4 ms·

Key statement: "The fact that the ratio between costs of constructing a home and the costs of the various materials is already so low is fundamentally what make

by Animats 5mo ago

Key statement: "The fact that the ratio between costs of constructing a home and the costs of the various materials is already so low is fundamentally what makes achieving substantial economies of scale difficult." 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.

pfdietz 5mo ago
It suggests we need to find cheaper materials from which to build homes.
- toomuchtodo 5mo ago
  I’m unsure if this solves the problem. Like childcare, we may need to collectively subsidize housing construction to make it affordable. Example: China. The problem is that the costs of labor and materials from the past are behind us, and there are potentially no material cost and productivity improvements to be had. The costs are the costs and potentially unavoidable.
  - why_only_15 5mo ago
    Does China subsidize housing construction? Is your claim something like "China encourages/forces consumers to save at high rates which lowers interest rates and makes there be more construction"?
    - toomuchtodo 5mo ago
      https://www.reuters.com/world/china/key-features-chinas-affordable-housing-policy-2024-06-04/ https://www.reuters.com/world/china/key-features-chinas-affo... https://www.sciencedirect.com/science/article/pii/S2666165923001047 https://www.sciencedirect.com/science/article/pii/S266616592...
- Animats 5mo ago
  Most of the world builds low-end homes from reinforced concrete. Most US buyers don't like that. (I live in a house built from cinder blocks filled with concrete and rebar, like a commercial building. It was built by a commercial builder as his own house. It looks industrial from the outside, and nice inside. I'm fine with that, but most people are not.)
  - pfdietz 5mo ago
    The underlying problem, I think, is that homes are used as displays of wealth. Veblen goods.
  - dilyevsky 5mo ago
    Most of the world doesnt have access to good/cheap canadian lumber and we do. It would make sfhs and even small multihome projects more expensive not less if you start building them from concrete and steel. Also at the risk of stating the obvious - frame is on the order of 10-20% of the total construction cost so wouldn’t really make much of difference anyway
    - pfdietz 5mo ago
      I was noticing on my last trip to Europe that telephone/power poles were made of concrete, not wood. This was near Budapest.
      - dilyevsky 5mo ago
        Same reason - US had a lot of timber and Europe generally didn't by the time industrial revolution came. In addition, a lot of eastern europe had to be totally rebuilt from scratch after ww2 and especially soviets were never really good with money (duh) and did a lot of the things for the show.
dlcarrier 5mo ago
It's a strange way to analyze the situation. By that logic, building from premium materials makes economies of scale more difficult, and building from cheap materials makes it easy. Also, labor inefficiencies clearly exist, as protectionism by definition creates artificial inefficiencies, and it is rampant in all aspects of construction. It's easy to buy an off-the-shelf and cheap window air conditioner that uses a far more efficient variable-speed heat pump than the fixed-speed heat pump most central HVAC's use, but that same technology is rare in installed central HVACs, because the licensing and certification requirements impede the adaptation of newer more-efficient technology, despite the requirements ostensibly existing to increase its use, but in practice providing protectionism at the expense of modern efficient technology. There's similar effects with protectionism slowing the adaptation of longer lasting, safer, or less error prone infrastructure in other fields of construction like plumbing, electrical, framing, etc.… Licensing and certification is also easily hijacked by NIMBYists, and because it's not based on actual safety requirements it can vary significantly from region to region, as is demonstrated by nationwide home builders having an efficiency disadvantage over those operating in only one region. Granted, repealing NIMBYism and protectionism is nearly impossible, so it's not an effective means to reduce the costs of building housing, but it does demonstrate that there is a lot of inefficiency in the process. It also means that the field is ripe for disruption, because a concerted enough effort to sidestep NIMBYism and protectionism could break through and create a significant and immediate impact on the field, as for example, Trader Joe's did with wine importation, Southwest did with scheduled airlines, and Uber and Lyft did with town car services.
- bob1029 5mo ago
  > but that same technology is rare in installed central HVACs, because the licensing and certification requirements impede the adaptation of newer more-efficient technology, despite the requirements ostensibly existing to increase its use, but in practice providing protectionism at the expense of modern efficient technology. In practice, the single stage condensing units tend to be significantly more reliable. Inverter units require specialized control boards and semiconductors. The most advanced piece of logic in my condensing unit is a macro-scale electromagnet that keeps a circuit closed. I have several replacements sitting around my garage somewhere in a box. These components are brand agnostic so I could probably help my neighbors out too (or vice versa). A single stage condenser can often survive things like a direct lightning strike. Also, if you live in a place like Texas gulf coast region, there isn't really a point to having a speed lower than 100%. You'd have 2-3 weeks out of the year where that would actually be useful.
AngryData 5mo ago
For a large part of residential construction if everything is new it only takes a few days to assemble for each step, the rest is just the logistics of choosing and buying the materials and getting delivery. Like even a large house can be entirely framed in a few days, a week at most, with two or three if all the materials are available and the frame design is finalized. With dimensional lumber construction there is a pretty simple way to stack and nail the floors then walls then ceilings then next floor if there is, then rafters. Work goes as fast as you can toss lumber and shoot nails. Everything so with simple blueprints of where the walls are, the height of the walls, and window and door placements. For a framer its like constructing with legos. Then a roof can be put on in half a day, siding 2-3 days, electrical and plumbing a day or two, drywall a day or two to hang and a day or two to mud and sand, painting can be done in a day or two. Getting decent trim might take longer, but it is also a more skilled and detail orientated work. With framing you can ignore 1/16th gaps and everything will settle and flex into a solid foundation. With pieces of trim a 1/16th gap could be a visible problem. You could potentially go from nothing to an entire nearly finished house in 2 weeks worth of labor, however because the framers, electrocutions, plumbers, siding, flooring, drywall guys are often all separate contractors and the shipping for all those materials are all on different schedules it takes longer. Or if a few guys are doing it all, they will lose a bit of speed by not being specialists for each task, but can make up that time having a more centrally coordinated plan of attack. Even then the permits and design planning and choosing the windows and siding and flooring and all that is often still the biggest speed bottleneck.

