A growing number of startups are trying to reinvent the U.S. homebuilding industry, with big goals of making it both more efficient and more climate-friendly.
It is a disruption that many say is past due. The construction industry is not only struggling to meet housing needs but also is one of the country’s largest emitters of greenhouse gases. According to clean energy think tank RMI, U.S. home construction produces 50 million tons of carbon emissions per year, equivalent to entire countries such as Norway or Peru.
Why We Wrote This
The carbon-intensive U.S. construction industry is scrambling to help ease a nationwide housing shortage. Startups are trying to find climate-friendly solutions, but the challenges they face are emblematic of the barriers to industrywide change.
Massachusetts-based Reframe Systems is among the new companies hoping to change one of the nation’s largest industries. Reframe is developing a “next generation” modular construction method to build high-efficiency housing. Employees follow instructions on iPads to install plumbing and electrical components into robot-made walls, then transport these modules to construction sites, where they are stacked into multifloor units.
But the challenges are myriad. Despite a huge influx of investor funding, the share of housing stock built through high-tech modular construction remains small.
“It’s very easy, especially in the Silicon Valley mindset, to dramatically underestimate how human and analog the construction industry still is,” says Tyler Pullen, a senior technical adviser at the University of California Berkeley.
A crowd has gathered to see a robot build a house.
In a concrete-and-steel factory in Andover, Massachusetts, yellow-vested consultants, sustainable builders, and possible investors strain to see past a clear fence. Behind the barrier, a giant blue arm jutting from the floor comes to life.
Its sensor-covered hand analyzes a pile of wood before emitting a loud hiss, then carefully suctions a two-by-four. Rotating at the shoulder and extending its elbow, the robot methodically delivers the plank to a partially completed wall.
Why We Wrote This
The carbon-intensive U.S. construction industry is scrambling to help ease a nationwide housing shortage. Startups are trying to find climate-friendly solutions, but the challenges they face are emblematic of the barriers to industrywide change.
On the other side of the factory – about the size of a hangar for small planes – a few human workers are on their lunch break. They are employees of a three-year-old company called Reframe Systems, which is one of a growing number of startups across the United States scrambling to reinvent the homebuilding industry.
It is a disruption that many say is past due. The construction sector is struggling to meet a pronounced housing shortage and is also one of the country’s largest emitters of greenhouse gases. U.S. home construction produces 50 million tons of carbon emissions per year, equivalent to entire countries like Norway and Peru, according to clean energy think tank RMI.
Venture capitalists have invested billions of dollars in companies with big promises to fix both of these problems. More than 100 startups have entered the industry in the past two decades, according to estimates by Tyler Pullen, a senior technical adviser at the Terner Center for Housing Innovation at the University of California Berkeley. He says there are likely more than 200 construction innovation companies currently doing business in the U.S.
Like many of these, Reframe is focused on a new form of modular construction to upend one of the county’s largest industries. The company aims to create affordable, net-zero houses, which generate the same or more energy than they consume. Reframe CEO Vikas Enti says he can deliver a hefty return to investors – all while making a significant dent in the housing and climate crises. The next step, he says, is to build a factory that can produce 500 apartment units per year using lessons learned from his small, pilot factory in Andover. Then, he hopes to build a network of facilities across the country, varying their sizes to meet the demands and needs of their region.
“There’s about 2,000 Home Depots across the country today,” Mr. Enti says. “We see a world where, for every 10 Home Depots, there’s one Reframe microfactory.”
So far, Reframe has completed one two-bedroom house.
Jacob Posner/The Christian Science Monitor
The big dreams of the modular housing industry
The challenges, many in the field point out, are myriad.
The current model for modular construction – using assembly-line technologies to build homes – has its origin in the period after World War II. With veterans returning home, and the homebuilding industry hollowed out by the Great Depression, the federal government turned to mass-produced housing to combat a massive shortage. But federal support for the movement dwindled, and in recent years, modular construction companies have mostly focused on the luxury housing market and sustainability-focused buyers.
Despite the huge influx of financing, the share of housing stock built through high-tech modular construction remains very small. Two billion-dollar modular construction firms that had attracted investor excitement, Katerra and Veev, both closed in the past four years.
“It’s very easy, especially in the Silicon Valley mindset, to dramatically underestimate how human and analog the construction industry still is,” says Mr. Pullen.
Modular’s role in addressing the housing and climate crises
Still, the need for companies like Reframe is clear, modular boosters say.
Many experts and policymakers are increasingly sounding an alarm about a growing shortage in the U.S. housing market. Depending on methodology, the size of the shortfall ranges widely, but it is always huge: from 1.5 million to 7.3 million housing units, according to the Harvard Joint Center for Housing Studies. At the same time, energy consumed by residential buildings is responsible for around 15% of all U.S. emissions. Fossil fuels warm most of the country’s roughly 145 million apartment units and houses, in addition to keeping their stoves running and heating water.
Global leaders recognize the need for change, too. The construction and operation of all buildings – not just residential – produce over a third of global emissions. Leaders attending the COP29 global climate summit announced on Nov. 13 a new initiative to spur construction of net-zero buildings.
Reframe was founded by roboticists who used to work at Amazon. Following instructions on iPads, its human employees insert plumbing and electrical wiring into the robot-made walls, turn them into “modules,” and bring them to construction sites, where they are stacked into multifloor, highly energy-efficient homes. Because the iPad instructions are akin to a Lego or Ikea manual, Reframe can employ fewer high-cost, high-skill laborers.
Having most of the needed professionals – electricians, plumbers, architects, engineers – under the same roof solves a problem of communication Mr. Pullen sees as endemic to the traditional construction industry. Every different professional involved must work together, but they are all “masters of their own kingdom,” he says.
While not all companies offer net-zero buildings like Reframe, Mr. Pullen says building in a factory setting lends itself to tighter structures that hold their temperature better. Plus, factory construction results in less waste. Companies know what they need to order for hundreds of projects at once; in traditional building, ad hoc orders require far more trucks and often leave behind excess material like piping and drywall.
All of this was appealing to Kathy McGilvray.
She is working with Reframe to build a three-story, modular home for her parents on a lot that she owns in Somerville, Massachusetts. There will be three units – one for them, one for her sister, and a rental.
A conventional new home would be “prohibitively expensive” for her, says Ms. McGilvray.
Reframe will build pieces of the triplex at its factory in Andover over four or five months, then assemble them at the site in Somerville over two or three months.
“My parents could move in in May. So, it’s extraordinary,” says Ms. McGilvray.
On top of that, her parents, who are on a fixed income, barely need to pay utilities for the all-electric, solar-powered triplex.
Despite the enthusiasm, modular companies have yet to establish significant pipelines of projects, and few are constructing the large apartment complexes that might put a dent in the housing shortage.
“History is replete with people who had the goal of doing this and didn’t do it, which doesn’t mean that somebody someday won’t do it,” says Christopher Herbert, managing director of the Harvard Joint Center for Housing Studies. “But it’s hard. It’s hard to get to that scale.”
