Kitsap Peninsula Business Journal
9-9-2003
SPECIAL REPORT - CONSTRUCTION ON THE PENINSULA
Builders and developers
tech-enabling new homes

The Kitsap Peninsula’s residential housing market isn’t any different than any others nationwide when it comes to increasing the elaborate list of amenities used to lure potential homebuyers. But with increasing frequency, those amenities include technology to broadband enable the entire home.

Developers have traditionally relied on creative tactics to differentiate their product and attract potential homebuyers. Community amenities ranging from parks to golf courses to restaurants and shopping help drive home sales. But leading-edge telecommunications infrastructure has become a key community differentiator — especially in Kitsap County where the KPUD’s fiber optic line is increasing its reach to most areas. Coupled with cable modem broadband service offered by Charter Cable and Comcast, and DSL by Qwest and Sprint, high-speed internet connections are quickly becoming as common as electricity. Look for this to increase as local cities adopt conduit standards for new construction that are specifically mandated to accommodate broadband infrastructure. Poulsbo has an ordinance ready for passage and Kitsap County more than likely will see this mandated in the 2004 version of its Comprehensive Plan.

Nationwide, developers are taking the initiative to introduce broadband to their communities, with many requiring residents be connected to the Internet and/or a branded community Intranet. This type is often occurring in Master Planned Communities (MPCs) where the developer maintains a central role in planning the community development, from roads, to parks, to broadband. In many new Greenfield developments, not only is broadband connectivity available, but it is a cornerstone of the community.

The basic concept behind a connected community is to enable every home within a development with a high-speed connection over which any combination of data, video, and voice services will travel. Locally, Poulsbo Place pioneered this concept. These networks are also the modern answer to creating a sense of community, tying every resident to a community Intranet for news, interest groups, and even parent-teacher dialogue.

Many developers are extending the concept of a connected community beyond the termination box at the resident’s home. Developers are partnering with builders to ensure the concept of advanced connectivity extends throughout the home, whether it is through structured wiring, wireless access, or Internet appliances. Builders in these communities are often required to introduce advanced wiring solutions and service distribution centers, such as residential gateways.

Builders are taking an especially active role in introducing these solutions. Compared with other in-home broadband technologies, such as wireless access or residential gateways, which can be introduced at any time after the home’s completion or retrofitted to older homes, it is really only cost effective to introduce structured wiring during the home’s construction.

The need for structured wiring has largely been simulated by the growing presence of the Internet, the expansion of PCs into the home, and the growing sophistication of entertainment, which has resulted in drastic changes in residential wiring needs. The copper wiring installed for POTS (Plain Old Telephone Service) in the 1950’s doesn’t meet the high bandwidth requirements of today. To meet those needs, an entire market has developed for the design and deployment of residential wiring solutions, with some electrical contractors beginning to specialize in this niche, and the state requiring licensing of electricians who install it.

Structured wiring allows for the integration of a voice, data, and video services into a central, manageable distribution center or hub. High-grade cable, such as CAT 5 or RG-6, carries services from the distribution center throughout the home. Modular wall plates or receptacles are a plug-in delivery component allowing for multi-service access from one location.

According to a February, 2003 In-Stat/MDR survey, it is becoming common practice for builders and developers to incorporate these various technologies into new homes. The In-Stat/MDR survey, a web-based survey with a total of 579 respondents, targeted residential builders and developers across the US. The survey focused on developers plans to introduce broadband into new communities and builders plan to introduce structured wiring and other technologies into new and retrofit homes.

The survey discovered that approximately seventy five percent of developer respondents had introduced broadband access into at least a portion of their MPCs with over fifty percent including it to every home in at least half of their development, and over twenty eight percent to every home in all residential developments. These figures indicate that the concept of a connected community is no longer a rarity, but is increasingly becoming the standard for new communities.

Builders have the choice of either making structured wiring an option or an upgrade to a new home, or it can be included as a standard in the homes. Whether it’s an option or standard often depends on the developer’s requirements or the home price. While structured wiring is not a standard in all homes, in those homes priced over $250,000, it is included as a standard more frequently. In homes priced over $350,000 structured wiring is a standard for 33.8 percent of developer respondents.

However, it’s clear that broadband connected communities occur across all price ranges from low to mid-range on up to exclusive high-priced communities. While the majority of developers are introducing broadband access, they do not necessarily view it as a critical success factor. Just over fifty percent of those developer respondents that had introduced broadband were using broadband availability as a key promotional point in selling the community. Furthermore, only 4.6 percent of those respondents believed that broadband access would be a critical factor to potential homebuyers.

Similar to developers, approximately 74 percent of the 482 builder respondents indicated they offered structured wiring in homes they build. Nearly one third of those respondents that did install structured wiring, offered it as a standard in all new homes, and an additional 20 percent offered structured wiring as a standard in certain communities.

It is evident that developers and builders have became much more proactive in introducing broadband technologies into their communities and homes. Developers view broadband as a competitive benefit in attracting homebuyers, but they do not heavily exploit the availability of broadband in promoting the community. The majority of builders, 74.1 percent of respondents, are implementing specialized wiring. Builders too are very actively deploying structured wiring solutions, and generally see a greater number of applications, from entertainment, to networked PCs, to security, that is driving the demand for this solution. It is expected that as the cost for these solutions continues to lessen and communities mandate the infrastructure as a condition of permitting, an increasing number of homes and communities will be equipped with broadband services, and will be equipped with increasingly robust broadband offerings.