WEBVTT 00:00:00.000 --> 00:00:01.820 I want you to start by doing something for me. 00:00:01.860 --> 00:00:03.540 Just for a second, close your eyes. I want you 00:00:03.540 --> 00:00:06.540 to visualize a construction site. Okay. It's 00:00:06.540 --> 00:00:09.300 November, it's raining, it's cold. What do you 00:00:09.300 --> 00:00:12.000 see? Mud. That is the first thing that comes 00:00:12.000 --> 00:00:15.949 to mind. Absolute... Mud. Yeah. Thick, cloying 00:00:15.949 --> 00:00:18.489 mud. You've got, you know, men in high -vis jackets 00:00:18.489 --> 00:00:21.149 standing around a trench that is slowly filling 00:00:21.149 --> 00:00:23.710 with brown water. Right. It's just miserable. 00:00:23.989 --> 00:00:26.429 It's miserable. There's a cement mixer somewhere 00:00:26.429 --> 00:00:29.469 in the background churning away, but nobody is 00:00:29.469 --> 00:00:31.609 pouring anything because the weather is just 00:00:31.609 --> 00:00:34.909 too bad. Of course. It is chaotic. It is wet. 00:00:35.090 --> 00:00:39.850 And honestly, it feels archaic. It feels like 00:00:39.850 --> 00:00:42.049 we are looking at a scene from 100 years ago, 00:00:42.130 --> 00:00:44.310 doesn't it? It really does. Just with better 00:00:44.310 --> 00:00:47.049 safety vests and maybe a portable toilet in the 00:00:47.049 --> 00:00:49.770 corner? Precisely. We are building houses the 00:00:49.770 --> 00:00:52.270 same way we built them in the 19th century. It's 00:00:52.270 --> 00:00:54.270 unbelievable when you think about it. Brick by 00:00:54.270 --> 00:00:56.810 brick, stick by stick, completely at the mercy 00:00:56.810 --> 00:00:59.710 of the sky. If it rains, you stop. If it freezes, 00:00:59.829 --> 00:01:02.409 you stop. It's a process defined by waiting. 00:01:02.710 --> 00:01:06.019 Now, I want you to wipe that image away. Completely 00:01:06.019 --> 00:01:09.140 delete it. Imagine a massive, pristine warehouse. 00:01:09.480 --> 00:01:13.439 It's 70 degrees inside. The air is dry. The lighting 00:01:13.439 --> 00:01:16.920 is perfect, bright. Clinical LEDs. I'm with you. 00:01:17.040 --> 00:01:19.799 The floors are polished concrete, clean enough 00:01:19.799 --> 00:01:23.079 to eat off of. And moving down a line, almost 00:01:23.079 --> 00:01:26.620 like a car in a Toyota plant, is a house. It's 00:01:26.620 --> 00:01:28.719 being put together like a massive, precision 00:01:28.719 --> 00:01:31.680 -engineered jigsaw puzzle. The walls are being 00:01:31.680 --> 00:01:34.519 craned in with millimeter accuracy. The electrical 00:01:34.519 --> 00:01:36.760 is snapping into place. The bathrooms are being 00:01:36.760 --> 00:01:39.640 tiled. All under a roof. All under a roof, completely 00:01:39.640 --> 00:01:42.299 protected from the element. And the kicker. Once 00:01:42.299 --> 00:01:44.780 it reaches the end of that line, it's shrink 00:01:44.780 --> 00:01:47.140 -wrapped, put on a truck, driven to a plot of 00:01:47.140 --> 00:01:50.140 land, and it becomes a home in days. Not months. 00:01:50.379 --> 00:01:52.540 Days. Today on The Deep Dive, we are looking 00:01:52.540 --> 00:01:54.560 at a topic that promises to revolutionize the 00:01:54.560 --> 00:01:57.400 way we live, yet is somehow one of the most misunderstood 00:01:57.400 --> 00:02:00.939 and, uh... financially brutal industries in the 00:02:00.939 --> 00:02:03.159 world. It really is. We're talking about modular 00:02:03.159 --> 00:02:05.319 building and we have to be incredibly specific 00:02:05.319 --> 00:02:07.819 right out of the gate here. We do. We are not 00:02:07.819 --> 00:02:09.780 talking about mobile homes. We are not talking 00:02:09.780 --> 00:02:12.539 about trailers. We are talking about high tech. 00:02:13.039 --> 00:02:16.699 permanent structures that range from luxury single 00:02:16.699 --> 00:02:20.919 family homes to research stations sitting on 00:02:20.919 --> 00:02:22.840 the ice in the middle of Antarctica. Which we 00:02:22.840 --> 00:02:25.419 will absolutely get to. We have a stack of sources 00:02:25.419 --> 00:02:28.719 today that is honestly fascinating. We've got 00:02:28.719 --> 00:02:31.460 industry reports. We've got FEMA studies on hurricane 00:02:31.460 --> 00:02:33.939 damage. Which are incredible. And we have some 00:02:33.939 --> 00:02:36.460 pretty grim financial breakdowns of why some 00:02:36.460 --> 00:02:39.259 massive companies have lost hundreds of millions 00:02:39.259 --> 00:02:42.060 of pounds trying to crack this code. It is a 00:02:42.060 --> 00:02:45.120 strange. mix of engineering marvels and brutal 00:02:45.120 --> 00:02:47.259 economic realities. That's a great way to put 00:02:47.259 --> 00:02:48.840 it. It's an industry that makes so much sense 00:02:48.840 --> 00:02:51.479 on paper. It seems inevitable, but it keeps hitting 00:02:51.479 --> 00:02:54.099 walls in the real world. So our mission today 00:02:54.099 --> 00:02:56.840 is to unpack how modular construction actually 00:02:56.840 --> 00:02:59.319 works. The nuts and bolts of the factory floor. 00:02:59.439 --> 00:03:01.699 Right. We're going to aggressively debunk the 00:03:01.699 --> 00:03:04.199 confusion between modular and mobile because, 00:03:04.280 --> 00:03:07.400 as it turns out, that confusion is a legal and 00:03:07.400 --> 00:03:09.979 financial nightmare for buyers. A huge nightmare. 00:03:10.199 --> 00:03:12.719 Yeah. And we're going to look at the future, 00:03:12.879 --> 00:03:15.580 something called open source building, which 00:03:15.580 --> 00:03:17.580 sounds like something out of a cyberpunk novel. 00:03:17.740 --> 00:03:20.340 It really does. But before we get to the sci 00:03:20.340 --> 00:03:22.939 -fi stuff, we need to ground ourselves in the 00:03:22.939 --> 00:03:26.300 definitions. Absolutely. Because modular is a 00:03:26.300 --> 00:03:28.620 buzzword that gets thrown around by real estate 00:03:28.620 --> 00:03:31.360 agents. and tech bros alike, and half the time 00:03:31.360 --> 00:03:34.379 they mean different things. Right. So let's strip 00:03:34.379 --> 00:03:37.000 it down. What actually is a modular building? 