A tale of two houses: Manufactured homes and industrialized construction in the U.S. and Sweden

Abstract

Communities in the U.S. face an intensifying housing affordability crisis driven in part by rising construction costs, skilled labor shortages, and stagnant productivity in the building industry. Many researchers and policymakers point to industrialized construction (IC)—the application of manufacturing methods to the building sector—as a framework for expanding production and reducing costs. The history of IC in the U.S. is marked by ambitious efforts with mixed results, including manufactured “HUD Code” homes as well as resurgent investment from private capital in recent decades. Countries like Sweden, on the other hand, have successfully integrated IC methods into their national housing strategy. This commentary traces the parallel tracks of the manufactured housing and IC sector in the U.S., contrasted with Sweden’s long trajectory towards a mature IC ecosystem. Four key takeaways stand out for the U.S. housing market: the value of the “triple helix model” for coordination between government, academia, and industry; the importance of strategic government interventions that do not “choose winners”; the effectiveness of building code harmonization in unlocking scale; and the potential to vertically integrate key business functions within a company to optimize the benefits of IC. Ultimately, this commentary highlights areas for synergistic and systemic shifts in the public and private sector to leverage IC methods as a part of the solution to the U.S. housing crisis.

Introduction

Communities across the U.S. continue to face a housing affordability crisis caused in part by the high and rising costs of construction that constrain new supply. Many factors contribute to the cost increases, but prominent among them are a worsening construction labor shortage and long-stagnant productivity in the building industry. Lengthy and uncertain entitlement and permitting timelines, fragmented building codes and uneven enforcement, and financing structures resistant to change all create further friction and inefficiency in housing production.

Against this backdrop, many researchers, advocates, and entrepreneurs argue that industrialized construction (IC) offers a compelling framework for modernizing the industry and reducing costs. IC refers generally to the application of concepts and methods from manufacturing to the building industry (Lessing, 2015). A range of terms and ideas fit under this broad definition: prefabrication, off-site construction, factory-built housing, manufactured homes (MHs) — which are built to federal “HUD Code” standards and which we discuss in this special issue—volumetric modular building methods, and panelized building methods, among others. ¹ IC methods can use predominantly manual labor with little to no automation, or advanced technology such as robotic arms on mobile gantries.

To varying degrees (depending on the specific production methods), IC approaches offer a number of potential benefits: time and cost savings, improved construction quality, increased worker safety, higher quality of life, greater material efficiency, and reduced waste, among others. The evidence base for these benefits is somewhat limited, but precedents in the U.S. and abroad reflect the potential role these approaches can play in the housing industry (Smith et al., 2023). Within the U.S., the MH sector is a longstanding and prolific proof point that: (1) off-site assembly can offer meaningful reductions in the time, cost, and labor needed to deliver new housing and (2) these savings can be passed onto households to create unsubsidized, naturally affordable housing opportunities (Herbert et al., 2023).

Outside the U.S., in countries like Sweden, Japan, and the United Kingdom, IC methods play a significant role in national housing strategies by providing capacity, quality, and efficiency to their building industry (Bertram et al., 2019). Sweden in particular has hosted a number of international delegations with representatives from governments and businesses to learn about their IC industry. This is due in part to market and regulatory dynamics that offer salient lessons outside of Sweden, including targeted government interventions and cross-sector collaborations with researchers and industry groups.

In recent decades, both private and public sector actors in the U.S. have fueled a resurgent interest in IC methods to address housing supply challenges nationwide. Large investments in new factories, software tools, and other technologies like 3D printing demonstrate the wide variety of emerging approaches to IC. Systems-level strategies to improve and expand the IC sector are still evolving, but many reflect precedents set by the MH industry and international markets like Sweden where IC approaches consistently provide a significant share of new housing stock. Successful interventions in Sweden include regulatory reforms to building codes, permitting and inspection processes, financing mechanisms from industry and government entities, and other key levers. Simultaneously, the renewed push for IC in the U.S. brings the already-existing MH industry into stronger focus for policy reform, investment, and market expansion (Waters et al., 2025).

This commentary briefly examines the uneven advancement of IC in the U.S. and Sweden, considering how these paths compare. The parallel stories offer lessons for better coordinating the policy and practice of MHs and other IC approaches in the U.S., which may be an important part of developing solutions to ongoing housing crises.

