Buying a home is a hallmark of achieving the American dream. And to some that dream looks like a two-bedroom, two-bath suburban home with a yard and, yes, a white picket fence. But if we’ve learned anything in recent years, it’s that the American Dream means different things to different people. Not everyone wants the cookie-cutter house in the ‘burbs. And the market has been very willing to accommodate a variety of housing needs. Innovations in homebuilding can be seen in home designs, in building processes and in ways to reduce costs. While it’s always exciting to see innovation in any market — whether it’s technology, transportation, or homebuilding — it takes time for new ideas to evolve from the brainstorming session to widespread accessibility. We’ve found that’s especially true in Central Texas.
Joe Fowler, in his final days as president of the Home Builders Association of Greater Austin (HBA), tells us that it’s the mission of the HBA to promote all kinds of housing and housing options. Regarding innovations in homebuilding and home ownership, he says, “alternative style housing options is something we want to see. And we want to see more of it.” But, Fowler adds, “it doesn’t mean they’ll become mainstream anytime soon.”
Fowler compared housing innovations to the electric car. While the technology has been around for a long time, electric autos only really started to gain traction over the past few years, partly because they’re only just becoming more affordable and more accessible to middle class Americans. “It’s the same with housing,” he says. Right now we’re at the point where a small demographic is interested in alternative style homes. That said, innovation is important for the future of the housing market. “It’s all part of research and development of where our housing goes,” says Fowler.
During the last 10 to 15 years, building science has become popular in homebuilding. Overall, the way houses are built hasn’t changed that much, but the types of things that go into new houses to make them energy efficient and to make the environment healthier encourages the industry to look at homebuilding with a new outlook. And then there’s the law of diminishing returns, says Fowler. “We can only spend so much on homebuilding innovations because if it costs too much, it defeats the purpose.” If homebuyers are asked to continually pay more than they’ll eventually save, they won’t want to spend their hard-earned money.
Tiny homes are an example of successful home building innovations around the country. The 250 to 400-square-foot dwellings became popular after the Great Recession, says Fowler. “Around 2008 to 2010, when the world stopped spinning economically, you had people looking for different ways to live. The conversation went toward seeking smaller and more efficient houses and simpler living styles.”
Two tiny home communities in Travis County are Village Farm in East Austin and Village Tiny Homes, located in Mustang Ridge, about 24 miles south of downtown. One of the first things you notice about these neighborhoods is how much they resemble master-planned communities, complete with trails, gardens, dog parks and picnic and recreation areas. So the target buyer has many of the same desires as those looking at a traditional home, but they clearly want to spend less and, for any number of reasons, occupy a smaller space.
But here’s where innovation slows to a crawl. While the idea of living in a tiny home seems to have hit a pop-culture nerve (just look at the dearth of reality TV shows about building, cohabitating and styling tiny homes), communities are not taking off with as much zeal as some forecasters predicted. It’s a problem here in Travis County, says Vaike O’Grady, a housing market researcher at Metrostudy. “Part of the issue is that land has gotten so pricey. It’s hard to find a site on which to put less expensive homes.” O’Grady recalls seeing tiny home models at different homebuilding exhibitions, including a recent Parade of Homes event, a few years ago. “There was a lot of activity,” she says. “I do think people are interested in it.”
Another recent innovation in homebuilding are single-family rental (SFR) communities. O’Grady has studied these projects and says it’s a growing segment of the market. “It suits people who want to be out of an apartment, but either for financial or lifestyle reasons, don’t want to own a single-family home.”
Single -family rental communities are another product of the Great Recession. It started when homeowners went into foreclosure and companies gobbled up properties as rental investments. “Then we saw builders start to explore it as a business opportunity here in Austin,” says O’Grady. “One of the first companies out of the gate, around 2013 or 2014, was Brookfield Residential, who partnered with American Homes 4 Rent.” Investing in SFR communities is a good deal for builders because it’s practically hassle-free. They don’t have to make a lot of changes like they would with an ordinary homebuyer. And then the investor just runs the property like an apartment complex.
For renters, SFRs are ideal. They live in a home with a yard, and in a neighborhood — not a complex — with a clubhouse and pool, but they’re not required to come up with a down payment or apply for a mortgage. Romeo Manzanilla, 2020 president of Austin Board of REALTORS (ABoR), says renting a single-family home is also a good option for young couples or young families who are “in a situation where they’re not quite ready to buy, but they don’t want to live in an apartment complex anymore.” Some of the companies that have dipped their toes in SFR developments in Austin include Lennar, Lonestar Development Partners, Clark Wilson Homes, AHV Communities and Capstone Management. And many other builders are currently considering such projects, says O’Grady.
Like with tiny home communities, SFR neighborhoods in Central Texas have taken longer to multiply the way they have in other cities, like Phoenix. “Taxes here can really get in the way of an investor’s ability to make a good return,” says O’Grady, who adds, “I do expect the category to continue to grow.” There’s a lot of capital coming into the SFR market right now and builders are being approached quite frequently.
Icon is a company that builds 3D-printed houses with technology they developed and designed. They’re headquartered in Austin and boast constructing the first permitted 3D printed home in the country — also in Austin. On its website, the company says, “Stagnancy in home building has not kept up with demand and population growth. This has contributed to a growing housing crisis.” Icon got into the market because it believes “traditional home building methods are inefficient and wasteful,” according to the company’s mission statement, so they’re working to inspire interest in a new category of affordable homes for ordinary people.
Icon recently built a slew of homes in the local Community First! Village and several more in Mexico for people living in extreme poverty. A “printer” erects the walls of the home while workers lay the foundation, install the electrical, insulation, windows, doors and roof. It takes a fraction of the time to complete the entire home, and a fraction of the laborers, too. Right now there’s no plan in place to use 3D printers on a wide scale, but the technology is only in its infancy. Who knows what will happen in five to 10 years. In 2019, Inman reported that when the idea of 3D printed houses first emerged several years ago it was “met with some derision.” But more companies have been exploring the possibility of using the technology to meet affordable housing needs.
If there’s one thread that weaves its way through these different homebuilding innovations, it’s accessibility. It’s the force that drives builders, investors and even the inventors and developers of new technologies like 3D printers and the special concrete used to rapidly erect inexpensive housing practically handsfree. “From an affordability standpoint, prices for these types of homes are low enough that we’ll see more of them go up,” says Manzanilla. “There’s no doubt that this type of construction will start to flourish.”