BiggerNews August: Will 3D Printed Homes Slash Housing Costs?

David:
This is the BiggerPockets Podcast show 643.

Zachary:
Six years ago, I was sitting in a presentation by a futurist. I don’t know how one gets to be called a futurist, but this person said he was, so I believed it. It was a great presentation. He talked about all these things, this is back in 2016, all these things that are going to happen in the future. One of those of which was concrete 3D printing of structures. I’d never seen anything like this before nor had anyone else in the audience. Somebody raised their hand and said, “Hey, how long until you think that this is the norm in construction?”

David:
What’s going on, everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast. Here today with my co-host, Dave Meyer, VP of analytics at BiggerPockets and all around big-brained man. Today, we’re going to be interviewing Zachary Mannheimer, the CEO of Alquist, a 3D home printing company, where we dive deep into the new technology behind 3D printing homes, get ourselves an education, and share it with you all. Dave, good morning to you, I guess, good evening out there at Amsterdam.

Dave:
Yeah, it is. It’s nighttime here, but thank you. It is great to be back. I always look forward to hearing what you’re going to call me on these episodes because I never know.

David:
That’s the hardest part of this job to be frank, what am I going to say in the beginning and what nickname am I going to have in the end.

Dave:
It’s like complicated financial economic questions. Got it. Come up with a silly nickname for Dave is just keeping you up at night.

David:
That’s different than the one that I said on every other show. That’s exactly right, but it’s my pleasure because I always love doing interviews with you because you think of such good questions. On that topic, what were some of your favorite things about today’s episode?

Dave:
Well, so this is today talking about 3D printed houses is something I’ve actually wanted to talk about for a while, and it’s not something I know anything about, but you read these articles and hear that the industry is maturing and it could be a potential solution for the supply shortage that we’re seeing in the US, and if you’re not familiar, depending on what estimates you look at, it’s projected that the US is somewhere between four and I think the upper bound is seven million homes short of what we need for demonstrated demand. We need a solution to that at some point in this country and 3D printed houses are often touted as one of the potential solution.
So I think it’s really interesting. It’s a far more mature technology than I thought it was, which was really interesting. I think this is something that investors should be keeping an eye out for in the next couple of years because it sounds like it’s coming around sooner than at least I expected. Now, I know we were chatting before we got onto this that you have some trepidation about 3D printed houses. Is that right?

David:
Yes. This has been one of the two things that have just caused my sphincter to tighten so quickly when it comes to real estate investing. One of them would be if the population significantly drops. If there’s no one left to rent houses, it doesn’t matter how brilliant your strategy was. The whole thing hinges on needing to collect income in one way, which is from a tenant. The other thing would be if we somehow found a way drastically reduced the cost of construction.
So if you could print a house for $12,000 or something and it costs $250,000 to build it, eventually, the cost of all the homes would start to drop and it would become much more difficult for real estate investors to make money. Really, the reason that real estate investing works so well, there’s a couple reasons. Leverage is a big one. It’s easy to actually borrow money to buy homes and everyone needs a place to live, but the biggest thing is scarcity. That’s what we’re getting to. Like you were saying, we have a shortage of housing supply and that’s really the reason why things are so expensive.
We could talk about a million economic factors that have all, I would say, created tailwinds that we’re pushing you forward, but scarcity is what makes anything valuable, and if we could just throw houses up all over the place, they’re not going to be very scarce, but luckily in today’s interview, we found it’s not quite that simple.

Dave:
Well, what about what you learned today? I guess give people a little preview. What did you learn today that most intrigued you and made you feel like this could be compatible for the real estate investing industry?

David:
Well, a lot of it is that they’re going to be reducing the time it takes to build a house as well as some of the labor costs. So you’re going to be shifting labor from a blue collar, “I got to go use my hands to frame wood,” into the white collar approach of, “I need to learn how to use this software to design a house.” So we’re not actually going to be losing jobs. That was another thing that would’ve concerned me. You’re just shifting the jobs away from manual labor into more of intellectual labor as you’re going to be having more engineers that need to be working through how they’re going to build.
Also the fact that they still have to use concrete. It’s a concrete block style that Zach was describing means the materials are still going to be expensive. You’re not going to just be able to throw these things up super quickly, and then it’s not right around the corner. So something I just noticed when it comes to technology overall is I remember when electric cars were brand new. What was that? 10 years ago or so? What do you think?

Dave:
Well, Tesla was, but actually, there were electric cars in the ’90s.

