Modular housing provides affordable homes to help address the housing shortage

Although there are many benefits to a growing city, the downside of such growth is often lack of housing. The Grand Rapids community is currently experiencing a housing shortage, much like most of the United States. As the city looks for solutions, local builders like InnovaLab are making great strides with their affordable, streamlined modular home builds. 

InnovaLab Development, a Rockford company, believes that strategically introducing modular development can change the game for the current housing market. The construction of these single-family and multi-family residential units are more affordable, quicker to build, energy efficient and more neighborhood friendly, says David Allen, president of InnovaLab Development. 
Courtesy of David Allen
Allen has 30 years of experience in community development and affordable housing in Grand Rapids. Prior to launching his company in 2020, he was the director of the Kent County Land Bank Authority, where he was introduced to modular building.

Photo by Tyler Herbstreith
“My passion has and always will be creating attainably priced housing,” Allen says. “I had a lot of connections with other nonprofits around the state and other land banks in other municipalities, so I got together with my business partner to launch InnovaLab to continue on with that work.”

In the summer of 2022, the Grand Rapids Area Chamber of Commerce retained Bowen National Research to conduct the Housing Needs Assessment for Grand Rapids/Kent County study. The study looked at past, present and future projected demographics, employment trends, economic drivers, current housing components and characteristics and housing gap estimates.

Courtesy of David Allen
Courtesy of David Allen
Kristin Turkelson, planning director at the city of Grand Rapids, says the study laid out the numbers relating to the housing shortage.

“We were able to determine that the housing shortage in the cIty of Grand Rapids is 14,106 units. That’s the number of units needed by 2027,” she says. “We know that we need housing – all types of housing at all types of price points.”

Photo by Tyler Herbstreith

Photo by Tyler Herbstreith
Turkelson says the modular home builds provide a nice solution and a benefit to the city. The expedited building process can help the city move the needle toward their goal.

“We’ve been tracking the data within the development center at the city, and we’ve unfortunately only been averaging 538 new units [a year] since 2015,” she says. “But when we look at that 14,000 number, that would necessitate an average number of 2,800 new units per year, so we are grossly deficient in the number of units being produced each year compared to what the need is.”

Turkelson says the city of Grand Rapids is also looking at short-term housing policy changes and updating their community master plan, which includes a large focus on housing.

“The city is heavily interested in working hard towards increasing our housing supply, with affordability in mind,” she says.

The housing shortage is causing issues, including affordability, but InnovaLab can help. Allen says the standard modular homes cost about $185/square foot to build. A 1,000-square foot home would cost $185,000 to build, not including the cost of land.

“We need houses, and we need them to be reasonably priced, and we need them fast,” he says. “That is what our focus is on at InnovaLab, delivering both HUD and modular homes to the market.”

Photo by Tyler Herbstreith

Although some people think of HUD (Housing and Urban Development) or modular housing as trailers, Allen says this is not the case. In fact, their innovative, updated build designs are increasingly harder to pick out of a lineup of their traditionally-built counterparts. 

“The materials are the same as any standard built house, other than the steel foundation,” Allen says. “From an environmental standpoint, they’re extremely energy-efficient, energy star-rated, and if a customer desires, they can be fitted to receive heat pumps or solar panels.”

Typically, these modular home builds take eight weeks to be delivered after the initial order, can be installed on the foundation in one day, and are ready for occupancy just a week later. Another benefit of this type of housing is that they are environmentally conscious. 

“The other aspect that is not usually considered when it comes to energy is what it takes at the factory to build these,” Allen says. “The average amount of waste – the materials that aren’t used, would fit in a 55-gallon drum. They [the modular home factory] get their materials cut to size in the factory so there’s very little waste on these, so that’s another environmental aspect kind of glossed over by some folks, but I think it’s important. When you go by a standard construction site, you’re going to see big huge dumpsters with all kinds of stuff hanging out of it.”

InnovaLab is working on a housing development with nonprofit Seeds of Promise to build 25 units for ownership on the southside of Grand Rapids. They’re also working with a developer in Muskegon for 20 additional rental units. Allen hopes to break ground on these projects, which he considers a game changer, next spring.

Seeds of Promise CEO Regenail Thomas says the 501(c)(3) nonprofit works to fill gaps within primarily BIPOC communities, operating as a ‘bottom-up’ rather than ‘top-down’ initiative. Located on the southeast side of Grand Rapids, Seeds of Promise has been around for nearly 20 years and partners with local organizations, businesses and government agencies to help address the needs of residents.

Seeds of Promise is currently focused on housing. Their team acts as advocates for equal housing opportunities and treatment for residents, maximizing owner-occupied housing locally. 

“With the support of David Allen as our project lead, we hope to bring a very forward, innovative housing option to residents in Grand Rapids,” Thomas says. “We call it the Seeds of Promise smart attainable homes. We’re targeting residents for ownership who are normally outside of consideration, those around the 60-80% average median income (AMI).”

These new, prefabricated homes will be for those who are often left out of the housing market, says Thomas. InnovaLab is currently developing a model for a resident within Seeds of Promise.

For a few groups of people, including communities of color and those experiencing poverty, the dream of being a homeowner seems too far out of reach, due to discrimination and racism. Seeds of Promise housing initiatives aim to reach those subsets often left out of purchasing a home, and help them to change their generational wealth. The initiative works together with City Hall, Grand Rapids Police and Fire Departments, local churches and neighborhood associations, says Thomas.

Working together with InnovaLab and Seeds of Promise, Allen believes these newly-designed homes can be a real gamechanger. 

“So then, that begs the question — why haven’t they been introduced sooner? The reason for that is the industry is not built to do that,” Allen says. “You have modular home dealers, and you have HUD home dealers, and they have their standard fare that they offer, and that’s their business model. They have no incentive to offer or push these homes. We’ve been really focused on trying to bring these to the market and we’re excited in the next year to do that, and hope both the Grand Rapids and the Muskegon markets will break ground next spring.”

“We’ve got cross-functional and cross-lateral support, and we’re looking for even more support from those in the community who believe that through service, we strengthen our community and build stronger relationships,” he says. 

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Sarah briefly lived in Grand Rapids years ago, before moving back to Lansing, but that West Michigan love never really left her heart. Through her coverage on small businesses, arts and culture, dining and anything mitten-made, she’s committed to convincing any and everyone - just how great the Great Lakes state is. Sarah received her degrees in Journalism and Professional Communications. You can find her in a record shop, a local concert or eating one too many desserts at a bakery. If by chance, she’s not at any of those places, you can contact her at [email protected].
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