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Original Comment

In my first two articles about the proposed Chicago deal to build 20,000 housing units, I expressed my frustration that City leaders chose a foreign company over the dozens of nearby modular manufacturers. I also expressed my frustrations over excessive regulations that hamper the growth of existing manufacturers. But competition and regulations are reality in our business. The real question we need to be asking ourselves is this: What can we as an industry do to better position ourselves for future opportunities?

I am 100% absolutely certain that modular construction will be much more widely adopted in North America than it has been in the past. When leading companies like Marriott, Google, Amazon, and Starbucks start embracing modular, you can bet it will catch on.

McKinsey Global Institute (MGI), one the world’s premier business consulting firms, cited deployment of modular construction as one of their five ways to close the housing gap in California. In fact, MGI stated that using modular construction would save California $100 billion over the next eight years.

The interest in modular construction is here!

Why then, aren’t more people using it? There’s a question I get asked a lot. I think a big part of the answer is that the industry is largely regional in nature. Sometimes a market (like multifamily) gets hot in a region where there simply are not many modular factories who can (or are willing) to service that area.

The modular manufacturing base is primarily located in regional “hubs” across North America including in places near Harrisonburg PA, Douglas GA, Elkhart IN, Dallas, TX, Riverside CA, and Calgary, Alberta. But the multi-family housing needs are in places like Chicago, Philadelphia, Boston, San Francisco, and Vancouver. Transportation costs of the modules are often a limiting factor in determining service area.

In order to expand the service area, we must find ways to reduce the costs of transportation, or alternatively, reduce other costs to offset transportation. Those opportunities exist within the factories by gaining efficiencies through more automated processes, streamlining production steps, and improving the work “flow.” Implementing new technologies and communication strategies that make it easier for your customers or builders to understand your products is another “under-explored” area within our industry. Manufacturers must continually be looking to improve upon their efficiency.

We can also address added costs that result from excessive regulations. The industry as a whole needs to actively and aggressively push back on new regulations that target our industry and add no value or safety for the end user. Regarding industry government affairs efforts, I’ve heard it said dozens of times from many companies - “that issue doesn’t impact my business so I’m not interested.” If the industry has an issue in Maryland, for example, every company needs to be concerned, whether they do business in Maryland or not. An attack on one of our companies is an attack on all of us! We need to bring the full weight of the industry to the table at each for each and every and challenge we face and speak with a unified voice.

In many of these cases, it’s not the distance from factory to site that matters. Often, the manufacturers within a particular region may or may not have the experience or interest in building for that sector of the market (multifamily, for example).

Business owners need to be regularly scanning their environment, identifying new market opportunities, and investing in market research and analysis. In short, the industry needs to have an insatiable appetite for learning. But beyond this, industry participants must be open to the POSSIBILITY of changing their own business models to pursue new opportunities (easier said than done, I realize!).

These are fairly high-level recommendations that can easily go overlooked by readers. So, I will boil it down to a list of more tangible items the industry needs to focus on if our goal is to grow market share:

1) It’s hard to speak with a unified voice when many companies in the industry are not supporting their respective trade associations! MBI serves companies engaged in commercial modular markets (education, healthcare, retail, administrative offices, institutional facilities, hotels). MHBA represents the single-family home market. If you are a modular manufacturer or contractor/builder, or a company that supplies services or materials to this industry, you need to join one or both of these organizations! If you don’t like the direction these organizations are heading, join, get involved and make your voice heard, rather than criticizing from the sidelines.

2) Both groups have services in place to help fight excessive regulations. But we don’t always hear about issues when they first arise. Believe it or not, the state agencies don’t inform us of what they are doing behind the scenes. We are counting on companies being our eyes and ears in the field. If you are having regulatory issues, let us know about it.

3) MBI has its “Seals” program whereby manufacturers are asked to acquire one $20 seal (label) for each commercial module manufactured. The funds from this voluntary program are earmarked to address government affairs issues and to further promote the industry through greater marketing efforts. Only about half of MBI’s manufacturers support this program. As a result, the funds and actions we can take are obviously limited.

4) MHBA implemented its Consumer Awareness Program (CAP) about a year ago. We ask all manufacturers to voluntarily add $10 / single family module manufactured. Those funds are earmarked exclusively for marketing and promotion to potential home buyers. Only eight of MHBA’s manufacturer members currently support this effort.

5) There are all sorts of learning opportunities available for the modular industry. Some of which are hosted by the above-named groups and many by other organizations such as the NAHB’s Building Systems Council, or the National Institute of Building Sciences Offsite Construction Council. I understand that training is time consuming and sometimes costly for many companies, but what’s the alternative? Manufacturers must embrace a continuous improvement mentality and an appetite for learning as much as they can about new technology, processes, skills, markets, etc.

6) More quality projects delivered! The best thing any company in the modular industry can do is to deliver a quality project – be that a home or a hospital. We try to showcase our best projects through various outlets and always need more case studies. For single family homes, the easiest path is to enter your project in MHBA’s Home of the Month contest. For MBI, we use Awards of Distinction entries year-round for our marketing efforts. Make sure to get your projects in for consideration.

I think we have many pieces of the puzzle readily available for this industry to take off. But like any puzzle, it’s hard to complete without looking at the bigger picture to see how all the pieces go together. And it’s impossible if some of the pieces are missing.

Started on August 16, 2017 by Tom Hardiman

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Who's Courting You?

Original Comment

With all the political chatter about building a wall or imposing travel bans to keep certain people out of America, there is no such conversation about keeping foreign investment out. In fact, most public officials in the economic development arena are actively recruiting foreign companies to open facilities on U.S. soil, often offering generous incentives to do so. And I’m not suggesting that is a bad thing.

Reuters analysis of federal jobs data shows that out of 656,000 new manufacturing jobs created between 2010 and 2014, two thirds can be attributed to foreign direct investment. More recent jobs numbers are not yet available, but over $700 billion in foreign capital has poured in over the last two years bringing total foreign investment to $3.7 trillion at the end of 2016, a world record.

For example, German carmaker BMW has invested $8 billion in a 1.2 million square foot assembly plant in Spartanburg, South Carolina, which has become the largest single exporter of cars by value from the United States. (source: Fortune Magazine June 30, 2017).

And again, I’m not suggesting this is a bad thing, because it does bring much needed jobs.

In my last article about the 20,000 modular home development in Chicago, I admitted that maybe I was naïve or even jealous. That was wrong. The appropriate emotion I’m feeling is frustration!

I’m wondering if anyone reading this has ever built a home or modular building in Chicago. If so, I’d love to hear your story about how the city leaders greeted you with open arms, with reporters on hand to take pictures, and the tax incentives and training grants that economic development officials no doubt showered on you.

Didn’t happen like that? How about this – you felt as if you were being prosecuted for crimes you hadn’t yet committed while city officials had their eyes on you. They buried you in a mountain of paperwork, permits, and approvals. You were questioned about the quality of your work and your workers’ union status.

