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AI. It's everywhere in the news, and it's no surprise that it's making its way into homebuilding too. For those who are unsure what AI really means, and more specifically what it means for homebuilding, here's a quick primer. There's really three areas where AI is taking root in the construction world: 1. Image-Recognition: This is a subset of AI that's more accurately called "Machine Learning,” and this is the tech behind recognizing your face to unlock your phone. But in the construction world, this is: Enhanced Security: By installing a sophisticated camera on your site, companies monitor threats or theft and notify you (or the police) when someone enters your jobsite off-hours and assess whether they are a threat by what they're carrying. (You may have already seen these systems in a Lowe's parking lot.) Want to learn more? IVIS Security Safety/Inventory Systems: A video feed can also automatically attain logistics on how many people are entering/leaving a site and whether they're wearing the right protective gear. It can discern how many cars are parked in a lot, and when they come and go. Oracle's Construction Intelligence (previously Smartvid.io) Estimating: Image recognition can also be trained to observe construction issues and make reports about them. Here’s one company has a tool that uses drone-footage to estimate roof repairs (a dangerous and time-consuming task for humans): Roofer.com Think about it! Anywhere you need to look at and assess something (and where it wouldn't be a privacy concern to stick a camera!) could be a use-case for image recognition. 2. Interpreting Real English: AI makes it possible to have complex conversations with a machine that understands the nuances of language. For construction, there are many uses popping up: Writing contract language is repetitive and time-consuming. Why not just write down notes on the essentials and have an AI draft your estimates/contract? Tackle Some data systems can now interpret common-sense questions and turn them into charts. Instead of messing around with Excel for a few hours, it's nice to just ask the computer, "Show me a chart of the last year of customer reviews organized by community.” Here are platforms that do this: Amazon QuickSight, Power BI Q&A, Salesforce Einstein Just like AI can take a sentence and return a work of art, there are also companies working on programs that turn a conversation into a house design. Kend from Poliark Think about it! Anytime you feel like "This takes so long, I wish I could tell it what I want and get results,” that's where we're headed. 3. Organizing Complexity and Making it Accessible: AI is particularly good at looking at huge sets of data and making it more accessible. There are several systems looking to take advantage of this: An automated code-approval process based on site-plans: AutoReview.AI Construction document organization and quick information retrieval: Digs Think about it! Any time you have a massive amount of information that's difficult to process, AI can help you get answers without page-turning, file folders, or even searching and scrolling. Many of these examples are being used in construction today, but not yet with production homebuilders. Where do we start?

High performance adhesive! Resistant to air and water! Long lasting performance! Highly durable finish! Low maintenance! Easy installation! While these phrases, (and others like them), are intended to make you feel good about a particular product, beware, because in truth, they are simply marketing phrases that don’t mean anything. These buzzy phrases seem to promise miracle results, but where is the substance? If you are considering introducing a new building material into the complex tapestry of parts and pieces that come together to create a durable structure, you should be digging deeper to understand what these products are… and are not. Due diligence is key in not falling prey to rosy marketing jargon. Let’s take for example, a piece of flashing tape. What really defines a “high performance adhesive?” It feels sticky, but that is far from the whole story. Is it a rubberized asphalt-based adhesive, with a limited effective temperature range, that is potentially incompatible with other materials, and inevitably loses adhesion power over time. Doesn’t sound so high performing now, does it? How does it compare to a competitive product in the applicable ASTM standards? What are the installation instructions? What are the conditions of use? Too often, these questions are difficult to answer. Some manufacturers are good at making this information readily accessible. Others, not so much. One piece of information that most reputable products have on file is a Product Evaluation Report. These reports cut through the marketing noise and clearly state code compliance, material properties, installation instructions, product limitations, and test results against industry standards among other pertinent information. The ICC Evaluation Service (ICC-ES) bills itself as the industry leader in performing technical evaluations of building products, materials and systems for code compliance, while other groups including the IAPMO Uniform Evaluation Services and DrJ’s Technical Evaluation Reports provide similar services issuing these documents to help architects, builders, inspectors, and the general public better understand product characteristics. There are a lot of amazing building products out there, and new, innovative products are being introduced all the time. But check yourself – don’t fall for the marketing jargon. Be sure that the products that you specify truly meet your expectations.

