Author's Forum: Building an Affordable House

Rob Studville: Welcome to "On the Park Bench" square conversation, brought to you by the Congress for the New Urbanism. "On the Park Bench" presents interactive conversations with thought leaders in new urbanism and allied industries related to the built environment. Today, we have an author's forum: "Building an Affordable House, Second Edition," with author Fernando Paj. The interviewer is myself, Rob Studville, and I'm really looking forward to this conversation today. So, share your thoughts on #ontheparkbench, www.tinyurl.com/otpb-feedback. Today, we have a home builder and author, Fernando Paj. He has developed affordable housing in California, the Midwest, and the Mountain States. His projects have won numerous awards, including the Green Building Single Family House of the Year and the Workforce Housing Award from the National Association of Homebuilders. He is the author of several books on affordable housing and is an urbanist who has become a familiar figure at CNU, often speaking from a developer's perspective. He is currently working with Andreas Duany on the design of neighborhoods for Latino communities. Today, we're discussing "Building an Affordable House, Second Edition: Trade Secrets to High-Value, Low-Cost Construction." This book was an ambitious project when the first edition came out in 2005. Since then, Fernando has become immersed in the New Urbanism and has incorporated much of what he's learned into the new edition. More importantly, affordable housing has become far more urgent in recent years. Our nation has gone through massive economic changes, and no housing issue is more important than affordable housing today. As I write in my recent review, this book is refreshingly free of jargon and dogma. I think it's a must-read for small developers, or really any developers. It provides a foundation for the choices that you have in reducing cost while retaining quality. I'm Rob Studville, editor of CNU's Public Square online journal. First, there's going to be a presentation by Fernando, then a brief discussion with Fernando and myself, and then Q&A from the audience. So, please be ready to use the Q&A function of Zoom to ask your questions as they occur to you. So, welcome to "On the Park Bench." I'm going to pass this along to you for a presentation. Hmm. Fernando Paj: Well, thank you very much, Rob. I really appreciate the introduction and your absolutely wonderful review that you did of the book. A very intelligent review, perhaps the most intelligent review I have ever seen of the book. So, thank you very much for that. And I'm going to start the slideshow here at the beginning this time. Thank you, and that's what a picture you chose from my image here at the introduction. But thank you very much for this opportunity. This is a great audience, and I sure appreciate everyone that's attending. And thank you, Hilary, for the very nice comment in the chat. Just by way of self-credentialing a little bit for those of you that don't know me: I have been in the sort of home building world for a good 40 years. You're never supposed to cop to more than 20 years, you know, that discredits you immediately when you go beyond 20 years. But since my first book was published 20 years ago, it'd be hard for me to pull that one off. I have always been doing affordable home building primarily, not because I aimed at that when I started out, but simply because I wasn't very wealthy. I was poor, so all the projects I did were on the poor man's budget, including building my first house in a very sketchy neighborhood in Los Angeles, and that's where I began. Rob Studville: Fernando, did you put your slides up? Fernando Paj: My slides are up. They should be. I thought I was sharing my screen, but... Let me go back to screen share. Let's see. Rob Studville: I didn't want them to miss the first slide. Fernando Paj: Okay, I will go all the way back to the beginning then. For some reason, I... little... hark! Is of all the different things going on at the screen at one time. So, I'm looking here for the... for the... There we go! Start all over again. There you go! Are you seeing my first slide, or are you seeing... Rob Studville: I was seeing the first slide, but I'm seeing your whole window. So, yeah, okay. You need to start the slideshow. Fernando Paj: Yeah, let's start the slideshow. There we go! There we go. Is that right now? Good! That is. I apologize. I actually hate it when presenters aren't ready and know what they're doing, and usually I do. But, you know... So, as I was saying, by way of self-credentialing, I've spent a long time in the building trades since I was young. And I found one day when I was developing in Los Angeles that a lot of my friends and colleagues were really progressing in their careers, building very expensive homes, tearing down million-dollar homes to build ten-million-dollar homes in Santa Monica. And I was jealous, you know, it was like, "Wow, I'm doing these little crummy little houses in the Mexican neighborhood, and these guys are so far ahead of me." Until a great recession came in about 1989, '90, and they were all wiped out. American Beauty Homes, a big developer, wiped out. And I wasn't. I was still building and going on. And at that point, I realized, you know, well, maybe what I'm doing isn't such a bad idea. Maybe it's actually a good business plan. And so, I started doing it very consciously, looking for inexpensive land, building inexpensive homes, and selling them. And I actually got pretty good at it. Eventually, a recession came to Los Angeles. I moved to the Midwest. I had never actually built for white people. I was always in kind of a Hispanic context, and I learned how to build for white people by going to a group out of Michigan that had built a very inexpensive house, a $90,000 house. Why? Well, because the realtors challenged the home builders in this city, saying, "Hey, we've got the million-dollar house in our town, we've got all these high-end homes, but what we really need is a $90,000 house." The home builder said, "It can't be done." And so, the realtors published in the newspaper the challenge: "Do it!" And they got together a group of home builders and tradespeople and designed a $90,000 house. And after they did that, one of the guys, the guy who kind of acted as general contractor of the house, started building it all the time and doing quite well with it. He discovered that it was much easier to build three or four of these than one big one. And I went and met with him. He lent me his plans. I took those plans, I modified them a bit, and I began to build. Why? Well, because they were kind of Midwestern-type plans, and it was a four-bedroom, 1,600 square foot house that I developed, improved on the plan, did the same practice that they had done, got all my subs together to work on the plan and see how to do it. And we were selling it for $75,000 a year at the time. Well, Fine Homebuilding, a magazine I wrote for because I'd been writing for magazines for a very long time, they were interested in how I did it. "Well, how do you build a house for $75,000?" And one of their editors came to visit me, and I explained to him the whole process, and they were really entranced by it, by the thinking, by the results. They didn't like the house in particular, but they really liked the approach. They asked me to write an article about it. They put that article in the back and shortened it, thinking it wouldn't really appeal to their readers. Well, it turns out it was the second most popular article they'd ever published. The most popular article they ever published was "The Not So Big House" by Sarah Susanka that launched her book series. Well, the promise of "The Not So Big House" was a fantastically beautiful home that wouldn't cost that much, right? That was the promise. It wasn't true, because Sarah's houses actually cost a lot of money to build, but that was kind of the premise with "The Not So Big House": spend it on beautiful things rather than on square footage. Well, it turns out it wasn't that simple, but my house was really designed to be affordable, and it became the second most popular article. A lot of people wrote in. So, they hired me, and they said, "Hey, we'd like you to do a book on it." Realizing I couldn't do a whole book on just what I did, I coached them into giving me a travel budget, and I went to every major market in the United States, and I looked in the newspaper to find who was selling the least expensive homes in the city. And I went and visited him and talked to him, and sometimes they had a value engineering vice president or a whole department dedicated to reducing cost. And I learned a lot of techniques from these guys on how to do it, which I incorporated and added to what I had been doing myself. Now, that was 20 years ago. And I, you know, I've done a lot of living now and then, and one of the big things was my engagement with the Congress for the New Urbanism. New organization. This led to my learning a lot and