00:03:37.219 --> 00:03:40.539 At its core, modular building is a method, not 00:03:40.539 --> 00:03:42.680 a style. That is the most important thing to 00:03:42.680 --> 00:03:45.479 grasp. A method, not a style. Okay. It is a process 00:03:45.479 --> 00:03:48.520 where a building is constructed off -site. The 00:03:48.520 --> 00:03:50.979 source material defines it as being made of repeated 00:03:50.979 --> 00:03:54.020 sections called modules. The Lego analogy seems 00:03:54.020 --> 00:03:55.939 to come up in almost every article I read. Is 00:03:55.939 --> 00:03:57.849 that too simplistic or does it hold up? it's 00:03:57.849 --> 00:04:00.110 actually the best way to visualize it think of 00:04:00.110 --> 00:04:02.889 a lego set okay you have these individual bricks 00:04:02.889 --> 00:04:05.930 or in this case entire volumetric sections of 00:04:05.930 --> 00:04:08.460 a house that are built somewhere else They are 00:04:08.460 --> 00:04:10.659 constructed in a factory setting. And delivered 00:04:10.659 --> 00:04:13.039 to the site. Then they are delivered to the site. 00:04:13.199 --> 00:04:15.979 But unlike a Lego brick, which is just plastic, 00:04:16.439 --> 00:04:21.199 these are complex 3D objects. When you say volumetric, 00:04:21.339 --> 00:04:23.860 what does that mean practically? Are we shipping 00:04:23.860 --> 00:04:26.360 flat walls or are we shipping boxes? That's a 00:04:26.360 --> 00:04:28.879 key distinction. There is panelized construction 00:04:28.879 --> 00:04:32.000 where you ship a flat wall, like an IKEA flat 00:04:32.000 --> 00:04:35.220 pack. But true modular, the kind we are discussing, 00:04:35.439 --> 00:04:38.879 is volumetric. You are shipping. a box. A box. 00:04:39.079 --> 00:04:41.740 That box might be a living room or it might be 00:04:41.740 --> 00:04:44.019 a kitchen with the cabinets already glued to 00:04:44.019 --> 00:04:46.240 the wall and the sink installed. So you're shipping 00:04:46.240 --> 00:04:48.360 air, essentially. You're shipping the space inside 00:04:48.360 --> 00:04:50.480 the room. You are shipping space. You are shipping 00:04:50.480 --> 00:04:54.019 a room. These modules can be placed side by side, 00:04:54.120 --> 00:04:56.939 end to end, or even stacked on top of each other. 00:04:57.079 --> 00:04:58.980 So you can go vertical with these. Oh, absolutely. 00:04:59.220 --> 00:05:01.180 The flexibility is actually pretty wild. You 00:05:01.180 --> 00:05:03.279 can create all sorts of configurations. It's 00:05:03.279 --> 00:05:05.720 not just put two boxes together. You can stack 00:05:05.720 --> 00:05:07.779 them four stories high, five stories high in 00:05:07.779 --> 00:05:09.959 some cases. And once they get to the construction 00:05:09.959 --> 00:05:12.100 site, how do they stay together? I assume we 00:05:12.100 --> 00:05:14.819 aren't just using gravity. No, gravity isn't 00:05:14.819 --> 00:05:17.730 enough. Not for a house, anyway. Once they are 00:05:17.730 --> 00:05:20.610 at the site, they are joined together using intermodule 00:05:20.610 --> 00:05:22.129 connections. Which is engineering speak for. 00:05:22.290 --> 00:05:26.410 Big bolts. Okay. Plates. Heavy -duty fasteners 00:05:26.410 --> 00:05:28.610 that pull these independent boxes together so 00:05:28.610 --> 00:05:31.230 tightly that they act as one unified structure. 00:05:31.589 --> 00:05:34.930 So it becomes monolithic. Yes. Once those connections 00:05:34.930 --> 00:05:37.290 are made and the drywall is patched over the 00:05:37.290 --> 00:05:39.629 seam, you really can't tell that it was built 00:05:39.629 --> 00:05:42.370 in pieces. It acts as one single structural unit. 00:05:42.649 --> 00:05:44.860 I want to go back to the factory floor. Because 00:05:44.860 --> 00:05:46.800 this is where the efficiency argument really 00:05:46.800 --> 00:05:50.100 lives or dies. The sources keep mentioning lean 00:05:50.100 --> 00:05:53.300 manufacturing. Now, I went to business school, 00:05:53.339 --> 00:05:55.360 so I know that term usually applies to building 00:05:55.360 --> 00:05:57.879 Toyotas. What does it mean for building a bathroom? 00:05:58.410 --> 00:06:01.110 It means applying the exact same principles used 00:06:01.110 --> 00:06:03.810 to build a Corolla to building your master suite. 00:06:04.009 --> 00:06:06.910 That's a heck of a mental image. It is. But think 00:06:06.910 --> 00:06:09.449 about a traditional job site again. It's linear 00:06:09.449 --> 00:06:11.949 and it's messy. You have tradesmen tripping over 00:06:11.949 --> 00:06:14.329 each other. The electrician can't start until 00:06:14.329 --> 00:06:16.990 the framer is done. But the framer is waiting 00:06:16.990 --> 00:06:20.029 on lumber that's stuck in traffic. Then the plumber 00:06:20.029 --> 00:06:22.949 shows up, but the floor isn't ready, so he leaves 00:06:22.949 --> 00:06:25.029 for another job. And meanwhile, you're paying 00:06:25.029 --> 00:06:27.579 interest on the construction loan. Every single 00:06:27.579 --> 00:06:31.819 day of delay costs money. Exactly. It's inefficiency 00:06:31.819 --> 00:06:35.220 baked into the system. In the factory, it's an 00:06:35.220 --> 00:06:37.480 assembly line. Controlled. It's a controlled 00:06:37.480 --> 00:06:40.319 environment. The materials are staged right there. 00:06:40.519 --> 00:06:43.300 The tools are hanging from the ceiling on pneumatic 00:06:43.300 --> 00:06:46.240 lines. You don't have workers driving to a site, 00:06:46.360 --> 00:06:48.540 setting up their radio, unpacking their truck, 00:06:48.699 --> 00:06:51.339 doing three hours of work, tearing down, and 00:06:51.339 --> 00:06:53.139 driving home. That makes so much sense. It's 00:06:53.139 --> 00:06:55.259 a completely different workflow. And because 00:06:55.259 --> 00:06:57.699 of that control, The sources highlight a statistic 00:06:57.699 --> 00:07:00.180 that I actually had to read twice. They claim 00:07:00.180 --> 00:07:03.160 these buildings are often 60 to 90 percent completed 00:07:03.160 --> 00:07:05.540 before they ever leave the factory. It sounds 00:07:05.540 --> 00:07:08.240 incredibly high, but that's the goal. That seems 00:07:08.240 --> 00:07:10.980 almost impossible. Well, think about what complete 00:07:10.980 --> 00:07:13.860 means. So when you say 90 percent complete, paint 00:07:13.860 --> 00:07:17.160 me a picture. If I walked into that module in 00:07:17.160 --> 00:07:19.279 the factory just before they loaded onto the 00:07:19.279 --> 00:07:22.050 truck, what would I see? You'd see painted walls. 00:07:22.430 --> 00:07:24.810 You'd see the power outlets wired and tested. 00:07:24.949 --> 00:07:27.610 You could literally plug a lamp in. No way. The 00:07:27.610 --> 00:07:29.810 water and sewage lines are installed in the walls. 00:07:30.029 --> 00:07:32.829 The air conditioning ductwork is in. So all the 00:07:32.829 --> 00:07:34.329 guts of the house are already there. All the 00:07:34.329 --> 00:07:37.870 guts. And even the interior finishes, the granite 00:07:37.870 --> 00:07:40.569 countertops, the kitchen cabinets, the bathroom 00:07:40.569 --> 00:07:43.310 tile, it's all installed at the factory. So when 00:07:43.310 --> 00:07:46.129 it arrives at the site, you aren't doing drywall 00:07:46.129 --> 00:07:49.480 mudding. You aren't tiling. Ideally, no. You 00:07:49.480 --> 00:07:51.839 are basically just hooking up the utilities, 00:07:52.120 --> 00:07:54.379 connecting the wiring harness from Module A to 00:07:54.379 --> 00:07:56.920 Module B, connecting the pipes to the main line, 00:07:57.040 --> 00:07:59.079 and patching the mate line where the boxes touch. 00:07:59.339 --> 00:08:01.420 It's almost plug -and -play. It really is. Like 00:08:01.420 --> 00:08:04.279 giant, inhabitable Lego bricks. That explains 00:08:04.279 --> 00:08:07.319 the speed. The sources say the construction of 00:08:07.319 --> 00:08:09.639 a specific module can take as little as 10 days. 00:08:10.170 --> 00:08:13.149 In the factory, yes. The throughput is incredible. 