My point is simply this – while its all well and good for elected officials to go after new employers, who’s taking care of the existing ones? Who is making sure that the company that has already been employing local people and paying taxes is healthy? Because our industry is made up of a lot of smaller companies, we don’t often make the splashy headlines or land the mega deals – or gain the attention of our elected officials.

There are over 150 commercial and modular home builders in North America (excluding HUD code builders) each employing an average of 65 people in their plants. That’s 10,000 factory workers, not including all the builders, subcontractors, suppliers, and others supporting the industry.

Now there have been some deals made to existing U.S. manufacturers recently. President Trump was quick to the podium to pat himself on the back for saving 1,000 jobs at the Carrier HVAC plant in Indiana. And it seemed like State officials opened the coffers and worked overtime to make that happen.

So yes, its frustration I’m feeling. It’s fine that foreign companies and being asked to the prom, and great that some larger U.S. manufacturers have been shown some interests as well. But who’s courting the existing modular manufacturers?

While foreign companies and large manufacturers ae being showered with incentives, existing companies are being showered with regulations, taxes, fees, and tough labor laws.

I’m not feeling the love; are you?

In my next article on this subject, I’ll focus on what our industry can and should be doing to better position ourselves for industry growth (I’ve been getting A LOT of input on this lately).

Started on August 9, 2017 by Tom Hardiman

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US Steal? America for Sale

Original Comment

U.S. Steel is one of the most iconic companies in the history of the United States. They even got mentioned in the Godfather! U.S. Steel was the company that built Disney’s Contemporary Resort as a modular building in 1971. U.S. Steel’s South Works facility in Chicago once employed over 20,000 people. The company was a symbol of this country’s manufacturing prowess.

However, beginning in the 1970s, South Works began a long period of downsizing, finally closing for good in 1992. Twenty-five years later, the lot still sits vacant. Despite several efforts to develop the property, nothing yet has materialized. Until now.

The Chicago Tribune reported a plan involving two European companies to build as many as 20,000 modular homes on a 440-acre unused tract of land known as South Works. The Tribune quoted Mayor Rahm Emanuel as saying “this agreement is a major milestone towards converting an unused stretch of land that represents Chicago’s industrial past into a vibrant community that will contribute to the Chicago’s economic, cultural and recreational future.”

On one hand, you have to admire the grit and tenacity of Mayor Emanuel to make something happen with this land. Embracing modular construction is another bold move for Rahm, one that will need to be squared with construction unions. But is selling off part of the Windy City to foreign interests really a good idea? Even if it is the “baddest part of town”, to quote Jim Croce.

The two companies cited in the story are Emerald Living, a unit of Dublin-based WElink Group, and Spanish partner Barcelona Housing Systems. Now, the last time these two names surfaced in the same news story, we learned that a U.K. housing authority had cut a massive US$3.3 billion deal with them. Under the deal, five factories would be opened in the U.K., employing U.K. residents and building 25,000 prefab homes for the U.K. over five years. Sweet deal for everyone, right? Well, not the U.K. modular manufactures who were left out of the deal.

Oh, and one more thing – there was a third partner in the U.K. deal: Chinese mega corporation, China National Building Material Company. It is actually the Chinese company opening the plants and building the homes in the U.K. “based on designs pioneered by Spanish specialist Barcelona Housing System.” Why are those words important? Because it’s the same language that appears in the news stories about the Chicago deal - “The site will have a substantial residential component of up to 20,000 housing units built with innovative, environmentally-friendly technology pioneered by Emerald Living’s partner, Barcelona Housing Systems (BHS).”

The Barcelona deal was apparently selected over a “vague” Chicago-based proposal and another proposal from a Chinese company. But who exactly will be building these homes?

Who cares, you say – no one else was building anything on the southside. Let a Spanish (or even Chinese) company have at it! It will ultimately be better for the city and better utilize an unused piece of land. All true.

The sitting mayor of Chicago is going to tell people it’s a good deal to have a Spanish (and perhaps Chinese) manufacturer build 20,000 homes on a piece of land once occupied by the mighty U.S. Steel? Why? Because part of the deal included the company opening a factory in Chicago and agreeing that factory would be unionized. That’s how Rahm squares the deal with labor bosses.

The modular home industry builds between 25,000-35,000 homes nationwide on an annual basis. A project for 20,000 homes would keep ten modular factories, each employing an average of 125 workers, busy for the next ten years! Oh, and by the way, Elkhart, Indiana is less than two hours from Chicago. That area is also home to nearly a dozen residential and commercial modular manufacturers who would probably like a bit of that action (remember when then-President Obama visited the area multiple times during the recession)? So many questions:

-Is it good for overall industry growth that 20,000 new Chicago homes will be modular instead of site--built?

-Does the development and potential revitalization of the southside of Chicago justify selling off part of the iconic city to foreign interests?

-Do we care if worker paychecks are from Spanish or Chinese companies?

-Is this “modular developer” the new industry model?

Maybe I’m just naïve, or even jealous. Why aren’t more developers working with U.S. manufacturers on innovative solutions to our urban housing issues?

This article is not intended as a wake-up call for the modular construction industry. It’s a far bigger story than that. This is a wake-up call for the North American construction and manufacturing industries at large. And it’s a wake-up call for our political leaders.

There is way too much information here for me to properly vet and vent in one article. I plan on writing a series of articles about this issue, what it means for the industry, and most importantly, what we should do about it.

Started on August 4, 2017 by Tom Hardiman

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State Updates

Original Comment

Massachusetts Update:
We recently spoke with Rob Anderson Chief of Inspections for the State of Massachusetts. Mr. Anderson provided many updates to the program including the fact that the manufactured program has been moved from Department of Public Safety to Department of Consumer Affairs and Business Regulation.

The new building code for commercial and residential (9th Edition) becomes effective on July 1, 2017. Builders have a six- month “concurrency” period to pick either 8th Edition (based on 2009 I codes) or 9th Edition (based on 2015 I codes), but cannot mix and match code editions.

On January 2, 2018, all newly submitted projects must be built in accordance with the 9th Edition. The Department is still determining what sort of grace period will be allowed for projects approved under the 8th Edition prior to January 2, 2018, but not yet started.

For the foreseeable future, there will be no new modular program administrator. Linda Shea, the current office administrative assistant, will continue to be point of contact for the industry and issue BBRS numbers. Fifteen regional code officials in the state will be the reviewing authorities for any new project in their respective region with Jeff Putnam, serving as the State Supervisor of those fifteen officials.

New York Update:
New York Department of State recently announced that all modular projects, including New York City, will go through their program. The agency will accept third party approvals for residential projects. For commercial projects, the agency MAY accept third party approvals “at their discretion.” The current backlog and delay in approvals is partial caused by agency understaffing which is out of the control of the agency itself (budget issue). We will continue to pursue more third-party approvals for commercial projects to improve the approval process.

