How Technology Can Help Housing Affordability


September 24, 2021—The External Advisory Boards play a significant role in the Wells Fargo Innovation Incubator (IN2) program, with each representatives’ insights helping to determine the companies selected for the program. The housing and commercial buildings board consists of industry and academic experts in the built environment space. With the recent announcement of the program’s eighth cohort, which is focused on developing technologies that reduce carbon outputs in residential and commercial buildings, we’ve asked some of these Advisory Board experts for insights on affordable housing challenges and recent technology advancements.

Q. What are the most significant challenges when it comes to efficiently and cost-effectively heating and cooling buildings. What opportunities are you seeing in hardware and software?

A. New home builders are faced with so many regulatory costs and fees that make building affordable homes very difficult to pencil. Some newer technologies may make a home more energy efficient, but add cost, and generally speaking, the average New Home buyer is concerned with energy efficiency but it ranks lower compared to other home features, or they just can’t afford to pay the incremental cost built into the home. Newer technologies must become more familiar and comparably priced to accelerate acceptance and adoption. — John Mangano, Senior Vice President of Building Technologies and Architecture at Toll Brothers

In terms of technology, I’m seeing hardware devices that provide benefits to multi-family and apartment buildings have improved in recent years, such as variable refrigerant flow and air-cooled heat pumps. Software controls are also getting more sophisticated, with more remote accessible products through smart phones and cheaper sensor technology. — Luke Leung, Director of the Sustainability Engineering Studio at Skidmore, Owings, and Merrill

Q. How has COVID-19 increased the urgency in addressing the affordable housing crisis?

A. COVID-19 has only further accelerated our immediate need to address affordable housing, which has been highlighted in a few key areas as many residents have remained home for extended periods of time during the pandemic. We have a clear issue with the existing stock of affordable housing and the lack of interior clean air due to a combination of inadequate air filtration, and air contaminants in underperforming buildings. Much of the existing affordable housing stock also lacks proper broadband connectivity, which has further hampered the ability of the residents to either work or attend school remotely. The impact of unemployment during COVID-19 has been unevenly shouldered by the less affluent sections of our population, which has further increased demand for housing, while the migration of more affluent families from cities to suburban areas has driven pricing of land and homes to record highs and decreased the opportunity for new suburban affordable housing developments. — Craig Collin, Chief Operating Officer at Tavistock Development Company

COVID-19 has put a renewed emphasis on the home and its importance as a stabilizing factor in people’s lives. The pandemic combined with low interest rates have caused an explosion of pent-up demand for housing along with scarcity and supply chain issues, translating to higher costs that are making housing less affordable. These factors may be temporary, but are worsening the affordable housing crisis. On the other hand, as more companies become comfortable with working from home, there is less pressure for some employees to live in higher priced metro areas, providing an opportunity to work from a more affordable location. On the whole, increased costs related to the COVID crisis have made it much more challenging to provide affordable housing.— John Mangano, Senior Vice President of Building Technologies and Architecture at Toll Brothers

COVID-19 has impacted affordable housing in four main ways:

  • By shining a light on inequities in housing and the ripple effect that housing has on health and wellbeing. Far too many Americans, disproportionately those of color, have substandard housing and aren’t able to afford anything better. A report from Global Wellness Institute found that our homes, communities and surrounding environment directly affect our daily behaviors and lifestyles, and together these factors determine 80 percent or more of our health outcomes. This made people of color more susceptible to COVID and their outcomes more dire.
  • By increasing housing insecurity. Many of the people who need more affordable housing options are in jobs and industries that were downsized during the pandemic, causing them to burn through their savings and build up debt to mortgage companies and landlords. The moratoriums on evictions didn’t erase the debt that was incurred when people couldn’t pay and will continue to impact their ability to obtain housing in the future.
  • By creating a seller’s market. Demand far outweighs supply and is drastically driving up the cost to purchase both new and existing homes. With people spending much more time in their homes and many people working or participating in online schooling from home, there is much greater demand on our home environment. Builders are not able to keep up with demand for new homes because of shortages in trade labor, building products and materials, as well as supply chain issues.
  • The greater economic impacts on individuals and communities. Major setbacks in an individual’s earning potential, savings, net worth and expanding debt translate into less buying power. Municipalities have also suffered from greater expenses coupled with less tax revenue, which impacts their ability to support development of affordable housing. — Betsy Scott, Executive Director of Programs and Engagement at Housing Innovation Alliance, LLC

Q. Which technologies are most in-need of modernization within the housing sector in order to reduce the carbon impact of buildings and increase affordability? Why?

A. I believe the most important factor is to address the energy consumption of our existing housing stock through energy efficiency improvements including thermal barrier, HVAC systems, air filtration and other large energy users like lighting and appliances. There should continue to be a focus on modern developments, fuel source types and offsets with renewable energy production, but there needs to be an immediate and systematic effort to improve our existing housing stock for current residents. These improvements must be focused on innovative technologies in applications, such as building envelope improvements, as well as operations of the residences, such as power use management. — Craig Collin, Chief Operating Officer at ‎Tavistock Development Company

Q. How will electrification and the expansion of EVs impact building energy use? Are we prepared to address these shifts with existing infrastructure and technology?

A. The U.S. is not ready for a high percentage of electric vehicles in the near future. It is likely EVs will reach price parity with fossil fuel-based vehicles within a few years, which could propel a rapid increase in adoption. From the projects we are working on in China, where the EV design penetration is around 10-30 percent, we are seeing that existing electric infrastructure is not enough to support that level of penetration. In a city like Chicago, there is a potential winter peak issue that has yet to be resolved. Vehicle charging at night, families cooking on induction cooktops, kids showering with electric heaters, and HVAC heating from an electric heat pump will all have a significant impact on the grid. We should make adjustments now before we are forced to. — Luke Leung, Director of the Sustainability Engineering Studio at Skidmore, Owings, and Merrill

Q. What innovations are you most excited about right now when it comes to affordable housing?

A. I am excited about efforts being made to rezone for greater density in a number of municipalities across the country, which will result in lower land costs and taxes per home and allows for more housing types that will meet the needs of a growing variety of buyers and renters. And, I am paying close attention to startups that are focused on finding ways to deliver attainable housing using off-site construction and a limited amount of labor. — Betsy Scott, Executive Director of Programs and Engagement at Housing Innovation Alliance, LLC

Betsy Scott, Luke Leung, John Mangano, and Craig Collin share insights about affordable housing technologies.

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