Five Barriers to Bringing 3D-Printed Construction to the Philadelphia Area
By: Jason A. Copley and Michael I. Schwartz
Like many municipalities across the country, Philadelphia and its surrounding areas face a housing crisis, particularly for low-income and homeless residents seeking affordable, well-constructed homes. One of the primary considerations that local and state governments face is the construction cost for these much-needed homes. However, construction costs alone should not necessarily overshadow other critical factors and interests, including whether these homes are environmentally sustainable and quick to construct. Alternative building methods such as modular (or prefabricated) construction have already taken hold in the affordable housing area as a way for builders and municipalities to take advantage of the associated cost and time reductions and greater building efficiencies.
Another alternative building method to modular construction that has not yet arrived in Pennsylvania is 3D-printed construction. Also known as additive manufacturing, 3D-printed construction is championed as a more sustainable and efficient building method than other more traditional building methods. In 3D-printed construction, digitally created designs and models are constructed in the field using robotic arms that pour building material layer by layer. Proponents contend that this method lowers overall construction costs by reducing material and labor, is more energy efficient, leads to less material waste, and is completed within a fraction of the time compared to traditional construction. All of these factors can translate into an increase in the availability of affordable housing.
To bring the future to the present, there are many factors the industry must iron out to lay the groundwork necessary for 3D-printed construction projects, including governmental compliance and approval, insurance, contract development, sourcing equipment and materials, and procurement of skilled labor.
Permits and Code Compliance
First and foremost, a construction project cannot commence until a developer obtains the necessary permits and approvals from a local building department. Developers are typically well-versed in these processes and can follow a predictable process to obtain such approvals. However, what will happen when a developer approaches a municipality’s building department and proposes to construct a 3D-printed single-family home or development? That inquiry will inevitably raise numerous red flags and concerns, and, to date, no local building department within the commonwealth has approved a 3D-printed construction project. Faced with this uncertainty, building departments may reject the plan or delay approvals, which would slow the use of this new technology. Nevertheless, the construction industry—and those in need of affordable housing—hope that swift and scalable solutions become commonplace and easily accepted.
While states such as California and Florida have enacted laws and procedures for the rapid preapproval of prefabricated components, a similar process would not necessarily help with approvals for typical 3D-printed construction that involve only onsite construction and assembly. Given that distinction, the International Code Council introduced and adopted Appendix AW to the 2021 International Residential Code (IRC). The appendix, which incorporates the Underwriters Laboratories (UL) 3401, is the more comprehensive attempt at developing a standardized code for 3D-printed construction. As many municipalities adopt sections of the IRC into their building codes either as-is or with slight modification, the intent is for this appendix to be similarly adopted into local building codes to define the approval process for the first 3D-printed residence in the commonwealth. The hope is that it also provides the rubric for future approvals and reduces the barriers to entry.
Obtaining Insurance
While a construction project cannot commence without permits, it is essential for a contractor or owner to get insurance so the developer assumes the risks associated with the project. For 3D-printed construction projects, there are inevitable challenges in procuring the requisite insurance. Insurance underwriting is based on risk calculations that rely upon historical data and claims history. The underwriting also considers state law, including prior court rulings related to insurance coverages and exclusions.
Given the new frontier of 3D-printed construction, the breadth of claims history is simply nonexistent. The learning curve associated with understanding the industry, technologies and materials is a challenge for insurers who typically issue policies for traditional construction projects. Yet once insurers and other parties fully understand these aspects of 3D printing, one can foresee the benefits of insuring these projects, which are expected to have a lower likelihood of jobsite injury due to the reduction of manual laborers and human error.
Of course, some would argue that these reductions are merely replaced with increases in other liabilities such as technological malfunctions and defective materials and construction. Whether those liabilities are covered claims is another issue altogether as policies typically carry exclusions related to defective work, cyber-related losses, and environmental liabilities. Regardless, developers will need to ensure that contractors, suppliers and vendors are likewise covered by insurance under existing or new policies, as well as that all indemnification obligations are intact.
