The California Department of Housing and Community Development approved a reduction in inspection frequency for BOXABL’s Casita Studio units, moving from full inspection of every unit to only 25% after the mandated first ten units under Title 25 §3032. This regulatory relief follows BOXABL’s designation as a Commercial Modular Manufacturer and validates the company’s production quality controls.

With inspections now required on just one in four Casita Studios, BOXABL can significantly shorten pre-delivery lead times and reduce logistics bottlenecks. The streamlined process is expected to cut holding costs, accelerate site installations and improve cash flow by delivering finished units faster to customers.

California faces an estimated shortfall of 2.5 million housing units through 2032, driving strong demand for accessory dwelling units like the 361 sq ft Casita Studio. Recent ADU permitting surged over 20-fold since 2016, highlighting modular units as a scalable solution to the state’s affordability and inventory challenges.

This regulatory milestone bolsters progress toward the proposed merger with FG Merger II Corp, positioning BOXABL for enhanced capital access to scale manufacturing capacity. Investors view the inspection change as a catalyst for growth in the largest U.S. housing market and a positive indicator for post-merger execution.