The Future of Homebuilding: Home-in-a-box

Predicting Our Future is a podcast about the next revolutions in technology, as seen through the eyes of serial entrepreneur Andrew Weinreich. Below is an edited excerpt from Episode 1: Home-in-a-box. Listen to the full episode here.

Blu Homes & Bill Haney

Blu Homes is a modular homebuilder based in Northern California. They offer a total of 16 models with names like The Lotus or The Breeze. The Breeze is what I think you’d expect from the name -- there are two large ultramodern boxes separated by an outdoor "breezeway." The Breeze has 3,558 square feet at a starting price of $1.3 million. The Origin, one of the smaller models, starts at 838 square feet for $495,000. Prices go up depending upon the types of finishes and appliances you select. I spoke with Bill Haney, the Founder and CEO. 

Bill Haney: "The ugly truth is that to build a new house is a time-consuming, emotionally exhausting, financially endangering pursuit. And a million new houses are built a year in the average market.

So we wanted to think about a way that people could build houses that was more joyful. You know, how could we reduce the stress and reimagine housing in a way that aesthetically was pleasing, environmentally was sustaining, and the construction process itself made more sense?

We wanted to make it use advanced information technology tools to make it easier to participate in designing your own home, advanced construction methods to make the benefits of industrial construction apply to single-family houses."

When Bill compared homebuilding to the construction of other consumer products, he made me feel like his vision for modular construction is an inevitability. 

Bill Haney: "Why is it that every useful good in our daily lives -- the coffee cup that I'm drinking out of, the phone we're speaking over, the book I read this morning when you and I were waiting to catch up -- all of these things were built in factories. All of them, even the most simplistic things. And the reason is that the quality goes up, the cost goes down, and the schedule becomes predictable. So why is the single-family house built in a field with 12,000 parts that show up and trucks over time and workers who come in and out for periods of time that can stretch to two or three years, in some cases?"

When Bill compared homebuilding to the construction of other consumer products, he made me feel like his vision for modular construction is an inevitability. 

Clearly, Bill is enamored with the Tesla model of building an expensive product that early adopters love, and then dropping the cost of subsequent models that are mass-produced. This approach resonates with me. The iPhone was launched the same way. 

Blu Homes are expensive, but meaningfully less so than comparable homes built by traditional builders. This year, they will put out 100 homes.

Acre Designs & Andrew Dickson

Acre Designs was the first kit homebuilder I spoke with. Andrew Dickson is the CEO of Acre Designs. As I spoke to him, it felt like his approach to disrupting the construction industry could have been taken straight out of the Sears 1908 playbook. He explained how his manufacturing process severely cut down the total construction time of his company’s homes by essentially building and transporting walls that fit together on-site.

Andrew Dickson: "They’re almost like giant Legos. So there are these large panels called 'SIP panels' and they're up to eight foot by 24 foot. They allow us to assemble a wall incredibly quickly, but they're also extremely energy-efficient, so great insulation value and airtight. That allows us to get out a home from foundation to roof on in two to three days. And so that's a huge shift off of the typical five to eight plus week period for that same process in traditional framing." 

Acre Designs has already built two homes in the Kansas City area, and they are in the planning phase to launch several more in Northern California. Theirs isn’t a kit you would assemble with your neighbors like the Sears homes. It’s designed for builders. 

"Our system leverages existing builders almost like Uber works with their drivers."

Andrew Dickson: "Our system leverages existing builders almost like Uber works with their drivers. So we provide existing builders all around the country with . . . in the simplest terms, a kit of all the materials necessary, and the designed systems to put these homes together quickly anywhere in the country." 

Andrew thought the cost savings for consumers would come from the much shorter amount of time it would take to build the home, as compared to a traditional build. 

kitHAUS & Tom Sandonato

In 2008, the kit builder receiving the most attention in the design world was a company called kitHAUS. When I interviewed the Founder, Tom Sandonato, he had an interesting story to tell about how the idea for kitHAUS sprang from his own journey building his home.   

Tom Sandonato: "I bought a piece of property in the Joshua Tree area of the outskirts of Palm Springs, California. . . . I have this piece of property, and it was on the national park boundary. I had like 16 acres on the park, and it was in this very, very beautiful place where there were these giant boulders and a pretty unspoiled landscape . . . just raw land. I wanted to build something there that tread lightly on the environment. I didn't want to have to move boulders or get heavy equipment in there. And I started looking for an aluminum-based construction system that might be able to do that." 

One of the things I found most interesting about his story was his selection of materials. Instead of using a wood frame, he chose to frame the building with aluminum, so it was lighter and easier to place in a hard-to-access location. 

Tom Sandonato: "The aluminum extrusion has a profile . . . built into the extrusion that accepts this SIP panel. So it’s like an erector set. We make those SIP panels specific to fit within our structure, and our structure, as a giant erector set, a piece of giant IKEA furniture. Those SIP panels fit into the floors, the walls, and the ceiling, so you have this completely insulated box. And then we pop in our glass and whatnot." 

"The aluminum extrusion has a profile . . . built into the extrusion that accepts this SIP panel. So it’s like an erector set."

From a distribution perspective, Tom figured out something that no one other than Sears seemed to do. He leveraged the power of a household brand to sell his product. Starting in 2008, Design Within Reach, a modern furniture retailer, promoted the sale of kitHAUS on its site. A kitHAUS sold for between $29,500 and $44,900. But sales never really took off through Design Within Reach. Either Design Within Reach wasn’t Sears, it wasn’t committed to the product, or the tiny homes were too small for the price, ranging from only 100 to 289 square feet, which in most jurisdictions is below the size of a structure requiring a building permit. When Design Within Reach sold in 2014 to Herman Miller, they decided to amicably part ways with kitHAUS. You can still buy a kitHAUS directly from their website. It doesn’t require a foundation. 

Stillwater Dwellings & Matthew Stannard

There’s something very distinctive about the designs of Stillwater Dwellings. All the homes I could find pictures of had these amazing vistas. They all seem to be perched on some elevation overlooking striking scenery. The roof is the signature element, extending in a slope from the back of the home to the front in a dramatic canopy overhanging an outdoor sitting area, pointed in the direction of the best view from the property. I asked Founder Matthew Stannard to walk me through the process of selecting a Stillwater Dwellings home and what the design process entails. 

Matthew Stannard: "Often, people take a year to come to us. Sometimes people just pick up the phone straightaway. It varies a heck of a lot, the education process people take them through in order to do a high-end custom home. But about half the people have already chosen one of the 20 plans from our website and the other 20 want us to choose it, and then we'll always modify it to some extent or another. Sometimes a little bit, sometimes a lot. It depends on the site and their own needs."

"We try to make [buying a house] a little bit more like buying, say, a Mini Cooper"

Matthew Stannard: "Because people like our design, our look and feel, all the proven details are already drawn and specified . . . so it's easy to change the floor plan. We have the spine and wings approach, and so we can easily extend the spine or reduce it, or make it two stories, and then sort of plug in the rooms along the spine. And so it's a very versatile diagram of a design that we have, and we can do all this very quickly and easily without the need to reinvent the wheel, as far as detailing goes. . . . We try to make it a little bit more like buying, say, a Mini Cooper where you choose your car and then you can change the wheels, the upholstery, the mirrors, whatever, and have your design, your car, made very easily." 

Stay tuned for the next episode in this series on the future of homebuilding where I’ll explore companies that are using factories to construct entire boxes, called "modules," which are then shipped and assembled on-site.

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