Modular construction is common in Phila.

Modular construction is not new to Philadelphia. A number of builders here have been using it, including Westrum Development Co. at its Hilltop at Falls Ridge in East Falls and the Arbours at Eagle Pointe in the Northeast.

Developer David Perelman built 75 modular homes during the 2003-2006 real estate boom to keep up with demand. And developer Jeffrey Tubbs, for his first foray into home building three years ago, used modules for his Flats at Girard Pointe, near Girard Avenue and Third Street.

The 106 modules now being used to build Diamond Green Apartments in North Philadelphia were manufactured by Professional Building Systems in Middleburg, Pa., one of a growing number of producers in the state, in a controlled factory environment. Individual modules can be 90 percent complete when they are shipped from factory to building site, with walls, flooring, ceilings, stairs, and even finishes complete.

Typically, a two-story, 2,500-square-foot house can be constructed in a factory in a week.

Modular building begins with the design process, which, unlike conventional “stick-built” homes, cannot be changed once construction begins. When the plans are complete, they are sent to a state or municipality for review, to ensure that building-code requirements are met.

While stick-built structures take five to six months to build, modular units can be completed in eight to 10 weeks on site. Many in the building industry in Philadelphia believe that modular construction could reduce housing costs.

Currently, it costs more to build the average house in the city than can be gotten in sale price when it comes to market. Only New York, San Francisco, and Boston have higher construction costs, said economist Kevin Gillen, a vice president at Econsult Corp. in Philadelphia, who has devoted considerable time studying the problem.

It costs $128 a square foot to build a Philadelphia house, while sale prices average only $100 a square foot. The cost of construction in the city is $35 per square foot more than in the Pennsylvania suburbs, studies show.

The city’s 10-year tax abatement, enacted in the late 1990s, helped close the gap enough to create 13,000 new units in the last decade, but residential builders are interested in reducing construction costs beyond that.

A study released in fall 2010 — “Going Mod: Reducing Housing Costs in Philadelphia with Modular Construction” — found that modular construction of a 16-foot-wide house in the city reduced square-foot costs by $32; for a 20-foot-wide house, the saving was $12 a square foot.

Among the study’s recommendations, according to its author, Karen Black of May 8 Consulting, was to build a modular-component factory closer to Philadelphia, to reduce transportation costs.

Contact Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com, or follow on Twitter @alheavens.

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