Thursday, November 14, 2019

Talking with Building Systems Council’s Director, Devin Perry

I met Devin Perry, the Director of the NAHB’s Building Systems Council, just as he took the reins to this invaluable organization and watched as he has brought it back to prominence after the 2008 housing recession.

Devin Perry, Director, Building Systems Council

Membership is growing and attendance at both the BSC annual meeting and the BSC Lounge at the IBS shows his dedication to making this Council the place to join and meet with others involved in all the different types of offsite construction industries.

So I sat down with Devin to learn what he and his staff are working on for offsite construction. Sit back and learn what he and his staff are planning.

Gary Fleisher (Modcoach): ‘The Building Systems Council annual meeting in Pittsburgh seemed to be a great success. What have you heard from BSC members and others about it?’

Devin Perry, Director, BSC: “We received tremendous feedback from our attendees. Networking and education annually rank as the top two reasons industry professionals attend the Building Systems Housing Summit and the conference received high marks in both categories.”

“On the education side, attendees scored the keynote presentation by Skyline Champion Corporation CEO Mark Yost very favorably. Other highly rated presenters included Danushka Nanyakkara-Skillington, an NAHB economist and Ed Hudson from the Home Innovation Research Labs.”

“Overall, the 2019 Summit was our highest rated conference this decade.”

Modcoach: “I personally thought it was the best annual meeting in many years. Where is next year’s meeting and are speakers lining up to talk?

Devin: “Glad you enjoyed yourself and we certainly appreciated your attendance!”

“We’re extremely excited about Summit 2020, which is September 27-29 at the W Midtown in Atlanta. Because the event has grown, the National Association of Home Builders is dedicating more resources to next year’s event.

We are developing an additional education track geared towards builders who want to learn more about off-site construction techniques, especially modular homes. As you have mentioned, there is a lack of education opportunities for builders that want to learn more about systems-built housing and the Building Systems Councils intends to fill that gap. More details will be available soon, but we are lining up presenters that will give “hands-in-the-dirt”, first hand practical education sessions on adopting modular, panelized, concrete, log and timber frame construction.

Best yet, our repeat attendees can take advantage of education opportunities focused on economic data, builder trends and industry insights,all while networking with a broader group interested in buying their products. It’s a win-win.”

Modcoach:
“Next up is IBS in Las Vegas. The Building Systems Council Lounge has grown every year and I expect this year to be the best yet. What do you have planned for Vegas?”

Devin:
“Yes, it’s hard to believe but the International Builders Show is just over two months away. We have lined up a tremendous amount of programming in the Building Systems Council Lounge, the home of off-site construction at IBS.

On the modular side, we have great presentations scheduled by Ken Semler and Vaughan Buckley. Also, a panel of BSC members will take audience questions about adopting modular construction on Tuesday, Jan 21 from 10:30 – 11:00 AM.

The lounge is hosting networking receptions on Tuesday and Wednesday afternoon with complimentary food and beverages. All IBS attendees in the off-site construction industry are welcome to attend.”

Modcoach:
“How does someone become a member of BSC and what are the benefits of joining?”

Devin:
"First and foremost, you must be an NAHB member. NAHB operates under a three-for-one membership model:- when you join your local home builders association, you automatically became a member of your state association and the NAHB. You can find your local home builders association by visiting nahb.org/join

Once a member of NAHB, you can join the Building Systems Councils as a modular home manufacturer, home builder or associate (goods and service providers) member. While each group has its own tailored benefits, BSC members enjoy opportunities for business development, nationwide marketing exposure and access to exclusive events by joining the council. Anyone interested in learning more about joining the BSC can contact me directly, 202-266-8577, dperry@nahb.org or visit nahb.org/whybsc for more information.”

Modcoach:
“Modular, panels and offsite market shares were a big part of the BSC Annual Meeting. What can the BSC do to help increase it?”

Devin:
“That’s the 3,000-pound gorilla in the room, isn’t it? BSC members and staff are working tirelessly to promote systems-built construction to the greater home builder community. There isn’t a better vehicle to champion modular and panelized home building than NAHB, which has over 140,000 members nationally and internationally.

