One builder tries to modernize home construction

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Factory direct to you

One builder tries to modernize home construction

By Steve Kerch, CBS.MarketWatch.com

Last Update: 12:03 AM ET Feb. 13, 2002

ATLANTA (CBS.MW) -- Look at the way we build cars and airplanes today. The

process is nothing like it was 70 years ago.

From the technologically efficient innovations in the factory to the use of

computer-aided design tools on the drawing board, the manufacturing of

virtually every major product in this country has been transformed.

Except for housing.

If you walked onto the site of a home building project today, you'd be hard

pressed to see much difference in the method of construction compared to how

houses were put up more than 100 years ago.

Sure there are new composite materials that go into our houses, not to

mention much better insulation and more energy-conserving products.

But the basic process -- dig a hole, pour a concrete foundation, nail up a

wood frame and hammer and saw the rest of the materials into place -- is

much as it has been for some time. (Not counting the characteristic pop of

the new pneumatic roofing-nail guns.)

Not that there is anything so terribly wrong with it. Certainly few of the

more than 70,000 home builders and their suppliers who turned up here last

week for the industry's annual International Builders Show would have any

complaints, given the record number of new-home sales in the last three

years.

One new idea

But at least one person in the vast crowd is convinced there is a better way

to build homes.

Cohen thinks that better way comes out of a 21st century factory. He's

not talking about just some of the pieces of the house coming out of a

factory, as many component parts now do, nor does he mean the factory-built

modules that are later assembled on some distant site.

The Denver home builder, whose background is in civil engineering, means to

construct an entire house in a plant on the site of a subdivision and

transport it in one piece -- appliances and all -- whatever number of blocks

to its foundation.

" I'm talking about building the same houses that would otherwise be

stick-built in the same place, " Cohen said. " I'm talking about subcomponent

assembly through different stages to make a finished product all in a

controlled environment. "

" The home is still built the same way it was in the late 1800s. You don't

see any of the practices (of modern manufacturing) at all in home building.

And there are a lot of inefficiencies built into the field environment, " he

said.

Not the least of those inefficiencies is the weather, which can wreak havoc

with the best-laid building plans. And as concern grows over the dangers

posed by mold in homes, keeping building materials out of the elements --

and away from moisture -- holds plenty of appeal.

The biggest appeal, though, may be on the bottom line for builders. Cohen

said his system brings building costs down 10 percent and reduces financing

carrying costs for builders by as much as 50 percent.

Plus, the process delivers a finished house in a month or less.

Not for everyone

There are drawbacks. The economics of his whole-house factory only make

sense for a subdivision of about 400 homes or more. The homes also have to

have steel framing so they can be moved without shifting. And an all-brick

house, because of its weight, is out.

Beyond that, any style home in any floor plan is possible. Two- and

three-story homes would roll off the line as easily as ranches.

The building method involves what Cohen calls " parallel production lines " in

which roofs, walls and floors are added on as the houses move from one bay

to another in the factory.

The system can produce anywhere from one or two houses a week for a

traditional, semi-custom development to 6 to 8 units a day in the case of

those that might be constructed for military housing, Cohen said.

The factory itself could be either a permanent structure that could be

converted to another use, such as a recreation center, once the subdivision

is built out, or be a temporary facility that would be disassembled upon

completion of the project.

Cohen has secured patents on his site factory and whole-house building

system. He is in negotiations with a Denver-area landowner to put up the

first site factory this fall for use in developing an undisclosed project.

R & D nonexistent

And whether or not his idea catches on, Cohen has a broader message

for the home building industry: It's time to start paying attention to

research and development.

" Research and development expenditures in construction were just .16 percent

of GDP in 1999 when the average for the whole economy was 2.5 percent, "

Cohen said. " Yet housing is 10 percent of GDP overall. "

" If you ask national home builders how much they spend on R & D, the answer

you get is that they don't. "

At least one group has recognized Cohen's idea. His system won an innovative

housing award in 2001 from the National Association of Home Builders'

Research Center and Popular Science magazine.

" You just have to ask yourself: 'Isn't there a better way to build housing

if you're building a whole bunch of it?' " Cohen said.

Steve Kerch is the real estate editor of CBS.MarketWatch.com in Chicago