A February study from the National Association of Realtors found that record-high home prices and record-low inventory have combined to create an affordable housing crisis in the United States. A follow-up study found that the lack of affordable housing is currently the nation's biggest barrier to home purchase.
Can AI play a role? If the solution to the housing shortage is more homes, technology can help streamline complex construction and development processes. Companies like TestFit are using AI to streamline feasibility studies, a long and complex process that must be conducted before construction. This is part of a broader trend of bringing AI to age-old disciplines in a variety of small but powerful ways to speed up construction, from equipment management to 3D design.
“Pioneers were integrating drawings and models years ago, but the industry has stagnated until recently,” says Clifton Harness, co-founder and CEO of TestFit, which just closed $20 million in funding. “TestFit is the first and leading company to connect estimating, construction costs and asset design in building construction software, de-risking decision-making and enabling significant time savings when developing new commodity properties.”
All of this is taking place against a national backdrop of increasing urgency. In May, the Biden administration announced a plan to ensure that the American dream of homeownership can once again become a reality five years from now. One of the plan's key components includes continued investment in new construction and collaboration with private companies to “improve building technologies” to accelerate development.
The new responsibilities of rapid real estate development are a tailwind for the sectors most sensitive to changing markets, regulations and macro trends. Technology developers are heeding these demands. I've written about the arrival of robots on construction sites, but they are not yet likely to have a transformative impact in the near future. Meanwhile, technologies such as drone inspections and automated compliance products for project management purposes are shortening construction development times.
TestFit is one company taking advantage of this trend. Generative design 3D prototyping software allows developers to iterate on transactions in real time. These real-world examples include TestFit's recent work on a senior affordable housing project that used software to expedite collaboration during the extremely competitive process of securing affordable housing subsidies. It was also when the company played a pivotal role in the redevelopment of the Austin area, including cost-effective housing options.
Overall, the housing problem is long-term and unlikely to be solved by a single technological innovation. But if more housing is needed, there is little doubt that technologies like AI are accelerating the pace of development and construction.