Some of the problems facing most communities haven’t been solved yet, even with many technologies coming up with keen ideas.
A good case in point is the nationwide housing crisis. The predictable answer is that affordability seems to be beyond the reach of those who try to hit the nail on the head.
Billions of dollars have been flowing into a corner of the tech industry focused on the housing market.
And now there are start-ups to help landlords manage properties, or homeowners manage sales, or tenants manage their packages.
But hardly any of it touches the central problem of housing: For many people, it costs too much.
None of that investment, nor the solutions that those companies are offering, will fundamentally change the dynamics of the housing market in a way that increases housing affordability,” Matt Hoffman, the vice president for innovation at the national housing nonprofit Enterprise Community Partners, surveying what venture capitalists have come to call “proptech,” said.
Policymakers warn that the housing crisis isn’t a problem technology can solve.
Yet, it’s intriguing to think what might happen if investors threw money more directly at this goal.
Hoffman believes that the right ideas could help change the market, so Enterprise recently began to invest in early-stage tech start-ups itself.
Clara Brenner, a managing partner at a venture capital firm, the Urban Innovation Fund, hears weekly from people, hoping she will do the same: When are you going to invest in a company, they ask her, that will solve the housing crisis or the homeless problem?
“This looking for a tech solution — I understand why people want it,” she said.
But she doesn’t believe it exists. The housing crisis is a policy problem, she says, one that Nimbyism zoning laws, land use restriction and tax policies have made worse.
She fears that the dream of a tech fix will distract voters and politicians from those culprits.
“They’re waiting for some tech company to come in and sweep up this mess,” Brenner said, “When, in fact, this is all our messes and we’re going to have to deal with it.”
The existing start-ups that have attracted the most attention for their potential to improve affordability are the ones trying to revive the decade-old dream of pre-fab construction.
It now costs as much as $500,000 per unit to build low-income housing in the most expensive markets.
Savings in the cost of construction could help developers of such housing stretch subsidies further. Cheaper construction could also change the math in markets where developers say it’s also not profitable to build middle-class housing.
The problem has been around since cavemen looked for something more comfortable, but the cost factor has always blocked the road as humans try to solve this intractable dilemma.