During the final segment of the Housing Innovation Alliance’s November Live Roundtable held in Denver, Ryan Melin, president and co-founder of Innovative Construction Group (ICG), and Cliff Nelson, division president at Mattamy Homes, shared how they’ve been working together to drive attainability in Mattamy’s Jacksonville, FL division.
ICG, located in Jacksonville, owns and operates a wall panel and truss plant and installs those components. About 70% of its business is single family, the other 30% is multifamily. In 2019, they will install about 7 million square feet of product.
Mattamy Homes is a large private homebuilder headquartered in Toronto, Canada. Their focus is on developing communities and bringing value to their homeowners. The company has a long history of off-site building.
Mattamy is working with ICG in Jacksonville. Nelson’s division does about 500 homes, and about 50% are delivered in a panelized environment. He says that this gives his team a unique opportunity to learn what is and isn’t working on both sides of the equation — site built and off-site built housing — and to use that knowledge to improve the production process overall.
Here are highlights from their conversation at the event – a case study of what they’re accomplishing together.
Cliff Nelson: Jacksonville is a pretty standard suburban-based market. First time buyers and second move up predominantly.
We were starting to get pricing north of 300K, getting into 310, 320. And we were really forgetting about those buyers that needed to buy a house in the mid-200s. We build in some large neighborhoods, and we had the opportunity to really just sit down and develop via a land plan, a much more efficient plan, cheaper lots.
We set out to come up with a more value-driven product. We labeled it the “spirit series” but didn’t market that as a specific brand yet. It’s a 2000-square foot house with three bedrooms and two-and-a-half baths starting in the 260s. That’s kind of the mid-point of that particular product line. It sits on a 40-foot lot that’s 110 feet deep.
Our architects in Canada helped us with the design, and then we took it to ICG and tackled the design to figure out how to build this thing efficiently and take some costs out of the bill.
“There are maybe six or seven different trades that Mattamy utilizes to do the
same scope of work we did.”
Ryan Melin: There’s a concept that’s a reality in the industry that says, “the lowest cost wins.” If Cliff can build the same thing that we do with a site builder or for cheaper or more efficiently than what we can do, there’s no place for us in the game. If his competitor can build a more attainable product cheaper than what he can do it for, people are going to gravitate to that. That’s the reality of the consumer in the industry.
The real value that we were able to accomplish together is to streamline the process.
Cliff has an in-house architectural manager within his division with a deep understanding of components, how they go together, which was critical to our success.
For Mattamy we incorporated wall panels, I-joist trusses, loose material, framing, labor hardware, structural engineering. There are maybe six or seven different trades that Mattamy utilizes to do the same scope of work we did.
Here’s one example in which we were able to help cut costs for Mattamy. Mattamy has used floor containers that use 27 different joists. We created a floor container with 24 joists. We were able to get rid of three joists, because our team called Cliff’s team and asked him if we could move the toilet six inches in the house. They figured out a way to redesign the bathroom, move the toilet six inches, and pull three joists out of it. That little change on a house that they’re going to build over and over again manifests itself into probably a $300 to $400 savings from moving a toilet six inches in a house.
“There needs to be a willingness to change the design cycle. If we’re going to be able to talk about integrated design, all that stuff is great at 30,000 feet, but until you’re sitting in the room together collaborating in the fashion that we have, none of that stuff means anything.”
CN: What’s this done for us? There’s just a lot of value in the collaboration and our teams sitting down with the vendors up front before building the first home type. It’s helped write our BuildPro schedule as far as sequencing the trades as they go through the house. Typically, our frame goes together a couple of days more quickly than a site-built frame. We’re able to get trades in there a lot quicker and move out of that initial house coming out of the ground, actually get dried in and get trades into the house and start finishing.
The process will allow us to put less trained, less experienced builders to supervise all this in the field. But we’ve found that the builders and super superintendents with more experience really thrive in this environment because their schedules work better. They’re able to get trades in there. They’re able to duplicate things over and over again. And certainly, at the end of the build, as we go through our QA process, we have just fewer items coming up.
But it’s not a silver bullet. It’s just a tool in the toolbox, and we just need to execute it well. The favorable side of a house going up a couple of days earlier or on schedule per our job template doesn’t negate if our builders fall asleep at the wheel. As we continue to collaborate and bring more vendors in upfront, it just helps everybody get better.
RM: As Cliff said, “It’s not a silver bullet.” Anytime we start doing work with a new partner, there’s a significant adjustment. And there are coordination challenges and people get frustrated. Just because we make this switch doesn’t mean that everything’s perfectly integrated on day one. There are adjustments that need to be made and feedback that comes in from the field.
There needs to be a willingness to change the design cycle. If we’re going to be able to talk about integrated design, all that stuff is great at 30,000 feet, but until you’re sitting in the room together collaborating in the fashion that we have, none of that stuff means anything.