Welcome back to the Deep Dive. Today, we need
to talk about the P word. The P word, I'm not
sure I follow. Prefab. Ah, yes. That is a loaded
word. It is, isn't it? For most people, if I
say prefab, you immediately have a specific image
in your head. And I'm willing to bet my morning
coffee it's not a flattering one. You're picturing,
you know, cheap vinyl siding peeling off in the
sun. Right. Or a temporary classroom that always
smells a little damp. Exactly. That smell of
damp carpet. Or let's be honest, you're picturing
a trailer park. That is the stigma. It's the
cheap and nasty reputation. Yeah. The word itself
sort of implies temporary, low quality, and maybe
even last resort. Right. And the mission for
this deep dive is to look at the, well, the massive
stack of research you've brought today and figure
out why that reputation exists. It's a long and
complicated story. But more importantly, we're
going to complete. dismantle that image because
I went into this expecting a story about I don't
know industrialization I thought would be starting
in Victorian London maybe that's a logical assumption
mass production standardization it all screams
Industrial Revolution doesn't it yeah the Ford
Model T era or something like that we tend to
think of it as a 19th century invention exactly
but the sources you brought they don't start
in a factory in Detroit they start on a beach
on a beach yes In the 12th century, this blew
my mind. We're talking about the year 1160. Specifically
between 1160 and 1170. And we're looking at the
Norman Conquest. Okay, so paint the picture for
us, because usually when I think of medieval
warfare, I'm thinking of sieges that take months.
Right, you surround a castle, set up your trebuchets.
And you just wait for everyone inside to starve
or get dysentery. But the Norns didn't have months,
did they? No, absolutely not. They were invaders
landing in hostile territory. The account comes
from a source by the historian Pierre Bouet,
who did a deep, deep analysis of the Roman du
Roi. Which is an epic poem, right? An epic poem
by a poet named Weiss. And the context here is
just critical. The Normans need a foothold, and
they need it now. And building a castle is not
a now kind of project. Not at all. Building a
stone castle takes, what, five, ten years? Even
a standard wooden Mott & Bailey fort, which was
the quick defense of the day, takes weeks to
fell the trees, strip the bark, shape all the
timber. And while you're doing all that, you
are incredibly vulnerable. You're just a bunch
of guys with axes on a beach while the locals
are up on the cliffs sharpening their swords.
Precisely. So Waste describes the Norman ship's
landing. And out of the holes, the knights aren't
just dragging raw timber. No. They are dragging
out beams that have been pre -cut, pre -drilled.
The text is incredibly specific. It says the
wood was pierced and planed back in Normandy
before they ever set sail. Just pause on that
for a second. In 1160, with no power tools, no
CAD software, no electricity, they had a workshop
in Normandy manufacturing a fortress. Yes. They
were essentially labeling the parts and loading
them onto a ship like a kit. That's unbelievable.
It's logistics on an imperial scale. The poem
even mentions they brought barrels filled with
wooden dowels pegs, you know. And these pegs
were pre -trimmed to fit the specific pre -drilled
holes in the beams. So it is, for all intents
and purposes, a flat -packed castle. It's 12th
century Ikea, basically. To exert peg A into
beam B to subjugate the locals. Pretty much,
yes. Yeah. But you have to think about the psychological
impact of that. What do you mean? The text says
they landed, they dragged these beams to the
chosen site, and during the night, they erected
a fortress and dug a moat around it. In one night?
A whole fortnight. In one single night. Imagine
you're on the opposing army. You see an empty
beach at sunset. You go to sleep. You wake up
at sunrise and there is a fully formed big fortress,
as the poem calls it, staring right back at you.
It's not just construction. It's a magic trick.
It's shock and awe. And that right there is the
core identity of prefabrication that gets so
lost in the modern cheap stigma. The Normans
didn't use prefab because they were poor. They
didn't use it because they couldn't afford stone.
They used it because they needed a level of speed
and precision that on -site construction simply
could not match. That is such a crucial reframing.
We usually think of fast as sloppy or cutting
corners. But here, fast was a military necessity.
It was a technology of power, of projecting force.
So we've established nights we're doing this
in 1160, which means we have a massive timeline
to cover today. A very long one. We're going
to go from these Norman conquests all the way
to Emperor Akbar the Great in India, then jump
through the mail order boom of the Sears catalog.
