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An Untapped Market for Architects: Working with National Home Builders

A quarter of new houses are constructed by the 10 biggest home builders—who don’t often see architects as a necessity. But a new book reveals that some design thinking can raise the bottom lines of a re-emerging housing market immensely.

By Kermit Baker, Hon. AIA
AIA Chief Economist

The emerging recovery in the single-family home building market should help revive the construction industry and the broader economy. Unfortunately, it probably won’t generate much business for architecture firms, because architects historically haven’t been heavily involved in designing new homes, particularly homes built by large-scale builders.

And lately, with the waves of consolidation seen over the last several decades, large-scale builders are gaining a larger and larger share of the market. As of last year, almost a quarter of all new homes were built by the top 10 builders nationally, and almost half by the top 100. The recently released 2012 AIA Firm Survey shows that in 2011 only 6.2 percent of revenue at architecture firms nationally came from the single-family residential market, much of it from additions and remodels to existing homes. A few years from now, when the industry gets back to building 1.2 to 1.3 million new single-family homes per year, the only way architects are likely to gain access to this market is to work with midsize and large home builders.

Understanding how big builders operate, and how architects can help them operate more efficiently, is critical to expanding design activity in this sector. A new book by me and three other Harvard University researchers, Bigger Isn’t Necessarily Better: Lessons from the Harvard Home Builder Study (Lexington), takes a detailed look at the operations of large U.S. homebuilders and their efforts to use their size to improve the efficiency of their operations. The places where home builders failed to leverage size to their advantage offer opportunities for much smaller building industry processionals (namely architects) to patch up these gaps with innovative design thinking and technical expertise.

Building towards prefab

The book describes how large home builders took advantage of their growing scale to access capital markets, take aggressive land positions, build brand awareness, and achieve strong financial performance in the period before (and during) the housing market collapse. However, bigger firms were not necessarily able to translate this business prowess into increased time- and cost-efficiency to build a house.

The areas of labor and subcontracting, operations, and information technologies are where the promise of better efficiencies reside. For example, there is considerable room for innovation and improvement in the management of construction sites. Home builders have always kept an arms-length distance from the construction site, relying on contractors and subcontractors. Continued reliance on this model means that larger builders do not get the benefits from scale often found in other industries (examples include aerospace, apparel, automotive, etc.), particularly where they do not invest in modern coordination and information technologies and approaches that can control costs, reduce delays, and better manage risk. Lack of timely coordination among builders, subcontractors, and suppliers drives up the time and cost of building. The application of BIM-aided integrated project delivery (IPD), for example, can be a massive step forward for residential builders in terms of reducing cycle time and construction costs.

The simple fact is that it’s hard to think of just about any industry that uses scale advantages less than residential construction. Commercial and institutional construction projects are typically organized much more efficiently than residential projects, a process many architects are already very familiar with.

Improvements are also possible in production and sourcing operations. To maximize efficiency in building a large number of homes, builders could improve their practices from the ground up. Drawing lessons from cutting-edge manufacturers, builders should think of home construction as the integration of subassemblies—both large and small—rather than custom-cutting pieces to fit at the jobsite. For example, if slab foundations were poured to within a quarter of an inch of flatness, then factory-built pre-sheathed panels with precut window openings could be stood up on such slabs in a matter of hours. And wallboard could fit without having to cut wedge-shaped pieces to compensate for racked panels cause by poor foundation pours.

Similar benefits would derive from improving the supply chain. For example, prebuilt panel and roof trusses could be trucked to the jobsite from plants operated by building product suppliers who focus on large-volume builders. Better coordination with suppliers could allow them to plan when those subassemblies are needed because the home builder shared updated building plans. The idea of making home construction focus primarily on the assembly of larger and larger subassemblies can be carried well beyond windows, doors, and doorframes to the trim around windows and doorframes, and to rooms in the home requiring the largest number of different building trade workers, such as bathrooms and kitchens. Switching to whole room subassemblies might not give substantial cost savings, but taken to scale the time savings could be immense. This is an area where most architects have vision as well as expertise: total kit-of-parts prefabrication that minimizes on-site construction as much as possible.

Designing the process

The way to more efficient home building requires changing entrenched procedures and adopting best practices. This includes everything from designing homes to the management of construction sites, ordering building supplies, coordinating the delivery and installation of materials and subassemblies, and sharing this information among all relevant parties. Architects can help home builders design new homes, certainly, but the improvements in efficiency here are as much about redesigning a process as a final product—and that’s where architects can help as well. By helping builders meet their principal objectives of managing construction costs, making the construction process more efficient, and increasing buyer satisfaction, architects can show that design adds to the bottom line.

Bigger Isn’t Necessarily Better: Lessons from the Harvard Home Builder Study by Frederick Abernathy, Kermit Baker, Kent Colton, and David Weil is published by Lexington Books.


Image courtesy of Lexington.


Recent Related:

2012 AIA Firm Survey: Economic Downturn Cut Architecture Firm Revenue by 40 Percent, Employment by Almost a Third

Kitchens and Baths Continue to Attract Design Focus

Community Design Trends Emphasize Infill Development

Conditions Stabilizing, with Focus on Energy Efficiency

Declines in Home and Lot Size Easing


Architect Live: BIM for Residential Architects

Visit the Joint Center for Housing Studies of Harvard University

Visit the AIA’s Center for Integrated Practice website of AIA KnowledgeNet.


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