Promoting Innovation: 2002 Assessment of the Partnership for Advancing Technology in Housing (2003)

There are many precedents for programs in the federal government that facilitate the development and diffusion of innovation in industry. Recent examples are the Department of Transportation’s (DOT’s) Partnership for a New Generation of Vehicles, DOE’s Building America, and EPA’s ENERGY STAR. Most federal technology advancement programs are initiated in response to a specific agency mission, e.g., transportation, energy conservation, or environmental conservation, although all three of these examples advance a national priority to conserve energy.

In the 1990s the DOE Office of Building Technologies, State and Community Programs worked on advancing housing technologies through its Building America program, which is similar to PATH. Though the DOE programs emphasize technologies that improve energy performance, they also address general issues affecting the development and diffusion of new technologies. DOE has made valuable contributions to predominantly private efforts by identifying opportunities and potential benefits of new technologies, conducting laboratory and field tests of products, developing analytical tools and rating procedures, and conducting outreach and education. DOE’s national laboratory system was a key resource that contributed to the success of these programs (Geller and Thorne, 1999).

It has been more than 30 years since HUD undertook Operation Breakthrough, an R&D program to improve housing construction. Its approach was to sponsor the development of selected technologies and promote their adoption in the housing industry. However, the government had neither the technical expertise nor the market experience to make the new technologies a commercial success. Operation Breakthrough was an example of the public sector attempting to direct development of specific technologies for a commercial market in which there was little or no government procurement interest. The lessons learned from Operation Breakthrough and other federal R&D projects are that successful programs are associated with government procurement or some other well-defined public sector objective; are supported by defined, nonproprietary research guided by a scientific community; and have an institutional structure that allows potential users to guide the program (Langlois and Nelson, 1983). The

genesis and purpose of PATH are aligned to these characteristics more closely than previous HUD-sponsored housing construction R&D programs.

Though aligned with the mission of HUD, PATH is derived from the mission of the NSTC, a cabinet-level council established in 1993 to coordinate the diverse federal R&D enterprise. An important objective of the National Science and Technology Council (NSTC) is to set clear national goals for federal investments in science and technology. Created with broad participation from government, industry, and academic institutions, PATH addresses expansive goals for developing and diffusing technology and improving the construction and performance of housing (NSTC, 1999).

The NSTC C&B was organized in 1994 to work toward goals for the construction industry. The subcommittee comprises 14 federal agencies and the National Science Foundation (NSF). It works in cooperation with U.S. industry, labor, and academia to improve the lifecycle performance, sustainability, efficiency, effectiveness, and economy of constructed facilities, including housing (Badger and Magnell, 1998). It set the following construction industry goals with a 1994 baseline and a 2003 target date for completion:

1. 50 percent reduction in delivery time, since the time from the decision to construct a new facility to its readiness for service is vital to industrial competitiveness and project cost reduction;

2. 50 percent reduction in the cost of operation, maintenance, and energy over the life of the facility;

3. 30 percent increase in the productivity and comfort of the occupants of industrial facilities and in the processes housed by the facility;

4. 50 percent fewer occupant-related illnesses and injuries caused by improper or poor building design, fire or natural hazards, slips and falls, and illnesses associated with a workplace environment;

5. 50 percent less waste and pollution at every step of the delivery process, from raw material extraction, through the construction process, to final demolition and recycling of the shelter and its contents;

6. 50 percent more durability (the capability of the constructed facility to continue to function at its initial level of performance over its intended service life) and flexibility (the owner’s capability to adapt the constructed facility to changes in use or users’ needs); and

7. 50 percent reduction in illnesses and injuries among construction workers.

The C&B recognized that its strategies for achieving these goals needed to be tailored to the needs and capabilities of the diverse segments of the construction and building industry. To explore the needs and opportunities of the housing segment, the C&B created a government/industry residential working group. With NAHBRC serving as the secretariat, the C&B residential working group convened a meeting in 1996 to review the national construction goals and craft implementation strategies for the housing industry. The residential working group identified reduction of production costs, shortened production cycle time, and improved durability as the goals with the highest priority for immediate action, and formalized seven strategies for achieving these goals (NAHBRC, 1998):

1. Establish and maintain an information infrastructure responsive to the needs of builders, designers, subcontractors, manufacturers, code officials, and consumers.

