Episode 34 Transcript: Sustainable Prefab: the Wave of the Future

Molly Wood Voice-Over:
Welcome to Everybody in the Pool, the podcast for the climate economy. We dive deep into the climate crisis and come up with solutions. I'm Molly Wood.

This week … we’re back to buildings! We’ve talked on the show before about how buildings and the built environment are responsible for a huge amount of global carbon emissions and energy demand … almost 40 percent … by some estimates.

A U-N report from 2022 found that although the buildings and construction industry has done some investing in energy efficiency and more sustainable processes …

its emissions have dramatically exceeded its gains … and in fact hit an all-time high … after a brief dip during the pandemic.

So THAT needs to get better A-S-A-P …

On previous episodes … we’ve covered building sustainable and net zero houses and housing developments … as well as finding sustainable building materials and creating a lower-emissions building process …

And this week … we found a guy building entire apartment buildings …

Steve Glenn:
I'm Steve Glenn. I am the founder and former CEO and now just board director of Plant Prefab.

Molly Wood:
and tell us a little about Plant Prefab.

Steve Glenn:
We design and manufacture sustainable multi -unit and multi -family housing.

Molly Wood Voice-Over:
Steve has been working on building better housing since 2006 …

Steve Glenn:
The one before Plant Prefab was a company I started called Living Homes. We were a designer and developer of extremely sustainable, mostly.

single -family housing, we partnered with great world -class architects, integrated a LEED platinum level environmental program. LEED is this kind of the leading international green building certification program. It's a point -based program. You get points for things that you do that make your buildings more energy efficient and water efficient and materially resource efficient, better indoor air quality. Based on those points, you can get certified or silver or gold platinum.

We designed the first dome ever to be certified platinum and we designed more platinum homes than almost any design firm. And we used outsourced factory production to build our homes. My first background's in tech industry. I didn't want to own factories and longer story, happy to get into, but that was what I did before Plant and ultimately in 2016, so we started living homes 2006.

2016 spun out Plant because we needed a company that had the kind of factories that I felt would be better suited for the kind of work we and many others were doing. And Plant ended up buying living homes in 2016. So that's kind of how we got it.

Molly Wood:
When was, just out of curiosity, when was the first certified platinum home built?

Steve Glenn:
2006.

Molly Wood:
Oh, okay. Got it. They were born at the same time.

Steve Glenn:
2006. Yeah, it was our first project.

Molly Wood:
Talk about the elements of building a house that are more or less sustainable for people who aren't familiar. And that'll, I think, kind of maybe lead us to this realization, it sounds like, that building, fabricating your own homes was actually the most sustainable option.

Steve Glenn:
Well, I mean that the areas to think about, let's start with energy, probably the most important area to think about from a sustainability standpoint, only because your home will use more energy over its useful life of, you know, 30, 40, 50 plus years than are embodied in the materials used to create the home. So super important area to get right. And

There are really two parts to that equation, how to reduce your consumption and then how to sustainably source it, the energy you need. (cut to)

Lighting, we use all LED downlights. LED light emitting diodes use a tenth of the power of incandescent and they're dimmable and no mercury. Obviously insulation hugely important to make sure you're not.

you're able to keep heat and cold air inside. (cut to)

So these are the things you can do to really reduce your energy use. And then to sustainably source, I started talking about a thermal based system that really is most efficient where you have great differentials between hot and cold.

Not so much an issue in Southern California. It doesn't get too cold. And solar power, photovoltaics, that's going to be the most obvious and by far the most ubiquitous way of creating renewable power supply for a home. Solar water heating is a much more efficient way to heat water.

So that's another great technology. Water, another area, particularly for California and other parts of the West that have real issues with water scarcity. So we use all water efficient plant fixtures in the bathrooms, in the sinks, tubs, showers.

Steve Glenn:
water -wise appliances which reduce water use. We build our homes to be gray water ready so you can take sink, shower, bath, dishwasher, washing machine water and use that for irrigation instead of, it requires landscape work which we don't do but the homes are sort of gray water ready for that.

