How did TIC handle the early-to-mid-90s housing bust?

NEW -> Contingent Buyer Assistance Program
"Pre-fab" is not a pretty euphemism for trailer parks. They are homes, just like any other, but mainly built off-site, then delivered in sections. Tastefully designed modular housing looks just like site-built stuff. Costs are usually lower, but not that much lower. (Easier to keep an eye on people and stuff at the factory, not to mention additional subs that don't have to get paid and thus no mark-up, among other things.) The real nice thing with the modular is that the start to finish time is waaay less than site-built. I have seen and been in nice modular homes that if one didn't know it was modular, wouldn't suspect a thing. It's all in who you pick to build it. There are value modular builders, whose homes look nothing more than a gussied up doublewide. Then there are modular home builders who aim for the upper end of the market with very nice homes. There's a whole spectrum of these builders.
 
pre-fab defenders: nobody is attacking prefab in terms of technology, cost, or appearance. its not that it wouldnt be viable in certain areas. people will pay in the millions for a $1100 sq ft prefab cottage on any of the balboa islands. but building large suburban tracts of prefab housing in upper-middle class OC communities is a stretch. it isnt that it wouldn't create just as sound of a home at less cost, it's that no one wants it -- its the perception, as bkshopr mentioned. there's nothing new about the concept and if viable, homebuilders would be doing it. you're missing the point by getting overly defensive about prefab as a technology. simply stating over and over that it's just as good won't change the homebuying public's perception of prefab.





going prefab to lower prices won't solve anything because buyers think existing housing is overpriced. they don't really care about the builder lowering construction costs so they can produce a home at their price level. if anything that was the faulty logic that led to condo and high-rise overbuilding. buyers want the bigger, better constructed, larger lot home coming down to their price, and are now realizing they can and should wait for prices to come to them. just because you can build it and sell it more efficiently doesn't mean anyone wants it.
 
Mixed Use as a solution is complete BS for the most part, case in point Jamboree Corridor. I agree, yes, that it looks cool and has some appeal, but it's really tough to do right almost anywhere in so cal, but cities mandate it because one of their planners just got back from some new urbanism conference. For that matter new urbanism is now a cheap word. It has it's origins on the east coast and is, imho, a dated theory and inapplicable to the west coast. I would suggest reading Kotkin's essay on new sub-urbanism.



Consturction costs in california are much higher, in my opinion out of control, compared to the rest of the country. Some types of structures are $50+ more to build per square foot in california. You do realize that land is much less than half the cost of new construction, and as we have seen, land prices have been slow to adjust, therefore another avenue would be to cut construction costs using pre-fab. If one could construction costs in half, prices for starter homes will be in the affordable range for many young, married couples.



Cut the developer out of the profit stream? That's not a very well thought out belief. Developer still has to find land, buy land, entitle land, finance construction, develop land, design product, coordinate construction, find buyers, sell homes, and offer customer service. What do you think? A factory finds some land and poops out homes on it and then sells it off never looking back? (okay maybe in texas they do but not in so cal)



So if you were the Irvine company, they way you would start selling homes is by bankrupting the company? Interesting strategy, I smell a bag holder.



Reason, you find that knowing blks wife is a structural engineer informative? You must be blown away by mosts than. Blks is Reason your wife?
 
Acmpe, condo high rises were a fluke due to the greed of public homebuilders, they saw an opportunity to get into a high profile industry and sell units at luxury prices to empty nesters and move down buyers. Definitely not the same mentality.



What the public wants? Again, no one thought zero lot, z lots, tri level townhomes, garden style homes, alley loaded garages, or even homes without basements (northeast) would ever sell, but they were built and now they are common place.



