A February National Association of Realtors study cited that record-high home prices combined with record-low inventory have created an affordable housing supply crisis in America. A subsequent study found that a lack of affordable housing is now the country's biggest obstacle to home buying.
Can AI play a role? If the answer to the housing crunch is more homes, then technology may help streamline the complex construction and development process. Companies like TestFit are using AI to streamline feasibility studies, a long and complex process that must be conducted prior to building. It's part of a broader trend of introducing AI to an age-old sector in various small but powerful ways to speed up the pace of construction, everything from equipment management to 3D design.
"Pioneers integrated drawings and the model years ago, but the industry has stagnated until recently," says Clifton Harness, co-founder and CEO, TestFit, which just closed $20 million in financing. "TestFit is the first and leading company to connect pro forma, construction cost, and asset design in our building configurator software, de-risking decisions and enabling critical time-savings when developing new commodity real estate."
All of this is playing out against a national backdrop of mounting urgency. The Biden administration in May unveiled a plan to ensure that five years from now, the American homeownership dream will once again become attainable. One key component of the plan includes continuous investment in new construction and working with private companies to "improve building techniques" to accelerate development.
The new onus for rapid real estate development is a tailwind for a sector that's more susceptible than most to changing markets, regulation, and macro trends. Technology developers are heeding the call. I've written about the arrival of robots in construction, which has yet to make the transformative impact it likely will in the near future. In the meantime, technologies like drone inspection for project management purposes and automated compliance products are snipping time off of construction development.
TestFit is one of the firms tapping into this trend. Its generative design 3D prototyping software allows developers to iterate on deals in real-time. Examples of this in action include TestFit's recent work on a senior affordable housing project where its software was used to fast-track collaboration during the extremely competitive process of securing affordable housing subsidies; as well as when the company played a pivotal role in the redevelopment of an Austin neighborhood that includes cost-effective housing options.
Overall, the housing problem is protracted and not likely to be solved by a single technological breakthrough. If more housing is what's in order, however, there's little question that technologies like AI are speeding the pace of development and construction.