Greg Leung had worked at Apple for years and was at the smart lock company Otto when he received the call for an interview with Connect Homes.
The playing field – building a starter home at a much lower price than other prefabricated houses on the market and one that could be deployed in locations in the urban core of most cities – was too good to miss.
"Basically, it's a beautiful product, but in a way that disrupts and changes the way homes are built," said Leung.
The homes are available in 14 standardized configurations and can be scaled from 460 square feet to 3200 square feet. What sets the company apart from its competitors, says Leung, is the speed at which Connect Homes can build a house and erect a full house in six days.
Additionally, homes can use standard shipping networks and rail transport to get their homes anywhere in the country. “We're building modules the size of a shipping container so that we can connect to the regular intermodal shipping network,” said Leung.
The company's smaller homes cost around $ 174,000 while a 3,200-square-foot home costs around $ 825,000. That's about half the cost of a customs house today, Leung said.
"We're offering a beautiful, modern product at half the price of a traditional home builder," he said.
Currently, Leung says, three types of new buildings are being built – new tract houses; Apartment buildings and high-rise buildings. However, there is a possibility of filling apartments. “70% of the Bay Area and LA were built in the 1970s. That means there are millions of homes that are too small and outdated and energy efficient, ”said Leung. "It costs 1 to 1.5 million US dollars to build a house. Nobody but us addresses the urban infill market."
Leung's interest extended beyond the 88 projects the company has completed for new homeowners. From its Los Angeles headquarters with a factory in San Bernadino, Calif., The company is also looking to change the way local and government attitudes toward shelters and unhoused housing.
Founded by Jared Levy and Gordon Stoddard, two architects who worked in the prefabricated buildings division of Marmol Radziner, Connect Homes had raised $ 27 million to develop a vision for a prefabricated future.
That capital includes a recent $ 5 million round that was used to restart the company and focus it on its manufacturing technology that can be used to create serviceable shelters in addition to housing work. This was yet another draw for Leung, whose experience in Northern California drew his attention to the housing problem the nation is facing.
The individual module protection developed by the company can be transported and set up on site in one day. By adding a generator to the 40 foot by 8 foot module the company is building, the shelter has the flexibility of a trailer, but can be habitable in 24 hours.
"We designed this to be sold to local authorities and third-party suppliers to house people," Leung said.
Customers for the new product include the Thatcher School in Ojai and a project in Mountain View, California that was carried out in collaboration with Life Moves.
The prices for the shelters range from $ 20,000 to $ 30,000 per bed or $ 80,000 per module. Those prices are incredibly cheap compared to the $ 500,000 to $ 1 million municipalities pay for a bed in permanent support shelter, Leung said.
However, the company's outlandish replacement for tent cities is not helping to address the underlying housing crisis in cities across the country.
"We're trying to be the opposite of bespoke apartments that we see as part of the problem. The shelters were a response to an urgent need. We could do something innovative to solve the problem," Leung said.I don't see the amazing talent and innovation applied to this problem. And it affects the well-being and health of millions and millions of people. This will potentially last a lifetime. "
Trying to create a new fable for rebuilding the construction industry brought Brick & Mortar Ventures back to the table to recapitalize the company with the new $ 5 million in cash the company recently secured, according to Darren Bechtel , the founder and managing director of the company.
Bechtel is a member of the Bechtel engineering and construction family. He has extensive industry knowledge and sees connect homes as one of the best ways to disrupt traditional building.
"You can't build cheaper than existing systems today," said Bechtel. However, the ability to rethink building as manufacturing creates an environment where costs can be cut more effectively, he said.
"It's been a primitive form of manufacturing for some time," Bechtel said of the housing industry. "It differs from traditional manufacturing, and even from automobiles, that when you reach the size of a house, you become beyond the ability to efficiently move that product from the manufacturing facility to the final delivery point."
This is the main problem that Bechtel has solved with Connect Homes. “You have to standardize on intermodal shipping or obtain permits. You are limited on the roads you use, ”he said. "If you're making a real set of parts, the artisans have to do the finished work on site."
According to Bechtel, Connect Homes takes a different approach than the builders, who for the most part want to be vertically integrated. He said Connect Homes is taking a more Apple-like approach, which involves monitoring the product lifecycle and customer experience. "In this way you are reaching a global dimension and creating the VW and Audi of housing," he said. “A house is the most expensive purchase. The fact that this is still a bespoke product in most scenarios doesn't make sense. "
Bechtel also distinguished between those companies that primarily focus on the accessory housing market in California and Connect Homes, which has broader ambitions.
“A lot of people who buy and sell ADUs get an additional guest house. You want more space for yourself, ”he said. “On a much larger scale, if you can build existing housing stocks in mid- or high-density areas that are old, larger-sized properties and two or three units in the same location with new inventory, you can improve both quality and quantity of the housing stock. "
This is the ultimate destination for Connect Homes, said Bechtel. And it will come back on the market, just like that market might rebound, Bechtel said.
"We believe that the demand for living space will recover massively," said Bechtel. "The single-family home market will return." And when it does, Connect Homes will work to meet the new demand.