Specifically, BSC is developing a new guide for builders interested in exploring off-site construction. It will be made available to all NAHB members as a benefit of joining the BSC. I equate the information published in the guide to a 200-level education course- and it will delve into each of the construction methods represented by the Council.

We’re partnering with some of our like-minded groups, like the Structural Insulated Panel Association (SIPA) and Structural Building Components Association (SBCA), to promote their educational resources through the BSC. For example, SIPA is sponsoring the BSC Lounge at IBS and the SBCA is sending a large contingent of members and staff to the three-day trade show for the purpose of exploring future opportunities. It’s the same for individual companies as well-the BSC was part of the conversation that led Skyline Champion Corporation back to IBS-where they are re-launching the Genesis® brand.

We’re also using our annual events, The Building Systems Housing Summit and Building Systems Councils Lounge at IBS, to promote systems-built construction especially at the Summit with the new education track, dedicated to builders that want to learn more about offsite construction.”

Devin, thank you for an interesting interview about the value of belonging to the Building Systems Council and all the great projects you’ve planned for us in the future.

All of us at Modular Home Builder blog wish you and the BSC the very best in 2020 and we’ll see you in Vegas!

East Coast Custom Modular Home Showcase

Every part of the country finds modular home factories of all sorts. Commercial and Residential modular construction is growing by leaps and bounds. But one region is known for its ability to build custom homes more than any other.


From Maine through Virginia, the modular home factories located along this corridor serving the huge populations of Boston, New York, Philadelphia, Baltimore and Washington, DC have built and continue to build some of the most unique custom modular homes in the world.

Day after day builders call upon these factories to produce homes true custom craftsmen would be proud of. Below are just some of those homes with both exterior and interior views.

Sorry, I won’t mention which factory or modular home builder built each home as these custom homes can be produced by just about any modular factory in the East.

Interior Pictures









Exterior Pictures:





wchhom1.jpg


If you find nice custom modular homes being built anywhere else in the world, please share some pictures with us.

Wednesday, November 13, 2019

Why Aren't More New Home Buyers Embracing Modular?

While I was at both the BSC and MHBA annual meetings in October I heard a lot about modular housing's market share only being 3% of all new housing starts and it got me asking, once again, why traditional site builders aren't converting over to modular and the even bigger question of why new home buyers in many areas have that "Not in My Neighborhood" mentality.

When you ask a builder why they would build a house on the customer's lot where everything has to be trucked in, cut and assembled there and in most cases while it's raining, snowing or in extreme heat, they usually answer because it's "built better."

Well, that's just total BS!


Not only will the lumber get soaked, so will the floor and roof trusses. Water can't be good for those prefab products. I've even seen wood framed windows stacked up against the house with rain pouring on them. That definitely can't be good.




Do you think cruise ship passengers know that their ship was probably built in modular sections and assembled in a covered factory? I doubt it. It's just something people really don't care that much about. They just want a safe and fun filled cruise.



Then I wondered if airplane passengers would like to see their airplanes built at the airport in the rain and snow. That wouldn't be good. Boeing wants their planes safe and dry while they are building them. Even a lot of the components going into large passenger planes are modular.



So why do new home buyers think that a home built on their lot stick by stick by a subcontractor who is probably paying low wages and hiring anyone that can fog a mirror is superior to a modular home?




That is still a mystery but we can begin to change it. We need to begin working together to promote our industry, educate new builders on modular construction and maybe we will begin to actually increase our market share beyond 3%!

Just for fun, watch this huge ship being assembled using 4 modules being delivered on 4 carriers. Almost like a 2 story modular home.

Tuesday, November 12, 2019

Who is Responsible for Poor Service in Modular Construction?

Nobody has ever built the perfect new home. We have gotten close but in the end it usually becomes a Blame Game.



Today's modular home buyer is no different than home buyers 200 years ago. They want perfect, will accept some imperfections but will always keep contacting you about something they "just found" in their new home.

When the end consumer buys something, anything, they expect it to be as advertised. They have an assumption of practical use which simply means that what they purchase will actually work for their needs without problem.

Nobody buys a new car assuming that it will be back to the dealership within a couple of days because multiple things either were missing, broken upon delivery or needed repairs within 3 days.