David:
Okay. So you first heard about it and you’re like, “This is the way of the future,” but it doesn’t really do anything right off the bat, and it’s not like a linear progression. It just slowly hangs around and they tweak with it and people use it and you have the early adopters, and then at a certain point, it becomes a superior technology, and then boom, it replaces all of the gas guzzling cards that we have now, which we’re not there right now, but I would think we can admit that’s probably where we’re going. The QR code is another example. Remember when QR codes came out and they were everywhere and then they just died and you didn’t see them anymore.

Dave:
COVID revitalized the QR code. It made that technology useful for the first time ever.

David:
It was the AEDs. QR codes are alive again and they shot right up. Now, we see QR codes everywhere. So for BP Con, I’m going to be having T-shirts made. So if somebody says, “Oh, my gosh, my gosh, I want to talk to you,” but I’m getting sworn by hundreds of people, I can just be like, “Hey, scan this QR code on my shirt. We’ll schedule a time to do a webinar or have a meeting or something like that.” So I can see those are definitely going to have a place in society.
I think 3D printing houses in many ways will take over and replace the way that we are currently constructing homes, but it’s not going to just take the legs out of construction and can significantly undercut the prices. In fact, do you remember, I think it was around 5% right now that he was saying that they would save on the construction compared to traditional?

Dave:
Yeah. It was something like that. So it’s not crazy, but with all technology, you would expect that to increase at some point, but, yeah, super fascinating interview. This is something I really enjoyed learning about and like you, I think that there are some really exciting parts of it. There are parts that you’re like, “Oh, man, I hope that doesn’t totally change the real estate industry,” but from what we learned from Zach, it sounds like there’s going to be opportunity for just change, innovation. It’s not going to necessarily be some people will win or some people will lose. It might just change the way a certain proportion of homes are built and constructed. It’s fascinating to learn about.
So hopefully, everyone, stick around for this interview. If you want to learn more about the projects that Zachary and his company, Alquist, are doing right now, make sure to check out the On The Market interview with Zachary, which we aired yesterday and you can find On The Market feed.

David:
Before I bring in Zachary, today’s quick tip, technology is always improving and the market is changing faster than I have seen in my lifetime. In this market we’re in now, it is more important than ever to stay abreast of the changes that are happening. We are doing our best here on this podcast to help you with that, but we cannot do it alone. I highly encourage you to use other forms of technology to stay abreast of what is happening in the housing market. BiggerPockets has other podcasts that you can be listening to.
You can be attending city council meetings and listening to what their plans are as far as zoning in your city. Understanding what’s happening as far as 3D housing, the labor market or interest rates will help you stay ahead of the curve when it comes to changes in the market so you can make the best decisions.
For people that follow me, I started a text letter much like Brandon Turner, where we send out the information that we think is relevant. I highly encourage you to check out something like that. Find your favorite news source. Find your favorite podcast. Find your favorite people on YouTube, but make sure every day you’re doing something that keeps you in the loop with what’s going on in the world of real estate investing so that your fear does not overtake your ambition. All right, Dave. Anything before we bring in Zachary?

Dave:
No. You said it great. Let’s get to the interview with Zachary Mannheimer from Alquist 3D.

David:
Zachary Mannheimer, welcome to the BiggerPockets Podcast. How are you today?

Zachary:
I’m doing well. Thank you. It’s a pleasure to be here.

David:
Yes, it is. I am equal parts curious, excited, and terrified about what we’re going to start off talking today because you are in the 3D housing space and outside of a major apocalyptic event, 3D houses have always been the thing that I’ve thought this could actually take down our industry. So I am hoping that you put me at ease, but I want you to promise to tell the truth even if it’s going to make me feel worse.

Zachary:
You got it. I will not be the monster in the room.

David:
Okay. Let’s start off by hearing a little bit about your history, how you got into the 3D house printing game, what your company looks like, and what you’re trying to do.

