Norris Bruce
Jun 14, 2019

The Future of Housing and Prefabs with Steve Glenn #647


Aaron Norris is joined again this week by Steven Glenn. He is the founder and CEO of Plant Prefab, and their mission is to make it easy, fast, and cost-effective for people to build custom, high-quality single and multi-family homes that are healthy, sustainable, and durable. The company operates out of a 62,000 square foot facility out here in the Inland Empire in Rialto, California. Previously, Glenn has worked with the Clinton HIV/AIDS initiative, was former CEO of PeopleLink, a founding partner of Idealab, and for Disney Imagineering as co-director of virtual reality studio.

Episode Highlights

  • Are consumers caught up to the idea of pre-fabricated housing, or do they still prefer manufactured?
  • What do people request more: custom or existing?
  • What is his vision for housing in the future?
  • What are the challenges now in the construction environment in California?
  • What is his Z6 program?
  • How important is design in the future?
  • What technology should we expect in homes in the future?

Episode Notes

While in the last show they talked a lot about accessory dwelling units, he’s very excited to talk about the future of housing. Steve knows a lot about this since he has been building LEED certified homes in one of the hardest states to build and manufactur in the country. Aaron asked how far things have come since he started. Steve said things have come a long way tremendously. They started in 2006, which was a year and change before the worst real estate downturn since the Great Depression. It was not an excellent time to be starting a home building and design business. Aaron said that’s the understatement of the century. They got through it and, and in the post downturn they got very busy and and have certainly seen a substantial increase in the business. The home market has rebounded pretty substantially since the downturn.

Steve survived through the downturn and offers a very different product. During that time, a lot of builders packed up shop if they didn’t go out of business. Aaron wondered how he survived that time, to which Steve said it was several things. First, he tends to be frugal as an entrepreneur, which helps. They had a number of projects that didn’t cancel, so that helped. He had raised some money, so they had a little bit of money to get them through. They made sacrifices, but it was a very challenging period at time, speficially when it came to making payroll. For years they were living month to month invoicing, and they weren’t getting paid.

Aaron next asked Steve who his core audience is for the prefab homes he’s building. He gets asked this a lot, and there’s not really one particular core audience. He has to make a distinction since as a company, Plant Prefab designs and constructs. They are a design studio Living Homes, and they constructed the factory, which is mostly building for other architects. They are doing a number of Living House projects, but most of the projects are for other architects, the majority of whom have never even done a prefab. With Living Home’s clients, they tend to really be into design. They have a strong point of view about design, and they work with a number of great architects, all who share a focus on modernism.

Aaron loves the way his project looks, and he asked if it has always been the design aesthetic that he perceived from the beginning. At Living Homes, they had as a thesis that there was a large and growing number of people who really appreciated modern design and also healthy and sustainable design. That market was underserved. The production home builders weren’t building for those folks known as the Cultural Creatives

Aaron had run in to the healthy phenomenon more specifically this year at the Consumer Electronics Show. KB Homes was there launching a product, and the word healthy kept coming up, and they are separating it from sustainability. Aaron asked him to explain the difference between healthy and sustainable. Steve said it’s a big difference. Sustainability has to do with ecological footprint, how much energy use, how much water, the kinds of materials you use, whether theyare they are recyclable, and carbon emissions involved in the creation of the materials. That’s all about environmental impact.

Health is a measure of indoor air quality, whether there are any toxic compounds integrated in the materials in your home. There are other things that some people track in this domain that have to do with lighting indoor air quality. These are probably the two biggest pieces discussed in the context of indoor health. Lighting refers to the temperature of the lighting and foot candles.

Steve has been on the bleeding edge of LEED certification, and a lot of the audience does renovations. A lot have moved into creating square footage as part of the strategy in a very competitive environment, especially here in California. Title 24 isn’t always something dealt with. Aaron asked if Steve was the first platinum LEED certified prefab property in the U.S., but Steve said they were we were the first home ever to be certified platinum of any kind, not just prefab or stick-built.

Aaron asked what this does include, to which Steve said LEED stands for Leadership in Energy and Environmental Design. It’s a green building certification program that was started by the nonprofit United States Green Building Council. It’s a point based system, so you get points that make your homes more energy efficient, water efficient, better indoor air quality, less carbon. Based on those points, you can get certified or silver or gold or platinum. Platinum is their highest level of certification. Their first home was the first home ever to be certified LEED Platinum, and they have had twenty seven homes certified platinum since, which is more than most design firms.

Aaron said from what he understands, it’s very expensive and will probably not fall into the affordable housing category, at least in the short term. As it turns out, more energy and water efficient building products are increasingly no more expensive than on sustainable materials, or at least higher quality materials. Doing a platinum level is going to be more expensive than just the cheapest possible home. The prices forresponsible materials is coming down pretty dramatically.

Aaron read an article about his company. As if platinum LEED certification wasn’t enough, he has another philosophy he calls Z6. Aaron asked if this is on the design side, manufacturing side, or ia blend of the two. Steve said it is more on the design side. LEED is a great objective third party measure of your environmental program because it’s a point based system and is objective. It’s a good way of being able to compare what you’re doing to others and keep yourself honest.

Under a number of circumstances, you can create a LEED platinum level home without any renewable energy, which he thinks is weird. They created a program that they use internally that they call Z6 really directly addresses the sort of six major environmental and health imperatives. They want to be able to impact very directly and set easy goals. This includes getting down to zero non-renewable energy and zero water for for irrigation. It makes it really clear, but the point is they have not hit zero on all their measures yet and may never. But, the point is to just try to minimize that as much as possible.

