Monday, November 12, 2018

Proof that Modular Housing Predates the Civil War

The Steamboat Arabia was built in West Brownsville, PA, just south of Pittsburgh, at the boat-yard of John S. Pringle in 1853. At 171 feet long and capable of carrying 222 tons of cargo, she was considered an average-sized packet boat.

The 28-foot-tall paddlewheels could push the steamboat upstream at a speed of over 5 miles per hour. It was used on the Missouri River.

The advertisement below was found on the buried Steamboat Arabia.

The above engraving represents a Portable Cottage, 14 feet 7 inches wide by 30 feet 1½ inches long, divided into two rooms, one story, 7 feet 10 inches high or the story may be made 9 feet high, of desired.  I contains six windows, all glazed, with Venetian Shutters to each window.

There are three doors - two of these outside and one inside and it is entirely constructed of wood. Sides and ceiling being composed of posts, rails and panels of uniform size. The roof is made of tongued and grooved boards, covered with paper, such as is used on fire proof roofs in cities, and painted with fire-proof paint which is sanded, and will last longer than shingles.

The perfectly simple nature of the construction enables two persons to put it together in a few hours, and take it apart again with equal ease. No apprehensions need be entertained as to their comfort in winter. From the inclemency of the weather, for from the the perfect manner of their construction, they are much warmer than any other frame building.

Persons serious of purchasing can see a cottage set up, at our factory.

Hinkle, Guild & Co.
No 865 West Front Street
Cincinnati, Ohio

In 1856, five years before the American Civil War broke out 1861, the Arabia hit a huge underwater snag and sunk 45 feet into a sandbar and was covered with soft mud encapsulating the entire ship keeping oxygen from rotting everything.

In 1987, it was discovered intact after years of erosion and shifting sand left the lost paddleboat 45 feet underground and a half-mile from the present channel of the Missouri River.

The excavation resulted in the discovery of the largest collection of pre-Civil War artifacts in the world.

A friend of this blog toured the Steamboat Arabia museum and was stopped in his tracks when he saw an ad for prefabricated AND modular homes found in the ship.

Not only is there proof that modular housing predates the Civil War, there were two modular homes on board when it sank.

If you visit the museum you may even see parts of the modular homes that were supposed to be on board.

Sunday, November 11, 2018

Modular Builder's Question Opens Pandora's Box

Recently a modular home builder in Virginia wrote and asked if I knew any factory that would sell him finished modules without interior trim, cabinets and plumbing fixtures? When I asked why he told me that he is getting tired of not having the factory properly install the trim and cabinets or not installing what the customer ordered.

Looking at the reason for his question I realized that “Bob” (not his real name) has been in the modular housing industry longer than I’ve been writing this blog and though he won’t tell me how many homes he builds a year I think the total is North of 20 a year.

It seems that quite a lot of the modular home factories that used to cater to the small builder supplying them with not only standard homes but also true custom designs are now putting huge 100-200 commercial module projects into the production mix which is hurting the quality he used to take for granted from his factories.

Merriam-Webster defines quality as a degree of excellence and superiority in kind or as a distinguishing attribute as a characteristic.

While service (Amazon) and technology (Apple) providers are able to measure specific attributes objectively to determine quality, a modular builder’s customer generally measures quality subjectively through their perceptions.

I reached out to some builders and factory owners to get their opinion of what he asked and the responses I received were quite eye opening.

A New England builder responded:
“The problem is with the service departments…. getting parts and or service crews if needed to resolve things in a timely manner when at times the trim maybe short or a cabinet door may need to be replaced etc. I mean the time frames are really ridiculously long, especially for parts, and most often come in wrong and the wait starts again. However time frames to get parts is often a problem everywhere even for us locally. Getting service crews on the other hand for non-parts problems takes way too long and can really tax a good relationship with a customer that up to that point we have so carefully built and enjoy.”

A Mid-Atlantic builder said:
“This would depend on the market that you are catering to. If you are in the starter to mid market - you are defeating the cost and time efficiency of the modular building process by deleting the trim and the cabinets. In this scenario, the builder would incur additional labor, additional job time and the cost of the cabinets and trim which will never equal the delete credit from the factory. At the high end there can be an advantage. If you are selling a spec home for over $850,000 or have a "high end client" who's lot your are building on, it may be a very good idea to delete the trim and cabinets from the factory.
The high end client will expect all the bells and whistles - including of course custom trim and a custom kitchen that the factory would most likely be unable to provide. The builder will also avoid any during construction job site damage to any high end trim or cabinets that were ordered from the factory. With the high end client, the custom trim and custom on site cabinets can be a additional profit center for the builder. We never ever obtain the flooring from the factory - to few selections to choose from and to much risk of damage during the completion process.”
 A large regional builder replied:
“We don't have labor to do it right in the field. We need to fix a factory mindset issue. Not excuse it. That would just be taking us backwards in the quest for factory built housing…”

An East Coast custom modular home builder:
“I have to be honest, it is getting to the point that stick building is faster than modular anyway. I truly can stick build a house for less money and less time. The factory quality has been abysmal as of late and service is just as bad as always. It’s a complaint I’m getting from other builders.”