U.S.’ divided efforts

Prototypal “kit homes” arrived in the early days of U.S. urban industrialization. Aladdin Homes offered toolless construction kits delivered to individual households and early mass builders using do-it-yourself on-site assembly; and Sears offered similar products that saw the construction of thousands of units in the early 1900s and through the Second World War (Aladdin Catalogs, n.d.). Sears shut down its kit home line in 1940 (Thornton, 2002) but Aladdin Homes continued fabrication until 1981, benefiting from an increased housing demand after the Second World War triggered by a large number of returning veterans, interstate highway construction, and suburbanization (Aladdin Catalogs, n.d.; Thornton, 2002). These two companies alone supplied approximately 150,000 homes between 1906 and 1981. During the 1950s and 1960s, homes using varying degrees of prefabrication continued to gain popularity as they provided an entry point to home ownership for households of various sizes and incomes. By the early 1970s, another form of prefabricated homes—colloquially referred to as “mobile homes” because some typologies included homes on wheeled chassis—supplied up to one third of all new single-family homes in the U.S. (Horwich, 2025). Responding to this proliferation of housing products with inconsistent quality standards and the concurrent housing market challenges, the U.S. Department of Housing and Urban Development (HUD) launched an ambitious program to spur industry-wide improvements.

Operation Breakthrough

In 1969, Operation Breakthrough launched as the most ambitious effort ever undertaken in the U.S. to industrialize housing production. Spearheaded by HUD Secretary George W Romney, the initiative was, in his words, “not a program designed to see just how cheaply we can build a house, but a way to break through to total new systems of housing production, financing, marketing, management, and land use” (HUD User, 2023). The program was designed to respond to many of the interrelated challenges that, unfortunately, continue to constrain housing delivery today: rising costs, stagnant productivity, and persistent labor shortages. The logic was clear: conventional on-site construction could not scale quickly or efficiently enough to meet demand, and a shift towards factory-based, systemized production (i.e. IC methods) presented a promising solution (Figure 1).

Figure 1.

Selection of Operation Breakthrough demonstration homes (1972).

Operation Breakthrough advanced an experimental three-phase agenda that cast a wide net across methods, materials, geographies, and typologies. In Phase 1, 22 housing systems were selected by HUD, ranging from precast concrete and wood-framed modules to units constructed largely of plastic and metal. In Phase 2, these systems were tested at nine sites across the country, resulting in the construction of more than 2900 prototype units. Phase 3 was intended to scale the most promising methods to high-volume production but fell short, delivering only 18,000 of the 25,000 units originally envisioned. In addition to the technical and financial challenges faced by several of the participating companies, an influx of investment and government subsidies into real estate boosted production of conventionally constructed housing across the country. Nationwide housing supply rose to its highest mark in over 20 years, undermining the urgency of Operation Breakthrough’s goals, and HUD abandoned the program soon after (Potter, 2024).

Operation Breakthrough ultimately failed to achieve its original transformative ambition of establishing a healthy IC market. Federal funding and political support were withdrawn in the early 1970s, leaving participating manufacturers without the capital or market support needed to transition from prototype to mass production. In the rush for speed and scale, quality control and consumer acceptance lagged at several of the pilot sites, resulting in structures that did not withstand the test of time, reinforcing a stigma around factory-built housing that persists today.

The HUD Code

The most lasting outcome of Operation Breakthrough was the creation of the National Manufactured Housing Construction and Safety Standards Act of 1974, establishing the HUD Code for manufactured housing.

Since the creation of the HUD Code in 1974, approximately 9 million MH units have been produced across the U.S., and today they house more than 18 million U.S. residents, often offering a relatively affordable form of homeownership (Rumbach et al., 2025). ² MHs account for approximately 15% of all rural homes and 10% of new single-family home starts in the U.S. annually (Choi and Goodman, 2020; Manufactured Housing Institute, 2023). Altogether and without direct public subsidy, housing produced to the HUD Code has supplied more units than all other forms of federal housing subsidy and assistance (including Low-Income Housing Tax Credits and housing vouchers, the two largest federal programs) combined. ³

MHs often serve as the lowest-cost ownership option due in part to the streamlined IC methods employed in their production (Herbert et al., 2023). However, these homes are often treated as second-class assets that face additional regulatory and social acceptance hurdles compared to conventionally built homes. Local governments use land-use regulation to exclude, limit, or condition the placement of MHs and mobile home parks within their jurisdictions (Rumbach et al., 2022). Other costs to new housing such as development impact fees often disproportionately disadvantage MH providers whose clients are particularly cost sensitive. A common symptom and consequence of these barriers is that MHs are often sold as personal property to households that lease the ground underneath. This lowers the entry cost for MHs but undermines a household’s ability to obtain a conventional mortgage, build wealth, and—ironically—attain greater housing mobility (Rumbach et al., 2025).

