Building Container-Based Homes to Combat the Housing Crisis in Southern California & Beyond w/ Strategic Habitats

John McMullen

Hello, and welcome to Inside Modular: The Podcast of Commercial Modular Construction, brought to you by the Modular Building Institute. Welcome, everyone. My name is John McMullen. I'm the Marketing Director here at MBI. Today I'm joined by Cory Segall, co-founder of Strategic Habitats. Cory is here to talk about his company's efforts to combat the affordable housing crisis with container-based homes. Cory, welcome.

 

Cory Segall

Thank you glad to be here.

 

John McMullen

Tell me about yourself. Cory, how did you find yourself in the modified container business and how did Strategic Habitats come to be?

 

Cory Segall

So, we started our business in 2002. We were and we still are a government contracting business, we've trained over a million troops since 2002 to present. We have an eight-acre facility here that we do a lot of construction. Our facility is a manufacturing plant where we would build facilities for the military, do training for the military, and now we're expanding and looking to get more into the residential affordable housing sector here in San Diego. Then looking to do it throughout the country as we see that's a real big need. Housing prices continue to go up in California, construction costs continue to go up. So, we have a really good and strong, affordable solution that we feel can help on the affordable housing, the homeless side, and just a new solution for developers that are looking to build and create multifamily projects. We feel like we can help.

 

John McMullen

So, you mentioned you're in San Diego. What can you tell me about the housing situation in Southern California right now?

 

Cory Segall

So, it just continues to go up. Costs are, just to be frank, very high, and they continue to go up. Obviously, San Diego is a place that everyone wants to live. It's great climate, there's a ton of great things to do here, whether it's the beach, whether it's playing golf, just being outside, there's just a lot of activities. So, a lot of folks like to move here and with the rising costs, we're always looking and wanting to do new things. So, we've kind of had a lot of city officials come and take a look at our facility and take a look at our products that we build, and they really like it. We're actively working with developers and other folks, churches, we're real excited about it.

 

John McMullen

Tell me about the products that Strategic Habitats is producing. You mentioned container-based houses, how is Strategic Habitats filling that gap for affordable housing?

 

Cory Segall

We’re just trying to get involved. There's a definite need for a more cost effective builds. With the rising costs of material and labor, developers are always looking for new ways to continue to build their projects at a timely manner, that's fast, that still looks good, and can give a high product to their clients. So, we see the need not only in the military, but also the growing concern in California for housing. We can build our units much faster than a new stick build and they're probably less than half the expense. I think they did a study where in California, it's 600 to 800,000 per door, we're substantially lower than that. We can build our units anywhere between eight to 10 weeks. So, they're cost effective, they're much more efficient, and the product is really nice, too.

 

John McMullen

So, let's talk about the first step of building houses out of shipping containers. How do you source them and what do you need? What do they need, I should say before they can be modified into housing units?

 

Cory Segall

We always get kind of a CAD drawing from our clients. So, we create those we have an in-house CAD drawer, that kind of gives us specs on exactly what the clients looking for. We will then get an approval from the client, get a kind of a sign off of the yes, we like this. From there, we order the containers and we have suppliers that we work with from Long Beach, Dana Point, all over California and throughout the nation that we get our supply from with containers. Once we have them on site, we have a strong crew of welders, carpenters, guys who are real tradesmen within that and are certified. Then they start building to suit, everything is to code and we build to the highest standards of what's going on here in California. After that, we slowly then will bring it to the client and there'll be prep work in between that on prepping the site before. What's great on these, these don't need a conventional foundation so we can put these on the dirt on the gravel and basically build them up like puzzle pieces. So that's been our process so that the client can see before, during, and after the process of what's going on. They can see us starting to put it together and then we can create a finished product for them.

 

John McMullen

So I know there must be a lot of design work that goes into these and I know containers come in fixed sizes, are you dealing with just one size of container, are you dealing with multiple sizes, what's involved from your point of view and from a client's point of view in taking these boxes and really turning them into homes?

