Monday, January 18, 2021

3 Post COVID-19 Trends in Off-Site and Modular Construction

2021 will see some of the precautions associated with COVID-19 become opportunities for the off-site and modular home industries. The changes will be subtle but will probably become standard fare in construction even after the pandemic has passed.


The Home Office

In the past, the home office was an option that was seldom chosen by new home buyers but COVID-19 forced many to work from home. Many businesses saw little or no drop in output from the ‘work from home’ employee and have decided this is a viable way to work. It eliminates the homeowners’ commute and allows the employee more freedom. 

Several modular home factories and their authorized builders have designed new floorplans with space for an office. In the past, these offices would required Internet and cable connections hardwired into the design but WiFi has eliminated that. 

Converting an area into an office is different today than yesterday in another unique way. Today’s office will have more of an open feel and probably without an interior door as many of those working from home will now save money by not having to hire baby sitters for their young children while they worked in a remote office. These offices may find half walls being utilized allowing the worker to watch their children’s activities instead of having their desk face a solid wall. 

Expect to see an increase in modular housing as many new homeowners now want to live “in the country” since they no longer have to commute. As an added benefit, they won’t have to buy a house in a tract builder development simply because it’s close to their workplace.

Air Quality

COVID-19 has us thinking about air quality more than ever before. Poor air quality in buildings has many contributors; paints with volatile organic compounds, poor air filtration and ventilation, building materials containing certain types of plastics, and mold prevention.

The modular housing industry has always been at the forefront of green and sustainable building materials. The process of building homes inside a protected environment helps make modular construction inherently better.

Tiny Homes

Another change that the modular industry will need to address is the tiny home movement. Every family that chooses to move into a tiny house is one less than a traditional modular factory has the opportunity to build.

Recently I’ve been hearing that many in Real Estate are beginning to classify any home under 1,100 sq ft as a “Tiny Home”. That new designation could benefit the modular industry as we can pop them out faster than eggs from a sea turtle. The economy of scale, more liberal zoning, eased building codes and favorable financing could team up to see many new modular factories open and older ones to become even more productive.

The only downside for the modular construction industry for this type of housing is the HUD industry, which is already better at building large single-wides and if their “Cross Mod” is resurrected in 2021, allowing them to build in non-HUD neighborhoods, they could beat modular factories to the endzone. 

2021 will be a great year for new single-family housing and modular can play a huge role in it. We just need to step up to the plate and hit it out of the park.

Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects


Contact Gary at modcoach@gmail.com

Saturday, January 16, 2021

Could Affordable Housing Bring on the Next Housing Recession?

Nobody would ever want to experience another Housing Crisis as we had in 2008. Not intentionally anyway.

One theory why it happened was the Government programs that helped low-income households purchase houses led to widespread defaults on the subprime loans they held, sparking the entire financial meltdown.

The U.S. subprime mortgage crisis was a set of events and conditions that led to a financial crisis and subsequent recession that began in 2007. 

It was characterized by a rise in subprime mortgage delinquencies and foreclosures and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.

Government housing policies, over-regulation, failed regulation and deregulation have all been claimed as causes of the crisis, along with many others.

Hopefully, everyone has learned some hard lessons from these past mistakes. 


Housing Crisis Warning #1

However, there is a fish in the construction industry that could begin to smell bad and that’s the rush to fill affordable housing in cities across the US. 

The problem of workers doing essential jobs such as teachers, police and fire personnel not earning enough to live in the neighborhoods they work in, forcing them to either pay high rents or buy houses beyond the city’s suburbs causing long commutes should be addressed.

Affordable housing can mean government-backed guaranteed mortgages and most likely higher taxes and added regulations. Giving more people home loans that hadn’t previously qualified for a mortgage can be accomplished by lowering down payments, subsidies, tax relief and lowering qualifying credit scores.

Isn't this similar what happened in 2007?

COVID-19 renter giveness legislation has already seen lots of people defaulting on their rent payments with many landlords now falling behind on mortgage payments on their investments. 


Housing Crisis Warning #2

Currently, there is a huge demand for all types of housing. Affordable rentals, affordable homeownership, build to rent housing as well as revised zoning to allow tiny houses and ADUs into more neighborhoods.

City, local, state and Federal government agencies have all pledged to make changes to zoning to allow more people to live in affordable housing while at the same time ever more stringent state and national building codes and rising building material costs keep skyrocketing homeownership beyond “affordable”.

As stated above, nobody wants to see another housing crisis but have we begun to put ourselves in the position that it could be inevitable?


Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects


Contact Gary at modcoach@gmail.com

Friday, January 15, 2021

A Unique Viewpoint of Victoria, BC's Tiny House Project

The Victoria, BC Council’s committee gave Aryze Developments the OK to put 30 tiny houses in the parking lot next to Royal Athletic Park.

The tiny houses are to made from shipping containers. Each one would be about 160 square feet and include a bed, hot plate and fridge. Shower and washroom facilities would be shared.

The city wants to see the occupation of the homes by March 31, a target date for getting people out of parks and other areas and into their own places. 

Thursday, January 14, 2021

“Adapting” is the Key Word for Off-Site Construction in 2021

Innovation, disruption and influencing are terms we’ve all been hearing lately to help bring Off-Site construction into the future but none of them will mean anything if we first don’t “Adapt” to new ways of working.

If we don’t begin to adapt to what is happening around us, how will we, the construction industry, ever begin to make significant strides in improving the oldest industry on earth?

COVID-19

Now, as we strive to recover, the coronavirus pandemic has forced a rethink of the way that buildings are designed and built.

When we adapt to the ‘new normal’, there is one area where there is widespread agreement: social distancing measures are here to stay. In order for on-site developers and contractors to operate effectively maintain social distance, they need to reduce their reliance on labor-intensive traditional construction methods. 

Modular construction requires much less manual labor on the job site, making it easier to ensure safer on-site social distancing. The modular factory also offers health and safety benefits because of their controlled environments. Modular construction is also quicker when compared to traditional processes, with buildings created in weeks instead of months.

Off-site developers need to adapt to a new way to build their projects. It may even mean building their own modular factories to ensure a steady flow of work.

Reluctant to Adapt

Contractors and Developers that have only built their projects On-Site will soon begin facing severe skilled labor shortages. Although many of them have heard of modular, they believe that going modular means drinking the Kool-Aid. 

Construction is a hugely traditional industry and change is often approached with a level of skepticism. 

Modular and other off-site construction methods are now being put on the fast track by the innovators, disruptors and influencers but until more off-site construction firms adapt to what is coming in the industry, all that new stuff will continue to go unused even though they know they can’t continue as they have been.

The need for new, affordable hoising isn’t going away and modular construction offers a solution.

Skills shortage

Across traditional construction, there’s a real shortage of carpenters, electricians and plumbers, with demand continuing to outstrip supply. By using modular construction there is a real opportunity to tackle the housing crisis without increasing the pressure on these more traditional on-site trades.

Within offsite construction, there’s a demand for specialized engineers, architects and contractors that are familiar with the intricacies of modular fabrication and the erection stages of a build. Increased education and outreach are crucial if we’re to impress the importance of modular buildings and encourage uptake of these roles.

Modular Slow to Adapt

There seem to be two camps in the modular industry when it comes to adapting to new processes and ideas. The first is “We’ve always done it this way” and to be honest, if you’re making a good profit doing it the way you’ve always done it, why change?

The other camp looked at the first camp and said “We can do it better”. The “better” costs money in several areas. First, there is the cost of doing the research to learn what is needed to be changed. Next is bringing in the people to help implement those changes and third is the actual cost of the equipment, processes, software, labor and everything else needed to make the change.

Several new modular factories that have started from scratch are already adapting to those changes but only time will tell if and when they become profitable.

Bottom Line: As in every other industry, modular and off-site construction will have to adapt to new pressures being put on them but what to adapt to, how much it will cost in time, talent and money and will the end result adapting bring our industry into a new future?

Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects

Contact Gary at modcoach@gmail.com

Wednesday, January 13, 2021

Shortage of Lumber Raising Costs Across the Board

A recent Modcoach poll shows that lumber pricing has already forced modular factories in all parts of the country to raise their costs to builders and developers since January 1st.

Many parts of the U.S. are facing lumber shortages — and experts say the problem is acute in the West after 2020’s devastating wildfires.

Industry experts say several events led to the lumber shortage: lockdown orders and closures, new safety protocols that slowed production at mills and a spike in home remodeling while Americans were quarantined followed by a massive wildfire season.

The National Association of Home Builders, or NAHB, reports that between mid-April and mid-September, lumber prices soared more than 170%, adding $16,148 to the price of a typical new single-family home. 

Prices drifted lower at the start of fall, but they’re on the rise again.

The question for modular factories and builders is how to continue quoting prices into 2021 now that the costs of lumber and many other basic commodities are showing no signs of stabilizing.

Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects

Contact Gary at modcoach@gmail.com


Tuesday, January 12, 2021

Will the US Modular Industry Begin Emulating its European Cousins?

With modular's market share of the US housing starts at 3%+/- year after year, is it time to look at other nations and how they've improved modular's share of the market? Many in the US are already taking a hard look at what Europe is doing.

