Thursday, February 27, 2020

Modular Construction’s Apathy Toward Change

I’ve been writing this blog for more than a decade and to be quite honest, nothing much has really changed in the modular housing industry during that time.


Factory management and modular new home builders, especially East of the Mississippi have found no real reason to change what is obviously a winning formula. Very few have embraced the expensive move into any real type of automation, BIM, Virtual or Augmented Reality and robotics.

They know that all these new approaches to help them improve their business simply are too expensive and usually too hard to implement as a few factories found out when they tried to install BIM. Besides, if what you’ve been doing for 20 years or more is working quite well, why change? We all know construction is a very labor intensive and hands on type of business.

Even marketing is not a high priority for most modular factories. With only a 3-4% share of all new home construction in the US being modular, who could blame them. Business is good right now!

Most of those in the modular construction industry have become very apathetic when something new comes along that could affect modular’s “business as usual”.

This shared apathy is about to get a ‘wake up’ call!


What started as a new idea from the Manufactured Housing Institute (MHI) called “CrossMod”tm is becoming a movement by MHI and its members into other areas.

Dr Ben Carson, the Secretary of HUD, was charged with making changes to new home construction that would make it affordable. That term refers to housing that can be obtained by the median wage earner in each part of the US. In January he announced he would be taking a nationwide bus tour focused on removing barriers to affordable housing stock.

He has spoken of how the Fair Housing act should be expanded to include discrimination against “types’ of new home construction. Last June HUD held an Innovative Housing Showcase, co-hosted by the NAHB, on the National Mall in DC where the only types of homes displayed were HUD manufactured homes.

HUD will hold it again this September but this time the NAHB (co-hosting again) is preparing to include non-HUD housing innovations. The “apathy blinders” will be removed this year as I’m sure NAHB will make sure every type of housing is fully represented.

But MHI isn’t sitting on their hands simply watching what is happening in affordable housing. No way! They are presenting new regulations to HUD that will allow HUD manufactured home factories to build the affordable housing Sec Carson is looking for.

These new regulations include two story, four module homes, townhouses and other types of buildings usually reserved for on-site, prefab and modular construction and allow them to circumvent most state and local code enforcement requirements.

The MHBA has spoken out about these changes but once more their member's apathy shows when very little about it is being discussed within the association.

Modular construction’s apathy shows when I talk with modular factory owners and management and their builders about a “fact finding” breakfast meeting I’m hosting with some of the most important people in the off-site industry with knowledge of these impending new regulations.

This is what I hear back from them (all true responses):

“This won’t have any effect on modular housing”

“Those regulations will never pass”

“I’m going to be out of town that day. What day did you say it was?”

“Not something we would be interested in”

“We are so busy we can’t spare anyone for a breakfast meeting”

Apathy!

Please don’t be one of those people that refuses to listen to what is about to happen in HUD that may have a direct bearing on modular housing.

MHI is working hard for their members to give them the tools to help HUD create affordable housing. Why aren’t we at least learning what MHI is doing from people that know? Then modular housing people can decide for themselves if this a threat to what you’re doing or just another option from HUD for people that want an affordable home.

CLICK HERE to read about Modcoach’s HUD Fact Finding Breakfast on March 25th.

Seating is very limited.

10 comments:

Tom Hardiman said...

Gary, curious as to why you say our (MHBA) members are apathetic about this issue and assume we are not talking about it. Is that based on the replies to your post (mostly from anon people and non members)? Or because our members are not talking about it on your blog?

I assure you that MHBA is not only talking about it, we are doing more than just talking about it.

Daniel G. said...

I hope people realize the firepower (Buffett/Berkshire Hathaway) behind the "Cross-Mod" push. That is serious lobbying power. Not meeting this head-on with everything in the arsenal will prove to be very bitter hindsight.

Tom Hardiman said...

Daniel G (and others)- our arsenal could certainly use some additional reinforcements, as I promise you the battle will not be won by posting opinions to online forums only.

Next week, MHBA has meetings w key housing policy makers in VA and Ohio as well as 7 (so far) meetings w Congressional reps with oversight of US housing policies. No doubt, we are facing ridiculous firepower from the "CrossMod" contingent.

But what's the alternative? Give up and hope the big HUD code boys leave enough scraps on the table for you to feed your family? To quote Tom Petty, if we go down, we'll go down swinging.

EVERY modular home builder and manufacturer across the country should be backing us on this.

Anonymous said...

Tom Hardiman, I find it very interesting that the first time I heard about these proposed regulations was on Gary's site. Then he wrote this blog story about apathy and it's as if everyone just woke up and started to try to stop what Daniel G calls "the firepower (Buffett/Berkshire Hathaway) behind the "Cross-Mod" push."

The Cross-Mod thing is already here and it sounds like you are trying to do something about it. Too late. The new regulations worry me more than Cross-Mod. What are we going to do when HUD can build what we build only cheaper, faster and with less state government regulations.

Plan to attend Gary's meeting breakfast. I strongly suggest everyone try to be there as I think it will be very informative and maybe a little heated.

Tom, you say comments on here come mostly from anon people and non members. I am signing this as anonymous simply because I don't want people to know which factory I manage.

Tom Hardiman said...

Anon, the proposed new HUD regulations and the CrossMod marketing campaign are not two separate issues. The proposed new regs will give a blanket approval across the country for products like CrossMod. And yes, they will most certainly compete at a lower cost with the IRC modular homes this industry builds to.

We may very well be too late. But that won't stop us from trying. I'm just suggesting (as Daniel did) that we, collectively as an industry, might fare a little better by working together on this.

Mark Conte said...

Gary,

I hope everyone understands, as individuals they can and should provide written comments on these proposed rules. Here is the link to the federal register where anyone can see the actual proposed rule and add their own comments.
https://www.federalregister.gov/documents/2020/01/31/2020-01473/manufactured-home-construction-and-safety-standards

I wish I could attend the breakfast, but I am unavailable. But regardless, I hope that everyone takes the time to comment.

William aka "Little Bill" said...

Mark, thanks for the link on where to leave comments. If it was not for Gary's blog site, I am not sure how the modular industry as a whole can learn about all of these happenings.

VM said...

I got to get it on this topic !
It seems that the modular regulations verses this new cross mod HUD seems a bit unfair to a true system built company. One can say if Carson’s proposals pass the zoning laws that it’s all over but crying.
If there is a way to adapt in this construction world with Modular regulations getting a easier path with less IRC state code inspections. , then I see both sides benefiting from this. Modular construction is not going to change the way it’s built better than HUD. That’s a great thing. What we should be concerned with is having these true Modular Factories design a Hybrid product that beats them at their on game.
At the end of the day , all builders of some sort want to stay busy , productive and profitable.

I always thought affordable off site construction was the new wave coming. But with true Modular factories continuing to go up in price , backlogs getting severe , the CrossMod boys have figured this out. Especially with regulations.

It should not be treated as a fresh new idea or news.
Several factories thru the years offered a HUD version to produce a series of affordable ,fast and less restrictive zoning product. AKA : Hudular
So , factories , builders and bloggers , find a way to beat them at their own game instead of coming to a party that the punch bowl is already empty ...

Anonymous said...

The concern is not HUD code vs IRC MOD code. The concern is the promotion of a home that in the minds of consumers appears to deliver something it is NOT. All builders want to deliver quality affordable homes to buyers but we want them offered based on comparable standards and regulations. Manufactured homes provide a quality solution for many buyers but they should be marketed as they are designed not promoted as something they are NOT.



Anonymous said...

Their is a reason that HUD retailers are referred to as dealers and Mod retailers are referred to as Builders.