A modular factory sales rep added:
“Just look at what happens to the majority of stick build guys that try mods. Their expectations are much greater than the reality of what was delivered. Why, cause we are just trying to fill our production schedule.
Our factories know only one way to sell to those builders. We have asked people with limited building experience, if any, and then refuse to educate them in proper modular housing techniques; engineering departments that cannot clearly understand what the builder wants and/or do not clearly know how to build it and hence can’t communicate it to the production line and we have management that wants only to know how much and how many........”

A Midwest Builder said:
“Today there is no clear cut case for service and repair after a home is delivered. Builders find problems and the factory service department asks you to give them a list of problems and cost to repair. At that point it could take weeks to get an answer and when they do get back they always want to cut the costs in half. It has become a two week negotiation process and we builders always lose money.”

Several major changes have had a huge effect on quality and affordability of modular housing across the US. First is the cost of freight which will continue to climb. Second is modular factories that used to exclusively build single family houses now adding hotels and apartment buildings into the mix where speed and cost are the keys to a developer’s profit while quality is often short changed in order to get them.

Third is the time needed to get state approvals for modular home plans. A truly grueling process for many factories and third party inspection services.

And lastly is the lack of training for quality control inspectors in the factory and for builders, set and finish crews.

Does this mean that modular is not the best way to build? Certainly not. Modular is finally being recognized as the future of construction in the US and around the world. We just need to realize that the old reasons for going modular is saving money and time are almost behind us.

In the future we must see a higher quality product that may cost the builder more up front but will not have the thousands of dollars in service and repair costs we see today.

Just look at the agenda for all those conferences and seminars where modular construction is at the forefront of everyone’s future thinking.

Thursday, November 8, 2018

The Vermont Modular Home Factory That Raises the Bar on Custom

Jason Webster, a Co-President of Huntington Homes in East Montpelier, VT, not only looks like someone you could trust building you a truly custom modular home, his family’s company has been doing just that since 1978.

Now they’ve produced one of the best videos I have seen in a long time showcasing their factory, their employees and the custom modular homes produced in their 100,000 sq ft factory.
Every time I talk with Jason I come away with the feeling I’ve just been let in on one of modular’s best kept secrets, a factory built on tradition and loyalty. A place where Jason and his brother Adam continually monitor quality both in the factory and in the field.

Take a few minutes and watch one of the best videos about why modular construction is the answer to housing. Yesterday, today and tomorrow.

Wednesday, November 7, 2018

An Insider's Video Viewpoint of the Offsite Housing Industry

Dave Cooper with Connecticut Homes is becoming quite the celebrity doing personalized video tours of homes of his company has built. He calls them Modular Minutes.

Dave Cooper

He is branching out in his video presentations addressing modular housing industry events and gives his own unique view of some of the biggest problems facing builders and factory management.

The video he just sent me will be the first of what I hope will be many he wants to share with my readers and all I can say is “Bring them on Dave” as his views will hit a chord with many of us.

Tuesday, November 6, 2018

10 Costly Mistakes a Modular Home Builder Should Never Make

Many new home builders attend seminars, buy How-To books, watch webinars and listen to TED Talks to learn how to improve their business. Heck, even my Modular Boot Camps, Round Tables and Builder Breakfast are all aimed at improving your business.

However if a modular home builder doesn’t correct the following mistakes, all the time spent improving your business could simply be a waste. You need to make sure you are not making these profit sucking mistakes and if you are, Stop Doing It and begin looking for ways to correct them and watch your bottom line at least stabilize and hopefully improve

1. Not being ready for subcontractors. If your jobs aren't ready for the trades, you're setting yourself up for a big problem. Even though a lot of the work is done in the factory and even though you may have your own finish crew, what happens if your electrician, plumber, HVAC, etc is delayed because you weren’t ready for them? Nothing, that’s what. You are at their mercy and if they had to move on to another job while waiting for yours, it could set back your completion date by weeks. Don’t blame the Subcontractor, blame yourself.

