Introducing the Change Order Podcast

Last year, I was commissioned to do a trend report about the future of housing. I was blessed with a client who imposed few restrictions in terms of what I explored. My areas of inquiry were determined by what was happening—and projected to happen—in the world of housing, not some predetermined conclusions shaped by a corporate agenda. Consequently, my inquiries led me down uncomfortable paths characterized by extreme housing shortages and unaffordability, inundated and sweltering cities, the presence of a digital Big Brother in every room in our homes, etc.

But these inquiries also led me to amazing men and women solving these seemingly intractable problems. As an ardent tracker of housing innovation, I was in heaven, meeting one brilliant thinker after the other, seeing novel architecture and design thinking, learning about amazing technology that could revolutionize how housing is made, used, financed, sold, and operated.  

Throughout the project, I kept thinking to myself, “I bet people would love to listen in on the conversations I’m having.” These conversations were not facile. They were seldom short. They often ended with more questions than they began with. They didn’t need to stop to define the terms REIT or thermal envelope.

And they weren’t strictly business conversations—often the conversations were about how these people were devising technical solutions for existential problems: how we can help people live easier through more affordable or better-designed housing, how we can build housing that lives in harmony with a planet on the brink of climate disaster, how we can come up with policy reform that makes all of these objectives possible. Whatever the specific character of the conversation, they were enlightening, both from a technical perspective and, ahem, a spiritual one—I felt heartened to know people were out there tackling big problems and designing some compelling solutions.     

The Change Order podcast is my attempt to keep these conversations going in the absence of an awesome, open-minded client paying me to do it (as always, I’m open to those too). My intention is to get together with folks at the vanguard of housing innovation—policymakers and activists, architects and engineers, developers and financiers, and people experimenting with novel ways of living that could have implications for mainstream housing.

You can find the podcast on Soundcloud where there are currently two podcasts: Ben Carlos Thypin and Stephen Smith (the latter is the infamous @marketurbanism on Twitter) from Open New York, NYC’s main YIMBY group, and Thomas Kosbau, all around great guy and founder of ORE Design + Technology, the firm behind DeKalb Market, 275 South, and a bunch more. More coming soon. To get updates, sign up for the email list. I also have an unpopulated Twitter and Instagram account here, because futureproofing. I encourage you to sign up to any and all.    

I really hope you give it a listen. Feel free to email me if you have suggestions, feedback, etc.

2019 looking like a big year for housing

Hey there, it’s been a long time. Good to see you. Lots of interesting developments in the world of housing innovation, policy, and affordability. Here are some:

Microsoft pledges $500M towards affordable housing in the Seattle Area. Seattle, like SF and other cities with scores of new, high paying tech jobs and no corresponding uptick in housing production, has a major affordable housing crisis. The pledge is ostensible penance for Microsoft’s part in creating the crisis.

While many laud Microsoft for its largesse, others wonder why they are doing this as a corporate entity? Instead, why aren’t they backing initiatives like last year’s proposal that would have levied large companies with a per-employee tax dedicated to homeless services and affordable housing construction (the same one Amazon put the kibosh on)?

Construction tech firm Katerra might be getting another cash infusion from the Softbank Vision Fund to the tune of $700M; this is on top of last year’s Softbank-led $865M D-round. The chatty cathies I know don’t have the greatest faith in Katerra—they say the scope of their ambitions is too great, they’re not staffed up, their initial projects have been fiascos, and they have an absentee CEO. For the sake of seeing further growth in this segment, I’m hoping these are mere growing pains and that Katerra’s promise corresponds with the gobs of cash it’s getting. 

Continue reading “2019 looking like a big year for housing”

Alexa, build me a house

What happened: Amazon Alexa Fund and Obvious Ventures invested $6.7m Series A for Plant Prefab—a modular prefab home builder.

Who is Plant? They’re an LA-based modular, prefab builder focused on high end, single-family and low-rise multifamily homes. They build mostly in wood and have a strong eco-bent and fondness for connected homes.

Why Plant? One, there’s growing interest in modular and prefab in general, made most evident by the somewhat recent SoftBank-led investment in Katerra, as well as other investments in the last couple years like FullStack Modular, Kasita, and Blokable.

