According to the Joint Center for Housing Studies at Harvard University, nearly one-third of U.S. households spend more than 30% of their income on housing, and 18 million households commit more than 50% for a safe place to live. According to the National Low-Income Housing Coalition, no state or metropolitan area in the United States has enough affordable rental inventory to meet the existing demand for its lowest-income residents.
Of course, basic availability in hot housing markets is key to making housing affordable. Ensuring low and predictable utility costs can also have a profound impact. The Wells Fargo Innovation Incubator (IN2) is uniquely positioned to assist with both.
A Commitment to Affordability
In June 2019, the Wells Fargo Foundation announced a commitment of $1 billion in philanthropic funding though 2025 to help solve the nation’s affordable housing shortage. Because of its close relationship with the National Renewable Energy Laboratory (NREL) and the award-winning IN2 program, Wells Fargo decided to employ the power of IN2 to tackle construction innovation and residential energy efficiency to make housing more affordable to purchase and rent, and less expensive to power.
Moving quickly to get the funding into the hands of those best positioned to impact the market, in November 2019, IN2 announced its sixth cohort of companies. Among the 10 new startups, eight have technologies that show promise in reducing housing costs through innovation in construction processes, materials, and district and community level design tools. The other two are working on energy-efficiency technologies.
A Natural Alignment
“Wells Fargo had the foresight; we agreed that their affordable housing initiative aligns nicely with what IN2 is doing and NREL’s expertise in construction innovation and energy efficiency,” said Trish Cozart, IN2 program manager at NREL.
“We can take IN2’s five years of experience with cleantech innovations that improve the energy efficiency of commercial buildings, and translate that to residential structures.”
NREL’s residential and commercial buildings groups will work with the selected IN2 startups to validate the technologies. When considering housing affordability, NREL is traditionally inclined toward energy efficiency; the IN2 expansion will provide NREL the opportunity to also explore the possibilities of offsite construction and prefabricated manufacturing.
“We believe factory construction can provide higher quality, faster construction, improved productivity, and increased technology integration,” said Shanti Pless, a senior buildings engineer at NREL. “That all results in cost-effective and affordable housing.”