Innovation in Residential Construction

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Innovations in Manufactured Housing

In 1999, an illustrated PATH document, Innovations at the Cutting Edge — New Ideas in Manufactured Housing, focused on creativity in the design and assembly of manufactured homes. This report introduced subdivision, infill, and design plans that used new urbanist ideals to incorporate manufactured housing into the surrounding neighborhoods. No longer did manufactured homes uniformly resemble rectangular boxes; they now had second-story additions, pitched roofs, and cathedral ceilings. Screened porches, decks, and garages are now typical options.

Steel framing is just one of many innovations currently being used in residential housing construction in the United States.

On discovering that valuations were inhibiting the residential construction business from adopting new technologies, HUD sponsored a building industry roundtable, Housing Innovation and the Appraisal Process, in 2001. New technologies increased the cost of a home, and builders were reluctant to increase the cost of their products. Homebuyers were often unwilling to pay for technologies not adequately reflected in the home’s appraised value. At the same time, appraisers were inconsistent in their valuations of innovation, and lenders were unwilling to finance properties of unknown value. The roundtable clarified everyone’s perspective and identified ways to resolve stakeholder concerns and move forward.

Identifying and Surmounting Industry Barriers to Innovation

In 2005, a PATH report, Overcoming Barriers to Innovations in the Home Building Industry, described the findings and recommendations reached by three investigative panels composed of housing industry leaders and stakeholders. Three expert panels — on risk, industry participant preferences, and education and communication barriers — sought practical insights into how each factor affected the adoption of new technologies. A review of the relevant literature yielded models of construction industry relationships and processes, models of innovation diffusion, and empirical information about the adoption of innovation.

International Exchange

Representatives of the housing industries of 12 nations met in April 2004 to share basic information about factory building practices, identify topics of mutual interest, and set an agenda for an international conference on innovation in manufactured housing. The PATH report, International Conference on Factory Built Housing: Innovation in Home Manufacturing, outlines the results of this meeting. The greatest interest expressed was in an exchange that involves looking at the business models used in other nations, exploring how different countries handle regulatory issues, examining case studies of housing technology transfer, and expanding the body of building science knowledge. Further plans are in the works for international exchanges to take place through conferences, field trips, and a website.

Adopting New Technologies

In 2003, PATH surveyed builders to learn more about their use of new building and construction products, materials, and practices. The results that appeared in The Diffusion of Innovation in the Residential Building Industry the following year found varying rates of adoption of new products, materials, and practices — even among builders who were leaders in embracing such technologies. Early adopters were less likely to be single-family production builders; more often, they were regional and national firms, multifamily and modular builders, and custom builders. Early adopters were also more likely to have a technology advocate within their organization who emphasized creativity and the use of resources such as those offered by PATH, as well as universities that provide easy access to content on innovative design and construction strategies. These firms were especially concerned with the risk inherent in new technologies and stressed the importance of working with established manufacturers who stand behind their products. Early adopters were also sensitive to homebuyer demand for new products and materials, and took the time to educate their customers on the value of new technologies.

Most of the respondents to this initial survey, however, were small to midsize builders. To learn how large producers adopt innovative materials and methods, PATH commissioned a second national survey. Eighty-four local, regional, national, and international firms who built more than 200 single-family residences in 2005 participated. HUD released the results of this second survey, Characteristics of Innovative Production Home Builders, in June 2006.

The survey results indicated that large production builders tend to be more innovative than smaller firms. Large producers have some advantages when it comes to implementing new building technologies: organizational depth, the ability to invest in research and development, a greater number and variety of technology champions in their ranks, and the capacity to form beneficial partnerships with manufacturers.

The larger builders also embrace more aggressive growth strategies that include incorporating innovative building technologies. Technology is considered part of a broader business plan that emphasizes enhanced quality, reduced callbacks, and higher performance as a means of increasing market share. Looking forward, the survey participants expect that energy costs, land costs and availability, and labor costs and availability will have the greatest influence on whether they choose to use new building and construction products, materials, and practices over the next 10 to 20 years.

The reports mentioned in this article are available from HUD USER as shown in the accompanying table.