||Not Your Father's Double-Wide
Prefab Market Positions Itself for Housing Rebound
Sandra Beer watched her neighbors in East Chatham, N.Y., devote copious time and sweat equity in building all or part of their homes.
"As a single working mom, I realized I couldn't go that route," says Beer, 51, a fundraiser for a PBS-TV station in Albany. So she explored factory-built options that would be energy efficient.
"I kept looking for something that was middle-class green," she recalls. She signed a contract for a two-bedroom, one-bath $160,000 prefab from Blu Homes, a Massahusetts-based company, in April that was completed in September. The price included delivery but not land.
"It was a lot easier than what others around me experienced," she says, noting the on-budget, quick delivery.
Like Beer, more U.S. consumers and developers are turning to factory-built housing for speed, quality and energy efficiency. The prefab market, once derided as the lowly world of double-wides trailers, is positioning itself for major growth when the housing industry rebounds.
"We're light years away from where we were five years ago," says Tedd Benson of New Hampshire-based Bensonwood Homes. His company is refining computer software that can do a 3-D home model, then cut, shape and detail each part in the factory.
That's not all. Other advances include a folding technology that allows Blu Homes to truck across the country modules as narrow as 8 feet that unfold -- origami-like -- to create homes more than twice that width when placed on a foundation.
Near Boulder, Colo., prefabs by Solar Village have thermal solar windows that collect the sun's rays during the day and release the energy for the home's use at night. "They heat homes for free," says Mark Kostovny, the company's founder.
Seeing future potential, more prefab home builders are entering the U.S. market even though the housing sector remains weak. They range from companies such as Bensonwood Homes, which build huge panels off-site that are pieced together on-site, as well as those like Blu that fabricate entire modules that are stacked or connected at the property.
Their prices vary widely, too, with custom projects by high-design companies, such as Santa Monica, Calif.-based LivingHomes costing more than $1 million.
Yet the weak economy has prompted many companies to focus on affordability, offering small and midsize homes (excluding land costs) for less than $300,000. Virginia-based Nationwide Homes has tiny Eco-Cottages that start at 250 square feet for $37,000, and Tennessee-based Clayton Homes sells a stylish, two-bedroom, 1,023-square-foot iHouse for about $100,000.
Going deeper green
Green prefabs are also becoming more energy efficient. Many, such as Blu Homes, meet the U.S. government's Energy Star standard, which typically means they use at least 20% less energy than regular new homes.
Others go much further. Some earn the top rating from the private U.S. Green Building Council or qualify as "net zero," which means they produce as much power annually -- often via solar panels -- as they consume.
"The folks doing modular now are going way beyond code," says green-building expert David Johnston, co-author of Toward a Zero Energy Home. He says those building old-fashioned, inefficient prefabs are struggling to survive.
"Our goal is to bring net zero to the mass market," says Shilpa Sankaran, co-founder of San Francisco-based ZETA? Communities, which began in late 2007. "The only way to do that is to be cost effective," she says, noting her company is building ultra-efficient homes for less than $150 per square foot.
Still, that's pricier than many conventionally built production homes. New U.S. single-family homes sold for an average of $83.89 per square foot in 2009, according to the U.S. Census Bureau. They were cheapest in the South ($76.77 per square foot) and costliest in the Northeast ($110.40).
Green prefabs have multiple advantages, aside from speed and lower utility costs, says Sheri Koones, author of the 2010 book Prefabulous and Sustainable. She says they're often higher quality, because they're built in climate-controlled conditions so building materials aren't exposed to bad weather. Also, she says, they waste fewer materials.
Sankaran says ZETA, which has a 91,000-square-foot factory in Sacramento and plans to open other U.S. facilities beginning next year, is steadily lowering its home costs, partly by eliminating construction waste and doing larger projects such as housing developments and classrooms.
Prefabs scaling up
Other off-site builders are also looking beyond single-family homes to create efficiencies of scale.
"There's a move to multi-unit housing as well as smaller structures," such as backyard cottages that are also known as ADUs, or "accessory dwelling units," says Preston Koerner, who covers the prefab home industry for his Jetson Green blog.
Developers like green prefabs because they're appealing and built quickly, says Michelle Kaufmann, a California-based architect whose company began selling a "Zero Series" of modular homes last year. She designed an enclave of eight townhouses in Denver that she says produce a net surplus of energy and cost about $160 per square foot.
Several prefab newcomers, including ZETA, Minnesota-based Hive Modular and Florida-based Cabin Fever, report healthy annual increases in the number of homes they're building.
"It's trending positive, but it's still a small niche market," says Brian Abramson, co-founder of Seattle-based Method Homes, which expects to build at least 16 prefabs this year.
Prefabs will gain market share "when the housing market comes back" and U.S. building codes demand greater energy efficiency, predicts Lloyd Alter, an architect who once developed these homes and is now an architectural critic for TreeHugger, an environmental website.
During the housing bubble, quality mattered less than a low price, but times have changed, says Benson. Buyers are now looking for improved quality, he says, because they plan to live in their homes -- not flip them as investments two years later.
"This is the time for off-site fabrication," he adds.
Future remains unclear
Will prefabs really take off, as advocates say?
In 20 years, everyone will be doing what Benson is doing now, but most off-site builders are not yet as sophisticated, says architect Susan Susanka, author of the Not So Big House series of books.
Obstacles remain. Budget-minded clients want energy efficiency and recycled materials, but "they don't always want to pay (extra) for that," says Christopher Thompson, Cabin Fever's director of marketing. "Green is a very hard sell."
"A lot of people are just kicking the tires" right now, says Solar Village's Kostovny. If the price is low enough, though, he says they buy. All six of the single-family homes his company built in a Boulder development for about $200,000 sold in one day.
Benson says many U.S. clients are still having trouble getting construction loans, a legacy of the overall housing bust.
As a result, some factories have closed. Kaufmann, who lost at least two factory partners, was forced to close her earlier prefab business in 2009. She sold her designs to Blu Homes, which has its own 80,000-square-foot factory in East Longmeadow, Mass.
"We're on a path to build a big company," says Blu President Bill Haney, noting his company has attracted more than $10 million in private capital, some of it his own. He says it's built nearly 20 homes since its founding in 2007, including four bought by Warner Bros. as dressing rooms and waiting areas for the Lopez Tonight TV show. He expects to do about 40 this year.
"It's one-stop shopping," Haney says of the process. "We try to manage the amount of stress people deal with." He says his own experience in building a home was a "complete nightmare."
Lisa Hawkins, who bought a Blu home last year, says it was "very painless," because she didn't have to worry about weather, delays or cost overruns. But having designed and partly built her earlier homes, she says, it also wasn't quite as much fun.
She says she's enjoying her new home in Pittsfield, Mass. She welcomes the bounty of natural light that pours through the many windows.
Similarly, Beer says she doesn't have to turn on the lights during the day. "I love the light and how much I see of the outdoors," she says of her 1,008-square-foot home. "I like how compact it is. It forces me to think about what I really need."
(Source: USA Today, 01/18/11)
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