at som lived and worked abroad in Abu
Dhabi in India and then spent a bit more
time in Chicago now as was mentioned I
am chief design officer for skander
skander up until about nine months ago
was a construction company and what we
realized over the past three and a half
years the firm that I led and that
organization couple other organizations
we were looking at co investing in a new
manufacturing facility so we started to
ask what it looked like to actually push
prefabrication off site construction and
really manufacturing into a way that
sort of functioned and structured a
little a little bit more like every
other designed object industry that led
to about nine months ago that
organization realizing that five years
from now if what we're talking about
actually happens if this is the way the
industry goes what the wonder was what
the core business model might be the
core business model actually changes so
so that's what's led to this integration
we're building a hundred and five
thousand square foot facility on the
southwest side of Chicago and we're
really looking at what it looks like to
maybe solve some of the ways we put
buildings together and maybe a different
way so with that I really want to talk
about how we build now and maybe where
we could go going forward I start with
this because according to wikipedia
which is always true and there's no
inaccuracies on it
32000 eighteen years ago somebody took a
rock and tied it to the end of a stick
and started hitting stupid and what's
really interesting is that some of the
biggest advancements in day-to-day
construction are shockproof handles for
that stick so it doesn't hurt as much
when you hit stuff with it it makes you
start to wonder how we sort of operate
how we do things differently when we
think about things that are happening at
the university level at the research
level and frankly again every other
designed object industry in the world so
I just want to just think about what's
happened over the past nine months over
the past nine months scientists have
invented a robot that swims by itself
and finds lost schools of fish and then
helps those schools of fish find their
way out all right so we have autonomous
robotic fish that are guiding other fish
in the ocean that's really cool
we have autonomous helicopter uber
vehicles that Dubai has announced
they're going to be rolling out in a
pretty meaningful way so all right so we
can lead schools of fish underwater we
can have helicopters fly us around we
even have a sort of concrete that
absorbs the sunlight during the day and
emits that light at night so that is
something that's coming into production
in 2018 and and frankly one of the most
exciting things in architecture is that
Kanye West has announced that he is an
architect and is forming an architecture
studio so the world is changing around
us and the reality is this is kind of
what it looks like this is kind of what
it looks like these are the realities of
how we put buildings together this is
the reality of what we do when we intend
to make the built environment better we
put up sort of complicated structures we
barricade off streets we shift and turn
and we're still putting things together
piece by piece by piece and we result in
situations like this so just as a frame
of reference this is a renovation
project it's a three hundred forty
thousand square foot office renovation
that's what came out of the building in
order to make a new one or to update it
so even the way in which we operate has
massive issues and holes in it in you
know I'll even go back to my dear friend
Bob Vila who is instructing people to
use in the rain obviously it was
probably today soaking rain dripping wet
and they've got a saw pointed straight
down at their feet so there's some
complexities in the way that we build
buildings there's realities of how
building construction as we know it
operates and works and there's even in
moments like this in moments were the
most organized projects where that sort
of information coming from design is
really informing a clean and crisp way
of building it's nowhere near something
like that something
that is putting together the most
advanced energy efficient passenger
airplane in the world at large scale
right we're looking at a very small
portion of a large assembly line and
when I say large I don't mean just in
this building this is final fabrication
this is assembly of all the parts and
pieces but all those parts and pieces
like the wings for example they go in a
dream lifter and they are plane even
bigger and they're built off-site at a
different location the body is built in
a different location the engines and the
interiors are all built in different
locations what you actually get here and
what's rather interesting is that this
is not the construction of an airplane
anymore this is the assembly of that
airplane all the parts and pieces come
together to make something far better
than what we had done in the past so I
wonder that if we start to imagine what
a future a possible future of the way we
build cities looks like an axe I think
it's less like what maybe Blade Runner
would suggest that's a that's a video I
think it's more that was about teamwork
and but it's a team that was losing I
think it's more like this I don't think
it's necessarily building Lego cities or
building buildings that look like Legos
I wonder if the way we build things
ought to look a lot more like an
automobile assembly line you know a
Toyota assembly line produces a car
every 57 seconds every 57 seconds a sort
of high-performance combustible machine
with heating and cooling and wheels and
shocks and springs is built in a factory
add to full code and regulation
compliance in fact a little over 50
years ago almost every state in the
United States had very specific
automobile code and regulation and what
happened through some of the
efficiencies that you get out of
processes like this is you end up with
this future state where you can design
to the best possible version of what
that car is and there's very few
regional changes there's an
understanding that something like the
IBC actually has relevance place to
place the place and location location
there's an understanding that you can
use materials
our best-in-class because you're using
them at scale and you know don't get me
wrong they were there there's been an
effort to really think about how you go
vertically with modular and prefab this
is one of my favorite examples actually
I really love it because if you look at
it it's actually a precast Highway tease
somebody they spend spend a little bit
of time trying to solve this but I
wonder if there's a better way I wonder
if there's something that looks a little
bit more like this as a studio and a
little bit less like what we saw so
here's an example this is a in Carmel
place in New York City this is a project
done in Brooklyn and shipped to site now
it's a small-scale version of it but
what gets interesting is that the final
form is a solution that looks a lot like
interesting architecture right it's
replacing a traditionally built building
with something built much better and in
fact maybe that's a cultural shift - do
you know that the average laborer that
works on a project goes to 15 different
locations over the course of the year
and more often than not they eat their
lunch in their car more often than not
they are in locations where they have to
put something on their head to protect
themselves they have to put they
sometimes even have to clip in so that
they don't get blown off a building
that's the realities of construction are
very complicated and frankly as
designers the reality of how our design
ideas come into fruition are often
muddied by the realities of how we
deliver buildings this is the site of
the Pullman car plant outside of Chicago