00:08:13.410 --> 00:08:16.430 Usually the whole process from order to delivery 00:08:16.430 --> 00:08:19.389 is one to three months, but the actual time that 00:08:19.389 --> 00:08:21.629 specific house spends on the assembly line is 00:08:21.629 --> 00:08:24.709 incredibly fast. But the real magic, and this 00:08:24.709 --> 00:08:27.910 is the aha moment for the logistics nerds out 00:08:27.910 --> 00:08:30.670 there, is something called parallel processing. 00:08:31.069 --> 00:08:33.830 Yes, this is the key. Okay, break that down. 00:08:33.909 --> 00:08:36.929 This is distinct from just building fast. Yes. 00:08:37.440 --> 00:08:40.399 In traditional construction, everything is sequential. 00:08:40.740 --> 00:08:43.639 It is a waterfall. You cannot build the frame 00:08:43.639 --> 00:08:46.679 until the foundation is poured and cured. Step 00:08:46.679 --> 00:08:49.360 one, then step two, then step three. Right. You 00:08:49.360 --> 00:08:51.340 can't pour the foundation until you've dug the 00:08:51.340 --> 00:08:54.080 hole and graded the land. It's a long, slow chain 00:08:54.080 --> 00:08:56.580 of dependencies. Right. And if step one is delayed 00:08:56.580 --> 00:08:59.899 by rain, step two is pushed back. And step three, 00:08:59.980 --> 00:09:02.759 the guy installing the windows is now fully booked 00:09:02.759 --> 00:09:05.399 on another job. So you wait three weeks. Exactly. 00:09:05.399 --> 00:09:08.100 It's a cascade of delays. Yeah. But with modular, 00:09:08.299 --> 00:09:11.200 you have parallel timelines. How so? While the 00:09:11.200 --> 00:09:13.100 guys on the site are digging the hole and pouring 00:09:13.100 --> 00:09:15.440 the foundation, the factory is already building 00:09:15.440 --> 00:09:17.080 the house. So the house is being built at the 00:09:17.080 --> 00:09:19.360 exact same time the land is being trapped. Yes. 00:09:19.639 --> 00:09:22.139 They are happening simultaneously. So by the 00:09:22.139 --> 00:09:24.139 time the foundation is dry and ready to accept 00:09:24.139 --> 00:09:26.620 a load, the house shows up on a truck ready to 00:09:26.620 --> 00:09:29.559 be craned into place. That is how you shave months 00:09:29.559 --> 00:09:32.480 off a project. That's it. You are compressing 00:09:32.480 --> 00:09:35.000 the schedule by doing two major things at once. 00:09:35.159 --> 00:09:37.940 And once it's on site. How long does the actual 00:09:37.940 --> 00:09:40.240 assembly take? I've seen time -lapse videos of 00:09:40.240 --> 00:09:42.279 this, and it looks fake. It does look like CGI. 00:09:42.460 --> 00:09:44.460 The source says placement of the modules can 00:09:44.460 --> 00:09:47.460 take just hours or a few days. Hours. Yeah. You 00:09:47.460 --> 00:09:49.799 literally watch a building appear over a weekend, 00:09:50.080 --> 00:09:52.139 neighbors go to work on Friday, come back on 00:09:52.139 --> 00:09:53.919 Monday, and there is a two -story house standing 00:09:53.919 --> 00:09:56.419 there. It feels like magic. That is incredible, 00:09:56.519 --> 00:09:58.460 but I have to play devil's advocate here. Please 00:09:58.460 --> 00:10:01.080 do. I feel like there's a massive stigma attached 00:10:01.080 --> 00:10:03.940 to the word prefab. People hear that, and they 00:10:03.940 --> 00:10:07.309 think, cheap plastic. They think flimsy. That 00:10:07.309 --> 00:10:10.769 is a holdover from the 1970s. And honestly, even 00:10:10.769 --> 00:10:14.169 earlier post -war temporary housing. So it's 00:10:14.169 --> 00:10:16.250 outdated perception. It's completely outdated. 00:10:16.409 --> 00:10:19.049 The sources are very clear on this. This is permanent 00:10:19.049 --> 00:10:21.659 modular construction or PMC. So these aren't 00:10:21.659 --> 00:10:24.100 temporary structures. Not at all. They are intended 00:10:24.100 --> 00:10:26.600 to remain in one location for the duration of 00:10:26.600 --> 00:10:28.600 their useful life, just like a traditional home. 00:10:28.740 --> 00:10:30.799 And they are built with standard materials. Yes. 00:10:31.039 --> 00:10:33.019 The same stuff a normal house is made of. We 00:10:33.019 --> 00:10:34.779 aren't talking about some composite space -age 00:10:34.779 --> 00:10:40.419 plastic. No. Standard 2x4 or 2x6 wood framing. 00:10:41.080 --> 00:10:45.309 Steel. Concrete. In fact, steel is becoming really 00:10:45.309 --> 00:10:47.490 common because it's moldable for cool designs. 00:10:47.950 --> 00:10:50.649 Ah, so you can get more creative with it. Exactly. 00:10:50.850 --> 00:10:54.409 And concrete is used for fire resistance and 00:10:54.409 --> 00:10:57.289 acoustic insulation between modules. If you cut 00:10:57.289 --> 00:11:00.450 into the wall of a high -end modular home, you'd 00:11:00.450 --> 00:11:03.110 see the exact same studs and insulation you'd 00:11:03.110 --> 00:11:05.549 see in a custom -built home. Okay, so we've got 00:11:05.549 --> 00:11:07.330 a house built in a factory made of steel and 00:11:07.330 --> 00:11:10.480 concrete, finished in record time. But here's 00:11:10.480 --> 00:11:12.580 a question I think everyone asks when they hear 00:11:12.580 --> 00:11:14.940 built in a factory and shipped on a truck. Where 00:11:14.940 --> 00:11:17.179 is this going? Doesn't moving a house break it? 00:11:17.259 --> 00:11:19.879 It's a valid fear. You imagine a house rattling 00:11:19.879 --> 00:11:22.659 down the highway, cracks forming in the drywall, 00:11:22.840 --> 00:11:25.539 windows popping out, tiles shattering. I mean, 00:11:25.559 --> 00:11:27.659 I get nervous moving a bookshelf in a U -Haul. 00:11:28.159 --> 00:11:30.419 Moving a whole kitchen with granite countertops 00:11:30.419 --> 00:11:32.919 seems like a recipe for disaster. But here is 00:11:32.919 --> 00:11:34.480 where it gets really interesting, and it's kind 00:11:34.480 --> 00:11:37.279 of counterintuitive. Okay. The expert consensus 00:11:37.279 --> 00:11:40.559 and the engineering data shows that the transport 00:11:40.559 --> 00:11:43.240 process actually forces modular buildings to 00:11:43.240 --> 00:11:45.600 be stronger than site -built homes. Stronger. 00:11:45.620 --> 00:11:49.139 How does putting it through a magnitude 6 earthquake 00:11:49.139 --> 00:11:51.860 on a highway make it stronger? Because it has 00:11:51.860 --> 00:11:54.460 to survive that earthquake. Think about the forces 00:11:54.460 --> 00:11:57.200 at play. Right. A module has to be lifted by 00:11:57.200 --> 00:12:00.139 a crane. that puts massive tension on the frame, 00:12:00.320 --> 00:12:03.200 then it's placed on a truck. Then it's driven 00:12:03.200 --> 00:12:05.580 at 60 miles per hour down a highway. And you're 00:12:05.580 --> 00:12:07.799 dealing with potholes. It's enduring potholes, 00:12:07.879 --> 00:12:11.059 wind resistance, which is essentially hurricane 00:12:11.059 --> 00:12:13.460 force winds if you're driving into a headwind 00:12:13.460 --> 00:12:16.080 and constant vibration. And then it's lifted 00:12:16.080 --> 00:12:18.039 by a crane again. It's like a structural torture 00:12:18.039 --> 00:12:20.340 test before anyone even moves in. Precisely. 