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2005 Builder of the Year
Bigelow HomesDoing good by doing right
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12.2004
Founder Perry Bigelow andpresident Jamie Bigelow
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Builder of the YearSpecial Report
>> A PB Staff Report
TOWNFOUNDERSChicago’s Bigelow Homes sets a benchmark for builders who aspire to (profitably) better the lives of the people who buy their homes.
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BIGELOW HOMES’ management team worksby consensus-building rather than top-downdecision-making. Running day-to-day opera-tions are from left vice president/constructionTony Spano, founder Perry Bigelow, landdevelopment manager Scott Bauer, vice presi-dent/controller Jim Smith, vice president/salesand marketing Mike Venetis, president JamieBigelow and vice president/purchasing DaveSpano.
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It would be rare to find a home builderwho has not made a public claim to pos-itively impact society. Ownership housingplays a big role in knitting together the fabric of com-munity in America. But what would happen if socialengineering role, along with nurturing the naturalenvironment, became your central reason for being?Would your company be more, or less, profitable?
The answers are on display in just such a company:Aurora, Ill.-based Bigelow Homes, which prominentlyshows founder Perry Bigelow’s mission on its confer-ence room wall: “To honor, glorify and experience Godin all relationships and to do good work.” Just below isthe company purpose, which now inspires a team ledby son and president Jamie Bigelow: “To respect and
value people, foster interdependent relationships, andrespect and care for the natural environment.”
As altruistic as these good and green goals are,Bigelow Homes has another attribute: it is also one ofthis country’s most profitable home builders, and it’ssteady increase in profitability mirrors the maturationof its most ambitious project: HomeTown Aurora. Thisunique, 173-acre, 1,288-home suburban experiment inbuilding houses in patterns that maximize the socialinteraction of neighbors, also walks softly on the land.Now in its sixth year of closings, its thriving successproves the validity of the Bigelow vision. Building acarefully crafted town that nurtures humans of all agesis not only better for residents than what the Bigelowscall “commodity housing,” it’s also more profitable.
When the editors of thismagazine look at candidatesfor the most historic andprestigious award in theAmerican housing industry,PB’s Builder of the Year, wesearch for a company withideas our readers can use to grow theprofitability of home building busi-nesses across the country. We look fora business model that fits market con-ditions emerging in today’s nationaleconomy, but with broad applicabilityto every region and locale. After all,housing is a local business. To beBuilder of the Year, a company musthave a certain something builderseverywhere can use to improve. Wealso ask, if this is the right company,why is this the right year?
In the case of Bigelow Homes, wefound a company with ideas so pro-found they work on either side of thegap between affluent, fast-growing sub-urbs and Chicago’s depressed, inner-cityneighborhoods. You can learn a lot fromBigelow about how to please customers— even if you never adopt theHomeTown development concept. Butmake no mistake, HomeTown is a win-ner. It will play in Peoria, Pensacola orPortland (Maine or Oregon).
This is Bigelow’s year becauseHomeTown now has a track record ofsuccess that’s undeniable. Andbecause the firm’s breakthrough opera-tion just west of Chicago’s Loop,replacing city blight with energy-effi-cient detached homes that inner-cityfamilies can afford, is now up and run-ning. Families are moving in, a tri-umph of political skill as well as pro-duction-building expertise.
Perry Bigelow is a deeply religiousChristian and his faith shows in bothlocations. To bring that faith into homebuilding, he has become a philosopher,sociologist and political scientist. Buthe is still the graduate engineer of his earliest professional training, acompatriot of energy efficiency guruJoe Lstiburek, a devotee of the hard-
nosed Lee Evans/ChuckShinn school of home build-er management, compellingevents to conform to plan,and a belief in MartinFreedland’s system of find-ing, training, retaining, and
respecting. He’s now a visionary, but before that he built operationalexcellence into his company, which is a marvel of lean production-building processes.
Efficiency MeetsInnovationBigelow’s homes sell fast because theycreate value that’s easy to see. In theinner-city, that perceived value resultsfrom even-flow production efficienciesthat allow Bigelow to build incrediblyfast and market new, detached homesso energy-efficient they carry a guaran-tee to heat for less than $275 a year, yetsell for prices starting at $115,000 (for1,140 square feet) in blue-collar, prima-rily African American neighborhoodswhere few detached homes have beenbuilt in 50 years.
In suburban Aurora, Bigelow’s valueproposition is more complex. Added tothe energy-efficiency and even-flow pro-duction that dramatically impacts hous-ing affordability are mixed-use commu-nity planning and traffic-calming inno-vations that increase social interactionamong residents bridging three (per-haps four) generations. By clusteringdetached homes in tight, “living lane”and “living court” neighborhoods,HomeTown Aurora makes room for 12parks, prairies, ponds, a mixed use com-mercial town center, post office, churchand general store. Interestingly, whilethe goal is to build a community wherepeople talk to each other, one net effectof the compact neighborhoods is lowerper-unit infrastructure costs.
Bigelow develops and builds in twoother communities in the suburbs, butnot on the scale or with the same controlas in HomeTown Aurora, which is the
culmination of a decade of work.“Most conventional, production-
built housing subdivisions start withhigh sales driven by lot availability andattractive pricing,” says firm presidentJamie Bigelow, “then sales tail offtoward build-out. The sales curve forHomeTown Aurora is just the oppo-site. We started slowly because, in theearly stages, people couldn’t see howdifferent this community is. It’s not asubdivision. It’s a real town, the kindmany people yearn for. We’ve now sold870 houses here, at prices rangingfrom $150,000 to $300,000. Whenthe neighborhoods started to reachcritical mass, visitors could finally seewhat it’s like to live in a connectedcommunity. As town attributesbecome more obvious, perceived valuegoes up.