beginning to think a lot more about land use and neighborhood planning, and how that affordable house integrates into, you know, the balance of its context within the neighborhood. And one of the things that came out of that is a book that I wrote with Honorum, called "Architectural Design for Traditional Neighborhoods," and it really could be called "Traditional Neighborhoods on the Cheap," if you want, because it really does kind of strip down what are the essentials and how they can be accomplished affordably. And it's a book that came out of inspiration of Corky's work with Dr. Horton, who had a very hard time understanding New Urbanism, as Corky had tried to explain it to him. Corky is an architect and urbanist out of Boulder, Colorado, teaches at the University of Colorado, and has as his clientele some national builders. And this little book, he thought, would help him explain. It's like, you know, it's about the length of a romance novel and written in plain language, and so the builders could digest the concepts. And I think, you know, between the two books which I have up on the screen, it kind of encapsulates what's happened between the first edition and the second edition, and where I focus more on design, in addition to all of the trade secrets, if you will, that go into building an affordable house. So, that article that I told you about, the one that came out in Fine Homebuilding, I did in 2001. By 2005, I'd finished the first edition of the book. And in 2008, I attended my first CNU in Austin. And I had my first speaking gig at CNU in 2009, the following year, and that's when I met Andres Duany. I got a call. I said, "You're going to be on a panel, but you're going to go right after Andres. Nobody can go after Andres, you're going to have to be in your best game. You have to put everything down because he's so good, and nobody... if you go after him, you're just done." Well, I got the call about 45 minutes before I had to speak, so I didn't really have a chance to do a lot of prep work. I just went and I did it, and I blew the room away. And afterwards, Andres came up to me and said, "Who are you, and I want to talk to you." And at that point began a relationship which has lasted since 2009 to date. And we collaborate now on a lot of things, in particular, on construction. Construction technology is what I focus on when I give this presentation to home builders. And when I say construction technology, I mean really nuts and bolts stuff. I talk about alternative foundation systems, about advanced framing, about alternative mechanical, electrical, and plumbing systems, about how to achieve high-end looking finishes on the cheap. And I really go into that kind of detail. And I'll show you just an example, because I'm not going to do that today. We're going to talk about design. We're not going to talk about trades, but I want to just give you kind of an example of what I'll do. For example, if I'm talking about framing. Okay, that's a very wasteful area in construction, as you can see in the picture. When I begin talking about framing, I talk, of course, about advanced framing techniques, what we used to call OVE, or Optimal Value Engineering. Advanced framing is a lumber-sparing approach to framing a building where you use less lumber. You use less lumber because you space studs out, like 24 inches rather than 16. You don't use the same header—that's the lintel or the structural element above windows and doors—you don't use the same one throughout the house. You make sure that the one you're using on a particular opening is the one that the structure requires, and no more. You do a lot of things to use a lot less lumber. Okay. So, it's a lumber-sparing technique that was developed in the 1970s. And although now it's embraced by green builders, it wasn't a green building technique. In the 1970s, we had the same problem we have today, which is that interest rates were very high. They weren't high like 6% like they are today; they were 18%. And builders really had to figure out how to deliver a very inexpensive house for anyone to be able to buy one. So, they did a lot of research at the time—the National Association of Home Builders, HUD, etc.—and came up with many, many, many great techniques at reducing the cost of housing. Now, some of those techniques today are green building techniques. They weren't originally; they were building. We've gone pretty far with that, and it's actually a fairly well-known approach now to framing. But there's more that can be done, and there's a lot of things that are in the codes and the building codes that neither builders nor developers use, and for the most part, architects completely ignore. And one expensive element in a house is what you're looking at right now, which is the sheathing, the exterior, the exterior wood sheathing. In this case, it's oriented strand board, OSB, that's the most common. Okay. That's very expensive. It costs a lot of money to put all that plywood, if you will, on the house, especially when that skyrockets in price. It's a commodity, and it does occasionally do that. It's like gold, you know, it goes up and down in value, and when there's a big storm and a lot of people are buying it to board up windows and protect their projects, and roofs get blown off in the storm, OSB or plywood sheathing goes way up in price. So, what do you do? Well, a typical wall construction is done with 2x6 studs, with a layer of sheathing—OSB is the most common—and then an R-value insulation. This is a common wall for the USA, and it costs about $60, more or less, a lineal foot. My wall, the approach that I use and teach in the class with the builders, is a 2x4 wall, a traditional 2x4 wall. Instead of wood sheathing, I use a foam sheet with an R-5. In other words, a foam sheathing with an insulating value such that when I put the insulation in that 2x4 wall, I only need to use a smaller level of insulation, or R-15. Between the R-15 and the R-5, I get R-20. I'm actually exceeding the standard wall, and plus that exterior layer of insulation works much better than just between the studs and the wall cavity. So, this is a great wall from an insulation perspective. But you ask, "Where's the structure?" Because that gives a lot of structure to the house. It gives us its shear value, its resistance to wind and earth movement and things like that. It's a great material, it's a great way to build a house. Well, here's something that you can look up. It's in the code, but very few builders—I've never actually met anyone but some engineers that know about it—which is that you could use half-inch drywall for the same purpose. You just have a different schedule. Normally, the drywall is nailed up at 16 inches on center, set the nails. Well, we set it at 7 inches instead. It's in the IRC, the International Residential Code. There's a table that shows you, it's called the Gypsum Board Bracewall Method. I use technique, but it's method in the code. There's a lot that you'll find in the codes that architects typically ignore that really can help you reduce the price of a house. You're going to put drywall up on the interior walls anyway. Just nail it a little bit more tightly, and you can omit the OSB or the exterior. Now, this is something that's done in places like New Zealand and Canada commonly, but here in the United States, for some reason, it's done very rarely. People ignore it. So, this is the sort of thing I will teach builders: you know, how to mine the codes for labor-saving and material-saving techniques. We always think, "Oh, the codes are getting harder, they're getting more complicated, they keep at every three years they add more." It's true, they are getting more complicated, but that's because it has a lot more options. And it's in those options that you find affordability. It takes a little bit to use this type of a technique. You have to know where the, you know, where the wind pressures are going to be on the house, and exactly how to, you know, design your wall bracing. You have to know how to deal with the portal walls. There's a number of things that go into it. It's not just so simple as nailing up the drywall with 7-inch on-centers. But I teach you how to do that in the course, and then I show you how much money I have saved on a typical house just from the alternative of going with foam board instead of OSB. In other words, going with an inexpensive foam sheathing instead of the wood-based sheathing. And it's a significant amount of money. And this is just one trade and one element in the trade. If you begin to add them all up—foundations, all the different things you can do with the framing, with the mechanicals, with the plumbing, with the electrical—well, you end up saving a lot of money on a house. And people are always telling me, and I've heard again and again, "Oh, it makes no difference. This approach really makes no difference. It's really all about land value. It's really all about zoning. It's really all about, 'We have to put an ADU.'" Well, that's great, but it's not true. You