Geography: California

Since 2020, CSH has used our Los Angeles Supportive Housing Loan Fund to test an important question: Can modular construction meaningfully reduce the time and cost required to deliver supportive housing at scale? 

This work began in response to the City of Los Angeles’ 2019 Housing Innovation Challenge, a $120 million initiative designed to encourage new approaches to accelerate housing production. CSH partnered with BlueHub Capital to support this effort, providing acquisition, predevelopment, and construction financing for a pipeline of modular projects. Along the way, we have not only deployed capital, but we have also refined how we underwrite modular deals and learned what it takes to make these projects successful. 

Since 2020, CSH has invested over $23 million in predevelopment, acquisition and construction financing for developments using modular construction methods. 

A Portfolio Designed to Test Innovation 

From 2020 through 2025, CSH supported a cohort of modular developments across Los Angeles County. Projects were initially selected based on strong financing and support from the City of Los Angeles. 

Over time, the cohort showed that the greatest time and cost savings were achieved by projects that combined streamlined financing, standardized design, coordinated permitting and expediting, and experienced development teams. These outcomes were often reinforced through collaboration and replication: shared project teams, cross-site coordination, and financing partners working across multiple deals to reduce complexity. 

Two projects in particular demonstrate how these factors translate into measurable results. 

Western Landing, developed by Abode Communities, represents one of the strongest examples of modular success within the portfolio. 

• CSH investment: $5.6 million (acquisition & predevelopment, with BlueHub Capital) 

• Construction timeline: 16 months 

• Total development cost: $49.7 million (~$613,580 per unit) 

Sherman Way, developed by LA Family Housing, followed a similar approach and achieved similarly accelerated timelines. 

• CSH investment: $5.8 million (acquisition & predevelopment, with BlueHub Capital) 

• Construction timeline: 16 months 

• Total development cost: $46.3 million (~$723,438 per unit) 

• Status: Lease-up, with grand opening expected Fall 2026 

This experience highlights both the flexibility required in modular development and one of the sector’s key risks: manufacturer instability. 

What Worked: Early Signals of Success 

Since 2020, CSH has underwritten 14 loans across 12 modular developments in Los Angeles County, deploying capital at multiple stages of the development lifecycle. This includes 10 acquisition and predevelopment loans to help projects get off the ground, as well as 4 construction loans to address late-stage financing gaps driven by rising costs. To date, 8 of the 12 projects have been completed, delivering 468 units of affordable and supportive housing, providing an early but important proof point that modular construction, when paired with the right financing, local permits coordination, and partners, can help bring housing online more quickly. 

Across the portfolio, several consistent themes emerged: 

• Accelerated construction timelines 

Several projects reduced construction to approximately 16 months, compared to the typical 18–24 months for similar developments. 

• Shortened predevelopment phase 

Timelines were compressed to roughly 22 months, versus 36 months or more, due to early-stage financing, upfront modular deposits, and coordinated project planning. 

• Strategic use of early capital 

Access to acquisition and predevelopment financing enabled developers to move quickly, while funding for modular deposits helped expedite manufacturing and construction timelines. 

• System-wide coordination improved efficiency 

Alignment across developers, lenders, and City agencies—particularly around permitting and design approvals—helped projects advance more quickly. 

• New financing tools unlocked progress 

The creation of new financing tools helped address a critical early barrier to modular development. CSH’s Supportive Housing Loan Fund, alongside LA LISC’s Modular Housing Fund (developed with philanthropic partners), provided early-stage capital for land acquisition, pre-development activities and modular deposits, giving construction lenders time to get comfortable and allowing projects to move forward during predevelopment. 

While these outcomes demonstrate the potential for modular construction to accelerate housing delivery, they were made possible in part by critical early interventions led by CSH and CDFI partners, including LA LISC. These efforts helped fill key financing gaps and de-risk projects at pivotal moments. At the same time, this work has surfaced important lessons about the risks and complexities that must be addressed to scale this approach effectively. 

What We Learned: Key Risks and Considerations 

While modular construction shows real promise, our experience also underscores that it introduces new complexities. These lessons are now central to how CSH evaluates and structures future investments. 

1. Manufacturer Stability Is a Systemic Risk 

One of the most significant challenges we observed was the instability of modular manufacturers. 

A major California manufacturer underwent a structural transition during the development of one of our projects, forcing teams to pivot midstream. More broadly, modular factories often struggle to remain financially viable without a steady pipeline of projects, which can lead to closures, restructuring, or changes in delivery timelines. 

CSH now places greater emphasis on: 

• Evaluating manufacturer pipelines and financial health 

• Understanding production capacity and backlog 

• Assessing contingency plans if a manufacturer fails to deliver 

Encouragingly, California policymakers are considering proposals to create insurance backstops for factory-built housing, which would help mitigate this risk at a system level. 

2. Coordination Across Teams Is Critical 

Modular construction requires a higher degree of coordination than traditional building. 

