Stacking Boxes: Is Modular Construction Viable in NJ?
Modular construction—building units in a factory and stacking them on site—is often touted as the future of development. It promises 30-50% faster schedules and 20% cost savings. But in New Jersey, the reality is more nuanced.
The Pros
- Speed: Site work and building construction happen simultaneously. While the foundation is being poured, the apartments are being built in a factory.
- Quality Control: Factory environments are controlled. No rain delays, no material theft, and tighter tolerances.
- Less Neighborhood Disruption: The "stacking" process takes weeks, not months. This is a huge selling point for infill sites in dense neighborhoods.
The Cons (and NJ Specifics)
The Union Factor
In New Jersey, trade unions are powerful. If you are using a factory in Pennsylvania with non-union labor, you may face picketing or political pushback on your site work (which must be done locally). Negotiating a Project Labor Agreement (PLA) that defines the scope of on-site vs. off-site work is critical.
Financing Complexity
Traditional construction loans are drawn down as work is completed on site. With modular, you have to pay for materials and factory labor upfront, months before the boxes arrive. Lenders need to be comfortable funding "off-site materials," often requiring a bond or letter of credit.
Design Constraints
Modular is not for every site. You are limited by the dimensions of the truck (typically 14-16 feet wide). This dictates your unit layouts. It works best for:
- Student Housing / Hotels: Repetitive, cellular layouts.
- Affordable Housing: Standardized unit plans.
- Mid-Rise Multifamily: 4-6 story wood frame over a concrete podium.
Is Modular Right for You?
I help developers evaluate the feasibility of modular vs. stick-built construction for their specific projects.
About the Author
Ryan Goldfarb is a real estate development advisor. He helps clients navigate construction methodology and labor relations.