2. Develop and implement improved methods for assessing and increasing the durability of specific types of building products.

3. Improve the efficiency of the housing production process.

4. Improve the efficiency of the regulatory and new product approval processes.

5. Develop an improved understanding of the performance of conventionally built light-frame structures.

6. Foster the development and commercialization of innovative products and systems based on input from the building community.

7. Expand markets and marketability for products and systems that reduce costs or improve durability.

In response, the C&B in 1997 organized the Partnership for Advancing Technology in Housing (BFRL, 2002), which in FY1998 was funded by Congress with an appropriation of $980,000. The administration initiated the partnership as an interagency program, with HUD and DOE leading the effort. The program was funded at approximately $10 million a year from FY1999 through FY2001 and at $8.75 million in FY2002. The congressional conference report accompanying the Veterans Administration, HUD, and Independent Agencies Appropriation Act of 1999 (P.L. 105-275) directed HUD

The conference report also directed that HUD provide an operating plan for the PATH program and a draft evaluation report describing progress toward meeting PATH goals. The first operating plan was submitted on March 11, 1999, and the first report on progress toward meeting the objectives outlined in the operating plan was submitted to Congress on April 22, 1999.

The administration broadened the program’s mission to establish goals and performance targets that not only were similar to the national construction goals but also were intended to change the way Americans think about and build houses (see the discussion of the goals below). To achieve these goals a PATH office was established under the HUD Policy Development and Research (PD&R) program, a director appointed, and the office staffed with people detailed from other federal programs. During its most active period, the PATH office was run by the equivalent of seven full-time federal workers. The PATH director served as the secretariat of the PATH Interagency Council (PIC), which included senior representatives from eight federal agencies (U.S. Department of Agriculture (USDA), EPA, Federal Emergency Management Agency (FEMA), Department of Commerce (DOC), Department of Labor (DOL), Department of Defense (DOD), DOE, and HUD) to help guide and monitor PATH activities. The Federal Agency Working Group (FAWG) was established with the C&B as the secretariat to coordinate federal resources and strategies that had an impact on PATH goals. At the same time a PATH Industry Steering Group was created and managed by the NAHBRC to coordinate the participation of private sector partners including builders, tradesmen, manufacturers, housing providers, model code organizations, financial institutions, utility companies, insurance providers, and academic institutions.

The program started with a high level of enthusiasm from both public and private sector participants, but as noted in the committee’s earlier reports (NRC 2001, 2002), the rapid growth and complex structure led to confusion in the identity of PATH and difficulty in defining the value of the program.

From 1999 through 2001, the administration included PATH in HUD’s annual budget request. With the change in administration in 2001 PATH funding was not included in HUD’s FY2002 budget request, but as a result of congressional action, funds for PATH were included in the FY2002 appropriation signed by the President. Funding has been provided for FY2003 and the committee assumes that the program will continue with approximately the same level of support.

The change in administrative priorities resulted in the PATH Program Office being dismantled. PATH management responsibilities were assigned to the HUD PD&R office. The program is now administered by the equivalent of 4.5 full-time federal personnel. The PIC and FAWG were disbanded. This has not eliminated interagency cooperation but it has reduced the involvement of other federal programs in the day-to-day PATH management. PATH has continued its relationships with industry and academic institutions. As noted in the following discussion, although the change in management strategies did not diminish the level of PATH activity, it impaired the program’s capacity to plan future programs and adapt to evolving goals.

Between 1999 and 2001, PATH initiated 56 active programs and projects undertaken by 11 private contractors and 7 federal agencies. Funding uncertainties and delays in the development and approval of a 2002 operating plan hampered initiation of new activities in 2002 and planning for the future.

