PREFABRICATED SELF-HELP KIT HOMES
A Mass Customized Option for Affordable Housing
María Carolina Rueda S.
Post-Professional Master of Architecture: Urban Design and Housing
Peter Guo-hua Fu School of Architecture. McGill University
Professor Avi Friedman
Keywords: Kit homes, Housing Affordability, Mass Customization
Montreal. August 2018
ABSTRACT
The North American housing affordability crisis is escalating each year. In Canada, approximately the 83 percent of all homeowners and 40 percent of all renters exceed their affordability threshold on an annual basis. This implies high prices that prevent low-income families from becoming homeowners.
Prefabricated, self-help kit homes are a potential solution to reduce housing cost, and to allow customers to participate in the decision-making process with respect to the design of their homes. The former is possible by eliminating paid labor and replacing it with sweat equity, while the latter is possible through the application of mass customization strategies that allow a high level of customer involvement during the pre-occupancy stage.
The main goal of this research is to identify the different strategies that manufacturers apply during the production of kit homes. In addition to the theoretical framework, this report consists of analyses of kit homes from eight manufacturers, including evaluations of their advantages and disadvantages with respect to both affordability and mass customization. These analyses led to the definition of guidelines for manufacturing kit homes in Quebec. These guidelines were based on the ideals of improving customer involvement and ensuring the feasibility of self-help construction, while also offering choices and flexibility within kit home packages and affordable options for buyers.
The main conclusion of this study is that self-help kit homes are approximately 45 percent less expensive than the conventional housing. However, this savings primarily depends on the ability of the buyers to be self-builders, and on the provision of cost-saving alternatives by manufacturers.
Moreover, in terms of mass customization, both panelized and pre-cut prefabrication methods allow a tailored or pure customization. However, it is essential to facilitate the decision-making of customers during the post-occupancy stage as well, and to define more specific parameters and variations.
I
RÉSUMÉ
La crise d’accesibilité du logement en Amérique du Nord s’intensifie chaque année. Au Canada, environ 83 pour cent de tous les propriétaires et 40 pour cent de tous les locataires dépassent leur seuil d’accessibilité sur une base annuelle. Cela implique des prix élevés qui empêchent les familles à faible revenu de devenir propriétaires.
Les maisons préfabriquées en kit d’autoconstruction sont une solution potentielle pour réduire le coût du logement et permettre aux clients de participer au processus de la prise de décision concernant la conception de leur maison. Le premier est possible en éliminant la main-d’œuvre rémunérée et la remplaçant par le travail des propriétaires, tandis que le second est possible grâce à l’application de stratégies de personnalisation de masse qui permettent un niveau élevé de participation des clients pendant la phase de pré-occupation.
L’objectif principal de cette recherche est d’identifier les différentes stratégies que les fabricants appliquent lors de la production et de la préfabrication des maisons en kit. En plus du cadre théorique, ce rapport se compose d’analyses de maisons de fabrication de huit fabricants, y compris des évaluations de leurs avantages et inconvénients en ce qui concerne à la fois l’abordabilité et la personnalisation de masse. Ces analyses ont abouti à des conclusions qui ont été examinées au chapitre 4 avec la définition de lignes directrices pour la fabrication de maisons en kit au Québec. Ces lignes directrices étaient fondées sur les idéaux d’amélioration de la participation des clients et d’assurer la faisabilité de l’autoconstruction, tout en offrant des choix et de la flexibilité dans les forfaits maison et des options abordables pour les acheteurs.
La principale conclusion de cette étude est que les maisons d’autoconstruction sont environ
45 pour cent moins chères que les maisons traditionnelles. Cependant, ces économies dépendent principalement de la capacité des acheteurs à devenir propriétaires-constructeurs, et de la fourniture
II par les fabricants de solutions de rechange économiques pour améliorer l’accessibilité financière. De plus, en termes de personnalisation de masse, les systèmes à panneaux prédécoupés permettent une personnalisation sur mesure ou pure. Cependant, il est essentiel de faciliter également la prise de décision des clients pendant la phase de post-occupation, et de définir des paramètres et des variantes plus spécifiques pour assurer l’abordabilité du logement et la satisfaction des ménages.
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ACKNOWLEDGEMENTS
First, I would like to express my deepest gratitude to Professor Avi Friedman, my research advisor, for his inspiring motivation and assistance during the year I spent in the accomplishment of the Urban Design and Housing Program. I am greatly honored to have been able to benefit from his knowledge and experience in housing.
Moreover, I owe my gratitude to the School of Architecture Graduate Fellowships Committee for selecting me to be the recipient of two generous awards, as well as the non-profit Colombian
Foundation Colfuturo which selected me as a beneficiary of its program. The accomplishment of this work would not have been possible without the financial support and assistance of both institutions, which encouraged me to focus on exposing all my skills and knowledge in order to be an outstanding student and demonstrate that I deserve their trust.
My deepest appreciation should be extended to the staff of the School of Architecture at McGill
University, particularly Ms. Marcia King for her help and patience. I am truly grateful to Prof. Annmarie
Adams, Prof. Robert Mellin, Prof. Vikram Bhatt, and Prof. Nik Luka for their immense contributions to my knowledge and research skills.
Last but not least, I am thankful to my family for all their unconditional encouragement and support during the achievement of every goal of my life.
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TABLE OF CONTENTS
ABSTRACT ...... I RESUMÉ ...... II ACKNOWLEDGEMENTS ...... IV TABLE OF CONTENTS...... V LIST OF FIGURES...... VIII LIST OF TABLES ...... X
CHAPTER 1: INTRODUCTION...... 1 1.1 RATIONALE OF THE STUDY ...... 2 1.2 THEORETICAL FRAMEWORK ...... 6 1.3 RESEARCH QUESTION ...... 8 1.4 GOALS AND OBJECTIVES ...... 8 1.5 INTENDED AUDIENCE ...... 9 1.6 METHODOLOGY ...... 9 1.7 SCOPE AND LIMITATIONS ...... 10 1.8 RESEARCH OUTLINE...... 10
CHAPTER 2: SELF-HELP HOUSING AND KIT HOMES...... 12 2.1 INTRODUCTION ...... 12 2.2 SELF-HELP HOUSING ...... 12 2.2.1 The Potential of Self-help Housing ...... 13 2.2.2 Progressive Housing ...... 15 2.2.3 Self-help Types ...... 17 2.2.4 Self-help Advantages...... 18 2.2.5 Self-help Disadvantages ...... 19 2.2.6 The role of Prefabrication in Self-help Housing ...... 20 2.2.7 Conclusions ...... 23 2.3 KIT HOMES ...... 25 2.3.1 The Emergence of Kit Homes ...... 25
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2.3.2 Kit Homes and Prefabrication ...... 31
2.3.3 Division of a Building into Systems, Modules and Elements ...... 31
2.3.4 Production Processes ...... 33
2.3.5 Mass Customization Through Kit Homes ...... 34
2.3.6 Affordability Through Kit Homes ...... 40
2.3.7 Conclusions ...... 42
CHAPTER 3: CASE STUDIES ...... 43 3.1 INTRODUCTION ...... 43 3.2 CASE STUDIES: MANUFACTURERS OF KIT HOMES ...... 46 3.2.1 Case Study 1: Scotframe Timber Frame Homes ...... 46 3.2.2 Case Study 2: Cottage Kit Homes ...... 56 3.2.3 Case Study 3: Shelter-Kit ...... 65 3.2.4 Case Study 4: Tene of Estonia ...... 75 3.2.5 Case Study 5: Summerwood Products ...... 85 3.2.6 Case Study 6: Enviro-Tech Post and Beam ...... 95 3.2.7 Case Study 7: Pacific Modern Homes Inc...... 104 3.2.8 Case Study 8: Sloan’s Mill Engineered ...... 113 3.3 EVALUATION OF ALL CASE STUDIES ...... 122 3.4 CONCLUSIONS ...... 125 3.4.1 Affordability Conclusions ...... 125 3.4.2 Mass Customization Conclusions ...... 127 3.4.3 General Conclusions...... 129 3.4.4 Insights into Chapter 4 ...... 129
CHAPTER 4: GUIDELINES TO IMPROVE KIT HOME MANUFACTURING FOR SELF-HELP CONSTRUCTION ...... 131 4.1 DESIGN ...... 131 4.2 ESTIMATION OF COSTS: MANAGERIAL MATTERS ...... 137 4.3 PRODUCTION AND PREFABRICATION IN THE FACTORY ...... 138 4.4 ERECTION OF THE BUILDING ON-SITE ...... 147 4.5 FINAL CONCLUSIONS ...... 147
VI
BIBLIOGRAPHY ...... 149
APPENDIX ...... 156
VII
LIST OF FIGURES
Figure 1.1: House prices and household incomes change in 35 markets: 2000-2015 ...... 2 Figure 1.2: House price and household income growth average: CMAs over 1,000,000: 2000-2015 ...... 2 Figure 1.3: House price index ...... 4 Figure 2.1: Project Elemental. Chile ...... 16 Figure 2.2: Self-help construction of prefabricated kit homes ...... 21 Figure 2.3: Off-site production ...... 22 Figure 2.4: Manning Portable Cottage ...... 26 Figure 2.5: Balloon frame and Platform frame ...... 27 Figure 2.6: Aladdin houses catalogues ...... 28 Figure 2.7: Sears Homes catalogues ...... 30 Figure 2.8: Division of a building into systems, modules and elements ...... 32 Figure 2.9: Customization versus standardization ...... 36 Figure 2.10: Family of supply chain structures ...... 40 Figure 3.1: Cost difference between conventional single-family home and kit home without labor (CS1) ...... 52 Figure 3.2: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS1) ...... 52 Figure 3.3: Cost difference between conventional single-family home and kit home without labor (CS2) ...... 61 Figure 3.4: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS2) ...... 62 Figure 3.5: Cost difference between conventional single-family home and kit home without labor (CS3) ...... 70 Figure 3.6: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS3) ...... 71 Figure 3.7: Cost difference between conventional single-family home and kit home without labor (CS4) ...... 80 Figure 3.8: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS4) ...... 82
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Figure 3.9: Cost difference between conventional single-family home and kit home
without labor (CS5) ...... 90 Figure 3.10: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS5) ...... 91 Figure 3.11: Cost difference between conventional single-family home and kit home without labor (CS6) ...... 100 Figure 3.12: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS6) ...... 101 Figure 3.13: Cost difference between conventional single-family home and kit home without labor (CS7) ...... 109 Figure 3.14: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS7) ...... 110 Figure 3.15: Cost difference between conventional single-family home and kit home without labor (CS8) ...... 118 Figure 3.16: Cost difference between conventional single-family home and kit home without labor, and kit home with labor (CS8) ...... 119 Figure 3.17: Average scores affordability and mass customization achievement ...... 122 Figure 3.18: Scores for affordability achievement ...... 123 Figure 3.19: Scores for mass customization achievement ...... 123 Figure 3.20: Average scores per assessment criteria: Affordability ...... 124 Figure 3.21: Average scores per assessment criteria: Mass customization ...... 124 Figure 4.1: One-bedroom kit home modulation ...... 132 Figure 4.2: Two-bedroom kit home modulation ...... 132 Figure 4.3: Three-bedroom kit home modulation ...... 133 Figure 4.4: One-bedroom kit home ...... 134 Figure 4.5: Two-bedroom kit home ...... 134 Figure 4.6: Three-bedroom kit home ...... 135 Figure 4.7: Original sizes ...... 136 Figure 4.8: Expanded sizes ...... 137 Figure 4.9: Pre-cut Timber Frame System package ...... 140 Figure 4.10: Panelized System package ...... 141 Figure 4.11: Hybrid Timber Frame System package ...... 142 Figure 4.12: Upgrades ...... 143
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Figure 4.13: Optional components to include in the kit home ...... 144 Figure 4.14: One-bedroom kit home without interior walls ...... 145 Figure 4.15: Two-bedroom kit home without interior walls ...... 146 Figure 4.16: Three-bedroom kit home without interior walls ...... 146
LIST OF TABLES
Table 3.1: Kit home cost without labor (CS1)...... 50 Table 3.2: Kit home cost without labor (CS2)...... 60 Table 3.3: Kit home cost without labor (CS3)...... 69 Table 3.4: Kit home cost with labor (CS3) ...... 71 Table 3.5: Kit home cost without labor (CS4)...... 79 Table 3.6: Kit home cost with labor (CS4) ...... 81 Table 3.7: Kit home cost without labor (CS5)...... 89 Table 3.8: Kit home cost with labor (CS5) ...... 91 Table 3.9: Kit home cost without labor (CS6)...... 99 Table 3.10: Kit home cost without labor (CS7) ...... 108 Table 3.11: Kit home cost without labor (CS8) ...... 117 Table 3.12: Evaluation chart...... 122
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CHAPTER 1: INTRODUCTION
For many years conventional building processes have been the standard of governmental agencies, and deemed as less risky and more aesthetic in providing affordable housing (Skinner &
Rodell, 1983). This trend has changed the conception of a house into a commodity that carries a mortgage, with current and future maintenance expenses, and is often unaffordable for most of society
(Skinner & Rodell, 1983). Self-help housing has the potential to reduce costs associated with owning a home. This consists of dwellings that are built by individuals or a collective whose commitment and participation substitute for paid professional labor, thus obtaining significant cost savings (Friedman;
CMHC; et al, 1999). However, since the acceleration in the growth of cities, this model has lost its acceptance for two possible reasons. First, in developing countries, it started to be associated and labeled as “squatter urban housing” because, out of necessity, people began constructing their own neighborhood homes, using recycled materials, without permits. Second, governments that supported this housing model found that people spent too many hours constructing their homes, which provoked the loss of jobs or reduction in incomes (Skinner & Rodell, 1983). Notwithstanding, the combination of self-help kits and prefabrication of homes can mitigate these problems. This statement has been proved by the success of kit homes, which are affordable and enable involvement of users in the design of their future homes.
In this chapter, the author will explain why it is imperative to solve the housing affordability crisis in Canada, and why self-help construction, through kit homes, can be one way of increasing home ownership that is economically sustainable, and is shaped by user preferences and needs for a place to call home.
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2.1 RATIONALE OF THE STUDY
In general terms, housing affordability is defined as the relationship between housing costs and household income. Affordability issues are, thus, the result of low incomes related to high home prices (Chisholm, 2003). At present, the difficulty in accessing suitable and affordable living accommodations is a worldwide concern. Specifically, Canada has a middle-income housing affordability crisis due to rising home prices that, since the year 2000, have grown approximately three times more than household income, as seen in Figure 1.1 and Figure 1.2 (Cox & He, 2016).
Average House Price Average Household Income
Figure 1.1 House prices and household incomes change in 35 markets: 2000-2015.
Source: Cox & He (2016)
House Price Household Income
Calgary Edmonton Montreal Ottawa Toronto Vancouver
Figure 1.2 House price and household income growth average: CMAs over 1,000,000: 2000-2015.
Source: Cox & He (2016)
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In 1986, The Canada Mortgage and Housing Corporation (CMHC), in an agreement with the provinces, determined that housing is considered affordable only if a household spends less than 30 percent of its total income on shelter costs. Shelter costs include the price of a dwelling, possible mortgage payments, utility costs, and other municipal services, as well as property taxes and, if applicable, condominium fees (Chisholm, 2003).
According to data from the 2011 National Household Survey (2013), 69 percent of households in Canada owned their dwellings. Although homeownership in Canada does not seem to be an issue, the survey demonstrated that 58.6 percent of homeowners had a mortgage, and that 83.2 percent of them, exceeded the affordability threshold. However, this issue is not exclusive to homeowners. In fact, according to the same survey, 40.1 percent of renters spend more than 30 percent of their incomes on housing.
This issue is related to the current accelerated development of North American real estate, which has led to a significant rise in land and housing prices. In fact, between March 2017 and March
2018, the new housing price indexes in Canada were up 2.4 percent (CANSIM, 2018) as is seen in
Figure 1.3. However, these could be reduced by eliminating labor costs. This is possible by replacing conventional construction with self-help construction, which enables owners to save costs by replacing part of the cost of labor with their own sweat equity (Ward, Harms, Burguess, & Turner, 1982).
3
Figure 1.3 House price index
Source: CANSIM (2018)
This, in fact, is not an entirely new strategy in Canada. After the Second World War, the country was afflicted with severe housing shortages, and the government reacted by implementing conventional home-building programs, which resulted in unaffordable housing for most Canadian veterans at the time. Hence, families started to build their own homes, and in 1949, the administration of the federal program, “Veterans’ Land Act” (VLA), began to support this practice by launching the
“Build Your Own Home” (BYOH) program. As a result, at the end of the year, approximately 70 percent of the all homes in Canada were built by their owners. Thus, thousands of families could acquire well- built homes through self-help construction, saving over 20 percent of total costs by avoiding the use of contracted labor (Shulist & Harris, 2002). For many veterans, the option to construct a home through their own labor or through mutual aid was enabled by the advent of complete kit homes, which have been commercially available in Canada since the beginning of the twentieth century (Shulist & Harris,
2002)
4
Kit homes are houses that consist of manufactured components, which are packaged and shipped to a customer’s property, to be assembled individually or collectively (Ghandehari, 2000). The home’s different component parts are prefabricated, which complements self-help as the most appropriate construction technology since it generates numerous benefits in terms of affordability and customization (Ward, Harms, Burguess, & Turner, 1982). On one hand, prefabrication allows both off-site production efficiency and a reduction of construction time and complexities during on-site assembly. The former provides kit-home owners materials at low prices, and the latter makes self-help labor feasible rather than paying for contract labor and contractors’ profits. On the other hand, prefabrication systems are flexible in design, thus allowing the creation of many choices that are offered to buyers through catalogues. Moreover, customers can provide their own home designs, and manufacturers can implement these customized designs by matching them with their production scope
(Cooke & Friedman, 2001). Hence, kit homes enhance mass customization, since they allow the alteration of products according to individual preferences and needs, and can be produced at low prices in a high-volume environment (Pine, 1993). This achievement is proof that self-help housing, with the benefit of prefabrication, is a suitable solution that can provide a larger number of families not only a house, but a quality home in accordance with their individual lifestyles, believes, and needs.
The success of the BYOH should motivate countries to recognize that self-help is an essential component of the housing market. However, approximately 90 percent of housing in Canada is developed through conventional construction (Wiedemann, 1990). Moreover, several developed countries have associated self-help housing with ‘squatter housing’ which is often found in developing countries, and therefore, have opted to provide affordable housing through conventional building
(Skinner & Rodell, 1983). This approach has led to speculative building that bases a house’s value on its appearance, rather than on what it actually provides for people. Hence, the home-building industry, in alignment with governmental policies, offers standard houses that provide modern and improved
5 designs and services but are counter-productive in the quest for affordability. Although governmental agencies provide mortgages, loans, and subsidies which help low-income families acquire homes, repayment often becomes unsustainable and unaffordable since they would require households to spend over 50 percent of their monthly incomes (Turner, 1977).
Thus, throughout this report, the author will study how kit homes approach the concept of affordability and mass customization based on self-help. Subsequently, the author will argue that manufacturers’ prefabrication methods and strategies that are applied throughout production have a significant impact on both concepts. This study is based not only on a theoretical framework, but also on analyses of case studies of kit home manufacturers, among which improvements in their assets and strategies will be identified. This evaluation leads to the development of an ideal generic model for the manufacturing of kit homes, which will be advantageous for potential self-help builders in Quebec.