Same thing with televisions, corn flakes and just about anything else you can think of, with the possible exception of a new home or marriage.

When someone buys a new modular home they are excited, not only to begin the process but also to the day they receive the key to their new home, close the door, look around and smile knowing that it is really their new home. What a great feeling.

But like most adventures, building a new modular home, or any home for that matter, is not a journey for the faint of heart. So let’s take a look at what happens when someone decides to actually buy a custom modular home.

Modular homes are sold through a network of factory authorized independent home builders that have home offices, showrooms and in some cases, model homes.

The buyer walks into the builder’s office believing that like just about everything else sold in the US, that builder will stand behind his/her product. 100%! And that is what happens in the vast majority of the modular homes sold.

What is happening behind the scenes is an entirely different story however. Things go wrong and “placing the blame” is an age old problem in the modular housing industry.

I did not write this article to point fingers at any one person or company. I wrote it to show that problems are inherent with all types of construction and the longer a problem goes without being resolved, the more antagonistic all sides become.

There are 6 main culprits when it comes to pointing out and/or assigning blame.
  1. The modular home factory
  2. The set crew
  3. The builder
  4. The Subcontractor
  5. The Customer
  6. The inspector

Here is a closer look at each and how they intertwine sometimes making a simple oversight into a huge problem that only gets solved after a lot of time, money and energy is expended.

The Modular Home Factory

This is where the first part of the actual assembly of the house begins. Drawings, quotes, redrawing, requoting and finally the drawings become approved and plans stamped, the quotes become a contract between the builder and the factory and things begin to happen to turn the house plans into reality.

Like anything in life, if things go wrong, they tend to go wrong at the most inopportune times and in the most inappropriate ways. Special order parts and materials must be ordered and arrive in time to be placed in the module as it goes down the assembly line. Plans that were approved and stamped may get adjusted at the last moment by the customer and the revised ones don’t reach the production floor in time. Hundreds of component parts and pieces must be assembled in the proper way and on and on and on it goes until all the modules are built, wrapped and ready to ship.

Monday, November 11, 2019

Cambridge, England Addresses Homelessness with Modular Housing

Cambridge, England, a city of 125,000 people has a homeless population that needs shelter. Unlike the homeless in California who are housed in converted garden sheds, the Brits are taking a more permanent solution using modular construction to accomplish it.


A row of low-cost "micro homes" is to be installed for homeless people in a city where houses cost twice the national average.

Cambridge City Council approved plans to create six modular units to combat "alarming levels" of homelessness where the city's average house price is $592,000, compared to almost $292,000 nationwide.


There will be six homes - each measuring 270 sq ft - will be built on land adjacent to Christ the Redeemer Church in Newmarket Road. Five homes will be for residents and the sixth will be for a full time support worker.


The modular homes will be an efficiently designed space that creates a separate bedroom, bathroom and utility room, with a shower and washing machine, and an open plan living/kitchen area.

The Cambridge City Council is allowing the ‘village’ to remain for 3 years on the site. I suspect that should give the Council enough time to decide if this is a good solution to their growing homeless problem or a failure. If it is a success, look for more of them to be built.

Sunday, November 10, 2019

Automation Can Never Replace This

Sometimes hiring the right person for the job is all you need for good looking work.

Saturday, November 9, 2019

Why A Modular Factory Could Fail

Over the past couple of years the media has championed modular construction as the new rising star of both housing and commercial construction. The 3% market share of new housing has begun to rise in many areas of the country but with that growth along comes problems.


Modular housing, like other industries, is a business. With any business, there are successes and failures. There are numerous reasons behind a manufacturer failing, including neglect, inexperience, and economics (financial). Economic (financial) reasons accounting for approximately 80 percent of all failures.

Here are the most common reasons modular home factories fail:

No Business Plan
Without a well structured business plan, it's hard to develop a direction for success. Many modular factories were started by experienced management staff that knew they could run a better organization than the one they worked for.

They found investors that shared their enthusiasm for modular housing and soon they were discussing everything from the design of the production line to how to steal builders away from their current factories. This is not unique to the modular housing and is how many industries have grown.

