AEC cropped up as a term in Autodesk community forums in the early 2000s as a quick abbreviation of a whole spectrum of design, developing and building fields in architecture, engineering, and construction.
It’s got a “we’re all in this together” ring to it when you take it out of its computer-aided design context. However, if that were the case–the “we’re all in this together” part–then two of housing’s most daunting and intractable challenges, affordability and labor capacity, would be far more susceptible to fresh, rational, and logical solutions today.
Often, construction and housing leaders chalk up those two enormous issues–affordability and skilled labor availability–to outside forces they can not do anything about. Local regulatory policy, for instance, gets a lot of the blame developers and builders place on the many profound mismatches we see between need for housing and business’s plans and current activity in those markets.
“It costs too much to develop and build for anybody except higher end renters and buyers,” we hear.
Of course, there’s truth to that statement. Localities’ loyalties have been and will be tied to the interests of those who own the land and vote there today. Those interests often run opposed to making their neighborhoods a welcome mat for new people, especially when new people often come in with fewer of their own resources and draw on a disproportionate amount of extra local services, infrastructure, and support for their needs.
The National Association of Home Builders calculated that 24.3% of new homes’ costs track back to local, regional, and national regulatory policy, code, regulation, fee, and impact. That regulatory burden represents a price-tag chunk that effectively prices out as many as 14 million Americans, the NAHB says, making it too costly for them to buy a new home.
Add to that, a new level of uncertainty on mortgage rates, given the Federal Reserve’s Federal Open Market Committee plans to begin winding down its balance sheet in gradual stages, shrinking its bond portfolio, which is full of mortgage backed securities it bought to stabilize the economy starting in 2008. As NAHB economist Michael Neal writes:
This event analysis suggests that, all else remaining the same, the balance sheet unwinding could push mortgage rates up, but not dramatically. More specifically, both a higher real return and, to a smaller degree, a higher mortgage risk premium would be the likely channels pushing up mortgage rates. However, mortgage rates have fallen since the FOMC articulated that normalization was coming “relatively soon”.
The overall path of mortgage rates will also depend on inflation expectations. If expectations of inflation decline, as would flow from money’s non-neutrality and as is expected in the near-term following the latest Consumer Price Index release, then any upward pressure could be offset, but, if inflation expectations rise, say in response to a fiscal policy shock when the labor market is tight, then mortgage rates could move up further. As a result, it is important to note that since an unwinding like this is historic, the outlook for mortgage rate is “uncertain”, as distinct from “risky”. Since the FOMC’s undertaking is unprecedented, it’s difficult to estimate with high confidence all of the potential outcomes and their associated likelihood of materializing.
If there’s a spike in interest rates, it’s safe to say that the NAHB estimate on the number of Americans “priced out” of the new home market would rise.
So, those outside forces do impact affordability, but they should not render housing’s businesses helpless in the fight for more affordable homes, against these outside forces.
What’s more, while similarly, external causes account largely for the shrinkage of construction’s skilled labor force–which also puts upward pressure on home prices–those external causes needn’t be paralyzing.
Not if AEC actually stood, in some meaningful sense, for “we’re all in this together.”
As building information modeling makes inroads into more and more design and build workstreams, the technology-enabled process–done right–really does put AEC into “we’re all in this together” mode.
BIM has an elegant, simple, and profound notion as a key benefit resulting from the investment of money, and time, and strategic modeling it takes to adopt it. It’s the notion of clash detection.
Clash detection, as this explanation notes, has three different classes, the most basic being the ability to recognize and prevent physical pieces and parts like plumbing runs and beams from being designed to occupy the same space:
- Hard Clash
- Soft ClashClearance Clash
- 4DWorkflow Clash
Now, imagine clash detection not just in pre-building modeling and design, but in the very disciplines and expertise areas and work-streams that need to behave like “we’re all in this together” to make construction projects work.
If well before the site work on a project, architects, engineers, and construction experts model their respective roles and responsibilities, and build the project virtually, running each of their teams, task by task, outcome by outcome, through the whole cycle from pre-site work to completion and delivery, then a form of 4DWorkflow Clash can play out at the architecture, engineering, and construction tactical level.
Ownership, accountability, responsibility, and resolution on each clash detected scenario could then be mapped into each project’s plan, whether it’s a house, or a community, or a high-rise apartment, etc. In a sense, if a work-stream allows architects, engineers, and construction teams to “occupy the same space” in a clashing way, then none of the three are accountable or responsible for the work getting done correctly, on time, and on budget. Instead, it’s finger-pointing time.
Subtracting time-waste, mistake-waste, legal-differences waste, and unforeseen circumstances-waste from construction projects would meaningfully offset some of the external force impacts on both affordability and labor challenges.
It’s an opportunity area that gains urgency by the day, and it only happens when AEC means “we’re all in this together.”
