EXCL: SpaceX Alum Says His ‘Lego’ Approach Can Solve the Housing Crisis

American Housing Corp. is a vertically integrated real estate developer and manufacturing company based here that aims to construct pre-built “townhomes” in desirable urban neighborhoods across the United States.

The factory-made components—such as pre-wired insulated wall panels, floors, stairs, roofing—are designed to be flat-packed in shipping containers and trucked to worksites where they are fitted together “like Lego” sets, says CEO and co-founder Riley Meik, to form three-story row houses.

The company’s goal is to mass-produce “good homes in good neighborhoods at good prices,” one employee told me during a tour of AHC’s cavernous, 50,000-square-foot factory and the model townhouse next-door.

Meik reckons that AHC can build housing at 30% to 50% of a conventional homebuilder’s cost. A mechanical engineer by training, Meik quit Brigham Young University to start Evolution Space, a rocket-launching company propelling payloads into suborbital space for scientific research.

He was subsequently hired by Elon Musk’s SpaceX to work on Starship’s aeronautic flaps. A trio of co-founders with experience in manufacturing, engineering, software, and real estate development round out AHC’s leadership team.

Cornell-educated Will Davis is vice president of software engineering and an alumnus of General Motors. Bobby Fijan, a graduate of the University of Pennsylvania’s Wharton School, helms the real estate acquisition division; he cut his entrepreneurial teeth at a Philadelphia-area real estate partnership overseeing office-to-residential conversions.

Special projects director Harris Rothaermel, a BYU grad and college friend of Meik, is a computer scientist with experience in aerospace at both NASA and Varda Space Industries.

The enterprise has won favorable attention from the venture capital community: Flux Capital, Antler, and Boost Capital Partners have ponied up $7 million in pre-seed and seed capital.

Meik reports, moreover, that a $10 million-plus Series A financing is in the works. That capital infusion will enable AHC to build a 230,000-square-foot factory capable of producing the 1,200 townhouses the company hopes to erect annually, its near-term goal.

“We’re hiring,” Meik tells Realtor.com in a sit-down interview at the company’s headquarters. “We’re looking for people passionate about solving the housing crisis.”

Realtor.com: You were talking about having worked in rocketry and at SpaceX. Is there a segue between what you were doing at SpaceX and housing?

Meik: Three things. While I was at SpaceX, I was living in Los Angeles. Lots of housing gets built on the outskirts of L.A. But in areas like Hawthorne or Manhattan Beach, new housing hasn’t been built for a long time.

Watching some homes get built and seeing people swinging hammers and nails, I started thinking about how inefficient homebuilding is. I started thinking: How do we turn the housing crisis into an engineering problem?

RDC: Could you elaborate?

Meik: There has been so much evolution and progress over the past 50 years introducing robotics and automation into the production process, making it easier and more cost-effective to produce higher-quality products.

Look at housing during that same timeline: Quality has been going down while cost has been going up. It’s the opposite. With consumer electronics, cars, airplanes, rockets—so much of the work is done by machines, not by humans. The structure of a home is significantly more simple, yet everything is built by hand on site.

RDC: What is the third component?

Meik: Vertical integration. If you look at SpaceX or Tesla, they are the best examples of phenomenal, vertically integrated companies. Every single part is produced in-house. Everything is owned from tip to tail by this one entity.

You see raw material comes in one door, a car goes out the other. They don’t even go through dealerships; they sell direct to the consumer.

RDC: Tell me about the building material, magnesium oxide. How did you develop it?

Meik: Lots of trial and error. Our wall panels (are) a good case study. They’re what’s referred to as a
“structural insulated panel.” It’s essentially two structural skins with foam in the middle. So it’s just a sandwich.

There’s only three ingredients: structural skin, foam, and then glue that holds everything together. It’s very easy to automate, and it becomes one structural panel. A wall has to resist a bunch of loads. You have axial loads, the weight of the building. You have sheer loads when the wind blows and hits the house. You have thermal loads; when it’s hot, you want to keep the house cool. You’ve got
acoustic properties.

