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Putting Technology into a Production Build

The 91-unit Oak Hill development in Pasadena, Calif., merges high technology with a low budget.

by Bob McCullough

When executives at R.W. Hertel and Sons, Inc. began to lay out the smart home features the company wanted to include in its upcoming Oak Hill project, they knew they had a technology tiger by the tail. Home prices for the 91 mid-range units in the Southern California development would start at $500,000, and Hertel knew that many of the buyers would be demanding, tech-savvy professionals who would be commuting from Pasadena to work for nearby high-tech firms in Los Angeles. n To meet their needs, Hertel would have to find a robust, easy-to-use structured wiring package that would be both modular and expandable. That package had to be capable of providing advanced Internet and computer access, along with state-of-the-art home control capability for energy management, security and home-office features. 

As a regional production builder, Hertel was also trying to provide technology on a budget, and the cost of the structured wiring package had to come in at under $1,500. 

For Purchasing Manager Mark Mandernacht, though, the toughest part of providing the best technology was sending the right message to potential buyers. 

“We had done pre-wires before,” Mandernacht remembers. “We used integrators and electricians, and they kept promoting the fact that they did Cat 5 pre-wires. But what they were offering wasn’t modular and expandable, and they never educated the homeowner about how the product they were installing would meet their needs. We ended up asking ourselves why we were putting it in if we didn’t sell the product or educate people about it. You could hook up the computer, but we knew you could do so much more with an integrated system. 

“There’s a real demand for high-tech usage in the home [in Southern California], especially when it comes to energy conservation,” Mandernacht adds. “Internet access happens every day with pre-wire systems from other builders, but we wanted a system that would make the home smart. One system can make life a hell of a lot easier just by pushing a lever, especially if you have something that allows you to check and monitor everything from your laptop, your master bedroom or from work. Since we live in a high-tech world, why can’t we have a high-tech home and offer that to homeowners?”

Integrator and Manufacturer Guide the Builder
Two companies stepped up to help Hertel offer that capability. ChannelPlus provided the product piece of the puzzle when Hertel selected the company’s Open House structured wiring and home control package. The integrator that provided the marketing capability and the savvy to get the parts and pieces to fit together was Home Tech Works, a relatively new integrator in the white-hot Southern California homebuilding market that emphasizes meeting the needs of individual buyers. 

“We knew this was Hertel’s first entrance into the structured wiring market,” says Erik Vidrio, CEO and chief designer of Home Tech Works. “A lot of production builders haven’t even heard of structured wiring, and they end up getting burned because they think they’re getting it from some integrators and they’re really not. Hertel was looking for something that would provide the entire backbone for under $1,200, and Mark [Mandernacht] expressed an interest in having the basics in place to be able to market smart homes.” 

Vidrio helped steer Hertel toward Open House for a variety of reasons. One was ChannelPlus’s 20-year history in the pre-wire market, of which Vidrio says, “They were doing structured wiring before people were calling it that.” Pricing was another obvious key factor, but Hertel also liked the fact that Open House was a turnkey system with modular capabilities, one that included option packages for such features as home theater and security that are well suited for the basic Oak Hill tech demographic. 

According to Michael Hernandez, product planner for Open House and ChannelPlus, that capability didn’t come about by accident. “We worked quite a bit with integrators when we designed our products, and Open House has an open-ended design,” he says. “It’s been out for 21⁄2 years now, and it’s our third-generation product. It was built for the standard production home, and the way it was designed it can be cookie-cutter or customized. 

“We look at structured wiring as the organizational point for services to come into the home,” Hernandez adds. “Everything is a subsystem—HVAC, security, whatever—and we just supply access points for those systems.” 

Open House is also ideal for some of the specific issues of the Southern California marketplace. Mandernacht stressed energy management as the most important element of Hertel’s smart home concept, and he wanted an expandable system that would grow to meet the needs of buyers as the community itself developed and became more technologically sophisticated. 

“We include growth potential to network communities that have houses with 2,400 to 3,600 square feet,” says Hernandez of the Oak Hill homes. “We have modules that can work as data products or as multimedia termination points that provide multifaceted function in every product, so we don’t have to fill up the can to provide a lot of functions. 

