Modular Construction

Welcome to our first blog post on our newest project, Cubix @ Othello! I’m Daniel Stoner with NexGen Housing Partners. NexGen is excited to bring this innovative, new apartment community to the Othello neighborhood of Seattle.

Who are we? Our company, NexGen Housing Partners, builds and manages apartment buildings in the Seattle area. Our mission is to provide innovative, green, affordable, market-rate housing throughout Seattle, under the brand of CubixTM Apartments.

In today’s housing crisis, “affordable” and “market-rate housing” may seem like an oxymoron. And for most apartment developers, it is increasingly unattainable as land and construction costs skyrocketed over the last several years. So, how can “affordable” and “market-rate” co-exist in the same project?  One answer to that question is by building small efficiency dwelling units (SEDU’s) primarily in up-and-coming areas of Seattle. These units range from 230 to 280 square feet, about the size of a typical hotel room (containing its own bathroom and small kitchen), about 20-30% less than a typical, market-rate studio. This means an Amazon custodian, for example, making $45,000 a year can still live within a 15-minute light rail or bus ride from work, rather than drive an hour each way from the suburbs, adding to the region’s already clogged freeways.

Another answer to the housing crisis is controlling construction costs. When a construction project costs less and takes less time, desperately needed apartments come to market faster and cheaper. As any econ 101 student will tell you, rising construction costs (and longer time needed to build) ultimately leads to higher rents. So, in this climate of skyrocketing costs, how do we find innovative ways of controlling those costs to maintain affordability? By utilizing modular construction in the building process, we manage costs and shorten the construction process, bringing units to market faster and more affordably.

So, what is modular construction? Imagine if we built cars the same way we built apartments. Imagine how inefficient that would be, to bring in each trade to the car dealership, one at a time, to put the wheels on, put the engine in, to install electronics, and so on. Now imagine building an apartment the same way we build cars: where box after box roll through a factory line with each station specialized in one task. The first station might be where pre-framed walls are installed. Next station plumbing; next station electrical; drywall; paint. Until eventually it comes out the end of the line, a completed apartment. That’s how modular construction works.

I followed the modular building industry for about ten years; I toured several factories and immediately saw the benefits of building in a controlled environment, where inclement weather won’t slow or stop the job. Construction mistakes are minimized; quality control can be closely monitored; an entire buildings’ worth of finished apartment boxes being completed within 30-40 days, ready to be shipped to the site. I was sold on the concept and knew that when the right site became available, I was going to give it serious consideration.

However, I wasn’t naïve to the fact that few developers were choosing modular construction. In fact, over the last ten years, there have been only a handful of modular construction projects in the Seattle area. And none of those developers did a second modular project. Why not? Was it an indictment of modular technology or of those who were building with it? I studied many of those completed projects, learning what problems they encountered, speaking with the subs about their challenges and experiences. I concluded that the learning curve of modular technology is STEEP. Assembling a building with ’Legos’ versus traditional stick-built construction is a radical shift, creating a whole host of questions to be answered: how do you make structural connections? How do you connect all the mechanical/electrical/plumbing? How do you get sub-contractors to bid on something they’ve never done before? We concluded that it was unrealistic to decide after one project whether modular is viable, when our lack of experience affected the metrics of success so dramatically.

If we were going to pursue modular, we needed a more long-term conclusion, once we understood modular like the back of our hand. So, we created a three-project thesis for answering this modular viability question. The first: the proof-of-concept, the second, design a system intended to “rinse and repeat”, and third, apply the system.

In 2015, We acquired a site in North Seattle, not far from Northgate Mall, that met all the criteria for modular construction. We acquired the land for cheap, so we knew we had some cushion to make mistakes and still be OK. If we were ever going to do modular, this was the ideal candidate. So, in early 2016, we pulled the trigger and made application to build our first modular building, a 108-unit, 42,000 sf ,4-story building, Called Cubix – North Park. The next 18 months involved getting the city up-to-speed on modular, negotiating a contract with the modular builder, educating subs on what we needed from them, convincing a lender to loan on a modular project, and working incredibly closely with our team to anticipate and eliminate issues. In April of 2017, we broke ground on the site work, and on July 30, 2017, we set our first box. Within nine days, we set 36 boxes and a building was erected in very little time. That was the easy part. We needed another 15 months to work through a slew of issues due to our lack of experience, the city inspector not fully understanding the process, and our subs learning on-the-job. So, after 20 months of construction, we received our C of O a few weeks ago and, thankfully, leasing has been brisk.

If I went into this with one project in mind, I undoubtedly would conclude the brain damage took a toll on me and my crew. But knowing our goal is to do modular well by phase III, we also gained invaluable insight and experience on how to do it much better next time; all the pitfalls we experienced first-hand are addressed in phase II.

Our experience gained will allows us to build Phase II (Cubix @ Othello) more efficiently and with fewer problems. Cubix @ Othello is an 85-unit, six-story micro-apartment building off the Othello light rail station, which started construction in September. Since we were going through the permit process while Cubix North Park was being assembled, we were able to incorporate all the mistakes made and lessons learned into the Othello plans and know this one will go much more smoothly and closer to the original schedule.

In future blog posts we’ll go into more detail on the modular construction process, from the perspectives of the architect (Jackson Main Architecture), the modular builder (Metric Modular), and others. We are excited to keep innovating with modular construction and hope you enjoy learning about the process!

-Daniel Stoner, Owner

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