Why Hasn’t Offsite Construction Fixed Housing Affordability?

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Mike Collignon: Hello again, everyone. And happy Arbor Day. That wonderful day where so many trees are planted around the country, helping to provide oxygen and carbon dioxide. I hope you're able to pitch in with your shovels and your work gloves and.

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Sam Rashkin: The mic. It's not really Arbor Day.

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Mike Collignon: But what do you mean? It? It says so right here on this calendar you sent me just last week.

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Sam Rashkin: No, no, no. That's part of an elaborate April 1st joke.

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Mike Collignon: Really? I mean, I thought it was odd that I got a 2026 calendar so late in the year from you, Sam, but you got me. Nice job Stan. Nice job bud. Oh, hey, April Fool's jokes aside, we're back for our sixth year of housing 2.0. Yeah, that's no joke at all. Now, my name is Michael Collignon. I'm the housing 2.0 program manager.

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Mike Collignon: And if any points you have questions, please don't hesitate to reach out to me via the chat box or by email. And I'm going to put my email in the chat box in just a little while. I am joined by my partner in crime and creator and teacher of the housing 2.0 content, Sam Raskin. That content is based largely on Sam's latest book, housing 2.0 Disruption Survival Guide.

00:01:18:04 - 00:01:42:15
Mike Collignon: The full program was established to help empower you, our building professionals, to design and construct higher performance, healthier, more sustainable homes at a fraction of the cost. Now, before all this came about, Sam had something to do with the Energy Star program and what used to be called Zero Energy ready Home programs. Maybe you've heard of those. Sam's going to lead today's seminar and also address your questions at the end.

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Mike Collignon: Now, before we get started, we need to recognize our main sponsor, and that is Panasonic. Panasonic Healthy Indoor Living Solutions is helping builders across the country differentiate themselves with powerful, code compliant and cost effective indoor air quality solutions that provide a safer environment for home buyers. Now, for those of you who might have been with us before, we're going to offer something a little different in 2026.

00:02:04:23 - 00:02:22:18
Mike Collignon: We're going to have four webinars, one each quarter. And we're also going to have some live in-person events. In fact, the first one is going to happen in Houston three weeks from today. So if you're anywhere in Texas and want to hang out with Sam in person, come on down to Houston. Check them out for complete Housing 2.0 information.

00:02:22:24 - 00:02:50:25
Mike Collignon: You can simply go to Green Builder media.com/housing-2.0. Now, during the course of today's presentation, you can submit questions for Sam. Simply use the Q&A function that's at the bottom of the zoom window. I'll review those questions and pose those to Sam after his presentation. All right, Sam, no more fooling around now. Let's talk about satellite construction.

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Sam Rashkin: We're good to go, Mike. And thank you. Thank you, everyone, for attending. Thank you, Panasonic, for being our sponsor for this seminar. And let's dive right into today's topic, meeting the Promise of Industrialized Construction. I'm confident all of you have been hearing a lot more the last 4 or 5 years about industrialized construction. We'll talk about why, we'll talk about challenges.

00:03:14:07 - 00:03:43:27
Sam Rashkin: We'll talk about a lot of what to expect moving forward from this important, emerging part of the industry. So here's the agenda. First, we'll start with the problem. A housing industry in crisis, and then the promise and industrialized construction segment of the industry that's uniquely addressed to address that crisis and come to the rescue. And third, we'll talk about the challenge widely, failing to meet the promise for such a long stretch of time.

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Sam Rashkin: And then finally, we'll wrap up with what do we do to actually meet the promise? What recommendations can we offer to get this ball rolling? So that's where we're headed. And let's first also get back to Mike's comment about the works workshop series this year. We're in Houston, April 22nd. Denver, May 8th. San Diego and Tampa are roughly scheduled September, October.

00:04:08:29 - 00:04:33:04
Sam Rashkin: And we're really excited this year with kind of the the content, I think, a lot more actionable and relevant. It's now featured under the seven Habits of Highly Effective Sector Builders, and we provide powerful fundamentals for better homes at lower cost. And I promise everyone, everyone that attends will have immediate actions for substantial cost savings and added value.

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Sam Rashkin: So we hope many of you will join us in person. And let's move on to the problem. Why an industry in crisis? Many of you heard me talk about, these, these issues before. So I always like to quickly review this context so quickly. Housing is really, crisis is really comes in four parts. There's a price income disconnect is shrinking, workforce is glacial productivity.

00:05:01:13 - 00:05:28:28
Sam Rashkin: And then there's this growing awareness about the significant regulatory burden. It's both friction and cost to the industry. So just quickly just establish these and move on. So let's talk about the price income disconnect and start with you. Obvious point that we all your news about everyday housing just not attainable. Sorry, 77% of US households cannot afford a median price.

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Sam Rashkin: New home from in this latest study. And it's just causing financial anxiety. It's it's creating tremendous pressure in the market on the industry. This is huge. So, the best way to show this is the contrast just since 2000 and, today. So here's a map of the country. This is from, the Joint Center for Housing Studies at Harvard University.

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Sam Rashkin: And this shows that home price to income ratio, via these, various color shades. And you see that you go from under 3 to 10 and over where the more affordable or the, smaller price to income ratio is in blue and you scale down to the dark colors. So in 2000, 65% of the 100 largest markets were affordable.

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Sam Rashkin: The price income ratios were below three. And here's a map showing all the markets that were affordable. And it's stunning when you then fast forward to, 2022 and you look at these, colors, you know, kind of light brown, red, dark red that are 5 to 8, 8 to 10, ten and over ratio. That's when five is considered severely financially burdened.

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Sam Rashkin: And you've gone to now a point where 50% of the 100 largest markets are in severe financial burden. And of course, you have the intense markets like the coast of California and Hawaii that are blowing past ten. This is not sustainable. And the reason it is, is the growing gap between income and price just creates havoc on the market.

00:07:14:09 - 00:07:36:14
Sam Rashkin: I love show palm is, chairman, the CEO of telomerase Essence. This is not just sustainable cloak, because it's not just me saying it. You know, that consumer has to be able to afford a product at some point. Now, this just kind of caves in on itself. So that's number one. Crisis first of four parts. The second is the workforce.

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Sam Rashkin: And we begin with the trade shortage. Every year we report on the numbers, latest findings. Now, the latest surveys are 94% of construction firms are still struggling to find workers. So we know this issue is not going away. And even more to that point is this, study from the Home Builders Institute that shows 42.5 is the average construction worker age.

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Sam Rashkin: At the same time, they're finding that for every five aging workers that retire from the industry, there are only two in the pipeline to replace them. Another study suggests 1 in 5, only one to replace every five that retire. So we have like a tsunami of even increasing ramping up workforce shortage. And we don't have replacements for the retiring workers.

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Sam Rashkin: Then we can move on to glacial productivity. Housing is the only industry that's in decline over the past 50 years. 50% decline in home builder productivity since 1968. While every other industry has become more productive and visually, it's obvious. Here's a picture from the Smithsonian Archives of the home under construction in 1877, in Nebraska. And fast forward 150 years.

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Sam Rashkin: And it's shocking how little innovation has entered how we build our enclosures. You still see all the products strewn across the jobsite. Not very safe working conditions. Just a lot of waste. More excessive amount of wood for what we need. All the same issues that we had 150 years ago are evident today. And also the numbers in terms of what it cost the industry because of that lack, lack of productivity, are just not we can't keep absorbing them.

00:09:26:16 - 00:09:59:01
Sam Rashkin: McKinsey and company pegged it at about $200 billion, a labor productivity gap that could be closed by adopting 21st century manufacturing methods. If you look at the, change in productivity since 1950, and you look at the increase for construction versus the economy wide labor productivity, it's about 35 times greater economy wide than for construction. And then the last, four parts is regulatory burden, local state codes.

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Sam Rashkin: There's just no uniform building code in the US. There are four separate models. Model codes that are used as guides, to compose hundreds of similar yet different local codes for all the local jurisdictions and states will add their own amendments and changes becomes havoc for anyone trying to build a product nationally. When you had that much variation, could you imagine a car or appliance manufacturer, or any product where you had to build different state by state and sometimes different local jurisdiction by local jurisdiction?

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Sam Rashkin: Hundreds of similar yet different local codes. And it's a real barrier to kind of having a product approach to the industry. And also, suggests that we have really, significant granularity in the climate requirements. It's 16 International Energy Conservation Code climate zones in the US, you know, eight in the United States, and you have eight in the dry state marine climates.

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Sam Rashkin: And then you have a state like California that will have 16 climate zones, just all on its own, completely unaligned with the national climate code. So, you know, everywhere you turn regulations that trying to make it simpler, it's making it harder for the industry. And last, well, we have some good news. Now, we do have a national code for the industry, but it's only for HUD code homes.

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Sam Rashkin: And, these homes had their whole separate code. It's a code that hasn't been updated in a long time. And a new update is coming. But it's a single national standard. It has a much more simple climate zone, segmentation for the country now three climate zones one, two and three. And they're, they're, move a foot where the piers chassis requirement may be removed, which imposes significant constraints on some, how the product can be applied.

