The lack of affordable and sustainable housing continues to be a major concern in the United States and the rest of the world — and it’s an issue that won’t be going away any time soon.
One company that’s taking steps to address it is MultiGreen, a real estate development firm that specializes in building attainable, sustainable, and tech-enabled multifamily housing.
MultiGreen aspires to build 40,000 economically and environmentally sustainable housing units by 2030. It’s an ambitious goal, but certainly an important one.
On Episode 13 of Digital Builder, Randy Norton, Founder and Chairman of the Board at MultiGreen Properties and Levi Naas, Director of Real Estate Development, also with MultiGreen, join us to share how they plan to tackle the global affordable housing crisis through innovative, sustainable, owner-driven building strategies.
During the episode, we tackled:
“We need to be cutting out all of the inefficiencies and waste if we have any chance of making this world a better place with attainable housing.” — Randy Norton
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Here are 3 things we learned about how owners are driving sustainable construction.
The world is going through an affordable housing crisis — one that, if left unsolved, will result in a serious shortage of homes.
A study commissioned by the National Apartment Association (NAA) and National Multifamily Housing Council (NMHC) found that in the United States, we need at least 4.6 million apartment homes by the year 2030. This doesn't include the 11.7 million existing apartments that need to be renovated during the same period.
According to the NAA, "Meeting projected demand means building more than 325,000 new apartment homes each year on average — a number the industry has not been able to hit for decades."
The folks at MultiGreen want to do their part in helping to solve this issue. For them, developing economically and environmentally sustainable housing is the most effective way forward. By using green building principles and a strategic approach to leveraging prefabricated, modular construction, they are able to bring multifamily units to market at a repeatable, rapid pace.
“Affordable housing and attainable housing is a global issue. There's over 200,000 people a day that are moving to what we call mega cities,” explains Randy.
“This causes infrastructure strain, namely with housing. Right now, there's a two month backlog at the Long Beach port because there's not enough employees to dock and get all of these shipments onto railways and our interstates.”
As a result, builders are facing major delays, where homes that used to take nine months to build are now taking 18 to 24 months — all while costs continue to rise.
“We need to have better certainty and cost execution and delivery. We need to be cutting out all of the efficiencies and waste if we have any chance to make this world a better place with affordable housing,” he adds.
This crisis was one of the things that drove to MultiGreen to set the goal of building 40,000 sustainable housing units by 2030.
As Randy says, “Just to get to equilibrium, we need to build 4.6 million units by 2030. And our thought was if we could just build maybe 1% of that, that would be an initiative worth noting.”
He also noted that building 40,000 homes is just the beginning. According to Randy, the current estimates around how many homes are needed in the future are “far understated.”
“It's far more than 4.6 million and by the time 2030 comes around with the demographic changes, the net migration and job growth in very specific cities, you're going to see an imbalance not only from a nationwide perspective, but it's MSA specific. So these 40,000 units are just our initial goal. After 2030, I would expect us to do far more,” Randy continues.
Goals that promote sustainability are immensely important and are definitely worth pursuing. But achieving them isn’t easy. Companies looking to get into sustainable construction must have tremendous commitment to their goals, along with a strong team culture.
Taking on massive sustainability goals can be expensive, warns Randy. For starters, you need substantial financial resources.
Commitment, dedication, and a willingness to play the long game are also critical. "You have to have an unwavering commitment because everyone along the way — from attorneys, design consultants, general contractors, subcontractors, and property managers — are going to be defiant," says Randy.
“And so you have to have a very long-term horizon in that perspective.”
Another key component is bringing on team members with the right culture fit.
Construction firms that want to go down this path have “got to look at their DNA,” says Levi Naas. “What is the DNA of their company? Do they have any sustainability initiatives going on? What is their culture like?”
According to Levi, one of things that made MultiGreen successful is the fact that sustainability, technology, and lean practices are baked into the firm’s DNA.
Additionally, an essential part of ensuring that your team is up to the challenge is to bring in young, forward-thinking individuals.
As Levi puts it, “This is technology and 90% of it is people. You can go get all of the best systems and none of them will be used. None of your software licenses will ever be turned on. None of your data will be accessed.”
“So it’s about getting the right people, and I think it’s going to require a lot of younger, tech-forward individuals.”
Achieving your sustainability goals also requires the right partners. Randy likens it to finding partners who operate like Tesla, which is open sourced with their IP, but with Apple's commitment to data privacy.
According to Levi, the right partners, along with standardization, can help firms build and scale quickly.
“We're really looking at building out a standardized design catalog of units and building asset types, which give us the ability to do volume quickly,” says Levi. “If you think of it a little bit as a Lego set, we have all the parts there and the composition of those Lego sets give us the uniqueness that each project needs building. Working with the same consultants, partners, and manufacturers helps us to reduce that reset and learning curve, and really begin to build out that volume.”
He explains that they have a weighted scorecard that factors in culture, technology, and price, with the first two components carrying more weight.
“We’re not always looking at the cheapest price; we want certainty in our price. We want the relationships to be strong. We don't want any breakdown in communications. And certainly, we want to know that they are tech-enabled or they are willing to bring themselves up-to-speed with the tools that we are offering. And ideally, that they're going to be bringing some innovation tools back to us,” remarks Levi.
He continues, “We need more folks who aren't just willing to collaborate with us, but who also bring something new to the table and let us get a different view of what's out there.”
The info and tips shared in this post are just the beginning. Be sure to check out the full podcast episode to get deeper insights and advice on tackling sustainable construction projects.