In 2012, we predicted that “by 2020, every new home will meet much higher performance standards, delivering outstanding comfort, indoor environmental quality, energy efficiency, and value. Homes will become more sophisticated in how they are designed, engineered, produced, tested, sold, and serviced—and more like other advanced products in our lives, such as our iPhones and our cars. Building science will be at the heart of the equation, understood and embraced by everyone in the home building industry.”
Prediction #1: “Homes will become more sophisticated in how they are designed, engineered, produced, tested, sold and serviced.”
Although there is still work to be done, without a doubt, the industry has made great strides in improving business processes, across all facets of the industry. Digital technologies and software such as Autodesk and Revit have contributed significantly to advancing BIM, which continues to change the way we design and build homes. Homes today can be “toured” even before they are built, thanks to the growing use of virtual reality and the ability for prospective homeowners to walk through a home before land is even purchased. Finally, with platforms such as Zillow and others, buyers can shop for a home from the comfort of their couch, which certainly wasn’t the case 8 years ago.
Part of the prediction that we made in 2012 was that “building science is critical to the future of the industry.” Building science is now the foundation of advancement in our industry. The building codes have leveraged years of building performance research by the Department of Energy and industry experts to justify higher performance requirements in the 2015 and 2018 energy codes, and state and local jurisdictions continue to push these limits based on building science principles. RESNET has grown its influence within the industry by entering into memorandum of understanding agreements with production home builders around the country and driving acceptance of the home energy rating process for energy code compliance. HERS Raters are now becoming de facto building inspectors!
Codes have continued to push performance, although we see a shift occurring as higher energy efficiency targets become less cost effective to achieve than adding renewable energy systems like photovoltaics to the house. In California, for example, the state energy code will require that all new homes, with some exception, be installed with solar energy systems beginning in 2020. As California is often the lead horse in the race to higher performance, we may see other states adopt similar measure in the near future. We are also seeing government and industry organizations, state and local public utility commissions and utilities themselves re-envision the electric utility grid, where distributed power generators like residential PV systems play an essential role. This is a fundamental shift in mindset to envision a “net zero” future on a broad scale.
Organizations that provide education to builders and other industry professionals—such as AIA, EEBA, Green Builder Media, and others—continually stress the importance of sound building science within their presentations, courses, and curricula. For many years, builders and suppliers have consulted with third party building science experts for guidance and advice while now, many of these companies have created building science positions to leverage this expertise internally. Building science continues to grow as a discipline taught within construction management programs in institutes of higher education around the country.
At a fundamental level, building science is helping to drive innovation within home building around the country. With increasing pressures to improve productivity and address the steady decline of skilled labor in our industry, housing providers are exploring new ways to improve the efficiency of home design and delivery. To do this successfully, we need to balance performance, cost, and productivity—and sound building science is essential to ensuring our homes will be comfortable, healthy, safe, durable and efficient.
Prediction #2: “Most buyers find comfort in tradition and don’t want to live in or next to a home that’s too far from the norm.”
This is one that I think we got a bit wrong. Today, consumers are leaning more toward contemporary design than we predicted that they would. Lean, modern homes with simple lines and designs are well-liked and sought-after—the contemporary farmhouse is a popular look; and today’s buyer is seeking a much more “simple” design than perhaps their parents did.
As we look at demographics, in the last decade, we have experienced a major demographic shift. Most significantly, the baby boomers have gotten 10 years older, and with that, their spending habits have changed; while millennials have moved into a position of earning—and spending. Today, with the knowledge that millennials demand higher performance, we can see that we were right in our prediction that 2020 home buyers will want their homes to be easy to own, which means they want homes that are energy efficient, water saving, more durable, and low maintenance.
Prediction #3: “Advancements in materials, products, and applications have made virtually airtight homes possible. But as building envelopes have dramatically improved, the environment inside of them hasn’t. Improving indoor air quality and dealing with moisture will be the next big challenge.”
Airtightness in homes continues to improve, including awareness of the importance to “build it tight, and ventilate right.” Awareness of indoor air quality has grown and become a focus within the industry thanks to the efforts of the U.S. Department of Energy, Lawrence Berkley National Laboratory, companies like Panasonic, Broan and others. The EPA Indoor airPLUS program has defined a path to achieve good indoor air quality, the International WELL Building Institute is driving efforts to improve human health and well-being in buildings, and efforts continue to define a standard for good air quality in homes.
Technology is also enabling opportunities to improve indoor air quality through new sensors and in-home smart devices. Products such as Awair, Foobot, IQAir and others can measure temperature, humidity, volatile organic compounds, duct and other toxins in your home and provide you with simple feedback metrics at home and on your smartphone while you are away. These devices and other technologies are helping to establish indoor air quality and a fundamental performance factor in our homes. While adoption of good air quality practices is not yet widespread, we are seeing a broader industry effort to address this, and we see this only continuing to grow.
