A proposal for an 11-story, 89-unit multifamily building south of Portland State University would produce the tallest modular structure in the city.

The design for 2055-2057 S.W. Park Avenue calls for a building 85 feet tall. It would have only studio apartments, and offer no off-street parking for motor vehicles.

Plans are for the apartments to be 100 percent affordable units at 60 percent of median family income, a development consultant said.

The proposal is from Lake Oswego architect Ralph Tahran, who was a co-founder of Otak Inc. Rowen Rystadt is listed as the owner’s representative. The pair previously produced for Native Land Development two Sellwood-Moreland multifamily buildings that provided 100 percent affordable apartments using provisions of Portland’s inclusionary housing policy.

This latest development plan elicited critical comments from neighbors during a design advice hearing held virtually by the Portland Design Commission on Thursday.

The building would use an innovative construction method. The first two floors would be poured concrete, with modular units stacked on top. This would allow for faster construction and fewer impacts to the neighborhood, the project team said.

The modular design makes the quality of the street level even more important, Design Commission Chairwoman Julie Livingston said.

“So you’ve got real architectural work to do on those lower floors,” she told Tahran.

The building would primarily use light-gauge steel and mass plywood panels. The project team includes Shirley Chalupa, a DCI Engineers principal who is tasked with ensuring structural safety at the tricky site located at the base of a large hill that has a history of slides. The builder is MODS PDX.

Austin Turner, a development consultant working on financing for the project, said the team will target the 4 percent low-income housing tax credit from the U.S. Department of Housing and Urban Development, as well as a Metro affordable-housing grant, to meet the city’s inclusionary housing requirements.

“The objective is to target 60 percent or lower (area median income), and we’re looking for veterans, we’re looking for disabled, we’re looking for Native Americans that are in the area that are chronically homeless,” he said in an interview.

The apartments could be attractive to veterans because of its proximity to Portland’s large Veterans Affairs hospital, Turner said. And although the site is close to Portland State University, the units are not intended to serve as student housing, he said.

The proposal calls for a building that would be much taller than surrounding single-family houses, as residents quickly pointed out on Thursday. The neighborhood is largely made up of two-story Victorian homes that were built in the early 20th century. Taller modern buildings are located across Interstate 405 from the site.

“This new building will ruin the beauty of this side of the city,” said Qin Hong, a nearby resident.

The site is within the neighborhood overseen by the Southwest Hills Residence League.

Turner described residents’ pushback as part of a reaction to the recent implementation of new, denser zoning in Portland.

“We’d love to please everybody, but it’s zoned for change,” he said. “I think the city’s going to help us reinforce their directive.”

Design commissioners criticized some of the proposal’s elements, including a sunken courtyard and ground-floor façade that they said does not meet standards. Commissioners floated possible design changes, including additions of balconies and a rooftop patio for residents.

“It needs to distinguish itself from looking like an office building,” Commissioner Zari Santner said.

The project team will make whatever changes are necessary to meet guidelines, Turner said. “We’re meeting the Design Commission where they want us to be,” he said.

A second design advice meeting or design review hearing will be scheduled later.

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Transition Projects doesn’t develop a lot of buildings, so it like to make them count. That’s why the Portland nonprofit sought the most cost-effective and fastest construction method for its unique Low-Income Single Adult Housing (LISAH) project, in the Kenton neighborhood.

“When you look at the cost of projects you look at levers you can’t affect, like the price of land,” said Tony Bernal, Transition Projects’ senior director of public policy and funding. “There’s a lot that’s outside of your control, so it’s about those things that are in your control and how you can gain cost efficiencies there.”

A preconstruction grant from Meyer Memorial Trust, Bernal said, led Transition Projects to choose modular construction for the project at 8550 N. Argyle Way. Thus far, Bernal said, the project’s cost has been competitive with stick framing.

“It’s fairly amazing as far as the process goes,” he said. “The speed of construction is certainly one of the benefits that you see from modular.”

LISAH will be four separate structures with a total of 72 units for individuals transitioning out of homelessness. All of the units will be available to people with incomes no greater than 60 percent of the median family income; at least 18 units have Veterans Affairs Supportive Housing (VASH) vouchers for veterans with as little as no income and as much as 30 percent of MFI.

Holst Architecture designed the project, while Walsh Construction is serving as general contractor. The modular units were manufactured in North Portland by Mods PDX.

Three of the four buildings will be two stories, with shared rooms. Each of these buildings will have four separate modular units. Sleeping areas and bathrooms will be communal.

The fourth building will be three stories and have 35 studio apartments – 220 square feet each – and a manager’s unit.

Also, all four buildings will have dedicated community space.

On the construction side, the compressed schedule of modular building changes project management significantly.

“A lot of it was early coordination between us and (Mods PDX CEO Nathan Young) on how we were going to get a lot of our mechanical, electrical, plumbing, fire sprinkler routing taken care of in his shop,” Walsh Construction assistant superintendent Nick Cardoza said. “Typically you’re able to figure out some of those routing questions out as it’s being built, but this all had to be figured out a lot earlier.”