Zachary:
So it’s a bit of an odd background. My background’s in theater. So obviously, it makes tons of sense that I now run a construction company, but I grew up on the East Coast, outside Philadelphia. I was in New York and London running theater companies and running restaurants for a dozen years or so and realized that the last thing New York needed was another theater or another restaurant. I wanted to get out of there and go to a place where I could have more of an impact, but mostly, I wanted to be inside a community that was less homogenous from an ideological standpoint, and I didn’t want to be in a bubble anymore, either artistically or as a human being.
So I didn’t know where I wanted to go. I did a road trip around the country in 2007. I drove to 22 cities to figure out where I wanted to live. I chose Des Moines, Iowa. I didn’t know anybody in the state of Iowa at the time. Now, I’ve got a wonderful wife and three kids, and that’s what happens when you move to the Midwest. I’ve been in Iowa now for about 15 years almost, and the reason why I moved out here initially was to start a theater, and me and many other people work together in Des Moines to start a nonprofit arts and education center in downtown. We did tons of shows. Every arts discipline was represented, but we took over an old 1937 art deco firehouse, and we turned that into an art space.
What we didn’t know at the time was that we were doing economic development and creative placemaking, two terms I didn’t know much about back then. So we started getting asked by smaller communities, mostly in rural areas surrounding Iowa and the Midwest of, “Hey, could we come to their communities? They have empty buildings on their main streets. Could we come and help turn those buildings into something like what we did in Des Moines?”
So we formed a company that’s called Atlas Community Studios that still runs today. It’s been in various forms for the past 10 years. We started working with smaller communities. It’s ballooned today to 27 states that we work in. So we would go to these communities and work with the town and find out what their ideas are and figure out what’s financially viable, and we wrote business models for restaurants, breweries, cultural centers, coffee shops, the fun stuff like that.
Then people started saying, “Hey, childcare is a major issue. We lost our hospital 10 years ago. Our schools are underfunded. Our infrastructure is crumbling. Our broadband is terrible, and oh, by the way, we don’t have anywhere to live. Nobody’s built a new house here in years.”
So the other aspects of what we were doing in master planning, we added people to our team that were experts in all of those pieces that we weren’t schooled in, but housing was always the one single thing that alluded us. We couldn’t figure out how to drop the cost. Really, in our opinion, there’s only two ways to solve the housing crisis. One, companies need to pay their employees more so they can afford the rising cost of construction materials or we drop the cost or, ideally, both, but since we have no control over the first one, we started figuring out how do we drop the cost. Frankly, we couldn’t figure it out.
Six years ago, I was sitting in a presentation by a futurist. I don’t know how one gets to be called a futurist, but this person said he was so I believed it. It was a great presentation. He talked about all these things, this is back in 2016, all these things that are going to happen in the future. One of those of which was concrete 3D printing of structures, and I’d never seen anything like this before nor had anyone else in the audience, and somebody raised their hand and said, “Hey, how long until you think that this is the norm in construction?”
He said, “Well, given the constraints of land and cost in urban areas and zoning and unions and regulations, et cetera, I’m betting about 10 to 15 years.” Everybody nodded their heads and agreed. By the way, I think he was right. He’s a good futurist. That was back in 2016, and I think 10 to 15 years is accurate, but afterwards, I went up to him and I bought his book so he would talk to me, and I asked him, “Hey, everything you were saying about urban areas, I think you’re right about, but in rural communities where I work, many of those issues and hurdles don’t exist or if they do, they could be changed pretty quickly, and don’t you think this is an industry that could take root in rural areas before urban as a flip?”
He thought about it and said, “I’ve never really considered that. You might be right,” and that’s all I needed, and that set me off on six years of research, traveling all around the world, meeting with every single major 3D company manufacturer at the time in-person or virtually, and learning everything I could.
At the time, we were working with HUD on a future of construction, future of housing panel. I got to know some folks from Virginia Tech University. This is about three years ago. They were equally obsessed with 3D as I was, and we decided to collaborate on a grant from the Great Commonwealth of Virginia, which we received, and that was to 3D print the first home, which we did last year, and that gave birth to the entire company.

Dave:
It’s a fascinating story, Zachary. I don’t know, David. We get to talk to a lot of very interesting investors and people in the real estate industry around here. This is one of the most unique stories of getting into real estate that I’ve ever heard. So really cool that you found your way to real estate on such an interesting path.
Can you tell us a little bit about the technology behind 3D printing? How does this work and why is now the time that it’s coming to fruition and why do you think in the next 10 to 15 years this technology could take over as the standard for construction?

Zachary:
So construction is the only major industry in the world that has not really changed much in the past hundred years, and it accounts for about 14% of the GDP globally. We’re not seeing any major changes in it or advances. I don’t think that we or anyone else in the 3D world needs to be a disruptor. That’s not the goal. The goal is how do we advance the industry collectively, how do we learn from it. By the way, 3D is not the only answer to solving the housing crisis. There’s manufactured housing, there’s modular housing, there’s pre-fabrication, there’s all sorts of things.
Frankly, I think all those worlds get married in the next five years and I could talk about that later, but the reason why this is coming to fruition now, and if there’s anything that is good about COVID and the pandemic, which is a weird thing to say, it’s that it has finally shown a light globally on how bad the housing problem is at a global scale, and folks in rural areas, they’ve known this forever. It’s been 50, 60 years for rural communities that they’ve been dealing with this issue, same for underserved communities in urban areas, but the rest of us have been hanging out and didn’t really recognize how bad of a problem it was.
Now that it’s here and it’s just hanging around and frankly keeps getting worse, we need new solutions. So introducing 3D now makes a lot of sense, but this isn’t new technology. We found a company in 1934 that was using a 3D concrete printer to build a home. It took a lot longer and was more expensive and much more labor intensive, but for all intents and purposes, it was 3D printing.
So I think it’s the piece of the pandemic happening, the economic situation globally, how bad the housing market is globally for anybody to be able to afford one of these homes, all these pieces coming together are forcing new innovations into this space.

