Betsy Scott shares inspiring stories of individuals coming together to advance innovative practices in the housing industry. Through the aptly named Housing Innovation Alliance, a collaborative think tank, Betsy is directly in touch with the big picture issues of our industry and some of the most exciting solutions that could solve them.
Full Podcast Transcript
Grace Mase 0:08
Hello, and welcome to the Revivify podcast. I'm your host, Grace Mase. Today I'm here with Betsy Scott. Betsy is the Executive Director of the Housing Innovation Alliance, which is a think tank for many of the brightest minds in our residential construction industry. They focus on business and technical innovation and housing. Welcome, Betsy.
Betsy Scott 0:33
Thanks, and I'm really excited to be here to talk to you as well. And thanks for having me.
Grace Mase 0:38
Would you please tell us a little bit about Housing Innovation Alliance? There's three parts of my question, what is it, why did you start it, what you hope to accomplish in the next five to ten years?
Betsy Scott 0:50
Well, first, what it is. You talked a little bit about this, we're a nationwide community focused on residential construction, where we pulled together game-changers, smart people from forward-thinking companies throughout the US, really looking at across the housing value chain from dirt to dweller. So ultimately, our biggest customer is the housing provider. But everybody in that value chain who works to help them deliver a better house or become a better business is also part of our community from manufacturers, to financial analysts and experts to offsite construction providers, architects, engineers, all of those kinds of people that really enable them to do great things. The second part, I believe, was why we started it? Before focusing on the Alliance, I've been doing this, we started the Alliance in 2008, that I worked for a company as the marketing director called IBACOS. And IBACOS is focused on innovation and housing, working with, at the time, they were working with the government quite a bit, as well as home builders and manufacturers on a program called the Building America Program through the Department of Energy. So zero-energy housing, in the early 2000s, before it was sexy, before it was more mainstream. So in working in IBACOS, we saw a lot of pockets of innovation going on in the US. But there really wasn't a conversation that brought all the stakeholders together that would need to make that happen on a bigger level. So you could see something great that was going on with KB home or with Pulte or you know, some of the great regional builders, but there wasn't enough conversation with a broader marketplace and really enabling people to take those learnings from one-off projects and turn it to really a movement within the industry. So we wanted to create a movement in the industry. So we created this group and invited more people to the table. And ultimately, it's evolved over the last several years to focus on topics that are more driven by the industry itself, rather than the government. And sometimes those things overlap, and sometimes they don't. So that's really how it's evolved. And how we got started with it. So I was there from the onset with the folks at IBACOS. And I have been the consistent force within the group. And now I really lead the programming and engagement, so the content aspects of it. And we have other people who lead development of the community and engaging people from throughout and beyond the industry and what we're doing.
Grace Mase 3:28
That's amazing. Well, first of all, thank you, I really appreciate how you guys are laying the groundwork for all of us to understand how to move forward. Of all the incredible professionals that you have connected with, what was the most memorable story? And why?
Betsy Scott 3:44
Well, that's a great question, and I'm going to answer it with a couple of examples. I've been in marketing for over 25 years and I worked in an agency environment where you have a lot of variety of clients. And been through good times bad on that side, and was attracted to housing because of the impact that you could have on somebody's everyday life. So it's really inspiring, you can really accomplish something in this industry, that really no one can deny, because we all need housing. It impacts our daily life, no matter who we are, where we live, and what we do. So the stories that really stick with me, are some of the people in our industry, what are they doing and why were they inspired to do it. So I'm going to give you a couple of examples. So there is a guy named Manzer Khan, who I just actually met last year, but he has expertise in health care IT. So he was doing the management software for when people were already ill and trying to manage those relationships and help them recover when they were in the hospital. And he got frustrated because he thought, "Well what if I, instead of managing issues, I helped stop issues." and really a great place to do that is to create healthier homes and communities. So that's something that he's focused on and really passionate about now. So that's one example. The second one, there's a woman named Maria, who I met, went down to Orlando, Florida, to an off-site construction company called Raney Construction. And they have 30% of their workforce is women in the factory. And Maria, I believe her name is Maria, she has school-aged children, and she had been working in the foodservice industry or the the hospitality industry. And the hours weren't conducive to her being available to her school-aged kids, she didn't have enough structure to her schedule, she wasn't making good enough money. She wasn't home at the right time. So she took a job and now she's building stairs and doing detailed work in a factory. And she's done every day in time to go pick up her kids at the bus. So just just an amazing, inspiring story. And then there's a guy named Aaron Holm. He's the CEO of Blokable, which is a almost a container type, modular manufacturing company. But he is in Seattle, and he was housing insecure as a child. So he's taking his expertise in manufacturing and building these modular homes to try and help deal with the affordable housing crisis in Seattle, that's one of his major goals. So I just find that very inspiring. It's something he's doing something for the greater good, and he's still doing it as a business himself. So those are really the stories that stick with me.
