production housing...short term economic engine or time bomb?

I ventured into the production housing arena some years ago during the upward pendulum swing of the housing boom in 2004.  This move wasn't driven by my desire to design mass-produced housing for the populace, but strictly selfishly financially driven.  Simply, I was presented with an amazing offer that was impossible to turn down.

The amazing benefits that came with the position allowed my professional moral compass to short circuit itself when questionable practices on behalf of our clients came to light.  I always filed them away in that dark closet in my mind, you know the one where you give a subject 1.6 seconds of thought and then immediately toss it into the closet and slam the door once you realize the path your thought processes were heading down.   A recent professional event triggered a desire to unlock that closet and sort through some of those happenings to insure I never enter that arena of architecture or development again.  

One of the most prevalent events that tends to float to the surface more than others took place in 2007 during a frame walk with the developer, engineers, and marketing teams of a publicly traded builder in the Lincoln community of Northern California (a frame walk is when the entire development team walks a new home before drywall, electrical, plumbing, etc is installed to make sure everything works with the program provided by the developer).  I was commenting to the regional vice president of the development company about the flimsy construction quality and use of recycled wood studs in the house and how they could barely hold their own weight, let alone the weight of drywall, roof, etc.  He gave a quick laugh and told me that "these houses are built to last 15 years and we'll be long gone before anything falls down here".  I tried to not show my disbelief in his statement and replied that the people buying these homes are purchasing with 30 year loans, so there seems to be an issue with the math here.  He stopped and looked at me and said, "not my problem, like I said...I'll be long gone".

I suppose you need to understand the mentality of the public builder before passing judgement.  The pressure to cut costs comes from the top down in the cut-throat competitive nature of the publicly traded housing.  This means it starts with the shareholders who need to be appeased that a tidy profit will show each quarter.  This pressure trickles all the way down to the purchasing managers of the respective builders who are beat up by their divisional presidents to look for innovative ways to cut corners and still meet the bare-minimum life-safety and building code regulations.  If they had their way and building regulations were not a factor, it would be very interesting to see what you would get.

Speaking of regulations, the powerful builder's lobby in California has lobbied to put in place a piece of legislation called SB800 or the "Right to Repair Act" which limits the ability for homeowners to enter into litigation over construction or design defects.  If you are planning on purchasing a new home, I suggest you become familiar with the strict notification and time frames necessary to maintain your rights to compensation or the means to obtain repairs by the builder with no expense on your behalf.

When you are dealing with builders who are building with the bare minimum in materials, you need to be buyer aware.  That new house look and smell can hide some alarming defects.  In California we use stucco siding in a majority of our new production homes and about 10 years ago the builders went mainstream with a "one-coat" stucco system.  This deviated from the ancient system of a three-coat exterior cement plaster that was 7/8" to 1-1/4" thick and could nearly stop a bullet.  The current one-coat systems being used industry wide now use a 7/8" sheet of foam as a filler attached to the wall studs and a 1/4" - 3/16" top layer of stucco color coat for texture.  Not exactly bullet proof, or time-proof for that matter.

I went back to that community in Lincoln recently, just a scant 5 years after it was finished and sold to an unsuspecting and wide-eyed first time home buyer.  I picked out one of the homes I remember walking through on the frame walk to see how it was holding up.  The one-coat stucco system that was used was cracked everywhere and discolored, the windows and doors had gaps all the way around the seams where the stucco had shrank away from the vinyl frames, and the overall condition of the homes in the community was very poor.  These were 5 year old homes...but they looked as if they were already 25 years old.  At this point, I just hope they last the length of the mortgage.