“I definitely think innovation in how we build has a significant role to getting to affordability,” said Carol Galante, the faculty director of the Terner Center for Housing Innovation at the University of California, Berkeley. “I can see it coming. I see it happening.”
It now costs as much as $500,000 per unit to build low-income housing in the most expensive markets. Savings in the cost of construction could help developers of such housing stretch subsidies further. Cheaper construction could also change the math in markets where developers say it’s also not profitable to build middle-class housing.
But Mr. Hoffman is skeptical that construction tech can fundamentally change affordability; market-rate developers have no incentive to pass those savings on to renters or home buyers, he said. And he shrugs at 3D-printed houses. “Where am I going to put those houses?” he said, nodding to the policy problems. “How long is it going to take me to find the land, get through the local zoning, the neighborhood planning process?”
Enterprise is looking instead for companies that could affect how we consume, finance and regulate housing. Perhaps they could enable models between renting and ownership, or squeeze new supply out of the housing that already exists. This month, Enterprise teamed up with a New York-based venture capital firm, MetaProp, to pick and co-invest in companies (MetaProp’s tagline: Location. Location. Innovation.).
Together they’re looking not for feel-good stories, but for viable businesses that could grow at Silicon Valley speed. Those companies may not even have creating affordability as their goal. But if that winds up being a result, Enterprise will be content.
“We believe that for-profit, fast-growing businesses — and we could be wrong about this — are going to have the biggest impact on this huge problem the fastest,” said Leila Collins, a senior associate at MetaProp. “I don’t have a lot of faith that there will be some huge policy change in the next three years that will make housing affordable in cities.”
Point Digital Finance, one company Enterprise has already invested in, helps homeowners tap the equity in their homes in exchange for a share of the property’s future appreciation. That service could help homeowners pay for constructing an accessory dwelling unit, like a backyard in-law cottage. Housing experts say such small-scale units could add to the lower-cost rental stock, but traditional lenders often won’t finance them.