The Vermont Housing Finance Agency (VHFA), Vermont Economic Development Authority (VEDA), and Vermont Agency of Commerce and Community Development (ACCD) have released a joint study exploring the potential of off-site home construction to help meet Vermont’s housing, workforce, and climate objectives. Off-site construction involves building homes in factories, then shipping and assembling them on-site. This method could offer cost-effective solutions for increasing housing availability in Vermont, where the demand for homes is far outpacing supply.

“Manufactured and modular homes are high quality and cost less than on-site construction, bringing down the price and allowing more renters to become first-time homebuyers,” says VHFA Executive Director Maura Collins. “Innovating the building process is one way to slow the growth in the cost of housing development.”

Vermont is facing a critical housing shortage, needing between 24,000 and 36,000 new homes by 2029. While challenges exist in scaling off-site construction, such as limited manufacturing capacity and workforce shortages, state officials see it as a potential solution for increasing home production and addressing workforce needs.

“At VEDA we help finance Vermont’s future, and the future requires building more housing faster than we are today,” says Cassie Polhemus, VEDA CEO. “In addition to providing Vermonters with a place to live, investing in off-site construction could also result in job creation, growth of the construction industry, and enhancing the state’s economy.”

The report acknowledges limitations, such as the initial investment required for new off-site construction factories, and the declining working-age population in the state. Nonetheless, opportunities include potential cost savings, job creation, and accelerated building processes, all of which could support Vermont’s climate and economic goals.

“This report represents the beginning of a conversation looking for wholistic, creative approaches to increase supply and lower costs as we tackle our decades-in-the-making housing problem,” says Alex Farrell, Commissioner of the Department of Housing and Community Development, within ACCD.

In addition to off-site construction exploration, Vermont is already working on other housing solutions, including the Homes For All initiative, and regulatory changes to facilitate building more affordable housing.

Off-site construction could be key to addressing Vermont’s housing challenges, providing cost-effective, faster solutions while fostering job growth in the state's construction sector.