Choosing Between a Prefab ADU vs. Traditional Stick-Framed ADU

Construction Options for an ADU
Accessory Dwelling Units (ADUs) continue to be a topic of heightened interest for homeowners and real estate investors.  As the need to have more usable space during a real estate market with scarce affordable housing increases, legislators are easing zoning laws and local building codes.

With relaxed restrictions, more homeowners are taking the next step of exploring which type of construction would be best for their particular ADU needs and usage plans. Should you construct your dwelling using the Traditional Stick-Built method to get exactly what you want? Or would a Prefab Modular Unit make more sense based on time and budget constraints?

For the purposes of this article, we are excluding “Manufactured ADUs“, as we are focusing on structures that are attached to permanent foundations. Also, we limited the scope of prefab modular companies mentioned to those that primarily offer smaller homes better suited for ADU applications. We recognize that there are many innovative prefab modular companies that are focused on larger, multilevel residences.

Traditional Stick-Built Construction
The vast majority of homes in North America are constructed using the traditional on-site, stick-built or lumber frame construction method. There are a number of reasons that homeowners choose the traditional method of home building, one of which is durability. There is no question that stick-built homes have endured for decades, even centuries, and stick-built is a tried-and-true construction method with plenty of skilled professionals that are knowledgeable and well-trained in this type of assembly.

Over the years, the construction industry has seen new innovations regarding the materials used for framing a home on-site. Generally speaking, stick-built frame is what most homeowners have in mind when building a new structure.

Pros of Traditional Stick-Built Construction
The pros favoring traditional stick-framed construction include that it is a proven technology, is highly customizable, offers flexibility, can be easier to finance, and offers higher degree of cost appreciation in the long-term, as follows:

1. Proven:
• The vast majority of houses in North America are stick-built
• Methods have been around for 100’s of years
• Renewable supply of lumber is highly reliable
• Structurally more stable with 16-inch on center spacing of studs
• Low risk of critical structural failures

2. Highly Customizable:
• Can create a design specific to your main house, specific needs, lot and local climate
• More personalized options can be incorporated, like oversized windows, indoor-outdoor spaces with folding doors, large kitchens, basement conversions, wine cellars, etc.

3. Flexible:
• New materials and best-practices can be incorporated on a timely basis
• Changes to the original design can be made mid-project
• Accommodates almost  any plot of land for the build
• Easy to remodel and modify over time

4: Financing: Lenders are comfortable with this type of construction

5. Appreciation: Highest levels of appreciation over time.

Cons of Traditional Stick-Built Construction
The cons attending stick-framed construction include that it tends to be the more costly option, takes longer to construct, is riskier in terms of potential unknowns, and in certain ways may be less convenient than pre-fabricated construction, as follows:

1. More Costly:
• Highly skilled on-site contractors are more costly than off-site factory workers and manufacturing facilities
• With more customization, comes more costs in terms of design, implementation and materials
• Unlike prefab companies, stick-built builders have lower economies of scale in order to reduce costs of supplies and materials

2. Longer Timeframe:
• With more customization, comes longer lead times in terms of design, scheduling, permitting, implementation and materials
• Depending on the local market, availability of highly skilled professionals may be in short supply
• 6–12 months of on-site construction

3. Riskier:
• Stick-Built projects are subject to more unknowns that can increase costs and extend timelines, such as weather delays, unavailability of skilled workers, and design approvals
• More prone to cost overruns and delays due to more options and decisions

4. Less Convenient: When compared to a prefab modular ADU, on-site construction time and associated inconvenience (e.g. noise, mess, scheduling, parking, etc.) will be significantly longer and more pronounced

Prefab Modular Construction
The modular home industry, which began in earnest after World War II, was the preferred method of construction during a time when veterans were returning home and the demand for affordable housing was unusually high. Unfortunately, what resulted has often given the term “prefab” or “modular” a bad name, which has often been synonymous with unattractive designs or poor quality.