“Our sales increased every year forfive straight years, and our profitabil-ity went right along,” he says. “Today,we’ve leveled production at just over200 homes a year in the suburbs,because that’s our capacity. To buildmore, we’d have to add another levelof management, and we don’t want todo that. We’re growing our opera-tions in the city. We think we can get to 150 units a year there, with one construction superintendent. Wehave our first closings in the city thismonth (Nov., 2004).”
However, profitability has not lev-eled off. The referral sales rate atHomeTown Aurora now stands at 30 percent and climbing. Buyers areeager to bring brothers, sisters andparents to the model homes, to sharethe home town experience, JamieBigelow says. “This is experientialselling,” he explains. “The differencebetween HomeTown Aurora and aconventional subdivision is like thedifference between buying MaxwellHouse at the supermarket and a tripto Starbuck’s. Coffee as a commoditycompared to a coffeehouse experi-ence. The value added is reflected inpricing and on the bottom line.
Why Bigelow isBuilder of the Year
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“We’re selling detached homes attownhouse prices. Much of HomeTownAurora is very affordable. We can dothat because we have really tight oper-ations and our density averages 7.45units per acre. Yet the experience ofliving in HomeTown vastly exceedslife in a conventional subdivision.One of the important attributes thatmakes a town truly pedestrian iswalking destinations. As we open themixed-use elements of our town cen-ter, our perceived value will continueto climb. Eventually, we’ll have 150employees in the town center. Most ofthem will live in HomeTown andwalk to work.”
Profitability Proves ItBigelow Homes is a relatively small,family-owned production buildingcompany (No. 362 in PB’s currentGIANTS rankings, on volume of$38.12 million from 212 homesclosed in 2003). This year Bigelowexpects to close 215 houses for $40million. But growth is not the storyhere. The firm is thriving inChicagoland’s massive housing mar-ket in competition with much largercompanies, including many nationalGIANTS. That tells us the Bigelowbusiness model works as a survivalstrategy for family firms across thiscountry that are also not growth ori-ented, perhaps even struggling tocompete against the behemoths ofthe industry.
Jamie Bigelow scoffs at the ideahis firm ever needed a life-preserver:“We’ve achieved differentiation,” hesays. “That was our strategy. We neverfelt threatened. This kind of commu-nity development will work anywherebecause this is the way a big portionof the population wants to live. Rightnow, in our market, HomeTownAurora is the only place they can findit. We really have no competitors. Idoubt the public builders will ever dowhat we do.”
We’re not sure of that. Even theGiants are up against increasing politi-cal opposition to conventional subdivi-sion development. One of the obviousbenefits of HomeTown Aurora is thatit’s a shining example of ‘smart growth.’When Bigelow began the long battle toentitle HomeTown Aurora, in the early1990s, the New Urbanist movementwas in its infancy and few planners orpoliticians in the Midwest had everheard of Traditional NeighborhoodDesign. Today, Bigelow finds manymore allies because HomeTown, ahybrid TND, has proved to be smart forAurora, Ill., as well as for BigelowHomes. Assessed value per developedacre is 2.25 times higher in HomeTownthan in conventional subdivisions in thearea. And many suburban Chicagoplanners are now well-schooled advo-cates of New Urbanism. That putsBigelow on the solution side of the bat-tle over urban sprawl and builders of allsizes want to align with that side.
Bigelow’s Profit StoryOver the last two years, Bigelow
has improved in all financial manage-ment categories, but several stand
out. Perhaps the most noteworthy islow lot costs, which are dramaticallybelow the target.
HomeTown includes costly com-munity infrastructure elements suchas sidewalks six feet wide (instead offour) and public streets 31 feet wide (toaccommodate guest parking) and traf-fic-calming devices such as safety plat-forms, traffic circles and chicanes thatdraw endless sighs of disgruntlementfrom teenage drivers. “But we havefewer linear feet of public street perunit,” Bigelow says. “That’s why ourimproved lot costs are low, even withall the extras we include. And our per-ceived value is high because our streetsare safe for kids of any age, throughoutthe whole 173 acres of HomeTown.”
The increasing perceived valuetranslates into a steady increase inprofitability, Bigelow says, and thefirm’s net profit history shows it.
Lessons To LearnOn the following pages, we’ll detailsome of the strengths we believe contribute to Bigelow Homes’ suc-cess, ideas you can move into yourown company.
“THE MIDWEST ISTHE LAST REGIONOF THE COUNTRYTO EMBRACESMART GROWTH,BUT WE BELIEVEOUR OPERATINGMODEL ISSUSTAINABLE. THEINDUSTRY ISMOVING IN OURDIRECTION.”JAMIE BIGELOW,
PRESIDENT
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1. Lean OperationsBigelow is a land developer and pro-duction builder, but the companymaintains an incredibly lean organiza-tion of only 50 employees, includinglaborers and warranty technicians, bystrict adherence to carefully engi-neered systems and work processes.While Bigelow is organized traditional-ly, along functional lines, it doesn’toperate in the dictatorial style of mostfamily-owned businesses.
Instead, managers at all levels con-tribute to all major decisions, includ-ing long-range planning and land pur-chases, in a collegial, almost familialatmosphere based more on consensus-building than top-down direction.Senior leaders in the functional areasare compensated with modest salaries,but derive the bulk of their incomefrom profit-sharing. Everyone doeswell by doing good.
The operating principle is thatBigelow hires people at every levelwith the intention that employment ispermanent, not dependent on thevagaries of the market. “We’ve neverbeen excited about being big,” saysPerry Bigelow. “There’s nothing in
our principles or vision about growth.Stable employment is our goal. Thatmeans we have to get higher produc-tivity per employee, so when the rev-enue is not there, we can still keeppeople employed.”
