The nation enjoys a “very high rate of economic activity,” yet “housing construction hasn’t been high.” Inflation’s a major factor — “land is several times more expensive than it’s been in the past,” and costs for “materials have gone way up.” Paradoxically, “we’ve been losing ground in meeting housing needs in this country, despite all the programs that we’ve had.”
Was that quotation from U.S. Secretary of Housing and Urban Development Scott Turner in 2026? Nope. It’s from U.S. Secretary of Housing and Urban Development George Romney in 1969. Nearly six decades ago, Congress funded a project to foster innovative ways to produce affordable housing. It failed, but the effort’s vision never vanished. And today modular construction might finally be ready for takeoff.
As described by St. John’s University historian Kristin Szylvian, Operation Breakthrough attempted to design and assemble “different types of single-family and multifamily factory-built housing.” It had a promising start. Boeing was involved after the company was plagued by “big layoffs” due to cancelation of the American Supersonic Transport. Then the program fizzled.
According to Szylvian, “no dramatic space-age type of technological advance took place in home construction” on Romney’s watch. A HUD summary laments that while Operation Breakthrough’s “intent was to build 25,000 subsidized units, as of March 1976 only 18,000 units had been completed.” As Ben Christopher of CalMatters put it, the program “ran out of money” and the “dream of the factory-built house was dead.”
But is modular housing back, this time for good? There’s reason for optimism. First, let’s get the terminology right. Per Texas-based law firm Winstead PC, a manufactured home is “a dwelling unit built on a permanent chassis … attached to a permanent foundation system” that “bears a HUD Data Plate and HUD Certification Label.” Think trailer parks. Local Housing Solutions explains that modular techniques that “allow for the construction of homes in pieces that are then assembled on-site. … Unlike manufactured housing, which is governed by a national building code … modular housing is subject to the same state and local building codes that apply to site-built housing.
A 2025 McKinsey & Co. analysis found that “recent developments in data, technology and automation are now allowing” factory-built housing to “deliver on its promise.” Examples include “new digital platforms” that “connect customers … with suppliers” and empower “companies to more easily customize and optimize their designs for specific sites,” and a focus on “one primary structural material” to “enable more standardized manufacturing, design and assembly as well as allow for cost benefits from procuring materials at scale.”
Recent industry highlights include:
- Fading West, based in Colorado, touts its “value engineering, speed, high-quality and architecturally interesting designs.” The company is assembling modular dwellings in Kemmerer, Wyo., for TerraPower employees arriving to work on the “only advanced, non-light water, reactor in the Western Hemisphere being built today.”
- Modern Living Solutions, a division of Greystar Worldwide, delivers “modular apartment homes at a price point that won’t break the bank.” Last summer it partnered with the University of Mississippi to “produce approximately 2,700 new beds for students at the Oxford campus, with students expected to move in by 2027.”
- In October, Irontown Modular completed “Utah’s first-ever modular apartment complex: The Other Side Academy Prep School Apartments, located in Salt Lake City’s historic district.” The project went “from factory start to occupancy in just 12 months — cutting typical timelines nearly in half.”
- Connecticut-headquartered FullStack Modular, which has a 130,000-square-foot factory in Carson, Calif., was picked by Cal Poly for “one of the most ambitious student housing projects in California.” At the school’s main campus, “4,200 new beds” are being built, thanks to the company’s “advanced volumetric modular construction,” which reduces “costs, construction time, and environmental impact while maintaining superior quality.”
- In February, San Francisco’s Villa Homes “installed the first phase … to Acacia Village, a new 25-home neighborhood in Santa Rosa’s Rincon Valley.” Once finished, the development “will stand as the region’s first single-family ‘pocket neighborhood’ built with offsite construction.”
These are encouraging anecdotes, but the companies — and their competitors — need help from government. While many cities, counties and states are rushing to shower the industry with subsidies, as Operation Breakthrough showed, the smarter (and taxpayer-friendlier) approach is to get out of the way. The National Association of Home Builders cites “a patchwork of state and local regulatory requirements and a lack of understanding of the off-site construction process” as “major barriers” to modular housing’s growth.
Some states have been early adopters of reform. In 2024, Utah enacted a “statewide building code for modular building units.” The International Code Council praised the measure as a tool to “leverage the lessons learned and best practices from programs across the country to deliver benefits to Utah residents and the manufacturers that can serve them.” The following year, Colorado mandated that once “the state housing board … adopts rules about any activity required to undertake or complete” modular buildings, “the state plumbing board, the state electrical board and the state fire suppression administrator do not have jurisdiction over and their rules do not apply to a factory-built structure.”
Even California is stepping up. Assemblywoman Buffy Wicks, D-Berkeley, believes that modular “can be part of the solution to our housing crisis.” Last year, she and several colleagues visited “Sweden, a global leader in industrialized construction, to gather policy insights.” In March, her Select Committee on Housing Construction Innovation announced a legislative package that addresses “the barriers that prevent modern and innovative methods of construction from scaling across California.”
Like fusion energy and the “paperless society,” modular homes have been “just over the horizon” for as long as anyone can remember. But at last, factory-built housing appears to make sense — and with a hands-off approach from government, it might even represent a breakthrough.
D. Dowd Muska is a researcher and writer who studies public policy from the limited-government perspective. A veteran of several think tanks, he writes a column and publishes other content at No Dowd About It.