1.2 THEORETICAL FRAMEWORK
According to Turner (1977), due to conventional housing, people are forced to decide between taking or rejecting a house offered by the government, without a choice, or choosing just the resources that they can afford, so as to improve their future financial security. Hence, self-help is the ideal form of social organization that involves self-sufficient and autonomous actions which lead to the “freedom to build”, and therefore, allowing inhabitants to make decisions about their investment and aims, taking into account individual circumstances such as income, and group circumstances such as relationships within the community or the government. However, Harms (1982) criticizes this attitude and argues that such freedom is not the result of people willingness to build their own homes, since it certainly happens when there is little or no other choice. However, both authors agree that self-help construction is the most suitable solution to achieve affordability while it allows a closer relationship
6 between a dwelling’s use and an occupant’s lifestyle. Hence, through self-help it is possible to eliminate the idea of housing as a commodity that has an exchange-value instead of a use-value.
Although Turner (1977) considers that the unique value of a house is related to what it does for the family and that how it looks is not indispensable, everyone has the right to have a house that transcends the limits of its functionality and generates an identification with each of its features. In this aim, prefabrication has played an important role in providing opportunities to households to customize their homes, while ensuring significant savings in cost and construction time. Since the beginning of the twentieth century, kit homes have been highly accepted in North American rural single-family housing due to their success in this regard, and specifically in facilitating self-help construction. The main reason for the success of kit homes has been their prefabrication systems that are employed to separate a dwelling into specific parts, produce these parts in a factory, and subsequently, assemble the parts on-site. Knaack, Chung- Klatte and Hasselbach (2012) explain that the definition of the parts results from the division of the building into systems, modules, and elements according to the different levels of construction or work packages. This process is the basis for the production of the prefabricated parts, as well as for their easy assemble through self-help construction.
Moreover, Ghandehari (2000) performed a thoughtful study about Canadian manufacturers of kit homes and identified the reduction of prices that results from self-help construction. In the study, the author identified that the application of self-help to the finishing stage is the most cost-saving, followed by shell assembly and rough finishing. However, users often face complexities when building on their own, and thus, they opt to pay for professional or trained contractors and forfeit those savings.
Hence, based on the case studies in this report, it is essential to identify the reasons for these complexities and how they can be improved through the many production stages or prefabrication strategies.
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In this regard, Cooke and Friedman (2001) explain that in most cases, although it is not possible to allow customers to build an entire home on their own, self-help construction of finishing and partitioning works can be a significant strategy to reduce costs. They based this conclusion on the study of one of the most successful kit homes' manufacturer, Sears, Roebuck and Company, who between
1908 and 1940, proved that self-help construction is, in fact, a suitable way to achieve both affordability and mass customization through prefabrication and appropriate market strategies.
1.3 RESEARCH QUESTION
How can self-help prefabricated mass customized kit homes lower the cost of housing?
Sub-questions
- What are the different production stages of the mass customized kit homes?
- What prefabrication strategies facilitate self-help construction?
1.4 GOALS AND OBJECTIVES
The main goal of this report is the study of kit homes as the most appropriate solution for self-help in the quest for housing affordability and mass customization. Moreover, the author argues that manufacturers’ prefabrication methods and strategies, applied throughout production, have a significant influence over the achievement of both concepts. The evaluation of eight manufacturers of kit homes enabled the identification of the main features that must be improved or replicated to subsequently, conclude the research with a generic model - appropriate to facilitate the development of self-help in Quebec. Therefore, the specific objectives of this research are:
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- To understand how self-help housing has been applied to increase access for low-income families to acquire a house.
- To study how self-help construction was improved through the efficiency and quality provided by the use of prefabrication technologies which led to the creation of kit homes.
- To identify the various strategies that are applied during production and prefabrication of kit homes, as well as their influence in achieving housing affordability and mass customization.
- To analyze eight manufacturers of kit homes, and to evaluate their advantages or disadvantages regarding the concepts of affordability and mass customization.
- To conclude the research with guidelines for manufacturing kit homes in Quebec, which will be able to mitigate possible obstacles that are impeding the use of self-help construction as the most suitable method to ensure housing affordability and household satisfaction.
1.5 INTENDED AUDIENCE
The intended audience of this research is mainly the professionals who have a role in the private development of housing. This audience concerns manufacturers who can improve their production and/or prefabrication strategies to ensure the feasibility of self-help construction and therefore, can offer mass customized kit homes at affordable prices.
1.6 METHODOLOGY
The methodology was a literature review of secondary sources to develop a theoretical framework in Chapter 2. For instance, Housing by People by Turner (1977) and Self- Help Housing a
Critique by Ward (1982) were helpful in understanding the role of self-help in the enhancement of affordable housing. Moreover, different academic articles were useful for the study of kit homes,
9 specifically in understanding their prefabrication methods and production strategies, as well as their influence on mass customization and affordability.
Moreover, the analysis of the research was based on a survey of kit-home manufacturers and an evaluation of their assets and disadvantages regarding the achievement of affordability and mass customization. This was based on specific assessment criteria that led to average scores about the success of each case study, and to conclusions that will create insight into the final proposal of this research.
1.7 SCOPE AND LIMITATIONS
The selection of the eight manufacturers for the case studies were based on the following objectives:
- To study manufacturers that produce and deliver kit homes designed to be built by their owners.
- To study companies that have over ten years of experience in manufactured houses.
- To study manufacturers that have a catalogue of single-family wood-framed kit homes for rural areas.
1.8 RESEARCH OUTLINE
The research is divided into four chapters:
Chapter 1 consists of the introduction which addresses the rationale of the study and the structure of the report.
Chapter 2 contains the theoretical framework of the research. Firstly, it comprises the study of self-help housing, how it has been applied to help lower the cost of housing and increase household
10 satisfaction, as well as what the role of prefabrication is in the accomplishment of self-help construction. Secondly, it contains the study of kit homes in regard to their prefabrication methods and production processes, as well as their influence on affordability and mass customization.
Chapter 3 constitutes the case studies (CS1 – CS8). Hence, it contains the documentation of eight manufacturers of kit homes based on their production stages and prefabrication methods, as well as their achievement of self-help construction and mass customization. This information was analyzed using online information for each case study, which was compiled through tables, and subsequently analyzed with statistical graphics, and a table of assessment criteria which allowed for the identification of the advantages and disadvantages of all eight manufacturers.
Chapter 4 consists of a proposal for a suitable generic manufacturing model resulting from the conclusions of Chapter 3. This model is based on ensuring the feasibility of self-help construction, and on improving mass customization strategies to reach a higher level of customer involvement in the design of their homes.
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CHAPTER 2: SELF-HELP HOUSING AND KIT HOMES
2.1 INTRODUCTION
Throughout the first section of this chapter the author shows the reasons why self-help is a suitable solution to enhance housing affordability and improve household well-being through direct and long-term advantages. Moreover, the author regards the disadvantages of self-help housing and how they can be mitigated by prefabrication to eliminate obstacles which impede its acceptance from all societies.
Subsequently, the second section consists of the study of kit homes as a prefabricated solution that mitigates the disadvantages of self-help housing. Moreover, the author determines how this kind of house allows high levels of customization while also ensuring affordable pricing, which is the basis for the analysis of the case studies.
2.2 SELF-HELP HOUSING
Historically, self-help housing was predominantly a rural model that allowed families to construct villages by themselves. The main driver of this effort was the fulfilment of their own needs, especially for housing which is not exempt from anyone in all societies (Ward et al., 1982). At present, self-help housing remains successful in reducing costs as well as strengthening communities, increasing household satisfaction, and the identification with their own house. However, there are few initiatives to support self-help housing and many stereotypes caused by conflicts between social classes persist
(for example: the conception of housing as a commodity, and the approval by governments to empower low-income people to make their own decisions) (Ward et al., 1982).
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2.2.1 The Potential of Self-help Housing
Self- help housing are the dwellings that are directly produced by their individual owners or through mutual aid from the community. The participation of users in the production of a home is not only related to the physical aspects of the construction, but also the managerial matters such as planning, costs estimation, and supervision. This strategy has proved, especially in developing countries, to be successful in significantly reducing the cost of a dwelling. Hence, it was later recognized by some governments as a potential solution to increase the housing stock in their cities, and therefore, the housing policy formula changed, and the governments started to supply missing elements such as build sites, public services, and construction credits. After the application of this policy, it was noticed that self-help and the improvement of sites and services can benefit low-income people in three ways
(Skinner & Rodell, 1983):
1. Progressive construction: through the application of self-help, thousands of families can acquire their own home, in contrast to the application of conventional building which reaches fewer numbers of people. This accomplishment is possible by saving labor costs, and with the help of the government which can provide the services, building sites, and/or infrastructure in older neighborhoods.
2. Low subsidies rates: if governments provide only the infrastructure rather than finished houses, this implies lower rates for subsidies. Thus, over the years, governments will have more funds to subsidize more families.
3. Reduction of standards: some standards can be reduced without affecting the livability of a house. For instance, the reduction of a build lot can reduce costs without affecting the quality of the house and its benefits.
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Empowering families to make decisions about the design and materials used in their homes, and to provide their own investment and labor, not only helps to reduce costs but also to counteract the effects of conventional building. In fact, without self-help, governments are preoccupied with providing appealing houses without regard to their functionality and maintenance costs in relation to the socio-economic conditions of low-income users. Thus, they develop speculative housing, which is caused by the lack of knowledge about the specific and diverse monetary and non-monetary factors that are determinant in the life of low-income households. The former regards the relationship between household income and the price of the house, cost of the building, and the user's assets. The latter consists of the accessibility, security of tenure, and physical standards of the dwelling which depend on the preferences or lifestyle of each family (Turner, 1977). Due to this unawareness, the house becomes a commodity, and needs are fulfilled regarding purchasing power rather than the urgency of need. Hence, the government defines all costs that the household will have to pay, without considering that costs start out low, but become unaffordable for the households over time. These costs are divided into four groups (Ward et al., 1982):
1. Costs related to preconditions of construction: land, materials, and loans to start the construction.
2. Costs related to the production process: labor, design of plans, contractor and sub- contractor profits, and transportation.
3. Costs related to the distribution and circulation of housing: real estate agents, marketing professionals, and interest payments.
4. Costs related to maintenance: repairs, and refurbishments.
Certainly, it is inefficient and arduous for governments to recognize and solve these factors for each family. For this reason, the autonomy of the households to make their own decisions is a
14 straightforward and flexible way to prevent a mismatch between their house and their needs. The power of decision-making is called by Turner (1972) “Freedom to build” which is based on primary considerations of the user regarding accessibility to prices, quality of the dwelling, location, and the control they will have over their future home by personalizing it.
Altogether, this coincides with the reasons given by people for the application of self-help construction: first, it is their only choice to own a home; second, they can avoid paying rent; third, they can have a dwelling with more space; fourth, they can have an appropriate space to raise their children; fifth, it provides them security as they age; and finally, they want to live in a rural area with a better quality of life (Ward et al., 1982).
2.2.2 Progressive Housing
As mentioned above, progressive housing is based on the limitation of government assistance to the supply of infrastructure, building lots, and/or municipal services. This strategy has been highly applied in developing countries. For instance, since 1990, Chile has been developing a program called
‘The Progressive Housing Program’, which aims to provide “housing solutions” to low-income people rather than finished homes (Greene, 2004).
A suitable example of this strategy is the project Elemental of the Pritzker winner Chilean architect Alejandro Aravena (Figure 2.1). This project consisted of providing low-income families an affordable 40 m² house that constituted “half of a good house”, which could be finished in the future by self-help construction. In fact, the main premise of the architect was to ensure more quality per m², vs. more quantity of m² (Aravena, 2010).
The idea of this project emerged because many families cannot afford a large quantity of square meters, and small houses that they can purchase cannot expand according to their needs and
15 improvements in their lifestyles. Thus, this was an opportunity for them to finish the other half of their house according to their preferences and identity. In this case, the architect provided the part of the house that had more complexities, and only the skeleton of the other half. However, in developed countries the cost of construction of a social housing shell represents only 30 percent of the total cost, in contrast to developing countries where it represents 80 percent. Thus, if the former performs progressive housing, they could include the complete shell, and rely on the household for the finishing works (Aravena, 2010).
Before After
Figure 2.1. Project Elemental. Chile.
Source: www.theguardian.com
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2.2.3 Self-help Types
1. Independent self-help: in this type, the different processes are carried out by individuals without the help of external sponsorship, supervision, or governmental financial support. Owners construct, manage, finance, design and make all decisions about their house without being part of a program or a group. Thus, they contribute “sweat equity” through their own labor, and “enterprise equity” by being their own contractor. In this case, it takes a long period of time to finish the house, since people generally can only work on weekends and after their paid-job during the week (Ward et al., 1982).
2. Organized self-help and mutual-help: in this type, low-income users are sponsored, supervised, or supported by external agents, who are the ones that initiate the effort of performing self-help works. The participants partake first in a pre-construction orientation and training period and later they construct and occupy their completed houses (Ward et al., 1982).
3. Employed self-help: in this type, an organization initiates a self-help program, where the participants are employed and receive cash wages during the construction of their houses. This is often sponsored by governmental agencies with the objective of helping low-income families (Ward et al.,
1982).
The achievements in terms of time, costs, and financial support depend on the type of self- help. However, each type has the same determining factor which is the low-income level of the participants in relation to housing prices, and the resulting difficulty to access a home of their own
(Ward et al., 1982).
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2.2.4 Self-help advantages
1. Economic advantages (Ward et al., 1982)
- Self-help can reduce over 20 percent of the construction costs by using the owner’s unpaid labor (I.e. sweat equity), and unpaid management (I.e. enterprise equity).
- The voluntary unpaid labor time spent on self-help construction can be converted into capital which allows the use-value to be transformed into market exchange-value.
- Self-help reduces monthly mortgage payments.
- Mutual-aid could transfer a significant part of the public cost of low-income housing to the private sector which is in fact, the user.
2. Physical and social advantages (Friedman; CMHC; et al, 1999)
- Power of individual decision-making.
- Development of skill expertise.
- Enhancement of owners’ self-esteem.
- Stronger community interactions and cohesion through mutual aid to build.
- Sense of place and belonging.
3. Building permit
Quebec has an advantage in contrast to other Canadian provinces, which is that owner-builders do not require building permits. However, they cannot work on installations that are related to the use of gas, petroleum equipment, or electrical installations (Régie du bâtiment, 2018). Moreover, even if the work is performed by contractors, they will be exempt from permitting as well, since they are not required for the framework elements that were prefabricated in a factory (Régie du bâtiment, 2018).
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2.2.5 Self-help Disadvantages
1. Safety
- The lack of knowledge about building techniques can lead to safety risks to a user during the construction process.
- Difficulty for households to obtain insurance on their homes if their construction is not supervised or assisted by professionals (Ghandehari, 2000).
2. Costs
- It is possible, through self-help, to save around 20 percent of the total costs of the dwelling.
However, for conventional building, users must spend an additional 1,500 to 2,000 hours over a year to finish the work. Thus, this can jeopardize a household’s income and even lead users to lose their jobs. This suggests that self-help can help to improve affordability, but only for families that have abundant free time to work on the construction of their home (Skinner & Rodell, 1983).
3. Financing support
Financial aid is often difficult to obtain since banks and other agencies do not agree in how to deal with non-professional builders (Ghandehari, 2000).
4. Quality
Since users are empowered to make decisions about the design of their houses, architects are not fully involved in the process and therefore, some people may consider that the quality and appearance of the dwellings are questionable (Edwards, 1989). Moreover, this has led to self-help housing being synonymous with the term “squatter housing” (Skinner & Rodell, 1983).
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5. Customization
Support and assistance from the government leads to restrictive conditions regarding users’ participation in the many decisions about their houses. Thus, governments provide standardized models that lead to identical and repetitive dwellings which create a lack of identity and uniqueness in neighborhoods (Turner, 1977).
6. Materials
- The lack of experience in construction can lead to a large amount of wasted materials.
- The common use of recycled materials in self-help construction can reduce the quality of the house or be a restriction to a user’s wishes and preferences (Ghandehari, 2000).
2.2.6 The Role of Prefabrication in Self-help Housing
Prefabrication is the off-site production of a dwelling’s parts which are used to reduce construction processes by assembling standardized parts on-site. Often, this is related to high- performance technologies which are suitable for exclusive buildings. However, prefabrication has also proved to be appropriate and advantageous in projects that involve low-income users (Stallen,
Chabannes, & Steinberg, 1994).
In fact, the disadvantages can be solved by complementing self-help with prefabrication:
1. Safety: through prefabrication, the required skill level of construction is lower than with conventional building, and self-help builders are supported by technical assistance. Thus, inexperienced labor can acquire the techniques to assemble and carry out and complete construction without risking their safety. Regarding insurance, the use of prefabrication guarantees compliance with
20 building code standards, which increases the likelihood of obtaining insurance coverage (Stallen et al.,
1994).
Figure 2.2. Self-help construction of prefabricated kit homes. Source: www.kickstarter.com
2. Costs: the use of prefabrication speeds up off-site production processes and on-site assembly of the components, which lead to lower labor costs. Moreover, users can assemble a house in approximately two months, while working during weekends only. This efficiency not only allows families to save money through their unpaid labor but also to retain their regular incomes.
(Wiedemann, 1990). Moreover, due to these savings, the required income to obtain a high ratio mortgage will be lower than the income required for a conventionally built house (CMHC, 2018).
3. Financing support: governmental agencies encourage prefabrication for the improvement of affordable housing (Stallen et al., 1994). Moreover, the use of prefabrication ensures governments
21 more control over the decisions of the household, aesthetic features of the house, and the safety of users, thus self-help housing is considered an advantageous solution for both its promoters and its users.
4. Quality: although construction is a craft that depends on the ability of skilled laborers, the application of prefabrication increases the precision of the products since the factories have the most sophisticated equipment and skilled labor (Figure 2.3), and thus, the components have tighter tolerances than the ones that are completely achieved on-site. Furthermore, simplification of on-site construction tasks and parts assembly allow for a higher quality of construction without the necessity of professional and technological assistance (Stallen et al., 1994).
Figure 2.3. Off-site production
Source: www.homag.com
5. Customization: the efficiency of prefabrication and the use of computer-automated software increase timesaving and control over the different production processes, which allow choices to be offered at affordable prices. These choices result from applying the concept of flexibility to the
22 standardized manufactured components, which enable variations different combinations. Hence, the design of a house can be fitted and altered according to a customer’s preferences and needs (Gibb,
2001).
6. Materials: since everything is planned before production, the quantities of lumber and other materials are precisely known for the construction of each house. Moreover, a manufactured house can be completed very quickly, which not only reduces vandalism and theft of materials but also minimizes their exposure to weather conditions (Ghandehari, 2000).
2.2.7 Conclusions
Although self-help housing can be a social practice independent of any support or sponsorship, this can only lead to short-term advantages which, in brief, will be merely the creation of a shelter.
However, with the help of housing policies, self-help housing offers long-term advantages that will ensure the well-being of inhabitants (e.g., availability of adequate sites, services, low interest rate financial support to construct their houses, or even assistance and mutual-aid). Hence, the acceptance by society to consider self-help as a political practice can lead to several advantages not only by enhancing the affordable of housing, but also by allowing a coherent relationship between dwellings and their users.
However, governmental agencies must allow households to make decisions about the features in their homes since they are the only ones that know what their specific needs and economic capabilities are. Obstacles to this empowerment are the many disadvantages that can result from allowing users to control the entire construction, management, and design process. However, prefabrication is capable of mitigating these disadvantages, and therefore, allowing the development of self-help as both a social and political practice, where balanced interaction can fulfill the needs of a
23 larger number of families in contrast to the number reached by the application of conventional building.
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2.3 KIT HOMES
With respect to the important role of prefabrication in self-help housing, it is imperative to study kit homes. Hence this section will consist of a study about the emergence of kit homes, production strategies that enable their assembly through self-help construction, and finally, the way that these dwellings approach mass customization and affordability.