Pennsylvania Update:
Mike Moglia, the new director of the PA modular program indicated that he is not sure the PA program will come on line for commercial modular in November as intended. No one has been hired to fill either of the two staff vacancies created by the retirement of Mark Conte and Milt Stoltzfus. To be proactive and better prepare for the transition, the program is currently doing the following: 1) Accepting applications from Third Parties but not requiring their payment until the program moves forward. 2) Third parties need to acquire their Accessibility certifications through the Department of Labor & Industry.

The intent is that the Third Party be the authority for plan review and inspection in the factory, instead of Labor & Industry. Local inspectors are also being brought up to speed on commercial accessibility, since the existing program dealt only with residential.

Started on June 7, 2017 by Tom Hardiman

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Modular Summit Rated a Success by Participants

Original Comment

The most recent Modular Home Summit in Springfield, Massachusetts was rated as “excellent” by over 70% of the participants. Co-hosted by the Modular Home Builders Association and Modcoach, the event attracted fifty-seven total participants who heard about code and regulation updates from New York Department of State (NYDOS) and the Massachusetts Board of Building Regulations and Standards (BBRS).

Rob Anderson, Chief of Inspections for MA BBRS, started the day with a series of updates from the recently approved 9th Edition of the building codes. Rob stated that the new codes go into effect on July 1, of this year, but builders still had the option of using the 8th Edition until January 2, 2018.

Joe Hill, Don Thomas, and Daryl Andreades presented on behalf of NYDOS and answered pre-submitted questions from the industry. NYDOS still accepts third party reviewed and approved plans for residential projects. For commercial projects however, the decision to accept third party approvals is “at their discretion.” Regarding the use of foam only assemblies, the state will continue to allow this practice while working with the manufacturers of the products form more details.

Mr. Hill also advised the industry to review and comment on the upcoming 2017 supplement to the code, which includes a provision that may trigger mandatory sprinkler systems in single family homes. If you build a two-story home and add a habitable attic space, that will trigger the requirement for sprinkler systems to be installed in the whole house.

Mr. Hill also clarified that all modular homes going into New York, including New York City, need to go through the DOS program. Regarding systems package approvals once the 2017 supplemental code is adopted, factories will not have to resubmit entire packages referencing the supplement, just an updated cover page.

Alex Pollard from the Massachusetts Department of Energy Resources (DOER) gave a brief presentation about a $1 million grant program to build new modular homes to replace older manufactured homes in Massachusetts. DOER is looking for developers/partners to submit a turnkey plan on how they will use the funds to meet the program objectives. The solicitation information can be found at www.commbuys.com under the Zero Energy Modular Affordable Housing Initiative.

Mary Gaiski of the Pennsylvania Manufactured Housing Institute and Tom Hardiman of MHBA gave a history and update of transportation issues in the Northeast. It is clear that this issue will need to be addressed state-by-state, starting with the most extreme situations in Connecticut.

Rick Wenner of PFS and Chuck Osterday of NTA closed out the summit with several recommendations and best practices as to how to speed up the approval process.

The event was sponsored by Muncy Homes, Champion, Universal Forest Products, and Harvey Building Products.

Started on May 19, 2017 by Tom Hardiman

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Massachusetts Governor Announces “Zero Energy Modular Affordable Housing Initiative”

Original Comment

In 2016, The Baker-Polito Administration announced the Affordable Access to Clean and Efficient Energy Initiative (“Affordable Access Initiative”). Lead by the Department of Energy Resources (DOER) and the Department of Housing and Community Development (DHCD), in collaboration with the Massachusetts Clean Energy Center (MassCEC), the Affordable Access Initiative aims to help low- and moderate-income Massachusetts residents access cost-saving, clean and efficient energy technologies. The Affordable Access Initiative launched with the creation of an inter-secretariat Working Group and a commitment of $10 million in funding from DOER and $5 Million from MassCEC.

Recently, the Baker-Polito Administration announced the results of the Affordable Access Working Group as well as several program opportunities through this Initiative. Those recommendations include the Zero-Energy Modular Affordable Housing Initiative (ZE-MAHI). DOER will fund programs that demonstrate significant potential improvements in the energy performance of manufactured housing in the Commonwealth through the replacement of existing manufactured homes with new modular zero energy housing. This grant opportunity builds on DOER’s successful Pathways to Zero grants for commercial zero-energy buildings.

More details about this grant opportunity can be found here.

Started on May 5, 2017 by Tom Hardiman

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Industry Meets with Maryland Department of Housing and Community Development

Original Comment

A few weeks ago, representatives from the modular home industry met with officials from the Maryland Department of Housing and Community Development including Secretary Ken Holt. MHBA Executive Director Tom Hardiman, Ken Semler of Express Modular, Harris Woodward of Finishwerks, and Rick Wenner of PFS participated in the meeting for the modular industry.

The purpose of the meeting was to discuss ways to improve efficiency and to streamline the process for approvals in Maryland. The main goal of the industry was to better ensure that modular builders have “parity” to site builders in terms of regulation.

When the state adopted the building codes without amending the sprinkler system requirement for single-family homes, the Industrialized Building Program immediately fell under those requirements. However, the counties had the option to delay adoption of the new codes, and in particular that requirement, and did so. The result was that for a three-year period, the modular industry had to include sprinkler systems in homes in counties that did not require it yet, while site builders did not. The impact was added cost for modular homes and a significant loss of revenue for the industry.

Today, all homes are required to have sprinkler systems. The industry wants to make sure that in the future if new provisions are required by the code or regulation, the adoption or exceptions are more closely matched between the state and counties. Secretary Holt ensured the industry that the State wanted to work together and that the program would allow such variances on requirements in which the counties opted out.

We also discussed ways to streamline requirements for sprinkler system installations and potential delays caused by the Department’s review of third-party approved plans deemed to contain code deviations.

Division Director Allen Cartwright informed the group of the State’s plans to create an online submittal process (similar to the State of Florida) and expects that system to come online in 2017. This would allow the builder, manufacturer, ATF, and agency to better track the progress of a project. The Department also inquired about offering an expedited approval process at a higher fee if the industry would be interested. While it remains unclear what that fee would be and how much more quickly the plans could get approved, the industry expressed interest in this option.

In all, the industry felt that the meeting was productive and the agreed upon changes could speed up the overall process by about two weeks with possibly more efficiencies gained if the online system and expedited process are implemented.

Started on April 12, 2017 by Kellie McDonnell

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Industry Gathers in Boston

Original Comment



I want to personally thank the twenty plus industry representatives who endured downtown Boston traffic to meet with me this week. We discussed many issues happening in Massachusetts, and I gained valuable insight and guidance from local builders.

We also talked about MHBA’s Consumer Awareness Program and some other recent success stories. Members enthusiastically offered their opinions and insights into our marketing efforts and ideas on how the association could grow.

I was particularly pleased with the level of passion and commitment to work together that I heard from many of the builders and manufacturers. The following day, I testified at the public hearing for the 9th Edition of the proposed new Massachusetts Building Code. Most of the comments I heard focused either on the inclusion of sprinkler systems in one and two family homes or the inclusion in the energy codes of electric vehicle and solar panel wiring readiness. It seems as if our building codes have gotten away from providing a minimum level of safety and entered into the world of personal behavior modification.