Over time, improvements in fabrication quality occurred to the level of becoming a construction method by one of America’s most famous and innovative architects, Frank Lloyd Wright. In 1955, Wright built Kalil House in Manchester, New Hampshire using modular fabrication technique, which has now become part of the permanent collection at the Currier Museum of Art.

Fast forward to the 21st century and we are witnessing a number of innovations within prefab modular construction. These advancements in construction methodology, materials science, design technology, and manufacturing have combined to transform the industry.

Advancement in the space, fueled by aggressive and optimistic investment, is helping to obliterate long-standing negative perceptions of prefab construction (deserved or not), e.g.: poor quality; structural inferiority; and unappealing aesthetics. Many manufacturers of prefab modular ADUs are relatively young and have been focusing on energy efficiency, green building practices and wellness, including maximizing natural light.

Pros of Prefab Modular Construction

1. Less Costly:
• Typically lower cost compared to stick-built homes since they are often built in bulk, using factory efficiency, and shipped out to customers across the country

2. Less Risky:
• Process is more controlled and predictable using machine precision
• No weather delays in the build phase, which helps to control the total build time

3. Less Stressful:
• Can be built off-site, reducing noise and interruptions to your day-to-day life
• Time of noisy on-site construction work is significantly shorter than that of stick-built projects

4. Faster:
• Modular homes can typically be built faster than stick-built homes as the majority of the pieces are already prepared or can be prepared quickly due to their assembly line processes and off-site machinery
• Building in the factory can start at the same time that the on-site foundation work begins, which is not possible with traditional building
• Post-Permit in-factory construction can average in the 8 week timeframe
• On-site installation can average 2 to 4 weeks

5. Greener: Prefab ADUs that are built with strict green building practices, like Blu Homes, will not only have lower energy costs, but will likely have higher resale value

Cons of Prefab Modular Construction

1. Accessibility (Critical):
• Modular structures are not suitable for all sites
• Before proceeding with any prefab modular solution, you will need to have the lot and access points assessed to ensure that the final deliverable ADU can be delivered safely and placed effectively on the site
• The following obstacles could make a lot unfeasible to receive a prefab ADU: utility lines, protected trees, narrow streets, a placement distance too long for a standard residential construction crane

2. Less Adaptable:
• The size of your preferred modular model may not satisfy local requirements for lot size and placement – for example, not having sufficient setbacks between the ADU and your property lines
• Prefab structures are more difficult to modify overtime, such as remodels
• Prefab structures have fewer options than stick-built homes
• Prefab structures may not mesh well with the design of your main house

3. Inspections & Permits: Prefab structures can be more difficult to get approved if your local jurisdiction is not familiar with a builder’s designs, processes or materials

4. Misperceptions of Total Costs: When comparing prefab to stick-built, be sure to include all costs related to the prefab, not just the base price, such as: sales tax, delivery fees, foundation and site work, utility hookups, crane costs, all options and upgrades.

ADU Scenarios to Consider: Variables to consider when choosing between Prefab Modular ADUs and Traditional Stick-Built ADUs:
1. Type of ADU: Detached, Attached, Conversion (Garage, Basement) Junior ADU (<500sq ft)
2. Primary Usage of the ADU: Rental Income; Home Office; Aging in Place; Extended Family
3. Future Plans for the ADU: Will you need flexibility to make changes or not?
4. Time Constraints: 
• Do you need to finish by a hard date?
• Or is it more important to extend the project to make it “perfect”?
5. Budget Constraints: How risk adverse are you in terms of cost overruns?
6. Lot Characteristics:
 • Do you know the ADU size constraints for your lot and jurisdiction?
• Does your lot pose obstacles for delivering and placing a modular ADU?
• What other challenges does your lot pose for any type of construction?
7. Custom Requirements: Can your most important, unique requirements be met by any existing modular ADUs on the market?
8. Regulatory: Local Jurisdiction’s Support of ADUs and Prefab Building.
9. Context: Climate & Weather Patterns.

