Episode 32 - Jason Webster, Huntington Homes
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Prefab Review
Hi, my name is Michael Frank and this is the Prefab Pod presented by Prefab Review where we interview leading people and companies in the prefab and modular housing industry. Today, we're speaking with Jason Webster, owner of Huntington Homes. Welcome, Jason.
Hey, Michael. Thanks for having me.
Prefab Review
To start, can you tell me a little bit about the history of Huntington Homes and how it got started?
Huntington Homes
Sure. So, Huntington Homes, we are a modular manufacturing company. We're based in Vermont. We were founded in 1978 and we build throughout New England. The company started, Huntington comes from the original owner a man named Hank Huntington who was a dealer in the 70s for one of the original modular home companies in New England called Continental Homes. And he built, I don't know, a bunch of houses in Vermont and then decided you know, towards the late 70s that he thought that they could build them themselves. And so he rounded up a group of builders in the area and then figured out and built Huntington Homes. One of the people that was part of that group and my connection to it and how I ended up here is that one of the people in that original group of people putting the company together was my father, who has been there since 1978.
Prefab Review
That’s great. And could you provide with a little bit of a fast forward to where you are today?
Huntington Homes
Sure. So in ‘78 when we started and through the early 90’s we were very much like all of the other manufacturers and some of the manufacturers today where, you know, we were a kind of a wholesale manufacturing company that sold through a dealer network. We operated that way definitely through the 80s. In the mid to late 80‘s opened a manufacturing plant in Massachusetts and we operated out of one of those plants. That plant was only operational for a couple of years. All manufacturing moved back to Vermont. In the early 90’s my father had an opportunity to purchase the company from the group that owned us through the 80s. And he really started transitioning the company. Then, in the early 90s to what we are today, I mean, we are still a manufacturing facility. Currently, I'm sitting inside our 100,000 square foot shop here. But we started transitioning away from you know, a kind of traditional dealer-based system to where we are today, where we sell everything directly to consumers.
Prefab Review
Yeah.
Huntington Homes
And we have packages that we offer to that client depending on where they're located. If they're close to us - meaning they're within forty miles of our headquarters, we offer what we call full turnkey packages, where we offer full general contracting services for the whole project. So obviously, we oversee the plant stuff and all the on-site construction as well. If they are in the rest of our service territory, which is the rest of New England but outside of that forty miles, then we offer what we call a modules with set crew package, which is where we provide the modules, we provide the delivery of those modules, and we provide the set crew to physically set them and make them structurally secure, airtight, and watertight; including a shingled roof or a finished roof. And then, the client then works with their, we've developed a really good set of documents to define the scope of work, the client then works with their own contractor for the button up work from that point on.
Prefab Review
That makes sense. It's funny, you're kind of close to Vermont sort of scope of services where you do everything, I would say when we have people come to us, it's basically what clients ask for. And what you’e able to deliver. I mean even you guys are able to deliver a very small minority of services just because it seems like the local aspect of construction means it's really hard to be vertically integrated across a project. Do you find that? I assume you find it's probably a little smoother and a little better on the projects where you can do the site work as well?
Huntington Homes
Yeah, I mean clients certainly prefer when we offer the full package, right? And you know, I kind of joke that it's one neck to squeeze.
Prefab Review
Right? Because then you don't have multiple contracts and stuff like that.
Huntington Homes
Yeah, it's certainly an easier project for a client to put together when we're managing the whole thing. Everything from preconstruction to the end because they ask one set of questions and they get one answer right? So then when they ask what does it cost? I answer their question.
Prefab Review
Right. You don't say, “hey, here's the module price. Go find some money and the answer for the site work”, right?
Huntington Homes
Versus yeah, go find the builder. And you know, you don't even know what questions to ask them because you don't know what they have to do and they've never done it before so they don't know either. So it's definitely evidenced by backlog, right? Now you know we're in weird times right now. Everybody's backed up. But, you know, our turnkey services are right now in Vermont we have a 24-month backlog for those.
Prefab Review
Oh Wow, so does that mean that for people who want, is that true on your line in-house as well?
