Proceedings of a Workshop to Review PATH Strategy, Operating Plan, and Performance Measures (2006)

DR. VANEGAS: I would like to introduce the panel that will start our discussion of goal III. First is Dr. Matt Syal, who serves as a professor and the graduate program director of the Construction Management Program at Michigan State University, which is one of the few schools in the country that integrates planning, design, and construction. He is also the research director of the Housing, Education, and Research Center. His Ph.D. is from Penn State University and he has worked in many positions for construction firms in the United States, India, the Middle East, and Africa. He also serves in several advisory and consulting capacities for construction in government organizations.

Next is Dr. Chris White, who works at the Building and Fire Research Laboratory (BFRL) of the National Institute of Standards and Technology (NIST). He is the NIST contact for PATH-sponsored efforts to develop methods for measuring the durability of materials. He is working with large industrial consortiums representing more than 90 percent of the nation’s output in sealants and caulking. His second focus is to provide the economic rationale for the adoption of new methods. Chris is an analytical chemistry polymer scientist with a Ph.D. from the University of Wisconsin-Madison and a former NRC postdoctoral fellow.

The focus of this session is Goal III, which is to advance housing technologies research and foster development of new technology. The discussion questions that we will be addressing are the same as those addressed in the previous sessions.

DR. SYAL: I am speaking form the perspective of university faculty. Our interests are to see how universities can do research and outreach, and bring housing design and construction into college classrooms. I am also speaking for the National Consortium of Housing Research Centers (NCHRC). The consortium members represent about 19 land grant universities with active housing research programs.

I will be talking about the NSF-PATH Housing Research Agenda Workshop Final Report, which is available on the PATHNET.org Web site. The report documents a year-long effort sponsored by the National Science Foundation (NSF) and PATH to develop a research agenda and a February 2004 conference of NSF-PATH researchers and members of the NCHRC. The agenda focused on basic or fundamental research (as opposed to applied research), which are the types of research projects generally undertaken at universities. PATH recognized early on that the best approach to stimulating housing technology research at universities was through a partnership with the NSF. The result is a program of university-based research that has steadily improved over the past five years. The program has sponsored about four or five projects a year, but most importantly it has helped universities create a critical mass of housing researchers.

Both PATH and NSF decided that to have a sustainable program, they needed to set up a visionary agenda of what they wanted to do over the next 10 to 20 years. I coordinated the effort of developing an NSF housing research agenda, along with a couple of the folks. One of them, Dr. Mark Hastak from Purdue University, is here. Another one from the University of Central Florida could not attend this workshop. In 2004, we invited about 45 researchers, who had direct or indirect interest in housing, to participate in a forum. The forum addressed five potential areas of research: construction,

management and production; structural design and materials; building enclosures, energy, and indoor air quality; community and the economy; and systems interactions and the whole-house approach.

In determining the appropriateness of Goal III, we should consider how PATH can bridge the gap or make the link between basic research and applied research, and between university resources and the needs of the industry. We should also consider how to use university-based research to both develop content and disseminate information to builders and consumers.

DR. WHITE: Earlier today we talked about the pipeline for delivering innovation to builders and the type of information they need. This is essentially recognition that there is no department of building science within the federal government. There is essentially no pool of money that allows a large agency to go after and solve the kinds of fundamental problems that we have been talking about.

Because resources are scarce, PATH needs to think about how to best use the limited resources. PATH’s total budget is very small considering the cost of doing research. PATH needs to use its funds to leverage other resources within the government, industry, and academia. Creation of that leverage is hampered by that fact that there is no central government or private organization for building science technology.

DR. VANEGAS: The development of housing technology is at the intersection of physical sciences, engineering, and business. Business decisions include consideration of both risk and return. The development and diffusion of technology also requires input from social sciences in order to measure the ultimate outcomes and impacts. Housing technology is not a simple term.

Research is part of a continuum that leads to development, then to demonstration, and to deployment. It is a continuum because once a technology is deployed, the cycle goes back to research to determine its performance. PATH is at the core of what the Department of Commerce calls the value of debt. The value of research appears when a technology becomes successful, but the true cost of R&D to make a technology commercially viable is seldom known.

Fully Integrated and Automated Technology (FIATECH), an organization concerned about technology for the capital construction industry, is a good organizational model of an industry-driven consortium for technology R&D, demonstration, and deployment. I am on the board of directors and find it a very interesting exercise. The Construction Industry Institute (CII) is another example of a collaborative approach to R&D for construction.

There is a tendency to segregate research, education, and practice. A conscious effort is needed to bring them together. This fact leads most universities to have active outreach programs to communicate with consumers and professionals. It is often very difficult to communicate the value of basic research to those outside academia. PATH can help bridge that gap.

