Mary Tingerthal, former commissioner of the Minnesota Housing Finance Agency, is working with public, private and nonprofit groups to champion modular and other innovative construction methods to lower building costs, counter a housing shortfall and stretch resources to build more affordable housing.
The state accrued a deficit of 50,000 housing units during the Great Recession, said Tingerthal, who wrapped up eight years as Minnesota Housing commissioner in January.
Catching up would mean building 30,000 units a year for the next five years — 10,000 units a year more than what is built each year, Tingerthal said. In all Minnesota will need an additional 300,000 homes by 2030, according to a report last year from a statewide housing task force that then-Gov. Mark Dayton created.
With the cost of producing homes “rising relentlessly,” modular and panelized construction techniques have the potential to lower building costs by as much as 20%, Tingerthal said, citing numerous studies. That would reduce the cost of a two-bedroom multifamily unit to $160,000 from the $200,000 the task force report cited.
“That’s a level of cost saving that I just can’t walk away from as a former public official, as a person who thinks about how can you get more affordable housing, how can you get more housing period for the same dollars,” said Tingerthal, primary staff person to the housing task force.
Tingerthal helped spearhead a “Construction Revolution Summit” that brought together leaders in homebuilding, design and policy from across the state in September to consider innovative, cost-effective ways to meet housing demand. She is working with members of the industrywide summit advisory group and event sponsors to produce an action plan that could be released in January.
Tingerthal, now president of the Tingerthal Group, worked at Minnesota Housing for 10 years earlier in her career before getting an MBA from Stanford University and working in housing finance in the private and nonprofit sectors.
Q: What would saving 20% on construction costs mean for Minnesota Housing?
A: At Minnesota Housing last year when we awarded all of the various dollars for projects, it was about $300 million total development cost. If you divide $300 million by $200,000 you get about 1,500 units. If you drop that to $160,000 you get 1,875 units or a 25% increase. That’s a big difference.
Q: What challenges do modular and panelized construction face in terms of industry acceptance?
A: The biggest thing we’re up against is that developers and contractors are very busy. There’s not a lot of incentive to think differently. If this is going to be real it needs some dollars and commitment and sponsorship to take it to the next level. Finding a home for it with an existing organization would be my preference.
Q: What are your long-term hopes on this issue?
A: I would love to see multiple modular factories in Minnesota.
I would like to see at least 10% of the multifamily residential construction being done as modular five years from now. The penetration level in the U.S. for modular in multifamily is 3%. I would love to see some of the development opportunities we have in St. Paul look seriously at incorporating modular construction. That includes Ford and Hillcrest (the former auto assembly plant and golf course sites both slated for redevelopment, respectively.)
Todd Nelson is a freelance writer in Lake Elmo. His e-mail is email@example.com.