Let prefabs sprout: are kitsets a housing crisis solution?

By Rebecca Stevenson, The Spinoff

An old cigarette factory in Masterton, a remnant from the Think Big era, has been re-purposed to tackle our affordable housing crisis. Rebecca Stevenson caught up with builder Mike Fox to find out how a plant in the Wairarapa is producing modular, kitset homes on the cheap.

Houses in New Zealand are not only expensive because we haven’t built enough homes; it’s that the homes we are building are big-budget too. We’re building four-bedrooms when three used to do, and our homes are outsized when compared with those in Germany, Spain, Italy, Japan, France and the United Kingdom.

But Master Builder (and former director of industry research and testing body Building Research New Zealand) Mike Fox says there are other, cheaper options. He’s one of the people behind a prefabricated housing factory in Masterton that can manufacture a modular, kitset home in a day.

Called EasyBuild, the factory produces modular components that are ready to go for quick on-site construction on both concrete slab or timber pile foundations. The timber portal frames and panels provide the structure of the kitset home with the on-site build time further reduced with pre-constructed and pre-cut components, with an average build time of six to nine weeks.

Kitchen and bathroom fittings have been pre-selected to provide “quality, style and value” and are unable to be customised while cladding options are available so you don’t even have to paint (for more detail head here).

Further speeding up the process is that the homes are pre-consented. Fox says this is a critical element in driving down both costs and time to build.

After a 30-year career in the building industry (Fox is also former president and chairman of the Registered Master Builders Federation NZ and a founding member of the Construction Strategy Group) he says he could have been winding down, but instead he’s invested into EasyBuild in the hope of helping young New Zealanders get on the property ladder.

The Spinoff: The question that people always ask about New Zealand is: why does it appear that building homes here is relatively expensive?

Mike Fox: The reason is one of scale. Because we have lots of small builders only building a certain amount. So you don’t get a lot of, I suppose, efficiency in size and customisation and the consumer is being conditioned to want a bespoke home every time. They don’t want the same home as everyone else. And so they drive this as well.

When you have everybody living in a unique home, you end up with building costs that are higher than they could be if people standardised and had homes that have been value-engineered and replicated many times over to bring efficiency down through everything – right down to consents, they are done quicker, the designs done quicker. Cost and efficiencies right through the whole value chain come down, and the end product then comes down as well, but it does mean the consumer has a little less choice but they end up with a way better value for their money.

I think for affordable housing, the housing is one part of it. The other part of it is really the land and to get affordable land that’s where there is going to have be some real high level of co-operation and willingness to create that because it won’t happen unless there’s intervention.

How does the new factory fit into that context?

What we’ve done with our new factory is that we have taken the best of Scandinavian design (from back in the late-70s and early-80s) and a business partner of mine, Dennis Ryan, then kiwi-ized it and turned it into a modular house for New Zealand.

In the mid-80s the market moved away from affordable housing to everyone wanting bigger homes, better homes and the whole un-affordability spiral started then, so that market dried up. And it’s only been in the last three years where we decided to bring it back to market. We modernised it and mass-produced it, now the market now is crying out for affordable, smaller homes that are really efficient and can be built really quickly.

Seems crazy that we moved away from affordable housing, can you give any more context about why you think that is?

Land started to become expensive, and as the land becomes more expensive, you need to build a bigger house on it to get a bigger return and it was a downward spiral. As the land prices goes up you are not going to put an affordable house on it. You’re going to put a house on it that’s going to value up so that you don’t lose money.

And then developers want their land to increase as each stage goes through, so they put restrictive covenants that stop people from building smaller or affordable houses. They want bigger houses built so the land value goes up, so when they sell the next stage it becomes more expensive and they make more money. It’s just the market, it will never deliver affordable sections.

The market’s going to have to have land introduced at an affordable rate – but it won’t be by developers. It will be by local authorities, central government; but then there will have to be some restrictions around tenure and people selling theirs off so they don’t profit out of the lower entry rate.

Three years ago what happened then to prompt you to get back into this?

Well, my business partner Dennis Ryan was in his 80s and he was looking for someone who could bring this product back to the market to service the need that he could see. He approached me and said ‘Mike, with your background and connections, you can do this, I am now to old to do this but you can do this’. And he was right, I am not blowing my trumpet, but I was well-enough connected to be able to put all the dots together, modernise it, get the testing done and put the structure around it that it needed.

This is an amazing product, we can build a house for 30% less than a conventional house, we can build it twice as fast, we can use semi-skilled labor to build it and it’s twice as efficient thermally as a conventional house. And, we produce two-thirds less waste in constructing it. Take a typical 100 square metre house – you would send three skips of to the landfill – we send less than half a skip.

Can you talk me a little bit through the factory itself and the prefabrication and how that actually works?