When the plan to launch PATH was announced in 1998, the President charged the program with reducing by 50 percent the time needed to move technologies to market by 2010. The President also defined housing performance goals to be accomplished by 2010, implying that they would be achieved through PATH efforts to advance technology development and diffusion. The following housing performance goals were the focus of PATH strategic planning in 1999 and 2000 (HUD, 2000):

1. Reduce the monthly cost of new housing by 20 percent or more.

2. Cut the environmental impact and energy use of new homes by 50 percent or more, and reduce energy use in at least 15 million existing homes by 30 percent or more.

3. Improve durability and reduce maintenance costs by 50 percent.

4. Reduce by at least 10 percent the risk of life, injury, and property destruction from natural hazards, and decrease by at least 20 percent illnesses and injuries to residential construction workers.

The PATH office updated its strategy and operating plan in 2000 to address shortcomings in the plan submitted to Congress the preceding year. The new plan kept housing performance goals at its center but noted that many technologies address several goals simultaneously. The strategy identified four intermediate objectives: (1) technology needs assessment; (2) technology development; (3) technology adoption; and (4) resource coordination (HUD, 2000).

The committee could identify no evidence or baseline data to indicate that the housing performance goals were measurable and achievable. The committee noted in its 2000 report that though the PATH goals are laudable targets for improving the affordability, quality, and livability of American housing they are probably not realistic, particularly for a relatively small, technology-focused program. They can give PATH general policy direction but they are not useful in strategic planning or performance assessment. The goals are influenced by numerous and complex factors, many of which are beyond the scope of the PATH program; full achievement of the performance levels set for all goals may not be possible. The committee recommended that PATH’s efforts and its performance measures should be consistent with its mission and level of funding (NRC, 2001). (See Appendix D for recommendations in the committee’s 2000 assessment.)

In 2001, responding to recommendations in the 2000 assessment and to committee discussions, the newly reorganized PATH management used the intermediate objectives in the 2000 strategy and operating plan to redefine the program’s mission and goals. The 2001 strategy focused more on PATH’s role

in facilitating the development and diffusion of technology in housing than on how the technologies affect the construction and performance of housing. PATH’s mission was redefined as follows (NRC, 2002):

To support this mission, the strategy set out four goals that are more closely aligned with the industry implementation plan for the residential national construction goals published in Building Better Homes at Lower Costs (NAHBRC, 1998). That report, documenting the findings of the C&B residential working group, noted:

PATH staff in consultation with the committee drafted the following strategic goals for the program (NRC, 2002).

1. To remove barriers and facilitate technology development and adoption.

   PATH will investigate the barriers, including regulatory barriers, that impede innovation, and will actively propose and develop programs to overcome those barriers by working directly with the housing industry. This work will guide the other goals and efforts.

2. To improve technology transfer, development, and adoption through information dissemination.

   PATH will coordinate dissemination of innovation information directed to the housing industry and consumers.

3. To advance housing technologies research and foster development of new technology.

   PATH will support “background” and applied research as well as technology development activities in the housing industry. This research will be complemented by short-term and long-term assessments of specific technologies that are on the market.

4. To support the program through appropriate management and resource allocations.

These goals lack performance targets because baseline data are not available. Insufficient baseline data and unrealistic performance targets were problems the committee recognized earlier with the housing performance goals and these problems remain. The committee has used the revised goals as the basis for the 2002 evaluation in Chapter 4 and the structure of the long-term evaluation in Chapter 5; it expects that this and future assessments will form the basis for more realistic performance targets.

In the 3 1/2 years since its inception, PATH has wholly or in part funded 56 activities. Some are short-term studies that provide incremental progress toward PATH’s goals; others are long-term programs to address the development and diffusion of innovation in housing.

HUD describes the activities undertaken through the PATH program as a continuum; it has grouped activities currently funded by PATH or recently completed into three categories related to their intended roles in advancing the development and diffusion of technology. The continuum is presented in Figure 2.1 as it appears on the PATHnet Web pages. Though some activities support more than one role in the continuum, in this report each is listed only once under the category the committee considered its primary role. HUD has defined the continuum, including the following list of activities, as representing the current operating plan for PATH (HUD, 2002).