Huntington Homes
The line right now has an unprecedented backlog as well, of about twelve months whereas historically the line might have been a 3 to 4 month backlog.
Prefab Review
So that does that mean some local people are just, I mean, if I have an impatient guy, probably being in this are just like, “Okay, it's not totally optimal, but let's just find a local builder.”
Huntington Homes
Well, yeah so that's how the first conversation goes, right? The client calls, hears the schedule, and they're impatient and saying, “well no, I'm gonna go look for somebody else.”
Prefab Review
Yeah.
Huntington Homes
They make 4 or 5 more phone calls, especially in our market, to find any honest, reputable contractor. The builder is booked out that same length of time right now, and then they come back and they say, “okay” and that a unique thing. It's a weird time that we're in right now for that. I suspect though, that it will shorten that lead time as we go forward.
Prefab Review
Yeah, being in front of the customer experience, you sort of hope it will, right? Because one of the theoretical advantages of what you do is being able to build it faster for people.
Huntington Homes
Correct. So right now, we can't beat the drum that we're faster, but we can certainly continue still beating the drum that we're a more controlled way to do it. You know, we are still building fixed-price contracts.
Prefab Review
Totally.
Huntington Homes
Whereas you know, most site builders that we know have moved to entirely time and materials contracts. Yeah, exactly.
Prefab Review
Yeah, that makes sense. So can you tell me a little bit about your product line today? Particularly about your true home product?
Huntington Homes
Yeah, so when clients come to work with us, in terms of what it is we're building for the client, we have kind of 3 design paths that we can go through. We have the stock homes design path which is on our website. We have 70 or 75 stock floor plans that a client can choose from. And then we have a list of materials that they can choose through and it's a list of standard options and upgrade options. Clients can modify those floor plans and then I call it, you know a choose your own adventure. As you go through our materials, to kind of pick what you want and it's it's a way for us to deliver to the client a product that is, you know, they had choices as to what they get, but it's within the swim lanes that we laid down. So they're staying within our vendors and mechanical systems and all that kind of stuff. So that's one design path called stock homes. A couple of years ago, we created a product line called Truehome which is a much more standardized build. Where you know, we we don't allow clients to modify the designs. And then, we've also already picked out the materials and so you know, the kitchen cabinet layout is done. You know the siding materials have been picked but the benefit of us having all of this stuff picked out is that there is a buy it now price on our website. And so you can go on and there's a price for you know, modules package or a turnkey package. But it tells you what that price is.
Prefab Review
Right? And that's all hard cost, right? That does not include soft costs, right? Yeah, but I guess theoretically there aren't going to be heavy design or engineering soft costs here. It's mostly just like permitting and stuff like that, right?
Huntington Homes
Correct, so there's a permitting cost. It's all basically you know, local building permits and engineering costs that are additional. Plus what I call the site prep and utility cost - so septic, excavation, well, driveway, power.
Prefab Review
Yeah.
Prefab Review
Right? Which is site specific.
Huntington Homes
But the reason we created TrueHome was not only so that there were more clients who knew what the house was going to cost them upfront. But it's also a way, the designs of the houses are really tailored towards our production system and what we're doing in the shop. And it's a way, the designs are such that we're able to drive the maximum amount of value from our shop to the client. And we took some of that efficiency and turned it into you know, absolute cost savings to the client. But we took a lot of that efficiency in the cost savings and actually plowed it back into materials, and mechanicals for the style and the types of houses that we all want to live in ourselves. And so we really focused on high quality - simple, durable building materials. We looked at stuff, you know, we were choosing materials with a high recycled content. Basically stuff that can return to the earth when it's done. We're trying to avoid the use of plastics. You know there's no vinyl siding that's happening. You know, we're using cellulose insulation, wood clapboards, and the other thing is that all TrueHomes are designed to operate without the use of any fossil fuel-fired mechanical equipment. So they all have building envelopes robust enough that even in Northern Vermont climate zone 6 they can operate with just electrically driven air source heat pumps. And if a client wants to go further, you can buy power from the utility company or you can go the next step and put on your own solar panels to generate your own electricity and go to this concept of zero net energy. So all of is part of the standard package, a standard True Home package.
