Putting the housing shortage in the shoes of builders is unjustified: they are the ones who are innovating

Attributing the housing shortage to construction companies that allegedly do not innovate enough is unjustified. So responds a tormented Pim van Meer, director of digitalization at developer VORM, to a high-profile column by Barbara Baarsma, chief economist at PwC and professor of Applied Economics at the University of Amsterdam. "Especially municipalities and other stakeholders are failing to respond."

I feel more like a developer than a builder, even though I once started out as an architect. I also operate for a number of construction companies as a building information manager. And for completeness: I have been working on the information needs of my customers - housing associations and investors - for more than seven years, and I have been working with municipalities for 15 years. I say that not to claim authority, but to be transparent about where my irritation comes from: I've been seeing it up close for too long. In other words, I look at the same chain through multiple lenses.

This week on LinkendIn, I read Barbara Baarsma's column "Incentives for building productivity" that recently appeared in the trade journal Market and Communication. She writes that the housing market is stuck in a vicious cycle. "As long as the housing shortage persists, demand for construction services will continue to far exceed supply. That imbalance - high demand versus inelastic supply - creates productivity problems in construction..."

In the sequel, Baarsma blames those problems on builders: "Due to excess demand, construction companies are profitable even without productivity investments. As a result, the housing shortage is not decreasing, and as long as that shortage remains, there is no incentive to innovate and work more efficiently. To break this cycle, a change is needed. For example, it requires construction companies to invest more in knowledge development and technological applications. Without that turnaround, the housing market will remain trapped in its own deficit."

I agree with the analysis that housing construction needs to be faster, more productive and smarter. And that more collaboration, digitization and standardization are indispensable. Where I thoroughly disagree is that innovation should mainly come from builders. They in particular have been investing heavily in this for years. The crux of the problem is that other parties do not help builders sufficiently to scale up their innovations. That mis-match costs time, attention and ultimately houses.

To innovate is to survive

If there is one place where innovation lands in practice, it is where money, risk and planning come together. Builders have long understood how parametric design, the Building Information Model and artificial intelligence can help increase repeatability, quality and speed. They can calculate variants, reduce clashes, reduce failure costs, and shorten the ROUTE to manufacturability. (Do they do this well enough in my eyes? Absolutely not but....)

Since the economic crisis of 2008-2010, that realization has also become razor-sharp among many builders: innovation is not a hobby, it is survival. And you see that reflected. The construction industry has - by trial and error - built up a working toolbox.

Who abandons real innovation?

The pace-setter or solution is not with the builder, but with other stakeholders. Municipalities, consultants, corporations, investors, grid managers: they too often get distracted by opinions, memos and meetings, where builders instead rely on models, data and testable choices. Through the input of Architects and Constructors who were the first to start adopting innovation.

And then the jab that I prefer to make concrete: you see many (large) municipalities that have invested tons of tax money in a digital twin. Wonderful. Only ... in the primary process it is often hardly used. Then that twin is not a steering tool, but an expensive shop window and usually invisible. You can't accuse construction of being too slow if you leave your own Ferrari unused in the driveway. Every builder has a three-dimensional digital Building Information Model. Officials and customers peer and review PDFs. If you really want to accelerate as a municipality, you have to lead the model.

Why does the pre-process fail so often?

Now the uncomfortable part, also for me. Builders, too, can make strides. Where they are strong in making houses and buildings, they are relatively weak in "stakeholder management" during the not-insignificant pre-process. Not because they are stupid, but because until recently they hardly played a role there. The pre-process is a political, social and legal minefield. And anyone who thinks you can solve that with yet another presentation or yet another participation evening is underestimating those dynamics.

Stakeholder management is not a friendly appendix. It is design work. It is listening, sensing, and above all, organizing decision-making. Who gets to decide what when, based on what information, with what thresholds, and what does that mean for the next step? If you don't put a tight rhythm to that, with common testable planning through digitally testable gates, noise wins out over evidence. And then the chain keeps going in circles while everyone is busy.

What about corporations and developers?

Let me also be honest towards developers - including myself. Developers were not the fastest. The realization that digitalization is a condition for survival set in later with us than with many builders.At the same time, developers also had quite a lot to deal with in recent years.

And housing corporations? There I see the same pattern: many corporations once started with digitization, the understanding of the use of data is reasonable, but in practice they are really still quite a bit behind developers - let alone builders. Not out of unwillingness, but because incentives, budgets, governance and capacity are often fragmented. This is understandable, but it is the reality.

What if we use the tools differently?

And now comes the irony that does energize me: the tooling that contractors are now using to build, we can use much simpler tools to make decisions faster in advance.

Not as a technical toy, but as a shared source of truth. A readable model with a limited number of hard quality criteria. A transparent log of choices. Variations that you look at together on effects, rather than on taste or gut! Then collaboration does not become a moral call, but a working form.

You don't have to retrain everyone to be a modeler for that. You just need to agree that decisions will no longer hover on interpretation, but land on verifiable information. If there is a 3D model, then everyone reads that model! Then CONNECTION occurs: not because we are all friends, but because we share the same reality.

Do we dare to grow up together?

So my response to Barbara Baarsma's column is as follows. Productivity is indeed crucial. Incentives do indeed matter. But blaming builders for the housing shortage because they are not innovating enough is unjustified. There are plenty of innovations. What matters now is that they find their way. Through shorter procedures and simpler decision-making processes.

The housing shortage does not require additional opinions, but mature collaborations. I hope that the cooperation agenda of the ministries of VRO and I&W will make a difference here? I am optimistic.

P.G. (Pim) van Meer
Director of Digitalization

Note: Pim is responding with this text to an opinion piece by Barbara Boersma. Her contribution can be read here.