MHs in the U.S. represent an important segment of new housing supply and provide a durable source of affordability. Recognizing their scale, understanding their regulatory encumbrances, and leveraging their strengths are important in advancing a broader IC strategy. However, the stigma creep of MHs still impacts new companies pursuing factory-based production, including those that produce homes meeting local codes rather than the HUD Code. This further complicates the embrace of more modern IC approaches.

Modern resurgence: Contemporary IC in the U.S.

The current landscape for IC in the U.S. is complex, diverse, and uncertain. This is partially because of the lack of consistent vocabulary, and what “counts” as IC. Some define IC narrowly, only including units that are made almost entirely within a factory setting as volumetric modules or closed-panel systems with integrated mechanical, electrical, and plumbing components. Others define IC more broadly, encompassing simple prefabricated trusses and kitted electrical subassemblies which are already commonly used in conventional building. The result is a blurred and fragmented understanding of what constitutes IC in housing delivery. For example, the Housing Innovation Alliance’s Off-Site Heat Map identifies nearly 1500 “off-site construction service providers” ranging from factories producing nearly finished homes to modest component suppliers of truss frame systems for projects completed predominantly on site (Housing Innovation Alliance, 2026). Across many definitions, however, the MH sector tends to be excluded from the otherwise-broad umbrella of IC methods.

By most estimates, homes produced using IC methods—excluding MHs—comprise a small share of annual housing starts in the U.S.: likely around 5% of new multifamily units (Modular Building Institute, 2025), and around 3% of new single-family houses (National Association of Home Builders, 2025). Including MHs would raise that number to 15%–20% of all new residential stock. This proportion more closely approaches those found in other countries often cited as having advanced IC ecosystems, such as Japan (Bertram et al., 2019).

What the contemporary resurgence of IC offers compared to the incumbent MH industry, then, is innovation and attention. In the last 15 years, billions of dollars of private investment from venture and other investment capital have funded a broad range of IC companies. These ventures vary considerably in their business models, with some pursuing vertical integration of multiple business functions while others provide services or products to developers, general contractors, or material suppliers as their primary clients. They reflect diverse technological approaches, including the use of advanced automation and robotics, 3D-printed structures, and sophisticated digital and software tools including the use of artificial intelligence and generative design. They reflect a range of market segments, including single-family homes, accessory dwelling units, remote short-term rentals, and low-, mid-, and high-rise multifamily buildings; and subsidized affordable and market-rate units; from California to Texas to Montana to North Carolina to Florida (Bartlett et al., 2020; Pullen et al., 2019). Across these various approaches and strategies, there are both successes and failures, and the IC sector writ large in the U.S. does not yet have the maturity or consistency achieved by the manufactured housing industry or the IC sector in Sweden (Decker, 2021; Pullen, 2022; Pullen et al., 2019). To contextualize the place of MHs within the broader IC sector in the U.S., we turn next to analyzing the emergence and contemporary state of IC in a country that is often viewed as a positive example for IC integration.

The long tail of Swedish IC

The first clear examples of prefabricated houses in Sweden were designed by the architect, professor, and military officer Fredrik Blom in the early 19th century as an assignment from the Swedish King. In the early 1820s, two portable houses were erected on a military practice field and at Rosendal castle in Stockholm. By 1823, 22 houses had been built using this method, some of them with two storeys. Several were even successfully moved multiple times after their original installation. Blom’s houses received international attention in English and French publications in the 1830s and 1840s. By then, 140 such buildings had been built, with the building parts manufactured in the factory in Stockholm (Peyronson, 1995).

Several additional companies began to manufacture full units in the latter half of the 19th century, including one started by PJ Ekman, Blom’s apprentice. Some of these units even won awards at international exhibitions in the U.S., Canada, and Europe (Lawn, 2015). In 1907, the manufacturer Fogelfors Bruk presented a series of standardized house models in a catalog using their prefabricated timber frame system—around the same time as companies like Aladdin Homes and Sears in the U.S. also offered housing products via catalogs (Jacobson, 1965). The company still exists in Sweden under the name Attacus Trähus and is still located in the village of Fogelfors.

These early representative examples introduced the ideas and potential advantages of IC methods in the Swedish market, but broader adoption required additional motivating factors.