So those are things that both reduce water use and that allow you to reclaim water for at least your landscape. On the material side, we try to source responsibly. Generally, that means materials made from recycled materials, materials that can be recycled. So for example, we have our insulation is 100 % recycled cellulose. It's basically used newsprint. Our drywall is made of almost 100 % recycled content. We've used Forest Stewardship Council certified wood that's a nonprofit that certifies that wood is grown, harvested in a sustainable way.

And then air quality, it's not really a sustainability issue, but it's certainly a health issue. So we care about paints and stains that are low or no.

VOC, Volid Organic Compounds, it can get off gas, it can cause health issues. We tend to put in fans on motion control in the bathrooms. It can filter and make sure that you don't have moisture that can cause mildew. Anyway, I could go on, but those are some of the things one can do.

Molly Wood:
OK, so then there's so many things that I want to dive into that you can see I have paralyzed myself with questions because they're all trying to get through the door at the same time. When, how did you, first of all, how did you become a home builder? Because looking at, you said you were a tech guy and you got into this, into.

Steve Glenn:
It's okay, we'll try to follow every thread.

Molly Wood:
prefab homes and sustainable development. How did that journey come about?

Steve Glenn:
Well, I wanted to be an architect growing up as a kid. I had Legos and books on Frank Lloyd Wright and grew up in a small town in North Carolina in the woods. So there I got both my love for nature and nurture on the nurture side, the architecture, great design. I got to college and got involved in tech.

co -founded a company which we ended up selling to Apple that started that track. Still thought I might go into design. I did a design program one summer and learned that I really had neither the talent nor temperament to be an architect, unfortunately. But I learned about this developer, Jim Rouse, who helped me to appreciate two things. First, he was the first social entrepreneur to whom I was ever exposed.

He was actually a really incredible developer, commercialized the mall, created the whole idea of the festival marketplace, started what is still today the largest originator of affordable housing tax credits, the enterprise. But he was actually deeply religious and he felt it was his God -given responsibility to try to do good work with the work he was doing.

didn't talk about that to investors, but so he was the first, as I said, social entrepreneur. I mean, I was in school in the mid to late eighties, Yvonne Chouinard and the guys behind Seventh Generation, like they were out there, but it just wasn't yet a popular thing. So, Rouse was the first guy who helped me, turned me onto this concept of wedding profit and purpose in the work you do. And I,

Steve Glenn:
I knew I wanted to add value someday in my work. And I also knew that people like teachers and healthcare workers and folks working at nonprofits, they did that directly every day by virtue of what they did. But I was drawn to commerce. And Rouse was the first guy to help me to appreciate, oh, wow, there are businesses that can be part of important sort of...

societal change, can be agents of change, and you get to leverage capitalism to sort of help spread whatever beneficence you're doing, assuming you're profitable and the business grows. I was like, I want to do that. And he also helped me to appreciate that if you care about the built environment, architects are great, but there are other people, some might even say a little bit more important, like developers.

Molly Wood:
Yeah.

Molly Wood:
Mm -hmm.

Steve Glenn:
in the position to hire architects or not, who have budgets. And I sort of was like, I think the world could use more responsible developers like Rao. So that was the kind of the germ of the, well, both inspired my desire to wed profit and purpose in my work, but also helped me to appreciate, well, someday I think maybe I should get into development, because I don't have talent to be a good architect, in my opinion, but I could help make great architecture. So that's...

That's how it happened. And then after a career of tech, I decided time was right.

Molly Wood:
fascinating.

And then what is it for people who don't know, talk about the climate impact of the built environment and why building houses in this way. I think you've drawn that connection between housing and the built environment and energy use. But it's interesting that it's become fashionable to talk about hydrogen airplanes and fusion when in fact, energy usage.

That your house is this massively impactful thing that isn't that hard, you know?

