Blokable Launches New Blog Series Reimagining How Housing is Built
Blokable, the Seattle-based vertically integrated modular housing developer, launched its new blog series exploring the root causes of the U.S. housing crisis and how private and public sector collaboration can chart a different course for housing development.
The first post in the series, The housing market isn’t broken, it’s working perfectly as designed, was published by Blokable Co-CEO’s Aaron Holm and Nelson Del Rio. In the post they outlined how the housing market currently functions and why it is unable to meet the staggering affordable housing demand. Despite the billions of dollars governments have spent trying to provide housing stability, there are 38 million people living in poverty as of 2018 — a number that has since been exacerbated by the economic effects of Covid-19.
Holm and Del Rio posed the question “Can a free market ever provide all of the housing needed in our society?” They then pointed to the structure of the housing market and the housing development process itself as holding the answer to achieving efficiency in the industry.
They described how the many players such as architects, developers, financial institutions and contractors compete to maximize profit and minimize risk in housing creation leading to fragmented interests strangling the housing market. Holm and Del Rio revealed that affordable housing is actually more expensive to produce than market rate with the per-door build costs for affordable apartments now ranging from $500K to $1M due to developers needing to pay additional costs associated with obtaining public subsidies and managing legal and financial compliance. And while construction innovations such as modular and panelized building systems have been presented as possible solutions, these have their own high material and labor costs and the competition between these providers actually discourages housing innovation.
The Blokable Co-CEOs concluded their introduction post to their blog series writing, “If all the money in the world won’t fix housing, then perhaps we shouldn’t be trying to fix it at all. Perhaps we need to create a new housing paradigm that leverages innovation to drive down costs, reduces the need for subsidies, and creates new wealth.”