L&G factory floor

There is no doubt that modular housebuilding is gathering pace but there is still a lot of resistance to this process.






Some think it is a valid solution only for the affordable homes or build-to-rent segments of the market. Many consumers still perceive that quality homes need to be built in a traditional way and would resist the idea that a large luxury home could be built in a factory. There is also the perception that you cannot build an aesthetically pleasing, luxury house using modular construction. The word modular is itself part of the issue, the word offsite is a more neutral word. Offsite comes in many forms—modules, panels, walls, rooms, structures, components—so we can build high quality complex unique buildings using modern methods of construction.

Will the large volume housebuilders change their construction model to an offsite model?

Some large housebuilders have already made a significant investment in building their own manufacturing facilities—so that would suggest that some believe that modular homebuilding is their future.

CLICK HERE to read the entire ENR InfoCenter article

Sunday, January 10, 2021

First Off-Site Construction Job Listings of 2021

Off-Site construction continues to see huge demands for housing, commercial and multi-unit projects. Now if you could just begin putting the right people into place within your company, it will be a win/win for everyone.


The Active Candidates section below represents candidates looking for new career opportunities.


The Open Positions section represents companies, who are looking for candidates to fill their open positions.


Contact Lynn Gromann at 888-831-0327 or Lynn.Gromann@LGARecruiters.com

if you would like further information on an available candidate or in an open position.


Active Candidates


EXECUTIVE / FINANCIAL

  • Sr. Director of Architecture & Engineering - 30+ yrs MOD / Multifamily, relo
  • Director of Architecture - Multifamily MOD - Upper Midwest, will relo
  • General Manager - HUD / MOD - wants TX or Southeast

PRODUCTION / OPERATIONS

  • Project Manager - MOD / Commercial MOD - West only
  • Production Manager - MOD / Commercial MOD - wants TX
  • Production Manager - HUD / MOD - wants Southeast or Midwest

ENGINEERING / ARCHITECTURAL

  • Commercial MOD Designer - Commercial MOD - wants remote
  • Revit Designer - Multifamily MOD - wants remote
  • AutoCAD Drafter - HUD 27+ years, wants remote position

SALES / MARKETING

  • Sales Manager - HUD / MOD 20+ years, possible relo

Open Positions


EXECUTIVE / FINANCIAL

  • VP Construction - Multifamily MOD - Southeast
  • CFO - Steel MOD - Southwest

PRODUCTION / OPERATIONS

  • Pre-construction Manager - HUD - West
  • Permit Associate - HUD - West
  • Production Supervisor - MOD - Southeast
  • Production Manager - HUD / MOD - South
  • Assistant Production Manager - HUD / MOD - Pacific NW
  • Site Finish Supervisor - Multifamily MOD - Southeast
  • Operations Manager - Start-up Steel MOD - Southwest
  • Project Manager - Manufactured Housing Community - Southwest
  • Production Manager - HUD / MOD - South
  • Assistant Production Manager - HUD / MOD - Southwest
  • Production Manager - Multifamily MOD - Southeast
  • Production Manager - MOD - Pacific NW
  • Production Manager - MOD - Upper Midwest
  • Production Manager - HUD / MOD - Upper Midwest

ENGINEERING / ARCHITECTURAL

  • Architect - MOD - West or remote
  • Structural or Civil Engineer - MOD - West or remote
  • Revit Designer - Multifamily MOD - Southeast
  • Industrial Engineer - HUD / MOD - Southwest
  • Project Site Designer - HUD - West
  • Revit Drafter - Multifamily MOD - West

SALES / MARKETING

  • Business Development - Multifamily MOD - Pacific NW
  • Sales Manager - MOD - Pacific NW

MATERIALS / PURCHASING / ESTIMATING

  • Purchasing Manager - Multifamily MOD - Southeast
  • Purchasing Manager (2) - MOD - Southeast

SERVICE / QUALITY

  • Quality Assurance - Multifamily MOD - Southeast

Friday, January 8, 2021

Quality Should Never be a "Line Item" for the Off-Site Construction Industry

I've been hearing from modular home builders and developers about houses and projects delivered to the job site with major quality issues, some costing tens of thousands of dollars to repair.

Modular home factory owners and management seek to contain costs in the manufacturing process and there is no better cost to eliminate than the cost of poor quality. Scrap material, lost labor hours and especially service and repairs after the house is delivered and set only add to unwanted costs.

In order to best eliminate these wastes, a modular home factory must plan a strategic approach to quality improvement. And don’t make it a “Line Item”.