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Sam Rashkin: So that's the good news. The bad news, though, is you have substantial local restrictions that block it from most major suburban communities. And so you you have a, a roadblock to really increasing traction in that industry. At the same time, there's a lot of site builders are moving out to markets where the hard code builders have traditionally dominated.

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Sam Rashkin: You know, the more rural, and exurban locations, you see some movement by more builders. So that's kind of the landscape for all these, crisis points. So let's move on to the promise of industrialized construction. And the key point I want to make is basically addresses the three primary issues that are within the control of the industry.

00:12:35:19 - 00:13:06:16
Sam Rashkin: Regulations are not, you know, they can't change on their own. But in terms of cost, workforce productivity, this industry is uniquely set up to address all of this with tremendous improvements and outcomes. And so what are these industrialized construction options for these four main options. And then the hybrid, the four main options or the kits, they're typically today used to be for how home kits.

00:13:06:16 - 00:13:32:14
Sam Rashkin: But today it's relegated to framing packages for the enclosure. And then in panels you have a whole array of different options. You can buy a traditional frame panel, a structural insulated panel, insulated concrete, panels. And then you can buy even precast concrete for both below and above grade. And on volumetric you have modular finish, blocks or building blocks, and you have modular unfinished building blocks.

00:13:32:16 - 00:13:55:09
Sam Rashkin: And then you have the HUD components would qualify as the volumetric option as well, where restrictions do not apply. And then 3D printing, that can either be done in the factory and then shipped to site for the 3D printer itself. Is can be brought out on site and use or print the homes directly on the foundations. So we have all those four options.

00:13:55:10 - 00:14:18:24
Sam Rashkin: In addition, you can do some mixing in that match. Mostly that would be panels and modules, you know, for the big spaces, a lot of lot that a lot of trades involve, rooms like bedrooms and great rooms. You might do panels, but for the kitchens and bathrooms, for the tremendous number of trades, you would build those in a plant, drop them in on site and use panels for the rest.

00:14:19:00 - 00:14:48:12
Sam Rashkin: So all that trade intensive work can be done in the plant. The other big advantage of that is to the degree in most cases, that you can set the kitchens and bathrooms to ship 8.5ft for less risk. You avoid having to get a special permit for transporting, having a trailer vehicle, tremendous reduction in shipping costs. So modules were shipped, a fraction of the cost of trying to ship a big full housing model that's 14 wide and 40ft long.

00:14:48:12 - 00:15:10:10
Sam Rashkin: We're shipping. So that's the landscape. Walking through the system, I mentioned that were turning of the century. And in the early 20s and 30s, you had these kid homes uses the most famous. This is when I visited in Sanibel, and at the time it was sold in 1925. You buy this home for about $2,200, and it came with 30,000 pieces on the right.

00:15:10:10 - 00:15:37:26
Sam Rashkin: You see, an advertisement for, one of these kit homes. And it was extraordinary that they could do this at that time. Today, as I mentioned, you're limited mostly to, framing packages where you send off your CAD drawings to the plant. They basically cut and ship the panels ready to install in order in sequence and numbered so that you have substantial quality control, because it's really hard to make mistakes.

00:15:37:26 - 00:16:07:19
Sam Rashkin: You know, the piece that should be attached to the next piece is hard to get wrong. So, these are out there, and these reduce waste. They reduce time, but they're much more limited industrialized. Role in the in the construction process. Next up up is framing panels. These are traditional panels built in a factory, often not very sophisticated, assembly lines and equipment and, robotics and so forth.

00:16:07:19 - 00:16:26:25
Sam Rashkin: But they, you know, their degree, they, they built in a controlled environment the advantages. But then you have the transportation and you see the crane has to be on site for a full day. So you had these trade offs and you had some redundancy in the panels where they know one panel meets another and walls meet walls.

00:16:26:28 - 00:16:55:19
Sam Rashkin: When you have, as I think they're just some additional framing materials that you need, some people and companies have had gone on to do high performance, low panels, as is humanity, homes and a wall to make a very high performing wall. Built to some the most rigorous, energy efficiency, guidelines and the homes assemble and, just equally, esthetic to traditional site built homes.

00:16:55:22 - 00:17:26:15
Sam Rashkin: And then you have structural insulated panels or elegantly simple parts to install. And what I love about those panels is you have no really opportunity for vapor flow through the assemblies and moisture flow to the assemblies, to the degree that the, where the panels meet is, try to put a tried and true detail. So you start on the joints and take joints and it's it's a lot less risk management than for traditional framing.

00:17:26:17 - 00:17:52:27
Sam Rashkin: And so it has a lot of attractiveness. It saves a lot of time. Then, you know, they go up and they can look just like traditional homes. When you see them assembled, you just see how inherently, dimensionally accurate they are, how how strong and durable they are with the two skins and impact resistant. And you know, lots of damage to these systems, insulate concrete panels is like the inverse of, concrete block.

00:17:52:29 - 00:18:15:12
Sam Rashkin: You have the styrofoam on the outside, you pour the concrete in the middle, the very light and easy to carry on site install. They have these metal in search of plastic inserts that are for attaching cladding and drywall on the inside. Again, you see the numbering systems to ensure the right panels are drawn with the right, panel next to it.

00:18:15:17 - 00:18:53:25
Sam Rashkin: And then they assemble to full home concrete sporting. Again, these are pretty elegant systems, but they're a little bit of labor intensive, requirements here. And then there's precast concrete, kind of mostly relegated to foundations. But I think in a world of increasing acceleration, disaster risk, no impact resistance, fire resistance, pest resistance, tornado resistance, almost every element of what risks you face in a home, these kinds of wall assemblies are brutally, bulletproof to almost anything.

00:18:53:27 - 00:19:22:10
Sam Rashkin: Earthquakes is probably the only one you have to have. Maybe some details there. But also, they saved about 70% concrete for foundations that you would normally need. And the company insulated our tent. You can put extra insulation to cavities ready to attach to drywall. Finished. Some really nice attributes of these go in much, much more quickly in the case of the foundation than you would to warm and pour and tear and all the things you have to do with a conventional poured concrete foundation.

00:19:22:16 - 00:19:47:07
Sam Rashkin: But also you can use them for above grade walls. And then there's, modular, which is also known as volumetric construction, where you build a box and you assemble it in the field. So you're shipping a full box, it can be finished, partially finished, fully finished. And mostly you'll see this in and, multifamily housing, hotels, building types.

00:19:47:07 - 00:20:09:24
Sam Rashkin: We have repetitive building blocks that really just are in the sweet spot for modular, but also used for conventional housing. So here you see a conventional home being lifted in place, you know, in virtually a day you have a finish line in stock and in a modern architecture, regular architecture. So more options now, this is the most advanced plant that I've personally inserted.

00:20:09:24 - 00:20:33:21
Sam Rashkin: If anyone knows different, let me know. This is audible and nap. Nampa, Idaho. Oddly enough, they service, I think, a large part of their products in California, but in the middle of the plant, a square donut in the middle of a donut if you all for an inch that 400,000ft² plants. We have 53, robotic arms building the walls.

00:20:33:24 - 00:20:57:29
Sam Rashkin: Then on the outside, the donut, all these walls that are made by the robots that are assembled and configured and wired and plumbed, and all the work happens there and then the panels are assembled on these rigs as well into modules, and then they're shipped out to site and installed, in this case multi-family, project. The software is really can just handle a lot of customization.

00:20:58:01 - 00:21:20:27
Sam Rashkin: You can do a lot of changes that shutting down the, the production line. So some really amazing advanced, capabilities there. But you got to see the beast, and then you got to keep this plant churning. There's such a huge CapEx investment to have a facility like this operating. So it's a that's huge, but this is a product.

00:21:21:00 - 00:21:45:10
Sam Rashkin: Yeah. This is 40%, 40% cycle time savings is a huge cost benefit to the builder developer. And again, the quality and accuracy and strength advantages in a plant, can be very impressive. They tout about a 20% reduction in costs, for particularly in a high cost market like California, where they build many of the projects and they're coming in about $100 a square foot.

00:21:45:13 - 00:22:10:12
Sam Rashkin: This is a little bit old data, so might be higher now. And then you have the combination of modular and panels. Plant prefab in Los Angeles is a very impressive specialized, facility. They have, a lot of capabilities, but I find them unique and they're, investment in world class design solutions. I think these are beautiful boxes.

00:22:10:14 - 00:22:32:19
Sam Rashkin: They have really a great attention to detail, good architectural design, really invest in higher quality materials. And simple if you go to any of my workshops, is a huge cost saving, benefit on the first cost and then the home ownership cost. Okay. The ability to replace a simple roof versus a complex roof is very, very different.

00:22:32:21 - 00:22:58:02
Sam Rashkin: So very interesting company. What they're doing and quality the finishes and certain trim is very different from the reputation. Most modular product has is kind of a weak sister to site build types in the industry. And then there's these core modules I mentioned for very labor intensive and trade intensive spaces. You do this in a plant at a fraction of time and cost and, and burden.

00:22:58:02 - 00:23:22:10
Sam Rashkin: And to have just your full kitchens and bathrooms drop down can be a real cost opportunity for builders. And the last segment, you know, the kind of the additive, manufacturing, or everything up to now has been kind of subtractive. We bring materials to a plant, and you cut away to get the product you want the one exceptions precast concrete but additive manufacturing, you just use materials for what you need.

