Leadership

An Attainable-Sustainable Axis Will Come To Those Willing To Learn

A challenge to those whose livelihoods are making new homes and neighborhoods will be to chart an axis that dot-plots both more homes for more people and more positive environmental impact in the building and operating of those homes.

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An Attainable-Sustainable Axis Will Come To Those Willing To Learn

A challenge to those whose livelihoods are making new homes and neighborhoods will be to chart an axis that dot-plots both more homes for more people and more positive environmental impact in the building and operating of those homes.

Together with
November 8th, 2022
An Attainable-Sustainable Axis Will Come To Those Willing To Learn
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America is underbuilt compared with its human needs for access to shelter, community, and places to thrive, a reality an increasingly bleak economic outlook aggravates as it weighs on housing's pools of resources.

An even harder challenge to those whose livelihoods are making new homes and neighborhoods will be to chart an axis that dot-plots both more homes for more people and more positive environmental impact in the building and operating of those homes.

Housing's dual mandate, if you will, like high employment and low inflation.

Urgency in the first reality is clear and present. It's being lived, and paid for, and chipped away at with each pricing, interest-rate, sales, and cost release. The second reality – because most of us don't eat, sleep, breathe and pay the price for it – feels less pressing at best, made-up at worst. But it too is clear and present.

The money, dirt, time, materials, technology, political will, and marketing it will take to plot an attainable and sustainable axis as future of housing is basic economics in any framework other than a quarter-to-quarter near-term fiscal sense. And, as William MacAskill notes here, it's even more basic than that.

Society tends to neglect the future in favor of the present. Future people are utterly disenfranchised. They can’t vote or lobby or run for public office, so politicians have scant incentive to think about them. They can’t tweet, or write articles, or march in the streets. They are the true silent majority. And though we can’t give political power to future people, we can at least give them fair consideration. We can renounce the tyranny of the present over the future and act as trustees for all of humanity, helping to create a flourishing world for the generations to come."

And that means – even as market-rate housing rides a downward trajectory to a low-point of an unknown depth and duration -- that bi-directional challenge is really a single economic imperative. Cue the 1960s era Fram oil filter "pay me now, or pay me later" commercial.

Let me digress.

A 2016 vintage would-be residential construction disruptor didn't want to talk to, listen to, nor learn from experts and experienced practitioners in homebuilding when he began standing his company up.

Having come of professional age in a post Alphabet, Amazon, Apple world, he could barely hide disdain for the "knowledge" people who build homes the way they did then, which is roughly the way they do know, which is also – we hear every time there's a seed capital, Series A, or Series B fundraise backing their start-up venture – how it's been done for [you fill in the blank]-hundred years.

Why would you want to spend time to understand what is a patently incomprehensible, counterintuitive, and irrational way to use resources to make shelter?" this person asked. "I don't want to learn from them. That would be going backwards."

Since that exchange with me almost eight years ago, Katerra came and – catastrophically – went, despite a $2 billion startup-and-go-big warchest. Dozens of modular, automated, factory-based, robotic, componentized, panelized, 3D-printed, etc. vertical construction platforms have come online, secured billions of dollars more in capital funding, set up high-engagement website platforms, hired-on name architects, pumped out press releases and ... promise to crack the code of attainable sustainable ground-up homebuilding.

We have another such announcement coming out of San Francisco, full of pedigree and promise:

Aro Homes, the tech-enabled homebuilding startup that designs and builds carbon-negative, precision-engineered and user experience-optimized homes faster and more cost-effectively than traditional homes, today announced its public launch with $21 million in funding. The company was incubated by Innovation Endeavors and represents its continued commitment to funding disruptive businesses in massive industries. Western Technology Investment and Stanford University also participated.
“Though housing has needed to be revolutionized for some time, few companies have met the challenge with the ambition and clarity of vision as the Aro team”
“The way we live has changed, but our homes — and the way we build them — haven’t kept up,” said Aro Homes Co-CEO Carl Gish. “Challenges across the housing market continue to mount, and we are driven to meet this crisis with the urgency it requires. Residential housing contributes 23% of global carbon emissions, and we believe it’s past time we apply technology and design to make homes more sustainable and livable. Aro Homes has partnered with world-renowned architects to design homes that generate more energy than they use and are extremely resource-efficient; using half the water of a comparable home. We are thrilled to announce our launch and set a new standard for housing that is as good for people as it is for the planet.”
Aro’s approach addresses the lack of innovation seen in residential homebuilding over the past several decades. While cars are starting to drive themselves and societies contemplate homebuilding on Mars in the not-so-distant future, the U.S. is still plagued by a homebuilding process that is inefficient, slow and costly; 40% of labor and materials are wasted, raw material costs are unnecessarily elevated, and the resulting homes are bad for the environment.

Fast Company's Adele Peters – who's been at the vanguard of reporting on housing's exciting tech- and data empowered home construction platforms for a decade or more – contextualizes the announcement with caveats known and unknown.

Unlike the traditional construction process, with developers, architects, general contractors, and realtors, “we own and control the process from end to end,” Gish says. That’s similar to Katerra, another homebuilding startup that failed not long after raising hundreds of millions of dollars from Softbank. Some of Aro’s team came from Katerra, and they argue that they’ve learned from Katerra’s mistakes.
“Construction is a complicated industry with so much room for improvement that it’s easy to get caught up in a lot of improvement projects—and I think we ultimately took some of that complexity for granted,” says Katie Blaesser, engineering director at Aro, who was previously a product manager at Katerra. The company tried to control the entire supply chain and every detail of construction, acquired other construction companies, and worked on multiple building types simultaneously, from office buildings to single-family homes. “We took on too many of those at Katerra. So instead of focusing on what really mattered, we changed directions so often that we had trouble finishing projects. Internally, we were often left wondering what the real goal of the company was. But at Aro, we’ve kept the goal simple and constantly remind ourselves what that goal is: to build residential housing in a more sustainable way.”
“This is a problem other people have tried to solve, and we don’t think we’re smarter than anybody else,” says Gish. “But we do think our approach and learning from what’s come before us and what people are doing today will allow us to achieve these goals.”

My friend, the disruptor and his disruptive innovative residential construction platform have lived to tell the tale so far. The reason for that owes more to what he and his team did learn about residential development in America than what they chose not to learn from big, experienced, successful incumbent players.

What he learned – and what any disruptive innovator will have to learn either the hard way or not – is that industrialized, automated, roboticized, simplified, waste-free, sustainable, and high-resiliency construction is really only one-third of the equation necessary to make new homes attainable and sustainable.

The other two-thirds of alignment and innovation necessary to put homes on that axis are political will and the equitable share of costs and value.

This trifecta – building technology, policy, and capital alignment – in tandem is believe it or not, what homebuilders and developers do, have done, and will continue to do as a superpower. That's reason to be hopeful in a future of housing that "creates a flourishing world for the generations to come."

ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

ABOUT

Since 1873, Kohler Co. has been improving the level of gracious living by providing exceptional products and services for our customers’ homes and their lifestyles.

Website

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John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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Since 1873, Kohler Co. has been improving the level of gracious living by providing exceptional products and services for our customers’ homes and their lifestyles.

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