Proliferation of preapproved housing and kits

By the First World War, the cost for building materials had increased and housing production had declined, resulting in a deficit of houses and an increase in rents. In response, Sweden’s government conducted a formal investigation into the building industry and identified an urgent need to increase quality and quantity in housing production through industrialization. It also advocated for subsidies for apartment construction and regulation of rent. In 1918, Sweden launched a national standardization project to harmonize the dimensions of timber boards and other building components (Björk et al., 2009). This initiative became crucial for the development of the single-family home building industry in Sweden.

As an example, AB Industribostäder (“Industry Houses” in English) started up in 1918 to design a series of model houses for workers using standardized parts. Despite not owning the production or assembly, their houses were more energy efficient and could be built in half the time of traditional homes. In 1922, the governmental authority Statens Byggnadsbyrå gathered the collective industry knowledge on housing design and delivery and published a series of model houses for open use. This initiative was a key starting point for several house-building companies that began to manufacture building elements in factories, some of which are still active a century later (Björk et al., 2009).

In the 1920s a housing co-op company—HSB—was founded and developed a series of standardized apartment layouts around the Second World War. Approximately 12,000 apartments used these standardized designs (Engfors, 1987) and HSB is still today a dominant actor in the Swedish housing market. Though the 1950s saw an increase in the number of apartments built overall, the building industry suffered from a shortage of workers and stagnant productivity. Innovations in precast concrete building components reduced onsite construction time and saw modest adoption. Companies like Ohlsson and Skarne innovated with extensive use of additional prefabricated elements, pre-packed components, and mechanization at the construction site (Marmstål, 1992; Skarne, 1987).

The Million Homes Program

In 1965, in the face of persistent housing undersupply, Sweden’s federal government launched the Million Homes Program. The goal was to spur the production of 100,000 new apartments per year over 10 years using various strategies. Most notably, developers could access favorable government loans for projects of more than 1000 apartments, and construction firms could access loans if they invested in machines and equipment for more efficient production (Hall and Vidén, 2005).

To take advantage of the incentives and meet the ambitious production goals, several construction companies developed their own building systems and production methods including the use of prefabricated structural, roof, and facade elements. Some firms also pursued plumbing and electrical subassemblies, in-factory installation of windows and doors, and prefabricated interior casework (Adler, 2005; Figure 2).

Figure 2.

Assembly of prefabricated concrete elements in a multi-family residential project, Sweden, during the 1960s.

Approximately one third of the units built under the Million Homes Program were in low-rise (two-to-four-storey) apartment buildings, another third comprised mid-rise (five-to-nine-storey) apartment buildings, and the final third was made up of detached single-family units. Use of IC methods grew during this period, including uptake for roughly two thirds of single-family housing, but it still made up a limited proportion of the housing industry overall (Gabrielson and Ringmar, 1970).

In some respects, the Million Homes Program succeeded to a fault: relative demand for new apartment buildings declined by the 1970s due to excess supply, and some of the largest housing projects received critique and stigma for concentrating lower-income households in units perceived to be of lower quality (due partially to unpopular aesthetics). As a result, many of the building and production systems developed to support apartment buildings for the Million Homes Program struggled to reach a level of maturity that would allow them to be competitive and profitable (Lidelöw et al., 2015). The demand for single-family homes, on the other hand, remained strong, due in part to favorable government loans for home buyers and the increased buying power of stably housed residents. As such, many companies in the single-family housing market continued to utilize IC methods well after the end of the Million Homes Program (Gabrielson and Ringmar, 1970; Figure 3).

Figure 3.

Manufacturer of volumetric elements in a Swedish factory during the 1960s.

Swedish wood: Building to new heights

Sweden joined the European Union in 1995, resulting in a major change to Swedish building regulations. This included a shift towards functional, performance-based requirements instead of prescriptive building codes. After a great fire in the city of Sundvall in 1888, restrictions on the use of combustible material in structural framing led to a strict ban on wood-framed buildings taller than two storeys high. The adoption of performance-based codes when Sweden joined the European Union lifted this ban and permitted the use of any material and method so long as they fulfilled functional requirements of fire safety, acoustics, vibrations, and structural stability.

This building code regime change unlocked the potential of taller timber-framed buildings already in use in the U.S. and elsewhere, inspiring cross-border research and several study tours from Swedish delegations (Alsmarker, 1993; Eriksson, 1993; Miller et al., 1994). Related pilot projects in the late 1990s marked the start of contemporary wood-based construction in Sweden, which became closely linked to the success and adoption of IC methods.