2.3.1 The Emergence of Kit Homes
Manning Portable Colonial Cottage
The emergence of kit homes dates back to the beginning of industrialized factory-built housing which resulted from the development of Great Britain’s colonization. By the sixteenth and seventeenth century, the British did not have knowledge about local materials in their colonies, and thus they manufactured, in England, all components needed for their settlements and shipped them to different locations worldwide. At the end of the 1700s and the beginning of the 1800s, storehouses and cottages which consisted of frames, panel roofs, floors and walls made of timber, were shipped to Sydney
Australia (Smith, 2010).
An early example of a prefabricated home is the Manning Portable Colonial Cottage (Figure
2.4) developed by London carpenter and builder, H. John Manning. This cottage was highly recognized due to its mobile system whose panels fitted between grooved posts that were standardized and interchangeable. Thus, this was the first innovative and expert system that facilitated the erection of settlements and their delivery, which met the definition of a prefabricated premise of dimensional coordination and standardization (Smith, 2010).
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Figure 2.4. Manning Portable Cottage. Source: www.mimbrea.com
Light Frame and Balloon Frame
A model of timber settlements was adopted in North America, which led to the creation of a light-frame system (Figure 2.5). This system enabled the creation of housing units whose components were finished in a factory and only required on-site assembly. The two possible construction techniques, for the accomplishment of this system, are balloon-frame and platform-frame. The former consists of continuous vertical timber elements that are extended from the base up to the top and support the intermediate floor joists and roof rafters. The latter consists of vertical timber elements that, unlike the balloon frame, are not continuously extended to the top but are interrupted by the floor joists. In addition to the difference in the vertical frame's height, the balloon-frame technique only allows construction of two stories, while the platform-frame technique can reach five stories (Knaack, Chung-Klatte, & Hasselbach, 2012).
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(1) (2)
Figure 2.5 (1) Balloon frame (2) Platform frame. Source: Knaack et al., 2012
These implementations resulted from the almost infinite supply of wood and the mass- production of iron nails, and in fact, most of the homes in the United States were constructed using balloon framing due to its assembly speed (Smith, 2010).
Kit homes in the United States
Kit homes started at the beginning of the twentieth century, during the industrial revolution with the adoption of the balloon-frame technique. They consisted of pre-cut or panelized timber to shape light-frame houses that could be ordered from a catalogue, delivered, and assembled on-site by the owner (Smith, 2010).
At the beginning of their development, by 1906, the most active manufacturers of kit homes were W. J and O.E. Sovereign with Aladdin Homes (Figure 2.6). The completion of the
Transcontinental Railroad in 1869 and the expansion of the United States to the West, led to the proliferation of kit homes since they filled an urgent need to supply a large quantity of quick, affordable, and easily constructed housing. As a result, Aladdin Homes believed in the application of mass production for mass housing. Therefore, they started the “Readi-Cut” system which consisted of precutting all lumber parts, in a factory, that were needed to construct a house, and subsequently, delivering these parts to be assembled on-site. This system was ideal in reducing
27 wasted materials, increasing the speed of manufacturing, improving the quality and precision of components, and thus, facilitating the building of houses through self-help construction (Smith,
2010).
Figure 2.6. Aladdin houses catalogues. Source: co.pinterest.com
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Sears Roebuck and Co
Although Aladdin Homes was the first company to offer a pre-cut lumber system for the creation of prefabricated homes, Sears, Roebuck and Co became the most famous due to its design flexibility, marketing strategies, and financial power. One of the main reasons for the popularity of
Sears’ homes was the diversity of its floor plans and packages in contrast to Aladdin Homes and other manufacturers who provided more simple designs (Smith, 2010).
Sears’s success was based on its variety of housing options at a time when society began rejecting prefabricated houses due to their monotony and repetitive designs. Hence, through catalogues, they offered around 450 design variations (Figure 2.7) among which customers could select the style of their home, but were also allowed to customize floor plans and materials according to buyer tastes. Moreover, buyers could bring their own plans which were fitted by Sears to produce the corresponding package and manual. The flexibility that enabled the variation of the dwelling’s choices did not affect the company’s profit since the pre-cut method allowed an easy adjustment of measurements and cutting lists without requiring modification to the entire production process. This improvement was very innovative since buyers had the opportunity to customize their houses according to their individual preferences, and at affordable prices (Cooke &
Friedman, 2001).
Another reason for their popularity was the offering of financing packages, such as low rate loans and mortgages or even credit for materials and labor, at a time when banks would not finance or support non-traditional building projects. However, both Sears and Aladdin Homes failed due to poor financial decisions during the Great Depression (Cooke & Friedman, 2001).
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Figure 2.7. Sears Homes catalogues. Source: co.pinterest.com
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2.3.2 Kit Homes and Prefabrication
As discussed above, the success of self-help construction depends on the prefabrication of homes. This has been proved through manufactured kit homes which enable not only operational efficiency, but also provide home customization and affordability. Three categories of kit homes exist: pre-cut, panelized, and modular. However, only pre-cut and panelized are appropriate for the performance of self-help; modular homes are prefabricated but require heavy machinery and trained contractors for on-site assembly (Ghandehari, 2000).
Pre-cut manufactured housing
Pre-cut manufactured houses result from breaking up the building into materials and parts that are necessary to complete its shell. Thus, components are produced in a factory, labelled, packaged and delivered to the house site for assembly. This category of manufactured houses is the one that requires the most work on-site (Wiedemann, 1990).
Panelized manufacturing housing
Houses that result from panelized manufacturing consist of wall panels, floor and roof sections delivered to the house site; and once on site, the shell can be framed and the doors and windows can be easily assembled. Moreover, panelized homes can use an open wall or closed wall system. Open wall packages use walls that contain exterior finishes, where plumbing, wiring and insulation are added at the job site. On the other hand, closed wall packages use walls that are finished in the factory and are shipped to be only assembled on-site (Wiedemann, 1990).
2.2.3 Division of a Building into Systems, Modules and Elements
The division of a building into its component parts can be accomplished based on the level of construction or the work packages of the construction trades:
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Classification by levels of construction
The levels of construction can be defined by systems or subsystems (Figure 2.8). On one hand, the systems are primary or secondary, where the primary consists of loadbearing components or the structural shell, and the secondary consists of non-structural components and finishes. On the other hand, subsystems are the modules that shape the primary systems. These are divided according to their function (e.g., roofs, floor slabs, partition walls, stairs, sanitary units). At the same time, the modules consist of elements such as beams, boards, insulation, etc (Knaack et al., 2012).
Whole building
Divided in systems
Divided in elements
Figure 2.8. Division of a building into systems, modules and elements
Source: Knaack et al., 2012
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Classification by construction trades
This classification has a higher level of precision than those mentioned above to define the work packages of finishing and building services (Knaack et al., 2012). These are classified by:
- Loadbearing structure: elements that distribute the loads, where building parts are connected.
- Envelope: interior and external protection of the building.
- Finishing: lightweight partition walls, stairs, and sanitary units. This category consists of components that are permanently connected to the building, and thus, furniture is not included.
- Building services: technical equipment of the building.
By classifying components that comprise a house, kit homes manufacturers can determine which elements must be produced off-site, and what the steps should be to ensure a suitable assembly. This process allows the establishment of comprehensive building instructions, and therefore, facilitates self-help construction by providing an organized and straightforward way to assemble the home.
2.3.4 Production Processes
Process applied in the creation of a building can have an effect on its resulting quality and costs. Thus, a suitable production process must efficiently regard the customer’s objectives throughout the various stages (Knaack et al., 2012) listed below:
1. Planning and design.
2. Consultation, planning, and estimation of costs.
3. Production or prefabrication in the factory.
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4. Logistics of delivery to the construction site.
5. Erection of the building on-site:
5.1 Shell assembly: includes floors, exterior walls, roof trusses, roof covering, exterior doors
and windows, and interior walls.
5.2 Rough finishing: consists of the work that follows shell construction to finish the
house.
5.2.1 Insulation, fireplace, drywall works, and stairs.
5.2.2 Mechanical, plumbing, and electrical systems.
5.3 Finishing: finishes of the house that depend on an owner’s taste such as: paint color,
handrails, floors coverings, kitchen cabinets, exterior cladding, etc (Ghandehari, 2000).
2.3.5 Mass Customization Through Kit Homes
Due to increasing customer demand for variety and tailor-made houses, the home-building industry has been developing mass customization, with the aim of keeping costs at an acceptable level and at the same time maintaining the efficiencies of mass production (Schoenwitz, Naim, &
Potter, 2012). This quest is possible by regarding two aspects that may increase or reduce the level of customization: the flexibility of prefabrication methods, and involvement of the customer in the production process (Duray, 2002).
Aspect of prefabrication methods
Often, the production of kit homes is based on the pre-cut method since it enables high levels of customization at affordable prices, without affecting the efficiency of production. This achievement is possible since it allows an easy adjustment of the designs to incorporate
34 modifications in measuring, without the necessity of changing the entire prefabrication process at the factory (Cooke & Friedman, 2001). Thus, the pre-cut method allows high levels of flexibility since standardized component parts can be modified at lows costs to the company and to customers, without adding internal complexities in the management of the variations.
Aspect of customer involvement
The degree of customization is proportional to the level of customer involvement in the production process. Lampel and Mintzberg (1996) developed a range of strategies to recognize the level of customer involvement by stating that the value chain comprises four main stages: design, fabrication, assembly, and distribution. The point of customer involvement in these production stages is an essential indicator of the degree or type of customization provided by the companies.
Thus, when customers are involved during the early stages, the product results in highly customized homes (Blecker & Friedrich, 2006).
This analysis was furthered by the definition of five strategies: pure standardization, segmented standardization, customized standardization, tailored customization, and pure customization. Pure standardization is the lowest level of customization since all stages of the value chain are standardized. Pure customization occurs when customers are involved in the entire design process. The other strategies are intermediate forms, which have different degrees of customer involvement during the production cycle (Blecker & Friedrich, 2006). Moreover, this model was adapted by the author Barlow et al. (2003) who develop a specific supply chain for housing, which considers the flow of materials, as well as the design functions as shown in Figure 2.9.
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Figure 2.9. Customization versus standardization. Source: Schoenwitz, Naim & Potter (2012)
The level of customization allowed by kit homes depends on the variety of choices that the manufacturer offers according to its production process while avoiding the loss of efficiency and the rise of prices. There are some manufacturers that follow the example of Sears, who will accept and create a house according to a customer’s plans and specifications (Cooke & Friedman, 2001).
According to the Figure 2.9, they could reach the level of pure customization since the buyers would be involved during the first phase of production by following a buy-to-order process. Other
36 manufacturers, offer customers home choices according to their catalogues. The kit home can be the replication of an existing home design from the catalogue or can result from a design alteration and fitting according to customer preference (Ghandehari, 2000). This process is called make-to- order which can be considered a tailored customization since buyers are allowed to make decisions by selecting parts that are predefined by the manufacturers.
Although customization of kit homes ranges between two levels, both levels allow significant customer involvement in the decision-making process for features of their house.
Moreover, these decisions are not restricted to the early production stages of their houses, but can be made during the construction or even in the post-occupancy stage. This is possible through self- help construction since it allows owners to finish their houses according to their personal wishes, within a suitable timeframe, and within budget.
Mass customization challenges
Although kit homes ensure a high level of mass customization, manufacturers must concern themselves with the complexities that can be presented due to the extensive variety in product that this concept implies. According to the authors Blecker and Friedrich (2006) two main problems exist:
External complexity and Internal complexity.
• External complexity
Although customer satisfaction increases with the offering of choices, a large variety of selections can lead to feelings of frustration and confusion since customers can become overwhelmed by the product selection process, and may not feel capable of making optimal decisions. This is called external complexity and it occurs due to three main factors: customers having limited information, lack of knowledge about the product, and ignorance about their own needs. Moreover, customers are unsure about deciding what they want and need. To understand
37 this phenomenon Blecker et al. (2005) developed a model that distinguishes between two types of needs: subjective needs which are influenced by a customer’s personal opinions, and objective needs which refer to what customers actually require. Based on this model, the authors suggest that companies should provide support to customers during the interaction process to help them identify their objective needs.
• Internal complexity
Internal complexity consists of negative effects such as an increase in costs and a reduction in the speed of the supply chain, which can originate due to uncontrolled growth in the variety of products. In fact, extensive product variety in mass customization leads to certain loss of efficiency during manufacturing which has an impact on costs, as well as on service and delivery times. The proliferation of variety, increases the complexity of purchasing parts and materials, while leading to difficulties during the processes of planning, management and control. In addition, since distribution networks are required to deliver the various individual products, distribution complexity will increase as well.
Customization from standardized components
Following the study of the challenges faced in mass customization, it is imperative to ask the question: how is it possible to offer choices while minimizing operational costs and complexities to ensure a low price of the house?
According to Gann (1996) a suitable way to face these challenges could be to adopt lessons from the manufacturing sector which allows the customization based on standardized components.
In fact, one of the main reasons for applying manufacturing techniques to housing has been to reduce the complexity of on-site building.
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This idea of meeting customer demand for a variety of choices, while improving efficiency in production, began in the late 1940s with the manufacturing techniques’ experiments at Toyota.
These experiments led to improvements in Japanese companies by creating teams of multi-skilled workers and sophisticated machines which produce a high volume of products in great variety. This is called Lean Production which in fact, has been transferred from the manufacturing sector to the home-building industry. To understand how Lean Production has influenced home building, the authors Naim and Barlow (2003) explained the concepts of lean and agile since both must work together to improve housing production. On one hand, agility means using market knowledge to address efficiency by maximizing the levels of service through flexibility and customization at an acceptable price. On the other hand, leanness means developing an efficient process to eliminate waste, reduce time, and improve schedules. The market incentive for a lean process is price, whereas for an agile process it is service. However, the emphasis of both lies in terms of customer satisfaction concerning their requirements. Hence, with the combination of both paradigms which the authors call leagility, it is possible to answer the introductory question of this subchapter: how to offer a customized product at an acceptable price.
Leagility is based in a supply chain system with different parts including material suppliers, production facilities, distribution services, and customers, linked together by a flow of materials and demand for information. To ensure the efficiency of this system, as well to minimize costs, the process must be developed under the notion of customer focus. This is possible by identifying the decoupling point of the system, which is the point of customer involvement that separates the supply-chain side, focused on customer delivery, from the side based on logistics planning. Thus, according to the decoupling point, it will be possible to apply different strategies to ensure that the total value is delivered to the end customer.
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Figure 2.10. Family of supply chain structures. Source: Naim & Barlow (2003)
As mentioned above, the levels of customization that reach kit homes are related to the buy-to-order or make-to-order supply chain. These strategies are suitable to avoid waste and stock obsolescence, but imply more time to produce the building materials. However, “lead-time” or time spent on off-site works can be advantageous to owners, giving them adequate time to prepare their lot foundation, and therefore to be prepared to receive their kit home.
2.3.6 Affordability Through Kit Homes
According to the study of Wiedemann (1990), prefabricated and conventional homes have similar total costs. The reason for this is that the installation charges for manufactured houses can be significant. Specifically, in Quebec, the cost of assembly of pre-cut homes is approximately 700 dollars per square foot.
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Thus, as mentioned above, the main strategy that leads to reduction of housing prices through the use of kit homes is based on self-help construction. Moreover, the efficiency of production can influence the price as well.
In fact, production costs are related to the time spent on completing the works off-site.
Through the pre-cut method, costs are minimal since cutting the different parts of the house to size is done using technologically sophisticated equipment. Moreover, most parts are standardized which allow for a high degree of efficiency. On the contrary, the panelized method application requires more time and implies more complexities since it requires a higher level of factory work to complete the components; this increases production costs, and becomes an added value for customers since it facilitates self-help construction. For instance, Sears offered the option of panelized houses but it imposed extra fees that clients preferred to save by working more on their own houses (Cooke & Friedman, 2001).
Regarding self-help construction, manufacturers provide different options which are: to deliver kit homes requiring complete assembly on-site by the owner; to provide a service of laying the foundation and/or constructing the shell of the house, or; to completely construct the house, thus requiring no self-help construction (Ghandehari, 2000).
A buyer’s decision among these options will be determinant of the total price of the kit home. According to Ghandehari (2000), when buyers decide to construct the entire house themselves they can save between 20 and 30 percent of the total cost. However, in most cases, owners consent to pay for construction since it is highly complex and requires more workers per job. Although this can affect the total amount of savings, the price of the house can still have a significant reduction if the finishing work is left for the owners. In fact, this is the most-cost effective phase for self-help builders because it represents approximately 50 percent of the total savings that can be achieved through a complete self-help construction.
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2.3.7 Conclusions
Sears is an example of kit home manufacturers that provided a potential solution to enhance not only housing affordability but also customer satisfaction. Hence, it will be of interest to understand, in the next chapter, how the present-day kit home manufacturers work, if they continue to ensure the feasibility of self-help construction, and how new technologies and online catalogues have changed customer involvement.
Considering the fact that prefabrication is the most appropriate technology for the success of self-help, its affordability depends on the methods and production processes that facilitate the assembly of the house by inexperienced owners who have no prior building experience. On the contrary, independent from these processes, kit homes allow a high level of customer involvement before, during, and after the completion of the houses.
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CHAPTER 3: CASE STUDIES
3.1 INTRODUCTION
This chapter consists of the analysis of case studies of eight kit home manufacturers from the UK, the USA, and Canada. Their selection was based on three premises. First, the manufacturer should produce kit homes that were mainly designed for owner-builders. Second, the company should have over ten years of experience in the production of prefabricated self-help kit homes.
Third, the manufacturer should offer a variety of single-family wood-framed kit homes for use in rural areas.
The main purpose of this study, was to evaluate the achievement of affordability, particularly with respect to the role of self-help construction. The accomplishment of mass customization through kit homes was also investigated. Evaluations of affordability were based on: comparisons between the costs of a kit home and a conventional single-family home; the role of self-help construction in reducing costs; the extent of alternative strategies that companies apply to achieve cost reductions that allow people to buy their ideal home without sacrificing their personal preferences due to budget limitations; and the possibility of achieving an accurate estimation of costs. These aspects result from the previous theoretical framework and the commonalities that were found throughout the research for each manufacturer. Moreover, the comparison of costs was based on the location and housing affordability context of each manufacturer.
For case studies of UK (CS1, CS2) manufacturers it is important to consider that population growth has been steadily rising throughout the years. In fact, the UK’s Office for National Statistics projects that between 2016 and 2026, its population will increase 5.5 percent. Moreover, during the twentieth century, the number of households increased three times, not only as a result of population growth, but also because demographic changes caused by an increase in the number of
43 people living alone. This issue leads to the necessity of supplying more housing units to the large number of people in need of a place to live. However, at present, either UK dwelling prices are not affordable for a large part of the population, or those who have access to a home live under poor living conditions. In fact, UK statistics from 2008 demonstrated that 42 percent of the homeless cannot afford the cost of rent, and that 33 percent of the total population rent or own a non-decent home. For this reason, it is important to determine if kit homes can be an appropriate solution to reduce this housing affordability crisis (Office for National Statistics, 2017). In fact, the average price of a conventional house, in 2017, increased about 5 percent over a 12-month period, and at present, a single-family home’s average price is £224,144 ($392,171 CAN) (Land Registry Data, 2018).