In the world of homebuilding, innovation is like a light showing the way forward, but it's also a rough sea full of challenges. To make changes in this industry, you need to have the guts to explore new territories. The challenge is to boldly transform long-standing customs. In the complex web of company dynamics, relationships are fragile and can easily be broken. Introducing new and disruptive ideas puts these relationships to the test, particularly if changes to the “status quo” face resistance. But if we’re open to change and we work together, forward-thinking teams can turn opponents into supporters. Every innovation brings real benefits—improving performance, increasing productivity, and cutting costs. These carefully- planned advancements form the foundation of progress, lifting the industry to new levels of efficiency and quality. The journey of innovating in homebuilding goes beyond just construction. It represents a major change—a proof of human strength and creativity. Homes born from overcoming challenges and embracing change are not just places to live but are symbols of progress. In the midst of this story of innovation and change, one question remains: Do we know any builders ready to embrace this vision and lead us into the future? It's a question that urges us to find those daring enough to explore the frontiers of innovation, shaping not only homes but also the very fabric of our lives.

For most people in the U.S., buying a home is the single largest investment that they will make. Not only that, but it is viewed as a rite of passage in our society and is linked to the American Dream. Owning a home offers freedom, stability, a sense of community and so much more. But today, for many, that dream is becoming harder to achieve. Some of the issues buyers face today are elevated mortgage rates, increased home prices, low housing stock, and economic hardship. Currently, the national average home price sits at around $384,500, but let’s take a look at how things stack up in two of the largest housing market states in the country: Texas and California. In Texas, the state’s median home price is $340,500 and the median household income in Texas is $72,284, compared to the national median household income of $74,755. 62% of people own homes compared to the national average of 65%. In California, the average home value is $783,500, and the median household income is $91,551. This is higher than the national average of $74,755, and the home ownership rate is only 55% -- 15% less than the national average of homeownership in the U.S. The Takeaway? Homeownership is plummeting at an alarming rate, and we are currently at the lowest rate since 1970. The average interest rate is 7.7%, which is dangerously close to 8%, so if a homebuyer earns the median household income and puts 10% down, they will have to spend 40% of their income on mortgage payments. To get that down to 30% -- which is a good financial standard – the buyer’s income would need to be $107,000. If rates rise even higher, the salary needed to afford a house would need to be $114,000 – which is well above the current national median household income of $74,755. According to the National Association of Realtors (NAR), this is not even the biggest problem. The toughest challenge is producing a down payment. If the national average home price is $384,500, buyers need a down payment of almost $40,000. To put it boldly, house affordability is plummeting. Buying a house is one of the biggest financial commitments you will make, and it doesn’t look like it is going to get any easier anytime soon.

Homebuilders build homes, right? Nope, trades do. Typically, builders’ jobsite superintendents or project managers manage the building process and coordinate with multiple different trade partners, usually sourced through a bidding process. In most markets, builders adhere to a 120-200-day build cycle, taking an empty lot to a finished house within this timeframe. Depending on factors such as the size of home, design, or location this can be incredibly challenging. To achieve this, it is especially important that the builders develop good relationships with their trade partners. In our work in the field with production homebuilders, we see lots of interactions -- both positive and negative. Just like any relationship, these partnerships require work. When mistakes happen, it’s easy to point fingers and assign blame. But the world isn’t perfect, and in order to build a house, a few nails are going to get bent. Working through the challenges together benefits both the builder and the trades. Part of our job is helping to train the builder – and the trades who work for them – how to incorporate building science into their construction practices. In addition to this, in order to create a great working environment, we encourage builders to keep the jobsite safe and to build rapport with the contractors. People go to work wanting to do a good job, and to go home feeling accomplished. Finally, be upfront with what you expect from your trades, and when they fall short, explain how to improve... and when you’re happy with the final product, reward all those involved! With the rising cost of homes, people are staying in their homes much longer and it is extremely important that houses are built to be efficient and durable for years to come... and the only way to accomplish this is to work together.