00:23:22:10 - 00:23:47:01
Sam Rashkin: You you print just to a printer prints the with ink. But you're printing at home. This is a product, built in a plant. Very likely applications to use, the cabins and such. You know, there's certain building types that would be conducive to doing. But, most of the 3D printing growth I've been seeing is on site with printers usually printing concrete homes.

00:23:47:04 - 00:24:15:21
Sam Rashkin: So their question is whether the market will embrace the design esthetic of concrete or not. Embrace it. But you talk about a home that's in fact resistant, pest resistant, water resistant, fire resistant. You start to realize there's a half dozen sandwiches and risk reduction and insurance cost savings and so many other factors that you have to weigh to finally get to what's the right, way to build and concrete has some interesting possibilities.

00:24:15:23 - 00:24:42:29
Sam Rashkin: So with all that, where is the country today and has a stand with other countries? And I frame this as delayed promise because you look at the other countries and where they're at, basically today is Japan's about 15% year. May 20th, Sweden 45 and Scotland 75. I'll get back later to Sweden. It's 45% for both multi-family and single, but in single family it's 85% of the market just for that building type.

00:24:43:02 - 00:25:20:19
Sam Rashkin: And U.S. is stuck at 3%. So you know, there's no a lot of reasons why I believe it's not happening. And we'll talk about that in the next section. What's what's the challenge? Why are we sailing to meet the promise of industrialized construction in the US. So, you know, I had the privilege when I was a national director of Energy Star to try anything and work with a great group of, collaborators on the team to figure out how do you scale, innovation, like energy starting to the market.

00:25:20:22 - 00:25:47:20
Sam Rashkin: And, you know, none of us came here with the skill or or knowledge how to do it. So we had the privilege to try and learn. And I became obsessive reading and documenting everything I could about, in hindsight, what why did why why was the program so successful? What did we get right and what fundamentals could I extract from, that experience that could be applied over and over again to scaling innovation?

00:25:47:23 - 00:26:07:19
Sam Rashkin: And one of the most significant I have a whole list of them and not enough time in the seminar to go through that. That's a whole other presentation. But one of the most, inspiring resources I found was a book, Inside the Tornado by Jeffrey Moore. Although it's really, it's all based on experience in the tech industry.

00:26:07:21 - 00:26:37:13
Sam Rashkin: I thought everything that was, all the seminal findings from network were relevant. Almost any innovation. And it begins by suggesting that market diffusion curve that's generally portrayed as you see here, is a smooth transition from very few early adopters to tipping by starting to get to mainstream users. And finally, at the end, you get your full market training creation by collecting the last laggards who haven't embraced the innovation.

00:26:37:14 - 00:27:07:28
Sam Rashkin: So this over decades, this has been the accepted way to portray the market confusion. Sometimes it's down with a bell curve. This is another form just for the market penetration rates. But what you're actually more basically speaks to and I've curated is, is conclusions to make them more simple. So don't blame him for this particular framework. But basically look at everything he said.

00:27:08:00 - 00:27:38:21
Sam Rashkin: I could basically say that everything that was, unique behavior to early adopters in three key points, not why they accepted innovation early. The cost worked for them because they value the innovation benefits at such a higher level than anyone else. So if they want to use a Laserdisc early and cost $20 a Laserdisc, when a VCR tape cost $2, they would do it.

00:27:38:23 - 00:28:06:13
Sam Rashkin: They just their cost value equation was way higher, and they didn't care about the friction and having to know, having to figure things out on their own or 2 or 2, from working groups to, understand the technology. They didn't care. And they also didn't worry about the uncertainty. They managed the risk, or they would go again and, and, find solutions on their own.

00:28:06:16 - 00:28:38:02
Sam Rashkin: This was this is just a unique behavior profile for early adopters. And what the kind of epiphany kind of point that, that really comes out of the book is this is diametrically different from mainstream users. They reject almost any cost, increased business as usual because they don't understand the value of the innovation anywhere near as the zealots who are the early adopters and they don't want any friction and want to just keep doing it the same way.

00:28:38:09 - 00:29:07:15
Sam Rashkin: And they want to deliberate and deliberate and deliberate, and they don't want any uncertainty that they just have such low risk. Consumers in the marketplace so completely different. And the outcome is that this transition is a continuity. Instead, it's a cost, in fact, no less. You're able to figure out the cost friction, uncertainty equation. You fall into this chasm and you kind of flatline.

00:29:07:18 - 00:29:38:27
Sam Rashkin: So if you see lots of innovations that never got traction, six there's never got traction. I can always find the cost friction key barrier that's just not being addressed by that industry, geothermal systems or fault detection diagnostics. So just a lot of, innovations that just get stranded flatline or just we lose them all together. And this was so helpful for help understanding why Energy Star was successfully addressed.

00:29:38:27 - 00:30:04:07
Sam Rashkin: The cost friction, uncertainty now without bumps in the road. But eventually we did. And now of course, you know, pushing 4 million certified homes. All the codes basically have been moving in lockstep with Energy Star, increasing their rigor to the point where the latest codes are a zero ready enclosure. Know the 2021 at 2024 SEC. All right. Very impressive enclosures.

00:30:04:09 - 00:30:37:15
Sam Rashkin: So this is unique and new and important. So industrialize housing has challenges with all of these scaling factors that I just mentioned. On the cost side one, the designs are not optimized for the planet. Normally what happens in the marketplace is a builder, a homeowner, or some entity that's going to build those a plant. They have designs, and the plant has to configure somehow their product to align with that design plan.

00:30:37:17 - 00:30:58:17
Sam Rashkin: And that's crazy. What are the products you would never go? Would you do that? You never go to a car dealership with a drawing for a car and say, I want this car. The extra cost that would entail for the manufacturing plant that builds a car to do what you want as an individual car designer would be off the charts.

00:30:58:17 - 00:31:29:12
Sam Rashkin: Expensive. This is killing the industry. We're not treating the house as a product. We say you go develop a design and then come to the plant and we'll figure this out. That's a huge cost penalty. Second, we have seven optimized field assemblies. We then often for many of these innovations I just walk you through earlier, you know, they just say here the sit panels, you go figure it out or here's no, no, here's, framing panel.

00:31:29:19 - 00:31:52:18
Sam Rashkin: The the field assembly has to be figured out. So it's completely optimized for construction. And then the large capital investment with uncertain demand is at so much cost. Could you have all those, fixed costs that you have to keep paying if you can't control the, the demand part of the business so you can build to a certain demand.

00:31:52:20 - 00:32:22:01
Sam Rashkin: So all of these combine to increase cost. And then on the, section side, too many players who make these industrialized products don't have set up services. So again, CIP plans or framing panels may not have set up services. They just want to sell the panels or this lack of whole product solutions like you again, you just get the walls, but then you have to have someone else, set them in the field.

00:32:22:03 - 00:32:43:25
Sam Rashkin: And when you as a builder have to figure out all these moving parts, remember, you know, the mainstream builder does not want that friction. And they can just not going to give up these hard earned trade, relationships that have taken sometimes years or decades to build just so they can use this one gets a wall enclosure solution.

00:32:43:28 - 00:33:17:07
Sam Rashkin: So all these create friction and block a lot of the solutions that are in the marketplace from getting traction. And the last part of the equation, uncertainty is, really just just as they, you know, builders are not going to take risks if there is uncertainty about the supply chain access and, and, how that will work. The, that can accept any uncertainty whether the trades will know what to do with the panels or how to do the wiring or the plumbing or, electric or they, they just don't want that aggravation.

00:33:17:09 - 00:33:44:19
Sam Rashkin: And then, sometimes there's still some code compliance issues with some of these industrial products where the local building inspectors just aren't on board yet. And there's so much uncertainty about the hidden value these innovations can provide. And so if you're not understanding that value, that cost value equation just gets ratcheted up so high, it makes it so hard to pull the trigger and move on to the innovation.

00:33:44:21 - 00:34:13:29
Sam Rashkin: So how do we meet the promise? What recommendations can I offer? So, there's some pathway here just to, scale industrialized housing and get faster, better, cheaper homes. So, oddly not. No surprise. I'm recommending we have to cross the chasm. And the first thing we have to do is mitigate the scaling barriers. Cost, value, friction, uncertainty.

00:34:14:01 - 00:34:36:19
Sam Rashkin: Two we have to look for opportunities to shrink the change. And we only can expect the building industry to absorb so much change at one time. And there may be some options for them to maybe get in with less friction. And we need to build on what's working. And look, if there are places where industrialized housing is scaling, what can we learn from that?

00:34:36:21 - 00:35:10:05
Sam Rashkin: So let's look at those, these recommendations. So first thing is again, we're back to, this killer, business model. We design a home, then we go to a plan that doesn't work. We have to design for manufacturer DSM. And the concept is that every element of the design process from inception, is mindful and fully addressing how the products manufactured in the plant and every part of the design integrates that.

00:35:10:08 - 00:35:39:28
Sam Rashkin: It doesn't have any impact on the design quality you get. You can get the same quality design that meets all the expectations of the home buyer without having to conflict with the best, lowest cost, configurations for how the plant makes their product. Now, this now this concept of design for manufacture comes from Six Sigma. I don't need to walk you through the key diagram step by step by step.

