Speed-to-Market Housing

4 min read

Factory_OS builds five stories in ten days 

Rick Holliday and his colleagues at Factory_OS aren’t very ambitious. They just want to change the way housing is built in this country.

The Vallejo, CA-based offsite construction company Factory_OS recently put up a five story, 110-unit housing project in West Oakland, CA in just ten days, making the parts in its Mare Island factory and then assembling units onsite at “The Union” development using 200 unionized laborers.

Holliday, who started Factory_OS just a couple of years ago with co-founder Larry Pace to target affordable housing and supportive housing for the homeless, talks about his offsite construction process in visionary terms. “We can cut the cost of building a homeless unit in San Francisco in half in the next two years,” he says. “We can build 40 percent faster than conventional and there’s more savings to be achieved. We’re just at the front end of radically changing the way housing is built.”

Besides the overall affordable housing market, Factory_OS also sees speed-to-market as transformative for urgent need housing, such as for the homeless or victims of disasters. It has recently received money from software giant Autodesk to start a Rapid Response unit to build disaster housing, along with funding a housing innovation lab.

1,200 Units On Order
The business is getting off the ground rapidly. It has orders for ten developments in San Francisco and Los Angeles next year, for a total of 1,200 units.

Holliday started in offsite by using another modular supplier. But that supplier was under-capitalized and subsequently failed. The spark for the new venture appeared in the form of an old friend, John Igoe, now director of real estate for Google.

“You should start a factory,” Holliday says Igoe told him. “And if you do it, I’ll order the first 300 apartments.”

Holliday found the startup capital and his factory building on Mare Island in 2017, and made his first hire in April of last year (he now has 200, many formerly minimum wage workers now earning $25 to $30 an hour). And being in the hugely expensive Bay Area meant the startup was at one of the Ground Zeroes of the affordable housing shortage.

The Union OS project (a second has been completed in the factory but has yet to move onsite) has been an eyeopener. “It would normally take a year,” says Holliday. “Instead, there was three months of factory work and three months of site work. We did it at the same time and then the set of boxes took ten days. Four months’ worth of work, but that would easily take a year in site building.”

Superior In Many Ways
Factory_OS thinks offsite construction is actually superior to onsite in many ways. In a side-by-side on its website to facilitate “a shift of mindsets” about the process, it concludes, “Faster time to market, leaner budget, consistent quality, reduced risk, green by design, quiet construction, union supported training and employment and a safer build all translate to homes that can be built 40 percent faster and with a savings of 20 percent over conventional construction.”

Traditional construction is “highly fragmented with many small companies working independently,” while Factory_OS is “vertically integrated for cost-saving efficiencies across the value chain, from innovation, architecture, engineering and design through to the carpenters, tradespeople and onsite assembly crews.”

The company feels traditional construction offers no incentive or resources for construction innovation, but the Factory_OS process has the innovation lab right in its factory and integrated with production practices.

Other offsite advantages it cites include better weather control, better technology, controlled construction schedules, permanent and highly-trained employees and up to 40 percent less waste than onsite building.

Story Contacts:
Carol Galante, Director
Terner Center for Housing Innovation, University of California-Berkeley

Rick Holliday, Co-founder
Factory_OS, Vallejo, CA

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.