Non-traditional construction methods seen as a way to help ease housing crunch in NH

·7 min read

Aug. 8—HAMPTON

F rom the outside, the three-story home within sight of the Atlantic Ocean looked like one more large, newly minted home awaiting siding.

In place of two outdated family cottages, a Massachusetts family "wanted to build something bigger — they were a growing family," said Drew Pierce, president of Seacoast Modular Homes in nearby Greenland.

But if any neighbors were home the day after the Fourth of July, they would have spotted a crane offloading four pre-built housing sections trucked in from 440 miles away.

Modular homes — built in a factory rather than on-site — are becoming a more popular way to help combat a crazed housing shortage across much of the country that has produced bidding wars, all-cash offers and disappointed home shoppers priced out of the market.

"I'm an advocate for modular housing because you can build 365 (days a year)," said Matt Mayberry, executive director of the New Hampshire Home Builders Association. "It's not weather-dependent. You can do it 24-7."

A Georgia modular home building company, BMarko Structures, set up a factory in Greenville, S.C., to build units for a 190-unit apartment building in nearby Spartanburg. CEO Antony Kountouris compared the operation with a BMW plant a dozen miles away.

"Why is it better for BMW to build your car in a factory rather than come out to your driveway to construct it?" he said on a recent tour with a Union Leader reporter. "What you're seeing here is the future. We're only getting started."

Housing advocates say traditional on-site construction can't be the only solution to a squeaky-tight housing market.

"We can't produce enough to really satisfy the market right now," said Andrew McCoy, director of the Virginia Center for Housing Research at Virginia Tech. "We need to have all kinds of different options."

The Virginia Tech center received a $500,000 grant from Virginia Housing, part of which went to partially fund a 3D printer, to experiment on printing certain 3D housing components.

"The point of the grant was to introduce technology," McCoy said in a phone interview.

"It will save time. It will save money," McCoy said. "It's extremely durable, so it's going to be something that's low maintenance."

Those houses also will be more energy efficient, saving half or more off monthly bills.

Cost projections for printing the exterior walls of the first house are preliminary at this point.

"While this is a prototype, our preliminary numbers tell us that the exterior concrete walls, versus the stick-built alternative that includes house wrap, sheathing and siding, would be an 8% savings (in price)," McCoy said in a follow-up email last week. "That assumes that we could use the concrete wall as an aesthetic, final surface, and it assumes production-level use of the printer."

Modular success

In western New Hampshire, developer Jack Franks used modular construction to build The Residences at Abenaki Springs, a multi-family development in Walpole.

He estimated modular construction cost 15% to 18% less than the on-site, ground-up approach referred to as "stick-build."

"The big deal is the time," said Franks, president and CEO of Avanru Development Group in Walpole.

The first phase, of 21 apartments, took 5 1/2 months to complete, compared to an estimated 12 to 14 months with traditional construction, he said.

"If you're saving seven months on construction interest and are operational, up and running, seven months sooner, you have seven months more revenues" from renters, Franks said.

Abenaki Springs was the first modular multi-family project that the New Hampshire Housing Finance Authority financed, according to Grace Lessner, communications and marketing director.

The project benefited from the federal low-income housing tax credit program, which the authority administers, as well as other funding.

"New Hampshire Housing reviews developers' proposals and allocates tax credits based on funding and the percentage of units designated for low- and moderate-income families," Lessner said.

Developers use those tax credits to raise private funding to finance construction, she said.

Hampton rebuilds

Business is booming this year for Pierce's company, which has nearly doubled its 2019 sales.

"We'll do almost $10 million in business this year," Pierce said

He sells modular homes in Maine and Massachusetts, but mostly in New Hampshire. His Granite State sales are primarily in vacation havens — along the Seacoast, in the Lakes Region and in the mountains.

"The biggest demand is from people coming up from Massachusetts and other states, but primarily Massachusetts," said Pierce, who also chairs Stratham's zoning board of adjustment.

Hampton building inspector Jim Marchese sees a few new modular homes in town, "but the majority of the houses remain stick-build construction."

Modular homes must meet the same local zoning requirements as traditionally built homes, as well as the international residential code.

"The difference in quality is the modular home is (checked) for code compliance at the factory, so we don't really look inside the modular home," Marchese said. "We just make sure it's connected and supported properly. We also verify it has been inspected. There's usually a tag under the kitchen sink."

Marchese thinks overall housing construction levels this year are "pretty much the same" as in 2019.

Town planner Jason Bachand said some properties don't conform to today's zoning codes, which have required setbacks, because they pre-date zoning changes.

"To replace that structure may require a variance because it cannot meet today's standards,' Bachand said.

Pierce's project on Kings Highway, a block from Ocean Boulevard, required multiple variances.

Like many companies, the Pennsylvania factory that makes his units is running into supply-chain issues with delays for such things as cabinets.

"Right now, if you order a house, it could take six months to come in," he said. "Normally, it takes two to three months," Pierce said.

If ordered today, the nearly 3,500-square-foot house on Kings Highway would cost $650,000 for modular construction, compared with $725,000 or more for traditional building, he said.

From groundbreaking to move-in, the project should take three or four months, versus six to 12 months, he said.

South Carolina factory

To speed up housing construction, BMarko Structures picked Greenville for its first housing prefabrication factory, which cut down on trucking costs for the construction of apartments less than a half-hour away.

Its 64-person workforce took 15 business days to construct each modular unit in June but planned to cut that in half.

The factory operates 15 stations at which floors are built, ceilings assembled and kitchen and bathroom cabinets are later installed. The units are trucked to their eventual home, where final utility hookups and siding are added.

"On-site, you can watch them literally be Legos stacking on each other," said marketing manager Tyler Wise.

A modular unit averages 600 to 700 square feet. Two- to four-bedroom units generally require two modules.

The hard costs of construction might not be much lower than building on-site, but the time it takes is cut at least in half, meaning developers can start earning rents sooner, Kountouris said.

"You can be preparing the site while the apartments are being built in the factory," Wise said.

Kountouris' company plans to concentrate in the southeastern part of the country, but he said nothing is preventing modular construction in New Hampshire.

"New Hampshire is a pretty hot market for modular, believe it or not," he said.

Finishing in Hampton

Back in Hampton, on a recent sun-splashed morning, workers were stringing wires on the three-story house. The peaked roof came hinged on to the top units. Once on-site, workers needed to attach the units together and connect the utilities.

If all goes well, the family can start enjoying those ocean views next month.

What's Working, a series exploring solutions for New Hampshire's workforce needs, is sponsored by the New Hampshire Solutions Journalism Lab at the Nackey S. Loeb School of Communications and is funded by Eversource, the New Hampshire Charitable Foundation, Dartmouth-Hitchcock Medical Center, the New Hampshire College & University Council, Northeast Delta Dental and the New Hampshire Coalition for Business and Education.

Contact reporter Michael Cousineau at mcousineau@unionleader.com. To read stories in the series, visit unionleader.com/whatsworking.