Redefining prefab for the 21st century

Driven by thoughtful design and state-of-the-art technology, prefabricated buildings represent a potential game-changer for the construction industry.

Redefining prefab for the 21st century

Throughout the first half of the 20th century, Sears offered customers the option of ordering entire pre-designed, prefabricated houses from their famed catalog. Appealing for their novelty and affordability, these homes gained a certain level of popularity, and a good number of them are still standing today.


Sears shuttered its homes catalog in 1940 and the reputation of prefabricated buildings took a downturn in the decades to follow. Despite the continually skyrocketing costs of construction and the growing crunch on affordable housing, prefabricated homes have not captured significant market share and are often derided as bereft of both quality and character.

“To be fair, early prefab housing projects were not really inspirational—pretty pedestrian, and a cookie-cutter design,” says Sarah Smith, an architect at Katerra, a startup working to industrialize and modernize building design and construction.

For Smith and her colleagues at Katerra, the stigma of prefab is ancient history. Rather than treat it as a dirty word, the Menlo Park, California-based company is redefining prefab as “offsite construction”—making better, faster, and cheaper buildings in which the efficiency of prefab and the personality of architectural design coexist.

The bold new approach, which has helped Katerra to raise more than $1 billion in financing in short order, is poised to shake up the industry.

New technologies, new design

While the construction industry clearly needs more efficient approaches, no property developer wants to build an uninspired home—and no one wants to live in one.

Outdated perceptions of prefabricated buildings characterize them as unsophisticated and “one size fits all,” but Katerra’s designers are working to demonstrate that the reality today is much different. The team has developed methods to balance factory efficiency with design freedom, using computer-aided design, engineering, and manufacturing tools to increase the speed and complexity of prefab building projects, all while retaining abundant choice in design.


“If you take the skin and finishes off of similar buildings, they are identical in many respects,” says Smith. “There’s no need to completely redesign an apartment building every time. By varying elements like the roof shape, siding, or interiors spaces, we can design two buildings that begin with the same structural core, but look and feel entirely different as a finished product. Meanwhile, close to 90 percent of the design and engineering work is done in advance, which is a game-changer for building more quickly and inexpensively.”

Katerra’s initial design solutions include curated libraries of interior design plans and products, and even standard building chassis (similar to the frame of a car) that retain the flexibility to configure each building uniquely for different regions or communities.

“Design is an integral piece of the puzzle,” Smith continues. “The reality is that as an architect you always have constraints—a client’s needs, building codes, budgets—but the best design often comes out of constraints. Designing for manufacturing forces us consider a lot more design challenges, a lot sooner than what we normally would. It’s a more holistic approach.”

High-performance buildings

While buildings today are almost exclusively designed as one-off prototypes, the way their systems are engineered–mechanical, electrical, plumbing, and fire protection, for example–suffers from the opposite problem. Manufacturers typically split these systems into off-the-shelf products that can support as many applications as possible. This generic standardization usually results in suboptimal performance and increased installation effort. In short, higher costs in both the short and long term.

“Most building system products are designed to support a huge range of applications and target retrofits rather than new construction,” Katerra engineer Taylor Keep says. “They aren’t engineered to be fit for purpose. This leaves a lot of value on the table. Rather than rely on few generic catalog parts, we are targeting optimized, integrated solutions and engineering any missing pieces ourselves.”


Katerra develops its building products in a method that has more in common with iPhones or automobiles than that of traditional construction. Every aspect of the building is scrutinized, with improvements and upgrades rolling into subsequent versions of each product. When standard components can’t support their product roadmap, Katerra invents new ones, already with dozens of pending patents.

For example, Katerra is driving significant time savings and quality improvements by installing plumbing in its factory-made walls and floors. Typical tolerances (wiggle room for installation errors) on a construction site are 6 to 16 inches—manufacturing brings this accuracy to within half an inch. To capture this value, Katerra is shifting from custom-built pipes and fittings to standardized plumbing assemblies that can be tested in the factory and installed using automated machinery.

Thinking differently about building

Smith and Keep say their architectural and engineering work today is unlike any throughout their careers. In part, that’s because the majority of Katerra’s leadership team has extensive backgrounds in tech and product design, not construction. While many consumer products have benefitted from IDEO and other transformative product design thinkers, buildings have not.

“We are a technology company,” says Keep. “We’re trying to bring empathy and product thinking to construction, systematically examining every part of buildings for ways to make them smarter and improve the experience for owners and occupants.”

When it comes to an industry that is so important to our social fabric and amounts to more than $10 trillion globally, a shift to prefabricated construction could fundamentally change the way we think about building.


“We want to create really great design for an affordable price tag for real people who have real jobs and deserve good places to live,” says Smith. “Architecture and construction may be complex, but we’re committed to solving it.”


This story was created for and commissioned by Katerra.

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