Prefab Review
One of the interesting things about them, so there are only 4 of them right? If I'm looking at the website right.
Huntington Homes
There are 4 of them now. We have fifth that that has been developed. We're just working on getting it uploaded to the website. And the idea is, as we kind of go, they take a lot of time to put these packages together.
Prefab Review
I imagine. Especially if you're putting dollars on a website with commodity prices being pretty volatile.
Huntington Homes
Yah, and so anybody that's built a house knows there's a lot of problem-solving that what a client is interested in and what the builder sorts through are very different things, right? Where clients are always focused on the big picture and they want the cosmetic stuff, right? They saw this photograph and they've sent you their pinterest board and you know, they want the blue cabinets with you know, Lacquer Brass hardware and that kind of stuff. Whereas the builder is sorting through making sure that the drawers, when they open, don't hit doorknobs. And so one of the things that's nice about the TrueHome package is that one, we've put we put a lot of time into the designs so that the designs the designs can facilitate the mechanicals in the operation of the house. So that we’re making the mechanical runs as simple as possible and not really tangling them in the structure. Just being thoughtful in how the design is being laid out. That's not to say that we don't have issues as we start building. And we run into small problems that we find, but the nice thing about standardizing the package and we know we're going to build that that again, is that we just go back into the engineering and we correct those problems. So as we go through each time, there's continuous improvement in those designs. So I don't eve think we're gonna get to the point where we have 30 True Home designs. Hopefully we get to the point where we have 10 of them.
Prefab Review
Yeah. Great. Yeah, so the thing I thought was interesting about it, I mean I love the concept, right? Coming from a high volume site with a lot of people wanting a lot of stuff. You know, being able to have things that are well thought out, I think not everyone necessarily wants that but we connect people with companies, we connect them with custom architects, and a lot of people want to feel good about the cosmetics and want to feel good about someone having thoughtfully done the work versus making a rash decision. So I like that concept. That was interesting that none of them are very large from a square foot standpoint, right? The largest one is 2,000 square feet. Is that indicative of, without knowing too much, is that indicative of the average home you build? Or would that actually end up being a little larger than the kind of range of homes you have, or is that kind of standard for you?
Huntington Homes
The majority of the homes we build are somewhere in that kind of 1,500 to maybe 2,200 square foot range, yeah.
Prefab Review
Are you mostly building primary residences or secondary residences or working with kind of investors? What are the use cases that people are coming to you for?
Huntington Homes
Yeah, in Vermont I mean, we definitely have resort towns here and so yeah, I don't know what the breakdown is. If I had to guess, I'd say 60% of what we build are you know, primary residences and 40% is you know, second home ski homes. And to go back to your question about different clients, and clients wanting different things - some clients come into a build where they very much want to build a custom home and that's not what the True Home package is designed for. You know that's not the itch that True Home is going to scratch.
Prefab Review
Right.
Huntington Homes
True home is for the client base that doesn't want to go through that, they just want to smash the easy button. And we find that the millennial group is there. They want to do their research. This is generalizing right, this isn’t everybody but it's as a group, they want to do their research. They want to know what to expect. And then they just want to smash the buy now button.
Prefab Review
Yeah, yeah. I think the cost certainty of it is also a really appealing aspect of it for people.
Huntington Homes
Yeah, and then there're the kind of on-the-move group. Which, you know, they have their house. They have a family. They need more room and that group tends to go towards the, “I want to build a custom home.” and then really interesting is the downsizer group which is coming back to the, “I did that custom home once and now I just want to smash the easy button,” because it was an experience. I'm glad I did it but I maybe didn't derive a ton of life benefitout of it. Like let's just make this as easy as possible.
Prefab Review
As someone who does a lot of non-easy home projects with our clients, and personally there are a lot of days where I'm like that sounds nice.
