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Residential Construction Industry

Institutional Affiliation

Course Name

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Table of Content

1. Executive Summary

2. An Overview of the Construction Industry in the U.S

3. The Business Model of Mandatory Homes

4. Frontier that Mandalay Homes should Prioritize

5. Mandalay Homes and Regulators

6. Potential Downside of Pursuing Further Innovation

7. References

8. Appendix
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Executive Summary
Residential construction pertains to the building of structures for individual and multi-

family houses. There are rules and regulations which govern the construction industry in the U.S.

construction companies are expected to conform to a code of standards and avoid practices that

contradict government regulations (Hoffman, 2022). Mandalay Homes needs to prioritize

government regulations vs. Performance driven standards to gain an advantage in the industry. It

can do this by familiarizing itself with government regulations and adopting a code of practices

that aligns with the industry. Similarly, Mandalay leadership should collaborate with regulators

to improve the construction sector and push building code standards to catch up to performance-

based standards. However, focusing entirely on innovation has downsides such as stagnation,

insufficient funds, and problems with regulators.

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An Overview of Residential Construction Industry in the U.S

Residential construction entails the building of multi and individual-family homes. These

may include manufacturing houses, single units, apartment buildings, and/or condominiums.

New York Northern New Jersey was identified as the area with the most commercial and multi-

family houses in the U.S. in 2021. Texas is one of the metropolitan areas that rank high for

residential construction starts (Rodríguez-Pose & Storper, 2020). Home renovations form a big

part of residential construction and the overall value of the residential building renovations

market has increased drastically over the years. In America, technology, practices, and resources

are needed to abide by local building codes and regulations. Individuals who fail to comply with

stipulated rules risk losing their licenses and being fined. Thus, engineers always strive to know

the building codes and conform to all of them. For instance, construction materials are normally

outlined by the materials easily available in the area to lessen work.

While the use of cement in construction has continued to rise in the construction industry

in the U.S., wood frame remains one of the most popular methods of residential construction.

Similarly, timber is also used in building and the sales for hardwood have passed three billion

dollars recently which shows versatility in the construction industry. The overall cost of

construction tends to vary and is affected by factors such as equipment, construction materials,

and the price of land (Hoffman, 2022). The wages of workers are also taken into account when

calculating the cost of building residential buildings. For example, the cost of using a mobile

crane is higher in the U.S. than in other areas.

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The Business Model of Mandatory Homes

In the past, there were few real estate business models that affected residential building

construction but things have changed over the years. In the past, if one had a lot of capital, they

could place big bets on the construction system and hope that things worked in their favour.

Also, people had the option of buying and holding real estate and expanding it steadily. The

advent of real estate agents has changed how things work and large influences people’s access to

homes. Real estate earns a living by assisting people to buy and sell homes (Kabirifar, &

Mojtahedi, 2019). In addition, they educate buyers on available options based on their prices. In

2016, the City Council passed the Mandatory Inclusionary Housing and made several changes

including modification to the income bands and stating that a minimum of 10% of housing is to

be affordable at 40%. It modified the workforce option to lower the average income to empower

families to buy and own homes.

Mandatory Inclusionary Housing will contribute to more affordable housing for citizens

and lessen the burden of the stress of construction. Mandalay Homes should prioritize

government regulations vs. Performance driven building standards. In the U.S., the government

has outlined rules and regulations that builders are expected to conform to or risk getting into

legal trouble. For instance, construction companies are expected to abide by various laws meant

to protect the environment from pollution (Hoffman, 2022). Thus, they expected to avoid

practices that put people at risk of pollutants or careless emission of waste into water sources.

Any construction company found culpable of intentionally releasing debris into the environment

risk closure. Thus, Mandalay Homes should prioritize government regulations because it affects

operations directly.
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Frontier that Mandalay Homes should prioritize

The company cannot operate without the approval of the government and concerned

bodies. Moreover, failure to be informed about all the regulations stipulated by the government

can result in legal trouble. Also, Mandalay Homes need to focus on performance-driven building

standards to appeal to clients. Following approved building standards will help Mandalay Homes

to avoid shortcuts and construct high-quality homes that meet clients’ expectations. Moreover,

the current state of building codes is not performance-based which put Mandalay Homes at

risk (Kabirifar, & Mojtahedi, 2019). Following a set of standards that dwell on the building’s

physical attributes will steer it in the right direction. A building design that follows prescriptive

codes should follow the current layout for energy features. In addition, prescriptive building

codes do not require post-construction accountability which means that buildings must meet

standards of construction. Performance-driven building standards put in unique strengths to

ensure that the structure meets government regulations and the expectations of clients.

Mandalay Homes and Regulators

Mandalay leadership can work with regulators to push building code standards to catch

up to performance-based standards by being flexible and accepting guidance where necessary.

