May
14
2019
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Beyond costs, what else can we do to make housing affordable?

This week on Extra Crunch, I am exploring innovations in inclusive housing, looking at how 200+ companies are creating more access and affordability. Yesterday, I focused on startups trying to lower the costs of housing, from property acquisition to management and operations.

Today, I want to focus on innovations that improve housing inclusion more generally, such as efforts to pair housing with transit, small business creation, and mental rehabilitation. These include social impact-focused interventions, interventions that increase income and mobility, and ecosystem-builders in housing innovation.

Nonprofits and social enterprises lead many of these innovations. Yet because these areas are perceived to be not as lucrative, fewer technologists and other professionals have entered them. New business models and technologies have the opportunity to scale many of these alternative institutions — and create tremendous social value. Social impact is increasingly important to millennials, with brands like Patagonia having created loyal fan bases through purpose-driven leadership.

While each of these sections could be their own market map, this overall market map serves as an initial guide to each of these spaces.

Social impact innovations

These innovations address:

May
13
2019
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Innovations in inclusive housing

Housing is big money. The industry has trillions under management and hundreds of billions under development.

And investors have noticed the potential. Opendoor raised nearly $1.3 billion to help homeowners buy and sell houses more quickly. Katerra raised $1.2 billion to optimize building development and construction, and Compass raised the same amount to help brokers sell real estate better. Even Amazon and Airbnb have entered the fray with high-profile investments.

Amidst this frenetic growth is the seed of the next wave of innovation in the sector. The housing industry — and its affordability problem — is only likely to balloon. By 2030, 84% of the population of developed countries will live in cities.

Yet innovation in housing lags compared to other industries. In construction, a major aspect of housing development, players spend less than 1% of their revenues on research and development. Technology companies, like the Amazons of the world, spend nearly 10% on average.

Innovations in older, highly regulated industries, like housing and real estate, are part of what Steve Case calls the “third wave” of technology. VCs like Case’s Revolution Fund and the SoftBank Vision Fund are investing billions into what they believe is the future.

These innovations are far from silver bullets, especially if they lack involvement from underrepresented communities, avoid policy and ignore distributive questions about who gets to benefit from more housing.

Yet there are hundreds of interventions reworking housing that cannot be ignored. To help entrepreneurs, investors and job seekers interested in creating better housing, I mapped these innovations in this package of articles.

To make sense of this broad field, I categorize innovations into two main groups, which I detail in two separate pieces on Extra Crunch. The first (Part 1) identifies the key phases of developing and managing housing. The second (Part 2) section identifies interventions that contribute to housing inclusion more generally, such as efforts to pair housing with transit, small business creation and mental rehabilitation.

Unfortunately, many of these tools don’t guarantee more affordability. Lowering acquisition costs, for instance, doesn’t mean that renters or homeowners will necessarily benefit from those savings. As a result, some tools likely need to be paired with others to ensure cost savings that benefit end users — and promote long-term affordability. I detail efforts here so that mission-driven advocates as well as startup founders can adopt them for their own efforts.


Topics We Explore

Today:

Coming Tomorrow:

  • Part 2. Other contributions to housing affordability
    • Social Impact Innovations
    • Landlord-Tenant Tools
    • Innovations that Increase Income
    • Innovations that Increase Transit Accessibility and Reduce Parking
    • Innovations that Improve the Ability to Regulate Housing
    • Organizations that Support the Housing Innovation Ecosystem
    • This Is Just the Beginning
    • I’m Personally Closely Watching the Following Initiatives
    • The Limitations of Technology
    • Move Fast and Protect People


Please feel free to let me know what else is exciting by adding a note to your LinkedIn invite here.

If you’re excited about this topic, feel free to subscribe to my future of inclusive housing newsletter by viewing a past issue here.

Dec
04
2018
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Cove.Tool wants to solve climate change one efficient building at a time

As the fight against climate change heats up, Cove.Tool is looking to help tackle carbon emissions one building at a time.

