Affordable housing is often incredibly expensive to build. (In 2018, the average cost of a single unit in an affordable apartment building in San Francisco was $750,000). The new Nest LivingHome toolkit, created by the Amazon-backed modular housing company Plant Prefab and the architecture firm Brooks & Scarpa, is designed to give cities and nonprofit developers a variety of designs that can save costs by using prefab parts—and the housing can also be built more quickly than traditional construction. The first organization to use the kit will be a nonprofit in Santa Monica that currently has a waiting list of 8,000 people looking for affordable housing.
“In the last 10 years, there’s been this kind of unprecedented increase in costs for land and labor and materials and even permit fees,” says Steve Glenn, CEO of Plant Prefab. “So creating affordable housing is becoming more and more of a challenge.”
The kit includes multiple options for designs that can be built on unused urban lots throughout a city, such as a homeless shelter that can house as many as 224 people on a 50-by-150-foot lot, permanent supportive housing for families, and shelters that can be installed to run off-the-grid in parking lots. Like other Plant Prefab designs, the buildings will be constructed in a factory rather than directly on urban sites.
This type of modular construction saves time; while workers handle steps like putting in a foundation and utilities on a site, others can build the actual units in a factory that doesn’t have to deal with weather issues or other delays. “That’s one way that we massively reduce time,” says Glenn. “And that means you reduce your carrying costs for your construction loans.” A building can be completed in roughly half the time it would take with conventional construction methods. The company’s factory in Rialto, California, an hour east of Los Angeles, can also operate more affordably than firms building inside L.A. by reducing labor costs. “We pay our folks a great living wage, ” he says. “But those same guys earn two, three times that in Los Angeles, on the West Side.” (Plant Prefab also offers full benefits, stock, and predictable daily work, so there are some advantages for workers.)
In 2018, the LA County Housing Innovation Challenge, a program that aims to support solutions to address the current homelessness crisis in the area, gave the project a $1 million grant. The funds will help support construction of the first building to use the toolkit, a development by the nonprofit Community Corporation of Santa Monica. Like other nonprofit developers, the organization struggles with construction costs.
“I’ve been in this industry for a while,” says Tara Barauskas, executive director of Community Corporation of Santa Monica. “There are different, overarching, systemic problems that our industry faces, and right now, cost is probably the biggest one. . . .Unfortunately, we don’t get discounts of any kind from anybody. We have to participate in the open marketplace in terms of land, in terms of all of our architecture, engineering, construction. In fact, we end up paying more for construction than typical market rate because we pay prevailing wages. So all-in costs are in the $600,000-per-apartment-unit range. It’s really astronomical.” Because the design for new Nest building hasn’t been completed yet, it’s not clear what the total savings will be. But the most basic Nest module (not including plumbing or kitchen and bath fixtures, since some apartment buildings will have shared facilities) starts at $57,900.
The nonprofit is currently working on a deal for the land to put up the new building, and it will then finalize the design. Since the toolkit provides preliminary designs as well, that’s another way that nonprofits can save costs. The building will have individual bedrooms but shared kitchens and living spaces, which will also reduce the cost of construction.
“If it works, we can do it again,” she says. “The idea is that it’s scalable, and what I liked most about the Nest concept is that it offers options for different types of sites. So ideally, it could become a template that could be reapplied.” The need in the area, as in many other large cities, is acute. One report suggests that L.A. County needs more than half a million new units of affordable housing to meet demand. “There’s a crushing need for affordable housing this area,” says Barauskas.