People want a place to live, the american way (right or wrong) is to own rather than rent and most homebuyers aren't looking at it as an investment, and i believe people will stop buying based upon home appreciation (for at least a few years). The mentality will change to finding simply shelter, near your place of employment, that you can call your own and get some of your money back when you move out. I say pre-fab potentially offers affordable shelter, and once people see it built and a friend of a friend moves in, they'll start to come around.
 
jcaraway, are you even reading the posts before responding with attacks? you do realize that reason and bkshopr are two different posters right?





i would agree that TIC and builders did a great job of designing smaller, denser (and what would have traditionally been considered less desirable) homes at a premium -- whether they be attached townhomes, detached condos, or tightly packed SFRs. the problem is there are too many of these sitting on the market. why build more of these, even at lower costs? people are waiting for homes to come down on the existing inventory and existing models, or waiting on prices for the bigger homes in the neighborhood, or in more prestigious neighborhoods. in other words, prefab is the solution to a problem that does not exist here in irvine.
 
<em>"but cities mandate it because one of their planners just got back from some new urbanism conference. For that matter new urbanism is now a cheap word. It has it's origins on the east coast and is, imho, a dated theory and inapplicable to the west coast. I would suggest reading Kotkin's essay on new sub-urbanism."</em>





Whether or not you are a fan of new urbanism, it is where we are headed. It promotes higher densities which appeals to the developers, and it promotes walkability which appeals to residents (new urbanist communities have demonstrated price premiums reflecting consume demand.) In theory, it should reduce traffic as some trips which are necessary to complete today with an automobile can be accomplished on foot in a new urbanist community -- at least this is what community planners now believe which is why new urbanism is being embraced by civic leaders.
 
<p><em>"If one could construction costs in half, prices for starter homes will be in the affordable range for many young, married couples".</em></p>

<p>Am I the only one that thinks the builder will pocket the extra profit....not make the home more affordable to the people ?


</p>
 
<strong>Note: seriously off-topic post</strong>








My idea of a starter-home prefab community would be something like, small cottages packed in a community. Each cottage would have a drive-way to the side to park 1 car, a storage shed, and 1 street parking spot in front. The community would be built in a location where land is not to expensive and on a special 30-50 year co-ownership lease-purchase contract (for lack of better word).





First, the cottage homes would be relatively small and inexpensive, like these (but bigger):


http://www.tumbleweedhouses.com/houses.htm





The assumption is that 1-2 persons may be living in the cottage, and the minimum sq ft should be 250 (150 sq ft for 1st occupant + 100 sq ft for additional occupant). The cottages in the community would range from simple 250 sq ft with sleeping loft for 2, to 770 sq ft 2-story floor plans with 2 bedrooms upstairs. Space-saving appliances will be included in the purchase.





The co-ownership agreement is different from typical lease to own. The land owner agrees to a 30-50 year lease on the land and property, and the home purchaser pays a lump sum or enter lease agreement to occupy the property. If the purchaser opt for lease, he/she will make monthly payments at fixed rate for the 30-50 year duration, not unlike a 30-year fixed rate loan, but with no pre-payment option.





However, in 30-50 years, the agreement will end and the property will be torn down or removed. The home purchaser must vacate or remove the homes, but receives 30%-50% of the current market value of the land (paid by land owner), assessed by the county. The land owner then recovers the land for re-development.





Under the above scheme, the cottage community will only occupy the land for set period of 30-50 years. Afterwards it will be torn down and re-developed according to whatever that is needed in the future. The buyer is able to afford a small starter home with fixed payment for 30-50 years and the lease is transferable (and can be sold for a profit). Whoever end up with the property at conclusion of its lease period will walk away with 30%-50% of its land value, paid in lump sum cash. The land owner gets to maintain his/her ownership of the land, make a profit from lease payments through the 30-50 year duration, and take the land back at conclusion of the lease. In some ways, the home buyer and the land owner become business partners who share the risks and rewards of ownership, and not like the typical mobile home park lease.
 
Shouldn't construction costs be at an all-time low in comparison to days of old considering the following factors?



1) Cheap immigrant labor and extremely cheap ILLEGAL immigrant labor

2) New building materials and lower cost of these materials through new production processes (ie drywall, abs tubing for everything from sewer to sprinklers).

3) New technology and tools - air powered nail and stapling guns, new earthmoving equipment, etc.

