RAND Report Recommends Strategies For The Federal Government To Accelerate Innovation In Housing Industry

For Release

February 25, 2003

The U.S. economy would benefit from higher levels of innovation in the housing industry. Housing innovations help reduce home energy consumption, cut costs of materials, and reduce barriers to home ownership, among other benefits, according to a RAND report issued today.

The report analyzes the unique structure of the housing industry that can make innovation difficult. To better leverage its existing programs, the report suggests, the federal government could advance innovation with a new set of strategies, including but not limited to greater support for research and product development; a strengthened knowledge base; and improved market linkages.

Building Better Homes: Government Strategies for Promoting Innovation in Housing was prepared in response to a request from the U.S. Department of Housing and Urban Development (HUD) Office of Policy Development and Research, and the Partnership for Advancing Technology in Housing (PATH). In development since late 2001, the report will serve as a basis for broad thinking in PATH, HUD, and other federal, state, and local agencies, as well as the homebuilding industry at large, on the future of residential construction.

“This report answers many questions for PATH,” said David Engel, Director of Affordable Housing Research and Technology in HUD, “but, more importantly, it also provides insight and guidance for all groups that are committed to advancing housing technology.”

Relying on previous literature from academia, government, and industry, as well as meetings with representatives from the housing industry, this report describes the importance of innovation in the U.S. housing industry and discusses challenges to the advancement of housing technology in historical and contemporary contexts. In examining past government efforts to promote innovation in housing, the report explores the specific industrial, institutional, financial, and cultural barriers that can impede the advancement of housing technology. It explores opportunities to overcome challenges within these contexts and recommends new directions for technology development policy that the federal government should consider to increase the rate of innovation in housing. Perhaps most notable among these is greater attention to the effect of market forces on innovation.

PATH began as a technology barriers analysis project, and it has an ongoing interest in reviewing barrier-related issues. PATH also works to develop potential alternatives or improvements in coordination with existing industrial and governmental frameworks.

“Promoting innovation is one of the government's most effective strategies for boosting economic growth,” said Scott Hassell, lead author of the report. “In an industry that represents nearly 20 percent of the gross domestic product, innovation can result in significant benefits for the environment, worker safety, and American homeowners.”

The Science and Technology Policy Institute, a federally funded research and development center sponsored by the National Science Foundation, prepared the report. The Institute is managed by RAND, a nonprofit institution that helps improve policy and decisionmaking through research and analysis. Originally created by Congress in 1991 as the Critical Technologies Institute, the institute works to help improve public policy by conducting objective, independent research and analysis on policy issues that involve science and technology.

Building Better Homes was authored by Scott Hassell, Anny Wong, Ari Houser, Debra Knopman and Mark Bernstein. The report can be ordered from PATH by calling (800) 245-2691, or from RAND at www.rand.org.

About PATH:
PATH (www.pathnet.org) is a public-private partnership of leading-edge homebuilders, manufacturers, researchers, professional groups, and Federal agencies concerned with housing. By working together, PATH partners improve the quality and affordability of today's new and existing homes, strengthen the technology infrastructure of the United States, and help create the next generation of American housing.

About RAND

RAND is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous.