Opportunities and Challenges in the Implementation of Modular Construction Methods for Urban Revitalization

Abstract

The urban landscape is undergoing significant transformations due to economic shifts, urban planning initiatives, technological advancements, and sociopolitical changes. Almost 89% of the U.S. population is projected to reside in urban areas by 2050, which increases a pressing need for innovative and efficient urban revitalization strategies. Modular construction is an extensively researched topic with potential promise for addressing these challenges; however, there is a lack of comprehensive understanding of its specific opportunities and challenges within the context of urban revitalization. This paper explores the potential of modular construction methods as a viable solution in densely populated areas with limited space and competing land uses. This study employs a systematic literature review using PRISMA and mixed methods analysis with NVivo to identify the opportunities and challenges associated with implementing modular construction in urban settings. The findings highlight the advantages of modular construction, including reduced construction time, enhanced quality control, and improved sustainability. However, challenges such as land scarcity, restrictive zoning laws, and the need for innovative planning and collaboration among stakeholders are also emphasized. This paper provides valuable insights for policymakers, urban planners, and developers to effectively leverage modular construction methods for sustainable and efficient urban renewal efforts.

1. Introduction

1.1. Background

Over the past few decades, cities have experienced significant transformations due to economic shifts, urban planning initiatives, technological advancements, and sociopolitical changes [1]. These changes have led to projections that 89% of the US population will reside in urban areas by 2050 [2]. Despite this expected influx, some cities face population shortages and urban decline, contrary to these projections. Detroit serves as a notable example. Once the epicenter of the American automotive industry [3], Detroit flourished in the early to mid-20th century. However, the downturn of the auto industry and the 2008 financial crisis precipitated a severe population decline and urban migration, resulting in significant social issues such as crime and low education rates [4]. In response, Detroit has embarked on numerous projects to revitalize and redevelop the city, including the Detroit Riverfront [5], the redevelopment of the Michigan Central Station, and new residential and commercial developments [6]. Other cities, such as Pittsburgh, PA; San Francisco, CA; Denver, CO; and Seattle, WA, have also successfully revitalized and transformed through similar initiatives [7,8,9].

Urban revitalization involves initiatives to restore a city’s area to its former vitality by addressing social and economic decline, deteriorating infrastructure, and supporting the city’s identity [10]. Urban revitalization aims to reverse the decay in urban centers, which is often marked by ongoing population loss, higher levels of poverty, increasing unemployment, rising fiscal stress, degrading environmental quality, and overall physical deterioration of infrastructure [11]. Providing housing is a crucial component of urban revitalization as it helps maintain population stability within urban neighborhoods. The convergence of housing needs, aging building stock, and declining economic conditions can accelerate urban decay. Therefore, the rehabilitation and redevelopment of the existing built environment to provide new housing is essential for supporting urban revitalization. These efforts create employment opportunities and promote economic growth, thereby fostering a more sustainable urban future.

In addressing these housing challenges, innovative and practical design and construction techniques are vital. One effective strategy is the use of modular and prefabricated construction [12]. Modular construction generally offers significant advantages, such as reducing construction time, controlling the production environment, reducing labor costs, and ensuring factory-standard quality controls. A prime example of successful implementation is the Carmel Place project in Manhattan, a modular micro-apartment building that showcases how modular construction can address housing shortages in dense urban areas [13,14]. This project not only demonstrates the effectiveness of modular construction but also highlights its potential to provide high-quality, affordable housing quickly and efficiently.

Modular construction methods are particularly advantageous for urban revitalization projects. By prefabricating building components off-site and assembling them on-site, construction time is significantly reduced, minimizing disruption to surrounding communities—a crucial factor in urban settings [15]. Moreover, the flexibility of modular designs allows for easy adaptation and scalability, enabling customization to fit specific urban needs without extensive on-site work [16]. In addition, implementing modular construction for urban revitalization also offers significant environmental and land-use benefits by performing most work off-site, reducing the need for land-clearing, and minimizing the horizontal footprint of construction projects. It generates minimal waste, contributes to reduced landfill use, and promotes land-use efficiency by enabling vertical expansion, mitigating urban sprawl, and supporting compact urban development. Additionally, modular construction facilitates urban revitalization through infill development and adaptive reuse, playing a crucial role in mitigating the adverse effects of unregulated land consumption and climate change [17].

Choi et al. [12] conducted a survey in their study to identify the benefits of modular methods in dense urban areas. According to the results, modular methods enhance site operations, shorten construction timelines, improve quality standards, increase productivity, reduce costs, improve safety, ensure adequate labor availability, minimize waste, reduce on-site disruption, increase predictability and reliability, decrease weather-related delays, promote better sustainability, and require fewer permits. While modular construction offers advantages and benefits for urban revitalization, it has some limitations and constraints. For instance, implementing modular construction requires the need for substantial capital investment, high operational expenses related to machinery and depreciation, and increased costs for innovation and skilled labor. Additionally, urban areas have limited space for the storage of modular components. Furthermore, the design process of modular housing units demands comprehensive drawings and specialized design skills from architects and the necessity of designing transportable components and maintaining coordinated planning throughout the construction phases complicates the process further, especially for the urban revitalization projects [18]. Regardless of the limitations of modular construction in urban revitalization, modular construction is a practical and innovative solution for urban revitalization efforts, effectively addressing many challenges posed by traditional construction methods in constrained urban environments.