A familiar trend resurged in the 2000s: alongside issues of quality and working conditions, rising construction costs kept housing supply from keeping up with demand and prompted the Swedish government to again investigate solutions. The resulting report identified technical solutions and production methods, interdisciplinary and interorganizational collaborations, and supply chain improvements as important areas for the industry to prioritize (Byggkostnads-delegationen, 2000). IC methods, then, returned as part of the solution.

Several of Sweden’s major construction companies responded to the criticism and launched ambitious programs aimed at expanding their use of IC methods through off-site factory production. Some small- and medium-sized companies started to develop building and production systems that required fewer resources, committing to a higher degree of market specialization and tailored concepts for specific building types (Lessing, 2015). With a variety of approaches, so began the path to maturity for Sweden’s IC ecosystem.

Contemporary IC in Sweden

The IC sector has developed substantially in Sweden since the beginning of the new millennium. An important contributor to this success is the “triple helix” model, comprising close collaboration between industry, academia, and the public sector (Etzkowitz, 2008). Under this model, researchers help establish a shared language through practical theory and frameworks, industry actors test and adjust these based on experience, and this learning informs policy and other public initiatives. In practice, university professors and students maintain close relationships with active IC companies to continuously seed relevant and timely research, while government actors often provide a link to both through regular pilot initiatives and research funding. These positive feedback loops depend on open collaboration and knowledge sharing between stakeholders, including those that would otherwise be competitive with each other.

The areas of research and development span several key areas, including (Stehn, 2013):

• Technical and design-oriented processes: Structuring and refining building systems to better design for manufacturing, transport, assembly, and disassembly;

• Production capacity: Manufacturing principles and methods, including equipment and other technologies for automation and production flow;

• Digitalization: Systems for improving and integrating workflows between design, manufacturing, procurement, and on-site assembly; and

• Business models: Strategic aspects of IC as a different business logic than traditional construction with specific value offerings and customer segmentation.

As a result of progress in the above areas, three primary segments have emerged, reflecting distinct types of products and production systems: (1) single-family houses as products, (2) product-oriented IC for multifamily housing, and (3) project-oriented IC for multifamily housing. These segments are described in the sections that follow.

Single-family houses as products

The single-family housing industry reflects many decades of shifting towards IC methods, and several companies now leading this segment were founded between 1920 and 1940. These firms anchor themselves to industrial principles of standardization and product (rather than project) orientation. As a partial result of the consistent long-term demand for single-family housing in Sweden, roughly 80% of all detached homes use IC methods. The large degree of market penetration has both resulted from and enabled a greater variety of production methods and a more closely tailored product fit compared to the multifamily IC segment; these companies often embrace a high degree of specialization, tightly aligning their production process with the desired building typologies, layouts, and degree of customization to fit their specific customer segments (Figure 4).

Figure 4.

Factory production and site assembly of wall panels and roof trusses for single-family houses.

Roughly 15 companies lead the single-family market, but there are many smaller active producers filling certain niches. The largest companies can produce 1000–2000 houses per year. Panelized systems are most commonly used when the building product benefits from some customization, and they co-exist with volumetric modular approaches, which are more often used to produce higher-volume, lower-cost units. The production facilities themselves range from advanced and highly automated factories to primarily manual production with low automation (but still in a factory setting). Regardless of the degree of automation, tight factory logic underlies the production strategy: well-structured production flows that utilize work stations, tight material flows, and standardized technical solutions curated to the specific output (Figure 5).

Figure 5.

Site assembly and examples of finished single- and double-family houses.

Product-oriented IC for multifamily housing

Several companies have developed specialized, IC-forward concepts for specific niches within the multifamily housing market such as workforce, middle-income, and student housing. Many of these represent vertically integrated models controlled by a company owning the value chain from design through manufacturing, transportation, and on-site assembly. Some companies even develop their own projects, including land acquisition, neighborhood and urban planning, unit sales, and facility management. Many of these companies produce their units via IC methods in order to control cost, quality, lead time, and other factors. Factory production of volumetric elements (modules) is most common, but some companies use panelized systems to enable more design customization (Figures 6 and 7).

Figure 6.

Manufacture of volumetric elements in an automated factory with a high degree of prefabrication.

Figure 7.

Volumetric elements placed for four-storey apartment buildings to dramatically compress construction schedule.

Roughly 10 companies dominate the market for product-oriented multifamily housing, which, together, provide 15%–20% of new multifamily units in Sweden. These companies and the volume of their housing output have grown considerably in the last 10 years following significant company investment into production facilities.