2. Paying your subcontractors too early. Pay them too early and you may not get them back to finish the job. As a GC you’ve had subs ask you for an advance or even the total when they are half way through your job. You’re a good guy and do it telling them they have to get the work done ASAP. That may or may not happen. Don’t blame the Subcontractor, blame yourself.

3. Beating up your subs to rebid and cut costs. What part of the job don’t you want done properly? A low bid from a sub because you beat them up will almost always mean corners are cut and in many instances, things are not done at all. It would be better to negotiate a fair price, keep them happy, pay them promptly when the job is finished and you will have a sub that will go the extra mile for you.

4. Lack of Systems and Procedures. This is your business, not your foreman’s, not your supplier’s and definitely not your subs. If not already in place, you need begin to create standard operating procedures for your company. If your systems aren't documented, they don't exist. If you don’t have them already, call your fellow modular home builders that buy from your factory, contact a professional experienced in preparing them or simply sit down with your team over pizza and beer and hammer it out. Anything is better than nothing. Maybe you do have policies and procedures in place but what happens when they are not followed? Do you have the required HR warning procedures in place to fire someone that continually breaks the rules you set up for your business. Do you ever check to see that your procedures are followed? Don’t forget who owns your business.

5. No marketing, sales or business plan. No matter how many times some builders hear me say that these are a ‘must’ for the success of their business, they simply think it takes too much time and effort to do and besides, they have been doing business for years and years and they know absolutely everything they need to know. There will never be another 2008 housing crash. Time to head to the bomb shelters. These plans help guide your decisions and actions and should be reviewed and updated at least annually and should be used, not just put on a shelf or given to lenders.

6. Keeping your employees out of the loop. Nothing will tire your staff quicker than a lack of communication. Keep the lines of communication open both to and from the management level. You'd be surprised how responsive your employees will be if you keep them in the loop. Provide clear direction and they'll be yours forever. Even if you are a one person builder that subs everything out, you’ve got to keep these people in the loop or your business will be in the poop.

7, Not Pricing your homes for the market. Your market will set the price of your homes, not your cost. For example, after doing research you find that other builders are selling a 2,400 sq ft home for $300,000 excluding land costs and you are trying to sell yours for $350,000 based on your costs, you may have a problem. The local market will set the sales price of your homes, not the cost of the goods used. Direct construction costs, not profits, are the only variable in the pricing formula. Time to rethink your position in the market.

8. You can’t control your home buyers. We’ve all the customer that wants what they want when they want if even if it means changing their minds after the house has hit the production line at your factory. It’s time you take control of the process by setting time frames, offering guidance and packing selections, thereby lessening the confusion for your customer. There is a premium to be paid if you just want red M&M’s. This is your business and you have to help your customers in a very business-like way. Stop your groveling.

9. You don’t have a flexible build schedule. Most builders use some type of build schedule. Everything from customers meetings to quotes from the factory and your subs to inspections. What most of you don’t have is any flexibility built into it. When there is a setback such as a delay at the factory, rain for a solid week, unexpected snow or even your delivery being pushed back a week, many of you throw your hands up and think it is the end of the world. It really is if you haven’t built some flex time into your build schedule and shared with your customer all the things that could go wrong when building a modular home. Keep your customer in the loop and they will work with you. Don’t and the surprises never stop coming for them.

10. You don’t inspect your job sites enough. Are you conducting critical point inspections? You should be. Don’t just leave it up to your foreman to do it. It’s your business. Decide what is critical that you personally should be inspecting on every house. Don’t just show up with donuts and coffee. Show up with a checklist and go over the results with the people responsible. Do this before customer walks. You are the one the customer will blame for poor quality workmanship.

Even if you are only guilty of one of these mistakes, that is one too many. Remember, this is your business so start correcting your mistakes.

Monday, November 5, 2018

RAD Urban, Modular’s Hidden Gem on the West Coast

If I were going to build a huge commercial modular home factory in California I couldn’t find a better place to build it than beside the Corporate offices of In-N-Out Burgers. My nose would take me to their test kitchen every day.

That is exactly what RAD Urban’s three founders did. Randy Miller, the CEO, Andy Ball, President and Drew Gissinger, Chairman must really like their burgers.

Wanting to bring quality high rise living units to the Oakland, California market RAD Urban’s factory uses LGS frames as the basis for accomplishing their goals. A huge factory finds workers building sleek modules destined to help curb the West Coast’s need for apartments.

As far as I can determine RAD Urban has no plans to build single family housing or affordable housing complexes. As they grow they may begin looking at hospitality projects like citizenM’s latest hotel in Seattle, WA.

