By: Leslie Mann
June 24, 2010
They are the Rodney Dangerfields of new housing; they get no respect. Often misnamed and misunderstood, they are the exception to the rule. But for homebuyers like Jamie and Andrew Kach, they make sense.
Collectively called factory-built homes, they are built partially or completely in factories, then delivered to home sites by truck. They are outnumbered by conventional "stick-built" or "built-on-site" homes, but offer advantages to the buyer.
"It was way faster; the house was up in a week," Jamie Kach says, adding that they are leaving their Chicago condo for more elbow room and top schools in Highland Park. "I have friends who have built (stick-built) houses that took months and months. Also, this was much less hassle. We didn't have to wait for subs to show up or deal with weather delays."
Before meeting her builder, Neil Fortunato of Green Building Technologies Inc. in Highland Park, Kach wasn't familiar with factory-built houses. "He showed us that with a panelized house, we could have a high-quality house with our own floor plan and green products like spray-foam insulation," she says.
The Kaches chose panelized builder Sterling Premium Building Systems in Wausau, Wis., because Fortunato had worked with the firm before. After fine-tuning the floor plan with an architect, they met with a Sterling representative at Fortunato's office to choose doors, hardware, roof shingles, siding, staircase/railings and windows.
After the Kaches' house arrived, Fortunato's crew assembled the panels (floor, wall and roof sections), then clad its exterior in fiber-cement siding and reclaimed brick. Move-in day is slated for September, after the crew completes the interior work.
"When people hear 'factory-built,' they think of mobile homes," says Fortunato, who built two Sterling houses before the Kaches' home. "But once they get past the 'double-wide' idea, they're on board."
Unlike the old-fashioned mobile homes, panelized houses match or better their stick-built counterparts in design and quality, say their manufacturers. Ditto for modular houses, which consist of modules (completed sections), not panels.
These houses enjoy a different reputation in other parts of the world. "They are more common elsewhere, especially Japan and Sweden," says Emanuel Levy of the Systems Building Research Alliance in New York. "In many other countries, 'factory-built' equals 'high-quality,' so they don't have the stigma they have here." In England, buyers call them MMCs (modern methods of construction).
"We're building inside, away from the weather, so we can control the quality," says Sterling product manager Steve Wirtala. "Everything is plumb and square and totally customized. If there is a con, it's that things move fast, so you don't have time to make a lot of last-minute changes." He says it takes Sterling three months to build and deliver the house.
Manufacturers also tout the green aspect of building in a controlled environment. Less building material goes to the landfill, they say, because it is to their advantage to use products efficiently.
Although manufactured homes tend to be lower-priced homes, modular and panelized homes run the gamut in cost like their stick-built counterparts, from ordinary to ornate, depending on the extras and square footage. Modulartoday.com, a reviewer of factory-built homes, says manufactured homes cost $35 to $45 per square foot and modular homes cost $70 to $80, compared with $100-plus for stick-built. Numbers vary widely by region and builder. One thing for sure: Time is money. So the factory-built manufacturers' claim that they save homebuyers money does ring true when it comes to the cost of weather- and labor-related delays. Not to mention limiting the time the buyer has two mortgages and two real estate tax bills.
The notion of factory-built houses isn't new. In the early 20th century, companies including Sears, Roebuck & Co. and Montgomery Ward shipped home kits to buyers by railroad. Buyers or their builders assembled the pieces in paint-by-number fashion. In the 1940s, other buyers bought steel houses from Lustron Corp. Even architect Frank Lloyd Wright gave the idea a shot, with his 1950s "American System-Built Houses."
The greatest hurdle for the homebuyer considering a factory-built house is research. The manufacturers consider themselves a step away from the "end-user" (homebuyer) and typically deal directly with general contractors. Consumers' calls go unanswered. General contractors who know their factory-built-home stuff, like Fortunato, are hard to come by.
We have not, as an industry, learned to promote our homes," admits Vic DePhillips, chairman of the National Association of Home Builders' (NAHB) Building Systems Councils. "The buyer must make it his mission." He suggests cruising the NAHB's online directory of factory-built house manufacturers, then going to their Web sites to find links to local homebuilders. The NAHB directory only lists member companies and confuses the visitor by listing some companies under the wrong type of factory-built.
"I recommend visiting the factory too," adds DePhillips. "Everyone's Web site is pretty, like model homes. But at the factory, you'll see their work firsthand."
Like the stick-built housing industry, the factory-built industry has been hit hard by the recession, say the manufacturers. Although no one tracks numbers of all types of factory-built houses, housing consultant Fred Hallahan of Hallahan Associates in Baltimore, says Americans built 13,000 modular houses in 2009, down from the 2005 peak of 43,000. "It is bleak now, but no more bleak than the overall housing market," says Hallahan.
Inhibiting the growth of factory-built houses, says Hallahan, is "the perception that you don't get a choice of designs. But with panelized and modular, that's not true."
Factory-built houses are more concentrated in some towns and cities than in others for good reason, explains John Perry, chief executive of Contempri Industries Inc., a modular house manufacturer in Pinckneyville, Ill.
"Sometimes, we are excluded because a town is union-controlled," says Perry. "They don't allow permits for anything 'factory-built.' But other towns, like Antioch, are fine with it and have even gone as far as to send their inspectors to our factory." In states that are "home-rule," like Illinois, he adds, each municipality is free to set its own rules. "So it's like having 32,000 little countries, each with its own rules," says Perry.
Contempri's best market, says Perry, is "scattered lot," as opposed to large-scale developments. "The individual builder with a buyer calls us," says Perry.
Meanwhile, the "mobile" home has evolved into a different animal. Since 1976, when the Federal Manufactured Home Construction and Safety Standards (the "HUD Code") kicked in, it has been called a manufactured home. It includes amenities once restricted to stick-built houses such as tray ceilings, whirlpool tubs and walk-in closets. According to the Manufactured Housing Institute, it can be built for 10 percent to 35 percent less than stick-built houses and appreciates in value with time.
Although the number of factory-built homes may never catch up to that of their stick-built cousins, diligent buyers who recognize their advantages will continue to build them one at a time. If in doubt, visit the game board published in jest in a recent Dwell magazine. If your answers to these questions are "yes," then a factory-built house is for you, according to the game: "Got land?... Are you aware that you have to pay for shipping, like for a pair of shoes, only much larger? ... Do you understand that you provide the foundation on which the (house) will rest?" On the other hand, if your answers to these questions are "no," then this type of house is not for you.