Factory-built houses looking a lot more like homes
The word heard most often about the US housing industry lately is ''depressed.'' Most builders, lumbermen, and real estate brokers would quickly agree that the description fits their businesses.
But not Austin Guirlinger, president of Cardinal Industries, a Columbus, Ohio , manufacturer of modular homes. For several years, the company has grown 20 percent annually, a rate Mr. Guirlinger expects to match this year, easily beating the $238 million in sales recorded in 1981. And, he notes, ''we haven't laid off one person in 13 years.''
Unlike most construction firms building houses from the ground up on site, stick by stick, the modular housing business has been thriving, although not always to the same degree as Cardinal. The modular industry is starting to enjoy the fruits of an effort to improve its product and thereby its image.
For nearly three decades, builders have been trying to use factories to bring affordable, easy-to-build housing to the public. For most of that time, the key word was ''affordable.'' But to the public at large, ''affordable'' meant ''cheap.'' Modular housing was seen by many people as similar to prefabricated houses and mobile homes: It was good for temporary or interim housing, but the best homes were still ''stick built'' from scratch on the site.
Lately, however, as housing costs continue to climb and mortgage rates stay in the unreachable range for many people, the companies that build modular houses have moved ''upscale.'' Now, these companies are using their factories to advantage, employing building techniques that could not be copied in a stick-built house.
The result, observers say, is a house that is somewhat more expensive than modular homes built just five years ago. But today's models are often better built, contain more features than previous factory-built housing, and are far more energy-efficient than comparable stick-built homes.
(Modular homes are still a relatively small segment of the housing industry. Last year, Mr. Guirlinger says, only about 54,000 modular housing units were produced by US companies, compared with 1.2 million units of all types counted by the Commerce Department.)
''The industry has changed dramatically,'' says Robert Gough, a housing analyst at Data Resources Inc., a Lexington, Mass., consulting firm. ''The modular house is a different product than it was just four or five years ago. . . . I think the industry can pat itself on the back for responding to what the market was demanding.''
Speaking of some modular homes, Mr. Gough said, ''You can't tell if you're in a stick-built or modular home.''
One way a person could tell is by the speed it took to build the house. ''In 30 to 60 days from the time you decide you want a house, you have it,'' said Bonnie Huedorfer, assistant vice-president at the First National Bank of Boston. This includes time to select a house, arrange financing, clear the land, dig a basement and pour the foundation, and put the pieces of the house together.
The two mr three days needed for the last step not onl hyx- /OoO costs for the builder, but dramatically cuts interest expenses for materials that are assembled and sold quickly. An added benefit is a marked decrease in thefts of lumber, tools, and other materials from the site.
Another advantage to modular homes, Mr. Guirlinger says, is the investment in capital equipment that can be made. ''We can spend a quarter of a million dollars for a piece of equipment if it will save just $50 per floor,'' he said. ''A regular builder can't do that.''
Builders say actual savings on the price of a home are hard to pin down, because of varying land costs and interest rates. One, however, estimates savings as high as 22 percent on the house itself.
With four factories, two in Ohio and one each in Georgia and Florida, Cardinal is one of the biggest modular home companies. Another large producer, Continental Homes, has plants in New Hampshire and Virginia.
At Continental's Nashua, N.H., plant, a typical modular home can be started and ready for shipment in about two days, sales manager Raymond Nolan says. Doing the job this quickly requires tools and techniques that would be foreign to the average carpenter.
In one of the first steps, for instance, the assembly of the floor is not done with a simple hammer and nails but with a powerful, hand-held nailer that rams 8- to 10-inch nails through the plywood and studs.
Although the gadgets are fascinating, it is the energy-saving materials and procedures that Nolan enjoys pointing out most often when he gives a tour of the plant. The outside walls of the house, for example, contain 12-inch-thick Fiberglass insulation and a 3/4-inch sheet of hard-pressed Styrofoam. To prevent air leaks, caulking is squirted around electric outlet boxes from behind, something Nolan says would not be done in a stick-built home.
Mr. Nolan talks about the energy savings with a hint of envy. While it costs him more than $1,500 a year to heat his own stick-built house with natural gas, a gas utility in Massachusetts has estimated the annual cost to heat one of Continental's homes at less than $350.
While construction techniques do not differ much among modular home factories , marketing strategies do. At Continental, a buyer can have a home built to a wide variety of specifications, including one- and two-story models. The 12 -foot-wide modules come in lengths from 24 feet up to 56 feet. Some interior walls can be added or eliminated, depending on the family's needs. Decorating touches like draperies, carpeting, wallpaper, kitchen cabinets, and paint are selected by the customer and added in the factory.
While Continental prefers to accommodate individual tastes, Cardinal Industries is finding greater success by emphasizing standardization. Every module Cardinal builds is 12 by 24 feet, Cardinal president Guirlinger says. One module could contain a kitchen, hall, and bedroom. Another might be a living room and dining room, and a third could hold a bedroom, bath, and utility room. So far, he notes, Cardinal has not found it necessary to appeal to that segment of the market that would demand greater variety.
This year, he said, Cardinal will produce 6,000 living units, or about 12,000 module , at its four plants. Eventually he hopes to turn out 40,000 modules a year.
The company's strict adherence to standardization seems to work best with multifamily housing, and Cardinal has so far specialized in apartments, condominiums, town houses, and motels. It only recently started offering single-family homes.