Despite use of prefabricated houses dating back to western migration in the 1800s and to "catalog houses" sold by Sears, Roebuck and Co. in the early 20th century, modular construction has yet to become dominant in the U.S. housing industry.

But the modular market is growing. Modular construction was among initiatives the Biden Administration in 2022 named as ways to raise the nation's housing supply. Across U.S. residential and commercial sectors, modular construction was estimated to represent more than 6.6% of new construction started in 2023, representing more than $14 billion in total project value, up from $3.7 million in 2015, according to trade association Modular Building Institute. Multifamily and workforce residential housing represented 20% and 8% respectively of the total projects.

Globally, the modular construction market size is expected to grow from around $84 billion in 2023 to more than $130 billion by 2030, per a recent report from market research company Fortune Business Insights.

In its Budget 2024, the Canadian government earmarked $500 million for developers with innovative construction techniques, like modular housing, as part of a larger strategy to leverage federal housing financing to encourage local governments to align building codes, says Leonard Catling, a spokesperson for the Canada Mortgage and Housing Corporation.

Canada established a goal to build a minimum of 2 million new homes by 2031, on top of the 1.87 million it forecasts will be developed in that period. Canada's housing corporation insured its first project through a new pilot loan insurance program for modular construction in fall 2023, generating interest in modular and other alternative construction industries, according to Catling.

"To tackle the housing crisis and create vital housing supply we need to invest in ideas and technologies like modular homes, mass timber production, "panelization," 3D printing and pre-approved home design catalogs," says Catling.

Yet the promise of reducing labor and the growing investment of venture capital into modular (and into the less proven 3-D printed) housing market looking to turn a profit should raise alarms, housing policy analyst Katelin Penner argues.

Though high-quality modular construction is preferable to designs that use shipping containers — like Marston Court in London — there are more common-sense solutions to lower the cost of housing, Penner says.

Cutting out developer fees and lowering interest rates, and using a public developer to cut out the profit motive — such as the Social Housing Development Authority recently proposed in the New York State Legislature — reduces the price to build and protects union jobs, Penner explains. Eliminating developer fees alone could reduce costs by 10%, per a report Penner co-authored on social housing.

Modular has also increasingly become a tool for constructing housing for people without homes. In San Mateo County near San Francisco, Bloszies has designed several "campuses" dedicated to serving people experiencing homelessness. Yet he says he's found that governments are often excited about building cheaply but willing to neglect the population's needs.

"There's no sense of community, the support buildings are an afterthought, and you end up with a camp that you just cleaned out, in more sturdy boxes, but it really hasn't solved or addressed the root problems."

In his plans, Bloszies uses input from service providers and residents, creating outdoor spaces, offices for support staff, quiet areas and — in one campus — a dog run. He's also open-sourced the schematics for his module designs to help flatten modular design's steep learning curve.

In Minneapolis, the Family Housing Expansion Project has received warm reception from residents and the public, officials say, and offers a roadmap for future development by the housing authority. The project won several awards and was recognized by the land-use nonprofit Urban Land Institute.

The dramatic reduction in the construction schedule, waste and carbon emissions, while maintaining a high quality of construction, helped create a model to transform communities, says Lucia Garsys, a juror from the Urban Land Institute award panel. "Replicability and innovation were key," she tells Next City. "This project exemplifies how those transformations happen."

Other public housing authorities can take note of the model, MPHA executive director Abdi Warsame says in a statement. "This successful project creates a blueprint for MPHA and housing authorities across the country to deliver quality, cost-effective, deeply affordable family housing."