Grace Mase 6:35
Wow, that's incredible. I mean, such a touching stories, every single one of them, and they all have a clear purpose, why they want to make the world a better place. And they start with themselves doing the work to create a better healthier home, creating stairs, manufactured stairs, so they can be also connecting with their kids, in a more meaningful way, also to having the experience of not having or insecure home and be able to provide homes for many that could be much more affordable. That's beautiful.
Betsy Scott 7:08
Yeah, it really is amazing when you see that. And those are unique stories, but I would say as an industry that we're very, in large part, all trying to do the right thing and our hearts in the right place. So I think that that's really what I see in those people, and when I see in the industry in general, that kind of inspires me and, and sticks with me.
Grace Mase 7:28
And I think that's the beautiful part is the grassroots effort. It's not something from top-down, it's grassroots here, everyone has that. I mean, they're passionate, they're committed, and they're doing something that has a huge and meaningful impact to our industry overall.
Betsy Scott 7:43
Grace Mase 7:45
Now, let's shift our direction a little bit. Where do you see homebuilding industry is headed?
Betsy Scott 7:50
Well, we look at the future from kind of three different angles, we look at the business models and housing, what the consumer actually needs, and kind of what their experience is like. And we also look at the home delivery process itself. So I see a lot of potential, I mean, in an industry that's slow to change. So I see a lot of potential in there. And I'd really break it down into three key areas. I think in the future, we're going to be much more technologically enabled. And when I say that, I mean both on the consumer side and on the home delivery process side. So we're seeing more uptick in smart home technology, But also in the technology and how we're engaging customers in the customer service process, and the home selection process, and the home service process. So before you move in, to while you're living in there, just to create a better experience, as well as the smart technology. So home performance and, and maintenance and serviceability that way. So that's one, and on the other side designing and delivering housing with more of a manufacturing bent. Historically, even even now, we take a lot of products out in the field, and we try and construct them and and we're still stick-building housing a lot. But I see that that I see the opportunity for that to change, and it might include robotics in the field, and more factory-built housing. So it's more of a blend of technology solutions than just what we're used to. And more technology like the 3D modeling and things that you see in the the commercial world I think will be a lot more prevalent in housing. Then second, a much more diverse set of players. I heard an alarming statistic, we actually have a group that's focused on labor and housing, the labor shortage in housing and they said that housing is 80%, white and male.
Grace Mase 9:43
That sounds about right.