The problem that is evident in modular housing is a lack of a basic Business Plan. Yes, there is a plan prepared for attracting investors but shortly after the money comes in, the plan is put aside because something comes up that was unexpected. The Business Plan has to be part of the factory’s success. It must be a living, breathing thing that the owners and management work with every day, changing it when needed and adhering to it when things become chaotic.

If a factory doesn’t have a strategic business plan, it’s time to get the management team, along with key staff, together and prepare one.

Lack of adequate capital
Many times modular home factories start off under-funded. Then after a short while, money runs short and things that were needed to increase sales to meet projections begin to be neglected. Training suffers, quality suffers, morale suffers and finally the factory shutters its doors.

By not being clear at the beginning with a financial direction, it’s easy to forget about things such as inventory and receivables. Work with a good CPA or accountant to create a pro forma. By projecting cash flow for years 1 and 2, the owners will learn how much capital they will need on hand in order to survive.

Not managing cash flow
Countless times modular home factories fail because they don’t understand working capital. A company may buy a large piece of equipment because they think it will fulfill a need, but if the return on investment is not fast enough, this one piece of equipment that was “the answer” may affect that company’s ability to “keep the lights on” and “keep their employees paid”. Or the factory management may begin pandering to a new income base they believed would bring in millions of dollars only to find out that the margins were not enough to continue operations.

They failed to make sure they had enough short term assets to cover short term debt.

Lack of a good marketing program to attract new builders
If a modular home factory doesn’t get new builders, revenue will begin drying up.  It would be almost impossible to find a single Marketing Plan in our industry. Most factories use the old “Buy from us and we’ll give you the lowest price” approach to marketing, going after other factories’ builders instead of trying to convert site builders. There are a couple of factories that do have effective marketing plans but you could count them on one hand.

Most factories have never sat down and defined a persona of what their new builders should look like and then create a plan to attract them.

Not having a diverse builder base
If a modular home factory puts 80% of its efforts into satisfying three or four home builders, it's time to diversify. We’ve all seen what happens when a factory’s biggest builder switches to another factory. Images of chickens running around screaming “the sky is falling” comes to mind.

Sometimes a factory will seek out commercial developers to increase sales. This is becoming more prevalent today and many factories have successfully integrated these large scale projects into their production line without a major impact on their builder base.

Modular home factories only have to look back to 2008 to understand that diversity is one of the keys to continuing to stay in business.

Failure to understand the industry and the target customer
Today there can be no lone cowboys riding off into the sunset knowing that they did a great job. If a factory is not working with others to make the entire modular housing industry more coherent and responsive to today’s market, it might as well put an expiration date above its door and let the countdown begin.

If you are a builder, take a long hard look at your factory and ask yourself if they are poised for a successful future and if you are part of the factory management team, ask yourself if you have an effective Business and Marketing Plan in place.

Gary Fleisher is a housing veteran, editor/writer of
Modular Home Builder blog and industry speaker/consultant.
Contact: modcoach@gmail.com

Greenfab Gives Modular Housing a Bad Name

Dream-house nightmares haunt Seattle homebuyers as builder struggles


Greenfab Factory

Homebuyers in Seattle have come to expect a process that is costly, protracted, and nerve-wracking. But nothing prepared Andrew Weller and Kristin Nierenberg for the new-house nightmare they’re still living through.

In June, the young couple demolished their Madison Valley bungalow and moved into a rental to make way for a modular house from Greenfab Homes, a Seattle firm known for elegant, environmentally friendly prefabricated dwellings.

For $453,000, Greenfab would build Weller and Nierenberg a home in sections, or “mods,” in its factory in Burlington and then assemble it on the now-vacant Madison Valley lot. Prefabrication, which can dramatically reduce overall construction time, has been getting a lot of attention lately in cities like Seattle that want to add housing supply as quickly as possible. Weller says Greenfab promised to have the couple and their two young children in their new home by Christmas.


Swen Grau and Dirk de Pree, Greenfab’s general manager and chief financial officer, respectively, declined by phone and email to discuss customers’ complaints or the future of the company, which has a sales office in Phinney Ridge. Although the company’s website site is still up and its 800 number remains in service, the factory in Burlington was locked at midmorning one day this week and appeared empty except for what looked like a single mod.

