TecHome Builder Magazine | September/October 2003 print edition | By Michael Bordenaro
Technology master planning is coming to a community near you. Will you be a part of it?
• Developers’ standards can be quite detailed but will, at minimum, require builders to offer a base-level structured wiring package.
• Builders may have to submit their homes to technology inspections, and make voice, data and video services available at move-in.
Think of a technology master plan as a master-planned community’s technology code. But unlike building codes, which address safety concerns, most technology plans are market-driven. Using demographic profiles of buyers, developers work with technology consultants to come up with an infrastructure plan and a menu of services that will appeal to buyers. The consultant designs the physical infrastructure, develops a vision statement to sell buyers on the plan’s benefits, and works with regulators to encourage competition and better pricing for services. How does all this affect the builder? At its simplest, a technology plan might require the developer to bring a fiber connection to each lot, and each builder to offer a specified base-level structured wiring package.
Required builder qualifications could range from an understanding of what makes a good structured wiring package to the ability to market community amenities.
Builder Requirements
At the very least, builders who want to work in these communities will need to demonstrate their ability to install the basic wiring package, whether they use staff installers or a technology subcontractor. They may have to submit their homes to technology inspections, and be willing to make voice, data and video services available on move-in.
They may also have to explain the benefits of various technology options to buyers. Familiarity with local area network (LAN) configurations and other protocols for delivering electronic services will help here, as will willingness to track emerging technologies.
“It is part of our strategy to identify and work with the more sophisticated homebuilders,” says Eric Teed-Bois, director of community development at Trimark Communities’ Mountain House community in California’s San Joaquin County, 60 miles east of San Francisco. When complete in 15 to 20 years, the community will include 16,000 residential units and more than 1 million square feet of commercial space. As part of the screening process, builders who want to work in the development have to do a formal presentation of their technology qualifications.
The more detailed the builder’s knowledge, the better his chances of landing a contract. “If you market and sell technology, it is important to be able to deliver it,” says Thomas A. Reiman, president of The Broadband Group, a Sacramento, Calif.-based consultant that helped Mountain House with its technology master plan. “If you crimp a Cat 5 wire incorrectly, you won’t get Cat 5 performance, and consumers who buy technology typically understand when they aren’t getting the proper performance.” This means the combination of services and the wiring supporting them needs to be up to standard, or the homeowner will not be satisfied.
Developers’ standards can be quite detailed. Craig Lobel, director of community technologies for Newland Communities, La Jolla, Calif., is in the process of establishing a structured wiring performance guideline for homebuilders. The guideline will include sections titled “Structured Wiring: Why It Is important to the Owner,” “Residential Wiring Architectural Requirements,” “Security Wiring,” and “Universal Drop Requirements.”
Lobel wants to make sure that builders understand how to meet Newland’s technology master plans, because of technology’s importance as an amenity. “A community intranet is like a swimming pool, golf course or tennis courts, only the intranet is transparent and it is used more than the pool, golf course and tennis courts combined,” Lobel says.
Of course wise developers won’t reject an otherwise good builder just because the builder doesn’t have experience with home technology. Instead, they will provide training. Reiman has been hired to conduct builder seminars on subjects ranging from installation to sales, create structured wiring installation guidelines, train installers, inspect installations and provide post-occupancy systems tests.
Costs and Rewards
Some builders will question whether the above effort is worth it. Robert Picchi, president of Blue Ridge Advisory Services Group, a technology consultant based in Blowing Rock, N.C., advises builders to carefully weigh the costs and benefits of working in such communities. “If the plan cost is negligible, then the builder will probably embrace the plan as one that will enhance the marketability of his finished product.”
Reiman insists that the returns should outweigh the costs. “In communities with a technology master plan, builders have realized substantially higher returns than in communities without one,” he says. “We are improving the value of the home by creating a forum on which greater margins can be built.”
Of course it’s easier to sell high-margin upgrades if customers come to the table asking for them. That’s why developers and consultants work hard to create demand for technological amenities. Reiman creates a vision statement of how technology will be used in the new community, including a description of how technology can help homeowners live. He tries to paint this picture without using the word “technology.” Instead, he uses images of Little League games being sent to grandparents by streaming video, of intranet baby-sitter groups that help working mothers, of schools that let parents go online to check on their children’s progress, and of remote meter-reading capabilities.
Mountain House is a good example of how buyers respond to such efforts. Lennar and Putle Homes completed the first residences this year. With homes priced from $300,000 to $500,000, the development is attracting first-time homebuyers who find this price range affordable compared to developments closer to San Francisco Bay. According to Teed-Bois, many of these people want to take advantage of the community’s high-speed Internet connections. “The structured wiring is actually a very good selling point for a lot of our buyers who have a sophisticated understanding of technology and are moving here, in part, to allow more telecommuting to work,” Teed-Bois says.
Such buyers are making technology a crucial part of focus of community life. Newland’s Lobel noted that when an intranet went live in one of its communities, “within weeks there were 40 or 50 user groups established. It changes the way people live day-to-day,” he says.
Newland has established a newsletter series to help residents, vendors, and homebuilders understand the role of technology in its communities. The series addresses issues ranging from terminology to performance standards to services availability. By being an active educator of all parties, says Lobel, Nelwand finds it is easier to fulfill its technology master plan in its communities. THB
Michael Bordenaro is a Chicago-based freelance writer.
SIDEBARS
Challenging Change
How The Pinehills found stability in an unstable industry.
The one constant about technology is that it changes. Products become outdated. Vendors come and go, or change their offerings. To be effective, a technology plan needs to be able to respond to the unexpected.
That’s what happened at The Pinehills, a planned community in Plymouth, Mass., which has been heralded as having one of the most advanced technology master plans in the country. When its vendor partner Verizon withdrew data and video distribution from its service offerings, the community quickly needed a back-up plan.
John Judge, president of The Pinehills, LLC, had only three months to find an alternate way to provide high-speed video services to homeowners. After evaluating the options, he made the bold decision to have the development purchase, install and own the needed fiber and head-end equipment itself. “We considered outsourcing the project, but we realized no one had the passion to realize the full value of the master plan better than we did,” Judge says. This arrangement allows The Pinehills to bring fiber all the way to the home, and gives the buyers the opportunity to take advantage of this new “utility.” More than 95 percent of the buyers are taking advantage of the fiber system.
Gatehouse Networks, a telecommunication company based in Greenwich, Conn., provided the head-end equipment, and Livermore, Calif.-based Alloptic provided the fiber and portal connections at the residences.
While meeting the 3-month installation schedule for the head end building was a challenge, Judge saw advantages in taking ownership of the video and data distribution. “To begin with, it provides some consistency in a highly fluctuating industry,” Judge says, noting the ever-changing ownership and services provided by telecom, video and data vendors.
“The real value is in being thoughtful to how the community might grow in the future,” Judge says. “The cost of not doing it right the first time means you have to do it twice. Because if you invest in copper wire and other technologies outstrip it, you are faced with a demand to step it up, which will be more expensive.”
Five to ten times as expensive, according to Reiman. His studies conclude that data, video or voice vendors who want to bring new services to the development after it’s complete may have to pay ten times more than if they had been involved in the initial land development. That’s why some community developers install empty conduit to allow new services to be added later on.