Betsy Scott 9:44
Which is about right. But at the same time, we've had a labor problem for a very long period of time. So I think moving forward, we need to rethink labor. And that's kind of what we were talking about with that group. Looking at engaging women in different ways. Maria, who I mentioned earlier, women in leadership roles like Sheryl Palmer at Taylor Morrison, women who on boards of advisors and things like that, as well as the same kind of evolution with people of color. So I would see us looking at the workforce and housing looking quite a bit more like the people who are actually living in the housing than predominantly white and male. So I see a huge opportunity for that different skill sets that those people can also bring to the table. And continued, you know, foreign investment, and then players from other industries that might help that as well. Get more diversity through bringing people from automotive industry, and from Japan, and other areas that are actually getting engaged in the US housing market. And then the last thing is really a more robust offering for consumers. So historically, we've thought of housing mostly is that we're gonna rent an apartment, and we're gonna buy a house. But people can't afford things the way that they used to be able to afford things. And we're seeing a lot of opportunities come up, like build-to-rent, where you're purposely building a new home, somebody who's getting the benefit of being in that business, and you're renting it to someone gets the new home experience without having to have the credit history, or the long term commitment or any of those other things. So I think a lot of that's going to emerge, we're also seeing co-financing where people co-own a property, so somebody gets an investment benefit out of it, while the person who's living in it pays a much smaller amount of purchasing the house and can buy more of it over time. So I think there are a lot of really unusual financial models that are emerging, that we're going to see more of that will be part of the solution that helps us get to greater attainability.
Grace Mase 11:50
That's fantastic. You mentioned about build-to-rent, is it like leasing a car kind of experience, you lease your monthly payments, and then at certain point, the lease time period is up, you have option to buy?
Betsy Scott 12:02
In some instances it is it is like that, sometimes, it depends on really the builder. I think part of what's interesting with it, because we work with mostly production housing providers who've sold homes for most of the time. Sometimes they're building the homes like a general contractor, and they sell their those homes to a property manager. So those property managers become customers to them just like consumers are. And sometimes they get their money and go away after they've built it. And sometimes they're sticking around. And they're managing the properties on an ongoing basis. But I have heard from some of them, that they choose how long they're going to hold on to it as an asset and when they might flip it over, and what the opportunities might be for the people who have lived in in the home. So it really varies, I think, from builder to builder on how they work that but there's definitely opportunity there. So it's an interesting space that we're looking at right now, too.
Grace Mase 12:59
Great. So you mentioned earlier about labor shortage and home buildings. So why do you think that is?
Betsy Scott 13:06
While there's a number of factors for labor shortage, I mean, there's there's probably more factors than there are solutions at the moment, honestly. But I would say a couple of the huge ones are at least now when I was in high school, we had vocational education programs in high school. So there was an aspect of education and training that it was an alternative. And then it was an acceptable alternative when I was in school, and that's really for a large part gone away over the funding for it. Some programs have to be cut, and sometimes those programs have been cut. So people in high schools don't understand, and aren't aware of that as a career opportunity in the same way perhaps that they used to be. There's a lot of, someone said a lot of matriculation in the housing industry, where a parent is a builder and then their child becomes the builder and they take the business on. Well, we see this in other industries, we've seen that people are might be a dry cleaner, or they might own a restaurant and their child chooses to become a doctor or an attorney or, or something that they believe is is going to make them more money or give them more cash. So we see we see a lot of that, which is certainly an issue as well. And I think it's the both; perhaps it's the misconception that housing isn't a career, it's a job, and not understanding that there's really money to be made and upward mobility in the industry. And really, with the way that the industry is changed, a lot of different types of professions that you could get into within one industry. You could be a tech person, like you're, you're a technology person in the housing industry. And there are engineers in the housing industry. So I think I think the perception is is wrong and and we have a PR problem, so that's another reason.
Grace Mase 15:05
Education problem too.
Betsy Scott 15:07
An education problem, education and PR problem. Absolutely. So I think those are some of the biggest ones that we're facing right now.
Grace Mase 15:15
Yeah, you're absolutely right, I think about back in high school, I actually took a couple semesters of drafting class. It was elective that was elective, and that caught my attention. I was like, hey, this actually is interesting, I can start vision something and put into on paper. And somehow we'll find a way to make it built. And then, of course, the structural part of it, mechanical part of it, it became feasible. And that was exciting to see that you have vision, and then in the process, you get to work with a group of people converting to a reality.
