Modular Construction Projects For Homeless Housing Gaining Visibility

Modular construction has been used to build a hotel in New York and food halls in Southern California, but in Los Angeles, it is gaining visibility as it is employed by developers of housing designed to help chronically homeless residents of the city. 

On Friday, a team behind a new permanent supportive housing project called Watts Works held a virtual groundbreaking for the development. Because the project will be built with decommissioned shipping containers, the event included a tour of the Colorado factory where modular company indieDwell is refurbishing the containers into the components of the residential development. 

The steel boxes are due to be shipped out to the Watts site, which was occupied by a single-family home, in April and May. The 25-unit, four-story project is expected to be complete by September. 

“We’re really focused on a way to get people inside faster and cheaper,” Daylight Community Development co-founder Greg Comanor said at the digital event. Daylight has partnered with nonprofit affordable housing veteran Decro to develop the project, with design by Studio One Eleven.

Modular housing involves off-site prefabrication of pieces of a unit or full units, including recycled shipping containers, and then shipping them to the project site for assembly. It isn’t a new construction type, nor is it a common type. One estimate said modular makes up roughly 5% of all new projects in both commercial and residential real estate across the country.

The number of unhoused people in Los Angeles County has increased for three of the last four years, numbers from the annual countywide homeless count indicated in 2020. In the city alone, there were an estimated 41,300 people experiencing homelessness in 2020. That marks a 16.1% increase over 2019’s numbers, according to the Los Angeles Homeless Services Authority. Because the totals reflect a point-in-time count, it is often considered to underestimate the actual population, many of whom move around and might not have been counted.

Daylight is one of the developers using this construction type to build housing for chronically homeless people. This housing usually includes not only a physical space to live but access to support services. Watts Works is its first project, but there are three more in various stages of development that will use modular construction. All four will use roughly the same development and construction teams, Comanor told Bisnow.

“We tried to create a rinse-and-repeat model,” Comanor said, referring to attempting to find a system that could be replicated elsewhere on similar sites across the city. The team has one other project under construction in North Hollywood and another in Van Nuys that is in the final stages of permitting and slated to begin construction next month.

Watts Works will not use any tax credits but will instead get $2.4M of its funding from city of Los Angeles Measure HHH, a $1.2B bond for building 10,000 supportive housing units; $2.64M in No Place Like Home funds from the county and state; and 24 vouchers from the Flexible Housing Subsidy Pool, a supportive housing rental subsidy program from the LA County Department of Health Services.

Though it is small in terms of unit count, Comanor says that fewer units is often better for those transitioning to housing, allowing them to more easily form a new community with fellow residents. It also is appropriately scaled to the residential neighborhood, which can make it more amenable to neighbors and avoid the pushback that sometimes accompanies homeless housing projects. The small size of the site was also encouraging because there are many sites like this one all over the city, and a project like this could easily fit in many places. 

The goal with Watts was to get funding from the fewest sources, Comanor said. The small site and low unit count kept costs down. The total project cost for Watts Works is $9.4M, or roughly $378K per unit, Comanor said. That’s well below the $600K per-unit costs that this type of housing often averages. 

For service providers who will work in the projects once they are completed, the units can’t come quickly enough. 

Among the population the Downtown Women’s Center serves, “housing continues to be the most critically needed resource,” said Lorena Sanchez, the center’s senior director of communication and development. In data that the center published in January 2020, it found that among housing-insecure women in Skid Row, 82% indicated that they had struggled to access permanent housing. 

The DWC is set to provide services at Oatsie’s Place, a 45-unit Daylight Community Development project set to begin work in Van Nuys next month. The project would provide permanent housing for women experiencing homelessness and survivors of domestic abuse. It could be open as soon as January, Sanchez said. The proposed timeline is impressive to Sanchez. The center is planning an expansion to their downtown parking garage, and that isn’t expected to be complete until 2025, she said. 

“I’m really happy to see more conversation around modular housing to add to the pool of available permanent supportive housing,” said The People Concern CEO John Maceri. “It’s long overdue and it’s something we’re very excited about as a service provider.”

The People Concern is providing services for three modular projects with the Daylight and Decro team. It has also partnered with another company, FlyawayHomes, that uses modular for the same type of housing on two modular developments already and another three forthcoming. 