4) Cheaper tools - imported from China.

5) Computer aided drafting - track homes have never been easier to design.



The list goes on and on. Factor in mass production and houses are dirt cheap to build.
 
Prefab construction although sounds ideal in theory in cost cutting measure benefit and better quality control in a factory requires greater attention in design development and construction documentation. Here is the truth about the industry.



The crème of the crop architects do not practice in the production housing field. The higher academic ideal and vision of these bright architects just could not accept the abuse and design critiques from the builder team composed of MBA’s and marketing specialist not trained in the architectural field. Only some staff working in housing architectural firms graduated from a 5 year college and most is certified in a vocational trade school or community colleges. Builders would agree that most architectural construction drawings are full of mistakes and ambiguities produced by incompetent staff.



Building from inaccurate dimensional and badly detailed drawings is an everyday nightmare for builders. Builders built model homes for a reason so they can discover all the flaws before starting the actual production units. Models are patched, bandaged, foundation cut and repacked. Windows are replaced because wrong size window labeled on drawings, Beams are relocated proposed by structural engineers that the location interfered with architectural ceiling treatment. Half of a model home often was torn apart and put back together again.



Drawings are bad and it is a fact of life in the field. Structural, mechanical, electrical, civil, and architectural drawing contradicted one another.





Just imagine hundreds of prefab were made form incompetent drawings and now they are all delivered to the job site. Factory made prefab could not be patched, modified or adjust to fit. All hundred of units have to be thrown out and remanufactured again based on corrected drawings. The time delay and the inflexibility of prefab to accept dimensional tolerance and modification are the primary reasons most builders have not utilize this technology.



Irvine has the best housing in the nation due to the constant refinements and correction made during construction by the builders.





The auto industry is an excellent example. Even with the brightest engineers and car designers the new model is riddled with mechanical problems and flaws. It often takes several years to eradicate problems by redesign. The cost of re-engineering is into the millions for the car manufacturers. Architectural fee is only about $25,000 per plan and hardly enough to produce an accurate set of engineering specification plan for prefab assembly line.





Assuming the builders would commit to a high fee the constant evolution of housing designs will render the prefab prototype obsolete very quickly. The builders would never recapture their investment if the product has a short shelf life.
 
<p>The craftsman cottages in the South East quadrant residential neighborhood of the traffic circle in City of Orange. Most were Sears Roebuck and Wardway kit houses made during the teens. Footages are often limited from 480sf-980sf because of the pallet size that fit on the train cart. </p>

<p>We have the same limitation today in transportation. Trooper, do you remember the oversized home parked along the the 101 fwy in Hollywood for days because the height was too tall and the width exceeded the lane width so special precautionary police escorted the trailer for its entire journey. </p>

<p>I wonder if the builders are willing to do that? Is it practical to transport prefab in congested SoCal highways in heavily populated area? The logistic is too complex and we are still quite a bit away from the ideal. I am all for the idea but at the end the saving is not enough for the trouble.</p>
 
<p>Of note, these guys are in Santa Monica. </p>

<p><a href="http://www.livinghomes.net/communities.html">http://www.livinghomes.net/communities.html</a></p>

<p>And they are building thier first development in Joshua Tree. Why?</p>

<p>Because they can get the lots cheap!</p>

<p> </p>
 
<p>bk, the majority of these oversize transports happen in the wee hours of the morning. It takes a special permit and an escort (not police) in front and back, both with lights and signage. The lead vehicle has a pole sticking straight up out of it's front bumper. The pole is 2" higher than the actual load that it is escorting....it travels about 100 yards in front of the load to make sure it will fit under wires and overpasses. (obviously, your example didn't have one of these)</p>

<p>The route will have to be honored, no matter what because a lot of work goes into mapping out city streets that can handle the load, if the truck can turn ok, overhead wires and tree branches....etc. </p>

<p>The problem with the house on the 101 Fwy ? Driver was supposed to skirt the city and take the 405 Fwy...smarty decided to take a short cut off the charted route. D'oh !!! </p>
 
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