00:12:20.340 --> 00:12:22.899 A traditional house never has to survive that. 00:12:23.100 --> 00:12:25.240 Yeah. It is built on the ground and it stays 00:12:25.240 --> 00:12:28.039 on the ground. It never experiences 2G forces 00:12:28.039 --> 00:12:30.320 from a pothole. So they have to over -engineer 00:12:30.320 --> 00:12:33.000 it just for the delivery. Because modular homes 00:12:33.000 --> 00:12:35.840 have to survive that journey, they are over -engineered. 00:12:35.899 --> 00:12:38.519 The sources note some really specific durability 00:12:38.519 --> 00:12:41.879 specs. Like what? Give me the details. For example, 00:12:42.059 --> 00:12:45.720 they typically use screws instead of nails for 00:12:45.720 --> 00:12:48.519 the drywall and framing connections. Why screws? 00:12:48.620 --> 00:12:51.000 What's the difference? Nails rely on friction. 00:12:51.200 --> 00:12:54.519 With enough vibration, like a 500 -mile truck, 00:12:54.899 --> 00:12:57.820 ride nails can back out. We call it nail pop. 00:12:58.360 --> 00:13:00.559 i've seen that in older houses exactly screws 00:13:00.559 --> 00:13:02.899 hold tight they don't back out under vibration 00:13:02.899 --> 00:13:05.559 okay that makes sense simple but effective they 00:13:05.559 --> 00:13:08.620 also often add glue to the joints for extra rigidity 00:13:08.620 --> 00:13:11.639 it's a glue and screw method and here is the 00:13:11.639 --> 00:13:15.190 stat from the text They typically use 8 to 10 00:13:15.190 --> 00:13:17.990 % more lumber than conventional housing. 8 to 00:13:17.990 --> 00:13:20.809 10 % more? Yeah. Just for the trip? Just to bulk 00:13:20.809 --> 00:13:22.649 it up for the road trip. Exactly. They're adding 00:13:22.649 --> 00:13:25.409 extra framing, extra bracing, strapping the walls 00:13:25.409 --> 00:13:27.649 differently, just to maintain structural integrity 00:13:27.649 --> 00:13:29.950 during transport. So by the time it lands on 00:13:29.950 --> 00:13:32.070 your foundation, you have a house that is essentially 00:13:32.070 --> 00:13:35.730 a tank. In a way, yes. It was built to survive 00:13:35.730 --> 00:13:39.190 a road trip, which means it is incredibly robust 00:13:39.190 --> 00:13:42.100 once it's sitting still. That's the logic. And 00:13:42.100 --> 00:13:44.159 it holds up. That's a fascinating inversion. 00:13:44.360 --> 00:13:47.220 The vulnerability of transport creates the strength 00:13:47.220 --> 00:13:49.940 of the final product. It's like buying a laptop 00:13:49.940 --> 00:13:52.659 that's military grade drop tested versus one 00:13:52.659 --> 00:13:54.860 that's just meant to sit on a desk. That's a 00:13:54.860 --> 00:13:57.019 great analogy. And we actually have real world 00:13:57.019 --> 00:13:59.480 data to back this up. It's not just theoretical 00:13:59.480 --> 00:14:02.100 engineering talk. Okay. There was a fascinating 00:14:02.100 --> 00:14:05.059 revelation in the source material regarding FEMA. 00:14:05.240 --> 00:14:07.440 This was the study after Hurricane Andrew, right? 00:14:07.460 --> 00:14:09.840 Yes. Hurricane Andrew devastated Dade County, 00:14:10.039 --> 00:14:14.360 Florida in 1992. It was a Category 5 storm. Absolute 00:14:14.360 --> 00:14:16.600 destruction. I remember the footage. It was apocalyptic. 00:14:16.600 --> 00:14:19.580 It was. FEMA went in afterward to assess the 00:14:19.580 --> 00:14:22.580 damage, essentially a... forensic audit of the 00:14:22.580 --> 00:14:25.320 housing stock to see what failed and what survived. 00:14:25.580 --> 00:14:27.580 And what did they find? Because the perception 00:14:27.580 --> 00:14:31.000 is that prefab stuff flies away in a stiff breeze. 00:14:31.179 --> 00:14:33.519 The opposite. They concluded that modular and 00:14:33.519 --> 00:14:35.899 masonry homes fared better than other types of 00:14:35.899 --> 00:14:38.220 construction. Better than the site -built wood 00:14:38.220 --> 00:14:42.100 frame houses. Yes. The report specifically noted 00:14:42.100 --> 00:14:45.179 that the modular units held up incredibly well. 00:14:45.340 --> 00:14:47.700 Wow. And it comes back to that overengineering. 00:14:47.799 --> 00:14:51.159 If you build a house to survive a 60 mile per 00:14:51.159 --> 00:14:54.019 hour highway drive with wind resistance, you've 00:14:54.019 --> 00:14:56.600 inadvertently built a house that is pretty good 00:14:56.600 --> 00:14:59.860 at surviving high winds. That is a massive validation. 00:15:00.220 --> 00:15:02.379 I mean, Hurricane Andrew is no joke. If it can 00:15:02.379 --> 00:15:04.679 stand up to that, it can stand up to a standard 00:15:04.679 --> 00:15:06.779 thunderstorm. Absolutely. And it's not just the 00:15:06.779 --> 00:15:09.000 U .S. The sources mention European standards, 00:15:09.340 --> 00:15:12.240 specifically the CE marking. What is that exactly? 00:15:12.379 --> 00:15:14.960 I've seen the CE logo on electronics. My toaster 00:15:14.960 --> 00:15:17.779 has one. OK. But on a house. In Europe, the CE 00:15:17.779 --> 00:15:20.100 mark acts as a guarantee of mechanical resistance 00:15:20.100 --> 00:15:23.139 and strength. But what's fascinating is the level 00:15:23.139 --> 00:15:25.639 of traceability. Traceability. The source says 00:15:25.639 --> 00:15:28.269 that because it's a factory process. Every batch 00:15:28.269 --> 00:15:30.629 of raw material is recorded. So they know exactly 00:15:30.629 --> 00:15:32.990 which batch of steel went into your living room 00:15:32.990 --> 00:15:36.210 wall. Yes. Suppliers are certified, raw materials 00:15:36.210 --> 00:15:38.570 are tracked by batch, and assembly quality is 00:15:38.570 --> 00:15:41.330 managed step by step. It's like a car's VIN number. 00:15:41.639 --> 00:15:44.580 That's a perfect comparison. When a unit is finished, 00:15:44.779 --> 00:15:47.580 it gets a unique ID and stamp. It guarantees 00:15:47.580 --> 00:15:50.139 resistance against wind and earthquakes because 00:15:50.139 --> 00:15:53.000 there is a digital paper trail for every bolt 00:15:53.000 --> 00:15:55.179 and beam. You definitely don't get that with 00:15:55.179 --> 00:15:56.759 a traditional builder. I mean, half the time 00:15:56.759 --> 00:15:58.840 you don't know where they bought the lumber or 00:15:58.840 --> 00:16:00.799 if they followed the specs perfectly. Right. 