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How Prefab Wood Can Make Housing More Affordable

A new report explores how offsite mass timber and light-frame wood construction could boost affordability, cut carbon emissions, and speed up construction.

Rendering of a mass timber affordable housing construction with blue sky in the background

The need for more affordable housing in the U.S. is well known. The Housing Coalition’s 2020 annual report showed that rental rates are out of reach for nearly every worker in the bottom 50% of the national wage distribution. And with research showing that housing is a major social determinant of essential health and well-being, this is a critical and urgent problem to solve.

A recent report by Minneapolis-based environmental nonprofit Dovetail Partners and New York City–based development firm Spiritos Properties LLC—a collaborative effort of authors Kathryn Fernholz and Jeff Spiritos—delves into the origins of the nation’s housing shortages, the historical efforts to deliver more affordable housing over the past 100 years, and the new opportunities on the horizon to construct more affordable housing using efficient prefabricated mass timber.

The report cites the benefits of wood construction—including the mix of both mass timber and light-frame wood construction—to further improve the delivery of timber buildings up to 5 stories and provide a solution for timber buildings between 6 and 12 stories.

Source: Housing wages based on HUD fair market rents. The hourly wages by percentile from the Economic Policy Institute State of Working America Data Library 2020, adjusted to 2021 dollars.

Want to see the full report by Dovetail?

Read the Report

A Brief History of Affordable Housing: Lessons from the Past

According to the report, past affordable housing initiatives—with the exception of a few stand-out examples—have been plagued by poor design, discrimination, stigmatization, and, in some cases, corruption. Today’s affordable housing initiatives can learn from the past and avoid repeating such mistakes.

The first mention of affordable housing in the U.S. was in response to the hardships of the Great Depression, which was triggered by the 1929 stock market crash. By 1933, over 13 million people in the country were unemployed, and almost half of the country’s banks had failed. This led to widespread homelessness and poverty, in both densely populated regions and rural areas. The National Housing Act (NHA) of 1937 attempted to simplify complex housing policy and encourage private construction of housing—but instead, these policies further stigmatized poverty and public housing by limiting choice and isolating the poor.

Affordable housing made some positive strides with the Housing and Urban Development Act of 1968 Section 236, which provided private developers with incentives to build more low-income housing. A subsequent construction boom aided in the creation of both market-rate and affordable housing.

In further efforts to make improvements, HUD created the Low-Income Housing Tax Credit program (LIHTC) in 1986, which is the primary public source of funding for low-income housing projects today. As of 2020, this permanent federal program provides over $9 billion in annual tax credits to states to support the construction of new units in partnership with private developers or city housing agencies.

Demonstrating the Affordability of Mass Timber with Light-Frame Construction

The report suggests that more autonomy and choice for residents, speed of construction, and a flexible variety of housing types are key drivers of success when it comes to effective and inclusive affordable housing solutions.

“The time is ripe to focus on the next best way to build affordable housing in the quantities demanded to provide decent housing and as a foundation for all other opportunities to spring from,” according to the report.

The authors point to 340+ Dixwell Avenue, a New Haven, Connecticut-based affordable housing demonstration project, as a real-life example of what is possible using mass timber and light-frame construction. Designed by Gray Organschi Architecture and Schadler Selnau Associates and developed by the non-profit Beulah Land Development Corporation, Spiritos Properties, and HELP USA, the four-story, two-building complex will maximize the number of apartments in a preferred mix of 1-, 2-, and 3-bedroom units. The project will also provide ground-floor commercial retail space for neighborhood businesses, amenity use, and parking.

The project features a CLT honeycomb bearing system to expose a significant number of walls and ceilings, minimizing the use of dropped ceilings. The result is efficiently stacked layouts with simplified structural, mechanical, electrical, and plumbing systems. The CLT panel façade will reduce exterior joints and achieve exterior tightness—for energy savings—more easily than could be achieved with stud walls.

The report lists a plethora of benefits realized by combining mass timber and light-frame construction for 340+ Dixwell. Mass timber construction can accommodate up to 18 stories with the 2021 adopted code changes, helping to maximize the number of affordable units. It can be done using an efficient crew size—light frame wood construction on a project of this scope requires 20-30 people compared to 6 or so with a primarily mass timber structure. And prefab mass timber offers faster construction schedules and delivers savings over-light frame construction alone.

Other benefits include greater thermal efficiency, elimination of waste, and a safer work site, along with wood’s biophilic and climate advantages.

340+ Dixwell’s cost comparison of mass timber vs. light-frame demonstrates the value that a combined mass timber and light-frame solution can provide. For an equivalent structure, light-frame is considerably less expensive than mass timber, coming in at about $24/square foot versus $40/square foot for materials—a savings of approximately $16/square foot. But using mass timber allows for savings elsewhere in the process, including reduced construction timeline, reduced construction loan interest, and faster access to rental revenue. Taking this holistic project viewpoint into account, the premium for using mass timber is actually expected to be about $9.42, or 5.12%, per square foot, rather than $16.

Of the project’s 69 apartments, 80% will be reserved for those earning up to 60% of the area median income (AMI) and 20% of those affordable units will be supportive housing. The remaining 20% will be market-rate.

“Given the myriad benefits of mass timber residential construction, a mass timber structure should be the next generation for creating healthy, durable, high quality of life housing for all. The character of mass timber erection sets the stage for a much faster and smoother project. It is less reliant on sequence, or on the weather. In our 340+ Dixwell passive house project, it makes creating the airtight shell that much quicker and less risky.”

Jeff Spiritos | Dovetail Author | Dovetail Partners

Wood Innovations Can Address Affordable Housing Gap

Generating affordable housing is undoubtedly one of the construction sector’s greatest challenges. As this report suggests, we need fresh solutions that are scalable, durable, energy-efficient, and promote well-being. Mass timber combined with light-frame construction can, as the authors demonstrate, deliver on value, longevity, speed of construction and flexibility.