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While prefabricated buildings continue to pop up in Washington and Northern California, they aren’t catching on in Oregon.

鈥淐onstruction costs are the biggest part of it,鈥� said Nathan Young, owner of MODS PDX Inc. in Portland. 鈥淭he labor shortage is also a part of it. We haven’t seen the kind of labor shortages they have in the Bay Area.鈥�

Prefabricated building techniques can save developers time and money. But the conditions have to be right, according to industry professionals.

鈥淧eople aren’t committed to it to the point of this is a way they are going to do things going forward,鈥� said Derrick Aragon, principal at Northwest Ventures Group Inc. 鈥淭hey are comparing (prices), and if (a modular price) comes in in the same ballpark, they say they want do it the way they always have.鈥�

Northwest Ventures Group is one of the few companies that has successfully developed a prefab project in Portland. The firm was the principal developer of the Dekum 13 project in Portland; it also has two other prefab projects in the development stage.

Improvements in design and quality have made the structures more attractive across the country.

鈥淭he designs have come a long way,鈥� Young said. 鈥淵ou have seen them in high-end magazines. They’re in all sorts of different styles. They don’t look like or have a module feeling.鈥�

Modular buildings have improved since the days of mobile homes. Today, everything from 300-square-foot temporary lodgings to 4,000-square-foot luxury structures can be built on a factory assembly line hundreds of miles from their final destinations.

Still, the industry largely serves a niche market. While Kiplinger and similar websites offer slide shows featuring million-dollar, 4,400-square-foot modular mansions, the average prefabricated structure tends to be geared for the small single-family or multifamily markets.

According to the National Association of Home Builders, the聽national average cost聽per square foot for a typical聽modular聽home is $76.80. The average stick-built home聽costs $94.34 per square foot. However, regional disparities can have dramatic impacts on those costs.

According to Young, in the San Francisco Bay Area, residential construction is running $400 to $500 per square foot. Modular construction varies more by producer, but averages approximately $160 per square foot.

In Portland, the disparities are much closer and in some cases, modular homes cost the same as traditionally built ones. In a report on housing released in 2016, the city of Portland estimated stick-built construction costs at $207 per square foot.

鈥淥ur push has been on energy efficiency,鈥� he said. 鈥淢ore millennials 鈥� are keen on getting smaller, 2,000-square-foot homes that are energy efficient.鈥�

Another big selling point for prefab structures is the time savings they can offer a developer. Every month that can be saved on construction means less financing costs carried out of the developers’ pocket.

鈥淭he big driver is time and quality,鈥� said Aaron Holm, CEO of Blokable.

Holm’s company focuses on building affordable homes in markets where many people are priced out of housing. The company is headquartered in Seattle and has a 30,000-square-foot facility in Vancouver. He said that in some areas his modular construction method can build housing up to 50 percent faster than traditional stick-built methods.

鈥淚n this industry, the idea you have to custom-build every structure seemed kind of crazy,鈥� he said. 鈥淚 just thought here was a huge opportunity to build a product that could fill a need.鈥�

Holm entered the industry after serving as a product manager at Amazon. He was involved with overseeing the company’s brick-and-mortar bookstores and Amazon Go grocery endeavor.

His new company’s niche is small 鈥減lug and play鈥� housing that runs between $135 and $350 per square foot. Like most modular designs, the structures are built in a company factory, and then shipped to the site. Currently, the company has projects in the San Francisco Bay Area, Seattle and Auburn, Washington.

What each market has in common is a labor shortage and skyrocketing property prices, forcing people out of the market. Things have gotten so expensive in the Bay Area that Google recently announced that it would purchase 300 prefabricated homes to serve as temporary housing for its workforce.

鈥淥ur mission is to make housing affordable to everyone,鈥� Holm said. 鈥淎s we ramp up, we can really drive down cost and time. There is certainly room to expand. I think the key thing is delivering value.鈥�

Affordable housing is a key market for the industry, which could make it a viable option for dealing with the housing crisis in Portland.

Stuart Emmons, a housing advocate and modular housing specialist, believes prefabrication can help address homelessness.

鈥淢odular/prefab is still feeling its way,鈥� he said. 鈥淭he solution (to homelessness) is there is a series of solutions. Prefab is part of it.鈥�

One issue limiting the use of prefabricated homes, Emmons said, is a lack of builders. While there are more builders on the East Coast and Midwest, most builders try to stay within 1,000 miles of their primary market.

鈥淭he problem is that there aren’t that many manufacturers on the West Coast,鈥� he said. 鈥淚t’s a wide open field.鈥�

While, in theory, prefabricated structures could be shipped across the country, transit regulations can make shipping the structures across multiple states a challenge.

鈥淚n California and Canada they allow wider shipping,鈥� Aragon said. 鈥淚n Oregon, (the limit) is 16 feet wide. You have to pay for extra permits, but you can’t go past 20 feet.鈥�

A recent change to Oregon law added four feet to the maximum length of items that can travel on state highways.

鈥淔our feet doesn’t sound like much, but when we are looking at small places, every foot counts,鈥� Aragon said.

Another issue has to do with finding general contractors that have dealt with using a modular format. Contractors still have to prepare the site, perform foundation work and put the new structure in place.

鈥淲eather is my biggest concern regarding modular delivery in the cooler, damper Northwest climate,鈥� said Robert Lecher, project manager at Ankrom Moisan Architects.聽鈥淭he factory can do a good job preparing boxes for shipment, but general contractors have a big learning curve to keep the project dry while being erected.鈥�

Lecher teamed with Bridge Housing to construct the Marea Alta development in San Leandro, California. The two-phase project will provide 285 units when it is completed in 2018. He said that finding builders capable of handling projects that size is a big problem.

As housing prices continue to soar, quick inexpensive ways to build houses will look more attractive, Lecher said.

鈥淚 believe we’re about to see a large increase of modular housing in Portland and Seattle,鈥� he said.