If stability is the goal, it seems to beworking. VP/controller Jim Smith hasbeen on board 15 years. VP/construc-tion Tony Spano has been withBigelow 12 years. His brother DaveSpano has eight years in the firm andrecently moved from the field toVP/purchasing. Jamie Bigelow hasbeen in the company for 11 years, start-ing in sales, then VP of sales and mar-keting, and recently elevated to presi-dent within the framework of owner-ship succession that is now largelycomplete. “In another year, I’ll beworking for him,” Perry Bigelow says.“He’ll always have a job and he’llalways be the boss,” Jamie responds.
Blitz BuildingThe real key to Bigelow’s high pro-ductivity per employee is the consis-tency of what it builds and how. In the city, Bigelow is not the developer, but rather a general contractor for
Ezra Community Homes. The non-profit developer is Chicago MetropolitanDevelopment Association, an arm ofUnited Power For Action and Justice, acoalition of primarily African Americanchurches and service industry laborunions. Perry Bigelow is a long-timemember of one of the churches. Heagreed to take on the challenge of building affordable homes to fit vacantcity lots, but only on the condition thathe could bring his well-oiled produc-tion-building machine to bear on thechallenge. The city acquiesced, but ithasn’t been easy dealing with arcanecodes and enforcement.
The city product line consists ofonly two floor plans, both two-story,slab-on-grade homes, one of 1,140square feet, the other 1,380 square feet.Both plans have the same openings forwindows and doors, and offer very fewoptions. Construction is panelized andtakes place on an accelerated scheduleof 31 working days from the start of fram-ing to closing. Each house is framed,windows and doors installed, locked anda security system engaged — all in threedays — to create a safe working environ-ment for crews who are in a sometimesdangerous neighborhood.
“OUR PAPERLESSP.O. SYSTEMGENERATES APURCHASE ORDERAND AUTO-FAXES TOTHE TRADE PARTNER.THERE’S STILL AHARD COPY ONTHEIR END, BUT IDON’T EVER WANT ITBACK.”DAVID SPANO, VP
PURCHASING
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“We create affordability by gettingthe lots for free from the city and build-ing very fast,” Perry Bigelow says.“There are no interior color selectionsexcept for the flooring. The elevationvariations involve only porch and sid-ing materials choices. The kitchen cab-inet layout is the same for both plans.When construction is complete, weclose the next day. We can’t leave ahouse sitting empty.”
In HomeTown Aurora, the com-plexity of four product lines, with threeto six plans each and multiple optionand upgrade choices, stretches theconstruction schedule to 54 workingdays, but selections are all made beforeconstruction begins. Bigelow allowsno changes at all after a start. “Weexplain our processes very carefully tobuyers,” says Jamie Bigelow. “Theyunderstand that minimizing changesis part of our value equation and thatthey benefit from it. Once you set theexpectation, that actually becomes apositive for customer satisfaction.”
The contract to construction startprocess is machine-like. And unlikeconventional subdivisions, HomeTownAurora’s point of differentiation is inthe community experience, not somuch in the architecture and featuresof individual homes. “There’s a lotmore variation in HomeTown than inthe city,” says VP of construction TonySpano. “But we still have a lot moreconsistency than most builders.”
Paperless P.O.s StokeEfficiencyBigelow recently achieved major gainsin productivity by creating its own most-ly paperless purchase order system in-house. “I knew from my own field expe-rience just how much time our superswere spending — 10 to 12 hours a week— just signing and checking P.O.s,”says VP/purchasing Dave Spano, wholed the team that pulled together thenew system. “When I came into this job,it was something I knew could be donethat would be of great benefit. It alsosaves our trade partners a lot of time.
The old system required printing outthree-part forms, two of which went tothe trade, who had to separate them bycommunity and job, then send them onto the appropriate foreman. “Then hehad to get it to our field super when thejob was complete, so he could check,
sign and return it to the foreman,” saysSpano, “who had to return it to thetrade’s office for attachment of lienwaivers. Then it came back to ouraccounting department for invoicing.”
When Dave Spano came into pur-chasing, VP/construction Tony Spanohad already put in place a computer-ized construction scheduling system.“I started thinking about tying theP.O.s to pay points in that schedule,”Dave Spano says. “We could tie a P.O.to every line. All we needed was cod-ing to link those two programstogether. We wrote it, in-house, andthe rest is history.”
The trades were skeptical it wouldwork because of past failures of paper-less systems with other builders. “Butthey know we have a history of makinginnovations work,” Spano says. “We stillgenerate a P.O. that is auto-faxed to thetrade. So there’s still hard copy on theirend. But I don’t want it back. We arepaperless. What generates the paymentis a program we wrote to look at each ofthe computerized weekly schedules.When anything is marked 100 percentcomplete, it goes into the accountingsystem and searches for a P.O. tied tothat task. If there is one, it pulls it outand invoices it automatically. If the tradeis on 30-day terms, the check is cut 30days later.”
Bigelow is armed and ready to even-tually begin e-mailing P.O.s to trades,but right now, Illinois’ requirement forlien waivers hamstrings that possibili-ty. “When our system prints a check, itautomatically sends a lien waiver to thevendor,” Spano says. “We can’t e-mail
lien waivers because they could bemanipulated. Since the lien waiversare auto-faxed, we decided to just stickwith auto-faxing the P.O.s for the timebeing. The onus is on the vendors.They have to get the lien waiver back tous to get their check.”
The simplicity of the paperless P.O.system allows VP/controller Jim Smithto handle the entire accounting func-tion with one full-time and one part-time employee.
Gains In CustomerSatisfactionDuring 2003, Bigelow reengineered itsquality assurance program to add a new,internal quality walk, conducted by theassistant super, one week before the war-ranty manager conducts the orientationwalk with the customer (two weeksbefore closing). Through the course of2003, that change dramatically impact-ed outstanding warranty items.