by Animats 5mo ago

pfdietz 5mo ago

It suggests we need to find cheaper materials from which to build homes.

toomuchtodo 5mo ago
I’m unsure if this solves the problem. Like childcare, we may need to collectively subsidize housing construction to make it affordable. Example: China. The problem is that the costs of labor and materials from the past are behind us, and there are potentially no material cost and productivity improvements to be had. The costs are the costs and potentially unavoidable.
- why_only_15 5mo ago
  Does China subsidize housing construction? Is your claim something like "China encourages/forces consumers to save at high rates which lowers interest rates and makes there be more construction"?
  - toomuchtodo 5mo ago
    https://www.reuters.com/world/china/key-features-chinas-affordable-housing-policy-2024-06-04/ https://www.reuters.com/world/china/key-features-chinas-affo... https://www.sciencedirect.com/science/article/pii/S2666165923001047 https://www.sciencedirect.com/science/article/pii/S266616592...
Animats 5mo ago
Most of the world builds low-end homes from reinforced concrete. Most US buyers don't like that. (I live in a house built from cinder blocks filled with concrete and rebar, like a commercial building. It was built by a commercial builder as his own house. It looks industrial from the outside, and nice inside. I'm fine with that, but most people are not.)
- pfdietz 5mo ago
  The underlying problem, I think, is that homes are used as displays of wealth. Veblen goods.
- dilyevsky 5mo ago
  Most of the world doesnt have access to good/cheap canadian lumber and we do. It would make sfhs and even small multihome projects more expensive not less if you start building them from concrete and steel. Also at the risk of stating the obvious - frame is on the order of 10-20% of the total construction cost so wouldn’t really make much of difference anyway
  - pfdietz 5mo ago
    I was noticing on my last trip to Europe that telephone/power poles were made of concrete, not wood. This was near Budapest.
    - dilyevsky 5mo ago
      Same reason - US had a lot of timber and Europe generally didn't by the time industrial revolution came. In addition, a lot of eastern europe had to be totally rebuilt from scratch after ww2 and especially soviets were never really good with money (duh) and did a lot of the things for the show.

