Modular vs. stick build: The pros and cons of factory and on-site construction
Updated: May 23, 2023
As a development partner, Big Block brings two primary methods of construction to the forefront of a project: stick-built and modular construction. Stick-built refers to the traditional method of building a home on-site, while modular construction involves constructing a home in a factory setting and then transporting it to the building site.
When we’re helping our partners navigate the development journey, we also need to help them evaluate which method is right for the project.
Regan Morris, director of acquisitions and development for Silver Sage Housing, said he was skeptical about modular when his organization first started working with Big Block as part of their Home Fire project.
Regan has spent his entire career in construction, working in a variety of roles from residential to commercial projects, and he deeply understands the industry. But his only encounter to modular construction before working with Big Block had been a negative one with poorly built and cheaply made modules.
He even cautioned Natoshia Bastien, the President and CEO of Silver Sage Housing, against modular.
“Part of Natoshia's original message was to have an open mind and be innovative in building for the future,” Regan said. “After keeping an open mind and meeting Grandeur's team, I have been impressed since day one. … I was amazed by the efficiency and attention to detail. Every little thing I could think of was taken care of, above and beyond my expectations.”
Repeatability
Big Block’s factory partner for the Silver Sage Home Fire project is Grandeur Housing out of Winkler, Man., and when Regan toured their facility, he observed the efficiencies that come with repeatability, noting that it allowed the workers to focus on one aspect of construction and perfect their job.
Grandeur’s Project Sales Manager Curt Penner says repeatability is the main thing Grandeur looks for in a modular project.
“We want the same thing happening over and over and over again; that’s how factories work,” he said.
The factory system is a well-oiled machine and works best with repeatable finishes and assemblies, which is why Curt says they only take on projects that are a good fit for modular.
“We know where we shine and apply that to each project that we encounter,” he said. “Sometimes it’s just better to be site built and knowing that difference is important.”
Modular often makes sense for larger projects, like multi-unit residential buildings, where each suite is relatively similar and can be built as a unit and then assembled together on the site.
“Sometimes the nature of the design lends itself well to modular construction while some designs become difficult and costly to build in a factory and ship to site,” Curt said. “In those situations, either a redesign so it suits modular is required or it needs to shift to a site built element.”
Planning & timelines
A lot of pre-development work needs to be done for modular development, which can be a blessing, but it’s also a big challenge.
“Because of the speed and the process of factory construction, all decisions need to be made in advance of construction start,” Curt said.
This concept is often difficult for people to grasp as site-built projects can accommodate more changes as they move much slower than construction done in a factory.
But one of the benefits to this is having clear pricing for the project from the outset, and Curt says it can also help special interest groups fully understand the scope of the project.
“Our approach of planning ahead forces them to start their planning process earlier than they normally would have,” Curt said. “What components are they incorporating? Who’s going to be using these facilities? … Sometimes we’re asking questions they haven’t yet asked themselves but are important to planning the building.”
Timelines also play a role in the decision making process. With stick builds, all the work is done sequentially, while with modular, the foundation can be completed at the same time as the modules are being built, compressing the timeline.
This simultaneous action with Modular can drastically cut down the time to project completion, and in the first few rounds of the CMHC Rapid Housing Initiative (RHI), the government heavily recommended using off-site prefabricated construction components, whether modular or panel.
Though the size of the project also needs to be taken into account; if the project is sized right and designed for efficient constructability even a stick build can be done within a 12-18 month RHI timeline.
Location & climate
In general, modular is great in remote locations with limited access to labour, while stick-built projects make more sense when you're building in locations that have high access to trades and materials, such as bigger cities and centres.
That said, some locations can actually be too remote for modular, such as places where it would be difficult, if not impossible, to get a module on a truck to the location, like on an island, says Ben Miller, Big Block’s VP Operations.
“With stick build, you can go anywhere because it’s easy to ship the bundles and lifts of lumber,” Ben said.
Climate is also a factor. Modular makes a lot of sense when you have a short construction season, or in challenging weather with wind, rain, snow or heat. Taking the construction indoors allows you to continue building no matter the weather outside, cutting back on weather delays often seen with stick builds.
Budget
Stick builds tend to be about 5% cheaper than building modular, in part because modular builds have a sturdier construction built to withstand transportation. That said, stick builds tend to be a longer process, so from a financing standpoint, you might end up paying the difference in interest on loans.
Financing modular builds does need to be approached differently compared to stick builds, but organizations like Big Block and Grandeur can help guide you through the process.
In recent years, we saw lumber prices rise dramatically, and sometimes quickly. Organizations suddenly saw project prices rise mid-build and in some cases, stick builds allowed more flexibility with the budget.
“It’s harder to adjust things in modular construction to bring the cost down because it's already under construction, whereas in stick building, you have more flexibility,” Ben said.
With a stick build, for example, you could change your plans for the floor or cabinets and buy more affordable materials to help adjust the budget, whereas with modular, some of those decisions would be set.
On the other hand, in times when material costs are rising, modular’s accelerated timeline means much of the material is secured by the factory up front, providing a degree of insulation from price escalation should the marketplace see sharp increases later on.
For Regan with Silver Sage, budgeting with modular was a relief.
“Everything is controlled,” he said. “You know exactly what you’re getting prior to building starts. Those guys will give you a budget that will be 99.9% accurate. … They know exactly what to do and how long it’s going to take.”
Finding the right fit
Regan knows modular isn’t the right fit for every project, but it was for the Home Fire project, which was part of the Rapid Housing Initiative and had tight timelines.
“As a supervisor, the biggest issues that we had [with stick builds] were timelines,” he said. “We always fought with reaching our goals for timelines. We were never ahead, and we were always last minute cramming to get done to meet our timelines. At that point, we were then affecting the quality of the build.”
He appreciates the controlled factory environment, where the workers can spend the allotted time on the build with no downtime for rain, cold, heat, or wind.
“My initial thought on modular construction was not great, but after seeing the factory and attention to detail, it won me over,” he said. “I’m a firm believer in modulars now. … It could really streamline building in the future.”
As your development partner, Big Block can prepare a concept, budget, and timeline to help you decide whether modular or stick is best for your next project — taking into account location, financing requirements, and more to make sure the route you take is the one that leads to project success. Contact our sales team today about the land parcel you have identified, so we can show you what we can do.
. . . you can scout for more evidence of our expertise in community-minded housing development through our archive of multi-family and mixed-use residential construction projects.
