Real Estate

A Catch-22 Thwarts Rebound In The Wake Of California Wildfires, Natural Disasters

It could be days or weeks before California’s wildfire menace lets up, and the Atlantic hurricane season has until the end of November before it’s officially declared done. Natural disasters’ tally—tens of thousands of acres, many thousands of structures, including homes, lost, hundreds of thousands of people evacuated or displaced outright, millions of people enduring life-and livelihood-altering power blackouts and reduced access to other essential resources, human lives—keeps reaching new heights.

And when armies of firefighters finally contain the fires, and the inundation and whipsawing cyclone winds die back, and people return to what’s left of their homes, what then? As natural catastrophes collide head-on with an already pronounced, multi-pronged housing crisis, one might conclude that American ingenuity, advanced re-construction methods, and rapid response regulatory and financial tools would kick into high gear.

Instead—even as construction automation, precision manufacturing, and machine learning capabilities sprout up in pockets of the U.S. as proof-cases of better, faster, higher-quality, and more efficient ways to rebuild—localities and states tend to revert to outdated, hide-bound, make-shift recovery tactics.

A new report, from the MIT Humanitarian Supply Chain Lab spotlights the dilemma—exponentially more urgent after the barrage of natural disasters on both coasts and inland.

“Factory-built houses are constructed using modular, panelized, and pre-assembled methods. They can be built outside of areas damaged by hurricanes or tornados and can be brought into the disaster area if homes have been destroyed. This innovative option could also be used to alleviate the shortage of affordable housing stock that afflicts many communities across the nation. Yet a mere three percent of American single-family houses are factory-built, says the report.

“Regulations and policies ill-suited to meeting the demand for disaster and affordable housing options are partially to blame for the low take up of factory-built structures.

“When financial assistance is not a viable option, the most commonly used federal tool for direct housing is manufactured housing. These homes are designed to be permanent but are utilized temporarily to provide disaster survivors with direct housing. A manufactured house can provide housing for a family for more than 50 years, but the US Congress requires that temporary housing assistance provided by the Federal Emergency Management Agency (FEMA) last no longer than 18 months. FEMA’s temporary deployment of a manufactured home costs roughly $110,000 to $129,000 per unit, the report finds.”

An analysis from Home Innovation Research presented by director of market research Ed Hudson at the National Association of Home Builders 2019 Building Systems Housing Summit in October, notes that, in the five-year future, more builders anticipate wider use of off-site building technologies, but builders identify numerous barriers to investing in and applying them. “Need trustworthy local sources,” is one such impediment, as is “offsite alternatives require extensive pre-planning and long wait times for delivery,” and, perhaps most important, “there’s a negative perception of offsite in their market.”

“If the housing system was more effective after disasters, communities would recover faster,” notes says Michael Windle, Researcher at MIT’s Humanitarian Supply Chain Lab and author of the report. “Despite the problems America faces with affordable housing and disaster housing, we lack a strategy that brings temporary-to-permanent housing into our collective toolkit.”

Modular and offsite players in California have begun tooling up as at least part of a longer-term, strategic solution in disaster’s aftermath. Blu Homes, Dvele, Factory_OS, Plant Prefab, and other modular and offsite builders are working to break through preconceived biases about quality and design to become post-disaster resources. Dvele co-founder and CEO Kurt Goodjohn says that California Factory-Built Housing law now fast-tracks offsite inspection and code approvals at the state level, which allows Dvele to consolidate the work of 35-separate construction trades—and the time it takes for inspections of each phase of their work—into a single process.

As part of its California Wildfire Rebuild Initiative, Dvele has purchased home sites in fire-ravaged locales, like Ventura’s Skyview Terrace, and in Santa Rosa’s Fountaingrove area, as discovery and learning centers for residents to learn their options, ranging from moving back into a rebuild on their property, or rebuilding and selling the home.

“This is an education process,” says Goodjohn, who says Dvele is conducting seminars on remediation options, processes, and procedures to help residents understand a clear, predictable decision path after their loss. “Victims of these events have this land and they don’t know what to do with it—and they’re hearing about delays in permitting, insurance, financing, not to mention the time and costs on design, inspections, and construction. We want to make it clear that the price, quality, aesthetic, safety, and delivery time of our homes is transparent, and that in spite of what’s going on locally as far as price surges and market constraints, our prices are the same here as they are any place we operate and serve.”

Factory-built housing may not be a panacea, but it should be a key component of the nation’s housing stock at a time when both the severity and frequency of natural disasters are increasing, and states continue to struggle to meet the demand for affordable housing.

To get at the other “key components” necessary to restore people’s access to housing, innovators need to get over several steep obstacles, not just a single one in isolation. This is why the Ivory Prize for Housing Affordability, a $200,000 award whose focus is on triangulating solutions that draw on design and building technology, capital finance, and regulation and policy, has emerged as an important catalyst to structural change. Applications for the 2020 award can be submitted through December 15.

“From innovative financing models, groundbreaking construction technology, and visionary policy and regulatory reform, our 2019 inaugural class showcased what’s possible,” said Clark Ivory, head of the Clark and CEO of Christine Ivory Foundation and Ivory Homes. “I can’t wait to see how our 2020 winners will take solving the housing affordability puzzle to the next level.”

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