MR. ENGEL: Given this morning’s discussion that PATH may have too many goals and objectives, and that the program’s limited resources are spread too thin, and given also the fact that the Department of Energy has a significant building technology development program, albeit one that is focused on energy, would it make sense for PATH to eliminate R&D as a goal and focus on the barriers and information dissemination goals?

MR. SPEAR: That may be effective as long as PATH keeps demonstration projects and programs like the Concept Home. R&D to develop new technologies could be left to others.

DR. O’BRIEN: Research for the development of materials and technologically advanced products can come from industry, but R&D for improved, more efficient processes and policies needs to come from another source, such as PATH—for example, the PATH-sponsored study at Virginia Tech on the innovation process. PATH should continue to sponsor research with an emphasis on the innovation process. There will always be people in industry, academia, and government doing research to make a better widget, but research on innovation in housing is not likely to happen without a champion like PATH.

Regarding the suggestion to look to CII as a model, CII does not have housing anywhere on its radar screen. However, CII has done a good job of understanding government and industry construction issues, benchmarking and identifying best practices, and developing education programs. It has a complete feedback loop that helps its industry sponsors improve their processes.

DR. VANEGAS: CII is a example on how government and industry as owners, suppliers, and building contractors can work together with academia to develop a vibrant research program.

MR. HATTIS: I would like to address Dr. Syal’s point on the relationship between basic and applied research. A model that comes to mind is FEMA’s National Earthquake Hazard Reduction Program, which has been in existence for about 15 years or more. It has a budget of about $100 million per year. It is much larger than PATH, but it is small by comparison to many other federal research programs. It bridges the gap between basic and applied research. It sponsors research on materials and structures (including wood, which relates to residential construction) and applies developing changes to the codes and standards that regulate building construction in earthquake areas. The earthquake codes and standards today are completely different from what they were ten years ago and this is the result of a program that coordinated the efforts of NSF, NIST, USGS, and FEMA. The problem is very different from the one PATH is addressing, but it is a model of a successful program that has been able to get appropriations year in and year out. They have advocates in Congress. It also helps that every once in awhile there is an earthquake in California.

DR. SYAL: Should PATH do research? It is not a question that can be answered yes or no. Large homebuilding companies, like Pulte and K. Hovnanian, are starting their own research programs. However, they will probably think of the results of that research as being proprietary information. It is unlikely that they would publish the results of their research unless it gives their company an advantage.

If they need some basic research done, they have the resources to get a private or academic consultant to do the research. They can also team with local and national builder associations, suppliers, and supply chain organizations.

Small and medium builders generally do not have the resources needed to sponsor research. Sometimes they can initiate programs with local extension services or local universities that have a funding source such as PATH. The critical mass of housing researchers will likely dwindle without federal funding support. Without PATH funding, the group that will suffer most will be the small and medium-size builders.

DR. WHITE: Innovation in other industries is driven by funding. For example, research in biomedical sciences is currently experiencing tremendous growth that is spurred by federal funding. At the same time universities, such as Tulane, are shutting down their civil engineering programs because NSF has decided that it is not an area they are going to fund.

The only source of funding for housing technology research is PATH. If PATH stops funding research, the only information PATH will have to disseminate will be product literature from manufacturers. There are some problems that are so big that they require a very large research effort. PATH cannot support such large programs but it needs to be part of that effort.

As a point of information, the National Earthquake Hazard Program is now a NIST program.

DR. HASTAK: I would like to think that the partnership in PATH stands for partnership between academia, industry, and the government. As academia focuses more on research and dissemination of that information, continued funding from PATH has become very important. If research funding is cut, it will not only cut down on the development of new technologies, but will also cut down dissemination of information. It will also cut down on education because schools will not be able to sustain the current programs. I think it is extremely critical for PATH to continue funding research.

MR. WEBER: The Portland Cement Association’s PATH-funded research has been an excellent way for the association to work with other sectors of the homebuilding industry such as the Steel Framing Alliance, and the Structural Insulated Panel Association. PATH provides a nonproprietary forum where PCA members and others can pool resources for research. This approach to federal funding to support industry cooperative efforts is also used by the Federal Highway Administration. PATH funding makes a difference.

DR. VANEGAS: The lack of funding may be due to not asking the right questions. Housing researchers need to broaden their vision and to look at how they can address the problems that currently have large funding programs. For example, every university is building a brand new bioengineering, bioscience, bio-whatever laboratory. A lot of bio-based materials can have a tremendous impact on the housing industry. Housing researchers are not partnering with the people that are getting the big bucks. Nanotechnologies are another example of an area of intense research interest. There are some potential things for construction such as steel that is ten times lighter and ten times stronger, where nanotechnology could impact the housing industry.

