How Can We Address the COVID-driven Complexities of the Housing Crisis?

By: Kyley Harvey, Head of US Design

While many questions about the long-term effects of the COVID-19 pandemic remain unclear, at least one thing is certain—its impact on the housing market has thrown an already-critical housing shortage into even sharper focus.

Prior to the pandemic, a US shortage of 7 million affordable and available homes was already forecasted and has only intensified during the pandemic. With the need for safe, healthy housing more important than ever, COVID-driven impacts on construction projects have only created further headwinds in the industry’s ability to scale and respond to the need. These challenges are being felt across the US and around the globe in the form of construction delays, disrupted supply chains, operational restrictions, and uncertainty in occupancy and rents.

The result only further reinforces the ongoing productivity challenges facing the construction industry and underscores the need for scalable processes and solutions to keep pace with the deficit in housing, particularly in the affordable marketplace. 

Coming into the pandemic, the number of multifamily units permitted in the last three years hit a 30-year record. While the pandemic has presented new challenges, the demand for multifamily dwellings has not abated—and will not any time in the near future. To meet this demand in the face of uncertain times, the industry must lean into solutions that will increase the predictability and efficiency of project development, design, and construction.

The good news? We’re already seeing momentum for many potential solutions.

Several growing trends in the areas of offsite construction and industrialized building design are poised to provide multifaceted solutions that can help address pandemic impacts, helping to address safe working conditions, ongoing labor challenges, and the increased scale of delivery needed in order to meet soaring housing demand and bend the affordability curve.

Growing Interest in Offsite Construction

Interest in factory-built housing and offsite methods, already on the rise over the past few years thanks to the benefits of predictability and speed to market, has only increased since the onset of the pandemic. Many experts and analysts are in agreement that the pandemic is likely to accelerate adoption of offsite project delivery.

Design for Manufacturing and Assembly (DfMA) offers a number of competitive advantages that become even more relevant in a post-pandemic industry. DfMA and offsite construction have demonstrated that they can help to scale housing production with a focus on repeatable design and mass production—a perfect fit for the unitized nature of multifamily design and construction.

On top of this, shifting labor from construction site to factory setting also offers unique benefits during COVID, including enabling staggered schedules and social distancing practices within a tightly-controlled factory setting. Offsite reduces the overall amount of labor needed at the jobsite as well, in addition to facilitating concurrent site preparation and factory work.

Katerra’s Tracy, CA Component & Finish Material Factory.

“If we can begin to embrace these new methods and materials, we have the opportunity to not only respond more effectively to COVID—we can perhaps emerge even stronger than before.”

Meeting the Shifting Needs of Living Spaces

It’s clear that the requirements for our living spaces are changing, particularly in a multifamily setting.

Over the past several months, as social distancing has become the new norm and our homes have evolved into blended live-work-learn-play spaces, multifamily design has been forced to pivot around newfound occupant priorities and needs in living space design. The expectation of outdoor spaces within a development, connectivity for education and work, and highly adaptable spaces are all part of an ongoing industry dialog around the future of multifamily design.

Maximizing natural light and considered use of natural materials, such as mass timber, in another factor that will continue to play an increasing role in creating comfortable, healthy interior spaces as people are evolving to spend more time in their shared live-work spaces. Hundreds of studies corroborate the fact that natural elements like sunlight, views, vegetation, air quality, and use of natural materials have substantial impact on occupant wellbeing within building interiors.

In addition to the benefits to occupants, commercial owners and developers are recognizing the value of these material choices due to their track record of driving premium resale and rental rates, a trend which we are seeing firsthand at Katerra via increased interest in utilizing mass timber in multifamily residential interiors.

The Postmark, a multifamily development in North Seattle, incorporates Katerra Cross-laminated Timber in floor slab and roof structures.

What is certain is that projects that already incorporate natural materials, live-work spaces, and indoor-outdoor solutions, will be ahead of the curve in meeting new resident needs.

Responding to the Urban to Suburban Shift

With work from home becoming a longer-term paradigm and sustained social distancing measures in place, the trend toward suburban relocation has been well-documented and is gaining momentum.

In partnership with a number of our clients in the multifamily market sector, our team at Katerra has had line of sight to increased demand for suburban multifamily development around building types, even prior to the pandemic. In particular, garden-style walk-up developments represent a building typology that inherently meet current market needs. As a low-rise building type, often spread out across spacious sites, these developments are the right fit for suburban areas and offer an abundance of outdoor areas, elimination of interior corridors, and limited communal spaces.

Garden-style project are often overlooked, but they are a critical source of housing supply. 15 million US residents live in garden apartments, with more than 125,000 new units built annually, according to CoStar data.

The volume at hand is where offsite construction begins to come back into the picture. Factory-built housing provides a realistic pathway to help scale up repeatable building designs that can be deployed in large volume, in predictable timeframes, to help meet a significant portion of our housing market needs – both COVID-driven and legacy needs.

None of these factors will be a silver bullet solution, neither to the specific pandemic impacts on housing nor to the long-term housing shortage. But if we can begin to embrace these ideas, collectively as an industry, we have the opportunity to not only respond more effectively to COVID—we can perhaps emerge even stronger than before.

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