Betsy Scott 15:51
Absolutely. And but those aren't things that you see.
Grace Mase 15:54
Betsy Scott 15:55
You can kind of understand if you're in biology class, what it might be like to go to school for medicine and become a doctor because you see things that are related to a field that you might want to get into. Right. And we don't really have that in the high school system anymore. And that's really when people are making decisions and trying to figure out when they're around that age, whether they're whether they go into higher education or not. That's kind of where they start their path. So I think that's a, I think that's an opportunity for us. So those are, are really barriers to us finding new people. And then the biggest barrier is we've got people aging out. I think the stat is for every one person who comes into the trades for building five people leave.
Grace Mase 16:42
Wow. I had not heard that fact. That's, that's astounding.
Betsy Scott 16:48
Yeah, it is pretty staggering. And, and so it's like you get, at the moment, because of the way that we've been thinking about labor, perhaps because we haven't, some of the coolest things that are going on to try and combat that have just started happening in the last few years. So we're having a really hard time replacing people, we can't replace them nearly as fast as they leave. And then we're already kind of short-handed as it is. So I think there's but that's a super negative thing to say and kind of a downer. But But I think at the same time, there's also really big opportunities if we rethink how we address the issue.
Grace Mase 17:26
Yeah, the attrition rate is tough. I, I have never heard this one out of five, one come in and five leaves that's really is a leaky bucket, it's hard to keep maintain it in a stable level. So how do you think we can make up the labor gap? And what roles can women play?
Betsy Scott 17:46
I talked a little bit earlier about women, people of color, new skill sets, off-site construction, I think all of those things kind of play a role here. And I think one of the first things that we need to do is we need to create a new narrative, tell stories that are relatable to people about people like them, whether it's women, people of color, younger people who are in the industry, why they chose to be in this in the industry, what they're getting out of it, and what the career path looks like. So give the narrative of why you should want to be in housing or in the trades, that the doctors are already giving, for being at what's the reason to be a doctor. Now the doctors don't really talk about eight years eight plus years of school, grunt work for how many years as a resident, all the debt that you're in before you get that degree, and then you may find that you don't like it, but you're still in debt. So I think we need to start telling stories that create the narrative, create the expectations, and create some excitement, for people to really see what the opportunity is. A number of people who are in our working group on labor would talk about how with that story, you'd be able to overcome the hurdle of the parents who were really just want to make sure that their kid can earn a living and not have to stay at home forever, right. And they just want them to have a good life as good or better than they did. So a lot of them talk about if we were able to do that, that would be helpful. By having a like attracts like, by showcasing people who are of color or women who are in powerful positions and have made a career and are making a mark in housing. You can, it's just like what's going on with the government now, you can see yourself and the opportunity for yourself in that position. Better when you see someone like you, whether it's age, race, sexual orientation, male, female, whatever that case might be. So I think the one of the biggest opportunities are those stories. And then leveraging some of the really cool programs that have already come out over the last couple of years, and just doing everything that we can to elevate those within people's consciousness so that they can take advantage of them. And they can do what they've been designed to do.
Grace Mase 20:17
That's awesome. You're right, and having a conversation, just like the field of architecture. There's a group of woman started this missing 32, or a couple years ago, they started this group called missing 32, the whole idea is we're missing 32% woman in the field of architecture that went through their education, but somehow, due to various frictions like upward mobility, family, children, and so forth, that prevent them to move forward, retain in the field. And start having that conversation and start showing up at these kinds of discussions that become more prevalent for us, become aware of and trying to find solutions, or manage ways to, or finding ways to manage the situation more effectively.
