I would love to see you write a follow up about manufactured homes and extreme weather events (ie; what happens to trailers in hurricanes). Otherwise it is absolutely true to say that smaller more affordable housing is prohibited in most municipalities to keep poor people out.
I like to think of this in different terms. There’s a difference between “mobile home,” “RV,” and “manufactured home.” I grew up in a place where all three of these existed. I like this article explaining the differences but I don’t think it understands the differences. And it seems neither do many regulators.
Going to be quite regressive here, but mobile home parks are not attractive and lose value over time. Unlike stick-built home developments, they're just not great investments. This point alone puts lower-income people further away from the ladder of economic opportunity.
These things matter. I don't think lowest-common-denominator solutions are the best solutions for our country.
I would rather see innovation directed toward figuring out how to assign negative economic value of homeless people and people with housing insecurity and use that to fund subsidies for people in housing need.
Was nodding along with the linked article until he suggested distributed nuclear batteries in household appliances replacing electricity. I’m not anti nuclear energy but I mean…. Come on, now!
I think you may be under-estimating the potential for modular construction. I know I read some blog posts by a couple in Japan who are mostly known for their YouTube cat videos, but also had just bought a condo in a new Tokyo building where basically you were getting the shell of a split-level apartment, and then completely designing the interior space using some quite fancy CAD to basically snap together whatever components you wanted, almost like Legos. They had an _astonishing_ array of components available, including stuff like suspended cat runs (hence the cat-blogger people posting about it).
The chassis regulation seems bad and unjustified as a federal regulation. But I assume that there are countries that don't have a similar regulation. So, I'd think one could look at those countries to see how much effect this seems to have.
Interesting to bring Musk into this - he lives in a Boxabl Casita, a modular factory manufactured house that is robotically built and folds for transport on standard size trucks. They’re unfolded on site and set up in a day. Right now the company has approval for being a second on site dwelling under California law. This seems like it might have possibilities to somewhat increase rental units, but the potential the company is aiming for is global technology licensing / franchising and intends to offer larger - up market products. That sounds disruptive to me - if it works.
In ever trailer park I've been in, the double-wides don't look anything like the one pictured in the article. In Missoula, anything that nice is already on its own lot, and with our median home prices hitting $400K, probably out of reach for most local buyers. The problem goes beyond supply. Making more shoddily-built homes that are virtually guaranteed to lose value is not a solution. In another generation, cities like Missoula, Bozeman, Boise, Santa Fe, will all look like Vail or Jackson Hole: high cost of living and low local wages will keep locals trapped, while local economic activity, especially rents, are diverted out of the local economy into the finance centers. No local wealth will develop, but prices will rise as the moneyed classes bid each other up for every piece of property. The Western U.S. will be one giant poverty trap.
When I was growing up in the early 80s my grandparents lived in a "nice" mobile home park, where everything looked like that. It was in the middle of Anaheim, California, and everyone there seemed to be middle class blue collar retirees. (My grandfather had been fairly high up in IBEW, the union for electrical workers.)
Their mobile home -- all of the mobile homes in that complex -- had been placed on a brick foundation and didn't look like they would ever move again. The complex had a club house with tennis courts and a swimming pool. It was a gated community with a security guard and manicured garden beds of flowers.
It was a pretty huge complex, hundreds of homes as I recall.
Needless to say, growing up that was my image of "trailer park" so I was pretty confused to learn that basically everyone else in America had a different image.
I dunno why my grandparent's mobile home park was so dang nice.
My grandparents lived in a very similar community although it was in Florida. Did the old folks get around on three wheeled bicycles? That was a big thing in FL in the 80s.
I've been inside them. Also, please note, as I mentioned, the housing MY is talking about is already out of range for consumers in the local market, at least. Particularly if the land goes with the house. The available affordable MFD options are tin cans.
That's a reasonable distinction. The units I've been in didn't have construction issues that were apparent to a layperson; mostly finish problems like poorly hung doors, or poorly mounted sinks. They often had cheap glass, and they're notorious for bad draining and inadequate insulation, which is a real concern if you're looking to carbon costs.
Are you suggesting there's nowhere in or near Missoula that would be attractive to develop if it were legal for developer to just truck in prefab homes rather than requiring large amounts of local skilled labor to build on site? There's no decrepit buildings that could be replaced if there was a low financial and schedule risk was to just ship in a replacement housing unit? I don't know Montana very well but my experience of similar remote centers is that the biggest impediment to more housing is the availability of labor to build it.