Prediction #4: “Expectations for comfort, performance, and health will be higher and there will be more builders catering to the high-performance home market.”
There is greater awareness of performance in the industry, but many builders continue to struggle with basic construction best practices. Smart home technologies are gaining traction and drive focus on the “living experience” in our homes, and more builders seem to be leveraging consumer awareness in this area. However, true “design for performance” is still struggling to take hold on a large scale. But progress has been made since 2012, for sure, as there has certainly been an increase in the number of production home builders who have adopted these standards into their business processes in the last 8 years.
Prediction #5: “Traditional ducted HVAC systems will become less effective at providing ventilation, humidity control, and filtration. With lower loads, less and less air will pass through the system.”
What we predicted in 2012 was not completely off, but we strongly believe today that forced air systems will remain the dominant heating and cooling systems in residential new construction. Yes, less air is needed to condition homes today due to the increase in home energy performance standards, but every room of the home needs conditioned air. We may need less of it, but how we deliver and feed air into each room needs to be innovative.
Another area that we didn’t predict was where HVAC systems were located. Today, in the sunbelt states of the country, the dominant location of air handlers and ductwork is in the hot attic! Homeowners, HVAC contractors, and builders are finally realizing that these are ridiculous places to put these systems and they have been causing many headaches for builders and contractors. This will be the fastest moving trend in the next five years. California’s Title 24, as well as the national I-Codes, are pushing builders to locate HVAC systems in conditioned space.
Prediction #6: “Future Home Energy Management Systems (HEMS) will be integrated give homeowners total comfort, control, and insight into how their home is performing.”
Since 2012, the industry has made significant strides in this direction. Smart thermostats like Nest and others have become mainstream, and players like Google and Amazon have entered the space boldly and loudly; and are vying for market share among consumers—particularly the growing millennial sector—who have come to expect all of the features, comforts, and control that a smart home provides. Whole-house integration is something that as an industry, we are still lacking. But as we look ahead, we believe that this will be the era of integration, which is something that we at IBACOS have always been focused on, as we work to improve building systems and business processes.
Prediction #7: “Creating a mind shift with key stakeholders is paramount to facilitating change.”
This statement is as true now as it was in 2012. It’s no secret that equipment manufacturers, trade contractors, code bodies, and officials all have a vested interest in the status quo. With changes in building systems or business processes, manufacturers would need to reorient huge portions of their businesses in order to develop, manufacture, and market them on a large scale. Trade contractors would also have to learn a whole new bag of tricks and get used to the idea of less expensive equipment, faster installations, and lower overall income per installation. Code officials would need to better understand how high-performance building practices impact codes. But all of this doesn’t mean that innovation and change is impossible. Throughout IBACOS’ journey, one thing that has remained consistent is the level of collaboration that is required to achieve innovation and change in our industry. We must continue to work together to make an impact.
Prediction #8: “Performance must be incorporated into green building programs.”
Energy Star has come further toward addressing aspects of the operational performance of homes by requiring some measure of commissioning oversight of the HVAC systems in certified homes. While this is not measuring actual performance of the home, it goes further to ensure that the home will perform as it is designed. RESNET continues to expand its National Registry of certified HERS rated homes, which is a great resource but does not address actual performance of the home. DOE has developed a database called the Building Performance Database for storing actual building performance data for commercial and residential buildings, which could become a resource for developing an operational “rating” system for homes; however, there is still little evident progress in the industry to introduce something of this nature.
Prediction #9: “We need to adopt principles found in the Passive House certification criteria based on a super-tight shell and site orientation to control solar gain.”
Passive House has certainly gained more visibility in the industry and with this, an understanding of the path to “zero energy” continues to reach a broader audience. However, Passive House remains a niche approach and there are very few builders that build homes to this standard. The adoption rate could be compared to a luxury car whose luxury features like back-up cameras, heated seats, Bluetooth, etc. slowly—but eventually—become mainstream in economy cars.
Jason Schneider
2030 AND BEYOND
Now, as we look ahead into the next decade, we believe more passionately than ever that NOW is the time for innovation, and the key to progress lies in aspects of our industry working together to embrace change. In this, we are seeing some clear themes emerging:
Theme #1: The need for productivity will continue to drive offsite solutions.
According to McKinsey & Company, there is a huge productivity opportunity in construction. “$1.6 trillion of additional value added could be created through higher productivity, meeting half the world’s infrastructure need.”