Steve Glenn:
Yeah. No, no, it's huge.

Yeah, so if you were to look at all buildings as a category and all transportation as a category and all manufacturing as a category, buildings, the energy required to heat and cool buildings and light them is more than all the energy used for all of transportation and all of manufacturing.

If we just focus on electricity, 72 % of electricity that is created in this country is to heat, cool, light buildings. If we focus on carbon emissions, 40 % is due to the energy required to heat, cool, light buildings. 30 % of all raw materials that are extracted on this planet are used to make buildings.

So yeah, buildings are kind of the most important single category to get right. And the good news is the technology, if you will, to dramatically reduce the ecological footprint, certainly from an energy standpoint. So more energy efficient lighting and better insulation and higher performance windows and.

Energy Star appliances like that. It just there isn't there isn't the cost premium that there certainly was in 2006 when we built our first home, which I meant, by the way, live in our first home, again, first home ever to be certified lead platinum. So, yeah, this is this is an important area to to get right. And we can we can.

Molly Wood Voice-Over:
Time for a quick break … When we come back, we’ll talk a little more about the journey from tech founder to sustainable home designer to Steve’s eventual realization that if he was really going to do this … he was gonna need some fancy factories.

Molly Wood Voice-Over:
Welcome back to Everybody in the Pool. We’re talking with Steve Glenn … the founder of a company called Plant Prefab … and how you can go from software startup guy … to building automated factories to generate sustainable apartment buildings … not OVERNIGHT … but over time … at least. Here’s Steve …

Steve Glenn:
I started a company called PeopleLink in 1996, just kind of Facebook too early. Brought a CEO in in 2000 when, 2001.

Molly Wood:
Yes, yep, I'm going all the way through the origin story to the present.

Steve Glenn:
when the downturn happened to really move us into B2B, which was not an area of expertise for me. Took some time off, did some nonprofit work with the Clinton Foundation and then felt like the time was right to get into real estate. And my thesis for business came pretty quickly. I concluded that there was a large and growing number of people who liked me.

really care about design, health and sustainability. So, you know, back in the day we were driving Priuses and shopping at Whole Foods and buying some furniture from Design Within Reach, really probably more from IKEA and Reading Dwell and Wired and buying from Patagonia and, you know, using Apple products. And so as I just quickly alluded to, there were a number of companies back then, even more now, but...

who built products in a way that reflected the kind of value we place on health and form and functionality, health and sustainability. But the production home builders, the KB homes, Lennar's, Pulte's, Syntex's, the world, they weren't building for us. And so we said, our formula will be simple. We'll hire world -class architects.

people like Ray Cappy and Kieran Timberlake and later Brooks Scarpa and others. And we'll integrate a lead platinum level environmental program. And then we will use outsourced factory production to build our product. I came from technology, I worked at Apple and Apple doesn't make anything, it's all outsourced. Factories are very different than sort of product companies.

Molly Wood:
Yeah. Yeah.

Steve Glenn:
And because they want to stay full and products work in cycles and you know all sorts of fun stuff like that. And so I didn't want to have factories and the one and only advantage of starting a new real estate company 2006 which was a year and change before the worst real estate downturn since the Great Depression because there were mostly disadvantages to that timing was that the factories to whom we outsourced our work weren't busy. So they took our projects and.

Molly Wood:
Mm -hmm.

Steve Glenn:
they needed clients. And so in our first 10 years, we worked with 10 different factories, half of whom closed by the way, during the downturn. So it's, and we were, you know, if you go look at stuff we do, some of which you can see at plantprefab .com, they're beautiful projects. We were working with people doing mobile homes. And so in fairness, they just weren't used to the kinds of projects and that have the kind of materials that required the kind of skills that.

you know, we required. So post downturn, we got really busy. They got really busy. We're like, we've got to find a better way. And so we concluded that if there was a company set up not to do standard low quality, non -sustainable homes, but rather architectural, super sustainable, lead platinum level,

Steve Glenn:
very high quality homes, more custom. If that company existed, not only could it solve our needs, but much more important from an environmental, sorry, from a sustainability standpoint. And I don't mean environmental, I mean like company sustainability. We could, exactly, we could potentially solve the needs of hundreds of thousands of individuals and developers who need a better solution for the projects they build than...

