Monday, August 20, 2018

It’s Your Turn to Change the Modular Housing Industry

For the past few years a lot of highly educated people recognized by their peers in the modular construction industry have brought forth a lot of unique and groundbreaking ideas of what could be the “next big thing” in affordable modular housing and commercial projects.

A few of these ideas have garnered people’s interest and have been advanced by leading websites like Dwell. Some have even gone as far as receiving funding from investors like Kasita.

We all remember the huge amounts of investment dollars showered on Blu Homes a few years back to help them become the next big thing in modular housing only to see them shrink their national housing efforts to a small area of California and several top management changes.

The modular construction industry always seems to be on the verge of becoming the answer to many of today’s housing problems but even with all the good press and wonderful intentions our industry continues to be a very small niche in the affordable and custom housing industry.

Commercial modular on the other hand is kicking butt. Articles are being written every day about all the projects being built and planned around the world.

Many of you have been in the modular housing industry for decades and even if you are relatively new to it you all share one thing in common - you want modular to grow faster and become a real driving force in new home construction.

Well, now’s your chance. I want to hear from you as to how you would improve what we are already doing, what you see as opportunities missed and what ideas, both realistic and ‘outside the box’ you have been thinking could be that ‘next big thing.’ Time to let everyone know about your ‘disruptive’ idea.

You are the actual “boots on the ground” in this industry and seldom does anyone actually ask you for your thoughts and ideas.

Now I’m asking you to “Anonymously” leave a comment about your ideas. Nobody will know who you are and that’s a good thing as we might get some really off the wall thinking brought to the attention of our industry.

It really doesn’t matter is you are in modular sales, work on the production line, set the modules at the job site or a member of management, you’ve got to have at least one idea how to improve our industry. (This is not a “complain about your factory” article and if one appears I will quickly remove it.)

Start writing those comments and let’s see what real insiders in the modular industry have to say about its future possibilities.


Anonymous said...

Make Modular Homes Cool. Granite, stainless steel appliances, farmhouse sinks, tiny homes, and ship lap all became trendy because of HGTV.

Need professional, partially scripted reality shows of homeowners buying and building modular homes on a mainstream cable or streaming network. Think of what reality shows did for Duck Commander (Duck Dynasty), Magnolia (Fixer Upper), ATM (Tanked), some products/services shown on Shark Tank, Carlo's Bakery (Cake Boss), etc.

Script it like Extreme Home Makeover (minus the free home, 250 volunteers, and unrealistic build schedule). Film current living situation and what they dream. Mix in a bit of House Hunters drama where homeowners decide between 3 plans. Track story of designing and building home both at manufacturer and on-site. Hit some challenges like Property Bothers and solve it with clever solution or trade-off. Then do a "Move that Bus!" reveal.

Get a a narrator / host like Mike Rowe or a personality known in homebuilding like Mike Holmes to host (he's a fan of modular homes).

Reality Show Variation - Build Modular Homes for Celebrities. Study how DeBeers made diamonds the default gemstone for engagement rings. Prior to 1940s, diamonds were considered second rate cheap gemstones for engagement rings (~10% market share). They gave diamonds to celebrities to wear and use as symbols of love. Add in a clever ad campaign "Diamonds are forever." Now, 80+% of engagement rings are diamonds.

Anonymous said...


Thanks for the invite.

For our industry to move forward we need to fix two things. We need to fix The Product. And we need to fix The Process.

The Product. In general, we’re building crap. Yup, I said it. Unnecessary rooflines, bad window proportions and placement, plastic and faux building materials, quartz-countertop-lipstick-on-a-fiberglass-batt-insulated-pig. BUT, it’s not our fault. We’re just building what the 3% are asking for. We’re making good money. We have 6 month backlogs. 4000sf plastic homes are paying plenty of our bills. . . . . . for now. When the market tanks that 3% are gone.

We need to change Our Product. We need to say NO to the distractions our 3% clients are asking us to build. We need to focus on better design, real building materials, and zero-energy-ready as a standard. We need to dictate what Our Product is. We need to elevate Our Product so that it is truly better than what the site builder is offering. The New Product is NOT the same-stuff-with-different-words that we’ve been building. It’s a lot better. We need the other 97% to want Our Product.

