Tuesday, February 20, 2018

Oregon Kills Tiny House on Wheels Industry

Oregon, once one of the states that readily accepted tiny houses on wheels (THOW), has decided to change its building codes which effectively ends the state’s acceptance of movable tiny houses. This negatively affects Oregon’s tiny house industry.

Oregon's THOW industry now includes a growing number of professional builders providing viable, affordable THOWs built to RV codes.

Tiny home trailers are no longer considered travel trailers and cannot be titled or registered.

Many tiny house builders in Oregon have been building to the RV association’s codes, which are accepted internationally as the industry standard for building tiny houses. In 2017, Oregon specifically removed THOWs from those RV codes.

A lot of states have written building codes giving THOWs a way to travel freely in their states and changed zoning laws to allow them in more areas. Oregon by declassifying THOWs from RV building codes, means that people that want to buy a Tiny House and move them from place to place within the state will be denied access to public roads without a special provisional permit.

THOW manufacturers in Oregon will not be allowed to tow their homes to buyers in surrounding states unless put on a flatbed trailer which means they will probably exceed the height limit. These THOW builders cannot get their THOW certified as an RV in other states because they were manufactured in Oregon which is already forcing some companies to move their operations out of state.

What was once an industry with a future in Oregon is fast becoming a distant memory. Will other states look at this as a way to curtail the the THOW movement?

Sunday, February 18, 2018

Guerdon Building Largest Marriott Project to Date

Prefabricated hotel rooms already outfitted off-site with furniture, carpets, curtains and artwork will be hoisted onto the framework of two Marriott hotels in downtown Hawthorne beginning Monday in a project closely watched by developers across the country.

The rise of Space X and the Ram’s future pro football stadium are fueling development in Hawthorne, CA and driving the demand for Marriott’s largest modular hotel project to date.

The 354-room dual-branded Marriott is a vital piece in the city’s transformation from, as the LA Times put it, “a nose-down industrial city to something, hip and cool.”

Guerdon’s modular construction is saving time and increasing quality by building rooms in a factory controlled environment concurrent to foundations and first-floor work on-site. Modules leave the factory ready to stack; complete with carpet, beds, and artwork installed.

The $86 million development, just two miles from SpaceX, will feature a Marriott Courtyard with 221 rooms and a 133-room TownePlace Suites extended-stay hotel on an L-shape parcel at the corner of Hawthorne and El Segundo boulevards.

All the rooms and bathrooms already have been built and will simply be stacked up on the site vertically and connected to electric, plumbing and other utility lines. The project is Marriott’s largest prefabricated development yet.

“For the past four months we’ve been under production on these modular units in a factory in Boise, Idaho,” said Brad Wagstaff, owner of Mogul Capital, a Marriott and Hilton franchisee. “There is a lot of interest in this project nationally among developers looking at the big push in modular construction that Marriott is doing.

“This project is going to come out of the ground very fast.”

The whole arrangement of 354 rooms and shared, oversized amenities — including a spa, pool, meeting rooms, a fitness center, barbecue area, sports court and restaurant — is expected to be open for business by summer of 2018.

Saturday, February 17, 2018

Labor Shortage in the “New Inner City”

Offsite construction has a labor shortage problem. Whether it's modular, manufactured, panelized or one of the other myriad of new ways to build a house, the offsite construction industry simply can’t find enough people to work.

Most modular and manufactured housing factories are located in rural areas where often generation after generation worked side by side producing homes. Those days are long gone.

The young people that once knew they could get a job at the local factory are now choosing to leave the small town environment they grew up in and are off to college or the military where they will see opportunities not available back home.

The Wall Street Journal called small towns in rural America the “New Inner City”.

Starting in the 1980s, the nation’s basket cases were its urban areas—where a toxic stew of crime, drugs and suburban flight conspired to make large cities the slowest-growing and most troubled places.

Today, however, a Wall Street Journal analysis shows that by many key measures of socioeconomic well-being, those charts have flipped. In terms of poverty, college attainment, teenage births, divorce, death rates from heart disease and cancer, reliance on federal disability insurance and male labor-force participation, rural counties now rank the worst among the four major U.S. population groupings (the others are big cities, suburbs and medium or small metro areas).

In fact, the total rural population—accounting for births, deaths and migration—has declined for five straight years.

