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California lawmakers are pressing for a fresh push to expand factory-built housing, with Assemblymember Buffy Wicks positioning 2026 as a potential turning point after years in which modular construction remained niche rather than mainstream.
Wicks, an Oakland Democrat who has led housing policy in the Legislature, has organized two select committee hearings under the general banner of “housing construction innovation.” The hearings focus on factory-based building—why it could help address California’s housing shortage and what state action might make it more viable this time. Wicks said the hearings are “ostensibly” designed to gather information for a white paper being prepared by researchers at the Terner Center for Housing Innovation at UC Berkeley, but also to build momentum for a legislative package. Both the white paper and the bills are due to be released in the coming weeks.
The strategy arrives after years of California’s permitting and regulatory overhaul that Wicks described as removing “bureaucratic hurdles” related to housing. She said that in addition to those efforts, a problem still not “fundamentally tackled” is the cost of construction. “Over the last eight to 10 years or so the Legislature and the governor have really taken a bulldozer to a lot of the bureaucratic hurdles when it comes to housing,” Wicks said. “But one of the issues that we haven’t fundamentally tackled is the cost of construction.”
The renewed interest in factory-built housing reflects a long pattern of reinvention—and repeated setbacks—dating back to earlier waves of industrialized homebuilding. The Associated Press story notes that in 1971, then-Housing and Urban Development Secretary George Romney predicted a sweeping shift toward “industrialized” housing construction, but a federal initiative called Operation Breakthrough ran out of money within five years. It also describes modern interest in modular construction growing in California’s urban areas, especially in the Bay Area, where cranes assembling factory-built modules into apartment buildings have become more visible.
The push now draws on claims of productivity gains from shifting residential construction toward assembly-line methods. Ryan Cassidy, vice president of real estate development at Mutual Housing California, said the idea is similar to how cars are produced: “When you go to buy a car, you don’t get 6,000 parts shipped to your house and then someone comes and builds it for you.” Cassidy’s organization committed last year to build its next five projects using factory-built units, and the story describes how standardized modules and panels could allow factories to buy materials in bulk and run work faster because tasks can happen in parallel.
Backers also point to measured differences in construction timelines. The story says off-site construction reliably cuts construction timelines by 10 to 30 percent, citing an analysis by the Terner Center. It also reports that Terner Center director Ben Metcalf told the select committee at its first hearing in early January that factory-built housing “has the potential to reduce hard (labor, material and equipment) costs by 10 to 25% — at least under the right conditions.” The caveat is central to the skepticism that has followed earlier industrialization attempts.
Wicks’ committee hearings also reflect the view that conditions for cost reductions have been difficult to sustain at scale. The Associated Press story says factories are expensive to set up and keep running continuously, which makes mass production hard to justify in an industry marked by boom-and-bust cycles and locally tailored development. Metcalf said in the early January hearing that it is “hard to build out that pipeline for a factory” when housing projects are approved one at a time under different local rules and after years of piecing together financing.
Other obstacles described in the reporting include up-front costs and financing risk, plus uncertainty in construction and approval steps. Jan Lindenthal-Cox, chief investment officer at the San Francisco Housing Accelerator Fund, said industrial construction “costs less overall but costs more in the short term” because “everything is frontloaded,” with design, engineering and material decisions finalized before factories begin producing. The Accelerator Fund, described as a privately-backed non-profit, said it hopes to ease those concerns with short-term, low-cost loans to developers so lenders and investors might feel more confident later, once the approach is more proven.
A similar theme of risk—and the need to reduce unfamiliarity—comes up with permitting and contracting. Apoorva Pasricha, chief operating officer at Cloud Apartments, said that a subcontractor unfamiliar with modular construction might bid higher to cover uncertainty and that code officials could be “extra cautious or extra slow.” Pasricha argued that “creating familiarity with the process helps drive that risk down,” but questioned who would pay the price to learn.
The reporting also highlights failures that linger in industry memory, including the 2021 bankruptcy of Silicon Valley-based modular start-up Katerra, after spending $2 billion on what the story describes as a hyperambitious effort to disrupt the building industry. Brian Potter, a former Katerra engineer who now writes the Construction Physics newsletter and is the author of a recent book titled The Origins of Efficiency, said off-site construction has fundamental limits in addition to regulatory issues, and pointed to the broader challenge of making some things faster and cheaper while others remain difficult.
As lawmakers consider what state role might be most useful, the story says supporters have pitched several approaches: helping maintain a steady pipeline so factories can run at capacity, reducing insurance and bankruptcy risk between developers and manufacturers, and standardizing parts of building-code requirements so local inspectors do not repeatedly re-check modules. Supporters have also argued for a broader regulatory focus rather than targeting only the modular sector, with Stephen Smith of the Center for Building in North America telling the committee that regulators should consider what he called “small victories,” such as walls built in factories and systems like elevators and escalators, as part of general regulatory modernization.
Wicks, for her part, said the factory-built concept will not resolve every housing problem on its own. “I don’t think factory-built housing is going to solve all of our problems. I think it’s a piece of the solution,” she said. “We’re not talking about actually funding the building of factories. We’re talking about creating a streamlined environment for these types of housing units to be built.” In that framing, the committee’s work and its planned legislative package aim to set conditions where factory-built construction can compete more effectively on cost and speed, rather than repeating earlier federal efforts that failed to maintain funding and scale.