The Process. In general, it’s a mess. Almost every prospect client can tell you a story about how their neighbor was bamboozled by a Modular Builder. Or was it the Factory that bamboozled? Who Knows. Because the Process is so obscure even judges have a hard time sorting who screwed who. This needs to change. Either the Builder needs to own the Factory. Or the Factory needs to own the Builder. One stop shopping for a client. No finger pointing. No dropped communications. One responsible party.

My Two Cents for this Tuesday afternoon.

Anonymous said...

Right Sir! Its called vertically integrated! If the eastcoaster mod folks dont do it ie ...vertically integrate.. and thereby control the produce.. end quality-wise.. the Asians will..(Asian firms have bought into Balt-DC-VA markets recently so there coming for a piece of your action)

Granted rural East..PA etc is safehaven at least for if you want an even smaller piece of the SFD market and be happy to continue give the big share to the regional custom stick guys like Fineline (remember their anti-mod blog online Coach printed off).OK!.We are in a relatively low density low volume market relatively speaking compared compared to CA and AZ DC-Balt-DC marketplaces etc, ...but ...what will we capture when the hurricane market types die capture-wise.. What happens when you get much of the Atlantic coast storm damaged teardowns ..more near completion..what then.. wait for another hurricane?

Anonymous said...

I fully agree with two cents above and others commenting. As Marcus Lemonis states its “People, Product and Process”

You can observe everywhere on the net that there is a constant conflict between manufacturer and builder which begins and ends with finger pointing. From personal experience even when the factory owned the builder there was disconnect because of two issues and they are as follows:

People and Process: Retail units may do an excellent job at selling homes however they are lousy at building homes even when they are owned by the factory which is a prime example of you having the right person but they are sitting in the wrong seat on the bus. The solution is in the process itself. If the factory were responsible for the house and the retail unit was merely responsible for selling, each would be directly held accountable for their actions or lack thereof. Major retails of other products, cars, furniture, appliances, etc. don’t finish the manufacturing process on the retail end.

The second issue is elevation design and end product that hasn’t moved out of the manufactured home image of 1970 +/-. If it looks like a dog then it’s a dog. To compete with site builders start building products similar to site built in the factory. The footprint is steering you in the face if you observe what the top 5 builders in country are having success with in the market.

The third element is cost as cost doesn’t equal market, having the best home is only part of the equation. The market dictates Fair Market Value, not manufacturers, and until you are able to improve the product and reduce the cost of doing so you will continue to sell to the 3% as mentioned by another.

Another two cents added…..

Anonymous said...

On process, we HAVE TO IMPROVE engineering. Our footings and steel beams are approaching RIDICULOUS.

As a builder, I appreciate the economies that assembly line processing of engineering brings. But we're also increasingly frustrated by the apparent lack of VALUE engineering. Since our factory does not have a PE on staff, the "engineers", all perfectly well-intended guys, have taken CYA to a new level, and gravity just keeps on getting heavier every year.

Our rep recently told us that these guys are erring on the (very) high side, sometimes doubling or tripling loads, to avoid liability. Without PE and liability insurance in place, they have to protect themselves, at our cost.

Example: we had a W24 steel beam (that's right, 24"H) that weighed more than 5,000lbs, to underpin 40' of marriage wall on a 2-story. Gable end to gable end was 40'. Everybody that walked through the house, inspectors, another engineer, trades, etc were awestruck. Nobody could understand why were apparently building to commercial code (eg. 100PSF)!!!

This problem can probably be applied to other process areas, and always goes back to resistance to change. If we don't change, the Kasitas of the world are going to gobble up market share. At our expense.

Angel Landings said...

The problem I see with modular/manufactured housing today is that they are only marketing to the 3%. That even include the new companies. Recently I did a 3 month study on where and who would like to see a better-improved product. I realized it was not the disaster market. It was the tech market. Current homes are designed lie the home for the 3 little pigs (and the bad wolf).

Manufactured housing to succeed they need to become scalable as cloud computing did for the tech business, or what the electric grid did for electricity generation. You buy a unit that is complete (grid) but can be scaled up, flexible and adaptive to any environment. Should have options to scale its own power, water supply, and space. Communities can build clusters. This stratgy worked for AirBNB they focused first on tech communities then on rest of us. Tech is the fastest growing sector in the world and manufacture homes do not reflect that of a tech strategy.