Just two decades ago, the onset of new technologies, in particular the internet, promised to boost the fortunes of rural areas by allowing more people to work from anywhere and freeing companies to expand and invest outside metropolitan areas. Those gains never materialized.

As jobs in manufacturing and agriculture continue to vanish, America’s heartland faces a larger, more existential crisis. Some economists now believe that a modern nation is richer when economic activity is concentrated in cities.

There is an even deeper reason that people are leaving good jobs in rural areas and moving closer to large cities. Larger paychecks.

An example of this can be found at a lot of fast food restaurants and convenience stores right in your town. They need workers just as badly as the factory does but they are willing to pay wages that rival and sometimes exceed what a modular or manufactured housing pays.

In my town of 40,000, local stores have signs posted for wages unheard of before. The Aldi Supermarket has a help wanted sign with wages for part time clerk/stockers of almost $20 an hour plus benefits. Two large convenience store chains in town are paying $14 an hour to run cash register.

Factories and huge warehouses in the area usually offer a starting wage of $12 an hour plus benefits. A local sheet metal fabrication plant is offering $18 an hour after a 1,000 hour training program at $14 an hour. Still has the help wanted sign on thier building.

Add to this the opioid drug problems facing small towns, the lack of skilled labor education in high schools and the push by almost every parent to send their child to college and you’ve got a labor shortage.

Even if a factory can get someone that’s either qualified to work there or is willing to go through an apprenticeship, a majority of these new hires don’t make it past the first two weeks. They don’t show up for work or they don’t pass a random drug test.

There doesn’t seem to be an easy solution for this problem so maybe it’s time for the offsite industry to begin taking a tougher approach to lessening the labor shortage.

Offsite Construction businesses coming together and putting some real workable ideas on the table is the first step. Then agreeing to implement some of them is the next step. Will it mean raising prices?

One thing is certain, without a continuous supply of skilled labor willing to work and stay in rural America, the offsite industry could be facing a future where high tech and robotics will be our only choice.

Modcoach note: I’ve added this video not to show how spoiled the Millennial generation is perceived to be; I simply found it hilarious!

Friday, February 16, 2018

Builders Association Gets a Second Life

An article in Associations Now

In order to revive the faltering association, the Modular Home Builders Association launched a “Modular Home of the Month” initiative that has helped both grow its membership and promote the industry.

Several years ago, the Modular Home Builders Association launched its “Modular Home of the Month” initiative, which has not only attracted and retained a new segment of members, but it has also been a great marketing tool for MHBA and the industry.

MHBA's February "Home of the Month"

In order to revive the faltering association, the Modular Home Builders Association launched a “Modular Home of the Month” initiative that has helped both grow its membership and promote the industry.

Several years ago, the Modular Home Builders Association launched its “Modular Home of the Month” initiative, which has not only attracted and retained a new segment of members, but it has also been a great marketing tool for MHBA and the industry.

Here’s how it works: Modular home builders submit applications with different homes they’ve recently built, and then MHBA decides which one to feature that month—giving preference to its member home builders and those who use member manufacturers, while also trying to spotlight different styles of modular homes.

The monthly winner gets featured on the website, in press releases, and in social media posts. At the end of the year, MHBA does a “peoples’ choice” award for the Modular Home of the Year, and that winner will get even more good PR. “We try and sell it as, ‘This is the cheapest marketing you’re going to get,’” said Tom Hardiman, executive director of MHBA and principal at Hardiman-Williams.

This one initiative has helped MHBA attract a new segment of members, namely home builders, rather than just the manufacturers it used to serve. It’s also provided education to the greater public on what a modular home is and helped to spotlight some of its member companies. But more than that, it’s helped the association come back after the brink of death.

Back in 2012, when Hardiman-Williams LLC stepped in and took over the Modular Building Systems Association, the AMC had its work cut out for it. It was at the height of the recession for home builders, and the association had just three members left. Basically, it was about to shut down operations.

Hardiman remembers telling the those remaining on the association board: “Just give it to us: We’ll work on commission only when we sell a membership, and that’s how we’ll get paid. And if we don’t, there’s no skin off your nose.”

Some of the immediate actions included rebranding the organization, renaming it the Modular Home Builders Association, and rewriting the bylaws. But Hardiman quickly realized that in order to appeal to a new segment of members, MHBA needed to offer them what they wanted, too. Previously, the association had a heavy focus on advocacy, related to lobbying on building codes and regulations that would make life easier for manufacturers.