what's interesting about this and what's
interesting about these ideas of factory
and manufacturing based buildings is
that you can take a labor force a work
force that is sort of dwindling and
shrinking and you can give them a stable
job that starts at the same time every
day that ends at the same time every day
in fact one of the things that we're
doing right now we've just negotiated a
manufacturing labor agreement so we're
running a factory in Chicago that is a
hundred percent Union and at the same
time is creating a next generation
pipeline for new employees employees
that can potentially buy the affordable
housing that they produce we see this
all over the place there's lots of
really interesting examples many
examples not far from here
of better ways to build of leveraging
indoor environments of climate
controlled environments to build in more
interesting ways we can stack buildings
that look a lot like the buildings we
know but are done a little bit
differently we can start to make boxes
out of them we can start to stack boxes
and insulate boxes and treat them
differently you know here's the thing
one of the most captivating parts to
Tesla as a company to me was that their
effort was to build an autonomous
vehicle what they started with was a
vehicle that anybody could drive because
as a steering wheel has a window it has
a gas pedal has a brake it's very
familiar a dear friend of mine and
somebody that Phil and Andrew know in
Chicago asked me this they said look if
I were building a factory to do any sort
of prefabricated building I do the wild
most crazy buildings I could imagine I'd
stacked them every which way and I would
say you know eventually we'll get to
something like that but let's start with
replacing what we know now with a better
version of what we know how do we make
it familiar how do we remove some of the
association that comes from this
typology and and shift to better
buildings because there are examples of
ways that factory built buildings can
look and act a little bit more
contemporary a little bit more
interesting they're tools that come into
place whether you're building engine
assemblies or whether you can start to
build better HVAC system systems that
understand how a building functions
going forward you know there's some
important lessons to be learned about
passing on trade and skill and I
mentioned this a little bit earlier
since 2008 2008 we lost 2.2 million
people in the skilled and semi skilled
trades across the country we've only
replaced roughly 1.2 million of those
people so we have a shortfall there so
while teaching people of masonry for
example is valuable I'd rather think
about the same tools that are
captivating much of our economy as we
shift to a creative economy what are
those tools that maybe takes those same
ideas and makes them relevant like you
see just not that far from here into the
way we build things makes them relevant
in the way we assemble things
oddly enough it's not the most exciting
thing to take an ABB robot that cost a
lot of money and put it in the field so
what happens if we move it into the
factory and and what does it look like
to do additive manufacturing where does
that fit in in the grand scheme of
things I was just looking at a really
exciting new ceramic printer and it's
not just for how we build entire
assemblies but I start to wonder how we
build the parts and pieces a little bit
differently they don't actually have to
look like castles for you to leverage
the tools that exist but they certainly
can look much better than this because
frankly this is where our mind goes when
we think about the power and potential
of something not built in the location
where it finally resides this is a gift
to you as well I'll put that one up
there's a way to think about how these
new materials these new techniques these
new approaches can make wildly new
interesting buildings and I would argue
there's a path here then to say what
we're doing right now if we look at how
every other design object industry
treats manufacturing treats a supply
chain treats materials and innovation
that we can think about what those
outcomes are just a little bit
differently that we could in fact think
about what entire rooms could be shipped
to site we can think about new materials
this is a very simple pedantic example
of bathrooms and exam rooms okay so
these are bathrooms and exam rooms for a
hospital that we were prototyping a year
and a half ago they're structured on a
1-inch thick aluminum honeycomb panel
it's not the sexiest of materials but
it's the same thing that airplanes are
made out of and you would never use it
as the floor of a bathroom in a let me
see let me go back there you never use
as a floor of a bathroom at a hospital
unless you determine that it is the most
structurally resilient material that you
can buy a hundred at a time and CNC
pre-cut all of a sudden you have an
assembly that doesn't require setting
down into the slab you could actually
change the way you build now it's a
funny example but it is saying all right
let's play with material a little bit
differently let's actually think about
assemblies how do we treat assemblies
differently
let's start by ganging them together and
building sub-assembly it's like again
you would see in most other
manufacturing processes but what you do
when you look at these is you start to
learn better lessons you discover their
better ways to put these together
there's even better ways to get
materials so while we imagine not having
to use sheet material going forward what
does it look like in the interim to have
sheet material that's CNC pre-cut to
exact dimensions this is not just for
sort of one-offs or special subsets but
it's going to be more and more the way
we have to build all buildings and if
that's the case let's move all the way
forward to a better process what does it
look like when you can build entire
sections of buildings and stack them
together this is one of the test rigs
that we've been working on this these
are 15 by 40 foot 9 foot clear ceiling
ten and a half foot tall structural
steel boxes the first couple of
buildings we're doing in Chicago will be
are going to be erected in mid spring
summer of next year and these are 8 and
10 storey buildings we start to wonder
ok how do we replace what is typically
happening with things a little bit
better and at the same time how do we
replace assemblies like this assembly
does it take a lot of hard work this is
the jig to weld all those pieces
together we start to wonder what happens
when we can automate those processes now
from a an architect and a builders
perspective it gets really exciting to
have robots with weld arms working on
something like this it sounds like we're
sort of pushing the edge of something
until again you go back to an automobile
factory and you realize that that is the
only way that systems are put together
and in fact having a robot weld
something is the only way you have
surety that those welds are accurate and
tight and doing it in a controlled
environment is always going to be a
better way to do it so when you look at
assemblies and chassis like this you
start to say ok where does this take me
now if I start with something like this
where can I go in a year
what's version 3.0 was version 4.0 how
do I move forward piece by piece how do
I build things not installed specific
stalls so this again happens all the
time if we're gonna build an insight
we're going to treat
as individual sub assemblies we start to
wonder what happens if you actually have
them on a line the first couple of
projects that we're doing are going to
be testing these new assembly methods
but in a year's time the agenda is that
we're rolling 12 building blocks a day
off of an assembly line because we're
going to treat it as a proper assembly
line and as folks in the United States
