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Colorado bill aims to offer grant funding for modular home construction

Modular homes
Posted at 4:37 PM, Mar 25, 2022
and last updated 2022-03-25 20:21:18-04

DENVER — Inside a sprawling manufacturing facility in Globeville, it’s loud. Workers clad in safety gear and orange shirts are busy nailing together the walls and shipping them out of the facility right to the construction site.

This Simple Homes factory was constructed two years ago to create prefabricated, otherwise known as modular, houses.

The idea is to move more construction work inside of factories to make the home building process faster, cheaper and more efficient.

Modular homes have come a long way since the 1970’s; the Simple Homes factory can build everything from a traditional single-family home to a multi-story condominium complex.

“We build all across the Front Range, and you cannot tell that our that our product was built in the factory in any kind of way,” said co-founder and CEO Jeff Hopfenbeck.

So far, this factory has built more than 350 units with many more on the way. Most recently, the company signed a deal with the town of Winter Park to construct 22 more affordable homes in the community.

“Each one of these houses will get framed up to go from foundation to dried-in, weather-tight in three to four days,” Hopfenbeck said.

The process starts with a three-dimensional design that details down to the last support beam what the home will look like and what types of materials it will need.

The data from the design is then sent to automated saws that measure and cut the wood and another that prints assembly instructions on the beams. The beams are then rolled out onto the factory floor for workers to assemble.

Hopfenbeck says the automation cuts down on waste in a big way; he estimates that there is a 10-15% reduction in lumber waste per project, which can significantly cut down on costs.

The process also doesn’t necessarily require every worker to be skilled in construction, carpentry and the like.

“We just have such a challenge in the construction industry, or with skilled labor, the skilled trades,” Hopfenbeck said. “That's forcing a lot of builders and a lot of companies to say, 'How can we use technology and use tools to be able to improve productivity, and ultimately deliver more homes with fewer people?'”

Hopfenbeck doesn’t consider himself an industry disruptor, but with the incredible demand for housing in the state, he sees modular construction as a potential solution.

Colorado lawmakers agree that prefabricated home construction could play an important role in the housing crunch.

Over the past year, a legislative task force took a closer look at the issue of housing affordability and availability in the state to propose policy changes.

House Bill 22-1282 is one of the ideas that came out of that task force. The bill calls for $40 million in grant funding to be dedicated to innovative housing, like modular homes.

“Not only is it going to create jobs, but it's going to create new and innovative jobs, and it has the potential of putting Colorado on the map of being one of the most innovative places to solve this problem,” said Rep. Mike Lynch, R-Larimer, one of the bill’s co-sponsors.

The money will be given out over a period of three years. The bill is just one piece of a $400 million package state lawmakers are proposing to help with housing.

“I think Republicans and Democrats both understand that affordable housing is a problem in our state, and its housing is becoming quickly unattainable for many,” said Rep. Kyle Mullica, D-Adams, another bill co-sponsor. “This is not going to solve everything, but it's going to be a step in the right direction.”

The bill has bipartisan support; it creates a program in the Office of Economic Development to provide grants and loans to innovative housing companies with 500 employees or less.

It stipulates that more of the grant money can be dedicated to communities with limited economic opportunity or poor-quality housing.

“I think what we're really trying to do here is give individuals the opportunity to get homeownership. That's really how you can break a cycle of poverty,” Mullica said.

The bill passed its first committee test this week and moves on through the legislative process.

Hopfenbeck supports the bill, saying it could provide low-cost capital to construct future factories with a focus on affordable housing.

Beyond the funding, he hopes lawmakers will eventually take a look at some regulatory reforms to make the construction of these projects a little easier, like streamlining state certifications or unifying building codes.

For now, though, he looks forward to legislative support for the modular housing model because the demand isn’t going away anytime soon.