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Two Phoenix-area builders are putting insulated concrete panels at the center of a new business system.

Since its inception, the Alliance has promoted innovations like off-site construction as important tools for homebuilders who want to position themselves for future success despite a shortage of skilled labor. While it's tempting to talk about these tools in isolation, the truth is that they will only deliver their full potential as part of a business strategy designed to take advantage of them.

That won't be news to most builders. It's just another way of making the obvious point that while technology will play an important role in solving problems like the worker drought, builders will also need to work at adapting their business practices.

More of them might actually undertake that work if they realized the additional benefits of doing so.

That was the message delivered by a pair of speakers at this year's Alliance Summit: Mitch Rotta, Director of Construction at Tricor Contracting and Mike Mancini, President of SoDella Construction, both located in the Phoenix-area. The two are joining forces to create what they hope will be a new model for production-builders: the Integrated Component Builder or ICB. They're billing it as a systematic business approach for builders that offer a consistent home product with little or no variance between units.

SoDella is already deep into the process of building a community of such homes: Hampton East, a 140-unit build-to-rent project in Mesa. For the past four years the company has been working with Phoenix-based HercuTech to help the manufacturer develop its HercuWall insulated concrete panel system. HercuWall will be at the center of the new business approach.

Lessons Learned

Mancini and Rotta first met a year ago. "We got together for coffee and ended talking for 4 1/2 hours," says Rotta. "We had complementary strengths, so we quickly grasped he power of joining forces."

Tricor is a turnkey contractor in the build-to-rent business with a client list that includes large institutional investors. Rotta and Mancini figured they could build on the lessons Mancini was learning on the Mesa project to develop similar communities on other markets.

Those lessons have been encouraging. Combining the HercuWall with a consistent home product has generated efficiencies that Mancini hasn't been able to consistently realize with traditional stick framing. They include:

• PREDICTABLE SCHEDULING. Every shell takes exactly the same amount of time to complete, so construction can proceed on a true evenflow schedule. As part of this, HercuTech knows exactly how many panels of what design will be needed every week.
• SIMPLE CONSTRUCTION. Homes are being assembled by a crew of four, which moves from house to house with little need for supervision. "We can train a crew in a day," says Mancini. "We put them to work on the first home, then told them to just keep going until they got to the end." It's the same for every trade on the project, which makes for minimal supervision.
• PROJECT-WIDE SPECIFYING. The project is being managed like a commercial build. With identical specs on each unit SoDella can source material and subcontractor prices for the development as a whole rather than on a house-by-house basis.
• MATERIAL SAVINGS. Consistent product specs allow SoDella to lower procurement costs by cutting out the supply chain. Rather than going to the local supply house for individual kitchen sinks they can simply order 140 of them from the manufacturer or distributor and store them until needed.
• MODELING EFFICIENCIES. Designers were able to use 3D modeling to fully optimize every part of the home before construction began, from the building envelope to the mechanical, electrical and plumbing infrastructures. They only had to do this once. "We were able solve potential design issues upfront," says Mancini.

Continuous Improvement

Future projects will include partnerships with other developers in various states. Mancini and Rotta believe they can continue to optimize designs and minimize costs in each successive community by following the same set of steps:

1. Design and model the homes
2. Procure materials in bulk
3. Use alternative materials where they make sense
4. Look for ways to simplify the construction process
5. Gather data and apply the lessons to do better on subsequent projects

They have also decided on a gradual, systematic approach to innovation. "SoDella has optimized shell construction by perfecting the use of HercuWall," says Rotta. "On the next project the we will be looking for a more efficient mechanical system that reduces or eliminates ductwork." Once that's in place they will turn their attention to the next system.

They plan to give precedence to systems that meet their performance goals while requiring as few skilled workers as possible to install. The vision is a fully componentized house package that can be largely assembled off-site.

Transforming Relationships

Mancini and Rotta say that the cost and labor savings made possible by this approach are just the initial benefits. They predict improved builder-homeowner and landlord-tenant relationships and stronger customer loyalty thanks largely to the following.

• LONGER WARRANTIES. This is a reflection of their confidence in HercuWall. "There are fewer defects than in a wood frame. Termites and mold are reduced or eliminated," says Rotta.
• LOWER UTILITY BILLS. "With R-30 walls and HERS scores in the mid-50's we will be in a position to guarantee maximum utility bills," says Mancini. That's something only a few high-performance builders can afford to offer at this point.
• A QUIETER HOME. The use of insulated concrete not just on the exterior but in the demising walls between units practically eliminates noise complaints, which is one of the biggest issues in multifamily construction.

As of early April, about 40 tenants had moved into the Mesa community. Mancini says that even though some units are 150 feet from a highway and others are 200 feet from construction activity, residents invariably comment on how quiet their homes are.

The partners see these benefits as having long-term implications. A tenant in a quiet, healthy and energy-efficient rental should be less apt to move, thus reducing community turnover. Someone buying such a home will have a more favorable view toward the builder and will be more open to doing business with that builder in the future.

These benefits are crucial to the goal of creating "customers for life," which could include after-sale service offerings. At this point few builders offer such services but Mancini and Rotta predict that more will do so in the future and so are building their business with them in mind.

Of course, that future won't come unless homeowners are on board, and getting them on board will require builders to put homeowners' needs first. That means building a house that makes their life better and then sticking around to support it after the sale. 

Mancini and Rotta insist that the technologies they're using and the systematic business approach they're developing will make such relationships practical. "We believe we can transform the industry," says Mancini.

Further Reading

"What Is HercuWall?" | Housing Innovation Alliance | 05.01.19