Sola Impact unveils plans for affordable modular housing in Los Angeles

In a recent Board of Equalization meeting held on July 29, 2025, discussions centered around the pressing issue of affordable housing in California, particularly through the lens of modular construction. Sola Impact, a Los Angeles-based real estate developer, presented a compelling case for the benefits of modular housing as a solution to the state's severe housing shortage.

The developer highlighted that California is currently facing one of the most significant housing supply crises in the nation, with projections indicating a staggering 57% decrease in building permits issued in 2025 compared to the previous decade. This decline exacerbates the already critical lack of affordable housing options, particularly in urban areas like Los Angeles.

Sola Impact's approach to modular housing aims to reduce construction costs significantly. The company reports that it currently builds units for approximately $279,000 each, a stark contrast to the average cost of traditional construction, which can exceed $700,000 per unit. The goal is to lower this cost to below $200,000 per unit within the next two years, which could enable rental prices to drop to around $1,000 per month. This reduction in housing costs could free up disposable income for families, potentially stimulating the local economy and improving quality of life.

The advantages of modular construction were emphasized, particularly its speed and efficiency. By manufacturing units in a factory setting, Sola Impact can simultaneously conduct site work, significantly reducing overall construction time. The company estimates that modular projects could see completion from permit approval to occupancy in as little as nine months to a year, a substantial improvement over traditional building timelines.

However, the presentation also addressed challenges faced by the modular housing industry, including financing hurdles and the need for supportive policies from local and state governments. Sola Impact suggested that tax incentives, such as property tax exemptions or sales tax waivers for modular construction, could encourage more developers to enter the market and help alleviate the housing crisis.

The meeting underscored the importance of innovative housing solutions in addressing California's ongoing affordability issues. As the state grapples with a housing shortage, the potential of modular construction to provide quicker, more cost-effective housing options could play a crucial role in shaping the future of affordable living in California. The Board of Equalization's consideration of supportive measures could further enhance the viability of these initiatives, paving the way for a more sustainable housing landscape.