Which is the story in itself. Well, yeah. And
then to the Cold War, kitchen debate, and finally
to the laser cut. 3D modeled homes of today.
It is a broad spectrum. But before we get to
the rest of the history, we really, really need
to clean up the vocabulary. Oh, good idea. Because
as you said at the top, people hear prefab and
they think one thing, but the industry is actually
divided into very specific legal and technical
categories. Right. Let's de -confuse the jargon
because I spent about an hour just trying to
parse the difference between modular, manufactured,
and mobile. They sound interchangeable. They
do. Are these just marketing? terms or do they
actually mean something legally? Oh, they are
distinct legal categories. And confusing them
is actually dangerous, especially if you're thinking
of buying one. Prefabricated is just a big, broad
umbrella term. Just means some or all of it was
made in a factory. Got it. Made off site. But
what happens after the factory and which rules
they follow in the factory determines everything.
Okay, let's break it down. Let's start with modular
homes. To me, that sounds like something from
a sci -fi movie. Or maybe Legos. Legos is a fair
analogy. It's a good way to think about it. Modular
homes are created in sections or modules in a
factory. Like a whole kitchen is one module,
a bedroom is another. Exactly. Sometimes whole
halves of the house. Those modules are then transported
to the building site, lifted by a crane, and
put together. But here is the crucial distinction,
and this is the boring but incredibly important
regulatory part. Modular homes are built to the
IRC. The International Residential Code. The
IRC. Okay. And that's the same rulebook a regular
contractor uses if he's building a house from
scratch on my lot. Exactly. A modular home is
built to the exact same structural, safety, and
energy standards as a stick -built home. It goes
on a permanent foundation. Once it's assembled
and finished, legally and physically, There is
almost no difference. So you couldn't tell the
difference just by walking through it? You'd
never know. The bank appraisers usually won't
know. Your home insurance company won't know.
It's just a house. So effectively modular describes
a construction method, not a separate class of
housing. It's just a house that took a truck
ride. Perfectly put. Now contrast that with the
second category. Manufactured homes. This is
where people get confused. This is the pivot
point, because manufactured just sounds like
a synonym for made in a factory. It does, but
legally it refers to something very specific.
Manufactured homes are not built to the local
IRC. They are built to HUD code. HUD, as in the
Department of Housing and Urban Development.
The federal government. That's the one. It's
a federal building code. Why does that matter?
A code is a code, right? I mean, if the roof
stays on and the lights turn on, who cares who
wrote the rulebook? It matters for two huge reasons,
zoning and finance. The federal HUD code supersedes
local building codes. Okay. This allows these
homes to be built on a steel chassis, basically
a permanent metal frame that's part of the structure.
They are trucked to the site in one or two big
pieces, and often that steel frame stays right
there underneath them. So they are structurally
distinct. You have a house sitting on a metal
skeleton, not necessarily a traditional concrete
foundation. Yes. And because of that steel chassis
and the fact that they aren't built to the local
IRC standards, many towns and cities have zoning
laws that explicitly ban them. You can buy a
beautiful piece of land in a suburb, but the
Tang Council can say sorry. No HUD code homes
allowed here. That feels like a massive trap
for an uneducated buyer. You buy the land, you
buy the manufactured home because it's more affordable,
and then the town basically tells you to get
lost with your new house. It happens all the
time. But the wildest category, legally speaking,
is the third one. Let me guess. Mobile homes.
Mobile homes. Which I think most people would
just call trailers. Historically, yes. But here
is the legal kicker, the part that changes everything.
In many jurisdictions, a mobile home... or a
tiny home on wheels, for that matter, isn't real
estate. It's not real estate. What is it, then?
It's personal property. Wait, explain that distinction,
because that sounds like boring legalese, but
I have a feeling it's not. It's the most important
distinction of all. If you buy a house, you get
a deed. It's attached to the land. It appreciates
in value, usually. Sure. If you buy a mobile
home or a trailer, you often get a title from
the DMV. The Department of Motor Vehicles. The
same people who renew my driver's license are
deciding if my house is up to code. Because if
it's on wheels, the law sees it as a vehicle.
A very heavy, very slow, non -aerodynamic vehicle.
That changes everything. That means you can't
get a mortgage, right? I mean, you can't get
a 30 -year fixed rate on a Honda Civic. Bingo.