Betsy Scott 21:01
And we've been doing, and we were inspired to do this from other stories that we heard, when we were at the builder show a couple years ago telling HerStories in the housing. So stories, you don't normally, a lot of times you see speakers at events, they're not usually people of color, they're not usually women, but there are women in housing that are doing interesting things. So we've been featuring those women over the last couple of years. And I also joined a, there's a group in the housing side called Women in Housing Leadership, that also does some. Now it's a growing group of women who are in leadership positions and housing, we've also got younger professionals who are joining, who can be mentored by some people who have really made their mark in this space. So that's a definitely an opportunity. But I think there's more to be done in terms of getting the next gen in and getting people with different educational levels, different backgrounds, women, and people of color engaged in the process. So I think that's a good opportunity for us that we can start tapping into.
Grace Mase 22:01
Now, do you have any predictions of how women's influence will continue to develop an industry for the future?
Betsy Scott 22:09
Well, I hear a lot more people talking about getting women on their board of advisors, there's a lot of research that's come out in terms of how more effective they are. And I don't want to sound, I think we always run the risk of sounding, "Yay women! Nay men!" which isn't true. But if you think of it this way, in a board or in the leadership position in the company, if everybody there looks like each other and has the same kind of background as each other, you're going to get the same solutions to this, to problems over and over again, you're not going to have as much dynamic thought and interaction. And we like to say all of us are smarter than any one of us. And all of us really means all of us, all people of different kinds. So I think we'll see more women in Board of Advisor positions, whether it's in homebuilding companies, technology companies that are related to housing, manufacturers. So I think we'll see a lot of that. I mentioned buddy, Randy's got 30% of his workforce is women. So I think, and I've met some very impressive women who are general contractors. So I think we'll see more women in the field. They have to fight their way to get there. But they're interested in being there. And I think there's room for growth, we need more people in general. So we need to start expanding the net and looking at more diversity that way
Grace Mase 23:33
To be inclusive, because when we include other people with different backgrounds, different perspectives, helps to really solve the problem in a much better fulfilling way.
Betsy Scott 23:43
Grace Mase 23:45
So yeah, for us, we have about 60% are all woman in our team, just because they're qualified. And they think a lot of things, they look at the problem differently. And they solve the problem differently, which is very exciting and very challenging. To learn how to be challenging in the way that we need to think about how to be inclusive, how everyone to think to help everyone solutions.
Betsy Scott 24:06
Grace Mase 24:08
Now, what advice would you give a young person with high school diploma who are looking into entering this our industry? And what are some of the paths in an industry that you may recommend?
Betsy Scott 24:20
I have to say, of the best timing in the world with these questions, because I was just with the working group last week in an event and and we had a call a couple weeks ago, and I'm flooded with ideas from them. So I also want to I want you to know that we've talked about a lot of things and a lot of times I get the intelligence that I get from people in our community. So I want to make sure that that's clear, because I don't build anything professionally. So I would say a couple things. There's a labor shortage on both sides. So there's a labor shortage in homebuilding like the management side, and the business of building side and there's a labor shortage in the trade side. So if it's a young person who's looking to get into the business of building side, that's probably a four year college. There are some great programs out there. We have good friends on our working group from Penn State, and Tuskegee, and the University of Denver. And I know there are a lot of other great programs out there. Probably one of the best things to do would be to look at the student chapters within the National Association of homebuilders. Because then you can identify the university's kind of as a consider it reverse telephone lookup. If that makes sense to anybody in the next gen, I'm probably dating myself. But that's a good way to find the programs. So I would suggest that. If you want to get into trades, it's really more specialized. And you don't need to spend the money to go to a four year school, you probably want a two year program or go to intensive training and trades, you can get done faster at the training process, get into the field and start making money faster. And you will be hot and sweaty, probably any it'll be it's not it's a dirty job, but you make clean money. For the first several years before you move up. But I would suggest that so on that side, there's an awesome community called hmmr. And when you look it up, it's hammer without an E. So it's h MMR. And there's a guy named Breck going he's on our working group. And hmmr just started. I