For the case studies of USA (CS6, CS7, CS8) manufacturers, the state of housing is not different. According to The State of The Nation’s Housing of 2017 by the Joint Center for Housing
Studies at Harvard University (2017), housing prices in the USA rose 5.6 percent, and the Consumer
Price Index for rent rose 3.8 percent in 2016. Moreover, the country shows acceleration in population growth as well, which suggests that by 2020 the population will increase by 1.27 million per year. However, in the USA, housing affordability data drastically change state by state, as do housing policies and planning permits. Thus, although manufacturers ship kit homes to all cities in the USA, it is important to consider the state where the manufacturer is located, to develop a specific and more accurate comparison of costs. Hence, CS6 (Enviro-Tech Post and Beam) is based on the average cost of a conventional single-family home in the state of New Hampshire, which is
$230,288 US ($305,865CAN); CS7 (PMHI) is based on the average cost in California (where housing affordability is an issue) which is $354,793 US ($471,230 CAN); and CS8 (Sloan’s Mill Engineered) is based on the average cost in North Carolina which is $235,009 US ($312,135 CAN) (National
Association of Realtors, 2018).
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As mentioned in the rationale of this study, Canada presents a housing affordability crisis as well. Moreover, the average cost of a conventional single-family home is significantly different within the provinces, where each province has its own regulations for issuing planning permits.
Hence, manufacturers that offer kit homes in Canada, were compared specifically with Quebec, in order to achieve a thorough approach to the goals of this research report. The average cost of a conventional single-family home in Quebec province is $248,000 CAN (Centris, 2018).
In addition to average cost of homes, it was important to consider the average size of a conventional home in each context. Thus, the comparison between the total cost of a conventional home and a kit home, was based the most expensive design of each manufacturer, which size was similar or larger than a single-family home’s average size in the country studied: 90 m² in the UK
(Office for National Statistics, 2017); 176.51 m² in Canada (Tencer, 2016) and; 225.38 m² in the USA
(U.S Department of Housing and Urban Development, 2017). Moreover, to understand the significance of self-help construction in generating savings, 30 percent was added to the cost of the kit home, for the cost of labor. In fact, for the case studies of Quebec, these added costs were calculated based on the data of Gandhari’s study (2000).
The analysis of achieving mass customization was based on information provided by manufacturers about their: designs, levels of customization, flexibility regarding modifications, variations of design choices, and strategies employed to facilitate customers’ decision-making. The source of information was limited to manufactures’ websites since it was important to understand how kit homes are related to digital media only, thus avoiding inefficient communication with manufactures’ dealers, and avoiding customers’ long-distance commutes to dealerships for them to learn about choices and functionality of this type of housing. In fact, all catalogues, building manuals, and instructional guides (including videos) were digital.
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Manufacturer's Profile
Scotframe has over 50 years of experience in manufactured housing. The head office
is in Aberdeenshire, Scotland, and it delivers the kit homes to all countries of the United Kingdom. Its manufacturing system is based on environmental credentials, and therefore, the timber frame system consists of panels which thermal specifications vary according to the price that customers can afford.
1. Design Item Description Image Scotframe has a rural homes' collection which has about 1. Choose an existing 20 different style choices among which the customers model can select a pre-existing model with or without modifications, or bring external floor plans to create a 2. Customize an existing tailor-made kit. Moreover, Scotframe provides some model design considerations (e.g.location, sitting, design) that owners should consider before making decisions about the location and appearance of their house. 3. Bring your own plans
Choices
Bedrooms 2-4 Bungalows Area (m²) 75 m²-155,50 m²
Bedrooms 3-4 1 1/2 Story Area (m²) 136 m²-201 m²
Bedrooms 3-5 1 3/4 Story Area (m²) 135 m²-239 m²
Bedrooms 3-4 2 Story Area (m²) 145 m² and 172 m²
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2. Consultation, Planning and Estimation of Costs Item Description Image The company has lots for sale in two areas of Scotland: Ayrshire and Aberdeenshire. However, if the customers are searching for an affordable lot, the Highland Self Lots Build Loan Fund of the Scottish Government offers financial assistance and several lots.
The lots offered by the company include all the Municipal Services municipal services.
The lots offered by the company include the outline Planning Permit planning permission. Scotframe creates kit homes according to the Val-U- Therm Plus method. Thus, starting prices depend on Estimation of costs thermal specifications, as well as on the areas and dwelling styles.
The starting prices are between $438- $612 per m². The price of a model increases approximately a 10% from the most basic (1) to the middle thermal Starting Prices specification (3), as well as within the best thermal specifications (4 and 5). Hence, the price increases a 30% from the thermal specification 1 and 5.
1* Open-3* Closed $37,108-$89,880 Bungalows 4* Closed-5* Closed $446,77-$105,385 1* Open-3* Closed $72,231-$140,560 1 1/2 storey 4* Closed-5* Closed $85,548-$163,109 1* Open-3* Closed $68,600-$133,892 1 3/4 storey 4* Closed-5* Closed $83510-$151,121 1* Open-3* Closed $64,645-$94,902 2 storey 4* Closed-5* Closed $80,088-$109,515 The mentioned range of prices is between the smallest Note and largest houses of each style.
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3. Production Item Description Image The company's kit homes are panelized. The panels' production is based on thermal specifications that follow the Val-U-Therm PLUS method. This method enhances the efficiency of insulation materials, thus minimizing heat loss. The price of the many specifications increases according
to their level of performance. The best specifications (4 Panelized and 5) consist of closed walls, and thus, the insulation, sheathing, windows and doors are installed off-site if the customers request it. The medium-level thermal specifications (2 and 3) can consist of closed walls as well, or customers can opt for opened walls which are less costly. Finally, the most basic specification (1) is only available as opened walls.
4. Delivery Item Description The company delivers the kit homes but at an extra Company Delivery price.
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5. Construction Item Description Image The rural catalogue consists of compact and simple designs that owners can assemble on their own. Self Builder Moreover, the company provides the plumbing and electrical systems ready for installation, as well as light- weight panels that are easy to erect. According to the company, customers do not need Do-It- DIY Skills Yourself (DIY) skills since it is only necessary common sense, motivation and project management skills. Under ideal weather conditions, the construction of a kit home's shell only requires 5 days, and the Time construction of the whole house can take about 8 weeks. Kit Specifications Sole Plate components according to the Thermal Kit Ground Floor Specifications Structural elements, ceiling Plasterboard, and First Floor Insulation. External panels according to Thermal Kit Specification, Walls Structural Elements, Plumbing and Electrical Dwangs, Internal Partitions, Plasterboard, and Insulation. Structural elements, Apex Panels, Plywood, Boards, Roof Framing, Plasterboard, and Insulation.
Windows and External The windows and rooflights can be double or triple Doorsets, and rooflights glazed depending on the Thermal Kit Specification.
Internal screens and doorsets, wardrobes, finishings, Finishes stairs, shelving, sundries, and cornice.
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3.2 CASE STUDIES: MANUFACTURERS OF KIT HOMES
3.2.1 Case Study 1: Scotframe Timber Frame Homes.
Source: (Scotframe timber frame homes, n.d.)
Affordability
Self-built kit home price vs. conventional home price
In contrast to the average single-family home price of $392,171 in the UK (Land Registry
Data, 2018), the highest starting price of a Scotframe kit home is $163,109 for a 1 ½ story house of
201 m². However, it is necessary to consider additional items that define the total cost of a kit home, excluding labor since a kit home owner’s labor is provided in sweat and enterprise equity.
Item Price ($ CAN) Lot 81,551 Starting Price 163,109 Planning permits 2,021 Delivery 1,045 Mechanical,plumbing and electrical system 15,050 Estimated Total 262,776
Table 3.1. Kit home cost without labor (CS1)
Table 3.1 is based on the following data:
- According to the UK Land Directory (2004), the average price of a lot of land in the countryside is about a 45 percent of the total cost of the house which is, in this case, $81,551 per lot. Considering that the price of lots that the manufacturer offers cost about $174,955 (including planning permits) and that this price corresponds to an area of 0.5 acres, it is possible to deduce that the price in this case study reflects a lot of 0.25 acres, which is a suitable size considering the
50 floor area of the house. It is important to take into account that this price does not include the compulsory outline application permit, costing $808 per 0.1 acres, for a total price, in this case, of
$2,021 (Planning Portal, 2018).
- The delivery cost is $2.62 per 1.6 km (Road Haulage Services, 2018). Thus, the cost in this study of $1,045 is calculated for the distance from the factory in Aberdeenshire (Scotland) to London
(England) which is 527 km away (Time and Date, 2018).
- Owner-builders must employ contractors since they cannot execute the mechanical, plumbing and electrical installations by themselves. The average cost of these tasks is $4,375 for electrical installations (Home Advice Guide, 2018) and $10,675 for plumbing and HRV (Heat recovery ventilation) installations (SelfBuild, 2018) for a total of $15,050.
These data lead to the total price of the house being $262,776 ($1,307 per m²). This means that customers can save about 33 percent through self-help construction (Figure 3.1). This proves that kit homes can help to lower the cost of housing in the UK, and to mitigate poor living standards.
In fact, the most expensive option from this manufacturer is for the the 5* closed Val-U-Therm system which is their panel specification that ensures energy efficiency and the most suitable thermal comfort for the house.
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450,000 120% 400,000 100% 350,000 300,000 80% 250,000 60% 200,000 150,000 40% 100,000 20% 50,000 - 0% Conventional Home Kit Home
Cost ($ CAN) Percentage
Figure 3.1 Cost difference between conventional single-family home
and kit home without labor (CS1)
450,000 120% 400,000 100% 350,000 300,000 80% 250,000 60% 200,000 150,000 40% 100,000 20% 50,000 - 0% Conventional Home Kit Home- Owner Kit Home-Labour Builder
Cost ($ CAN) Percentage
Figure 3.2. Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS1)
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Figure 3.2 includes hypothetical costs of a kit home constructed using specialized labor. It shows that with labor increasing the cost of a kit home by 30 percent, there would be no difference in price for a kit home using labor and a conventional house in the UK.
Self-help construction feasibility
The possibility of accomplishing self-help construction must be considered by kit home manufacturers to ensure that customers are able to save a large amount of money relative to a convention home. Through the analysis of this case study, it is possible to identify that although the company provides an easy-to-assemble panel system (it is light and has a very high-level of off-site completeness), it does not assist owner-builders with step-by-step manuals, nor instructional videos or other assembly guides to avoid the necessity of employing contractors.
Affordable options to lower the cost of the kit home
Regarding choices that allow customers to decide how expensive their house will be, the company offers different selections with a wide range of pricing according to the panel thermal specification of their Val-U-Therm PLUS system. Thus, a customer can save about 30 percent by choosing a basic and opened panel system. In this case, the company provides complete information about panel specifications and prices, thus facilitating a customer’s decision-making. For instance, by understanding the differences in the various panel systems, customers can decide if less costly options are, perhaps, unfavorable since they require more contractors during the assembly of the house. In fact, owners will have to install insulation and other materials that are not accomplished off-site, and therefore, this option is suggested to owners that have do-it-yourself (DIY) skills and are motivated by self-help construction. Otherwise, the final cost of the home can be higher than the closed panels due to the higher cost of labor.
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Mass customization
Level of customer involvement
Regarding customer involvement during the design phase, it is possible to conclude that the manufacturer provides a high level of customization options. In fact, customers not only have the possibility of modifying existing choices, but also to completely request design changes for their ideal home, and Scotframe will adjust its prefabrication standards to incorporate these changes for the elaboration of the kit. Although kit homes provided by this manufacturer are panelized (which implies certain limitations to avoid internal complexities in off-site tasks), the manufacturer is very flexible regarding possible modifications and new designs. Thus, this can be considered as a buy-to- order strategy, which leads to a pure customization.
Choices and variations of existing models
Customers have numerous choices for the design of their house with a wide range of customizations that can be significant to their lifestyles. For instance, based on the family structure size, customers can choose between a 2-bedroom, 75 m² home or a large 5-bedroom, 239 m² home.
Moreover, according to their preferences or the level of complexities that they can handle during self-help construction, they can choose between a 1-story house, a 1 ½ story house, a 1 ¾ story house, or a 2-story house. These models have different facade designs, volumes, plan configurations, and programs. These variations are important since the manufacturer avoids repetitive and standard designs, and thus, allow customers to own a more personalized house.
Manufacturer strategies to avoid external complexities of mass customization
Based on the online catalogue and other information provided by the manufacturer for each design, including design type, number of bedrooms, floor area, frontage, height, price, and visual information that consists of a 3D image, and plans, it is possible to deduce that buyers will not face
54 external complexities. In fact, the arrangement of choices is very clear, and the manufacturer provides some tips that buyers must consider before purchasing a kit home. Hence, this facilitates the decision-making process and ensures buyer satisfaction.
Moreover, regarding the information about their Val-U-Therm PLUS products, and the production and building phases, the manufacturer provides extensive information to ensure that customers are aware of the benefits of buying a Scotframe kit home. Moreover, they have a section of Frequently Asked Questions specifically about the thermal panel specifications.
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Manufacturer's Profile Cottage Kit Homes has 34 years of experience in prefabricated timber frame housing. The head office is in Scotland, and it is a member of the Structural Timber Association of the UK. Its kit homes are based on Q-mark quality standards which are applied to their design, manufacture and assembly system. Moreover, the company's mission consists of providing affordable options, easy-to-assemble homes, and customization.
1. Design Item Description Image
1. Choose an existing Cottage Kit Homes provides 37 different choices of kit model homes. Customers can select one and order it without
modifications or customize it. The customization is accomplished through a computer-aided design software that is managed by the in-house architectural team to create tailor-made houses that fulfill the preferences and needs of customers. 2. Customize an existing The different options of the catalogue are classified according to the number of bedrooms. model
Choices
1 Bedroom Area 62 m²
2 Bedrooms Area 64 m²- 145 m²
3 Bedrooms Area 80 m²- 180 m²
4 Bedrooms Area 95 m²- 142,5 m²
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2. Consultation, Planning and Estimation of Costs Item Description Image
The company does not offer lots. However, it provides advice to customers about aspects that are important to Lots consider before buying a lot (e.g. location and acknowledge of planning regulations)
Customers are in charge of getting the connection of Municipal Services municipal services to their lots. The company does not
offer any assistance for this process.
The company offers assistance at no extra cost, for the Planning Permit application of planning and building permits. The starting prices regard the basic kits that include all materials necessary to achieve self-help construction, as well as structural calculations and timber frame specifications that may be necessary for the building permits processing. Moreover, the company has a Build
Estimation of costs Cost Calculator that customers can use online to get an estimation of the kit home cost with the delivery included. The calculation is based on the "Route" that customers select for the construction of their house ( I.e. Self-build, Self-manage or Full Build), the lot's location, and the design. The starting prices for the self-build route without
including the delivery are between $525-$612 per m². Starting Prices These prices increase about a 6% and 17% from the Self- build option to the Self-manage and Full Build options respectively. 1 Bedroom $40,328 2 Bedrooms $38,564- $84,857 3 Bedrooms $47,678-$101,721 4 Bedrooms $55,776-$75,355
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3. Production Item Description Image
All cottage kit homes consist of prefabricated panels. The company offers standard opened walls with external clad, as well as closed walls, which insulation is installed off-site. Opened walls are better for owners 1. Panelized that wish to erect the house by themselves since the panels are very light in contrast to the closed walls, which are heavy, and thus, require the use of mechanical handling.
4. Delivery Item Description
The company delivers kit homes to the customers' site 1. Company Delivery at an extra price.
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5. Construction Item Description Image According to the company, any person can undertake the assembly and internal fitting of the house since the designs are simple and are single-story houses. 1. Self Build Moreover, the manufacturer supplies an understandable assembly manual. However, if customers need to ask for a mortgage, they must hire a building supervisor.
Kit homes can be assembled by any owner even without prior building experience, by following the instructions DIY Skills of the manuals. However, the builder needs carpentry skills. The manufacturer does not give information about the Time time needed for the erection of its kit homes. Kit Specifications Wall plates, prefabricated panels, hardware, roof Structural Pack trusses, PVC fascia, double glazed windows, external doors,etc. Prefabricated partition panels, insulation, plain Finishings Pack plasterboard, ceilings, interior doors, facings, etc.
Buyers are in charge of all the tasks involve in the assembly of their kit homes. However, rather than 2. Self Manage undertaking DIY skills, they hire different builders for
specific trades. By selecting this option, customers employ an NHBC (National House-Building Council) registered house 3. Full Build builder that assumes the responsibility for the whole project. This option is for owners that need warranty, insurance and mortgages.
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3.2.2 Case Study 2: Cottage Kit Homes
Source: (Cottage Kit Homes, 2018)
Affordability
Self-built kit home price vs. conventional home price
Cottage Kit Homes are distributed throughout the UK, and thus, comparisons will be based on the average single-family home price in the UK which is $392,171 (Land Registry Data, 2018).
Item Price ($CAN) Lot 52,547 Starting Price 101,721 Planning permits 1,294 Delivery N.A Mechanical,plumbing and electrical system 15,050 Estimated Total 170,611
Table 3.2. Kit home cost without labor (CS2)
Table 3.2 is based on the following information:
- As with the previous case study, it was calculated that 45 percent of the total cost of the house is the price of the lot. Based on the case study of Scotframe which suggests that a price of
$81,551 corresponds to a lot size of 0.25 acre, here $52,547 corresponds to a lot size of 0.16 acre.
This relationship between price and lot size is important for the definition of the approximate planning permit cost which is $1,294 (Planning Portal, 2018).
- Delivery is included in the starting price of the kit.
- Owner-builders must employ contractors since they themselves cannot accomplish the mechanical, plumbing, and electrical installations. The average cost of these tasks is $4,375
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(Road Haulage Services, 2018) and $10,675 (SelfBuild, 2018) for the electrical installation, and plumbing and HRV installation, respectively.
These data lead to a price of $170,611 ($947 per m²) for a 180 m² house; a price which is very low in contrast to the average price of a conventional single-family home in the UK.
450,000 120% 400,000 100% 350,000 300,000 80% 250,000 60% 200,000 150,000 40% 100,000 20% 50,000 - 0% Conventional Home Kit Home
Cost ($ CAN) Percentage
Figure 3.3. Cost difference between conventional single-family home
and kit home without labor (CS2)
As seen in Figure 3.3, the price of the kit home is 57 percent less than a conventional home, meaning that the quality of the dwelling can certainly be improved through the kit homes and at an affordable price. In fact, the size of this kit home is larger than the average house in the UK, and the kit-home plan has higher standards of livability, as well as a complete architectural program.
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450,000 120% 400,000 100% 350,000 300,000 80% 250,000 60% 200,000 150,000 40% 100,000 20% 50,000 - 0% Conventional Home Kit Home- Owner Kit Home-Labour Builder
Cost ($ CAN) Percentage
Figure 3.4. Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS2)
According to Figure 3.4, with the addition of labor costs, the kit home is still less costly (by
27 percent) than a conventional single-family home in the UK. However, it is important to consider that if a customer needs a mortgage, they would be required to employ a supervisor for the construction of the kit home which can significantly increase its total cost.
Self-help construction feasibility
One of the main goals of this company is to provide affordable housing. According to the company, through the self-build option, customers can save about 20 to 40 percent vs. a conventional home. Hence, they provide manuals to guide owner-builders through step-by-step the construction of the house. Moreover, the panelized system is easy to assemble, and customers can decide between a closed wall or opened wall system. Both have different costs, but the former reduces times and complexities in the construction of the kit home.
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Affordable options to lower the cost of the kit home
An alternative option to lower the cost of the kit home is to choose between an opened wall or closed wall system. Moreover, the manufacturer offers three options for the kit home according to the “route” they want to take: Self-build, Self-manage or Full-build, with self-build being the most affordable choice. However, customers can accomplish an accurate estimation of costs since the company provides all starting prices and information about what is included, and their website has a Build Cost Calculator which indicates the cost of each “route” and includes the price of delivery depending on the location in the UK.
Mass customization
Level of customer involvement
The level of customer involvement is high but has some limitations. The mass customization strategy is make-to-order, and thus, customers can modify existing models but cannot create a completely new design. Nevertheless, the company is very flexible for implementing significant changes such as adding extra rooms, moving internal partitions, changing the color of the facades, combining two models, and modifying the position of windows and doors or adding new ones. This customization is easy to accomplish since the manufacturer assists the user without charging extra fees, and thus, approaching a tailored customization.