can do a lot in the hard cost construction area to reduce the price of a house, or just the cost of a house. But we're not going to talk about the trades. We're going to talk a little bit about the kind of the design approach. First of all, we've got a problem we're all very aware of in the last, like, three, four years: house prices have gone up like 40%. There's a big decline in housing starts, especially for the lower-priced houses. There's almost no construction of lower-priced houses, although builders have started to because nobody's able to buy their expensive houses; they've run out of rich people. And so, they're having to find that really large market of people that aren't so rich. And the Urban Land Institute, from where I got these little quotes, thinks that the way to go about it is to explore alternative construction techniques. And they emphasize things like off-site or construction, which I'll address briefly, but for me, that isn't it. It really is exploring alternative techniques. Sometimes they're not so alternative; sometimes they're techniques that we've just forgotten about. Now, one thing that folks have been doing is, of course, building much smaller homes, and here you have some examples. Now, I bet you can guess who the developer is and builder of these homes. This is from Lennar, one of the biggest home builders in the nation. And they build these, I don't know, I assume they build them all over the country, but I've seen them in Austin and Houston and San Antonio. They're on $300,000 in Austin, $200,000 in the Houston area. They're on very narrow lots. They're very narrow homes. They're quite small, I think, like maybe 900 square feet, 800 square feet between both floors. Very simply built. They're not a super attractive house, but you know what? A big market for them. No garage. You see just a driveway to park your car. So, parked cars all in front of these houses in the neighborhood. Exactly what a New Urbanist would not like. However, there is such a strong need for affordable housing that not only is it a good market opportunity, it's, I think, a moral imperative. I think it's a moral imperative to provide affordable homes. And the smaller houses, people have been surprised to see that you could build homes at 800 square feet, and they sell. There's a fellow in North Carolina just interviewed and did an article on that. He's built some net-zero homes at around $200,000, or 800 square feet each. And the, you know, the city council, seeing that nobody's going to buy an 800 square foot house without a garage... Well, guess what? They sold out. This has been proven again and again that price drives the market. Because today, it is so difficult for people to get into a house that, like I said, this is a moral responsibility to provide homes that people can afford. If you have a nation of people starving, you don't get too prissy about the quality of the food, the local ingredients, the fine dining has to go out when people are starving. And I see people are starving for housing in the United States, which is why I advocate for and focus on affordable housing. And the first thing you have to avoid if you want to build affordable housing is what I call "cheap-washing." Cheap-washing, I mean, is using a strategy where you think of some very complicated story to explain why your house is very inexpensive, even though it's expensive. So, for example, we have a $450,000 townhouse, a rowhouse, a small one. And the developer and the architect present a big, you know, lecture on it. They're at CNU, and they're explaining, "Well, these townhouses are right near transit. They're very close to rail, so they're really inexpensive because you could live in this house without a car. And if you don't have a car, you've got a $10,000 savings per year, because that's about the average annual cost of a car. At $10,000 a year over a 30-year mortgage, that's $300,000 you've saved. That means this house is not $450,000, it's $150,000. Not only that, but you're going to be so healthy walking back and forth to the train station in the blizzard that you're going to save $150,000 in medical expenses. Free!" That's what I call cheap-washing. It's untrue. It's a lie. The people who could afford that $450,000 house, for one, are probably going to have a car, may not use the train all that much. And the people who maybe could benefit from all those things like the rail can't afford to buy the $450,000 house. People that don't have a car and need public transportation need cheap housing, not expensive housing with an elaborate story about justifying the price. So, if you want affordable housing, it has to be your goal. You have to make it so. The price of the house is the main focus. You can have some other focuses, but you can't meet all the goals at once to the same degree. In other words, you can't have the most energy-efficient house in the world with the best equipment and have it be affordable. However, you could have a goal like, "You know what? I really want my affordable houses to also be as energy-efficient as possible." But affordability is what's driving it. So, it is efficient as possible. And there's a lot of things that do double duty that are inexpensive and help with energy efficiency, such as insulation. You can add insulation for pennies, and yet it does have a big impact in terms of the energy efficiency. So, you can't meet all your goals at once. It can't be the most beautiful, most energy-efficient, most luxurious houses in the world, and at the same time be affordable. But you can have more than one criteria. However, you have to have weighted criteria: what's important? So, list your values and order. That's a value. Engineering value is what you want. You want it beautiful? That's your value. Now you try and figure out how to do it beautiful at the lowest possible cost, the most efficient way possible. Now, for me, my goals in particular, when I built, affordability is number one. I'm after the lowest cost. That is my bottom line, that's my North Star. But because I sell to human beings and not chickens or barnyard animals, I have to make it marketable. It has to be pretty enough. It has to be something, you know, a homeowner can be proud of. You know, you want to invite your friends over and have them say, "Oh, what a nice house!" So, it has to be pretty enough, it has to be remarkable. And it also has to be durable. Why? I am not into durability as a moral thing. I'm not because, "Oh, I want to build houses that last 300 years," in other words, like Steve Mouzon. That is not my objective. I have a very, very practical objective for durability, which is that warranty calls will eat your lunch. They will destroy your profit. If you build a cheap house that, on top of being cheap, is poorly built where you haven't exercised... you're going to have a lousy house, too. You see, if you're going to use, say, materials where you use the minimum amount of concrete, the minimum amount of lumber, the minimum amount of structure, you better make sure that structure is in the right place. You better make sure that concrete is poured under the right conditions. You have to exercise quality control, or you will spend any little profit you made, and more, on warranty calls. So, I have a very practical reason for durability, and it's not moral, it's not my ideal. Now, steps to achieving affordability: you have to design for it, you have to collaborate towards it. Of course, you have to use the new land strategies that are becoming more and more available throughout the country, and you have to build affordably. To build affordably, you have to design affordably. This is an example of a design technique that I use, which is, I get the ratio of the exterior wall surface to the interior volume that that wall surface, exterior surface, is enclosing or covering. You see two sort of houses, 625 square feet. One of them is a square, and the square is 25 lineal feet per side. And the other's a rectangle, 50 feet by 12 and a half. A weird rectangular house, but I'm just trying to make a point here. They both enclose the same area, and yet one, the rectangle, uses 25% more exterior wall. That's 25% more siding, 25% more insulation, 25% more sheathing, 25% more drywall, 25% more of everything. So, it's a lot more expensive. Now, not all the houses are that simple, so I do a simple thing, which is, I measure the exterior wall area of the house. I do this four times all around, you know, length times height. And then I divide that by the interior square footage. So, in my example, I divide the square footage of the house by the square footage of the exterior wall, and I come up with a ratio or a result of 0.78. That means that every 0.78 square foot of exterior wall will cover 0.78 square feet of interior floor area. In the square, you'll see I'm covering less interior floor for each square foot of exterior wall. I'm trying to get as close to one as I can: one square foot of exterior wall to one square foot of interior wall area. It's impossible to do unless