“That wasn’t super appealing to the builders,” Hardiman said. “They wanted more PR, more promotion, and the chance to show off their homes they built to their customers, so we really changed the whole focus of the organization.”

So, instead of MHBA having an internal government affairs and regulatory focus, it turned its attention to educating homeowners on the benefits of having a modular home.

In all of this, Hardiman said his biggest takeaway is to think like your members.

“If you were in their shoes, would you join this group and participate?” he said. “We have a bit of an obsession with trying to stay relevant and provide a real return on investment for our members.”

Thursday, February 15, 2018

NYC Expands Its Housing Plan to Include More Modular Homes

An announcement Tuesday by the New York City Department of Housing Preservation and Development (HPD) gave lower-income New Yorkers lots to look forward to–literally. HPD Commissioner Maria Torres-Springer announced that nine development teams would be creating 490 affordable apartments and homeownership opportunities on 87 vacant lots through the department’s New Infill Homeownership Opportunities Program (NIHOP) and Neighborhood Construction Program (NCP).

The programs were designed specifically to unlock the potential of vacant lots long considered too small or irregular for traditional housing with innovative smaller homes, and develop more affordable housing on lots long used for parking at existing housing complexes. This latest round of development is the third and final in a series: The program has already seen the construction of over 600 affordable homes on 81 lots.

Earlier rounds of designations in the program were announced in March and July of 2017. NIHOP/NCP RFQ encourages capacity development among smaller developers, particularly local non-profits.

New York City wants to capitalize on advances in technology and innovative design to expand modular building and micro-units that can lower the cost of construction, build new homes faster, and respond to the city’s changing demographics.

The newest sites to be identified are located in Brownsville, Bedford-Stuyvesant, East New York and Weeksville in Brooklyn, Morrisania, East Tremont, Morris Heights and Melrose in the Bronx, South Jamaica in Queens and East Harlem in Manhattan.

The newly-created homes are part of the “Housing New York 2.0,” road map announced by Mayor Bill De Blasio in November, which accelerates and expands the production of new housing, fights tenant displacement, creates more housing for seniors and working families and provides new home ownership tools.

In addition to plans to build homes on vacant lots, the plan includes the expansion of modular buildings and micro-units.

“No site has gone overlooked, and we are pursuing innovative new programs and initiatives to put even the hardest to develop lots to use as affordable housing,” said Torres-Springer. “With this latest designation, these remaining 87 small, scattered lots are on the road to becoming nearly 500 affordable rental and homeownership opportunities.”

Wednesday, February 14, 2018

Register Today for the BSC's February Lunch-N-Learn

Contact Devin Perry, Executive Director of the BSC, to reserve your spot or call 202-266-8577

Pittsburgh Remodeler’s App-Based Tools Win Google First Place Award

Innovator Brad Kriel is bringing high-tech gadgetry to a hands-on industry. His new tools can benefit both modular home factories and builders.

The 37 year old is founder and CEO of Velocity Robotics, a North Side-based startup company that makes “smart tools” to eliminate human error in construction and fill gaps in the skilled labor shortage.

Last week, his innovations earned Kriel’s company first place in AlphaLab Gear’s Hardware Cup competition at Google’s offices at Bakery Square. Velocity came up short in the contest two years ago, but wowed the AlphaLab judges this year with their productivity aids.

Among Velocity Robotics’ smart tool creations: AutoSet, a miter saw attachment, that uses Bluetooth tech to record accurate measurements in a smartphone app and sends those exact measurements to a saw to help make precise cuts. That accuracy can allow construction to move faster and prevents the cost and waste that come from materials being cut imperfectly, solving two major pain points for contractors.

“There is a clear problem being solved in a large, mostly untapped market,” Kriel says. “We have put together a solid team to solve the problem, and have built a solution based on solid market feedback.”

With $3,000 in prize money in his pocket, Kriel will move on to the international finals. If he wins at that competition here in Pittsburgh in April, victory comes with a $50,000 convertible-debt investment from Startbot VC. The second and third prize winners in the international finals will also receive cash prizes.

“We’re building an entire suite of productivity-enhancing, tech-based products for the construction industry, not just here in the U.S., but internationally as well,” Kriel says. “We have lots of ideas for various mobile apps, power tool accessories, and robotics-based products. The market will tell which ideas get implemented.”

His website states he is looking for investors to help him launch his app-based tool line. Just might be something for some of you to look at.

