Thursday, August 25, 2016

Developer Proposes 200 Tiny Prefab Homes that Fit Together Like LEGOs

Imagine the smallest space in which you could possibly live. Now imagine something smaller.

Can you get by in just 160 square feet?

The answer, as Berkeley based modular building developer Panoramic Interests will tell you, probably depends on what other options you have. And in the Bay Area, there aren't too many.

Panoramic has a pitch for San Francisco: Turn over just a portion of a DPW owned parking lot at 2627 Cesar Chavez and the company will build 200 new homes there in only a couple of months.

They promise that modular, prefabricated infill units can come together for 60 percent of the cost of a normal building and a fraction of the time. The same company has put up some similar tiny homes in the city before, but these would be even smaller.

CLICK HERE to read the entire Curbed - San Francisco article



Can Idaho’s modular-home builders help with affordable housing?

“Modular or manufactured homes cost roughly half as much as conventional homes and can be built quickly. I’ve snobbishly dismissed this form of shelter as flimsy or unworthy. It serves 18 million Americans having an average income of $30,000.” 

“I can’t do that any longer. If you dream as I do of home ownership for Idahoans, many of whom spend as much as half their income on shelter, we must consider building many units in one place at a low cost.”


This article does make some valid statements but when you begin your article lumping modular and manufactured homes together and saying that modular homes cost about half of what a real conventional home costs, this is an injustice to every modular home builder and factory in the US.


There are only three associations for modular housing, the Modular Building Institute (MBI), the Building Systems Council within the NAHB (BSC) and the Modular Home Builders Association (MHBA) and unfortunately the story of what modular housing really is all about just isn’t getting out there fast enough.

The MBI focuses on commercial modular construction and showcases this industry so well that it’s shows and meetings are some of the biggest in the housing industry.

On the other hand, the BSC, which should have the clout of the entire NAHB behind it, has been struggling over the past decade to get noticed. I just learned that it is about to, once again, become a powerful voice for the modular industry and that is the best news possible.

The MHBA is another association that fell on hard times after the 2008 housing crash but the good news, the really good news, is that it is becoming a very vocal champion for modular housing. With new marketing efforts in place, a stronger board of directors and management team having been installed along with a rapidly growing national membership, the MHBA is now the flagship for modular housing.

Our industry is in good hands. Now it’s time for them to start promoting modular as the best way to build new homes and differentiate modular from manufactured housing.

FEMA "Modulars" Headed to Flooded Louisiana

According to the Associated Press, the infamous FEMA trailers are headed back to Louisiana to help provide temporary shelter for the thousands of displaced residents that remain stuck in shelters, living in hotels, or staying with family and friends after flooding ravaged their homes, creating a housing crunch that may bring back temporary housing units like those used after Hurricane Katrina.

Just don’t call them FEMA trailers. Instead call them modular housing.

The 2016 version of the FEMA trailer

I guess if the temporary home looks more like a jobsite trailer than the FEMA trailers of yesterday you can call it modular. Nothing hurts the real modular housing industry more than being linked to pictures like this.

The much-maligned trailers that filled front yards and miles of vacant property in south Louisiana and Mississippi a decade ago became a symbol of everything that had gone wrong with the federal disaster response to the 2005 hurricane.

The trailers drew health worries after toxic levels of formaldehyde were found.

Governor John Bel Edwards stressed that he prefers a quick way to make homes habitable but he acknowledged some sort of modular housing may be needed that people can set up in their yards while repairing flood-damaged property.

Louisiana Governor John Bel Edwards announced the "Shelter at Home" disaster recovery program Wednesday.

According to Edwards, FEMA will fund up to $15,000 to render a home "safe, secure and habitable." The program will only be eligible to people who's homes can be restored to basic living condition, for $15,000 or less.

The governor also announced two interim housing options for flood victims.

