‘Demand Is There, But Labor Is Lacking’: Agorus’ Greg Otto At Bisnow’s Orange County Event

The housing market in Southern California has always been one of the most vibrant in the country, but it is increasingly becoming more unaffordable due to high property taxes, strict building codes and heightened construction costs. Renters now make up 45% of the state’s total housing market, the second-highest proportion of renters in the U.S.

In Orange County specifically, there is an undersupply of housing — falling short by 65,000 units. The shortage is expected to continue to grow across Southern California over the next several years. 

However, one El Cajon-based construction company that specializes in industrialized construction, Agorus, is aiming to alleviate the pressures of the housing market by creating more housing more efficiently through manufactured panelized building components. 

“We have a very tech-centric focus, both hardware- and software-wise, to enable the use of robotics in the manufacturing process,” said Greg Otto, vice president of growth and construction at Agorus. “We are facing a huge labor shortage that isn’t going away, and the endgame of our ONE Phase process is to be able to take what is traditionally done in the field and automate it for factory production, shorten the project duration and deliver a quality product, faster.”

Otto will be speaking at Bisnow’s Orange County Multifamily Conference, along with other local leaders in the Orange County multifamily market on Aug. 23. Register here.

Bisnow spoke with Otto about what motivated him to speak at this event, the new trends that developers should pay attention to in Orange County and what new projects Agorus is working on in today's market.

Bisnow: What multifamily development trends do you see in Orange County?

Otto: The Orange County market is heavily impacted by labor and trying to overcome those issues is a major priority for us. It's becoming increasingly more difficult to develop projects, given the cost of labor and the cost of materials, even more so now, within a very difficult financial market. 

Industrialized construction allows you to build housing more efficiently using better decisions about material and system integration, as well as overcome a labor shortage. This is something we need more of not only in Orange County, but across the country. It also forces the industry to look at labor differently.

During our ONE Phase process, we complete installation of a new home in roughly three to five days, at which point it is ready for a rough trade inspection, which is truly innovative.

In Southern California, demand is no problem. The biggest problem in California is being able to supply what demand can afford. As of right now, they don't fit together. What the market can supply is generally too expensive relative to demand.

Bisnow: What inspired you to speak at Bisnow’s OC Multifamily Conference?

Otto: Bisnow represents a good platform to get connected with other CRE professionals. I find that California is very fragmented and regionalized, despite the fact that the state is seen as one large economy. I believe there needs to be more sharing of ideas. I think Bisnow is a good network to tie all of that together, in which you get a diverse and engaged audience.

I don't view what we're up to at Agorus to be something to hold confidentially. We want to share and bring everybody along with us to try to improve the process to produce housing and create a better outcome for everyone.  

Bisnow: What are some of the development or economic challenges facing the market? 

Otto: For us, the challenge with development, in general, is just that the supply chain and labor remain issues. We still see a lot of volatility in material pricing. As we’re coming back online from the pandemic, and now face new economic realities, it is really difficult to produce desired outcomes, like housing that is affordable. 

California could use some help from our politicians, too. Our process to get housing built is overly burdened by regulation. It's really slowing down the production of housing. The bottleneck with jurisdictions is unacceptable. 

Bisnow: What projects is Agorus working on in this market?

Otto: We just finished 39 townhomes with Hallmark Communities. We have a prototype project in Santa Barbara that we'll be finishing up this year that combines the latest in terms of our innovative multitrade solution. We are looking to roll it out commercially in 2024 as OneBuild.

The Santa Barbara project is one of the most important because it shows the advancement of our product — the idea of a manufactured, multitrade panel, weather-wrapped on the outside, sheetrocked on the inside, full MEP, insulation, low voltage — everything's installed at the factory. When coming together, it’s a true kit of parts and assembled in only a couple of days. You’re ready for a rough trade inspection in five days or less. 

Going into the new year, we're setting up a factory to support three pilot projects in Southern California, ranging anywhere from 80 to 300 homes. These pilots are true multitrade and will be a showcase for our OneBuild product.

Bisnow: Where do you see Orange County’s CRE market headed in the next few years?

Otto: Put simply, we need to build a lot of housing everywhere in California. It’s not one single thing. We need to do infill now, we need more single-family homes and more apartments. You name it, we need it. We need to find new solutions to deliver it. We are hopeful that Agorus can be a big part of this solution.

This article was produced in collaboration between Agorus and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.