and especially folks all across the
world have looked at what happens then
when you can apply cladding to this this
is a photograph out of pol coms Factory
in Poland what they were studying is
better ways to ship entire building
assemblies including finished facades
from Poland to Brooklyn
what is that path and then what does it
look like when we start to create sub
assemblies in one location that bolt on
and treat things differently again a
theme for us is that we're finally at a
place when we take design and we take
manufacturing and we take construction
we bring it all together means that we
are actually incentivized to push some
of these and it's not that far away from
other industries other industries do
this all the time right if you look at
the creative exploration of how let's
say a mobile home is designed there's
two parts to it there's the effort to
understand look and feel and curve and
shape but there's something that we miss
in the way we typically practice and
that is iterative improvement every
other designed object industry in the
world takes advantage of lessons learned
year over a year over a year what might
it be then to have model years of let's
say apartment units I live in downtown
Chicago downtown Chicago has a massive
housing need we can't fill the housing
need with the way we build things now
actually most cities large and small
have pressures around housing what
happens if you have an iterative process
for model years where year after year
after year you're making improvements on
the previous year's design and you're
doing it at scale you know this is this
idea of sort of partnering with
materials and manufacturers isn't really
new to our profession there's a million
in one examples of it my favorite is
this one so this is the post office
downtown Chicago
it is a Mies designed building one of the
things I really loved about it was that
when this building was first imagined
those pieces of glass didn't exist not
just they themselves but the idea of
making glass that big
didn't exist what that meant was in
order to make a building like this
happen and frankly for a lot of
buildings to happen after it you had to
take the lessons learned in how glass is
floated Mies and the contractor works
with a partner in Pennsylvania to
discover better ways of floating glass
to get to a point where the building
could exist and because of that we've
seen a shift even in the way glass is
produced and manufactured to this day so
I'm gonna do something real quick I'm
gonna jump into some really I was about
to say boring let's not use that a lot
of data points and for those that love
data pay attention for those don't love
data
there's pizza outside and I'll be done
with us in about seven minutes just just
soak that in for a second 13% of the
world GDP this says construction what's
interesting is when you look at GDP
measurements design AEC architecture
engineering construction all lump into
this category
so 13% of the globe's GDP comes directly
with what we design how we think about
it how the pieces come together and this
is it says 1% over the past 20 years but
I want to look at it slightly
differently so this is global
productivity since 1995 if you take this
all the way out to the late 60s and 70s
these lines don't actually change what
you see here in the middle that sort of
bluish gray line that is GDP
productivity year-over-year enhancements
this is since 1995 ok what you see above
it it actually is manufacturing right so
manufacturing is above the total economy
it's out it being out productive or the
rest of the economy is less productive
than manufacturing there we go it's
towards the end of the day the reason
why construction the AEC industry is
pulled out and it's always pulled out
when you measure GDP the reason for that
is because we haven't beaten inflation
in over 55 years so that means that our
industry because of our separation
isolation means
inflation is outpacing our profession
and therefore we have to remove it from
most measurements of GDP or else that's
going to negatively impact the way
countries work and when you take a look
at sort of what that means sort of the
potential to get there you realize that
on a compounding annual growth rate it
is staying rather static another way to
look at it and this comes from a
McKinsey report in 2017 looking at a
productivity potential in the way we
build things so contracting and
collaboration this is one of my favorite
things and I get in trouble for saying
this the 2017 AAA contract documents
strongly suggest that an architect
should never set foot on a construction
site
nor should they ever have any comment on
shop drawings for fear of risk and
liability so I just I want to frame that
just at a high level as we try to
understand what we do there's pressures
around risk and liability in our
industry that strongly suggests we
shouldn't have a part in it I would say
the opposite is true now more than ever
design and engineering should be baked
into every aspect of what we do and back
to design and engineering think about
the tools and platforms that you are
using right now to create your projects
to test your ideas to push them forward
when you move into firms that are deeply
embedded in Revit and the information
that goes into Revit for example but the
separation of how that building gets
built means that that information
whether it's from Revit or CATIA
or any number of other platforms that
information gets lost when you're
actually building something and the
knowledge of how things are built is not
included in the models that you create
procurement and supply chain is really
interesting 178 % potential growth in
just procurement and supply chain for us
what that actually means our Factory
we're able to negotiate with all about a
couple of the unions so 80% of our work
and Chicago is a union town as a bit of
framing 80% of our work is done by a
single manufacturing union the other 20%
are by traditional trades that at first
was an issue to us how do we do
electrical sub assemblies when we don't
have electrical union as part of what we
do what we discovered is actually on
that line right there so most of the
building
that are in planning right now our
digital models are going directly out to
supply chain partners and they're
building entire electrical sub
assemblies that will come a hundred to a
truck to the factory and they'll bolt
right in so there's a little company
called AC Delco AC Delco is a single
largest wiring harness company in the
United States they provide the wiring
harnesses for most automobiles produced
in the United States but you don't think
about them because they're sort of under
the surface they provide a kit a piece
that bolts into a kit of parts on side
execution is a really good one when you
think about the fact that shifting from
a day like today where productivity
actually massively drops if not stalls
on a construction site what happens when
you move it on into a factory technology
is a big piece too as we start to align
many of these pieces you realize that
there's gaps and opportunities to even
change the way we do things we're having
a conversation two weeks ago with
somebody who does power over ethernet
lighting power lighting is really cool
actually it's sort of Ethernet cable
goes in the back and voila you have a
smart intelligent dimmable tunable light
fixture they're also really expensive
unless you look at them at scale you can
imagine a room like this where all these
light fixtures are daisy chained off of
maybe two light fixtures where you're
reducing the amount of infrastructure in
the ceiling massively and at the same
time increasing the quality of the light
that you have so even in our tests right
now we're starting to see almost a 30
percent savings and lighting in our
models based on traditional lighting and
having a tenfold quality increase in the