Despite the growing interest in modular construction methods and practices, there is a lack of comprehensive understanding of their specific opportunities and challenges within the context of urban revitalization. Most studies focus on modular construction practices, making it difficult to discern the specific opportunities and challenges when applying these practices for urban revitalization. This knowledge gap hinders stakeholders involved in this process from effectively implementing modular construction in urban revitalization projects. Considering these issues, a systematic literature review has the potential to provide a snapshot of current studies to identify and consolidate the opportunities and challenges of modular construction within the context of urban revitalization. Therefore, this study aims to identify these opportunities and challenges in light of a systematic literature review to provide a snapshot of current studies on modular methods for sustainable and efficient urban renewal.

1.2. Current Studies in Modular Construction for Urban Settings

Modular construction has been a subject of interest in recent studies focusing on various areas [19,20,21,22,23]. However, limited research efforts have investigated a few aspects of modular construction to tackle challenges and capitalize on its benefits in urban settings. For example, Wei et al. [24] proposed a generative design approach to automate modular construction for residential buildings in congested urban areas, emphasizing the use of Building Information Modeling (BIM) for systematic design parameterization. This approach highlights the potential for improved efficiency and accuracy in the design phase.

Another study by Sing et al. [25] developed an analytical hierarchy process-based decision model to aid project planners in determining the suitability of modular construction techniques in urban projects. Their research underscored the speed and advantages modular construction offers, providing a valuable tool for decision-makers in urban planning. Hyun et al. [26] concentrated on establishing a framework for long-term public housing supply plans using small-scale offsite construction in Seoul. Their study stressed the importance of estimating potential projects and conducting feasibility analyses to ensure sustainable modular construction in urban areas. This framework aims to address the growing demand for affordable housing while maintaining sustainability.

These studies illustrate the growing recognition of modular construction’s potential in urban settings, yet they also indicate the need for further research to fully understand and harness its benefits. Continued exploration and innovation in this field are crucial for overcoming the unique challenges urban environments present.

1.3. Motivation of the Study

As established qualities of off-site modular construction approaches, as demonstrated in the literature, are assessed, their effective application for select specific cases can be further considered along with what additional areas need to be addressed to provide meaningful built outcomes to further revitalization efforts. In this case, the target need motivating this paper is the combined set of the following specific conditions: The housing supply crisis in United States cities, particularly the absence of entry-level, starter homes in the marketplace [27]. The opportunity and challenges presented by significant areas of vacant land in established urban neighborhoods; in Detroit specifically, this accounts for more than 60,000 parcels [28]. The necessity of sustainably facilitating new development specifically through the efficient constructive delivery of high-performing, lower-intensity homes. Modular construction techniques may offer ways to address this combined challenge, but additional understanding is needed to support more significant use by developers for this case and others.

2. Methodology

This study employs a systematic literature review approach to explore the opportunities and challenges of modular housing for urban revitalization. The research design consists of two major steps, including (1) a review with Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) 2020 reporting guidelines [29] and (2) mixed methods research to identify studies such as word frequency and systematic analyses [30], as presented in Figure 1. The details of these steps are presented in the following sections.

2.1. Systematic Review with PRISMA

The PRISMA technique comprises a comprehensive set of guidelines aimed at enhancing the transparency and quality of reporting in systematic reviews and meta-analyses. It provides a detailed flow diagram to ensure researchers meticulously document the methodology, selection criteria, and findings of their reviews. By adhering to PRISMA, researchers can produce reports that are clear, complete, and reproducible, ultimately contributing to the reliability and credibility of evidence synthesis in scientific research. This technique plays a crucial role in minimizing bias, improving the critical appraisal of published literature, and facilitating the application of findings [29].

Following PRISMA steps and to ensure the highest quality, the paper identification was designed based on research databases, time span, and keywords. Scopus and Web of Science (WoS) databases were selected due to the abundant literature data with their convenient search system and impact and influence in academia [31]. Only English-written publications were considered, and the time frame was limited from 2008 to 2023 considering the post-financial crisis and housing issues in urban areas [32,33]. In order to effectively search for relevant publications, keywords were systematically selected by considering the terms related to modular construction and residential buildings in the context of urban revitalization. It is important to note that our keyword search was comprehensive, utilizing the default “Topic” search in Web of Science, which includes the title, abstract, author keywords, and keywords plus fields. In Scopus, we used the TITLE-ABS-KEY field code, which searches across title, abstract, and keyword fields. This approach ensured a thorough coverage of relevant literature beyond just author-defined keywords. Next, the keywords were categorized based on four criteria: “Level”, “Objective”, “Scope”, and “Method”. The “Level” pertains to the scale of modular construction application (e.g., city), while the “Objective” represents the purpose of using modular construction (e.g., rehabilitation and revitalization). The “Scope” indicates the type of object being created through modular construction (e.g., residential or commercial buildings), and the “Method” refers to the specific measures employed for urban revitalization (e.g., modular construction). By employing this categorization, we identified initial keywords and subsequently expanded them by considering synonyms and related terms within the scope of our study. By structuring the keywords into these four categories, the aim was to capture the spatial context, revitalization goals, specific building types, and construction methods central to the research question. This approach allowed for a systematic combination of keywords across categories, enabling the uncovering of potential papers that might otherwise be missed with a more limited search strategy. The selected keywords and categorization are presented in

Table 1. Keywords and their categories for the paper identification.

Level	Objective	Scope	Method
Urban	Rehabilitation	Residential building	Modular construction
City	Regeneration	Housing	Off-site construction
Neighborhood	Renewal		Prefabricated construction
	Revitalization		Modular design

.

