Three years ago, as the construction industry cratered, Bill Haney and Maura McCarthy made the curious—maybe crazy— decision to launch a prefabricated home business. Their vision: architect designed, factory-built, single-family dwellings with green accents (including energy-efficient appliances and airtight construction) that appeal to higher-income, eco-conscious buyers. “Yes, the housing market has been decimated,” says Haney, 49. “But if you have the moxie to get going during a recession, you can build something sustainable and significant.” So-called modern prefab had become a staple of home-design magazines during the housing boom. But the economics of mass-producing green homes like Priuses didn’t work.
For one thing, building houses narrow enough to fit on a truck while still wide enough to live in is no mean engineering feat. Then there was all that custom work. “The options package just grew and grew, and economies of scale were never reached,” says Allison Arieff, former editor-in-chief of Dwell, who wrote the book on prefab in 2002 (Prefab, Gibbs Smith). “The homes ended up being all one-offs.” When overall housing demand tanked, some prefab firms shut their doors. With Blu Homes, headquartered in Waltham, Mass., Haney and Mc- Carthy are building a different model. Their solution: steel and software. Using recycled-steel frames with large hinges, Blu homes fold up to fit on a standard tractor-trailer that handle cargo up to 8.5 feet wide. Fancy software automates design, manufacturing and purchasing. The extra efficiency allows Blu to offer more options and still make a living; doing it all in-house also eliminates confusion among a slew of subcontractors. “You have to control the manufacturing, design, shipping and the finishing,” says McCarthy, 31. “The guys who pack up the thing in the factory have to be the same guys who set it up on-site.” That recipe sounded plausible enough to attract $25 million in funding from investors like Abby Disney, Walt’s grandniece. (Haney keeps a 40% stake.) Blu used some of the proceeds to buy mkDesigns, a high-profile prefab firm founded by San Francisco architect Michelle Kaufmann, giving the company green cachet and some award-winning designs.
Since 2008 Blu has built 28 homes, which sell for between $125,000 and $500,000 (land not included), and has orders for 42 more. McCarthy estimates that Blu’s East Coast operation will be in the black at an annual production of 50 homes, a goal she expects to hit in 2013. Blu is set to open a factory just north of San Francisco this year. And if the housing market nose-dives again? “The general notion that we want to be greener, we want to conserve, we want to be healthier— that’s a cultural trend that has not been thwarted by the economic downturn,” says Haney. Clad often in jeans, sports jacket and a baseball hat, Haney dabbles in documentary films when he’s not cranking out houses. (His latest flick, The Last Mountain, chronicles mountaintop coal mining and stars Robert F. Kennedy Jr.)
Haney met McCarthy, a venture capitalist who invested in prefab builders, in 2005 at World Connect, a non-profit organization focused on solving health care issues in developing countries. At Blu’s 120,000-square-foot factory outside Springfield, Mass. A 1,650-square-foot model called the Glidehouse (ordered by a retired Boeing engineering executive in Seattle) is under construction. Build time is about six weeks. When finished, the floors and walls will fold up like a corrugated box, and the entire house—from the low-flow toilets to the kitchen sink— will fit on an 8.5-foot-wide trailer. (Unfolded, each of the structure’s two wings measures 18 feet wide by 48 feet long.) Joining the sections and bolting them to a foundation takes a day; spot-painting and other finishing work about a week. (For a diagram of the setup process, see page 52.) Blu architects draw the folding domiciles on a system called CATIA made by Dassault Systèmes. Boeing uses the same program to design and stress-test airliners. When changes are made the algorithms make engineering adjustments, calculate the cost and send a bill of materials to the factory floor.
Blu is rolling out a new interface that allows customers to view models in three dimensions and to preview thousands of options, from the location of the kitchen to the flanges in the Anderson windows. Replacing wood framing with recycled steel allows Blu to build foldable houses that can withstand high winds and heavy snow. Steel also adds flexibility: The absence of load-bearing walls means windows and doors can be placed just about anywhere. Says McCarthy: “It feels much more like building a car than building a stick-built house.”
Indeed the Blu factory resembles a gargantuan assembly line rather than a construction site. The structural steel rolls in from a loading bay, and machines fabricate it into parts that are welded together to form the frame. After the exterior walls are hung the house slides on rollers to another station where workers add interior walls, insulation and the roof. Next comes the drywall, cabinets and bathrooms. The entire house is constructed in the factory; the only work done at the owner’s address is minor painting and woodwork near the folding joints. For two-story models a crane drops the upper floor in place.
Blu’s customers are clustered on the coasts. To expand, Haney and McCarthy will need to reach more people like Sandra Beer, a fundraiser for a PBS station in Albany, N.Y. and a single mother. Beer bought a 1,008-square-foot Blu Element model last year. A big draw for Beer: never having to deal with an army of contractors. “They gave me a price, and that is something I can control,” she says. Haney and McCarthy have the luxury of patient investors. “The timing is horrible right now,” says Abby Disney, who has put in $3 million. “If you buy Bill’s thesis you might have to wait a while, but things will turn around.