Those programs include U.S. Department of Housing and Urban Development approved mobile homes. Edwards said FEMA "trailers" available to flooded families will be "very different" than those used following Hurricane Katrina.

Those FEMA homes will be available to families with homes facing more than $17,000 in damages. However, those FEMA homes will not be able to be placed in flood zones.

The Democratic governor unveiled a package of transitional housing programs Wednesday that his administration and the federal government have developed.

Federal Emergency Management Agency Administrator Craig Fugate has pledged that any temporary housing units that will be offered will be ‘‘much improved” modular housing, not trailers.

Wednesday, August 24, 2016

Strategy and Tactics for Your Marketing Plan

An article by Reed Dillon
 
At this point in the process you have created your marketing goals, completed a SWOT assessment, developed a list of marketing opportunities and have created your budget.

The next stage is to ascertain a path that you will take to achieve your goals. Public Relations or (PR) is usually an easy first step. Editors of all types are always in constant need of content and information.
 

As mentioned in the previous blog one should explore both Inbound and Outbound Marketing methods. Every market behaves differently, so be sensitive to it. Don’t always assume that because a certain marketing tactic worked for another business that it will work in your area. Again all markets are different.

Do not be afraid to experiment and take calculated chances. You never know, you might stumble on something that might work that you did not expect, but remember there are no silver bullets. It is never one single thing that will ultimately drive more business to you. Often it will take a mix of strategies to reach your target market.  

The goal is to reach your target demographic and that is only accomplished by understanding them. Analyze your target market at length, walk in your customers shoes. Try to understand what motivates them and then utilize the best method of capturing them as a lead. Getting to know who you are actually marketing towards helps you to develop product, plan to promote to them.  

We welcome hearing your thoughts regarding Marketing Plans and Strategies. Feel free to post your questions and thoughts in the comments section below.

ABOUT Reed Dillon - Reed Dillon is the owner of Creative Brand Content, www.creativebrandcontent.com - a marketing consulting company and Modularhomeblogs.com, a subscription blog service for builders. Reed has spent nearly two decades heading the marketing departments of some of the industry’s leading modular manufacturers and earning numerous national marketing awards.

Contact can be made at reed@creativebrandcontent.com or by phone at 540-488-2978.

Parts of this blog was resourced from the blog 6 Steps to Develop an Effective Construction Marketing Plan by Michael Moore

Monday, August 22, 2016

A Challenge for Modular Home Sales Managers

When business is good, like it is this time every year, modular factory management is busy planning production, quoting homes, signing paperwork with their builders, scheduling deliveries and servicing homes. What none of them are doing right now is preparing a plan to bring in new builders and train them.

Some factory owners have told me they will not go after new builders. Instead they want to build relationships with their existing builder base and help them improve sales. A question comes to mind. Looking over your builder list, how many of them are under 50 years old? I’d bet very few if any.

So here is my challenge for every factory Sales Manager. You can do this without anyone knowing it.


Go through your authorized builder list (single family builders only) and mark approximately they have been with your company and their age. Then mark any builders that bought their first house within the last 2 years that are still with you. Now go over the prospect lists that your sales reps should be turning in of new builders they are prospecting. Finally, how many of these prospects are completely new to building modular homes?

Without even knowing your company I can probably tell you the answers to some of these questions with great accuracy.

  1. How long have they been with you? This is a tough one because of the recent IBS problems, so this one I cannot answer.
  2. Age of your builder? At least 80% of them are over 50 with some of them over 60.
  3. Number of retained builders after 2 years? 20 - 25%
  4. Number of prospective new builders? 1 or 2 per sales rep per year.
  5. Prospects new to modular housing? 0 or at the most 1.

If this isn’t eye-opening for you, you and your sales staff have become order processors instead of sales professionals.

Yes, orders need to be processed and your sales rep is the one best suited for the job but that doesn’t excuse them from prospecting for new builders. This is something most sales reps loathe and will do everything in their power to avoid.

