Tribally-owned housing company continues to expand operations

Tuesday, July 23, 2019  

DETROIT LAKES, Minnesota – Tom Bohnet spent his career building up two profitable businesses, one that creates precision components for the aerospace industry and another that builds custom bows for hunters.

After retiring four years ago, he and his wife Mary Lou decided to return home to rural Burke, South Dakota, to live on his parents’ ranch.

At the time, only a 970-square-foot home graced the ranch. So the couple decided to build a new home.

With few building options available in such a rural area, the Bohnets decided to explore modular homebuilding, a growing industry that involves construction of buildings off-site in controlled plant conditions. Modular construction typically takes about half the time as conventional homebuilding.

A friend of the Bohnets’ had built a home through a modular construction company in Detroit Lakes, Minnesota called Dynamic Homes. The Bohnets decided to tour the company’s facility. As a retired engineer, Tom Bohnet quickly recognized the professional standards in place at the company’s factory, including its use of quality building materials and attention to details.

The couple decided to purchase a home from Dynamic Homes.

“The quality control they had there was really good,” Bohnet said. “You didn’t see any shortcuts.”

It’s a refrain that Paul Okeson, president of Dynamic Homes, is accustomed to hearing.

For nearly 50 years, Dynamic Homes has constructed modular homes and commercial buildings inside its sprawling 120,000-square-foot factory in Detroit Lakes. It was Minnesota’s frigid winters that inspired a group of local entrepreneurs to find a more effective means of home construction in cold weather.

They founded the company first as DynaCorp, but changed its name just a year later to Dynamic Homes.

“It was started by some stick builders and entrepreneurs in town, actually in 1969,” Okeson said. “They were just looking for a better way to build. Especially in the winter up here, you get four to five good months to build in, if that.”

In the 1980s, the company boasted factories in Detroit Lakes, Mandan, North Dakota and Pelican Rapids, Minnesota. But rising interest rates and a fire in the Pelican Rapids factory forced the company to close all but its Detroit Lakes factory, though that plant has undergone several expansions since then.

In 2000, Ho-Chunk Inc., an economic development corporation owned by the Winnebago Tribe of Nebraska, became the majority owner of Dynamic Homes.

Today, the company has nearly 100 employees, making it one of the five largest employers in Detroit Lakes. However, the company has struggled in recent years to recruit plant workers to replace an ever growing number of retirees. Many of the company’s employees have been there for 30 to 40 years.

“We’re struggling like everyone right now to find bodies because the labor market is so tight,” Okeson said. “We could use a strong 10 bodies in the factory right now.”

He said many of the company’s workers came from farms and high school shop classrooms and have been loyal and hardworking. Replacing them at a time when technical skills like carpentry and plumbing have become less emphasized in schools has been difficult, Okeson said.

In the past 10 years, nearly 30 employees have retired.

“A lot of manufacturing is dealing with that right now,” he said. “It’s not just Dynamic Homes.”

In 2018, Dynamic Homes sold nearly 150 homes and is expecting to sell 170 this year, he said. In past years, the company typically sold nearly 230 homes a year, but at the same time Dynamic Homes has begun building larger and more expensive homes, Okeson said.

“The dollar value is kind of still there, but the quantity is not,” he said.

The housing recession of the late 2000s also hampered Dynamic Homes’ sales, as increased government regulations hindered the ability of first-time homebuyers to acquire financing. Many such homebuyers needed to save up as much $50,000 or have enough equity to make up the difference, Okeson said.

In recent years, however, relaxed regulations have led to more first-time homebuyers purchasing the company’s homes, he said. “That market is coming back,” he said.

The company constructs three types of buildings: individual family homes, commercial buildings, such as apartments and hotels, and tribal housing.

After the housing recession began, more than 50 percent of Dynamic Homes’ sales came from tribal housing. Much of that housing was sold to the Winnebago Tribe, Okeson said.

He estimated Dynamic Homes has manufactured nearly 30 homes for the Winnebago Reservation in northeast Nebraska, including most of the homes in the tribe’s Ho-Chunk Village, a modern mixed-use development that has won several awards. The company also manufactured an apartment complex in Dakota Dunes, South Dakota, for the tribe.

The company has constructed duplexes and single-family homes for the Three Affiliated Tribes in North Dakota, four-plexes for the Standing Rock Sioux Tribe in North Dakota and duplexes for the Lower Sioux Tribe in Minnesota.

He said the company strives to manufacture at least one home a day in its production facility.

“That’s a big monster out there that’s hungry,” he said. “If we go a month or a week or whatever it is without selling a house, it’s difficult here.”

Inside the factory on a recent summer morning, two workers assembled pre-cut planks onto a massive wood foundation and used nail guns to secure them in place. Most houses the company builds are two-module homes and are about 1,500 square feet.

Okeson said one of the essential elements to the company’s superior craftsmanship is the high-quality wood it purchases. Workers will throw out any planks that are warped or have large knots, he said.

“We’ve been purchasing from a lot of the same mills for over 40 years,” Okeson said.

Once the first floor of a home is constructed, workers pick it up with lifts and move it to an area where other workers begin putting insulation in it.

Inside the factory, the constant “thwap, thwap” of nail guns and “boom, boom” of hammers could be heard, along with the mechanical whine of table saws and hand saws.

Further down the assembly line, other workers complete drywalling and custom finishes.

“Most everything we build is custom,” Okeson said. “I’d say 90 percent.”

Customers work with dealers to design their homes, deciding on finishes and layouts. They can design their homes as simple or fancy as they like, he said. The company sells its finished work to dealers for about $75 a square foot, but dealers then charge customers for the land, utility infrastructure and foundations upon which the homes are assembled.

When the homes are finished, the company transports the modules and roofs with semitrailers and assembles them on foundations using cranes.

In late 2015, several semitrailers pulled up to Tom and Mary Lou Bohnets’ ranch in south-central South Dakota and began unloading nine modules, each about 750 square feet in size. While it took longer than expected to assemble the home because a crane operator arrived late the first day, the company’s crew finished its work before noon the second day.

The home is now one of the largest that Dynamic Homes has ever built, though it’s by no means the largest building it has constructed. Nearly four years later, Tom Bohnet said he and his wife have received numerous compliments on their home.

“It’s gone through a few winters, and it’s nice,” he said. “It’s all been good.”

Ho-Chunk Inc. owns Indianz.Com. The website is not involved in the corporation's activities or with Dynamic Homes.