Industrialized construction’s advantages lie in utilizing factory production methods that increase efficiency and offer a more predictable construction timeline. Developers of industrialized construction projects in CA have built homes 10-50% faster and 10-40% below the cost of the status quo. One such HAF-financed project, Tahanan Supportive Housing, proved a cost and time savings of 41% compared to similar new construction Permanent Supportive Housing projects, according to a study by the California Housing Partnership Corporation and the Urban Institute.
The chief barrier to scaling industrialized construction is that it requires significant early stage investments, which traditional lenders are often unable to finance. Aided by U.C. Berkeley’s Terner Center for Housing Innovation and Gray Impact Consulting, HAF conducted over 100 hours of interviews with developers, architects, contractors and factories to develop a loan product that would tackle the financing barriers preventing wider use of industrialized construction. The Industrialized Construction Catalyst Fund (ICCF) is designed to make short-term loans to cover critical early costs, enabling developers to make required factory deposits ahead of permanent financing commitments, in turn enabling them to realize the full pricing and schedule benefits of industrialized construction.