D.R. Horton, the largest homebuilder in the United States, has partnered with Prophetic, a startup based in Portland, Oregon, to improve how it evaluates land for new housing developments. Prophetic’s AI-based zoning platform takes on the task of interpreting local zoning laws and automates it in a matter of seconds.

The U.S. is facing a housing shortage of approximately 4 million homes, a gap from years of underbuilding and rising development costs.

By using AI, D.R. Horton hopes to identify suitable land faster and with greater accuracy, making it easier to deliver homes to a market that needs them.

Why It Matters: Zoning laws vary widely by city and county, creating major delays for developers who need to determine what can be built and where. AI enables the processing of those laws almost instantly, allowing builders like D.R. Horton to make informed decisions and move projects forward more efficiently. If widely adopted, this technology could open up more land for residential or even commercial building development.

• AI Condenses Zoning Reviews from Hours to Seconds: Prophetic’s platform processes thousands of local zoning documents using large language models trained to extract key development rules. This includes minimum lot sizes, density requirements, and setback distances. Developers now only need half a minute, opposed to two or three hours, with the added benefit of showing the exact sourcing details.

• Tool Covers Zoning Scenarios Across 25 States: Zoning regulations vary so widely across jurisdictions that there are more than 440,000 different ways to describe what can be built on a single parcel of land. By pulling in every zoning manual from every city and county in a given state, the system allows homebuilders to assess buildable land more consistently.

• Addresses Ongoing Home Supply Shortfall: Since the Great Recession, home construction has not kept up with demand. The result is a shortage of around 4 million homes, according to Zillow and other sources. This shortfall has driven prices up more than 50% since before the pandemic. Helping builders identify developable land more efficiently with AI could contribute to increased homebuilding. This application insinuates that AI technology could also extend to commercial real estate development.

• Gives Developers a Time-Based Advantage in Land Deals: In real estate development, those who can act first often secure the best opportunities. According to Prophetic’s CEO, builders using AI can evaluate land faster than competitors and make offers before others finish their zoning reviews. This ability to make quicker decisions can give builders control over land that others haven’t had time to assess, allowing them to lock in deals first.

• Focuses on Practical AI Applications in Construction: Unlike AI tools designed for more visible or creative uses, by translating zoning codes into actionable information in seconds, AI tools can eliminate a major source of delay in the homebuilding process. This is especially important for companies under pressure to meet growing demand.

Go Deeper -> D.R. Horton is tapping a startup’s AI zoning tool to build more homes – CNBC

D.R. Horton Partners with AI Startup to Speed Up Home Development – The Tech Buzz