The answer to this question begins with the ‘E’ in ESG. The simple truth is that decarbonization and the measured environmental impact of all industries must matter. Homebuilding will be no different. Decarbonization is being elevated as an essential and prioritized value in homebuilding, with the industry itself being asked to develop effective and efficient ways to successfully define, integrate, and measure these qualities within the day-to-day business of building America’s homes. The actual nomenclature or term ESG (Environmental, Social and Governance) has become something of a pariah due to it emerging as an intensely political issue. This has been caused (in part) by the major global investment firms’ pragmatic – yet highly politicized – crusade to drive the principles of ESG investing into the thinking of American companies, investors, and the public. However, when you revert to the origins of where this all started, it all made beautiful sense. It was an idea that was the centerpiece of the 2004 United Nations Report, ‘Who Cares Wins’. This was a thesis presented by a group of the world’s major financial institutions proposing some profoundly simple stuff – like the notion that how much a company cares about the impact it has on its planet, its people, and its community, should deeply matter. So much so, that it should be directly tied to both the reality and perception of that company’s market value. A publicly traded homebuilding company’s board responsibility to its shareholders and the value of the company should no longer be simply measured or incentivized relative to just current and future revenue and profit growth. Now a sense of broader responsibility is being brought to the table as part of the company value equation. Presenting new aspects in the measurement of “success” in the task of increasing shareholder value and catalyzing the development of homebuilding organizations that will become better equipped to authentically serve the new housing needs of generations to come. Despite the current ESG political malaise, when you step back and consider the fundamental wisdom that these ideas represent – and the inevitably of these principles becoming a privately and publicly mandated part of American business life – then as a major homebuilder, there’s really no choice other than to show up and be a proactive participant in the ongoing creation of this new game and rules. The homebuilding industry is being held to a higher standard. Seeing this through the shared lenses of business sensibility, situational inevitability, and of course, corporate, and personal conscience - it’s not difficult to grasp just how much this really does matter.

It has been said by many who knew him that Coach John Wooden was not only a great coach; he was an amazing person of true character. One of many of Wooden’s many notable quotes is the following: “The true test of a man's character is what he does when no one is watching.” In support of Coach Wooden’s belief, studies have shown that people behave differently when they know that they are being watched. This is known as the Hawthorne effect. Whether studying the impact of keeping a food journal on weight gain or monitoring medical staff compliance with hand-washing requirements, study after study shows that behavior is influenced when participants are aware that they are being observed. So how might this apply to homebuilding? Specifically, how might it apply to the role of third-party inspections throughout the construction process? If nurses know that the hospital is counting how often they wash their hands and the rate of hand washing goes up, then shouldn’t we expect the number of construction quality issues identified by third-party inspectors to go down over time? After all, field managers know when the inspector is on their jobsite. Plus, they should believe that the quality of the homes under construction is, at least in part, a reflection of themselves – their own capabilities and commitment. So why are homebuilding results mixed? ·       Is it because field managers don’t see third-party inspectors as having authority ‘over’ them and their performance? ·       Might it be that third-party inspectors don’t carry the same sense of ownership for the finished product? ·       Or is it because field managers are busy, and they see the inspector as taking work off their plate? In other words, ‘why should I look at that home tonight when I know my third-party inspector will be checking it tomorrow morning?’ In some cases, third-party inspectors are hired to simply “check the box” and meet some externally-imposed requirement for third-party oversight. Often, they are hired to provide an added layer of oversight but (unintentionally) get used to replace a job that the site supervisor should ultimately be responsible for… and be passionate about. In these instances, third-party inspections can do more harm than good, as their involvement should never relinquish responsibilities shared by both the installer and the builder. Simply put, it’s dangerous and irresponsible… and unfortunately, we see evidence of this a lot.