Rather than discuss the specific code changes, I felt it was important to send a broader message to the board. I have included that testimony here. Oral testimony for BBRS Public hearing on March 7, 2017:

Mr. Chairman, members of the BBRS board, thank you for allowing me to speak today.
My name is Tom Hardiman and I am the director of both the Modular Building Institute and the Modular Home Builders Association, representing the commercial and residential modular building community.

Yesterday I had the opportunity to meet with about twenty modular home builders, manufacturers, and developers to discuss not only the issues we are having in Massachusetts, but the opportunities for growth here.

We feel that the modular industry can help the state address important social issues such as affordable housing and homelessness as well as reduce the amount of construction waste that ends up in our landfills. We feel that the industry can build high quality, energy efficient homes and buildings and do so in a safe and controlled working environment.

However, to do this, we need a set of fair and predictable rules and regulations. We are here today to commit to working with the BBRS and the program to ensure public safety while also providing a path towards greater economic opportunities for Massachusetts businesses and workers.

We also need a program director. We do not feel that this program can operate efficiently without filling the current vacancy. Given the enormous growth potential in this state, it is necessary to have a fully staffed and fully functioning program.

Our goal is to work with the BBRS and within the program to demonstrate why we believe “Modular Means More.”

Again, I thank you for the opportunity to speak here today.

Started on March 8, 2017 by Tom Hardiman

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2017 Building Trends - Don't Forget the Gen Xer

Original Comment



The past decade has seen transformative technological advancements in society, powered by shifts in connectivity. At the same time, home building business and operations are stuck somewhere in yesteryear. As millennials begin to enter the market as home buyers, the “must-haves” they demand may finally spark innovation. There’s pressure on builders to build better, faster, smarter, and more efficiently. See story here.



But don't forget the Gen X generation. Members of Gen X are increasingly the typical buyers of newly built single-family homes. For homes built from 2010 to 2015, approximately four out of 10 were purchased by a member of Generation X. And this share will rise in the coming years. See story here.

Started on March 7, 2017 by Kellie McDonnell

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Some more interesting information on Generation X financial position

http://www.businessinsider.com/the-financial-state-of-gen-x-and-gen-y-2014-7


http://www.pewtrusts.org/en/about/news-room/press-releases/2014/09/18/pew-finds-generation-x-facing-an-insecure-financial-future

Updated on March 7, 2017 by Steve Lefler
Tiny Homes Cracking The Code

Original Comment

At the most recent ICC code development hearings, the tiny house construction appendix received the necessary 2/3 majority vote required for inclusion in the 2018 International Residential Code (IRC). As an appendix to the code, it is not an enforceable part of the code unless specifically adopted by a jurisdiction. However, the appendix provides useful information for code officials to reference and a stepping stone for future inclusion.

The appendix specifically defines the term “small house” as a building containing one dwelling unit and having a floor area of not more than 500 square feet. The appendix goes on to list several exceptions to the IRC for “small houses” including exceptions to the minimum ceiling heights, floor area, door sizes, and hallways.

We previous penned an article stating that tiny homes were not modular homes yet and specifically referenced certain exceptions to the IRC would have to be made. With the passage of this appendix, it seems as if some of the groundwork is being laid for tiny home compliance. Find our original article here.

Started on February 27, 2017 by Kellie McDonnell

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Where in the U.S. Are the Most New Homes Being Constructed?

Original Comment



Frazzled home buyers can breathe a (little) sigh of relief—particularly if they live in the Northeast.

In a sign of more new homes to come, builders secured 4.6% more permits to construct brand-new homes from December to January, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Permits were 8.2% higher than in January 2016.



http://www.realtor.com/news/real-estate-news/more-new-home-construction-on-the-way/

Started on February 17, 2017 by Kellie McDonnell

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Tiny Houses Are Not Modular Homes....Yet

Original Comment

I recently attended a meeting with the Georgia Department of Community Affairs Industrialized Buildings Advisory Committee (IBAC). One of the main agenda topics was the regulation of tiny homes, roughly defined as a dwelling under 500 square feet.

Tiny homes have recently emerged and have grown in popularity in part due to two cable shows featuring people wanting to downsize and change lifestyles. What rarely gets mentioned on these shows however, are the codes or standards the home is built to and the zoning challenges.

For example, many tiny homes are built on a chassis and have wheels for ease of mobility. Typically, a “mobile home” like this would fall under the federal HUD code. However, HUD specifically exempts homes under 400 sf.

So if its built offsite in a factory, it would be considered a modular home, right? Well, no. Not if it’s on wheels. So if it’s not permanently affixed to real property and under 400 sf, where does it fall? And that is the current challenge faced by this emerging cottage industry (pardon the pun). More often than not, tiny homes are built to meet or exceed the same standard as a recreational vehicle.

The Georgia IBAC struggled with this exact same question – how do we regulate a home that doesn’t meet the International Residential Code (IRC)? While this decision was moved to the next meeting of the IBAC, there were many indications of where it’s headed.

In order for a tiny home to be regulated under a state program like Georgia’s and receive an insignia from the agency, it cannot be a tiny home on wheels (THOW). It must be affixed to real estate. According to Will Johnson, CEO of Tiny House Atlanta, about 75% of the potential customers of tiny homes are looking for one permanently affixed to a specific plot of land, rather than the mobile option.

In addition to the “permanency” requirement, manufacturers of tiny houses will have to significantly redesign some units in order to comply with the IRC. For starters, the 2012 IRC defines a dwelling unit as having at least one habitable room not less than 120 sf. That minimum requirement was lowered to 70sf in the 2015 IRC, an indication that perhaps the general public is trending towards smaller homes. There is also the issue of ceiling height and stair geometry. Many tiny houses have bed lofts above the living space with minimal clearance above. This would not meet the code as there has to be a minimum of 5 feet between the floor and the ceiling or that space cannot count towards the minimum room size requirement. The code also requires that each dwelling unit have a water closet, lavatory and bath (or shower), as well as a kitchen with a separate sink. And if those lofts had stairs leading up to them, the rise/run requirements in the code might call for the stairs to take up a majority of the living space. And, unless this house is going on the lot behind your current home, it’s not an accessory structure as defined by code either.

None of this is to say that tiny houses cannot meet the IRC – they can. It will just take a bit of creative designing and perhaps some exceptions to the code in future versions. As it is written now however, it would be impossible for the tiniest of tiny houses to comply given these requirements.

Beyond the code requirements, tiny houses still face many local zoning restrictions. For example, many localities have minimum size requirements for dwellings. However, we are seeing more zoning boards approve “tiny house developments” where several of these units are placed to form a tiny house community. There are also talks that HUD may reduce or eliminate its 400 sf minimum requirements, opening up the possibility of federal regulations for this niche.

So, while it’s a super-cool idea, make sure your tiny home complies with your local codes and zoning requirements before you run out and buy one.