If you have row homes, you don’t want to hear your neighbor. You need something that’s fire-resistant. How can we do all of those things with a nice, flat paintable surface where you can hang your TV and pictures of your kids, and be mass-produced?

Then we came across magnesium oxide board. It’s a hard material that’s reinforced with fiberglass. It’s got a Class-A fire rating. Combined with the foam, it has really good acoustic properties (and) thermal properties. When you paint it, it looks beautiful.

RDC: And cost was, of course, a consideration.

Meik: A big consideration. There were other options but were more expensive.

RDC: What about the foundations?

Meik: So our foundations are typical. Our floor system is different than a typical house. Most homes are using lumber for everything, studs and plywood for walls, trusses or joists for your floor. We use a cold-form steel product for our floor system, and then we use that same magnesium oxide panel as the subfloor and as the ceiling.

Usually you have screws holding everything together. We use rivets (which) are more common in aerospace and automotive. We’re using the same faucets and the same outlets; but in terms of the actual building itself, it’s very different than a typical house.

RDC: How did you hit upon the townhouse as a model?

Meik: Good question. We all felt very strongly that the key to solving the housing crisis in the U.S. is figuring out how to build “missing middle” housing at scale in the country’s most desirable cities and neighborhoods. The row home was a way to build family-sized housing in a more dense way than typical, single-family homes that are detached with big backyards and big driveways.

We believe that the best way to solve the housing crisis is building family-sized housing in places that people actually want to live: L.A., San Francisco, New York, Seattle, or Austin, where a young family is looking to buy a starter home that they can afford in a good neighborhood.

RDC: I know Austin recently reduced zoning from, was it 5,700 square feet to 1,800?

Meik: One of the big reasons that I chose Austin is you can build up to three homes on any single-family lot. In order for this solution to work, you need the regulators to make it legal to build higher-density housing.

And we need to build at a cost that makes the project pencil and is actually affordable. Austin was an ideal fit. You can get great talent here, and you can get permits relatively quickly.

RDC: Do you have a number off the top of your head for the time it takes for a permit?

Meik: For home initiative projects, most of them are in the two- to four-month range in Austin. But you’ll be surprised if you look at even L.A. County, the number of times that you find a single-family home built on a property that’s zoned for multifamily.

There are thousands and thousands of properties in desirable cities where you could build on them by right just by building more densely.

RDC: And you think politically, they’ll be accepted?

Meik: Definitely. What are people going to say? “I don’t want young families moving into my neighborhood?” I think this is one of the reasons that we focus on building a product that looks nice. We want to make it as easy as possible for cities and neighborhoods to let us build there.

RDC: Tell me about the actual economics. I think I heard your cost of labor is 10 times less (than conventional homebuilding).

Meik: Yeah. Once the parts actually arrive on site, if you were to count the number of labor hours that go into building a typical house. If there’s five people on site for an hour, that’s five labor hours. We use a tenth of the labor of standard construction on site.

So significantly less labor (expense), which obviously plays a big part in lower construction costs. But it really depends on the market and obviously supply and demand, and sometimes labor is just more expensive because the area is more expensive.

RDC: I hear that you were building out a prototype? Is it just a demonstration?

Meik: About a half-hour from here. It’s less of an external demonstration, more of an opportunity for us to test improvements to the system. After we finished building the first house, we had a list of improvements we wanted to make to the components themselves and to the factory.

We spent a few months in the weeds, making improvements to the design of our parts, making improvements to the factory. And then once we felt that we had arrived at a more mature version of the system, then we decided to build another house. But our first homes that we will be selling to customers will be here in Austin proper, and we’ll be sharing more about that later this year.

RDC: You had said that there was powerful alumni and source of talent growing out of the Elon Musk nest, or orbit.

Meik: We do have some people who work here now that came from the Musk ecosystem. That’s part of the reason that we chose to build a company in Austin. You’ve got Tesla’s Gigafactory. You have The Boring Company, so a lot of great engineers there. You have the Starlink factory in (the nearby city of) Bastrop, also phenomenal engineering talent. And then Starbase in South Texas.

Elon has definitely played a very big role in making Austin not just a great place for tech companies, but specifically companies that are trying to build physical things in the real world and manufacturing at scale.