Huntington Homes
Yeah, which kind of bringing this back to our industry, for that group of clients that wants the custom home especially in the North East where we operate, and in Vermont definitely, there are a lot of really good custom home builders. And I don't ever argue that our shop can create value to that type of home right? We're not necessarily driving value to that project. We might be a way to build that project but we're not doing it any better than a custom home builder could have done it because it's bespoke, right? Every single thing is being decided and changed. You know, we’re kind of leaving that custom old market and saying, “look if that's what you want, that's totally fine, but here are these other builders that I think are really going to give you that product better than we are” and you know instead, we're really just focused in on standardizing our offerings as a way to build better houses for less money for more people.
Prefab Review
Makes total sense. Do you have any like favorite projects that you guys have done recently or in the last few years? One that you might want to talk about or give as an example?
Huntington Homes
You want me to pick my favorite child. We have done a lot of building on Nantucket islands.
Prefab Review
Yeah, I'm looking at your website. So definitely if you're speaking specifically let us know because people oftentimes look at websites like I'm looking at this.
Huntington Homes
Yeah, so there was a project that we did and it was probably seven years ago, now. It was right in the downtown core, historic district of Nantucket. If you've ever been to Nantucket, it's right across the street from where you come in on the ferry and it's right across the street and it was a staff dormitory for the Nantuket Yacht Club. And it was right in downtown. And from a design standpoint, we had to kind of merge all of these items, right? So because of its location, because of the very stringent design requirements on the island itself. But definitely in the core district. You know the house and the dormitory had to look like it had been there forever, which means certain windows have to be used. So all single pane. You know single pane wood windows that we source from a Vermont manufacturer. And at the same time, that has to meet all of the current building and energy codes and in that location you know, meeting a high wind standard as well.
Prefab Review
Great.
Huntington Homes
And so it was really from an engineering standpoint, it was a fun project to kind of pull together all of those you know, sometimes conflicting requirements. And the project turned out to be a great project.
Prefab Review
That's cool. I was going to ask you to in the fire round, but let's get to it now. We actually have yet to do a project that requires putting modules on barges and I can see you've done a few of those. I assume that's how you're getting them there and what are the nuances for that?
Huntington Homes
We've built about 600 houses on the island of Nantucket.
Prefab Review
Oh, Wow!
Huntington Homes
Yes, we’re actually out there this week setting one and we're out there next week setting one and we're out there the week after setting one and we were there last week setting one.
Prefab Review
Wow, how many sorry, to the extent you get to, how many homes are you doing per year if you've done 600?
Huntington Homes
Yeah, so as a manufacturer, we are small compared to some of the other ones. We're you know, currently, we're doing 75 homes a year. There’s a rush right now to get to Nantucket and the reason there's such a concentration of stuff is that we don't ship out there in the summer because the barge comes in at the same dock that all the tourists come in and it's in the town. The town doesn't want that. You know, houses and tourists in the same place at the same time it makes a lot of sense. We don't want to be there either. I don't know what the statistic is but we're not the only modular company that goes ther.
Prefab Review
It makes sense. So are there a few crane companies that just hang out on the island?
Huntington Homes
On Nantucket, there are a couple of other companies that go out there, I would have to think that Nantucket Island is the largest concentration of modular or prefab-built houses in the country. It's just constantly modular homes being sent out there. And there's a crane that stays out there.
Prefab Review
That's actually good to know. But there's just one, that's interesting.
Huntington Homes
Just a crane on the Island. It goes from spot to spot because the town limits where it can sit. When we deliver modules, we're considered a house move. And they only allow one a day.
Prefab Review
Yeah, so they consider one at a time but like any number of modules? Y
Huntington Homes
Any number of modules. But the project is one a day. So to barge it out there, there's a large company, we deliver modules to New Bedford, Massachusetts. Then we load them on a barge and they go over to Nantucket.
Prefab Review
Othe true homes right, that adds cost understandably. What does that add from a cost perspective?
Huntington Homes
Correct. So True Home, that's actually a really good question. True Homes were never designed with Nantucket in mind. So the cost doesn't include the barge cost but the True Home would never pass the design review of what happens out there. In terms of per square foot costs, plus or minus $20 a square foot for transportation and barge costs.