00:35:39:28 - 00:36:04:16
Sam Rashkin: But the key thing is that from concept, you know, the process you're going to use to manufacture the product, to optimize you attached to it. It's all this, kind of do loop of seeding, feedback that keeps making it better. And you keep getting final designs and restarting the process and getting better and better. Low and lower costs, better, user experiences all happening.

00:36:04:19 - 00:36:37:05
Sam Rashkin: So this is this has to happen. We can't just build to to some new design every time. So here's an example where one builder was really, really effective. Recognizing this, I don't know if he use the same terminology I did designed for manufacture that comes from, again, Six Sigma. But essentially this is how we're building science. Many of you may know Rob Howard, if you're in the high performance stage, and he's a wonderful speaker, he's an educator at Appalachian State and building science, but he builds homes as well.

00:36:37:07 - 00:37:08:11
Sam Rashkin: And so here he's offering, 200,000 lower under $200,000 product for for first time buyers. It's a two bedroom, one bath home. And the entire aspect of this home design is completely mindful of it's a panel enclosure. So it's a simple roof and it's simple for footprint. The spans for the roof panels do not require any extra trusses or structure.

00:37:08:11 - 00:37:36:11
Sam Rashkin: You have a ridge beam up the middle that can easily support the load of panels spanning from that ridge to the wall. And then you have, in the design. That center wall provides perfect location for posts to support the beam. You have no plumbing. The exterior walls, which is much better for SIPs. And because the SIPs are so efficient, a six inch sip wall can have more value than a four inch frame wall.

00:37:36:14 - 00:38:00:14
Sam Rashkin: You wind up with a four inch wall. Surround the entire front perimeter, getting you're getting two inches. So the floor plan like this. You gained about 30ft² of space. And then we'll show you that there's, the space over the, the volume over the bedrooms is used for storage. The volumes over the kitchen, dining, living is used for a, vaulted ceiling.

00:38:00:14 - 00:38:34:16
Sam Rashkin: So you have a better, higher quality design with the vaulted ceiling. And everything's on two foot dimensions because it creates less waste in the plant producing the panels. Easy to do. He comes up with a very, you know, really good quality design for an entry level product. And he's still under $200,000, using much higher quality finishes, materials trends, such a high quality window with cementitious board siding versus vinyl.

00:38:34:18 - 00:39:02:04
Sam Rashkin: It's higher quality kitchen appliances, higher quality cabinets and flooring. This is a starter home under 200,000 using suit panels and everyone says this is too expensive. We'll talk later how this is done. The next thing you have to do is design for assembly. When you actually design a product, we thinking, how will this be made in the field again from Six Sigma, design for Assembly has four key components.

00:39:02:06 - 00:39:41:29
Sam Rashkin: One is you want to minimize the number of parts, or one part can replace four parts. It's a huge closet. You want to have standardized parts instead of three separate parts. You want to go to where you have one part. So maybe use one nail stone, three different nail sizes and the cost savings. Having to stock and manage all those different nail sizes is, the savings offsets any extra cost for the where you may have a slightly bigger nail size, and you need, then you want to have orientation handling, minimize all these asymmetric parts and make it much harder and require perfect placement and harder installation.

00:39:42:02 - 00:40:07:21
Sam Rashkin: So think about how things will be assembled. And then also organizing how products will be delivered. So there's a lot less movement, with the materials and working on the materials. So all this kind of analysis is really done in the design process you do at home, but has repercussions in terms of cost savings. Every element of how it's nice after and optimized for how it will be assembled on the field.

00:40:07:23 - 00:40:32:08
Sam Rashkin: Okay. And then on friction, the several options. What we can do here. One is, you know, all the industries that provide just panels, I think would benefit so much. It's an either had set up services in-house or at least had all the logistics. So you could, they seamlessly connected you to set up services on the build. It wasn't having to have all this extra friction to find the best, set up service.

00:40:32:08 - 00:40:55:26
Sam Rashkin: It knows what to do with that panel and set it up, most effectively. And then I think more companies need to think about whole product solutions. Okay, you know what I if I just buy the exterior panels, I still need a framework to frame the inside of the home. Can we provide all the exterior walls as well as the interior walls and the roof, structure?

00:40:55:28 - 00:41:28:19
Sam Rashkin: So we have the entire enclosure or entire finished home. And then more for vertical integration. We'll create less friction because you can start if you're the developer and you're building the homes, you're the you're the customer and the plant at the same time. So you you have more, you have more certainty about, the production and on how the industry can grow significantly to the degree can get rid of these local restrictions on how to code product products.

00:41:28:19 - 00:41:51:07
Sam Rashkin: So the degree that I could industry can demonstrate more and more parity with cycle. I think some of these local restrictions can reduce friction trying to, enable that product to be a, viable option, not just in rural locations. And then you want to clarify the benefits. So we could do that by providing free preschool class designer plants.

00:41:51:10 - 00:42:20:16
Sam Rashkin: So taking initiative, making sure that the world doesn't see very bland designs when you use an industrialized option, which is just as, high quality designs when you use industrialized solutions and then you want to, I think, have take advantage of your, of, of the benefit that you have, building the plan with better quality, better cycle time and the ability to integrate better performance and back it up again.

00:42:20:16 - 00:42:45:21
Sam Rashkin: I mentioned a SIP plant has a SIP panel, has no pathway for moisture flow through the assembly. The way the panels are sandwich glued and pressed, firmly against the core insulation. Blocks out any vapor flow through the panel so guarantee there's no moisture flow through the panel for guarantee that it's more dimensionally accurate for guarantee, and it goes up quicker.

00:42:45:25 - 00:43:08:03
Sam Rashkin: There's all these things you can back up that the traditional systems cannot. And then there's true cost, bidding. There's a way to clarify all these benefits and quantify them. I'll give you more detail on that. And you want to earn trust. I, and get people familiar with touching, feeling, smelling. These innovations invite them to demonstrations where they actually see these go up.

00:43:08:06 - 00:43:22:08
Sam Rashkin: I've seen one, I've seen some manufacturers actually have these where they like local builders to see their system install the product. So I mentioned true cost bidding.

00:43:22:10 - 00:43:42:26
Sam Rashkin: And let me give you a sense of what that really entails. So I'll give you an example since I full disclosure, I do a lot of, consulting with the CIPs industry and developed a true cost cutting tool, use sets as an example, but I can use insulated concrete panels. Precast concrete. I can use volumetric.

00:43:42:26 - 00:44:08:11
Sam Rashkin: I can do this. I can do this with almost, almost any of the options. But you see, Rob Howard's plan on the left that we talked about earlier, very simple, optimized for six. And then you have the simplified simple roof. And then you have this cross section shows how the house is built. So you see you have the storage of, of the bedrooms and vaulted ceilings and the living space and have all this going for you.

00:44:08:13 - 00:44:40:09
Sam Rashkin: So the first thing of all these hidden cost savings, it's inherently goes in about one ACH this year or less, which is often, one third of the 350 target. Most builders shoot for it, which gives you more room to do pull back and other requirements. Maybe window, specifications will include equipment specifications because you're so airtight, but you don't have to pay for the or tightness that comes included when the panels are installed.

00:44:40:11 - 00:45:09:15
Sam Rashkin: Similarly, the insulation comes included. Grade one perfect insulation. No field work, so that's included in the price of the parts. That's not included in the price of the framing. And since the entire outboard walls of the enclosure have inboard sheathing, you don't need to cut the drywall to align with studs. You save all that cutting and all that material waste, so you have less drywall expenses for time and material.

00:45:09:17 - 00:45:31:21
Sam Rashkin: And then because it's so dimensionally accurate and it goes in, so at such high quality, you have less rework and your trim goes in perfectly, less fitting and matching. It's just savings there. And then it goes in. Maybe half the time of framing or a third the time, whatever it may be. Time is money. You have all the hidden cost savings of time.

00:45:31:21 - 00:45:56:26
Sam Rashkin: Most builders, the cost per day overhead, according to one study, is $500 a day. So you have 4 or 5 days that you say you're starting to get into thousands of dollars, and then you have the hidden added value. I mentioned about 30 extra square feet of space because it's a four versus a six inch wall. You have the condition storage and then the bedrooms, you have the vaulted ceilings that have a flat ceiling which adds more value.

00:45:56:29 - 00:46:22:08
Sam Rashkin: You have storm and impact resilience and wildfire resilience. And all this extra quality is dead straight walls. You pound on them, you feel how solid they are, how strong they are. All these value adders and cost savings are hidden. So, for the CIPs industry, this is a very simple two cost leading tool. So we take Rob Howard's project and just fill it in with the basic number, which is all you need.

00:46:22:10 - 00:46:48:25
Sam Rashkin: These green boxes. Here are the inputs. Next. The first two are names Duke Street Cottages, Granite Falls Square footage. Then whether there's a conditioned attic space, it's being used like for a room or, thinner walls, in this case, two versus six inches or conditioned attic storage. How much square footage you have and if you have vaulted ceilings, how much square did you have with that to put that in.

