CLEVELAND — In early December, the city of Cleveland put out a nationwide Request for Proposals (RFP) to modular home manufacturers to establish a facility on the city’s east side.
“We have torn down about 20,000 houses in Cleveland since the Great Recession of 2008,” City council member Kris Harsh said. “And we can't maintain the status quo and just leave all those lots empty. We have to rebuild the city.”
More than one million Ohio households are spending at least half of their income on housing, which puts them at risk of foreclosure or eviction, according the Ohio Housing Finance Agency.
Their latest housing needs assessment estimates there is a shortage of more than 270,000 affordable housing units across the state. And, while residential construction has been on the rise since 2009, it isn’t helping to alleviate the need for low-income housing.
“By bringing a modular builder into the city, we can build houses faster, we can build houses affordably, and we can build houses at these same production quality standards that everybody is used to,” Harsh said.
The majority of homes in the U.S. are built on-site, meaning construction happens at the spot where the house will be. But the cost of labor and materials for new builds in Cleveland, which Harsh estimates is around $300,000, prices a lot of people out of the market.
Modular homes, which are built in sections in a factory and then assembled on site, could be more accessible for lower income residents. Depending on the size and features of the house, Harsh said the cost ranges from $150,000 to $250,000.
As of now, the nearest modular home manufacturer is about an hour away, in Sugarcreek, Ohio, but leaders hope to bring one to Cleveland by next summer.
Once up and running, Harsh said a manufacturer could produce 200 homes per year—on the low end—and would mean more jobs for residents.
“When a modular manufacturer opens up, they're probably going to have about 40 employees in that first shift,” he said. “But if they add a second shift, that's 80. If they add a third shift, that can be 120 employees.”
Greater Cleveland Habitat for Humanity CEO John Litten said he sees firsthand the need for something like this in the city. This year, Habitat is launching a modular home program to put up 20 to 25 houses in three neighborhoods.
“The need is great. We have to shut down applications on a relatively regular basis,” he said. “My point is that there's a lot of families, a lot of households that want what Habitat has to offer.”
Litten said Habitat intends to continue building modular homes, and having a closer manufacturer could help to bring costs down by $10,000 to $20,000 per house.
Harsh acknowledges the cost of these homes could still be unattainable for some.
“There is going to be down payment assistance programs,” he said. “There's going to be affordability programs for the folks who qualify for those and need to use those to access these houses.”
And, he said he realizes there will always be skepticism when trying something new, but with time, he trusts residents will understand what modular homes have to offer.
“We can rebuild entire streets, entire blocks and entire sections of neighborhoods with a new construction style that will again be iconic in another 30 or 40 or 50 years,” he said. “Once people have had a chance to grow up and celebrate birthdays and weddings and all the holidays in those new houses, they will become another iconic thought of what a neighborhood in Cleveland can be, but it's time to build that neighborhood.”
The city is collecting responses to their RFP for Modular Home Manufacturers through the end of January. Then, Harsh said, in February, they’ll choose five companies to build sample homes in a pilot program before making their final selection.
The Site Readiness Fund for Good Jobs has already identified a location on Cleveland’s east side where the manufacturer is expected to go.