FIGURE 2.1 PATH continuum. SOURCE: PATHnet.org, HUD (2002).

1. Research and development is described as technical investigation and creation of new areas of knowledge or actual products, including innovation in materials, systems, construction processes, and management techniques. Related activities:

   • Technology roadmapping identifies industry needs by brainstorming R&D planning processes to find starting points for planning federal and private R&D investments. The PATH Industry Steering Committee, composed of approximately 150 industry representatives, identified the technology issues the roadmapping sessions were to deal with.

     • The Information Technology Roadmap addressed ways that computers, software, and communications (especially wireless and the Internet) can improve the speed, efficiency, and quality of the homebuilding process. Opportunities were identified to link information technology tools and data within and between firms to improve housing design, regulation, production, and operations.

     • The Panelized Construction Systems Roadmap addressed opportunities for shifting away from construction-in-place methods to respond to changes in the availability of skilled labor, quality control, standardization, and reduced production costs. The industry needs identified included common standards, specifications, and interfaces to give builders consistent performance choices, improved production, and delivery systems and site assembly to simplify logistics from production through assembly.

     • The Whole-House and Building-Process Redesign Roadmap took a systems-oriented view of housing construction to identify methods of building faster, at lower cost, and with higher quality. The brainstorming session explored opportunities to create an environment in the homebuilding industry that facilitates systems solutions and encourages collaboration and alliances to apply systems sciences to the process of designing and building homes.

     • The Energy Efficiency in Existing Buildings Roadmap addressed technologies that offer significant improvements in the energy consumption of existing homes. The exercise identified such promising examples as air infiltration and insulation, improvements in various elements of HVAC, and better-performing windows.

     • The Research and Development Needs for Structural Performance of Light-frame Residential Construction Roadmap explored how future R&D efforts can be directed to support better performance of light-frame residential construction. The group identified as priorities increased accessibility to existing data and technology transfer as well as methods to analyze and introduce new materials.

   • Background research encourages the enhancement of knowledge about housing applications.

     • The NSF Directorate for Engineering has a program of annual academic research grants. In the first year there was an open call for a variety of research proposals, which was refined to focus on three areas designated through PATH’s technology roadmapping: information technology to accelerate and streamline home building, advanced panel systems, and whole-house and building-process redesign. NSF and PATH are also interested in partnerships between research institutions, industrial enterprises, local government, and other R&D participants in the home building industry.

   • Standards and metrics research consists of studies conducted by NIST to judge the capacities and characteristics of new and existing technologies.

     • Building for Environmental and Economic Sustainability (BEES) software is pro-

duced by the NIST Building and Fire Research Laboratory with some PATH funding. The software is intended to support building-product purchasing decisions by providing science-based information for selection of environmentally preferable products. The software, aimed at designers, builders, and product manufacturers, incorporates environmental and economic performance data for over 65 generic building products.

• PATH-D is a NIST-based program to develop and implement an Internet-based decision support system for builders, designers, and homeowners. It provides technical and economic data on the durability of alternative solutions for designing, constructing, purchasing, maintaining, and replacing the functional elements in housing. The first two building products selected for research are sealants (e.g., caulk) and coatings (e.g., paints and stains).

• Applied research includes work with government research laboratories to produce unbiased data on housing technologies, bridging the gap between background knowledge and actual performance.

  • The work of the USDA Forest Products Laboratory (FPL) Advanced Housing Research Center is supported by PATH in the following areas: reliability-based design for housing in high-wind areas, effects of cyclic moisture on engineered wood-panel products, wood/non-wood composites using recycled materials, and grading rules and grade stamp criteria for recycled lumber.

  • DOE National Laboratories are supported by PATH through the DOE Office of Building Technology, State and Community Programs, which houses the Emerging Technology program to increase awareness and demand for energy-efficient technologies while helping manufacturers and utilities bring the technologies to market.