types of lighting we do because
technology allows that and then my
favorite is capability building when
McKenzie has a little footnote here that
five to seven percent is the sort of I
don't know there's probably other things
that are probably gonna work out by the
time everybody's talking and working
well together let's see let's go to that
one this next one I think is big
well while we're waiting for the next
slide to load this is the reality to
that when you can commit to certain
things you actually massively speed up
the process one of the benefits that
we're seeing right now and some of the
partners that we're working with is that
that speed increase on one particular
project we'll take a look at it that
speed increase from a developer's
perspective saves almost a million
dollars in debt service so all of a
sudden we can build at a faster rate
with better quality materials and do it
in a way that actually changes the way
we operate this goes back to that
earlier point 2.3 million jobs lost
between o 6 and 11 and we're not filling
them up so we're looking for other ways
to do this one of the things you also
notice when you step back and realize
the way technology is disrupted most
industries is that we're not losing jobs
in those industries actually what we're
doing is we're creating new and
different types of jobs my hunch is that
folks in this school are learning how to
do architecture in a bit of a different
way than even folks 10 years or 20 years
50 years ago we're doing it you're
learning new tools to stay relevant as
part of this process this is a diagram
that I color-coded myself I I spent a
lot of time on it so think about this
for a second 48% of the energy that we
produce on this planet goes into
operating buildings do you know that in
19 in the mid 90s I was about to say
1996 I'm not certain so don't quote me
on that we're having a lot of issues
with the amount of pollution coming out
of automobiles as a society a global
society we fought back against that
pollution that was coming out the energy
used by cars and 20 years later the
automobile industry had reduced the
amount of pollution coming out of the
average car by something like 97 percent
and at the same time we have an attitude
that says the car folks they're still
ruining this planet look at all those
cars belching out everything that's
coming out of the back end of them and
that hasn't changed actually that number
has gotten worse so in 20 years an
entire industry reshaped the way they
operate and we we can't really point at
ourselves there's no group of people to
point to to fix that number
this is actually this is a fun one this
is based on Chicago so think about this
for a second this is the amount of waste
thrown out every day from every kitchen
and family room and living room and
bedroom of every house and apartment in
Chicago and that's the amount of trash
that goes out of a construction site
okay so a way to think about it is that
you know one out of every five pieces of
material of twenty percent of new
building materials shipped to site and
paid for go straight to the trash so
think about it like the Giza Tower right
the Giza pyramid right that amount of
trash and I wish for a place like
Chicago that that were correct but it's
not it's actually that it's a T Giza
pyramids of trash a year the other way
to think about this is this is 20% of
the costs hard cost of doing building
every year going straight into the trash
so not only is an economic story but it
is a reality of our environmental
responsibility here's the embedded
version of that diagram that a style of
diagram that I patented 60% of stuff
that we shipped to site is also
packaging so when when truckloads come
to a construction site the vast majority
of what we ship is actually not the
things we want to get to the
construction site in the first place
it's the way we wrap and protect those
things so if I were to go back and
wonder maybe there is a better way to do
it maybe Henry Ford had a good idea when
Henry Ford did the Model T they made
something like 10,000 Model T's and the
reason for it was that they wanted to
get enough scale they wanted to do
enough of them that the cost would go
down that the quality would go up that
all those price points that made the
Model T this amazing thing could
actually play out in real life when we
talked before about sort of modular
homes and trailer homes there is a
certain understanding in our industry in
our profession about the lack of quality
or lack of design but here's the thing
for a planet that's facing massive
crises of affordable housing did you know and this
in the country of New Zealand they have
100
thousand homes they need a build in the
next five years alone just to cover
pent-up demand in Saudi Arabia it's 1.4
million homes in Salt Lake City just the
city alone is 57 thousand homes in a
place like Chicago is just over a
hundred thousand homes we have these
massive crises and maybe there are
different ways that we can handle it
maybe this is not the way we think about
it maybe it's a little bit more like
this what I love about this is this is a
the the Tesla skateboard right so these
are battery packs and motors and running
gear and computers and all the sort of
technical bits that makes a Tesla a
Tesla and a version of this is
underneath that car it's underneath that
car it's underneath that car it's even
underneath their new car what's really
important for us to think about then is
maybe what we're seeing here is there is
power in having design and
intentionality in each one of these
pieces but each one of these pieces is
running on a platform that is
interchangeable that has parts and
pieces that I have been pushed farther
than any other parts and pieces you know
one of the things and we were talking
about this on the drive over here
Tesla's have shifted to these massive
touchscreens for all their controls it
is the vision of the future you can
touch and interact and it's a beautiful
thing the reality that they did that was
because that's wildly cheaper from a
manufacturing perspective if you have a
single display that runs everything is
software versus knobs and widgets and
buttons and flips both from a quality
perspective you can make that thing
faster and from an experience
perspective you can actually add
features by just updating the software
there's ways when this can start to look
not only like a type of housing we could
live in but something that comes out of
a factory instead of something that
looks like this I don't remember why I
had that slide in here I found it and I
liked it I just I loved the creativity
in it I don't even remember if we're
just gonna let it sit there for a second
so I'm gonna leave it with this this is
the
golde masters what we're calling it
right so on the production line this is
the standard unit for a ten story
building that we're working on right now
this was a that the proof that our our
partners our owners our engineering part
one walks through this unit to confirm
that this is exactly what we're building
because the building that we're doing
has a hundred and forty of these units
this also represents maybe what it looks
like to test a lot of new ideas but test
those ideas in ways that are very
similar to what we know right now to
remove some of the stigma and
association that comes from building
things in a factory really interesting
things like this masonry facade is it's
a kingspan product it's a thermally
broken insulated metal panel we get a
high performance building enclosure with
a thin set Belden brick so I'm talking
really specifically about the tectonics
of how the building goes together
but it results in a beautiful masonry
facade facade that can be applied in the
factory the window walls are set
directly into these chassis and can have
any sort of personality or attitude