00:16:00.899 --> 00:16:03.679 In a factory, you have quality control inspectors 00:16:03.679 --> 00:16:06.720 checking every stage. On a job site, the inspector 00:16:06.720 --> 00:16:09.379 comes by maybe once or twice for key milestones, 00:16:09.679 --> 00:16:12.919 foundation, framing, final. But they aren't watching 00:16:12.919 --> 00:16:15.120 the glue dry. They are not. They aren't checking 00:16:15.120 --> 00:16:18.340 the torque on every screw. In a factory, that 00:16:18.340 --> 00:16:20.700 is part of the workflow. So we've established 00:16:20.700 --> 00:16:23.200 they are strong. We've established they are fast. 00:16:23.639 --> 00:16:25.740 But we keep dancing around this elephant in the 00:16:25.740 --> 00:16:28.570 room. The mobile home confusion. This is the 00:16:28.570 --> 00:16:31.710 identity crisis. It is the bane of the modular 00:16:31.710 --> 00:16:34.549 industry's existence. It really is. I feel like 00:16:34.549 --> 00:16:36.330 if you tell someone, I live in a modular home, 00:16:36.490 --> 00:16:39.590 they immediately picture a trailer park. They 00:16:39.590 --> 00:16:42.549 picture wheels. And the industry hates that. 00:16:42.669 --> 00:16:45.570 It's a major pain point. But the distinction 00:16:45.570 --> 00:16:49.309 is actually legal and structural. It's not just... 00:16:49.480 --> 00:16:52.500 marketing fluff it's not just rebranding no it's 00:16:52.500 --> 00:16:54.559 not just a rebranding exercise they are fundamentally 00:16:54.559 --> 00:16:57.539 different things so let's clear the confusion 00:16:57.539 --> 00:17:00.860 once and for all what is the actual difference 00:17:00.860 --> 00:17:03.940 between a modular home and a mobile or manufactured 00:17:03.940 --> 00:17:06.799 home it starts with the building code This is 00:17:06.799 --> 00:17:09.339 the boring but essential part. A boring but important 00:17:09.339 --> 00:17:12.299 part. Exactly. Modular homes are built to local 00:17:12.299 --> 00:17:15.500 or state building codes, usually the IBC, the 00:17:15.500 --> 00:17:17.940 International Building Code, or the IRC, the 00:17:17.940 --> 00:17:20.200 International Residential Code. Okay, so what 00:17:20.200 --> 00:17:22.440 does that mean in practice? It means they are 00:17:22.440 --> 00:17:24.420 treated exactly the same as a house built on 00:17:24.420 --> 00:17:26.759 -site. If your town requires a certain thickness 00:17:26.759 --> 00:17:29.779 of insulation or a specific type of roof truss 00:17:29.779 --> 00:17:32.500 to handle snow load or a specific type of wiring, 00:17:32.779 --> 00:17:35.599 the modular home has to meet that standard. So 00:17:35.599 --> 00:17:38.180 it's legally a house. Period. And mobile homes. 00:17:38.339 --> 00:17:40.759 Mobile homes or manufactured homes are built 00:17:40.759 --> 00:17:43.359 to a federal code established by HUD, the Department 00:17:43.359 --> 00:17:45.440 of Housing and Urban Development. A national 00:17:45.440 --> 00:17:47.500 standard. A completely different set of rules. 00:17:48.220 --> 00:17:51.359 The HUD code overrides local codes. It allows 00:17:51.359 --> 00:17:53.220 for different standards regarding frame construction, 00:17:53.599 --> 00:17:56.559 insulation, and fire safety. So modular equals 00:17:56.559 --> 00:17:59.619 local code, mobile equals federal code. Correct. 00:17:59.759 --> 00:18:02.240 But the physical difference is even easier to 00:18:02.240 --> 00:18:04.119 spot. Oh, correct. It's all about the foundation 00:18:04.119 --> 00:18:06.599 versus the chassis. The chassis, like on a car. 00:18:06.839 --> 00:18:10.819 Yes. A mobile home or manufactured home has an 00:18:10.819 --> 00:18:13.599 integral steel chassis with axles. It is built 00:18:13.599 --> 00:18:16.309 on wheels. It's part of the structure. Even if 00:18:16.309 --> 00:18:19.410 you take the wheels off, that steel frame is 00:18:19.410 --> 00:18:21.710 part of the floor structure. It's designed to 00:18:21.710 --> 00:18:24.089 be potentially moved again. And a modular home. 00:18:24.190 --> 00:18:26.269 A modular home is placed on a permanent foundation 00:18:26.269 --> 00:18:29.369 or a basement. Once it's there, it's there. It 00:18:29.369 --> 00:18:31.150 becomes part of the land. But there is no chassis. 00:18:31.250 --> 00:18:33.529 The floor joists sit directly on the foundation 00:18:33.529 --> 00:18:35.869 walls. You can't just hook it up to a truck and 00:18:35.869 --> 00:18:38.769 drive away. It becomes real estate. Okay, that's 00:18:38.769 --> 00:18:41.670 a clear distinction. But what if I'm looking 00:18:41.670 --> 00:18:44.480 at a house and I can't see the foundation? Maybe 00:18:44.480 --> 00:18:47.039 there's skirting or landscaping. Is there a way 00:18:47.039 --> 00:18:49.480 to tell just by looking? There is a listener 00:18:49.480 --> 00:18:52.279 tip here. We call it the tag test. Ooh, I love 00:18:52.279 --> 00:18:55.380 a good hack. How does the tag test work? If you 00:18:55.380 --> 00:18:58.819 are looking at a mobile or manufactured home, 00:18:59.000 --> 00:19:02.220 there will be a small metal tag on the outside 00:19:02.220 --> 00:19:04.720 of each section. On the outside? On the siding, 00:19:04.799 --> 00:19:07.559 yeah. It's usually red or silver riveted on. 00:19:07.640 --> 00:19:10.079 You can't miss it if you look for it. Okay, external 00:19:10.079 --> 00:19:13.619 tag equals... Mobile. Right. A modular home has 00:19:13.619 --> 00:19:16.799 no external tag. None at all. Instead, it has 00:19:16.799 --> 00:19:19.299 what's called a data plate inside the house. 00:19:19.640 --> 00:19:22.039 Where do I find that? Usually under the kitchen 00:19:22.039 --> 00:19:24.759 sink or sometimes on the back of the master bedroom 00:19:24.759 --> 00:19:27.839 closet door or near the electrical panel. And 00:19:27.839 --> 00:19:29.819 what's on it? It looks like a tech sheet. It 00:19:29.819 --> 00:19:32.000 lists the manufacturer, the inspection agency, 00:19:32.339 --> 00:19:35.619 the appliance info, the design loads like snow 00:19:35.619 --> 00:19:38.200 load and wind load, and the manufacturer bait. 00:19:38.640 --> 00:19:40.180 So if you're house hunting and you're unsure, 00:19:40.339 --> 00:19:42.779 look under the sink. That is super useful. Now 00:19:42.779 --> 00:19:45.539 let's talk money, because usually banks are pretty 00:19:45.539 --> 00:19:48.140 picky about what they finance. Do they treat 00:19:48.140 --> 00:19:50.440 these differently? This is where the code distinction 00:19:50.440 --> 00:19:53.259 matters most to your wallet. Because modular 00:19:53.259 --> 00:19:55.660 homes are built to local codes and are permanent, 00:19:55.920 --> 00:19:58.160 banks finance them with standard construction 00:19:58.160 --> 00:20:01.299 loans and traditional mortgages, the same as 00:20:01.299 --> 00:20:03.400 a site -built home. So you can get a regular 00:20:03.400 --> 00:20:06.519 30 -year... Fixed mortgage with normal interest 00:20:06.519 --> 00:20:09.579 rates. Exactly. Mobile homes, on the other hand, 00:20:09.619 --> 00:20:13.319 often require special lenders. Why is that? Because 00:20:13.319 --> 00:20:17.599 they are sometimes classified as chattel or personal 00:20:17.599 --> 00:20:20.660 property, like a car or a boat, rather than real 00:20:20.660 --> 00:20:22.900 estate. So it's not a real estate loan. It's 00:20:22.900 --> 00:20:25.480 a personal property loan. Right. Unless they're 00:20:25.480 --> 00:20:27.279 permanently affixed to land and you go through 00:20:27.279 --> 00:20:30.019 a legal process to retire the title, the interest 