Factory-Built Homes: A Solution For California’s Housing Shortage?

In 2018, California residents experienced the deadliest and most destructive wildfire season in the state’s history. Around 24,000 structures and homes were destroyed, marking the beginning of the state’s crippling housing shortage.

This article was written by Kylie Webber and originally published by California Business Journal.

Today, Californians are still paying the price when it comes to housing. The state is short by approximately 3 million homes to house its populations, and California residents are quickly learning that traditional, stick-build construction is not the most efficient solution to the crisis.

Or Michaelo is the Founder of The Home Gallery, a Malibu, CA-based company that designs, builds, and curates a collection of factory-built homes, offering new potential.

“We come from a background of stick-built construction, and we’ve always been fascinated with development aspects of construction. However, there came to the point where we wanted to start planning for our future and the future of homeownership for Californians, so that conversation led us to explore factory-built homes,” Or, the founder and CEO of The Home Gallery, told California Business Journal.

The aftermath of the 2018 wildfires was the turning point. While members of his community were dealing with heartbreak and destruction, they also needed quick housing solutions that met the design standards of the community.

With the help of his brother and cofounder Joseph Michaelo, Or developed an elevated manufactured home built to higher standards than traditional manufactured homes and coined them ‘factory-built’ models. Starting out with their own luxury contemporary factory-built home brand called ORBIT Homes, Or and his team quickly realized that they wanted to offer even more options to potential home buyers. Thus in 2022, The Home Gallery emerged from the needs and desires of California communities.

The Home Gallery provides a wide variety of styles and floor plans all with beautiful design elements, ranging from traditional, modern, and contemporary. The idea was born from the aim for efficient construction. While traditional construction often inevitably requires changes and delays during the construction process, The Home Gallery’s ‘factory-built’ models provide a hassle-free experience for the home buyer.

These homes are built to the highest federal HUD codes straight from the factory and can be placed on any pre-existing plot of land in California. Compared to traditional stick-builds, they are also pre-inspected during every step of construction, which tremendously minimizes the amount of time inspections take on-site.

Factory- built homes also have financial advantages over stick-builds, the first being attainable pricing. Building in a controlled environment makes the construction process more efficient and creates 20-30% in savings compared to a traditional stick-build.

“We finally got a crucial response from bigger banks with Freddie Mac and Fannie Mae acknowledging that they will be appraising these types of homes just like they appraise regular construction,” Or said. “This was our main challenge and finally it’s being accepted more.”

California needs factory-built homes because they can be built within a short period to meet the market demands and are built to last. The Home Gallery’s building process creates less waste, as all materials are cut and fabricated to the precise measurements from the plans. Any leftover waste is typically reused on a future project.

What started as an idea that emerged from a need, is now a giant leap for all Americans looking for affordable and reliable homes with beautiful design elements. A 2021 study produced by Manufactured Housing Institute indicates that 22 million Americans live in factory-built homes. Approximately 90% of residents are satisfied with their manufactured homes, while 71% choose factory-built homes due to their affordability.

“The fact that we know we can create homes that streamline the building process and simplifies the whole idea of building a dream house for home buyers, motivates us to wake up in the morning. Not everyone has the time or financial ability to choose stick-built construction. We hear and understand the needs of the communities we are a part of.” Or says.

“The main challenge we’ve been going through is the perception that people have about factory-built homes,” Or says. When most people think of factory-built homes, or manufactured homes, they often think of tiny cookie-cutter mobile homes lacking any design appeal. What they don’t know is how The Home Gallery’s factory-built homes are transforming the industry and challenging the status quo.

Perception is powerful; shaking it from people’s reality requires consistent effort. Most people don’t believe a house can be built in a factory, delivered on wheels, while still looking and feeling like a high-end stick-built home.

“The clientele here expect homes at a very high standard, so we decided to produce high-end factory-built homes to help with the 600 homes that were lost in our community,” said Joseph Michaelo.

Designs are created by architects and finishes are selected by interior designers. The Home Gallery is continuously thinking outside the box, has created several innovative models to fit the aesthetic standards of any community. As more Californians begin to explore and build these beautiful, attainable, factory-built homes, the more the outdated societal perception changes.

“The goal for the next five years is to expand our locations so that even more people can come experience and learn how factory-built homes are constructed,” Or said. “We are really energized by what’s in store for the future.”