actually for this building one of things
I want to point out is that this is for
an affordable building we're running
v-tex so a vertical ptex packaged air
conditioning heating units in the facade
here vented directly out to the exterior
that's not the most ideal version for us
right now
but because we tested it out we're now
working with United Technologies and
carrier to say I need something better I
need a better heart and lungs and brain
for a building and if I'm going to be
producing 3000 of them a year I need
something that is super energy efficient
and works within a similar enclosure at
the same time you see that it's up on
posts and that was a really specific
thing each one of these this is actually
two chassis is bolted together that
chassis that we looked at earlier our
maximum tolerance is about a sixteenth
of an inch to put that in a little bit
of perspective sorry a minimum tolerance
is zero inches so when we bolt these
things together we're bolting a moment
frame steel tower together this is a
robust steel chassis and at the same
time we filled it with the rest of
building wood you see poking up the top
there those are registration pins that's
what allows us to hoist these things to
take them and place them on site they
also do something really neat they allow
you when you set the next box on top of
it they Center the boxes pull them tight
and make certain that everything is
registered the way you want it
this technique Julian who designed this
system was working in as he tells it and
so I'm sure it's full of embellishment
he was sitting in the back corner of
shops office when they were working with
Skanska and for City Ratner building the
Brooklyn tower saying it's never gonna
work you have tolerance error issues
you're gonna you're gonna run into some
problems and so he designed this system
and as he was designing this as a
replacement system is if anyone saw
those articles that's when they got to
the 11th floor and they realized the
boxes weren't aligned with each other
the reason for that was because they
were taking construction tolerances from
the earth and and sort of mirroring them
and exacerbating them all the way up so
we wonder then what does it look like
when that is how we do buildings now
back to that example I gave earlier I'd
love to imagine new forms and shapes and
twists and turns and technologies on
buildings for now version 1.0 of what
we're doing is to replace the buildings
we do with much better versions
internally we've made a pledge that by
2025 we're going to do two things one is
that we're only going to be producing
when it's housing Net Zero or net
positive housing and the reason for that
is that when we can start to put
pressure on all the systems when we
start to think about enclosures a little
bit differently we can actually get
there we're not that far away when you
think about everything in harmony at the
same time by 2025 our agenda is that our
good version of product as it were is no
longer affordable housing so one of the
important things about affordable
housing is that that word affordable has
a bunch of baggage to it most typically
the word affordable means massive
subsidization let's take the cost of
what it usually takes to build a home
and shrink it down to what people can
actually pay for it I'm gonna refer back
to Chicago for a second but the typical
affording affordable housing project in
Chicago requires 14 funding sources does
that make sense so forth from tax
financing to credits to read
two grants two actual sort of money
fourteen different places to get all
that money together to do affordable
housing project in San Francisco they
just updated what qualifies for
affordable housing so if you live in San
Francisco as a single person you make
less than one hundred and seventeen
thousand eight hundred dollars a year
you qualify for subsidized affordable
housing okay if you're a family of four
it's almost a quarter of a million
dollars is what it costs before you can
actually go out and buy your own housing
so by 2025 our agenda starting with
Chicago is to remove the word affordable
because back to those other examples
about productivity and efficiency our
expectation is that there's a way to
bring better homes to people and bring
that cost down I just finished the
building home of building a home in
Chicago that I wish I would have waited
a year or two so I could do it this way
and in the basement I have two things
called power walls has anyone seen these
things tesla powerwall they're they're
really awesome they're five and a half
inches thick they look like a piece of
art they're 15 kilowatt backup batteries
and they cost five grand a box five
years ago when I was doing a similar
project that is an eight foot tall
high-voltage container full of tractor
batteries and it cost almost $37,000 so
when I think about that I don't think
about what Tesla did is sort of ruining
the home backup battery industry
actually I think it's the other way
around
they've brought the technology to more
people they brought better designed to
more people they've changed the way we
do it so again when I go back to what
can happen when you align supply chain
when you think about buildings as
products you start to get affordable
housing that looks like this you start
to get affordable housing that looks
like this you start to change the
expected narrative because if I'm doing
three thousand of those countertops it
changes the way a I specify countertops
and B where I get them from if I'm doing
three thousand units of high quality
lighting I can actually change the way I
light things I can use new technologies
that example I gave earlier about the
power over ethernet
the research that we're doing right now
suggests that if it cost me $1 for a
light switch and three to four dollars
for a standard light fixture so that's
five bucks okay cost me ninety five
dollars in labor and conduit and wiring
to connect all those parts in the study
that we're doing with one of our
partners if I switch the
high-performance LEDs it's a twenty
dollar light fixture or a twenty dollar
switch and a thirty dollar light fixture
and ten dollars in labor to put it in so
all of a sudden you're changing the
narrative on how these pieces go
together I just radically increase the
quality of light it's dimmable it's
tunable and at the same time removed the
cost we have a partnership now with MIT
and Autodesk because we believe that
those chassé that I was looking at
before our factory when it's fully up
and running in February is not going to
be making the steel boxes
we've chassé outsourced that to a steel
fabrication shop because what we're
working on right now is back to robot
automated welding solutions we don't
actually want to introduce welding in
our shop until we find the right pieces
and the really great thing about it is
that that technology exists a lot of the
things that we wonder as maybe the next
great thing for how our build our our
industry works already exists out in the
marketplace so buildings like this can
be built entirely off-site this is a
hundred and ten units of affordable
housing it's one story of podium and
five-and-a-half stories of boxes that
are shipped fully finished buildings
like this can happen from beginning to
end in eight months that changes the
game for a lot of people that are hungry
for better design better opportunity and
a place to put their head and in places
like Chicago in places like Salt Lake
City in a downtown urban centers like
right here in Knoxville there's ways
that you can do really interesting
innovative work it looks and smells and
acts and feels very familiar to the
people moving into it and I would argue
it's just the start of a better way so
with that I think I'm going to my phone
says it has a little battery I'm gonna
go back to a hammer and maybe open it up