 

Cory Segall

So, we usually work with high cubes, which are nine foot six. So, it's a much taller configuration within our containers. Usually, they're eight feet tall, but we like a high cube that we that we work with, and usually go with eight by 40 that gives us the maximum amount of square footage. Usually, developers have a certain amount of square footage that they want each unit to be and then we basically have the f40s that sit next to each other. If we want it smaller, we can actually have a 40 and a 20 put together and then they can kind of work. The 20 can be the bedrooms or the bathroom, we can just kind of configure it however it’s needed. Most of the time, developers will have a certain square footage, they want a one bedroom or two bedroom, and then we could just build it to suit. But that's usually how we've done it most the time we'll use an eight foot by 40-foot container, but a much another foot six inches tall or so it gives it doesn't feel as small.

 

John McMullen

What’s the development process like for container homes? Are there any additional hurdles that you guys have to go through to create these homes? Are there zoning issues, anything like that?

 

Cory Segall

Well we work with the developer hand in hand. They deal with the permitting on the jurisdiction side of things, and then we'll have our facility approved by the State of California to where all of our units will be stamped so it's built to code. Then from that, we will build everything to the engineer drawings. So, engineer drawings are really important so we know structurally where everything's going to be, the sizes of our windows, our doors, everything is built to code to where we can then build them and then stack them up. All the weight goes on the corners so once we start messing with walls, it doesn't really affect the integrity of the building because all our weight is on the corner. We retrofit the inside to make sure it's extremely strong and these can go up to nine storeys high. We try to stay at three storeys or below because after that you have to bring in an elevator. That just helps with not having to go through those types of permitting, but we work in tandem with the developer on the permitting side of things. On our end, we work with our engineer to get make sure our engineer drawings are built to suit. So, we have a nice, consistent flow.

 

John McMullen

You mentioned earlier that you had a building for military background, you're using containers for military purposes, training folks, what would you say the learning curve has been like moving from applications like that, to turning shipping containers into homes that people feel comfortable in? What have you learned during that that process?

 

Cory Segall

Yeah, it's a big jump. When you're habiting homes, you have to have the certain codes, you have to build to suit, you have to build it to the California compliancy. In the military, you build it, you throw it on their land, and it's a training facility. There's no code, there's no proper foundation, there's no installation, all those things have to now be in on a residential habitat unit. So, there's a big curve, but it's something that we're now pretty vested in and feel confident in. But there's definitely a big curve because we can build something that is a steel structure, we can slap it on the military, and then they use it for training. So, it's strictly for a training purpose. Then the move over to residential is making sure it's fire rated and making sure your sprinkler systems are in. You have your installation, you have your windows a certain height for egress and egress in case of a fire multiple exits. It's just having that and then also working with the engineer so that it's structurally sound too. So, it's definitely a curve but one we're excited about.

 

John McMullen

Were there any particular design challenges that you struggled with at first, but now you feel like you've got a handle on things? It sounds like you've got a handle on things, but I'm just wondering if there was something specific that maybe made you stumble at the start?

 

Cory Segall

I think getting proper square footage. A lot of times developers will want a certain square footage so they can get highest, best use and also that they can charge for that out in the market. We were having a hard time with that, because each unit is about 320 square feet on a 40 foot container. So, some wanted it 800 and change. So just kind of getting those one unit, two bedroom and then three bedroom units to what our client wants, and then kind of going from there. We're really trying to establish having one, two and three bedroom units to where they're kind of streamlined. But every client has different needs. So as long as we can capture their need and their main importance, we can then add those into the building. So, the pre planning in the beginning is always extremely important, no matter who our client is.

 

John McMullen

If I were to come to you tomorrow and say, Hey, Cory, I want to start building homes out of shipping containers. Is there something that comes to mind that you would tell me to get started? Maybe better yet what would you tell me that perhaps I had not considered?

 

Cory Segall

First off, you have to know your land. Where's this going to be? Are there any certain jurisdictions that prohibit these from being in? If there's not, we can then kind of work in tandem to understanding the ground soil. Is it hard packed? Are you going to want it on a piece of concrete, are you going to want it on dirt, are you going to want it on gravel? So, it's understanding the land, understanding the permitting processes, understanding what type of foundation, and then goes into design. Then from our end, we can create a design that is then acceptable to the client. We take those drawings, and then bring that to our engineered firm, that give us our engineering. Then from that we'll have a budget within what it's going to cost to do the project on how many units the client wants, kind of go down that path, and then create the engineering drawings. Once we have those, and they're stamped by the state of California, we're running through the processes with our developer whose project this is, then we order and we start manufacturing it.

