It all started with a headache. In 2001 Michelle Kaufmann, AIA, LEED AP, and her new husband, general contractor and wood craftsman Kevin Cullen, moved into a rented bungalow in Sausalito, Calif. She experienced one migraine, then another. Soon the pain became an unwelcome nightly ritual for which she and Cullen couldn't pinpoint a trigger.

Until they investigated inside the bungalow's walls and found an unchecked spread of toxic mold. The mold, it turned out, was causing the headaches. But it also caused Kaufmann—who'd spent the previous five years working for Frank Gehry, FAIA—to begin thinking about the impact people's homes have on their health. She researched nontoxic materials and products, becoming more intrigued with every discovery. When she and Cullen decided to look for a different house, they noticed that many of the features they wanted—natural light, fresh air, and low energy bills, along with a definite absence of mold—fell into the green building category.

Discouraged by a lack of available green housing options, they decided to design and build their own home on land they'd bought about 25 miles north of San Francisco. The events that followed have been well-documented in the press: Kaufmann designed a house for Cullen to build, and friends and colleagues asked if they could have something similar. Their requests sparked her idea of mass-producing the design. She found an interested factory and a client willing to take a chance on a prefab house. In the end, Kaufmann and Cullen's stick-built home took 14 months to construct, while the identical prefab version took just four months and cost 20 percent less. It also produced, according to her calculations, 50 percent to 75 percent less construction waste.

The stark contrast between the two projects sold Kaufmann on the virtues of prefab. "I became so focused on my mission, which is to make thoughtful, sustainable design accessible,"she says. "Everybody should be able to have a green house. For it to be accessible, it has to be time-efficient, cost-efficient, and easy."

In the five years since she started her firm, the Iowa State University- and Princeton University-educated Kaufmann has made remarkable progress in achieving this mission. Michelle Kaufmann Designs (MKD) has built 33 green, modular homes to date, mostly on the West Coast. Some have been custom. Othersare off-the-shelf or "preconfigured" residences, such as the Glidehouse, which is based on her own home, and the Sunset Breezehouse, which features a central space that opens to the outdoors. Other preconfigured offerings include mkSolaire, designed specifically for narrow urban lots; mkLotus, aretreat or vacation home; and the new mkHearth, a modern farmhouse based on barns in Kaufmann's native Iowa. (All preconfigured houses are tailored to the owners' sites and offer a carefully vetted palette of eco-friendly materials and systems.) Thirty employees buzz busily around the firm's Oakland, Calif., headquarters, which possesses the same design sensibilities as its houses: clean lines; simple, yet high-quality materials; and an overall sense of calm and order.

Since 2006, the firm has built many projects in its own factory, mkConstructs, in Lakewood, Wash. MKD purchased it from another modular housing company, retaining much of the existing staff and recruiting new workers to ensure the highest possible building quality. "Now we're taking what we've learned in all the construction phases and applying that to our designs," says Paul Warner, AIA, a principal at MKD who oversaw the transition to an in-house factory. "We're taking advantage of the fact that we are true design/builders." Kaufmann believes one of her firm's biggest strengths is its ability to learn from its mistakes, and being closely involved with the factory process gives her and her staff more opportunity to do so.

This trial-and-error approach also came in handy when she realized that her original idea of having a traditional real estate broker handle sales just didn't fit MKD's identity. "For us it's about helping guide people through complex choices," she says. "That's a very different thing." Now, the company's business development strategy centers on gently educating potential clients about sustainable design and modular building, as well as walking current customers through the design and construction process. The firm's Web site even features a series of how-to videos showing Kaufmann making green, do-it-yourself home crafts projects. "It's an entry point into green—an effort to meet people where they are," she explains.

For Kaufmann to truly accomplish her mission of providing cost-effective, sustainable housing, she'll need to achieve greater scale. She's already started, having signed on with developers to create assisted-living multifamily housing in Half Moon Bay, Calif.; 24 townhomes in San Leandro, Calif.; a community for a group of Benedictine monks in Big Sur, Calif.; and a 122-unit mixed-income project in Denver. (Coincidentally, part of the Denver project will provide housing for Franciscan nuns; Kaufmann speculates that her emphasis on restful, serene spaces may attract those with a strong spiritual bent.)

Using mid-century housing pioneer Joseph Eichler as a model, she hopes to have 475 homes built by 2010 and 10,000 by 2015. "Then the energy savings, water savings, and carbon savings will get really interesting," she says. MKD itself takes on liability for the units, which appeals to developers managing their risks in a slow housing market. It's a burden Kaufmann feels comfortable handling, given her firm's setup as a sort of industrial design firm that happens to make houses. "We find what we believe to be the best balance of being beautiful, sustainable, low-maintenance, and long-lasting," she says. "Adding on that layer of liability means we really care. If we were just the architect or just the builder, we might make different choices."

A common knock on prefab housing is that it's been tried for decades and never fully succeeded, at least not in the United States. "In Japan, if you're doing a high-end home, you want it built in a factory," Kaufmann points out. The American tendency to associate modular housing with trailer homes is slowly going away, thanks in part to her efforts. She also believes consumers are growing more attuned to energy savings. In areas with high labor costs, she estimates that her homes can cost 20 percent less than their stick-built counterparts. But no matter where they are, their operating costs will be lower than most houses due to their energy-efficient and water-conserving traits.

As important as the energy issue is, Kaufmann cites communication technology as the key to the current prefab wave. "Technology unlocks geography," she says. "If your range is within 60 miles, it's tougher to achieve scale. We don't have those limitations." In 2007 she brought on a principal from the high-tech world, Lisa Gansky, to join her, Warner, and principals Scott Landry, AIA, and Joseph Remick, AIA. Gansky—co-founder of Ofoto, the online photo-sharing company that is now Kodak Gallery—has helped the firm develop an innovative software tool called the Configurator. Debuting in January 2009, the Configurator will let potential clients easily walk through different MKD homes online, trying different materials, finishes, and systems. In a particularly ingenious twist, it will also let them set filters per their own environmental preferences; if, say, water conservation is their top priority, they can set the Configurator accordingly.

Although Kaufmann's lofty goals demand a forward-thinking mind-set, she hasn't forgotten the basics. "There's so much to be learned from an Italian courtyard house or a barn in terms of light and airflow,"she says. The office's many talented architects and designers share her passion for suffusing spaces with natural light, uniting indoor and outdoor rooms, and making maximum use of square footage and materials. Kaufmann also embraces the personal aspect of her work, thinking about each home as if she herself were going to live there. If she can find a way to maintain that overall sense of care and connection as she moves into community design, she and her staff just might crack the prefab code once and for all. For now, she'll keep planting pockets of prebuilt beauty, improving our battered landscape one dwelling at a time.