Project-oriented IC for multifamily housing

Project-oriented concepts represent the rest of the multifamily market, hemming more closely to conventional methods based on the need for more unique and flexible designs. However, in Sweden, even these projects tend to use consistent building systems, using a higher degree of prefabricated elements relative to other countries. Projects typically use prefabricated components for the structural frame, roof, facade, balconies, and stairs, with precast concrete panels dominating the market (Figure 8). Projects also commonly use fully assembled bathroom pods. In Sweden, 15–20 precast concrete firms are responsible for supplying the majority of the multifamily market output and act as suppliers to various construction companies. Many of these companies have their roots in the strong multifamily housing development of the 1960s, and their lack of vertical integration is a partial result of their preference to reduce risk and vulnerability to the market downturns evident after the Million Homes Program.

Figure 8.

Precast concrete panels used in combination with bathroom pods to achieve schedule compression.

Mass timber panels have grown in popularity as a low-carbon alternative in recent years. Heavy investments in at least four factories—three new and one existing—have bolstered the in-country capacity for cross-laminated timber production, including a growing export market throughout and beyond Europe.

A combined lens: Key takeaways from Sweden’s IC experience

IC methods already play a significant role in the housing markets of both the U.S. and Sweden. The continued undersupply of new housing in the U.S., however, has brought increased attention to the potential of expanding MH and other IC approaches in recent years. Many entrepreneurs and a growing number of government agencies believe IC methods are a key part of solving the housing crisis by providing additional capacity and greater efficiencies in cost, material, time, and labor. In that way, many of the housing and building industry dynamics motivating IC adoption—and making it difficult—resonate between the U.S. and Sweden. Both countries see IC methods as a tool for building housing more quickly, more cost-effectively, and to a higher quality, while improving safety outcomes for the workforce. With skilled labor shortages and rising housing costs in both countries, these desired benefits are significant motivators.

But beyond the basics, several key lessons about Sweden’s success are relevant to MHs and the broad IC sector in the U.S.

Takeaway 1: The triple helix model of collaboration is effective

The system dynamics of the building industry create a difficult landscape for large-scale innovations—such as IC methods—to navigate, highlighting the need for broad engagement of many public and private housing sector actors. There are knowledge siloes, fragmented decision-making protocols, unpredictable permitting and financing dynamics, a lack of standardized zoning and building codes and enforcement, and a general culture of fiscal conservatism.

No single stakeholder is responsible for stewarding these innovations, so success depends on collaboration within and across actors. The learning curve required for success makes markedly positive outcomes unlikely on the first project. But the project-based nature of the industry means that different stakeholders will have to restart that learning curve on the next project. A new company or innovation thus cannot build the evidence base to de-risk the model and approach, especially given the long timescales of housing projects. Without the evidence base, securing a sufficient pipeline of clients and projects to sustain capital-intensive IC operations long term is very difficult.

Overcoming these barriers requires action from government agencies at local, state, and federal levels, as well as from companies of various sizes, and offers many opportunities for cross-cutting research. These friction points apply to all IC efforts (including the MH sector) but may be more pronounced for non-MH projects because they are subject to the same complex tapestry of regulation and industry fragmentation of conventional construction methods. By comparison, the MH sector is more tenured and consolidated than other IC approaches in the U.S.

There are few reliable interventions that can disrupt existing dynamics, but Sweden’s creation of positive and continuous feedback between industry, government, and academia (the triple helix) seems functional and worthy of imitation. While any industry could benefit from this model, the building industry seems to suffer significantly from disjointed efforts: academic research detached from industry implementation, and errant policy directives.

The U.S. would benefit from more coordinated state or regional initiatives given its scale relative to Sweden. Unfortunately, this is where some aspects of Sweden’s triple helix ecosystem do not map directly onto the U.S. context. Who should start or anchor a triple helix-like system, and how can it be sustained? In Sweden, key players include a national network of public housing authorities, several universities and professors guiding collaborations with industry, and regional economic development plans that explicitly support IC entrepreneurship, among other programming.

In the U.S., HUD is the primary influence on many aspects of the MH sector, while state agencies typically administer in-factory inspection programs for other housing units produced with IC (and especially modular) methods. The on-the-ground implementation of such programs often comes down to layered and contextually specific interactions with local and regional actors. These topics would benefit from more research and shared understanding, as they suffer from a lack of industry and consumer familiarity and persistent frictions and misconceptions (e.g. about eligibility, jurisdictional authority, etc.). In the U.S., a small number of universities and programs are focusing more curricular content and research on the IC sector. However, these efforts remain relatively modest and disconnected, and could benefit from stronger regional or national programming to allocate resources and coordinate research and knowledge sharing. Additional support to prioritize research based on industry and policy goals could be a key enabler for the MH sector and the IC market writ large.