Based on determined searching strategies such as databases, timeframe, English-written papers, and keywords, this study extracted publications by utilizing the Scopus and WoS databases’ respective Application Programming Interfaces (APIs). This approach enabled efficient, reliable, and reproducible data collection. To create search queries, keywords from each category were combined using Boolean operators. A typical query structure was: (“urban” OR “city” OR “neighborhood”) AND (“rehabilitation” OR “regeneration” OR “renewal” OR “revitalization”) AND (“residential building” OR “housing”) AND (“modular construction” OR “off-site construction” OR “prefabricated construction” OR “modular design”). These query terms were applied to search the title, abstract, and keyword fields in both databases, ensuring a comprehensive search that was not limited by potentially suboptimal author-chosen keywords. These queries were used to interact with the Scopus and WoS APIs. The metadata was extracted, including document identifiers, titles, authors, publication names, citation counts, publication dates, and URLs. The scripts handled pagination for large result sets and included error handling for API responses. The retrieved data were stored in structured formats for analysis. Rate limiting was implemented to comply with API usage guidelines and logged query information and results for reproducibility. This approach ensured consistency in the search process across both databases and facilitated updates to the literature corpus as needed.

After our initial search, we realized that the application of modular construction necessitates facilities for modular manufacturing, and there is a limited number of studies on this topic. To address this gap, we conducted an extended search to broaden the scope and include publications on temporary facilities near urban sites that enable the manufacture of modular construction components. For this extended search, keywords were categorized into “Objective”, “Scope”, and “Method”, similar to the initial search, to explore the potential of manufacturing modular housing units in temporary places near urban sites. The extended search did not include the “Level” category, as it focused more broadly on temporary facilities and manufacturing processes for modular construction, which were not necessarily tied to specific urban scales. Hence, the extended search emphasized the “Objective” (e.g., modular, temporary), “Scope” (e.g., modular facilities), and “Method” (e.g., modular construction, industrialized construction) to capture the literature on innovative manufacturing approaches for modular housing units near urban sites. Utilized keywords and their categories for extended search are presented in

Table 2. Keywords and their categories for extended search.

Objective	Scope	Method
Modular	Modular facilities	Modular construction
Temporary		Industrialized construction
Facility		Off-site construction

.

2.2. Mixed Methods Research

To begin the mixed methods research, a word frequency analysis was conducted using NVivo software (https://lumivero.com/products/nvivo/) on the full text of the 24 papers identified during the final screening process. This analysis provided three key pieces of information for each word: (i) Length (number of characters), (ii) Word Count (frequency of occurrence), and (iii) Weighted Percentage (relative frequency compared to total words counted). The purpose of this analysis was to identify and quantify the most frequently occurring words and themes within the literature, providing a data-driven foundation for understanding the key topics in the field of modular construction for urban revitalization.

The word frequency analysis served multiple purposes. Firstly, it allowed for the identification of hot topics or prevalent themes across the reviewed papers, offering insights into the most discussed aspects of modular construction and urban revitalization. Secondly, it provided a statistical basis for comparison with the human-generated factors table, allowing for a cross-validation of the identified opportunities and challenges. By comparing the high-frequency words in NVivo with the keywords derived from the factors table, it became possible to identify areas of alignment between the literature’s focus and the predetermined categories, as well as potentially uncover new or unexpected themes that emerged from the data.

This scheme comprised two main categories, “Opportunities” and “Challenges”, each further divided into subcategories representing key factors identified in the literature. To facilitate a more efficient and accurate text analysis, these factors were then translated into a keywords table. This process involved extracting single words or short phrases from the detailed insights associated with each factor, creating a more concise and easily matchable set of keywords. For example, the “Factory design” factor under “Opportunities”, originally described with insights such as “Agility”, “Mobility”, and “Less infrastructure and minimal site space for setting up”, was distilled into keywords like “agility”, “mobility”, “infrastructure”, “space”, “site”, and “setup”. Similarly, for “Challenges”, the “Modular design” factor was represented by keywords such as “limited”, “panel”, “dimensions”, and “logistics”, derived from the original insight “Limited panel dimensions due to logistics”.

3. Results

This study identified 24 papers through PRISMA. These papers were thoroughly reviewed, and mixed methods research analysis was performed using word frequency results from NVivo software and matched with the identified factors. The results of each step are described in this section.

3.1. Review with PRISMA

In the paper identification step, 2059 papers were extracted from the WoS and Scopus databases. During this step, 1596 duplicate papers were removed, resulting in a final count of 463 papers for further screening. In the initial screening, the titles of each of the 463 papers were examined, and papers were excluded if the title did not mention the context of modular housing for urban revitalization or the provision of temporary manufacturing facilities for modular housing purposes. In total, 390 papers were excluded after the initial screening, and 73 papers were listed for the final screening.

The final screening of the papers was performed by reviewing the abstracts of the 73 papers to assess their eligibility and quality, aiming to identify opportunities and challenges for this study. After the abstract review, 47 papers were moved to the next step. In the final step, papers were included based on the following criteria: (i) for modular housing, the construction method must be modular construction used for building residential houses in the context of urban revitalization and (ii) for the factory, and only temporary manufacturing facilities for the construction/assembly of modular houses were considered, which was presented in Figure 2. All identified papers were reviewed by two researchers, and any conflicts between their decisions were resolved. Finally, 24 papers [34,35,36,37,38,39,40,41,42,43,44,45,46,47,48,49,50,51,52,53,54,55,56,57] were selected and categorized based on their scope (

Table A1. Summary of opportunities and challenges from identified papers in the context of production facility.

