As housing costs soar, another Seattle apartment project tests a new way to build

On a corner lot in Belltown, the crane that sets up a thin rectangular panel looks like a mundane everyday construction activity. But out of sight of the casual observer is what’s inside the panel.

“They just put radiant heat in this apartment when they installed the panel,” said Arlan Collins, looking on. It took about three and a half minutes, then the crew moved on to the next.

Collins is CEO of Sustainable Living Innovations, the developer of this 15-story apartment tower built using hundreds of panels with heating, electrical and plumbing equipment inside that were built in a Tacoma plant.

Scheduled to include 112 apartments, the project is the latest experiment in modular construction, an ongoing effort in the construction industry to bring the efficiency of a factory to the job site and reduce time and costs. The technique allows offsite teams to build panels at the same time as others prepare the development site.

At Belltown, crews guiding the floor panels in place Tuesday will continue the action hundreds of times, alternating between laying floor panels and built walls.

“We build a building like you would build a car or a plane,” Collins said in an interview.

Sometimes built with stacked blocks like Legos and other times with panels set up as walls and floors, modular construction has caught the attention of developers and policymakers looking to streamline housing construction, especially in expensive cities on the west coast facing a housing shortage. Yet questions remain as to how much these techniques can save.

SLI’s fully electric apartment building has a lot of environmental good faith. The tower will feature hundreds of solar panels on the outside, water and heat recovery systems and other efficiencies. According to SLI, the building is the first high-rise apartment tower to meet the net-zero energy standards set by the International Living Future Institute, which has also certified the Bullitt Center.

Artist's impression of a 15-story building in Belltown, Seattle.  When completed, the building will consist of 112 units, of which 27 are designated as affordable.  The building is a 100% electric building with no natural gasoline line, no fossil fuels burned on site and 600+ solar panels on site.  (Ellen M. Banner / The Seattle Times)

SLI, which announced this spring that it had raised nearly $ 30 million from investors, has built a similar building in the university district and is planning more, including one with the Downtown Emergency Service Center for the Homeless.

The Seattle Office of Housing will provide partial funding for the DESC project as part of an effort to support permanent supportive housing developments that promise time and money savings.

“I think we are all very frustrated with the time it takes to produce housing in a community with such great needs,” said Sondra Nielsen, director of property development and facilities at DESC.

DESC plans to open the building in March 2023. Nielsen said the planned construction schedule for the project is “barely 15 months”, down from the usual 15 to 17 months. “We hope we can do better, but we won’t know until we do,” Nielsen said.

Modular construction has gained traction as developers seek to contain costs, said Christopher Ptomey, executive director of the Terwilliger Center for Housing at the Urban Land Institute.

Construction projects like high-rise apartment buildings can sometimes take up to two years. Modular construction has the potential to reduce lead times by 30-50%, according to industrial groups.

But the strategy comes with risks. Transporting the panels or building blocks to the site can increase costs. For companies setting up new factories to build their Lego-type panels or blocks, the upfront costs are high, said Ptomey. Local regulations can lag behind new technology, and a month saved in one phase of the project can easily be wasted in another.

Daniel Stoner, who developed low-rise apartment buildings using the Lego-style technique known as volumetric modular construction, said he expected to save time but spend about as much on construction costs.

“Our experience was just the opposite,” Stoner said.

Building two buildings in Seattle has proven to be around 15-20% cheaper than building the projects using traditional methods, Stoner said. But the schedule has grown longer due to the training required, the city allowing hang-ups for a new type of construction and due to the pandemic.

Funding for new construction techniques can be difficult. Some lenders “see modular technology as untested or speculative and they are reluctant to fund it,” Stoner said. (Even so, he’s optimistic. Stoner is planning another similar building in Lake City.)

According to the city, a “cost driver” for SLI projects “has been the time associated with securing appropriate additional private funding for the projects. This represents a necessary start-up cost which, as seen with other newer organizations, can be mitigated once it is proven to be reproducible, ”Seattle Office of Housing spokesperson Miriam Roskin said in a statement.

For now, modular projects will also face challenges facing the entire construction industry: supply chain havoc and a labor shortage.

Container ship congestion along the west coast has affected SLI’s “general product delivery”. Roskin said.

Collins of SLI says the company is finding ways to save time and money. “We expect it to go faster as we build the next one,” he said.

Across the industry, modular construction became more common from 2015 to 2018, but remained less than 4% market, based on industry data.

“There are a lot of attempts to apply manufacturing to housing production,” Ptomey said. “What is not clear is what is the path to take to determine which of them can really reach scale and be replicated? ”

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