Risks in 3D

Reservations are being taken for ICON and Lennar’s 100 home community of 3D printed ranch style homes now being built in Georgetown, Texas. Called Wolf Ranch, the development offers eight floor plans for three- or four-bedroom homes, ranging in size from 1,574 to 2,112 square feet.

The homes are relatively affordable, with prices starting in the mid $400,000s. If you search YouTube for “Lennar Wolf Ranch 3D,” you will find some interesting videos demonstrating the process.

California has followed Texas’ lead by amending its residential code to allow for the construction of 3D printed homes, commenting that “3D building construction has moved from a conceptual stage to reality.” This is an exciting time for 3D construction, following years of experimental projects in the arena, but a question in my mind is, when will the bugs get worked out, and what will 3D printed construction look like after things get sorted out?

Some early, obvious considerations, according to a building official involved with the Wolf Ranch project, are as simple as where to install plumbing and electrical utilities, and how to handle insulation. Other considerations are less obvious, such as, how will the builder manage quality control on a large scale project when the materials, equipment, and processes are so new to all involved? Other unknown issues will likely come up as time goes by.

In the meantime, the regulations published by Underwriters Laboratory (UL) for 3D printed homes are robust, which is good news for all involved. In this article, we describe how the regulatory scheme is supposed to work to ensure quality, and hopefully mitigate against the risk of claims. And we will review some risk management considerations that builders, risk managers, and their lawyers should be aware of.

As background, 3D printing is also called additive manufacturing. It involves creating a product, in this instance a house, from the ground-up in a layer-by-layer fashion by using either a cement or plastic based material, coupled with other materials such as plastics, wood, fiber, or other biodegradable materials. The process being used at Wolf Ranch involves a cement based proprietary mixture, called LavaCrete, that is extruded out of a nozzle in layers in pre-programmed patterns that are determined by the computer-generated plans prepared for each layout.

The touted advantages of 3D printing include reduction in labor costs, reduction in waste, and increased speed of manufacture. Some predict that 3D printed homes may potentially result in time savings of 60% to 70%, and cost savings of 20% to 30% or more when compared to existing construction methods.

The International Code Council’s Appendix AW, which was published in November 2021, is the building code modification that allows 3D printing to be used as an alternate building method. Appendix AW essentially requires the construction of 3D printed homes to comply with UL standard 3401, last published on Nov. 28, 2022. 

When compared to other published standards for alternative building materials, UL 3401 is a remarkably thoughtful and holistic standard regulating the mechanical strength, fire performance, air and water barrier, thermal insulation, indoor air quality, durability, and integrity of 3D construction. It requires the establishment of quality control procedures for material properties, and also requires the establishment of performance requirements.

The baseline testing required by UL 3401 includes fire resistance, non-combustibility, thermal insulation, sound insulation, flame spread, smoke and heat release, compressive strength and other characteristics of concrete or polymeric material, interior floor finish and coverings, fire spread of exterior wall coverings, weather protection including air and water barriers, roofing fire classification, plastic and foam plastic construction materials, and indoor air quality. Test data can also be used as a basis for structural loading calculations.

Interestingly, UL 3401 requires machine control software to automatically capture and record production information, and it prohibits manual modification of data. The information to be captured by the machine includes real-time data such as ambient temperature and humidity ranges during the production, additive manufacturing material used—including lot or other identification numbers, and post-processing repairs, refinishing, or scrapping of building elements. Significantly, UL 3401 also requires third-party material tracing of proprietary additive manufacturing materials to verify that the formulation does not change from the one used and approved during the initial testing phase. Changes in formulation must be evaluated to determine that they do not adversely impact the material properties or the building elements, including reevaluations of different formulations used for differing site conditions such as temperature, humidity, and precipitation. 

In addition to material testing, the quality control process mandated by UL 3401 includes requirements for the calibration of equipment and procedures for assessing and addressing defects in the finished build. Construction details are required, including building envelope details, and how other components such as utilities are to be secured and located in channels. In sum, UL 3401 requires that all materials are to be evaluated holistically as part of the overall assembly.

The Risks and the Unknowns

UL 3401 appears to be a reasoned and comprehensive standard, but, of course, the jury is out on how the standard will be implemented. For example, UL 3401 mandates an initial inspection of the production equipment and the fabrication process after the equipment is located onsite but before fabrication has begun. But there is an exception (where approved by the building official) after the first home is built in a single housing tract, allowing for representative testing of subsequent buildings, again as determined by the building official. So, in a 100-unit development, how many units will be tested, and, if things go bad, how many will a plaintiff’s lawyer argue should have been tested? Code officials will likely face significant challenges in figuring out how to evaluate these buildings.

Liability risks are likely to be varied. They include the effort to adapt existing contractual arrangements to the nuances of 3D printing, versus starting contract documents from scratch and truly tailoring contracts for the new exposures that this process will present. Aside from the standard risk transfer and risk management issues—for example, the consequence of delays caused by equipment breakdown, and how to allocate responsibility for future defects—one author who discussed 3D printing in the book, “Automating Cities: Design, Construction, Operation and Future Impact” noted that “3D printing is disruptive for intellectual property law and policy because it cuts across the various disciplines of patent law, copyright law, trademark law,  consumer law, designs law, and confidential information.” 

In terms of readily foreseeable risks, a senior level casualty risk control person from a national liability carrier ticked off three immediate concerns:

• Off-gassing and resulting injuries to workers during construction, both onsite and in a factory setting.
• Plastic burns hotter than wood, so will the fire suppression system incorporated into the house do the job?
• Expansion and contraction rates of different materials (plastics, concrete, metals, etc.). Breaks, cracks, and leaks into a wall assembly are a concern.

Like every other new technology, the devil is in the details, and the future of 3D printing will likely go through several iterations before things get sorted out. In the memorable words of Donald Rumsfeld “…there are also unknown unknowns—the ones we don’t know we don’t know.” Till then, I wish the best of success to ICON, Lennar, and other industry leaders as they forge ahead with this promising technology.

The future looks bright, indeed, though everyone will be money ahead by keeping their eyes wide open.