Housing affordability has become one of the defining economic challenges facing communities across the country. At its core is a persistent mismatch between the housing available on the market and what many families can afford. When available housing stock does not match housing needs across communities, the effects are manifold: constrained family budgets, employers’ difficulty attracting workers, and limited economic mobility for families.
At JPMorganChase, we recognize our business is only as strong as the communities we serve, and a strong economy starts close to home. Advancing housing affordability requires an enabling environment with clear, predictable policies and processes that reduce the cost and complexity of housing production, support innovation, and help deliver more attainable options for renters and prospective homebuyers.
In the JPMorganChase PolicyCenter’s Building Blocks series, we examine practical, evidence-driven state and local policy levers to reduce the cost drivers of housing production and improve affordability. The first brief focused on zoning and land use, building codes, and permitting; our newest brief examines innovative construction as a potential tool to lower development costs and expand affordable housing options for renters and prospective homebuyers.
Construction remains a major driver of home prices—estimated at roughly 64% in recent analyses—and those costs fall hardest on low-to-moderate-income households and first-time homebuyers. Innovative construction approaches like modular and manufactured housing can shorten timelines and lower costs, but scaling their use to achieve potential cost and time efficiencies requires consistent rules, a rigorous evidence base, and dependable demand so builders, manufacturers, and capital providers can invest with confidence.
We outline three policy recommendations that, together, are designed to reduce friction and promote market adoption of innovative construction:
1) Reduce fragmentation and align rules such that off-site and site-built homes are on equal footing.
A prominent constraint is regulatory fragmentation. When land use and zoning, building code requirements, and inspection pathways vary widely—or are unclear—manufacturers lose the efficiencies that come from standardization, and developers inherit added soft costs and scheduling risk. The goal is to create a predictable pathway that places off-site and site-built housing on equal footing across regulatory bodies so that developers and manufacturers have clear and consistent processes for entitlement. A promising model is Colorado’s move toward a statewide factory-built building code (SB25-002), designed to provide clarity, remove cross-jurisdictional uncertainty, and increase standardization.
2) Support dependable demand pipelines that boost market confidence and promote scale.
Even when the regulatory path is clear, innovative construction is unable to scale without demand certainty and corresponding financing structures that support the production of housing using these methods. Manufacturers need predictable order pipelines to finance factories and sustain operations, and developers often face deposit and payment timing that do not match conventional construction loan draw schedules. For this reason, demand aggregation and multi-year pipelines become especially important: they increase utilization, reduce execution risk, and make it easier for capital providers to underwrite production with confidence.
In practice, states and localities are experimenting with different pipeline-building tools, including public programs that combine public land availability through land banks with tailored funding sources. New York State’s MOVE-IN NY program shows this in action. . The program is backed with $50 million to expand an initial pilot and build up to 200 additional off-site starter homes, working with local partners such as land banks to support development. Just as important, the program leverages CrossMod, a type of manufactured housing eligible for GSE-backed mortgages, which helps ensure that lower-cost production translates into access to conventional mortgage and appraisal channels.
3) Build implementation capacity and an evidence base to inform and catalyze market adoption.
Implementation capacity is often where promising approaches either become routine or remain fringe. To support adoption, the industry needs clear operational guidance from public agencies, trained plan reviewers and inspectors, a strong construction workforce equipped to deploy these methods, and credible evidence on cost, speed, and quality to lead to a greater understanding of when these innovations work, under what conditions, and how they can be scaled to meet housing needs. Research increasingly shows innovative construction can deliver faster timelines and improved resilience, often at lower cost, but outcomes vary widely by market and regulatory conditions, underscoring the need for shared proof points and stronger technical capacity to reach mainstream adoption.
Innovative construction can deliver meaningful efficiencies, but only when regulation, financing, and market demand are aligned. This is the opportunity for the housing field right now: to treat innovative construction as a practical supply strategy, which coupled with other foundational regulatory reforms, can help deliver more homes at attainable price points.
Ultimately, innovative construction will only help close affordability gaps if the housing delivery system can support adoption at scale. With clearer rules, dependable pipelines, stronger implementation capacity, and financing structures that make delivery more predictable and less expensive, these methods can help lower development costs and expand attainable housing options for renters and prospective homebuyers. The payoff extends well beyond housing: stronger neighborhoods, a more resilient workforce, and local economies better positioned to grow in place.