By following these five steps, quality can be improved and it shouldn’t cost either the factory or the builder $5,000 a house for quality to be added as a line item.

1. Work as a Team Quality won’t be substantially improved by one or two people. To really make lasting and meaningful changes in manufacturing processes, it will take a team-based approach.

One of the most important first steps is knowledge of the current process and how it got to this point. Why is the process the way it is today? There must be a reason or cause, and that reason should be considered so as not to repeat a problem of days gone by.

2. What is the Quality the Builder and Developer Expect? Too often, factories want to make a product “better” but don’t really know what better means.

Someone at the factory should serve as the builder/customer advocate. This voice can come from the sales or marketing departments. Use the builder/customers’ perspective to define what the best-in-class product would be and meet those requirements while minimizing cost.

3. Share Repair and Service Costs in the Field with Everyone at the Factory
The cost to fix a defect in the field once it reaches a customer is dramatically higher than the cost to fix the source of the problem before it is created. It is essential that the production line people be trained to understand the cost multipliers involved with warranty repair or replacement and the cost of a damaged reputation. Once the staff takes this perspective, a desire to find a root cause for problem-solving is inherently developed. It’s surprising the number of cost-saving and quality improvements come from the people that actually do the work.

I remember building some very nice homes when I was a sales rep for Champion’s Genesis Home division. Curved walls, some curved half walls with matching curved oak tops, award-winning kitchens and even factory installed Bruce flooring, finished oak staircases and ceramic. When one of the custom homes was finished by the builder at the job site, I took pictures of both the inside and outside of the home and posted them on the bulletin board of the factory lunchroom. None of the people realized what they built on the production line looked like when completed. I got a lot of people telling me they were proud of the work they did on that house.

4. Look at the Root of the Problem All too often, management tries quality improvements to fix the symptoms of failure rather than the root cause. And sometimes those improvements are just as bad as the original symptom.

If a modular factory has started a builder/customer advocate program the root cause may not appear in the production line, rather it might only show its ugly head when the house is assembled in the field and that is why the advocacy program can help identify these root causes.

5. Adherence and Discipline are the Keys to a Quality Modular Home Throughout the quality improvement process, it is essential that strong process discipline is employed.

However, there is a rather large grey area when it comes to building a custom modular home. Some of the processes and options being asked of the production line people could be new when the module comes down the line. The line worker may not know how to do it properly. These areas need to be identified before the modules hit the line and addressed with the people that will be assembling them.

This doesn’t mean that someone needs to watch over the worker’s shoulder while they are doing it. It means that the problem was identified, discussed with the people that will be doing it and letting them know if they run into a problem that others will be available to help. A guess on the production could cost thousands of dollars in repairs in the field.

These are 5 general suggestions to help ensure quality is built into every home and not have Quality become a “Line Item”.

Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects

Contact Gary at modcoach@gmail.com

Women Are the Answer to Off-Site Construction's Skilled Labor Shortage

The construction industry in the US is facing a shortage of skilled trade laborers but many off-site housing factories are overlooking the opportunity women can bring to the table. 


The current skilled labor shortage is due to several factors, including the emphasis on getting a four-year college degree and an increasing number of retiring Baby Boomers. Modular and other off-site housing manufacturers are having an especially hard time finding skilled labor.


Modular factories have an especially hard time finding and keeping young people wanting to do woodworking, plumbing and electrical work. Many factories have older workforces and more skilled trade veterans that are retiring and without young people replacing them the factory’s future is at stake..


The shortage of skilled trade labor has pushed up wages in these occupations. According to data from the Bureau of Labor Statistics, the median annual earnings for skilled wage occupations is $47,428, nearly 20% higher than that across all workers.


Women held 50 percent of American jobs in 2019, and yet, according to the U.S. Bureau of Labor Statistics, only 2 percent of the skilled construction labor force are women. That is actually up from eight years ago when only 0.6 percent of the skilled workforce was female.


Factory owners and GMs looking for more output have not been able to add second shifts to boost production and with housing running strong and modular factories looking for skilled labor to meet that demand, it could be the perfect time to invite women to look at the skilled labor positions in our factories. 


Offering women the training, either at the factory level or at a trade school, to get a skilled job in your modular factory could definitely be the win/win situation both need today. 


If there is a trade school near your factory, check them out and offer apprenticeships. If there aren’t any private trade schools, start your own apprenticeship program. But whatever you decide to try, remember, doing nothing means is just a few short years you may be wondering where your next plumber or finish carpenter will come from. Don’t let the woman you didn’t offer to teach a skilled trade be the difference between your success and failure.


Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects


Contact Gary at modcoach@gmail.com


Wednesday, January 6, 2021

Are Off-Site Experts Contributing to Factory Failures?

There are so many "Experts" in off-site construction today, each armed with the software, app or disruptive idea that will change how we build housing today, that it's almost impossible not to see, read about or hear one telling you that by giving them tons of money, you can be the new leader in off-site housing.


It reminds me of a dozen blindfolded people trying to describe an elephant. It all depends on where you’re standing and what they touch. They all know it’s big but beyond that there is no point of reference for them to collaborate on.


The person in the front may think he is touching an extra long tail as is the person at the back. Are those tree trunks or legs? And what’s with those long rock-like projections?

You get the picture. We all know something about modular construction but very few know it all. It all depends on your viewpoint.

About four years ago I invited a modular home “expert” to tour a modular factory with me. As he looked at the production line, he asked me when the steel frame gets added to the house? Turns out he had only toured two factories, both were manufactured home plants. I spent the rest of the tour explaining the differences to this off-site housing "expert".

Fast forward to the present and I’ve encountered many more of these housing “experts” that had no idea what true modular manufacturing is all about. These same experts were speaking at events and conferences I was attending before COVID-19 and now on Zoom conferences and video interviews. You have to ask yourself what part of the elephant were they touching before they spoke to their audiences?


The problem with this begins when they speak to a group of investors and developers that are so ready to drink whatever Kool-Aid these experts provide. I know very few speakers that have ever been in the trenches of modular construction. There are so many levels of knowledge and expertise needed and most of them only know their small segment.

One of the first misperceptions is when the developer is told, usually by the expert along with the factory rep, exactly what they want to hear. Modular construction is cheaper by 25%, it’s finished in half the time, it is available whenever the developer wants it; etc. I know, this sounds like the perfect way to build a 5 story apartment building or hotel.

And it could be if it was reality. I know of no modular factory in the world that can shave 25% off the cost of a site-built project. That ship sailed a long time ago. And that part about taking half the time; who’s kidding who here? Yes, you will probably save some time but not by half unless you’re just counting the time from the modules arriving on the job site until the building is ready for occupancy.

And what about the part of getting it when the developer needs it? Let’s look at that. Factories can’t afford to set idle just waiting for the developer to secure permits, financing, tax credits and code approvals, each of which can extend the lead time for producing the modules in the factory back weeks, months or even years.

So the modular factory must accept whatever comes in their door ready to begin the process. If a factory produces 15 modules a week and the project is 75 modules, that is five weeks the production line is building nothing but that project.

Suppose that project gets delayed a week before going to the line because of a SNAFU with financing, zoning, etc, can the factory wait for the developer to correct the problem? No, they are a business and building modules is their product. Without product, they lose money. Lose enough money and they are forced to close their doors.

People have been asking me lately, why would a modular factory go out of business when there are so many modular projects that need to be built? Now you know part of the answer.

Since there is no national network of independent modular factories that could easily shift the developer’s project to another factory, the project is delayed and the developer is stuck in the void.

So what is modular reality?

It’s the best way for investors, developers and builders to construct everything from hotels, affordable housing projects, single and multi-family homes, ADU’s, tiny houses, workforce housing and just about any other type of building.

But there are limitations and that’s the reality. Listening to those “experts” and planning your project around what they say is not the way to go.

Before you even begin talking to any modular factory about building your next project, you should take the time to find a consultant with the working knowledge and expertise of what is modular reality for your project. That reality is not always found by just talking to the factory people.

I recently learned that the engineering department at one modular factory turned down a developer’s project after the developer spent countless hours and many meetings talking about it with the sales and management side of the factory. They couldn’t build what the developer wanted, so he went back to using a site builder for the project.

Little did the developer know that another factory within a hundred miles actually has built similar projects but since they didn’t use any consultant with modular knowledge, they missed the boat.

Here is more reality.

Modular construction can be slightly faster to complete, it can save you money and it will definitely give you a better product over site-building your project. It is also inherently more energy-efficient, greener and sustainable.

The modular factory becomes your partner in identifying problems and offering solutions before anything is even built. You can also visit the production line and watch as your modules are produced. Your groundwork and foundation can be completed at the same time your modules are being produced.

And let’s not forget the people that build the modules for your project. They actually show up every day! They also work in a stable environment and usually work in the same station on the production line where they hone their skills.

It was Winston Churchill that said, “Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…”

That is also true for modular construction. It is the worst type of construction except for all those other types that have been tried from time to time.

Gary Fleisher, the original Modcoach is a housing veteran, editor/writer of the Modular Home Builder and Modcoach News blogs as well as the leading consultant network, Modcoach Connects.