Recent outputs such as HUD’s Offsite Construction Research Roadmap lay out several relevant threads for industry, research, and policy work at various geographic scales (Smith et al., 2023). However, recent funding opportunities from HUD intended to align with the roadmap—which could have catalyzed triple helix-like pathways for collaboration—did not ultimately award any of the submitted research proposals. Philanthropic capital may present unique avenues for establishing such an ecosystem in the U.S. but also risks spawning even more disjointed efforts.

Takeaway 2: Government intervention must be strategic

The histories of Sweden and the U.S. (through Operation Breakthrough and the Million Homes Program) illustrate the importance of intentional and sustained government support in transforming the housing industry. In some ways, intentional and strategic interventions are a natural outcome of the triple helix model. Sweden’s early examples of innovation, knowledge coalescence, and acceleration through government-led standardization demonstrated an important precedent for efficiently shifting Sweden’s housing market towards industrialization.

More specifically, Sweden’s government directed resources into research to diagnose the problems of housing industry performance. This included holistic, industry-wide studies spotlighting stagnant productivity as well as specific projects exploring the feasibility of taller wood construction. It launched outcome-based programs like the Million Homes Program and performance-based building codes that enabled but did not require IC methods based on the acute and long-term needs for housing. Notably, the government did not “choose winners” by favoring specific building methods in policy or financing, or by granting significant subsidies to companies to set up large, new IC factories.

In the U.S., the development and implementation of the HUD Code for MH represents a proven, cost-effective, and high-impact mechanism to scale IC methods. However, the MH industry suffers from friction in financing, siting, and local zoning and building code barriers that could be addressed through stronger coordination within and between governmental agencies across different levels of government. For example, many MH residents still have difficulty accessing traditional mortgage products due to strict definitions and terms from governmental agencies like the Federal Housing Administration. Federal attempts to eliminate de facto local prohibitions of MHs in many municipalities (e.g. through indirect means like limits on roof pitch or detached garages) have had limited success due to weak enforcement or unreliable recourse for residents demanding proper implementation of federal mandates by their jurisdiction. Some state agencies with programs for in-factory inspection offer inconsistent language and definitions between MH units versus other factory-produced units, and local building officials can still stall or complicate projects.

Across MHs and the IC sector more broadly, government-led education could be an important opportunity for strategic progress. A robust investigation to benchmark the status quo of building industry performance could diagnose problems and set targets for improvement. Better documentation and aggregation of data on construction costs, schedule outcomes, and workforce data could allow government agencies to host trustworthy information and metrics. Many existing data sources are private, expensive, biased towards particular industry groups, and often opaque in their sourcing and cleaning methods. Establishing a more transparent, neutral, and integrated hub of housing construction data could inform more efficient and effective government interventions.

Takeaway 3: Code harmonization can be transformative

Sweden’s progress on building code reform is worth highlighting on its own. In particular, the shift to performance-based building codes in the 1990s unlocked the construction of taller wood-framed structures and many attendant IC methods. The new building code regime put Sweden in alignment with other countries in the European Union, establishing a shared framework and metrics for assessing factors such as structural strength, fire safety, and energy efficiency. In addition to the benefits of adopting an established Eurocodes framework, the reforms made it easier for innovative companies to supply across national boundaries.

Perhaps more importantly than the advantages of IC methods, Sweden’s building code reform has incentivized the entire housing industry towards outcome-based metrics. In prescriptive systems, inflated construction costs and timelines tend to result from narrowly defined design and assembly requirements that don’t allow for optimization based on project-specific conditions. Establishing objective measures of safe and healthy home features allows private actors to innovate and optimize on costs and speed. More open-ended codes also help address the misconception that IC methods are constrained to “cookie-cutter” homes, demonstrating that they can deliver homes at lower costs and higher quality. Sweden provides several decades of evidence that these goals are not in conflict.

