Across the United States, the cost of housing has significantly increased in recent years, driven by population growth, larger home sizes, and a limited supply of new construction. Properties that were once affordable have, due to zoning regulations, become expensive homes, creating a lack of reasonably priced housing for many individuals.

The housing market in the Bay Area has been particularly affected, with the average price of an existing home reaching nearly $1 million last year. John Geary, a native of Cupertino and son of a single-family home developer, observes, “I’ve witnessed the insufficient development of housing throughout my life here.”

He connected with Eric McInerney while both were employed at Bain, and they developed a strong friendship, even living together in Chicago. Sharing a common interest in housing issues, they frequently discussed the affordability crisis and eventually began exploring potential solutions.

In California, a key development in addressing the crisis has been new state legislation that simplifies the process of building Accessory Dwelling Units (ADUs) – smaller, independent housing units located on existing properties, such as a detached one-bedroom home in a backyard.

Geary’s awareness of the potential of ADUs grew when his father, developing a subdivision in San Juan Bautista, was required to incorporate 15 ADUs into a plan for 45 lots. Finding limited viable options for affordable construction, and hearing similar experiences from other homeowners, they identified a gap in the market.

Recognizing this opportunity, Geary and McInerney launched Abodu. Based in Redwood City, California, the startup provides three customizable home models that are manufactured to order and delivered to homeowners in approximately 12 weeks.

The company secured $3.5 million in seed funding, led by Kim-Mai Cutler, formerly a writer for TechCrunch and now a partner at Initialized Capital. Her influential essay on “vomiting anarchists” brought attention to housing challenges within the Bay Area and the broader tech community.

Abodu currently offers a studio, a one-bedroom, and a two-bedroom model, priced starting at $189,000, $199,000, and $259,000 respectively. These prices encompass standard installation, foundations, and utility connections, excluding local permit fees, which Geary estimates range from $1,500 to $7,000. More luxurious options and finishes are also available, and customers can purchase units online or visit the showroom in Redwood City.

“These homes are built entirely offsite to adhere to all local building codes. The construction process, materials, and requirements are the same as building from the ground up in a backyard; we simply manufacture them in a factory,” Geary clarified.

The completed home is transported to the property and carefully lifted into place by a crane, positioned on the prepared foundation.

Currently, factory construction takes around 10 weeks, while preparing the property for installation requires approximately 10 days. As the unit nears completion, construction crews begin site preparation. “From the homeowner’s perspective, the disruption is largely confined to that final phase of the project – a period of just two weeks, rather than months as with traditional construction,” Geary explained.

Customers can utilize standard home equity lines of credit (HELOCs) or cash-out mortgage refinancing to finance their purchase.

The company presently employs 10 individuals and shares its office space with its Redwood City showroom.

Geary notes that initial interest came from property owners seeking rental income from backyard units. However, the pandemic has increased demand for more adaptable housing arrangements, as families accommodate returning children and older relatives seeking to maintain social distance.