Santa Monica project points the way to easing California’s housing shortage

A few days ago, Santa Monica’s city and civic figures ceremonially opened a 13-unit apartment complex called Berkeley Station for low-income families and young adults – exactly the sort of housing that California needs the most.

It is remarkable in two respects.

Its location in one of the state’s most affluent coastal cities is one notable aspect. Other coastal cities have been notoriously resistant to high-density projects for low- and middle-income residents —Huntington Beach and Half Moon Bay being two examples.

“Berkeley Station is proof that Santa Monica can take on the housing crisis with urgency and results,” said Santa Monica Mayor Caroline Torosis.

Berkeley Station’s other notable feature is that it consists of modular units that were constructed in a factory an hour’s drive northeast of Santa Monica and assembled on site in just three days.

For years, housing experts have cited modular construction as a way for California to accelerate development and tame chronically high building costs.

A recent study by UC-Berkeley’s Terner Center for Housing Innovation declares that modular construction could reduce costs for apartments that “in California typically exceed $400,000-$500,000 per unit and are even higher in the high-cost metro areas where housing needs are most acute.”

Berkeley Station doesn’t break new ground on the financial front. It cost $1 million per unit, most of which was a loan from the city. But its pathway, starting out as an on-site project and later morphing to modular, is at least partially responsible.

“We were able to build the onsite elements at the same time as the offsite elements, so that saved time. Overall, this process is taking about nine months, whereas normally if we were building everything ground-up on the property, that would be about 20 months,” said Tara Barauskas, executive director of the Community Corporation of Santa Monica, the project’s sponsor.

The key to making modular construction more cost-efficient would be adopting it more fully, thus achieving economies of scale. That would involve changing some state laws, persuading housing lenders to be more accommodating and overcoming resistance from construction unions.

While construction using public funds, such as the Santa Monica city loan, is required to pay workers state-determined “prevailing wages” — in reality, union wages — using actual union members is not required by law. However, unions press local officials and state legislators to require projects to have union labor commitments.

Three years ago, when a modular apartment project was being built in San Francisco, the head of the local construction trades council, Larry Mazzola, called it “crap, basically,” and declared “We’re going to fight vigorously with the city not to do any more of these.”

By happenstance, as Santa Monica was opening Berkeley Station this week, one of the state Legislature’s most vociferous advocates of modular housing was showcasing a package of three bills to make it less difficult.

Assemblymember Buffy Wicks, an Oakland Democrat who chairs the Select Committee on Housing Construction Innovation, spent much of the Legislature’s fall recess last year touring modular projects, in other states and other nations, and talking to various interest groups, including unions.

“As nerdy as it sounds, I’m now a subject matter expert on prefabricated housing — to the point that factories as far away as France are reaching out to my office to offer their insights,” Wicks said.

The three bills that she and other legislators introduced would make building codes more modular friendly (Assembly Bill 306), would bar local governments from using building codes to block modular housing (AB 1815) and would make it easier to transport modular units on the state’s highways (AB 2012).

The package is a test of whether California is serious about building more housing more efficiently, or if it’s just paying lip service to solving the crisis.