Government-backed modular housing trend arrives in Cleveland

Earlier this week, the City of Cleveland and Cleveland’s Site Readiness for Good Jobs Fund announced that UK-based MMY was selected as the City’s preferred modular housing manufacturer, following the award of $2.56 million to support the construction of a new modular housing factory.

The news mirrors a larger trend taking shape nationwide. As local and state governments embrace modular housing as one of many solutions to their housing shortfalls, many are willing to put their money where their mouth is and provide financial support for modular manufacturing facilities in an effort to stimulate more housing production.

The funding for the Cleveland project, which comes in the form of Ohio Historic Preservation Tax Credits, will aid in the redevelopment of the Wellman-Seaver-Morgan Engineering Company building, a historic property located in an underserved area of the city. 

The Cleveland redevelopment

The 185,000-square-foot building, constructed in 1901, has fallen into deep disrepair after being mostly abandoned over the last few decades. Originally used to build ore unloaders, the building will soon serve as a key piece of Cleveland’s housing and economic development strategy. 

MMY is still lining up some of the remaining financing for the estimated $26 million redevelopment project. The builder’s CEO, Robin Bartram-Brown, told HousingWire TBD that financial support from the city and state is crucial to getting a project like this up and running, as the building needs a lot of investment. 

“This is a significant historical building in Cleveland, and the intent of the Site Readiness Fund and of the mayor was always to keep it, but that means that you need a lot of help to be able to do that,” Bartram-Brown said. “It’s a very complex capital stack to bring this building back to life.”

The factory, part of a 350-acre redevelopment initiative called The Midline, is expected to create more than 150 jobs. Beyond that, the facility, at full buildout, would have the capacity to deliver three homes a day, predominantly single-family homes in and around Cleveland. 

The MMY factory, Bartram-Brown said, will feature three production lines aimed at vertically integrating the homebuilding process: a modular housing assembly line, a sub-assembly line that manufactures housing components and a precast foundation line that produces foundation systems.

A broader national trend

This isn’t MMY’s first project in the United States. In 2024, the City of Louisville awarded the company a $500,000 grant and a subsequent $1.2 million in additional funding to develop a modular housing factory in the city. The roughly 100,000-square-foot facility could ultimately build up to 500 housing units per year, according to an announcement from the City of Louisville. 

Elsewhere in the country, many other local and state governments have provided grants, loans, tax incentives and other forms of financial support to help launch modular housing factories.

For example, in March of this year, Philadelphia Mayor Cherelle Parker unveiled a proposed 2027 city budget that would designate $10 million to lure a modular factory into the City of Philadelphia. The proposed funding, part of the mayor’s plan to build 30,000 housing units by 2028, signals that city officials see modular housing as a critical component of their effort to deliver 30,000 new housing units by 2028.

There are other examples from Colorado, where harsh winters, especially in high-altitude mountain communities, can disrupt traditional construction. To mitigate those challenges, state officials have prioritized modular housing as a way to maintain year-round building activity.

In recent years, Colorado has provided millions of dollars to finance the construction of modular housing factories across the state. In 2024 alone, the state awarded grants totalling $9.6 million and low-cost loans totalling $38 million to spur the construction of modular housing facilities statewide. 

One such facility is a new 140,000-square-foot factory in Aurora, CO. Vederra Modular received $6 million in loans and lines of credit from the state to build the facility, which is expected to produce between 500,000 and 650,000 square feet of housing per year. 

Elsewhere in Colorado, the City of Boulder built and now owns a 31,375-square-foot modular housing factory. Flatirons Habitat for Humanity operates the facility in partnership with the local school district. The factory, which builds 1,150-square-foot, three-bedroom net-zero duplex homes, is expected to boost Habitat’s housing production from just three to four homes per year to as many as 50 homes annually. 

Yet another example comes from New England. In 2024, the U.S. Department of Housing and Urban Development (HUD) awarded the Metropolitan Area Planning Council, a regional planning agency in Greater Boston, $3 million to help plan for a new modular construction facility in the region. 

Taken together, these types of public investments suggest that policymakers in various states and cities throughout the country view modular housing as a worthwhile investment. As the national chronic housing shortage persists, many local governments are betting that expanding modular manufacturing capacity can help boost long-term housing production.