Embracing Modular Building

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Some custom builders are reaping the benefits of the streamlined, quality-controlled processes offered by modular construction.

Courtesy of New World Home
One of New World Home’s “New Old Green Modular” home designs, the Chadwick.

Source: CUSTOM HOME Magazine
Publication date: June 30, 2010

By Stephani L. Miller

If you think modular construction has no place in the world of custom home building, think again. Some custom builders have found that—like panelization and prefabricated components—modularization is just one more highly engineered method of delivering a home, and modular factories are effectively just one more subcontractor providing a service.

Now more than ever, even high-end clients are interested in building their homes as cost-effectively and time-efficiently as possible, so it’s not surprising that forward-thinking custom builders are turning to modular construction to accommodate them. Those who have added modular to their repertoire are reaping the benefits, which include:

-More uniform quality and control over materials and labor;

-A trained, skilled labor force;

-Reduced impact from adverse weather;

-Faster production;

-Cost control;

-Greater accuracy and predictability of completion dates;

-A parallel and expedited project management process (site is prepped while modular home is in production); and

-Less material waste.
Problem Solvers

Those who have chosen to offer modular construction have done so mainly for practical reasons.

With more than 30 years of custom building experience among them, the three founders of Bethesda, Md.-based Sandy Spring Builders have watched as new technologies and building systems have emerged and gained traction in the industry. Mimi Brodsky Kress and Phil Leibovitz became particularly fascinated with modular housing and experimented with it in various ways over the years. But it was only about five years ago that they, along with their co-founder Richard Mandell, began to consider the process in a more serious light.

After receiving numerous inquiries from potential clients who knew exactly what they wanted but didn’t have the time or funds for the site-built custom process, the trio hit on modular construction as a strategy for delivering cost-effective custom-quality houses more quickly. They spent nearly five years working with architects and modular manufacturer Haven Custom Homes developing a collection of house plans based on many of their best custom projects and eventually launched a new modular division, Sandy Spring Classic Homes.

“People automatically assume a modular house is going to be cheap,” says Leibovitz. “But we’ve always known that you can do anything you want in a plant: you can build a Toyota or you can build a Lexus.” Specializing in teardown replacement and infill projects, Sandy Spring Classic Homes sells modular homes for about $1 million on average. To date, the company has completed 12 homes in the competitive Washington, D.C., metropolitan area and has another 10 on the books.

Similarly, about five years ago Meridian Homes, also based in Bethesda, was getting out of the increasingly unrewarding spec building market and shifting toward more renovation work, according to co-founder Jonathan Lerner. As the company added renovation projects to its portfolio, he and his partner and brother, Michael Lerner, noticed that their average three-level bump-out project in the D.C. area ran about $800,000 and took about eight months to complete.

They wanted a faster, more efficient, and more economical solution to offer their renovation and custom home clients and eventually selected modular. They’ve since honed their offerings and process to the point where they can now tear down an existing house and factory-build a new one with modular partner North American Housing for the same cost as an addition, Jonathan Lerner says.

The company’s construction is now split about 50/50 between site-built and modular, according to Lerner. “Particularly for infill building, we think modular is a good way to go because of the speed,” he says.

For the founders of New World Home in Atlanta and Jersey City, N.J., modular construction was the only method that made sense for delivering their collection of cost-effective, traditional-style, LEED Platinum homes. Tyler Schmetterer and Mark Jupiter started their own company after working for years with high-end builders and growing frustrated with the industry’s resistance to change and out-of-the-box thinking, as well as its inefficiencies.

“We didn’t set out to get into the modular business,” Schmetterer says. “We set out to get into the ‘new old’ green building business—to design and build homes that are deeply rooted in the historical architecture of this country, combined with state-of-the-art green practices from around the world. But it took us about 15 seconds to get our head around the benefits of building inside a factory.”

Now New World Home has a series of partnerships with modular manufacturers around the country and has completed 10 of its “New Old Green Modular” homes, with about 20 more in progress. Although the company is not a custom builder in the conventional sense and maintains a collection of traditional plans that can be customized, New World Home also has a custom division that works with clients to design any home they wish and deliver it through the modular process.
The Right Client

While most custom home clients still prefer site-built construction and making decisions and selections for their home as their project progresses in the conventional manner, there is a customer segment that wants the same level of craftsmanship and quality, but wants more immediate results.

Haven Custom Homes’ president and CEO Jerry Smalley describes his company’s typical client as a “creative customer”: a well-educated consumer who knows what he/she wants; appreciates form, function, quality, and value; and has an interest in design and sustainability.

“If a client is worried about being overwhelmed by the process or cost or timing, I know automatically that modular construction is a good option for that client,” says Sandy Spring’s Leibovitz. Clients who choose the modular path get the materials and finish selections out of the way and circumvent the hassles and inconveniences of a long construction schedule. “It’s for a certain kind of person who wants a systematic, simplified way to achieve a custom-quality house.”

