This article is part of the Business Journal’s special section about innovation in architecture, construction and engineering.
If homes were cars, most homebuilders are still building shiny versions of the 1929 Ford Model A.
Other consumer items — from cars to phones to cameras — have evolved in many revisions in the last 100 years, both in how they perform and how they are made, Aro Homes co-CEO Carl Gish told the Business Journal.
"We are using a multidisciplinary approach to try to fundamentally unblock the evolution of the building industry," Gish said. "Everyone knows it's broken."
Aro Homes aims to own the design, engineering, site selection, construction, site work and sale of ultra-efficient, factory-built residential homes.
The vast majority of homes are still built on-site using stick construction, and different companies and consultants pick up the different pieces of the puzzle.
Aro aims to own the entire process, Gish said.
The company was founded in June 2021 to design and build ultra-efficient homes inside a factory setting, which reduces waste by 40%. The factory setting also allows for more precision in construction and avoids weather delays. The homes have consistent design and engineering for systems like heating, cooling, water and plumbing, "so we're not reinventing that all the time for each home," he said. Aro plans to reduce completion time from 18 months for standard construction to 90 days using its platform, Gish said.
The electric utility bills for the homes should be negative, Gish said. The homes are also designed to cut water use in half by integrating reuse and treatment of water that flows from showers and sinks for toilet flushing and landscape watering.
Aro's home feature electric heat pumps and electric fireplaces, all electric appliances, LED lighting and solar panels paired with batteries that will provide more electricity than the houses use. They are prewired for electric car charging. They are highly insulated to reduce heating and cooling costs.
Aro is building homes that most people want, about 3,000 square feet with four bedrooms. It buys old, run-down existing homes in established neighborhoods and replaces them with new, two-story homes.
Aro’s factory is in Sacramento near McClellan Park. The company is based in Mountain View. About 14 of the company's 25 employees work in the Sacramento factory, Gish said.
The company uses machine learning and other technology to identify locations, which will typically be run-down older housing stock. Aro also uses algorithms and machine learning to achieve local zoning requirements as well as sustainability goals.
One of the ways it can compress the construction timeline is that it will lay foundations at the same time it's building the home in the factory. Aro will send modules to be stitched together on-site. Another way it collapses the construction time is that many of its permits and inspections occur on the factory site, under state law, which sidesteps waiting for local inspections. The company plans to locate its first homes in existing neighborhoods in San Jose, Cupertino and Mountain View. Aro Homes buildings should sell for the going rate for homes in those neighborhoods, Gish said.
The company was founded in June 2021, and it came out of stealth mode in November when it announced it raised $21 million in funding led by former Google CEO Eric Schmidt’s venture capital fund, Innovation Endeavors.
Aro should place its first home in the next few months, and then should start to generate revenue very quickly, Gish said, funding its further growth from operations. The Sacramento factory should be able to produce about 100 homes annually.
Portola-based venture capital firm Western Technology Investment and Stanford University also participated in the funding with Innovation Endeavors.
