Modular Building Challenges

Will Modular Building Go Mainstream? Not So Fast.

The method, which features off-site, manufactured components transported to a jobsite, has grown in popularity of late, but must overcome several obstacles to reach mainstream viability
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Illustration by Jonny Ruzzo

Many people in the construction industry speak glowingly about prefabrication—and for good reason.

The method of assembling components of a structure off-site—either in a factory or other manufacturing facility, and then transporting the completed components to the construction site for final assembly—has grown in popularity, especially since the COVID-19 pandemic.

But why hasn’t prefabrication, also known as modular construction, become more mainstream?

Modular from the start

Construction of the first prefabricated hotel in New York City took place in 2014 (it opened in early 2018). Co-developed and operated by Citizen, the 100,000-square-foot structure features 20 stories, includes public amenities and 300 technology-driven guestrooms.

“Because modular construction is atypical in the United States, there was added scrutiny of the project and hesitancy due to the unknowns,” said Devon Prioleau, director of project management at Macro. Prioleau served as commission/project manager for the Citizen Bowery hotel project between 2014 and 2016. 

CitizenM’s hotel modules are made of steel-framed construction that were fully fit-out and punch-listed by a Polish company. The modules were later assembled on-site via a central core and window/curtain wall system. Prioleau said the elements were stacked onto the central core essentially like “Lego blocks” and MEP systems were plugged in.

“To make this project and modular construction in general work is a decision you need to make very early in the planning and design process, or you lose the possibility of advantages,” Prioleau said. In other words, modular construction projects only succeed when there’s great effort put into pre-planning, logistics and coordination. “It’s a hell of a process that requires the entire team to be fully behind the project,” Prioleau added.

When construction teams use technologies such as building information modeling (BIM) that help with pre-planning and get teams on the same page, they get the benefits associated with modular and prefabrication. There’s a significant “correlation between companies’ BIM use and the degree to which they enjoy improved schedule and budget performance from using prefabrication or modular construction,” according to a story in a 2020 Dodge Data & Analytics Report.

Prefabrication and modular construction aren’t magic wands that can simply be waved leading to amazing results, however. The method takes the entire team—starting with design—to maximize its benefits. 

Not all modular is created equal

There’s a perception that the only way to gain from prefabrication and modular construction is to build in bulk. While this magnifies the building method’s advantages, they also can be recognized in multi-story facilities, where floors and panels can be replicated.

In the Dodge Data & Analytics Report, 70% or more of survey participants said four building types were found to be the most likely for a high frequency of prefabrication or modular construction. Three of them—hotels and motels, multi-family and college buildings and dormitories—are multi-story structures.

Although there’s agreement on the ideal building types for prefab and modular construction, the industry hasn’t yet set up relevant rules. “To pave the way for more prefab and modular construction, there needs to be standardization across the board,” said Jonathan Delcambre, a managing partner and senior design leader at architecture and design firm BKV Group.

Delcambre, who has been in the industry for more than 20 years and specializes in housing, is an advocate of prefabrication and modular construction; in fact, he used prefabrication to build his first home. “Currently, the prefab and the modular world is a hodgepodge, which creates challenges in the industry,” he said.


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An increase in regulation of prefab parts would encourage more use of the construction method. “Many companies and fabricators do things their way, so there’s not a tailored process,” Delcambre said. This requires modifications during construction, which minimizes the benefits of prefabrication construction.

When the industry falls in line and follows the model spearheaded by Swedish furniture maker Ikea, which standardizes everything, prefabrication and modular construction will lead to even greater benefits, experts say.

Gap between modular and project design

Ever watch the credits roll after a movie? It’s incredible how many people are involved in the production. The same can be said about construction—and we all know everyone needs to get it right for a project to be well constructed and meet budget and other expectations.

Construction starts with design. “Designers are not trained to build,” said Steve Jones, a senior director for Dodge Data & Analytics. Jones, who has worked in the industry since the 1970s, believes that it is about halfway through what will be a 30-year total transformation process. “The design side needs to design with prefab and modular construction in mind,” he said. When designers start to think, ‘Is there a design that would enable prefabrication and or modular construction to occur,’ those delivery methods will boom, he added.

Because prefabrication and modular construction aren’t part of project design, there’s a gap that the trade contractor has to fill in. There’s a limited number of general contractors who have the necessary expertise for this type of building. Therefore, they need to bring in specialists who eat away at the margins and rely on outside sources.

Many projects are built via the design, bid, build product delivery method, with a general contractor selected based on the low bid. Instead of taking on risks and being innovative, general contractors are prone to do what they know best, which will maintain their profit margin. “Ultimately, it’s a question of risk,” Jones said.

The benefits of prefabrication and modular construction are real. To recognize them to their fullest extent and see the predicted growth, however, requires overcoming these challenges.

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