For one young Vermont entrepreneur, the future of housing is in piece work
A stone's throw from Hinesburg Road in South Burlington, there's a short, crushed-gravel path running through the weeds that just barely resembles a driveway. As of yet, there are no water lines or power poles running to this residential lot; neither is there a septic tank, a foundation, nor even a hole in the ground to indicate where the structure will be.
But the house that will stand here in the next few weeks is already 90-percent finished. The carpeting is laid, the cabinets and wood trim are fully installed, and the electrical outlets are already wired and ready to accommodate lights and appliances - in fact, you can see them through the window curtains. The house is sitting out in the field in several pieces, like Lego blocks, just waiting to be assembled. Barring unforeseen delays, its owners should be moved in by Halloween.
This isn't a trailer or mobile home - it's a $600,000 luxury split-level abode. Sandwich-ed between a dairy farm and the 15th hole of the Rocky Ridge Golf Club, it symbolizes more than just the rapid transition of Vermont farmland to residential real estate. It's also indicative of another trend rising on the New England landscape: modular homes.
The future of housing in Vermont, and elsewhere, may look a lot like this ready-made real estate. Unlike conventionally built houses, modular, or "system-built," homes are constructed almost entirely indoors in a climate-controlled factory, using the cost efficiencies and quality controls of an assembly line. Modulars are typically less expensive, faster to build and more energy-efficient than other homes, but they're otherwise indistinguishable. That makes them an attractive alternative for advocates of affordable housing. On the downside, they may also represent a threat to the future of Vermont's traditional building trades, as construction jobs are outsourced to modular-home factories elsewhere in the country.
No one is more familiar with the pros and cons of this approach than entrepreneur Addison McKenzie, founder and co-owner of Home Sweet Homes, a modular home company in South Burlington. At 24, the bearded and laid-back Barre native looks more like someone who should be debugging computer hard drives than selling half million-dollar homes on the back nine.
At the moment, his biggest - maybe only - problem is convincing people that "modular" doesn't mean "mobile." Actually, modular homes are built to higher standards than trailers or mobile homes. They also use 20 percent more lumber than conventional, or "stick-built" homes, which enables them to withstand being transported on the road for long distances, McKenzie explains.
They are typically less expensive, though, than those built on site - sometimes by as much as 25 percent, according to figures from the National Association of Home Builders. And they can be customized or expanded just as easily. As McKenzie puts it, "The modular homes we build are custom homes."
McKenzie cuts an unlikely figure as a real estate mogul. He wears his untucked, button-down shirt over baggy jeans and ratty sneakers. Yellow, mirrored Oakleys perch on his head. "I'm not into all that corporate shit and making tons of money," McKenzie says. "I don't have hobbies. I just love getting up in the morning and building homes."
In spite of the blasé attitude and hipster-slacker appearance, McKenzie is serious about his business. Several years ago, when he and school buddy Jon Vines were getting their Associate degrees at Vermont Technical College, they bought some real estate together, and sold it at a profit eight months later. It was the last piece of property the two ever bought on which they didn't build a house.
Home Sweet Homes - which they co-own - was founded in 2003 and has been doing a robust business ever since. This year, the company will build 20 to 30 new homes in Vermont alone - and the company just opened a new office in Cape Coral, Florida. "We're not sprinting," McKenzie says modestly, "but we're not crawling, either."
Without a doubt, modular-home sales are booming. There are no figures showing how many of the nearly 3000 building permits issued in Vermont last year were for modular homes - there's not even a trade association for the modular-home industry yet. But between 1992 and 2002, modular-home production rose 48 percent nationwide, according to the National Association of Home Builders. The fastest region for growth was in the Northeast, where one in every 10 homes going up is now modular.
In some respects, modular-home construction makes sense in Vermont. The construction season is short, making it preferable to do as much of the work indoors as possible. Modular homes, like the ones Home Sweet Homes sells, are produced in a factory in Mifflinburg, Pennsylvania, in a building large enough to accommodate 10 football fields. The materials are exposed to the elements for much shorter time periods, and can be assembled onsite in a matter of days. As a result, the construction loans for modular homes are also much shorter in duration - as little as three months, compared to a year or more for a stick-built house - resulting in lower interest payments for the owners.
Modular homes can be as large as 10,000 square feet, in which case they arrive on site in 33 pieces. But McKenzie sees big opportunities in building small, affordable houses in Vermont. "It's at a crisis point," he says. "It's really sad to see the people who work here but are not able to afford to build a new house."
Home Sweet Homes was recently hired to build four new affordable homes in St. Albans with the Lake Champlain Housing Development Corp. - soon to be the Champlain Housing Trust when it merges next month with the Burlington Community Land Trust. Two of the houses are already built and two others are going up this week. Executive Director John Powell says it was his first experience with modular homes; he wanted to see how they'd measure up in terms of cost, construction time and efficiency.
Overall, he says, he was impressed. "I was very pleased with the quality that came out of this manufacturer," says Powell, who spent 30 years in the for-profit construction arena as owner of Flanders Lumber Company in Essex. The homes tested very energy-efficient, and arrived in near-perfect condition. Powell notes that after being shipped hundreds of miles, the only defect was a minor crack in some sheetrock that took minutes to repair.
Powell says that although he didn't realize an enormous savings per se, the accelerated construction schedule is definitely a benefit: It enables his agency to get people into houses more quickly.
Is that a good thing for everyone? At a time when economic-development specialists are working to bolster the building trades in Vermont, houses manufactured out of state take some jobs away from local contractors. Sure, modular homes still require local plumbers to hook up the furnace, local electricians to connect to the power source, and local excavation crews to dig a foundation and pour the cement. But it's still the real-estate equivalent of a chain store.
Affordability isn't guaranteed, either. Spiraling fuel prices have driven up the cost of transporting modular homes by 25 percent in the last two years. McKenzie is still at an advantage, though, and with the shortage of Vermonters going into the trades, he's banking on a bright future in modular homes. He predicts, "Modular homes will be the conventional building method of the future."