North Carolina

Ben Carson talks about NC company, affordable housing, Oreos and REOs

Ben Carson, the secretary of housing and urban development, wanted to talk about a North Carolina company he thinks could play a role in making new apartments more affordable.

So his spokeswoman reached out The News & Observer and asked if this reporter had a few minutes to chat with the secretary before he boarded a plane.

The call came on Thursday, just a couple days after the secretary made headlines for a gaffe involving cookies and calls were made for him to resign from his position in charge of the organization that assists about 4.8 million households with housing.

But Carson, a one-time presidential candidate and a renowned brain surgeon, specifically wanted to chat about Prescient, a building technology company whose headquarters was based in Durham until a little over a month ago.

The company was forced to relocate when a deadly gas explosion completely destroyed the company’s headquarters in downtown Durham. Now it is operating out of its manufacturing space in Mebane, where it uses design software and robotics to create pre-fabricated steel framing for apartments, a process it says cuts down on costs. (A company official said the current plan is to keep employees permanently at the Mebane office now.)

Prescient’s innovative approach to construction apparently caught the Department of Housing and Urban Development’s attention.

“You know, they are pushing a lot of the technologies right to the brink, which is what we need,” Carson said of the company, “because we have such a significant housing problem associated with affordability” right now.

And “their technology and digital design,” Carson added “... is able to build housing much cheaper and much faster and much more efficiently.”

The Prescient facility in Mebane. Prescient, a Colorado-based construction software company, is hiring 200 people at the Mebane site and moving its headquarters from the Denver area to Durham, the company announced on Wednesday. Zachery Eanes

Prescient’s off-site construction method reduces labor costs and speeds up construction times, all things that make apartment projects cheaper to build and hopefully leads to cheaper rents.

And now, for a full week, HUD will display a prototype of the company’s construction on the National Mall during the first week of June, as part of the Innovative Housing Showcase, a conference meant to show off new building technology.

“It really puts us on the national stage,” Prescient’s Chief Marketing Office Rich Pond said in a phone interview. “More people can find out who we are since we are still a relatively young company.”

It also could help the company, which was founded in Colorado in 2012, land some government contracts. Pond said the company is currently in talks with the federal government about some projects.

Pushing back against NIMBYism

But finding cheaper ways to build apartments is only part of the solution to the affordability crisis, with the main cause of rising housing prices being restrictive zoning and regulations, Carson said.

Carson noted that 17 million households in the U.S. are severely cost burdened, meaning they spend more than 50% on housing. In North Carolina, nearly half of all renters pay more than 30% of their incomes toward housing, a percentage that is widely considered to be unsustainable, according to the N.C. Justice Center.

Zoning regulations and NIMBYism — short for “not in my backyard,” a term often used to describe people who oppose new development near their homes — are a common target of Carson’s as the source of this problem.

“The very best way, obviously, is to address the ideological factors that are causing (prices) to rise so much,” Carson said of how to create more affordable housing. “These density and height restrictions and parking restrictions, they add to a new, single-family construction about 25% (in price) and to multifamily 32% on average. That’s a massive increase in pricing, which leaves a lot of people very distressed.”

In a release, Carson’s office noted that the country is woefully behind schedule in building new housing units.

The U.S. needs about 1.3 million new homes and 325,000 new apartments per year to keep up with population growth. But last year, only 900,000 homes were started and on average only 244,000 apartments are built per year, HUD said, citing data from the National Association of Home Builders and the National Apartment Association.

“We are working with the various local jurisdictions to remove a lot of the (regulatory) barriers,” Carson said. “That is the thing that the builders are waiting for.”

Carson’s week in the news

It’s been an eventful week for Carson, who earlier this week made a notable faux pas during a Financial Services Committee hearing in Congress.

During that hearing U.S. Rep. Katie Porter, a Democrat from California, asked Carson a question using the term REO, a common acronym meaning real-estate owned that is used to describe foreclosed properties.

“An Oreo?” Carson responded, mishearing the acronym as the name of the popular cookie.

When asked if he knew what an REO was, Carson eventually answered incorrectly that it was a “Real estate e-organization,” The Washington Post reported. The misfiring by the secretary led to many people calling him unqualified for the position of HUD secretary, Time magazine reported. He later told Fox Business that he was having difficulty hearing.

In response to a question in Thursday’s interview about the fallout, Carson appeared to invoke U.S. Rep. Ilhan Omar, a Democrat from Minnesota, and the current debate around abortion rights in the U.S.

“Sometimes you just push back,” Carson told The N&O. “She said you’re sleepy. Of course, I may be sleepy after 18-hour operations and taking care of little babies that some people don’t think deserve the right to live.”

That appeared to be a reference to a string of tweets between the representative and the secretary.

On Tuesday, Omar had tweeted: “Not sure he was fully awake, maybe he meant to reclaim his time back to sleep,” in response to a video of the Oreo comment.

Carson replied on Twitter: “I know what it’s like to actually be sleepy, especially after 18-hour surgeries and operating on babies in the womb. I hope @IlhanMN knows I care about all people, even those she doesn’t recognize as having a right to life.”

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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.