Homebuilding leaders often see themselves as adaptive survivors — business Darwinists thriving through cycles of economic turbulence, policy shifts, and market disruptions. Yet, as Donald Trump prepares to begin his second term as the 47th President of the United States with a bang, this sense of adaptability will be tested like never before.

A second Trump Administration already promises to be a dynamic breeder-reactor of creative political, social, economic, and cultural destruction and turbulence. Imagine a policy context equally unencumbered by bothersome regulatory impediments and uncoddled by access to quasi-slush funds of shadow government welfare.

Its goal is to shock organizations and enterprises into remodeling—from scratch and at an accelerated pace—into more brilliant, efficient, and results-producing systems with a whole new set of engagement rules.

What a construct! Homebuilding – and its individual organizations – can and must do better at what they do.

So it's go-time. Homebuilding’s leaders might best wholly consider walking the walk of business Darwinists.

Out: "Everybody needs a home."

In: Homebuilder's version of "You eat what you kill."

Complacency and business modeling based on typical, cyclical demand curves? You can go there at your peril.

The return of a pro-business administration promises deregulation, policy volatility, and a wave of mergers and acquisitions (M&A). The housing industry, already strained by chronic undersupply, skyrocketing costs, and structural inefficiencies, now faces an urgent imperative: adapt, evolve, and lead — or risk obsolescence.

As voters elevated housing affordability to a top political issue in 2024, the housing industry stands at a crossroads. This is a call to action for leaders to embrace innovation, prioritize customer value, and remodel their businesses for a brighter, leaner, meaner, more aggressively efficient future.

Uncle Sam may not be the enemy – nor the friend – he has been up to now.

The Housing Crisis: A Catalyst for Change

Evidence of Crisis

The housing market in the U.S. has reached a breaking point, with trends showing unsustainable trajectories for prices, affordability, and supply:

• Affordability Breakdown:
  • Home price-to-income ratios hit record highs, with only 10% of U.S. metro areas considered affordable in 2022. This shift erodes the American Dream of homeownership for middle- and working-class families.
  • Homelessness has surged to its highest levels since 2007, expanding beyond urban centers to suburban and rural areas.
• Chronic Underproduction:
  • The U.S. has built fewer than 10 million new homes per decade since the 2010s, a 60% decline from the 1970s, despite a 65% population increase. The Housing Underproduction in the U.S. report estimates deficits ranging from 1.5 to 5.5 million units.
• Structural and Dynamic Challenges:
  • Regulatory barriers and NIMBYism constrain supply, while outdated building codes and fragmented permitting processes add costs and delays.
  • Construction productivity has stagnated since 1970, with innovation and technology adoption in the sector lagging far behind industries like manufacturing and healthcare (MIT Technology Review).

The Paradox of Housing Opposition

Every new homeowner becomes part of the resistance to further development, perpetuating a cycle of scarcity and a cruel, strategic paradox in which homebuilders — by succeeding — themselves create time-released forces of opposition to their future success. This entrenched opposition to new housing intensifies supply shortages and drives up prices for future buyers. Breaking this cycle requires a new narrative that frames housing not as a commodity but as an essential component of societal stability and progress.

The M&A Imperative: Scale and Survival

Trump’s Pro-M&A Landscape

Under a new Trump administration, a more lenient antitrust environment is expected to catalyze a wave of consolidation across industries, including housing (Axios). This could significantly impact the industry in two key ways:

• Opportunity:
  • Consolidation offers the potential to achieve economies of scale, aggregate resources, and streamline fragmented operations. Larger firms can leverage advanced technologies, negotiate better terms with suppliers, and invest in long-term strategies that smaller competitors cannot afford.
• Risk:
  • Without strategic intent, M&A could entrench monopolistic practices, stifle competition, and exacerbate inequities. Housing leaders must ensure that consolidation prioritizes systemic improvements rather than the mere survival of the most prominent players.

