(LRT THINK TANK) INSIGHTS ON ATTAINABILITY + PRODUCT: HOME AS A SERVICE

5 minute read

In November 2019, we hosted 120 or so key stakeholders in the housing industry for a deep dive event focused on driving attainability for middle income households – those who make roughly $50K-$125K per year.

In table-based think tanks of six to eight people, we addressed 15 questions related to PLACE, PRODUCT and PRODUCTION (or process) – the three big buckets that need to be tackled to make homes more attainable without sacrificing the quality of our homes and our lives.

Here’s a question from the PRODUCT segment of our agenda.

Some housing providers and even municipalities are taking a home-as-a-service approach, maintaining ownership of land or equipment like HVAC to lower the total cost of home ownership. What do you think about a shared ownership model?

We asked 29 thought leaders, including housing developers, regional and national builders; experts in innovation, architecture, investment, marketing, quality management, and off-site construction; manufacturers; academics; researchers and market analysts, and a technology provider.

Here’s what they had to say. They’ve highlighted potential opportunities and challenges.

1: Carefree maintenance.

There’s a convenience factor for both younger folks and for the aging baby boomer who’s retiring. They could have a maintenance package and carefree living in their home.

We loved the idea of Oakwood Homes’ Shazam model [that provides warranty, seasonal maintenance and handyman services]. You know that maintenance is happening, you know that you get a peek at what’s going on in there. If there are problems, you know ahead of time and can help prevent some potential construction defects down the road.

On the flip side, though, if there is a construction defect, who’s responsible for it?

2: Possible joint venture.

What if I, as the buyer, finance about 50% of the cost to that home and lease the other 50%. (We’re not suggesting that’s the optimal ratio, but you get the point.)

In that case, the other half is more of an operating expense, like a utility, that I pay on a monthly basis. I would not have to finance the full cost of the home. Perhaps the builder, landowner or developer is financing the other half on my behalf.

It may be difficult unless you’ve got some sort of benevolent landowner or somebody with an interest, whether it’s a municipality or a community land trust that’s trying to create permanent affordable housing.

3: Upfront trade-offs.

Using solar as an example, what if you as a buyer could put zero down and get some discount on potential zero-energy costs? It’s a little easier to wrap your mind around it because there are some rebates in that space – the ability to get some money back as the leasing company and as the buyer. It would bring down your overall house costs. If you’ve got a leasing fee potentially, what would that cost? How would it compare to a warranty that’s going to cover the cost?

4: Possible drawback at resale.

If you were going to sell your home and you tell the next prospective buyer, “By the way, I don’t own the mechanical systems here and you need to negotiate with the company that owns them,” this could be a problem. This happens in the solar business with the power purchase agreements, and it actually has scuttled quite a few sales of homes. It might be more of a headache than it’s worth.

 

What’s Next?

With 29 people, we got a good mixture of perspectives. We believe that “home as a service” is one of the waves of the future of housing and that it warrants more discussion.

Look for further insights on this front as part of our 2020 editorial program, including case studies and expert profiles. Stay tuned!
Do you have something to share? Contact us, we’d love to hear from you.

Read More Think Tank Recaps

INSIGHTS ON ATTAINABILITY + PRODUCTION: LABOR
INSIGHTS ON ATTAINABILITY + PLACE: ZONING
INSIGHTS ON ATTAINABILITY + PRODUCT: FINANCING
INSIGHTS ON ATTAINABILITY + PRODUCTION: DIGITIZATION

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