Sunday, January 31, 2016

The Historic Modular Builders Round Table at Lewisburg PA

An observation of the January 28th Modular Round Table by Josh Margulies, owner of Mariner Homes in Frederick, MD.

Josh Margulies, Mariner Homes

Mod Coach and the Modular Home Builders Association hosted this event and 24 guys show up.  These were builders from Maryland to Maine.  Considering this event happened in the wake of the blizzard of ’16, that ain’t bad.

I was in some very good company.  I should not feel otherwise.  Trades associations are an old thing. 

They grew out of a thing called guilds.  Guilds are old and have in the past been quite powerful over those within the trade they controlled.  I guess that is where the guild differs from the modern day trades association, the compulsion versus the decision to become a part of something that is at once part of you but separate from your immediate business.  Governments have replaced codes and standards set by Guilds and associations today are voluntary.  So is conformance with a code of ethics.  So is honor and honesty.  So also is partnership, tolerance, communication, analysis, diligence etc. etc.  You can run a business without these qualities: just neither very long nor very well.

The custom (or not custom) home builder who employs modular technology to build houses for his customers must acknowledge one thing every time he sets a house or big (> 750 sq. feet) modular addition: 85% of that work happened somewhere else.  He did not frame check it nor follow up the insulators work, nor check on the trim carpenters nor electricians, nor plumbers,  nor roofers, painters,  point up men, shit, he didn’t even watch the damn boxes get wrapped in visqueen.  And the modular home builder is a home builder?  Really?

14 years a construction superintendent with “those people” –  Ryan Homes, Winchester Homes, Pulte Homes, Centex Homes.  How many sticks?  How many dumpsters?  How many framing carpenters!? How many subdivisions – because that is how you built them you see not one at a time, but by the subdivision.  I tell you, it ain’t a job for a dog or an old man.  How many booms?  How many busts?  

I’ve got little bits and pieces of me all over the state of Maryland my Maryland!  Who has not driven by those jobs?  I am certain many custom home builders employing modular technology started a similar way.  Volume, site built production construction accounts for well over 50% off all single family detached homes built in the United States today.  The change in the concentration numbers for the industry over the past thirty years to from scattered lot to volume, PUD type work is staggering.  It is an economic reality that cannot tolerate argument in places like Texas or Nevada where skilled labor can be found cost effectively.  Modular housing, SFDs anyway, cannot cost effectively compete with on-site stick building in a volume environment.

When we wrap our heads around that as modular builders, the silly lamentation about market share should start to go away.  Modular, in the Northeast and Mid Atlantic is doing well in specific market circumstances.  New Jersey and hurricane Sandy is a specific market circumstance.  That a Yankee carpenter cannot be bought or found in all of Massachusetts and Connecticut is a specific market circumstance.  That labor is outrageous in Long Island is a specific market circumstance.  These circumstances make modular home building technology viable.  Knocking down the old house in the good but old neighborhood for a quick new one or the house in the middle of Hicksville when all subs have been sucked up off the face of the earth by ABC HOMES to build places called “Puffingtonne by the Water” or “Lilly Pond Creek Station”

We currently have a predicted annualized rate of SFD growth in the mid 600 thousands.  This, if anyone can remember, is abysmal.  Reports I’ve read in the past from the dept. of Commerce maintain 1.2 million units (house) as a good healthy ‘normal’ rate.   But I have absolutely no idea what normal means any more  - or if I do – I don’t get it as quickly.  I would suggest that the slightest serious sustainable uptick in SFD construction in the Mid Atlantic and Northeast will quickly backlog stick builders.  There is nothing wrong with modular.  There is something wrong with people choosing stick first.  Figure that one out marketing people!!

But as to this historic and epic gathering of Generals:  not much really – what was good, the best thing more than anything, was getting everyone in one room.  Would have been more were it not for the damn blizz ’16.  I don’t like naming storms any more, I don’t know why.  Piss on them!  Why do they get names?  We basically wanted a wave of a magic wand to

  • Improve image of modular home building to the consuming public.
  • Improve and, continue to define the relationship between the manufacturer and the actual home builder responsible for turning the components into a home.

There ain’t much else that cannot go in either magic wish.  When I think about it, I would not use magic, I would use prayer but I am being Judaic –Christian and that is not currently fashionable.  I would use magic for punch out or trim carpentry or maybe drywall repairs.  I would use my special ‘builder’s wand’.  We all have one.

Actual stuff to promote those two lofty ideals

Advertising kitty
I like it – it is not administered by anyone but the association.  Only the association can work for all members.  Member – factory and builder kick in per box – cool.  How do you tap free loaders?  Maybe How do you minimize the cost of free loaders?  Advertising = Promoting Image to me by the way.  Does a dot org advertise for a bunch of dot coms?  That is why we have lawyers.  I was glad to meet Steve Snyder at that historic meeting.  I am glad that an attorney is a member of this association.  However, like pests, automatic weapons, and birth, I believe in lawyer control as well.  Hell, I bet Steve feels the same way!

Increase membership
This is very important of course and I have no idea how a consistent, diligent, responsible, ongoing don’t you ever let up recruitment plan is being implemented by the association but Tom Hardiman and his people are on it.  I will send a list of my recommendations of modular friendly subs – that, I would think is a responsibility of all members.  Yes that is right as well, recruitment is a member responsibility.  

Partner with local HBAs – I was real impressed by the way one of the boys from the Maryland HBA was impressed.  We did not have time to talk.  I suppose I must be better about that sort of thing.  It was really swell to finally meet Andy Gianino of the Home Store

Random Thoughts

  • I think member manufacturers should encourage membership of non-member customers.
  • I think builders should encourage membership of other builders.
  • Having said those things – be careful – quality of membership is important.
  • I think an association also can – and should – create some exclusivity – some restriction to membership – this sounds very un-American but this is an association representing some of the finest homebuilders in the United States.

Sub committees no doubt are being formed to address salient issues?

At the annual MHBA conference in Philly late last year one of the speakers quoted P.F. Drucker – “It cannot be assessed if it is not measured”  For the record that stayed with me for 3 months. Drucker did say another thing I remember reading:  “Everything degenerates into work.”  If that does not happen … nothing does.

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