Of course, operating in a grim business environment has become standard practice for factory-built housing companies, but what differentiates many of these firms’ performance in 2007 is the willingness to explore new approaches to building and selling their products. “It’s been a challenging year,” agrees Kevin Flaherty, vice president of marketing for Genesis Homes, the modular division of Troy, Mich.–based Champion Enterprises. “But we see some opportunities within a difficult marketplace.”
Fresh Approaches
Those opportunities include new products. Firms such as Genesis and American Homestar Corp. are retooling floor plans and rolling out smaller models for more price-sensitive buyers. Factory-built companies are also actively pursuing niche markets. Genesis displayed a narrow-lot modular home at an Urban Land Institute meeting. Says Flaherty, “Rural and urban America have not been glutted with new housing, so they are somewhat protected.”
The post-Katrina landscape, which includes New Orleans and the Mississippi Gulf Coast, encompasses both those markets, which has made it an important business priority for American Homestar. In 2007, the company joined forces with The Home Depot in select Louisiana locations, placing a model modular home on-site. “We serve as the builder, and we have the salesforce in the home,” explains Ronnie Richards, American Homestar’s vice president of marketing. “The buyer selects a plan from us, and then they go into The Home Depot and select the finishes from the largest design center in the world.”
The program quickly exceeded expectations. American Homestar contracted for 60 homes via The Home Depot partnership within the program’s first week.
American Homestar also will soon be producing housing for Katrina survivors living in substandard housing in Mississippi. The company won its bid to produce as many as 600 Katrina Cottages for the state. The 400-square-foot homes, which will feature a front porch and a metal roof, will be suitable for short- or long-term use, unlike the notorious FEMA trailers.
Alison Rice is a freelance writer based in Arlington, Va.