 

John McMullen

I’m going to go off on a little tangent here if you don't mind. You keep mentioning the types of foundations that are available for container homes. You mentioned dirt, you mentioned gravel, concrete, of course. Are there differences? Like does it matter to you as a builder? Or is it just a matter of which one the homeowner chooses and then adapting to that?

 

Cory Segall

Yeah. I mean, obviously, the flattest and the smoothest is always the most ideal. Us coming from the military, we usually put it on the ground, we put it on grass, we put it on gravel, we've put it on just dirt. If they have a nice flat concrete pad, that's obviously ideal. Then we can then secure it down into it. But these can go on multiple different surfaces, so doesn't need to be perfectly flat. We can alter our ground support in our boxes to make it flat, adding either supports under each side to give it that flatness, but it doesn't need to be completely flat, like a new stick build does, where it needs foundation or needs to have a perfect surface in order to build. We can adapt in the field, depending on the terrain. So there's multiple options.

 

John McMullen

What's your elevator pitch to those? Be it you know, government officials who are looking for housing, housing authorities, or individual homeowners, what's your pitch to those who are on the fence about container based homes?

 

Cory Segall

Look, I mean times are changing. We need to evolve with what the main pain points are in our economy, its labor and materials. We're trying to build new affordable housing that works, so that you don't have to wait 18 months. These can be built to suit, they can be built fast, they look really nice, and it's an alternative solution to what are the main problems within the construction industry. Those are the top two things, labor and material. I know labor is always going to be your issue with people. But if you have a material solution that can help with that and build units that you can be proud of, this is the way to go.

You have to be open to change, you have to be open to trying new things. Put up a couple of different projects up with this in your area and you're going to see a huge benefit. Not only from your cost to put this up, that's going to be substantially less, but it's going to be built much faster. So, you have got to get with the times and evolve to what's coming down the pipeline. Those two things are always increasing so you can find new ways to increase housing and put these in areas that you know can help with not just the housing crisis but could be the homeless crisis, could be sanitation within certain areas that will help with littering or give people a sense of purpose that they're in a nice home. There are many different reasons why having a more cost-effective living situation is going to be much more beneficial for our communities.

 

John McMullen

Do you think containers are our long-term solution for housing? Is this something we're going to be doing for years and years and years to come? Or is this just something we can take advantage of now as we consider other long-term solutions?

 

Cory Segall

Well, I think this is a long-term solution. One, it's a steel structure and steel is far more sound than wood. You don't have to deal with termites or water damages. I mean, there will be some wood that's inlaid to separate the bedrooms and bathrooms, but for the most part, having steel structure is a much stronger force than any wood structure. The great thing about these is if you want, you can move them. It's a permanent structure, but you can also throw this on a truck and get it out within a week. So, it's a great alternative to someone to where if they wanted to try this in a plot of land that they had, they can put up a structure and if five years from now, they changed their mind, they can actually move it out. They don't have to tear it down like you would a new build, concrete build, or something that you need heavy machinery. Then you have to clean up and then it's just a whole other mess. So, it can be a permanent structure, it can be a movable structure and it can be not permanent. So, there's a lot of really good alternatives that containers are great for. So I think it's a long term, long term play.

 

John McMullen

What’s next for Strategic Habitats? I know you guys have been doing military work for a long time, you're now invested fully in the residential side of things. But what do the next three to five years look like for you guys?

 

Cory Segall

We want to continue to grow, have more projects going on in California. We want to be doing more projects, getting involved in the community, and we just joined with you guys. So, we want to kind of get our message out there and bring on more work and more projects. So people can see what we can do and give a real good solution. We want to just continue to grow and make this a real strong solution that people will start to use. Whether it be a smaller multifamily or bigger, I think this is a great solution that's going to stay for years to come. I know with anything new, there's going to be some pain points, but I really think this will be a great solution for many years to come. We're just excited to be involved with different building communities and the modular building community. We're with building communities here in San Diego and just ready to do more projects.

 

John McMullen

Oh, of course. It's been a pleasure. Thank you for your time today. If there's anything we here at MBI can do for you, please let us know.

 

Cory Segall

Thank you so much. Glad to be here. Thank you.

 

John McMullen

My name is John McMullen and this has been another episode of Inside Modular: The Podcast of Commercial Modular Construction. Until next time.