An Open Book of Housing Market Insights
Feature Interview With Jennifer Castenson, Vice-President, Buildxact
Predicting housing market trends is a complex exercise due to myriad factors like economic indicators, interest rates, population growth, and local market conditions. It involves analyzing historical data, demographic shifts, and economic indicators to make informed projections. However, unforeseen events, such as economic crises or pandemics, can greatly influence outcomes, making accurate predictions challenging.
Recently I had a chance to talk with Vice President at Buildxact and Forbes communist Jennifer Castenson on her observations about emerging trends in the built environment. She also offers a few perspectives on books that have impacted her thinking in this space.
What three housing trends are currently front and center in terms of what you’re observing on your radar screen?
They are sustainability, resiliency, and offsite construction. While these three themes are super broad, all of them have become top concerns today as housing is increasingly threatened by more and more severe weather events. We are at a tipping point. So first there needs to be a change so that homes and the process to build them are more sustainable. Beginning this today would be a major step towards mitigating the damage we’re causing to the environment.
Can you share more about what you mean about resiliency?
We also need to start using more resilient products and more resilient designs that will stand up to the weather events. Housing is a basic need to feel comfortable, safe and healthy. So it is important to find ways to provide it even in face of the climate change that is occurring.
What about offsite construction?
I see this as the process or tool that will help us arrive at both of these objectives in a fast, affordable way. It’s achievable.
What concerns you the most in terms of what you’re seeing?
My biggest concern is the politicization of some of these topics because more often than not this creates a barrier to innovation and change. When we look at and think about housing as a product I’m hopeful that we can approach housing topics with a clean, clear, unbiased lens. By doing this we help position the United States as a leader in housing versus chasing innovation approaches that are happening in other parts of the world.
Can you elaborate a bit more on that last point?
Sure. Some countries have made it a priority to fund a continual innovative approach to developing housing much like we have done for other industries here in the US. One of our very large federal investments is in healthcare. If we shift some of that to building better homes and communities, we would be able to reduce the amount of time and resources that we spend on healthcare. Since housing contributes to health in such a big way, we should start at the root cause.
Affordable housing continues to garner a ton of attention among everyday Americans who are being increasingly priced out of markets. What in your mind are some overlooked solutions in addressing these issues?
I wouldn’t call it overlooked, but I believe that the most impactful approach would be to have a higher-level strategy involving all stakeholders that is aimed at one thing: a fabulous product for the homeowner.
Since there are dozens of stakeholders in the housing industry, who often have separate and sometimes conflicting agendas, it would be important to aim all conversations and decisions on the ultimate goal of a great product. To do that, all stakeholders would have to agree to their role and their responsibility, and then take accountability for that role.
Sounds pretty simple and feels like something everyone would want to do in today’s environment in order to create change and therefore more profitable, healthy businesses.
How in your view has climate change impacted the broader conversation about housing?
First, it has politicized housing. Second, it’s made housing mainstream news. Everyone is facing a climate event that they never anticipated or know someone who is. The shock and surprise factor is making people reconsider what it means for them and how or if they can proactively prepare.
Certain areas like Miami and New Orleans that were once attractive are becoming less and less so because of the add-on costs associated with extreme weather events. Plus, these events are putting more people at risk as home insurance providers start pulling out of states like Florida and California where they can no longer afford to provide insurance due to the hurricane and wildfire activity.
What sorts of implications are we seeing from all of this?
Honestly, we already see climate change impacting a growing part of the U.S. map. People are choosing now to move to low risk areas, like Minnesota, Illinois, Rhode Island and Maine. This will have an impact on local government, which will have a trickle-down impact on the federal government. It will also affect corporations, driving them to collaborate with cities on incentives to establish offices and manufacturing facilities. And because there are long term impacts, it will take time to understand the entirety of the whole landscape. But what is certain is that the changes have already started.
So how might all of this fuel a new narrative around housing?
New discussions need to occur around home and community designs that can mitigate disaster so that people have the freedom to live where they choose. These need to be high level conversations that incorporate all stakeholders in the process, including urban planners, architects, builders, developers, and local jurisdictions among others. It is critical that all are involved in order to support a path to more resilient housing options.
Can you talk a bit about the concept of “Middle Housing” and types of promising solutions it may offer not only in terms of affordability but community vibrancy?
There is a concept called missing middle, which is also often referred to as workforce housing. This term, coined by Dan Parolek, speaks to housing that can be designed and built at a higher density to hit a price point that isn’t subsidized like traditional affordable housing. The direct result is housing that’s more affordable for middle income earners or the general workforce.
In many cities across the country, builders and developers are focused on delivering higher price points because that is what makes sense for their business model and their profits. At the same time, this is becoming more and more of a challenge as land costs escalate and as regulatory costs become a greater share of the construction of a new home.
With today’s inflation and interest rate hikes, property values are soaring, which is good for today’s homeowners, but makes it even more difficult to make new projects a reality. This, therefore, becomes another barrier to reaching the missing middle price point.
Parolek and his architecture firm Optima have designed many great solutions that showcase a higher density housing typology. His work and the resulting case studies are proof that while there are solutions available, they require local regulatory approval and public approval, which isn’t always easy to come by.
Are you seeing any rays of hope on the horizon in terms of the continued growing needs around affordable housing?
I’m always hopeful. I like this quote from Martin Luther King Jr.: “We must accept finite disappointment, but never lose infinite hope.”
Most of my hope comes from others in the industry who are tireless in their efforts to share and provide solutions. Just look at innovators like Veev, Vantem, Autovol, Mighty Buildings, and Fading West. And there are those like Katerra who paved paths for the industry. Instead of pointing at their failure, we should be embracing the progress that they represent, learning from it, adopting it and improving on it.
In closing, what are a couple of books and authors that have continued to inform your thinking about housing and the built environment?
I read a lot, including books that are written by those in the housing industry; however, I think the most impactful authors are those outside of the industry. Housing needs a new way of thinking. With that said, I love author and psychologist Adam Grant who wrote Think Again: The Power of Knowing What You Don’t Know. I also just read Unreasonable Hospitality: The Remarkable Power of Giving People More Than They Expect by Will Guidara and walked away with some amazing insights.
Alongside my reading, I listen to many podcasts on a regular basis and almost always learn something that applies to either my leadership and management skills, or to the change management that is happening and needs to continue to happen in the housing industry. Some of those podcasts include How I Built This, Construction Brothers, Freakonomics, 99% Invisible, Invest Like the Best, Re:thinking, and The Happiness Lab.