Another New British Modular Factory Ready to Open

ILKE Homes, a British modular homes company , which specializes in off-site manufacturing techniques, is creating 150 new jobs at its first factory in Harrogate.

The new hires will support the business as it delivers up to 2,000 modular homes a year in an effort to help solve the UK’s housing shortage.

The business plans to grow staff numbers to 800 over the next three years.

With operations due to commence at the new 270,000 sq ft factory in March at Harrogate, the jobs will initially consist of 100 people in the manufacturing and supply chain team, supported and enabled by a large team of designers, engineers and other professionals.

The manufacturing team is expected to grow to around 300 over the next 12 months.

The new team will create high-specification modular homes using the latest precision manufacturing processes to ensure durable, high-quality homes every time.

Homes will have flexible layouts with over 100 possible variations, from two-story terraced houses to three-story semi-detached properties, and blocks of apartments of up to four stories.

As mentioned before, 68% of Britain’s builders embrace modular and offsite construction and that number will continue to grow.

Should You Charge for an Estimate?

Before I remodeled my kitchen I went to Home Depot to look at cabinets. Not the ones on the shelf, rather the ones in the kitchen vignettes. I used to design kitchens for my customers when I was general contractor so I assumed if I took my Chief Architect drawings into the store they could give me a price.

“Nay, Nay!” They looked at my drawings and told me if I wanted the ‘off the shelf’ cabinets I could use the limited price list they handed me. But if I wanted a real estimate, I had to have one of their kitchen installers visit my house and do his own measurements.

Thinking I could save the installer a trip I explained that I have designed and built over 100 custom kitchens in my former business.

Again, “Nay, Nay!”. If I wanted a prices on the upper end cabinets instead of the particle board boxes on the shelf I must have their installer measure my kitchen. Well, we all know that Joe the Installer is so much more accurate than me and as my wife pointed out, “you’re not a young as you used to be, maybe you missed something.”

So I shelled out $99 and waited 3 days for Joe to come and measure. Guess what? My measurements were accurate to within ⅛” but Joe didn’t like my layout and told me he had to take his info back to the designer for her to draw out my kitchen.

After waiting over a week, we got the call that our kitchen drawing was ready. She had done a nice drawing of the exact same kitchen I had walked into Home Depot with 2 weeks earlier.

My new Millwood Kitchen I installed myself

Needless to say that Home Depot lost a sale and I lost $99.

That experience started me wondering if custom new modular home builders should charge for estimates and answer is yes!

This isn’t 2009 when you had enough time to do estimates all day long because you had nothing to build. No, this is 2018 and if you are like most modular home builders today, you are very busy almost to the point of turning down work.

That doesn’t stop new home buyers wanting an estimate on the highly inaccurate drawing they did while sitting at their kitchen table.

Unlike my adventures at Home Depot, these folks have little or no idea what they want or how to go about designing it, let alone pricing it.

Now let’s look at charging for an estimate.

In 2009 your time was probably worth next to nothing since you didn’t have any homes to build. Today is different. Craving out some time to do estimates is actually costing you time in the field and/or working with the people who signed contracts to build a home with you.

To better understand why I am telling you to charge for an estimate we have to have an understanding of the difference between and estimate and a quote.

The first thing to understand about quotes and estimates is that they are NOT just two different names for the same thing. Estimates and quotes each have distinct uses, benefits & disadvantages. Knowing these is key to avoiding problems that can cost you time, customer goodwill and even money.

An estimate is basically a ‘guesstimate’ or rough, educated guess based on what a job MAY cost. Often it is supplied either before you know all the details of a particular piece of work (such as during an initial call from a prospective new customer) or during a site visit.

Estimates are your first thoughts on costs and can change drastically when you get further information, when unexpected complications crop up during the work or the scope of what you have been asked to do increases.

Let’s face it, we only build 4 types of modular homes. Ranch (includes split and raised), Cape (includes finished and unfinished 2nd floors and chalets), Multi-story and contemporary.

Within 5 minutes of looking at a customer’s paper and pencil drawing you probably could give them an estimate on the ‘basic’ home with your standard features. That’s really all you should give them at this point.

Buyers are funny though. If you give them a ballpark estimate within a few minutes of arriving, they may feel cheated and may not respect your price.

Years ago I had a very successful builder tell me estimates weren’t worth the paper they were written on but they do lead to sales so you have to make the buyer wait at least two days so they think you worked hard doing it.

