Light-gauge steel framing offers many benefits for the production builder:
So, why do production builders resist the change? Ed Hauck is a consultant for Builder Partnerships, Littleton, Colo., which is a network of more than 500 homebuilders and 75 building product manufacturers. Hauck has more than 20 years experience in home production, and he helps builders find efficiencies and maximize value in their construction strategies. "I tried steel framing years ago when the cost of wood was so high, but lately with the price of lumber, it's just not efficient," he says.
That time Hauck refers to is the period in the early 1990s, when the price of lumber soared. Tariff issues with Canada and reduced access to traditional forest sources because of issues with the spotted owl, drove up the price. The Random Lengths Framing Lumber Composite Price hovered around $600 per 1,000 board feet during that era. Currently, it stands at about $340.
Larry Williams is executive director of the Steel Framing Industry Alliance (SFIA), and he remembers that time. "The conditions in the market were causing builders to look for alternatives," he says. "The key driver was the price of wood, which doubled overnight. Residential has always been a small market for steel. But prices were so high, it became cost effective. The industry became interested in promoting steel framing. But after a couple of years of trying that, it became quite clear some additional work was required related to the development of an infrastructure to support it."
Specifically, the steel framing industry was not set up to deliver the products and services in the way the builders wanted it. Trade contractors weren't trained and prepared to meet residential market demands, which caused builders, who rely heavily on the trades for expertise, to move cautiously even though the cost incentive was very high.
Also, according to Williams, the engineering and technology weren't quite ready either. "We did a lot of work on new technologies, including more efficient ways to build and more efficient ways to manufacturer," he says. "That resulted in the slammer stud and the L-header, things that are commonly used out on the residential job right now."
The industry also turned to new manufacturing techniques that Williams says were heavily influenced by Australian and New Zealand advances. Auto manufacturing systems allowed light-gauge steel framing to compete against the panel shops production builders had set. "It was a slow climb through the early 2000s," says Williams.
There were successes. Williams says that Lennar Corp., Miami, which is the nation's second largest homebuilder, expected to be closing more than 21,000 homes in 2015, began framing with steel in many of its Texas communities before the housing bust.
Nader Elhajj, director of business development for FRAMECAD, Carrollton, Texas, points out that PulteGroup Inc., Atlanta, operated a steel framing paneling shop in Northern Virginia that served several of its communities, but shut it down during the bust.
FRAMECAD is one of the companies working to overcome the infrastructure obstacle. "It started to pick up in 2012," says Elhajj. "When we decided to open an office in Texas, we saw good potential in the U.S. market. We saw huge demand in the residential market."
FRAMECAD sells an end-to-end solution that allows builders and framers to receive coil stock at one end of the facility and turn out engineered framing products, including trusses and wall panels at the other end. "Our target is the wood framers," says Elhajj. "As well as existing framers, existing builders, or modular builders and manufactured homebuilders. These people are already set up to use cold-formed steel. It's a lot easier for us to show them the economies of using our system versus the way they're doing it right now."
When asked about the obstacle to converting a regional production builder, a company that closes 1,000 homes per year, Elhajj says: "It's mainly a culture. Most builders are second- or third-generation and they've always built with wood. They ask 'Why should I change it now? Why should I invest in new technology?' We can talk about benefits and advantages, but the bottom line is they're making money now, so why switch? The other concern is where do they get their labor? Metal framers make a lot more money in commercial framing."
Williams offers a glimpse at how to overcome the labor obstacle, and it's in technology. "I'm a real believer in automated framing systems," he says. "They significantly reduce training requirements for a framer. When you're stick framing, you have to have someone on-site who knows where each stud goes, and you have to make sure guys are grabbing the right material out of the bundle. With the automated framing system, they prepunch where the fasteners should go. They move at a pace that all the materials coming out of the machine, the guys can actually frame the wall. Same thing with the trusses. The materials are ink-jetted so the crews know where they go. It's virtually idiot proof."
