Solutions for Global Affordable Housing are not a Mystery

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Why do innovations in affordable housing technologies appear and then disappear so quickly?

There seems to be a real need in the world for better and faster ways to build affordable housing. It is estimated that there are 1.5 billion people who do not have adequate shelter, aka affordable housing. This would represent roughly 1/5 of mankind. We can assume all of those people just choose not to have houses and end this article here. Or, we can ask how do we make housing affordable for more people. Obviously we’re opting to lean toward the second suggestion and peel back one of the many criteria that will be needed for the next great innovation to be breakthrough in solving affordable housing globally. Before I reveal what that one thing is lets look at a very simple outline of the history of housing, which as an industry is rather modern.

The first affordable houses

Affordable housing isn’t a new concept. I actually think it is an inkling we now have to achieve something that was available to most people in times past. When populations were much smaller and resources per person much greater, constructing a new home, a sustainable home simply happened by using the resources that were available. Hence things like logs were used to build a house. This was great until too many people gathered in an area and what was once abundant now needed to be conserved. Hence, logs were cut down and sawmills sprung into place. After all it was easier to build with cut lumber then irregular logs so there were additional benefits in the process as well. (remember this is a brief history!)

Then came the first unaffordable houses

Now then, rather than taking an axe and cutting your own trees you could work your chosen craft and earn money and use your earnings to buy lumber. As a matter of fact you could buy as much as you wanted and build as much as you wanted. If you built too large then some wouldn’t be able to afford your home. It was soon figured out that there was a norm, or average that people were spending on housing (based on income and other economic factors too extensive for this article) and the “housing industry” sprang into being. And therein lies the intersection of a good thing and a reality. The good thing is that the housing industry served the majority and above. Good housing stock was built and most Americans enjoyed a decent house.

Housing on the fringes

But not everyone wanted or could afford the average house. On the high end, luxury homes filled the desires of the affluent and lower priced alternatives, like track housing filled the needs at the lower end. The industry as a whole drove prices for materials (like our lumber mentioned above) down to the point they became commodities. In other words no matter how much more you produced the prices were about as low as they could go and it would now cost the individual more to go cut the tree then to buy the wood.

This works until…

This works for the majority, most of the time, and then there are some challenges that make affordability a real problem. For starters, because the systems for building became so efficient and the majority can afford what is being constructed, the ones who can’t afford the average house (low-income families) or the lower priced housing alternatives now have one less option. In other words, when it now cost more to get the logs then buy the lumber the option to use logs is removed from their set of possible solutions. So lower priced alternatives are sought to substitute for acceptable housing and housing in other forms appears; mobile homes and the modern tiny house for example. But there is a bottom to all of this. You can only go so far in the selection of less expensive materials until the materials no longer work as adequate housing alternatives. This is where the ‘novel” housing ideas come into play. Ideas like building houses out of pop cans or discarded car tires. These ideas are rooted in the same principle: find a less expensive way to build an acceptable house that is affordable to low-income families using stuff that appears to be abundant. Fair enough! Positive things can be said about each of them in their own right.

However; if a new idea or affordable housing technology is ever going to have the ability to be truly acceptable, affordable, and scalable it must overcome many hurdles. We love to cite important factors that project a perceived better future and pin that concept to the new idea as a way to promote it; like suggesting a novel idea is socially acceptance or it is eco friendly construction. Yes, these are important factors. But even more so, when it comes right down to it, the housing solution must be able to compete with the readily available building materials already in the market (like lumber or bricks). The fact remains that someone might want to try a new building concept and even be convinced that it is better for the occupant, the environment, or a host of other reasons, but if that material is more expensive than locally available building material then it will go nowhere towards being a solution to the global housing shortage. Yet, the fact remains, housing at the lower end of the housing spectrum remains unacceptable, inferior, and unavailable to billions of people.

Hence, the search for the under $1,000 USD or under $500.00 USD house. The quest is important, but the solution is not so obvious. If it were, we wouldn’t have such a large scale housing crisis in the world where the estimates of need are sometimes cited as being in the billions. Like I mentioned before, I like new technology and innovation is awesome. People are creative. But after years of working on the solution ourselves, we’ve had to face the same challenges and look squarely in the face of prospective customers and say…”it just isn’t affordable”.

But that hasn’t stopped us from continuing to search and develop, invest and research to provide the most cost effective building solutions available; I still admit that we aren’t completely there yet. Too much work still needs to be done to drive costs down. We must continue to evolve to lower the costs even more because it seems obvious to us that anything manufactured, anything produced in a factory, anything that gobbles up space in a shipping container will never work. Our focus instead is on identifying things that are commodities or can become commodities…ones that are less expensive then the already available commodities, and leverage them to produce lower costing, more affordable, and better housing…faster.

This means developing, finding, or creating the next construction solution that is available in overwhelming volume and costs less than a brick, a sheet of galvanized tin, or a 2 X 4.

To me, there seems to be a glimmer of hope in a very simple idea. Whatever it is that is developed will need to be decoupled from the factory and be built almost anywhere by almost anyone. The cost of manufacturing coupled with the cost of shipping is a double hurdle that has never been overcome in the housing markets,and probably never will be. So unlocking the mystery to the elusive affordable house globally is partially wrapped up in identifying construction equipment, construction tools, and construction materials that are already, or can become commodities which can then be applied in new and creative ways to improve energy efficiency, increase durability, lengthen longevity, and most of all increase affordability. To me, field built SIP Panels seem to lead us in the right direction.

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