Choices and variations of existing models
The company offers multiple design choices for the house, especially related to home size and layout. In fact, the variations in size do not result from merely expanding a regular plan, but the home’s shape, program, and arrangement of its spaces can change as well. These alterations cause variations of the facades, which lead to unique designs which are not monotonous nor repetitive.
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Manufacturer strategies to avoid external complexities of mass customization
The Cottage Kit Homes models are classified according to the number of bedrooms. This is a suitable way to organize their catalogue since this feature can be the basis for the decision-making of any family structure.
In addition to the home’s plan, each model has a video of the house which shows the facade of each model. However, this could be improved by also showing interior spaces, since understanding architectural plans is not a simple task. However, if customers are really interested in this company’s homes, their design team can provide detailed images of a tailor-made home using computer-aided software to modify existing home models.
In addition to the design, the manufacturer provides information about the timber frame, the benefits of self-build, the assets of the company, and a section of Frequently Asked Questions regarding their kit homes.
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Manufacturer's Profile
Shelter-kit has over 48 years of experience in manufactured housing. The head office is in Warner ( New Hampshire, USA), and it delivers kit homes to the 50 states of USA, Canada, and all around the world. Its main objective is the production of customized kit homes that can fulfil customers' requirements and be assembled by owners without prior building experience.
1. Design Item Description Image 1. Choose an existing
model Shelter-kit offers over 50 models of 1, 1 1/2, or 2 story 2. Customize an existing houses (e.g. ranches, capes, colonials, etc). Customers
model can replicate one of the existing floor plans or customize it (except for the Goodfit Homes). Moreover, the company can manufacture kit homes according to 3. Bring your own plans buyers'external plans or design new models by following specific requirements. 4. Design with the company
Choices Bedrooms 1-3 GoodFit Homes 838 sq. ft (77.85 m²)- 1,662 Area sq. ft (154.40 m²) Bedrooms 1- over 5 Houses 875 sq. ft (81.29 m²)- over Area 3,000 sq. ft (278.70 m²)
Bedrooms 0-2 Cabins 144 sq. ft (13.37 m²)- over Area 1,500 sq. ft (139.35 m²)
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2. Consultation, Planning and Estimation of Costs Item Description Image Lots The company does not offer lots. Customers are in charge of getting the connection of Municipal Services municipal services to their lots. The company does not
offer any assistance for this process. Customers must accomplish the processing of the planning permit. Hence, they should specify to Shelter- Planning Permit kit what are the plans and technical information that building officials request. Prices vary depending on the size, shape and complexity of the kit. Moreover, kits whose construction is on a Estimation of costs concrete slab are less costly because they do not include the "first-floor subfloor".
Kit homes' starting prices are between $36-$63 per sq.ft, the Goodfit homes are between $55.5-$68, and the average starting price of the cabins is $42.5 per sq.ft.
With respect to cabins and houses, the total cost of Starting Prices their models is not specified on the website since the complexities and configuration can vary in each specific case. On the contrary, Goodfit Homes are not allowed for customization, and thus, they have fixed starting prices.
Goodfit Homes $57,921-$92,567 Houses Not specified Cabins Not specified
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3. Production
Item Description Image
The many parts of the structural shell are pre-cut from quality and individually selected lumber. After the off- site production of the components, these are labelled Pre-cut and indexed to construction drawings in order to facilitate their identification during the construction. Moreover, the pieces have special joints that facilitate their assembly.
4. Delivery
Item Description Shelter-kit delivers the kit homes at an extra cost. The shipping costs range between $1,290 and $5,172
Company Delivery depending on the distance from the factory. Moreover, the company ship kits to Canada without billing extra fees.
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5. Construction
Item Description Image The pre-cut parts are easy to assemble, and Shelter-kit recommends a mutual-aid construction of at least two Self Builder people. The use of cranes, lifts or specialized tools is not necessary to build the house. According to the company, over 85% of their kit homes have been built by owners without prior building experience. Moreover, the company provides a manual DIY Skills that is unique for each kit and includes understandable drawings, as well as step-by-step instructions and unlimited assistance throughout all the construction stages. Kits can be assembled between 5-25 days. The time Time depends on the kit's complexity. Kit Specifications The different kit home's styles include all the construction materials such as hardware, fasteners, framing, sheathing, siding, sub-floors, stairs, roofing, and so on. Although the package does not include the windows and doors, the manufacturer offers it at an extra cost. However, the company does not provide other finishing materials and the porch railing system.
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3.2.3 Case Study 3: Shelter-Kit
Source: (Shelter-Kit, 2017)
Affordability
Self-built kit home price vs conventional home price
The kit homes manufactured by Shelter-kit are available in Canada and the United States.
However, the comparison will be based specifically in Quebec.
At present, the average price of a single-family dwelling in Quebec is $248,000 (Centris,
2018). The highest starting price of a Shelter-Kit is $92,567 which corresponds to a 154.40 m² house.
Table 3.3 below consists of additional costs that must be considered to compare total costs:
Item Price ($ CAN) Lot 24,025 Starting Price 92,567 Planning permits N.A Delivery 5,172 Mechanical, plumbing and electrical system 22,388 Estimated Total 144,152
Table 3.3. Kit home cost without labor (CS3)
To obtain these costs, it was necessary to consider the following information:
- The land value in North America must be approximately 20 percent of the building cost which, in this case, would be $24,025 (TGG Accounting, 2013).
- This study uses the highest delivery price given by the manufacturer, which is $5,172.
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- The owner must employ contractors since they themselves cannot execute mechanical, plumbing and electrical works. The cost of electrical installation is $50 per hour, and electricians spend about 1 hour per 10 m² (FIXR, 2018). The cost of plumbing labor is approximately $85 per m²
(SFGATE, 2018). It is also imperative to add the cost of supplies which is about $55 per m²
(Ghandehari, 2000).
As a result, the most expensive Shelter-Kit kit home costs $144,152 ($933 per m²). This means that the kit home is approximately 42 percent cheaper than a conventional home as shown in Figure 3.5. This percentage will decrease when adding the cost of windows and doors which, as well as other finishing materials, are not included in the kit. However, the savings will still be significant.
300,000 120%
250,000 100%
200,000 80%
150,000 60%
100,000 40%
50,000 20%
- 0% Conventional Home Kit Home
Cost ($ CAN) Percentage
Figure 3.5. Cost difference between conventional single-family home
and kit home without labor (CS3)
The kit house used in the comparison is the largest Goodfit Home model which is part of the catalogue of unique designs that were conceived in collaboration with the architectural firm, Ross
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Chapin Architects; it has three bedrooms and two floors. Hence, it is possible to conclude that customers can have access to affordable, quality homes appropriate for any family structure.
Table 3.4 includes labor costs to better understand how essential self-help construction is in lowering the cost of housing through kit homes.
Item Price ($ CAN) Lot 24,025 Starting Price 92,567 Planning permits N.A Delivery 5,172 Foundation 8,492 Shell Assembly 18,528 Rough Assembly 23,160 Mechanical, plumbing and electrical system 22,388 Finishing 30,880 Estimated Total 225,212
Table 3.4. Kit Home cost with labor (CS3)
300,000 120%
250,000 100%
200,000 80%
150,000 60%
100,000 40%
50,000 20%
- 0% Conventional Home Kit Home- Owner Kit Home-Labour Builder
Cost ($ CAN) Percentage
Figure 3.6. Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS3)
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As seen in Figure 3.6, labor costs increase the total price of the house about a 33 percent, and therefore, the difference in price between this kit home and a conventional home is only about
9 percent.
Hence, regarding additional elements that are not included in the kit home such as appliances, finishing materials, or in this case study, windows and doors, it can be deduced that the kit home’s total cost, including labor, might exceed the cost of a conventional single-family home in
Quebec.
Self-help construction feasibility
In order to ensure savings, manufacturers must help owners to be capable of constructing kit homes by themselves. In this regard, the manufacturer is successful since it provides understandable manuals, clear instructions for all construction tasks, as well as unlimited and unpaid assistance in case a customer has difficulties or questions about the build process.
Affordable options to lower the cost of the kit home
Customers are not required to buy all materials from Shelter-Kit. In fact, the company does not include windows and doors because it implies extra costs that can be avoided by contacting a local and larger supplier. Hence, customers can manage expenses in this matter. However, Shelter-
Kit does not facilitate the estimation of costs to a potential buyer, because it only provides a generic range of prices per sq. ft for most of its models. Hence, to make budgeting decisions, customers must undergo a long process that consists of contacting the company and waiting for a response to receive a budget estimation. Moreover, to contact the company, customers must have some idea about their wishes in terms of design, size, and location, which may prove difficult since some people may not be sure about their wishes without first knowing the cost of the products.
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Mass customization
Level of customer involvement
Shelter-Kit achieves the highest level of customization. Their pre-cut system allows them to offer many variations without affecting production efficiency or costs. In fact, their customization does not impose any additional fees, and the company offers options that are flexible to the preferences and needs of customers. Hence, in addition to the various choices available through their catalogue, customers can modify them, bring their own plans, or provide sketches and ideas for a new design with the help of the company. The two last options are part of the mass customization strategy, buy-to-order, which resembles the pure-customization level.
Choices and variations of existing models
Customers can choose from a wide range of home designs according to their specific space requirements: house sizes from 77.85 m² to 278.70 m², with 1 to 5 bedrooms. Moreover, according to a customer’s aesthetic preferences, they can choose different styles or buy a house in the GoodFit category, which is less standard when compared with other prefabricated houses. It is not clear what the variations between the different home plans are since some models lack this information.
Manufacturer strategies to avoid external complexities of mass customization
The manufacturer provides dimensions, photos, estimated assembly time, additional modification options for the models, and specifications of the kits. Pictures are a suitable way to show the models because they provide ideas to the customer about how each design will look in real life, and about the success of self-help construction. However, not all models have the floor plans.
Moreover, the company provides planning and suggestions that customers should consider before making decisions about the design of their kit home, as well as a section of Frequently Asked
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Questions where the manufacturer explains the different building phases, and how feasible the self- help construction is. This is essential to help customers get an idea about the challenges they may face, as well as about the resulting benefits from the way that this manufacturer accomplishes each phase.
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Manufacturer's Profile
The manufacturer Tene of Estonia has over 12 years of experience in the production of EZ Log Structures. The head office is in the Republic of Estonia. Since 2011, it started to export kit homes to North America and at present, exist distributions
centres in Kentucky (USA), and Ontario (Canada). The kit homes are highly accepted due to its assembly system that facilitates self-help construction and its accomplishment by inexperienced owners. 1. Design
Item Description Image
EZ log structures' catalogue has about 60 homes and 1. Choose an existing cabins. Customers can choose a design without the model possibility of customizing it. However, the company provides the option of adjusting and pricing the buyer's unique design. Users can filter the search for their ideal model online, by selecting the area, product category, and wall thickness. Moreover, the website shows complete
information about each product, which is useful for 2. Bring your own plans customers to select their design based on what they can achieve as self-builders.
Choices
Bedrooms 1-4 Homes 398 sq. ft (36.97 m²) - 1,365 Area sq. ft (126.81 m²) Bedrooms 1-3 Cabins 398 sq. ft (36.97 m²)- 1,350 Area sq. ft (125.41 m²)
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2. Consultation, Planning and Estimation of Costs Item Description Image Lots The company does not offer lots. Customers are in charge of getting the connection of Municipal Services municipal services to their lots. The company does not offer any assistance for this process.
In addition to Europe this manufacturer ships kit homes
to Canada and the U.S. Thus, it does not offer assistance Planning Permit for the planning permits since each country has its own requirements and specific regulations.
Starting prices vary according to the size and wall thickness. Moreover, prices increase if customers accept the upgrades that the company offers for
Estimation of costs additional $2,550-$5,100 (e.g. homes with studs, mounting brackets, and interior tongue and groove wall cover boards). The shipment is included only within the U.S.
The company only offers the Self-build option. The Starting Prices starting prices of cabins and homes are equal and range between $38.5-$64 per sq. ft.
Homes $27,283-$85,049 Cabins $22,871- $85,544
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3. Production Item Description Image
The company has an inventory of over 1,500 pre- packaged kits ready to deliver- to- order. However, most of the kit homes are make-to-stock, and all 1. Pre-cut components are pre-cut. The different pre-cut pieces that shape the structural shell consist of kiln dried northern spruce logs which assembly resembles a puzzle.
4. Delivery Item Description The company exports kit homes to North America, but it only includes the delivery price for the cities within the U.S, and does not provide the estimated delivery cost to 1. Company Delivery Canada. However, the kit homes' catalogue includes information about the weight of the kit and the package size, which can be useful for the quotation of the delivery with an external company.
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5. Construction Item Description Image
Self-help construction is the only available option to build these kit homes. Thus, the company ensures an easy assembly by improving the construction system 1. Self Builder and providing educational material (e.g. instructional video, manual with step-by-step instructions, manual for the insulating wiring construction).
Owners without prior building experience can assemble these kit homes since the pieces can be joint as a DIY Skills puzzle. The manufacturer provides a tongue and groove method which facilitates the construction process, reduce times, and eliminates the need for specific tools.
The manufacturer does not give information about the Time time needed for the dwellings' construction.
Kit Specifications Kits do not include the tongue and groove floors, and Floor thus, the customers must request them as an upgrade. Pre-cut interlocking exterior and interior wall logs Walls (thickness according to the model), and studs and brackets insulated for exterior walls. Tongue and groove cover boards, ceilings, tongue and Roof groove roof boards, fascia trims. Double glazed wood windows, doors locks and Windows and doors deadbolts, windows and doors' trims, and interior doors hardware. Others Electrical drilling, all the necessary hardware.
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3.2.4 Case Study 4: Tene Of Estonia
Source: (EZ Log Structures, 2016)
Affordability
Self-built kit home price vs conventional home price
Tene of Estonia kit homes are manufactured in the Republic of Estonia and distributed throughout the United States and Canada. Thus, this case study will be compared with Quebec as well. This comparison will be based on the highest price of these kit homes, which is $85,544 for a
125.41 m² home.
Item Price ( $ CAN) Lot 21,159 Starting Price 85,544 Planning permits N.A Delivery 2,066 Mechanical, plumbing and electrical system 18,184 Estimated Total 126,953
Figure 3.5. Kit home cost without labor (CS4)
Additional costs of items are shown in Table 3.5. The total price of the kit home without paid labor were based on the following data:
- The land value in North America must be approximately 20 percent of the building cost which (TGG Accounting, 2013) in this case would be $21,159.
- Considering that delivery to Canada is not included in the price, the distribution centre located in Danville, Illinois (USA) must ship the kit home to the Canadian distribution centre located in Perth, Ontario, to subsequently deliver it to any city in Quebec. Thus, the total price of delivery
79 results from the sum of both routes. The first one is based on the average US freight rate for that zone of the country, which is $2.03 per km (US 2.53) (DAT, 2018) and the 806 km between both cities. The second one is based on the average freight rate in Canada which is $1.31 per km
(Canadian Trucking Alliance, 2017), and the distance between Perth and Quebec City which is 328 km.
- Owners must employ contractors since they cannot execute mechanical, plumbing and electrical work by themselves. The cost of the electrical installation is $50 per hour, and electricians work about 1 hour per 10 m² (FIXR, 2018). The labor rate for plumbing is approximately $85 per m²
(SFGATE, 2018). It is also imperative to add the cost of supplies which is about $55 per m²
(Ghandehari, 2000).
300,000 120%
250,000 100%
200,000 80%
150,000 60%
100,000 40%
50,000 20%
- 0% Conventional Home Kit Home
Cost ($ CAN) Percentage
Figure 3.7. Cost difference between conventional single-family home
and kit home without labor (CS4)
Summing these costs leads to a total price of $126,953 ($1,012 per m²). This means that if the owners are willing to construct their houses by themselves, they can save approximately 49
80 percent (Figure 3.7) and own a quality single-family home at half the price of a conventional dwelling. In fact, the kit home that corresponds to this price has a large area, 3 or 4 bedrooms, and includes doors and windows, at a fixed price unless the buyer wishes to accept the upgrades that the company offers.
Table 3.6 compiles prices of the labor costs, to compare the difference in price between a self-built kit home, a kit home constructed by hired labor, and a conventional home.
Item Price ($ CAN) Lot 21,159 Starting Price 85,544 Planning permits N.A Delivery 2,066 Foundation 6,898 Shell Assembly 15,049 Rough Assembly 18,812 Mechanical, plumbing and electrical system 18,184 Finishing 25,082 Estimated Total 192,793
Table 3.6. Kit Home cost with labor (CS4)
The total cost of $192,793 indicates a price increase of about 27 percent, as seen in
Figure 3.8.
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300,000 120%
250,000 100%
200,000 80%
150,000 60%
100,000 40%
50,000 20%
- 0% Conventional Home Kit Home- Self-help Kit Home- Labour
Cost ($ CAN) Percentage
Figure 3.8. Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS4)
This kit home is still below the average price of a conventional single-family home in
Quebec. In this case, the difference is about 22 percent, which suggests that this manufacturer’s kit homes are in fact, affordable.
Self-help construction feasibility
Considering that there is a significant difference between the total cost of a kit home completed by self-help construction and one constructed by skilled labor, Tene of Estonia must ensure that kit home buyers will be able to construct them by themselves in order to achieve these savings. In this regard, the manufacturer facilitates erecting the dwelling via a prefabrication system that is not offered by all manufacturers. This consists of "tongue and grooved interlocking corners for easy stacking", which allows customers to assemble the different pre-cut parts like a puzzle, without the need for specialized tools. Moreover, the company provides videos that explain the
82 complete construction process with step-by-step instruction manuals where all pieces are labelled and indexed; and a manual for the insulating wiring construction is also provided.
Affordable options to lower the cost of the kit home
Customers can decide to implement upgrades for certain models. However, the materials included in the kits cannot be altered.
The manufacturer provides starting prices for all of the designs in their catalogue, which customers can use to compare the various Tene of Estonia’s EZ log structure models or other manufacturers’ models.
Mass customization
Level of customer involvement
The level of customization of this company is low due to their special joints which characterize their pre-cut pieces. Although their system facilitates self-help construction, it is an obstacle for mass customization since the manufacturer needs to standardize measurements in order to reach an effective and low-cost production. In fact, their customization strategy is make- to-stock or ship-to-order, thus providing the lowest levels of customer involvement (segmented standardization and pure standardization respectively). The make-to-stock strategy results from a goal to reach a short lead-time by stocking pre-cut parts and simply creating the package for the model that was ordered. The ship-to-order strategy consists of an inventory of over 1500 pre- packaged kits that are ready to be shipped.
Despite its goal of production efficiency, the manufacturer should create variations that respect the standard measurements of their prefabricated pieces. However, buyers cannot customize their homes, nor exist design variations, which leads to repetitive designs that do not uniquely identify a customer’s personal style. This low level of customer involvement is
83 counterbalanced by the option for customers to bring their own plans, which can be adjusted to the manufacturer’s prefabrication standards, but extra fees will be incurred.
Choices and variations of existing models
Tene of Estonia offers a catalogue of cabins and kit homes. The only variation offered is the size of the home since all styles, facades, and plans of their models are virtually the same.
Manufacturer strategies to avoid the external complexities of mass customization
The manufacturer lacks information to facilitate a customer’s decision-making process about the model they wish to order. This issue results from an online catalogue that can only be filtered by size and wall thickness, which is a feature that is not imperative for the selection of a house. Thus, the company should improve their platform by adding selection criteria of the number of rooms, which can be a significant factor for a customer’s lifestyle or needs.
