In an effort to make more inexpensive housing quicker, Colorado officials are looking at modular homes — housing that’s typically constructed in a factory and later assembled on site.
They also want them built in Colorado.
Gov. Jared Polis, Colorado’s economic development office and the state housing financing authority this week announced loans for eight developers to build 4,755 modular homes annually across the state, including in Denver and Aurora.
The loans amount to nearly $38 million with below-market interest rates, state officials said.
The loans went to three longtime housing manufacturers in the state, two Colorado startups and three out-of-state recruits, state officials said. Together, the companies will create 1,280 jobs in Colorado.
Littleton-based Huron Components and California’s 3D home printer Azure Printed Homes will build units out of Denver, state officials said. And Vederra Building Systems will redevelop a factory in Aurora to support building more energy-efficient modular homes, the company announced Friday.
“The funding will bolster employment opportunities as well as a pipeline of affordable housing,” Colorado Housing and Finance Authority Executive Director and CEO Cris White said in a news release, “providing more Coloradans with the opportunity to thrive.”
The money for the loans came out of the Innovative Housing Incentive Program ($20 million) and the Affordable Housing Financing Fund ($18 million). The companies selected will build panelized homes, tiny homes, kit homes, and 3D-printed homes.
The other companies — Adoba Design, Fading West, Timber Age Systems, VillaLife and Guerdon — will have operations in Pueblo, Buena Vista, Durango and Florence.
“This is an important part of our work to increase Colorado’s housing supply and make sure our state has nice housing for every budget,” Polis said in a statement.
The state is grappling with high housing costs as most homes sold for more than $500,000 in January and nearly $600,000 in the metro Denver area, according to the Colorado Association of Realtors.
And the more-affordable option, modular homes, are more expensive in Colorado because a majority are made out of state.
About 88% of factory-built homes in 2022 came from outside of Colorado, according to state data.
The losses for Colorado are in the hundreds of million dollars from delivery costs, state revenue and potential jobs, according to the news release. The cost of a modular home built outside of Colorado is 8% higher because of shipping.
Nathan Peterson, CEO of modular home builder Vederra, told The Denver Gazette that Colorado lost many modular home factories after the 2000s housing crisis put them out of business.
Now, he said, Colorado is trying to catch up to demand.
Colorado modular homes made up 1.5% of the market, state data from 2022 shows, when the national average was 4%.
“Our utilization is rather low because we don’t have any factories that are here,” Peterson said. “It’s hard to figure out modular housing when you have to do it from five states away.”
Huron Components got a loan worth $8 million to build 2,000 homes in a year out of the metro Denver area.
Azure Printed Homes, one of the first companies to 3D print homes with recyclable materials, received nearly $4 million to build more than 350 tiny homes out of the city of Denver, according to state officials. The company can bring its printing technology to smaller pop-up sites to build many homes near its destination.
“We look forward to robotically 3D printing our homes all year round in our uniquely efficient and sustainable way to make affordable housing a reality for more Coloradans, creating a more sustainable future for the state,” said Ross Maguire, Azure Printed Homes co-founder and CEO, in the release.
The state gave Vederra a $6 million loan to build 316 units, or 500,000 square feet of housing each year out of Aurora. Its City Council passed a resolution earlier this week to designate modular housing as its own category of housing and make it easier to build more by reducing city fees.
Councilmember Francoise Bergan, who proposed the resolution, said she hopes Aurora’s position on modular homes can set a “gold standard” for the rest of the state.
The Vederra 110,000-square-foot factory in Aurora, which will prioritize building for affordable housing organizations, is expected to generate $138 million for the economy annually, state officials said. Peterson said the redevelopment would make it Colorado’s first factory to build net-zero homes that meet Department of Energy certification standards.
Vederra is scheduled to start building homes in the third quarter.
With new companies entering the Colorado market, Peterson said he’s not worried about competition because of how far behind the state is with modular homes. And the loans for companies like his will help.
“We could probably have seven or eight factories here,” he said, “and they wouldn’t be stepping on each other’s toes.”
