BSC Summit

Wednesday, September 20, 2017

FEMA Orders Take Over Manufactured Housing Production

This is the busiest time of the year for Highland Manufacturing, as peak selling season is still underway, and it's about to get busier but on Oct. 16, the Worthington-based modular home builder will shift its production almost entirely to building houses for victims of hurricanes Harvey and Irma.
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Daryl Muzio, general manager at Highland Manufacturing, got the call Aug. 27, after Hurricane Harvey hit the Texas gulf coast. He was told the Federal Emergency Management Agency (FEMA) had put out a request for 4,500 housing units, and by the following Friday, Muzio had already agreed to build more than 150 units.

Most other manufactured housing factories serving this areas also received the same news and will soon begin turning their production lines into FEMA homes for both Harvey and Irma displaced residents.

"We were expecting it as soon as Harvey hit," Muzio said. "And we're ready for it. It's got us all on FEMA overtime, we call it."

Highland's parent company, Champion Home Builders, is one of the "big three" manufacturers in the modular home industry, along with Clayton Homes and Cavco Industries. The three will build a majority of the homes FEMA has requested.

"We'll be building 167 through January," said Travis Morrison, safety and continuous improvement foreman for Highland Manufacturing. "After that, another 130."

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The houses, called "one-bedroom express units," are small, eight-feet wide by 48-feet long structures. They're much more basic than Highland's usual offerings, and are meant to be highly portable. They're also meant to be able to withstand strong winds better than typical site-built houses.

"It's the type of home where you can just go into a driveway of a demolished house, plug it into the electrical utilities, and it's good to go," Muzio said.

The Worthington factory's 21 stations typically build two-and-a-half homes every day. However, on FEMA's demanding schedule, they'll be tasked with producing four on a daily basis.

"These FEMA units are all identically the same, so it makes the flow through the production line a lot more efficient," Muzio said. "Once our people get into the swing of things, we'll be able to build them really quickly."

The FEMA contract will provide a boost for Highland's 145 employees. The extra demand allows Highland to keep its employees working five days a week rather than the usual three during the winter, which is typically a slow time for homebuilders.

"It's big, big for us," Morrison said. "Most winters you've got three or four weeks down because we don't do nearly as many homes."

Highland builds custom-made modular homes for customers throughout the Midwest, including in Minnesota, Iowa, Colorado, Nebraska, Wisconsin and more. The manufacturer will shut down nearly all of its usual business while the construction of FEMA homes is underway.

Right now, FEMA inspectors can be found inside the facility, bringing their particular brand of scrutiny to the operation.

As soon as production starts and the first FEMA homes roll off the line, they will be wrapped up and shipped south for hurricane victims.

FEMA has asked for 8,500 homes so far, but more than 560,000 hurricane victims have already requested housing assistance. With additional hurricane aid funding recently authorized by Congress, FEMA will likely ask for even more modular homes.

"There will be more coming," Muzio said.

Tuesday, September 19, 2017

The Brits Have Developed Another First in Modular Construction

Just when you think modular construction is about done being creative, something new pops up. This time its "Cafe in a Box".

Shipped to a prepped site within an office building or built into a modular Marriott hotel while being built in a modular factory or just about anywhere that could find people looking for a good cup of coffee, this is a great idea.

Packed into a shipping box, trucked to the site and installed in one day.


Awesome!

Modular Housing Could Reinvent Single Family Home Rental Market

In 2015 Northern Nevada’s largest home builder, Lennar, opened its latest community of new, single-family, detached ‘built to rent’ (BTR) homes in Sparks, Nev.The 80 new houses at Frontera at Pioneer Meadows are available to rent, starting at $1,499 a month for a 1,210-sq.-ft. home and rising to $1,999 for 2,182 sq. ft.

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The number of single-family homes intentionally built to be rental housing is still a tiny fraction of the home building overall, but it is growing quickly from effectively zero to become a new sector of the market for new development. Approximately 25,000 plus new detached homes are built for rent every year.

Build-to-rent is a relatively new concept in the UK also, with most developments historically built for sale rather than for renting. But developers have recently started to capitalise on demand for a different kind of product, and there are now 83,650 BTR homes completed or planned across the country.

Currently, one-in-10 households live in single-family rental housing – that’s 12.7 million of the total 120 million households now living in the U.S. To serve these renters, leading master-planned community builders are likely to begin developing new, detached homes for rent.

Living in a “BTR” home means living in a development designed for renters: typically it has communal spaces, amenities like gyms and swimming pools, and some even have concierge service. Rents often include perks like high speed Internet and gym membership.