"The land is too expensive for the local market" is the "nobody goes there anymore, it's too crowded" of housing policy. If the lowest price homes are on the market for $400K then a $399,999 house has helped improved the housing situation.
Whether the houses are shoddy or good is a question of building code, not whether the house was built onsite or shipped in.
There's tons of decrepit buildings. They just sit there, gaining value and harboring raccoons. Nobody sells, they get rich without the risk or cost of improving the property. The reason prices are so high is outside buyers: techie types from Boston, e.g., who think a 2BR/2BA for $600K is a steal, since the same home in Boston would be $2.5M. They don't comprehend, or care, that only the local 1% can afford the $120K down payment. Put another way, all the local middle class housing is being converted into upper class housing, and MY's solution is to lower the quality of middle class housing all the way down to the trailer park.
As for labor, I don't know. Inside three blocks of my downtown office, they've built three luxury hotels, a student housing building, a brewery, a half-block of townhouses, and the new library. There seems to be plenty of workers, but perhaps too few to do the above work in addition to building new houses.
I’m surprised you didn’t mention that Musk is currently living in a $50k manufactured home, by someone who could presumably be the Elon Musk of home construction.
So you do get a lot of stuff right. And other stuff you just don't know about. Wondering why construction productivity goes down? Well son get on a construction job. And the question you want to ask as a construction worker/supervisor/union agent is what's next when this job is done? Nothing booked when this job is done? Well let's slow this puppy down. I have never seen that not happen on major construction projects.
Now on to modular housing. The first thing you have to do is lose the idea that it is in any way inferior. It isn't. Not only are such structures built in clean well lit environmentally controlled factories they are also built to a much higher level of precision and use more and better fastening systems than site built construction. The need is obvious which is that they have to travel over sometimes crappy roads with potholes. They have to get where they are going intact. While still meeting the same building codes as any site built structure.
I am not the least bit surprised that anti-housing laws have been formalized. But thirty years ago the main barrier were local building codes designed to protect local construction trades from competition. Unless the factory is in your town it was considered the enemy. The rules you have laid out are dangerously stupid and risk the lives of their inhabitants. You can lag bolt 'mobile homes' directly to the slab and remove the undercarriage. Which can be reused for transport. Not allowing or insisting such structures be bolted to slab puts their residents lives in danger when storms with high winds like hurricanes or tornadoes arrive. That is the issue I would use to fight this particular stupidity.
This is just the sort of high-progressive-ideals-meets-brass-tacks brilliance that I love and expect from Matt. Seriously, who else does it better? I find his argument completely convincing and I'll probably agree with this position until I die.
I fully support the idea of modular homes as an option to reduce housing costs, but Matt's post doesn't really discuss the biggest problem with the "mobile home park" model, which is that people only own the (rapidly-depreciating) building rather than the land underneath it. I've seen the marketing, and it's very predatory. They tell poor people, mostly seniors, that they can own their own home at a low, low cost that seems too good to be true, because it is. They're really just taking out something like a car loan for a house that will lose value, and then also paying rent on the land to the property owner. It's worse than normal renting, because at least with normal renting the landlord is responsible for maintenance on the house itself. In this case, you're stuck with an asset but don't own the land, so it's a bad deal.
"When factories are running at capacity, unit costs are lower. When demand is sufficient to open more factories, shipping costs fall. So you can have a flywheel of falling costs and higher quality."
It's generally pointless to rail against idioms, and this one may be too entrenched to eradicate, but may I point out that actual flywheels do not do anything like what your metaphor wants them to do?
You're imagining some sort of accelerating virtuous circle here, where every complete rotation makes the next rotation faster.
In fact, adding a flywheel to a system does just the opposite: it stabilizes the rotational speed and increases the rotational inertia. It smooths out small deviations, so that the output shaft tends to keep rotating at the same speed even if there are deviations in the power pumped into it.
What adding a flywheel to a system will never do is to increase the speed of the system, or increase the acceleration of the rotation. Of course, you can also make a system with a flywheel accelerate, but it will accelerate despite the flywheel, not because of it.
I don't know what the right metaphor for a virtuous circle of accelerating rotation might be, but a flywheel ain't it.
