Something like a factory requires an intensive upfront captial investment, if tastes change often enough the process would need to be amendable to adapt to changing tastes.

Combined with that, I think the fact there is no uniform standards for acceptable floor plans, compliant layouts and construction codes across the different jurisdictions really makes it hard for there to be economies of scale.

> note I don’t think construction codes are strictly a problem within the US, there’s apparently a manufactured housing code. However planning controls are a seperate thing and possibly still an issue.

An example from Sydney (which likely relates to other jurisdictions) Outsides construction code, in Sydney there is a quasi instrument called the apartment design guide which issues requirements on floor plans, floorspace, how far a bedroom wall can be from a window in a bedroom, ceiling heights a lot of things that act as constraints on the possible layouts of a home, and I have no doubt some form of this exists in other jurisdictions as well. I imagine when there is so much variation in different legislative constraints in different jurisdictions there isn't really economies of scales as there are actually several different non homogenous market segments with incompatible set of constraints, and where there's overlap it may not be a high demand end product.

I don't think this as much of a problem but I imagine there are cases where some unionised construction industries may refuse to use work on site using prefab components. I haven't really heard of such cases so I'm not convinced this is a real blocker.

There is this factory for lack of a better word near me that makes houses, packages them on a truck in pieces, and will ship them around the US to a foundation. All is said and done it's _maybe_ 100k cheaper to go with them than to buy the land and find your own contractors (and when the cost is between 300k-750k either way it doesn't really matter).

The essay touches on why this is the case, but fundamentally the issue with homebuilding isn't that we haven't optimized how to build houses. It's that only certain small segments of the population have seen anything but crushing decreases in wages on top of rampant inflation. So of course, when the average income of a region is 35k and the average house is 650k, there are issues that optimizing can't solve.

The bigger issue is the cost of land. The differential for land to build is often 10:1.

So even if the prefab shave 10-20% the price for a custom build, it's still not making much of a difference for the normal buyer.

unless a develop or government was opening up mutiple parcels of land well below the costs to build a house, prefab is not really going to be worth it.

That's striking. Building houses looks labor-intensive, but, if that's correct, labor cost isn't that large a fraction of the final cost.

A big part of the problem is the same with cars; nobody makes used cars, and nobody builds used houses. The buyers are the ones with money and they drive the demand.

https://www.amazon.com/Building-Affordable-House-Fernando-Pa...

(Some of the obvious wins have taken over quite quickly; almost no builders frame roof trusses anymore and instead bring them in from a factory on trucks and crane them into position - three men can do in a day what would have taken an entire team a week.)

There will be locations that are more desirable than others, and even if you keep building houses where there’s space, the need to congregate in particular areas (such as for work) will result in particular locations being more desirable.

And, it’s hard to increase the density of an area once the housing supply is already built out.

So instead, that supply stays fixed, demand increases, and the price increases in turn.

This actually made me think then that an accelerator for scalability could be: public transit into population centers that ensure areas with abundant space (and cheaper housing supply) can still easily access the areas that would otherwise be hugely expensive to live near

I believe this was done near DC where the public transit buildout helped foster further housing development in those emerging areas. Not sure if other HCOL areas, e.g. CA Bay Area, have similar things going on for East Bay mobility / other cross-county transport

This is my takeaway: to reduce home-construction costs, we need to apply economies of scale further to the inputs.

What is the idiot index for lumber, drywall, et cetera?

I think people overestimate the labor requirement/cost for building new construction because so much of their experience is dealing with repairs and maintenance and adapting old construction. While it might take a day or two to fix one already existent bathroom because of tearing old stuff out, not making a massive mess, fishing tools and materials through little access holes, you can plumb an entire new framed house with multiple bathrooms that doesn't have drywall in the way or people living in it in the same time or less. In the time it takes to fix your old existent leaking tub, in new construction a plumber could install 3 tubs, 5 toilets, 7 sinks, and hot water heater with all new pipe. And it will be a much easier task with far less struggle and both physical and mental anguish. Construction guys absolutely love new construction because it is literally 10x easier and without having to hack together old standards into new standards.

Material costs are at minimum atleast 50% of the cost of new construction, some contractors will just automatically bid everything at double the base material cost and make decent money off that. And potentially even higher total cost will be just material if everything is decided beforehand and all the materials are ready to go on site, because half of your labor cost is paying for all these contractors and subcontractors to travel around to different sites at different times. If they can put in a solid 20-30 hours on a single project without leaving the job site, they are going to be happy and be making bank and able to put in low bids. If they gotta return to a single job site 20 separate times from repeatably going to stores, waiting for supply deliveries, waiting for decisions, they are going to want some compensation for it and it gets rolled into the labor cost.