Opportunities

Insights

[34]

[35]

[36]

[37]

[38]

[39]

[39]

[40]

[41]

[43]

[56]

[57]

Production facility layout and location

Agility

*

*

Mobility

Less infrastructure and minimal site space for setting up

Labor condition and efficiency

Labor safety

*

*

*

*

*

*

*

*

*

Reduced physical demand on skilled labor

Enhanced product and production quality

Controlled weather conditions for on-site construction

Efficient storage solution

Addressing storage problems on site

*

*

Space for material inventory

Transportation costs and delivery times

Short distance to customer

*

*

*

Reduced transportation time

Sustainability

Better procurement

Shortening the supply chain uncertainty in material delivery

*

Local resources

Just-in-time (JIT) delivery

Resource leveling

Shared capacity and equipment among different stakeholders

*

*

*

*

*

*

*

*

*

*

Installing production capacity wherever it is needed

Reduced construction schedule

Sustainability

Reduced waste

*

*

*

*

*

Reduced environmental impact (carbon emission)

Technology

Opportunity to use new technologies (e.g., BIM, 3D Scanning, IoT, etc.)

*

Challenges

Insights

[34]

[35]

[36]

[37]

[38]

[39]

[40]

[41]

[42]

[43]

[44]

[45]

Production facility design and planning

Maneuver capability due to the weight mobile unit

*

*

*

*

*

*

*

Stability of the mobile unit

Available space for the circulation

Equipment size

Storage space

Setup and dismantling

layout design (assembly line)

Capacity

Low production capacity

*

*

*

*

Manufacturing and assembly workforce

Travelling workforce

*

*

*

Culture

Training

Finding qualified labor, availability of skilled labor

Logistics and site

Support from off-site

*

*

*

*

*

Changing the location of the production units

Path assignment and traffic allocation and distribution

Quality assurance

Production of defective panels

*

*

Permits and regulations

Taxes

*

*

*

Local people

Legal permits

Health and labor regulations in each region or country

Technology integration

Limited information and application of new technologies (e.g., BIM, 3D scanning, IoT, etc.)

*

* refers to the studies mentioned in the references.

and

Table A2. Summary of opportunities and challenges from identified papers in the context of modular design.

Opportunities

Insights

[46]

[47]

[48]

[49]

[50]

[51]

[52]

[53]

[54]

[55]

[56]

[57]

Design enhancements

Mass customization

*

*

*

*

*

*

Flexible and free-form structures

Lightweight structures

Aesthetics and versatile structural forms

Increased structural redundancy

Durability and stability

Allowing for integration of technology

Quality of the end product

Enhanced productivity and quality

*

*

*

*

Cost optimization

Reduced construction cost and time

*

*

*

*

*

Safe working environment

Safe working space

*

*

*

*

Site and space utilization

Relocatability

*

*

*

Limited space in urban areas

Efficient use of idle land

Sustainability

Reduced embodied energy

*

*

*

*

*

*

*

*

*

Recycling and reuse of the materials

Ease of dismantling and deconstruction

Minimized environmental impacts in waste, pollution, resource, and energy

Affordable housing

Challenges

Insights

[46]

[47]

[48]

[49]

[50]

[51]

[52]

[53]

[54]

[55]

[56]

[57]

Design Limitation

Size and height of the units

*

*

Economic

High initial costs

*

*

*

Initial investments in training of personnel

Legal approvals and building permits

Legal requirements and building permits

*

Logistics and transportation

Transport limitations

*

*

*

factory setup

supply chain issues

* refers to the studies mentioned in the references.

in Appendix A), focused either on modular design or production facility for modular construction, to identify opportunities and challenges and moved to the next step for in-depth review and mixed methods research.

3.2. Mixed Methods Analysis

The translation from detailed factors to concise keywords allowed for an easier match between the identified factors and the high-frequency words from the NVivo. It also standardized the terminology, reducing the impact of variations in phrasing across different papers. The resulting keywords table, structured as a JSON object, categorized words under “Opportunities” and “Challenges”, with each subcategory containing an array of relevant keywords as presented in Figure 3.

The word clouds for opportunities and challenges offer a visual representation of the most frequent terms in the identified literature, revealing key themes in modular construction for urban revitalization. In the challenges cloud, “mobile”, “unit”, “production”, “quality”, and “assembly” keywords dominate, indicating that the mobility of construction units, production processes, quality control, and assembly techniques are primary concerns. Interestingly, “limited” appears prominently, suggesting that constraints are a recurring theme across various aspects of modular construction. The opportunities cloud, in contrast, highlights “construction”, “material”, “scanning”, “site”, and “production” keywords as the most prominent terms. This juxtaposition reveals a shift in focus from challenges related to mobility and quality to opportunities in construction techniques, material innovations, and advanced technologies. The presence of “environmental” in the opportunities cloud, absent in the challenges cloud, indicates a growing emphasis on sustainability as a potential benefit of modular construction in urban revitalization efforts.