That improvement in warranty oper-ations, carrying into 2004, reached alow point of 35 outstanding warrantyitems for the entire company in Octoberthis year, and is one of three factorsBigelow identifies helping to dramati-cally improve customer satisfactionscores. That improvement is reflectedin third party customer satisfaction sur-vey scores in the first half of 2004.
The other factors are better settingof customer expectations by the salesteam, and the effects of the paperlessP.O. system in freeing field supers to spend more time focusing on cus-tomer issues. pr
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2. Elements ofCommunityTo catch up with Perry Bigelow on the philosophical, spiritual and socialunderpinnings of his HomeTowndesign concepts, you’ll have to do a lot of reading. Start with ChristopherAlexander’s The Timeless Way ofBuilding and A Pattern Language.Then there’s Robert Bellah’s Habits of the Heart, Wendell Berry’s Unsettlingof America, Home Economics and Sex,Economy, Freedom and Community,Kathryn McCamant and CharlesDurrete’s Cohousing and B. JosephPine II and James H. Gilmore’s TheExperience Economy and RandyFrazee’s The Connecting Church.
America’s New Urbanists are well-represented in Bigelow’s library,which includes Peter Calthorpe’s The Next American Metropolis andthe Duany, Plater-Zyberk, Speck col-laboration Suburban Nation, as wellas Peter Katz’s original definition of New Urbanism.
Don’t forget Housing as if PeopleMattered (Cooper Marcus/Sarkissian),Tony Hiss’s The Experience of Place,James Kuntstler’s The Geography of Nowhere, David Sucher’s CityComforts—How to Build an UrbanVillage, and Allan B. Jacobs’ GreatStreets. And Sarah Susanka’s The NotSo Big House and William Whyte’sSocial Life Small Urban Space arealso represented.
In the midst of all this study, PerryBigelow reached a conclusion: “I decid-ed the lives of pedestrians, especiallychildren, are more important than thedesire of anyone to drive fast, includ-ing fire trucks,” he says. “And the sociallife of every child is more important.”Bigelow identified dangerous streets asa suburban evil that inhibits childrenfrom the freedom to wander as theyused to 50 years ago, leading to parent-managed lives and stunted socialdevelopment. “We keep our kids infenced back yards, like cages,” he says.“Parents are not going to let them playout front when cars are driving 50miles an hour on suburban streets.And that happens everywhere.”
The elaborate traffic-calming tech-nology in HomeTown’s streets comesfrom Bigelow’s worldwide search forways to force cars to drive slow
enough that drivers and even theyoungest kids can react to each otherand avoid harm. It’s Bigelow’s mostobvious, and profound, innovation topedestrian-friendly TNDplanning. And HomeTownbuyers embrace the con-cepts, although teenagedrivers we witnessed seemless than thrilled.
Bigelow had to fightfor traffic-calming, espe-cially against fire officialsconcerned that thedevices would damagetheir trucks and reduceresponse time to fires.“We argued, and won, on the basisthat our system of interconnected,electric smoke detectors—as many asfive to a house, all with battery back-up—means the fire department isnever fighting more than a propertydamage fire in HomeTown,” Bigelowreports. “We argued the life threat isgreater from speeding cars, and theimpact they have on the lives of chil-dren a greater cost.
“Today, we have aldermen fromother jurisdictions visiting HomeTownbecause their citizens are clamoringfor traffic-calming after seeing whatwe have,” Bigelow says proudly.
3. Energy Efficiency& Green BuildingPerry Bigelow started his company inthe early 1970s and built his reputationfor quality by pioneering energy effi-cient homes during the backlash to thefirst energy crisis in 1974. He became
an innovator in environment-friendlyconstruction in the same time-frame.“I started building spec houses, one ata time, like most builders,” he says.
“Eventually, we became adesign/build firm, devel-oping property as well asbuilding. We found aniche building on sitesthat were difficult for oth-ers because of topogra-phy and woods.”
Bigelow even invent-ed a ‘plant spatula’—adevice that attaches to afront loader, allowinghim to move seven
square feet of vegetation at a time intransplanting operations. “Any treesmaller than three inches (diameter)we save,” he says.
Bigelow developed a line ofhouses he called “Solar-Therm”that were U-shaped, with a two-story solar-therm room at the cen-ter. “It had a huge glass wall withan ‘insulated curtain wall.’ Almostall of the rooms looked out towardit. The curtain wall went up forsolar gain during the day and camedown at night. It had an R-valuealmost equivalent to a 2x4 wall atnight. Those houses heated for $30to $40 a year.
Finding ways to build energy-efficient houses that are affordablebecame Bigelow’s quest. The break-through came when Perry Bigelowheard a young Canadian buildingscientist named Joe Lstiburek bat-tle audience abuse at a meeting of the
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One simple rule governs marketing atBigelow Homes: say nothing in any com-munication that any other builder in the
market could say. As is usually the case with whatlooks simple on the surface, the secret of BigelowHome’s marketing efforts goes far beyond the sellline in any advertisement. What Bigelow does sowell is articulate to buyers the values that the built-in features of the community deliver: a nurturingenvironment where children can safely learn andgrow, and a real neighborhood with friendlystreets and small-town atmosphere designed toconnect neighbors one to another.
For example when it comes to energy efficiencyBigelow translate this feature — something anybuilder can claim to deliver — into buyer value inits advertising by offering its “three-year, $400heating guarantee.” Bigelow makes the abstractsubject of safety very real by marketing “Kid-SafeNeighborhoods” and delivering on the promisewith HomeTown’s curving, winding street designand traffic calming devices that force cars to goslow. Likewise, in every ad and marketingbrochure, all photos show actual residents andreal events in HomeTown. “Forgetthe canned shots that show an idyllicworld,” says vice president/sales andmarketing Michael Venetis. “The realthing at HomeTown is better.”