dlcarrier 5mo ago

It's a strange way to analyze the situation. By that logic, building from premium materials makes economies of scale more difficult, and building from cheap materials makes it easy. Also, labor inefficiencies clearly exist, as protectionism by definition creates artificial inefficiencies, and it is rampant in all aspects of construction. It's easy to buy an off-the-shelf and cheap window air conditioner that uses a far more efficient variable-speed heat pump than the fixed-speed heat pump most central HVAC's use, but that same technology is rare in installed central HVACs, because the licensing and certification requirements impede the adaptation of newer more-efficient technology, despite the requirements ostensibly existing to increase its use, but in practice providing protectionism at the expense of modern efficient technology. There's similar effects with protectionism slowing the adaptation of longer lasting, safer, or less error prone infrastructure in other fields of construction like plumbing, electrical, framing, etc.… Licensing and certification is also easily hijacked by NIMBYists, and because it's not based on actual safety requirements it can vary significantly from region to region, as is demonstrated by nationwide home builders having an efficiency disadvantage over those operating in only one region. Granted, repealing NIMBYism and protectionism is nearly impossible, so it's not an effective means to reduce the costs of building housing, but it does demonstrate that there is a lot of inefficiency in the process. It also means that the field is ripe for disruption, because a concerted enough effort to sidestep NIMBYism and protectionism could break through and create a significant and immediate impact on the field, as for example, Trader Joe's did with wine importation, Southwest did with scheduled airlines, and Uber and Lyft did with town car services.

bob1029 5mo ago
> but that same technology is rare in installed central HVACs, because the licensing and certification requirements impede the adaptation of newer more-efficient technology, despite the requirements ostensibly existing to increase its use, but in practice providing protectionism at the expense of modern efficient technology. In practice, the single stage condensing units tend to be significantly more reliable. Inverter units require specialized control boards and semiconductors. The most advanced piece of logic in my condensing unit is a macro-scale electromagnet that keeps a circuit closed. I have several replacements sitting around my garage somewhere in a box. These components are brand agnostic so I could probably help my neighbors out too (or vice versa). A single stage condenser can often survive things like a direct lightning strike. Also, if you live in a place like Texas gulf coast region, there isn't really a point to having a speed lower than 100%. You'd have 2-3 weeks out of the year where that would actually be useful.

AngryData 5mo ago

For a large part of residential construction if everything is new it only takes a few days to assemble for each step, the rest is just the logistics of choosing and buying the materials and getting delivery. Like even a large house can be entirely framed in a few days, a week at most, with two or three if all the materials are available and the frame design is finalized. With dimensional lumber construction there is a pretty simple way to stack and nail the floors then walls then ceilings then next floor if there is, then rafters. Work goes as fast as you can toss lumber and shoot nails. Everything so with simple blueprints of where the walls are, the height of the walls, and window and door placements. For a framer its like constructing with legos. Then a roof can be put on in half a day, siding 2-3 days, electrical and plumbing a day or two, drywall a day or two to hang and a day or two to mud and sand, painting can be done in a day or two. Getting decent trim might take longer, but it is also a more skilled and detail orientated work. With framing you can ignore 1/16th gaps and everything will settle and flex into a solid foundation. With pieces of trim a 1/16th gap could be a visible problem. You could potentially go from nothing to an entire nearly finished house in 2 weeks worth of labor, however because the framers, electrocutions, plumbers, siding, flooring, drywall guys are often all separate contractors and the shipping for all those materials are all on different schedules it takes longer. Or if a few guys are doing it all, they will lose a bit of speed by not being specialists for each task, but can make up that time having a more centrally coordinated plan of attack. Even then the permits and design planning and choosing the windows and siding and flooring and all that is often still the biggest speed bottleneck.