Mass Timber

Executive Summary

The United States faces a critical housing shortage of nearly 4 million homes while simultaneously confronting climate change challenges. Mass timber construction technology offers a promising solution that addresses both issues while also having strong aesthetic appeal and fast building timelines. With appropriate policy interventions, mass timber technology can help create abundant, affordable, and climate-friendly housing while supporting economic development in rural timber-producing regions.

Key Benefits of Mass Timber

• Increases Supply of Housing: Mass timber is particularly advantageous in a height range (6-18) where other building materials have important drawbacks and thus helps build more multifamily housing and fill a crucial gap in urban housing development.
• Cost-Effectiveness: Faster construction (up to 25% quicker than traditional methods), reduces labor costs and time investments.
• Environmental Advantages: Each cubic meter of mass timber sequesters approximately one metric ton of CO2.
• Superior Structural Properties: Mass timber has a 20% higher strength-to-weight ratio than steel and 4-5 times that of non-reinforced concrete.
• Safety: Mass timber is more fire-resistant than conventional lumber, creates cleaner work environments, and performs well in earthquakes.

Growth Trajectory

Mass timber construction has expanded rapidly from the first U.S. building in 2011 to over 2,000 buildings by 2023, with projections suggesting 24,000 new structures by 2034. Major corporations including Walmart, Google, and Microsoft are also adopting this technology for their facilities.

Policy Challenges and Recommendations

• Forest Management: Pass the bipartisan “Fix Our Forests Act” to streamline environmental reviews, improve forest management, and create sustainable timber supply chains.
• Manufacturing Capacity: Implement targeted tax credits for R&D and facility construction to help with the substantial upfront capital investment requirements ($60-75 million).
• Transportation Regulations: Create a standardized, streamlined multi-state permitting system to replace the current patchwork of state requirements for oversized loads.
• Building Code Adoption: Encourage the remaining 22 states that have not done so to adopt the 2021 International Building Code that allows mass timber construction up to 18 stories.
• Workforce Development: Establish tax incentives and educational partnerships to develop specialized skills needed for mass timber manufacturing and construction.

Introduction

The United States is grappling with a housing shortage. We have nearly 4 million too few homes. We’re also increasingly dealing with climate change. Helpfully though, an innovative building technology that reduces both construction costs and takes action on climate change is gaining momentum across the country.

Mass timber construction, which uses engineered wood products that have been cross-laminated to increase their collective strength, has a strength to weight ratio 20% higher than steel and four to five times that of non-reinforced concrete. It is far more fire-safe than the raw lumber typically used for single-family homes.

Mass timber is emerging as a promising solution that could transform how we build housing and commercial structures, make our communities more beautiful and fire-safe, and help sequester carbon emissions. But there are important policy hurdles that are in the way of speedy mass timber adoption.

Mass timber can, in some cases, be slightly more expensive in the materials themselves compared to concrete and steel but, if things go right, can be built much more quickly which generates significant savings on labor and time cost of capital. This helps developers build more, which increases supply, which lowers Americans’ cost-of-living. However, that time savings can get short circuited by anything that causes uncertainty/delay (and I discuss what can cause that later in this report). Furthermore, that time savings can get short circuited by anything that causes uncertainty/delay. So, what is imperative from a policy perspective is to root out the thickets that cause uncertainty, shortage, and delay. That helps developers construct these incredible buildings that deliver lots of value at lower costs.

In this report, we first explain the wide variety of benefits that mass timber has. This shows why removing those hurdles to mass timber is worth doing. We then explain how policy challenges related to forest management, limited manufacturing facilities, transportation regulations, building code adoption, and workforce development are slowing the rollout of mass timber. At each step, we explain what policymakers can do to alleviate those challenges.

Why Mass Timber is Growing

The technology has come a long way since the first mass timber building was constructed in Montana in 2011. By 2023, the number of mass timber buildings in the United States had grown to over 2,000, up from just 500 in 2020.

The first map below shows all of the mass timber buildings completed through 2017. The second map is all of the mass timber buildings completed since then.

This rapid growth shows no signs of slowing, with projections suggesting there could be 24,000 new mass timber buildings by 2034. What makes mass timber particularly promising for housing is that it hits a sweet spot in mid-rise construction. Traditional light-frame wood construction is typically limited to five or six stories, while concrete and steel construction for taller buildings can be prohibitively expensive for many mid-rise projects. Mass timber fills this crucial gap, being particularly well-suited for buildings between 6 and 18 stories. This height range is ideal for urban infill development and the kind of medium-density housing that many cities desperately need.