Elhajj pulls the cost and infrastructure obstacles together. "At today's price, you can be more economical with cold-formed steel in the residential market," he says. "But you have to have the investment in the technology and the investment in the infrastructure."
While steel is a recyclable material and steel framing can be recycled over and over again, steel framing does have a bad reputation in one particular area of sustainability: energy conservation. Steel conducts approximately 10 times more heat through it than wood does, which means thermal bridging is an issue the industry has to address.
In the early 90s, when lumber prices were high and steel framing had an opportunity, the wood industry aggressively fought back with the thermal bridging issue, showcasing steel-framed homes that had improper insulation. Consequently, vertical lines appeared on the siding and roofing material, where moisture had condensed and dirt collected. That perception still resides in the minds of homebuilders.
"It's a fact," says Elhajj, "if you don't insulate, you will have that phenomenon. But even with a wood house, that will happen. It just takes longer. The thermal issue is still a concern. But now we have a lot more solutions and documentation to overcome it, whether with SFIA or FRAMECAD. We provide solutions and how to do it."
With current technology and systems, there is no reason why a steel-framed house cannot be as thermally efficient as a wood-framed structure. Overcoming the perception of the problem, though will continue to take education and awareness.
"Wood is cheap here in the U.S.," says Elhajj. "There's an abundant supply. It's an extremely strong industry with great lobbyists and the U.S. Department of Agriculture on its side. I can't say wood is not good. It has its advantages. But steel is the future. There's no way out of it."
Elhajj identifies environmental regulations and other factors that are going to place steel in a very advantageous position against wood. "At some point, wood is going to run out at the prices we have now," he says. "Steel is the only option that you have, because it's recyclable. You can recycle steel forever. And it is the only material that assembles as fast as wood can. Plus, it gives you the fire resistance, the termite protection, all of these natural disaster resistance you cannot get with wood. It's natural for steel to be the dominant construction material of choice in the future."
When will that happen?
"The tipping point is going to be cost," Elhajj says. "Once the cost per square foot becomes evident and documented. One of the issues now is we don't have any documentation on cost comparison. Go to any wood builder and they can tell you their cost per square foot." When asked for a price on steel framing, the response often is that it depends on what you want. "So steel framers go around that and give an angel price, which scares a lot of framers and builders off. They want to know what their price per square foot is. And we don't have adequate case studies that document that."
Documenting that comparison will require the cooperation of steel framers in the residential market who may be reluctant to participate, fearing increased competition. Still, to reach the tipping point, the obstacle steel framing has to overcome is cost.
In the past 18 months, there have been at least 14 major fires that have destroyed apartment buildings and hotels in cities from coast to coast in the U.S. and Canada. These events all have two things in common: all have been framed with wood and all are in the range of four to six stories in height.
While the building codes now permit the use of wood in these types of structures, builders are liable to find out that using wood has a price: higher insurance costs.
Insurance underwriters set significantly higher premiums for wood-framed construction than noncombustible framing materials like cold-formed steel because wood construction has a greater likelihood to burn or be damaged by fire and will be a total loss versus a partial loss. Loss history for wood construction has been poor and insurance carriers are very restrictive regarding the amount of risk they will take. This drives up the cost to the builder and actually weakens the pro-wood argument that it is less expensive than other materials.
On the other hand, cold-formed steel is noncombustible: It simply does not burn or contribute to the spread or intensity of a fire. This is why Schaumburg, Ill.-based Zurich Insurance Co., in cooperation with the Steel Framing Industry Association, now offers the US Assure Builders Risk Plan that is a specifically designed for steel-framed projects. The firm says the plan is the first offering explicitly based on the non-combustibility of steel versus wood. And once a project is properly qualified as noncombustible by an underwriter, it may also qualify for discounts on other kinds of insurance, such as property insurance.
Some have followed the trend of using wood in nonresidential construction, often citing cost as their motivation. However, there can be substantial savings associated with noncombustible materials, and they could be selling themselves short if they're not exploring the impact of lower insurance costs. As the market adjusts to the upswing in major claims from the recent fires, builders and developers need to take a closer look at their choice of building materials.