Prefab Review
That's what I would have guessed. When we've priced out certain parts in Maine, it's kind of the same thing. And when we've priced out Hawaii, it's more like $50 a square foot which is actually, given the distance, seems like good value.
Huntington Homes
Yeah, that seems inexpensive for that distance.
Prefab Review
I think the thing is there's a lot more commercial freight sending and this is from Washington. Sending people to point that might even be more expensive now. This has been awesome learning a bit about your business. If you don't mind, can we transition to the fire round? In this sort of little section, we ask sort of quick questions that we get as frequently asked questions from our audience, so we can tap into people with expertise like yours.
Huntington Homes
I’ll do my best.
Prefab Review
I guess one question is what should people really care about, and I'm sure this is sort of definitional of what you do, when building in really high snow load areas? So we’ve done a couple of projects recently in Tahoe and Jackson Hole where there's like 200 pound snow loads.
Huntington Homes
Yeah, so I mean pitch doesn't really matter, right? Snow’s gonna pile horizontally or vertically. So we build as any modular prefab company does. wWe have to build to the local codes for where the project is being delivered to or being built. And so as part of our engineering review, we find what the requirements are. For that, I mean snow load requirements are for that reality. And then we just build from an engineering standpoint, we engineer our roof system or our truss system to that snow load.
Prefab Review
Similarly, you were talking a bit about are there things you do specifically from the actual home standpoin? From an installation standpoint etc?
Huntington Homes
Yeah, so it's just kind of our offerings to clients. We have 4 different wall packages that we offer. And so we start with just a basic, you know, 2x6 framed wall with dense, you know, high levels of air ceiling. So under 1/50 air ceiling values on everything we do, no matter what the insulation value is. But then, that standard 1x1 wall is going to get an r-21dense back cellulose. The next wall assembly we do, which is the standard wall assembly, and the True Home product is what we call a 1x8 eps wall assembly. Where we still build a 1x1 wall but on the inside of every stud plate and you know rough opening, we layer a strip of eps foam and then we attach the drywall to that. And so we're making the cavity deeper so that we can get more cellulose in the cavity but we're also introducing an r-5 thermal break at all the framing members. So it's an r-26 wall or an r-21 plus 26 cavity. Then we do a ten-inch wide double stud which would go to an r-35 and we do a twelve-inch double stud which would get to an r-41.
Prefab Review
Next question, obviously for a lot of your areas it sounds like people are maybe from your network or maybe elsewhere, they're finding local contractors to do a lot of the work. I understand that you're still doing the set, but are there specific things that people should look for in terms of finding sort of GCs and builders that will do the job?
Huntington Homes
Yeah, one something that's really interesting right now is a lot of the inquiries that are coming into us right now are younger contractors. They are seeing the writing on the wall that stick by stick construction method is not the future. And so we are fielding a lot of questions from those younger contractors, right? Now, how can they get involved and how we can do projects together? We have, I'm just thinking about you know the projects we have under contract for the summer, and the handfuls of them, the clients are here because the contractor brought them here and you know the contractors are realizing, “hey, my square foot price is much higher than your budget.” They're also starting to realize that their square foot numbers were starting to get really crazy. And that they're exploring this as a way to get the prices down for a client. It's also a great way for them to have us do the heavy lifting, right? So we take care of the framing and mechanical rough-end and the insulation and the sheetrock. Basically the entire building envelope, and then they get to come in and do what most of them want to do which is you know, the details, the trim work, the cabinets. You know the detail kind of stuff. So for clients looking for contractors, I always encourage them to make sure that they’re looking for a contractor that has bought into the system and wants to be there. And then we have just developed a really good set of documents to define out the scope of work as to what comes in our package and what the contractor still has to provide. And so the client should be looking for a contractor that wants to be there. The client should also be looking for a contractor that's confident and honest and is gonna actually sit down and read those documents so that they know what they're getting into in the project so that they can provide you know good budgets.
Prefab Review
Yeah. Will you typically have the builder come to the factory to understand?