Worldwide, housing is a $3.4 trillion industry. In the United States it is $1.1 trillion. Improving an industry of this size should be worth investing more than $5 million per year.

DR. WHITE: Nonetheless, researchers are going to answer the questions of the people who are paying the bill.

DR. SLAUGHTER: Federal organizations are usually buffeted by political vicissitudes. The challenge is how to create a sustainable momentum. Operation Breakthrough was incredibly exciting for the people who were involved in it, but support for the program was not sustainable. There are not a lot of people around who were involved in Operation Breakthrough. Many people do not know what it was, what came out of it, or the specific technologies that were demonstrated, many of which are incorporated in buildings. PATH needs to create a program that is sustainable. In 15 years, the program may not be called PATH anymore, but it may continue as ongoing links among its partners.

One of the issues we have been exploring is the role of manufacturers and the supply chain. PCA is represented at the workshop, but more of these organizations need to be involved. Manufacturers can be an effective leverage point. For example, if DuPont has come up with an ultra-strong material using nanotechnologies, you can bet they want to get their share of the construction industry. It may be commercial or housing or both. If they can reduce their risk by participating in a partnership with governmental research labs, university research labs, or industry research labs, they will do it. The money begins with the manufacturers. If PATH wants to leverage R&D dollars, then go to where the money is.

DR. WHITE: That is the model that we have built for PATH-sponsored research at NIST. There are 20 companies under specific Cooperative Research and Development Agreements. They encompass the entire output of several industries, such as caulk and coatings. We leverage the PATH money with matching funds from industry. The goal of this approach to PATH research is to create a sustainable pool of resources that can be adapted to other problems as they are identified.

Part of the problem that PATH has encountered is that administration changes resulted in a loss of support and funds. DOE faces similar problems, but DOE can show that it consistently delivers value from the research it does. That is what PATH needs to do.

DR. MARTIN: Over the past year, we have looked at other similar federal government-private partnerships. We are trying to identify approaches that are likely to lead to a sustainable program.

DR. JACKSON: I am Ric Jackson. I am the director of FIATECH, which was referenced earlier as a possible model for PATH. FIATECH is a consortium of owners, operators, contractors, suppliers, research organizations, and a few academic organizations that pool their resources to address capital construction issues of mutual concern that have a technology solution. The technological solution often exists, but the issue is that the construction industry has been slow to adopt it.

Part of our discussion today is how FIATECH attracts industry participation. It has been a long process. FIATECH was started by people in industry who were concerned that the industry was suffering because the results of research and innovation were not being deployed and flowing to their bottom-line profitability.

It is difficult to get people in an industry to work together, but effective people saw value in pooling their resources. They see value in working on projects that affect their bottom line and they see value in attracting others to pool their resources. FIATECH is focused on getting people to work together to solve problems.

DR. MARK: How much does FIATECH charge for membership?

DR. JACKSON: The dues structure was recently revised. Membership fees are based on a

company’s revenue. FIATECH’s founders had been in other organizations that charged one large fee for all participants. They thought that the large fee was a barrier to participation by small companies. They based the membership fees for FIATECH on a company’s revenue and in the case of government or academic organizations on the research budget. The average fee is about $35,000, which includes participation in two projects. There is an additional fee for participation in more than two. If the research budget is under $5 million, then the fee is $10,000 and that includes participation in one project.

MR. SPEAR: If PATH were to come to an organization such as the American Institute of Architects, it might be willing to contribute to a collaborative research fund. It seems that most of PATH’s current partners are receiving funding from PATH rather than contributing to a research funding pool.

DR. VANEGAS: The role of academic institutions in preparing the homebuilding professionals of the future places them in the forefront of cultural change. They are in a position to foster a homebuilding culture that values research and innovation. They can disseminate knowledge of PATH’s mission through their graduating classes. Investing in academic research provides more than the results of a research project.

MR. GONZALEZ: In California, concerns that the spotted owl issue would affect lumber delivery spurred research in steel frame construction. This is an example of demand pull determining research priorities, because the building industry needed to adapt to changing conditions to survive. If PATH can determine what that demand is, then it can sponsor research that can have an immediate effect on the housing industry, whether it is energy, materials, or processes. The issues may not necessarily involve high-tech innovation. The demand may be for new uses for things that are out there.