you're building a sphere, and a sphere is very difficult to build. They don't sell well, the geodesic domes haven't really taken off, as far as I know. And so, you end up with just simple geometric shapes, like squares and rectangles. And one of my favorite shapes, or a house that I built again and again using this footprint, is 0.88. That's a very good ratio. I'm assured, just by achieving good wall-to-wall ratio, that I am designing an affordable house. The next thing I do after I've got my shell—I haven't laid out the bedrooms, or the kitchen, or my beautiful living room, none of that—I've just got a shell now, a footprint. The next thing I do is, well, I go to the part of the house, or what I call the utility core, which is where all of the heavy appliances, the furnaces, where your plumbing, everything is going to be, and I centralize them. And I centralize them in what I call the utility core. And if you've ever seen the movie "The Matrix," one part where they're fighting between walls in an old building, old buildings used to have utility corridors or double walls where all the pipes and all the heavy stuff ran. Why? Well, because they were using cast iron sewer pipes, they were using galvanized metal water pipes, they were using big old steel ducts. And so, this stuff was very difficult to snake around a house like we can do today with the flexible water pipe and with the easy plastic plumbing and all. So, right now we can have a bathroom here, throw a bathroom over there, put the toilet in the other room, send the water heater over into the garage, spread everything. And that adds a lot of cost to the construction, a lot of long runs, expensive electrical copper lines, etc. So, I concentrate all of that in one central location which I call the utility core. Now, I want you to look at the house for a minute. Three squares there on the bottom right. That is a pretty house, right? That is the house that won the Green Built Demonstration House of the Year, and I designed that with Torgus. We built it on a free lot in Omaha. I used all the techniques in the book, and I sold a house at cost for $90,000. It was a demonstration house to show that it can be done. But that's a very pretty house at a very low cost. If we look now, there's another technique you can use, which is to group all the wet areas, all the wet areas. I call it the "wet room rectangle." We're all familiar with back-to-back plumbing, right? You have to have the toilets back-to-back, saves you 50 bucks. But if you group all of the bathroom, all the wet areas, the kitchens, in one tiny square, you actually make a square. If I had, say, the water out in the garage, I would extend my rectangle all the way out to where that water was; it would become gigantic in comparison to the square footage of the house. There's a fellow who invented this approach, his name was Gary Klein, and he's a hot water expert, and he invented it to cut down the waste, the wasted water that we do when we turn on the faucet and wait for the water to heat up in order to shave or brush our teeth. So, he found a technique to reduce that wait by really tightening up, and he calls it the "hot water," but I call it the "wet room rectangle" because it applies to all plumbing. You're really reducing the amount of plumbing that's required, the length of it. And he discovered that 67%, if you could reduce your plumbing area to 67% of the total square footage, it was kind of a sweet spot that worked really pretty well. So, techniques like this that are all about design. We haven't talked about what type of pipe you're using or what kind of fixtures; we're just talking about how to lay things out. So, I've laid out the shell of the house to make it affordable by heavy use of things like electrical panels and water heaters and furnaces, and then tightened up all the plumbing areas and the areas that use, you know, a lot of pipe. Tighten these all up. These are all design. And this is before I begin thinking about the beautiful bedroom, and where the window should go, and how large the closet should be. And this is the kind of discipline you have to have to build an affordable house. Greenhouses start at half a million. You know, you can actually build houses for under $100,000 if you focus on all of these things that I'm talking about. You have to also get the collaboration of everyone you work with, because your subs do not think in terms of, "Oh, I got a lot less pipe in this house, I can charge them less." No, they use rules of thumb. "Okay, we got two toilets at $3,200 a toilet. We got three sinks that..." So, in other words, they use just fixture values. You have to convince them to actually think in terms of materials and labor. And so, you have to find people to collaborate with. You have to get them on board, and the main ones to get on board, believe it or not, you know, the framer's important. Everyone always brings the framer at the outset, and the framer's important, but I bring them last. The ones I bring on first are my plumber, heating and air, and my electrician. They're also the smartest guys on the crew. They're the ones you can actually talk to and have a reasonable conversation with. And they're also the most skilled. So, they're the most expensive. These are the ones that make a good hourly wage. They're often even somewhat sophisticated because they've been through apprenticeship programs. They kind of understand profit and things like that. So, these are the guys to bring on board first. And in that discussion, that's in the cartoon there, I'm discussing going from a gas-electric house to an all-electric house way, way before all-electric was cool. In fact, when I did that, I did it because it costs less to build, and I use an electric furnace. And I published that article in Fine Homebuilding. A reader wrote and said, "Hey, you may be building the houses cheap, and you may be saving money, but you're saddling your poor buyers with these horrendous utility bills." And I thought, "Maybe the guy's right. Maybe I am. Maybe I'm the worst of the worst." So, I called the utility company, the electrical company, and said, "How do my houses compare?" And they had all the addresses, and they ran some numbers, and it turned out that my houses were actually among the lowest electric bills in the city, even though they were all-electric. Why? Because they were very well insulated, which is cheap. They were very well sealed, which is cheap. I did a lot of cheap things so that I could do other cheap things, and in the long run, balance the two so that I could save money overall. Just in terms, very quickly, about the prefab. You know, the idea of volumetric building, which is modular, where you take large pieces of the construction, make it off-site in a factory, and then you deliver it to the job site. You use a crane to set it all up and then you sort of assemble it on site, and that's supposed to save you a lot of money. If you've ever done it, you know it doesn't. However, we have an idea, and this is something I'm currently working on with Andres, of what we call the "wet-dry module," which is simply the kitchen and bathrooms all in one prefabricated factory module. That we have a factory that will make these on-site. In other words, we'll have a shed. It will build these on-site, and we'll set it up like a modular factory, but it'll be a mobile one that can go from subdivision to subdivision. We'll build these on-site, and instead of using a crane, we'll use a forklift and a flatbed to deliver them to the location of the building, and then set them down. That concentrates all again what I was describing before: the plumbers, the electrician, the HVAC guys—the heavy, expensive trades—and all the expensive finished trades—cabinets, you know, the millwork, the tile. All of these expensive aspects of construction get built in a small factory setting, where it is more efficient to build, it is less expensive to build. And then you just build a house around the module rather than shipping the whole house. You ship only that part which it makes sense to build in a factory. That's my response to the idea of modular and, you know, prefabrication. But let's go briefly to land use, which is something that I've actually learned from all of you, so I probably won't say anything that you already know. One of my favorite affordable home builders is Donald McDonald in San Francisco, who built and sold $400,000 single-family homes in Westbeth, in the... I think that's, or maybe I've got my cities confused, but an area, a very tony area of San Francisco. And he did it not because he couldn't get more money, but he wanted to prove that it could be done. And he did it by building 10 houses on a single lot. And he did it by having the houses one inch apart. Because this is for Americans, it's very important to have a single-family home with that space between the houses, so one inch was the space he used. He built 10 of them on a single lot. The houses are no more than 16 feet wide, and he used the discipline: no more structural