But let’s suppose you do have one or two sales reps that actually do prospect and find not only experienced modular builders but site builders that want to make the move to modular. Do you, as the Sales Manager, have any kind of structured training and retention programs in place?

Here is another thing I hear a lot when I talk with factory management. “Why should I train someone to be a good modular home builder and then watch as they jump ship and go to another factory?” Damn, that’s a good question but like all challenges, there are ways to do it.

Over the past year I have held a Factory Owner Round Table and a Builder Round Table and they proved successful in many ways that have benefited both parties.


Now I’m planning to put together a Sales Manager Round Table where you can meet, discuss what the industry as a whole can start doing to train builders and join together to make it work.

There also needs to be a few builders involved in this Round Table.

Watch for news about this Round Table but in the meantime, take the Sales Manager Challenge and see for yourself why I say there is a need for new successful builders in our industry and a program to train them.

Sunday, August 21, 2016

IBS Bankruptcy Aftermath - Rumors and Speculations

The May 11th announcement by the IBS Corporation that they were filing bankruptcy actually took no one by surprise. What did take a lot of their builders and employees by surprise was the company’s insistence that things were going to be OK, just wait until next Monday and production will begin again followed by no production and yet another promise of production beginning the following week.


Now the rumors are flying that on September 9th at least a couple of the closed IBS factories will be officially owned by Champion Home Builders, one of the largest HUD and modular home companies in the US. The most important of all the closed IBS plants is the Liverpool, PA factory that at the time of bankruptcy was supporting a lot of big modular home builders throughout the Eastern US.

No official word from the Bankruptcy Court yet but maybe this time the rumors have some truth to them.

This news has brought with it a lot of speculation about just what Champion brings to the table. Let’s take a look at some of the scenarios that could present itself.


  1. Champion could reopen the former Excel factory and begin producing the same products that Excel provided its builder base. If that were to happen, it would mean a cultural shift within Champion from a cookie cutter type modular home builder with limited options to a wide open “anything goes” custom modular factory. Smart money wouldn’t bet on that.
  2. Does Champion want all the IBS factories including Keiser Homes in Maine which was a rental? Champion has a strong presence in the MidWest and while reopening the two All American plants may sound like a good idea, it may be too late as all their former builders have joined with other good regional factories that produce everything the All American plants did. Smart money might bet on the Iowa plant but maybe not so much on Champion reopening the Indiana factory.
  3. Mod-U-Kraf. This is a great facility and it needs to be reopened as a ‘State of the Art’ factory. However does Champion really want or need this factory. New modular factories have opened in the South and they are quickly proving themselves up to the task of building good custom modular homes. Champion is well served with HUD in this market and if they reopen MUK, their best source of modular business will be their established street dealer network who may be unwilling to spend the time required selling customizable modular over selling from a plan book like their HUD line. Smart money says this will become a Hudular plant if it is acquired by Champion.
  4. Keiser Homes. This factory was a rental for IBS and after the bankruptcy court brings down the gavel, Champion may have to bid against other modular factories to get this plant as it is unclear whether the Court can force a landlord to continue a lease with another tenant. Smart money says this is a no bet situation.
  5. Eastern modular home builders. Some of the former IBS management and engineers were hired by New Era, a Champion modular home company in NW PA with the sole intention of moving them back to the Liverpool plant when Champion acquires it on September 9th. Production at competing modular factories spiked during the second quarter as the Excel builders scrambled to find factories to build their houses. Curiously though, some of these builders are anxiously awaiting the reopening of the Liverpool plant thinking it will be like the good old days.
  6. An interesting thing is currently happening in the East. New housing starts are up a little but after talking to several factories and vendors it appears that the building bubble caused by the IBS bankruptcy has run its course and for a lot of factories things are settling back down to OK levels again. Former Excel builders have become accustomed to their new factories and in many cases the builders have been pleasantly surprised by what these new factories can do for them.
  7. Builders leaving modular construction. One thing that has surprised everyone are the number of small modular home builders that have either switched back to site building or have gone out of business because of deposits paid to an IBS factory and now their customers are suing them for that money. With no plan by any factory to actively recruit ‘new to modular’ builders and these small builders jumping ship, the modular industry may be in good shape for a while but the long term market for modular construction may shift from single family residential to commercial.