Started on August 5, 2016 by Tom Hardiman

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Tiny Homes move a step closer to code recognition.
At the recent ICC hearings, the tiny home movement made big advances towards recognition in the International Residential Codes with the passage of a proposal to include tiny homes as an appendix in the 2018 IRC. The proposal is still in the ballot phase and must be approved by two-thirds of the voting members of the ICC before it gets approved – a tall hurdle to clear. The appendix makes certain exceptions and exemptions from the IRC for tiny homes, defined as 400 sf or less. Whether this proposal received final approval in this cycle or not, we expect the tiny house movement to continue to gain momentum and traction.

Updated on November 18, 2016 by Kellie McDonnell

Steve,
This is a great post! The industry is struggling with the tiny house concept and coding. It is being viewed differently state by state. This has a huge impact on granny pods/elder cottages, another growth opportunity for the modular industry! Look forward to more on the subject.

Regards,
Ken

Updated on August 5, 2016 by Ken Semler
Modular Home Builders Association's Annual Membership Meeting Shows How Modular Means More

Original Comment

The Modular Home Builders Association (MHBA) held its Annual Membership Meeting October 19-20 in Harrisburg, Pennsylvania.

The annual membership meeting provided professionals in residential modular construction a forum to network, exchange ideas, learn from experts, discuss issues, and grow professionally. Attendees participated in a discussion on MHBA’s Consumer Awareness Program led by Mike Zangardi of Ritz-Craft Homes and Ken Semler of Express Modular. Outgoing Chair Pat Fricchione of Simplex Homes and incoming Chair Robert Bender of Commodore Corporation led a discussion of what’s to come in 2017, including upcoming marketing efforts and promotional materials.

Tom Hardiman, Executive Director of MHBA, provided an outlook of government affairs in the modular industry, giving insight into federal, state, and local ordinances that could have a significant impact on the industry.

“There have been over 20,000 federal and state regulations introduced in the last 6 months. MHBA’s role is to prevent over regulation and push back when government gets too aggressive,” Tom said.

Harris Woodward of Finish Werks gave a presentation on high performance homes and how the modular industry is best poised to capture this market.

Special recognition was given to MHBA outgoing board member, Mike Clementoni from Muncy Homes, Inc., for his years of commitment and dedication to MHBA and the modular industry.

The event closed out with the announcement of the 2016 Modular Home of the Year. Congratulations to Zarrilli Homes from New Jersey! Their custom beach house was created as the perfect home for a large family to come together. With an open floor plan and custom finishes, this beach house is the perfect setting for a weekend away. See more photos at http://bit.ly/2016_HOY

Started on November 9, 2016 by Kellie McDonnell

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Not Welcome Here!

Original Comment

From time to time, we hear about local officials who want to ban or prohibit all new modular homes from entering their towns. Such is the most recent case in O'Fallon Illinois (population 29,000).

Apparently City leaders are not happy with the looks and site orientation of a recent modular home. Their solution? Ban all new modular homes going forward. Now, that's about as uninspiring and brain-dead solution as I've ever heard. You can still build a home that looks identical to a double-wide, you just have to build it on site, I suppose.

The Planning Commission has a public hearing on the matter next Monday June 27th. MHBA has already contacted the City's Development Director and expressed our concerns and let them know that these types of bans will not be allowed to go unchallenged!

Maybe local officials will see the light on this one and redirect their misplaced biases.

Started on June 22, 2016 by Tom Hardiman

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A win, but not a victory. The O'Fallon City Council voted 11-1 to approve an AMENDED ordinance aimed at curbing modular home construction in the City. The original ordinance called for an outright ban of all new modular homes. MHBA hired an attorney and rattled enough cages to get the city leaders to at least amend the ordinance.

Any new modular home will now require a special permit upon being approved via their "planned use" requirements. This is by no means the desired outcome we sought, but a marginal win compared to the outright ban.

MHBA is considering its next steps including legal action against the City.

Updated on July 6, 2016 by Tom Hardiman

well done tom

Updated on June 30, 2016 by Joshua Margulies
Ways a Modular Home Can Save You Money

Original Comment

So you are in the market for a new home and heard that a modular home might be a less expensive option? Given that modular homes are built with the same materials and built to the same codes as conventional site built homes it would seem that the costs would also be the same. Generally speaking, the costs are comparable, but there are a few ways that a modular home can save you money.

Construction Loan – During the construction phase of your home, typically you will have a construction loan. Payments (or draws) are taken from this loan to pay contractors, subcontractors and materials, with the borrower (home owner) paying the monthly interest payment. Once construction is completed, the construction loan will be paid off with your permanent mortgage loan. One of the key advantages of modular construction is the shorter construction schedule. Construction of your home is occurring at the same time as the foundation work. When the foundation is completed, it is generally only a matter of weeks before your home is set. It is not uncommon for a modular home to be completed two to three months sooner than a comparable site built home, saving you the interest payments for those months. The amount you save here depends on the principal amount, the interest rate and the draw schedule. For illustrative purposes, the monthly interest payment on a $200,000 loan at 5% is $833.33.

Materials/Waste - The U.S. Environmental Protection Agency estimated that a staggering 164 million tons of building-related waste was generated annually in the United States. According to the National Association of Home Builders (NAHB) construction of a typical 2,000-square-foot home generally produces about 8,000 pounds of waste. That's four tons of waste going to our landfills for every new homes built! A home built in a factory controlled setting yields far better results. NAHB's study concluded that on average, 4 pounds of waste is generated per square foot of new home construction (4lbs/sf). The typical modular manufacturer generates about half a much waste during the construction process.

On a modular home site, you do not see the row of dumpsters filled with drywall, lumber, and excess building materials like you do on nearly every conventional site. Excess lumber on a modular home is either used for additional wall bracing while the home is being constructed in the factory, or stored and used for a future home. Additionally, it is much easier and cost effective for the modular manufacturer to separate and recycle items that often land in the same dumpster on site. As a result, the hard costs of waste disposal are reduced.

Waste Disposal Costs: This might equate to $300-$400 on a 2,000 square foot home. But there is also the upfront cost purchasing the material that was wasted. It is not at all uncommon for site built contractors to order a little extra for all materials delivered to the site. Why? Because they don't want to run short and have to stop the project and go order more.

Materials Cost: While material waste depends largely on which materials we are talking about, we will use a "waste" figure of 10%, meaning 10% of the materials you pay for do not end up in your home with a conventional builder. That can be a significant amount when you consider as much as 25% of the total cost of your home is materials expense. This is a 2-2.5% savings on your total cost alone!

Let's use that 2,000 square foot home as an example to show the savings:

Total home cost = $240,000
Construction loan = $200,000
Cost / sf = $120
Materials cost = $60,000
Materials waste cost = $6,000
Materials disposal cost = $400
Construction loan savings (2 months of interest) = $1,667
Total cost savings with modular = $8,067 = 3.4%

When you factor in workforce labor productivity (it takes fewer labor hours to construct a comparable size modular home), as well as overall energy efficiency of the modular home once occupied (due to higher quality control and tighter building envelop), it's easy to see how a modular home can end up saving you 5+% overall.

