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Steel framing is starting to replace wood at some new housing tracts, and Southern California is one targeted market.

March 08, 1998|NONA YATES | TIMES STAFF WRITER

The California economy is on the rebound, housing starts are up and the familiar sound of framers pounding nails into studs can be heard at new housing developments throughout Southern California.

Well, at least that sound is heard in most new developments. But in some subdivisions, the familiar sounds of construction have given way to the less familiar clang of metal against metal and screw guns, rather than nail guns, fastening framing together.

Welcome to the world of steel-framed housing, an emerging alternative to the traditional wood-framed home that has long been the staple of builders.

Steel has been making inroads into the national housing stock for

the last five years. About 1% of the

new housing starts each year use steel framing, according to the National Assn. of Home Builders.

The steel industry claims that as much as 6% of new housing is steel-framed. The American Iron and Steel Institute estimates that 95,000 steel-framed homes were built in 1997, up from 500 in 1992.

Admittedly, these numbers represent only a small part of the 1.2 million housing starts each year. But the iron and steel institute is aggressively marketing steel to the building industry.

The steel industry hopes to capture 25% of the market in Southern California and three other targeted areas--San Francisco, Atlanta and Chicago--and 10% of the rest of the country by 2000.

"In California in particular, we're spending $1 million on projects to test new tools, new fasteners, new technology," said Geoff Stone, who manages the American Iron and Steel Institute's residential steel-framing program.

The institute is working with builders to reduce costs and train and educate workers, he said.

Builders like Jeffrey Prostor, division president of Brookfield Homes in Costa Mesa, are turning to steel in a big way. Most of the company's current projects in Los Angeles, Orange and Ventura counties, nine subdivisions totaling about 500 homes, will be framed with steel.

"We believe the benefits are significant for our potential buyers, that if we commit ourselves to steel, people will start to identify it as superior to wood," he said.

Another Southern California company that has had success using steel is Taylor Woodrow Homes in Laguna Hills. The company has completed two tracts of steel-framed housing in Temecula and Mission Viejo and has plans for a third in Newport Coast, a high-end Orange County community where half the homes are framed with steel.

Taylor Woodrow was one of the first to venture into steel-framed construction with its "Homecoming" project in Temecula in 1993, said Dale Hines, director of construction for Taylor Woodrow.

"Temecula was the largest tract of steel-framed housing in the country at the time," Hines said.

About 100 single-family homes were built and sold from 1993 through 1996. The Mission Viejo project, Cliffwood, includes about 55 homes built with steel studs.

Steel framing is not new. Heavy, welded, so-called red iron has been used for years in custom homes and commercial buildings.

But today's material is light-gauge, galvanized steel. It is joined with screws and other fasteners and manufactured in sizes that match traditional lumber dimensions, making it more attractive to building contractors.

"Builders are looking for something that looks, acts and goes up like a wood stud," Stone said.

Builders began to look to steel as a viable alternative when lumber prices spiked in the early 1990s.

The composite price of framing lumber nearly doubled from 1986 to 1994, as average annual prices soared from $218 per thousand board feet to $410.

Monthly lumber prices peaked in December 1993, at $499 per thousand board feet, according to Random Lengths, an industry publication based in Eugene, Ore., which reports on market trends in the wood products business.

"Whenever lumber prices go up . . . lots of people start thinking about steel," said Gopal Ahluwalia, director of research for the home builders association.

"In the marketplace, when the Random Lengths composite price moves into the $500 range, builders across the country start planning on switching to alternate materials," he said. "We've observed this phenomenon twice, in late 1993 and early 1994."

The price increases impacted builders dramatically, often wiping out already slim profit margins and contributing to considerable financial losses.

"When lumber prices went up sharply, there were builders that had contracts based on much lower prices. It's my understanding that some of those guys got hit in their pocketbooks in six figures," said Jay Crandell of the home builders association's research center.

Steel offers builders price stability not afforded by often volatile lumber prices. It "allows us to lock in our price for a year," according to Brookfield's Prostor.

Although cost is an important factor influencing builders' decisions, other issues play a part as well.

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