Technology

Trailblazers: Focus On Toyota-Like Assembly Line At Connect Homes

As one of housing's few brightspots – build-to-rent neighborhoods and their developers and investors – started to hit higher, more prohibitive barriers to pencilling to profitable pro formas, Los Angeles-based Connect Homes announced it would unveil its Pro Platform solution.

Technology

Trailblazers: Focus On Toyota-Like Assembly Line At Connect Homes

As one of housing's few brightspots – build-to-rent neighborhoods and their developers and investors – started to hit higher, more prohibitive barriers to pencilling to profitable pro formas, Los Angeles-based Connect Homes announced it would unveil its Pro Platform solution.

December 13th, 2022
Trailblazers: Focus On Toyota-Like Assembly Line At Connect Homes
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The Atlantic's "10 Breakthroughs of the Year" special feature this week showcases applied brilliance. The science and technology advances writer Derek Thompson highlights are "are just the beginning of the long story we call progress." They live up to their billing as standouts in a year full of stunning strides forward.

The accomplishments span every station of life, from birth to death, and every component, from our cells to the stars. They include a drug that revives the organs of dead animals; an embryo created without sperm or egg; a telescope to see the universe’s first moments; and an AI that conjures award-winning art." Derek Thompson – The Atlantic

Conspicuous in its absence – at least for one keen to witness human endeavor rise to challenges near and dear to those in the "station" of housing – is a breakthrough that could reverse the spinning gyre of a ground-up market-rate residential real estate development business community that's pricing out people and households faster than it's pricing them in.

In that context, the trailhead of a future in housing that can offer more affordable access to sustainable, resilient, safe, and healthy housing – and one can hold hope that a "10 Breakthroughs of the Year" line-up in the next couple-to-five years might include such a venture – is a crowded place right now.

Each trailblazer has oriented itself to bending a curve that arcs one way to its opposite direction -- costs, land-use/policy rigidity, capital constraint, or consumer indifference. One enterprise striking out early on that path charts is mission this way.

To deliver modern homes that are affordable, green and available wherever you are." – Connect Homes mission statement

Essential to a true breakthrough on the trail to a future of housing that's affordable to more working households is subtraction. Only by subtracting – bending the cost curve from bloated to light-and-lean – wastes of time, money, materials, approvals, and hand-offs will any housing trailblazer make it to one of the "10 Breakthroughs" line-up.

And one more area – particularly now – needing subtraction: Uncertainty.

Recently, as one of single-family development's few remaining brightspots – build-to-rent neighborhoods and their developers and investors– started to hit higher, more prohibitive barriers to pencilling to profitable pro formas, Los Angeles-based Connect Homes announced it would unveil its Pro Platform solution.

Connect co-founder and chief product officer Jared Levy notes in a statement:

PRO is the ultimate solution for building high quality, marketable communities for rent or sale and removes many of the uncertainties involved in today’s home and community building environment.”

Greg Leung, who rose in a 12-year career at Apple from planner to senior director for worldwide supply demand management, joined as CEO of Connect Homes in September 2020.

As I learned about homebuilding's challenges, I was at first motivated by how auto manufacturers figured out how to go from bespoke vehicles to mass production, using precision manufacturing along an assembly line," says Leung. "Now, the end-to-end build cycle for homes is harder than that, and the challenge of moving the atoms across space and time into a real world, real site environment of dirt, door-frames, walls, etc. that make the built environment has been a rough go for all of the Silicon Valley-based initiatives so far, which have encountered a chasm in the real world of dirt. I like solving complex problems. But, to me, there's something almost spiritual in this pursuit. This is a problem we have to solve as a country."

To Leung, the only way to sustainably accomplish subtraction – of the tens of thousands of dollars of waste in every new home and the strong forces of uncertainty – is to bring the residential build-cycle two constructs it's never had – Predictability and Repeatability – to the need to do what any enterprise with a place in housing's future needs to do: Scale.

Up to now, the closest any human operational model has come to predictability and repeatability as engines to scalability, Leung says is through "end-to-end" industrialization. This explains a factory assembly-line process – just as he'd practiced in his role directing global supply chain at Apple – right out of the Toyota lean manufacturing model and modern aerospace production.

If you're unsure as a developer whether you're going to get permitted and vet through inspections on your products, you've got to factor that into the cost pro forma," says Leung. "Our projects get approved in far less time, and the repeatability of our platform removes huge hidden costs of risk. Predictability, too, is the antidote to risk. We're solving for the hard costs of building, which comes by eliminating waste."
Image courtesy of Connect Homes
  • Connect Homes uses an assembly line process in its San Bernardino, CA,  facility to efficiently produce high quality prefabricated homes at scale.
  • Connect Homes’ factory is broken into 7 stations, where 1 home moves through 1 station per day.
  • They use a steel frame module so they can design the floor plan to be more efficient with big open spaces, larger slider doors, and floor to ceiling glass windows.
  • Homes arrive at site, 90% complete, with a Level 4 finish – HVAC, fire sprinklers, plumbing, electric, countertops, cabinetry, etc. all pre-installed.

With Leung at the helm, Connect Homes has optimize its supply chain to be as efficient as possible, so that they can produce modules that are 90-100% complete by the time the units are put on the loading truck and installed on site. They also provide pricing visibility for everything except for costs associated with the foundation (as this varies from site to site) which is unlike the typical design and build process.

Connect Homes earned honors this past Spring as an Ivory Prize for Housing Affordability finalist, which TBD notes here.

They talk about shelter as a basic human need, and it is," says Leung. "But it also meets higher-level human needs when you talk about connecting with family, partners, friends, roommates, ties to nature, having a sense of peace. There's something so moving when you see clients welling up with tears when they see their home and reflect, 'this is going to change my life.' Having that kind of impact, or at least working for it, is like nothing I've ever been able to do before now."

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.

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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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