We all do good work, and let’s face it, we all want to be praised for it. So let’s do it. Consider this the proverbial ‘family fridge!’ What’s Your Photo of the Week? “The Photo of the Week” should show a well-executed construction assembly that will potentially improve the durability and/or performance of the assembly, system or home, or provide the homes’ occupants with a heathier, quieter, or otherwise enhanced living environment. The photo should illustrate an excellent example of your unique “best practice” standards executed perfectly. With your photo, let us know why it is a best practice and where it was taken. Share it with us so that we can not only hang it “on the fridge,” but also all learn from it and move this industry forward… one assembly at a time! Consider assemblies or activities across these thirteen systems: • Safety (during the construction of a home) • Site (managing site conditions such as runoff water management, materials and refuse) • Foundations • Framing • Thermal Enclosures • Air Barriers • Drainage Plane and Flashings • Wall Claddings • Showers and Tubs • Roof Claddings and Drainage • HVAC Systems • Plumbing and Electrical • Interior Finishes We get very excited about quality, and we’d love to hang your work on our fridge, so submit a photo today of something you are proud of! Photos will be evaluated by IBACOS prior to being posted. P.S. - Don’t forget to share it with your team as well… Why? • The trade responsible can use it to share with their field staff to help reinforce the proper execution of the detail. • It may help to promote competition among different trade partners. • It can educate your entire staff on what your construction standards are and why you follow them. • It provides your sales staff with a way to share our unique performance standards with potential customers who were considering your homes vs. your competitors.

The construction of the American home has gone through a significant evolution in the last 50 or so years. From architectural design to performance complexity, homes and the materials that go into building them have come a long way and continue to evolve. But why is it that in many cases, the laborers (trades) have struggled to keep up with this evolution? One possible explanation is that of language barriers, which result in an inability to adequately train and develop a workforce. The majority of the construction workforce in the U.S. today does not speak English as their first language. Higher turnover rates of a largely migrant workforce make it difficult to provide the degree of training and expertise to the workers who show up each day to build our homes. What is a production builder to do? First of all, don’t give in and don’t give up. In spite of language and training obstacles, today’s construction worker is ready to work hard and wants to do the job right… as long as “right” can be made perfectly clear. Here are few ideas we have found around the country that seem to work: Provide your construction standards in graphic or physical format. Isometric drawings are typically easier to follow correctly than traditional line drawings. Provide these for your trades. As a project passes through various phases of construction, a superintendent could staple printouts of illustrations to help trades with challenging details or requirements. Physical mockups are a great way to communicate how you want specific details installed regarding exterior flashing, window installations, and claddings. Set the expectation with your trade partners that each crew needs to have at least one worker who is proficient in English. Hire superintendents who are bi-lingual. There are certainly other additional ideas that could be added to this list. If you have one, share it with us, as we’re all better when we work together!

Unless you’re playing mini golf with your kids, successful golfers need to be good at both driving the ball off the tee and putting the ball across the green. Strength in one or the other is good, but likely still results in a frustrating afternoon. The same is true of homebuilding. Often, homebuilders pursue short-game results – closings, margin, etc. – at the expense of their long-game success. Hitting projected closings in a month or a quarter is critical to maintaining control of cash flow and meeting buyers’ expectations. But accomplishing this by stacking trades on top of one another in a house to get it done isn’t sustainable. Quality suffers. Trade relations suffer. Construction Managers’ well-being suffers. And the expense doesn’t end here. Likely, long-term customer satisfaction and willingness to refer declines. Warranty spend per home increases. Trade bids go up, or, at the very least, a trades' best crew may be sent to another jobsite that isn’t as stressful. Plus, the cost of replacing outgoing staff with new hires is significant. But getting your long game right doesn’t have to compromise short-term results. A systematic focus on reducing cycle-time and increasing consistency by attacking the issues that are causing variability and disruption will produce greater predictability. Greater predictability is often the precursor to lower costs. There are many factors at play that can contribute to variability, but the way you choose to build shouldn’t be one of them. There are two schools of thought in homebuilding: 1. As the general contractor, the builder hires skilled labor and relies on that group of trades to make smart, informed decisions on how to build homes for that location, that buyer profile, that builder, and that price. 2. As the entity owning the relationship with the home buyer, the builder embraces the responsibility to decide how their homes are to be built, usually in collaboration with the trades, and hires the skilled labor to execute. The first approach may deliver in the short term but makes long-term results uncertain. The second does not guarantee success but is far better at achieving lasting results that a company can anticipate and build upon. So the moral of the story is you really need to do both, as a laser focus on one will jeopardize your success with the other. Just ask a golfer... or heck, even the caddy!