Moreover, the manufacturer does not provide essential information about its products and assets. As a solution, the customer can contact the company or visit a dealer’s showroom. However, this process implies complexities and time delays for the potential buyer.
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Manufacturer's Profile
Summerwood has 25 years of experience in kit homes of prefabricated products, and the head office is in Toronto, Canada. Its catalogues have traditional and classic designs, several measurement variations, and customization options which facilitate customers' decision-making through useful digital tools and visual contents.
1. Design Item Description Image
Summerwood offers cabins as kit homes. Each cabin 1. Choose an existing style has a wide range of models (I.e. over 150) among model which the customers can choose one online, by filtering results according to product, price, style and size. Models can be replicated or customized in the Custom Design Center. The latter consists in a computer-aided design platform where users can change different features of their houses according to individual 2. Customize an existing preferences, while they visualize their choices in a 3D model model, and are aware of the rise or decrease of starting prices.
The company recommends digital tools that customers 3. Design with the can use to create floor plans based on ideas of existing company models or from scratch.
Choices
Exist 16 cabin styles. Each style has 13 measurement's Cabins variations that range from areas of 14 m² to over 100 m².
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2. Consultation, Planning and Estimation of Costs Item Description Image
Lots The company does not offer lots. Customers are in charge of getting the connection of Municipal Services municipal services to their lots. The company does not offer any assistance for this process.
Customers must accomplish the processing of the planning permit. Nevertheless, the company will assist Planning Permit them in generating the required drawings and documentation.
Starting prices depend on style, measurements, and construction options (I.e. pre-cut, pre-assembled or
Estimation of costs installed). The total cost does not include windows and doors and can increase due to upgrades or the selection of optional accessories.
Cabins' starting prices range between $45-$85 from the option of self-help construction to the pre-cut option Starting Prices and between $75-$95 to the pre-assembled option. This difference means a rise of 15% for the pre-assembled option and 75% for the installed option.
150 sq. ft (13.93 m²)- 450 $7,715-$20,750 sq. ft (41.80 m²)
500 sq. ft (46.45 m²)- 1,000 $22,750-$54,200 sq. ft (92.90m²) Over 1,050 sq.ft (over 100 $54,200-$72,000 m²)
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3. Production Item Description Image
Framing and siding components of kit homes are pre-
cut off-site. The manufacturer ships these components 1. Pre-cut to the building's site as different pieces that owners must assemble with their DIY skills, or paying extra fees for the acquisition of a pre-assembled kit.
4. Delivery Item Description
Summerwood is in charge of the delivery. However, it is
not included in the starting prices as it depends on the 1. Company Delivery location and size of the house. The company ship kits to every country.
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5. Construction Item Description Image Exist to options for the assembly of a kit home: the pre- cut option which assembly process requires more time but is ideal for owners that are willing to apply their DIY 1. Self Builder skills, and the pre-assembled option which is faster but requires mutual-aid since components can be too heavy.
Inexperience owners can assemble a pre-cut kit home by using basic tools. The company provides detailed DIY Skills step-by-step instructions, tips, illustrative online videos about installation methods, and answers all questions about the construction process.
Time depends on the size and complexities of each model. The most basic units can require only one day or Time two for their assembly, and the largest and more complex may take weeks. Kit Specifications Runners, joists, sheathing, floorboards. Upgrades: floor Floor insulation, pine flooring. Wall plates, walls studs, and siding. Upgrades: T&G Walls cedar siding, interior cedar siding, and wall insulation. Ceiling joists, rafters, ridge board, sheathing. Upgrades: Roof Cedar roof boards, cedar rafters, roof insulation. Trim Cedar trim. Upgrades: Maintenance free trim. Pre-assembled floors, walls, and trusses to facilitate the 2. Pre-assembled assemble on-site. The company is in charge of the shell installation and the foundation. This option is only available for homes 3. Turnkey that are within a 300km-radius from the Head office in Toronto.
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3.2.5 Case Study 5: Summerwood Products
Source: (Summerwood Products, 2018)
Affordability
Self-built kit home price vs. conventional home price
Summerwood’s kit homes are made and distributed throughout Canada. Thus, their highest priced home can be compared with the average price of a conventional single-family home in
Quebec ($248,000). The kit home’s starting price in this case study is $72,000 which corresponds to a cabin kit home of 139.35 m².
Item Price ($ CAN) Lot 18,620 Starting Price 72,000 Planning permits N.A Delivery 896 Mechanical, plumbing and electrical system 20,206 Estimated Total 111,722
Figure 3.7 Kit Home cost without labor (CS5)
The costs shown in Table 3.7 concern the following information:
- The land value in North America must be approximately 20 percent of the building cost
(TGG Accounting, 2013) which, in this case would be $18,620.
- The average rate in Canada for flatbed delivery is $1.31 per km (Canadian Trucking Alliance,
2017). The cost of delivery in this study (i.e., $896) is based on the distance from a factory in Toronto,
Ontario to Quebec City, Quebec (i.e., a distance of 684 km).
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- Owners must employ contractors since they cannot execute the mechanical, plumbing and electrical works by themselves. The cost of electrical installation is $50 per hour, and an electrician spends about 1 hour per 10 m² (FIXR, 2018). The cost for plumbing labor is approximately $85 per m² (SFGATE, 2018). It is also imperative to add the cost of supplies which is about $55 per m²
(Ghandehari, 2000).
300,000 120%
250,000 100%
200,000 80%
150,000 60%
100,000 40%
50,000 20%
- 0% Conventional Home Kit Home
Cost ($ CAN) Percentage
Figure 3.9 Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS5)
As seen in Figure 3.9, the total cost of Summerwood’s largest kit home is $111,722 ($801.73 per m²) which is 55 percent less costly than a conventional single-family house in Quebec. This difference in cost savings would decrease with the addition of windows and doors which are not included in the kit’s starting price. However, the difference will still being significant. This proves that certainly, self-help construction helps lower the cost of housing, and allows customers to own a reasonably priced house of suitable size.
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After adding the necessary labor costs, incurred by homeowners, for specialized contractors, the total cost of the kit home increases about 30 percent for a total of $184,935 (Table
3.8).
Item Price ($ CAN) Lot 18,620 Starting Price 72,000 Planning permits N.A Delivery 950 Foundation 7,664 Shell Assembly 16,722 Rough Assembly 20,903 Mechanical, plumbing and electrical system 20,206 Finishing 27,870 Estimated Total 184,935
Table 3.8. Kit home cost with labor (CS5)
300,000 120%
250,000 100%
200,000 80%
150,000 60%
100,000 40%
50,000 20%
- 0% Conventional Home Kit Home- Owner Kit Home- Labour builder
Cost ($ CAN) Percentage
Figure 3.10. Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS5)
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Figure 3.10 shows that the cost of the kit home will still be below the cost of a conventional home but with a cost savings of 25 percent. Thus, Summerwood’s kit homes are less costly than conventional single-family homes with self-help construction or with the use of contract labor.
However, the latter leads to double the savings, and thus, the total savings depend on the owners’ decision and their budget.
Self-help construction feasibility
Although Summerwood’s kit homes ensure savings with or without self-help construction, the company designs their kit homes based on the premise of ensuring easy assembly of the house.
In addition to pre-cut parts that can be assembled by only one person, the manufacturer assists owners during the entire construction process and provides educational materials such as detailed step-by-step instructions and illustrative videos, which demonstrate their installation methods.
Moreover, the manufacturer also provides the option of purchasing a pre-assembled kit at a price that is approximately 15 percent more expensive than the starting price of their basic kit home. This option is suitable for owners who want to spend less time on construction since pre-assembly can save 50 percent of the time spent on assembling the home.
Affordable options to lower the cost of the kit home
Customers have the option of deciding where to buy components such as windows and doors. They can purchase them with a local supplier or with Summerwood, however, the latter is more expensive. Moreover, the variations in measurements’ of each model allows a customer to obtain their desired design, without the necessity of paying for extra space they don’t need which can significantly increase the total cost of the kit home.
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The company offers these various models with specific starting prices, which is useful to potential buyers who can compare and contrast options, and thus, estimate the total price of a home to determine what is affordable to them.
Finally, Summerwood has an additional advantage in that it offers special add-ons products.
Thus, if a starting budget is limited, the customer can initially build a smaller-sized home, and in the future, during the post-occupancy stage, can decide to extend the house if they so desire.
Mass customization
Level of customer involvement
Summerwood has an optimum level of customization since it allows customers to have extensive participation in the building process and to make decisions about each feature of their house. If none of their 150 models fit a customer’s preference and needs, the buyer can design a new model with the assistance of the manufacturer without paying extra fees. They can also use a design platform to modify multiple physical features of the home (e.g., size, wall height, measurements, overhang, type and color of the siding, roofing, windows and doors location, and trim colors). Although these changes are limited to the measurements of the walls and floor plans, the company offers different choices for both aspects. Thus, this represents a level of pure- customization through the buy-to-order mass customization strategy, which is possible due to the pre-cut prefabrication method which does not imply strict standards to attain efficient production.
Choices and variations of existing models
Customers are offered an extensive range of choices and variations regarding all possible features that can be customized in the design of a house (e.g., style, facade, size, measurements, number of bedrooms, the arrangement of spaces, program). Thus, choices are provided regarding
93 not only a customer’s aesthetic preferences, but also the fulfillment of their needs. For instance, the manufacturer offers several measurements and size choices, thus guaranteeing the manufacturer market penetration that is aimed at every family structure. Moreover, the existence of several variations avoids repetitive and monotonous designs that can result from the strict standardization of models. Thus, buyers can construct a house that is unique and reflects their own personal identity.
Manufacturer strategies to avoid external complexities of mass customization
The manufacturer has an advanced, computer-aided design platform called Custom Design
Center, which customers use to select their desired model and to change different features of its facade while they visualize the results of their design in a 3D model. This tool is suitable to avoid the external complexities of mass customization, since customers can clearly understand how the design of their houses will look by selecting and changing certain features of the model. Moreover, this not only facilitates the decision-making process, but also ensure customer satisfaction at the end of the construction phases, since the house will look the same, or even better, then how the owners imagined it. Thus, this advantageous for both customers and the manufacturer which can gain market recognition.
Moreover, the manufacturer has a section called ‘Advice’ that provides information about what customers should know before beginning the selection of their design (e.g., material choice, pre-cut vs. pre-assembled, delivery, permits), about the construction phase, and the Frequently
Asked Questions of the potential buyers. This is imperative to solve all possible concerns that are presented during their decision-making process when purchasing a kit home.
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Manufacturer's Profile
Enviro-tech Post and Beam has over 30 years of experience in timber frame manufactured housing. The head office is in Canterbury, New Hampshire (USA), and its designs follow the concepts of affordability and energy efficiency. Moreover, its kit homes consist of an easy-to-assemble system, which allows self-builders to construct their houses without the use of specialized machinery.
1. Design Item Description Image
1. Choose an existing model Enviro-tech Post and Beam has a catalogue of homes and barns. It offers 15 kit homes' models which
customers can replicate or customize according to 2. Customize an existing individual preferences. Furthermore, the company model provides a design service to elaborate floor plans of
new homes, based on images or ideas that customers 3. Design with the collect about their desired dwellings. company
Choices
Bedrooms 2-6 Homes 1,235 sq. ft (114.75 m²) - Area 3,031 sq. ft (281.58 m²)
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2. Consultation, Planning and Estimation of Costs
Item Description Image Lots The company does not offer lots. Customers are in charge of getting the connection of
Municipal Services municipal services to their lots. The company does not offer any assistance for this process. Customers must accomplish the processing of the Planning Permit planning permit. The company does not assist owners in this matter.
Starting prices include the working drawings of the existing models, a building manual, and all kit homes' components. Pricing increase if customers select the tailor-made design option, as well as if they add spaces Estimation of costs or materials. The company provides a detailed Cost Estimate sheet to guarantee that customers are informed about prices during their decision-making process.
Starting prices of two-story kit homes range between $33-$46 per sq. ft and single-story kit homes range between $46- $60 per sq. ft. These prices increase by Starting Prices about 20%-30% with labor costs and range between $105-$175 per sq.ft if kits include the finishing materials.
Homes Basic kit home ranges between $68,500-$151,600
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3. Production
Item Description Image
2. Pre-cut Kit homes consist of a Hybrid Timber Frame System that results from the combination of pre-cut Eastern White Pine Pieces and Structural Insulated Panels (SIP). Timber is cut through a "computer controlled cutting machine"
which ensures precision and reduces off-site labor times. Panels facilitate on-site construction and energy efficiency as well. Moreover, the walls' wiring system is
installed off-site and around the floors' perimeter in 2. Panelized order to facilitate future maintenance.
4. Delivery Item Description
The company delivers kit homes to the customers' site 1. Company Delivery without charging extra fees.
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5. Construction Item Description Image
Enviro-tech Post and Beam manufactures kit homes that can be assembled by owner without prior building experience nor mutual-aid or specialized machinery. 1. Self Build The manufacturer provides plans, an instructional video, phone tech support, and building manuals to explain the assembly process.
Kit homes are designed with wood pegged joinery system, as well as with a hybrid timber frame system DIY Skills which facilitates the frame erection without using special tools.
The manufacturer does not give information about the Time time needed for the erection of the dwellings. Kit Specifications Eastern White Pine timbers, pegs and barn screws, Timber Frame Kit instructional video, 3D Numbered Frame Plan. Precut Panels for walls and roofs, splines, screws, foam, Panel Kit instructional video, and detailed panel plan.
Timber frame porches, pine roof boards, dormers, Additional tongue and groove pine decking, loan of a toolkit. The owners should purchase the windows with a local Windows supplier since it avoids storage problems for the company, and it results cheaper for the users as well.
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3.2.6 Case Study 6: Enviro-Tech Post and Beam
Source: (Enviro-Tech Post and Beam, 2011)
Affordability
Self-built kit home price vs. conventional home price
Enviro-Tech Post and Beam’s kit homes are made and distributed throughout the United
States. In this study, the price of the kit home will be compared with the average price of a conventional single-family home in the state of New Hampshire, where the manufacturer’s headquarters is located. The average price of a conventional single-family home in Hew Hampshire is $305,865 (National Association of Realtors, 2018), and the starting price of a kit home of similar size is $99,678 for a home size of 230.95 m².
Item Price ($ CAN) Lot 27,349 Starting Price 99,678 Planning permits - Delivery Included Mechanical, plumbing and electrical system 37,067 Estimated Total 164,095
Figure 3.9 Kit Home cost without labor (CS6)
Table 3.9 is based on the following information:
- The land value in North America must be approximately 20 percent of the building cost
(TGG Accounting, 2013) which in this case is $27,349.
- It is difficult to estimate the cost of planning permits since they change in each county and national and state regulations do not exist in this regard.
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- Owners must employ contractors since they cannot execute the mechanical, plumbing and electrical works by themselves. The cost of electrical installation is $86 per hour, and an electrician spends about 1 hour per 10 m² (FIXR, 2018). The cost of plumbing labor is approximately $76 per m² (SFGATE, 2018). It is also imperative to add the cost of supplies which is about $76 per m².
350,000 120%
300,000 100% 250,000 80% 200,000 60% 150,000 40% 100,000 50,000 20% - 0% Conventional House Kit Home-owner builder
Cost ($ CAN) Percentage
Figure 3.11 Cost difference between conventional single-family home
and kit home without labor (CS6)
The total cost of the kit home that results from the items in Table 3.9 is $164,095 (710.52 per m²), which is 46 percent less expensive than an average conventional single-family home in New
Hampshire (Figure 3.11). Although possible planning permits could increase this cost, the difference in price will not change significantly. Thus, a customer can have access to a large kit home, with multiple rooms and a high standard of living, at half of the price of a conventional home. This difference would certainly not be possible without eliminating the cost of construction labor.
According to Figure 3.12, with the addition of labor expenses, the total cost of the kit house would be only 16 percent less than the conventional home, which is too low a difference when the cost of planning permits has not been added to the total cost, nor have the finishing materials’ cost which depend on the customer’s preferences.
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350,000 120%
300,000 100% 250,000 80% 200,000 60% 150,000 40% 100,000 50,000 20% - 0% Conventional Home Kit Home- Owner Kit Home-Labour Builder
Cost ($ CAN) Percentage
Figure 3.12 Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS6)
Self-help construction feasibility
The feasibility of self-help construction depends on strategies that the manufacturer applies in order to ensure that their models are easy to assemble. In this regard, Enviro-Tech Post and Beam apply both the pre-cut and panelized methods to create a hybrid timber frame system. The panelized method facilitates construction since the panels are installed by slipping them behind the posts and beams. Thus, this assembly can be accomplished by any person without previous professional experience.
Moreover, the manufacturer provides instructional videos, step-by-step manuals and unlimited assistance to guarantee a successful construction outcome.
Affordable options to lower the cost of the kit home
Customers can decide if they want to pay extra for a finishing package, as well as for windows and doors. They can buy them with either a large local supplier or with Enviro-Tech, but the latter is more expensive, and certainly, the manufacturer prefers to avoid the storage and
101 delivery of such elements. Moreover, the company advises buyers to choose a rectangular design if they are looking for the most affordable home option. The reason for this suggestion is that it is easier “building up” than “building out”, and customers can save significant costs when building the home’s foundation.
Regarding estimation of costs, customers have access to prices for all models, and the company provides a detailed Cost Estimate Sheet which lists all individual costs of the house, without including the possible recruitment of labor.
Mass customization
Level of customer involvement
Enviro-Tech Post and Beam encourages a high level of customer involvement since it allows customers to make modifications related to the physical features of the house, its spatial configuration, and possible expansions to the home. However, these impose extra fees, and therefore, customization is only possible if a customer is willing to sacrifice affordability for a unique design.
Choices and variations of existing models
Enviro-Tech Post and Beam offers a limited catalogue of only 15 designs. However, the models have multiple variations in size, number of bedrooms, number of floors, and program.
Moreover, the facades and styles are different between the existing designs which avoids monotonous and repetitive choices and can ensure that diverse customer preferences are satisfied.
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Manufacturer strategies to avoid the external complexities of mass customization
Although the manufacturer does not have a technological platform for the search and selection of existing models, it is not essential since the catalogue is so small. Thus, it is easy to comprehend, and the company provides suitable information that allows customers to understand the features of each model. This is possible since Enviro-Tech provides all plans, elevations, interior and exterior 3D views, and basic information such as price, size, and number of rooms before the mentioned details. Moreover, the company has multiple photographs of houses that were built by owners, a video and information about the construction process, as well as building manuals and a section of Frequently Asked Questions. This information is suitable for a customer to make decisions about buying a kit home since they will be informed about the possible complexities of the self-help construction, the quality of their future dwelling, and the advantages or disadvantages of these kinds of homes.
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Manufacturer's Profile
Pacific Modern Homes Inc. (PMHI) has over 50 years of experience in design and manufacturing of kit homes. The head office is in Elk Grove (California, USA), and its production consists of wall panels and pre-cut roof trusses which high quality has been highly accepted in California and Hawaii.
1. Design Item Description Image
PMHI offers 37 models and provides different options 1. Choose an existing to the customers: to choose between existing models, model to customize them according to individual needs and
preferences, to bring their own floor plans and fit them 2. Customize an existing according to specific production guidelines, to create a tailor-made design with the company's assistance. The model two last options imply extra costs that depend on the area. For their accomplishment, it is necessary the 3. Bring your own plans following steps: first, customers provide a sketch of their desired design; afterwards, PMHI transforms the sketch into architectural drawings according to certain 4. Design with the manufacturing standards and building codes; finally, the
company manufacturer elaborates a complete set of plans and structural designs. Choices Bedrooms 1-6 1 Story Homes 600 sq. ft (55.74 m²) -4,500 Area sq. ft (418.06 m²) Bedrooms 3 and 4 2 Story Homes 1,600 sq. ft (148.64 m²)- Area 3,500 sq. ft (325.16 m²) Bedrooms 1-3 Cabins and Chalets 600 sq. ft (55.74 m²)-2,000 Area sq. ft (185.80 m²)
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2. Consultation, Planning and Estimation of Costs Item Description Image Lots The company does not offer lots. Customers are in charge of getting the connection of Municipal Services municipal services to their lots. The company does not offer any assistance for this process. Customers must accomplish the processing of the Planning Permit planning permit, and the company assists them during the process.