Molly Wood:
Right, self -sustaining company, yeah.

Steve Glenn:
the traditional site -based approaches that people have been doing for thousands of years. So we spun out Plant Prefab in 2016. Initially, it's two separate companies. And then it was kind of clear that it should be one entity. And so Plant bought Living Homes in 2016. Living Homes became the Plant Design Studio. And that's what we've been doing.

Molly Wood:
Got it. OK, let's break that down a little bit more versus sites. You talked about sort of the site specific model. Do you mean, so plant prefab, prefab is in the name, is primarily what you do, build a house, and then take it somewhere to get super simplistic? Yep.

Steve Glenn:
to traditionals.

Steve Glenn:
Right.

Steve Glenn:
Yeah, so we build off -site pre, before fab fabrication. It's factory built housing or off -site construction. It has a number of names and the idea is building and components and off -site. And there's two major building systems, modules and panels. Panel is like a part of a wall or roof or floor. Module is like.

big Lego pieces, the big chunks of a room or multiple rooms. Those are the two major systems. We're really the only company who does both. And we just opened last year, opened the first $40 million fully automated facility that's the first in the US purpose built to do both of those systems. Again, other folks out there do one or the other.

sort of anybody you've ever heard of does one or the other. And so we were shipping these components to the site and a crane assembles them. And the advantages you get with prefab, almost always time, because in a traditional site -based process, it's very linear.

you're subject to the vagaries of weather and general contractors who sometimes don't show up and it's super linear process. You literally have to grade the land, then do the pores for the foundation, build that, then the utilities. And you gotta do all that before you can do framing, electrical plumbing, super linear, again, weather delays, subs who may or may not come. Whereas offsite,

We're building in a controlled all weather facility on a line and now with automation. So we used to take like three months by hand on projects now, depending upon the project, it can be days or weeks, but it's parallel to the site work, right? We don't have to wait. And then the components come on and typically are installed in a day or a few days, depending upon the size of the project. So it's a very different way.

Molly Wood:
Wow.

Steve Glenn:
And you don't always save money. Sometimes it can cost a little bit more just because of the transport and the install. It depends what you're doing. But sometimes you can save money. And even when you don't, it tends to generally be pretty cost neutral. But time in construction is definitely money because of all sorts of expenses that you incur with greater time.

Molly Wood:
And you do. OK, so and then that was my next question is, who are your customers? Are primarily developers, you said? Mm -hmm.

Steve Glenn:
Developers and general contractors doing multifamily for rental or sale as well as multi unit projects. Yeah.

Molly Wood:
And then how big a transition was it to then be in the factory and production business?

Steve Glenn:
Huge, yeah. I mean, we had worked, as I mentioned, with 10 different factories, so we weren't unfamiliar with factories, but we had never run them. And so, yeah, no, I mean, big learning curve stuff, but we didn't, we weren't totally naive. We kind of knew what we wanted from a customer standpoint. We had certainly seen best practices at some other factories. So, and you know, we...

Molly Wood:
Yeah.

Steve Glenn:
ultimately opened two facilities, both working manually before we opened Tehan Ranch and consolidated there, which is our first fully automated facility. So just to help people understand scale and scope with the two facilities we had in the past, we could do...

maybe 100 ,000 square feet a year like Max. In this new facility, we can do three to five million square feet a year. So it's a very different scale. It's a 270 ,000 square foot facility. It's right over the Tejon Ranch. It's just south of Bakersfield.

Molly Wood:
And then where do the completed buildings go? Like, what's your kind of range? How far away can you build something and then have it installed?