member larger than a 2x6. That's his biggest joist, his biggest header, his biggest rafter, nothing larger than a 2x6. So, he used a number of self-discipline things in order to achieve the very low price of construction. This is some... a project called Finley Street Cottages, by Eric. Eric Crumber took, I think it was two lots, divided them into four lots, and then built this kind of combination of duplexes and ADUs, so that he had like about four units per the new lots, but the new subdivided lots. And although they are fee simple in the sense that the front duplex is a real duplex, one owner owns the whole thing. Even though it's a duplex, and it's a fee simple, he owns the whole thing. So, he rents these out. And he's got a common courtyard in the back. It's a very pretty little courtyard right here, and you'll notice he does a number of things that I describe in the book. And actually Rob pointed this out to me, it's true. And Rob actually, I'm sorry, Derek actually read my original book, and his house is featured on the one of his projects is featured on the front cover. He has very low lines, not more than 4 and 12 pitch. This makes some of my architectural friends very angry when I advocate for this. And he's got very simple, inexpensive trims and siding, you know, just a lot of techniques to bring down the cost that are really only visible if you're looking for them, because otherwise it's just a very pretty project. Another pretty project is the T-Light Series, a series of houses that my friend Corky Corcoran did. He's a very outstanding member of CNU, a longtime member, urbanist advocate of CNU principles, teacher at the University of Colorado. And he designed this project with his partner, Ronnie Polona—I'm sorry, Ronnie Pelucy. Their firm is called Campion. They're in Boulder, Colorado. Now, you'll notice that these garages—there's six of them, we're looking at four, there's another two you can't see—they're all facing a common driveway. I calculated the concrete in this area, and it was a lot lower, like 40% lower than it would have been to have run 25-foot long, 16-foot wide driveways out to the street, each with their own curb cut or skirt, which has an additional cost to the actual concrete driveway. This is a lot less money to do it this way. And the houses are run perpendicular—I'm sorry, run, I guess it would be, yeah, perpendicular to the sidewalk. Let's look at the front. If you look at the, well, this is the entry. This is the sidewalk to enter the fronts of each of these houses. You can get three of these houses on a single Denver lot. That was the idea. So, through each of these three houses, the area of one Denver lot, if you look at the houses across the street, they're the kind of traditional configuration facing the streets. These are not. These are facing each other with a kind of a common courtyard, if you will, or a little green area. Now, these houses are such that there is very little yard. There's no backyard, there's very little front yard, as you can see. So, where do you barbecue? Where do you put up your umbrella? Where do you have an outdoor family gathering? Well, they do it between the houses. What happens is that the one house has an exclusive use easement deeded over to the house next door. So that although it's two 5-foot yards, it's actually a 10-foot yard on one side of each house, and then that's where you could build your deck. And you can, you know, you can put out your barbecue and your outdoor table, etc. So, this is a way of achieving outdoor space without actually, but still having a very tiny lot. Like I said, these are like maybe 20... I think it was 22 by 55, or no, 34 by 55. I think that was the size of the lots. So, the houses occupied the whole lot. And this is the way that you get outdoor space. It's a very clever use of land, and it reduces costs quite dramatically, because in places like Denver, the land costs are very significant. So, it used to be that the land cost made it impossible to build affordable housing, but with all the new development codes and zoning codes, yeah, actually, right now, it's easier to get a really inexpensive lot, because once you take a single-family lot, even if it's $200,000, well, you've got a pretty reasonable land value for each house. This is a famous house: Herbert and Katherine Jacobs' first house. It's known as the Jacobs One. It's supposed to be the first Usonian house that Frank Lloyd Wright drew. Houses for people from the USA, Usonian. And he got inspired to this because of a relationship he developed with a newspaper reporter that was doing a profile on him as an architect. And his newspaper reporter really admired him as an architect, and they got into the conversation of what type of house the newspaper guy had, and he had none. He rented. "Why do you rent?" "Well, I can't afford a house." "Oh, what could you afford?" "Well, I could probably afford a $5,000 house." "Wow! That's pretty tough, though, Frank, right?" And then he said, "So, you would buy a house if it was for $5,000?" And the guy said, "Oh, yes." "But do you really want a $5,000 house, or do you want a $10,000 house for $5,000?" was the question. And that's the question always. And that's the question we first started with. When you have a lot of objectives, like you want it to be, you want it to have beautiful eaves returns, and you want the ornamentation just so, and you want high pitches, and you want all this important stuff, but you want it to be affordable. That's wishful thinking. So, he said, "Let me think about it." And days, or weeks, or months—I'm not sure how much time went by—Frank contacted the newspaper man and says, "I think I can do it. I will sell you a $5,000 house if you're willing." And the guy said, "We're willing, that's what we want, that's what we need." Of course, he was honored to have a house designed by Frank Lloyd Wright. Frank charged him $500 to design the house. It's actually kind of a hefty fee relative to the price of the house, but it was his first Usonian house, and in fact, he delivered it to Herbert and Catherine Jacobs for $5,000. Many compromises went into this house. It's a pretty house, Frank Lloyd Wright, he's a genius. Most of us are not Frank Lloyd Wright, so we can't necessarily pull off what he pulled off in terms of the combination of high aesthetics, high value, and innovation. This house, you'll notice, has a gravel driveway. It has no foundation. It's just a slab on top of the grade, what we would call now a shallow, protected footing. It has many, many compromises in terms of interior floor space that were very unusual for the time, but the result was he was able to deliver a $5,000 house. This... close your eyes. Okay, only open them if you're willing to see an ugly house. Is the modern version of that house. I love this house in the same sense that some people love brutalism. Some people love a lot of the 20th-century modern houses, which have a wonderful concept behind them, they're actually quite ugly. It's a lot of mark to me, quite ugly. There's a lot of ugly architecture that architects and highfalutin builders and realtors, and people with good taste and knowledge, appreciate only because it accomplished what it set out to accomplish. You know, like form follows function. Form follows function doesn't necessarily equal... it is form follows function. It's something that expresses what that building is for. And this building is for only one thing: this building is for low-cost housing. It was designed in every respect for low cost of construction. The builder, Peterson, was famous for knowing not only their floor plans, but how many nails it took to build the house. They were in very tight control of the inventory to build this house. 2,500 of them are still in existence and still occupied by people who love their house. And why do they love the house? Because people typically do not buy a house from the outside in. We talk about curb appeal. It's nice to have pretty houses, that's great. But when people go out there to buy a house, especially at the affordable level, they really buy it once they step inside of it. And this is a very nice floor plan. A million things are done to make it inexpensive. For example, it has no ductwork. It has just one giant, which is a little space beneath the slab where the forced air unit, the furnace, blows hot air. It didn't used to have air conditioning where it was built. Blows hot air down into this underneath the slab, and then there are little holes in the slab where the hot air comes up to warm the room. So many, many techniques used to make this house inexpensive to build. 