Communication is essential, Young said.

“It’s much more of a team-driven experience,” he said. “You really want to bring everybody together in the very beginning to talk about what we call ship loose, or items that are left to be done on the site; so we’re working very closely with Walsh to make sure there is good continuity from both subcontracting and material bases.”

The payoff is evident in the timeline. Ground was broken on LISAH in July, and completion is expected by early March 2020.

“I think for us, trying to lop a month or two off the schedule means that we can house people much faster,” said Jenn Sharp, senior project manager for development consultant Housing Development Center.

During initial site work, including installation of a huge dry well, the modular units were being constructed at the Mods PDX factory. Foundations for the four structures were poured just days before the first modular boxes were set. The three single-room occupancy buildings are now set, while the larger studio apartment building will be complete in October.

The modular units are fairly simple, with wood-framed construction and standard MEP configurations. They are over-engineered, Young said, to withstand transport by truck and then being rigged and set with a crane.

“You’ve got site-specific constraints that determine the modular,” he said. “So it’s about where the crane can go, size of the boxes, transportation issues.”

On-site, carpenters from Walsh Construction subsidiary RDF Builders and Local 1503 constructed the foundation formwork. Meanwhile, a team of riggers from Bent Level Construction as well as Young himself and Mods PDX Director of Operations Pete Victoor set the first three modular units on Aug. 26 and 27.

“Bent Level is taking approximately one hour per box, maybe moving a little faster,” Cardoza said. “This allows the building to be built as we’re doing all the site work; there’s a ton of underground piping in this project, so just the site graded out and getting this (retaining) wall in, all the infrastructure had to go in, and Nathan was able to build these buildings as we were doing that.”

Yet Young thinks there is a lot of room for improvement.

“There is a need to figure out how to standardize the building process a lot more,” he said. “Eighty percent of every building can be the same every single time instead of these uniquely designed buildings, which would allow us to standardize our process and increase our production flow and spit these out a lot faster so we can start to affect some of the housing crisis.”

Modular construction on the scale of a modest project like LISAH isn’t necessarily cheaper than traditional stick framing, Bernal said, but it’s not more expensive either. And when the time savings is considered, it can be a sound choice.

“We knew what we were getting into and that we were going to explore modular,” Bernal said. “I think it was worth it, but it took a while.”

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The construction industry has a conundrum. It’s one of the few industries in the United States struggling to improve productivity.

“We’re actually looking at a crazy dichotomy where construction over the past number of years has actually lost productivity,” said Jonathan Orpin, founder and president of New Energy Works Timberframers and Pioneer Millworks – both based in Southeast Portland.

That’s one of the fundamental drivers, he added, behind continued exploration of prefabrication in construction. Another reason is the worsening housing crisis across the country. Many project teams are seeking new ways to drive down the costs of development, whether residential or commercial.

While prefabrication of various building components is taking place in piecemeal fashion across the industry, one specific solution could be found in building enclosure systems. Pre-panelization is slowly gaining popularity, in part because project designs are being developed virtually with building information modeling (BIM) software.

This topic was explored Thursday at Pioneer Millworks’ warehouse as part of Design Week Portland. There, Orpin was joined by Nathan Young of Mods PDX, a manufacturer of modular buildings, and Geoff Sosebee of Lever Architecture, who has designed several cross-laminated timber projects involving prefabrication.

“Wider use of BIM, automation, it’s coming, but slower than almost any other industry,” Orpin said. “Developers are pushing this need too, and in the last few years we’re finally seeing a big investment.”

Orpin pointed to Katerra. The Bay Area startup, around four years old, is now worth $1.2 billion. It dived headfirst into offsite construction as part of an end-to-end business model that includes design, materials, procurement, offsite manufacturing and construction.

As for modular construction, Young said, the engineering goal is to reduce to a minimum the number of prefabricated components needed to complete a building. This also makes prefabrication better suited for multistory buildings with repetitive units or those with remote locations or where construction is particularly disruptive.

“Our belief is that 80 percent of every building is exactly the same,” Young said. “And the more we can standardize that, the more we can use offsite production to lower those costs.”

Part of the problem in finding more efficiency in prefabrication – whether panelized walls, cross-laminated timber or other types of systems – comes on the factory floor. In terms of both technology and scale, there is much remaining to be desired.

“We’ve been doing pre-panelized roof and wall systems since 1993, and it’s evolved since then, but we’re still working in a reasonably rough shop setting as opposed to what I saw during my recent trip to Europe,” Orpin said.

In Western Europe, at least, he added, roughly 35 percent of single-family homes are built using offsite construction; in the United States that figure is less than 1 percent.