The Role of Consolidation in Housing

M&A activity can address several critical pain points in the housing value chain:

• Productivity Gains: Larger, well-capitalized firms are better positioned to adopt modern production techniques such as robotics, modular construction, and AI-driven project management.
• Operational Efficiency: Consolidation can eliminate inefficiencies across fragmented supply chains, permitting processes, and land acquisition practices.
• Market Influence: Unified entities can wield more significant influence in shaping policies that align federal, state, and local priorities with industry needs.

5 Pillars of Transformation for Housing Darwinists

Productivity Revolution

Challenge: The construction sector has been plagued by stagnant productivity for decades, relying on methods that have remained largely unchanged since the 1970s. This inefficiency inflates costs and slows delivery timelines.

Solution: The industry must embrace a technological transformation:

• Modernization: Modular construction, robotics, and advanced manufacturing techniques can streamline production and significantly reduce waste.
  • Example: Companies like Dusty Robotics use automation to eliminate manual errors in layout processes, improving accuracy and speed.
• Integration of Data: Firms must adopt integrated data platforms to optimize project workflows, monitor performance, and enable predictive decision-making.

Proactive Policy Engagement

Challenge: Development is often delayed or derailed by permitting bottlenecks, community opposition, and misaligned regulatory frameworks.

Solution:

• Community Collaboration: Homebuilders must engage local stakeholders early to build trust and mitigate resistance. Transparent communication about the benefits of new housing—economic growth, improved infrastructure, and environmental sustainability—is essential.
• Policy Advocacy: Industry leaders should advocate for streamlined zoning and permitting reforms at the state and local levels. This includes advocating for categorical exemptions for infill housing and upzoning around transit corridors (The Builder's Daily).

Talent and Workforce Development

Challenge: A chronic labor shortage threatens the industry’s capacity to scale, compounded by an aging workforce and declining interest from younger generations.

Solution:

• Vocational Training: Partner with educational institutions to create targeted programs that train workers in modern construction techniques.
  • Federal Support: Programs like the proposed Housing Fellowship for young professionals can cultivate the next generation of skilled workers.
• Rebranding Homebuilding: To attract diverse talent pools, position the industry as a leader in sustainability, technology, and community building.

M&A as a Value Creator

Challenge: The industry’s fragmentation limits scalability and stifles innovation.

Solution:

• Strategic Mergers: M&A can be a tool for consolidating resources, investing in cutting-edge technologies, and creating integrated business models.
• Customer-Centric Focus: Consolidation should enhance customer experiences by offering higher-quality, more affordable housing solutions. This requires a shift from viewing housing as a commodity to a value-creation ecosystem.

Customer-Centric Ecosystems

Challenge: Housing solutions often need to address the evolving needs of modern consumers, who demand affordability, sustainability, and adaptability.

Solution:

• Data-Driven Insights: Use AI and advanced analytics to understand consumer behavior and preferences, enabling personalized solutions.
• Connected Homes: Develop housing as a platform for community and sustainability, incorporating intelligent technologies that enhance energy efficiency and livability.

A New Housing Industrial Strategy

Federal Role in Driving Transformation

The federal government must take bold action to enable the housing sector to thrive:

• Invest in Innovation: Fund modular housing, adaptive reuse projects, and low-cost financing for mixed-income developments.
• Streamline Regulation: Simplify permitting processes and modernize building codes to reduce barriers to production.

Industry Responsibility

• Collaborate with Federal Initiatives: Private actors must leverage government programs to scale innovative solutions and deliver meaningful impact.
• Align Consolidation with Customer Value: Ensure that M&A activity leads to systemic improvements, not monopolistic dominance.

Housing Darwinism Redefined

This is a pivotal moment for the housing industry. The Trump administration’s pro-M&A stance offers opportunities for bold transformation but also a stark warning: Survival of the fittest must not equate to survival of the largest at the expense of inclusivity, innovation, and attracting new customers.

Homebuilders must embrace their role as societal stewards, remodeling their businesses around efficiency, adaptability, and customer value. The path forward demands collaboration across public and private sectors, leveraging data, technology, and policy to create a more innovative, sustainable housing ecosystem.

This is not just a call to adapt but a call to lead. The time to act is now. Let the fittest rise — not merely to survive but to thrive and build a better future.

And remember: "Everybody needs a home," but while this may be true, they may not need or be able to buy yours.