Characteristics of Innovative Production Home Builders
(June 2006, 104 pages)
Since the post-World War II days of Levitt and Sons, production builders have dramatically shaped the way we build and what we build in America. Increasingly producing the majority of the new housing stock in the United States, production builders have developed scale economies to leverage with their material suppliers, to build efficiently and cost-effectively, and to implement major technological changes through the industry. With these resources, some production builders have not implemented drastic changes in their processes, while others have pushed the envelope in industrializing their construction sites. This context has led PATH to ask important questions: Do production builders have a whole staff that looks out for new techniques and materials? How do they implement change throughout their organization? What are their relationships with consumers, and do they communicate technological information to them?
In 2004, the Partnership for Advancing Technology in Housing (PATH) completed the study titled "Diffusion of Innovation in the Residential Building Industry," which focused on how and under what circumstances residential housing innovations become standard industry practices for a cross-section of American homebuilders. It reported the results of a national survey of home builders on their decisions to adopt new products, processes, and technologies and presented an analysis of the correlation of company size and geographic region to company innovativeness, measured through the use of several innovative products in the NAHB Research Center's Annual Builder Practices Survey (ABPS). Although the findings helped identify differences in innovation between larger and smaller builders, the survey predominately reflected the experiences of smaller builders.
In order to understand innovation among larger builders, specifically large production builders, PATH commissioned a national survey of production builders building 200 or more homes a year in 2005. This universe includes several national (and international) homebuilding firms, of which a few have become publicly traded Fortune 500 companies, as well as regional and local housing production companies. Those builders produce more than 500 units per year per region and even more than 5,000 units across the country. Through this study, PATH seeks to understand how these large firms process, acknowledge, and adopt technological change.
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