at the new factory. Currently, purchasing an ADU from Stack homes isn’t any cheaper than building one from scratch. The base price for the 640-square-foot Ridgeline, a one bedroom, is $245,000.

Non-HUD regulated off-site construction, Smith said, could one day be cheaper. “But one has to build the infrastructure of a factory and knowledge and that takes time. So initially, it probably won’t be, but over time, it will be.”

Modular homes might not compete on cost. But time savings, set prices and a tight labor market could give them a leg up over traditional construction.

Plus, there are other barriers to building ADU’s that prefabricated buildings could overcome — finding a contractor to take on a small ADU project could be tricky in a city where construction is booming.

Jörg Rügemer, a professor at the University of Utah’s School of Architecture, said there are two key factors Utah must focus on to bring down the cost of housing: zoning and size.

“One of the major strategies to bring costs down is to really rethink the space demands we have,” Rügemer said. Accessory dwelling units like the one the Matesens purchased could help. “It’s another opportunity to provide small, efficient housing on existing land,” he said.

The Salt Lake City Council adopted changes aimed at making it easier to build ADUs this past Spring, but the uproar over a proposed development in the upper Avenues neighborhood that would include mother-in-law units shows that attitudes have not entirely shifted in their favor.

“I think maybe once the housing crisis gets so bad that we just have no other choice anymore,” Rügemer said, “maybe that’s when things change.”

Editor’s note • The Clark and Christine Ivory Foundation is a donor to The Salt Lake Tribune’s Innovation Lab.