Strictness, Partners and Lenders Address Root Causes of Long-Term Decline in Housing Starts and Resulting Crisis of Affordability, Offer Solutions
ORLANDO, Florida and MIAMI, December 17, 2021 / PRNewswire / – Rigor, a decentralized finance (DeFi) platform for homebuilding, joins lenders, builders and homebuyers in calling for an end to the ‘affordability crisis’ plaguing housing markets for decades. While the U.S. Census and the Department of Housing and Urban Development today reported an 11.8 percent increase in housing starts from October, it will take more years to fill the shortfall of about seven million housing that plague the US housing market, according to industry estimates. trade groups and a recent White House report.
Despite historic housing demand, the United States is now building 50% fewer homes than those built during peak production in 2006. Housing starts as a percentage of population have declined 39% since then. 1970, and house prices rise faster than wages in 80% of the US metropolitan markets. The explanations put forward for these massive deficits do not explain this long-standing supply-demand imbalance. These include intermittent supply chain issues, labor shortages, regulations, and even the high cost of textiles and other building materials. While these reasons are valid, they ignore the fundamental problem within the industry.
“What we are seeing is not an ‘affordability’ crisis, it is a loan crisis hitting home builders hard and preventing production of the homes we need,” said Isaac lidski, CEO of Rigueur. âAt Rigor, we think this is both an understandable and a fixable problem. Understandable because building homes is viewed by many as a risky investment – so much so that building new homes receives a pitiful three percent. of all home loans. Solved because when you combine transparent capital flows for lenders with instant payments for verified supply chain work, you eliminate the risks that have prevented large-scale investment in the asset class.
Rigor is an easy to use web application that allows anyone to lend for home construction projects. With Rigor, lenders get a platform to find and finance quality home building projects, pool their capital with other lenders, and get paid back. Home builders manage the work that these funds pay for with task-level budgets paid directly to subcontractors and suppliers as tasks are completed throughout a build – subject to verification by any person specified by the lender in combination: builders, contractors, vendors and municipality or third party inspectors. All parties can see and understand where and to whom capital is flowing in the supply chain in real time.
“You would never guess that housing demand is at record highs when you consider the difficulties that builders like us face in obtaining and managing construction loans,” said DK Kim, home builder and partner of operation of FL Pro Brokers at Orlando (as well as a Rigorous investor). âWe typically build 80 homes a year and have built a solid reputation for the homes we deliver and sell. Obtaining the financing to grow our business should be easy, but it wasn’t always the case. Rigorous tools and technology allow us to engage with and develop lending partnerships and streamline our operations. The result is that we can build more homes with less headache and deliver for investors and buyers. “
âThere is an incredible opportunity here to put our money to work for positive change in the housing industry,â said John starr, a private investor in Central florida who lends through Rigor as part of the business “100 houses” beta. âHomebuilders like me face all kinds of risk. It is a fragmented and restrictive market and it makes it very difficult to manage or scale investments. Rigor is already changing that – and I’m optimistic about what that means for really solve the housing shortage.
âEnough of the excuses,â Lidsky said, âit’s time to find solutions, and that’s exactly what Rigor is here to offer. Lenders get the transparency and returns they expect from home builders get the loans they need to meet high demand, contractors get paid on time for their work, and ultimately more Americans can enjoy the dream of homeownership. Let’s break this vicious cycle! “
Rigor is a decentralized finance (“DeFi”) platform for building houses. The company built and deployed the Rigor app, now in beta and used to build homes in Central florida. The company recently raised $ 2 million Seed funding from private investors to fund initial growth strategies and welcome additional investors. Current strategic investors span the existing and new homebuilding ecosystem and include crypto-native asset funds, traditional homebuilding lenders, home builders, contractors, and subcontractors. Rigor’s founders include CEO Isaac lidski, a serial entrepreneur in the field of technology and home construction, New York Times bestselling author and former Supreme Court clerk; Erich wasserman, president of BD, founder of the advertising technology success story MediaMath; and Web3 technologist and product manager Jonas Weinstein.
To participate and learn more, please visit: www.rigor.build and follow on Twitter: @Rigor_HQ
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