CLICK HERE to read the entire Seattle Times article

Friday, November 8, 2019

What Would You Do If Your Modular Home Factory Lost a Million Dollars?

I don’t know..”What could I do?”


Well, if your factory was in England, the British Government would loan you $38,000,000 to build a second modular factory! Maybe or maybe not a new factory, that hasn't been quite decided yet.

Yeah, I know. That would never happen in the US. In fact, the US government doesn’t even know the difference between modular homes and manufactured homes as witnessed this Summer at the Innovative Housing Showcase on the Washington Mall.

Homes England, the non-departmental public body that funds new affordable housing in England, is the one that approved that $38,000,000 loan to Ilke Homes.

Ilke Homes chief executive Dave Sheridan said the business was currently considering whether or not a second facility will be needed to boost the firm’s production capacity from the planned 2,000 homes per year to 5,000.

Give me a minute here to contemplate that number. 2,000 homes a year from one factory would be 40 homes a week. Based on an average of 3 modules a home, that would be 120 line moves a week or 24 moves a day. 5,000 homes would be 60 line moves a day or one every line move every 8 minutes.

Quality be damned, just make sure you keep to the schedule! And let’s not forget to order enough carriers to haul them to the job sites at one every 8 minutes.

I can see why Homes England loaned Ilke Homes the money as it makes perfect sense to me now.

Ilke was set up in 2017 in a joint venture between steel frame modular specialist Elliott and housing contractor Keepmoat, and completed its first homes last year. Homes are constructed in the firm’s Yorkshire factory and transported to site by lorry. In June it signed a deal with housing association Places for People to deliver 750 houses, and also counts Keepmoat and Home group among its customers.

Let's hear from our friends in England about this.

Wednesday, November 6, 2019

Disaster Housing Construction Challenges In America

Exploring the Role of Factory-Built Housing

Factory-built houses are constructed using modular, panelized, and pre-assembled methods. They can be built outside of areas damaged by hurricanes or tornados and can be brought into the disaster area if homes have been destroyed. This innovative option could also be used to alleviate the shortage of affordable housing stock that afflicts many communities across the nation. Yet a mere three percent of American single-family houses are factory-built, says the report.


Regulations and policies ill-suited to meeting the demand for disaster and affordable housing options are partially to blame for the low take up of factory- built structures.

When financial assistance is not a viable option, the most commonly used federal tool for direct housing is manufactured housing. These homes are designed to be permanent but are utilized temporarily to provide disaster survivors with direct housing. A manufactured house can provide housing for a family for more than 50 years, but the US Congress requires that temporary housing assistance provided by the Federal Emergency Management Agency (FEMA) last no longer than 18 months. FEMA’s temporary deployment of a manufactured home costs roughly $110,000 to $129,000 per unit, the report finds.


States that receive federal recovery dollars have leveraged factory-built homes to address combined disaster and affordable housing challenges. However, these instances are rare because disaster recovery block grant funds usually arrive long after a disaster occurs – after temporary housing assistance is likely to be discontinued. For example, Congress appropriated $1.3 billion for flexible housing construction and repair after Hurricane Ike struck in 2008, yet virtually none of these funds were expended until after the 18-month timeline for temporary housing.

“These overlapping roles and competing perspectives between states, tribes, and territories and the federal government highlight a piecemeal approach to disaster housing that effectively excludes factory-built homes as a viable option for post- disaster housing,” the report states.

Yet these issues can be resolved, and the report offers recommendations for helping emergency managers, housing agencies, policymakers, community leaders, and construction companies to address the challenges.

“Despite the problems America faces with affordable housing and disaster housing, we lack a strategy that brings temporary-to-permanent housing into our collective toolkit. Improved construction technology alone cannot solve these issues, but factory-built housing should be part of the solution,” says Michael Windle, Researcher at the Humanitarian Supply Chain Lab and author of the report. Factory-built housing is not a panacea, but it should be a key component of the nation’s housing stock at a time when both the severity and frequency of natural disasters are increasing, and states continue to struggle to meet the demand for affordable housing.

For more information, contact the report author Michael Windle at mwindle@mit.edu.

Download the full report here: https://dspace.mit.edu/handle/1721.1/122651