There’s an old saying that says, “How are you going to keep them down on the farm?” However, these days an updated version might be, “How are you going to get them into their own place?”
What’s become almost a cliché—young adults moving back in with their parents due to lack of affordable housing—remains a big problem for young adults as well as their parents. Highlighting the crisis is a 2017 report “The Large Unmet Demand for Housing” from the Federal Reserve Bank of Kansas City. The conclusion of the report is that there is a significant shortage of housing and affordable new options remain far below demand.
The report cited the limited supply of housing available for rent or sale as the biggest reason for the U.S. housing crisis. Other factors included rising rent and new home prices and the fact that “…construction of new apartments is centered disproportionately on luxury units too expensive for most young adults.”
That’s bad news for young people who can’t afford to move out. Although there may be some advantages to having amenities that only mom can provide, many would like to trade their makeshift basement apartments for their own digs.
However, despite the clear need for housing, the report states, “Construction has not responded vigorously to increasing demand thus far.”
What’s the holdup? Major challenges facing builders include a shortage of construction workers, difficulty financing land purchases, and the technical logistics of new construction.
As bleak as the situation may sound, young people may want to hold off on convincing their parents to install a basement pool table. A new construction company called Katerra recognizes that the current housing crisis also presents opportunity, and it has set out to revolutionize the construction industry.
At Sapphire Now 2017, Ravi Naik, senior vice president for Technology at Katerra, explained how Katerra’s unique approach, coupled with the latest in available technology, is transforming the way buildings and spaces come to life.
The company has factories around the globe, where they produce their own materials. They also manage the global logistics for construction companies, own their supply chain, and manage design through construction. The company is applying systems approaches to remove unnecessary time and costs from building development, design, and construction.
Technology at work
Naik believes his company’s unique approach is already yielding results. “Efficiency no longer needs to come at the expense of quality or sustainability. Our goal is to build buildings very rapidly at a significantly reduced cost, which would in turn bring great value to the citizens of this country and then globally,” he says.
This should be good news for tech-savvy young people who would appreciate both the transformative way new spaces are coming to life as well as the technology that is driving the progress.
Naik said that the company needed to have the right technology in place before it could get more people into new housing. “We went live with a next-generation ERP suite, and for the first time we have a truly integrated end-to-end business process in place—right from procurement to logistics to finances and revenue recognition.”
Naik added that the upgrade was integrated and went live in a very short time with minimal disruption. Katerra can now track inventory and knows when deliveries are expected. Additionally, their business intelligence platform now ties to the IoT network, allowing for tracking labor and managing productivity.
This level of technology has already made an impact. Naik described how Katerra finished the construction of an entire first floor of a multi-unit residential building in just six hours. “We were able to do that because now we have technology, tools, and software actually designing the building, right to the last nail.”
With Katerra seemingly cracking the code on new affordable housing construction, parents with young people residing in their basement can take heart, knowing a solution could soon be at hand.