Am I Blu? Yes, as Another Prefab Dream Fades to Black

Blu Homes, started with millions of smart money and plans to build folding steel prefabricated and modular houses, is sold to Dvele.

Dvele Skyview House Ventura Californaia

 Dvele Homes

Most houses and buildings today are built pretty much the way they have been for 70 years: A bunch of guys in big pickup trucks show up on a site and hammer wood or pour concrete. And every decade, architects and builders try and solve this, to bring it inside, to make it logical and efficient. Lustron tried it in steel, Carl Koch with wood at Techbuilt and Acorn, Elmer Frey with mobile and modular. And every time there was a serious economic downturn, these companies would go out of business because they had high fixed costs and in hard times, couldn't compete with the guy with the pickup truck. 

Twenty years ago, there was yet another explosion of interest in modern, green, prefabricated housing, after Dwell magazine ran their Dwell Home competition (won by Resolution 4) and Allison Arieff and Bryan Burkhart wrote their book Prefab. Lots of architects were convinced this was the future and jumped in; as I wrote ten years ago:

Early off the mark were Michelle Kaufmann, who launched her Glidehouse, and myself, launching the Q. It was an exciting time; we were all going to reinvent the building industry. We had so many cute lines- "you don't build a car in a driveway, why would you build a house in a field?" and we had to beat all of the other architects and designers off with a stick, there were so many throwing their pencils into the ring.

Then the financial meltdown came in 2008, and many of the factories closed, right on cue. But there was a glimmer of light in all this: Blu Homes. Founded in 2007, it made a big splash with big blue booths at home shows across North America. It raised nearly $200 million* to use fancy software and a huge submarine factory in Vallejo, California to build steel-framed houses. Where most modular housing rarely traveled more than 500 miles from a factory, Blu had an ingenious folding design that reduced the width of the module so that it could travel on a normal 8.5' wide truck. It bought Michelle Kaufmann's company and offered her designs. Co-founder Bill Haney told Todd Woody of Forbes that "the general notion that we want to be greener, we want to conserve, we want to be healthier--that's a cultural trend that has not been thwarted by the economic downturn." 

Alas, it was not to be. It may not have been as expensive to ship these houses, but you still had to send crews to unfold and finish the house and deal with every state's approval process. They were still a lot more expensive than a conventional house, which every greener and healthier house is. And the overhead was as high as the ceiling in that amazing sub factory (now being used by another modular company).

Enter Dvele

Interior of Skyview House with a white kitchen and floor to ceiling windows

Now, it's assets have been acquired by Dvele, another California prefab company with a plan to "to innovate and totally disrupt the home-building industry to create the smartest, healthiest, most sustainable homes on the market." According to the press release:

“In the early years of our entrepreneurial journey, Blu was the company we looked at as leading the charge for high-end prefabricated homes,” said Dvele Co-Founder and CEO, Kurt Goodjohn. “We have the utmost respect and appreciation for what Blu has contributed to our collective space. They forged a path allowing Dvele’s innovative home focused technologies to flourish. Combining the Blu brand with our original vision for Dvele as a technology platform is a powerful step forward in our quest to revolutionize this industry.” 

I was not quite ready to kvell over Dvele, and always worry when I see words like "disrupt" and "revolutionize this industry" so I spoke to CEO Kurt Goodjohn, known to Treehugger for his previous work in prefab in British Columbia. They are building a quality product certified to Passive House (PHIUS) standards, using healthy materials and smart technology, with sensors in every room and even in the walls. He says "The cheapest car has a 'check engine' light; your kid's bedroom should monitor the CO2 levels."

Dvele factory
Building a house in a factory.  Dvele

Kurt notes that fewer people are going into the construction trades and borders are certainly getting tighter, so the efficiencies that come from factory production are getting more important every day. Standards are getting tighter too, and particularly airtightness is critical to meet Passive House standards; this is easier to do consistently in a factory. Speaking of which, Dvele bought an existing one that has been producing high-quality Park Model homes for 40 years.

Blu was Going to Disrupt and Revolutionize the Industry Too

According to John Caulfield, writing in Builder Magazine back in 2011, Blu was all about "differentiators" that separated it from other companies. One was the national branding, which didn't last long. The second was the computerization, with Dassault CATIA design and "3D configurators," which every company has some version of now. The third was its clever folding design, which no longer is mentioned on their site.

So far as I can tell, they ended up being a small, semi-custom modular builder serving the competitive California market, suffering the same fate as so many prefab builders did a decade ago, as described by Allison Arieff in Forbes: "The options package just grew and grew, and economies of scale were never reached. The homes ended up being all one-offs." And: "If you figure it’s already a niche market, and it never claimed to be otherwise, you already have a small percentage of an overall housing market that is crummy."

I am saddened by the Blu story, which started as a well-funded tech play that was going to disrupt and revolutionize the industry and in the end, was sold for parts. I believe that Arieff is right, that it's hard to chase a niche market, but some have succeeded in it; in other countries, everything is built this way, and everybody benefits from the quality and efficiency it delivers. Taking to Kurt about his longer-term plans, he expects to go beyond the niche, and I think he might just pull it off.

Perhaps being bought by another company will give Blu greater critical mass, and I hope they will do well with Dvele. Then I will kvell.

*Update, 22 June: Blu raised $200 million, not $25 million as previously noted.