00:46:48:25 - 00:47:11:13
Sam Rashkin: And then right down here, automatically you get your numbers to the street called cottages. The total enclosure cost with framing was about 59,000. The total enclosure cost is six and 68,000. Some sets is 9000 more, which is normally what you're up against. You're looking at a bid package for framing. You're looking at a bid package for six. You got, 10,000.

00:47:11:13 - 00:47:36:03
Sam Rashkin: I can't add that to my cost, but you have all this said that you have $36,000. So the net benefit you had is that $27,000 cost advantage for six. Now, you may say, I cannot I don't want to be burdened, selling the extra value. I'm going to stay, but at least you're informed you know the numbers and you can decide what kind of building you want to build.

00:47:36:03 - 00:48:02:12
Sam Rashkin: You want to have the walls are getting stronger, more resilient, and you can make that choice and the details the tool provides, it shows you the cost for structure, insulation, airflow, drywall and, quality and time. What all those costs wind up being, and then the values that were assigned based on how the tools algorithm works, the quality and strength and dimensional accuracy were worth 1600.

00:48:02:14 - 00:48:26:25
Sam Rashkin: The resilience to what wind, wall, fire and impact were. 1200. Just the insurance this kind of loan probably could well offset, make this way understated in terms of its real benefit. There's no attic living space, but we did have the added space on the lower level, and we had that attic storage space so we didn't have to build a basement house for 15,000 with vaulted ceilings added value.

00:48:27:00 - 00:48:45:17
Sam Rashkin: So you see how you get your numbers, you're making a much more informed decision and you can still go with framing, but at least you're looking at a true cost comparison and can pick your spots when and if you would want to use an industrialized option. So true cost is real important. And I also think you should look at options.

00:48:45:17 - 00:49:06:28
Sam Rashkin: Maybe if you need to go slow, you need to get your feet wet and you want to replace a full trade. But this is an example of a new, company coming from UK to the US. Here you are. There's a pop up micro factory. This, container comes 40ft container inside of. It's a full robotic manufacturing system.

00:49:06:28 - 00:49:30:06
Sam Rashkin: You could put it in ten if this nearby, empty, warehouse space or you don't need a lot of space, but it's so low friction. It's it integrates assembly, cutting and link fastening. It's all done for you. Almost like a complete trade solution. Very repeatable as one. It's one system, and it's moved to the next house, the next house, the next house.

00:49:30:08 - 00:49:48:06
Sam Rashkin: And then when it's operating again, you can put a turn up, you can find a warehouse space. You need very little room. And it's making all your walls right off your cats, CAD drawings. And you're all you're good with. You figured out one trade that you could eliminate. So it's a it's a very small way to get into industrial housing.

00:49:48:09 - 00:50:16:22
Sam Rashkin: And maybe this is appropriate way for a lot of builders. The other option I mentioned is building on what's working. So, and the best example I can call your attention to is Sweden. I mentioned earlier 85% of single family homes there are built in a plant, and it's a completely vertically integrated business model. So up here in this spot is where logs coming from the forest and basically milled into lumber.

00:50:16:22 - 00:50:53:24
Sam Rashkin: They go into the plants and now come the best built homes in the world. Maybe. So. It's designed for manufacture. It's designed for assembly. It's mass customized designs that you choose from. You don't go to the plant and say, build me this design. You choose their world class designs, very advanced production lines that have been fine tuned and continuously improved decade after decade, and mitigate friction by having a whole product solution set up services and being vertically integrated makes it so much easier for them, and they have so much uncertainty removed because they have these great designs to choose from.

00:50:53:24 - 00:51:21:04
Sam Rashkin: It's a real product optimized for the consumer, and you go to a traditional retail center and make choices so much less, agony and, being overwhelmed than you do going to a design center when you buy a new home. It's such a simple way to get a beautiful new home. So here it is, advanced production. So before the design process begins, we know how and what these plants can do.

00:51:21:06 - 00:51:45:00
Sam Rashkin: So then we go and create products that are absolutely optimized for that production line. In Sweden, I notice they always use simple, elegant boxes, very efficient floor plans. They would never waste the volume of the attic like we do in the US with trusses. They use all that volume for a living space, so their homes are beautifully right size without hardly any wasted space on the floor.

00:51:45:00 - 00:52:18:13
Sam Rashkin: Plans. All their systems are integrated mechanical, electrical, plumbing, structure. Everything's all working as a system and optimized for production. And they mass customized choices create for the consumer great experiences, all optimized for how the panels are made. And then it's all designed for assembly. So I want to see your entire system has been engineered in the plant. They use a scaffold system that reminds me very much of what the siding replacement created on my home.

00:52:18:21 - 00:52:43:16
Sam Rashkin: But it goes up. Every part of the system is optimized to get those panels in place as quick as possible, as accurately as possible, minimize parts, optimize standardization. All the orientation and handling is optimized motion and how things move around optimized. They've got this figured out because they're building the same building blocks over and over again with mass customization.

00:52:43:18 - 00:53:05:00
Sam Rashkin: That design part is so important on the front end. And then the same thing for assembly, the they had the four decks and they had the, this decks just drop in. It's so elegantly simple. I mentioned the advanced production. You see the clog, the wood. They don't have roof openings. The windows fit precisely in the openings. Everything is made with such high quality.

00:53:05:00 - 00:53:33:19
Sam Rashkin: Takes very small number of people on the planet to produce entire homes. Just going to the plant every week. And same with the roof assemblies and laser technology for maximum quality, assemblies. And lastly, I mentioned the retail system is totally optimized as well, just where you can buy a car in the US by normally going down a street dedicated to car dealerships and see all the different car options and make a choice.

00:53:33:22 - 00:54:01:01
Sam Rashkin: There is a, retail center for buying homes in Sweden, and you can see most major manufacturers have the product there. You can walk them. You have all this curated choice of world class designs, optimized, convenient. You have comparison shopping, very simple transaction and uncertainties completely mitigated. So here's the kind of choices you can make. The first curated choice want be a budget?

00:54:01:03 - 00:54:27:29
Sam Rashkin: I want to spend $134 a square foot for your home. You know where to go and you have the designs that are optimized for the planet. If you move up to the next free choice to mid-range with another manufacturer, the price point is $169 a square foot. These numbers look old now. Might have gone up again. Optimized designs, everything is so simplified by treating the house as a product and you choose cabinets.

00:54:27:29 - 00:54:47:19
Sam Rashkin: You want some of the fixtures, you want and have limited choices, but it works so beautifully. And then on the higher end, use a home that's a 240 square foot and you see how simple the whole process is. The net is 85% of all the single family homes are factory built. And the three companies I just showed you are right here.

00:54:47:19 - 00:55:18:16
Sam Rashkin: I wore Nordic, my rigid hose and other yahoos are all here on that graph in, the top builders are making a thousand to about 250 homes a year, but you kind of get a sense just how this market's set up. So I'll wrap up by saying, something has to happen. We cannot impose all this financial burden because it's not just the cost of housing.

00:55:18:19 - 00:55:52:16
Sam Rashkin: As housing prices have increased exponentially, property taxes have have just fallen right in lockstep. They have gone up, insurance costs have gone up. Utility costs keep going up. Everything's going up. We have to mitigate and provide other options. So here today we're about 9% HUD code, 3% advanced manufacturing. And my forecast is by 2035 or 20% HUD, which is a two extra 9% at 20% advanced manufacturing seven zeros.

00:55:52:16 - 00:56:19:07
Sam Rashkin: So still 60% of housing I anticipate will be built with traditional conventional systems. We're not putting the framers and custom builders out of the equation. What we're doing is recognizing a big chunk of the market, at least 40% need a better option. They need to be able to buy housing that's been fully optimized. And the winners will be those manufacturing companies that apply these strategies across the chasm.

00:56:19:09 - 00:56:36:24
Sam Rashkin: I hope this makes sense. I thank Panasonic again for their generous support. They've been a long, long time. Housing 2.0. Partner, we couldn't be happier. And if you have any questions, Mike, I'll take those.

00:56:36:26 - 00:56:57:22
Mike Collignon: All right. Sir, we do have questions. And I was just putting in the chat box that, people can send in their questions. Now. Thanks. Those who have already sent in questions. Let's go ahead and get to some of those. John had a question, in regards to CIPs, you talked quite about a lot about CIPs.

00:56:57:25 - 00:57:08:24
Mike Collignon: You mentioned it's not been accepted or diffused very well. Can you kind of further drill into the why and how can they overcome that?

00:57:08:27 - 00:57:37:25
Sam Rashkin: Great question, Mike, and thank you for that one. Basically CIPs is probably fine with what they're doing. They're not going to scale because the cost value equation, the friction and the uncertainty are always going to limit it. So it's going to track at the flatline curve I showed you on the market innovation, chart that we showed earlier.

00:57:37:28 - 00:58:07:11
Sam Rashkin: So it's really designed for a, someone who wants just the highest quality wall assembly, where, you know, the installation is perfect. You know, it's a stronger wall to resist impact. You know, that it's it's just going to seal like it's just a sounder construction system. It's quieter home. They weren't there once. They had that cost value. Threshold.