2,500 of them exist. I've talked to people that live in these houses, and they adore them. They love them. It's very livable. If you have a beautiful exterior, but the floor plan is unlivable, people will not buy it. They will prefer a livable floor plan. Maybe a lot of you listening will make that same decision, because you're very aware of and concerned with, and all of that, the exterior of the house. The block face or the appearance of the massing has to be just right. The roof pitches have to be the ornamentation. But the regular guy, the regular family, really want a livable plan. I don't know if you've ever been to a mobile home. You go into a mobile home, it looks terrible from the outside. On the inside, you go in there, and you say, "Wow! I could live here. This is really nice. This is unexpected." And those people know what they're doing. They know who they're selling to. They know what it is that motivates people to buy. And it's the floor plan. And I want to show you... Rob Studville: And, Fernando, we should probably get to the questions, if you're... Fernando Paj: Yeah, I just wanted to show you in closing that although this is my philosophy, it's not what I do, because I also have an aesthetic side to my personality, and I'm an art school graduate. So, these are examples of what my affordable homes look like. These are about $125,000 houses when I built the Hmong refugee relocation. That's why there's all those flags. We gave everybody a US flag and a flag from the country of origin during the opening day. But they're pretty. I wanted to leave you with a nice image. Thanks, and sorry for going over. Rob Studville: Fernando, thank you very much. That was excellent. We will get to Q&A very shortly. And I wanted to mention, we'll go over the hour for those who have to leave. We will be posting the video tomorrow on the CNU website. So, if your question is answered after the hour and you have to leave, you can see the answer, you can see it responded to at that point. True. But I wanted to ask you a couple of questions, Fernando, before we get to the Q&A. And one is that you recommend that builders try designing a house that is as cheap as possible, then walk it back a little bit, add a few things to make it look better, maybe a few luxuries. Talk about this approach a little bit, please. Fernando Paj: Yeah, well, I always try and think in terms of how inexpensively can I build this? And I focus on that until I've achieved it. Then there's usually a little added latitude to upgrade. And I do that because, again, I'm building for human beings. But I will tell you kind of a design discipline that you can do, especially if you're an architecture designer, which is to read Chapter 2 of the International Building Code. Chapter 2 is the design chapter. It tells you everything that's required in the house. And by definition, just simply by omission, that's not required in the house. Read that chapter and design the minimal house that will comply with the residential code. For example, a bedroom needs a window of a certain size for egress for firemen to be able to come in and get you out in a fire. But it does not require a closet. It doesn't require a ceiling fixture. A switched outlet is enough. You know, a hallway doesn't have to be any more than three feet long. There are minimum standards, and if you apply every minimum standard to your design and omit anything that's not required, you could have an extremely affordable house. And it's a great discipline. It's an exercise. It doesn't mean you're going to build that house. It just means that now you've really learned, "This is the stick figure. This is the essence of what I'm doing." And I can go down. And I bet you if you did build that house, incidentally, you would sell it. You would sell it, because that's how deep the hunger is for affordability. But I think it's a great exercise, and I do recommend builders do that, and that designers do the exercise that I just described. I've done it, and it's an interesting exercise to see what you can do without exceeding, without adding one thing that the code doesn't require. Rob Studville: Okay. The other question that I wanted to ask was that affordability has a regional component, that regions vary in terms of how affordable they are. How much does where you work matter, and how does that factor into your thinking in terms of designing an affordable house? Fernando Paj: Well, it matters a lot, of course. And one of the... in that slide I showed where the Urban Land Institute was talking about the crisis in housing, one of the paragraphs in there describes that immigration... Now that our population is not growing, it's not growing because people aren't having kids, and it's not growing because we're not allowing immigrants in. So, our population is sort of stagnated right now. So, there isn't population growth to feed, you know, the market for the new housing sector. What there is is migration within the United States. People are moving from California to Texas, or from wherever it is that they're leaving, or New York to Oklahoma, maybe, I don't know where they're going. People are moving around. And you will definitely be able to build affordable housing a lot less expensively in Houston than you can in San Francisco or New York, for sure. So, the geographic component is a big component of the, you know, the price of housing, and part is of land. Also, availability of labor. There's a ton of labor in Houston. There's very little labor in other places. So, that's very important. However, you're always thinking relative to the market. I talked about Donald McDonald, who was building $450,000 single-family homes, well, in theory, in quotes, in San Francisco. Well, $450,000 in Omaha is an expensive house. It's a pricey house. It's a very nice house. So, of course, it varies, and it's always relative to where you are. See, Donald McDonald could have sold that house for $850,000. He didn't, because he wanted to show the city that it could be done. He wanted to make a point. He was... he wrote a book called "The..." it was like a manifesto on affordable home building and such. So, he's that kind of a guy. But it is always relative. And so, that's what you're trying to achieve. And in one place, you're really affordable house, like I saw affordable housing in Vail, in Colorado, for $750,000. So, you know, yes, there's a big regional component, a lot of which has to do with local labor, cost of living, and hence the cost of labor, and of course, land values. The zoning, by the way, that the new, all the new allowances in zoning, like, you know, here in Houston, we can build up to six ADUs on a single lot. And the front ADU can be commercial because no zoning. So, there isn't anything that says that you can't have a shop in a residential neighborhood. So, you can actually really easily create a mixed-use development simply out of ADUs, where you run ADUs as commercial, and the back ADUs are all residential. So, those, the new zoning that's happening, you know, there's like 20 states right now introducing major changes in terms of single-family definitions, getting rid of single-family zoning, doing a lot of things that facilitate, you know, taking that land value and reducing its impact on the single... Rob Studville: How do you define affordability? One of the viewers noted that it's often defined in terms of paying no more than 30% of net income on mortgage, but you define it differently. Fernando Paj: No, I define it exactly that way. I define it 80% of median, etc. But that's because I'm really striving for affordable housing in the true definition of the word, i.e., the least expensive housing in the city. Other people are not. They talk about attainable housing. In other words, they don't want to put that much effort into the cost part of the house, and they talk about attainable. Attainable is like the step above affordable, where there's enough people that can buy it, you know, middle-class people can buy it. And so, you kind of have to define it according to what you want to achieve. But I should tell you, even if you're building very expensive housing, there's no reason to use excess materials when you don't need to. I like the technique of what it's called shallow frost-protected footings. You know that foundations often have to have a depth below frost, because when the frost will make the foundation heave and crack and all that, so they have to go down deeper into the soil to a level where the frost won't be able to act on it. That's the way it's always been done, the traditional way. But Frank Lloyd Wright invented shallow, frost-protected foundations, which are a way of insulating the foundation to keep the warmth of the house and the ground underneath the foundation warm enough so that it will not freeze. And so, an area like where I would build in Omaha, a couple of houses I showed, where I have 60 inches to get down to frost depth, I'm able to do it with 14 inches. Big difference in how much concrete you use in a 60-inch footing versus a 14-inch deep. And it's much more energy-efficient because you have all of that insulation around your foundation. So, sometimes, you know, you can combine things in order to, you know, achieve higher values on more than just the economic front. Rob Studville: Yep. And that was Wisconsin in the 1930s. It was very cold there, and it's obviously worked out well for the better part of a century. We got a question about