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Harvard Study Tracks Nonprofit Developers’ Embrace of Factory-Built Homes

If managed carefully from the outset, off-site construction can bring down construction costs for nonprofit developers.

Home Industry News
By Devin Meenan
November 26, 2025, 11 am
Reading Time: 2 mins read
JCHS

Two engineers are evaluating a finished prefabricated modular building inside a large factory, ensuring quality and compliance

As housing remains unaffordable for many across the United States—and new construction hit a recent low on the back of consumer reticence—one solution that’s been floated are manufactured and modular homes. A new academic paper from Harvard University’s Joint Center for Housing Studies (JCHS) has tracked how nonprofit housing developers, or community-based organizations (CBOs), have embraced factory-built housing and off-site construction to deliver affordable units more efficiently. 

The paper found—by tracking six development sites across California, Minnesota and Rhode Island—that for most developments, off-site construction speeds up development timelines and lowered costs. That said, it’s also made clear that off-site construction is not a universal solution, but rather, one to be considered alongside others: “No single approach to off-site construction is right for all infill sites,” said paper author, JCHS Housing Design Fellow Aaron Smithson.

Smithson describes off-site construction as a “precision process,” meaning that early collaboration between the different parties involved in development—architects, manufacturers, contractors and developers—is essential to the process’ success. 

“Early collaboration (…) reduces costly revisions and mistakes later in the construction and assembly process,” Smithson wrote. A developer must consider a “project’s architectural context, the available manufacturers in the region, the logistical complexity of transporting and assembling components on-site and the local regulatory environment for both modular and manufactured housing.”

One regulatory barrier that manufactured homes face is zoning. Manufactured homes, which are mobile, are built to federal codes defined by the Department of Housing and Urban Development (HUD). (Modular homes, which are not designed to be mobile, are built to state and local codes.) As the paper notes, numerous areas are zoned so as not to permit HUD coded housing units. The paper contends that this stems from “longstanding cultural perceptions of manufactured homes as shelters for an undesirable class of people.”

To that end, the paper suggests that developers embracing off-site construction will need to advocate and educate community leaders on benefits of manufactured and modular housing, in order to promote fairer regulations. 

“Advocacy for a fairer regulatory environment for manufactured housing and more responsive lending practices for modular housing, as well as information sharing among development teams, can help cultivate a more mature and diverse off-site construction industry nationwide,” the paper said.

The paper itself fact checks the “common perceptions” that factory-built housing is uniform in design or architectural features: “Many of the designers and developers interviewed noted initial surprise with the level of design expression now possible in off-site construction and encouraged other CBOs and architects to learn from the expertise of manufacturers and installers.”

“As the industry scales and institutional familiarity with and regulatory acceptance of off-site construction methods grow, the technique is more likely to have a substantial and sustained impact on housing affordability across the U.S.,” Smithson concluded.

For the full report, click here. 

Tags: Affordable HousingHarvard UniversityJCHSJoint Center for Housing StudiesMLSNewsFeedmodular housing
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Devin Meenan

Devin Meenan is an assistant editor for RISMedia, writing Premier content and assembling daily newsletters for digital publication. His writing at RISMedia typically focuses on political issues and legislation impacting the real estate industry; he is the creator of the “Legislative Round-Up” series. He holds a B.A. in English and Film from Denison University, where he was also Arts & Life editor of student-run paper The Denisonian.

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