The prefab way to home ownership
Rob Stock looks at the potential of ‘modular’ manufacturing as a solution to the housing shortage.
Pip Payne is convinced New Zealand needs more prefab homes. Like Housing Minister Phil Twyford, he can’t see a credible solution to the housing crisis that doesn’t involve factory-built homes turned out at a rate that traditional building techniques can’t match.
The old ‘‘stick-built’’ method of building is just far too slow, and costly, and too often poor quality, Payne believes.
But unlike Twyford, who is spending taxpayer money on KiwiBuild, Payne is putting his own money into raising a prefab home on a ‘‘sand dune’’ on Wellington’s Kapiti Coast.
Twyford says prefab homes are essential to making KiwiBuild work, though few now expect the minister to deliver homes as fast as he hopes.
The idea of a ramp up in prefab activity, and the expansion of New Zealand-based prefab factories, has brought mixed reactions.
Some recall past generations of cold, draughty, damp prefab homes, and fear a new wave of them rapidly becoming highmaintenance, poor-quality dwellings like those that went up in the 1970s and ’80s.
Supporters of modern prefabs say quality has been a dreadful problem in traditionally ‘‘stick built’’ properties, citing defective apartments and leaky homes that have cost owners billions to fix.
Prefab technology has moved a long way since the 1980s, they say, and there’s many in the industry who want to draw a line under the past by ditching the term prefab entirely, and instead using words like ‘‘modular’’ housing, or ‘‘offsite construction’’.
Payne chose to have his home pre-fabricated in the Masterton factory of EasyBuild, a New Zealand company currently turning out a house a day.
It wasn’t his original plan. Like many, he longed for his own architecturally-designed dream home. ‘‘Everybody starts off wanting their dream home, even if they don’t have the money to pay for it. That’s human nature.’’
He toured the local building companies, and grew more irritated with each new one he visited. ‘‘The building companies had this slightly smirky look on their faces,’’ he recalls.
‘‘They said, ‘We can do it – probably – in nine months.’ They had all the power.’’
It was also clear that there would be no guarantee on price, which could escalate during the build. Payne, in his early 60s, was on a limited budget, and not keen on a large debt at his time in life.
‘‘So the only way to go was prefab,’’ Payne says.
Going prefab meant he had to give up on his personalised dream home, even though he got a home fast, and on budget.
But he does not believe he has given up on quality. He feels he’d be less confident if his home were being built by traditional builders, instead of the pieces being prefabricated in a factory, and assembled on site.
The house, while not completed, is now weathertight.
EasyBuild’s Mike Hunt says compared to a traditionally built home, his prefabricated homes have half the ‘‘air leakage’’ of traditionally-built homes.
They are, he says, drier, warmer and more solid.
‘‘They are way more robust than a stick-built home.
‘‘In the 1970s and 1980s prefabricated homes were ‘built for a price’, and not to the methods we have now,’’ Hunt says.
Solidity was important for Payne. ‘‘It was essential for us to feel that when that northerly comes in, that we could look out the window, and not feel the house move,’’ he says.
He’s even had the joy of being able to lend a hand on site from time to time.
While Payne’s route to prefab home-owning has been smooth, there are several problems that can scupper a plan to go prefab on a new house.
The first is that it’s relatively common practice for developers doing subdivisions to put in place a ‘‘no relocatable buildings’’ covenant.
Pamela Bell from off-site construction industry lobby group PrefabNZ believes this has been done thoughtlessly, following past covenants, perhaps as a result of a perception that ‘‘prefab’’ means low-quality, and of low architectural value.
The second is that banks can baulk at funding prefabs, though it is not because they are worried about the quality of the homes.
Payne’s funding from ASB was smoothly arranged, which he credits in part to prefab homes removing some of the risks that arise in a ‘‘stick build’’ like cost overruns, or consenting issues.
But Bell says some prefab buyers can struggle to get finance.
Essentially, banks sometimes perceive a timing and risk mismatch.
Banks do not want to pay money out for something that is beyond their legal reach.
They can lend on land because they can seize and sell it to get their money back, should they need to.
But releasing funds to pay a company to build a modular home in its factory, to be later assembled on site, can leave a bank with an uncomfortable period where it has no security to claim.
Bell is working with banks to smooth the way to an easier, more predictable set of lending behaviours from the banks, which can be a bit hit or miss, and expects an announcement from Westpac in the coming weeks.
‘‘The banks are going to have to solve it because it is the way of the future,’’ Hunt says.
Insurance is likely to play a part in that. Payne used a Master Builder to assemble his home and he was backed by Builtin insurance, in turn backed by Lloyds of London giving him a 10-year cover against defects.
The insurance guaranteed that even if his builder went bust, the home would be finished.
Something similar could help assure banks that their interests were protected in the event of a prefab manufacturer going bust before the home it was building was delivered to be assembled on site.