00:20:30.019 --> 00:20:32.279 rates on those chattel loans are usually much 00:20:32.279 --> 00:20:35.230 higher. What about resale value? Does a modular 00:20:35.230 --> 00:20:38.869 home resell for less? In the US, the valuation 00:20:38.869 --> 00:20:41.670 differences are often negligible. Appraisers 00:20:41.670 --> 00:20:43.730 look at it as a house. They don't care how it 00:20:43.730 --> 00:20:45.450 was built. They look at the square footage, the 00:20:45.450 --> 00:20:47.849 finishes, the comps in the neighborhood. If you 00:20:47.849 --> 00:20:49.630 can't tell the difference just by walking through 00:20:49.630 --> 00:20:51.789 it, the market generally doesn't care. But that's 00:20:51.789 --> 00:20:54.089 not the case everywhere. However, the sources 00:20:54.089 --> 00:20:56.690 do note that in the UK and Australia, there is 00:20:56.690 --> 00:20:58.990 still some resistance. Cultural resistance. Yes, 00:20:59.009 --> 00:21:01.900 and institutional. Some lenders and zoning boards 00:21:01.900 --> 00:21:05.019 are still skeptical about value retention. There 00:21:05.019 --> 00:21:08.240 is a worry that system built homes might degrade 00:21:08.240 --> 00:21:10.480 differently than brick and mortar. So there's 00:21:10.480 --> 00:21:13.140 a trust gap. A bit of one. But as the quality 00:21:13.140 --> 00:21:16.119 improves and as more of them are built, that 00:21:16.119 --> 00:21:19.460 gap is closing. Speaking of the UK, let's pivot 00:21:19.460 --> 00:21:21.579 to the economics of the industry itself. OK. 00:21:21.880 --> 00:21:24.500 Because for all the benefits we've just listed, 00:21:24.599 --> 00:21:28.529 speed, strength. quality, efficiency. It seems 00:21:28.529 --> 00:21:30.630 like a no -brainer business. If I were an investor, 00:21:30.789 --> 00:21:32.750 I'd be throwing money at this. You'd think so. 00:21:33.009 --> 00:21:35.029 But the sources paint a pretty bloody picture 00:21:35.029 --> 00:21:37.470 of the industry in the UK recently. It's a paradox. 00:21:37.910 --> 00:21:40.049 The product is great, but the business model 00:21:40.049 --> 00:21:42.769 is brutal. We have a perfect case study from 00:21:42.769 --> 00:21:45.750 the UK in the 2010s and 2020s that serves as 00:21:45.750 --> 00:21:48.369 a cautionary tale. Set the scene for us. Why 00:21:48.369 --> 00:21:51.019 the UK? The UK has a massive housing shortage. 00:21:51.160 --> 00:21:53.579 They simply do not build enough homes. A chronic 00:21:53.579 --> 00:21:56.220 problem. A chronic, well -known problem. The 00:21:56.220 --> 00:21:59.519 government knows this. So via an agency called 00:21:59.519 --> 00:22:03.079 Homes England, they decided to invest heavily 00:22:03.079 --> 00:22:06.539 in modular housing initiatives. They saw it as 00:22:06.539 --> 00:22:10.579 the silver bullet. Fast, scalable, modern. All 00:22:10.579 --> 00:22:13.279 of the above. Sounds like a solid plan. Government 00:22:13.279 --> 00:22:17.359 backing, huge demand. What went wrong? Despite 00:22:17.359 --> 00:22:20.339 huge investments, we saw a spectacular crash 00:22:20.339 --> 00:22:22.920 of several major players. The sources mentioned 00:22:22.920 --> 00:22:25.859 companies like Ilk Homes and LNG Modular Homes. 00:22:25.900 --> 00:22:27.640 Let's talk about Ilk Homes. What happened there? 00:22:27.759 --> 00:22:30.119 Ilk Homes was a darling of the sector. They received 00:22:30.119 --> 00:22:32.779 over 60 million pounds in government funding. 00:22:32.980 --> 00:22:35.680 60 million. And raised another 100 million privately. 00:22:36.410 --> 00:22:38.490 That is a war chest. They had the robots. They 00:22:38.490 --> 00:22:40.430 had the press releases. They were the future. 00:22:40.549 --> 00:22:43.130 That's huge money. And yet they went into administration, 00:22:43.349 --> 00:22:45.690 which is the UK equivalent of bankruptcy protection, 00:22:45.869 --> 00:22:51.509 in June 2023. And the debt. They owed 320 million 00:22:51.509 --> 00:22:53.670 pounds. 320 million in debt. How do you burn 00:22:53.670 --> 00:22:56.400 through that much cash selling houses? And that's 00:22:56.400 --> 00:22:58.720 not even the biggest one. Then you look at LNG 00:22:58.720 --> 00:23:01.640 Modular Homes. Legal in general is a massive 00:23:01.640 --> 00:23:04.160 insurance and pension firm. These aren't amateurs. 00:23:04.220 --> 00:23:06.980 They have deep pockets. Exactly. They built a 00:23:06.980 --> 00:23:11.339 massive 550 ,000 square foot factory near Selby. 00:23:11.460 --> 00:23:13.880 Over half a million square feet. That's enormous. 00:23:14.299 --> 00:23:17.740 It is like multiple. football fields enormous 00:23:17.740 --> 00:23:21.359 but they lost over 100 million pounds before 00:23:21.359 --> 00:23:23.839 they even started earning significant revenue 00:23:23.839 --> 00:23:25.960 100 million before they really even got started 00:23:25.960 --> 00:23:28.640 yes by the time they halted production in 2023 00:23:28.640 --> 00:23:33.440 the total losses hit 295 million pounds okay 00:23:33.440 --> 00:23:37.009 expert analysis time why If the houses are so 00:23:37.009 --> 00:23:39.430 good, why are the companies going bust? Is it 00:23:39.430 --> 00:23:42.029 just bad management or is the model flawed? It 00:23:42.029 --> 00:23:44.569 comes down to upfront production investment versus 00:23:44.569 --> 00:23:47.470 the reality of the construction cycle. The capex 00:23:47.470 --> 00:23:49.990 trap. The cost of the factory, precisely. Think 00:23:49.990 --> 00:23:52.109 about a traditional builder. What do they need 00:23:52.109 --> 00:23:55.269 to start a project? A truck, some tools, a few 00:23:55.269 --> 00:23:57.960 good guys. They buy a plot of land. They hire 00:23:57.960 --> 00:24:00.920 some subcontractors. Their upfront costs are 00:24:00.920 --> 00:24:03.819 relatively low. They get paid as they gild. If 00:24:03.819 --> 00:24:06.119 the market slows down, they just stop building 00:24:06.119 --> 00:24:08.519 and lay off the subcontractors. Their costs are 00:24:08.519 --> 00:24:10.480 variable. Right. They don't need to build a factory 00:24:10.480 --> 00:24:12.680 first. They don't have overhead when they are 00:24:12.680 --> 00:24:15.759 building. Exactly. But a modular company has 00:24:15.759 --> 00:24:18.900 to build the factory, buy the robots, hire the 00:24:18.900 --> 00:24:22.000 staff. pay for the electricity, and set up the 00:24:22.000 --> 00:24:24.240 supply chain before they sell a single house. 00:24:24.559 --> 00:24:27.599 So they are in a deep hole from day one. A very 00:24:27.599 --> 00:24:30.059 deep hole. And to get out of it, they need volume. 00:24:30.319 --> 00:24:32.720 They need to be pumping out thousands of homes 00:24:32.720 --> 00:24:35.400 to cover those fixed costs. The factory has to 00:24:35.400 --> 00:24:37.940 run at capacity. It has to. If they can't book 00:24:37.940 --> 00:24:40.160 revenue fast enough, the overhead eats them alive. 