Dave:
I was going to say when you say the problem with the housing market, are you mostly referring to affordability or the lack of supply and construction generally?

Zachary:
Yes and yes. I think that you’ve got massive problems across the board, and then you pair with that the deep need for this. So here’s a good example is that according to most reports, America is anywhere from four to five million homes short today. We can’t be filling that need as quickly as possible. On top of that, you’ve got this three-headed monster of migration that’s happening. It’s unprecedented right now. You’ve got economic migration that’s always been true. You’ve got pandemic migration, and now you’ve got climate-based migration, people that don’t want to live around where there’s natural disasters all the time, which makes a place like Iowa a wonderful place to live. I would welcome everybody to come and join, but that’s another story.
This three-headed monster of migration has never happened before at the scale, and our estimates are showing about 15 million Americans are on the move right now or are about to be on the move, and they’re all going to choose where they’re going to live by 2024. You pair that with the fact for the first time in human history people don’t have to be attached to a major city to experience the best arts and culture, the best business and educational opportunities. You can do it from anywhere if you have a strong broadband signal and you’ve got a home to live in.
So those are now the bedrocks of any single major community. Of course, you add transportation, healthcare, childcare, quality of life, et cetera, et cetera, onto that, all necessary things, but broadband and housing are at the base. So if we can create that, you can literally live anywhere, and the migration patterns have shifted. People aren’t going from first city to second city to third city anymore. They’re leaving New York and they’re going to Clarksdale, Mississippi and everything in between.

David:
So for those like me that are a little unfamiliar with what 3D printing is, I picture in my head some huge printer spitting out paper mache walls, and then somebody using some form of spitballs and speckling to connect them together.

Zachary:
We work closely with the elementary schools.

David:
Yes, exactly. Can you share for us what 3D printing is when it comes to real estate? What type of materials we’re using in the construction? How exactly it’s saving money compared to a traditional way of framing a home?

Zachary:
Sure. So the best way to describe this is like building a layer cake. So the printer is a giant printer. It looks like any other 3D printer that you would have in your home, except at a much larger scale. It’s a gantry style printer. There’s different versions of it. There’s some that run on track systems. There’s some that are independent. We use both, but the way it works is concrete is the material that we’re using. Technically, you can use any concrete. You can go and buy Portland. You can buy store-bought cement mix from Lowe’s right now and put it through your printer, but there’s much better versions to use. Most of the concrete that folks in our world are using is reinforced. We have a great partnership with a company called Black Buffalo 3D. They make the printer that we’re using today. They also make the material that we’re using today.
The material is super strong. It’s about 8,000 PSI, which is good for a lot of reasons, but the way it works is we do the mix on site. So everything is printed on site. You can pre-fabricate it and bring it in which we will start doing as well. I think a healthy combination of those worlds is where this industry goes, but we’re not quite there yet. So you bring the printer onto the site, you have a foundation that’s already laid. You start printing directly on top of that foundation.
So you have a silo, you have your pump system, and then you have the printer. Those are your three main pieces of machinery. So you load the raw material directly into the silo that hits the pump system. That’s where you hit it with water, which is a critical stage. You have to have a person there manning that station to understand the right ratio, which is all based on the weather that day. That’s the challenge. Then that’s pumped directly through the hose into the printer itself and is extruded through the print nozzle in layers, and that’s all controlled by a design that you did ahead of time that’s based in the computer system that runs the printer.

David:
If you could sum up where the efficiencies are in this process, where is the majority of the money being saved doing it this way?