The histograms of the top 20 words for opportunities and challenges (Figure 4 and Figure 5) provide a quantitative perspective on the mixed methods research on these themes. In the challenges histogram, “mobile” leads with 447 occurrences, followed closely by “unit” (384) and “production” (376). This reinforces the observation that mobility and production-related issues are central to the challenges faced in modular construction. The opportunities histogram, however, shows a dramatic lead for “construction” with 1165 occurrences, more than double the next most frequent word, “site” (526). This stark contrast suggests that while challenges are diverse and relatively evenly distributed, opportunities are heavily concentrated around innovations in construction methods. Notably, “scanning” ranks high in opportunities (324 occurrences) but does not appear in the top challenges, indicating that advanced site analysis technologies are viewed more as a solution than as a problem. The appearance of “environmental” and “local” in the opportunities list, absent from the top challenges, further emphasizes the potential of modular construction to address sustainability and community integration in urban revitalization projects.

4. Discussion

Aligning with the objective of this study, the findings from the systematic review and word frequency and thematic analyses were synthesized to highlight the key opportunities and challenges associated with implementing modular construction methods for urban revitalization. The focus of the initial search was to identify publications on modular design for urban revitalization. After conducting an extended search, publications related to production facilities were obtained. Finally, the publications were categorized based on the main theme: either modular design or production facilities. As the identified publications presented the opportunities and challenges for the main themes, the discussion section focuses on listing key insights for the production facility and modular design.

With the scarce efforts revealed from the literature related to the nexus of modular construction and urban revitalization, this study focuses on an area that needs more attention to further advance the potential benefits of modular construction in cities and urban revitalization. Among the obtained publications, the authors utilized modular design and production facilities as the main categories for opportunities and challenges. As temporary factories are considered for the manufacturing of modular units, production facility refers to the manufacturing location of the modular units, while modular design pertains to the construction methods used for residential buildings aimed at urban revitalization. The keywords of the identified opportunities and challenges for production facilities and modular design for urban revitalization are summarized in

Table 3. Identified opportunities and challenges in modular construction for urban revitalization.

	Opportunities	Challenges
Production Facility	Production facility layout and locations	Production facility design and planning
	Labor condition and efficiency	Capacity of the production facility
	Efficient storage solution	Manufacturing and assembly workforce
	Transportation costs and delivery times	Logistics and site
	Procurement	Quality assurance
	Resource leveling	Permits and regulations
	Sustainability and technology	Technology integration
Modular Design	Design enhancements	Design limitations
	Quality of the end product	Economic
	Cost optimization	Legal approvals and building permits
	Safe working environment	Logistics and transportation
	Site and space utilization
	Sustainability

, and the following subsections focus on the details of these opportunities and challenges.

4.1. Opportunities in Implementing Modular Construction Methods for Production Facility

Modular construction offers a range of advantages that make it particularly suitable for urban revitalization projects, especially when considering production facilities. The following discussion highlights key opportunities identified through mixed methods research, demonstrating how modular construction can leverage the unique opportunities of urban redevelopment.

Production facility layout and locations can be optimized to streamline production processes, facilitating rapid adaptation to changing demands. Modular construction benefits significantly from this flexibility, as factories can be designed to require minimal site space and infrastructure, making them ideal for urban settings where space is at a premium. Moreover, flexible production facility location allows for greater agility in production processes, enabling the relocation of production facilities closer to resources or markets. This adaptability ensures that factories can swiftly respond to market changes and operational needs, minimizing downtime and maximizing production facilities. The mixed methods research analysis highlights the term “site” across various studies, underscoring the importance of adaptable factory sites that can swiftly respond to market changes and operational needs [35,36,37,42,43,44,45]. Keywords such as “setup” highlight the importance of quick and efficient setup processes, crucial for factories in urban areas [41,42,44]. The ability to relocate and set up quickly ensures minimal downtime and enhanced operational flexibility. Additionally, the term “space”, with a frequency ranging from 0.2% to 0.27%, emphasizes the need for factory designs that minimize spatial requirements for the efficient use of limited urban space [34,42].

One of the key opportunities for production facilities lies in the improved labor condition and efficiency modular construction practices offer. Modular housing construction near a factory can significantly enhance safety measures in the assembly process, reducing the likelihood of accidents and creating a safer working environment. The keyword “safety,” frequently highlighted in the word frequency and thematic analysis, indicates a continuous focus on labor safety within factory environments [42]. By moving construction to a controlled production setting, the physical strain on workers is reduced through the use of automation and mechanized processes, addressing the terms “physical” and “demand” that suggest a need for lowering manual labor intensity [42,45]. Moreover, the production facility environment allows for better implementation of safety protocols and ergonomic workstations, contributing to overall worker well-being and productivity for projects in urban areas. Apart from the safety aspect, manufacturing modular units in the production facility allows for improved end product quality [34,35,36,37,39,40,41,42] and controlled working conditions in the production facility [42,43].

On-site manufacturing offers efficient storage solution to manage space constraints and material handling issues, and optimized storage designs ensure adequate space for inventory. Keywords like “material” and “inventory” emphasize the critical role of effective storage solutions in managing site constraints [37,44,45]. The frequent mention of “material” supports the insight that having sufficient space for inventory is essential for smooth operations [30,34,36]. Effective storage solutions are crucial for maintaining the flow of materials and ensuring that all necessary components are readily available when needed, thereby preventing delays and enhancing the overall efficiency of the modular construction process.

A manufacturing location close to the construction site for modular housing units and components significantly reduces transportation costs and delivery times. This proximity enables efficient logistics and transport systems, minimizing transit times. Studies highlight the importance of being close to the customer base, which reduces both transportation time and costs, as indicated by the emphasis on the term “customer” [43,44]. Moreover, keywords such as “time” and “distance” underscore a strong focus on reducing transportation times [34,36,37].