But according to Plant CEO Steve Glenn, the investment has a lot to do with providing Amazon a testing ground for their connected devices. He told Fast Company, “We will work with Amazon to integrate Alexa and other smart home technology they have into our standard home platforms…[and] working with them to create better integrated Alexa and other smart home technology solutions to help improve the quality of life and utility of people who live in the homes we build.” Continue reading “Alexa, build me a house”

Can there be an Amazon of housing?

A recent WSJ article reported that the disproportionate gains in labor productivity in recent years have affected a small percentage of companies. They write that, “the most productive 5% of manufacturers [in all sectors] increased their productivity by 33% between 2001 and 2013, while productivity leaders in services boosted theirs by 44%.” During that same period, “all other manufacturers managed to improve productivity by only 7%.” 

According to the Organization for Economic Cooperation and Development, the reason for the disparity is what they call diffusion—i.e. innovation and talent are being consolidated by the largest players and not diffusing to the smaller ones.

The market reach and pocket depth of giant multinational corporations—Amazon, Google, Apple, IKEA, Toyota, etc.—enable them to attract top human capital and make large technological investments. These resources create a nearly-insurmountable innovation gap for their smaller competitors and upstarts. In fact, the number of first-round VC financing was down 22% in 2017 versus 2012, and many attribute this to the dominance of companies like Amazon and Google. Investors might be asking why bother competing when the big guys will create a superior product in-house? Continue reading “Can there be an Amazon of housing?”

Is coliving ready for prime time? This big developer thinks so

When people speak of coliving, they tend to think of Common, Ollie, Roam, Starcity, and the Collective UK. These companies are all relatively new. Most are asset light. And though many have raised respectable sums of money, the volume of units they operate or own is a rounding error compared to the number of units development and/or managed by folks like Greystar, AvalonBay, and Related. With the exception of Vornado’s partnership with WeLive, behemoth multifamily developers have stayed out of the coliving/shared-living scene in any official capacity.  

That could possibly change.

Last year, Property Markets Group (PMG), a developer with $6B in completed projects and operating 80 buildings across the country, announced a sub-brand dubbed X Social Communities. PMG chose ‘social community’—as opposed to coliving—because they’re not keen on being called an adult dorm, according to their Dir. Brand Experience Brian Koles. Nevertheless, X bears a striking similarity to coliving: smaller units, big amenities, furnished rooms and apartments, roommate matching, and a ‘Rent By Bedroom‘ program, where each roommate has his or her own lease. 

PMGx differs some from the standard bearers of the burgeoning coliving market. One, they’re acting as developer/owner/operator (only Starcity and The Collective UK are doing that). X is also staying away from NYC, SF, LA, and Boston where most operators and owners are setting up. Instead, they are building in less constrained (and less expensive) cities like Miami, Chicago, and Denver.

By virtue of the markets X serves, unit and bed prices are lower than in top-tier cities. Leasing just began on X Miami, where rents range from $1,300-$2,800 with a unit mix of studios to shared three beds (Koles said the $1300 beds in shared units were leased out immediately. This lends credence to the notion that price, location, and amenities trump the need to have your own apartment). Their X Chicago, which opens July 15, has rents ranging from $1,100-$2,600 with a studio, one, two, three, and four bedroom mix. These rents aren’t necessarily cheap for their markets, but it’s important to note these are furnished apartments and beds (almost all en-suite) in Class A, luxury buildings with great amenities.

And then there’s the scale. Their beta building, X Logan Square in Chicago, had 120 units. X Miami has 464 units. X Chicago has 99 units. The PMG site shows more buildings planned in Chicago, Denver, and Fort Lauderdale. Koles says they’re looking to bring 10K+ units coming online in next 5-7 years. These numbers are substantially higher than the most every coliving project to date, with the exception of Ollie’s 422 bed Alta project

It will be a critical few years in terms of whether coliving is here to stay. The success of big projects like X and Alta by Ollie could be the validation other larger developers need to take shared apartments seriously. Conversely, their lack of success could be the segment’s death knell. And it’ll be interesting to see other companies move into different markets and segments. Common, for example, has an upcoming project in Newark and an affordable housing project in New Orleans. Several companies are moving into suburban coliving

With an ever-worsening affordability crisis, a growing trend toward shared living, and significant cooling in your standard, luxury rental, coliving has the potential to serve great numbers of heretofore underserved renters and enter the canon of standard multifamily operating models.   

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Life preservers are the hot new housing amenity

As many as 311k homes face being flooded every two weeks within the next 30 years—this is the finding of research recently released by the Union of Concerned Scientists (UCS). The research was based on projections made by the National Oceanic and Atmospheric Administration (NOAA), which include 6’+ sea-level gains by century’s end if our current GHG emission rates continue.

