Can Chicago’s carpenters union and builders unite to deliver new homes that are affordable to buyers and renters? A venture started on the city’s Southwest Side, launched in cooperation with City Hall, is a test for a new business model in the housing industry.
The Skender construction firm has opened a factory for modular homes at 3348 S. Pulaski Rd. Under an agreement with the Chicago Regional Council of Carpenters, Skender has brought in union labor to build the modular components, which are then delivered to the construction site.
It’s a system that backers say lowers costs, shaves weeks from construction time and produces high-quality and well-designed buildings. The goal is for 150 full-time jobs at the facility, where about 35 people are working now, said David Claus, communications manager for the carpenters union.
Skender’s first order is for 10 three-flats planned for Humboldt Park. The company and union hope the business will expand into orders for single-family homes and for multistory commercial buildings.
The initial three-flats are being built for the development firm Sterling Bay, which is providing the rental units as part of its commitment to build affordable housing around the city. In exchange, Sterling Bay got approval for tax-increment financing at its Lincoln Yards project on the North Side.
Modular construction and skilled labor “are the wave of the future when it comes to building homes in bulk and with quality,” Claus said.
“It’s very likely that this is a model that will spread,” said Tom Hardiman, executive director of the Modular Home Builders Association, which represents Skender and some 400 other members. He said the only similar arrangement he knows of is two ventures in Northern California that involve the local carpenters union.
Modular construction can be adapted for larger buildings, Hardiman said. A 32-story, steel-framed modular apartment tower opened in Brooklyn in 2016, and Hardiman said two 20-story modular hotels are being built elsewhere in New York City.
The Chicago operation is letting City Hall extract a public benefit from a property that had cost public pension funds millions of dollars. The Chicago Sun-Times has reported that the 3348 S. Pulaski site was part of a property portfolio that cost the pension funds $54 million after outside fund managers, including a nephew of former Mayor Richard M. Daley, made ill-timed investments.
When Mayor Lori Lightfoot toured the 105,000-square-foot facility May 28, she called it “lemonade from lemons.” Lightfoot preferred to focus on the location’s new role in addressing the housing crisis.
New modular units “will improve access to sustainable housing, prevent homelessness and ensure that as Chicago grows all of our neighbors can afford to grow too,” she said.
The venture also plans to build rental units for East Garfield Park in a development led by the Preservation of Affordable Housing.
Mark Skender, CEO of the construction firm, said it has had a 60-year relationship with the carpenters union and is proud that “we will bring together the design, construction and manufacturing under one roof to forge the future of the building industry.”
Claus said many of the workers will be drawn from the factory’s surrounding area and will be provided with training to advance their skills. The union has an ownership stake in the Sun-Times.