Modular housing construction near a production facility also presents better procurement to shorten the supply chain, reduce uncertainty in material delivery, utilize local resources, and implement Just-in-time (JIT) delivery. The terms “supply”, “delivery”, and “chain” reflect the industry’s emphasis on enhancing supply chain efficiency [35,45]. Additionally, the term “local” highlights the importance of sourcing materials locally to cut costs and support local economies [42,44]. Furthermore, the term “JIT” emphasizes the effectiveness of Just-in-time systems in inventory and production management for modular construction procurement [43].

The advantages of modular construction in terms of resource leveling include the collaborative use of resources, such as equipment, among stakeholders to optimize capacity and reduce idle time. Flexible resource leveling allows for responsive and scalable production, ensuring that resources are efficiently allocated according to project needs. Studies highlight the benefits of sharing resources among stakeholders, with terms like “equipment” and “stakeholders” underscoring this collaborative approach [35,39,42,44]. This flexibility helps stakeholders shorten the time required for the construction and assembly of units and components. Furthermore, the emphasis on the term “schedule” in various studies highlights the importance of reducing construction timelines [35]. By optimizing resource use and improving coordination, modular construction can significantly enhance project efficiency and delivery times.

The manufacturing of units supports sustainability by reducing on-site construction material waste and lowering the carbon footprint of factory operations due to shorter transportation distances. Studies highlight terms such as “waste”, “emission”, and “environmental” in this context, underscoring the environmental benefits of modular construction [37,42]. Furthermore, the manufacturing environment in the construction of modular houses offers the opportunity to use advanced technology, such as Building Information Modeling (BIM), 3D scanning, and the Internet of Things (IoT). Keywords like “scanning” and “BIM” reflect the growing adoption of these technologies in factory design, enhancing precision, efficiency, and sustainability in the construction process [34].

4.2. Opportunities in Implementing Modular Methods with Respect to Modular Design

Modular methods for housing construction offer various opportunities for urban revitalization, such as design enhancements, enhanced quality of the end product, cost optimization, provision of a safe working environment, improved site and space utilization, and sustainability. Further details on these opportunities, based on mixed methods research, are provided below.

Implementing modular methods presents opportunities in terms of design enhancements such as mass customization, flexible and free-form structures, aesthetically versatile structural forms, enhanced structural redundancy, durability and stability, and the integration of advanced technologies [46,47,49,50,52,55].

Manufacturing modular construction components in a production capacity allows for enhanced quality of the end product. The high frequencies of “production” and “product” mentioned in the studies highlight the emphasis on quality in production processes [34,37,39]. As an example, Pan and Zhang [47] compared concrete and steel modular production with conventional methods by measuring the number of defects, and their study demonstrated an enhancement in construction quality with few defects.

Modular construction methods in a factory environment enable cost optimization for the construction of facilities and overall construction expenses by reducing the transportation distance and enhancing quality control mechanisms. The term “construction” appears in multiple studies and indicates a significant focus on cost reduction through efficient construction practices in the factory environment [35,36,41]. In addition, the appearance of “construction” with the “facility” in different studies further supports the insight that cost reduction is achieved through the manufacturing of the components in a facility [34,37,42]. For instance, Zhou et al. [53] reported significant achievements with the implementation of prefabricated methods in rural areas, including a 35% decrease in construction time and a 45% reduction in costs. Moreover, Munmulla et al. [57] also demonstrated a 32% reduction in total construction costs and a 36% reduction in labor costs compared to traditional construction methods based on the case study of a single-story affordable modular house they conducted.

Modular construction for housing ensures a safe working environment during assembly, reducing accidents and enhancing overall productivity and quality, as this approach provides the construction and assembly of the units in a more controlled environment [47,54,56,57]. For instance, Pan and Zhang [47] compared accident rates between concrete and steel modular production and conventional methods and showed that modular production significantly reduced the risk of accidents. Mixed methods research highlights this aspect with the keyword “safety” in the following references, such as Pan and Zhang [47], Kim and Kim [49], and Woo and Hwang [51].

In terms of urban site and space utilization, Glumac [48], Kim and Kim [49], and Woo and Hwang [51] mention that modular construction addresses the challenge of limited space by efficiently utilizing small or irregularly shaped urban plots for housing development. This approach maximizes the use of idle or underutilized urban land, contributing to urban revitalization and sustainable development. Modular housing also offers the advantage of being relocatable, allowing it to adapt to changing urban needs. The opportunities for the urban site of the modular units are identified with keywords such as “site”, “space”, “mobility”, and “infrastructure” in the word-matching results [47,48,49,51,55,57].

Modular housing significantly contributes to sustainability across various dimensions. It reduces embodied energy through efficient construction methods and materials, mitigating environmental impact throughout the building’s lifecycle. Emphasizing the recycling and reuse of modular materials enhances sustainability by reducing waste and conserving valuable resources within urban contexts. Additionally, the design of modular housing supports easy dismantling and deconstruction, facilitating future renovation or relocation efforts with minimal ecological disturbance. Modular construction also minimizes environmental burdens, such as waste generation, pollution, and resource consumption, closely aligning with the objectives of sustainable urban development. Moreover, Maalek and Maalek [46] mention modular design in the specific form of skeletal spatial structure designs that can be adapted to create new solutions that meet the modern construction needs of contemporary societies, and those systems can address a wide range of sustainable construction demands, including residential housing. Munmulla et al. [57] compared the energy performance of traditional and modular construction through a case study and documented a 16% decrease in embodied energy. Mixed research methods highlight sustainability aspects with “waste”, “environmental”, and “impact”. Overall, modular construction methods optimize construction costs and timelines, ultimately fostering the availability of more affordable housing solutions in urban areas [46,47,48,49,50,53,54,55,56].