Zachary:
So right now, there is not a lot of cost efficiency in the market. Today, apples to apples, it’s pretty comparable to stick build if you’re building one home. If you’re scaling it, over 20 homes or more you can see significant cost savings today, but we’re seeing a little bit of cost savings, about 5% to 10%, in where we are today. We predict that in the next two years we’re going to get to 20% to 30% savings. That’s the goal, but there’s a couple things preventing that, and I’ll talk about that in a minute, but where we see the cost savings coming in?
First of all, time is the biggest one. We can 3D print the exterior walls of a 1500 square foot home in about 20 hours. If you have good weather, you can get it done in a day and a half, which is pretty incredible. So time is a big one. You’re saving anywhere from one to four weeks on framing, depending on where you are and what your crew is.
The next savings is in the material cost. The concrete is less than lumber. It’s not that much less today, but it is less, and we know it’ll get even further more cost effective as we create more materials.
The third piece of savings is in labor. Technically, we only need two humans to operate the printer. Now, we’re not there yet at Alquist. We use four people today, which is still less than a typical framing crew, but the goal is to get down to two, which we hope to be at by the end of next year. So you add all that up, the time savings, the labor, and the material savings, that’s where your capital savings come in and it’s only going to increase as we get better.
Now, the way that we believe it’s going to shift, and we’re going to see that dramatic savings is a couple places. Today, the 3D printing industry is a lot like buying a computer in 1972. They’re big, they’re bulky, they’re expensive, they’re inefficient, but they get the job done. We know that has to change. So the first thing that has to happen, the printers themselves need to get lighter, easier to transport, faster to set up and break down. It takes about a day and a half, two days to set them up and break them down today.
So we know that’s happening. There’s several designs with many different companies that we’ve seen. There are better, more efficient printers coming online in the next two years, which is exciting.
Secondly, the material needs to drop in cost. You’re probably going to start sourcing materials locally. That’s going to be a big shift over the next couple of years. How can you make more materials using recycled goods, using recycled glass, recycled plastic? Can you introduce hemp into this and make a hempcrete? The answer is yes, yes, and yes, but it hasn’t been done at scale yet, and it still has to go through a lot of more rigorous academic study, which we’re involved in three different projects right now with different universities looking at all those.
One exciting one is to see if we can use fly coal ash. There’s an abundance of it in Appalachia, which is where we’re printing one of our spots. That would be a game changer for the environmental industry as well. So all of those pieces need to come into play, but the third one, the most important one to really scale this and make this commercial is experience, rinse and repeat. There’s very few companies globally that are doing this work. There’s less than 10 homes in America that have been printed. Two of them are ours. We’ve got the only two in the world that have people actually living in them.
So this is still at the very beginning stages of this industry, and we are in touch with all the other groups doing this work. We are trying to play nicely in the sandbox and share data back and forth, and that’s really what it’s going to take, but we have to have a robust program to train people so they can get into this industry, which is what we’re starting as well. So by 2025, I think this industry’s going to be widespread.

Dave:
Economically, how much does it cost to buy this equipment? It must be incredibly expensive.

Zachary:
That’s relative. So it depends on how you’re looking at it, but they’re not terrible. Most of the printers today you can buy a good printer in the ballpark of anywhere from 200,000 to 500,000. You can buy the big ones, the ones that go up multiple stories and span multiple spaces. Those are more expensive. Those are about 800,000, but they’re almost all under a million dollars, and you can also start leasing them. Black Buffalo has a wonderful program where you can lease the printers month to month to test it out and see if you want to do it. It’s a great program for schools and communities and construction companies just to see how they like it.

Dave:
What level of expertise would you need? If I just wanted to go and try one of these out like you’re suggesting, do I need to buy CAD drawings or do I need to hire architect or a trained crew or is this something you could actually learn on your own?

Zachary:
You can learn it on your own. It would take some time. I would recommend working with another group, which is why Alquist is doing licenses for this purpose, which I can talk about later, but if you wanted to get into the work, so there’s technically no prerequisite that you need, but if you were going to do this solo, you would need to know CAD. You would design your home using CAD software. You would need to learn Slicer programs, which is the software that talks to the printer. The CADs design gets transferred over into a G code file, which is the piece that talks to the Slicer program. So you have to learn that language as well.
Once you know that, now you are almost home to operating the printer, to running the printer, and then you have to know a little bit of material science. You have to be good at the ratio of how much water to how much material, depending on the weather that day. So there are nuances to this, but we believe anybody can learn how to do this in about eight weeks, maybe less.
We’re working with a couple different universities now to create a program, that’s going to be a curriculum that we’re going to offer next year to community colleges, tech schools, and high schools because there isn’t a program nationally that teaches this, and that’s a hindrance to us as a company just from a hiring standpoint, but also to help stand up the industry. This is necessary.
Finally, young people have not wanted to go into the trades for decades. It keeps going down and down and down. We see 3D printing as a gateway to getting more people hooked on getting into the construction industry, but we need to be promoting that, there needs to be marketing around that. This has to be exciting. That’s another element that our work is going to be doing.