This is another niche that could be filled by custom modular home factories. Building offsite makes a lot of sense for BTR developers as they can get an entire community in the ground quicker with less labor on site and better built homes.

Just like Marriott building more and more modular hotels after discovering the huge advantages afforded by modular construction. BTR developers could be the next big thing for modular housing.

These BTR developers have probably never given any thought to having their homes built offsite so it should be the factory salesperson that calls on commercial accounts to find the Lennars, Toll Brothers, Ryans, etc; and begin telling the advantages of modular.

Just think, adding 25,000 new modular BTR homes would nearly double our industry’s size.

Monday, September 18, 2017

Lad Dawson Retires After a 45-year Career in Factory Housing & Commercial Construction

When Lad Dawson founded Guerdon in 2001, he did it with the vision of bringing commercial modular construction into the mainstream.


Whether you look at Guerdon’s ever-growing resume of successfully completed commercial projects, read article after article about the hospitality industry Betting on Modular Technology and factory production re-Shaping the Future of Construction, or simply drive through Boise to see the overflowing number of Guerdon modules pouring out of the factory, it is safe to say, “Lad’s vision has come to light and continues to become more prevalent each day.”

Positioning Guerdon on a strong course, Lad officially retired at a private company event attended by the Guerdon board and staff on August 4, 2017.
After a 45-year career in factory housing and commercial construction, Lad is looking forward to the next chapter of opportunities and interests. He looks forward to spending more time with his family and attacking his bucket list as aggressively as he has his most complicated business challenges.

Since taking the reigns as President & CEO in April of this year, Jerry Goodwin has continued to drive Guerdon’s legacy of success. He is leading Guerdon into its next chapter of growth while enhancing quality, efficiency and performance. During his installation address, Goodwin said of Lad’s vision, “It will be my mission and the mission of everyone here at Guerdon to continue to push that vision forward.”

Guerdon is currently working on projects for some of the biggest hotel chains in the world (including Marriott, Hilton, & IHG), affordable housing communities for low income families, major transit oriented apartment complexes that help aid a major housing crisis, and the first modular micro-suite apartment to be constructed in the Northwest. The future has never looked brighter for Guerdon’s modular technology and the growing role that Modular Technology will play in commercial construction.

Great Examples of Mixing Construction Methods

Right after I published the article about mixing different types of construction methods to produce great looking homes that wouldn’t have been possible with modules only I received these pictures from Bryan Hout, Preferred Building Systems, a modular home manufacturer in New England.
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This home was a team effort of Preferred Building Systems and BensonWood. Built in southern New Hampshire, this 2,700 sq ft, 3 bedroom, 2 ½ bath cape was produced using modular construction for the main part of the house and BensonWood supplying all the materials for a fantastic great room and a beautiful staircase to the upper floor.

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Another one of the homes Bryan sent incorporated multiple components consisting of roof trusses, wall panels in conjunction with Modular boxes.   
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This 3,280 sq ft home was built by Preferred Building Systems for homeowners in Vermont. It has 4 bedrooms and 2 ¾ baths and was set in one day with the builder supplying the roof.


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Bryan sent this last home that was set several years ago on coastal Massachusetts. Built on piers, this 3,440 sq ft, 4 bedroom, 3 ½ bath home featured a Nanawall installed on site by the builder.
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It featured a combination of floor panels, wall panels, roof trusses, rafters, modular boxes.

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Thanks Bryan for providing some examples of beautiful ‘mixed’ construction homes.

Friday, September 15, 2017

Time for a Modular Housing Mentoring Program Has Arrived

It’s amazing that the entire modular housing industry has never had any national programs in place to educate, recruit or mentor experienced and ‘new’ to modular construction builders.

You have to ask yourself why an industry that constantly says it wants to grow hasn’t. How do builders that want to add modular construction to their business model ever learn the most basic aspects?

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Salespeople have traditionally assumed the role of teacher but who trained them to help new builders understand the most basic differences between site building and modular? Factories don’t have any programs in place to teach salespeople how to attract and train new builders.

Modular and prefab factories don’t even have training programs for new salespeople so why does each factory assume their salespeople are the right people to help new builders understand all things modular. Most factory salespeople have never owned or worked for either a site or modular builder that would give them at least some understanding of what is needed to make a new to modular builder a success.

I’ve been told many times that the attrition rate of builders wanting to start using modular construction is 80% in the first year after signing on with a factory.

80 out every 100 first time modular builders no longer using modular after the first year. That is appalling.

