How AI Can Help the Construction Industry Meet the Need for Housing

With all the talk of AI and its potential, is it any wonder that this powerful technology can help address one of our country’s most pressing concerns—a housing shortage?
By Jim Campbell
January 25, 2024

According to research from the National Association of Realtors, the United States is facing a shortage of 5.5 million homes. The gap continues to grow despite widespread efforts to meet rising demand, like a multi-family housing boom in 2023. While construction companies are fighting hard to keep up, they are limited by a pressing labor shortage, among other critical hurdles like supply shortages and steep pricing. The same is true in real estate, an industry dealing with pandemic-spurred job hopping and an aging workforce that’s retiring and leaving a sea of empty seats to fill. Without people to do the work, growth is an elusive target.

While the heightened housing market and labor crunch are straining real estate and construction companies, their antiquated back-offices and mundane tasks could be hindering workers’ efforts to focus on critical housing developments. Too much time is spent making sense of complicated billing procedures, processing invoices and issuing paper payments across decentralized organizations. AI and automation can take over mission critical back-office processes like invoicing and bill pay, freeing up time for real estate and construction workers to prioritize developments in the field, including building and selling new places for people to live.

Here’s a look at the state of the financial side of both industries and how automation promises to overhaul them by creating efficiencies that ultimately help meet growing demand for the residential sector.


Construction and real estate are labor-driven industries, dependent on scores of vendors and suppliers who must be promptly paid to award loyalty and avoid operational challenges. The industries’ stakeholders—ranging from operators, contractors, subs and employees to board members and property managers—are dispersed across geographies, including jobsites, projects and properties. This ultimately makes billing cumbersome and time consuming.

Additionally, back-office work in both industries is largely still paper-based, which requires staff to spend hours or days shuffling receipts, change orders and invoices between locations and reconciling what’s been billed against what’s been delivered. Complicated lines and billing structures, partial orders and backorders create complexity and are prone to errors, requiring more time for fixes. Payments also pose hurdles, as many companies are still largely reliant on paper checks for payments, which is a method that drains additional time and expense.

Research from LevelSet and FieldWire shows that 80% of companies surveyed spend a significant portion of their workweek solely chasing down payments from vendors and following up on status. The paperchase isn’t just time and labor intensive. It’s also prone to errors, susceptible to fraud and lacks visibility, which makes it difficult for leaders to know what funds are incoming. This can stall payments to contractors and suppliers and make it difficult to purchase materials. This can also make finding committed workers to take on new work more strenuous and create obstacles against effective planning to keep up with housing demand.


Automated invoice and payment solutions can transform back-offices by eliminating paper and the chases it creates. By leveraging AI-driven solutions, staff no longer need to pull invoices from the mail, scan and email them for approvals or call vendors for status updates. Automation handles cumbersome processes and provides clear visibility into them. Some solutions seamlessly integrate with existing accounting processes and software while cloud-based solutions further streamline work by allowing review and approvals from anywhere, at any time.

Automation also reduces, maybe even eliminates, the need for cutting paper checks, stuffing envelopes and making trips to the post office to mail payments to contractors and vendors. By offering more secure, convenient e-payment methods, companies earn loyalty by ensuring accurate, prompt payments, paving the way to future work.

AI also allows back-office staff to handle greater workloads, such as taking on more invoices without taking up more time. AI equips companies with valuable insights, including historical data, and gives them more time for opportunities to strengthen important relationships or spot and rectify problems before they occur. Company leaders can also focus on growing the business and adjusting its course when necessary to ensure smooth progress.


Amidst the demands for residential development, the need for modernization in construction and real estate has become much stronger. According to Deloitte’s 2023 engineering and construction industry outlook, firms are increasingly investing in emerging technologies like AI to deploy AI alongside human staff to help them ensure more efficient operations and allow them to focus on more meaningful initiatives, like meeting the need for housing.

Without modernization, meeting this need poses considerable challenges. Companies would forego cost-saving efficiencies that can improve their bottom lines and ease hiring constraints. They would be forced to operate without visibility that can empower them to better manage cash flow to ensure growth, and they would saddle their employees with time-intensive tasks that draw their attention away from building the business. By investing in automation, construction and real estate companies can empower their people and to do more, in turn helping to chip away at the national housing deficit.

by Jim Campbell
Jim Campbell is the VP of Construction at AvidXchange, the industry leader in automating invoice and payment processes for mid-market businesses. Jim joined the company in 2016 after decades in the construction software industry and is now responsible for driving buyer growth in AvidXchange’s construction vertical. Jim began his professional career in 1979 with Timberline Software Corporation, a pioneer in the development of application software for the construction and real estate industries before it was purchased by Sage Software in 2003.

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