Published in Economic Development
Kent County Land Bank, which recently rebranded as Innova-Lab, has started developing modular housing on locations it owns throughout the greater Grand Rapids area. Kent County Land Bank, which recently rebranded as Innova-Lab, has started developing modular housing on locations it owns throughout the greater Grand Rapids area. COURTESY PHOTO

Kent County Land Bank pivots to meet growing demand for modular housing

BY Saturday, July 07, 2018 01:38pm

GRAND RAPIDS — Advocates looking to alleviate the city’s affordable housing issues increasingly are turning to modular, pre-manufactured housing as one option.

To that end, the Kent County Land Bank Authority last month announced its plan to rebrand as Innova-Lab and use its broad set of tools and powers to begin developing modular homes on more than 100 vacant sites it owns around Grand Rapids. For the development of the homes, Innova-Lab has partnered with Champion Homes Inc., a Troy-based modular home manufacturer.

“One of the key parts of our strategic plan is what kind of strategic partnerships can we forge where our tools can be used to bring more affordable housing and housing in general to the market,” said Executive Director David Allen. “The housing shortage is of historic proportions.”

To Allen and others, modular housing offers an affordable, quick and unsubsidized option to bring more housing to the market.

Crews can install modular homes in a matter of hours and the buildings can be prepared for occupancy within a couple of weeks, Allen said.

For Innova-Lab, the goal is simply to cover the costs of the homes by pricing them from $179,000 to $239,000, depending on size.

“That’s the piece of the market that’s missing,” Allen said. “If you look at (current listings) at that price point, there’s not much there.”

Additionally, Allen said other nonprofit affordable housing developers can use the organization’s designs and with their access to federal subsidies and grants, bring the cost down even more.

“It all of a sudden opens up a wide variety (of options),” he said.

CHEAPER ALTERNATIVE

Research from organizations that track the modular housing industry shows that the popularity of modular housing has skyrocketed in recent years.

Total shipments of modular housing grew more than 54 percent nationwide from 2013 to 2017, according to data from the Institute for Building Safety and Technology compiled in a report for the Manufactured Housing Institute (MHI), a Arlington, Va.-based trade association.

Modular housing now accounts for approximately 10 percent of new housing starts nationwide, according to the 2018 annual report from MHI. At an average price per square foot of $49, modular housing costs just more than half of a home built on site, the organization said.

Given many of the factors that contribute to higher housing costs — ranging from land costs, rising construction prices and the shortage of labor to build homes — modular housing industry stakeholders note the product has growing appeal for potential homebuyers.

“Everything is getting more expensive so modular housing is able to address some of the challenges in regards to the efficiency of the building process,” said Darren Krolewski, copresident and chief business development officer of MHVillage Inc., a Grand Rapids-based listing service for modular homes.

“There’s less waste, lower cost per square foot, (and it’s built in a) controlled environment,” Krolewski said. “The quality is very high because you have generally the same person doing the same job when the home is built in a factory environment.”

NEED FOR A PIVOT

For Allen with Innova-Lab, all those factors contributed to the decision to rebrand the Land Bank. However, he also noted that the pivot toward developing manufactured housing very much aligns with the Land Bank’s overall mission of economic development and having available affordable housing inventory.

In many ways, Allen acknowledges that the pivot to development was one of necessity for the nonprofit. As a state-licensed land bank, the organization largely serves as a clearinghouse for tax foreclosed properties.

As the economic expansion continues locally, however, foreclosed properties have been in short supply in Kent County, Allen said. With the group’s ownership of about 125 parcels in the Grand Rapids area and its unique ability to quickly clean up messy titles, there’s still very much a need for his organization, he added.

“Land banks were enabled in the state for economic development,” Allen said. “The reason for our existence is what’s going on in the economy. Real estate is a key part of that. For us … there are some unique tools we have as a land bank that can help with development.”

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