Solving the West Coast Housing Shortage
Written By Jim Mitchell
eVolve MEP for mechanical, electrical, and plumbing.

California, Washington and Oregon are all facing what has been characterized as severe shortages of affordable housing. Technology companies are pledging billions of dollars to help address these shortages. Apple Inc, Facebook, Google, and Microsoft are the major tech companies pitching in to solve the problem that, incidentally, has been blamed on them for driving up prices and demand in the housing markets where their facilities are located – particularly in Seattle and Silicon Valley.

In a Bloomberg.com article on the California housing crisis, the policy director for the Terner Center for Housing Innovation said, “Broadly speaking, there is no solution to the California housing crisis without the construction of millions of new houses.” It’s been estimated that it could take until 2050 to construct the 3.5 million homes that are needed in the next five years according to a 2016 McKinsey report.

Over the past year, Google and Facebook have each made a $1-billion commitment to affordable housing; Apple has allocated $2.5-billion; Microsoft is on board for $750-million. The financial commitments have gone to the communities these tech giants inhabit in the form of subsidized apartments, subsidies to housing developers and also to help modular-housing companies expand in order to increase the supply of affordable housing units. According to Bloomberg.com, the median price for a house in California is over $600,000, twice the national average. Four of the country’s five most expensive residential markets are there—Silicon Valley, San Francisco, Orange County and San Diego.

In Realtor Magazine’s Daily News, Google, based in Mountain View, CA, anticipated that its investments will result in 24,000 new units of affordable housing by 2029. The investments by Apple will fund loans for affordable housing developments and mortgage assistance and down payment funding to first-time buyers through the California Housing Finance Agency. Along with Google and Apple, Facebook plans to donate company-owned land for developments that include housing.

In July, The Wall Street Journal published the article, “Tech Giants Aim to Solve West Coast Housing Shortage,” which stated that the problem will need a shift in state and local policies to accompany the large commitment of funding from the booming technology industry. Those shifts will likely require revised zoning laws and tax provisions.

Perhaps the most sanguine of the tech giants’ strategies are the subsidies to modular-housing companies. As explained in the Dodge Data & Analytics 2020 SmartMarket Report on Prefabrication and Modular Construction, one of the most efficient methods of producing affordable housing units is, indeed, modular construction. The report states, “Prefabrication and modular construction are poised to transform several sectors of the construction industry.” Among the top reasons companies are converting their processes to modular construction are improved schedule performance, decreased construction costs and improved quality. Other benefits include improved safety, less construction waste, improved productivity, predictability, and client satisfaction. One important way to look at prefab and modular processes is, simply put, survival.

Prefab and modular construction are two of the many topics that will be explored during the virtual conference MEP Force 2020.

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