Developers consistently cited misalignment between design teams, manufacturers, and general contractors as a top challenge. Because modular units are fabricated off-site while site work occurs simultaneously, any disconnect can result in delays or costly redesigns. 

The strongest-performing projects: 

• Used teams with prior experience working together 

• Integrated modular considerations into design from the outset 

• Maintained clear communication across on-site and off-site workstreams 

As a result, CSH now requires more detailed vetting of team experience and works closely with developers to strengthen team composition during underwriting. 

3. Storage and Transportation Risks Must Be Managed 

Three projects in the portfolio experienced water damage to modular units during on-site storage, before roofing systems were installed. 

These incidents: 

• Triggered millions of dollars in insurance claims 

• Delayed construction timelines 

• Highlighted vulnerabilities during the period between delivery and installation 

Projects that successfully avoided these issues planned for: 

• Robust waterproofing strategies 

• Efficient sequencing to minimize onsite exposure 

• Clear protocols for transport and storage 

Going forward, CSH works with developers to evaluate these logistics early in the process. 

4. Permitting and Inspections Are Improving—But Still Evolving 

All projects in this portfolio were in Los Angeles, providing a consistent regulatory environment, but also revealing how local processes are still adapting to modular construction. 

Positive developments include: 

• Increased familiarity among city departments 

• Faster inspections as agencies gain experience 

• State-level support through California’s Factory Built Housing Program 

At the same time, developers continue to face: 

• Inconsistent interpretations of building codes 

• Delays tied to inspection coordination 

In response, California has introduced several policy proposals aimed at: 

• Standardizing building code interpretations statewide 

• Allowing developers to use state-certified inspectors 

• Aligning local requirements more closely with state standards 

5. Insurance Costs Are Rising 

Insurance has emerged as a growing cost pressure across all affordable housing, but particularly for modular projects. 

Builder’s risk insurance has become: 

• More expensive 

• More difficult to obtain 

This is largely due to concerns about water damage and construction-phase risks. Projects must now: 

• Budget for higher premiums and deductibles 

• Plan for potential delays tied to claims 

• Engage insurers early in the development process 

Looking Ahead: Policy Momentum and Market Potential 

California continues to position itself as a leader in housing innovation. As of 2026, policymakers are advancing a suite of proposals to support factory-built housing, including: 

• Standardizing building codes across jurisdictions 

• Reducing module transportation costs 

• Expanding access to experienced inspectors 

• Creating insurance protections tied to manufacturer risk 

• Aligning state funding programs with modular development needs 

These efforts reflect a growing recognition that, while modular construction is not a universal solution, it can play a meaningful role in addressing the state’s housing shortage. 

Five years into this work, one conclusion is clear: Modular construction can deliver real time savings, but only when supported by strong partnerships, coordinated systems, and proactive risk management. 

For CSH, these lessons are already shaping how we invest, ensuring that future projects not only move faster, but are also better positioned to succeed. 

Supportive housing is a critical solution to homelessness, but much of the nation’s existing supply is at risk. This April 2026 briefing from CSH highlights the growing crisis facing supportive housing properties, including deferred maintenance, rising operating costs, and limited funding options. Drawing on examples from states and localities across the country, the report outlines promising preservation strategies—such as grants, low-interest financing, and targeted programs—to stabilize and sustain these vital homes. With preservation far more cost-effective than new development, this resource offers actionable insights for policymakers and practitioners working to protect supportive housing and prevent further loss.

CSH is thrilled to announce the teams selected for the 2026 Groundwork: Youth Supportive Housing Development Training Series, a comprehensive four‑month virtual program designed to help communities turn early‑stage ideas into fully developed supportive housing concepts for youth and young adults.

This year’s Groundwork cohort brings together a diverse group of organizations—youth service providers, developers, system partners, and community leaders—who share a commitment to creating safe, stable, and supportive housing opportunities tailored to young people. Over the coming months, participants will engage in a dynamic learning experience that blends training, coaching, and collaborative project development.

About the Groundwork Training Series

Groundwork is a four‑month virtual learning and technical assistance program designed to help multi‑sector teams move a youth supportive housing concept from early vision to actionable plan. Through four live sessions, guided team meetings, individualized coaching, and optional office hours, teams build shared understanding, deepen partnerships, and clarify the steps needed to develop effective supportive housing for youth and young adults.

Participants explore model design, project development basics, system collaboration strategies, and role alignment. Youth and young adult engagement is strongly encouraged to ensure concepts reflect lived expertise and community needs.

Introducing the 2026 Groundwork Cohort

We are proud to welcome the following teams to this year’s Groundwork cohort:

• Better Youth — Los Angeles, California
• Child and Family Charities — Lansing, Michigan
• Covenant House International — Dallas, Texas and Boston, Massachusetts
• Emerging Phoenix — Richmond, Virginia
• Living Waters Youth — Chicago, Illinois
• Montana Continuum of Care Coalition
• Zoe, Incorporated — Richmond, Kentucky

These organizations bring deep experience, passion, and insight from communities across the country. Over the next four months, they will work collaboratively with CSH and one another to strengthen their supportive housing concepts and build the partnerships necessary for long‑term success.