for any
questions if anybody has any
yes ma'am
that's a real good question so at full
capacity single shift is 150 employees
for us yes not yet because right now
it's it's more performal base than
actually standing up on the ground we're
just getting everything up and running
now so the the analysis suggests 150
employees to produce that number of
units what what we're also looking at
and again maybe I'll frame a little bit
for Chicago Chicago is a Union town
which means that most buildings and
especially affordable buildings that
require subsidization require full union
employment and full union stack to build
them so what we've done is we've
partnered with a couple of the unions
we've navigated a manufacturing labor
agreement and then the important thing
about that is that under a traditional
model if I were doing an indoor
construction site and I needed the top
of this wanna badr Waddell haha that's
where that again
I need the top of this water bottle
taken off I'd have to ask you to do it
because that's not that's not covered
under my Union so we've shifted that
narrative and at the other side to we're
creating a pipeline so we have a
situation in Chicago we have over a
hundred thousand affordable houses that
need to be built and we have some
neighborhoods that are twenty
twenty-five percent unemployment rates
and so we're sitting there with a
massive need to build affordable housing
and a massive need to create jobs and
we're fortunate to find this a bit of a
crossroads there but at that sort of
twelve modules a day that factory will
be producing just about 1.25 1.3 million
square feet of buildings and right now
as we look at what 2019 looks like we're
worried about actually that being enough
for the conversations we've had yeah
yeah that's an interesting question so
we are so we have design in-house we
have manufacturing in-house we have
construction in-house we've done a
couple different things we haven't
brought development in-house yeah and
and on the design side one of the ways
that I frame it is that if you're a
best-in-class designer we partner we've
got a couple cool partnerships but if
you're not best-in-class we're gonna do
that we're not developing yet but one of
our development partners has kind of
said we are because we're now working
with banks to pre finance buildings as
products so that we're covering the
finance end of it and allowing the
developer and and that's primarily on
the affordable housing side we're
basically removing every one of the
barriers to entry on the affordable
housing side but on the larger scale the
six and 10 and 15 story buildings that
we're doing right now we're not the
developer yeah
it's a it's a it's a good question I
this is maybe naivety and sort of
hardheadedness is that our expectation
is that the industry can't continue to
function I don't believe that can
industry can continue to function the
way we do it right now at a large scale
so for me for us we have our sort of
3-year look ahead but frankly I don't
expect the vast majority of sort of
infinitely repeatable products to go
back to a traditional way of doing it
I've been asked a bunch of times about
that one project in New York City the
four city Ratna project that one project
and it didn't work so now what and
here's the thing we're kind of one of
the only industries that says it didn't
work that one time or we tried it in the
80s or we tried it in the 60s so we're
never gonna do it again we're the only
industry that kind of acts that way
unfortunately and at the same time if
you look in New York City New York City
has had something like six or seven
buildings built in this fashion two of
them in New York City or really New York
and four of them from overseas put on a
boat put on a truck right I mentioned
polkam earlier polkam has built
buildings that are in downtown New York
City and now being built in Seattle so
the easiest diagram that I can think of
when we talk about maybe what we see in
the United States is that if you draw a
line around especially it high-rise at
density if you draw a line around the
United States where you see people
building this way is outside of that
line we've mastered and and and one of
the things I get excited about in the
u.s. we've mastered lower rise lower
density wood frame structures examples
not that far from here are really
solving some better solutions for that
being based in Chicago and one of the
reasons why you see steel we use Steel's
that were doing non combustible
high-rise style buildings now that being
said I do have every expectation the
shift to cross laminated and parallel
laminated Timbers exploring new
materials but Chicago Chicago has a
history with this cow who kicked over a
lantern
and burned the city down so for us
building stuff off-site was sort of step
one long-winded way of saying we've
given it a three year horizon but the
demand that we're seeing even before our
factories up and running suggests that
it's sort of it's the industry's
opportunity to lose as it were if San
Francisco and Chicago that's right
it is and the reason for that Chicago is
fortunate because it has unions to
comply with some of the most backwards
code and regulation you can imagine we
have 51 mayors that all do it the
Chicago Way
and I throw air quotes because I think
everybody's heard about politics in
Chicago in one fashion or another so for
us and we have climate to deal with too
so for us it's about getting a process
right and the interesting thing when you
shift to manufacturing focus is that
once we get that process style then
we're starting to have conversations
with other places about where else we
might set up that process for now we're
leveraging all the rules and constraints
of Chicago so that to get it right in
Chicago suggests that it'll be
infinitely easier anywhere else yeah
yeah
yes they did they acquired they acquired
a modular manufacturer in Los Angeles I
would say yes it's a trend now I used to
joke up until they made that
announcement that we'd like to have an
attitude especially in certain sectors
where you sort of you work with somebody
to design an object you buy that object
you swipe your credit card and Amazon
Prime lets you know when it's gonna be
delivered to your doorstep but now that
 amazon's purchased a modular
builder i don't use that example as much
because but yes so oddly enough we've
had conversations with one of the other
organizations that has smart products in
their homes
now that amazon has aligned it that way
if you can think about it bringing in
those smart tools and technologies from
the very fundamental building of a box
does a bunch of really interesting
things from logistics and supply chain
coordination to actually the health and
viability of a building itself and that
sort of data and information is becoming
more and more interesting so you know I
here's the thing that maybe we should
all be considerate of with Amazon is
that everything is an exploratory pilot
which leads to a massive business line I
only say that they announced what the
Amazon ghost store in Seattle a year ago
they propped it up and now they're
building out eight more of those with
plans to build more so it's it's
interesting there's another really
interesting business case katara and i
know if anyone's come across katara  katara 
 was founded by a number of
Silicon Valley investors in a group home
developer on the west coast two and a
half years ago they're valued at one
point two something billion dollars in
two years so in Silicon Valley language
that's considered a unicorn that's the
language around it they're doing
panelized construction so IKEA style
flat-pack construction and maybe the
best examine goes back to you Amazon
that I can use is that it was started by
somebody from tesla
an apple materials person Flextronics
Softbank funding and you know the joke