Obviously it is impossible to apply all of these assumptions to all modular homes, but this article does demonstrate the potential savings you can realize with your new modular home.

Started on May 27, 2016 by Tom Hardiman

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What is the HERS Index?

Original Comment

With all the talk about green rating systems, we thought we’d devote some time to trying to explain what some of these programs mean to the average home buyer.

“HERS” is the acronym for the Home Energy Rating System. The HERS index is a nationally recognized system for home a home’s energy efficiency is measured. The HERS program also sets the standard for home homes are inspected and scored.

The HERS index was created by an organization known as RESNET (the Residential Energy Services Network) in order to give homeowners and buyers a standard by which they could measure the energy efficiency of their home.

According to RESNET, the HERS score is similar to an automobile’s miles per gallon. Only for homes, a lower HERS score is better. Here’s how it works:

A certified Home Energy Rater assesses the energy efficiency of a home, assigning it a relative performance score. The lower the number, the more energy efficient the home.

The U.S. Department of Energy has determined that a typical resale home scores 130 on the HERS Index while a standard new home is awarded a rating of 100. So a home with a HERS Index Score of 50 is 50% more energy efficient than a standard new home while a home with a HERS Index Score of 130 is 30% less energy efficient than a standard new home.

There are advantages of the HERS score, according to Steve Baden, the executive director of RESNET. “Today’s new homes are much more efficient in comparison to homes built just a decade ago. These homes are more affordable to maintain, comfortable, and have a higher value”.

To learn more about HERS or RESNET, go to http://www.resnet.us/

Started on May 23, 2016 by Tom Hardiman

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A 3rd party HERS rater validates the building envelope from which the computer building energy efficient program calculates the score in design. A HERS rater inspects those items during construction to validate to the local Building inspector the reported work and the actual work was performed and is correct. Once a residential house is complete; a HERS rater conducts a Duct and Door Blower test to determine its passing score. Many fail since it is after the fact of finsihed construction. A local building Inspector looks to the HERS rater for energy efficiency independence.

NOTE:
Clean Power Plan Rule

Because EPA has encouraged states to use building energy efficiency, including the imposition of building codes, as a way to comply with these targets, NAHB has been engaged from the beginning, which has helped to significantly improve EPA’s treatment of energy efficiency in the final rule. Additionally, NAHB, along with several partnering associations, filed suit against EPA over the Clean Power Plan Rule.

Updated on May 23, 2016 by Steve Lefler
Black Model Ts

Original Comment

For the past several years, the modular home industry has accounted for about 2-3% of all new home starts in the United States. Amazingly, this figure has held steady for the past decade despite a big upturn in housing, followed by one of the biggest economic collapses in history. Three percent through it all.

This week I have the honor of participating on a panel to hear a defense of a dissertation by a PhD. candidate at Virginia Tech, one of the leading schools of architecture in the country. Bandar Alkahlan is seeking his Doctor of Philosophy in Architect and Design Research and is set to present his research to this panel. Alkahlan chose to write his dissertation on the modular home industry, specifically “Integrated Design and Manufacturing (IDM) Framework for the Modular Construction Industry.” In reading his dissertation, the decade-long market share figure was confirmed. But his research really brought to light many reasons why our market share remains stagnant.

A key take-away from the paper for me is that, perhaps our market share is stagnant because our research and innovation is stagnant. Don’t get me wrong, I still believe modular is a far superior process for home building than the traditional “sticks and bricks” approach. But even within our industry, we still build relatively the same way as we did twenty years ago.

Alkahlan interviewed thirteen industry participants and asked them a series of questions, one of which focused on how companies integrate information technology. The choices ranged from use of two dimensional CAD, in which all thirteen respondents indicated using, to 3D CAD (6 of 13 answering yes), to Computer Aided Manufacturing (CAM), where only one respondent answered yes. None of the thirteen respondents answered affirmatively to more advanced processed such as BIM and 3-D printing of components and none indicated that they invest in R&D. Granted, there hasn’t been much in the way of excess revenue lately to invest in these programs and processes. But hear me out.

Alkahlan makes a comparison to the auto industry. The assembly line was truly an innovative break-though and allowed Ford to mass produce thousands of Model Ts at an affordable price. (You can have any color you want, as long as it’s black). When the US auto industry failed to adopt new processes in the 1970s, the Japanese automakers gained considerable ground, and in some cases lapped our manufacturers. Today, the auto industry has largely moved away from the straight assembly line production process. Now various car components are manufactured at multiple locations and assembled in the factory, based on consumers’ choices.

I’ve often said that every major industry from communications, to the auto industry, to entertainment has evolved and improved in productivity and efficiency. Every industry except the construction industry. But all of those other industries embraced new products and processes along the way which accelerated their growth.

This mass production mentality (vs. mass customization) is just one of the key points in his dissertation. But it’s a point that I think the industry must address. Is it possible that we are only 3% of the market because we continue to build homes the way Henry Ford built model Ts? Well, at least we are not still building horse drawn carriages like the site built guys!

Started on May 17, 2016 by Tom Hardiman

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Connecticut Transportation Bill Advances

Original Comment

House Bill 5548, addressing industry concerns regarding oversize shipments through Connecticut, recently passed the Committee on Public Safety by a 25-0 vote and was sent to the Hose floor with a recommendation that the bill "ought to pass."

The bill included MOST of MHBA's recommended language for amendments including allowing units over 14 ft wide and up to 16 ft wide to be shipped Monday through Friday during the day, identical to NY State's transportation requirements. The bill also treats modular homes the same as other industry oversize shipments reducing the possibility of discrimination.

MHBA wants to thank Ron Weaver of Ritz-Trans and Richard Wildermuth of CT Valley Homes for their legwork to get this bill to this point. We will continue to monitor the bill's progress and report back.

Started on April 1, 2016 by Tom Hardiman

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House Bill 5548 passed the Connecticut safety committee, then stalled out in the transportation committee, likely due to opposition from the State Department of Transportation.

MHBA reached out to the agency to follow up on our prior meeting and to once again request that they implement some of our recommended changes - changes that they currently have the authority to make without legislation.

The DOT replied to MHBA to say that they, in consultation with the State Police, considered our requests but did not feel the changes were necessary and they were not comfortable allowing oversize modular home shipments during the day - Nevermind that they allow oversize shipments from the pool and boating industries during the day!

MHBA pushed back one more time in an effort to gain some concessions in this effort. This time, the CT DOT agreed to change our oversize night shipments from the current Sunday-Wednesday schedule to a Monday-Thursday schedule. Our logic here is that the Sunday night shipment slots are not optimal, given the surroundings states' regulations that prohibit travel of oversize shipments after noon on Friday.

So while this, by no means, resolves our transportation woes in Connecticut, it is at least a small win in an on going effort to better synchronize Connecticut's transportation regulations with surrounding states. MHBA plans to continue working with the agency, the industry, and lawmakers over the summer to work on longer term solutions to this problem.