Why Groundwork Matters

Youth and young adults experiencing homelessness face unique challenges—and systems are often not designed to fully meet their needs. Supportive housing provides a stable, youth‑centered foundation for young people to thrive. By equipping communities with tools, knowledge, and a collaborative framework, Groundwork helps lay the foundation for impactful, sustainable solutions.

We look forward to supporting this year’s Groundwork teams as they bring transformative projects to life.

Twenty years ago, CSH developed the FUSE (Frequently Used Systems Engagement) model to deliver a transformative solution that aligns housing, health, and justice systems to provide supportive housing and coordinated care. With a proven track record of success, FUSE has become a national model for cross-sector collaboration and data-driven intervention.

For 20 years, CSH has partnered with communities across the country to identify people with complex needs who frequently cycle through emergency systems—such as shelters, hospitals, and jails—and connect them to the housing and services they need to break the cycle, achieve stability, and thrive.

This brief highlights 4 communities that have successfully implemented FUSE. Partners share their lessons learned and the lasting impact that FUSE has had on systems, residents, and communities.

This report presents a comprehensive assessment of workforce needs in the homeless services sector in Los Angeles County. Using detailed labor market data, industry and occupational analyses, and comparison of postsecondary award trends, this study’s findings reveal a significant gap between workforce demand and educational supply of trained workers.

The people who serve individuals experiencing homelessness are the foundation of the county’s response system. Supporting an adequate number of well-trained workers in this sector is not only a practical necessity, it is a matter of public trust and social equity. Ultimately, the county’s investments in services for the homeless must be matched by investments in the workforce. With data-driven strategies and targeted investment, Los Angeles County can build the workforce it needs to match the scale of its commitment to ending homelessness

Communities across the country are facing a shortage of qualified professionals in homeless services. In partnership with Los Angeles Homeless Services Authority (LAHSA) and local universities, CSH developed a workforce strategy centered on a university-based certificate program. Backed by labor market data through the Los Angeles Center of Excellence on Labor Market Research and extensive stakeholder input, the program aims to close the gap between classroom learning and frontline service needs. 

The 2025 Los Angeles Emerging Developer Learning Lab has launched, bringing fresh energy and innovation to the supportive housing landscape in Los Angeles. Led by CSH, the Los Angeles Emerging Developer Learning Lab is a strategic initiative designed to strengthen the capacity of early-stage and mission-driven housing developers committed to expanding supportive housing across Los Angeles County. Structured as a co-learning cohort, the program engages five selected development teams in a series of virtual sessions, one-on-one technical assistance, and peer learning opportunities. Each session is focused on building internal infrastructure, advancing housing projects, and fostering long-term sustainability. By investing in early-stage developers, CSH aims to cultivate a new generation of leaders equipped to deliver high-quality, service-enriched housing solutions for communities most in need. 

The 2025 cohort includes a mix of five nonprofit and for-profit emerging developer groups, many of whom are in the early stages of their development journey. A few participants bring experience in affordable and supportive housing and are using this opportunity to cultivate new leadership in the field through learning and collaborating. The program will run through December 2025; with monthly for co-learning sessions focused on key topics such as funding and financing, development and design, construction, operations, and supportive services. 

The group met for the initial program kick off in September. They took part in the first co-learning session focused on topics such as budgeting, structuring and building partnerships, and the cost-of-service needs in supportive housing. The group will meet again (November) for a themed co-learning session on trauma informed design.  

Meet the 2025 Teams

Neighborhood Community Housing, a nonprofit organization dedicated to providing affordable housing paired with supportive services to communities in Los Angeles and surrounding areas. Their mission is to revitalize communities and empower residents through stability, wellness, and opportunity.

The Good Seed, began as a ministry of Good Seed Church, focused on supporting transition-age youth, and has since expanded to serve women, families, and older adults across Southern California. Through housing, outreach, and intensive case management, they provide nurturing care and essential tools to help individuals thrive and become healthy, productive members of society.

Oliver Emerson Development, a real estate development firm founded in 2003, focused on transformative redevelopment and housing solutions. They specialize in repositioning underutilized properties into sustainable, community-centered assets that drive both economic growth and social impact.

The People Concern, a leading nonprofit in Los Angeles County that provides comprehensive services to individuals experiencing homelessness, poverty, and trauma. Through housing, mental health care, and supportive programs, they empower people to rebuild their lives and thrive in their communities.

Mercy Housing, a nonprofit dedicated to eliminating homelessness by providing affordable, service-enriched housing to families, seniors, veterans, and individuals with disabilities. Mercy is partnering with CTY Housing who provides turnkey development and financial advisory services to affordable housing stakeholders and has contributed to the planning and development of over 8,000 homes for low-income households, with a mission centered on building communities where individuals can stabilize and thrive.