Q&A: Michelle Kaufmann on the Future of Green Prefab Homes

mk headshotMichelle Kaufmann has been called the high priestess of green “prefab” design. The architect, who worked for Frank Gehry early in her career, was one of the first to make a persuasive case that prefabricated design — which saves time and reduces waste compared with conventional home building, among other benefits — could be green and chic. Her old firm, Oakland, Calif.-based mkDesigns, designed and built 51 prefab homes since 2004, more than any other architectural firm, according to Kaufmann. Each structure was built as a series of boxes in a factory that were then shipped and assembled out in the field.

In May, amid the economic downturn, Kaufmann closed mkDesigns after two factory partners went under and several clients lost financing for projects. The experience was “devastating,” Kaufmann said, but after some soul searching she committed to pursuing her passion for making “thoughtful, sustainable design accessible.” Kaufmann launched a new firm, Sausalito, Calif.-based Michelle Kaufmann Studio, and sold the assets of mkDesigns to Waltham, Mass.-based Blu Homes. Her new firm will design prefab homes, but now Kaufmann is focusing more on larger community developments, which she says will benefit from economies of scale. We sat down with Kaufmann during last week’s West Coast Green conference in San Francisco to discuss the prefab industry.

What opportunities do you see for startups in the prefab space?

It is the perfect time to be starting a business. You have to be smart about it, surgically focused and hard working. I think there are more opportunities now than ever before because the playing field has been leveled. I think the prefab home market, in general, is ripe for innovation. Builders and developers are looking for alternative methods of construction. They want it to be green, and they are looking for prepackaged solutions. It helps them with risk management and inventory control.

How much does technology play in prefab, or is it just a new way of doing architecture?

There is so much broken with the standard architecture and construction process for single family homes. Only 3 percent of homes are designed by architects. We as builders and architects can complain about it or do something about it, and technology is a critical part of that.  We’ve been using innovation and technology in every other industry to bring good design to the masses, yet we’re still building the way we’ve been doing it for a hundred years. The model is broken and wasteful. Have you ever heard of someone saying that I just finished a house and it was done on time and on budget?  You never hear that. That is wrong. Imagine if we said that about our phones. That product would not last. There is just so much we can improve because it is so broken.

What were the main lessons you learned from mkDesigns?

You need to be smart about prefabricated green building, to make it easier for people to have a green home. Not just for the families living in them but for the builders and developers. It isn’t a question if they want a green home. They want healthy homes, but we have to make it easy. We can’t make them cost more or take more time than a non-green home. Those are the right elements to target. That is what makes it all happen. Scale is the key issue I think for any company approaching the idea of prefab green homes. It’s tough to do it with one-offs, which is why I’m now focusing on communities. I don’t see how you could make it accessible without scale. If companies are going to be successful, they have to figure out how they will address scale.

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What would you have done differently in the way you executed with mkDesigns?

I don’t know that I would have done anything differently. We had a lot of successes. It was the timing and the lending crashing as well as the factories going out of business. Maybe in hindsight it may have been better to build everything in our factory and not trust factory partners. But that would have been impossible to tell at the time. We thought they were healthy enough to stay in business, but in one case their backers backed out and in another they didn’t share the true story of what was happening.

What will it take for prefab homes to become a significant portion of our built environment?

Financing is a key part. I was fortunate enough to spend the day with the founder of Patagonia, Yvon Chouinard. It was interesting to hear him talk about the work he’s doing with Walmart (s WMT). He’s trying to get them to do all organic food. If Walmart does all organic food, that changes the world’s production of food. I realized that it is important to have a grassroots movement to do proof of concept, but the thing that pulls it off is working with seemingly unlikely characters who have the scale capacity. It will be the bigger home builders embracing offsite technology, which they’re starting to do, that will change this industry. I think that’s why it is a really interesting time now. The big builders are now concerned about what they’re building — they need differentiation — and rethinking their models to figure out how to do more with less.

Will the scale-up require big investors?

Different businesses have different business plans. Some will take on investment money, some might be self-financed. What needs to be rethought is the lending practice. When we come out of this [economic crisis], we will have a totally different lending model. I think we’ll see more private companies rather than the big banks lending to individuals. Maybe a builder might look to take on investors to build a project rather than going to the banks. The most successful companies in the building world will be the ones who figure out how to do it without being dependent on the banks.

Photo: Sunset Breezehouse in Marin County, Calif., by mkDesigns. Credit: John Swain.