The builder benefits from the compressed schedule, as well. “It takes me a year to site-build a custom home, and I’ve got a project manager that only builds two a year,” Leibovitz notes. “The savings in overhead in terms of time and supervision alone are a big advantage.”
Design Potential

A fresh design consciousness has emerged within the modular industry over the past few years, spurred partly by the residential construction boom and manufacturers’ need to set their products apart from the competition. Before the housing downturn and recession, many architects also partnered with modular manufacturers to offer innovative factory-built houses at various price points, generating substantial interest among design-savvy consumers.

The idea that modular construction allows little room for creative expression is not uncommon, but the best modular manufacturers can produce nearly any house a designer can think up. The design simply must be optimized for the factory’s production process and local transportation requirements.

“There are always design features that will lend themselves better to modular construction if they’re slightly modified or tweaked; I wouldn’t call that a design restriction,” says Chuck Straub, division sales manager for modular company Penn Lyon Homes, which works with about 80 custom builders throughout the eastern part of the United States.

Both Penn Lyon and Haven say they are able to achieve nearly any design feature. For example, open spans may be more difficult to accomplish in a modular format, but both companies have devised solutions to deliver them. Sometimes a particular feature must be fabricated and supplied to a project as components rather than a complete module.

“I don’t honestly think that the systems-built process limits the design possibilities,” says Lerner of Meridian Homes. “It’s just a matter of how much more work you’re going to have to do in the field and how much more money it’s going to cost to implement the design.” The idea that one room equals one module and is therefore restricted to the width allowed on roads doesn’t necessarily apply, because larger rooms can be shipped in multiple pieces, according to Lerner, although he notes that it is less efficient.

New World Home’s experience in creating its extensive collection of designs illustrates modular’s capacity for flexibility. “We didn’t confine ourselves to boxes. We started with a farmhouse and we worked it out with the factory,” Schmetterer says. “You can’t just ignore the inherent production efficiencies in a plant, but we can take great design and configure to maintain the efficiencies of production.”
Custom Capabilities

While factory building 10 or 100 of the same home is far more efficient in terms of cost, time, and materials, most modular companies still are able to build custom homes more efficiently than could be accomplished by building on site.

“As the industry has evolved, the ability to customize and build completely unique floor plans has grown,” says Thayer Long, executive vice president of the Manufactured Housing Institute, parent organization of the National Modular Housing Council. “Our manufacturers are suffering a bit as this housing crisis has come on, and you’ll find that they’re willing to build any home. And they certainly can. Just like site builders, they build at any price point and any level of customization and amenities.”

Haven, for example, has partnered with many custom builders and notable architecture firms over the years to produce award-winning residences and show homes. “We have a very broad custom capability,” Smalley says. “We have demonstrated that if you can build it in lumber, we can build it.”

Meridian, Sandy Spring, and New World Home all have well-thought-out, optimized modular home plan collections, but each also offers custom modular capabilities. Production timelines increase in relation to the amount of customization a client chooses, and a project easily could push past the typical two to three weeks needed to produce a semi-custom home by as much as three to four months, according to Schmetterer. “And it will cost more because you’re consuming more labor and design hours,” he adds.
Learning Curve

Over the past decade, the housing industry has become more open to using new technologies and building systems, but change still happens slowly. Nevertheless, proponents of the systems-built process believe that modular construction is poised for fast growth when the new-home market recovers, and that it will gain greater acceptance within the larger housing industry from production and custom builders alike.

But most builders still don’t understand the potential modular construction holds, Thayer believes. “They may, wrongly, feel threatened by it, but modular manufacturers need builders. That’s who a large part of their customer base is: builders who will use their technologies to build homes,” he says.

Schmetterer and Jupiter see local builders as their company’s partners. “Wherever we build, we hire local builders and contractors to do the finishing work, because they know the codes, the code officials, and the best subcontractors,” Schmetterer notes.

When a modular home arrives on site it’s anywhere from 45 percent to 80 percent complete, depending on the complexity of the design. So after the factory’s set crew cranes the modules into place, the builder’s team still needs to button up the envelope, repair anything damaged during transportation, make plumbing and electrical connections, and do any remaining installations and finish work.

Custom builders may be hesitant to take on a building system that many people associate with cheap mobile homes rather than high-quality construction, and working with the wrong modular manufacturer certainly could be disastrous. But for builders who have already expanded their businesses into different types of services—home energy retrofits, remodeling, home maintenance programs for clients—offering modular construction is just one more form of diversification. Forging partnerships with responsive, design-focused manufacturers, educating your clients, and embracing modular construction as a process—not a product—are keys to success.

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