It is way past time for the U.S. construction industry to embrace “disruption” so that it can build housing at greater speed, efficiency, and profit, Gerard McCaughey, an international leader in Fully Integrated Off-Site Solution (FIOSS) construction, said at a 2018 ULI Spring Meeting panel.
“There are better, safer, quicker ways to build homes,” said McCaughey, Entekra Inc. chief executive officer, as he explained the benefits of using FIOSS systems.
McCaughey said the United States is way behind Europe and Asia in terms of housing construction methods. “The country that put men on the moon . . . is operating as if it’s 1812 [rather] than 2018” when it comes to building houses,” said McCaughey. “They’d laugh at you in Europe.”
Even though headlines say there is a labor shortage in the U.S. construction industry, McCaughey said it is an exaggerated “fake” issue because methods such as FIOSS do not require as many workers. He said that only one new worker enters the U.S. construction industry for every five workers who retire, but that should not be a problem if FIOSS methods are embraced.
“It’s rubbish,” he said about concerns of a construction labor shortage. Rather, “there’s a bad process.”
He played a video showing how a FIOSS house—with framing components done off site compared with “dropping off sticks” at an empty lot—can be erected in about six hours with a small number of workers and leaving “not enough waste to fill a plastic bag.”
“Tens of thousands of homes in Europe are going up like this,” said McCaughey. “Europeans and Japanese have proved that it works.” He added: “How are you not doing this?”
McCaughey said that builders could save an estimated $25,000—“profit unlocked” per house—over a 30-day building period. Such FIOSS construction would reduce the need for absolute and skilled labor, minimize the impact of weather delays, and increase safety while minimizing expenses for workers’ compensation coverage.
McCaughey said the FIOSS process requires more collaboration on the front end of the homebuilding process. Collaboration is key, and architects, engineers, builders, plumbers, and electricians all should be l in the room at the same time, months and weeks before work begins at the site.
Margaret Whelan, founder of Whelan Advisory, said that such a construction process is “not disruptive . . . it’s actually quite calm” compared with a typical build. Whelan also said that using the process would bring more diversity to the construction industry, as younger people and women gain jobs in pre-construction plants.
The panel was moderated by John McManus, vice president and editorial director of Hanley Wood Residential in Washington, D.C.
George Casey, president and chief executive officer of the Maine-based Stockbridge Associates consultancy, told the audience that a variety of factors could moderate housing construction in the years ahead.
He said that housing from roughly 1950 to 2010 experienced essentially a bubble of growth and noted that government support for housing incentives is dropping. The current administration’s cutbacks to immigration also will have an impact on the industry.
Casey said people are less inclined to buy houses. “Renting no longer has a stigma to it,” he said. “Buying and building a home feels antiquated.”