DR. O’BRIEN: A lot of the discussion today has been focused on the end customer being the person who purchases a home. Home buyers are generally most interested in the bottom line. They want a home that works for them, is beautiful, affordable, and energy efficient. Chances are they plan to sell the home in five years. However, if the customer is defined to also include municipalities and public service providers, such as electric utilities and wastewater services, then there is an opportunity for another potential partnership. Energy and water companies provide incentives for homeowners to use new innovative technologies to lower the demand on the public systems. For example, I built two homes in the last five years and in both communities, the energy efficiency standards for new homes were set by the local government. These organizations have an incentive to invest in education, outreach, and the development of new technologies

MR. CHAPMAN: Over the years, NAHB has looked to manufacturers and high-production builders to provide funding for almost everything. They get hit up probably 15 to 20 times a day for large contributions. The research that they are involved in typically is going to be proprietary, as was mentioned. There certainly is some room for partnerships, but they are unlikely to be big financial supporters of PATH.

A group of builders started an organization called the National Center for Housing in the Environment (NCHE). The object was to develop a source of reliable, untainted data on environmental issues that could help developers and builders with projects that were being challenged on environmental issues. They needed good data to support their projects, but most environmental data was biased because the Sierra Club or other groups sponsored it. The center’s object was to develop good data, even if it was bad for the housing industry. Unfortunately there was no support from high-production builders and manufacturers to help sponsor that organization, primarily because they wanted short-term deliverables.

When mold became a big issue, it took NAHBRC about two weeks to raise $750,000 for research on mold in housing. This supports the earlier discussion about focusing on hot-button issues. Builders and manufacturers are looking at their bottom line and are motivated by short-term results. Even a large builder is not concerned about houses that will be built 20 years from now. It is next year’s production, or at most the next five years’ production, that is a concern.

It is very exciting see Pulte committed to research and innovation, but if there is a 2 percent spike in interest rates, that program is in jeopardy. That is the reality PATH has to deal with.

DR. WHITE: A purely demand-driven research model might have difficulty responding to short-

term demand. When a demand is identified, it is going to take time to develop the capacity to get that research done. Even if you have all the money in the world to make it happen, it is not going to happen without a research infrastructure in place. It is important for PATH to have programs that maintain a research infrastructure.

MR. CHAPMAN: The NAHB spends most of its money and effort lobbying Congress about tax and budget issues that affect the business climate for builders. NAHB, the realtors, and others will spend a fortune on this battle because it has a huge and immediate impact.

I think all the ideas we are talking about on funding are correct and should all be pursued. The public-private partnership is important and is essential to the sustainability of PATH. It is a tough nut to crack, and there are times when there are opportunities and times when there are not. When I spoke to the High Production Builders Council about the NCHE, they could not have been more polite or showed me out the door faster.

DR. HASTAK: In CII’s research model, projects are led by an academic, but they also have teams of industry partners working with and advising the project team. Industries contribute both funding and expertise to CII research. They bring excellent ideas and keep the academics in touch with what is really important to practitioners. As a partner, industry should be sitting at the table discussing the current hot issues and what is needed for short- and long-term solutions to their problems.

MR. CHAPMAN: That is the role the PATH Industry Committee plays. That is how the goals were redefined. That is why so much of the work that PATH has done has changed. I think it has been a long process for PATH to get where it is and a great deal of that progress has been due to the involvement of industry groups. PATH is staffed by a very responsive group that pays a lot of attention to industry and academic feedback.

MR. PETERSEN: Pulte started its own R&D program for one reason. Pulte builds 40,000 to 50,000 homes a year. With that volume, if there is a problem, the answer to that problem is needed quickly. Pulte needs to control the agenda and the schedule. It does that by controlling the budget. Pulte has not made any of the manufacturers it works with sign confidentiality or proprietary agreements for the innovations it has developed. Everything is available to any other homebuilder. That is how we get industry to work with us. If we told them they were only going to have a market of 50,000 homes, they would not have an incentive to spend their time and effort to work with us.

A lot of technologies have been developed to address energy efficiency, but in solving the efficiency problem they created humidity problems. When the housing industry has done R&D, it has not done a good job of integrating new technologies into existing systems. System integration requires good-quality R&D. Ensuring that R&D has the support of basic research that provides the information needed for systems integration is a possible role for PATH. The R&D needs to be followed by the dissemination of information to ensure proper installation and operation of the new technologies. That follow-through is often missing.

I am from Michigan where I am surrounded by automotive engineers who love to work on their own homes. When they look at high-tech housing components, they are reminded of maintenance nightmares associated with technology that has gone. For them, housing innovation has a stigma, but technology has gotten a lot better and more reliable in the last five years. However, the stigma is there from the past 15 or 20 years when high-efficiency homes and tighter building envelopes were first introduced.