demographic trends. Less than 10 years away from the youngest baby boomers being 70 years old, there's going to be a massive decline in the largest ever population. We should expect some kind of whiplash with supply overcoming demand. Instead of getting people inside of tiny footprint houses, should we be planning on absorbing and retrofitting McMansions? Fernando Paj: Yes, I would agree with that. I saw neighborhoods in LA after the Great Recession there, I think it was '89, something like that. There was... they weren't quite big McMansions like today's, but they were big mansions for the time. Neighborhoods that were eventually occupied entirely by Hispanic families, large Hispanic families. I grew up in a very large house because we had a million people in it. I mean, we just had cousins and uncles and aunts and everything, so we didn't each have a lot of square footage. We had a lot less square footage back then than I do now, but there was just a lot of people in the house. So, I think that's a very good point to make, and a very difficult one to achieve. Because those McMansion neighborhoods want to preserve their property values, and they don't want it to become a slum, which is what they would interpret as if the houses had many, you know, multi-generation, or different families, unrelated people living in them. I don't think of it that way at all. And I think you're right on. I think absolutely that's something that can and should be happening. But I think it's a ways away. And it's not something that national home builders can do, or people that, you know, they're... We also need a lot more housing right now. So, I think it's a combination of both. Rob Studville: Do you have any recommendations for building affordably in historically row houses? Fernando Paj: Well, I would build row... Houses are historically affordable. You know, our row housing was constructed because of its affordability. They're typically much narrower. The common wall, you know, often, they're more efficient if you're in the middle of a rowhouse. You're going to have very little, you know, exterior wall exposure. So, there's many benefits to row housing. And yes, I don't see why... I don't understand the question clearly in the sense of you can build townhouses under the IRC, you know. If they're all fee simple, separate houses, you can group them together. It doesn't have to just be a duplex. It can be a fourplex. It can be a sixplex. Don't... if they're up and down. As soon as you put them up and down, and you try and make a fourplex like two, like maybe two units up and two units down, or four units up and four units down, you run into problems with having to go to the building code rather than the residential code, which forces you to have sprinklers. So, there are some issues with small multifamily, where we used to call like what, like a local landlord might own a fourplex or a sixplex or something on two or three floors. But row houses, there's really no real problem with that if they're two stories or less. If you're up to three stories and more than that, you will end up with a sprinkler for fire safety, and that makes it quite a bit more expensive. So, I think you have to decide on the design that you can build affordably if that's what you're, you know, if that's what you're trying to achieve. Yes, they're historically affordable housing type. And so, just use the same techniques as you would use in your other houses, but applying to that housing type. Yes, exactly. Exactly. Rob Studville: What kinds of cladding are you using most often over the foam cladding that you described? Fernando Paj: Well, I tell you, I have used different claddings. The house that I was describing, where I saved that $4,000 in foam, I used a SmartSide. SmartSide, which is an engineered wood pulp siding, if you will. It's similar to, you know, like the fiber cement sidings and such, except that it doesn't crack so easily. It's a little less expensive, less heavy. It's great if you use sheets of it with batten and board. It's a very nice finish. So, I've used that. I've used a lot of vinyl. The problem with a lot of vinyl is that you actually need the sheathing underneath it, and so you can't sometimes use it. However, when you're doing the board interior structure, you're at 16 inches on center. You can't do it at 24 inches on center. So, you sacrifice that extra stud with, you know, in trading for the outside. And with that foam board over top of it, there's a lot of sidings that you can nail up at 16 inches on center. But I like a solid siding if you're going to go over foam, because there's not a lot of protection there, you know, between the exterior and the interior of the house. If you take a sledgehammer to a vinyl-sided house with foam, your sledgehammer could end up in the living room. So, you, you, I do want something a little bit more sturdy on the exterior when I'm using that approach. A lot of times I use vinyl, I use stucco, you know. Why, stucco was a very nice material. It was the least expensive in Los Angeles. It'd be very expensive in other, in Houston. It's kind of expensive. In Santa Fe, it's not. So, you have to kind of decide that locally what is the siding that a lot of people know how to put up, and there's a lot of competition for the labor price of that siding. Rob Studville: Somebody from Asheville talks about they've completed a missing middle housing study that concludes that single-family is the most expensive housing technology. And so, he is asking, have you found that duplexes, triplexes, etc., and other missing middle in general, can be less expensive? Fernando Paj: They are. I have built a lot of duplexes and fourplexes. I've always built them, though, I should say, as fee simple, you know, like a row. Not really duplexes in the sense of one owner owns both sides, but rather duplexes in the sense of two owners. And I've done that because I built in college towns, and the families would buy the whole thing and then rent it out. And that's how they paid for the student housing during the four years of college. But when you do it that way, of course, you've got all the utility impacts, because you've got two sets of, you know, of the water service and electrical service. If you build a real duplex, i.e., a two-family house, that one owner, fee simple, one owner owns both sides, you can save quite a bit of money, and it's actually now becoming a popular type. At the time that I was doing that, it really wasn't. It was even a little hard to sell duplexes. People wanted single-family homes, but I think it's the best approach, really, and I think fourplexes are even better. So, I agree with that, especially because you can make them narrow. And the narrowness helps a lot to control costs. So, yes, they are less expensive, although they're not... nothing is a magic bullet. It isn't like you put them together, and now they cost half as much as they would to build apart. It's more like it costs 12% less, you know, it's a small difference. And that, and the type also impacts the value. So, it may cost you 12% less, but it's worth 20% less, you know, sometimes it's not a really good relationship between the two, only because of the perception that people want a single-family home. They want space between their neighbor. That's just a, you know, that's just a kind of a quirk or a malady of our culture. It's not necessarily anything to do with the architecture or the building type. Rob Studville: We had a question about the utility module that you... and somebody noticed that there was a 7-foot ceiling, and they wanted to know why. Fernando Paj: No, because... good question, and very observant. The 7-foot... it's actually an 8-foot ceiling, but the ceiling in that area is dropped. In the kitchen, it's dropped to 7 feet, because that's where the air conditioning is. Have, you know, if you've been to a hotel, sometimes you notice that there's an area of the hotel room that's lower than everything else. If you look up, you'll see that there's kind of a trap door in the ceiling, if you will, an area where you can tell, "Well, that's an access panel of some kind." Well, that's because the heat pump or the air conditioning is up in that ceiling. And that's how it is in that module. The heating air is up between the ceiling and the roof joists, if you will. It occupies that space. So, that's why it's 7 feet. It's actually, by the way, you can build 7-foot tall ceilings by the building code. It's one of the things you might observe if you do the exercise I recommended with Chapter 2. However, it doesn't save you money, because it's very hard to get, you know, you have to cut every stud by hand, and then the drywall doesn't work, and all. You're better off going 8 feet. So, in this case, it's a drop ceiling. Rob Studville: Okay. A question: how does affordable house construction compare to office-to-residential tower conversion costs? Do you have any idea about that? Fernando Paj: I understand. Well, the problem with tower or office-to-residential conversions is that