David:
How about the sturdiness of these types of homes? Is this something that’s going to hold up the same in the case of hurricanes, natural disasters, earthquakes or is it more suited for certain environments where you are less likely to have situations like that occur?

Zachary:
It’s concrete, so it’s going to be stronger than stick built anyway right off the bat. So we know that, and that’s important to remember here is that this is not some crazy special material that came from Mars and we’re building houses. It’s concrete. We’ve built concrete homes and structures for hundreds of years all over the world. That being said, to your question, which is a good one, we believe it can stand up to hurricane and tornado, but that testing has to happen. So that’s something we’re working on in the next year and a half. We’re testing for tornado, hurricane. We’re testing for seismic. We’re testing for flooding. We’re testing for fire, and we’re testing for ballistics. So we believe that with 8,000 PSI, it’s pretty, gosh, darn strong, but we need to prove it out. So that work is being done right now. You’re going to see academic papers on that next year.

David:
Are there any drawbacks to the level of creativity that you can put in the design of it like the elevation for the outside of the home or the floor plan itself? Do you see that being something that will be restrictive or is that just as quickly as they can keep up with updating software they should be able to build these homes just like they do traditionally?

Zachary:
As quickly as they can keep up with updating software. It’s quite the opposite of restricting. This is incredibly free. You can use this technology to customize designs instantly. One of our goals is in the next year, we want to be able to, you can go onto our website, anybody can, and design your home, and if you will have a basic design that we’ll have already done it, if you want to move a wall, add this so forth, we get a lot of questions about basements. Can you print on a basement? The answer is yes. Although I would describe our company as squarely anti-basement because you technically only need basements for security and safety.
Well, it’s concrete home, doesn’t really matter anymore. Stay away from the windows, and you also use basements for more space, and it’s far more cost effective to add 500 to 1,000 square feet onto the first floor of the home than it is to dig a whole basement. There’s no cost efficiency to printing a basement today. So the customization of this is really something that’s going to make a radical change in architecture. Really, this is not a new idea. Frank Lloyd Wright was doing it a hundred years ago back when his Usonian whole concept. When somebody came to him and said, “Hey, can you build me an affordable home but still have a really unique, interesting design? that was a challenge that he accepted and the material that he landed on was concrete.

David:
So what would the ideal environment be like for these types of properties? Do you think that they work the same in any location or are they more suited for a rural place where land might be cheaper?

Zachary:
No, I think they can go anywhere, eventually. Today, it’s much more challenging to do this work in an urban environment, especially if you’re doing for infill for a couple reasons. One, the cost structure that’s there is an issue in general for just building a house in the urban, so that’s a problem, but also the lot sizes are small. These printers are big. That’s going to change. Again, next two years, you’re going to be able to do it easier. You can do it today, but it’s much more challenging to do it today. So you’re more suited to more open spaces, rural areas today for this, but in terms of climate, et cetera, you can do this anywhere, but that goes to being able to source the material, and I would like to do that on a local scale, and to get really specific with it here in the states, what’s more hipster than being able to build your house out of material found in your own backyard? It doesn’t get more local than that. So that’s where we want ahead with this in the next couple of years, but I wouldn’t say the industry’s there just yet.

Dave:
One question I had just about the capabilities, we’ve been talking exclusively about framing and the exterior of a home, is that the current limitation? Do you perceive that changing? Is there ever going to be a time that you think that an entire home could be 3D printed or is that too far in the future to project right now?

Zachary:
No. We’re trying to do it right now. It’s a great question. So technically, right now, you can print the exterior and the interior walls with no problem. The cost savings are not there dramatically yet on doing the interior walls, which is why we’re not doing it just yet. We still frame those out same way you would in the other home, but I would imagine by 2024 that’s going to shift, hopefully sooner.
We also want to get into panelization, and we can prefabricate those interior walls, the floor system, the roof system, and bring those in and stand up a home in a matter of days. That is the goal with all of this, but I would say to take it a step further, Alquist’s goal is we want to be able to 3D print literally everything in your home out of multiple materials. So today we’re starting with small things.
Every Alquist home comes with your own personal 3D printer built into your kitchen just like a microwave. Don’t use it for food just yet, but we’re doing this one to help stand up the industry, but two, we think this is the future of home renovation and repair. If anything ever breaks in the home or you want to make aesthetic change, you’re not going to go to Lowe’s or home Depot anymore. You’re going to go online. You’re going to download a file and you’re going to print it out yourself, and that’s a big shift in the industry for where things are moving.
So today, we’re starting with small things. We’re printing light switch covers, doorknobs, drawer pulls, et cetera, out of plastics and polymers. So that’s easy, but eventually, we are going to be printing your kitchen cabinetry, your kitchen island, your furniture, your clothing on the rack, your food in the fridge. All of it can be 3D printed today, not all of it is delicious just yet, but we’re working on it, and I would expect by 2025 you’re going to see most of those things be printed.