Tailoring New Contracts
One of the main ways to avoid litigation altogether, or to improve the likelihood of success in the event of litigation, is to draft construction contracts that are comprehensive and tailored to each particular project. Like any other type of contract, it is imperative to enter any financial arrangement with defined responsibilities and expectations. However, this presents challenges to developers in the 3D-printed construction space who cannot recirculate previous contract templates. Compounding that challenge is that organizations that develop form construction contracts used throughout the industry, such as The American Institute of Architects (AIA) and ConsensusDocs, have yet to develop any form contracts specifically based upon a 3D-printed construction project. As a result, parties should hire legal counsel for guidance in drafting 3D construction contracts to capture the various nuances.
Meanwhile, some hold the opposing view that existing construction contracts would not require significant modification, as a majority of the same issues that arise on traditional construction projects could also occur on 3D-printed projects. Those involved in drafting construction contracts and litigation recognize that most of the focus is on three main issues: payment for work (including changes in scope), scheduling and delay, and defective construction. For example, if a developer contracts with a vendor who supplies 3D printers for rental, that developer could theoretically use a contract it holds with a crane rental company as a template. Similarly, if a developer contracts with an architect to draw a 3D-printed construction design, that developer could also use a contract it held with an architect who already uses computerized design programs to develop traditional construction drawings. In any event, creating well-accepted templates will help facilitate the use and acceptance of 3D construction.
Procuring Equipment and Logistics
The procurement and transportation of equipment is another important aspect of any construction project. With regard to 3D-printed construction, the main piece of equipment is the printer itself. Although recent news has indicated that a company known as Black Buffalo 3D Corp. is planning to construct a facility to build large-scale 3D construction printers in Monroe County, Pennsylvania, developers will otherwise need to source and transport these massive printers from outside the commonwealth. The limited number of 3D printers worldwide, paired with the current supply chain difficulties, make this sourcing more challenging.
Site logistics are also a critical consideration for 3D-printed construction projects. Especially in regard to affordable housing, 3D-printed construction can be seen as a prohibitive building method because affordable housing is often built in densely-populated and urban areas with spatial restrictions or on property otherwise undeveloped due to logistical challenges and constraints. In addition, 3D printers weigh several tons, and the steel frame must be erected several stories high. As an alternative, several industry leaders have elected to construct 3D-printed components offsite and transport them to the project site for eventual assembly. This method, which is similar to modular construction, eliminates the need to bring the printer onsite and may be more palatable for densely populated areas. Of course, offsite printing introduces a host of additional considerations, such as added transportation costs and risks, insurance coverage, and added risks of improper assembly of individual components that now need to be joined together at the project.
Hiring Skilled Labor
As many are acutely aware, there is a shortage of skilled labor in the construction industry. 3D-printed construction only compounds that challenge as it requires architects, engineers, contractors, subcontractors and technicians who possess the specialized knowledge and experience gained from working with this new technology. With no such projects in Pennsylvania, labor would likely come from states where 3D-printed construction projects have already taken place, such as Virginia, California, New York or Texas, or internationally in Mexico, the United Arab Emirates, Germany, or the Netherlands. This would add to transportation and lodging costs that would otherwise be avoided on traditional construction projects that source labor through local unions in close proximity to project sites.
While it will take an innovative developer willing to take on certain risks to kick-start the first 3D-printed construction project in Pennsylvania, that developer should only agree to assume these risks when the project can gain approval from local building officials. To encourage this new frontier of development and use its benefits to help reduce the ongoing affordable housing crisis, municipalities must first draft or adopt a uniform building code to support code officials in the permitting process to approve this new method of construction. The remainder of the important considerations would then be able to follow suit.
Reprinted with permission from the August 10, 2022 edition of “The Legal Intelligencer” © 2022 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.