goes something like a number of tech
people were standing in an office in San
Francisco looking at a construction site
saying I don't know what the hell
they're doing out there
but we could probably do it better and
and there is a reality where that that's
kind of the truth if we all step back
and look at the way we build things we'd
wonder why why we do it that way
so I do see it as a sort of global trend
and I'm not as a designer I'm not scared
about it I think that there are tools
and technologies and materials things
that are happening just three miles away
in advance an additive manufacturing and
insulation that at scale could radically
change the way our buildings work but
they kind of require that scale to get
there yeah
one could argue that over 95% of the
buildings that are built in this damage
have removed the designer from the
process okay
and I don't mean that - sort of like how
that hurts but that's a reality when you
drive around most places you don't see
the buildings that inspire you and
frankly the levers designed to make
experience better there's a lot of crap
out there it's our intention in the same
way that when you look back and you say
that just because I've used it but
somebody like Johnny Ivar mark knew
zamore Coomer shot you don't look at
them and say they're awful designers
because they don't they only produce
mass-produced or you don't look at
automobiles and say that there's no
design soul left in it anymore
Mercedes is a crappy car because they
only produce six different designs a
year I think for designers we have this
perception and concern that we're gonna
be removed from it but again literally
every other designed object in industry
in the world is leveraging to enhance
right to use new materials to use new
technologies and that happens at a
certain scale at least that's my
argument I don't intend to remove
designing I intend frankly to bring more
design to more people you could say that
the sort of the notion of modular or
trailer style homes is one of the most
disrespected aspects of our profession I
would say over the past 40 50 years that
was a solution to bring better homes to
more people that couldn't afford
traditional homes and we look at that as
a slight against design instead of
actually solving a real social need and
my hunch is that most designers
somewhere deep inside are more
interested in solving great social needs
through design than fighting for change
orders on a construction site so no I
don't I don't think it removes design
from the conversation I think it
actually probably gives design a
driver's seat in the dialogue yeah
it's a really good point how do you have
pride in your work if if you're doing
out in a factory line and there are
examples of factory lines that are
soulless soul-sucking
jobs and there's examples of factory
lines where the culture is really
wonderful where people feel like they're
changing the industry there's a company
called hem HEM they it's a Swedish
company that makes furniture ok the
individual the designer that founded
that company realized a couple of things
half of their design efforts we're going
to designing IKEA flat-packed furniture
so bringing more design to more people
right and the other half so $100 dining
room table to a family that needed $100
dining room table that same designer is
also designing $10,000 beautiful custom
bespoke dining tables that would sell in
high-end furniture galleries and what
they realized was that there's something
to be said for the amount of design work
that goes into solving and the
craftsmanship that goes into solving for
a table that can go in a box and be
shipped from IKEA to anybody's home that
didn't exist it was sort of designed for
designs sake on this side hem was
started to sort of find that place in
the middle maybe the point of that
example is there are hundreds of
thousands of people employed in the
construction process who do not feel
like they have a voice or a soul or a
position somebody who eats their lunch
in a pickup truck by themselves and
works by themselves or with crews or is
visiting 15 different sites I mean for
me if I step back and look at that that
is not a path that is about sort of
treating them as noble carpenters maybe
the way we'd like to think about it so
maybe that's a way that we're combating it  and this is one of things I
love about organization we have
leadership and design manufacturing
construction we also have a leadership
in people and culture and that
individual can veto any business
decision we make if it negatively
impacts the people that work for us it's
it's an interesting price too
pay but again it's setting the right
culture so that people have the pride of
ownership I
truth be told we'll have to wait and see
though - and really understand how it
works and how it unfolds but as I
mentioned before we're working with the
City Colleges of Chicago they're the the
trade schools and the community colleges
in Chicago the daily school for advanced
manufacturing we're partnering with them
because my hunch is that I can take a
20th century pipe fitter and she's
worked out in the fields for 40 years
she knows her way around a wrench and I
consider next to a 21st century pipe
fitter and that 21st century pipe fitter
may actually be driving a computer mouse
it runs an automated piece of equipment
so it's it's less about replacing jobs
it's less about dignifying the jobs
it's really just rethinking what the
next version of those might be
yep yeah it's a really good question so
what we're doing on this building is
that every unit has lights water
electricity everything is sort of
prepackaged we're trying to figure out
and we're working with carry on that
sort of heart-lung brains package on the
deal but they're connected to fresh air
supply for the whole building so part of
it is to make the most efficient box we
humanly can and then understand how they
work in concert with each other so to
provide a little bit more resiliency
we're going back and forth in the first
couple of projects one is like this one
is heavily focused on autonomous boxes
and the other building that's being
designed at the same time is heavily
focused on sort of shared cross platform
systems - it's it's a bit of a test for
us to see what are the efficiencies in
each one of the models and the
inefficiencies does it work that's right
yep that's right and that's fairly
typical in mid high-rise construction
at least in Chicago right so well that's
kind of where we're testing all right so
what are the redundancies now example on
this building we have continuous exhaust
out of all the bathrooms and that goes
into a heat recovery unit the pressure
as is the staircase is the staircase is
pressurized the corridors corridors back
pressurize the unit so we originally
tried to put all that into every unit
right full fresh air and take in each
unit we weren't getting the same energy
efficiencies that we do when we take a
whole building model but the packaged
fan foil units made a bunch more sense
in each and every unit
yep yep that's correct yeah so what
typically would happen this is a fairly
busy road downtown Chicago this is a
couple blocks from our office a couple
blocks from downtown
the trucks do not fly although it looks
like they're entering they're showing to
be flying normally we'd shut off the
sidewalk in that first parking lane for
a project like this about 14 months we
shutter down what we're gonna do now is
actually the site doesn't need to take
any of the street or right-of-way for
the podium the site and the podium are
built traditionally it's a cast-in-place
foundation cast-in-place podium with
post-tension slab on top that allows us
to put leveling and centering plates and
then eight modules a day show up and get
dropped on so the time that we actually
close down that street is not 14 months
