Resia’s latest apartment complex in Florida opened with a twist: Its kitchens and bathrooms were manufactured 500 miles away in Georgia.

The vertically integrated developer is among a growing cohort of multifamily builders taking modular production in-house — a shift industry leaders say could accelerate if a new bipartisan bill clears Congress.

The Renewing Opportunity in the American Dream to Housing Act, now under Senate review, aims to knock down one of the biggest hurdles facing modular construction: outdated lending standards and public confusion over what modular actually means.

“It’s still very much education,” said Tom Hardiman, executive director of the Modular Building Institute. “Perception is the main barrier.”

Modular construction made up 5.1% of total U.S. construction in 2024 and is projected to grow 4.5% annually, according to the institute. The multifamily sector has led the charge, with modular accounting for 8.8% of apartment starts last year.

Major players are taking note. Greystar, the largest apartment owner in the U.S., debuted its first modular project in Pennsylvania late last year and has six more in the pipeline. Components are built at the company’s factory in Knox, Pennsylvania.

“It’s more sustainable. There’s less waste,” Hardiman said. “So there’s a lot of advantages. The big, big, big driver is the developer gets their building open faster and quicker occupancy. Which means quicker return on investment.”

Modular advocates say the most common obstacle isn’t cost or quality but risk aversion. Builders and lenders alike tend to prefer the status quo.

That’s where the ROAD to Housing Act comes in. Sponsored by Sen. Tim Scott, a South Carolina Republican, the legislation directs HUD to examine how federal financing standards treat modular construction. One key friction point is draw schedules.

Modular projects require more funding upfront, while traditional financing models assume a slower, phased approach.

The bill also seeks to define “modular” more clearly. Currently, many consumers, and even some policymakers, confuse it with “manufactured” housing, which is factory-built but movable and subject to different regulations.

“We need to make sure that the federal government delineates between manufactured and modular,” said Lorenzo Sewell, business development manager at Ginosko Modular, who advised Scott on the bill.

Still, Hardiman worries the bill could worsen the confusion by placing its modular definition under the manufactured housing section. While the bill’s scope is limited to federal housing programs, supporters say it could prompt broader change.

“I think it will lead to private projects understanding the difference there,” Hardiman said. “A lot of times it’ll take the government to step in and implement something before it starts to become more mainstream.”

The Modular Building Institute is pushing to remove language subjecting modular units to HUD’s new National Standards for the Physical Inspection of Real Estate, arguing they already meet local codes. But overall, Hardiman said, the bill is a promising sign.

For developers, modular construction is increasingly a tool for affordability and efficiency.

Resia Vice President Matt Tall said the company’s modular projects serve middle-income renters such as teachers and first responders. Uniform room sizes reduce complexity and boost savings.

“The reason we’re able to do it for cheaper is because it’s standardized,” Tall said. “Your room is going to be that size.”

In Miami, Resia’s Golden Glades apartments were built with modular kitchens and bathrooms produced at its Georgia factory. The plant uses robotics to increase quality control and reduce reliance on skilled labor, which remains in short supply.

At Ginosko Modular in Michigan, indoor production sidesteps weather delays that typically cut the building season in half.

“You can control the climate, so you save time and money,” Sewell said. “That’s why we can build it better, faster.”

Ginosko’s build costs run about $73 per SF — half the price of conventional apartment construction, Sewell said. Greystar reported similar benefits with 40% faster completion, 90% less waste and 10% lower costs.

The Modular Building Institute projects the multifamily modular market will grow from $7.1B in 2024 to $11.3B in 2029, a 4.7% annual clip.

Despite growing momentum, modular backers still face reputational headwinds from high-profile failures like Katerra, which burned through $2B in funding before collapsing in 2021.

“I think everybody sees the value of it, but they’re always waiting for somebody else to be the guinea pig, to go first,” Tall said. “I think Resia is the company that’s the guinea pig. Now we’ve proven it can be done.”

In 2026, Resia plans to start selling its modular kitchens and bathrooms to other multifamily developers.

“I’m fairly bullish on us potentially coming to an agreement with some companies that are willing to take that modular chance again,” he said.