The #1 feature of housing in US is to keep the undesirables out. The best way to implement it is costly housing via zoning, deed restrictions and HOAs. And with costly housing, emerge good schools. Which creates a vicious/virtuous cycle. People who want to live in safe places (and/or good schools) create more demand in these specific locations even though they may not have the original motive (of keeping the undesirables out). This is the power of defaults.

Now, add to this that most of the wealth in US is housing, it creates a perverse incentive to stop any more supply, which they can accomplish at the city/county level.

Note: The above is US specific. There are other things at play in other countries. I'm not sure what drives costly housing in Canada and Australia.

The primary cost in homebuilding is not building itself. It is the gigantic amount of regulatory compliance and associated costs. Just splitting a parcel costs tens of thousands and takes years unless you know whose palms to grease. This is in the US in Washington state.

Housing is not a technical problem. Our medieval ancestors build housing using just twigs and mud. It's not that complicated to build something vastly better with modern materials. Modern conveniences like heating, electricity, sewers, water, etc. add a bit of complexity of course. But there's no logical reason why you should spend north of half a million on that. If you have a few spare thousands, you can own a pretty nice recreational vehicle that come with most of what you'd need. But good luck finding a spot in most densely populated areas where you would be allowed to live in one.

We keep finding extremely petty reasons not to do pragmatic things to fix housing and the cost of living crisis. Simply stopping the process of policing this sector would in short order lead to most cities gaining uncontrolled slums, camp sites, and what not. The irony of policy failure is that this is in fact happening in lots of places.

There are some things that could improve the situation. Post frame construction, Pre built trusses, macerating toilets that are more forgiving for sewer tie ins, localized instant hot so you don't have to run separate hot water lines, radiant heating so you don't have to run the duct work. It's all tradeoffs though and you aren't going to get a $500k house for $30k.

The other thing holding back progress are building codes and city laws. To be fair a lot of those codes exist for good reason but the inspection and permit system is suboptimal in most cases. You can buy a $30k small studio on Amazon right now that shows up on the back of a truck but good luck with your city allowing you to use it as a dwelling.

> You could find a way to use fewer and/or cheaper raw materials.

You can delete almost all of those components, almost all of that assembly work, much of the mass of the structure, much of the supply chain for the raw materials, almost all of the inventory costs, and you can make the financial carrying cost negative. You build it in a factory at room temperature mostly out of nearby rocks, and ship it flat-packed to the destination, where it mostly self-assembles over the course of a few minutes. The result is beautiful, requires little energy to heat or cool, and is impervious to insects, salt, caustics, weather, fire, and resistant to bombs.

Uh, the demonstration is forthcoming, bear with me.

More durable materials and construction techniques would also reduce the insurance costs which are basically overhead in the economy.

I think this can be largely solved by technology, but with a change of regulations, code, and division of labor in the trades.

1) Put all the power conduit, plumbing and HVAC into standardized modules that can be cut to length with a circular saw, and attached with tools that cost a total of $500 with no skilled labor. It doesn't matter if this increases material costs by 50% for those components because they are cheap vs. labor. I'd rather waste a $50 piece of conduit than pay three different tradespeople $100+/hour to hand-build junctions where the wasted piece would end up being.

2) The next big cost is probably drywall finishing + doors. I don't have a great solution. I can imagine just 3d printing the whole interior once the conduits are placed.

3) Roofs can be cheap if rooflines are simple, since that allows stuff like metal roof trim to be fabbed at a factory. I don't think asphalt shingles are going to make much sense in many places 30 years from now, so probably just bite the bullet, and pick something wind and fireproof, then make it cheap.

4) Put solar panels somewhere other than the roof, or replace the roof material with them entirely.

5) Framing and insulation are already embarrassingly cheap vs the rest of the house. Probably not worth optimizing unless it saves finishing labor in the next step (e.g., 3d print a beautiful interior wall so you don't have to pay for someone to apply joint compound + paint).

That leaves the foundation + architecture / engineering work as the hard part. Most of the design work for that stuff could be automated. Let the homeowner and builder boss an LLM around, and then run the LLM output through code compliance + simulation gates. The latter is really important because most local code is hazard or climate dependent, and having good deterministic vetting of designs would let the construction process apply to multiple climates.

Prefab could make sense, but, in practice, those people don't pick up the phone. One major issue is delivering the house to things like hills, or at the end of windy / suburban roads. (The prefab sections want to be 30-50ft long, but your residential road doesn't want to support trailers over 20-30' or so).