typically the depth is too big in offices. In other words, you would end up... it's very hard to create corridors and then have reasonable apartment lengths, if you will, you know, very long apartments. You don't have enough windows. And so, there's a lot of special problems with office-to-residential that are unique to the fact that the office wasn't designed for residences. And then there's issues like, you don't have enough, you know, the zoning issues like you have to have a certain amount of backyard or front yard or something with, if you're doing a residential tower or multifamily, and you don't have it in the office, because it was never required. And so, now you have to go through all these special permits and variances and such that complicate the process. So, I understand that there's a strong movement towards it, and I have done, and I have done some of it. It is challenging. Now, a very old office sometimes is... they're not, you know, those old industrial buildings that were converted to residential lofts. Those were much easier to do, actually, because they were not as long, they were not as deep. They didn't rely so much on artificial light, you know, they have to have windows. And so, it was, it's easier to do on an old building, let's say, than on a more modern one. Rob Studville: Can you talk any more about any other advanced framing when using the foam sheathing? Fernando Paj: Well, I've talked a little bit. You're going to be at 16 rather than 24 inches on center, which is a typical advanced framing. I had an engineer on my project, and we were able to show that the application of the joint compound at the joints provided sufficient stiffness that we didn't need to have blocking at the joints. The way that the drywall is installed is horizontally. So, the sheets are like 4 feet tall, and they may be, you know, 12, 16 feet long. And so, these are nailed up. The old style, where they would carve a piece of diagonal one into the framing. And so, at certain points you may have to do that. You have to use some of that. There are some alternatives now that you can use metal versions of it, that you just nail up. But you will have to use a little bit of diagonal. You may have to use a little bit of diagonal depending on what your bracing requirements are. I avoided that, for example, on the portal walls, which is the garage walls, where you have a three-car garage, and you have these very narrow... I use... I just used OSB there, because it was easier than doing some complicated thing. So, there are points at which you might just go ahead and use standard in the building, and other points where you don't. Like, you have a very short section of wall with a very severe, you know, wind impact. You may do it there. You do, though, reduce your OSB, either by 100% or 90%, or your exterior wood sheathing. If you use plywood, you know, it's plywood, OSB, it's a big cost, and there isn't really that much of a complication to it, unless you have a complicated building. When I showed you mine, you saw that it was kind of stepped in the back. Maybe it had a lot of zigzags in it, and that complicated it a little bit. You can also use interior walls, by the way, as part of your bracing, and use that technique, and that can sometimes alleviate the stresses on the exterior walls. This sounds like a pretty technical answer, I apologize. You asked a technical question. Rob Studville: And another question, it's a little bit more general, but may get into some technical aspects. But it was noted that building codes tended to require the use of 19th-century technology in the 21st century. Has this gotten better? And what can we do to accelerate the acceptance of modern technology? Fernando Paj: I don't know what you mean by technology, but the building code gets thicker and thicker every year because things are added to it versus taken away from it. I think it's an advantage that there's a lot of 19th century in the building code. Use it. Because the modern technology tends to be driven by special interest in the sense that it's a company that's trying to sell a product. You know, like, maybe it's Huber Engineered Woods, and they want to use the Zip System sheathing or the Advantech. And so, they create all these requirements on deflection and things that their product will meet. But the standard products, what I call the commodity-based products, you know, that aren't branded, they're just like rice, drywall. It's not a... nobody in particular. There are people that manufacture it that have no name. But so, I think the older parts of the code, a lot of times, are the best as far as new technology. Are you talking about things like, "Well, we want to be able to introduce this new type of SIP system," or structural insulated panel that uses a special type of urethane foam on the interior and then has a special exterior skin, or these? Well, there's a lot of that. A lot of things are being invented every day. There's... and those things are allowed in the code. The building code doesn't say you can't do that. It's just that if it's not a standard thing that they can do prescriptively... See, the residential code is meant so that a builder can build a house without an architect, without an engineer, just following the prescriptions. In other words, to paint by number. Do it this way, and you can do it where you don't have to... we don't have to redesign, we don't have to reinvent the wheel. We know this works. So, that's the intent of the International Residential Code, not the intent of the building code. The building code is a design code. You have to prove it works. You have to have a set of plans, and your engineer has to do all these calculations to prove this thing works. Now, you can use that approach with the residential code as well. And it's called "alternative means and methods." And there's a section of the code that deals with alternative means and methods. So, basically, anything you want to do... you want to build with rubber tires piled up? You want to, you know... That's how things like, you know, how do things like straw... Fernando Paj: Hold! Hold on a second, please hold on! I apologize. Rob Studville: Well, looks like we're getting to the end of our discussion. Fernando gets back. I wanted to thank everybody for being part of this. Fernando Paj: Yeah, I'm sorry. Rob Studville: And we may take one more question, but this has been certainly an interesting discussion. I can stay on if anyone wants to. Fernando Paj: I apologize. I just got off very quickly because I'm actually at a job site, and some guys started drilling. So, I thought, "Oh, this is going to be very good for our sound quality." Rob Studville: Okay, well, maybe we can take one more question and then... But I wanted to thank everybody for being part of this, and thank you, Fernando. But somebody asked if you had any thoughts on tiny homes. Fernando Paj: Any thoughts on tiny homes? Yeah. Thoughts. Well, tiny, real tiny homes are about 400 square feet. A lot of things are described as tiny homes. The Lennar homes I showed, the guy described North Carolina building 800 square foot houses. Those are small homes. They're not tiny homes. And I prefer small homes because tiny homes are kind of like RVs. And so, they're expensive per square foot to build. They can be certainly less expensive to build than a full-on house, especially if they're on a trailer, you know, the mobile homes on wheels. Tiny homes are in the building code. You can certainly build them. People have done successful developments using tiny homes, but they're for very specific populations. For example, single retired people or homeless vets, you know, things like that where these are folks that can really live within the size of a hotel room. So, it is a very niche product for very specific things, and I know it's become very popular, but it's a somewhat punitive way of living. So, a small house, it gives a little room for two bedrooms, for two baths, for a closet, for things like that. And I prefer that, although I'm building a tiny home right now. And I owned a tiny home for many, many, many, many years. I was right next to a railroad track, and yet it was my best rental. I'd rented it within 24 hours because it was the least expensive rental in the city. And people just love the idea of having their own home, even if it was really tiny. That's how hungry people are for affordable single-family homes. And I know we hate single-family homes, and we want missing middle, but for the most part, people want a single-family home. Rob Studville: Well, we will end with that, and thank you very much for this excellent discussion, Fernando. I really appreciate it. I hope people buy your book, "Building an Affordable House, Second Edition." So, please go out and pick up his book. You won't be sorry. There's some excellent stuff in there. Fernando Paj: Well, thank you. Rob Studville: And so, everybody have a great day. And I would thank everybody for attending. Fernando Paj: Thank you for having me. Rob Studville: Okay, take care.