In the cities suffering most from housing shortages—like San Francisco, where a lack of supply helped drive the median cost of a house up to $1.7 million—one part of the challenge is a lack of construction workers. After construction jobs shrank during the recession, many workers switched careers; others have moved, ironically, because of the high cost of housing. One startup wants to help with flat-pack, sustainable, prefab houses that are designed to be so easy to build that most of the work doesn’t require skilled labor.
“We saw that most of our major cities are facing a housing crisis,” says Bec Chapin, cofounder and CEO of the Seattle-based startup, called Node, which is part of Y Combinator’s current cohort. “And additional stock is a big part of the solution. But building anything is incredibly hard to do.”
A growing number of companies are turning to modular buildings to try to speed up construction—when apartments can be built in a factory and then lifted in place on the building site, it’s one way to avoid the need for as many construction workers inside the most expensive cities (and avoid other potential delays, like bad weather). A recent McKinsey report found that modular construction could shrink construction schedules by as much as 50%. But modular housing also has limitations, Chapin says.
“It’s a huge box going down the roads, and you can’t get it everywhere,” she says. “You need almost every single trade person you had at the factory again onsite to install it. And you need a huge crane, which is very costly . . . we were just really pushing on what’s a more scalable solution? How do we actually activate jobs, instead of needing the same skilled construction trades?”
Node designs flat-pack kits that can fit into a standard shipping container to be shipped on regular trucks or trains, and that come in pieces that are simple to put together. “We’re going much further than just a kit of parts,” she says. “We are making our kit easy to be assembled so that the same four people can put the whole house together. This means hardware that clicks walls together, [with] finishes on and mechanical systems in place.” Workers with less experience can complete the majority of the work (plumbers and electricians would still handle specialized work), helping increase the capacity for construction in a city while adding new jobs. A home can be built in less than three months, including the foundation and utilities, though the company is aiming to speed the process up to take just days.
As an early-stage startup, Node is beginning with backyard homes that it can use to quickly prototype the idea, though it’s designing the pieces of the kit so that they can later also be used in three-story multifamily homes. In Seattle, where the company is headquartered, backyard houses especially make sense as a focus; the city recently adopted new policies to support backyard homes, including eliminating parking requirements and allowing two cottages per backyard. Vancouver and Portland, Oregon, are also strong markets for ADUs. “This team is capitalizing on the huge demand for backyard studios in the Pacific Northwest,” says Y Combinator partner Eric Migicovsky.
Anywhere land costs are high, building in existing backyards is a relatively low-cost way to add new rental housing. But construction is still pricey. Node’s smallest unit, at 400 square feet, is $150,000, which Chapin says is significantly less expensive than building a backyard home of a similar size with traditional construction in Seattle now. The startup has also worked to streamline the building process so homes can be completed as quickly as possible.
The houses are also sustainably designed, and aiming to be “carbon negative,” or sequester more carbon than they emit (wood, the primary material, sequesters carbon as trees grow). The homes are ultra-efficient and can run on solar power, with optional additions to collect and filter rainwater. In a third-party analysis of one of the early prototypes, the home was nearly carbon neutral. The startup will install its first flat-pack home in Seattle later this year. “We believe we are very close to having our early homes be carbon negative, and that we have the greenest homes with the easiest build process on the market,” says Chapin. “It’s core to us to build homes that are better for people and the planet.”