The list of differences - and thusthe value-based ad messages —goeson and on, but unique ad messagesaren’t the only departures shoppersexperience at the Aurora, Ill. commu-nity. Instead of pulling prospectsdirectly into the sales office, Bigelowhas visitors start in the welcome cen-ter, which also houses the HomeTown Café. Here,a greeter (full-time on weekends and a café stafferduring the week) welcomes prospects to the com-munity and begins selling the HomeTown differ-ence. “No other builder has a general store in itssales office,” says Venetis, “ so people immediatelysee that we’re different from the commodity hous-ing subdivisions.” It’s not at all uncommon for
shoppers first salesexperience to comefrom a HomeTown resi-dent visiting the cafe ratherthan any sales professional.“Our current homeowners real-ly sell the community. They’re aseffective a sales agent as we could get.”
Just like residents, the sales staff doesn’t justdemonstrate model homes; instead they demon-strate the whole community. “We talk about kidsafe, tell what it means, show how we deliver. Weexplain how the living lanes and living courts cre-ate environments where neighbors can easily getto know one another and build relationships.”
As in most areas, Bigelow’s buyers typicallyshop four or five different builders before visitingHomeTown. “Immediately — and I mean in thefirst three minutes — we stand out as different,”says Venetis. “If buyers like it, we know it fast, andif they don’t, they move on pretty quickly. We’renot wasting time trying to sell people who are notreceptive to what we offer.” On average, aHomeTown buyers visit the community 2.8 times
before signing a contract, a veryquick conversion rate given theextensive housing options for buyersto consider.
Hometown’s sales staff worksbuyer registration cards, more thanin most builder sales offices, saysVenetis because of the extensivehousing offering in the community.“Cards help us qualify the prospectand maximize our ad expenditures.We learn what medium generateswhich buyer for what product line.
We target advertising very carefully.” Sales steerbuyers just as carefully. With the information onthe registration cards, agents advise buyers to“look closely at the first two models becausethey’re right in the price range,” he adds. “Thisupfront consulting saves time for us and our buy-ers and improves customer satisfaction by stream-lining the purchase experience.” pr
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SELLING VALUE
Energy-Efficient-Building Association,in 1983, to present his then-radicalconcept for using airtight drywall toseal houses from air penetration.
“We were achieving really tighthouses,” Bigelow says, “but they werealmost impossible to build and expen-sive. Joe Lstiburek’s approach was likea thunderbolt. I wasn’t smart enoughto come up with it, but I was smartenough to see that by using the dry-wall as an air barrier, you could con-trol quality much easier—just seal theconnections to the drywall at all theopenings. This allowed us to takeenergy efficiency into production-built, affordable homes.”
Now based in Massachusetts,Lstiburek is one of the world’s fore-most building scientists, certainlythe top practitioner in the Americanhousing industry, a consultant tomany of the public builders produc-ing thousands of homes a year. Hecredits Perry Bigelow with launchinghis career. “I wasn’t getting muchtraction on my airtight drywallapproach in 1983,” he recalls. “I wastelling people that wrapping houseswith polyethylene vapor barriers wasreally stupid, but nobody wanted tolisten to me, except Perry Bigelow.He started building dozens of air-tight drywall houses. He just wentoff and did it.
“I was getting crapped on by all the environmental people,”Lstibureksays. “If it were not for Perry, I’d be an asterisk in the history of building science, a footnote. PerryBigelow is my hero. He was the firstto guarantee energy bills. Now it’shard to find anyone who will admitto ever putting polyethylene vaporbarriers on the inside of basementwalls. I’m still trying to get poly outof the codes in some Chicagolandjurisdictions.
Bigelow Homes is still workingwith Lstiburek and still in the van-guard of energy breakthroughs.“Joe now believes it’s better to letbuildings breathe both ways,” PerryBigelow says. “In our city houses,we’re not depending on the drywallas an air barrier anymore. We nowdepend on the house wrap we applyto the outside of the building. It’snot a vapor barrier, but it is the airbarrier and drainage plane.
“In the old days, we didn’t separatethe two, but now we know that thevapor barrier can be one material andthe air barrier another,” says Bigelow.“In the suburbs, we still use airtightdrywall, but in the city, the constructiontechnology we use allows us to makethe change Lstiburek now advocates,putting the air barrier on the outside.”
Bigelow Homes remains dedicat-ed to delivering energy efficienthomes that stretch shoppers pur-chasing power and improve home-owner comfort. Every house inHomeTown has a heating and cool-ing system that is zoned by floor. Inthe summer residents areeducated to close the first-floor duct to push cool airup and in winter heat is dis-tributed through the first-floor registers since warmair naturally rises.
“We have yet to have oneheat distribution complaintin HomeTown,” says Perry.“The engineering works.”
Some specifics of Bigelow’senergy efficient building prac-tices are:
n Every room has a coldair return that runs all the wayback to the furnace throughthe floor joist system.
n Constant, continuouswhole house ventilation froma continuously operatingmechanical ventilation system.
n Raise energy heel truss-es that allow more insulationin the attic above the joint ofthe exterior wall and ceilingwhere there is very little airmovement.
n Insulated basements(an option on certain prod-uct lines) structurally engi-neered, foam-insulated pre-cast concrete.
n Ductwork installedwithin the home’s thermalenvelope.
n R-38 attic insulation;R-13 or R-20 exterior wallinsulation.
n Edge slab insulation (acopyrighted detail!) that pro-vides a thermal break andthree to five times moreinsulation.
n Engineered advanced framingsystem that combines optimumstructural strength with optimuminsulation.
In addition, Bigelow employsenergy technicians that inspectevery home for compliance to com-pany standards and performancecriteria. This one-two combinationallows Bigelow to deliver what noother builder in the area can: athree-year $400 heating guarantee.In the city housing product, becauseof a slightly smaller square footage,Bigelow’s three-year heating guaran-tee is $275.