I think the right metaphor is superchargers in cars. The engine has to get up to a certain output before diverting some of its power to compress the input air with the supercharger is worth it.
Maybe it’s a runaway train of price competition that results in ever increasing pressure on wages until the workers are so immiserated that it derails.
My understanding is that Amazon loves the flywheel metaphor, and they like it for a reason that doesn't really apply here: they build out an individual line of business that has "flywheels" so they can stop investing in that line of business and move on to conquer new markets. Their idea is that the business keeps going on its own momentum while its headcount costs are reduced. It kind of fits the metaphor.
Thing is, as done by Amazon, the flywheel metaphor is perhaps a bit more accurate than they would hope: areas where Amazon has stopped investing have proven to become flea markets filled with knock-offs and scams.
This cracked me up quite a bit when I first read it, so thank you, but on a second read I can't tell whether Matt implies an accelerating cycle or just a self-perpetuating one. Considering how "momentum" is commonly used, however, it strikes me that the eliding of the distinction between motion and accelerating motion is par for course --- punditry is a pre-Newtonian world!
"I can't tell whether Matt implies an accelerating cycle or just a self-perpetuating one"
Well, he says, "falling costs and higher quality," so I think he wants acceleration.
"...punditry is a pre-Newtonian world..." -- Pre-Copernican, I'd say. The best of them think that the universe revolves around the earth; most of them think it revolves around punditry.
A huge part of this dynamic is the perception that modular or prefabricated homes do not hold their value as well. Which returns to the housing-as-necessity vs home-ownership-as-investment dichotomy that drives so very much of this-- I'm considering buying a home; but because I know that's where a substantial portion of my money is going to go, I'm not even remotely considering a prefabricated home.
Modular and prefabricated homes are not the same as manufactured homes. Prefabs/modulars are built to the local building code. Manufactured homes are not.
I would love to see you write a follow up about manufactured homes and extreme weather events (ie; what happens to trailers in hurricanes). Otherwise it is absolutely true to say that smaller more affordable housing is prohibited in most municipalities to keep poor people out.
I like to think of this in different terms. There’s a difference between “mobile home,” “RV,” and “manufactured home.” I grew up in a place where all three of these existed. I like this article explaining the differences but I don’t think it understands the differences. And it seems neither do many regulators.
Going to be quite regressive here, but mobile home parks are not attractive and lose value over time. Unlike stick-built home developments, they're just not great investments. This point alone puts lower-income people further away from the ladder of economic opportunity.
These things matter. I don't think lowest-common-denominator solutions are the best solutions for our country.
I would rather see innovation directed toward figuring out how to assign negative economic value of homeless people and people with housing insecurity and use that to fund subsidies for people in housing need.
Was nodding along with the linked article until he suggested distributed nuclear batteries in household appliances replacing electricity. I’m not anti nuclear energy but I mean…. Come on, now!
I think you may be under-estimating the potential for modular construction. I know I read some blog posts by a couple in Japan who are mostly known for their YouTube cat videos, but also had just bought a condo in a new Tokyo building where basically you were getting the shell of a split-level apartment, and then completely designing the interior space using some quite fancy CAD to basically snap together whatever components you wanted, almost like Legos. They had an _astonishing_ array of components available, including stuff like suspended cat runs (hence the cat-blogger people posting about it).
There also are applications of this kind of CAD modular design at the high end: https://www.builderonline.com/building/building-enclosure/how-japans-sekisui-house-could-change-u-s-framing-from-fast-assembly-to-lateral-load-capacity_o
The chassis regulation seems bad and unjustified as a federal regulation. But I assume that there are countries that don't have a similar regulation. So, I'd think one could look at those countries to see how much effect this seems to have.
Interesting to bring Musk into this - he lives in a Boxabl Casita, a modular factory manufactured house that is robotically built and folds for transport on standard size trucks. They’re unfolded on site and set up in a day. Right now the company has approval for being a second on site dwelling under California law. This seems like it might have possibilities to somewhat increase rental units, but the potential the company is aiming for is global technology licensing / franchising and intends to offer larger - up market products. That sounds disruptive to me - if it works.
Trailers, swift!!