Scenarios Best Suited for Stick-Built ADUs:
• Design integration of the ADU with the main house is of high importance
• Unique custom usage requirements (aging in place, fitness, professional home office-e.g. Lawyer, Therapist)
• Challenging lot (inaccessible, nonstandard dimensions, steep grades)
• Need built-in flexibility for future usage (e.g. ADA-aging in place, multigenerational, unconventional workspace)
• Restrictive HOA
• Conversion within the main house (garage, basement)
• Attachment to the main house (multigenerational)
• Budget and timing flexibility

Scenarios Best Suited for Prefab ADUs:
• Timeline is critical (e.g. caring for an aging parent)
• Budget is fixed or inflexible
• Primary usage will be rental income
• Prefab vendor already has plans approved by your city
• Lot is sufficiently large and easily accessible
• Current available models meet your design and functional needs
• Project Manager provided by vendor
• Vendor provides end-to-end service with minimal disruption to your lifestyle

Scenarios for a Hybrid Approach
In theory, even the stick-built process has incorporated modular construction for many years, but on a smaller scale. Examples of popular modular components used in traditionally built homes include: cabinets and vanities, windows, roof trusses and door systems.

Here are two additional methods that can help shorten the timeline for stick-built ADU projects:
• City Preapproved ADU Design Plans
• Panelized Construction (wall systems built off-site then reconnected on-site)

Next Steps
Once you have a general idea of what you may want in an ADU and have identified critical questions that need to be answered, we recommend having as many informational calls as possible with prospective vendors and builders.
The first major milestone in your quest to build or buy an ADU is to have your lot assessed. Cursory lot checks can quickly identify if there are any obvious red flags, such as a lot with difficult accessibility, if interested in a modular ADU, for example. However, you will want to have an in-depth lot assessment conducted by a professional to understand technical requirements accurately and needs for your specific lot and jurisdiction.

Fees for this type of service can vary significantly depending on the service provider. For example, manufacturers and builders may charge more than independent consultants, but will credit this fee if you end up signing a contract with them. Maxable Space is a good example of an affordable independent service that helps homeowners navigate the ADU marketplace in California (specifically Los Angeles, San Diego and San Francisco).

When researching and considering your options, we strongly recommend giving more weight to those professionals that have successfully built ADUs within your local community, no matter their method of construction, be they designers, architects, builders, project managers or prefab manufacturers. This is especially important if time is of great importance, as the permitting process can be quite lengthy, if unfamiliar with local ordinances.

Regardless of the build type you choose (prefab or traditional), we absolutely recommend working with ADU Specialists – specifically proven builders who understand all of the nuances of your local ADU building codes, requirements, incentive programs and processes.

Prefab Modular ADU Manufacturers:
• Connect Homes
• ICON
• Mighty Buildings
• Modern Empathy
• Plant Prefab
• Abodu
• Blu Homes
• Dweller
• Habitat ADU
• Honomobo
• Meka
• PrefabADU
• Steelblox

For Further Reading:
• Maxablespace.com offers guidance on the various construction options for ADUs at: https://maxablespace.com/what-type-of-adu-build-is-right-for-you/
• The article, “Manufactured Homes as ADUs and Insights into the Prefab ADU Business Model” by BuildinganAdu.com is at: https://www.buildinganadu.com/adu-blog/manufactured-homes-as-adus
• Flipboard.com has published an article “Choosing Between a Prefab ADU and a Traditional Stick-Built ADU” at: https://flipboard.com/@jpcharfauros/self-improvement-ehvpgnm8z/choosing-between-a-prefab-adu-and-a-traditional-stick-built-adu/a-gR6a7Bu4SCGBZZ9zFqWIKg%3Aa%3A113039674-ce8726e34b%2Fpurgula.com

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