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BottomLine
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4. Even-FlowProductionOne of the most profound changesBigelow made in recent years toimprove operational efficiency wasthe move in late 1999 to a modi-fied even-flow production system.
“Ten years ago, builders in thismarket would tie themselves inknots every December becauseweather issues would compoundfrantic efforts to get extra closingsonto the books at year-end, saysBigelow VP Tony Spano. “Thebuilders would all put themselvesthrough hoops trying to get thoselast closings, then spend the nexttwo months recovering from it. Wedon’t do that anymore.”
Many smaller production buildersthink even-flow is a high-velocity con-
cept suitable only for builders start-ing and closing high multiples ofhouses every day. Bigelow puts the lieto that urban myth. “That’s non-sense,” snorts management consult-ant Chuck Shinn. “All you really needto make even-flow work is a consis-tent construction schedule. A lot ofbuilders who say they tried even-flowand it didn’t work never got pastevening the starts. They still hadcompletions all over the placebecause they left scheduling to thesupers. ‘Flow’ means you have to dothe same things at the same points inthe process on every house. You canhave even-flow at six houses a year ifyou start one and complete one everytwo months.”
Bigelow’s even-flow system, facili-tated by computerized constructionscheduling, creates a number of effi-
ciencies not possible if closings comein bunches. “For one thing, it allowsus to have one closing officer,” saysVP of construction Tony Spano. “Shecan’t handle eight in one day, but shecan handle one every other day.Remember, our goal is steadyemployment.
“It also allows us to quote accu-rate move-in dates to buyers, andthat improves our customer satis-faction,” says Spano. “And proba-bly most important of all, it givesus regular cash flow, which is a bigload off Jamie and Perry, that theydon’t have to worry about jugglingcash flow.”
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LEARN MORE ABOUT IT Log on to readmore about Bigelow Homes. Original arti-
cles posted include a deeper look at implementingeven-flow production and a unique team sellingconcept. www.HousingZone.com/1204
Imagine a community where homebuyers can watch their children ridetheir bikes along the sidewalk fromtheir front porch without the worriesof traffic being a danger.
Imagine a neighborhood where res-idents walk to the community postoffice each morning to drop off outgo-ing mail, and stop in at the attachedcafé for a coffee to start the day.
This is HomeTown. A communitydeveloped to feed the soul; wherefriends and families gather together, aswell as being an environmentallyfriendly neighborhood that lives lightlyon the land.
“Our definition of neighborhoodis the experience of living in a con-nected community, having as muchprivacy as desired, but also the abilityfor the first time since World War IIto live in a community designed toencourage people to live out theirhumanity,” states Bigelow Homesowner, Perry Bigelow.
Experiencing The Product“Most builders put models as far
away from the construction site aspossible,” says Bigelow. “They wantpeople to experience the dream, notthe reality.”
HomeTown did just the oppo-site. Bigelow placed models withinthe construction site. And becauseof this drastic change in the layoutof its models, Perry admits the firstyear of sales was difficult. “We werebuilding all these houses in the firsthalf of the first neighborhood.People had to drive through all theconstruction to get to the modelcomplex,” says Perry.
During the first year, people lit-erally drove up, pulled into thedriveway, backed up, and drove out,claims Perry. “Those people wanteda conventional house surroundedby their moat, and they didn’t wantto know their neighbors.” pr
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How to createcommunityBigelow Homes created its own community within the town of Aurora, Ill.People, and the relationships formed, make up HomeTown, a communitydesigned to encourage people to live out their humanity.
““OLD MEN ANDOLD WOMEN SHALLAGAIN SIT IN THESTREETS OFJERUSALEM, EACHWITH STAFF IN HANDBECAUSE OF THEIRGREAT AGE. AND THESTREETS OF THE CITYSHALL BE FULL OFBOYS AND GIRLSPLAYING IN ITSSTREETS.”ZECHARIAH 8: 4-5, PERRY
BIGELOW ON HIS INSPIRATION
FOR BUILDING HOMETOWN
Today potential buyers at HomeTowndrive right into the heart of the com-munity — over the traffic-calmingdevice, through the park and on to thecommunity store/café. They walk pastthe post office for the first 300 homes,cross the street, and through thepavilion (a structure used for the fourannual community-wide festivals) tothe model complex. If the potentialbuyer has children with, they have theoption to drop them off at the tot lotlocated outside the sales office.
“People arrive at the front door andalready think this place is different,”says Perry.
What makes HomeTown different?Deliberate planning.
Traffic-calming devices Safety platforms scatter about HomeTown.Based on a Dutch manual describingtraffic-calming devices to use withincommunities, Bigelow designed con-
crete risers throughout. While inHolland visiting communities withexamples of these traffic-calmingdevices, Perry picked up a copy of theDutch manual. Written in Dutch,Perry had the manual translated whenhe returned to the states.
These safety platforms have adesign speed of 12 mph. “Drivers can go over it with 15-16 in. wheelscomfortably at about 15 mph,” saysPerry. “At, 20 mph, it’s very uncom-fortable and most drivers only do that once.”
Other traffic-calming solutions fillthe neighborhood as well. Thoughprice certainly impacted the decision-making in planning HomeTown’straffic-calming strategies, it wasn’t themain reason. Creating a more neigh-borhood-friendly overall plan for resi-dents and visitors took precedenceover the costly safety platforms pricedat $15,000 to $20,000 each.
According to Perry, a traffic-calmingdevice is needed every 200 feet. Theparks within Hometown average 150-ftlong. “When going past the park, makea sharp turn, then make another sharpturn, go by the neighborhood park,then make two more sharp turns tocontinue down the street,” says Perry.“Those double-sharp turns, called chi-canes, become our preferred way ofcalming traffic.”