Z6 is zero energy, zero water, zero carbon, zero waste, zero emissions, and then zero ignorance. Energy and water have two sides to them. You want to minimize what you use. So they want to minimize energy and water to use as much as possible. The water use refers to places where like most of California where water is scarce, and they want to responsibly source what they use. For energy, they want to do things to reduce energy use and get power from renewable resources. On the water side, they wan to minimize water use and then reclaim true a grey water system the water for irrigation.

When it comes to carbon and waste, they want to think carefully about whether the source materials are recyclable and how much energy is used in their creation for emissions. They want to reduce or eliminate that indoor air quality. There is also zero ignorance. You can do many things that will impact all of these measures; but if the people who live in your homes aren’t responsible about their energy use, you will have a large ecological footprint. They want to make people more aware of their energy and resources to that.

Aaron likes this framework and thinks it’s a good roadmap to where we’re going in building as well. Aaron asked Steve if he sees some exciting development that he thinks will be adopted that hasn’t gone mainstream yet, like the solar tiles for Tesla batteries inside homes. Steve said there are a lot of things that are not mainstream yet. However, more and more people are using solar. A lot of people are using tiles now when panels are actually are more efficient. Some people just don’t like the look. Either way, grey water should be ubiquitous in regions of low water use. Grey water is using sink shower, bath water, washing machine, dishwasher, and using that water to create irrigation since it’s a second set of pipes. It uses an enormous amount of water that you can divert from sewers and use for plants instead of having to use potable water.

Aaron knows a lot of people in the utility business, and the utilities aren’t so excited about putting in the purple pipes and offering rebates for the grey water. Aaron asked Steve if the hesitation is coming from a conflict of interest or if the consumer just doesn’t care enough. He wondere why gray water more ubiquitous since it has been around for a while. He wondered wh it has not caught on, especially in California with the recent drought. Steve said the main reasons are it costs more, you have to put it a second set of piping in, lots of areas don’t make it easy to license likely because of ill-informed health codes which which haven’t been researched enought. Consumer demand is another thing, whether it’s not being educated about it or not caring enough.

Aaron liked that his Z6 really didn’t talk about technology. When it comes to built-in smart home technology, it feels like the race into the home from Amazon to Google Home. Aaron asked Steve if he is agnostic when it comes to technology inside the home. As a property owner, Aaron is a little hesitant with technology right now on the security side, across the board. It doesn’t matter which company it is. Aaron asked if he sees a lot of consumers demanding a lot more smart home tech. Steve said absolutely. Aaron wondered if there are specific systems that they want more than others. Steve said he doesn’t get that as much, but definitely things like the ring system and thermostat. Most of our clients, especially for the higher end homes, are doing complete AD and home automation systems. Living Homes is integrating a lot of smart tech. They bring in doorbells, and they took investment from Amazon last year. You can expect they’ll be doing some more substantial things with them.

This was what attracted Aaron to what Steve did. He was very excited that he was local in California. It’s interesting that Amazon would invest in housing. Aaron wondered why or if they are just wanting to test some things with the smart home. It’s well known that they are quite serious and quite successful so far at both integrating and selling smart home technology to homes. They liked Steve’s business and thought you could learn from each other and help each other. He assumes that’s why they invested, and he was talking to them about doing a number of things in the future.

Aaron asked what we should expect over the next 10 years when it comes to the industry. Steve thinks more and more homes will be built offsite. Thankfully, more homes will be built in a more energy and water efficient way. He hopes they will be built in a healthier way too. If consumers continue to be increasingly concerned about these things, he hopes to see greater affordability and greater and more accessible well-designed homes. He also thinks we will see smaller homes and cities allowing you to do more dense housing.

Aaron asked if he thinks design is going to become more affordable. Some of the products on his Web site are absolutely stunning, so he wondered if the cost of also looking awesome will be lower sometime soon. He said hopefully so because of what he and others are doing and that they can help bring costs down and make this more efficient.

Aaron next asked about robotics and manufacturing home. From the rehab point of view, skilled labour is definitely an issue here in California. Steve’s manufacturing process is really coming in at an important time. Aaron asked how much robotics is going to play into that in the next decade. Steve thinks it will be an increasing amount. Certainly if you go to Japan, their biggest homebuilder is the equivalent of KB Homes and others. They’re building with robots who can build homes. He thinks that will start to happen here in pretty significant numbers.

Aaron asked if he has architects coming to him that want to create some sort of a plan that can sell or if he is getting a lot more requests for custom built. Steve said it is both. They set it up to do custom projects. Those are the kinds of things that happen in cities. A lot of the product on his Web site absolutely looks custom and stunning. Aaron next asked about timeframes. If something is in his system and he built it once, is it faster than stick built. Steve said absolutely because they build in parallel to the site work. On average, at zero percentage he can give it on the amount of times that he ends up saving, generally about half. This is much faster.

Aaron ended by asking what’s the best way that people can get a hold of him and see some of his work. You would go to his website at www.plantprefab.com, his company website. You can also go specifically to the design group as well as look at www.livinghomes.net. You can also email them at info@plantprefab.com. They have weekly tours of the factory and of a show home they have in Santa Monica. They also have once a month tours of the factory. You can out all about this at www.plantprefab.com.

The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.

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