00:24:40.500 --> 00:24:43.079 And the sources mention planning delays as a 00:24:43.079 --> 00:24:45.940 culprit, too. This seems to be the specific bottleneck 00:24:45.940 --> 00:24:48.220 in the UK. That's the other side of the coin. 00:24:48.359 --> 00:24:50.500 You have this factory that can build a thousand 00:24:50.500 --> 00:24:53.920 homes a year, but you need land to put them on. 00:24:54.119 --> 00:24:56.599 And in the UK, the planning permission system 00:24:56.599 --> 00:24:59.339 getting the permits to build is notoriously slow. 00:25:00.119 --> 00:25:03.140 LNG specifically blamed local planning delays. 00:25:03.740 --> 00:25:05.900 They had the factory ready to run, they had the 00:25:05.900 --> 00:25:07.940 homes designed, but they had nowhere to put them. 00:25:08.180 --> 00:25:11.279 So you have a factory bringing cash every single 00:25:11.279 --> 00:25:14.019 day, waiting for a permit to pour a foundation. 00:25:14.670 --> 00:25:17.150 That's a nightmare. It's a tragic misalignment 00:25:17.150 --> 00:25:20.009 of speed. The factory is fast. The bureaucracy 00:25:20.009 --> 00:25:23.690 is slow. The factory assumes a steady flow. But 00:25:23.690 --> 00:25:26.369 the real estate market is stop and go. But it's 00:25:26.369 --> 00:25:28.849 not failing everywhere, right? The sources mention 00:25:28.849 --> 00:25:31.670 Japan. Japan is a fascinating contrast. Modular 00:25:31.670 --> 00:25:34.049 is increasingly common in Japanese urban areas. 00:25:34.369 --> 00:25:36.809 Companies like Sekisui House are massive. Why 00:25:36.809 --> 00:25:38.589 does it work there? What's different? A few reasons. 00:25:38.630 --> 00:25:40.890 One, the density. Japanese cities are tight. 00:25:41.559 --> 00:25:43.759 Modular allows for a level of compactness and 00:25:43.759 --> 00:25:46.140 precision that's hard to do on site. So it's 00:25:46.140 --> 00:25:47.900 a better fit for the urban environment. For sure. 00:25:48.079 --> 00:25:51.099 Two, earthquakes. As we mentioned, these structures 00:25:51.099 --> 00:25:54.309 are rigid and strong. Ease of repair or replacement 00:25:54.309 --> 00:25:57.269 after a quake is a big selling point. And I assume 00:25:57.269 --> 00:25:59.450 the cultural perception of manufactured is different 00:25:59.450 --> 00:26:02.250 there. Very different. Japan respects precision 00:26:02.250 --> 00:26:04.930 manufacturing. They don't see factory made as 00:26:04.930 --> 00:26:08.289 cheap. They see it as high quality. They trust 00:26:08.289 --> 00:26:11.130 the robot more than the craftsman in some ways. 00:26:11.210 --> 00:26:12.890 That's a really important distinction. It's about 00:26:12.890 --> 00:26:16.150 branding as much as engineering. In the West... 00:26:16.440 --> 00:26:19.319 We romanticize the hand -built home, even if 00:26:19.319 --> 00:26:22.079 hand -built means built in the rain by a guy 00:26:22.079 --> 00:26:25.180 who is tired. Absolutely. We value the bespoke 00:26:25.180 --> 00:26:27.500 illusion, even if it's structurally inferior. 00:26:27.980 --> 00:26:30.140 So we've covered the homes, the business, the 00:26:30.140 --> 00:26:33.140 failures. Now I want to go to the extremes. Okay. 00:26:33.299 --> 00:26:35.660 Because modular isn't just about suburban housing. 00:26:35.960 --> 00:26:38.799 The sources mention some pretty wild use cases 00:26:38.799 --> 00:26:41.259 where traditional building is literally impossible. 00:26:41.660 --> 00:26:43.440 It doesn't get more extreme than Antarctica. 00:26:43.740 --> 00:26:45.980 The Halley the 6th Research Station. Yeah. This 00:26:45.980 --> 00:26:48.099 thing looks like an AT -AT walker from Star Wars. 00:26:48.200 --> 00:26:50.579 It really does. The British Antarctic Survey 00:26:50.579 --> 00:26:53.579 needed a base on the brunt ice shelf. Now think 00:26:53.579 --> 00:26:56.119 about the logistics. Right. You cannot send a 00:26:56.119 --> 00:26:58.740 crew of bricklayers to Antarctica. It's freezing. 00:26:58.920 --> 00:27:02.099 It's remote. And here is the kicker. The ice 00:27:02.099 --> 00:27:04.380 is constantly moving. It flows toward the sea. 00:27:04.599 --> 00:27:06.700 So if you build a normal building, it eventually 00:27:06.700 --> 00:27:08.880 falls into the ocean. Or gets buried in snow. 00:27:09.380 --> 00:27:12.359 So modular was the only reasonable option. They 00:27:12.359 --> 00:27:15.339 built accommodation pods. Basically high -tech 00:27:15.339 --> 00:27:18.559 modules. On stilts? On hydraulic legs fitted 00:27:18.559 --> 00:27:21.279 with giant skis. They shipped them there and 00:27:21.279 --> 00:27:23.380 assembled them like a space station. And the 00:27:23.380 --> 00:27:25.440 hydraulic legs allow them to move the station 00:27:25.440 --> 00:27:29.000 if the ice cracks. Exactly. If the ice shelf 00:27:29.000 --> 00:27:31.359 develops a fissure, they can hook up tractors 00:27:31.359 --> 00:27:34.000 to the pods and tow the entire research station 00:27:34.000 --> 00:27:37.440 to a safer location. It is the ultimate mobile 00:27:37.440 --> 00:27:40.180 modular building. That is incredible engineering. 00:27:40.500 --> 00:27:42.339 Yeah. It shows that when constraints are high, 00:27:43.029 --> 00:27:45.650 Modular winds. It has to. And on the flip side, 00:27:45.849 --> 00:27:48.250 the sources talk about disaster relief. This 00:27:48.250 --> 00:27:50.890 is less sci -fi, but arguably more important. 00:27:51.130 --> 00:27:53.289 Speed is the factor here, right? Yes. When a 00:27:53.289 --> 00:27:55.750 disaster strikes like a tsunami or an earthquake, 00:27:55.769 --> 00:27:58.329 infrastructure is wiped out. You need toilets, 00:27:58.529 --> 00:28:00.730 showers, clinics, and housing now. There's no 00:28:00.730 --> 00:28:02.809 time to waste. You can't wait six months for 00:28:02.809 --> 00:28:05.910 a build. Modular units, often adapted from shipping 00:28:05.910 --> 00:28:08.349 container concepts or specialized flat packs, 00:28:08.589 --> 00:28:11.289 can be trucked in or flown in to provide immediate 00:28:11.289 --> 00:28:14.130 sanitation and shelter. It's literally saving 00:28:14.130 --> 00:28:17.670 lives by being fast. It is. It's utilitarian 00:28:17.670 --> 00:28:20.589 but essential. It turns shelter into a product 00:28:20.589 --> 00:28:23.329 you can ship. Okay, let's pivot to the future. 00:28:23.769 --> 00:28:26.029 This is the part of the outline that really caught 00:28:26.029 --> 00:28:29.740 my eye. Open modular building. and the open source 00:28:29.740 --> 00:28:31.779 movement. This is where it gets really interesting. 00:28:32.099 --> 00:28:34.119 When I think open source, I think of software, 00:28:34.299 --> 00:28:39.140 Linux, Wikipedia. How do you open source a house? 00:28:39.579 --> 00:28:42.000 This is a really exciting theoretical shift. 00:28:42.220 --> 00:28:45.460 It's often called P2P construction peer -to -peer. 00:28:45.599 --> 00:28:48.099 Peer -to -peer. How does it work? Imagine if 00:28:48.099 --> 00:28:50.019 architectural plans were like software code. 00:28:50.339 --> 00:28:52.220 Currently, architecture is very proprietary. 