The Atlanta-based startup provides an automated big-data platform that helps architects, engineers and contractors identify the most cost-effective ways to make buildings compliant with energy efficiency requirements. After raising an initial round earlier this year, the company completed the final close of a $750,000 seed round. Since the initial announcement of the round earlier this month, Urban Us, the early-stage fund focused on companies transforming city life, has joined the syndicate comprised of Tech Square Labs and Knoll Ventures.

Helping firms navigate a growing suite of energy standards and options

Cove.Tool software allows building designers and managers to plug in a variety of building conditions, energy options, and zoning specifications to get to the most cost-effective method of hitting building energy efficiency requirements (Cove.Tool Press Image / Cove.Tool / https://covetool.com).

In the US, the buildings we live and work in contribute more carbon emissions than any other sector. Governments across the country are now looking to improve energy consumption habits by implementing new building codes that set higher energy efficiency requirements for buildings. 

However, figuring out the best ways to meet changing energy standards has become an increasingly difficult task for designers. For one, buildings are subject to differing federal, state and city codes that are all frequently updated and overlaid on one another. Therefore, the specific efficiency requirements for a building can be hard to understand, geographically unique and immensely variable from project to project.

Architects, engineers and contractors also have more options for managing energy consumption than ever before – equipped with tools like connected devices, real-time energy-management software and more-affordable renewable energy resources. And the effectiveness and cost of each resource are also impacted by variables distinct to each project and each location, such as local conditions, resource placement, and factors as specific as the amount of shade a building sees.

With designers and contractors facing countless resource combinations and weightings, Cove.Tool looks to make it easier to identify and implement the most cost-effective and efficient resource bundles that can be used to hit a building’s energy efficiency requirements.

Cove.Tool users begin by specifying a variety of project-specific inputs, which can include a vast amount of extremely granular detail around a building’s use, location, dimensions or otherwise. The software runs the inputs through a set of parametric energy models before spitting out the optimal resource combination under the set parameters.

For example, if a project is located on a site with heavy wind flow in a cold city, the platform might tell you to increase window size and spend on energy efficient wall installations, while reducing spending on HVAC systems. Along with its recommendations, Cove.Tool provides in-depth but fairly easy-to-understand graphical analyses that illustrate various aspects of a building’s energy performance under different scenarios and sensitivities.

Cove.Tool users can input granular project-specifics, such as shading from particular beams and facades, to get precise analyses around a building’s energy performance under different scenarios and sensitivities.

Democratizing building energy modeling

Traditionally, the design process for a building’s energy system can be quite painful for architecture and engineering firms.

An architect would send initial building designs to engineers, who then test out a variety of energy system scenarios over the course a few weeks. By the time the engineers are able to come back with an analysis, the architects have often made significant design changes, which then gets sent back to the engineers, forcing the energy plan to constantly be 1-to-3 months behind the rest of the building. This process can not only lead to less-efficient and more-expensive energy infrastructure, but the hectic back-and-forth can lead to longer project timelines, unexpected construction issues, delays and budget overruns.

Cove.Tool effectively looks to automate the process of “energy modeling.” The energy modeling looks to ease the pains of energy design in the same ways Building Information Modeling (BIM) has transformed architectural design and construction. Just as BIM creates predictive digital simulations that test all the design attributes of a project, energy modeling uses building specs, environmental conditions, and various other parameters to simulate a building’s energy efficiency, costs and footprint.

By using energy modeling, developers can optimize the design of the building’s energy system, adjust plans in real-time, and more effectively manage the construction of a building’s energy infrastructure. However, the expertise needed for energy modeling falls outside the comfort zones of many firms, who often have to outsource the task to expensive consultants.

The frustrations of energy system design and the complexities of energy modeling are ones the Cove.Tool team knows well. Patrick Chopson and Sandeep Ajuha, two of the company’s three co-founders, are former architects that worked as energy modeling consultants when they first began building out the Cove.Tool software.

After seeing their clients’ initial excitement over the ability to quickly analyze millions of combinations and instantly identify the ones that produce cost and energy savings, Patrick and Sandeep teamed up with CTO Daniel Chopson and focused full-time on building out a comprehensive automated solution that would allow firms to run energy modeling analysis without costly consultants, more quickly, and through an interface that would be easy enough for an architectural intern to use.

