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Tuesday, Mar 21, 2023

Boxed In

The 70-year-old Rancho Park home had deteriorated beyond repair, damaged by leaks, asbestos, and a sinking foundation.

Rather than fix it, architect Frank Vafaee began anew, building a sleek contemporary home out of factory-made pieces.

“There was nothing there to salvage,” said Vafaee, founder of home-parts designer and manufacturer Proto Homes.

His six-year-old maker of components for prefab homes is banking on manufacturing efficiencies and appealing designs to draw customers, but it’s entering a relatively mature market that hasn’t gained the traction some thought it would when prefab became a design darling a decade ago.

“Architects and designers have been trying to figure out economies of scale for decades,” said Amanda Dameron, editor-in-chief of architecture magazine Dwell. And the process is far from one-size-fits-all.

“It’s about finding strategies that accomplish efficiencies for a great number of people while still allowing them to exercise their own aesthetic judgments,” she said. Despite those challenges, scores of companies are in the game trying to figure it out.

The 3,000-square-foot home on Westwood Boulevard that Proto just finished is on the market for just shy of $2 million. It was built in just over four months and exactly on budget, defying the tendency of most construction projects to go long – on time and expense.

“Our whole effort is to make the process as predictable as possible,” Vafaee said. “That’s a developer’s dream.”

Proto, based downtown, has three more homes under construction in West L.A., in partnership with Tarzana investment firm Core Vision Capital. Vafaee, 59, expects to partner with Core Vision on 10 to 15 homes by the end of the year, with plans for another 10 or 20 in the year after.

“We want to get to a place where we do as many as we can,” said Moe Ghazi, 33, who launched Core Vision to exclusively build homes using Proto’s prefab pieces.

“In construction, the problem is the unknown. With Proto, the actual product we have is 100 percent predictable and the cost is planned down to the penny,” he said.

Home history

Prefabricated homes whose components are built in factories for assembly on site, often called “prefab,” have been around for decades. Sears Roebuck and Co. began its mail-order program in the early 1900s, sending thousands of Americans kits to make houses that were faster and cheaper to build than traditional alternatives. After World War II, some homebuilders turned to prefab as a cheap, quick remedy to a housing shortage. In recent years, prefab has become the darling of ambitious, modern, and sustainable design. But that doesn’t mean it’s been easy for companies to nail down a business plan.

Architecture firm Marmol Radziner in Santa Monica came on the scene in the mid-2000s as the Rolls Royce of prefab, but lately, has scaled back on that focus.

“We found that the advantages were minimal versus traditional construction,” said Todd Jerry, Marmol Radziner’s chief operating officer. With all the customizations needed to make prefab homes unique, costs ran high, and architects were limited by the size of the trucks needed to deliver the plug-and-play pieces.

Marmol Radziner also struggled to get lenders on board, finding banks hesitant to finance homes that would begin as a jumble of construction materials in a factory.

Vafaee has similarly fought to steer banks away from traditional thinking.

“Our biggest challenge is to convince the big boys that this is the future, and it’s nothing to be scared of,” he said.

Core values

Proto’s model is to build its home components in a downtown warehouse, and deliver the pieces to the construction site. There, the homes get built like empty warehouses, with walls that stretch from ground to roof. That leaves room for the most distinctive, if not attractive, trait of a Proto Home – a unit plunked in the center that houses the home’s infrastructure: electric, water supply, sewage, gas, wiring, and air conditioning.

“If a piece of brick gets caught in the sewer system, you don’t cut down walls to get to it, you go into the core and fix the system,” said Vafaee. That’s supposed to be an antidote to the most common way that homes get outdated – failing infrastructure that is too expensive to fix.

“It gives you the capability of updating the infrastructure without updating the architecture of the house,” Vafaee said. Alternatively, the homeowner could easily change the floor plan or add extra rooms without having to do a costly re-do, making the house what Vafaee calls a “platform of innovation.” With 80 pieces available from Proto, the homes can be constructed in nearly any layout, and to any scale. The costs end up at 30 percent to 40 percent of the typical cost for modern custom homes in urban areas, according to Vafaee.

Proto’s prices range from $175 a square foot to $275 a square foot, while comparable new construction could cost between $350 a square foot to $400 a square foot. Proto’s prices for developers who want to buy home pieces without interior finishes range from $70 a square foot to $175 a square foot.

Building bigger

Core Vision has scouted out a site in West L.A. and two more in Rancho Park for Proto’s next homes. Ghazi, who has worked as a real estate broker for about 15 years and runs real estate investment firm Ghazi Capital Group in Tarzana, is on a hunt for more sites in West L.A. But with plans to sell Proto homes for $2 million to $3 million, he’s anticipating a good return for himself and about a dozen investors.

The just-finished Rancho Park home got a solid offer just a week after hitting the market, said Tami Pardee, owner of Venice real estate brokerage Pardee Properties, who has signed on to sell all the homes in the Proto-Core partnership.

Faced with the new orders from Core Vision next year, Proto is scouting for a factory bigger than its 14,000-square-foot site near the 110 freeway.

At the moment, Vafaee can only produce components for 30 or 40 homes a year. With more space, he would be able to scale up to 300 homes a year. Then, costs would decrease if Vafaee could buy supplies in bulk and streamline operations. Jerry, of Marmol Radziner, said Proto’s hybrid approach could be more effective for custom design than building completely off-site. And Dwell’s Dameron said she has noticed Proto’s consistent efforts to innovate, such as its method of clustering a home’s mechanical pieces in a central unit.

“That tells me they are continuing to experiment, and that is the most essential element of prefab work,” she said. “You have to pull a lot of levers to figure out how to reach the economy of scale.”

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