Modern problems call for modern solutions, or so Icon and Lennar (LEN -0.46%) would have us believe. In the face of building-supply kerfluffles, yo-yoing lumber prices, and labor shortages, the duo has taken a different approach to creating new housing: Just print them.
Icon has developed one of the world's first 3D printers for houses. That's right. Utilizing the same technology that's used to build figurines and tiny tools on home 3D printers, Icon has managed to create a 3D printer for houses -- in which people will live.
Now, they've teamed up with Lennar to create a 100-home subdivision in Austin, Texas, to help ease the explosive levels of pent-up housing demand in that city.
Image Source: Getty Images
What is a 3D-printed house?
It's the first question everyone asks, so let's just knock it out. What is a 3D-printed house? It's a house that's 3D-printed. It's absolutely that simple. Instead of using traditional stick framing for the wall systems, a 3D-printed home has walls that are extruded using the biggest 3D printer in the world. A house's walls are printed one layer at a time, building from the ground upward. And nearly any shape is possible, which leaves a lot of room for architectural creativity.
Instead of plastic, the materials used include a proprietary blend of Portland cement, polymer, and supplementary cementitious materials, along with other additives meant to strengthen the finished product. This glorious goop is known as "Lavacrete."
Once the Lavacrete walls are completed, laborers and construction specialists can then quickly add a roof, windows, doors and finish the interior with familiar materials like drywall, trim and tile, when desired. The finish work isn't always strictly necessary, as the Lavacrete walls are complete as they stand, but many people prefer a more traditional look.
3D-printed houses may be the future of construction
Although the technology is fairly new, 3D-printed homes have been in small-scale production for a few years now, with Icon's first home printed in 2019. Labor shortages have plagued the construction industry ever since the Great Recession caused many construction workers to seek other employment, and jobs were not created to replace them. As the real estate industry rebounded, not even the jobs that remained could be filled, which continues to be a struggle today.
This is one of the many problems that a 3D-printed home promises to solve. Instead of a dozen or so people required to put together a traditional home, Icon's Vulcan printer only takes three to four people to run. Additional work still needs to be done by a traditional construction crew, but considerable labor is saved by using the Vulcan printer in a big development like the Icon/Lennar project in Austin.
However, the savings in labor and materials aren't the only reasons 3D-printing homes makes sense. In many climates, 3D-printed homes provide additional green benefits, with thick, heavy walls with voids that act as additional insulation and sturdy cement structures that literally can't be burned, rotted by moisture, or destroyed by earthquakes.
The one downside I see is that these homes must be built on a cement slab, and that can be challenging in some areas due to interesting geography and building traditions that may cause buyer resistance. For example, where I live in the Ozarks, basements are popular features because of frequent tornadoes. As of now, Icon can't build a basement home even though they already have a sort of in-ground slab at the bottom. Even so, the Sun Belt is where it's at right now, and there's nothing more fitting for the Sun Belt than a slab foundation home.
Investing in the Icon/Lennar Austin subdivision
Icon is not a publicly traded company and has made no public statement indicating it intends to head in that direction. So, you can't just buy Icon stock and be done with it as of this moment. So far, however, Icon has raised $266 million in funding through three funding rounds, with the most recent Series B round being led by Norwest Venture Partners. Lennar was one of the biggest investors in that round, funding its position through LEN X, Lennar's technology and innovation arm.
You've got a few options if you want to invest in Icon or one of its projects -- and who wouldn't? First, you can wait for the next funding round, should it happen. That'll probably be the third quarter in 2022 based on the timing of other funding rounds. Second, you can directly invest in structures created by Icon's giant toys by buying some of these houses in the Lennar subdivision.
Third, you could invest in Lennar, because I have a sneaky suspicion that if these 100 houses take off, the company may be interested in acquiring Icon straight out. There's no data to back that; I'm just looking into my empty teacup and reading the leaves lying in the bottom. And what I see is that first, there was a major investment and then a pretty serious partnership with technology that's never scaled so big before. Lennar is always looking for faster, cheaper, and better ways to build more houses -- and having an army of giant 3D printers seems like it would fit the bill.