How Mass Timber Saves on Costs

Mass timber can also be more cost-effective than other materials such as concrete and steel for a few different reasons.

First, because mass timber is significantly lighter than concrete or steel, mass timber buildings require less extensive foundations, which can reduce costs and construction time, particularly on challenging sites. This light weight also means that mass timber performs especially well in earthquakes too, making it a great choice in seismic zones.

Second, mass timber can get built faster. Unlike traditional construction methods, mass timber components are prefabricated and shipped ready-to-install to construction sites. Developers don’t need to wait for concrete to cure and so mechanical, electrical, and plumbing work can begin earlier in the construction process, further accelerating project timelines. This approach also brings manufacturing efficiencies to an industry that has long struggled with productivity improvements. The results are impressive: mass timber projects can be completed 25% faster than traditional construction methods and in some cases even faster than that.

This mass timber building in Minneapolis was completed in less than three months at an average rate of just nine days per floor.

A new grocery store in Germany was able to be constructed in just 8 weeks thanks to mass timber’s prefabrication.

Third, mass timber unlocks considerable labor cost savings. Those savings can vary from project to project but some mass timber buildings require as few as one-quarter of the usual number of construction workers on site. A mass timber hotel built in Redstone Arsenal, Alabama was built 37% faster and needed 40% fewer construction workers than a comparable hotel from more traditional materials and processes would have. The Minneapolis T3 building pictured above needed only half as many construction workers as it otherwise would have.

Mass Timber’s Other Benefits

Mass timber is far more fire-resistant than some people might intuitively think. During a fire, the exposed outside of the pieces char, creating a protective layer around the interior wood, thus slowing damage. In fact, mass timber has been shown to perform comparable to or even better than steel and concrete in terms of fire safety.

Mass timber creates safer, cleaner work environments for construction workers, and generates less on-site waste than traditional methods. Additionally, compared to steel and concrete, mass timber has naturally superior thermal properties that can help reduce energy costs.

Mass timber is good for the environment too: a cubic meter of mass timber sequesters about a metric ton of carbon dioxide. And, contrary to what some might assume, it doesn’t require old-growth trees. Instead, mass timber is produced from the small-diameter trees that forestry experts recommend removing to prevent forest fires. This creates a virtuous cycle where sustainable forest management practices support environmentally friendly construction.

The aesthetic appeal of mass timber shouldn’t be underestimated. The exposed wood elements popular in these buildings align with contemporary design preferences, potentially making higher-density housing more attractive to both developers and residents. This architectural appeal, combined with the material’s sustainability credentials, could help overcome local resistance to denser development in some communities. Mass timber typically has strong acoustic performance as well. Some research suggests that mass timber has other biophilic properties —it can reduce stress and increase productivity.

Not Just Housing

As helpful as mass timber is in housing, it can also be a great building technology for other purposes. For offices, major companies are taking notice. Walmart’s new headquarters are mass timber. One of Google’s new offices is mass timber. The new 400,000 square foot roof of the Portland Oregon airport– mass timber.

Microsoft’s newest data center in Virginia– mass timber. Penn State’s new Engineering Building, a restaurant in Nashville, a church in Dallas– mass timber.

Regional Economic Implications

For cities facing housing shortages, mass timber offers a promising path forward. Its ability to efficiently deliver mid-rise buildings could help create the missing housing that many urban areas need. The combination of faster construction times, lower labor requirements, and environmental benefits makes mass timber an attractive option for developers seeking to build more housing while maintaining profitability and meeting sustainability goals.

The regional economic implications are also promising. While the Pacific Northwest has been an early leader in mass timber, the industry is expanding rapidly in the Southeast, where abundant yellow pine forests provide an ideal raw material. The state of Michigan is also rapidly developing a successful mass timber industry. Building a mass timber industry can help create new manufacturing jobs in rural areas, particularly in regions with strong forestry sectors. This development in turn, could help bridge the urban-rural economic divide.

Policy Challenges

To understand the policy problems that are currently inhibiting mass timber, it makes sense to follow the supply chain from a tree in the forest all the way to finished and occupied building. First, there are forest management and environmental policy barriers that were never intended to stymie an environmentally friendly technology like mass timber but do exactly that. Second, because mass timber is such a new technology, there is a limited number of manufacturing facilities. Third, state-to-state differences in oversize load regulations make moving mass timber elements more difficult. Fourth, many states still have not adopted the most up-to-date building codes that allow for greater mass timber construction. Finally, as with manufacturing facilities, given the technology’s newness, there’s a great need for accelerating the construction workforce that can work with mass timber. Fortunately, there’s a potential policy solution to each of these challenges.

