This summer is shaping up to be a big one for Blokable, the Seattle construction technology company that hopes to upend the market for new affordable housing.
After escorting Gov. Jay Inslee around its 50,000-square-foot plant in Vancouver this month, executives say the company will soon launch its first housing developments: one in Edmonds, and another in Auburn.
The projects will put to the test technology that Blokable has spent two years honing. At its Vancouver plant, machines help mass produce steel-framed units — called bloks — that it will then ship to site, where they quickly can be hooked to utilities and readied for occupancy.
But the projects will also test structural changes at the company, and could determine its future.
For one, co-founder Aaron Holm is now sharing CEO duties with lawyer-turned-developer Nelson Del Rio. Del Rio had served as an adviser since the company’s start in March 2016, but entered day-to-day management this spring.
The other change is to the startup’s business model. Blokable had planned to sell bloks to private housing developers, who would then configure and install them.
The initial plan called for the bloks to sell for about $200 per square foot. But the projected construction costs were greater than that. So Blokable added staff and partnered with architects and engineers to reduce as much cost overrun as possible.
“All the costs were getting padded and we were like ‘You know what? Forget it. We’re going to deliver the entire thing,'” Holm said.
The new plan targets nonprofits and market-rate developers as customers. These customers won’t need to hire a general contractor to prepare the site and assemble the bloks.
“We provide the full service for the customer. All they have to have is land and financing and we can provide the rest.”
And that pivot is why Holm said he turned to Del Rio in the first place.
Nelson Del Rio
Although Del Rio, 57, has spent three decades in the capital intensive world of construction, his conversations veer quickly into political science and social activism.
A Chicano who grew up around the outskirts of the San Francisco Bay Area in the 1960s, Del Rio said he did not realize until he was older how much housing and stability leave lasting impacts on a person’s life, but it’s a tenet he holds today.
His stepfather shod horses and his mom worked odd jobs when she wasn’t taking care of the kids. Del Rio learned to work hard everywhere except at school and dropped out by age 14.
“I was bored to death and thought it was a waste of time so I said I was going to go and prove the American Dream,” he said. “I didn’t know I was disadvantaged. I just went out and started working — dishwashing, then welding.”
Still, he managed to land at the University of Washington through a program to help minorities get a college education. He excelled in studying economics. Then he graduated cum laude from Harvard Law School.
Societal issues never drifted too far from his goals, he said. As a real estate developer he built government buildings to ensure, among other things, that welfare offices looked humane.
“I didn’t like the buildings. They were dehumanizing,” he said. “But the government can’t usually change it so I changed it (as a private developer). Then, once you change it, the communities see a higher quality facility, better behavior, it brings up the value of the overall community.”
Now at Blokable years later, Del Rio said he has chance to make a bigger difference.
There are a few demonstration bloks set up around Washington, but only now are the first communities getting close to fruition.
One project, in partnership with the King County-based nonprofit Compass Housing Alliance, aims to build up to 80 units on a church property in Edmonds.
If the city permits the project, Blokable could contract with a firm to install infrastructure. Then it will truck its modular units from Vancouver to the suburban Seattle site for installation. Janet Pope, CEO for Compass Housing Alliance, said the speed and cost savings are significant improvements over past projects.
“It’s going to vary a little bit based on land and where the sewer pipes are but it’s likely going to cost under $150,000 (per unit),” she said. “That’s considerable savings. And when you consider time is money, they manufacture these over months as opposed to stick-built, which is a three-year process.”
Pope, who has been in the industry for 25 years, said if the first housing development succeeds it could open the door for more. Money saved could be invested in more housing; an effective project could inspire donors and agencies to contribute more money.
“It’s a big test because if we can demonstrate we can build for cheaper, will the agencies fund it?” she said. “That might open up a lot more types of funding or the public funding might just be able to fund more projects every year.”
Bloks will come with built-in sensors that could lower maintenance costs, Pope said, quickly alerting landlords to fires and even mold. She added that built-in software could help social services caseworkers better communicate with tenants who need regular care.
“I think it can revolutionize social work,” she said.
That is the kind of change Del Rio and Holm say they are rooting for. The homes can provide stability to underserved populations; and the firm hopes they eventually become homes so that people who would otherwise be stuck in the rental cycle could instead become homeowners.
“Having one person worth a lot isn’t the same as having a lot of people building equity. They have higher self-esteem. They’re self-determining. All of these things come at the root,” Del Rio said. “Blokable is more than a blok. It’s an approach to creating wealth in an otherwise unforgiving landscape.”