These 311k homes—whose current value stands at $120b—are just the beginning, according to The Guardian:  

The losses would multiply by the end of the century, with the research warning that as many as 2.4m homes, worth around a trillion dollars, could be put at risk. Low-lying states would be particularly prone, with a million homes in Florida, 250,000 homes in New Jersey and 143,000 homes in New York at risk of chronic flooding by 2100.

On top of this, areas could be dealing with myriad issues like closed roads, infrastructure damage, and other stuff that would grind our economy to a standstill.

Needless to say, the nation’s largest economic powerhouses—most of which are coastal—are vulnerable. In the next 30 years, many should be okay…except Miami, which is projected to have 25,001 to 150,000 homes experience chronic inundation by 2045. Continue reading “Life preservers are the hot new housing amenity”

Affordable AF: video recap of Pizza + PropTech (5/30/18)

Last week, Dror Poleg and I hosted our first ever Pizza and PropTech event in NYC. We had a great turnout and will be doing another in July. Be sure to sign up to my newsletter for updates.

While you’re counting down the days until July rolls around, check out our talks.

All the single families (all the single families)

For the better part of 80 years, the dominant type of new construction in the U.S. has been suburban, single-family housing. In a CityLab article from a couple years ago, Richard Florida wrote:

  • 60-70% of existing homes are in low-density, suburban areas (less than four homes per acre). Assuming an average household size of 2.54 people, that’s around 10 people/acre. For comparison sake, Manhattan has 112 people/acre.
  • 90% of homes built since the 1940s have been in low-density areas.
  • In the 2000s, 23.3% of new homes were built in undeveloped areas (aka “greenfield”), 33.2% were in areas with a prior density below one home per acre, and 31.9% were in areas with a prior density between one and four homes per acre.

This development trend is as much a function of the regulatory difficulties of building in cities and their immediate outskirts as it is a viable business model for the suburbs—conditions like high infrastructural costs and taxes, high (personal autos) transit costs, and limited economic opportunity plague many suburbs.  

The above are some reasons why suburban poverty growth is far outpacing cities and rural areas. And despite a median sales price of an existing single-family home being a modest $257k, factors like flatlining wages and high rates of debt for both school and auto loans have led to a suburban affordability crisis—evidenced by record low homeownership rates.

This is why any housing solution in America that excludes the suburban, single-family home is incomplete. Here are a couple such solutions that are rocking the suburbs. Continue reading “All the single families (all the single families)”

Where did I put that gosh darn shaker of salt?

Everyone is like millennials this, millennials that. Yes, there’s a lot of them. But they’re broke and, despite their Tinder-swiping ways, they ain’t reproducing.

If you want to get excited, look to Boomers. They’re plentiful too, well-heeled (at least relative to millennials), and many of them are looking for compact, age-appropriate crash pads before heading off to heaven.

Some folks foresee a mass senior downsizing, calling it the silver tsunami. And one person who’s got his surfboard ready is Jimmy Buffett.

Buffett has already built an empire leveraging his white-bread, inebriate beach-bum brand for everything from Broadway musicals, themed restaurants, and 11 Margaritaville hotels. Now Margaritaville Holdings is partnering with senior-specialists Minto Communities to offer up two 55+ communities dubbed LATITUDE MARGARITAVILLE (all caps for easier reading). Continue reading “Where did I put that gosh darn shaker of salt?”

Oh what a feeling when you’re sleeping on the ceiling

Back in 2011, MIT Media Lab’s Changing Places Group started their CityHome project, which explored how data and technology could make living spaces more flexible, efficient, and reflective of use patterns. Eventually, the group built a prototype micro-apartment with sensor-enabled, gesture and app controllable furniture; the centerpiece of which was a module containing a bed, table, kitchen, storage and other stuff.

The CityHome was part of a larger movement. Mostly focused on micro-apartments (sub 350 sf), this movement saw how furniture could play a critical role in spatial design. Other players included LifeEdited (where I worked for several years) and Yo! Home—the residential arm of Yo! Companies/Yotel/Yo! Companies.

Anyway, fast forward a few years and some of the MIT students decided to bring the tech to the free market. Thus Ori Systems was born. Continue reading “Oh what a feeling when you’re sleeping on the ceiling”