And finally, if the Liverpool plant reopens and produces homes exactly like Excel did, with full customization and the discounts enjoyed by the former builders, won’t the result be the same as Excel’s? Low prices, heavy discounts and the ‘build anything for anybody’ mentality are not in the Champion playbook. Will Champion try it for a year or two and then make a decision? Probably. But you have to ask yourself if Champion, one of the huge players in the HUD and Hudular market, who doesn’t sell like this anywhere else in the US will bend the rules for this one factory? Smart money says to wait two years and see what happens.

September 9th, the date rumored to be when the bankruptcy court bangs down the gavel, should be interesting.

Friday, August 19, 2016

Regulations Continue to Cripple New Home Construction

A hidden scourge is hampering millions of American families across the nation from getting a toehold on the housing ladder.

The insidious costs of unnecessary regulations are staggering, and consumers and the business community are all paying a terrible price.


The problem is particularly acute in the homebuilding sector, which is one of the most regulated industries in the nation.

Government regulations account for more than 24 percent of the cost of a new single-family home. In other words, regulations account for more than $50,000 of the cost of a $195,000 new home.

The cost of regulation in the price of a new home is rising more than twice as fast as the average American’s ability to pay for it. The average cost attributable to regulation in the price of an average new home increased by 29.8 percent during the past five years while disposable income per capita rose only 14.4 percent.

This regulatory burden is unduly harming the price-sensitive entry-level market, forcing many young families and millennials to the sidelines. The share of first-time buyers has traditionally averaged about 40 percent but now stands at just less than 30 percent, and this number continues to fall.

The regulatory burden includes costs associated with permitting, land development, construction codes and other financial hindrances imposed on the construction process. The hefty price homebuyers are paying for government regulations represents just one more obstacle that homebuilders need to overcome in restoring the marketplace to normal conditions.

These regulations come in many forms and can be imposed by all levels of government. At the federal level, the list of agencies that regulate the housing industry is long. For example, new regulations from the Occupational Safety and Health Administration, the Environmental Protection Agency, the Federal Emergency Management Agency and other agencies are driving up the cost of housing, resulting in fewer affordable options for homebuyers as well as renters.

Local governments and jurisdictions need to take into account that permit, hook-up and impact fees, along with zoning, development and construction standards, directly increase costs to builders or cause delays that translate to higher costs for the buyer and harm housing affordability.

State building codes and environmental requirements also add to the costs.

For new home buyers with a  median income of $62,100, less than two-thirds of the households can afford a median-priced home, according to the latest data from the National Association of Home Builders/Wells Fargo Housing Market Index, a quarterly measure of housing affordability. In terms of affordability, San Antonio ranks 171 out of 236 local markets.

Reducing regulatory burdens would be a promising approach to improve housing affordability.

Regrettably, builders and developers can expect to feel the impact of additional regulations in the near future, and the rate of increase in regulatory costs embodied in the price of a new home will likely be accelerated, which will force more of new home buyers to the sidelines.

For example, OSHA’s new silica rules are set to go into effect next year, threatening to impose billions of dollars of extra costs on the construction industry.

Local fire departments continue to advocate in favor of fire sprinklers, which adds on average $6,000 to the cost of building a single-family home, according to a recent Fire Protection Research Foundation study.

It is incumbent on government at all levels — local, state and federal — to slash burdensome and unnecessary regulations on the nation’s small businesses. Moving decisively to cut the excessive red tape will promote job creation, reduce costs for consumers, and boost housing and homeownership.