00:58:07:13 - 00:58:28:27
Sam Rashkin: That's much higher than the mainstream. Buy it now to the degree that a builder like Rob Howery and more of them appear on the scene and start optimizing for CIPs, you can get there and have such increased. But already I'm seeing Rob Howard is now looking at modular and say modular might be even a lower cost option than the simpler.

00:58:29:00 - 00:59:03:25
Sam Rashkin: So it's where we wind up. It's hard to say, but I think CIPs are fine for now in the niche that they are set up based on the business model of the plants. The plants do not want to do the setup. They did not want to be vertically integrated and be the builder developer. They do not, provide solutions for framing the interior walls are going to still have to have the framing trade, plus the crew that does your setup of the CIPs, and you have still a lot of uncertainty in terms of limited suppliers.

00:59:03:27 - 00:59:36:17
Sam Rashkin: You don't know what kind of designs you can get with it because of not proliferating or class designs yet. So cities where it is, not because anyone's doing anything bad, it's just the business model being chosen will always tell me that that's the track they'll go. Now, there was one developer that was, that acquired a plant that was going to start, completely building for itself panels from that plant, but they wound up unable to get the funding they needed, and we never got to see how that would work.

00:59:36:22 - 00:59:46:04
Sam Rashkin: In the case of CIPs. But, that's the best answer I can give you. Just it's not set up to cross the chasm.

00:59:46:06 - 01:00:02:24
Mike Collignon: All right. More questions rolling in. So we appreciate those. I had a question from the Roy. Modular in the EU is far ahead of the US. What was the history of the acceptance curve there?

01:00:02:27 - 01:00:32:16
Sam Rashkin: I don't know the I don't know the exact curve acceptance, but the reason why modular is bigger in EU and Europe and UK is most of the housing in those markets is multi-family, which is right in the sweet spot for modular. And, you know, there's a history of building modular or multi-family housing projects that were always gone there, always even in the designs before modular was being is very conducive to modular systems.

01:00:32:19 - 01:00:55:14
Sam Rashkin: So modular provides a complete solution, a whole product solution you don't have to worry about or managing all the other trades. There's very low friction. You come to the site, you drop in the product and it's cost competitive because it just eliminates so much time, so much work with trades, so much quality oversight, so it can be done.

01:00:55:14 - 01:01:20:20
Sam Rashkin: There. Now we see the same thing happening with auto roll here in states there in Idaho serving service in California. And what I'm watching with great interest to see how they progress. But so far they're doing reasonably well from what I'm hearing from some industry observers. So and from someone who works at the company. So, we have a we have a precedent for how modular can work.

01:01:20:20 - 01:01:34:10
Sam Rashkin: Well, there's also a volumetric, company in Philadelphia that's been very successful for a long time. So, it's just not scaling, yet in this country.

01:01:34:13 - 01:01:51:29
Mike Collignon: So let's continue on with that line for just a second, Sam, because Kelsey was asking about examples of offsite in the US production builder market. And if there are examples, where are they doing well and in which ones seem to be the most advanced?

01:01:52:01 - 01:02:27:13
Sam Rashkin: Well, I can't think of anyone that's really crushing it in the offsite space right now. What I have been interested in is watching the Japanese acquisition of U.S. home builders go up exponentially the last five, seven, eight years, and the Japanese companies like Second Semi House have tremendous capabilities for industrialized housing. And what creates interest for me is how much they might want to introduce some of the industrialized expertise that they have into their American, market.

01:02:27:16 - 01:02:57:12
Sam Rashkin: So far, there's been very high resistance because the regulatory burdens are so great. I mentioned earlier that there are hundreds of different codes. Effectively, when you look at all the customized ways the four national codes are being adopted, and that kind of creates havoc on a production facility that needs to have a large, service territory to keep the plant functioning on a full two shift or three shift or, operation.

01:02:57:15 - 01:03:17:20
Sam Rashkin: So, so the regulatory burden is going to be a trick. And I hope, you know, I've been looking at options and solutions for making that happen, but, you know, what you can do is robots. All of those done, they picked a single large market like California, a market that needs a lot of multifamily housing.

01:03:17:23 - 01:03:56:27
Sam Rashkin: And they can address the code in California with a pretty, consistent production process that doesn't have to change much if they're building in San Francisco or Los Angeles or Sacramento. The housing can go in pretty much consistent from the plant. So, I think that's the way modular has applied here is you pick a market with a large amount of demand and, reasonably, basic code that you can build to that will address a large section of that state, and you can make it work.

01:03:57:00 - 01:04:17:09
Mike Collignon: So many good question. Sam. Let's keep in rolling. So let's talk specifically. Let's stay with the, let's go back to, I should say, to the Europe, question. Jack was wanting to know, are there any US based housing dealership locations similar to the Sweden example?

01:04:17:12 - 01:04:42:14
Sam Rashkin: Not one that I know, but you can go to individual companies and on their, at their plants will have 1 or 2 that you can walk through. Nothing like the Sweden, Swedish model where you go in and it's just like getting a brochure for a car company, you know, you you pick the model that you like, the Camry or the Corolla or the Avalon, but.

01:04:42:14 - 01:05:08:07
Sam Rashkin: And you get that, and then you pick through and you see your options for your leather seats or regular seats, your options for your real coverings, your color of options for the car itself, your options for special features and screens and so forth. And then you configure your car. Usually you're buying a car on the lot that has all those, included as part of a model category.

01:05:08:07 - 01:05:38:18
Sam Rashkin: You're the lead, the all the limited edition, and it automatically comes with a curated set of upgrades or features, and you buy to that price point. So the housing industry doesn't do that. You walk through and it's still very, sub optimized compared to what the car industry does. And the Europeans do in terms of the retail centers and mostly the ones I see doing it the best are Sweden, companies.

01:05:38:21 - 01:05:58:07
Mike Collignon: Right. We're going to get into a little bit of detail on this question from Howard. He understands the thermal value of SIPs, but can you address, running the electrical in exterior walls? He wants to know if you're advocating for a service cavity, in board. A sip.

01:05:58:09 - 01:06:27:00
Sam Rashkin: The way sips works is that the foam itself, has effectively cut out a conduit at the one foot height and four foot height running parallel with the floor, and then every four feet is a vertical 1.5in hole, effectively being a conduit. So the electrician, all you have to do is chase wires like they normally do in a house, pushing it and pulling it through those chases.

01:06:27:00 - 01:06:54:28
Sam Rashkin: You can get to any outlet location and a switch location, of course, and then there's some, and you can get to ceiling, boxes, ceiling locations for electric boxes to lighting. So, it's a learning curve. It's it's something to get used to. Many will say once they learn it, they like it. It there's no extra effort to do a, electrical wiring, the CIPs and conventional.

01:06:55:00 - 01:07:20:22
Sam Rashkin: I will hear some say that they still prefer frame, wiring and let's, conventionally framed home. So this is, again, the uncertainty that's in the industry. You don't get consistent, assessments of things like ease of installation for electric, and so that you have to manage the uncertainty. But the key thing about the industry is they've done a good job making it easy to trace and run wires.

01:07:20:24 - 01:07:41:00
Sam Rashkin: For your outlets, your switches, and throughout the house on the exterior walls, just because the form itself has, those, cutout, a set of conduit, holes for running horizontally and vertically, like a grid in the panel.

01:07:41:02 - 01:07:58:23
Mike Collignon: All right. I've got a couple questions that are kind of bigger picture here, Sam. Rosalie wanted to know, how do we get planning or planners to accept these new ways of construction? Because it's not traditional, framing and and that sort of thing.

01:07:58:25 - 01:08:30:25
Sam Rashkin: Well, it's not the planners, sphere of influence. The, you know, a planner doesn't say, okay, this will be a setup, community. There is a major role is to create the, the, you know, the street layouts, the open spaces plan, all the utility services and layout a community so it can be built with know lots of created in homes can be built on those lots.

01:08:30:27 - 01:09:11:17
Sam Rashkin: So, so the in title a plan that then becomes in perpetuity the community. Plan. So they do not know. Then they go out and builders come and they bid to lots and builders build the way they want to for the most part. Now some developers will have a, architectural plan book, but normally an architectural plan book is done to ensure a design esthetic and certain kinds of, are there, setback requirements.

01:09:11:17 - 01:09:48:07
Sam Rashkin: And sometimes rear garages may affect the design, but no, they're not saying this is how you actually build a home. Now they may specify something like it has to be energy star has to be passive House. They can do that sometimes at the planning level, but they won't say how they'll set a threshold for the performance. So my point is the seventh floor and sort of planner normally doesn't include specifying the construction method so that you have to get to the developer, to the builder in the herself.

01:09:48:10 - 01:10:08:10
Sam Rashkin: And, that there's some, that, you know, again, this is where if you're vertically integrated, you're both the developer and the builder, you can choose the hand that I'm going to build with this industrialized housing option. And then you can affect that kind of choice.

01:10:08:12 - 01:10:38:04
Mike Collignon: Okay. And then another kind of bigger picture question. There's a specificity to this too, but I think the broader issue is something to, to really look at. Jordan wanted to know, how do you see industrialized construction for New York City specifically? But the second question really is where it is. It's given the strong union presence there, what do you what do unions think about this?