As a Building Performance Specialist, my fundamental duty is to walk active residential construction sites with builders while evaluating their building practices for potential risk. I point out good practices, and identify opportunities where warranty issues or litigation could result. In a nutshell, I help builders build better homes. One of the most important things we talk about on site is safety. You’d think that ‘being safe’ would be an easy thing to achieve compliance with among trades and employees, as flying debris, sharp objects, and falls are just a few of the many hazards that present themselves daily. But no, it is not easy. Getting trades and site visitors to practice good, basic safety practices is like squeezing blood from a stone. One of the most fundamental safety practices is wearing a hard hat. I wear one whenever I am on site, inside or outside, curb to curb. For if I do not wear a hard hat, or the site supervisor does not wear a hard hat, how can we expect the trades to wear a hard hat? Signs are everywhere. Fines are imposed by builders. And most notably, OSHA requires that they be worn. So, I ask you Mr. Building Inspector… Why will you not wear one on the jobsite? Unfortunately, the site supervisor does not complain about this or even politely ask that one be worn, as he or she typically chooses to pay deference and show respect to you since you are in a position of power and have great influence over the critical path of scheduling of the job. But here is the rub that frustrates me as an outsider looking in: Why can’t building inspectors show the same respect to the builder clients and industry that they serve? Think about the uphill battle that a builder faces in trying to get a trade to wear a hard hat if the site superintendent is not wearing one, or if I did not wear one when fulfilling my duties on site? It is my belief that of all folks on a jobsite that could have a positive impact on promoting a safe practice as simple as wearing a hard hat, a building inspector would garner the most respect and influence in getting the trades to do the same. So how about it Mr. Building Inspector? Help the industry take a big step forward and put that hard hat on! Oh, and while you are at it, kindly remove your muddy shoes before entering the home that you are performing a final inspection on just days before closing. Your cooperation is appreciated more than you know… and who knows, it just might save a life.

It’s cliché to say change is hard… but for many of us, it is. And the more people involved, the harder the change. The following 3 steps don’t make successful change easier, but they increase the likelihood of success – for the long term – ensuring that your change will ‘stick’ long enough to see a return on your investment. #1: Set clear expectations. Define what success looks like. For fans of Steven Covey’s 7 Habits, he describes this as ‘Begin with the End in Mind’. Is success earning a 95% customer ‘willingness to refer’ score? Or is it seeing a 20% reduction in warranty spend? Whatever it is, make sure it’s measurable. Next, document the changes you intend to make – with specificity. Be clear about both what you plan to do, why you plan to do it, and why you’re choosing a certain path to get there.     #2: Share these expectations with your team. Sure, start with your internal team. But don’t stop there. Homebuilders don’t build homes; trades do. Success often fails because key members of the ‘extended team’ aren’t involved in the process. Note the use of the word ‘share’ and not ‘tell’ or ‘communicate’ or ‘contract’. This should be embraced as an exchange of information, ideas, questions, and answers… to reach a shared understanding of what is expected from all parties involved. Remember, success requires engagement and execution from everyone, while failure only requires a lapse from one. #3: Sustain results by monitoring. It’s a fact. People behave differently when they know they’re being watched. If you fail to monitor the result of change, those results may be fleeting.  It’s hard to fire a shotgun and hit a clay pigeon. It’s exponentially harder to successfully hit 25 consecutive clay pigeons. It’s very rare that our definition of success is limited to achieving results once – one survey, one house, one quarter. No. We are striving for results we can sustain… community-wide, division-wide, and company-wide. Lastly, people like to feel like they are winning. Define your metrics for success, monitor processes, and share these results – good or bad – with all those who are effecting and affected by the results. Set > Share > Sustain to implement change and Succeed.