  • FEMA identifies and evaluates innovative techniques that may improve (1) the disaster resistance, affordability, and design efficiency of coastal construction; (2) the retrofitting of manufactured homes to improve their resistance to natural and manmade hazards; and (3) the design of home tornado shelters. PATH has funded publication and distribution of this information.

• Technology development covers agreements with trade associations, association-affiliated research groups, and innovative manufacturers.

  • The NAHBRC tests new and emerging technologies, assesses technology demonstrations and field tests, develops reports on technology advances and performance, and disseminates research findings to homebuilders. PATH has funded projects on innovative structural materials and design research for residential construction, assessment of residential building engineering design and performance, and product marketing research.

  • PATH has sponsored work at the Manufactured Housing Research Alliance (MHRA) dealing with the root causes of moisture damage, evaluation of foundation systems currently on the market and techniques for their installation, development of a Design Approval Primary Inspection Agency (DAPIA)-approved manufactured home design that replaces wood framing with cold-formed steel framing, and current regulatory hurdles that prevent use of manufactured homes in single-family attached developments.

  • PATH-sponsored research at the American Iron and Steel Institute, North American Steel Framing Alliance (NASFA), examines corrosion of galvanized fasteners used

in cold-formed steel construction, and develops design details for hybrid cold-formed steel-wood framing, and compiles construction connection details.

• The PATH Cooperative Research Program (PATH-CoRP) gives grants to encourage innovators to rapidly introduce new products that improve housing performance. The grant program, administered by NIST, has funded work on roofing that cools and generates electricity, walls that snap together, super-insulating panels created from coal-power-industry by-products, large insulated steel forms for high-performance cement foundations and walls, energy-saving programmable thermostats, and systems engineering building techniques that cut costs and improve the quality of rural and inner-city housing.

• Technology evaluation makes preliminary assessments and provides market entry points for technologies.

  • Field evaluation projects that have been established at 18 locations throughout the United States are helping innovative builders integrate selected technologies into housing designs; measure the cost of incorporating the technologies; evaluate how well technologies are accepted by builders, construction trade groups, and homeowners; and measure product performance.

2. Information dissemination and outreach covers activities that link the fragmented interests of the housing industry to facilitate sharing of information about innovation at different stages of technology development and diffusion.

   • Technology identification and demonstration identifies emerging technologies in a wide range of categories to facilitate their speedy introduction into the market.

     • The Technology Inventory, maintained by the NAHBRC, is a database listing information on new technologies that have potential for improving housing performance but have less than 20 percent of their potential market share. The inventory is used to identify technologies for field evaluations and demonstration projects.

   • Technology forecasting keeps the homebuilding industry informed of global technological changes by monitoring the construction industry and forecasting potential applications.

     • The technology scans are a series of fact sheets published by NAHBRC describing technological developments in other industries and nations and at federal laboratories. The topics include surface and interior finishes, thermal and moisture protection, safety, information technology, materials recycling and reuse, basic materials, building envelope technologies, sustainable design strategies, design and Internet tools, indoor environmental quality, electrical energy/power systems generation, plumbing, and heating, ventilating, and air conditioning.

   • Technology dissemination documents builders’ and homeowners’ success stories showing how advanced and cost-effective technologies perform in real-world applications.

     • The stories report the experiences of builders who are adopting new technologies.

   • Technology information about technologies and resourceful building practices is provided at the following two Web sites.

     • ToolBase is a Web portal operated by NAHBRC to provide technical information on building products, materials, new technologies, business management, and housing systems. A hotline for direct telephone assistance and an e-mail newsletter augment the Web site.

• PATHnet is affiliated with the HUD USER Web site to provide information on PATH activities and access to PATH-sponsored publications and reports.

• Technology awareness activities sponsored by PATH and other housing-related organizations around the world are listed on a calendar. They are supplemented by press releases and news updates from HUD, PATH partners, and other industry sources.