This initiative demonstrates the importance of a vigilant and on-going government affairs effort, as few issues are typically resolved with a quick and clean solution, and often require frequent pressure to make incremental improvements.

Updated on May 10, 2016 by Tom Hardiman
You know, the problem with this industry is….

Original Comment

No matter how many events or meetings I attend with modular home companies, eventually someone starts a conversation off with those words. I heard it a few times at a recent event in New Jersey but for some reason, this time it just didn’t resonate with me.

At the risk of sounding ironic, the problem with this industry is that we are too quick to point out the problems of this industry! Yes, we have issues and challenges to work on – but so does every other industry.

MHBA is about to launch a consumer awareness program that will be positive and professional. And I hope that positivity is contagious within the industry. We need to start talking about what is RIGHT with this industry!

-We build a better home that stick builders!
-FAR less waste ends up in the land fill!
-Our work environments are FAR more safe for our employees than stick builders!
-Our homes are MORE durable that then average stick built home!
-And our homes are MORE energy efficient than that average stick built home!

So for all you naysayers out there – knock it off! You are in a great industry and should be proud of your work.

Started on April 22, 2016 by Tom Hardiman

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here here! how we doing on that tom?

Updated on April 22, 2016 by Joshua Margulies
Consumer Awareness Program - FAQs

Original Comment

MHBA launched their Consumer Awareness Program (CAP) to more effectively educate potential home buyers. The questions and answers below will hopefully answer any initial questions you have about the program and the efforts that will stem from its creation. read the full press release here.

Does my company have to participate if we are members?
No, you may be a member of MHBA and enjoy all the benefits of being a member without participating in this program. While it is completely voluntary, we are strongly encouraging all manufacturers and builders to support this effort. There may be additional benefits that you will not receive, however that are above and beyond the MHBA membership benefits. This may include a special logo or designation for participating companies, articles or blogs about participating companies, and featured case studies on our website.

What will the funds be used for?
The money will be used for a focused marketing plan that will draw new homebuyers to the website to educate them about the industry. Funds will also be used to develop promotional/collateral materials such as videos and marketing templates for use by MHBA members.

How will funds be collected?
Funds will be remitted to MHBA on a monthly basis and reported as a separate line item on MHBA’s financial statements to better ensure transparency and accountability. MHBA has requested that all manufacturers add $10 for each box or module manufactured after April 1, 2016.

What kind of marketing will take place?
MHBA will develop online and print marketing collateral material to be used by the manufacturers and builders, and may include but not limited to videos, flyers, templates, and case studies. We will also update the website to educate potential modular home buyers.

How does this benefit members?

Members will be able to use the marketing materials developed through this campaign for their own regional marketing efforts. MHBA will also attract thousands of potential new home buyers to modularhousing.com where your company is listed in the directory and under the “member list.” If you are a builder member, you will also receive any requests for quotes that match your service area. Lastly, we expect the entire industry to benefit from a heightened awareness and positive message we deliver about modular homes.

Will company information be shared?
MHBA will not share any information individual company information collected each month. We will however, aggregate all the data and share that industry information with members.

Started on February 19, 2016 by Kellie McDonnell

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We have officially launched our Consumer Awareness Program (CAP) as of April 1st! We have reached out to all of our manufacturers for their support on this initiative. So far, the following MHBA manufacturer members are on board: Apex Homes, Excel, Manorwood, Muncy Homes, New Era Building Systems, Pennwest, Premier Builders, Ritz Craft, Simplex, Superior Builders, and Westchester Modular Homes. We are waiting to hear back from several others.

Additionally, several builders have shown their willingness to support this effort including: Express Modular, Finishwerks, Mariner Homes, and Zarilli Homes.

MHBA has started working with a PR firm to help craft and develop our message and campaign theme. This campaign will influence our website redesign and collateral marketing materials.

The campaign itself will run for a six month "pilot period" and be reassessed at our annual meeting in October. If you want more information or want to have your company listed as a participating member, email tom@modularhousing.com.

Updated on April 7, 2016 by Tom Hardiman
Update on Maryland Sprinkler Systems

Original Comment

Recently, House Bill 19 was introduced in the Maryland General Assembly by Delegate Christopher Adams and others. Contrary to some of the comments received about this bill, it DOES NOT repeal the requirement to install sprinkler systems in single family homes. In the past, counties had the option of opting out of this requirement, and several did. Unfortunately, the State Department of Housing and Community Development (DHCD) took the position that the county exemption did not apply to the statewide modular administrative program, meaning the industry was forced to include the systems despite what the county or customer wanted. The counties had a three-year window to opt out before they were required to comply. That window has now closed and as of today ALL homes built in the state are required to have sprinkler systems installed.

The bill introduced by Delegate Adams simply repeals the language that currently prohibits the counties from opting out, giving them the option to do so again. If passed as written, the modular industry will be facing the exact same discrimination and disadvantage as it did for the prior three years.

MHBA expressed these concerns to Delegate Adams, and MHBA Director Tom Hardiman had a lengthy conversation with the Delegate about the industry positon. It was clear that he was not trying to harm the industry, as he really did not understand it. He was simply trying to bring more power and control back to the local level.

MHBA stated to the Delegate that MHBA opposes the bill as written and had three options 1) Lobby for an outright repeal of the sprinkler system requirement state wide. This is a much larger and more contentious issue and pits the industry directly against the State Fire Marshal, firefighters, and other “safety” advocates. 2) Lobby to kill this bill. This is a much easier strategy and will ensure that everyone must continue to install sprinkler systems. While not ideal, it at least ensures a level playing field. 3) Add language to the bill to ensure that any exemptions for counties are fairly applied across all types of home construction by adding the words “including modular homes.” This will likely trigger the DHCD to work with MHBA to modify the regulations to ensure a level playing field.

MHBA plans to continue working with Delegate Adams to get language included in this bill in case it does pass. However, there is no companion bill running concurrently in the Senate, a sign that the bill will have a difficult chance of passage. We also will not be upset if the bill fails to pass, as again, we will at least be on equal footing with stick builders. Lastly, we plan to approach DHCD again and request a top to bottom review of the entire program after the legislative sessions ends.

Started on February 19, 2016 by Tom Hardiman

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House Bill 19 as amended received an "unfavorable" report from the Environment and Transportation Committee. MHBA has been monitoring this legislation and lobbied to have language included that ensured that, if passed, counties that opted out of the sprinkler system provisions also included of modular homes in those counties.

The bill was amended to include this subsection: "If a local amendment conflicts with the Standards, the local amendment prevails in the local jurisdiction."

MHBA's position on this bill has been 1) if it passes, it should apply to ALL new home construction in these counties, or 2) it shouldn't pass and everyone would continue to have to install the systems. It appears as if the bill's language covers our industry on both scenarios.

