A new housing development in Santa Monica, California, is drawing attention as a potential model for tackling the state's persistent housing shortage. Its location in one of the nation's wealthiest coastal cities is significant, especially since many affluent coastal communities have historically resisted high-density projects aimed at low- and middle-income residents, such as those seen in Huntington Beach and Half Moon Bay.

Berkeley Station: A Modular Success Story

Proof of Concept in an Affluent City

Santa Monica Mayor Caroline Torosis stated, “Berkeley Station is proof that Santa Monica can take on the housing crisis with urgency and results.” This project showcases a viable path forward for addressing critical housing needs within high-cost areas.

Factory Construction Accelerates Timeline

The Berkeley Station development features modular units constructed in a factory located just an hour northeast of Santa Monica. A key advantage was the assembly process, which took only three days on site. Housing experts have long advocated for modular construction as a method to speed up development and control chronically high building expenses in California.

While modular construction could potentially reduce apartment costs—which typically surpass $400,000 to $500,000 per unit in California—Berkeley Station cost $1 million per unit, largely financed by a city loan. Tara Barauskas, executive director of [organization name not fully specified], noted the efficiency gains.

“We were able to build the onsite elements at the same time as the offsite elements, so that saved time,” Barauskas explained. “Overall, this process is taking about nine months, whereas normally if we were building everything ground-up on the property, that would be about 20 months.”

Barriers to Widespread Modular Adoption

The Need for Scale and Legislative Support

Achieving significant cost reductions through modular building hinges on widespread adoption to realize economies of scale. This requires changes to state laws and overcoming resistance from various interest groups, including construction unions.

Projects using public funds, like the Santa Monica loan, must pay state-mandated “prevailing wages,” which are often union wages. However, unions actively lobby officials to mandate union labor commitments for such projects. Larry Mazzola, head of the local construction trades council, previously voiced opposition during a modular apartment build in San Francisco three years ago.

Legislative Push for Innovation

Coinciding with Berkeley Station's opening, State Assemblymember Wicks, an Oakland Democrat and chair of the Select Committee on Housing Construction Innovation, introduced a package of three bills aimed at streamlining modular housing.

Wicks spent the fall recess touring modular projects nationally and internationally, stating, “As nerdy as it sounds, I’m now a subject matter expert on prefabricated housing — to the point that factories as far away as France are reaching out to my office to offer their insights.” The proposed legislation seeks to prevent local governments from using building codes to block modular housing and to ease the transportation of these units across state highways.

This legislative package will serve as a critical test of whether California is genuinely committed to efficient housing construction or merely offering superficial support for solving the crisis.