Mandalay leadership's pursuit of innovation to promote growth may hinder it from seeing and

implementing other effective strategies to stir up growth. The main role of regulators is to ensure

that construction companies comply with government regulations that govern the sector (Sanni-

Anibire, et al. 2022). Any company or individual who flouts such regulations and standards of

practice risk losing their licenses, fines, and/or imprisonment. Thus, regulators are strict and

thorough when it comes to ascertaining that everyone complies. The government set standards of

construction to protect the public and the environment from pollution and destruction. Different
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industries have different rules and regulations which govern operations to ensure order and

accountability. Failure to do so can result in bad practices that destroy lives, properties, and the

environment (Li, et al. 2019). Building a collaborative relationship between regulators and

Mandalay leadership is crucial for growth and future sustainability.

While the regulator is known for using its powers to ensure that construction companies

follow rules, building collaboration is more important. Doing so will eliminate hostility between

the parties involved and enable them to share ideas on how to push the building code of

standards to catch up with performance-based standards. Currently, Mandalay is primarily

concerned with following stipulated rules to avoid punitive measures (Sanni-Anibire, et al.

2022). The regulator holds the power to change things by adopting a hearing ear and allowing

industry players to express themselves. Instead of being rigid and uncooperative, it should be

friendly and draw Mandalay leaders close to encourage them to open up and share ideas. For

example, giving Mandalay leadership a chance to share their views on issues affecting them and

how they can be addressed is the first step towards fostering collaboration and eliminating the

tension between them. While it might take a few attempts before they find the best strategies to

scale up performance standards, teamwork will help them find the right solutions. Moreover, a

partnership between Mandalay leaders and regulators will ensure that challenges are addressed to

help them catch up with performance-based standards (McCoy, et al. 2020). Regulators can

ensure that industry players observe regulators while still engaging them in meaningful ways to

improve performance standards.

Sharing visions and plans with regulators will help Mandalay leadership determine

appropriate frameworks to scale up operations. In addition, it will lessen the stress that comes

with meeting all outlined requirements. Once a collaborative relationship is created and matured,
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any issue that arises can be solved jointly in an engaged manner instead of applying force or

threats (Bertram, et al. 2019). Furthermore, it will allow Mandalay leadership to share ideas with

regulators on how to improve the industry to benefit all stakeholders. Thus, Mandalay leadership

can work with regulators to push building code standards to meet performance-based standards

by fostering collaboration and partnership. Instead of focusing on their roles of limiting

interactions, they should come together and strategize on how to improve the construction

sector.

Potential Downside of Pursuing Further Innovation

Potential downsides to Mandalay’s pursuit of further innovation instead of a growth

strategy include stagnation, conflict with regulators, and insufficient resources. Mandalay Homes

is hell-bent on improving innovation at any cost to scale up performance but it has its challenges.

One of the downsides of its pursuit is stagnation in development as it puts all its energy towards

innovation and ignores other frontiers that can promote growth (Hoffman, 2022). Moreover, it

limits the leadership to innovation alone which hinders them from other aspects that can drive up

sales. Leaders may have other suggestions or solutions to scale up performance standards but

they are limited to innovation. Also, the pursuit of innovation may cause conflict between

Mandalay Homes and the regulators as they adopt strategies to scale up development. Regulators

have strict requirements that industry players are expected to follow to continue operations.

Anyone found contravening these regulations can be fined or lose their licenses. In this case,

Mandalay risk getting into trouble by relentless pursuit of innovation without considering the

standards of operations. Another downside to pursuing innovation is the risk of insufficient

resources needed to support innovative measures. Innovation is costly and needs adequate
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resources to sustain. Mandalay Homes risks getting stuck while undertaking innovative projects

which will affect its operations in the long run.

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References
Hoffman. A. (2022). Mandalay Homes: Building Sustainable Innovation in Residential

Construction.

Bertram, N., Fuchs, S., Mischke, J., Palter, R., Strube, G., & Woetzel, J. (2019). Modular

construction: From projects to products. McKinsey & Company: Capital Projects &

Infrastructure, 1-34

Kabirifar, K., & Mojtahedi, M. (2019). The impact of engineering, procurement and construction

(EPC) phases on project performance: a case of large-scale residential construction project.

Buildings, 9(1), 15.

Li, J., Greenwood, D., & Kassem, M. (2019). Blockchain in the built environment and

construction industry: A systematic review, conceptual models and practical use cases.

Automation in construction, 102, 288-307.

McCoy, A. P., Thabet, W., & Badinelli, R. (2020). Developing a new commercialization model

for the residential construction industry. In eWork and eBusiness in Architecture, Engineering

and Construction (pp. 533-539). CRC Press.

Rodríguez-Pose, A., & Storper, M. (2020). Housing, urban growth and inequalities: The limits to

deregulation and upzoning in reducing economic and spatial inequality. Urban Studies, 57(2),

223-248.

Sanni-Anibire, M. O., Mohamad Zin, R., & Olatunji, S. O. (2022). Causes of delay in the global

construction industry: a meta analytical review. International Journal of Construction

Management, 22(8), 1395-1407.

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Appendix
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