Create a Marketing Budget

An article by Reed Dillon

Creating a marketing budget is absolutely essential in order to execute an effective Marketing Plan.

Do not fall into the trap of making all marketing expenditures ala carte’ based on momentary judgments. This is a very short sighted view that results in generally spotty and inconsistent outcomes.

Set aside a percentage of revenues as a starting point and then adjusting accordingly. Make a plan based on your best judgment and stick to it until you can effectively measure results. Create a marketing mix between Inbound and Outbound Marketing methods.


The good news is that the cost of Inbound marketing methods are relatively low as compared to traditional broadcast based Outbound marketing techniques. The catch is that Inbound marketing takes ongoing effort for it to work. The most important thing is that you solemnly commit to a budget that you are willing to invest and begin to develop a marketing mix that works effectively in your market area.  

We welcome hearing your thoughts regarding Marketing Plans and Strategies. Feel free to post your questions and thoughts in the comments section below.

ABOUT Reed Dillon - Reed Dillon is the owner of Creative Brand Content, creativebrandcontent.com - a marketing consulting company and Modularhomeblogs.com, a subscription blog service for builders. Reed has spent nearly two decades heading the marketing departments of some of the industry’s leading modular manufacturers and earning numerous national marketing awards.

Contact Reed  at reed@creativebrandcontent.com or by phone at 540-488-2978.  

Parts of this blog was resourced from the blog 6 Steps to Develop an Effective Construction

Thursday, August 18, 2016

Kylie Kuhns’ Aspirations and Inspirations

A few years back I had the honor of having Kylie Kuhns, the daughter of Apex Modular Homes’ owner, Lynn Kuhns, speak at one of my Builder Breakfasts about Kelsey’s Dream. It was the first time many in our industry had heard of her and the dedication she has for helping children with cancer to not feel alone and scared.


Kylie Kuhns, founder of Kelsey's Dream


Now, just a few years later, this young woman is recognized by many people and organizations around the world for her hard work and love for the cause that bears her sister’s name, Kelsey Kuhns.


What a pleasant surprise to learn that Kylie, a Penn State student, has been recognized by HerCampus.com for all her efforts in support of children with cancer. As an industry, let’s continue to support Kylie and Kelsey’s Dream.


Here is the article:


Kylie Kuhns: Helping Families Cope with Cancer
By Catherine Lowe in CAMPUS LIFE


At 11-years-old, while most of us were envisioning ourselves in training bras, Kylie Kuhns was envisioning a life-changing organization. After losing her older sister Kelsey to a 7-year battle with leukemia, Kylie fought to ensure that the legacy of her strong and compassionate sister lived on. Kelsey's Dream brings light, companionship and support to children undergoing cancer treatments. Within Kelsey's Dream, Kylie has cultivated several initiatives that have invigorated hospitals across the country. Now a sophomore in college, this girl isn't slowing down, showing cancer that the Kuhns girls are never going to stop fighting.

CLICK HERE to read the entire aricle

Wednesday, August 17, 2016

Rumors Flying About Two Modular Home Factories - UPDATE 8/18/2016

Emails and calls have been coming in about two modular home factories that may be going out of business shortly.

I have tried contacting the owners of both of them and can't get anyone to answer either the phone or my email.

Unfinished Foremost Model Home

Having driven past one of them last week, I noticed their new and as yet not finished model home overgrown with weeds which is a good indication that things have not gone well for them. The model home was hit with gunfire a few months ago which could be another indicator.

The other factory's number on their website is rerouted to a cell phone with a different number and you have to leave a message. Ooops!

Does anyone know what is happening with Foremost Homes in Greencastle, PA or Quality Crafted Homes in Beaver Springs, PA?

Inquiring minds want to know.....

UPDATE:
Just got this from an "in the know" person  that says Foremost Homes and the Foremost Industries Panel and Truss plants will be closed by the end of the month.  The modular factory is rumored to be reopened by the end of September under a new name.