Battling Back, Home Builders Cut Options

Since almost the day they were born, suburbs have been criticized for their plain vanilla sameness. Is the downturn causing the landscape to become even more look-alike?

Faced with declining demand for new homes and a glut of inventory, home builders are cutting house plans from their portfolios and standardizing on design in an effort to save costs and better compete with bargain-priced foreclosures and pre-existing homes.

Miami-based Lennar Corporation is streamlining the number of models it offers for new homes. And Los Angeles–based builder KB Home "is cutting costs partly by standardizing window sizes and floor plans rather than allowing endless local variations," The Wall Street Journalrecently reported.

Is what's good for builders good for the suburbs?The big home builders have a long history of "value engineering" -- finding ways to squeeze costs and time out of the home-building process, whether by cutting back on expensive materials or spacing studs farther apart. During the boom, it allowed them to put more homes up faster and rake in profits. Now, it's a more a matter of survival.

Steve Ruffner, president of KB Home's southern California division, tells us that the Wall Street Journal is referring to the company's "Open Series." This year-old house collection is, indeed, offered nationwide. And these homes do feature standardized windows and flooring. KB also contracted with KitchenAid, Maytag, and Delta for appliances and furnishings. "It gets much better deals for customers," Ruffner says, adding that the series targets homeowners who earn the median income in their respective markets.

KB Home Chief Executive Jeffrey Mezger told analysts last year that the new designs cut construction costs by $80,000 and allowed it to cut home prices by $60,000 on a typical home, according to Business Week.

If The Open Series sounds like historic Levittown developments writ very, very large, you wouldn't be completely off the mark. In their respective heydays, both targeted first-time buyers, and both achieved affordability through economies of scale. KB as well as Levitt and Sons, the now-bankrupt developer of Levittown, have allowed for customization, although naturally there are many more options nowadays than the gray-flannel-suit era offered.

In that sense, KB is fighting against the homogeneity of postwar housing. The company, along with other home builders, is also trying to right the wrongs of suburbs past: Open Series homes are built to Energy Star specifications, and they're 45 percent more energy-efficient than homes constructed in the 1990s.

And both KB and Lennar get credit for thinking smaller. In keeping with a trend toward smaller homes, Lennar has been nixing the super-sized plans from its portfolio. Ruffner won't specify the average size of Open Series interiors, but says that customers can elect to expand the square footage of the base models.

Levittown and its ilk encouraged Americans to settle in gas- and land-guzzling hinterlands, ushering in the age of strip malls and cookie cutter developments. At least Mother Nature can thank the recession for making future suburbs a little more eco-friendly.

Now, if only Toyota could get those Prius brakes to work.
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