Piece by piece, along a factory line, workers erect walls, string electrical wires, fasten plumbing, hang drywall and paint until a bare 12-foot by 30-foot steel chassis looks almost like a move-in ready apartment.

The Bay Area is one of the most expensive spots in the country to build and RAD Urban’s approach is trying to bring more housing online at a cost that allows developers a chance to sell units faster and at a better cost to customers and of course, make more profit.

RAD Urban is using the principle of finding a hungry market for their modules, building a factory close to that market and transporting modules a short distance to that market saving up to 20 percent over the cost of site building.

Developers see savings through lower labor costs, lower material costs and lower freight costs. There is also little need to them to pay huge trash charges as most of that waste is addressed at the factory.

A few newer U.S. companies are getting in on the trend of producing closer to red hot housing markets. Kasita, a Texas-based startup with a factory in Austin, recently brought a modular house to downtown San Jose as part of a country-wide tour.

The 400-square foot unit — long and narrow, like a traditional modular home — drew hundreds of visitors during its two-day stay.

RAD Urban sees its niche as large apartment and mixed-use complexes with more than 100 units. It set up its factory in 2013, customizing the space with rails to slide frames between stations, and platforms to allow workers access to the underside of the units so they can add insulation and finish ceilings.

The steel frames range in width from 10 to 16 feet, and can be 15 to 40 feet long. A typical unit is 360 square feet. Attaching two or three units together make up a one- or two-bedroom apartment.

Because the need for housing in the Oakland area seems unquenchable for decades to come this “Pop Up” factory could be the model for future commercial modular factories where red hot housing markets exist. Look for more RAD Urban type factories to begin popping close to major cities throughout the US.

Saturday, November 3, 2018

Modular Homes Don't Buckle Under the Pressure

I have really tried but I can't find any way this could happen to a new modular home.

Britain Desperately Needs to Jump Start Its New Home Construction

Britain faces a shortfall of 1,000,000 homes within eight years unless local and national councils dramatically speed up their rate of house building.

Some councils are decades behind where they need to be if they intend to meet Government estimates of how many homes need to be built in the coming years.

At current rates the average local authority would need an extra 6.2 years to build the homes the Government has estimated will be needed by 2026, according to analysis by Project Etopia, the modular homes builder.

Most of the furthest behind boroughs are in London.

Redbridge is estimated to need 26,000 new homes by 2026 but built just 318 annually on average over the five years to 2017.

With the same labor shortage in Britain that we face here it may take even longer to get those 1M new homes and probably by the time they reach that goal they will need a million more.

Modular construction is the only answer that can even begin to solve both Britain’s and our housing shortages.

Friday, November 2, 2018

Finding Skilled Labor is Like Playing Hide and Seek

Yesterday I went shopping for the first of my Christmas gifts and noticed every single store had help wanted signs in their windows. That is to be expected for this time of year.

However the signs were not like the ones I had seen before. About half listed the starting hourly wages on them. Wages from $15-18 an hour were the norm and most of them guaranteed 40+ hours through Christmas and full time in 2019.

One of the bigger stores had an employee at the front door handing our job applications.

Health Insurance, paid vacations, 401K, performance bonus and other perks could be found on almost every sign.

I stopped by Lowe’s on the way home to buy some discounted Halloween decorations and saw a familiar face at the lumber service desk. It was a new home site builder I’d met last year on one of his jobs. He told me that he figured he was further ahead mentally working at Lowe’s than spending time and energy on finding labor for his jobs. He said he was paying $20 an hour for laborers and still couldn’t keep them working.

A couple would only show up a few days a week and one was even dealing meth on the job.

And this brings me Amazon. I realize they probably have the same labor issues everyone else does but here is the big difference. When I hit ‘Submit’ on Amazon’s site to place my order it usually arrives within a day or two. I never think about a labor shortage at Amazon because everything happens just the way they promised it would.

But home builders are not Amazon clones. There are no instant houses unless you sell manufactured houses and deliver them off your street lot.

Home builders are being forced to look for workers that would rather work in a store with their peers for $18 an hour and lots of perks than work with their hands in the field for the $20 an hour with limited perks.

Trolling for skilled labor is even harder. Finding a trim carpenter that can do true custom work is getting expensive. Competing for their time with other modular and site builders is driving their wages higher and higher as demand is outstripping supply.

No longer can a builder simply put a help wanted ad in the local newspaper looking for laborers. No, today they must go into the home supply stores, the home and farm stores and anywhere else true hard working laborers have gone to get jobs and try and entice them to come work for you.

It truly has become a game of hide and seek. They hide and you seek them out waving $20 bills as bait.