With chicanes at each end of theneighborhood park, it serves the socialfunction of identifying to a personwhere the center of this neighborhoodis. At the same time, they help withtraffic-calming every 200 feet. Not tomention, it’s easier for fire trucks tomove through the chicanes versusdriving over the safety platforms.
Parks & SidewalksIn HomeTown, an “eyes on the street”strategy dictates park placement. “Aspr
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THESE 7-FT DEEP FRONT
PORCHES (top) provide acomfortable sitting area for thefamily.
TRAFFIC-CALMING DEVICES
(left) wind through thecommunity. One of twogathering places (right) forcommunity events.
many houses face the park as possi-ble,” says Perry. “The parks are locat-ed to create more connectivenessbetween people, not where it’s rightfrom a land engineering standpoint.”
Parks cost more when placed onvaluable rather than leftover land, butthat’s part of the HomeTown purpose.“It’s part of our central philosophy ofdeveloping a real neighborhood,” saysPerry. In all, on 173 acres in the com-munity, there are 12 parks, completewith tot lots, gazebos and gatheringplaces. It only takes three-minutes orless for residents to walk to their near-est neighborhood park.
What better way to walk to aneighborhood park than on the over-sized 6-ft wide sidewalks windingtheir way throughout the communi-ty. Rather than the typical 4-ft widesidewalks, Perry thought over-sizedsidewalks, while 50 percent morecostly, deliver the community-friend-ly environment that HomeTown cre-ates for its residents.
Bigelow fought the town of Aurorato make its sidewalks 6-ft widebecause of the difficulty two peoplehave comfortably walking side-by-sideon the standard 4-ft wide sidewalks.“With a 6-ft wide sidewalk, three peo-ple can walk side-by-side and it’s com-fortable,” states Perry.
Significant Street NamesTo add to the significance of HomeTown,Bigelow purposely named two of itsstreets:
n Serendipity Drive — named forfinding good things when not lookingfor them. Perry says HomeTownstands for delivering a good communi-ty for people that may not know theyare looking for it.
n Symphony Drive — named aftera group of musicians, which play
together in harmony in a com-mon culture with a commonpurpose and produce a beauti-ful sound. Perry says, in aneighborhood like HomeTownresidents’ play together in har-mony with common cultureand purpose.
Living Court Vs.Living LaneThe two basic building blocksin HomeTown — living courtsand living lanes — combine tocreate mini-neighborhood pat-terns or pocket neighborhoods.
A living lane has houseswith garages on the side of thehouse. “The garages are setback from the house, so peo-ple don’t feel the impact ofthose garages as much as on asuburban street,” states Perry.
Living lanes cost a bit moreto build than living courts because ofthe pavement of the streets. Thesestreets resemble a conventional subur-ban street pattern. Evergreen treesserve as the gateway for entering theliving lanes.
Each mini-neighborhood controlswhat happens inside each living court,but Bigelow tries to control what hap-pens on the streets. In certain areasthe elevation comes with the houseand can’t be changed by buyers. “Forus the public street is the most impor-tant public amenity we have and wewant to make sure that architecturallyit’s the most inviting place that we canmake it,” claims Perry.
Living courts have the same basicset of patterns of a living lane, but thehouses form around a courtyarddesign. A main sidewalk down thecenter of the living court connects toeach home’s private sidewalk and front
porch. All the front porches, and themain entrances to the houses face outinto the living court. This gives a senseof a private courtyard within the neigh-borhood.
Pattern LanguageWhen it comes to the pattern designsfound throughout HomeTown, Perryclosely followed Christopher Alexander’sA Pattern Language: Towns, Buildings,Construction. This book focuses onways to create an uplifting environmentto the human spirit.
Bigelow uses “something roughly inthe middle,” — Alexander’s pattern forpeople gathering together at something,whether it be a patio, table or bench, inthe middle of the neighborhood. Withineach mini neighborhood, concretepatios cross the middle of the living lanestreets, similar to the safety platforms.Only people living on that street may usethe patio for personal purposes. Benchesand a table placed off the side of the laneon the patio generally find people gath-ered around it. This same set up isfound within the living courts as well.The patio, benches and table all appearwithin the center of the living courtattached by the main sidewalk runningthrough the court.
Another pattern found in HomeTown— front porches. Instead of being thestandard 2- to 3-ft wide nostalgic porch, pr
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The Front Porchnewsletter is distributed toall HomeTown residents.It’s an inside look into thenews and special eventsof HomeTown Aurora.
Reporters of The Front Porch cover all eventswithin the community with pictures to illustrate theevents. There’s a page dedicated to community lifegroups and activities that residents can participatein, if desired.
A favorite resident recipe always appears in thecurrent issue along with a message from the neigh-borhood dog, Bailey Campbell. Upcoming events, alist of newcomers, and newborn babies atHomeTown are listed too.
HometownNews
LIVING COURTS help createsmaller neighborhoods withinHomeTown. Residents’ homesfront the shared common walk-way and gathering place.
the standard depth at HomeTown is 7-ftdeep. Perry says Alexander’s patternsuggests a porch should not be lessthan 6-ft deep. At 7-ft, the porchbecomes a room. Another patterninvolves raising the porch so whensomebody walks by, one feels moresecure or less threatened by the personwalking by because the person sittingdown cannot look the person walkingby in the eyes.
Newest Product inHomeTownThere’s more to come in Hometown.Bigelow is in the process of completingthe Town Center. Above the TownCenter will be the newest housingproduct for Bigelow — The Lofts.
“HomeTown’s Town Center isdesigned as a greenfield town center,”says Perry. The overall density is lesscompact than downtown Aurora, butmore compact than the typical subur-ban shopping area. A park for meetingand gathering occupies the heart of the
Town Center complex with anotherpavilion for community activities. AsHomeTown grows Festival Parkbecomes the large gathering spot forwhole community activities: Christmastree lighting, community picnics, etc.The trellis at the center of the parkalready has hosted several weddings.
