California Lawmakers Aim to Boost Factory-Built Housing

State legislators believe the turning point might actually be here for modular homes and want to make 2026 the 'Year of the Housing Factory'.

Mar. 3, 2026 at 2:31am

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As California faces a housing shortage, state legislators are exploring ways to promote factory-built housing as a solution. Assemblymember Buffy Wicks is leading the charge, organizing hearings to gather information and build support for a package of bills that could provide state assistance to help the modular housing industry overcome barriers and scale up production. Lawmakers are considering measures to create a steadier pipeline of projects for factories, insure factories and developers against risks, and standardize building code requirements to ease the approval process for factory-built units.

Why it matters

Factory-built housing has long been touted as a way to build homes faster and more cheaply, but efforts to industrialize residential construction have repeatedly failed to take off. Now, with housing affordability a major concern, California policymakers see an opportunity to finally make modular construction a more viable option, potentially helping to address the state's housing shortage.

The details

Assemblymember Buffy Wicks has organized two select committee hearings on 'housing construction innovation,' with a focus on factory-based building. The hearings are meant to gather information that will inform a white paper and a package of bills Wicks plans to introduce in the coming weeks. Potential state interventions being discussed include: creating a steadier pipeline of projects for factories by encouraging or requiring affordable housing developers and public entities to use modular construction; providing insurance to protect factories and developers from the risks of project delays or bankruptcies; and standardizing building code requirements to ease the approval process for factory-built units.

  • In early 2026, California state legislators plan to introduce a package of bills aimed at boosting factory-built housing.
  • In late 2024, Assemblymember Buffy Wicks organized a series of meetings on 'permitting reform' that led to nearly two dozen housing-related bills the following year.

The players

Buffy Wicks

An Oakland Democrat and one of the California legislature's most influential policymakers on housing issues, leading the charge to promote factory-built housing.

Gavin Newsom

The governor of California who enthusiastically signed into law last summer legislation exempting most urban apartment buildings from environmental litigation, a key housing policy priority.

Ben Metcalf

The director of the Terner Center for Housing Innovation at UC Berkeley, which is writing a white paper summarizing the information gathered in the select committee hearings.

Jan Lindenthal-Cox

The chief investment officer at the San Francisco Housing Accelerator Fund, a privately-backed non-profit providing short-term, low-cost loans to developers to cover the higher upfront costs of factory-built construction.

Brian Potter

A former Katerra engineer who now writes the widely-read Construction Physics newsletter and has cautioned about the challenges of making factory-built housing work at scale.

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What they’re saying

“Over the last eight to 10 years or so the Legislature and the governor have really taken a bulldozer to a lot of the bureaucratic hurdles when it comes to housing. But one of the issues that we haven't fundamentally tackled is the cost of construction.”

— Buffy Wicks, Assemblymember

“Factory-built housing has the potential to reduce hard (labor, material and equipment) costs by 10 to 25 percent — at least under the right conditions.”

— Ben Metcalf, Director, Terner Center for Housing Innovation

“Beyond just the regulatory issues, which are real, there are just fundamental nature of the market, nature of the process, things that you have to cope with.”

— Brian Potter, Former Katerra engineer, writer of Construction Physics newsletter

What’s next

In the coming weeks, Assemblymember Buffy Wicks plans to release a white paper summarizing the information gathered in the select committee hearings, as well as introduce a package of bills aimed at boosting factory-built housing in California.

The takeaway

California lawmakers see factory-built housing as a potential solution to the state's housing shortage, but past efforts to industrialize residential construction have struggled. This time, policymakers are exploring ways the state can help the modular housing industry overcome barriers and scale up production, though some experts caution that there are fundamental challenges that will be difficult to overcome.