Modular housing could help tackle affordable housing crisis

Jan 17, 2024

CARSON, Calif. — When it comes to building affordable housing, Rich Rozycki, CEO of CRATE Modular, says efficiency is a must. "What we’re doing is applying an assembly line automotive-type techniques to the construction of buildings. By doing that, you can eliminate a lot of the waste that goes into construction," he said. "Whether it's material waste, whether it's labor waste."

Rozycki says his company's focus on modular housing, where each section is built and assembled in its Carson factory can help make a dent in Southern California's affordable housing crisis. The company started off repurposing shipping containers but now design their own modules with steel. "We’re using a combination of structural and light gauge and that allows us to build bigger modules and that allows us to also stack larger projects and taller projects than what we can do with containers," he said. "Rather than being limited to four stories or so, we can build six, seven, 15 stories."

Rozycki says modular housing can be built six to 18 months faster than using traditional construction methods. CRATE Modular's latest project will open this year, a 47-unit supportive housing development called McDaniel House in Koreatown, funded in part by Proposition HHH, a $1.2 billion bond measure focused on creating 10,000 units of affordable housing within ten years - a goal falling short affording to an LA City audit last year.

Tim Kawahara, executive director of UCLA Ziman Center for Real Estate, says there are several factors that stand in the way of easing LA's affordable housing crisis, including restrictive land use policies. "75% of residential-zoned land in Los Angeles is for single-family homes so that's excluding multi-family, which is what you really need to do if we’re going to create housing stock at scale," he said. "And then there is a very long approval process. So for developers, it can take four or five or more years to get your approval before you break ground."

Kawahara says the high cost of land and community opposition in some areas also hamper efforts to build more units. He says modular housing is one promising method. "Time of construction on-site is going to be dramatically less because most of the stuff is going to be built in a factory and therefore produces less pollution, less CO2 on site," he said.

Rozycki says it takes about a week to build a module and the goal this year is to build several modules a day. "If we’re ever going to get ourselves out of the affordable housing crisis, we are not going to do it over a 20, 30, 40-year period. Yeah, maybe we will, but that is not going to solve anything. It's going to be a very slow and painful," he said. "If we really want to put a dent in it and really attack the problem, we need to provide some scale and that's what modular has the opportunity to provide."