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Four (Usually Unmentioned) Challenges Mass Timber and Modular Must Overcome to Succeed


Guerdon Modular Buildings

Talk to offsite construction's true believers and it can seem that modular construction, mass timber, and integrated building systems are a massive tsunami that's just beyond the horizon. But as I listen to the enthusiastic talk, I'm also noticing barriers that the construction industry will need to overcome if that wave finally is to arrive. Here are four such problems.


1. Simultaneous spending. Modular construction's big attraction is that you can cut time to occupancy by 20% to 50% because you're building the units that will constitute the upper floors at the same time you're doing preparation work. However, if you're a developer or financier, this also means you have to buy materials for the upper stories far earlier than you would if you waited until site prep was over. Developers who are low on funds probably won't be able to choose the modular option.


2. Building CLT Plants. Both might start with a log, but lumber and engineered wood manufacturing facilities are quite different; put very generally, one slices logs into studs, while the other peels the tree into thin sheets or strands and then glues and compresses the pieces together into plywood or OSB. Producing cross-laminated timber requires a hybrid process, taking precision-cut studs and then glueing them together into layers. As a result, creating CLTs isn't as simple as twiddling some knobs at existing plants; manufacturers need to either retrofit an existing plant or start fresh.


3. Time and Money. As BFS senior vice president Dave Snyder noted recently, framing a home at the jobsite basically requires you bringing to one place workers, some relatively simple tools, and a pile of studs. An offsite factory is far more--it's a building, and fixed equipment, and utility costs on top of the people and the studs. That typically means onsite construction is cheaper than offsite up until the offsite factory gets so busy that its operating costs drop. When builders are busy, offsite makes sense. But what if we have another housing crash? Then the plant becomes a financial albatross. Given what happened during the Great Recession, that's a risk that will give some people pause.


4. A Brave New World. At present, none of the major lumber manufacturers have announced plans to build a CLT plant. At the same time, I've been told that all of them have teams studying what they can reap from getting into mass timber. But remember: Some of mass timber's biggest opportunities are in commercial and high-rise multifamily construction, and those buildings historically have been created out of steel and concrete. The big timber companies don't have a history of selling to those buildings' developers. I can imagine each company's sales executives being asked how much revenue they are confident of generating if their company got into CLT. The first answer likely would be "we aren't confident now," and the second would be an appeal to recruit an army of salespeople who have relations with those developers. That can be a daunting proposition.

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