The focus on increasing productivity through the use of a variety of different offsite production solutions is something that we have seen emerge on a large scale since 2012. We do believe that finally, the era of change is upon us, and the time to act is now. There is much work to be done, and it is not easy work, but with collaboration and a willingness to embrace change, great things can be achieved. The results from those who are already walking this path are emerging – such as Katerra, BMC, Innovation Construction Group, HercuTech, Prescient, and others. The Housing Innovation Alliance is currently assembling a heat map of the U.S., showcasing over 200 locations where component and modular companies are partnering with production home builders and developers.
Theme #2: A fundamental focus on quality is poised to have a major effect on our industry, positively impacting the obvious: better homes. It will also have a direct positive impact on a myriad of things, from builders’ margins to customer satisfaction and employee retention.
We know how to build houses. The challenge now is how to do it consistently. Today, there is more than $22K of potential waste in a house that can be reclaimed by a wholistic, company-wide focus on quality. Not a “finger-pointing, find-the-mistakes-and-blame-someone” exercise, but rather a corporate culture mindset change that provides the knowledge, tools, and insights to empower everyone to sing from the same song sheet. It requires the development of—and subsequent adherence to—quality standards that everyone agrees to and understands. From the corner office suite of C-level executives, to purchasing, design, operations, field supervisors, and trades, a radical focus on quality in our training, our processes and our communication could have a profound effect on our industry in the decade ahead.
Theme #3: Health will play an increasingly more significant role in the way we design, build, and live in our homes.
Health has—and will continue to—assume a much more prominent role in our industry than ever before. With the aging boomers and the health-conscious millennials, whole communities and business models are being developed around the concept of health-focused living. We are moving into an era where health-related amenities are becoming mainstream in communities, much like pools and golf courses.
Some are choosing to make health and wellness the key focal point. One such example is Darwin, the home wellness intelligence platform developed by Delos, that is based on the WELL Building Standard. Another example is the Lake Nona community in Orlando by Tavistock Development. Here, the WHIT Home, one of Lake Nona’s living laboratories, ensures that wellness features surround dwellers with amenities like a Sleep Sanctuary, a Wellness Kitchen, dynamic lighting and with latest technologies for fitness, rest and relaxation. Babcock Ranch in Florida believes in providing a rich array of amenities that offer its residents every opportunity to enrich their health and wellness.
Theme #4: Manufacturers and other players will step in and lead the way with new systems and strategic partnerships.
One example of this is Covestro and its investment of millions of dollars to produce a highly durable and well-insulated wall system that can be panelized in a panel plant. The wall system is innovative, as it allows the builder to remove wood sheathing from walls and replace it with an insulation board and structural foam; providing a complete structural wall, where currently the industry relies only on wood sheathing materials for strength.
Other manufacturers are partnering with providers to grow capacity and provide a better value proposition to the industry. One such example is LP who invested $45 million in Entekra to help builders build better and faster. LP also has a complete suite of framing solution products—from engineered studs to water-resistant sheathings—all to provide a complete enclosure system for the builder and the trades.
Theme #5: New business models will continue to emerge.
Business models will evolve in the next decade more than ever before. It’s hard not to be inspired by the dramatic change to business models in many aspects of life: “Taxis” barely exist anymore with the introduction of Uber and Lyft; Airbnb has rocked the hotel industry and is now looking at building. What do these and other changing business models mean for the housing industry? Certainly, we see change in how many builders are becoming more integrated in their design and production. Others are changing their business model on the other end of the spectrum with the growth and rising popularity of single family for rent living and co-housing. In 2016, the Housing Innovation Alliance began discussing how production home builders could enter the SFR space. Since then, several of the housing giants have dipped their toe in these waters. There is more—much more—of this type of dramatic change to business models ahead.
Theme #6: Our homes will continue to become smarter.
Our homes will be—and maybe in some cases, already are—smarter than us. This is absolutely on a growth trajectory. Data, artificial intelligence, and machine learning are finding their way into our homes, and revolutionizing the way we build, buy, and live in our homes. Our homes now have sensors—learning our living habits and predicting (and providing) what will make us more comfortable, more energy efficient, and healthier. The systems within our homes are learning how to “talk” to one another, and consumers can “manage” almost any aspect of their home environment from the palm of their hand. And at the heart of it all? Data. Data that the industry can turn around and use to make even better products and deliver the next generation of homes.
DOE continues to invest in the smart home arena, mostly in areas of equipment “fault detection” and comfort control in buildings, which would significantly advance the opportunity to maintain optimal performance of HVAC systems in homes. There are a number of projects currently funded with these initiatives. Within the research and technology communities, there is growing awareness of the power of smart technologies and artificial intelligence to help manage ongoing performance of buildings and interact with occupants to improve the indoor living experience.
The shift is upon us, and the time for change is now. But we must embrace collaboration, and not allow our vulnerability and fear of change to drive us. If we can embrace collaboration and change, great things lie ahead for housing in the next decade.