So far there seems to be serious demand for the product, with the company already boasting an impressive roster of customers that includes several of the country’s largest architecture firms, such as HGA, HKS and Cooper Carry. And the platform has delivered compelling results – for example, one residential developer was able to identify energy solutions that cost $2 million less than the building’s original model. With the funds from its seed round, Cove.Tool plans further enhance its sales effort while continuing to develop additional features for the platform.

Changing decision-making and fighting climate change

The value proposition Cove.Tool hopes to offer is clear – the company wants to make it easier, faster and cheaper for firms to use innovative design processes that help identify the most cost-effective and energy-efficient solutions for their buildings, all while reducing the risks of redesign, delay and budget overruns.

Longer-term, the company hopes that it can help the building industry move towards more innovative project processes and more informed decision-making while making a serious dent in the fight against emissions.

“We want to change the way decisions are made. We want decisions to move away from being just intuition to become more data-driven.” The co-founders told TechCrunch.

“Ultimately we want to help stop climate change one building at a time. Stopping climate change is such a huge undertaking but if we can change the behavior of buildings it can be a bit easier. Architects and engineers are working hard but they need help and we need to change.”

Dec
17
2017
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Oracle to buy construction collaboration software maker Aconex for $1.2B in cash

 Oracle will pay $1.2 billion in cash to buy construction software developer Aconex, the companies announced today. Based in Melbourne, Aconex’s cloud-based software allow teams working on building projects to collaborate and share documents. Oracle agreed to pay AUD $7.80 (about $5.97) per share in cash for a total of $1.2 billion. This price represents a 47% premium over… Read More

Jul
10
2017
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How Bassem Hamdy aims to disrupt the construction industry

 Construction – the actual process of putting brick on brick to build something – is still in the dark ages. While there is plenty of technology out there to help plan massive projects few people are thinking hard about what it takes to actually build. Luckily Bassem Hamdy is one the case. Hamdy works for Procore Technologies where he and his team build products to help… Read More

Mar
07
2017
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John Deere partners with Kespry to bring drones and aerial data to construction and forestry

 Heavy equipment makers Deere & Co., better known as John Deere, have forged a strategic alliance with drone-tech startup Kespry, the companies announced Tuesday in Las Vegas at CONEXPO, an international trade show for the construction industry. The deal could prove a boon for sales of Kespry’s drones and data analytics software. It could help John Deere tap into a new, high-tech means… Read More

Feb
02
2017
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Caterpillar invests in Airware bringing drone tech to mining and construction enterprises

Airware drones demo The venture arm of Caterpillar Inc., a major manufacturer of construction and mining equipment, has invested in San Francisco drone tech startup Airware. Rather than make its own unmanned aerial vehicles, Airware has focused its efforts around providing software and services that help large enterprises use drones throughout their operations. Airware’s cloud-based software helps… Read More

Jan
24
2017
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EquipmentShare, the Airbnb of construction, raises $26 million

EquipmentShare facilitates peer to peer rentals of heavy equipment. It hasn’t even been a year since EquipmentShare raised a Series A round of funding, but the “Airbnb of construction rentals,” has closed a $26 million Series B round. The Columbia, Missouri-based startup helps contractors rent out their under-utilized equipment, or rent safety tested equipment that they need from a fellow contractor. Last year, EquipmentShare also launched… Read More

Dec
19
2016
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eSUB Construction Software raises $5 million to help subcontractors track jobs and get paid

eSub's construction project management app for subcontractors. A San Diego startup called eSUB Construction Software has raised $5 million in a Series A round led by Revolution Ventures according to President and CEO Wendy Rogers. The company’s cloud-based project management apps help subcontractors track and get compensated for all the work they do on construction jobs. Rogers said, “There’s a saying that subcontractors get paid for… Read More

Jun
17
2016
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DIRTT’s ICEreality puts VR to use for interior, office design

DIRTT-MixedReality-6   A manufacturer of custom prefabricated elements to be built into offices and other work spaces, DIRTT Environmental Solutions is the latest corporation to adopt virtual reality for the enterprise, rather than entertainment. The company unveiled their ICEreality software this week at an annual construction industry trade show, NeoCon 2016, in Chicago. (Yes, tech news had the audacity… Read More

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