Updated on March 24, 2016 by Tom Hardiman

In California, Since 2009 CA. (WUI) Wildfire Urban Initiative was enacted requiring all new residential construction to have fire suppression systems consisting of commercial fire sprinklers, an alarm bell and waste valve to clean out system. The construction of the home includes fire resistant materials like windows, eaves and siding. It adds about $9000 to the cost to build a home to this standard and reduces the cost of fire insurance.

What California really needs is an exterior roof system for wild fire prevention.

Updated on February 19, 2016 by Steve Lefler
New York Bill to Replace Older “Mobile” Homes with Modular

Original Comment

NY SB 6954 was recently introduced by Senator Elizabeth Little to “establish the rural mobile home replacement program.” From the legislative findings:

In rural areas affordable housing is often a mobile home. Many of these mobile homes are older and dilapidated with rusted, leaking metal roofs, holes in flooring, leaky metal-framed windows with interior take-out storms. No matter the amount of rehabilitation investment, the end result is unsatisfactory in terms of longevity, energy efficiency and affordability. The legislature therefore finds that, in rural areas of the state, a program should be established to fund the replacement of mobile homes with new affordable and energy efficient modular or stick-built homes.

This program will fund the replacement of mobile homes with new affordable and energy efficient modular or stick-built homes. The use of stick- built homes has a multiplier effect for the area as local contractors, labor and building materials are used. Eligible applicants must attend and complete a homeownership training program for which includes household budgeting, home maintenance, predatory lending and post-purchase counseling. This program is an important component of replenishing the affordable housing stock in rural areas.

The total payment pursuant to any one grant contract shall not exceed seventy-five thousand dollars and the contract shall provide for completion of the program within a reasonable period, as specified therein, not to exceed four years.

MHBA will monitor this bill closely but it is at least encouraging that some lawmakers know the difference!

Started on March 10, 2016 by Tom Hardiman

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A Role to Play

Original Comment

Just about every sports cliché you can think of came to my mind last week when I attended a facilitated a meeting of twenty or so modular home builders. The “roundtable,” organized by Gary Fleisher provided a forum for builders to vent their frustrations but more importantly share their ideas on how to grow the industry.

As expected, one of the core themes of the meeting was the need to change the perception of modular among the average home buyer. What was not expected was just how ready willing and able the builders were to make this happen – NOW!

My key take away from the meeting was that the modular home industry is a team and we all have to work together to improve it, but that we all have roles that we are good at, and should focus on doing our part well. For example, Gary played a key role in pointing out some of the shortcomings in the industry, making people aware of these issues and pulling together a meeting to discuss them. Many builders felt that the manufacturers’ role should be to focus on their manufacturing processes to provide the builders with the most efficient, quality product at the best price possible. It’s not necessarily the manufacturer’s role to take the lead in marketing or in lead generation, although no one suggested that the manufacturers stop doing their part in this regard. There was also some conversation and concern that the manufacturers were not innovating and pushing the envelope enough in terms of new technologies, products, and processes.

The builders felt that it was their role to be the primary face of customer service and to take the lead on local marketing efforts. Some expresses frustration that from time to time, a potential customer talks with a factory rep who provides that customer with pricing information.

All this leads me to the role that the builders (and manufacturers, I might add) feel that MHBA should play. I was honored to be asked to facilitate this meeting and I see this task of helping to change the perception of modular homes as one of the biggest challenges and opportunities in my professional career. MHBA can serve as the conduit to collect marketing funds through the manufacturer network, coordinate the marketing message, develop marketing resources for the builders, help manage and facilitate the marketing committee activities, and provide positive information about modular homes to the end users to help educate them.

There were other discussions regarding recruitment, training, and orientation of new builders, as well as better understanding the relationship between the builder and manufacturer in this post-recession economy. This industry no doubt will have its critics and will no doubt experience some big challenges ahead. But if we all understand our respective roles and do them well, this team will ultimately succeed!

Started on February 1, 2016 by Tom Hardiman

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Three Little Words

Original Comment

As we get closer to Valentine’s Day, I want to remind you of the importance of three little words that can make a big difference. No, I’m not talking about “I love you” although those three words are quite powerful. I’m talking about “or modular units.”

Last week, I was sent a notice from the Missouri Public Service Commission announcing an upcoming workshop to discuss proposed changes to the Manufactured Housing and Modular Unit Program. Like many other states, Missouri has one agency that oversees both the HUD code manufactured housing industry as well as the IRC and IBC residential and commercial modular industries.

There was obviously some work being done behind the scenes, because when the announcement came out in early January, it included a whole array of proposed changes as well as two entirely new chapters to the program. In all, the changes impacted eight chapters of the program (Chapters 120-127). While some of the chapters were specific to manufactured housing, and thus, not areas we want to address, many other smaller changes were being proposed for residential and commercial modular applications.

These proposed changes were being driven by an internal audit on the program, which found that under its prior leadership, the program had a little too much discretion into determining who paid certain fees and who faced certain penalties. The additional driver behind the changes were problems that surfaced as a result of improper installation practices, as well as federal requirements on the manufactured housing side. For example, an entire new chapter (Chapter 125) is being proposed specifically to address tie down systems in manufactured housing. A second chapter (Chapter 126) addresses the new licensing requirements for installers of manufactured housing. But therein lies the issue. Buried within pages of regulations and contained within a chapter that seemingly has no impact on the modular industry were these three words: “or modular units.” To put this in context, the section in question was spelling out new requirements for installers of manufactured housing "OR MODULAR UNITS".

Those three little words impact the entire modular industry and any home or commercial modular unit installed in the state. We obviously plan to raise the question as to why modular was included in this chapter seemingly aimed at manufactured housing and plan to submit our comments addressing these three little words.

But I say this to bring up a bigger point. Often times we get caught up in the excitement and exposure generated by tantalizing headlines and emotional opinions in our industry. Anyone with a phone can now make videos, blogs, and offer commentary on how to improve the industry, and in many cases they offer good advice. But who is going to do the real work of reviewing hundreds of pages of regulations to make sure a state agency doesn’t sneak in language that will drive up your costs and delay your next project? These are often defensive strategies aimed at making sure the business climate doesn’t get worse than it is, and often we view these tactics in a less than favorable light. I can’t tell you how many times I have heard that “we need to be more proactive on our government affairs issues.” And I agree, we do.

One of the most exciting plays in all of sports is the “Hail Mary” pass at the end of the game. For those few seconds you watch as the outcome of the game hinges in the balance. But how often does that strategy result in victory? More often than not, it’s a solid defense that keeps you in the game. And no one plays defense better than us! To get more information on this specific issue or on other issues we are working on for the industry, email tom@modularhousing.com.

Started on January 18, 2016 by Tom Hardiman

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Regional Outlook Webinars Scheduled

Original Comment

MHBA will be hosting a series of Regional Outlook webinars on January 25-26. These webinars will cover the economic forecast for 2016 as well as issues and events in the various regions. These webinars are free for MHBA members ($99 for non members). Go to our events page to register.

Started on January 5, 2016 by Tom Hardiman

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