Instead he simply looked at similar homes he completed and used them to prepare the estimate. Gut feeling was his estimating program. Funny how that still works today.

Here is where the hard part for builders enters the picture, actually asking these potential buyers for $99 to do their estimate. Your time is worth something, why not $99 for the ‘two days’ it will take you to give them an estimate?

Once they have skin in the game, they will be back to get their estimate and if they like it you can move on to working on a quote for them and hopefully a contract. If they don’t like your estimate for whatever reason, you simply tell them you will do another “estimate” for free. They already paid you for time and doing another one won't really cost you anything. A third or fourth one however is reason to charge them again.

A quote on the other hand is an exact price for the job being offered. As such it is fixed and CANNOT be changed once it has been accepted by the customer (unless the customer changes the amount/type of work required or you discover something completely outside of the scope of what was agreed).

Quotes are only issued after an onsite visit and you are confident that you have established exactly what is needed.

Key point: It’s important to remember that quotes are presented formally and represent a contract between you and the customer. As such they can be used as legal standpoints for price should a dispute arise.

Understandably, quotes give customers peace of mind; safe in the knowledge that they know exactly how much the work will cost before the job begins.

Key points to remember:

Estimates are a rough idea of price. They should be used as an initial GUIDE PRICE ONLY.

Quotes are legally binding and should ONLY be used when you are certain of the costs involved.

NEVER label a written estimate as a ‘Quote’ – You can be held to the figure provided.

ALWAYS ensure that the customer understands whether they are getting an estimate or a quote.

Charging for an estimate will also keep them from coming back every other day with a new drawing and wasting your time.

Tuesday, February 13, 2018

Britian's WElink Modular's Much Heralded Housing Plans Collapse

Your Housing Group and its partner WElink have abandoned their joint venture into modular housing delivery.

Launched with great fanfare in December 2016, the Live Verde North West venture sought to deliver 25,000 low-carbon homes across the UK over five years. But having struggled to progress plans into manufacturing, time has been called on the project.

Ajmal Rahman, chairman of WElink, said: “WElink are disappointed to hear of the YHG board decision to withdraw from the JV. This was one element of our UK strategy to deliver off-site manufactured, energy-efficient housing in large numbers across all tenures.

“WElink will take time to consider the implications of this decision and comment further in due course.”

WElink is a renewable energy business headquartered in Dublin, with 11 global offices, including one in Manchester’s Spinningfields. It has established Live Verde as its UK modular housing business and also owns Barcelona Housing Systems, which develops modular construction methods.

The business is backed by China’s National Building Material Group, which as part of the JV agreement was to fund six modular housing factories in the UK.

Housing association YHG, which owns and manages 28,000 houses in the North, has been expansive in its ambitions, announcing its intention to enter the PRS market with its Hive brand in early 2017, lining up a 30-story tower in Liverpool Waters.

The organisation was also said to have entered negotiations to take on the New Chinatown site in Liverpool from North Point Global.

Brian Cronin, chief executive of YHG, said: “We are already pressing ahead with our growth strategy to build more than 5,700 homes in the next six years, representing a 20% increase to our current stock.

“Our exciting build program is unaffected and will continue to deliver high quality homes by both modern methods and traditional means of construction

“We remain committed to exploring innovative ways to build more new homes across all tenure types, including affordable-rent homes. We passionately believe that modular and other modern methods of construction provide a new way forward for the housing sector.”

In a joint statement, the partnership said: “One of the most important facets of the housing crisis is that for more than three decades Britain has not built enough homes to meet demand.

“As organisations we agree that modular, off-site construction is one of the key elements of solving the housing crisis, enabling us to build homes more quickly in order to meet that demand.

“Like many organisations that have announced plans to build off-site manufactured homes we have not been able to bring forward our plans as quickly as we had hoped.

“In working to bring our plans to fruition we have to date been unable to unlock projects at agreed commercial terms that would enable us to build off-site manufactured homes in large numbers.”

The statement concluded: “Both Live Verde and Your Housing Group remain committed advocates of the benefits of modern methods of construction. While we are unable to find a way forward at this time, we acknowledge that a positive working relationship has been created between the parties and we have not ruled out working together in the future.”

WElink, which in December signed a Memorandum of Understanding with Swansea City Council to develop housing, said it remains committed to developing £2.5bn of housing with UK partners.

An article in "North West Place" - Feb 13, 2018