Huntington Homes
If they want to, for sure, right? If they're interested and they want to come here or if they have questions about our documents, you knok, what does this mean? Where's the handoff point? Then if not visiting us, they absolutely should be calling us to ask us those questions.
Prefab Review
Yeah, well when possible, especially because a lot of times from a financing standpoint, the way I don't know if this is true for your projects, the way this works, is the GC kind of owns the prime contract and you're almost a subcontractor for the GC like as the margin.
Huntington Homes
So yeah, most of the projects we're involved in, our contracts for the modules go straight to the client and then the builder has a contract with the client.
Prefab Review
You'll do two separate contracts. That's the way many of ours work too. But anyway I guess you probably know more. I think the GC still maintains a lot of the liability.
Huntington Homes
It depends on the state. So in the state of Massachusetts you know, construction supervisor who pulled the permit, it is their license that is responsible for every subtrade that's on the project, us included. No matter if our contract is with that CSL or the client. And so that's how it is in Massachusetts. In Vermont, it's not like that because there are really no enforced building codes for single-family residential, right? There's no engineering.
Prefab Review
Interesting. And then last question and this is something that we can get a lot of questions about but I think I'm always interested in how you're dealing with it as well. With the current supply chain issues, particularly I'd say windows and particularly in custom projects, are there things that you see holding up projects more than almost anything else? Do you have solution?
Huntington Homes
Yeah, so fortunately so we work with a couple of different window manufacturers. We get kind of weekly updates as to what their backlogs are and what their lead times are. And we're just ordering everything way in advance and we have projects that we're building in October or November and their windows are already on order. And so we're just we're staying ahead of it. We also have learned the hard way what window products are kind of quick ship products and what windows and what colors and what styles and what series are long lead items. So we're just doing a good job on managing the preconstruction aspect of it to get those projects flagged into the purchasing so that they're ordering that stuff well in advance. There's no question that our inventory levels are low right now. Are you know, we're inventorying three x more than we historically did, you know we, like everybody else, relied on an absolute just-in-time inventory system. And now there are still things like windows and cabinets that are still just in time inventory because they're unique to the project. But were really stocked heavily on the kind of commodity stuff of framing, sheet goods, insulation sheet rock. You know, we're just stocking really heavy on that stuff so that we don't run out of it and then, we're just dealing with it right? So you know, stories of just today you know, we went to place an order for roof shingles for a house that we're about to start building to find out that that color's not available. You know, we went to order the flooring to find out that that color was discontinued or that stain was discontinued. So we're you know, going back to the client and you know, picking out substitute materials and fortunately most clients at this point, know the drill, right? We're not the only people in their lives that have long lead times. So they understand it and they're working with us on it.
Prefab Review
That's good. It's been terrific learning a bit about your company and we really appreciate the all this stuff. The final question, I ask this to everyone. What are you most excited about for your company or for the industry in the near future?
Huntington Homes
I think all of us that are in the industry all think that we're the next big thing. We all think that the industry is the next big thing and I think we are the closest we've ever been to being the next big thing. I think that there's a fundamental shift in clients where they're realizing and seeing the value in off-site manufacturing, in home building and that they're starting to not see the craftsman builder. That isn't to say that some of them don't exist. But for the most part, you know, it used to be well, you know my house was built by the master craftsman that lives down the road. That master Craftsman that lives down the road they are either harder and harder to find or they tend to be building the highest-end homes right now. And so there aren't the majority of the home buyers or you know clients out there are viewing our industry as a way to build them a better house. Which is another way to say they're not viewing us as an inferior product anymore.
Prefab Review
Yeah, makes a lot of sense. Yeah, I honestly think a lot of people who we see come to our site are you know, oftentimes they've been like looking at our site or dwell or something for years and they're inspired to own this cool, factory built house. So I'm with you. I think there's a lot of momentum. Thank you so much again for being on our podcast. For those of you who want to learn more about Jason and Huntington Homes visit huntingtonhomemesvt.com and as always you can learn more about the industry as a whole at prefabreview.com.
Huntington Homes
Yeah, hey Michael thanks for having me. Good to talk.
Prefab Review
Thanks again.