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”

Affordability is the freaking amenity

If you have an hour to fill and are interested in the intersection of design and affordable housing, you could do a lot worse things than watch this talk at Harvard’s School of Design’s Reframing Housing from a few weeks ago (below). The panelists represent some of my favorite designy, affordable projects of the last decade or so. Each represents a way to develop in a different urban (or non-urban) condition and all the considerations that condition entails. All are worth knowing about if you don’t already.

From Philly, there was architect Brian Phillips. His shop, ISA, has done of a ton of cool infill projects that incorporate a variety of cost-saving, energy-saving, design-savvy stratagems for affordability. ISA is the design force behind Postgreen homes, makers of the 100k house, a LEED platinum townhouse in Philly’s East Kensington neighborhood that was built for $100/sf. Postgreen—powered by ISA—has done a bunch of similar project with names like Awesometown and Avant Garage. Continue reading “Affordability is the freaking amenity”

Much ADU about something

Around 76% of American housing is single family. One solution to adding affordability and density to this commodious architectural form is accessory dwelling units, aka granny flats (because grandpa, you know, lives underground). ADUs are basically little houses you can toss in your backyard—they can be used by family, a tenant, or Airbnb. They’ve been gaining popularity particularly in California and Oregon, each state lending crucial legislative support.

But a lot of folks paying a mortgage can’t necessarily afford to build a second home, which can easily run $100K+.

Portland-based startup dubbed Dweller has a solution for this shortfall. According to the CityLab, “Dweller fronts the cost of purchasing and installing one-size-fits-all prefabricated ADUs in backyards. Third-party property managers rent out the unit to long-term tenants, and Dweller splits the revenues 70-30 with the homeowner, almost as if the company is leasing the land.” Homeowners can buy back ADU at any time or can purchase one of the prefabs outright.  

Continue reading “Much ADU about something”