01:10:38:07 - 01:11:07:08
Sam Rashkin: Often they're very suspicious. No, I was just in Hawaii last December, and we talked about affordable housing solutions. There. And you have to listen and collaborate with the unions where they have a, a controlling presence. Now, New York, like Hawaii, has an extremely high price point. And so, you know, you know, this is politics and this I don't have answers to.

01:11:07:10 - 01:11:38:03
Sam Rashkin: It's, and that's why it's such a good question. That said, you see private skilling in, there are modular modular in, in places like New York. The most famous one was the Marriott Hotel that was built in Manhattan, where they actually ship the modules from Poland on a boat to New York. And then he built the hotel with these hotel room modules, like 30 stories up in the air.

01:11:38:06 - 01:12:06:15
Sam Rashkin: So something happened there where the modular choice was not blocked by the unions. Electrical, plumbing, mechanical, concrete, whatever it was, you know, it did get through. So there are examples where it happens and there must be, a way to make it happen. I don't know the answer. How you do it. That.

01:12:06:17 - 01:12:21:14
Mike Collignon: I want to I want to, go back to something that's near to your heart. Sam. Greg wanted to know, can you speak to the integration of third party testing, like, say, Energy Star? In modular, in the modular setting?

01:12:21:16 - 01:12:53:19
Sam Rashkin: Yes. You know, there already there's a system in place for Energy Star implants. Energy star has a manufactured housing, option. So you can do Energy Star manufactured homes, you can do energy efficient new manufactured homes as well at you. And, and there's, a whole protocol for doing the plant verification, and I think it uses some of the Nic specs or other systems that are already in place for offsite and mixed in with some verification by raters.

01:12:53:22 - 01:13:21:25
Sam Rashkin: Since I've left Energy Star, I haven't kept abreast of all the details of the protocols, but, that already exists, so I think it's just a matter of adapting those to modular, construction. You still will need to do this with panels to the degree that the panels are finished, and you can inspect and feel the insulation quality and other details with, air barriers that you could in open construction.

01:13:21:25 - 01:13:45:19
Sam Rashkin: But I know the, the, the protocols are there, and I always would refer people to the, energy star certified home team and the and the Efficient New Homes team at DOJ notwithstanding, there's been a lot of, personnel changes over the past year or so.

01:13:45:22 - 01:14:17:26
Mike Collignon: So, Sam, I want to hit on, two questions at once because they they both get the same thing. So, Clayton, in his kind of question, he points out that the Swedish government had enormous incentives. They had, you know, formal programs put together to provide subsidies for homes. Back in the mid 60s and mid 70s, 1984, they had a program, substantial subsidies and tax rebates.

01:14:17:28 - 01:14:39:22
Mike Collignon: But also their building code is strictly performance based. So you get some innovation through that. And he said the similar programs and regulations kind of underpin housing throughout Europe. He was wondering if you can comment on how that might translate to the US market.

01:14:39:24 - 01:15:17:25
Sam Rashkin: That is such an excellent point. And, and ran say, I know how to do that. Instead, what I'll say is. I think it's critical where you have that degree of success. We learn what drove that success. How much of it was driven by a subsidy or incentive or a regulatory climate or a, some other, intervention at the government level or institutional level that affected the market.

01:15:17:25 - 01:15:48:26
Sam Rashkin: But let's understand what happened that led to that kind of transformative outcome that was like nothing close to it anywhere in any of the country, and save their elements of it in part or full that are transferable here to the US that we can build upon. And let's also quantify what the outcome is to Sweden for having made those investments and whatever subsidies or incentives that they provided.

01:15:48:29 - 01:16:16:25
Sam Rashkin: But because of that, they have such a viable, robust, industrialized housing industry like almost no one else per capita for they know for the number of homes they're building, they're it's incredible what kind of benefit it is to their economy to have that. Plus, I think it creates incredibly better homes, lower cost to operate, with longer lifetimes for the residents who buy those homes.

01:16:16:27 - 01:16:56:18
Sam Rashkin: So let's quantify some of this, that study it and let's, see if we can learn what's transferable and can be applied here. But without question, we know a couple of the items. One is we need a national code for, industrialized housing, but we cannot make a product that has to meet that kind of extra extraordinary, variation and, code requirements and, and standards and expect it to be, managed by a plant.

01:16:56:18 - 01:17:18:12
Sam Rashkin: It's just not feasible. So we have to we have to get a, find a solution to a national code that works, that aligns with the manufacturing processes of these plants. And, and then secondly, I think we have to do these studies of what's working in other countries, make that investment.

01:17:18:14 - 01:17:29:05
Mike Collignon: And the follow up to that, Sam, is Rosalie's question. If you're familiar with any kind of grants or programs that look to help fund housing innovations.

01:17:29:07 - 01:17:56:01
Sam Rashkin: Well, you know, do you for a long time did the Building America program, which is all about funding housing innovations, now that the events building Construction program, which is trying to, support industrialized housing and to have certain things that they fund, but, I'll submit that all these efforts, again, are usually focused on the technical technical solution.

01:17:56:04 - 01:18:36:16
Sam Rashkin: When I get I believe the solution is the business model that we have to, we have to flip from this traditional way in the U.S that we go to a plant and give them a design, and then it gets built to plants, produce, just like the auto industry, certain models, and we choose those models and then the plants, because so many of those models will be built, can invest in their health performance, invest in their energy performance, invest in all their smart technology integration, cameras and sensors and controls.

01:18:36:18 - 01:19:03:26
Sam Rashkin: And they can invest in their design solutions and they can invest in, just the daylight, capabilities and all the storage innovations and, you know, when a car manufacture makes, you know, hundreds of thousands of a specific model car, it is integrating so many innovations because they know that it can be amortized over all those hundreds of thousands of times.

01:19:03:26 - 01:19:28:08
Sam Rashkin: It will be solved. Absent that, you have huge cost, errors that you have to absorb. So, like I said, a lot of the a lot of the funding and research that's been going on can focus on can I get a better production line or a better robotic solution, like, right, again, I look at the Swedes, they hardly use any robotics.

01:19:28:10 - 01:19:42:03
Sam Rashkin: It's all about the business model, is the observation I have. If you want to get after Troughing Joffrey, Joffrey Morris scaling factors.

01:19:42:05 - 01:19:58:21
Mike Collignon: I want to I want to bring in a question that came in while you were answering, because it's very timely. And then we're going to get to a question that actually I also have. So I was glad that that was sent in. So the question that came in while you're answering, the wants to know, doesn't modular have to meet the residential code?

01:19:58:21 - 01:20:02:12
Mike Collignon: Why why is a new code needed?

01:20:02:14 - 01:20:26:03
Sam Rashkin: It meets the residential code, but it, it still has to address variations in the code. Now, normally they'll serve A23 hundred mile radius. And in that two 300 mile radius, there could be four or 5 or 6 different code requirements. And so they're not building, an assembly and a product to a single, set of standards.

01:20:26:05 - 01:20:42:27
Sam Rashkin: And so that's so you have to the plan has to be able to adapt to those, they don't have a national standard. So that's that, that's that's a cost factor that's added into that. What you pay for a modular home through.

01:20:42:29 - 01:20:44:05
Mike Collignon: Okay.

01:20:44:07 - 01:21:07:26
Sam Rashkin: But it's absolutely right. The only thing that they the only the only, exemption they get is the field inspections don't have to be done in the field because obviously the building inspectors are not going to see the construction once it's installed in site. So they get the benefit of using the industrialized housing, a verification process that the manufactured housing industry does.

01:21:07:26 - 01:21:18:00
Sam Rashkin: The next specs and other groups that inspect plants, they they're able to use that process. But those inspectors have to know the code that's being applied.

01:21:18:03 - 01:21:24:04
Mike Collignon: Okay. And those are those are some of the variations then from the ERC.

01:21:24:07 - 01:21:53:29
Sam Rashkin: Well, they're building some version that building IAC and, and, and ICC and and all the variations and how they're adopted. No state by state or community by community. Yeah. And then, you know, and then there's various ways the same codes not often, verified the same way by the same by different till inspectors, building inspectors on the field when the inspector may approve something, another 1st May not.

01:21:54:01 - 01:22:07:06
Sam Rashkin: So it's just a hard no to plant the plants so benefit if we we can find a way for them. So they can be a true product manufacturer with a single standard.

01:22:07:08 - 01:22:29:25
Mike Collignon: Yeah. And I think that's part of the challenge, Leroy, is that yes, you have a national model code, but states are allowed to adopt the amendments. And sometimes in humble states, municipalities are allowed to amend those. So yes, there's a national code, but not in the sense that say I'm talking about where there's across the board. Everything is the same.

01:22:29:28 - 01:22:54:09
Mike Collignon: And that's where you run into some challenges there. One of the thank Gail for sending in, the a shout out to the housing affordability breakthrough Challenge. It offers five, $2 million grants to support proven, ready to scale housing innovations. Across one of three focus areas, those areas being design and construction, finance and service delivery and programs.

01:22:54:09 - 01:23:29:24
Mike Collignon: So thank you, Gail. She's, the regular attendee of these webinar. So thank her for being here to, so I wanted to get to the question that even I have Sam. And it came in from Lee. So I give credit where credit is due. Will the HUD change allowing manufactured homes to not require a permanent chassis, allow manufactured housing to enter the modular home market at a more competitive, more competitive price point and hopefully a higher quality build?