it'll probably be about five and a half
weeks because what we're doing is we are
and actually this came in one of the
reviews that we were doing a little bit
earlier today we were originally trying
to design without any logistics vehicles
trying to stay within our right not have
escort vehicles we switched to 15 foot
wide modules in Chicago which require
two escorts see the Chicago allows us to
gain up to four trucks between escorts
so what we lost in we we added another
escort vehicle which is 500 bucks a day
for us we gained in much more efficiency
and getting more buildings set at a
single time it also let us create single
unit boxes to
yeah we have in and I'll use it sort of
that example my home real quick I just
built it downtown Chicago it's a net
positive infill house what we did on it
is what we said was that I switched
almost 90 percent of the electrical load
in the house to a separate set so
chicago everything runs in conduit metal
pipe do you run the wires through see
not 70 90 percent of our wiring is all
low-voltage because it already is your
LED bulbs are low-voltage my wife and I
had this conversation our TVs low
voltage is just as a transformer our
hair dryers are low voltage they also
just have transformers on almost
everything was so we ran it all low
voltage so that we can go to a single
high efficiency transformer in the
basement the reason for that and the
reason why we went to a high efficiency
transformer is because we're still
working through the city of Chicago to
get the PV array on our roof once we
have the PV array we just got rid of
that 35% efficiency loss that you get by
converting from direct current sunlight
to alternating current hundred and ten
volt so I say that as an interesting
example that we're testing right now
with a couple of partners to say if I
can shift to all low voltage direct
current systems if I can now work with
our appliance partners to make low
voltage direct current systems now I
have no transmission loss I have no
transition loss I can actually gather
Sun directly on the roof I I gave on my
house is an important one because this
is downtown Chicago where annualized sum
average is 3.1
two hours of Sun a day what we're
starting to say is all right it's not
just making each piece equipment more
efficient but how are they all working
together and then how are we finding the
next piece in the inefficiency slide so
you hit a good point we switched from
incandescent to LEDs right everyone is
using LEDs now and while they have their
energy rating it's massively reduced
against incandescent we're still losing
a lot of energy in that transfer we went
from very energy consuming pcs desktop
PCs that pulled a lot of power out of
the wall to stuff like this and my iPad
which doesn't use nearly the amount of
energy into your point I used to sit at
my personal desktop for an hour a day
maybe versus having these things devices
on at all time so for us we're trying to
navigate all those how all those streams
go together we have a wonder with a
couple of our partners that if I can do
water heating cooling air heating and
cooling power storage all on a combined
unit it does two things for me I can
reduce the footprint such that solar
power will charge it and also I can
start to produce solutions that don't
have to go and brand new buildings they
can now go in renovations and adaptive
reuse but you're exactly right we keep
on making things better and then we
quickly spend the capital that we make
so we get more energy efficient and then
we go out like my eight-year-old and
spend his allowance as soon as humanly
possible on more stuff
yeah yep right right no you're exactly
right that heat can then go into heating
hot water can actually go to geothermal
based heat batteries that are stored
till late all sorts of things that we're
not doing right now we've moved the
inefficiency to another same thing with
electric cars we've moved the
inefficiency to somewhere else and
haven't quite solved it right I think
about I'm gonna use Chicago one last
time my electrical company is paying for
my house to be 100% solar the reason for
it is that it's cheaper to provide
$20,000 in solar panel on my house than
the upgrade the infrastructure that they
have to upgrade to provide that amount
of electricity times a hundred thousand
people it is you're exactly right the
generation piece has to be linked
hand-in-hand and we're hoping that by
better aligning a lot of the parts and
pieces we can actually have more cogent
argument for why
yes ma'am so the units right now what
we're doing the units are about 95%
complete in the factory it's only final
connections that happen in the field and
so we've moved all those connections so
they vertically stack so we make those
connections floor by floor corridors are
corridor racks so they're horizontal
infrastructure so we stack up sort of a
full floor and then we drop racks in
place they become the floor of that
level and the ceiling of the level below
all the units tie into that you sort of
think about it as sort of a backbone of
the building facades on this particular
one everything but the wood screening is
shipped on the module and that's a lie
that sort of thin-set brick that I was
showing you we're doing a hold off on
that brick so when we join these
together we can do a final tape and seam
and then put the last pieces in place
the stair towers are prefabricated with
stairs fully finished stairs in them
except for the last rise and run that
are on hinge so we can stack them and
then sort of clip them all together and
this is actually one of my favorite
stories we've been talking with three
elevator manufacturers about
prefabricating elevator shafts in the
field one of the three said we could put
entire elevators in the factory with
your tolerances another one said we can
look at that over time and the third one
said elevators are the most accurate
pieces of equipment in a building so
there's no way that your tolerances
could be as good as ours and I responded
with what are your tolerances and they
said roughly 3/16 of an inch per floor I
said that's great
you know our test models are now showing
1/16 that's our test ax r and they said
well that's impossible that doesn't
exist in the building trade so we're not
going to do it I happen to walk out of
that meeting and and they've been asking
me ever since they've solved it but I
bring that up because now and and this
is not for next year this may be three
four five years out we're now talking
with a couple of tower crane companies
about building entire elevator shafts
putting a tower crane on top of it using
it as they as the tower of the tower
crane putting a boom on
and running that as a skip lift so even
before the building happens in the
modeling the structural modeling we're
about we can do about a 20-story
building where we just build a 20-story
elevator shaft put a boom on top and
then build a building around it so for
us as much as humanly possible for the
first half a dozen buildings we have in
design right now the bigger ones over
100 unit buildings were shipping a
chassis out to one of our manufacturing
or mechanical partners and they're
building entire heating cooling plants
in a box doesn't go back to our shop it
goes straight to the site where it gets
clipped into the building as well so for
us and again it's it's really driven by
the environments that we're in the more
work I get that shipping air has some
money to it but the more work I push out
to the field the more opportunities I
have for failure I imagine the work that
was done on some of the projects
yesterday when it wasn't down pouring or
let's say Friday when it wasn't down
pouring versus today means that there's
gonna be some issues many of which we'll
never know until down the road something
fails so for us as much as humanly
possible in the factory
