More than a century ago, US President William Taft dubbed San Francisco the “City That Knows How” to honor how quickly it rebuilt after the 1906 earthquake.
SF lost some 28,000 buildings to the earthquake and ensuing fire. To rise from the ashes, the city let some commercial landlords rebuild without permits and, believe it or not, flout seismic recommendations.
San Francisco again faces daunting construction goals. Under state pressure, it has crafted a plan to make room for more than 82,000 new homes this decade. That’s three Great Quake reconstructions.
SF won’t let developers build without permits or ignore seismic codes, but state officials have been dismantling many barriers to new homes – like making it harder for neighbors to block or delay a project.
One hurdle is proving stubbornly high: money. The city’s prolonged economic malaise is making market-rate developers and investors queasy, and voter sentiment killed a potential blockbuster bond to build affordable housing.
The dilemma would seem to invite some of that old-fashioned San Francisco know-how. New mayor and political novice Daniel Lurie tried to channel it during last year’s campaign, talking about new solutions to the city’s housing woes.
He boasted about his nonprofit’s track record – “I’m the only candidate who has developed affordable housing” was a standard line. But the housing in question was a single project, built under circumstances that would be difficult to repeat.
Do as the Swedes?
According to a 2013 historical survey by the New York City Department of Buildings, prefabricated homes began to catch on in the US in the early 20th century.
But Americans perceived them as “unsightly and unstable,” according to that NYC survey, and the technologies of the age weren’t ready for the design challenges of urban infill construction.
This century, however, the stigma has begun to fade. Modular homes are enjoying something of a boom, at least outside the US. Former SF Planning director John Rahaim characterizes SF as behind the times. “There’s great potential in modular and in other kinds of prefabrication,” he tells The Frisc, adding that “there’s a perception that it’s less safe, but I also think that’s been proven wrong.”
The analytical firm Mordor Intelligence reports that in Sweden, for example, 45 percent of new homes use modular technology, and more than 80 percent include some form of prefabrication. The numbers are lower in Germany, but they still add up to tens of thousands of units annually.
Mordor notes the sector is growing rapidly, especially in “areas subjected to recurrent seismic events.” (Modular homes manufacturers market their units as ideal for earthquake zones, in part because they’re supposed to be easier to repair and replace.)
Now, where do we know a city with both a housing shortfall and recurrent seismic events? There’s no US boom, but there are examples closer to home. SF’s first modular project, 38 Harriet Street, dates to 2013, the handiwork of now-defunct developer ZETA and SF-based Panoramic Interests.
Among other Bay Area projects to pop up last decade was a 22-unit Panoramic building for UC Berkeley that went up at the rate of one story a day using pieces shipped from China. Panoramic owner Patrick Kennedy spent years trying to sell San Francisco on more premade apartments, which are built on a chassis of shipping containers and designed to snap together like LEGO bricks. It was to no avail — SF politicians balk at the use of overseas labor.
There are domestic modular manufacturers, however. Vallejo’s Mare island is home to Factory_OS, one of the few modular developers that has already contributed to SF projects, including the one that Mayor Lurie loves to cite.
The prefab life
Lurie oversaw 833 Bryant, a 145-unit building in SoMa, which Lurie’s nonprofit Tipping Point Community helped build. “These projects traditionally take six years or more and cost an average of $700,000 per unit, while Lurie’s project took just three years and cost $383,000 per unit,” a campaign press release from July of last year boasted.
The figures align with a UC Berkeley Terner Center analysis from 2021. Terner’s Nathaniel Decker noted that modular is faster and cheaper in part because construction can happen in parallel to work at the housing site and it allows for more flexible financing.
However, the Terner analysis also emphasized that Lurie’s coalition achieved its savings via unusual means: large amounts of private donations, a smaller average unit size, and, most critically, it sourced its modular housing from Factory_OS.
Life as a prefab company can be tenuous. Some, including the once-promising Hayward-based VEEV, have folded in recent years. Last year, Factory_OS announced that private equity buyers had acquired “certain assets, including the intellectual property, trade name, backlog, production facility, and catalog of Factory_OS.” The announcement said the firm was “positioned to enhance its manufacturing processes significantly.” (Factory_OS did not respond to requests for comment on this story.)
The first guys on the beach always get shot up.
Patrick Kennedy, developer of SF’s first modular apartments, which opened in 2013
Lurie’s mayoral opponents tried to turn 833 Bryant into an albatross. For example, Mark Farrell highlighted its history of code violations during a debate. To whatever extent housing was a salient election issue, voters were unmoved.
When asked about plans for more modular homes, Lurie declined to answer specifically. Through a spokesperson, he told The Frisc only that he’ll be proposing “innovative solutions that accelerate the development of housing.”