“We assigned the land value to thehousing, which gives us a low basisand allows us to build commercialspaces economically enough so wecan lease it at rates that will supportthe activity the community has,”states Perry.
In creating Town Center, Bigelowhopes to attract tenants that will build abetter and stronger community. Possibletenants include: candy shop, ice creamshop, café’/restaurant, salon/tanningspa, barber, florist, bookstore, andhealth/wellness center, to name a few.Hopefully, residents will also be able topurchase insurance, apply for a mort-gage, receive financial advice, and dotheir banking all within the community.
Retail shop square-footage ranges from880 to 6,160.
Since family, and people in general,are the main focus of HomeTown, a daycare center will be in the Town Center.In the Town Center, plans for a commu-nity church are taking shape as well.
The other reason for the size ofTown Center was the development ofthe loft product. “An urban loft typical-ly looks out a window that’s right onthe public sidewalk, and looks acrossthe street at another building. Thatwouldn’t sell in the suburbs,” saysPerry. With HomeTown’s loft set-up,the view out the window is of the pavil-ion and park surrounding it, which hasbecome a main gathering place forcommunity events at HomeTown.
And, unlike urban lofts, these loftsoffer windows on two sides of the build-ing, and have attached two-car garages.Other features include solar tubes thatdraw natural light into the building, 10’ceilings, polished concrete floors, curvedwalls, and exposed duct work. PBpr
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(TOP LEFT & RIGHT) A look into "The Lofts"currently being constructed in HomeTown.(Bottom left) Parks intertwine within livingcourts and living lanes.
Read the Special Report thismonth on page 54 and the likely resultwill be a rewrite to the 2005 businessplan already on file in your office. Likeevery company selected as ProfessionalBuilder’s Builder of the Year, BigelowHomes in Aurora, Ill., shows homebuilders a better way to prosper in thisever-changing industry.
Consider this quote from companypresident Jamie Bigelow as you reviewyour 2005 business strategy:
“We’ve achieved differentiation. Thatwas our strategy. We really have no com-petitors. I doubt the public builders willever do what we do.”
According to many in the industry,Bigelow Homes should be on the endan-gered builder list rather than highlightedas Builder of the Year. The firm ranksnumber 362 on PB’s 2004 GIANTS listwith volume of $38.12 million from 212homes closed in 2003. They should holdtheir ranking in 2005, with expected rev-enues this year of $40 million on 215homes closed.
Industry PR suggests that a single-market, family-run home builder thesize of Bigelow should: n have trouble competing with the
nationals for land;n be unable to get the best trades to workits projects or attract top talent to theorganization;n pay higher rates for the trades they dohave on the job;n pay capital costs so unfavorable as todrive product pricing above that of big-ger competitors.
The list could go on, but the day-to-day at Bigelow tells a very different story.For each of the negatives Bigelow man-agement creates a positive:n A community like HomeTown appealsto both land sellers and the municipali-
ties that eventually entitle the land andapprove plans for development. In fact,Bigelow can supply towns with chartsand data that show its developmentmodel delivers an assessed value peracre 2.25 times higher than that of con-ventional subdivisions in the area. Thesestats make Bigelow a preferred buyer forland and a go-to builder for local govern-ments and planning commissions.n Even-flow production, a paperless pur-chase order system that actually worksand personal relationships with bothcompany founder Perry Bigelow andcurrent president Jamie Bigelow makeBigelow Homes a first choice companyfor many trades. On average, Bigelow’strades average better than 10 years withthe company. Employee longevity is nodifferent because of Bigelow’s operatingphilosophy: staff lean and offer lifelongemployment opportunities without thethreat of layoffs in lean years. Many cur-rent Bigelow employees sought outemployment at the company aftertenures at national and other local homebuilders.n Bigelow’s production home buildingmachine runs so smoothly that PerryBigelow was able to convince the compa-
ny’s trade partners to build houses in thecity on a compressed schedule at thesame rate they charge Bigelow for sub-urban work.n 2003 net profit of more than threetimes the industry average separatesBigelow from the rest of the builder uni-verse in a more meaningful way tobanks than any other financial measure.
Real differentiation — the kindBigelow planned for and achieved —isn’t internal. The value of the plancomes in how it plays in the market-place. Here too, the company sets abenchmark for builders. Again, Jamie
Bigelow best describes the differencebetween selling a Bigelow home atHomeTown and selling a conventionalhome: “We’re selling an experience. Thedifference between HomeTown Auroraand a conventional subdivision is likethe difference between buying MaxwellHouse at the supermarket and a trip toStarbucks. Coffee as a commodity com-pared to the coffeehouse experience. Thevalue added is reflected in pricing andon the bottom line.”
What in your 2005 business plan getsyour operation to differentiation and therewards it brings? Do the diligence thatthe team at Bigelow Homes did. Figureout what your company stands for andhow that vision translates into a uniqueoffering the marketplace. Invest theresources to create a compelling valueproposition for your staff, your tradepartners, your customers. Put the peoplein place to execute and practice patienceas they stumble and learn along the way.
Differentiation drives profitability.This more than anything is the story ofBigelow Homes, the reason ProfessionalBuilder picked this company over all oth-ers as our 2005 Builder of the Year. Learnfrom this example how to be the compa-ny that only your team can be. PB
Heather [email protected]
Business Planning 2005
We’ve achieved differentiation. That was ourstrategy. We have no competitors. I doubt thepublic builders will ever do what we do.”
Bigelow Homes president Jamie Bigelow‘‘
PERSPECTIVEby Heather McCune
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Copyright © Reed Business Information, a division of Reed Elsevier, Inc.All Rights Reserved. Reprinted from Professional Builder December 2004 with permission.
