In the seesawing scene that is home building and buying in the pandemic era, the housing shortage drags on — as does a dearth of skilled workers who’ve left the industry since 2020.
In mid-March, the National Association of Realtors (NAR) said the “housing inventory at the end of February totaled 870,000 units, up 2.4% from January and down 15.5% from one year ago (1.03 million). Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months and down from 2.0 months in February 2021.”
Caught between a shortage of homes for sale, rising mortgage rates, higher prices and a construction labor shortage, the one thing on the mind of Jack Oslan, CEO and co-founder of construction automation startup Diamond Age, is reinventing home building from the ground up.
“The problem we’re tackling is that it’s not a very popular industry to go into anymore. We have this huge labor shortage which travels downstream,” he said. “The unintended consequence is we don’t have enough homes. The solution is to create automated tools that do those tasks.”
Oslan called Diamond Age’s automated solution a “factory in the field.” It’s a site-deployable gantry system rigged with robotics, 3D printing technology to extrude concrete walls, and a suite of other construction tools that plug in at various points to cut windows and doors and perform other jobs.
Nothing’s been built using this system yet, but Oslan said the technology promises to drive down the construction cycle from a “best-in-class” average of 120 to 150 days to just 30 to 45 days — and saving time, of course, saves money.
“If you think about the entire ecosystem of the way homes are built, there are dozens of people in the supply chain, starting at land development all the way through home construction,” he said. “If we can consolidate a portion of the back end, the vertical home construction, we can then take some of that margin and sort of redeploy it back into cost savings of the homes.”
Citing just one example — hanging cabinets — Oslan illustrated the laborious nature of how building has traditionally been done, as well as the complexities and need for skilled workers it requires.
“Our automation system is going to be able to create a three-dimensional model of the walls of the kitchen, put railings up and fix them into our concrete walls and allow people to simply take the cabinets, hang those on the wall, and then affix those cabinets,” Oslan said.
He added that taking “backbreaking work, the rough end work associated with construction” off of people and feeding it to an automated system is far easier and reserves “high value tasks for people.”
Platform Efficiencies for Homebuilding
Pointing to what is fundamentally an issue of supply and demand, Oslan harked back to the absolute beginnings of the current housing shortage, which began to take shape during a different crisis.
Because it was inextricably linked to mortgages, the 2008 crash put the home-building business into lockdown mode, he said. That resulted in a shortage of workers that the industry is still struggling to recover from.
“The industry lost couple of million workers,” he said, “and now we don’t have enough people to keep up with demand.”
That combination of macroeconomic headwinds is creating an opening for construction technology to become a new and decisive force. Infused with $50 million in Series A completed in March, Diamond Age is ready to revolutionize a deeply challenged sector.
Its technology will get its first trial run in May when it does its first commercial deployment with housing developer Century Communities.
Describing how the system reduces human labor needed by roughly 55%, Oslan told PYMNTS, “The system is powered by a simple three-axis overhead gantry. The gantry itself is a very simple, basic robot, but the secret sauce is all of the robotic tools that our team has created to basically perform tasks in the construction of a single-family home.”
The framework gantry covers the site, placing materials in precise locations where workers need to do their jobs, along with the tools to create them.
“Our gantry is the battery,” he said. “Tools plug in, and we build homes.”
Cheaper by the Square Foot
With the housing market in upheaval and the economic outlook still uncertain, Diamond Age is setting out to prove that automation gets homes built faster and with less cost — something that home buyers can ideally benefit from in the final selling price.
“Phase one of what we’re doing is oriented at getting more housing stock in the market faster,” he said. “Then, as any startup starts to have more experiences and really optimize technology, we expect to see a reduction in the cost per square foot for building homes.”
The company has no plans to license or sell its automated homebuilding technology, preferring to enter as a vertically-integrated general contractor, complete with its own workforce of trade craft workers.
“Our customers are the home builders,” he said. “They don’t want to buy technology. They don’t want to operate technology. They just want it to work for them.”
Though the first deployment is in May 2022, Oslan said, “2024 is when we target our first sort of scaling step, where we’ll have multiple cohorts of our technology out in the field, and 2025 is probably where we hit the accelerator.”