4.3. Challenges in Implementing Modular Methods for Production Facility

Production facilities for urban revitalization face challenges in design and planning, capacity, workforce, logistics and site management, quality assurance and regulations, and technology integration. The discussion below presents challenges identified through a review of publications and mixed methods research analysis.

Production facility design and planning involves overcoming challenges related to maneuver capability due to the weight of mobile units, stability of the mobile units, available space for circulation, equipment size, storage space, setup and dismantling, and layout design for the assembly line. The mixed methods research analysis highlight these issues with terms like “layout” [34,38], “assembly” [34,39,40,41,42,43,44], “equipment” [38,39,41,42,44], “storage” [42], “circulation” [42], “mobile” [35,42,43,44,45], “unit” [39,42], “setup” [41,42,44], “line” [39,41,42], “size” [34,42], “weight” [34,42], and “stability” [42].

Yang and Lu [34] highlight that approximately 20% to 50% of total operating costs in manufacturing are tied to material handling and layout, while a well-designed facility layout can potentially reduce these expenses by about 10% to 30%. Gee and Brown [42] suggested a mobile factory system for on-site construction. Their study demonstrated that setting up the mobile unit presented several challenges; the slight reduction in the defined operational plan area highlighted the necessity of establishing precise dimensions for the unit to ensure safe processes. Gee and Brown [42] mentioned that space for temporary tool storage was not considered in the factory design in advance and solved the issue by adding a tool rack system.

The low capacity of the production facility in modular construction is a significant challenge, with an emphasis on terms like “production” in Nam et al. [39], “low” production capacity highlighted by Gee and Brown [42], and “capacity” noted by Gee and Brown [42] and Alarcon-Gerbier and Buscher [45]. However, the only identified references that mention production capacity as a challenge include Peiris et al. [35], Nam et al. [39], Gee and Brown [42], and Rashid and Louis [41]. It was considered that single-word matching was not able to distinguish production capacity as an opportunity or challenge. For instance, Nam et al. [39] state the importance of production planning in industrialized construction due to its direct impact on the project’s timeline, quality, and sustainability. As modular project characteristics vary from project to project, bottlenecks and construction delays frequently occur, which lead to a reduced production rate and overall inefficiency in the production process.

Manufacturing and assembly workforce challenges include managing a traveling workforce, addressing cultural differences, providing adequate training, and finding qualified labor. The terms “qualified” and “workforce” mentioned in references including Son and Han [36] and Gee and Brown [42] underscore the labor-related issues in the implementation of the modular methods. As an example, Son and Han [36] underscore that current inspection methods in the manufacturing phase depend on manual measurements that tend to be inaccurate, laborious, and time-consuming. They propose using laser-scanned data to reduce the need for physical labor and to identify whether the production phase fails to meet user requirements due to geometric constraints. In addition, Kazemi et al. [44] point out that a movable factory in urban areas can cause additional expenses for labor logistics, fluctuating wages based on the location and training cost of the labor. For this reason, it is important to identify foreseen expenses to plan and take action in advance.

Logistics and site challenges involve support from off-site, changing the location of production units, and path assignment and traffic allocation. The mixed methods research highlights logistical issues with terms like “distribution” [36,37], “allocation” [37,45], and “traffic” [37]. Additionally, the importance of “units” is noted by Rashid and Louis [41], Kazemi et al. [44], and Alarcon-Gerbier and Buscher [45], while “support” and “offsite” considerations are emphasized by Gee and Brown [42]. The term “changing” is also relevant in the context of transportation, as highlighted by Kazemi et al. [44]. Alarcon-Gerbier and Buscher [45] studied the flexible location problem of mobile and modular production facilities. They suggest making short-term and periodic plans to better manage cost, travel distance, and time required for the relocation of the mobile production units.

Quality assurance is also crucial as a challenge considering the term “quality” appears in multiple studies, including Peiris et al. [35] and Ahn et al. [40], with a focus on the impact of the defective panels on cost and schedule. For instance, quality problems might cause construction at the site to terminate entirely due to the time required for reassembling and redelivering defective panels if the issues cannot be easily fixed on-site. To reduce quality issues such as missing parts or dimension errors during manufacturing, the study of Ahn et al. [40] introduces a projection alignment method that visually guides workers by overlaying the designed model onto the actual assembly location, which allows workers to find the correct installation spots easily and check for any missing components or deviations by comparing the final product with the projected plan.

Considering the permits and regulations for production facilities in urban areas, these facilities encounter challenges including taxation, community engagement, securing legal permits, and complying with health and labor regulations across different regions or countries [38,53,54].

Peiris et al. [35] mention the limited information and application of new technology integration like BIM, 3D scanning, IoT, etc., for the implementation of modular construction technology. Technology as a challenge in the modular design is highlighted with the keywords “limited”, “information”, and “technologies” in the mixed methods research analysis.

4.4. Challenges in Implementing Modular Methods for Modular Design

Modular design as a construction approach for urban revitalization confronts design limitations, economic challenges, legal approvals, and building permits, as well as logistics and transportation issues. Detailed information is provided below by combining results from publication reviews and mixed research methods.