Since it’s obvious that the individual modular home factory across the country will never embrace a training program that costs them quite a lot of money to start and maintain, then the next best is a mentoring program with successful modular builders helping new modular builders.

Again, that takes money and individual modular factories just can’t justify the expense of establishing a program helping new to modular builders only to see the builder jump ship and go to another factory. Nobody can blame them for not putting this type of program into place either.

If both training and mentoring is off the table for modular factories then who should step up and take the reins of trying?

How about the NAHB’s Building Systems Council and/or the MHBA (Modular Home Builders Association) stepping up the challenge?

Training is an expensive undertaking and I doubt that either one of these organizations will be prepared to start a training program for quite some time even though both are growing stronger by the day.

But let’s be honest here, the expense of their helping develop a mentoring program would be considerably less and once put into place builders could begin taking it over themselves insuring its survival. There’s no better way for something to get done than to ask someone who is already busy.


Both of these organizations have boards comprising some of the best modular home builders in the country and as I’ve learned from personal interaction with them, they would welcome the challenge of implementing the foundation of a good mentoring program. Some of them are already doing it without recognition.

The benefits of mentoring are many and will vary from program to program, participant to participant.

Here is a short list of the benefits of a builder to builder mentoring program.

For the Mentor
  • Allows the mentor to "give back" -- to both the industry and the mentored.
  • Reminds the mentor how to listen actively rather than passively.
  • Encourages the mentor to share knowledge, which helps increase the mentor's sense of self-worth.
  • Strengthens the mentor's interpersonal relationship skills
  • Helps re-energize the mentor
For the Mentored
  • Increases the mentored's self-confidence
  • Helps the mentored learn to take better control of his or her business
  • Educates the mentored on how to accept feedback in important areas, such as communications, technical abilities, change management, and leadership skills.
  • Provides an important networking contact for the mentored
  • Helps provide a path to success
For the Modular Housing Industry
  • Conveys to people within the industry that the organization is willing to invest in its members
  • Shows the outside world that the organization values its members/employees
  • fosters leadership skills in mentors
  • Encourages the mentored's growth from being mentored to becoming a mentor.
  • Promotes a sense of cooperation and harmony within the organization.
  • More long term modular builders coming into the industry.
The only thing stopping this is good modular builders doing nothing. If you would like to explore the modular housing industry starting a mentoring program, contact either the BSC or the MHBA and tell them Modcoach told you to call.

Thursday, September 14, 2017

ATTENTION MODULAR HOME BUILDERS - Prices Are Going Up Quickly

I just received this important information that will affect your business for the foreseeable future.

Prepare for higher prices on common building materials -- as well as the possibilities of longer lead times and even some shortages as the laws of supply and demand take hold.
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To protect themselves, your factory will be probably begin including escalation clauses in your contracts and you need to make your sure your future contracts with new home buyers reflect this. Don't make assumptions about lead times and let your customers know of any changes right away.

The biggest forces behind this volatility are hurricanes Harvey and Irma. Their damages caused plywood and OSB prices to spike and lead times to stretch out.

Additional price increases are expected. Demand for roof shingles is high, although much of the repair work will be several months out.

The aftermath of the storms will tighten trucking capacity in the South, which could cause delays and additional costs in receiving products from that region. Gas prices are increasing freight costs as well.

Coincidentally, China recently shut down 80 percent of the US's supply of galvanized roofing nails due to environmental concerns. The facilities may come back on line sometime in September but it'll take a while to replenish shelves.

The window market also has supply issues. Four of the 28 window glass lines in the country are down: two due to a fire and two for scheduled maintenance.

Fortunately, this has caused only mild delays in window production so far.

Other factors leading to steep wholesale price increases to your factories:

Steel rod has increased approximately 50% since the beginning of the year which means the price of fasteners is going up. Shipping rates have climbed 6-8% based upon consolidation within that industry.

USD exchange rate has decreased overseas approximately by 3% and available capacity has been reduced as a result of Anti-Dumping actions against overseas manufacturers.

Modular Home Misrepresented in NC Online Article

MODCOACH NOTE: Two things caught my attention when I read this article. First the home is setting on cinder blocks, not a foundation and secondly this obvious manufactured home was labeled throughout the article as a “Modular Home.”

Modular home causes stir in Cumberland Heights


The beige double-wide modular home at 2210 Bragg Blvd. currently sits sideways on its diamond-shaped lot. It sticks out like a sore thumb among the small single-family dwellings in the neighborhood.