Unlike other manufacturers, PMHI starting prices are based on the total wall length, style, and the number of Estimation of costs windows, rather than on the kit homes' area. Customers can find on the website a complete pricing list of existing models.
Kit homes' starting prices range between $46.5-$60 per Starting Prices sq. ft. These prices only include materials, which represents about the 25%-35% of the total housing cost.
1 Story Homes $35,800- $230,800 2 Story Homes $58,120- $191,250 Cabins and Chalets $36,575-$94,450
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3. Production Item Description Image
PMHI kit homes consist of panelized walls which design results from a computer software that ensures accurate
measurements and eliminates possible waste. These 1. Panelized panels are packaged and delivered to the building's site with windows and wall sheathing installed off-site, as
well as with floor plans, roof truss layout, and a list of materials included in the shipment.
4. Delivery Item Description
The company delivers kit homes to the customers' site,
which can be within the U.S or other countries. As a 1. Company Delivery result, PMHI provides two types of kit homes for the projects located inside and outside the U.S: the
Domestic-Package and the Export-Package respectively.
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5. Construction Item Description Image
Panelized walls facilitate and speed up the assembly process of kit homes. Each piece is numbered and 1. Self Build indexed to the plans and inventory to guide the builders identifying where must be placed each piece.
Although owners can decide to construct by themselves, exists some models that are easier for inexperienced people such as the single-story homes. DIY Skills Moreover, since the panels are closed walls, they are too heavy to be erected by only one person. Thus, it requires a mutual-aid construction.
The manufacturer does not give information about the Time time needed for the erection of the dwellings. Kit Specifications
Kits include the shell materials: panelized wall sections, Domestic Package exterior siding, windows, roof framing, sheathing, joists, exterior doors, hardware, beams and posts.
In addition to the domestic package content, these kits include the finishing materials (e.g. insulation, roof Export Package covering, paint, floor covering, electric and plumbing components, fittings, cabinets).
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3.2.7 Case Study 7: Pacific Modern Homes Inc.
Source: (Pacific Modern Homes Inc., n.d.)
Affordability
Self-built kit home price vs. conventional home price
Pacific Modern Homes Inc. (PMHI) manufactures kit homes in Elk Grove, California and ships them throughout the United States. This case study is based on the average price of a conventional single-family home in the state of California ($471,230), as well as on the average home size in the
United States (228.26 m².) Hence, chosen kit home selected for comparison has a size of 240.80 m², with a starting price of $169,912.
Item Price ($ CAN) Lot 41,712 Starting Price 169,912 Planning permits - Delivery Included Mechanical, plumbing and electrical system 38,648 Estimated Total 250,273
Figure 3.10 Kit Home cost without labor (CS7)
Table 3.10 includes prices for additional items with regard to the following information:
- The land value in North America must be approximately 20 percent of the building cost
(TGG Accounting, 2013) which in this case would be $41,712.
- It is difficult to estimate the cost of the planning permits since they change in each county and national and state regulations do not exist in this regard.
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- Owners must employ contractors since they cannot execute the mechanical, plumbing and electrical works by themselves. The cost of electrical installation is $86 per hour, and an electrician spends about 1 hour per 10 m² (FIXR, 2018). The cost of plumbing labor is approximately $76 per m² (SFGATE, 2018). It is also imperative to add the cost of supplies which is about $76 per m².
500,000 120% 450,000 400,000 100% 350,000 80% 300,000 250,000 60% 200,000 150,000 40% 100,000 20% 50,000 - 0% Conventional House Kit Home-owner builder
Cost ($ CAN) Percentage
Figure 3.13 Cost difference between conventional single-family home
and kit home without labor (CS7)
The total cost of the kit home, resulting from the estimated costs in Table 3.10, is $250,273
(1,039 per m²). This indicates that the price of a conventional house in California is 47 percent higher than the kit home, and although planning permits could increase this cost, the difference will not change significantly (Figure 3.13). Hence this demonstrates that through self-help construction kit homes are an affordable solution for people to own quality and dignified homes, built to high standards which are not affected by the lower price, and can possibly be even better than a conventional home.
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500,000 120% 450,000 400,000 100% 350,000 80% 300,000 250,000 60% 200,000 150,000 40% 100,000 20% 50,000 - 0% Conventional Home Kit Home- Owner Kit Home-Labour Builder
Cost ($ CAN) Percentage
Figure 3.14 Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS7)
Figure 3.14 shows the cost difference between the kit home and a conventional home in
California in the case where an owner pays for contract labor. This would lead to a possible increase of 30 percent to the cost of the kit home, thus coming very close to the cost of the conventional with a difference of only 17 percent. In fact, the costs will converge if planning permits, appliances and other finishing materials are added to the kit home cost.
Self-help construction feasibility
According to the manufacturer, unskilled owners can construct their home on their own.
This kit homes are panelized, facilitating the construction of the house and reducing the time of the building process. However, the panels are closed walls, and they are heavy, thus at least two people are required for their assembly. Strategies applied by PMHI to ensure feasibility of self-help construction could be improved. Rather than providing step-by-step manuals, they only provide plans where all the materials of the package are indexed. Although it is useful to know the location
110 of each component, owners will not have enough information to know the correct sequence of the build process.
Affordable options to lower the cost of the kit home
The building kit available for customers inside the U.S. is called the domestic package and includes all materials that are necessary for the construction of the kit home. Thus, the only option that can be useful in reducing the price of the home is choosing a smaller house. However, this could negatively affect the lifestyle of certain family structures.
Regarding the estimation of costs, the manufacturer provides starting prices for each home and a construction costs estimate.
Mass customization
Level of customer involvement
PMHI offers many possible options for customization. However, creating a tailor-made design in partnership with the company, or customers bringing their own plans imply extra costs.
Moreover, the possibility of changing existing models is limited to three possible modifications that ensure the production efficiency of the manufacturer in relation to the panelized prefabrication.
The possible changes are: modifying rooms, adding or changing the size of windows, and moving walls. Thus, the company applies a make-to-order strategy characterized by tailored customization, and although it has limitations, resembles a high and suitable level of customer involvement.
Choices and variations of existing models
The manufacturer offers a wide range of variations in size, number of bedrooms, and house type (e.g., single-story, two-story, cabins, chalets). Moreover, each model has a different facade,
111 and the floor plans are different for each model. Hence, customers can choose their ideal house not only regarding their need for space, but also the regularity of the plan to ensure easy self-help construction, as well as the accomplishment of their aesthetic preferences, and so on.
Manufacturer strategies to avoid the external complexities of mass customization
PMHI avoids external complexities by facilitating a customer’s decision of their ideal kit home. Their strategy is based on providing clear and detailed information about their designs, as well as the production and building process.
Regarding designs, their catalogue is organized by the number of floors and range of home sizes, which is a suitable filter to start searching for a model. Moreover, each design has a 3D image and plans, information about size, price, number of bedrooms and bathrooms, as well as a description of the house, its livability, unique features and modifications that are possible.
Regarding the production and building process, PMHI provides all information and videos about their manufacturing standards, quality, services, materials, prefabricated system, and so on. This is useful for customers since having complete information about the company can affect a customer’s decision about whether to buy a kit home with this manufacturer.
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Manufacturer's Profile
Sloan's Mill has over 50 years of experience in log and timber frame manufactured housing. The head office is in Asheville (North Carolina, USA), and its main objective is to provide resistant, affordable, and easy-to-assemble structures through suitable engineered systems.
1. Design Item Description Image
1. Choose an existing model
Sloan's Mill has a catalogue of 50 designs of 1 or 2 story houses. The buyers can choose a model and order it
without alterations, or customize its features according to individual preferences.
2. Customize an existing model
Choices 650 sq.ft (60.38 m²)- 2,700 Area 1-story house sq. ft (250.83 m²) Bedrooms 1-3 950 sq.ft (88.25 m²)- 3,500 Area 2-story house sq. ft (325.16 m²) Bedrooms 1-4
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2. Consultation, Planning and Estimation of Costs Item Description Image Lots The company does not offer lots.
Customers are in charge of getting the connection of Municipal Services municipal services to their lots. The company does not offer any assistance for this process..
Customers must accomplish the processing of the Planning Permit planning permit. The company does not assist owners in this matter.
Starting prices depend on the size and details of each design. They include the basic kit which contains all log, timber frame, and timber engineered materials.
However, prices may increase if customers request optional components such as the stair package, the SIP Estimation of costs roof panels, and/or the SIP wall panels. These
components are available for owners that wish to reduce times and construction complexities, and their price depends on each model and if customers request an installation service.
Starting Prices Starting prices are about $46.5 per sq. ft.
1-story house $30,250-$125,685
2-story house $44,200-$162,925
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3. Production Item Description Image All engineered wall logs for exterior walls and timber frames are pre-cut in the factory. The engineered term
1. Pre-cut means that every piece is manufactured to reduce moisture contents of wood and prevent cracking through a "glue laminated" method.
The company offers SIP (structural insulated panels) roof and wall panels as optional additional components 1. Panelized to the kit homes. The customers can order them with the insulation installed off-site, as well as the ceiling decking on the roof panels.
4. Delivery
Item Description
The company delivers kit homes to the customers' site, 1. Company Delivery at no extra costs for the lots that are within a 160-km radius from the factory.
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5. Construction Item Description Image
The company ensures that its designs and structural systems were conceived to be easy to assemble by owners without prior construction experience. Although 1. Self Build the company does not provide a manual with step-by- step instructions, it assists customers with an expert that supervises the on-site construction at no extra costs.
People without prior construction experience can assemble these kit homes. However, if owners do not DIY Skills consider themselves capable of its execution, they can purchase the optional panel packages that reduce complexities. According to the company, the construction of a shell of Time a 2,000 sq.ft kit home can only take 3 days. Kit Specifications Engineered pre-cut wall logs for exterior walls, log siding for gables, engineered porch posts and porch beams, kiln-dried fascia,dormers and skirt, pre-cut and Basic Kit numbered timber frame, oak pegs joints, pre-cut roof system, hardware, tongue and groove decking for roof, ceiling and second floor, timber rafters and beams, etc. Timber floor joists, tongue and groove pine floor decking sub-floor and ceiling for lower level, timber Second floor frame for porches and decks, and decking for roof and ceiling. Optional SIP roof and wall panels
Optional Stair Package Pre-cut stair package with rails.
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3.2.8 Case Study 8: Sloan’s Mill Engineered
Source: (Sloan's Mill Engineered, n.d.)
Affordability
Self-built kit home price vs conventional house price
Sloan’s Mill headquarters is in Asheville, North Carolina (USA), and they deliver kit homes throughout the U.S. This analysis is based on the average price of a conventional single-family home in the state of North Carolina ($312,135), and the average home size in the U.S. (228.26 m²). Hence, the home kit chosen for comparison has a size of 237.46 m², with a starting price of $114,688.
Item Price ($ CAN) Lot 30,560 Starting Price 114,688 Planning permits - Delivery Included Mechanical, plumbing and electrical system 38,112 Estimated Total 183,360
Figure 3.11 Kit Home cost without labor (CS8)
Table 3.11 includes costs of additional items in regard to the following information:
- The land value in North America must be approximately 20 percent of the building cost
(TGG Accounting, 2013)which in this case is $30,560.
- It is difficult to estimate the cost of planning permits since they vary county by county, and national and state regulations do not exist in this regard.
- The price of delivery is included within a 160-km radius from the factory in Asheville.
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- Owners must employ contractors since they cannot execute the mechanical, plumbing and electrical works by themselves. The cost of electrical installation is $86 per hour, and an electrician spends about 1 hour per 10 m² (FIXR, 2018). The cost of the plumbing labor is approximately $76 per m² (SFGATE, 2018). It is also imperative to add the cost of supplies which is about $76 per m².
350,000 120%
300,000 100% 250,000 80% 200,000 60% 150,000 40% 100,000 50,000 20% - 0% Conventional House Kit Home-owner builder
Cost ($ CAN) Percentage
Figure 3.15 Cost difference between conventional single-family home
and kit home without labor (CS8)
The total cost that results from adding labor that cannot be accomplished by the owner and the price of the lot (Table 3.11) is $186,360 ($772.17 per m²). This cost demonstrates that Sloan’s
Mill kit homes can be 41 percent less costly than a conventional single-family home in North Carolina
(USA) (Figure 3.15). This difference is significant, and thus, it would not be affected by the cost of planning permits that are not included in the cost.
It is important to consider that despite the low price of the kit home, it contains generous spaces, a unique style, and a program able to fulfill the needs of many households.
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350,000 120%
300,000 100% 250,000 80% 200,000 60% 150,000 40% 100,000 50,000 20% - 0% Conventional Home Kit Home- Owner Kit Home-Labour Builder
Cost ($ CAN) Percentage
Figure 3.16 Cost difference between conventional single-family home, kit home without labor,
and kit home with labor (CS8)
Labor costs increase the price of a kit home by about 30 percent (Figure 3.16), thus the difference between the kit home and a conventional home in North Carolina will only be about a 11 percent. This result is not significant regarding that some items exist that have not been added such as planning permits, appliances, and other finishing materials with costs that are difficult to estimate.
Self-help construction feasibility
This manufacturer is unique in the way it ensures the feasibility of self-help construction.
Instead of using step-by-step manuals, the company provides an on-site supervisor that provides guidance to an owner during the assembly phase of their house. This service does not cost extra, and it ensures that the construction process and results will be optimum.
Although the manufacturer states that their kit homes can be assembled by an inexperienced person without prior construction experience, it offers an optional structural
119 insulated panel (SIP) roof and wall panels for owners that do not feel confident about their DIY skills.
Thus, these panels facilitate a faster assembly of the home.
Affordable options to lower the cost of the kit home
The kit home’s package includes all materials that are necessary for the shell assembly and rough assembly. Customers cannot change the materials included in the package, and the only options they have are upgrades which consist of options for the stairs, roof panels, or wall panels.
Moreover, the manufacturer does not specify the starting price of each design and only provides a general cost per sq. ft. Thus, customers cannot achieve an accurate estimation of costs, nor can they determine if the company’s prices are affordable or within their budget.
Mass customization
Level of customer involvement
The level of customer involvement is driven by the mass customization strategy, make-to- order, since a customer can modify existing designs but cannot create a tailor-made home.
However, the level of customization is high since the company does not limit the number of possible modifications, and they are flexible in fulfilling buyers’ needs to fit their preferences, without charging extra fees.
Choices and variations of existing models
Sloan’s Mill has about 50 models in its catalogue. Each design has a unique facade and style, a wide range of sizes between 88.25 m² and 325.16 m², single-story or two-story houses, as well as floor plans with different architectural programs and shapes, which are different within the design choices. Thus, the manufacturer makes it possible for all their customers to find an ideal home in its catalogue and provides several variations to match the specific needs and preferences of different users and family types.
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Manufacturer strategies to avoid the external complexities of mass customization
Although the manufacturer does not have an advanced platform for searching and selecting existing models, it is not essential since the catalogue is organized from lowest to highest price.
However, the manufacturer lacks some essential information that could be useful to a customer’s decision-making process. For instance, although each model has plans and elevations, they do not have starting prices, the number of rooms and bathrooms, etc. Moreover, a 3D image would be useful since some customers cannot understand architectural plans, and therefore, this can lead to external complexities.
For information concerning the building and production process, this manufacturer provides several images and descriptions about both, and it has a list of Frequently Asked Questions, focused on their log and timber-frame homes. This information is important to solve customers’ questions about the advantages of kit homes, and the feasibility of the self-help construction.
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3.3 EVALUATION OF ALL CASE STUDIES
AFFORDABILITY EVALUATION Average per # ITEM CS1 CS2 CS3 CS4 CS5 CS6 CS7 CS8 Assessment Criteria Savings Through Self-Help 1 2 4 3 3 4 3 3 3 3,13 Construction Self-Help Construction 2 1 3 4 4 4 4 1 3 3 Feasibility 3 Costs' Alternatives 3 1 4 0 4 4 2 4 2,75
4 Accurate Costs' Estimation 4 3 2 3 4 3 3 4 3,25 Average Score 2,5 2,75 3,25 2,5 4 3,5 2,25 3,5 3,03
MASS CUSTOMIZATION EVALUATION Average per # ITEM CS1 CS2 CS3 CS4 CS5 CS6 CS7 CS8 Assessment Criteria 1 Level of Customization 4 3 4 2 4 2 2 3 3
2 Flexibility- Modifications 3 4 4 0 4 4 3 4 3,25
3 Choices- Variations 4 4 3 1 4 4 3 2 3,13 Strategies to Avoid External 4 3 3 3 1 4 3 3 3 2,88 Complexities Average Score 3,5 3,5 3,5 1 4 3,25 2,75 3 3,06
Table 3.12. Evaluation chart
Affordability and Mass Customization Achievement
CS8
CS7
CS6
CS5
Affordability
CS4 Case Study Case Mass Customization CS3
CS2
CS1
0 1 2 3 4 5 Average Score
Figure 3.17. Average scores affordability and mass customization achievement
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Affordability Achievement
CS8
CS7
CS6 Accurate Costs' Estimation
CS5 Costs' Alternatives
CS4 Case Study Case Self-Help Construction Feasibility CS3 Savings Through Self-Help CS2 Construction
CS1
0 1 2 3 4 Average Score
Figure 3.18. Scores for affordability achievement
Mass Customization Achievement
CS8
CS7
CS6 Strategies to Avoid External Complexities CS5 Choices- Variations CS4 Case Study Case Flexibility- Modifications CS3 Level of Customization CS2
CS1
0 1 2 3 4 Average Score
Figure 3.19. Scores for mass customization achievement
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Average Per Assessment Criteria: Affordability
4
3
2 # Assessment Criteria Assessment #
1
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Average Score
Figure 3.20. Average scores per assessment criteria: Affordability
Average Per Assessment Criteria: Mass Customization
4
3
2 # Assessment Criteria Assessment #
1
0 0.5 1 1.5 2 2.5 3 3.5 4 Average Score
Figure 3.21. Average scores per assessment criteria: Mass customization
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3.4 CONCLUSIONS
3.4.1 Affordability Conclusions
1. As shown in Table 3.12 and Figure 3.18, the most successful case studies are:
Summerwood (CS5), Enviro-Tech Post and Beam (CS6), and Sloan’s Mill Engineered (CS8). Their common strength is providing cost-saving alternatives which allow customers to reduce the starting price of their homes. This is a suitable strategy, since it allows people to own a desirable, affordable house without being forced to sacrifice their personal preferences and needs, due to budget limitations in relation to the costs of the house. Thus, they can have access to their desired kit home with fewer features or purchase them immediately from a large outside supplier at lower costs.
2. Although self-help construction is the basis for affordability of kit homes, this does not have a higher average score related other assessment criteria (Figure 3.20). In fact, Scotframe (CS1) and PMHI (CS7) got the lowest scores in this area since they only provide plans that are indexed to the different parts of the package. These manufacturers state that their kit homes can be assembled by owners without prior construction experience because their panelized systems are easy to assemble. However, instructional material and other forms of guidance from these companies are essential since few people are able to understand architectural plans, and thus, they cannot translate them into the building process.