In the U.S., the HUD Code for MHs stands as a precedent to the power of nationwide harmonization of code and enforcement. However, even the HUD Code includes some prescriptive requirements that undermine the otherwise flexible compliance system and constrain innovation. Perhaps most infamously, the requirement that MH sections and units be “built on a permanent chassis” applies even to sections installed on a second storey (International Code Council, 2021). The rigid requirement raises costs, reinforces stigma, and entrenches a bifurcated housing market divided between stigmatized “trailer homes” and traditional construction (Booth, 2025). Removing requirements like this may also help address many of the de facto barriers to MHs in local zoning and building codes. More open requirements for building characteristics, like incentives for improved energy efficiency in MH units, could further reduce the stigma against “cheap” factory-built homes.

Takeaway 4: Incremental vertical integration can align incentives

Traditional housing development and delivery models are designed to delay design decisions and capital expenditure, avoid liability, and minimize overheads on a project, company, and industry level. These are the same reasons behind some broader building industry struggles, including: failure to deliver projects on schedule and under budget (Procore, 2021), frequent lawsuits between project team members for damage and liability (Ho and Liu, 2004), and high rates of employee and company turnover relative to other industries (Li et al., 2022). This status quo of race-to-the-bottom competition and adversarial incentives leaves ample room for improvement.

IC methods can improve many of these outcomes, but IC adoption and successful execution depend in part on addressing inefficient but commonly used delivery models (e.g. sequential design phases preceding competitive bidding processes) and misaligned incentives between actors within the same development team. This is why many of Sweden’s largest IC firms adopt vertical integration including manufacturing, construction, and development, among other business functions. Many of the most prolific IC producers in Sweden such as Derome, Lindbäcks, and OBOS now operate factories to supply their own real estate development projects in a vertically integrated model, but only after decades of iterative expansion.

In the U.S., several IC startups—including Katerra, which amassed billions of dollars in venture capital investment—pursued vertical integration from the onset and collapsed just years after launching. Katerra and other high-profile failures continue to cast a pall over the perception of risk for IC companies and IC-aligned projects. More narrowly focused IC companies face difficulty delivering on the promise of IC due to the aforementioned misaligned incentives and coordination issues. U.S. firms like Autovol and the Pacific Companies and Volumetric Building Companies have grown over time to incorporate both manufacturing and development capabilities. Growing the number of successful examples can help improve public perception and deliver and scale IC’s promise.

The MH sector already demonstrates a degree of vertical integration, with the large manufacturers Clayton, Champion Skyline, and Cavco offering semi-integrated dealer-retailer services, financing partners, and site installation. However, certain states explicitly prohibit individuals or developers from purchasing directly from MH producers, and the modest but measurable margins of MH retailers increase the cost to homebuyers. In the face of a stagnant or waning MH market, there may be an advantage to companies that seek to stimulate their own demand by incorporating development into their business.

Further implications for IC in the U.S.

Looking towards policy and regulatory reform, expanding IC methods in the U.S. may follow two distinct pathways unique to the American context: through the standalone MH industry and through reforms to the building industry more broadly.

For the first pathway, the MH sector is largely insulated from the complex patchwork of state and local zoning and building codes. Expanding the scope of the HUD Code to include other IC methods could then take advantage of this existing regulatory infrastructure. This is likely the simpler pathway for expanding IC and has the convenience of circumventing many of the systemic challenges partially addressed by Sweden’s incremental reforms. However, the HUD Code has not seen many significant changes in the 50 years since it was established, and the incumbent housing industry may be more likely to oppose a dramatic expansion or reinterpretation of the HUD Code’s scope. Significant changes may also threaten the simplicity and consistency that has been a crucial advantage of the MH sector.

By comparison, expanding IC through the conventional housing market could allow innovative methods to meet the contextually specific needs of different regional housing markets. Many of the interventions and lessons offered by the Swedish case apply more directly but reflect a considerable effort over a long period of time. Despite the purported promise and progress of IC in the U.S., entrenched structural barriers tend to favor site-built methods. Supply chains for factory-produced components remain underdeveloped; labor markets and union dynamics organize around traditional on-site trades and may present tensions both real and perceived with IC methods; conservative investors and lenders remain skeptical of new building methods; and many local officials do not have the capacity, familiarity, or willingness to accommodate IC approaches.

In both pathways, the deepest benefits of IC methods in the U.S. likely demand and depend on systemic change. Stability, success, and scale for IC approaches will require robust public and private sector coordination, as well as a cultural shift in how the building industry conceives of housing delivery.

IC is not and cannot be the sole solution to the housing crisis. The strategy to address the housing crisis will need to embrace different approaches and leverage the strengths of each, including the tenured (if potentially underutilized) MH sector. Real progress will take time, but for this hard and worthy work it is good to learn from friends across the seas.