00:28:52.619 --> 00:28:54.660 You hire an architect. They own the design. Right. 00:28:54.759 --> 00:28:56.740 You pay an architect. They draw plans. You own 00:28:56.740 --> 00:28:59.150 that specific set. But open source changes that. 00:28:59.289 --> 00:29:01.569 Instead of every architect hoarding their designs, 00:29:01.769 --> 00:29:03.910 they share them online. A community of designers 00:29:03.910 --> 00:29:06.009 works together to perfect a module. So I could 00:29:06.009 --> 00:29:07.990 go online and download a design for a bedroom 00:29:07.990 --> 00:29:10.630 module. Yes. The concept is open structures. 00:29:11.009 --> 00:29:13.690 Just as software has shared libraries that anyone 00:29:13.690 --> 00:29:16.490 can use, building is moving towards shared designs 00:29:16.490 --> 00:29:19.940 and tools. You download the file. What then? 00:29:20.079 --> 00:29:22.019 You download the file and instead of sending 00:29:22.019 --> 00:29:24.640 it to a printer for paper, you send it to a CNC 00:29:24.640 --> 00:29:27.740 machine, a computer -controlled cutter that cuts 00:29:27.740 --> 00:29:30.700 sheets of plywood into puzzle pieces. That sounds 00:29:30.700 --> 00:29:33.579 incredibly democratic. That's the word. Democratization. 00:29:33.660 --> 00:29:36.759 It allows communities to share plans and use 00:29:36.759 --> 00:29:39.759 low -cost materials. The source mentions using 00:29:39.759 --> 00:29:43.279 things like plywood or even 3D printing. So you 00:29:43.279 --> 00:29:46.400 don't need a massive LNG factory. You could theoretically 00:29:46.400 --> 00:29:49.279 do this in a local makerspace. That's the dream. 00:29:49.460 --> 00:29:52.059 It empowers people to reconfigure their public 00:29:52.059 --> 00:29:56.160 sphere. The source compares it to pre -industrial 00:29:56.160 --> 00:29:58.779 vernacular architecture. Unpack that phrase. 00:29:59.000 --> 00:30:01.180 That sounds like academic jargon. It basically 00:30:01.180 --> 00:30:03.819 means how we used to build before professionals 00:30:03.819 --> 00:30:06.619 took over. Before professional architects, communities 00:30:06.619 --> 00:30:09.000 built their own homes using local styles and 00:30:09.000 --> 00:30:11.500 methods. Everyone in the village knew how to 00:30:11.500 --> 00:30:14.509 build a barn. You used local wood, local stone. 00:30:14.809 --> 00:30:17.170 It was common knowledge. It was. This is a high 00:30:17.170 --> 00:30:19.890 -tech return to that. It's using modern tech 00:30:19.890 --> 00:30:22.009 to let communities build for themselves again 00:30:22.009 --> 00:30:24.589 rather than relying on a giant developer. And 00:30:24.589 --> 00:30:27.069 I imagine this links to sustainability. Hugely. 00:30:27.230 --> 00:30:30.410 It's green building meets commons -based activity. 00:30:31.400 --> 00:30:34.720 If you can 3D print a module locally using recycled 00:30:34.720 --> 00:30:37.539 materials, your carbon footprint is a fraction 00:30:37.539 --> 00:30:40.779 of shipping a steel box from a factory 500 miles 00:30:40.779 --> 00:30:43.440 away. You eliminate the transport cost. Which, 00:30:43.539 --> 00:30:45.559 as we discussed, is the hardest part of modular. 00:30:45.819 --> 00:30:48.519 It feels like we are on the cusp of a major shift. 00:30:48.680 --> 00:30:52.240 We have the big tech version, massive factories 00:30:52.240 --> 00:30:55.180 churning out precision homes like Toyotas, and 00:30:55.180 --> 00:30:57.539 the grassroots version. Yeah. people downloading 00:30:57.539 --> 00:31:00.400 plans and printing them locally. And both are 00:31:00.400 --> 00:31:03.220 driven by the same realization. The old way of 00:31:03.220 --> 00:31:05.160 building brick by brick in the mud doesn't make 00:31:05.160 --> 00:31:07.519 sense anymore. It's broken. It's too slow, too 00:31:07.519 --> 00:31:09.920 expensive, and too wasteful. So let's wrap this 00:31:09.920 --> 00:31:12.279 up. We've covered a lot of ground, from the factory 00:31:12.279 --> 00:31:15.119 floor to the Antarctic ice shelf, from the financial 00:31:15.119 --> 00:31:17.680 ruin of UK startups to the open source future. 00:31:17.900 --> 00:31:20.599 We have. It's a huge topic. If we summarize the 00:31:20.599 --> 00:31:22.779 current state of modular building, it seems like 00:31:22.779 --> 00:31:24.720 a technology that has proven itself technically. 00:31:25.150 --> 00:31:28.730 It works, it's strong, it's fast, but is struggling 00:31:28.730 --> 00:31:30.950 to find its business footing in some places. 00:31:31.170 --> 00:31:34.470 That's a fair assessment. It is faster, it is 00:31:34.470 --> 00:31:36.890 potentially stronger, it is technically sophisticated, 00:31:37.190 --> 00:31:41.309 but it is fighting two wars. Two wars. One against 00:31:41.309 --> 00:31:43.710 market perception, the mobile home confusion, 00:31:43.930 --> 00:31:47.259 and one... against the brutal economics of factory 00:31:47.259 --> 00:31:49.740 setup costs. But the trajectory seems clear. 00:31:49.940 --> 00:31:53.319 I think so. The final takeaway for me is that 00:31:53.319 --> 00:31:55.880 we are moving toward a world where a house is 00:31:55.880 --> 00:31:58.819 a product, like a car. Traceable by serial number. 00:31:59.059 --> 00:32:02.500 Exactly. Manufactured to spec, quality controlled, 00:32:02.700 --> 00:32:05.640 and delivered complete. The idea of a custom 00:32:05.640 --> 00:32:08.259 stick -built home might eventually become a luxury 00:32:08.259 --> 00:32:10.880 oddity like a hand -built car is today. That 00:32:10.880 --> 00:32:13.740 is a wild thought. Most people drive Toyotas. 00:32:14.170 --> 00:32:16.450 Not hand -built Rolls Royces. Maybe we'll all 00:32:16.450 --> 00:32:18.569 be living in Toyotas soon. And we'll be warmer, 00:32:18.690 --> 00:32:21.109 safer, and build them faster because of it. I 00:32:21.109 --> 00:32:22.509 want to leave the listener with a provocative 00:32:22.509 --> 00:32:24.269 thought based on that open source discussion. 00:32:24.769 --> 00:32:27.210 We are seeing 3D printing get bigger and cheaper. 00:32:27.390 --> 00:32:29.869 We are seeing designs go online. Where is this 00:32:29.869 --> 00:32:33.109 going? If open source modularity takes off, will 00:32:33.109 --> 00:32:35.329 we see a future where you download your house 00:32:35.329 --> 00:32:38.230 design and print it locally, bypassing the traditional 00:32:38.230 --> 00:32:41.410 construction industry entirely? Could Amazon 00:32:41.410 --> 00:32:44.390 or just a local library become your home builder? 00:32:44.750 --> 00:32:48.450 It sounds impossible now, but 20 years ago, so 00:32:48.450 --> 00:32:50.609 did printing a kidney or carrying a supercomputer 00:32:50.609 --> 00:32:52.990 in your pocket. I wouldn't bet against it. Something 00:32:52.990 --> 00:32:54.750 to mull over the next time you see a construction 00:32:54.750 --> 00:32:57.289 site stuck in the mud. Thanks for diving deep 00:32:57.289 --> 00:32:59.130 with us. It was a pleasure. See you next time.