Basically what we do is we are like the IKEA of the building industry, so we build a flat pack house that can go to site in a container that people can then assemble on site. So, even a DIYer can do it. They will need some skills but they can do it. As long as you have one person trained on site, that’s all you need to really run the whole thing because the rest of it’s just really manual labour. And the level of prefabrication that we go to is so high that everything just locks together, like a big Meccano set.

So, typically when people make kit houses before they were basically sent a bunch of material and a set of plans and said go to it. Ours is a fully prefabricated unit that goes together with a minimum of building work done on site. So basically what we do, our factory’s in Masterton, we source all our materials locally from Juken – they make all the hard panels for the homes. We’ve got Kiwi Lumber who is also there, so the structure, the delivery for getting the raw materials to the factory is minimal. Basically it’s just coming 20-or-30 kilometres to the factory.

We then prefabricate our panels and timber components and they get put into a container, sent off to site anywhere in New Zealand and then your local ITM will then deliver the balance of the materials. So we are not carting the whole house all around the country, we are just carting the structure around in the container. The other materials come locally to finish the home off.

Is there anything similar or equivalent? Obviously there are prefabricated house companies out there already in the market.

There’s nothing like this. This is a unique product. You can buy this product in three ways. You can use one of our preferred builders, any builder can go to ITM buy one of these and build it. Or anyone can just go buy one and build it. We’ve pre-consented them right round the whole country so they have a multi-proof consent. So, that means that the local authority has to issue a building consent for it so long as it meets the town planning regulations. It’s already pre-consented.

The design and consent is already done, so you can get a consent in half the time that you’d do with a commercial thing, probably quicker because the council don’t get to fiddle with your plans. We made sure we did that because we didn’t want city local authorities reinventing the wheel every time we tried to get a building consent. So, we took them out of the equation. Most people can’t believe what they are getting for their money.

Talk me through then what the options are then? If you are looking at a home like this what’s in the catalogue?

We’ve got a list of about 21 designs or something in the catalogue. You can get mirror images of those designs, so basically you know to get the rooms in the right position and what have you. But the way that this works is that we’ve got enough variations of the different floor plans so that people won’t change them. If they want to change the plans around, that’s when you start to lose the efficiency to scale and all the rest of it. The best way to do it is to choose one of the houses out of the book, to the right siding and run with the products that we’ve put in it because then you will get a very, very efficient, cost-effective house.

One of the reasons why houses aren’t affordable is because people keep wanting to change the products and all the rest of it and before they know it, the price is creeping up, creeping up, creeping up and they’ve lost all of the efficiencies that have been able to have been put in place from day one.

We can join these together, we have two-storey models we can join them together we can make duplexes and that type of thing. But you know, this isn’t a Hobsonville solution – they’re not three-storey, you know like those types of things. They are not those solutions. These are houses that are more suited to infill housing, housing in someone’s backyard, batches, you know, not inner-city but more on the fringe.

Why did you choose Masterton?

We went there because we had plenty of space, we had plenty of labour available (currently EasyBuild has 12 employees) and we were close to the source of the materials that we needed. And one of the really cool things is that our factory was built – now you are way too young for this – our factory was built right in the Muldoon era, it was one of the Think Big things. So was a cigarette factory that we’ve repurposed it to actually build houses for Kiwis now, which is really cool.

What’s the sort of turn around on one; I see a catalogue, I want one of number 17.

Our factory can produce one a day, a home a day and putting another shift on we can produce three houses a day. Now that’s pretty amazing. Let’s say you had a site that was flat, straight forward, and you wanted to really get under way quickly, we could be underway in a month.

What’s the cost that you are looking at for one of these?

You can do a three-bedroom, 100 square metre house for probably about $240,000, and you can do a four bedroom house for less than $300,000. We do smaller houses and they seem quite expensive because they have everything in them that a bigger house has got. So when you increase the size of the house, you’re getting more floor area but you’re not necessarily putting another kitchen in, another bathroom and so the overall cost starts to come down.

What has demand been like?

We’ve been taking orders for probably just under a year now. Obviously we needed to make sure we got all the bugs out of the system and all the rest of it, which we have done. We put five emergency houses in fifteen weeks in Edgecumbe for flood-affected people at the Kokohinau Marae (as part of Te Puni Kokiri’s papakāinga project). So we had a 15- week programme to put five, two-bedroom houses in there. I don’t think anyone else could have done that. Now we’ve got orders for probably getting up towards a hundred.

Have you put in your own personal money into the factory? Who has funded it?

We have put all of our money into creating the system and everything to do it. It’s taken many years and significant investment to do that, then we have partnered with a manufacturer who has really put his hand into this pocket to get the factory up and running.

We decided that it is time, we had a change of Government and a number of other things have changed. So we decided that it was time to let everybody know about just what they can get. There is no point in them going to China or Ireland, there’s a solution already here. And no, this isn’t all the solution, this is part of the solution.

This article was first published on The Spinoff