Testimony to the California State Assembly Select Committee on Housing Construction Innovation

On January 14, 2026, Tyler Pullen testified to the California State Assembly Select Committee on Housing Construction Innovation.

Testimony by Tyler Pullen
Assistant Director of Building Innovation, Terner Labs
Researcher, Terner Center for Housing Innovation, UC Berkeley

Watch the hearing video (testimony starts at 2:18:05)

Good afternoon, Chair Wicks and members of the Select Committee. My name is Tyler Pullen, and I am the Assistant Director of Building Innovation at the Terner Labs, and a researcher at the Terner Center for Housing Innovation at UC Berkeley.

I have spent nearly a decade researching and working in and around innovative and industrialized construction topics, especially factory-built housing (FBH).

In that time, I’ve done hundreds of interviews and sourced and reviewed over 800 companies innovating in the building industry, as well as joined or hosted several international study tours on the topic.

And just in the past two months, Terner staff has spoken with more than 50 people in the housing industry—including many of those on these panels—to identify best practices and collect potential policy ideas.

From this and previous research, the good news is that many of the challenges you have heard about in these hearings are solvable.

An important preface: the following ideas are not all-inclusive of the policies we heard over the last several months. But they represent a subset of those that had relative consensus among interviewees. And I’ll note that the full and more robust list of policy ideas will be published in the white paper on which we are actively working.

Altogether, the policies fall into four main categories.

The first area centers around building code reform, with the goal of increasing certainty and consistency in code review and enforcement.

For instance, as California has done for some elements of local zoning, it could decide that state building code should preempt local codes—for FBH, or writ large—to minimize local variations that can make standardization difficult.

Some interviewees reported that the existing state program for in-factory inspection is intended to apply in this way, but there can still be friction with local code officials unfamiliar with HCD’s program.

Another suggested policy to address this was to allow state-certified, third-party inspectors for all on-site work on FBH projects, rather than just the in-factory portion, to minimize the coordination risk between state and local review scopes.

Other ideas supported by interviewees encouraged further streamlining such as establishing a shot clock for local review of FBH projects.

A second policy area identified focuses on reducing the risk and liability gaps on FBH projects through targeted state funding.

For instance, a state program could support factory bonding to minimize pass-through risk to general contractors and developers while the industry matures to be able to bond more of its own projects.

Another suggestion was a state loan guarantee program available to developers using FBH for their projects, so that early adopters of innovation are supported if and when their factory partners fail.

Note that we did ask interviewees about potential funding or tax incentives to directly stimulate the construction of new factories but heard that removing regulatory friction and easing project financing was more important to stabilize the industry in the near-term.

A third policy category centers on using existing programs, such as those supporting affordable housing, to incentivize and support innovative methods and using limited state resources more efficiently.

Incentives could focus on desired outcomes, such as granting additional points or providing additional funds for those delivering housing more quickly and cost-effectively, contributing less waste to landfills, or reducing on-site disruption with less noise and traffic impacts on neighbors.

Adjustments to existing state financing programs could support a wider range of eligible spending, such as on the upfront deposits and early drawdowns often required for FBH projects to move forward.

Other research into innovative construction highlights “demand aggregation” as a key place for government intervention; this refers to a consistent market demand to stabilize a high volume of factory output.

Interview respondents in our research had mixed views on how to achieve this, but they identified university student housing and surplus state-owned land sites as potential targets to aggregate demand for FBH.

The fourth major area identified for state action is in education and research.

This could include more outgoing education and training for local code officials and inspectors to improve the streamlining function of the existing in-factory inspection program.

The State could standardize, collect, and share data on project outcomes to build a deeper evidence base on the dynamics influencing development costs and the impact of innovative building methods.

And finally, the State could directly fund research, with one specific suggestion to seed one or more research centers providing virtual and/or physical hubs for the knowledge sharing and training described above.

In conclusion: even the most successful international precedents show that mature and stable ecosystems for construction innovation take time, and providing a supportive regulatory environment for housing progress writ large is a long-term project. But there are near-term opportunities for California to establish itself more firmly as a national and global leader in forward-looking reforms for innovative construction.

To that end, I look forward to your questions and continued discussion. Thank you.