The Modular-Home Maker That Could Make Housing Cheaper

Upstairs in Katerra Inc.’s cavernous 250,000-square-foot factory on the west side of Phoenix, real estate developers compare quartz countertops and bathroom fixtures while architects use the company’s design software to pick from premade plans. On the factory floor, workers and robots hammer pallets of Douglas fir into finished wall panels and put them on an assembly line, where other machines and craftspeople add windows and plumbing before a crane stacks the finished walls on a flatbed. When the truck arrives in Lodi, Calif., three days later, Amanda Andel, a construction materials manager, uses an RFID scanner to see what’s arrived and an iPad to show where cranes should set each piece of a four-story retirement home.

This process is a radical change for the construction industry and a threat to decades of this-is-just-how-we-do-it attitudes. While other construction tech startups try to modernize some parts of the business, designing modular homes or building robot-run factories to make prefab parts, Katerra seems to have the best shot at putting all these pieces together, from design to finished building. It’s pitching some of its own appliances, carpets, windows, even engineered lumber. The company wants to control everything from “womb to tomb,” says customer Dean Henry, chief executive officer of real estate firm Legacy Partners Inc.