In ever trailer park I've been in, the double-wides don't look anything like the one pictured in the article. In Missoula, anything that nice is already on its own lot, and with our median home prices hitting $400K, probably out of reach for most local buyers. The problem goes beyond supply. Making more shoddily-built homes that are virtually guaranteed to lose value is not a solution. In another generation, cities like Missoula, Bozeman, Boise, Santa Fe, will all look like Vail or Jackson Hole: high cost of living and low local wages will keep locals trapped, while local economic activity, especially rents, are diverted out of the local economy into the finance centers. No local wealth will develop, but prices will rise as the moneyed classes bid each other up for every piece of property. The Western U.S. will be one giant poverty trap.
When I was growing up in the early 80s my grandparents lived in a "nice" mobile home park, where everything looked like that. It was in the middle of Anaheim, California, and everyone there seemed to be middle class blue collar retirees. (My grandfather had been fairly high up in IBEW, the union for electrical workers.)
Their mobile home -- all of the mobile homes in that complex -- had been placed on a brick foundation and didn't look like they would ever move again. The complex had a club house with tennis courts and a swimming pool. It was a gated community with a security guard and manicured garden beds of flowers.
It was a pretty huge complex, hundreds of homes as I recall.
Needless to say, growing up that was my image of "trailer park" so I was pretty confused to learn that basically everyone else in America had a different image.
I dunno why my grandparent's mobile home park was so dang nice.
My grandparents lived in a very similar community although it was in Florida. Did the old folks get around on three wheeled bicycles? That was a big thing in FL in the 80s.
I had totally forgotten about those things! My grandparents didn't have one but my mom did for a while.
Do you have evidence for your shoddily-built critique?
I've been inside them. Also, please note, as I mentioned, the housing MY is talking about is already out of range for consumers in the local market, at least. Particularly if the land goes with the house. The available affordable MFD options are tin cans.
I think there is a difference between cheap finishes and shoddy construction. What specific items of shoddy construction did you see?
That's a reasonable distinction. The units I've been in didn't have construction issues that were apparent to a layperson; mostly finish problems like poorly hung doors, or poorly mounted sinks. They often had cheap glass, and they're notorious for bad draining and inadequate insulation, which is a real concern if you're looking to carbon costs.
Are you suggesting there's nowhere in or near Missoula that would be attractive to develop if it were legal for developer to just truck in prefab homes rather than requiring large amounts of local skilled labor to build on site? There's no decrepit buildings that could be replaced if there was a low financial and schedule risk was to just ship in a replacement housing unit? I don't know Montana very well but my experience of similar remote centers is that the biggest impediment to more housing is the availability of labor to build it.
"The land is too expensive for the local market" is the "nobody goes there anymore, it's too crowded" of housing policy. If the lowest price homes are on the market for $400K then a $399,999 house has helped improved the housing situation.
Whether the houses are shoddy or good is a question of building code, not whether the house was built onsite or shipped in.
There's tons of decrepit buildings. They just sit there, gaining value and harboring raccoons. Nobody sells, they get rich without the risk or cost of improving the property. The reason prices are so high is outside buyers: techie types from Boston, e.g., who think a 2BR/2BA for $600K is a steal, since the same home in Boston would be $2.5M. They don't comprehend, or care, that only the local 1% can afford the $120K down payment. Put another way, all the local middle class housing is being converted into upper class housing, and MY's solution is to lower the quality of middle class housing all the way down to the trailer park.
As for labor, I don't know. Inside three blocks of my downtown office, they've built three luxury hotels, a student housing building, a brewery, a half-block of townhouses, and the new library. There seems to be plenty of workers, but perhaps too few to do the above work in addition to building new houses.
I’m surprised you didn’t mention that Musk is currently living in a $50k manufactured home, by someone who could presumably be the Elon Musk of home construction.
So you do get a lot of stuff right. And other stuff you just don't know about. Wondering why construction productivity goes down? Well son get on a construction job. And the question you want to ask as a construction worker/supervisor/union agent is what's next when this job is done? Nothing booked when this job is done? Well let's slow this puppy down. I have never seen that not happen on major construction projects.
Now on to modular housing. The first thing you have to do is lose the idea that it is in any way inferior. It isn't. Not only are such structures built in clean well lit environmentally controlled factories they are also built to a much higher level of precision and use more and better fastening systems than site built construction. The need is obvious which is that they have to travel over sometimes crappy roads with potholes. They have to get where they are going intact. While still meeting the same building codes as any site built structure.