01:23:29:27 - 01:23:56:10
Sam Rashkin: Yeah, I think I'm hopeful, as is the rest of the industry, that the chassis requirements are moved because one, you can now have higher pitched rates if you don't have the depth of the chassis to account for when you shift the chip, the module or you know it should ship the home box if you will. And two, you can start configuring the home so it could be installed on slabs.

01:23:56:10 - 01:24:20:26
Sam Rashkin: You can have it stacked on top of each other in a way you couldn't do. You create all the options that she's talking about. So it comes down to now the local, restraints on manufactured housing, whether those can be removed. And there I think it's up to the industry to, on critical issues that the local jurisdictions care about.

01:24:20:26 - 01:24:49:01
Sam Rashkin: Sometimes it's esthetics, sometimes it's, rigor of the foundation, sometimes it's the rigor of the disaster, resilience, whatever it may be, the degree that the industry can meet the expectations of local jurisdictions that are blocking them, the more they can remove those restrictions and open up markets they have not had access to up to now. And there are tremendous amounts of restrictions on where you can locate them.

01:24:49:03 - 01:25:15:27
Sam Rashkin: So yeah, I think it's a travesty is gone. And then they integrate the ability to, meet local, expectations. I think markets will open up because the price point for a manufactured home is like half of the average, cycle time or 40% less. It's a big number. Lower.

01:25:16:00 - 01:25:28:02
Mike Collignon: All right, we've got a couple requests, Sam, for sharing. The first one came from Joan. Are you able to share your true cost bidding sheet?

01:25:28:05 - 01:25:55:19
Sam Rashkin: You know, you see this? Yeah, I have my email up here. Reach out to me directly if you're interested. I'll see if I can get permission from shipper to share it. Currently, shipper has the first version of the tool, which is very much more granular to use. It was a lot, a lot more friction. And so hearing feedback, we went back to the drawing board, came up with a real simple, tool.

01:25:55:19 - 01:26:23:14
Sam Rashkin: We just putting a few entries in to get numbers and, I'd love to share it. I just had to get permission from CPA and the other options to reach out to super directly Jack Armstrong. And, I'm sure you would love to share the tool, but you can either, the chat to me here at this number or super directly, and I'll see if I can get permission to send it to you, but I'm happy to share it with everybody, see if it's okay.

01:26:23:16 - 01:26:43:13
Mike Collignon: Yeah. And Jack is a is a good friend of green building media to a long time. Absolutely. Yeah. And then also the same advice might be for, for Donnie here, to reach out directly to Sam. Donnie was. I know if you have a list of manufacturer of prefab manufacturers in the Midwest.

01:26:43:16 - 01:27:28:13
Sam Rashkin: Well, I'll just say I'm reluctant to share specific names. I don't want to get, any implied endorsement attached to me, to be honest, but, but there's a lot of resources out there. If you start, go on the web and you'll get some good feedback. The key thing, picking options is no, so you have eyes to the degree that any of these companies can address or achieve Energy Star certification, indoor air plus efficient new home is a really great, quality, validation about the company being able to do that.

01:27:28:15 - 01:27:57:04
Sam Rashkin: And it also means they're more eyes on the product because it has to achieve those certifications. So, I would say, if go to the websites for Efficient New Homes and Energy Star, they have a have a builder locator tool. And I don't know if you can filter for, off site or manufactured or I'm not sure which term we use, on those locator tools, but you might be able to find some.

01:27:57:07 - 01:28:21:08
Sam Rashkin: But, you know, it's, I think a lot of them in the Midwest. It depends on what North you have. Most of the modular companies are concentrated in Pennsylvania. Is a big in West Virginia. Maybe a little bit. I think Ohio is as well. But once you you get more to panels, if you get to the rest of the country.

01:28:21:11 - 01:28:33:21
Sam Rashkin: So, it just winds up that modular has a, a really good set up in the northeast. So you kind of assume concentrated there.

01:28:33:24 - 01:28:44:15
Mike Collignon: All right, final call for questions. Sam, this one came in from Jordan. What do you think about industrialized construction for retrofits?

01:28:44:17 - 01:29:06:22
Sam Rashkin: Oh, that's a great question. You know, to the degree it's already used now for ADUs. Right. So if you want to have an accessory dwelling unit for those are familiar with that acronym, if you think about it, if I can get it right, if I can get an Adu for 150,000, let's throw a number out at 6% interest.

01:29:06:22 - 01:29:45:29
Sam Rashkin: That's like something like 900 a month. And, if it generates $2,500 of rent per month, some pay 900. That's a huge business opportunity to have a modular Adu. Just drop in sites and states that have become very generous, allowing it to use, without, I think, increased property taxes and other regulation. So California, Washington, I think, Massachusetts, there are a number of states for you to use have been really, really addressed with public policy.

01:29:46:01 - 01:30:16:29
Sam Rashkin: But if you do an addition where it's an add on to your house, it could possibly work. Because, like, you know, you're trying to align the architecture. So it's not like a blatant, addition that doesn't matching some existing home esthetic. However, for panels, I mean, for for the walls, you can use framing panels, set panels. There are a lot of options you can use to build the walls.

01:30:17:01 - 01:30:32:10
Sam Rashkin: It's just such a small project. You know, again, you have the friction of finding the builders and workers that will understand how to work with that technology.

01:30:32:12 - 01:30:50:17
Mike Collignon: Kristen wanted to know if you could share your opinion on adding, innovative adhesives to, basically provide structural resilience to all new panel build types as well as in retrofit systems?

01:30:50:19 - 01:31:15:20
Sam Rashkin: Unfortunately not. I don't have a good, sense of that. What we do know is, use like closeout spray foams in, roof assemblies and wall assemblies. You know, the tremendous increase in impact resistance and racking resistance. And it's a really great way to strengthen a home to the foam board. It comes to the adhesives.

01:31:15:22 - 01:31:27:29
Sam Rashkin: I don't have as much, no experience or I haven't read enough on that to know the answer to that question. So I'm not the person to speak to it.

01:31:28:01 - 01:31:46:13
Mike Collignon: Sure. Final question. I've got here is from Aaron. He says, and I apologize if I, butchered the pronunciation of the company's name. Bill Clark didn't make your list of Swedish factories. Any ideas to. Why are you familiar with them?

01:31:46:16 - 01:31:50:19
Sam Rashkin: Let's see. How you spell it.

01:31:50:22 - 01:32:02:07
Mike Collignon: B o k l. Okay, I don't see it in the book. Look, that's how they pronounce it. Thank you. Aaron, I don't see it in me.

01:32:02:12 - 01:32:28:07
Sam Rashkin: This is a list I got from a professor who specialize in Swedish housing and put together, put all this work together. A really good slides that you've seen, and, they don't show up here. So I don't know them. Can't really. I suspect the one of the smaller companies, if they don't show up here, you see roughly about, the top 8 or 9 do about 75% of all the homes.

01:32:28:09 - 01:32:49:05
Sam Rashkin: And then I think it's a huge cliff and everyone else does a very small amount not. And the market itself is very small now. It looks like it might be eight or 9 or 10,000 homes a year. So it's not a big market, as you would expect. But new to me. So that's all I can give you on that.

01:32:49:08 - 01:32:54:20
Mike Collignon: And apparently they are the product of an Ikea and Skanska merger.

01:32:54:22 - 01:33:23:09
Sam Rashkin: Oh that's right. So you'll see Skanska there. And Skanska, it's interesting, they already I think they made additions to the panels. They made the windows and the cabinets. And so there was a lot of vertical integration in that plant at the Skanska and Sconce. Of course, there's a lot of commercial construction in this country. They look to bring their Swedish residential production technology to.

01:33:23:10 - 01:33:30:13
Sam Rashkin: And so as soon as I saw the code quagmire, they said, now we're not going to do that.

01:33:30:16 - 01:33:31:08
Mike Collignon: Gotcha.

01:33:31:10 - 01:33:32:29
Sam Rashkin: And that was decades ago.

01:33:33:01 - 01:33:35:27
Mike Collignon: Okay. So no, it's not something recent.

01:33:35:29 - 01:33:38:03
Sam Rashkin: No. So it's only gotten worse.

01:33:38:05 - 01:34:12:07
Mike Collignon: Okay. Well, that concludes our first seminar for 2026, but, we'll be back with another housing 2.0 webinar on June 24th. Thank you so much for attending today. Thank you once again to Panasonic Healthy Indoor Living Solutions for their generous sponsorship and, wonderful questions that open the audience. Really appreciate it. Our next Green Builder Media webinar is going to take place on Wednesday, May the 6th, and, Sam and I will be there for that one two.

01:34:12:07 - 01:34:34:08
Mike Collignon: Actually, we'll be looking back on 30 years of Energy Star for homes. We'll be joined not just Sam and I, but also Doctor Howard Bashford and Darren Watts. Jack, you won't want to miss that unique walk down memory lane. So again, that's May 6th and it will start at 2 p.m. eastern time. Until next time, stay safe, stay healthy and take care everyone.

01:34:34:08 - 01:34:34:23
Mike Collignon: So long.