Installation and Costs of the Residential Fire Sprinkler Market - PowerPoint PPT Presentation

Understanding Installation and Costs of the Residential Fire Sprinkler Market Dedicated to improving home building since 1964.

Background and Objectives The need for fire sprinkler systems in residential construction has been under discussion for some time. A key element of the discussion involves an analysis of the actual impact that fire sprinklers have on the construction process. The purpose of this study was to obtain data directly from home builders concerning the installation of residential fire sprinkler systems. Some topics of interest included: • Installation and design characteristics • Permitting • Costs • Indirect impacts on the construction process Dedicated to improving home building since 1964.

Data Collection Data was collected via an online survey of builders. An email invitation was sent to both NAHB members as well as the NAHB Research Center’s Online Builder Panel in April of 2007. The NAHB Research Center maintains its builder panel solely for the purpose of market research. The panel contains about 4,000 participants and is representative of the U.S. population of builders. Participation criteria required respondents to have installed at least 1 residential fire sprinkler system in the past 3 years. Given the small percentage of homes with sprinkler systems, a relatively small group of builders is experienced in sprinkler installation. 126 builders took the survey, and of those builders 102 had definitive knowledge of sprinkler pricing — the data from those builders is used in this report. Dedicated to improving home building since 1964.

Data Collection (continued) Survey results were weighted to more accurately reflect market conditions. Weighting was based on number of homes built by each respondent. In other words, responses from builders are reflected in proportion to the number of units they construct-- responses from larger builders are more heavily reflected than responses from smaller builders. Dedicated to improving home building since 1964.

The results of the 2007 survey were obtained primarily from the NAHB Research Center Builder Panel. These results are compared with similar data obtained last year (2006) based on builder responses from a general survey conducted of builders in areas of the country where some form of a fire sprinkler mandate has been implemented. The questions indicated on he following slides paraphrase the actual question posed to the respondent. Dedicated to improving home building since 1964.

Why did your company install fire sprinkler systems in its new homes? Reasons for Installation 4.8% Other reason(s) 10.8% 13.7% Builder choice 26.1% 2006 2007 0.4% Home buyer demand 26.7% 94.7% Code requirement 70.0% 0% 20% 40% 60% 80% 100% 6

Of the homes your company built what percent of fire sprinkler systems were installed by the following? System Installer Not sure 3.6% 5.3% Plumbing contractor 20.5% 2006 2007 Combination contractor 3.2% (plumbing and fire sprinkler) 13.2% 91.5% Fire sprinkler contractor 62.7% 0% 20% 40% 60% 80% 100% 7

What type of fire sprinkler permit is typically required when installing fire sprinkler systems in your new homes? Type of Fire Sprinkler Permit 2.2% Other Permit 0.0% Only a plumbing permit 8.3% 13.7% Not sure 3.6% 2006 1.0% No permit is required 13.5% 2007 Fire sprinkler permit part of plumbing 6.3% 13.2% permit 38.8% Separate fire sprinkler permit 33.3% Fire sprinkler permit part of building 38.0% 28.0% permit 0% 10% 20% 30% 40% 50% 8

What percent of the homes your company built with fire sprinkler systems used the following as their water supply? Water Supply 97.5% Public water system 74.7% 2.5% Private well 14.1% 2006 2007 0.0% Not sure 9.4% 0.0% Other 2.0% 0% 20% 40% 60% 80% 100% 120% 9

Typically, how much is a fire sprinkler permit fee Fire Sprinkler Permit Fee 7.0% Greater than $500 15.8% 2.0% $401 - $500 2.3% 7.0% $301 - $400 19.5% 2006 21.2% $201 - $300 11.4% 2007 20.1% $101 - $200 12.6% 11.7% $1 - $100 14.8% 37.4% No Fee 23.5% 0% 10% 20% 30% 40% 10

In jurisdictions where you build most of your homes with fire sprinkler systems, what type of fire sprinkler inspections are required? Fire Sprinkler Inspections 64.0% Rough-in or Close-in 43.5% Flow test Hydrostatic/Pressure 43.3% test 39.1% Final 2007 Part Of The 30.4% Plumbing Inspection Thermal insulation - 12.0% freeze protection 13.2% Not sure 0.0% Other 0% 20% 40% 60% 80% 11

Have you ever installed a freeze protected (glycol) fire sprinkler system? Installed Freeze Protected (Glycol) Fire Sprinkler System 50.4% No 63.0% 16.5% 2006 Yes 2007 34.8% 33.1% Not Sure 2.2% 0% 10% 20% 30% 40% 50% 60% 70% 12

What effect does the installation of fire sprinkler systems in your new homes typically have on the homebuyers homeowner insurance Homeowner Insurance Impact 41.5% Provides home buyer with discounted insurance premium 46.4% 4.3% 2006 Results in coverage exclusions 19.1% 2007 54.4% Not sure 38.8% 0% 10% 20% 30% 40% 50% 60% 13