On the contrary, the kit homes’ production of the successful case studies is based on pre- cut parts or both - panelized and pre-cut, and they provide many significant materials to guide owners in the self-help construction of their houses and to ensure that they will achieve affordability by reaching all savings possible through their kit homes.
3. The case studies that were compared with conventional homes in Quebec, indicate that by eliminating labor costs, it is possible to save about 30 percent of the total cost of a kit home. The
125 simulation of prices was based on the study by Ghandehari (2000), and this approximation of savings was useful for the other case studies to get an idea of their relationship with the cost of conventional homes.
4. The average affordability score of all the case studies is 3.03 over 4 (Table 3.12). This demonstrates that kit homes are successful in terms of affordability. In fact, the savings of kit homes in contrast to conventional single-family homes at specific locations, were between 33 and 55 percent. However, by adding 30 percent of possible extra costs that would imply labor, the difference between the costs of both kinds of homes were reduced or even eliminated. Thus, this proves that affordability of kit homes depends on the success of self-help construction.
Although CS1 got a lower score in this aspect (Figure 3.18), it does not mean that it is not affordable. However, the cost of the studied kit home was $1,307 per m², in contrast to CS2 (Cottage
Kit Homes) which like CS1 is also a UK manufacturer, and its cost is $947. This significant difference can result from environmental credentials imposed on CS1 requiring the creation of panels that are based on high thermal specifications, which are more expensive than conventional panels. This shows that this manufacturer does not prioritize affordability of its products, since this strategy aims to maximize market penetration, rather than to provide quality low-cost solutions.
5. By comparing case studies that were based on conventional single-family homes in
Quebec, it is possible to identify that the highest score was obtained by CS5 which is a Canadian manufacturer (Figure 3.18). On one hand, CS3 obtained a low score in the Possibility of Costs’
Estimation criteria, and CS4 does not have a score in providing cost-saving alternatives. Although these aspects do not affect the affordability of the kit homes, they are important strategies to help the customer throughout their decision-making process, since they can ensure that customers’ choices are the most suitable for their budgets.
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3.4.2 Mass Customization Conclusions
1. The first insights from the analysis of mass customization through kit homes, was that manufacturers’ flexibility towards possible modifications to their homes was limited with the application of panelized prefabrication and was optimum only for pre-cut prefabrication. However, the scores indicate that both methods allow customers to make changes to the spatial and aesthetical features of the home. In fact, although modifications are restricted to measurements and specific manufacturing standards, to avoid internal complexities in the company, customers are highly involved in the decisions about the design of their houses, and can change multiple aspects of existing models, or even have access to tailor-made designs. Thus, this is what Gibb (2001) defines as “customized solutions from standardized components”.
2. As seen in Table 3.12, the average score for the achievement of mass customization is high (3.06). The only case study that was not successful in this regard was CS4 (Figure 3.19) due to its unique prefabrication system. Although convenient in the construction process since it facilitates the assembly of the pre-cut pieces by using special joints that function like a puzzle, thereby reducing the time spent on the building phase, this system requires a high level of standardization to ensure the successful of their lean-production model. Hence, it significantly reduces the level of customization and opts for make-to-stock or ship-to-order mass customization strategies. However, variations could be offered and some modifications may be possible, even if they are limited. In fact, the other case studies prove that, despite the necessary restrictions of the possible modifications, it is possible to reach a pure or tailored customization without jeopardizing the production efficiency.
3. Although case studies CS6 and CS7 allow the customers to be highly involved in the decisions about the design of their houses, they obtained low scores in the Level of Customization criteria (Figure 3.19) since they charge extra fees for that possibility, which can, therefore, affect the
127 affordability. Thus, this is against the main premise of mass customization which is to adjust and fit the products according to the customers’ preferences and needs at low prices. In fact, it is difficult to understand why these manufacturers charge extra fees, considering that the ones that do not, are successful in achieving affordability. This indicates that their production is not being jeopardized by the free-of-charge customization service.
4. Figure 3.21 demonstrates that the lowest average score of any criteria in the mass customization evaluation was for Strategies to Avoid External Complexities (2.88). According to the authors Shoenwitz, Naim and Potter (2012), the complexity of the components and sub- components of houses can lead to confusion rather than satisfaction. Hence, it is important to prioritize the customers’ understanding about all the phases of the kit homes’ creation to ensure an optimized decision-making process. This can be achieved by providing complete information, which should be made available on the web rather than by phone, email, or in the dealership. The reason being that the latter options imply more time, and the manufacturer’s service points are often far away from the cities. Hence, to be able to compare different manufacturers well, it is best for the customers to obtain all the information online.
5. The three case studies that were the most successful regarding the achievement of affordability (CS5, CS6, CS8) are also the ones that better approach the mass customization (Figure
3.17). Thus, it is possible to conclude that offering variation, flexibility, and, more importantly, a high level of customer involvement, does not affect production or the manufacturer’s profit. This allows for manufacturers to provide quality housing at low cost, and therefore, it is a suitable solution for the housing affordability problem that persists in every developing or developed country.
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3.4.3 General Conclusions
- Although kit homes are proven to be an affordable solution that lead to the creation of mass customized housing, it is important to consider the availability and affordability of the lots.
This study is based on the approximation of the lot’s cost based on the ideal that it should not be greater than 20 percent, which is not an accurate data. However, the percentage of savings is significant which means that it could possibly be enough to cover an increase in the cost without affecting its difference with the average cost of a conventional single-family home.
- Planning permits are complex for the manufacturers since they ship to several countries.
In the case of the USA and Canada, each county and province, respectively, have different requirements and standards. However, all manufacturers provide support related to permitting by providing all the material that is necessary for the approval of the kit homes.
3.4.4 Insights Into Chapter 4
After the evaluation of the different case studies with respect to their achievement of affordability and mass customization, it is possible to conclude with some objectives for the proposal of Chapter 4. Some of these objectives will follow the assets of the case studies that were the most successful, while others will aim to improve the way that the architects approach the creation, development, and marketing of kit homes.
1. Cost-saving alternatives
- Develop an idea of how kit home packages could be created to allow people to finish their houses during the post-occupancy stage.
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- Develop a model of how the building could be divided into systems, modules, and elements.
2. Prefabrication methods
- CS6 is a successful example that demonstrates that the hybrid timber frame system is a suitable prefabrication method to increase the feasibility of the self-help construction while maintaining a high level of mass customization.
3. Strategies to avoid external complexities
- Develop ideas about strategies that will facilitate the decision-making process for the customers with respect to their ideal design and the customization of the manufacturer’s existing models.
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CHAPTER 4: GUIDELINES TO IMPROVE KIT HOME MANUFACTURING FOR SELF-HELP
CONSTRUCTION
4.1 DESIGN
As discussed in Chapter 3, the mass customization strategy make-to-order is the most efficient solution for both manufacturers and customers to design kit homes. This strategy is based on the use of standardized components to provide several variations. Thus, by restricting the possible modifications and new ideas during the customer involvement phase to specific parameters and dimensions, the manufacturers can ensure production efficiency and reduce wasted material while they facilitate the buyer’s decision-making process about modifications to existing models or the tailor-made designs. In fact, one of the main sources of external complexities is the customers’ lack of awareness about the specific features that they really need or desire; this often results in customers opting to buy the standard design, which may not be necessarily with respect to their personal requirements.
The main guideline in terms of design strategy, is related to the prefabrication system.
Considering that both pre-cut and panelized methods allow a high level of customer involvement, manufacturers can offer both choices. Hence, the designs can be restricted to modules of 1.2 m or
0.6 m that represent a full or half width of the panels, respectively and, therefore, the distance between the supports of the timber frame in the case of a Hybrid Timber Frame System. Figure 4.1 shows an example of a kit home plan in which the arrangement of spaces and areas results from this modulation, while Figures 4.2 and 4.3 show the expansions based on the same modulation.
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Figure 4.1. One-bedroom kit home modulation
Figure 4.2. Two-bedroom kit home modulation
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Figure 4.3. Three-bedroom kit home modulation
By developing designs and variations based on specific modulations, plans can be reduced or expanded according to a customer’s preferences or needs, as well as according to the level of complexity that they can accomplish through self-help construction. Thus, a customer could order a small home and develop add-ons during the post-occupancy stage. This is an option that was not provided in the case studies analyzed in this study and could be significant in terms of a customer’s satisfaction and affordability. Figures 4.4, 4.5, and 4.6 show examples of 1-, 2-, and 3-bedroom floor plans, respectively, that are based on the mentioned modulation.
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Figure 4.4. One-bedroom kit home
Figure 4.5. Two-bedroom kit home
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Figure 4.6. Three-bedroom kit home
Using the example of Aladdin Homes or Sears, another option for the modification of existing designs can be to expand the dimensions of the spaces instead of adding more bedrooms.
The different alternatives must be restricted to the measurements of the panels’ widths to continue with the same premises for the production process. The floor plans shown in Figures 4.7 and 4.8 are some examples of these types of variations.
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Figure 4.7. Original sizes
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Figure 4.8. Expanded sizes
4.2 ESTIMATION OF COSTS: MANAGERIAL MATTERS
After evaluating the different case studies, it was concluded that, by providing the possibility to estimate the costs of a kit home, a customer’s decision-making process can be facilitated with respect to their economic capabilities. However, a detailed list of costs or a cost calculator was provided in only a few of the case studies. In fact, in most of the case studies, only the starting prices were provided, but not the extra charges that would be associated with modification of the existing models or offered upgrades. Thus, the following guidelines could improve the customer involvement in managerial matters:
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• At present, the manufacturers provide online catalogues that include the different existing
models but without specifying the possible modifications. By applying a design guideline
based on the panels’ measurements, the manufacturers can show the different choices for
each model with the specific price that comes with each variation. Thus, customers can
make more informed decisions based on their preferences as well as their budget.
• Online catalogues could be improved with a computer design tool like the one implemented
in the successful case study of Summerwood. Certainly, through a 3D view, buyers could
more clearly visualize the different options for the customization of their homes, and their
results in relation to the facade.
• In addition to specifying prices, manufacturers should develop a cost calculator to
complement the catalogues. This could be implemented in the computer design tool by
calculating the final price that results from each individual choice and modification. Hence,
the customers can be more aware of the number of variations that they can afford given
their budget and can prioritize the modifications that are most necessary. Furthermore, this
would allow customers to start planning what they can develop in the future during the
post-occupancy stage.
4.3. PRODUCTION AND PREFABRICATION IN THE FACTORY
4.3.1 Prefabricated systems
As previously mentioned, both pre-cut and panelized prefabrication methods are appropriate for achieving affordability and mass customization. Thus, manufacturers can offer three types of prefabricated systems as options for the customers.
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1. Pre-cut Timber Frame System
2. Panelized System
3. Hybrid Timber Frame System
The selection of the package depends on the level of complexity that the potential self- builders can achieve for the construction of the kit homes. For example, a Pre-cut Timber Frame
System consists of several pieces for which assembly requires more time and carpentry skills. In contrast, with the selection of either opened or closed walls, a Panelized System is easier to construct since the customers can avoid finishing works. Although the Hybrid Timber Frame System implies more steps than the Panelized System (since the timber frame must be assembled to subsequently install the panels) it can be easier for self-builders since the panels are lighter, and therefore, they will need less mutual-help for the erection of the house. These degrees of complexity are also correlated with the prices of the homes; that is, the homes are more expensive when the complexity is lower. In fact, Sears’ panelized kit homes were exclusive for the people that were willing to pay an extra cost to facilitate the construction process (Cooke & Friedman, 2001).
4.3.2 Kit home packages
The definition of the components of each kit home’s package is a potential manufacturing guideline to provide cost-saving alternatives to the customers. In fact, customers can purchase some materials with larger, local suppliers which can result in lower costs, or they can add during the post- occupancy stage depending on their budget.
Based on a study by Knaack et al. (2012), the most suitable way to define a package’s components is to classify of the levels of construction based on the primary systems; i.e., flooring, walls, and roofing. Furthermore, defining these components must consider the following:
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1. To determine what is included in the starting prices. The definition of the components
of each package is related to the prefabricated system: Pre-cut Timber Frame System
(Figure 4.9), Panelized System (Figure 4.10), and Hybrid Timber Frame System (Figure
4.11).
Sheathing
Floorboards Floor Headers
Joists
Timber Frame
Siding Pre-cut Timber Walls Frame Trim
Insulation
Joists
Timber Rafters Roof Ridge Board
Sheathing
Figure 4.9. Pre-cut Timber Frame System package
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Sheathing
Floorboards Floor Headers
Joists
Beams and Posts Exterior Siding
Prefabricated Exterior Panels Sheathing Opened Walls Double Glazed Wall Plates Windows Insulation Trim
Beams and Posts Panelized System Prefabricated Panels
Exterior Siding
Exterior Closed Walls Sheathing
Insulation
Dual Glazed Vynil Frames
Double Glazed Windows
Framing Roof Sheathing
Figure 4.10. Panelized System package
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Sheathing
Floorboards Floor Headers
Joists
Pine Timbers Timber Frame Kit Prefabricated Trim Hybrid Timber Panels Frame Walls Opened Walls Exterior Siding
Exterior Panelized Kit Insulation Sheathing Dual Glazed Vynil Frames
Framing Roof Sheathing
Figure 4.11. Hybrid Timber Frame System package
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2. To offer upgrades for the materials that are included in the basic kit homes (Figure 4.12).
Tongue and Groove Floor Decking
Walls Interior Cedar Siding Ugrades Tongue and Groove Covering
Roof Cedar Roof Boards
Ceiling
Figure 4.12. Upgrades.
3. To offer some optional components (Figure 4.13) or elements that the customers can:
• Decide to include in the kit.
• Dismiss as part of the design.
• Purchase with a larger, local supplier at lower prices.
• Purchase during the post-occupancy stage according to their budget.
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Double Glazed Windows
Doors
Porch Rails
Rough Finishing Dormer
Interior Walls
Closets Optional Components for the Kit homes Fireplace
Kitchen Cabinets
Lighting Fixtures Finishing Bathroom Appliances
Painting
Figure 4.13. Optional components to include in the kit home
Although panelized walls include window framing and openings for doors, these are offered as optional components since they can be less costly if purchased with a larger, local supplier. This also applies to the interior walls, which can be purchased during the post-occupancy stage or dismissed if the customer desires a more open plan. Finally, the porch, dormers, and fireplace depend on individual preferences. Moreover, the porches can be constructed during the post- occupancy stage, as well as the finishing components which can be also purchased outside and at a lower price.
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A strategy to determine the interior walls that the customers wish to include in a kit home during the pre-occupancy stage is to offer this option through a computer design tool. For instance, manufacturers can show the plans with and without partitions in order to provide an idea of how the spatial and architectural features differ between the alternatives (Figures 4.14, 4.15, and 4.16).
Figure 4.14. One-bedroom kit home without interior walls
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Figure 4.15. Two-bedroom kit home without interior walls
Figure 4.16. Three-bedroom kit home without interior walls
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4.4 ERECTION OF THE BUILDING ON-SITE
Based on the examined case studies, it was possible to identify the main guideline that facilitates self-help construction. In this case, most of the manufacturers that were successful in this regard, worked with the Pre-cut or Hybrid Timber Frame System. In these systems, each piece is numbered and indexed to step-by-step manuals that are understandable for any owner without knowledge of architectural plans or the construction process. Moreover, manufacturers provide phone assistance and instructional videos that support self-builders during the construction process. Manufacturers of panelized kit homes did not perform as well in this assessment criteria, but they could improve by adopting the use of such instructional materials to ensure that their packages can be assembled safely and without too much complexity.
Finally, all manufacturers could ensure the self-help construction feasibility by providing examples of the instructional material during the definition of the kit home’s design. This information will allow potential owners to know about the construction process of each prefabricated system, and subsequently define the level of complexity that they can accomplish.
4.5 FINAL CONCLUSIONS
Following Turner’s study (1977) about “Freedom to build” which is based on the participation of users in the design and managerial matters, the main guideline to ensure customer satisfaction in terms of affordability and customization is to provide different choices related to cost and design variations. By offering three types of prefabricated systems, as well as modulating manufacturers’ designs, the customers’ decision-making process can be facilitated. This is possible by guiding them through the definition of the kit homes’ components that are essential during the pre-occupancy stage and the ones that can be purchase during the post-occupancy stage. Hence, at
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certain period in time, the customer can own a home that they both want and need without jeopardizing their economic situation. This possibility can be related to Progressive Housing since this would extend the significance of the homes as “housing solutions”, rather than only the supply of finished houses (Greene, 2004). Moreover, owner-builders that do not have prior construction experience will have the option of choosing the system that implies less complexity with respect to their DIY skills, or to start with a basic design that can be transformed and finished after they feel confident in the execution of other building tasks. Finally, although the prefabricated system and the design are easy to assemble, companies must provide instructional materials during the first phases of the manufacturing process to ensure the success of self-help construction.
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APPENDIX
EVALUATION OF CASE STUDIES
Assessment criteria: Affordability
Self-built kit home price vs conventional house price
1. 5-19 percent.
2. 20-34 percent.
3. 35-49 percent.
4. Over 50 percent.
Feasibility of self-help construction
1. The manufacturer only provides the plans.
2. The manufacturer provides an easy-to-assemble system.
3. The manufacturer provides only a manual.
4. The manufacturer provides two or more of the following forms of assistance: step-by-step manual, supervisor/phone assistance, easy-to-assemble prefabricated system, instructional videos.
Cost-saving alternatives
1. Customers can reduce costs by choosing a small or simple design, then expand it during the post- occupancy stage (only for the manufacturers that offer the add-ons).
2. Customers can reduce costs by modifying the designs to eliminate some materials or components.
3. Customers can reduce costs by selecting lower material standards or the pre-cut system instead of a panelized system.
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4. Windows and doors, as well as other finishing materials, can be ordered through a larger supplier.
Accurate estimation of costs
1. The manufacturer only offers quotations by contacting the dealer or provides a budget calculator without explaining each price.
2. The manufacturer provides a generic range of prices for all designs.
3. The manufacturer provides the starting price of each design without specifying the costs of possible alternative options for the construction, materials, customization, and prefabricated system (if it exists).
4. The manufacturer provides the starting price of each design, the prices of alternative options, and a budget calculator.
Assessment criteria: Mass customization
Level of customization
1. Selection of variations of the same model.
2. Modifications and/or tailor-made designs at an extra charge.
3. Free of charge modifications.
4. Free of charge modifications and tailor-made designs.
Flexibility - Modifications
1. Only adding optional packages or elements.
2. Only facade changes such as colors and materials.
3. Limited spatial (areas, program, partitions, and so on) and facade changes.
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4. Unlimited spatial and facade changes.
Choices - Variations
1. 1 variation.
2. 2 variations.
3. 3-4 variations.
4. Over 5 variations.
Strategies to avoid external complexities
1. The manufacturer lacks information about the design, production, and construction of its kit homes.
2. The manufacturer only provides complete information about existing designs.
3. The manufacturer provides complete information about the design, production, and construction of its kit homes.
4. The manufacturer also develops innovative strategies to facilitate the customers’ decision- making.
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Evaluation Case Study 1: Scotframe Timber Frame Homes
Affordability
Mass customization
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Evaluation Case Study 2: Cottage Kit Homes
Affordability
Mass customization
160
Evaluation Case Study 3: Shelter-Kit
Affordability
Mass customization
161
Evaluation Case Study 4: Tene of Stonia
Affordability
Mass customization
162
Evaluation Case Study 5: Summerwood
Affordability
Mass customization
163
Evaluation Case Study 6: Enviro-Tech Post and Beam
Affordability
Mass customization
164
Evaluation Case Study 7: Pacific Modern Homes Inc.
Affordability
Mass customization
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Evaluation Case Study 8: Sloan’s Mill Engineered
Affordability
Mass customization
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