think they just hit their one year anniversary earlier this year. And they are focused on creating opportunities for the next generation of the trade workforce. They're predominantly right now framing, they had to start somewhere. But they also have a relationship with the National Kitchen and Bath group. So together they do a mentorship and training program called what is it Next Up, I think is what it's called. They go into high schools and talk about what career trades are like. And they do mentorship where they pair people who are actually much closer in backgrounds and age to each other to talk about what it's like where you can get build some relationships and get some real world opinions and ideas on what it's like to be in the industry. And he said, Breck said that his membership in his community is predominantly 35 years and younger. Whereas in the, in the industry, a lot of times you go to trade shows or you go to see panels, and they're white men in their 60s, or 50s, who are trying to connect with teenagers and 20 year olds, and explain to them how they got into the field. And it's like trying to connect with your parent or grandparent, it doesn't always translate too well. So, so Breck's doing a great job. So I would suggest that as a good connection, a good forum, between those two groups, to get engaged on the trade side. And then there's one other group that I want to make sure that's part of our working groups to talk about. So there's a group called the Leading Builders of America. So it's all as you would expect the bigger builders who build probably 50% of all the houses in the US. And they've really made it their mission over the last couple of years to try and tackle the labor problem. Because if you're building half of the houses, and you don't have enough labor, that's just not a very good business proposition. But they created this group called the Building Talent Foundation, led by a spunky woman named Branka. And they have opportunities for training and mentorship and professional development as well. And I think it's important to say, Yes, we want the next gen people to come in. But sometimes there's an opportunity for people who are displaced from their industry. You know, there's a lot of people in housing, who are from the military, they're looking for a career and the they're not finding something that else that they like, those skillsets translate very well into working in a team and the housing environment. Engineers, if they decide that they're bored, and they don't like being at a desk, and they want to be out there and they want to be doing something out there. There's an opportunity there too. And I think and I don't think we've tapped this, but it could be a good way to solve the diversity problem too we've lost half of our jobs in hospitality.
Grace Mase 29:18
Betsy Scott 29:18
Those people are looking for stability. Hospitality is probably the most diverse industry that we have. Right. And those people need to be retrained and they need new, many of them will need new positions because we don't know that then industry is going to come back. They've said I think 2025 is when it's going to start looking like it used to. So I don't know how many people are going to want to wait, living paycheck or lack of paycheck to paycheck. Who could, with the way the industry is changing, who could do well, in housing
Grace Mase 29:52
Absolutely. If you think about entertainment for people who usually setting things up for Coachella for example, those people are out of place displaced with jobs as well. But they're certainly know how to set up events, setting things up and prepare for, I mean, I have very clear deadline and budget to work with. So they will be a great transition to housing industry during the meantime.
Betsy Scott 30:13
Yeah, and a lot of those people, a lot of those people are women too. And they say women are really good project managers. And really, that's what a lot of housing is, is a schedule management, it's project management, all of those kinds of things. So I think we really just need to think out of the box and where we go and be a little bit more open to different sources. Because I think we could kind of if we take the right approach, we could solve a variety of problems by changing our mindset, our own problems, and perhaps other problems that are going on in the industry if we just change our mindset,
Grace Mase 30:49
Right? If by enlisting all these different industries, join forces, we actually solved their problem just as well solving our problems.
Betsy Scott 30:57
Exactly, then they can actually get more affordable housing.
Grace Mase 31:01
That's fantastic! It's a win for everyone.
Betsy Scott 31:04
It's just if we look at as a whole connection, the connections and overlaps between things that could open us to a whole lot of possibilities.
Grace Mase 31:15
Right. It's a domino effect. And this is reason why you're in Housing Innovation Alliance.
Betsy Scott 31:21
Yeah, I know I I get so excited when I hear what people are doing. It makes my brain run at amazing speeds and doesn't really want to shut down but it's really it's really fun. It's a really fun industry to be a part of and, and to have people share their stories, take their time and share their stories is always great.
Grace Mase 31:43
Thank you so much, Betsy. I hope everyone enjoy hearing from Betsy Scott of Housing Innovation Alliance. And thank you for joining us this episode of Revivify Podcast, and we'll see you next time.