Homebuyers in Seattle have come to expect a process that is costly, protracted, and nerve-wracking. But nothing prepared Andrew Weller and Kristin Nierenberg for the new-house nightmare they’re still living through.
In June, the young couple demolished their Madison Valley bungalow and moved into a rental to make way for a modular house from Greenfab Homes, a Seattle firm known for elegant, environmentally friendly prefabricated dwellings.
For $453,000, Greenfab would build Weller and Nierenberg a home in sections, or “mods,” in its factory in Burlington and then assemble it on the now-vacant Madison Valley lot. Prefabrication, which can dramatically reduce overall construction time, has been getting a lot of attention lately in cities like Seattle that want to add housing supply as quickly as possible. Weller says Greenfab promised to have the couple and their two young children in their new home by Christmas.
But in September, after the couple had already paid Greenfab around 90 percent of the contract price, they got some unwelcome news. Several subcontractors working for Greenfab told the couple they hadn’t been fully paid.
Soon after, Weller said, a Greenfab official told him the 11-year-old firm was insolvent. “‘Sorry, we don’t have any money’ — that was basically it — ‘and we can’t finish your project,'” said Weller, a 34-year-old data visualization analyst with the state’s Office of Financial Management. Adding insult to injury, Weller said, Greenfab insisted he pick up his unfinished mods from the factory in Burlington.
Greenfab declined repeated requests for comment.
Weller and Nierenberg, who is 36 and a physician, have since restarted their house project with the help of another Seattle modular company, Method Homes.
But the couple’s move-in date is now next spring and their total cost is likely to be $200,000 higher — in part, Weller said, because Greenfab didn’t install the appliances, flooring, cabinets, counter tops, and other amenities the couple says they already paid for. That’s “meant some serious financial difficulty,” Weller said.
Weller and Nierenberg aren’t the only homebuyers left in the lurch by Greenfab.
Andrew MacCreary, a 44-year-old marketing coordinator who bought a Greenfab prefab house for his Whidbey Island property, said the company initially promised a move-in date of June 2018.
But MacCreary’s mods didn’t arrive until May 2019, and by mid-September, workers doing the final installation glumly informed MacCreary that Greenfab “was out of money and ‘we just lost our jobs.'”
MacCreary also had to find other contractors to finish his house. He hopes to move in by December, but said he’ll end up paying roughly $80,000 on top of the original contract price. Greenfab, MacCreary said, has left him and others “hundreds of thousands of dollars in debt and stress.”
It’s not clear what went wrong for Greenfab, which as recently as August was praised as one of “6 eco-minded prefab companies in Seattle” by Dwell magazine.
Swen Grau and Dirk de Pree, Greenfab’s general manager and chief financial officer, respectively, declined by phone and email to discuss customers’ complaints or the future of the company, which has a sales office in Phinney Ridge. Although the company’s website site is still up and its 800 number remains in service, the factory in Burlington was locked at midmorning one day this week and appeared empty except for what looked like a single mod.
Former Greenfab customers, contractors, and employees speculate that the builder became overextended after trying to ramp up its output of homes.
MacCreary said he was told by a Greenfab employee that the troubles began in 2018 when several Greenfab customers were unable to fully pay for their mods, which halted work in the factory and backed up subsequent projects. “That had a domino effect,” MacCreary said. “They weren’t prepared for that kind of a scenario.”
A former Greenfab contractor who asked not to be identified said Greenfab sometimes underbid on projects and then had to ask clients to pay more. In at least one case, the contractor said, a frustrated client decided not to use mods and hired a conventional contractor to build the house.
Greenfab would hardly be the first homebuilder to get overextended. And its troubles would appear to be the exception for an industry that is gaining attention in the Puget Sound region and other booming areas as a faster and potentially cheaper kind of construction.
By moving most of the construction process into a controlled factory setting, a prefab home can be built more efficiently than a home at a conventional construction site, and often with better quality, said Tom Hardiman, executive director of the Charlottesville, Virginia-based Modular Building Institute. (Unlike mobile homes, prefab or modular homes must meet the same code requirements of site-built homes.)
Those factory efficiencies can translate into cost savings, especially on larger multifamily projects. Hardiman said modular construction is becoming increasingly popular as a faster and more cost-effective way to build multifamily housing.
For example, Method, one of the largest modular companies in the Seattle area, is rolling out a “wet core” design that puts the kitchen and bathroom in a modular core and builds the rest of the home from premade “panelized” wall sections. By concentrating the home’s more expensive elements in the core, Method hopes to lower the cost of multifamily housing units by 10 percent to 20 percent, said Method founder and CEO Brian Abramson.
Those cost savings don’t always show up in single-family prefabricated homes. One reason is that in the single-family housing market, modular builders, with their costly, regulated factories and skilled workers, often are “competing head-to-head with site framers, many of whom are employing really cheap immigrant labor,” said Ryan Smith, director of Washington State University’s School of Design and Construction and an expert in prefabricated housing. As a result, Smith said, many prefab single-family homes are still a “premium” product.
But prices could fall if demand for prefab single-family homes rises and draws more competitors into the business. In Seattle, some affordability advocates see a large natural market for prefab homes in the city’s efforts to increase the number of backyard cottages, or Detached Accessory Dwelling Units (DADU).
In the meantime, prefab single-family homes are gaining popularity with buyers willing to pay for cutting-edge, environmentally sound design. That was the marketing pitch from Greenfab, which touted “a housing concept for the new economy focused on reducing costs, energy consumption and environmental degradation,” and offered features such as net-zero energy technology and rainwater collection.
But one of Greenfab’s biggest selling points was speed. Because most of the construction took place in the factory, Weller and Nierenberg expected they’d need only six months in a rental, instead of the 12- to 18-months that a typical site-built project would have required.
MacCreary, too, says that as a result of an over-optimistic delivery date, he spent $24,000 on unanticipated rent while waiting for Greenfab to deliver.
Whether those who say they lost money with Greenfab will see any of it again isn’t clear. The company has retained a local law firm, Wenokur Riordan, which describes itself as specializing in financially distressed companies.
MacCreary, for one, isn’t holding his breath. He thinks the chances of recovering money from the company are “slim to none,” and has decided instead to “really put my focus on the house and getting it done and just hope for the best later.”