From the June 2006 issue of New Urban News

New housing manufacturing system tried at TND

Robert Steuteville

 Photo by Robert Steuteville

New Town Builders of Denver, Colorado, is testing a new manufacturing system for houses in traditional neighborhood developments (TNDs) that the company hopes will reduce defects, cut costs by 20 percent, and reduce construction time by up to 75 percent.
The system, developed by Cohen Brothers Homes of Denver, involves building a 30,000 sq. ft., 52-foot-high, prefabricated structure on the site of the future community. Within this structure, 30 to 40 employees will assemble houses, five at a time. At first the process will take about a month per home, but Cohen Brothers believes cycle time could be reduced to two weeks when kinks in the production are worked out. Once each 30- to 50-ton house is completed in this weather-protected setting, it is trucked over private streets to the lot where it will permanently stand. Cohen Brothers, a long-time commercial contractor in Denver, created the system and won the 2001 Innovative Housing Technology Award from the NAHB Research Center and Popular Science magazine, but this is the first time the system has been put in place in a development.
prototype project
Known as the Whole-House Building System (WHBS), it is now being tried at Tollgate Crossing, a 237-unit project in Aurora, Colorado, that has TND features. The test is big enough to prove the technology, Gene Myers of New Town Builders told New Urban News. If everything works as expected, the system will be scaled up for use in several larger projects. The houses will be the same models, designed by Braun & Yoshida Architects of Denver, that New Town Builders has already successfully built and sold in three mixed-use TNDs: Belle Creek, Bradburn, and Stapleton. The first houses are scheduled to roll off of the assembly line this summer. The test will include detached and attached houses. (Attached units will come out of the factory missing one wall — a party wall to which they’ll be joined at the homesite.)
New Town Builders is one of a handful of relatively large regional builders in the US focusing on traditional neighborhood development and New Urbanism. The company is expanding rapidly, with more than 5,000 units at nine projects under construction or in the pipeline (see sidebar on page 4). Myers believes the system will help his company meet tough competition from national builders, particularly on virgin land. “Smart growth is working very well on infill sites, but we’ve experienced a lot of challenges on greenfield sites,” he says. WHBS will help meet those challenges, Myers says, because:
• It brings mass production advantages to the largely stick-built industry, potentially reducing costs and defects.
• Unlike factory-built housing, this system does not have to conform to the dimensions of highway bridges, or use modules that do. Conventional manufactured housing has always been limited by the realities of shipping, Cohen Brothers notes on its website. “The width of a road lane, length of a maneuverable trailer, and height of a bridge overpass do not conform to the dimensions of a comfortable American home,” the company says.
• The system is especially well suitedto TNDs, where houses are generally more compact, vertically proportioned, simpler in massing, and often have detached garages, Myers believes. “Our houses are not like those Texas designs with multiple gables and attached garages,” Myers says. “How do you take one of those down the street?”
To understand why New Town Builders wants to stake its future on WHBS, one has to understand the company and its market area. Myers is committed to bringing “high design” in both neighborhoods and houses to a broad market. Belle Creek, the 1,000-unit development where Myers wants 50 percent of the households to be those making 80 percent of the median income or less, is located in a ruthlessly competitive, rapidly growing part of the Denver area. “When we started out we had 4 competitors, now we have 96,” he says. The competitors include many national builders selling houses by the square foot, says Myers. Sales in Belle Creek have slowed in recent years, and New Town Builders has been unable to a charge a price premium, like that of many TNDs, in this project. New Town Builders’ construction costs are typically $10/square foot higher than the national builders, which are in the $60 to $70/square foot range, he says. Two ways of dealing with this problem — compromising design standards or giving up the goal of competing with national builders on the metropolitan fringe — have been rejected by Myers so far.
Cost advantages of national builders
The national builders have three primary cost advantages, according to Myers: 1) Less expensive financing; 2) Lower “cycle” or construction time per house — it takes New Town Builders 90 days to put up a house, but the national builders can do it in 70 days or fewer; and 3) A more direct supply chain. National builders have volume national contracts for materials, while New Town Builders gets materials from a regional or local supplier, at higher cost.
The cost of finance issue was addressed last October when the Tierra Group of Durango, Colorado, owned by the Southern Ute Growth Fund, purchased a 49 percent stake in New Town Builders. The Growth Fund is a $2 billion, triple-A rated arm of the Southern Ute Indian Tribe, giving New Town Builders access to low-cost capital. “That drops our finance cost down to or below that of the national builders,” says Myers. The Tierra Group is also developer of a TND in Durango called Three Springs, designed by Duany Plater-Zyberk & Company, making Tierra another significant player in TND in the state. New Town Builders and Tierra Group emphasize affordable housing, community building, and environmental protection, Myers says, making the partnership a good one on philosophical terms.
The cycle time will be slashed by the WHBS — down to an estimated 20 days — for several reasons. First, construction is not constrained by weather or by lighting conditions (multiple shifts can be added as need be). Second, and perhaps more importantly, construction can take place on many aspects of the house nonsequentially and simultaneously. For example, mechanical systems can be installed prior to the roof being put on, or sheetrock can be installed prior to electrical wiring, according to Partners for Advancing Technology in Housing, which is providing technical assistance to the project.
supply chain addressed in phase two
The supply chain issue will be addressed in the second phase of this experiment, Myers says. After the technology is proven, Myers envisions having a central plant near a rail line with access to materials that can be purchased in bulk, bringing the costs down close to those of national builders. The central plant will produce panels that will be shipped to plants at each of the TNDs, where the final assembly and construction of the houses will take place.
This article is available in the Month(s) 2006 issue of New Urban News, along with images and many more articles not available online. Subscribe or order the individual issue.