Getting Off The 'Stick'

October 7, 2005
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GRAND RAPIDS — The vast majority of homes built in the United States during the past 200 years have had pretty similar structural elements. Long, slender pieces of wood are fastened together to form rigid planes. Those rigid planes are hoisted into place to become the exterior walls. Materials and fastening techniques have varied over the years, but the fundamentals have stayed more or less the same: Make a wood skeleton, then wrap something around it to keep the elements out.

But as the world’s lumber reserves become less vast, contractors’ wages go up and the fuels used to heat and cool American homes become pricier, alternatives to stick framing become more attractive.

One such technique is panelized construction. The basic idea is that the walls of a home are built in large pieces on a factory floor instead of being assembled stud-by-stud on the job site. Depending on the type of panels a home builder chooses, there may be a dramatic savings in on-site labor costs; and in some cases, panelized construction can be cheaper altogether.

“If you’ve got a better way of doing something and it’s cheaper, then why isn’t everybody doing it?” asks Rockford builder Joe Ellsworth. His company, Controlled Environment Structures, is one of a handful of Michigan firms that specialize in panelized construction.

“Cheaper” is a relative term. Let’s say, for argument’s sake, that the construction of a traditional, stick-built 2,000-square-foot home costs $200,000. A panelized home would cost about the same, but much more of the cost would be associated with the panels and much less with labor on the job site. Because so much of the assembly work is already done in the factory, a panelized home can usually be erected in a day or two. With that in mind, many buyers choose to assemble their own homes, or at least serve as their own general contractor. Companies such as CES supply the panels, the crane to set them in place, and as much construction help as the end user desires.

When it comes to the actual construction of the panels, there are two schools of thought.

Many companies such as CES use structural insulated panels (SIPs). These large-scale building blocks look somewhat like ice cream sandwiches. A thick layer of polystyrene foam is bonded between two pieces of oriented strand board (OSB). There are no studs or other internal braces. Homes built with SIPs rely on the rigidity of these panels for structural strength. The strength is a selling point — Ellsworth said that in 1989 when Hurricane Hugo leveled a neighborhood in South Carolina, the only two homes left standing were built with SIPs. Even so, Ellsworth tends to emphasize SIPs’ energy efficiency as the main point of attraction. This, he said, is where the homebuyer finds long-term cost savings.

When Controlled Environment Structures builds a home, the entire structure is made of SIPs. Instead of a traditional poured-wall foundation, special pressure-treated woods are used for insulated basement wall panels. A subfloor is installed and the upper floors are built on top of it. Once the exterior walls are in place, the panels of the roof structure are lowered into place. Because these panels have an insulating value much higher than conventionally constructed walls, entire homes can be heated with efficient, heat-on-demand water heaters and special heat pumps, Ellsworth said. Even large homes can be heated for just hundreds of dollars per year, he said.

These panels are so efficient, in fact, that the United States Department of Energy is using them in an experimental “zero-energy” housing project. The goal of the experiment is to build inexpensive homes that are able to generate as much energy as they use — by capturing wind, solar and geothermal energy. The Oak Ridge National Laboratory researchers who are conducting the study decided that for cost and energy efficiency’s sake, SIPs are the best construction option.

SIPs are not the only type of panelized construction available. When panel building initially became popular in the 1970s, many builders did the same type of framing as in stick-built homes but simply moved the construction process into the workshop environment. That is actually how Controlled Environment Structures got its start in 1986. But, like many small panel shops in the United States, Ellsworth and his partner Don Hogle soon found it was easier and less expensive to leave the actual panel building to larger-volume operations. CES now works with a panel-building firm in northern Michigan; many of that company’s competitors are based in Canada.

Ian Alisch is sales manager for Double S Homes in Surrey, British Columbia. He estimates that 95 percent of the company’s homes are sold to Americans. Alisch said two primary factors make American consumers look north when buying home panels. First, panel prices have often been the same dollar-for-dollar across the border. So if an American consumer could buy a house’s worth of panels for $50,000 U.S. or $50,000 Canadian, the exchange rate makes the choice relatively obvious. Even though the two currencies have come closer to parity in recent years, Alisch said, there are still advantages to buying Canadian.

“A 15- to 17-percent savings is better than no savings at all,” he said.

The other reason that Canadian panel builders were successful was the nearly unlimited availability and cheap price of Canadian softwood lumber. Because of stipulations in the North American Free Trade Agreement, tariffs are placed upon Canadian lumber products brought into the United States. However, no such tariffs exist for Canadian manufactured goods. Panelized home kits are considered manufactured goods, not lumber products. Hence, no tariff. So, less expensive Canadian labor is used to assemble less expensive Canadian lumber, and then the finished product is shipped to the American end user.

Unlike Controlled Environment Structures, Double S does not build insulated panels. Instead, the company markets kits that contain all the materials necessary to frame and finish the exterior of a home. Once all the panels are nailed together and fitted with the included, pre-cut siding and roofing materials, the house looks complete from the outside, but is nothing more than bare studs on the inside — no plumbing, no wiring, no insulation. These kits typically cost around $30 to $40 per square foot in American dollars. Once complete, they are no different than a home built entirely on the construction site.

Whether a homebuyer uses SIPs or standard panels, problems can arise on the job site. Although panelized construction is gaining in popularity, it still makes up a small percentage of the new home construction market. That means many contractors are not accustomed to dealing with panels. That, according to Ellsworth, is why panelized construction is still an “alternative” building process.

“It’s the contractors,” he said. “These guys need to get educated and get into the 21st century. All they’re concerned about is keeping the cost of that house down. They don’t have to pay to heat the place for the rest of their lives.”

Ellsworth doesn’t understand contractors’ resistance to working with panels. He said that once the panels are in place, there is very little difference between them and a site-built stud wall. The panels are machine-cut to include details such as cutouts for electrical outlets and switches, as well as channels that allow wiring to be easily fed through the foam core. Drywall can be affixed to the interior using glue and fewer screws, so there are fewer blemishes that need to be spackled and sanded. The precision cut and fit of the panels means that contractors who install cabinets, trim and flooring need not worry about adjusting for walls, floors and ceilings that are not plumb, square or level. Basically, he stands by the contention that SIP construction is simply a better method.

The country’s largest homebuilder agrees. Bloomfield Hills-based Pulte Homes, which has several developments throughout West Michigan, has created its own SIP design and construction process through its research and development group, Pulte Home Sciences. It has built two panel factories — in Manassas, Va., and Detroit — and has plans for several more throughout the country.

Ellsworth said that when a company like Pulte is willing to embrace a technology such as SIP construction, smaller homebuilders will have to choose between following their lead or failing.    

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