Every year, the Housing Innovation Alliance holds an event dedicated to the future of the industry. Experts come together to share their insights on building trends, the impacts that various topics have on the industry, the best use of information and data, and what to expect in the next three to five years.
WELCOME & KEYNOTE
John Burns and Deana Vidal, John Burns Real Estate Consulting
The five hour-long event kicked off with a presentation from keynote speakers John Burns and Deana Vidal of John Burns Real Estate Consulting. They discussed the current state of the economy, the industry, and shared tips on what we can expect in 2022.
Stimulus Continues to Drive the Economy
Even today, the economy is benefitting from the Government Stimulus checks of 2020 and early 2021. With $5 trillion in circulation between businesses and consumers, people are using their money to make investments and purchase property.
Burns is unclear when the effects of it will wear off, but suggests it might not be anytime soon.
Top 10 Design Trends
Deana Vidal shares research from the New Home Trends Institute on current trends.
Hidden prep kitchens, ample storage space, and natural light are among the top 10 design trends as of late. For buyers, insufficient storage is a deal breaker in places like the bathroom, and those who work from home prefer having an office in the back of the house, as opposed to the front.
Of course, mental and physical wellness will always be a concern for developers and homeowners alike. Rather than focusing on healthy products, builders should pay attention to making the bedrooms restful, the air filtered, and surfaces easy to clean.
John Burns emphasizes the amount of talent leaving to industry.
Leaders should focus on paying and treating their employees and subcontractors better. Workers are quick to accept better offers at companies like Amazon or UPS—and those companies are hiring by the thousands.
Technology, Tools, and Training for 2022
John Burns suggests focusing on technology tools to increase productivity and efficiency. More can be done with the limited labor we have available—it’s just about utilizing those resources and becoming well-trained.
Some solutions might come in the form of robotics, such as the ABB robots that construct modular homes in rapid time.
FUTURE OF HOUSING: EXPERT PANEL & DEBATE
Facilitated by John Burns, Chief Executive Officer, John Burns Real Estate Consulting
Panel of Experts: Peter Gajdoš, Partner, Fifth Wall; Joel Kirstein, Managing Director, Berkadia; Malee Tobias, Senior Vice President and Chief Marketing Officer, Brookfield Properties.
“The Great Reinvention”
Consumers are rethinking and re-innovating, with help from technological advancements in the workforce, and the ability to work from anywhere.
Malee Tobias, Senior Vice President and Chief Marketing Officer of Brookfield Properties, suggests that the power is slowly shifting from the Boomers and into the hands of Millennials and Gen Z. The industry is changing with the younger generation’s vocal dialogue surrounding climate change, social justice, mental health, and identity.
Not only does this change who is buying our homes, but it influences where the houses should go and what to put in them.
3D Printing with ICON
Peter Gajdoš, Partner of Fifth Wall, dives into the features and future of 3D-printing technology. Notably, he discusses the innovations of ICON, Lennar, and BIG’s community of 3D-printed homes in Austin, Texas.
According to Gajdoš, 3D-printed homes are three to four times faster to build than stick construction, save up to 60% of material due to decreased waste, and are 50-60% cheaper than traditional homes.
These types of homes provide a climate and economic benefit, something that is important to the Millennial buyer. 3D-printed houses offer up to 60% less carbon emissions when constructed with well-insulated cement-based printing materials.
In fact, the cement material is so durable that it has been proven to withstand even a 7.4 magnitude earthquake, as one of ICON’s previous projects found.
Data Science and Investment
Joel Kirstein, Managing Director of Berkadia, discusses recent innovations that have piqued his interest: artificial intelligence data science research.
He mentions the goal of Berkadia is to “help clients make actionable insights quicker and more accurately,” according to Kirstein. This can be done by using observations based on data from a variety of reliable sources.
For example, they use data insights to answer questions such as “can my tenant afford to pay rent?”, and subsequently, “do I need to lower rent prices?”
THE GLOBAL SUPPLY CHAIN: UNDERSTANDING THE DRIVERS
Facilitated by Betsy Scott, Executive Director, Programs and Engagement, Housing Innovation Alliance
Panel of Experts: Lora Cecere, Founder, Supply Chain Insights; Jack Buffington, Professor and Program Director, Supply Chain, University of Denver
A Preexisting Condition
The pandemic was a trigger, according to these experts.
