Has Skender Cracked the Code of Modular Housing?

An experienced Chicago builder is making a big investment in it.

We have all been waiting for the modular construction revolution since about the end of the Second World War, because it held such promise. When I was in the modular biz, I would say, "You wouldn't build your car in the driveway; why would you build your house in a field?"

But after a couple of setbacks, including when Forest City Ratner famously said it had "cracked the code" of modular construction, it may well be that modular is finally having its moment. One interesting company getting into it is Chicago's Skender, which just unveiled its prototype unit to the press. Earlier this year, the company CEO was quoted in a press release:

“Fragmentation has crippled our industry far too long,” states Mark Skender, the company’s CEO. “Our new business model revolutionizes how the industry builds by demolishing the silos between design and construction, and introducing manufacturing. Combined with our Lean project delivery approach and culture of perpetual innovation, we can now fully realize the potential of vertical integration to significantly reduce risk, delays and waste while maximizing value, quality and positive experiences for our clients. It’s a uniquely stress-free building solution.”

Lean design and construction is, according to one definition, "a production management-based project delivery system emphasizing the reliable and speedy delivery of value. It challenges the generally-accepted belief that there is always a trade-off between time, cost, quality and safety." It is based on Japanese manufacturing technologies like Kaizen, the philosophy of incremental, continuous improvement.

Skender is also bringing the architects in-house. It has hired executives with modular experience and bought an architectural firm, Ingenious Architecture, "to offer Lean, integrated services such as design-build, design-assist and design-for-manufacturing to new and existing healthcare, hospitality and multifamily clients."

As Kelsey Campbell-Dollaghan of Fast Company notes, "The goal is to overcome fragmentation between architect, engineer, contractor, and subcontractor, bringing them into the same factory to combine the efficiencies of modular architecture with the holistic approach of a design/build firm."

The company describes the promise of modular prefab in words that sound familiar to anyone who has tried to do this in the last sixty years:

By designing, manufacturing and constructing modular buildings and building components, we can centralize and stabilize labor, standardize the assembly process and eliminate weather-related delays. This process will increase efficiency, shorten schedules, ensure consistent high quality and reduce costs—ultimately making new buildings affordable, even in our current environment of rising costs for labor and materials.

© Skender

I was very much a skeptic about the Atlantic Yards project, writing in 2011: World's Tallest Prefab To Be Built in Brooklyn? Fuggedaboutit. But this appears to be a very different and more thoughtful process. Skender seems to be taking a straightforward approach of building boxes that stack directly on top of one another with structural posts in the corners, much like a shipping container, but not limited to shipping container dimensions. This has inherent limitations in height, but avoids the problems that they ran into in New York, where they tried to plug boxes into a frame, a much more complex process. They are building a lot into those boxes, right down to scent diffusers:

© Skender

The modular process allows Skender to incorporate smart apartment tech into the individual units from day one, and the mass production element results in seamless and inexpensive tech integration. Depending on the developer’s needs, each apartment unit could be manufactured to run on a suite of smart living products including Google Home smart speakers, Nest security and thermostat products, and Lutron smart lighting and shade controls.

© Skender

The company expects to shrink the "timeline of traditional building by up to 50 percent and generate up to 15 percent project cost savings."

The big problem in modular has always been that it works wonderfully in boom times but has relatively high fixed costs that kill it in the economic downturns. But Skender has been around for sixty years, as long as modular; they are talking multifamily, healthcare and commercial buildings, which are perhaps less sensitive to downturns than market housing. Perhaps they might actually pull this off.