Capacity, unions, and rules
Former SF Planning Director Rahaim says the new mayor should push hard for modular, but he acknowledges that there are only “a few manufacturers,” and they don’t have the collective capacity to produce tens of thousands of units in the time it would take to meet SF’s housing goals.
Panoramic founder Patrick Kennedy, who helped build SF’s first modular apartments at 38 Harriet, still feels the wounds of his pioneering foray: “The first guys on the beach always get shot up.”
The prefab boxes are a good starting point, but if you want anything custom at all, you might as well make something entirely original.
architect anders lasater
He’s giving up on SF “for a while,” and doubts “the technology is ever going to fulfill its potential in San Francisco,” even with a modular-minded mayor. As Kennedy sees it, a big problem is design. Sweden has standardized layouts for affordable housing projects, and it’s easy for a modular developer to “stack them up like shoeboxes.” But in SF, where every new building is “bespoke,” much of the potential time and cost savings are eaten up.
State regulators are forcing cities, SF included, to simplify and clarify design standards, but it’s unclear if the city will ever streamline enough to suit the likes of Kennedy.
Southern California architect Anders Lasater agrees. “The prefab boxes are a good starting point, but if you want anything custom at all, you might as well make something entirely original,” he tells The Frisc.
Organized labor is another major obstacle. “Technically there is no reason we couldn’t do [modular] tomorrow,” YIMBY Action Director Jane Natoli says, but “the opposition from labor would be strong.”
In a 2021 letter to the city, Larry Mazzola, president of the SF Building and Construction Trades Council, blasted four modular SF sites, including 833 Bryant, alleging they result in subpar buildings the city “should be ashamed of.” They’re cheaper, Mazzola acknowledged, but “you get what you pay for.”
(Maceo May Apartments, a Factory_OS project on Treasure Island, ended up flooded after an enormous storm hit prefab units delivered without roofs. The building opened in 2023 with more than 100 units for formerly homeless veterans.)
SF Electrical Construction Industry director of research Alex Lantsberg adds that the process itself is the problem. Fast build times don’t give union workers “with a long history of craftsmanship” enough time to spot potential problems.
Factory_OS uses union labor at its Vallejo plant. In response to Mazzola’s 2021 criticism, Tipping Point said at the time the 833 Bryant components were assembled on site by SF union workers, just as with any other building.
Even a recent olive branch from the union camp was less than it seemed. Former supervisor Ahsha Safai, a longtime labor organizer who ran unsuccessfully for mayor, said he’d support modular homes in SF only if they were manufactured here with union labor. Safai did not respond to requests for comment; he likely knows there are few prospects for a major manufacturing plant in the city.
Skeptic exception
The big exception to labor skepticism is the Nor Cal Carpenters Union, whose members work for Factory_OS in Vallejo. The executive secretary treasurer, Jay Bradshaw, has criticized other unions and praised the modular industry for addressing an “opportunity shortage” for union work.
In emergencies, cities can rebuild fast. The next test will come to our south, as Los Angeles grapples with the loss of tens of thousands of homes in the ongoing fires. (SF and the rest of California, already dealing with a housing shortage, might also feel ripple effects of all those displaced Angelenos looking for new homes.)
After the 1906 quake, officials let builders cut corners, but they also let them put up cheap, fast “earthquake shacks” – the early 1900s version of micro-units. Funny how those shacks turned into historical assets, and today many top-dollar listings brag (sometimes without evidence or justification) that the house on offer started as a “converted earthquake shack.”
SF has a lot less open space than it did 100 years ago, of course. But our stubbornly high housing costs are a barrier to a more diverse, affordable city. Whether one considers it an emergency or not, there’s no question we won’t have enough places for people to live unless the city figures out how to build faster, more cheaply, and – this time – up to code.
Thank you for this article. I have two comments below, but first, I must encourage you to always preface every SF housing article with the actual housing information. This is found on the SF Housing Pipeline, the most current (as of Q3 2024) stating that SF has 72,659 units already in the pipeline (with 34,531 being large projects that primarily need a competent advocate on the Board of Supervisors to move forward) (see https://sfplanning.org/project/pipeline-report#current-summary).
Regarding prefab, please also note that it is efficient in both resources and energy. On-site construction wastes a great deal of resources, but factory prefab is perfectly efficient in its use of resources (ex: there are few materials that must be tossed out after completion, as materials are continuously used on the next part of the factory production process). Also, on-site construction is rarely as exacting as the digital-to-automation prefab process, and the prefab architects are always highly knowledgeable as to the best form of materials, insulation, etc. (which hired architects may or may not be), and therefore the prefab buildings are better designed and better built to be energy-efficient.
Thanks.