That number is driven by manufacturing efficiencies unseen in the U.S. In one European factory, Orpin said, the average production rate is 150 single-family homes per year using a labor force of eight production floor workers and four office staffers. The use of automated storage and nailing machines, robotics and other technology accounts for additional labor, time and fiscal savings.

“It was a very telling moment,” he said.

The industry is still fighting the cost issue, Young added, even though prefabrication ensures better quality by virtue of components being built to higher tolerances and in controlled settings instead of a job site open to the weather.

“We haven’t mechanized to the full advantage of where we could be compared to Europe,” he said. “And part of that is that it requires standardization which we don’t have in America; we’re not quite there yet.”

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A relatively small residential project in Portland’s Kenton neighborhood could provide a glimpse at the future of wood-framed construction.

In addition, the project aims to revive a long-disregarded housing type – single-room occupancy – now found only in a few aging hotel buildings scattered around Portland.

The first phase of the proposed would provide 35 studio apartments, a one-bedroom manager’s apartment and six additional single-room dwellings. They would fill four buildings on property at 2310 N. Hunt St. According to a request for design review filed with the Bureau of Development Services on Oct. 15, three of those buildings would each hold two single-room units. The apartment building would also have a community room.

The project, developed by Portland nonprofit Transition Projects, is part of the same initiative that produced the Kenton Women’s Village and is aimed at much the same demographic. All units are intended for persons earning no more than 60 percent of the median family income for the metro region.

Holst Architecture has designed the project; a voluntary design advice hearing before the Portland Design Commission took place in July. In total, LISAH will provide 72 residential units, it was split into two phases because of funding concerns centered on low-income housing tax credits. The first phase is now before BDS staff and calls for 42 total units.

“The project finally got its approval for the competitive tax credits from the state,” Holst Architecture marketing director Abigail Carlen said. “That will fund the whole thing eventually, but right now they’re going forward with the first phase. They’ve been working on it for quite some time. It’s been three years now, so it’s good that they got those credits secured.”

Modular components will be used to piece the four structures together.

“We were brainstorming with Transition Projects on how to bring the cost of housing down and what we could do differently,” Holst Architecture principal Dave Otte said. “They were interested in tiny houses, and we quickly came to the realization that with any kind of scale or adaptability to different parts of the city, doing something bigger made more sense. So, the way these duplexes came about was we thought, ‘What if we took tiny houses and stuck them together?’”

To accomplish this, Holst Architecture turned to Mods PDX, which manufactures prefabricated wood-framed walls and other residential construction components.

“We’re still working on details on how they’ll be divided up and go together,” Otte said. “But basically the idea is to make the boxes in the shop to ensure quality control and bring them out to the site and save a lot of time. You can be doing your site work while you’re building the boxes in the shop. While you’re grading, you’re building at the same time.”

Otte said he hopes modular construction will reduce the construction time frame by several months.

“The question is: How do we get housing on to the market to folks who need it the most as soon as possible?” he said. “So that’s why as soon as we got the funding we were all systems go.”

The property, near Kenton Park, currently hosts the 14 tiny houses of Kenton Women’s Village with its 14 tiny houses. The village opened last summer as a temporary housing solution that eventually would be replaced by permanent affordable housing.

The 9 percent federal Low-Income Housing Tax Credit allows Transition Projects to complete the purchase of the site from Prosper Portland and move ahead with construction, which will cost an estimated $11.2 million, according to a city report. A $500,000 grant from the Meyer Memorial Trust also was a key piece of funding.

“We are now finally moving full steam ahead,” Otte said. “It has been a difficult process getting people to buy in to the model.”

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

“Construction costs are the biggest part of it,” said Nathan Young, owner of MODS PDX Inc. in Portland. “The labor shortage is also a part of it. We haven’t seen the kind of labor shortages they have in the Bay Area.”

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

“People aren’t committed to it to the point of this is a way they are going to do things going forward,” said Derrick Aragon, principal at Northwest Ventures Group Inc. “They 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.”

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.

“The designs have come a long way,” Young said. “You 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.”

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 national average cost per square foot for a typical modular home is $76.80. The average stick-built home 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.

“Our push has been on energy efficiency,” he said. “More millennials … are keen on getting smaller, 2,000-square-foot homes that are energy efficient.”

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.

“The big driver is time and quality,” 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.

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

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 “plug and play” 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.

“Our mission is to make housing affordable to everyone,” Holm said. “As 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.”

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.

“Modular/prefab is still feeling its way,” he said. “The solution (to homelessness) is there is a series of solutions. Prefab is part of it.”

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.

“The problem is that there aren’t that many manufacturers on the West Coast,” he said. “It’s a wide open field.”

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

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

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

“Four feet doesn’t sound like much, but when we are looking at small places, every foot counts,” 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.

“Weather is my biggest concern regarding modular delivery in the cooler, damper Northwest climate,” said Robert Lecher, project manager at Ankrom Moisan Architects. “The 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.”

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.

“I believe we’re about to see a large increase of modular housing in Portland and Seattle,” he said.

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