“It’s an emerging technology in that although the concept and type has been around for a while, it hasn’t been used widely to provide permanent supportive housing,” Maceri said. With all the projects coming online, he said he thinks many more permanent supportive housing projects will make use of modular building in the next few years. 

Watts Works and its sister modular projects from Daylight are among a growing number of modular projects that are being used to quickly and less expensively build housing for unhoused people in Los Angeles. A series of three projects from developer Aedis Real Estate Group, along with KTGY Architecture and HBG Construction Corp., is using modular units as well. The steel units are fabricated in a shipping container factory but are not recycled shipping containers.

The first, called Hope On Alvarado, opened in February at 166 South Alvarado St. in LA’s Westlake neighborhood. The 84-unit project began construction in September 2019. Two companion projects from the same team, the 96-unit Hope on Hyde Park at 6501 Crenshaw Blvd. in Hyde Park and the 49-unit Hope on Broadway at 52nd and South Broadway in South Los Angeles have both broken ground and are expected to be complete in Q2 2022.

Hope on Broadway, the smallest of the three, has estimated costs of $18M, and the largest, Hope on Hyde Park, will likely cost $39M, according to Aedis’ website.

Architects who spoke with Bisnow noted that they expect prices to drop as more permanent supportive housing is built with modular construction. That could come from more builders becoming familiar with the type, creating a larger pool of teams that will be able to bid for the projects, or it could come from more manufacturers cropping up and creating competition on that front. 

The shorter timelines alone are an attractive advantage to the construction type. 

“It’s been astonishing to the public at large how long it takes for [housing for the homeless] to get built,” said Mark Oberholzer, principal at KTGY Architecture + Planning Associate, which is designing all three of the Hope On developments.

“I don’t think it’s a panacea for every situation, but in this vein, it’s working out pretty well,” Oberholzer said.

Developers and designers working on these projects noted that modular construction works well in situations where the units are small and similar, which is the case on these permanent supportive housing projects. Most of the units are studios or a mix of studio and one-bedroom units, which means there are few variations on the modules that need to be fabricated.

“Putting two 20-foot containers together makes a nice studio for someone,” said Studio One Eleven senior principal Michael Bohn, who led the design team for Watts Works and is also designing the companion projects for Daylight and Decro.

Modular is a good solution in high-cost areas like Los Angeles, Comanor said. But in other nearby areas, like the Inland Empire or Ventura County, it would be cheaper to build similar projects conventionally in part because of the cost of labor, Comanor said. Projects that receive Proposition HHH funds must follow prevailing wage requirements.

“In Pueblo, Colorado, where our factory is, the living wage is significantly lower than the prevailing wage here in LA County,” Comanor said.

Logistical constraints, however, can arise for certain sites that make them less than optimal for this type of building. Bohn said that prior to selecting the site for Watts Works, two other sites were considered, but they were obstructed by overhead power lines. Since the containers for the project needed to be craned in, that posed too great of a risk.

The containers are also often delivered all at once, meaning that sites need to be near an area like a park or large lot nearby where they can be stored while the project is being assembled.

“It doesn’t work for every site, but it’s an important tool to use when it works,” Bohn said.

Comanor agreed, adding that it will take a variety of approaches together to respond effectively to the need for affordable housing in the city, including buying properties for affordable housing and protecting existing affordable units and naturally occurring affordable housing.

“I don’t think there’s one silver bullet,” Comanor said.

Near Union Station, at 1060 North Vignes St., a county modular project for temporary bridge housing is nearing completion. The 232-unit project broke ground six months ago and is aiming for an April opening.

The two-building project includes a two-story building with 132 units made of shipping containers built locally in Carson and 100 units in single-story trailers, five units per trailer, that are built in Idaho. All the units are ADA-compliant and fully furnished, including a microwave, mini-fridge, desk, wall-mounted television, bed and private bathroom facilities. The plan is to eventually convert a to-be-determined number of the 132 shipping container units into permanent housing.

The estimated project cost is $48M, with $42M of that coming from Federal CARES Act funding for coronavirus relief, and the remainder coming from Los Angeles County Supervisor Hilda Solis’ Interim Housing Pool fund. That works out to roughly $200K a bed.

“When did we ever think we would be able to do something so fast at such a low cost at such an opportune time?” Solis, whose district includes the project site, told the Los Angeles Times in January. “I was amazed.”