Dave:
That is a fascinating vision about being able to produce repairs and parts that you need for your home. I honestly had never thought of something like that. It’s so exciting. It’s so cool. Yeah.

Zachary:
Back to the Future 2?

David:
You remember that Back to the Future movie where they, yeah, they get the little pizza out of the thing and they stick it in there and it comes out, right?

Zachary:
Right before a flee gets on and fires them.

David:
So the idea would be like you have a 3D printer in your house and something breaks and you just like tell Amazon, “I want this thing,” and they have the designs already made up or some company like that. Boom. Prints out, you stick it in there.

Zachary:
That’s right. Every home comes with a jump drive full of those designs. So as an example, light switch cover takes about 40 minutes to print it, costs 17 cents.

David:
That’s a good point there. In general, if you’re looking at an entire 3D printed house, obviously, construction costs different are varying region to region. So if you could take the average price in Des Moines, Iowa of constructing a house traditionally versus what you think it’s going to get to with the 3D printer, do you have a percentage of how much money you think it’s going to cost to do it, the 3D?

Zachary:
Today, the 3D part is taking up about 20% of the home. So we are seeing a 5% to 10% decrease in cost by using this technology today, but we see that increasing over time once we gain more experience and the pieces I mentioned before, the printer’s getting better, the material, et cetera. So we’re headed that direction, but I do believe in a healthy marriage between 3D and pre-fabrication.

David:
Okay. So can you paint a picture for me of how you can see that realistically blending together?

Zachary:
So this is another thing that we love is job creation and workforce development. Ultimately, our goal at Alquist is to build community. That’s always been my personal goal. That’s why I got into theater in the beginning is I wanted to build community, bring people together. I did that for many years in theater. Then I was doing cultural creative placemaking, and today, we print houses with giant robots. So very through linear throughout.

Dave:
Standard career trajectory, for sure.

Zachary:
Total standard, very boring, but the goal is always building community, and that’s what we’re trying to create here. So what we envision are local facilities where you’re doing panelization, and that’s already taking place today. You can do panelized houses today with no problem, but you’re limited in design. That’s really the big challenge with panelized houses is they all look the same. They’re big and boxy, but they serve a purpose.
So if you can combine the two technologies and use the 3D part to add aesthetic and more design elements to it and print on site and bring the other pieces of the home in, you’ve got the best of both worlds. So I envision communities having a space where this happens. The ideal community is taking all their recycled materials, and not to make another Back to the Future reference, but it’s like the end of Back to the Future 1, where Doc pulls up in the driveway and he just grabs random things out of the trashcan and throws it into the flex capacitor to make it work. That’s where things are headed, probably not tomorrow, but very soon, where you are going to be able to make your material out of recycled materials, not just for the walls of your home, but for other things inside the home.
Frankly, this is something we have to do for the planet, anyway. We have to head this direction, and we believe one of the big knocks in our industry is concrete. Concrete is far from the most environmentally friendly material, and we know that, and we want to get a get away from concrete over time once it’s realistic. So that’s really the goal. If we can really make hempcrete and make material out of recycled materials, our homes are not just going to be carbon neutral, they’re going to be carbon negative, and that’s a big goal of ours, but we’ll probably need another two, three years before that’s achievable.

Dave:
That’s amazing. It sounds like this entirely different vision for how homes could be construction, sourced, what materials are used. It’s really fascinating. Honestly, it’s far more advanced than I thought it was. It seemed in an infancy and it seems like this could be something that might impact the market in 10 or 15 or 20 years, but you’re saying two or three years till we see some of these innovations come online.
One of the things we talk about regularly on this show is basically supply and demand in the housing market and how one of the reasons housing has become so unaffordable in the United States is because there’s a lack of supply. Do you see not only this technology bringing down the cost potentially of building new homes, but do you think it could increase the speed at which we build new homes and therefore help increase the total supply of houses in the United States?

