4 ms·

Quality prefabricated homes and apartments are a great idea. There's a negative association with prefabricated homes, but I've seen a lot of newer companies tha

Quality prefabricated homes and apartments are a great idea. There's a negative association with prefabricated homes, but I've seen a lot of newer companies that seem to be focusing on quality and efficiency, often targeting the higher end of the market. And lots of new homes built on-site are of very poor quality these days: https://www.washingtonpost.com/news/where-we-live/wp/2017/05/23/new-home-build-quality-standards-are-slipping-and-how-you-can-protect-yourself https://www.washingtonpost.com/news/where-we-live/wp/2017/05... This approach doesn't seem like a solution to affordable housing, even though many of these companies use that concept in their marketing. In the least affordable housing markets with worsening trends, including Seattle and San Francisco, construction cost is a tiny fraction of the problem. Efficient, prefabricated housing isn't going to make housing meaningfully more affordable in places where the majority of the cost of a dwelling is its land.

pxeboot 8y ago
The article claims a per unit cost of almost $800k in SF. Cheaper, prefabricated units could make a significant difference here.
- davmre 8y ago
  That per-unit development cost is almost certainly including the cost of acquiring the land. Labor in SF is expensive, but not that expensive.
  - epistasis 8y ago
    Labor is hugely under supplied in SF. I hear it's really hard to get on a contractor's docket these days without a really big project.
Eridrus 8y ago
> This approach doesn't seem like a solution to affordable housing, even though many of these companies use that concept in their marketing. It's not a complete solution, but construction costs provide a floor on the price of new housing. Even if we solve all the other issues around zoning, impact fees (https://letsgola.wordpress.com/2018/06/03/impact-fees-are-bad-taxes-are-good/ https://letsgola.wordpress.com/2018/06/03/impact-fees-are-ba...), approval times, NIMBYs, etc, the price of dense, new housing is going to provide a floor on how much it costs to house people. It's also super important for construction to be cheap for it to make sense to build denser housing where moderately dense housing exists, because in those cases the value of the building over the cost of land is significant, e.g. I live in a 4 story building, but I live right on top of a subway station where we should probably have far more density, but my landlord is deriving value from all the occupants, but not the land. So, it's not going to solve the housing issue by itself, but like the Ben Horowitz saying, there are no silver bullets, only lead bullets. And making construction costs cheaper is one of them.

pxeboot 8y ago

The article claims a per unit cost of almost $800k in SF. Cheaper, prefabricated units could make a significant difference here.

davmre 8y ago
That per-unit development cost is almost certainly including the cost of acquiring the land. Labor in SF is expensive, but not that expensive.
- epistasis 8y ago
  Labor is hugely under supplied in SF. I hear it's really hard to get on a contractor's docket these days without a really big project.

Eridrus 8y ago

> This approach doesn't seem like a solution to affordable housing, even though many of these companies use that concept in their marketing. It's not a complete solution, but construction costs provide a floor on the price of new housing. Even if we solve all the other issues around zoning, impact fees (https://letsgola.wordpress.com/2018/06/03/impact-fees-are-bad-taxes-are-good/ https://letsgola.wordpress.com/2018/06/03/impact-fees-are-ba...), approval times, NIMBYs, etc, the price of dense, new housing is going to provide a floor on how much it costs to house people. It's also super important for construction to be cheap for it to make sense to build denser housing where moderately dense housing exists, because in those cases the value of the building over the cost of land is significant, e.g. I live in a 4 story building, but I live right on top of a subway station where we should probably have far more density, but my landlord is deriving value from all the occupants, but not the land. So, it's not going to solve the housing issue by itself, but like the Ben Horowitz saying, there are no silver bullets, only lead bullets. And making construction costs cheaper is one of them.