Lessons learned from our work to accelerate production of PSH 

In the urgent need to bring thousands of people inside from the dangerous chaos of the streets, DESC and other providers are trying new and innovative ways of building safe permanent housing faster and for less money. We have some lessons to share about our recent experiences trying to achieve this goal. 

DESC always seeks to find new and better building methods that improve our tenants’ quality of life. We had a recent rare opportunity to build two developments at the same time, one using conventional construction and the other using a new technology involving prefabricated panels installed onsite in a steel frame. In this case the traditional approach to design and construction has won the race and cost less. 

In 2020 the COVID-19 pandemic turned housing urgency into emergency, threatening lives in deeply unpredictable ways, especially for those already living precariously on the streets. The City of Seattle responded to the virus with a pilot program to build sustainable, affordable supportive housing more quickly and more efficiently than before. The Office of Housing accelerated permitting and researched and investigated new building methods. 

Pilot program requires innovation

The pilot program required innovation, including using “alternative construction” methods. DESC was selected to build two of the projects, and the city recommended DESC consider a highly touted new patented modular system manufactured by Sustainable Living Innovations (SLI) for one of the buildings. 

One of our projects (DESC’s The North Star) would be built using traditional methods. The other, Green Lake, would be built with the panelized method, with panels manufactured in Tacoma and assembled at the Green Lake site. The panel method promised to save both costs and time.  

The North Star came in on budget and on time, and the architects and contractors even found some ways to save money in this conventionally built project. Opened in August 2022, as a recent design award attests, it is a beautiful building that staff and tenants love.  

While the Green Lake project’s panelized construction, metal and composite materials, and advanced energy saving technology, may prove more cost-efficient and sustainable over time, its building has fallen behind schedule and over budget. The good news is that despite the delays, all of the panels are now at DESC Green Lake, and our building contractor will be able to finish the project. 

Comparing milestones

They are two entirely different buildings, the wood and drywall North Star and the structural steel Green Lake, and their development was different from the start. 

MilestoneThe North StarGreen Lake
Design kick-offJune 2019May 2020
Full funding awardedDecember 2020December 2020
Financial closingApril 9, 2021Dec. 13, 2021
Early construction work startJan. 11, 2021N/A
Construction startApril 16, 2021Dec. 22, 2021
Certificate of OccupancyJuly 18, 2022November 2023
Fully leasedNovember 2022May 2024?

There has been a lot of buzz among developers that modular construction would go faster and be less expensive for developing affordable housing. The city recommended the SLI panel system after a thorough investigation. A market-rate high rise apartment building downtown, 303 Battery, was already under construction using this system, and funded by one of the world’s best-known financial groups. 

Representatives of the city, DESC and other funders toured 303 Battery, a full mockup of a modular unit in SLI’s warehouse and the factory actually producing the panels. The agency researched the company and the building method, asked questions and was assured that the suppliers, contractors, subcontractors and adequate employee compensation were in place. 

Learning from innovation

As the project progressed, SLI began to show financial problems, struggling to pay suppliers and reporting delays in closing on expected venture capital. DESC is working through that and our partner the city is helping mitigate potential risks. DESC is committed to making sure all SLI’s vendors are paid. We are a homeless services agency. We have a mission and values that we honor, and we are going to work to ensure that vendors are paid and our financial partners such as Enterprise and Office of Housing are also committed to that goal. In partnership with investors and funders, we have balanced the project and there are no current liens. 

The cost to build the panels has come in higher than projected by the manufacturer, SLI. They are obliged to cover the additional costs, but if they cannot do so then the project will end up costing DESC and the city much more than originally expected. That remains to be seen. 

The city piloted this program with the aim to experiment and test new methods, and Green Lake’s construction is a learning experience for DESC and the project’s public funders. 

There’s no “easy” button

But it is also an example of the complexities of solving homelessness, quickly increasing affordable, permanent housing, while still building for long-term durability and sustainability. Our experience has been that panelized construction still needs some refining. Although there may be promise to this new technology, DESC has concluded that there was not enough general experience with the method to meet budget and schedule on our project when money was on the line. 

DESC’s Director of Facilities and Asset Management Sondra Nielsen stressed that while it is very important to try new things, some construction methods have stood the test of time, building permanent supportive housing is expensive and takes time, and “there’s no ‘easy’ button to be pressed.” 

“People need to try innovation so that we can move the conversation forward about really understanding what works and what doesn’t.” 

We were seeking a faster pathway here but have not yet found it.