I am not the least bit surprised that anti-housing laws have been formalized. But thirty years ago the main barrier were local building codes designed to protect local construction trades from competition. Unless the factory is in your town it was considered the enemy. The rules you have laid out are dangerously stupid and risk the lives of their inhabitants. You can lag bolt 'mobile homes' directly to the slab and remove the undercarriage. Which can be reused for transport. Not allowing or insisting such structures be bolted to slab puts their residents lives in danger when storms with high winds like hurricanes or tornadoes arrive. That is the issue I would use to fight this particular stupidity.
This is just the sort of high-progressive-ideals-meets-brass-tacks brilliance that I love and expect from Matt. Seriously, who else does it better? I find his argument completely convincing and I'll probably agree with this position until I die.
I fully support the idea of modular homes as an option to reduce housing costs, but Matt's post doesn't really discuss the biggest problem with the "mobile home park" model, which is that people only own the (rapidly-depreciating) building rather than the land underneath it. I've seen the marketing, and it's very predatory. They tell poor people, mostly seniors, that they can own their own home at a low, low cost that seems too good to be true, because it is. They're really just taking out something like a car loan for a house that will lose value, and then also paying rent on the land to the property owner. It's worse than normal renting, because at least with normal renting the landlord is responsible for maintenance on the house itself. In this case, you're stuck with an asset but don't own the land, so it's a bad deal.
"When factories are running at capacity, unit costs are lower. When demand is sufficient to open more factories, shipping costs fall. So you can have a flywheel of falling costs and higher quality."
It's generally pointless to rail against idioms, and this one may be too entrenched to eradicate, but may I point out that actual flywheels do not do anything like what your metaphor wants them to do?
You're imagining some sort of accelerating virtuous circle here, where every complete rotation makes the next rotation faster.
In fact, adding a flywheel to a system does just the opposite: it stabilizes the rotational speed and increases the rotational inertia. It smooths out small deviations, so that the output shaft tends to keep rotating at the same speed even if there are deviations in the power pumped into it.
What adding a flywheel to a system will never do is to increase the speed of the system, or increase the acceleration of the rotation. Of course, you can also make a system with a flywheel accelerate, but it will accelerate despite the flywheel, not because of it.
I don't know what the right metaphor for a virtuous circle of accelerating rotation might be, but a flywheel ain't it.
I think the right metaphor is superchargers in cars. The engine has to get up to a certain output before diverting some of its power to compress the input air with the supercharger is worth it.
Maybe it’s a runaway train of price competition that results in ever increasing pressure on wages until the workers are so immiserated that it derails.
Perhaps?: "... a spiral of falling costs and higher quality."
Not a metaphor, but the phrase that seems most apt here is "economies of scale".
For something more figurative, "snowball effect" seems to fit better than flywheel.
I love this comment from a guy with treadmill in his name!!!!
My understanding is that Amazon loves the flywheel metaphor, and they like it for a reason that doesn't really apply here: they build out an individual line of business that has "flywheels" so they can stop investing in that line of business and move on to conquer new markets. Their idea is that the business keeps going on its own momentum while its headcount costs are reduced. It kind of fits the metaphor.
Thing is, as done by Amazon, the flywheel metaphor is perhaps a bit more accurate than they would hope: areas where Amazon has stopped investing have proven to become flea markets filled with knock-offs and scams.
This cracked me up quite a bit when I first read it, so thank you, but on a second read I can't tell whether Matt implies an accelerating cycle or just a self-perpetuating one. Considering how "momentum" is commonly used, however, it strikes me that the eliding of the distinction between motion and accelerating motion is par for course --- punditry is a pre-Newtonian world!
"I can't tell whether Matt implies an accelerating cycle or just a self-perpetuating one"
Well, he says, "falling costs and higher quality," so I think he wants acceleration.
"...punditry is a pre-Newtonian world..." -- Pre-Copernican, I'd say. The best of them think that the universe revolves around the earth; most of them think it revolves around punditry.
A huge part of this dynamic is the perception that modular or prefabricated homes do not hold their value as well. Which returns to the housing-as-necessity vs home-ownership-as-investment dichotomy that drives so very much of this-- I'm considering buying a home; but because I know that's where a substantial portion of my money is going to go, I'm not even remotely considering a prefabricated home.
Modular and prefabricated homes are not the same as manufactured homes. Prefabs/modulars are built to the local building code. Manufactured homes are not.
why no audio for this article?
Sometimes it takes a few hours. I think yesterday's only posted this morning.