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The productization of housing is set to start in San Jose

Nabr, which I wrote about last year over here, recently announced its first residential project in San Jose’s SoFA district. Named SoFA One, the project is expected to have 125 apartments that will be offered up on a hybrid lease, own, and lease-to-own model. In this latter scenario, the company is saying that people will be able to buy with as little as 1% down. Construction isn’t scheduled to start until later this year, but if you’d like to get early access, you can add yourself to their waitlist, here.

As a reminder, Nabr is touting itself as a direct-to-consumer real estate company that aims to bring the same manufacturing and supply chain efficiencies that we have seen in virtually all other industries to the production of housing. This, of course, is not a new ambition. The flatlining of construction productivity is well documented, and lots of architects, builders, and entrepreneurs have tried to innovate in this space over the years. But it’s clearly a notoriously difficult problem to solve. So the obvious question here is: What is going to make Nabr any different?

Nabr is trying to productize housing. To do this, they’re building a vertically integrated process, going deep into supply chains, and trying to standardize their product offering as much possible. In the case of SoFA One, the base building is expected to consist of a CLT loft-style frame that can then be fitted out with various interior offerings. The idea here is that 90% of the build will be a repeatable system but that the remaining 10% is something that their customers will be able to customize — similar to when you’re buying a new car. The car is the same, but would you like black leather or brown leather?

Continuing with the car analogy, the company is also taking a move out of Tesla’s playbook for how they plan to roll out their products. The plan is to start at the top of the market (like what Tesla did with its expensive roadster) and then move downmarket as they drive efficiencies and cost savings in their delivery process. What they are trying to do is find the compounding innovation that has been present in most industries but that has been noticeably lacking from construction.

This all sounds great, but we know that buildings have a myriad of unique challenges compared to other products like cars and smartphones. My iPhone is the same as your iPhone, except for maybe the color and the case I put on it. But each development site is unique. Some have a high water table below it and some don’t. Some have adjacencies that will impact how you need to build and some don’t.

Each jurisdiction also has unique codes and regulations — everything from urban design guidelines to more or less stringent seismic requirements. Some cities have snow and some cities don’t. The list goes on. So what Nabr is going to have to do is create regionalized products with as much repetition as possible. And if they can generally lock the ~90% base building systems and just adjust the balance as needed, maybe that’s enough to do it.

At the end of the day, our industry is not completely void of innovation. It’s just a bit slow to change. We never used to build skyscrapers, but now we do. So I’ve decided to cast my developer cynicism aside. Today, we don’t have truly productized housing, but maybe we will.

As an aside, Nabr also recently shared their leaderboard of cities where people want to see a future Nabr building. Those cities are New York, London, Los Angeles, Toronto, and San Francisco.

Image: Nabr

2 Comments

  1. AM

    It would interesting to know what (if anything) truly makes nabr different, since Katerra miserably failed at it, among many others.

    Liked by 1 person

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