The supply chain challenges that exist in the housing market ripple back beyond COVID, and even pre-2008 recession. A lot of the cyclical issues in the housing market, as found by Jack Buffington, has to do with labor and lumber.
Because of the current global supply chain issues, Lora Cecere, Founder of Supply Chain Insights, believes that the cycle will continue throughout 2022.
She predicts that a glut of inventory will result in inflating products that are tight, while having a surplus of others (most likely, not anything in the building industry)—things like toys and handbags that didn’t make it to the shelves for Christmas.
There is a lot of data out there. How do we best connect the digital thread and create computer models to better predict implications and engineer resolutions?
Cecere suggests that we need to think untraditionally when it comes to supply chain data, because the data is often unstructured and needs a different type of architecture.
“Large builders who have data scientists that can work in the world of Hadoop and R… who are able to use market indicators to give good signals to suppliers, will win,” says Cecere. “But it really requires rethinking to be able to drive a good signal.”
The Root Of It All
We should get to the root issues of the supply and demand infrastructure, not simply fix its symptoms. Cecere and Buffington say that it comes down to effective data sharing and good ethics.
One issue, Cecere mentions, comes from managing logistics and pricing, as well as specific treatment of others.
“It isn’t that we are short truck drivers,” she points out an example. “We [just] do not have good environments for truck drivers to work in.”
The more we can work together as people and try to provide good data, the better we will be. Cecere says that she’s even seen builders—competitors—work together to share inventories when everyone was short on different materials.
“The more that we can have relationships where we can share inventories and information, the better,” she says.
ESG & THE FUTURE OF SUSTAINABILITY
Facilitated by Margaret Whelan, Founder and CEO, Whelan Advisory, LLC
Panel of Experts: Anthony Cazazian, Head of US Residential Real Estate, Man GPM; C.R. Herro, Executive Vice President of Operations, bettr homes; Gene Myers, Founder and CEO, Thrive Home Builders
What ESG Means To Experts
The panel swaps ideas about what Environmental, Social, and Governance (ESG) means to each of them.
C.R. Herro, Executive Vice President of Operations at bettr homes, sums it up quite nicely:
“Between us [panelists], we have the full spectrum of why ESG is important. The people that think ESG is about doing the right thing, aren’t understanding that ESG is about risk mitigation, right? A good company thinks about profit; a better company thinks about profit and their impact on the societies that give them permits. Ultimately, ESG is about this: ‘are you smart enough to anticipate the world changing, and still be relevant next year?’” — C.R. Herro
Anthony Cazazian, Head of US Residential Real Estate at Man GPM, notes that ESG is what helps him ensure that future generations have a better world to live in. To him, it’s about how the world is rapidly changing, and how to become a leader of that change.
Implementing ESG Practices Today
Cazazian mentions that interest in single family rentals and build-for-rent homes has attracted institutional and capital interest. Build-for-rent is one area in particular that can take advantage of all of this.
Gene Myers, Founder and CEO of Thrive Home Builders, suggests the following:
“Some of our customers are not going to get the big picture. And so maybe we need to take it in steps. And I think a logical step for the industry and for us is electrification. The theory, of course, being, if we get fossil fuels out of the house, we won't be using any of them.” — Gene Myers
Margaret Whelan, Founder and CEO of Whelan Advisory, adds to this her belief of value. “I think those [electric] homes are going to hold their value a little bit more in the resale market,” she says. “[This] is going to be attractive, and hopefully means that [the family that invests] will take some of the incremental profit and use it the next time.”
C.R. Herro gives suggestions for the future of effective building. Improving the thermal envelope to be more weatherproof, less conductive of heat and cold, and more consistent with energy demand. This can be done with SIPs.
Structural Insulated Panels (SIPs) may be of beneficial use to builders everywhere, according to Herro.
“You can get a very well-built home with less complexities from your trades, and more high-end predictability and performance on the backend,” he says. “Structural insulated panels is a way to modularize the design of your home, build it in a factory with a different trade base than is conventional, and deliver something that is easier, quicker, and better to execute in the field.”
Herro finds that SIPanels are a far superior envelope, and the experts believe that if we don’t innovate our manufacturing process now, traditional builders may fall by the wayside.
Learn more about the event and watch content on demand on the Housing Innovation Alliance website.