Steve Glenn:
Yeah, yeah, yeah, never a question anyone can answer with anything specific because it's like, what are we doing? Where it's a budget thing? What's your local labor rates? All that fun stuff. But we're doing a number of projects, of course, throughout California from, you know, Dun, Sonoma and Marin to San Diego. So the whole state more along the coast than inland.

Molly Wood:
Right.

Steve Glenn:
I think it's fair to say. Colorado, Utah, trying to think. I think we've built Nevada, but certainly those states I mentioned.

Molly Wood:
And then what is the impact of multifamily versus residential in terms of sort of overall, why is that a better market? And then why is that a better market from a sustainability perspective?

Steve Glenn:
Well, multifamily is residential. It's just kind of, I think maybe you mean single family home. Yeah, well, right. It just, you can do bigger projects and repeatability and certainly in general, that's more affordable to people. I mean, there's the rental side, but there's also, condos tend to be more affordable than single family homes. So, and of course,

Molly Wood:
Yeah, sorry. Single family. Multi -family versus single family.

Steve Glenn:
most affordable housing is multi -unit, not single -family housing. For the same reason, it's just cheaper to do that than single -family homes and sort of densify, which in general, cities need to get denser as opposed to moving people out to the suburbs more so. Multi -family denser housing is consistent with our mission. By the way, we're...

We're the first full service prefab company that's certified B Corp. So, you know, we are a mission driven company and gotten certified for that. So, know, so the labs that administers that kind of reviews what you do. It's not just statements. They want to make sure you're, you know, walking the walk. We also like multifamily because so we like it from a.

Purpose standpoint, and it's a place where prefab can really scale because we can build bigger numbers of units and that helps take advantage of what we do.

Molly Wood:
To put a finer point on it, it's maybe, to your point earlier, wealthy people can afford to hire an architect to build them a house from the ground up that's going to be as sustainable as possible. But you've created a model that is not only good business, but it makes energy efficient, sustainably built housing more accessible to more people.

Steve Glenn:
We hope so.

Molly Wood:
Yeah. And how much is the automation a part of that? Like how tech forward is your factory?

Steve Glenn:
pretty tech forward.

Molly Wood:
in terms of the efficiency. I mean, it's obviously tech forward. I mean, is there anything like it?

Steve Glenn:
There are other automated factories. There's nothing like ours, as I mentioned earlier, that does both panels and mods in the US. But the US isn't the most advanced country with respect to prefab. Countries like Scandinavia, or countries in Scandinavia, like 70 % of their homes.

single and multifamily built in factories. Japan, the biggest home builders, people like Sekisui and Asahi Homes are prefabricators. Germany, huge percentage, UK too. And the reason is that those countries historically had much higher rates for land and labor and materials than we have had. All that changed in the US after the downturn of 2008 through 2012. There are...

has been this unprecedented increase in costs across the board, again, land, labor, materials, even permit fees. And so, and at the same time, somewhat coincidentally, but not totally, the venture community has said, hey, you know, there's a trillion dollar market opportunity here in construction. Let's start to fund some companies to try to bring innovation. And, you know, many have flamed out.

but that's inevitable in any kind of new industry. So the US does not have the most advanced factories in the world. I'd like to think we're among them. We're using equipment from Germany that others have been using, but we don't have the kind of history in the US that other countries do.

Steve told me that at the moment … the overall market for multifamily buildings has slowed … because of high interest rates … and the overall costs he mentioned … but it started to pick up a little right at the end of last year.

And obviously in this country we need both a TON more housing … and a ton more sustainably built housing … so hopefully the US is ready to catch up with some of these other countries … and get ourselves some more automated housing factories … am I right?

That's it for this episode of Everybody in the Pool. Thank you so much for listening.

Email me your thoughts and suggestions to in at everybody in the pool dot com and find all the latest episodes and more at everybody in the pool dot com, the website. And if you want to become a subscriber and get an ad free version of the show, hit the link in the description in your podcast app of choice.

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