In your opinion, how important is the discounted insurance premium to the home buyer Importance of Discounted Insurance Premium to Home Buyer Very Important 16.4% 71.2% Important 17.5% 22.6% Neither unimportant nor important 13.3% 2006 2007 5.0% Unimportant 16.1% 1.3% Very unimportant 21.1% Not sure 15.6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 14

Of the homes you build with fire sprinkler systems, are sprinklers typically installed in the following locations Sprinkler Location 23.4% Attic 42.7% 64.9% Garage 61.5% 42.2% Crawlspace (for storage) 37.9% 2006 27.2% 2007 Crawlspace (not for storage) 20.9% 61.6% Finished Basement 54.7% 35.8% Unfinished Basement 52.7% 0% 10% 20% 30% 40% 50% 60% 70% 15

In the jurisdiction where you build most of your homes with fire sprinkler systems, is a fire sprinkler system design and/or plan required? Fire Sprinkler System Design/Plan 94.1% Yes 68.9% 4.7% 2006 No 18.9% 2007 1.2% Not Sure 12.2% 0% 20% 40% 60% 80% 100% 16

What percent of your fire sprinkler systems were designed by the following Fire Sprinkler System Designed By 82.2% Fire sprinkler contractor 57.4% Combination contractor (plumbing and 0.7% 10.6% fire sprinkler) Plumbing contractor 13.1% 2006 2007 8.0% Design consultant 11.6% Not sure 7.2% 9.1% Other 0% 20% 40% 60% 80% 100% 17

Is there a separate design fee for the fire sprinkler system Fire Sprinkler System Design Fee 43.0% Yes 49.3% 47.7% 2006 No 40.4% 2007 9.3% Not sure 10.3% 0% 10% 20% 30% 40% 50% 60% 18

How much is the design fee Fire Sprinkler System Design Fee Design Fee Cost 28.1% 30% 27.4% 25% 20% 16.0% 2007 15% 12.5% 9.2% 10% 6.8% 5% 0% $1 - $100 $101 - $501 - $1001 - $1501 - Greater $500 $1000 $1500 $2000 than $2000 Design Fee Cost 45% 41.5% 40% 35% 30% 25.2% 2006 25% 19.9% 20% 13.4% 15% 10% 5% 0.0% 0% $1 - $499 $500 - $999 $1000 - $1499 $1500 - $1999 $2000 or more 19

Of the homes you built with fire sprinkler systems, which of the following water service pipe changes resulted in an additional expense Water Service Pipe Change Expense 64.4% Increased size of water service pipe 50.3% Added an additional water service 22.9% 31.8% pipe 2006 2007 No additional water service pipe 28.8% 34.8% changes Changes did not result in an 1.8% 11.9% additional expense 0% 10% 20% 30% 40% 50% 60% 70% 20

How much is the additional expense for the water service pipe changes Water Service Pipe Change Expense $8000 or more 12.1% $7000 - $7999 $6000 - $6999 0.1% $5000 - $5999 2.1% 2006 $4000 - $4999 7.6% $3000 - $3999 1.9% $2000 - $2999 7.8% $1000 - $1999 8.6% $500 - $999 38.1% $250 - $499 21.4% $1 - $249 0.2% 0% 10% 20% 30% 40% 50% 21

How much is the additional expense for the water service pipe changes Water Service Pipe Change Expense Greater than $5000 4.1% $4001 - $5000 0.2% 9.4% $3001 - $4000 $2001 - $3000 15.5% 2007 17.4% $1001 - $2000 $501 - $1000 27.3% $101 - $500 7.2% $1- $100 1.5% No additional Cost 17.4% 0% 5% 10% 15% 20% 25% 30% 22

Of the homes you built with fire sprinkler systems, which of the following water meter changes resulted in an additional cost Water Meter Additional Expense 36.4% No additional water meter changes 45.8% 2006 11.4% Added an additional water meter 2007 25.2% 43.6% Larger size water meter 27.4% Changes did not result in an 13.8% additional expense 9.2% 0% 10% 20% 30% 40% 50% 23

How much is the additional expense for the water meter? Water Meter Additional Expense $3000 or more $2500 - $2999 $2000 - $2499 0.2% 2006 $1500 - $1999 $1 - $1499 No additional cost 99.8% 0% 20% 40% 60% 80% 100% 120% 24

How much is the additional expense for the water meter? Water Meter Additional Expense Greater then $2000 6.2% $1501 - $2000 4.6% $1001 - $1500 19.3% $501 - $1000 2007 11.4% $101 - $500 19.8% $1 - $100 4.8% No additional cost 33.9% 0% 5% 10% 15% 20% 25% 30% 35% 40% 25