Modular design faces significant design limitations such as limited panel dimensions due to logistics and ensuring quality assurance throughout the production process. The words stated such as “panel” in Ahn et al. [40] and “logistics”, limited”, and “dimensions” in Gee and Brown [42] emphasize that modular design is impacted by the logistics of the urban site. Gee and Brown [42] highlight the maximum prototype unit dimensions for their study as 6 m by 2 m to maximize flexibility, making the unit suitable for parking in a domestic driveway or placement in a facility like a 20-foot ISO shipping container.

Considering the economic aspect as a challenge in modular design, authors like Maalek and Maalek [46] and Munmulla et al. [57] mention that the initial investment required for training personnel to effectively manage and assemble modular housing components is a challenge from a labor perspective. In this sense, the term “training” is mentioned as a keyword under the labor category [53]. In addition to the training costs for labor, materials are purchased in advance in modular construction, which causes high initial investment costs compared to traditional construction methods [53,57].

Glumac [48] highlights that obtaining necessary legal approvals and building permits poses a significant challenge due to varying regulations and zoning restrictions for modular construction. The word frequency and thematic analysis highlight the permit aspects considering the keywords like “local”, “legal”, and “region” [48,53,55]. For example, Glumac [48] underlines the implementation of a functional temporary land-use policy as a legal measure and mentions the maximum legal duration of tiny portable houses in the area is five years in the Netherlands.

The logistics and transportation of the procurement of modular components may face transport limitations in narrow urban streets, finding appropriate areas for factory setup, and supply chain issues [53,54,57]. For instance, Glumac [48] underscores the critical role of road conditions and transport distances in the logistics of moving prefabricated components from the manufacturing facility to construction sites for modular units. In addition, Munmulla et al. [57] identify inadequate transportation infrastructure for the movement of modular units in urban areas as a constraint.

Overall, the identified challenges and opportunities with the related reference studies are presented in Table A1 and Table A2 in the Appendix A.

4.5. Identified Research Gaps

Several multi-factor considerations emerge as being relevant to the overcoming of challenges to achieve opportunities. The beneficial efficiencies possible with modular construction depend on the effective combination of facility design (process, location, scale) and the parameters of the products (modules, building components) being produced. This necessitates careful integration of the building design content, the specific fabrication process, and the on-site installation. Further, the achievement and maintenance of high production quality is essential for taking full advantage of the modular process both in the built product and the process efficiencies. The identification of these considerations points to gaps in the collected research where additional attention is needed.

While there are generalizable insights to be taken from the range of studies, regardless of the specific geographic location on which they are focused, there remain factors unique to individual locations that could influence their efficacy. Qualities of regional urban forms impact the physical and operational parameters that need to be addressed in the construction of housing. Similarly, the demands and expectations of housing markets influence the characteristics and viability of new housing stock. Further, there is an overlap with local building culture that combines factors such as material supply and labor experience with resident expectations. For the authors’ initial motivations, this asks for further focus on North America, but similar attention could be of added value in other regions as well.

Some studies have looked at the application of industrialized construction to the single-family home sector; Gee and Brown [42] and Munmulla et al. [57] are examples. However, most attention to the present has been given to applications for larger-scale multifamily projects. There is therefore the potential for more extensive investigation into the prospects for the scalar adjustment of modular construction techniques both as it relates to the production facilities and the end projects.

This sets up the prospect of exploring how identified opportunities and novel approaches, including insights from other manufacturing sectors, might be best leveraged when confronting the specific challenges presented by targeted real-world efforts at supplying housing. Considering what component scale, what type of fabrication facility, and in what location relative to the site are just some of the factors to assess in future efforts to improve the deployment of modular construction techniques, particularly for addressing the sustainable housing needs of our cities.

5. Conclusions

The systematic literature review conducted in this study revealed critical insights about recent studies on the application of modular construction techniques in contemporary urban conditions. Through careful selection of search parameters, the process returned studies focused on aspects of modular construction and also captured relevant work in areas such as mobile manufacturing and urban revitalization. The review illustrates the opportunities that pursuing modular construction approaches provide for building in our cities. Potential benefits existing in the form of increases in quality, sustainability, and worker safety combined with reductions in cost and project schedule are established. Also identified are ways that transportation, facility location, and production consistency can be beneficial. Further, modular construction is particularly suited to productive integration with emerging technologies (BIM, IoT, advanced scanning, etc.). However, there are challenges that emerged from the analysis of the literature too. Difficulties can arise when considering the demands of module transportation, labor requirements, the relative inflexibility of factory outputs, and achieving production quality. The sometimes conflicting identification of individual factors as both opportunities and challenges suggests the need for more nuanced understanding and refined approaches to achieving improved results.

The limited but meaningful number of papers returned, in addition to suggesting the need for more research in this area broadly, indicated research gaps in areas including design/process integration and the optimization of modular approaches to the unique parameters of specific urban conditions. The authors recommend that future research embrace interdisciplinary approaches to fully address the scope of these challenges and include needs assessments, feasibility analysis, process proposals for proof-of-concept testing for both establishing fabrication facilities and designing constructed products, and eventual deployment. These more focused analyses and proposals will better support an understanding of what will be needed, not only for academics but also for practitioners, developers, and governments, to more effectively leverage the opportunities offered by modular construction to sustainably address development needs and provide a reference for intentional adaptations for use in diverse urban contexts and locations.