Zachary:
Absolutely. That is its biggest advantage of this industry is that … So take the Black Buffalo printer that we’re using now. It’s on a track system. You can add infinite tracks to that system. So technically, you can go and print dozens of homes in a row without ever having to take the printer down, which is going to save tons of efficiency. Now, we don’t want to recreate Levittown here. We don’t want every single home to look the same right next to each other. So that’s another benefit to this in terms of the design standpoint.
You can do two different designs in the same print right next to each other. The robot knows when to stop extruding and when to start again based on where it is and based on the design of the home. So yes, that is the direction this is taking, but the fear factor here, of course, is it’s Terminator 2. It’s the whole world of science fiction, of we’re replacing human jobs with robots, and that’s exactly why our company is called Alquist. So we have to remember that if we’re going to replace human jobs with robots, we have to create far more jobs for humans at the same time, and this technology is one of the few big innovations that can do both of those things at the same time.

David:
All right. Well, thank you, Zachary. This has been fascinating, and I’m not nearly as scared as I was afraid I would be in the beginning.

Zachary:
Good.

David:
So thank you for educating us, as well as putting me at ease that our entire industry is not going to have its knees taken out.

Dave:
Phew. David, you could actually sleep well tonight.

David:
Yes, absolutely. We’re going to get you out of here. Is there any last words that you want everyone to know about 3D housing and where you think that things are going?

Zachary:
Just if you want to get involved, reach out to us. Our website is alquist3d.com. We’re always looking for people that are passionate. Anybody can learn how to do this, and we’re always looking for new places to print. So please reach out.

David:
All right. Thanks a lot, Zachary. It’s great meeting you.

Zachary:
Thank you.

David:
All right, and that was our interview with Zachary. All right. I feel a little relieved and also excited. How about you, Dave?

Dave:
I think that was fascinating. I learned a lot and I’m really interested to see how this industry continues to develop. I am not afraid of it. I think there is going to be some really interesting things that come from it and, hopefully, will restore some balance to the housing market because it has been wild over the last couple of years. I think seeing a more predictable and affordable housing market is probably beneficial for everyone.

David:
We need that much like Obi-Wan Kenobi told Anakin in Star Wars to the fed, “You were supposed to bring balance to the housing market but with quantitative easing. You destroyed it.” So I think more than ever-

Dave:
I missed that quote from Star Wars somehow. I missed the quantitative easing reference, but-

David:
That’s the BiggerPockets remixing right there, but it does apply. We definitely need more supply, and if this is something that can help provide that and bring the cost of housing down for everybody, that is a huge win because not everyone educates themselves like we do here at BiggerPockets and not everyone is listening to podcasts like we’re hearing. There’s a lot of hurting, really struggling people. That is the cost of everything that they need is going up. The last thing they need is for housing prices to keep rising, and that’s not going to stop as long as we have the supplies issues that we do.

Dave:
Yeah. Well said. It sounds like it’s not going to be an immediate fix to the inflation problem that we’re seeing right now, but I did some analysis actually a while ago. Even at the rate of construction that we were seeing a few months ago, it was going to take something like eight to 10 years to close the housing gap. So this is a long-term problem and that was at when construction rates were up. My expectation is that they’re going to drop now with housing prices flattening, interest rates going up, price of materials and labor continuing to rise. I don’t think builders are going to keep building at the same rate as they were. So we’re probably seeing an even more exacerbated problem with building and keeping up. So while probably won’t fix the problem short term, it is hopeful that over the long term, this could help bring more inventory online for the housing market.

David:
Yeah. I would really hope so. I don’t know this part, but my gut tells me this probably will pick up steam faster in rural areas where you have a harder time finding labor to go out there and build homes, where the houses are spread apart a little bit more and you can’t just put up a housing tract as quickly as in the more suburban areas where they tend to put up housing right outside of the major dense urban areas that we see.
So I would keep an eye out for this, especially if you live in an urban area, some of the states that have more land like the Kansas and the Iowas and the Kentuckys that it’s not as difficult to get housing permits issued. It’s just a little bit harder to get builders to want to go out there and build them because you’re not making a ton of money selling these cheaper houses. I think that this technology could really increase.
For all my stock nerds out there, it might be worth looking into some of these companies that go public that do 3D printed housing as the technology improves and they get closer to being able to ramp up production.

Dave:
Well, I am very bad at picking stocks, but logically, that makes sense.

David:
All right. Well, thank you, Dave. This was a great time with you. As usual, you asked incredible good questions and you bring a good name to our name of David. So I appreciate you for holding the line-

Dave:
Likewise

David:
… and making us look good.

Dave:
Thanks, man. This has always been a blast.

David:
All right. This is David Greene for David not great at stock picking Meyer signing off.