Forest Management

The National Environmental Policy Act (NEPA) requires federal agencies, including the Forest Service, to assess environmental impacts before conducting major actions like forest thinning. It can take months just to decide between an Environmental Assessment (EA) or a more complex Environmental Impact Statement (EIS); for larger projects, a full EIS is often required. They also have to identify stakeholders and gather public input. A typical EIS can take 3-5 years to complete. Even the shorter EA process often takes 1-2 years. Then there has to be a whole comment and response period and then, on top of that, there are all of the vulnerabilities to lawsuits that come with NEPA. Being worried about litigation leads to slower, more risk averse action and then environmentalists can use NEPA to delay projects for years. NEPA is an enormous drain on the Forest Service. They have very limited capacity, a limited budget for environmental review, and already have a huge backlog of projects waiting for NEPA review.

This matters for mass timber because mass timber doesn’t require old growth trees. Instead, it actually works best with smaller diameter trees that are exactly the kind that need to be thinned from forests to reduce the risk of wildfires. Meanwhile, forest thinning becomes more economically viable if there’s a market for those trees. That’s mass timber. This creates a potential win-win where forest management and mass timber supply go hand-in-hand. Except those NEPA rules get in the way of both. They make the forest management harder to do and they make supply less predictable, which discourages investment in mass timber manufacturing.

A great first step to addressing some of these problems would be for Congress to pass the bipartisan “Fix Our Forests Act.” This act:

• Creates “Fireshed Management Areas” where NEPA review would be streamlined.
• Establishes intra-agency strike teams to help accelerate environmental reviews
• Expands categorical exclusions for certain forest management activities
• Allows Forest Service to retain and use timber revenue for restoration work
• Creates new workforce development provisions to address capacity issues
• Expands “Good Neighbor Authority” allowing states, tribes, and local governments to conduct forest management on federal lands
• Extends stewardship contracting terms from 10 to 20 years, providing more certainty for industry investment
• Streamlines approval processes for removing hazardous fuels and dead and dying trees
• Creates new partnerships and grant programs to develop regional forest product supply chains

The Fix Our Forests Act thus could help accelerate the development of mass timber by increasing mass timber supply, reducing regulatory barriers that impede forest management projects, supporting the development of a more robust mass timber supply chain, and by creating more certainty for mass timber investment. It will also save Americans money. According to one estimate, every dollar spent on preparedness and climate resilience saves $13 dollars in damages, cleanup costs, and economic impact.

Mass Timber Manufacturing Facilities

Once a tree suitable for mass timber has been cut down, it then goes to a mass timber manufacturing facility. Unfortunately, while demand for mass timber is growing rapidly, manufacturing capacity hasn’t kept pace. This gap exists primarily because building a mass timber facility requires a substantial upfront capital investment (often $60 to $75 million). Many potential investors remain hesitant due to the relative newness of the technology and uncertainty related to the other hurdles discussed in this report.

A targeted tax credit could help address this challenge by reducing the effective cost of building new facilities and providing more certainty for investors. This would be similar to how tax credits have successfully spurred growth in other emerging industries like solar manufacturing. As more facilities come online, they would help create the economies of scale and supply chain efficiencies needed to make mass timber even more cost-competitive while also supporting rural economic development in timber-producing regions.

This kind of tax credit could be structured as follows:

• An R&D tax credit, structured as a 20% credit for qualifying research expenses, would encourage manufacturers to innovate and improve mass timber production processes, develop new products, and create more efficient manufacturing methods.
• A capital investment tax credit, offering a 10% credit for major equipment and facility investments between $200,000 and $3 million, would directly reduce the substantial upfront costs that currently deter many potential manufacturers from entering the market.
• Full expensing for materials like cross-laminated timber, laminated-veneer lumber, and glulam would improve cash flow for manufacturers by allowing them to immediately deduct these costs rather than depreciate them over time.

The combination of incentives would be particularly powerful because it addresses both the upfront capital costs that deter new facility construction and the ongoing operational costs that affect profitability. It would be very good bang for the taxpayer’s buck. It would also not need to be permanent. As the industry becomes more established, these tax credits could be reduced/removed over time.

