Wednesday, June 25, 2014

Douglas Cutler's Answer to the 3% Modular Question

Douglas Cutler is one of the most celebrated architects in the nation for his work in addition construction, modular design and high end architecture. He is often recognized by the media for his outstanding work including many articles in Better Homes and Gardens, Automated Builder Magazine, and many other modular industry periodicals.

So I asked him why he thought modular housing had such a minuscule share of the new home market.

Modcoach: Mr. Cutler, with your background in designing world class modular homes, why is modular housing share of the new home market stagnant at 3%

Cutler: The Manufactures continue to push away architects that have experience in modular design because they fear competitive bidding. The manufactures refuse to acknowledge modular building is hybrid building and leave the architects out of the process. The sales reps say "you don't need an architect"

Modular factories offer design service at a loss so this keeps the design professional out of the process as well. The modular "business model" is stuck in the mind set of the trailer home industry, but not the technology. 

It may only take 5 days to build the homes in the factory but it can take 5 months to process the customer for a custom home. Until the industry recognizes this it will never gain market share. The process must be compensated for. Talent will not work for free. 

He sent along several pictures of what can be done when the new home buyer uses an Architect. The factory did not have any trouble building these homes so maybe Haven Homes had the right idea many years ago when they actually encouraged Architects to submit design plans. Nobody has stepped up to fill Haven's shoes but I'm sure someone will.


Anonymous said...

Due to the limited market share of modular housing it is difficult to maintain operations with custom designs only. The trick is to develop a blend of standard products (that have some architectural interest) and true custom work engaging the architectural community for its design. It is probably heresy to suggest that many factories are merely tract builders in disguise that haven't learned how to introduce interest into their designs.

Anonymous said...

Maybe if the industry would seek input from architects they could produce more that the "Levittown" look. There is a definite need for the current models for the first time and downsize markets but there is a niche in the middle that factories could penetrate with a vision if not pure custom at least semi-custom designs.

Builder Bob said...

Modcoach, Haven Homes failed not not entirely because of the economy, it failed because the new owners decided to build crappy little houses just like every other factory.
If Haven could have weathered the storm, people would be buying their Architect designed homes today.

Anonymous said...

Haven Homes failed in large because they dropped all of the builders that had helped them build their business and tried to work exclusively with architects.

Anonymous said...

That is a beautiful home with amazing design. Having said that, I would like to point out that the architect speaks like many architects do: just pay me to design beautiful homes that generate fees for the architect. Very few architects ever even consider the fundamental goal of all modular factories is to turn a profit, not build beautiful homes. While I am sure Mr Cutler believes that we all would sell more homes if we just listened to him on design, I have my doubts. There are niche factories who place value on high level design, but most want to identify greatest area of demand and produce as many floors as possible at the highest profit margin. If that is at the low-middle portion of the market, so be it. Mr Cutler and modular factories have different paths to profit maximization for their respective businesses.

Anonymous said...

The process of marrying design and profits are not mutually exclusive. I have received many inquiries from clients who want something that does not look like a double wide. Not every home built needs an architect but not every home needs to look like last years car model either.
Yes there is a market for the entry level 2 box plan but there is a definite market for the move up home with some architectural interest. An yes factories want more through put at the highest margins funny so do site builders who look at the standard double wide modular homes and comment "if it looks like a duck, acts like a duck, its a duck"

Anonymous said...

I wonder if any other industry tries so hard to bottle itself into one entity? When we make suggestions about what our industry on the whole should do, we take away the very character that is beautiful about home building. Each modular factory and home builder is different. Some want to build two box homes off of their brochure with no options. In this case, they would be silly to enlist the help of an architect. Some manufacturers want to be the next Haven, and in that case I am sure they could use an architect or at the very least direct their customers to design/build firms to achieve their dream home goals. Maybe the reason we are stuck at such a low market share is because we are all so busy worrying about what other factories, mod builders, or architects are doing and we forget to plow dirt. Let us all go serve our customers in the best way we can (which is different from one factory or builder to the next), make a profit, and grow market share.

Coach said...

I find it interesting that I have had interviews with many industry leaders this past month with few comments. But let one Architect say that we should look toward professional design and the flood gates open. Are we really so rigid in the way our industry works that we lose our creativity. I agree with Anonymous 8:56 AM that each factory needs to create their own niche within the modular housing industry. For the most part I think that is happening but now it's time to begin working together to let home buyers know the advantages of modular and to work to support the builders who are the front line. Seriously think about joining the MHBA

Randy said...

As a person who has worked on high end custom modular homes I can say that the issue is that the client wants the $150/ft house for the production level price of $75/ft. As long as the Mod factory is set up for one off customs ...great. Set the level of expectations accordingly.
In addition, if an architect wants to do a custom house, that is great.... then he CAN'T go down to the line and ask for changes as it proceeds from station to station.

Anonymous said...

I see that there aren't any more comments from June 2014 but since I'm an Architect and I built a second home using a Probuilt modular on Cape Cod, I'll offer my insight.
I've worked with many High End commercial Design Architects that have been published in Arch Record, etc and received design awards for over 30 years. Everyone wants to be paid to make a living but both sides of this Modular Factory-Architectural design coin have some issues. Modular Companies are assembling buildings in factories, that is what they do well but there is a lack of PR and Industry change to address the Modular stigmas. Architects aren't just designers that work on really expensive buildings that some of the comments blogged before seam to think. Modular Industries should learn from Architects how to position their marketability. Architects don't just work with builders, they aren't just designers, reference the Architect/Client/Contractor triangle. If the Modular Industry set their business up with a similar model, perhaps their market share would increase. It takes a Team to get a lot of work done. Design Builders typically aren't huge firms because of this aspect of spreading too much. The Modular Industry should ally itself with as many Architects, Realtors, Home Trade Shows, Contractor Associations, PR Documentaries to eliminate the go it alone looks like a factory duck stigma. Give and get more. Yes, I've attended some pathetic modular seminars at AIA trade shows where the modular buildings looked like a duck. Modular shouldn't have the stigma that it builds only single residences.
Did you see that "Awesome High-Rise Modular Apartment Building" building documentary in London on a PBS show? Why isn't there a link to that film on this website?
I've been wondering since 2006 when I built my 2nd home why the Modular Industry hasn't caught on more in the building industry because I see, as an Architect, a huge potential for the Modular Industry saving costs for Architectural designs. Modulars haven't exploded into a larger market share yet, but with the right vision, they will.
Respectfully, Susan Gist-Miller, Architect