  • Activities undertaken by HUD and HUD USER include special outreach efforts: seminars; the FEMA Design Quality Manual; weatherization; a “Ten Most Wanted” Hazard Resistance Workshop; prescriptive packages; and the FEMA Coastal Construction Guide. PATH has published brochures and manuals and conducted events in coordination with other federal agencies and private industry.

3. Planning and barriers analysis activities forecast potential areas of innovation and identify institutional, cultural, regulatory, and financial barriers to them.

   • Regulatory preparation works to ensure that outdated building codes do not keep a product from entering the marketplace.

     • The National Evaluation Service (NES) prepares technical reports describing building construction materials or products and listing conditions necessary to ensure compliance with each model building code.

     • The National Conference of States on Building Codes and Standards (NCSBCS) manages the Streamlining project as a cooperative effort among 55 national organizations and federal, state, regional, and local governments to bring better management practices to regulation of the design and construction of all types of buildings throughout the United States.

   • Technology reviews are case studies that analyze the technical, regulatory, marketing, and financial factors that contribute to the success or lack of success of a technology in the market.

     • Commercialization of Innovations: Lessons Learned asked practitioners using exterior insulated finishing systems (EIFS) and wood I-joists to reflect on their experiences and relate what they thought worked well and what they would do differently. The report provides general advice that could be applied to the introduction of new technology by other private parties and public officials concerned with innovation in the housing industry.

   • Barriers analysis conducts market research to identify institutional barriers to housing technology research, development, and the adoption of innovations.

     • Issue groups look at housing technology problems faced by PATH partners who have found effective alternatives and solutions. The groups consider technology roadmapping, finance, insurance, quality and labor, and consumer education.

     • ToolBase Roundtables are meetings and accompanying reports on specific housing technology interest areas that intersect with PATH’s work. Recent roundtables have addressed changing demographics, labor shortages and productivity in the homebuilding industry, new horizons in quality management, supply chain solutions from the senior homebuilding industry, the manufactured home, certification of products for the mature market, technology innovation, and the home appraisal industry.

     • The Technology Barriers Analysis Project is exploring industrial, institutional, financial, regulatory, and cultural barriers to the advancement of housing technology. The study is reviewing existing literature to identify issues for further exploration and alternatives for overcoming barriers.

The following organizations, as PATH partners, are undertaking the funded activities listed above; most of these partners also provide funding and in-kind support.

• Certainteed, Inc.

• Department of Energy (DOE)

• Environmental Protection Agency (EPA)

• Federal Emergency Management Agency (FEMA)

• Forest Products Laboratory (FPL)

• Manufactured Housing Research Alliance (MHRA)

• National Association of Home Builders Research Center (NAHBRC)

• National Conference of States on Building Codes and Standards (NCSBCS)

• National Evaluation Service (NES)

• National Institute of Standards and Technology (NIST)

• National Science Foundation (NSF)

• North American Steel Framing Alliance (NASFA)

• Rand Corporation

• Steven Winter Associates

• University of Georgia

• Virginia Polytechnic Institute

Finding: PATH is an ambitious program intended to initiate significant change in an industry that affects 14 percent of the U.S. economy (NAHB, 2002) by sponsoring an annual program of activities valued at $8 million to $10 million. As a partnership it is intended to focus attention on the development and diffusion of technology for the housing industry and to use this attention to leverage action on related government, academic, and industry programs. PATH evolves by responding to its stakeholders and the recommendations of the committee. The committee has observed positive change as the program matures.

Recommendation: PATH should continue to respond to input from its diverse stakeholders and the evaluations of this committee by fine-tuning its mission and goals for increasing the rate at which technologies are developed and diffused in the housing industry.

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BFRL (NIST Building and Fire Research Laboratory). 2002. NSTC Subcommittee on Construction and Building, available on the Web at http://www.bfrl.nist.gov/860/c_b/cbpartnershipforadvancingtechnologyinhousing.htm. Accessed September 18, 2002.

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