“In Southern California we’re a lot more open to using a larger enclosure of 36 inches,” Hernandez adds. “You can foresee a lot more growth because the consumers are savvier, and the upgrade money is higher. We also make allowances for DSL, because 50 percent to 70 percent of that market is DSL-wired. We include special amp panels for cable modem, and we have residential gateways and data routers available.

“For an investment of $1,100 to $1,500 for your structured wiring package, you’re not going to just get passive video and two phone lines,” Hernandez concludes. “You’re going to get eight to 10 phone locations that provide four lines as well as power video distribution. We also provide full IR control over the video in the far bedrooms, a music distribution system and a phone management system. We were able to answer a lot of [Hertel’s] questions easily, and economically in that area. What we were trying to do was provide the biggest bang for the buck.” 

Educating Homeowners Is Vital to Success
But Hertel knew that many aspects of Open House’s technology package would go unused or be underutilized if homeowners weren’t included in the education process. For the marketing part of the sales equation, Hertel turned to Home Tech Works, which went to work on the process of handselling systems through individual customer surveys. 

“We wanted them to make sure the homeowner wasn’t overwhelmed,” says Mandernacht. “We wanted a program that was fairly simple that people could come up to speed on right away. A lot of people work on computers, but they don’t know that much about them. We wanted a clear presentation of a program that was easy for homeowners to understand and put their hands on.” 

Erik Vidrio of Home Tech Works agrees that that basic concept applies to both the product and the education process. “We didn’t want what I call ‘crazy controls,’” he says. “We wanted to stick with a three-button concept: a button for what’s going on when you’re at work, another for when you’re at home, and another for when you’re asleep. We knew from working with the ChannelPlus product that it could provide that capability.” 

“But the real difference we provide is that we’re also a marketing company that goes to work for the builder,” Vidrio adds. “Hertel is a regional builder in a very hot high-tech market, and there’s a lot of competition to provide customers with features, especially when it comes to energy management.” 

Home Tech Works differentiates itself by surveying potential buyers about their technology preferences, asking them to specify the different option packages that would be installed in the home upon purchase. The survey is the basis for the structured wiring plan, with Hertel matching up the features that buyers specified and then making sure the Open House package is correctly configured to provide them. 

“Home Tech does its options by doing what it calls a lifestyle survey,” says Mandernacht. “Once they do the survey, they design something to fit their lifestyle. There was a lot of attention to detail, and it required a lot of going back and forth.”

The attention to detail took on different ramifications when the two companies began to plan the model homes for the development. Mandernacht saw those homes as a key component in selling the units, and he strongly felt that they needed to reflect the real technological capabilities in the homes themselves. 

“We have a lot of professional families in the high-tech industry,” he says. “I thought the computer concept in the house would appeal to the buyer. I wanted to have computer-screen mockups throughout the house, to show people that this is what a normal house is going to look like before too long.” 

“I don’t see any builder doing this kind of thing in models,” Mandernacht adds. “It’s kind of a custom-home thing, taking that level of capability and bringing it down to the everyday-home person, to help people with things like energy conservation or utility bills, and make life a little bit easier with this system.” 

Potential homeowners were quick to buy into that concept when it came to selecting options. “We had a den option with computers in the den, and a lot of people are taking that before the home-office option,” he commented. “We also had a lot of people working out of their home who need technology to assist them with their jobs. We wanted to stress that we had something in place that could do that—help them manage their kids, their dinners, and their schedules and do their work at the same time.”

While the task of planning the high-tech home has been successful, Mandernacht is also quick to stress that Hertel is at the beginning of the project. Initial results and reactions have been successful and positive, but Hertel is unrolling Oak Hill in two different development phases, and he has his own set of personal benchmarks when it comes to the way homeowners are reacting to their new smart homes. THB

Bob McCullough is a freelance writer based in the Boston area.

SIDEBARS

ROI

• Builder R.W. Hertel and Sons wanted an integrator who would educate homebuyers.

• Using an established structured wiring manufacturer helped assure the builder.

• Oak Hill is 91 units starting at $500K each.