Transportation Regulations

Once the mass timber components have been manufactured, they then need to be moved to the construction site. Unfortunately, the current state-by-state permitting system for oversize loads creates significant obstacles for mass timber transportation. Each state has its own distinct permitting requirements, processing times, and fees for oversized loads, and that forces carriers to obtain multiple permits for a single cross-state delivery. For example, a mass timber shipment from Oregon to Colorado might require separate permits from Oregon, Idaho, Utah, and Colorado, with each state having different application processes, waiting periods, and route restrictions. This patchwork system creates costly delays and uncertainty as a holdup with any single state permit can disrupt the entire delivery schedule. Building sites also usually have very limited space to store inventory; they need materials to arrive just-in-time. Complicated transportation regulations don’t help with that. Moreover, they can slow down the construction timeline and that’s particularly a problem for mass timber because it’s the speedy construction time that delivers much of the cost savings.

The federal government should create a standardized multi-state permitting system. This would dramatically streamline mass timber transportation. Under such a system, carriers could obtain a single federal permit valid across all interstate highways, with uniform safety requirements and route planning standards. This would replace the current need to navigate different state systems, reducing both administrative burden and delivery times. The federal permit could incorporate best practices from various states while maintaining high safety standards through requirements like escort vehicles and prescribed routes. A unified system would also enable better coordination across state lines, allowing for optimized route planning and more predictable delivery schedules that achieve the just-in-time arrivals that construction sites need. This streamlined approach would reduce transportation costs and make mass timber more competitive with traditional building materials, while maintaining or even enhancing safety through consistent standards and improved oversight. As importantly, this policy reform could be done at little to no cost to the taxpayer.

Building Code Adoption

Once at the site, the mass timber components can only build the buildings that they’re allowed to build. At the state-level, the 22 states that have not already adopted the 2021 International Building Code (IBC) that allows mass timber up to 18 stories, or something equivalent, should do so.

States that have already adopted that 2021 IBC (or something equivalent) could further accelerate mass timber rollout in their states by expediting reviews of mass timber projects, fund training and workforce development programs, and streamline permitting for mass timber fabrication facilities.

At the federal level, Congress should introduce new legislation to: 1) Direct Occupational Safety and Health Administration (OSHA) to develop safety guidelines for mass timber construction which will simplify compliance for builders. 2) Direct the Department of Housing and Urban Development (HUD) to create an expedited approval track for mass timber designs in federally funded buildings. 3) Provide funding to the American Wood Council and APA- The Engineered Wood Association to do further research on mass timber prefabrication.

Workforce Development

The current shortage of mass timber workers stems from the industry’s rapid growth outpacing workforce development. Mass timber manufacturing and construction require specialized skills that differ significantly from traditional wood products manufacturing and building construction. Workers need to understand advanced manufacturing equipment, digital design tools, precision assembly techniques, and the unique properties of engineered wood products. However, because mass timber is a relatively new industry in the United States, few training programs exist, and most workers lack experience with these specialized processes.

The federal government should combine tax incentives with educational partnerships/ apprenticeships to expedite the expansion of the mass timber workforce. Tax credits for companies offering mass timber training would encourage private sector investment in workforce development. For example, a credit covering 50% of training costs would make it more financially feasible for manufacturers to develop comprehensive training programs, invest in training equipment, and provide ongoing professional development for their workers. Funded partnerships between manufacturers and educational institutions would create a pipeline of skilled workers while advancing mass timber knowledge and innovation and would provide hardworking with a solid career path. These partnerships could include shared facilities where students gain hands-on experience with mass timber manufacturing, cooperative research projects to improve production processes, and curriculum development ensuring education programs align with industry needs. Federal funding could cover infrastructure costs, instructor training, and program development, while manufacturers could provide equipment, expertise, and internship opportunities. As with the Fix Our Forests Act and the tax credit for mass timber manufacturing facilities, these would be a great deal for taxpayers and, by increasing the supply of homes, would overall lower the cost-of-living.

Conclusion

As the technology continues to mature and supply chains expand, mass timber could play a crucial role in addressing America’s housing challenges while creating a more sustainable built environment. The rapid growth in mass timber projects over the past few years suggests we’re at the beginning of a significant transformation in construction technology—one that could help create the abundant, affordable, and climate-friendly future we all want. But important hurdles to that remain. Federal and state policymakers should act to remove those hurdles.