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Note the cinder block footings

Residents of the Cumberland Heights subdivision feel that the city of Fayetteville has ignored their concerns about the construction of the home in their neighborhood.
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“We were very much blindsided,” Jeannette Strickland said. “One day, it just appeared.”

However, city officials say the building meets all state and local requirements and has gone through the proper procedures for construction.

“We follow state and local regulations for building codes and feel that has been done in this case,” City Communications Director Kevin V. Arata said. “We will continue to closely monitor the completion of this project to ensure all required regulations are met.”

Strickland and eight of her neighbors pitched in to hire lawyer C. Adam Barrington III to represent them in a civil case to try to stop the modular home from being built in July.

The civil lawsuit is personal to Barrington. In court documents, he wrote that he lives 400 yards from the mobile home.

“It’s still pending the final inspection by the city to comply with building codes,” Barrington said.

He declined to comment further on the case because it is still open.

CLICK HERE to read the entire Fayetteville Observer article.

Wednesday, September 13, 2017

British White Paper Addresses Housing and Skilled Labor Shortage

Fixing Our Broken Housing Market
A White Paper Presented to Parliament by the Secretary of State for Communities and Local Government by Command of Her Majesty.



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Now if that isn’t the introduction to fix and improve the lack of affordable housing I can’t imagine what would be. “by Command of Her Majesty” is nothing to be trifled with or ignored.


In the US it would take an act of Congress to present such a far reaching White Paper and we all know that wouldn’t be easy, especially today.


The paper points out at least four major flaws that have hindered building enough new homes and apartments throughout England. Those are:


  • Planning for the right homes in the right places


They found that in order to build the homes England needs, they need to make sure that enough land is released in the right places, that the best possible use is made of that land, and that local communities have control over where development goes and what it looks like.


  • Building homes faster


Where communities have planned for new homes, they want to ensure those plans are implemented to the timescales expected by making sure infrastructure planning is fast tracked. They will support developers to build out more quickly by tackling unnecessary delays caused by planning conditions, facilitating the strategic licensing of protected species and exploring a new approach to how developers contribute to infrastructure.


They will take steps to address skills shortages by growing the construction workforce by providing more training and pathways for young people.

Builders and developers will be held accountable for the delivery of new homes through better and more transparent data and sharper tools to drive up delivery.


  • Diversifying the market


The way in which the house-building market operates in England constrains the supply of new homes, because there is insufficient competition and innovation. They want to diversify the market to achieve the amount, quality and choice of housing that people want.


This includes supporting new and different providers, more innovation in methods of construction, and supporting new investors into residential development.


Modular and prefab housing will become a major part of this process with government helping factories get operational quickly.


  • Helping people now


The broken market is creating challenges for households across England. They realize a long-term solution is needed to build more homes.


They want to encourage more builders and developers to enter the housing market to supply new home owners and affordable rental housing. A way to identify future trends in population shift and what is needed to meet these needs is also on the immediate agenda.

This 106 page Fixing Our Broken Housing Market white paper is quite the read for US builders, developers, prefab and modular people. They have laid out the plan for what is needed in England but a lot of it applies to the US as well.

Tuesday, September 12, 2017

Why Rebuilding May Be More Difficult in Florida than Texas

After Irma finishes with Florida, the state  will join Texas on the long, long project of rebuilding homes and businesses. The work will require thousands of construction crews, drywall installers, plumbers, electricians — every kind of trades person you can imagine.

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In Texas, however, the supply of those people may be more abundant than the supply in Florida, for one simple reason: Licensing.

In most states, not just anybody can show up with their toolbox and start working on a house. In order to protect the public from incompetent contractors, governments typically require people to pass tests, pay annual fees, and demonstrate either significant education or experience in the field.

In Florida, a license is required for most significant remodeling and construction work. The chapter of the state code that governs those licenses is nearly 60,000 words. Before someone even takes the contracting exam, they need to have either a four-year degree in a related field, or four years of proven experience. Just like a lawyer or accountant, they need to demonstrate that they've taken continuing education classes in order to keep their licenses current.

In Texas, there's almost none of that.

The construction professions for which Texas requires licenses are electricians, heating and air conditioning installers, mold assessors and remediators, water well drillers, specialized construction of modular housing and modifications for disability access. (Along with a slew of non-construction licenses, from laser hair removal to property tax consultants.)

That means a lot of the work on a house that's been flooded — such as installing drywall and flooring — can be performed by almost anyone. For consumers, that allows for more choice, especially at a time when skilled contractors will be in short supply. But it also entails more risk, since it's difficult to ensure that the person doing work on your house is trustworthy.

CLICK HERE to read the entire Houston Chronicle article