ORLANDO, Fla. and MIAMI, Dec. 17, 2021 /PRNewswire/ -- Rigor, a decentralized finance (DeFi) platform for home construction, is joining with lenders, builders, and homebuyers to call for an end to the "affordability crisis" that has plagued 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 as compared with October, it will still take years to address the shortfall of approximately seven million homes plaguing the U.S. housing market, as estimated by industry trade groups and a recent White House report.
Despite historic demand for homes, the U.S. is building 50 percent fewer homes today than were built at peak production in 2006. Housing starts as a share of population have declined 39% since 1970, and housing prices are rising faster than wages in 80% of U.S. metropolitan markets. The explanations offered for these massive shortfalls fail to explain this longstanding supply-demand imbalance. These include intermittent supply chain woes, labor shortages, regulations, and even the high cost of textiles and other building materials. While these reasons are valid, they fail to account for the root problem within the industry.
"What we're seeing isn't an 'affordability' crisis, it's a lending crisis that's hitting home builders hard and preventing the housing output we need," said Isaac Lidsky, CEO of Rigor. "At Rigor, we believe it's a problem that's both understandable and solvable. Understandable because home building is seen as a risky investment by many - so much so that new home construction receives a pitiful three percent of all real estate lending. Solvable because when you pair transparent capital flows for lenders with instant payments for verified work to the supply chain, you eliminate the risks that have prevented scaled investment in the asset class."
Rigor is an easy-to-use web application that enables anyone to lend into home construction projects. With Rigor, lenders gain a platform to find and fund quality homebuilding projects, pool capital with other lenders, and get repaid. Homebuilders manage the work those funds pay for with task-level budgets paid directly to subcontractors and vendors as tasks are completed throughout a build – subject to verification by anyone the lender specifies in combination: builders, contractors, vendors, and municipal or third-party inspectors. All parties can see and understand where and to whom capital flows across the supply chain in real-time.
"You would never guess that demand for housing is at record levels when you consider the difficulties builders like us face securing and managing construction loans," said DK Kim, homebuilder and operating partner of FL Pro Brokers in Orlando (as well as a Rigor investor). "We typically build 80 homes a year and have established a solid reputation for the homes we deliver and sell. Getting the funding to grow our business should be easy, but that hasn't always been the case. Rigor tools and technology allow us to engage with and grow lending partnerships and streamline our operations. The result is that we can build more homes with fewer headaches and deliver for investors and buyers."
"There is an amazing opportunity here to make our money work for positive change in the housing industry," said John Starr, a private investor in Central Florida who is lending through Rigor as part of the company's "100 Homes" beta. "Home construction lenders like me face all kinds of risks. It's a fragmented and restrictive market and that makes it very difficult to manage or scale investments. Rigor is already changing that - and I'm bullish on what this means for really solving the housing shortage."
"Enough with the excuses," said Lidsky, "it's time for solutions, and that's exactly what Rigor is here to offer. Lenders get transparency and the returns they expect, home builders get the loans they need to meet big demand, subcontractors are paid on time for their work, and ultimately more Americans can enjoy the dream of homeownership. Let's break this vicious cycle!"
About Rigor
Rigor is a decentralized finance ("DeFi") platform for home construction. The company has built and deployed the Rigor application, now in beta and being used to build homes in Central Florida. The company has recently raised $2M seed financing from private investors to fund initial growth strategies and welcomes additional investors. Current strategic investors span the existing and new home construction ecosystem and include crypto-native asset funds, traditional home construction lenders, homebuilders, contractors, and subcontractors. Rigor's founders include CEO Isaac Lidsky, a serial tech and home construction entrepreneur, New York Times best-selling author, and former Supreme Court clerk; Erich Wasserman, president of BD, founder of ad tech success story MediaMath; and Web3 technologist and product leader Jonah Weinstein.
To engage and learn more, please visit: www.rigor.build and follow on Twitter: @Rigor_HQ
CONTACT
Greg Peverill-Conti
PR for Rigor
gregpc@sharporange.com
508-878-4103
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