Introduction

In a recent exchange between Benjamin Toney — a scholar-practitioner straddling academia, policy, and the housing innovation space—and Jason Van Nest, Executive Director of the Center for Offsite Construction (CfOC), a familiar set of tensions came into sharp relief: the persistence of outdated construction methods, the failure ad-hoc policy treatments to yield scalable outcomes, and the unrealized potential of offsite systems to reshape how buildings are designed, financed, and delivered.

But underneath the technical language and policy critique lies a deeper question: What will it take to move an entire industry from craft to product?

Toney, whose work is currently embedded within a legal-policy strategy firm in California, opened the discussion with a tour of his current efforts: launching a new research and communications initiative focused on housing innovation, labor conditions, and 21st-century adaptation. He had just visited a Northern California carpenters’ training center when he joined the call. Van Nest, speaking from the CfOC’s research base at New York Tech, pulled up a live draft of Modular 2.0—now in its annual revision cycle—and began walking Toney through its theoretical architecture.

What followed was a spirited conversation about systems design, manufacturing maturity, and the limits of policy without markets.

Engineer to Order vs. Configure to Order

At the heart of the exchange was a diagram that has come to define CfOC’s worldview: the ETO-to-CTO continuum, a framework borrowed from manufacturing theory and adapted to the built environment. As Van Nest explained, most American housing is still trapped in the “Engineer to Order” (ETO) paradigm, where each project is bespoke, risk-heavy, and slow.

“In home construction, it’s 1790,” Van Nest said, “and we’re still walking into the shirt shop to get measured.”

By contrast, in industries that have achieved scale and efficiency—like footwear or consumer electronics—products are “Configured to Order” (CTO). Customers select from standardized options. Interfaces are known. Supply chains are tuned.

“You walk into Foot Locker knowing your size is 10.5,” Van Nest continued. “The salesman isn’t stitching your shoe. He’s not turning oil into polyester. He’s delivering a finished product that plugs into your needs.”

This level of maturity, the CfOC argues, is what modular construction must achieve—not merely in its physical technologies, but in its organizational models and contractual frameworks. It’s not enough to build indoors. One must also build differently.

Social Technology and the Limits of Policy

Toney was quick to reframe the issue as not just technological, but institutional. He described the real bottleneck as one of social technology—narratives, contracts, incentives, and governance structures that either enable or block change.

“You still have to build an entity that can absorb and negotiate the aggregate and distributed risks across all actors in the field,” Toney said. “The technical capacity might be there, but the institutional machinery isn’t.”

Ben’s sentiment echoes Mod 2.0’s emphasis on “social technology” as the missing link. Physical innovation (pods, panels, digital twins) cannot catalyze system change alone. It must be coupled with new ways of organizing contracts, aggregating demand, financing production, and sharing risk.

Van Nest agreed—and offered a metaphor that underscores the absurdity of the status quo: “Construction is one of the only industries where we’re still shipping raw commodities to a site  of product consumption and asking everyone to fabricate, assemble, and install … on-site, one job at a time. It’s like if your running shoe was made in the Foot Locker stockroom.”

Design Competitions vs. Productization

The conversation then turned toward government-led efforts to spark innovation through disconnected policy interventions. Both participants expressed skepticism. Toney referenced recent discussion by economist Salim Furth inquiring as to whether preapproved plans are disconnected from parcels and production pathways.

“Everybody wants to do one of those competition format design things,” Toney said, “but they don’t map the designs to the land, and they don’t map them to production. That can be a missed opportunity.”

Van Nest pointed to the CfOC’s recent role advising multiple jurisdictions across the Northeast that are funding “strategic plans” to create modular factories—before knowing what products they will make or how demand will be aggregated.

“It’s risks an expensive version of, ‘if you build it, they will come,’” he said. “Some municipalities are eager to build the factory before they even know what it should produce.”

This is where the CfOC’s roadmap differs. It begins with product definition. Without clearly defined, legally defensible, and interface-standardized products, there can be no financing, no procurement, and no scale. As Van Nest put it: “To reform the marketplace, you need three things: agreed-upon products, the capacity to manufacture them, and a mechanism to aggregate demand. Big partnership are the only way to wrangle something this big – individual firms cannot muster that much capitol and mitigate that much risk.”

The Legal Divide: Common Law vs. UCC

One of the most elegant pivots in the conversation came when Van Nest reframed the modular challenge in legal terms. “If you go into a law library,” he said, “engineer-to-order construction contracts live under

common law section – over on the left. But when you buy a product (a toaster, a car) you’re protected under the Uniform Commercial Code – over on the right. These sections don’t really mix.”

This distinction matters. In common law, responsibility is adjudicated through notions like standard of care and negligence. But in product law, the emphasis is on warranties, returns, and merchantability.

For modular construction to be treated (read ‘financed’) as a mature industry, its components must be sold as products, not services. That transition requires both legal reform and interface standardization, such as the CfOC’s work with the International Code Council (ICC) on the Modular Interface Standard (CfOC-ICC-1220).

From Manufacturing Snobbery to Structural Critique

The tone of the conversation was direct but never cynical. Van Nest—at times self-described as a “manufacturing snob” — offered blunt assessments not out of elitism, but out of exasperation with an industry searching for a path to modernization.

“There isn’t a modular plant in America that scores above a 2.5 on a 5-point manufacturing scale,” he said, referencing a collaboration with a systems engineering consultant. “They’re still growing into factories. Many are still functioning as indoor construction sites.”

Toney acknowledged the scale of the problem. “We just have to change 40 million minds,” he joked. “But hey, we’ve got two so far.”

Conclusion: From Talk to Transformation

The conversation ended with an invitation. Van Nest offered to list Toney as a contributor to Modular 2.0 and encouraged him to join the network of thinkers, practitioners, and policy leaders helping shape the field’s future.

For those outside the field, the conversation may read as technical or even niche. But the stakes are high. Construction remains one of the last major sectors untouched by true industrialization. As a result, it is slow, expensive, and environmentally unsustainable.

Modular 2.0 is not just a framework. It is a provocation to friends like Ben. Conversations like this one — with rigor, tension, and a dash of humor — are where its future will be forged. Please reach out to the CfOC to join such a chat.

To learn more about the Center’s research roadmap or join the commentary circle on Modular 2.0, visit the Center for Offsite Construction’s website, or reach out directly. As always, we welcome disagreement—so long as it moves the conversation forward.