I’m Bored. Want to Build a House?
by Tony Chavira
I’m serious. Let’s start building this weekend. It should only take, like, the whole day Saturday. I just need someone else to hold the other side of the wall while I bolt everything into place. Four guys can do the whole thing, I swear.
What if I also told you that I was able to get a custom design for my house and all the materials to build it with less than $70,000! Let’s up the ante: my house is also certified L.E.E.D. (i.e. it’s sustainable/green design) and it’s all set up for solar, water reclamation, and close to zero waste. Sound too good to be true? Well, unfortunately for me, right now it is.
And the worst part is that “Modular Housing” has been around since the 1960s. The idea that we can piece together fully-customized structures with pre-assembled pieces is not new; in fact, carpenters have used similar techniques around the world throughout history. And yet, I can’t get a cheap modular home on any property in L.A.
a D&G modular home
“But Tony!” you say, “you could pay a ton of cash and get a really awesome-looking modular home tomorrow if you want.” Yeah, that’s also an option, but the concept of modular housing isn’t meant for super-rich jerks who want to make an example for the rest of the world. Modular housing also isn’t meant for an architect who wants to get his or her design manifesto across through thousands of kiss-ass publications. Modular housing is meant for the people! THE PROLETARIAT!
The problem here is obviously economy of scale. Think about it this way: if I make just one modular house with just one design, it’ll cost me an arm and a leg. And maybe one of my kidneys. Why so much? Because I made just one, so it costs a ton of cash to make a mold for that one house. In fact, it would even cost more money than building a regular house, because you need to use that first design to build a mold and system for future modular development.
But instead, let’s say that I made 10,000 modular houses. I made 15 designs that are different from each other, but still have customizability per house. If I decided to build 10,000 homes the old-fashioned way, the production cost would eat me alive. The time to build just one house would be months, and I’d still need to put together the other 99,999. I don’t have that kind of time. I need to live in a house now and I’m not made of money.
a dose of gratuitous cheesecake
10,000 units of modular housing could all be done in a relatively short time with a minimum of manpower. How is that possible? Because they’re manufactured like pieces to a puzzle: after you put one together and get the hang of it, the rest are easy and fast. You and a team of ten people might even be able to put together a whole house in a few hours and move on to the next one right away. “Economies of Scale” literally means that the more houses you build, the lower the cost of each house. The bigger the scale, the cheaper the house. So, for example, if we wanted to sell a modular house to everyone who lost their home in the Southland fire or Hurricane Katrina, and everyone who defaulted on their mortgage, each house might cost less than $70K and would be fully customizable. They could all probably go up over the course of a week or two, a month at the longest.
But what’s standing in the way of this kind of progress? First, tradition of construction: there are too few qualified contractors who are used to working with and developing modular housing, and it’s hard to teach an old dog new tricks. Especially when there are hundreds and hundreds of years of tradition behind traditional construction. Second, investors: I seriously doubt we’re going to be able to pull 10,000 people together to give a modular housing developer $50K, so we’d need to find a large developer who’s willing to frontload the cost of producing modular homes. No easy task when $70K times 10,000 units equals about $700 million. It might be cheaper per unit to do 20,000 houses though (maybe $60K per house), but the front-loaded cost for the developer would be $1.2 billion. Third, and most important, public demand. Come on, if everyone collectively decided that modular was the smart way to go, we might be able to lean on some government officials to subsidize developers, provide construction incentives and streamline zoning requirements.
Alas, we’re trapped in a world of rigid, traditional construction practices, investors who’d rather do small high-end developments than go for gold on massive democratic ones, and government officials who sit around and expect the city planning department and master plan to eventually solve all of our housing needs. Someday I’ll get my modular house, although I might be old and gray at that point. A man can dream though. A man can dream ...