You can't get one on a mobile home either. You
get what's called a chattel loan, which is basically
a personal property loan. And I'm guessing the
terms aren't as good. Much higher interest rates,
much shorter terms. And this is one of the main
reasons the stigma of poverty attaches to mobile
homes. The financing structure itself is predatory
compared to standard real estate. You pay more
to borrow money for an asset that depreciates
in value, just like a car. That is a huge aha
moment. The stigma isn't just about the vinyl
siding. It's baked into the financial system.
Exactly. It's a structural trap. Okay. There
was a fourth term in the notes that seemed like
a hybrid of sorts. Panelized homes? Is that just
another word for modular? No, it's different.
It's kind of the Goldilocks solution. Sometimes
they call them system -built homes. Imagine you
want to build a house, but you don't want to
build every single wall frame by hand on the
site in the rain, cutting every two by four one
at a time. Which sounds miserable and slow and
wasteful. It is. So with panelized homes, the
structural components, the wall panels, the roof
trusses, the floor systems, are made with high
precision in a factory. They use automated saws
and laser cutters on large wooden sheets. Which
I assume saves a ton of material waste. Massive
amounts. In a factory, a computer program figures
out how to get the most parts from every single
sheet of plywood. On a job site, a carpenter
cuts a board, throws the off -cut in a dumpster,
and grabs another board. Got it. Panelized homes
take those flat panels, stack them on a truck.
flat packing, really, just like the Norman Castle,
deliver them to the site, and a crew assembles
them piecemeal with a crane. So it's the halfway
point. You get the factory precision and efficiency
for the tricky structural parts, but you still
have the flexibility of assembling it on site,
which might get around some zoning issues. Exactly.
It combines the efficiency of prefab with the
look, feel, and legal status of a site -built
home. Okay, I feel much better equipped now.
I know the difference between a DMV title and
a mortgage deed, which feels like important life
knowledge. It really is. So let's jump back into
the time machine. We left the Normans in the
12th century with their instant fortress. Where
does the story go next? We move forward a bit
to the 16th century and we head east to India.
Okay. Specifically to the Mughal Empire. The
Mughals were known for just incredible architecture.
The Taj Mahal, obviously. I can't say I knew
they were into prefab. Well, we're looking at
the reign of Emperor Akbar the Great, and we
have these fascinating reports from 1579 by a
chronicler named Arif Kondahari. He describes
how the emperor utilized movable structures.
Movable structures? You mean like elaborate tents?
Much more substantial than tents. Imagine two
-story wooden palaces that could be disassembled,
moved, and reassembled. A mobile palace. Why?
The Mughal court was peripatetic. It moved around
a lot. Right, because for an empire that big,
the emperor has to be seen. You have to go on
tour, visit the provinces. Exactly. And when
the emperor goes on tour, he can't sleep in a
ditch. He needs a palace that reflects his divine
status. But he also needs to be able to pack
it up and move it to the next province next month.
So prefabrication became a tool of imperial administration
and pageantry. It's an interesting theme, isn't
it? How prefab today implies cheap housing. But
historically, for both the Normans and the Mughals,
it implied something totally different. It implied
the racket projection of power. That is a very
astute observation. It started as a technology
of dominance. It only became a technology of
mass housing much, much later. Speaking of mass
housing, let's jump to the early 20th century,
the United States. This is the era of the catalog.
The famous Sears catalog homes. I love this concept.
I think it is so romantic. In a weird capitalist
way, between roughly 1902 and 1910, you could
literally open a catalog, pick out a house like
you'd pick out a shirt, send a check. And they
would mail you a house. A whole house. It was
the ultimate mail order kit. And we aren't talking
about a garden shed here. These were substantial
multi -story family homes, beautiful craftsmen
bungalows, big colonials, Dutch colonials. So
what showed up at your door? A really big box.
It would arrive by rail, usually. A whole box
car. And then it would be trucked to your lot,
and it would arrive in thousands and thousands
of pieces. Thousands. We're talking 10 ,000 to
30 ,000 individual parts. Every piece of lumber,
every bundle of shingles, all the nails, the
windows, the doors, the paint, the varnish, and
a very, very thick instruction manual. Step one,
build foundation. See page two. Basically. Yeah.
And every single piece of lumber was numbered.
So you'd pick up a board stamped A42. And look
at the blueprint to see where piece A42 was supposed
to go. It really was giant Legos for adults.
But did people actually build these themselves?
Many did. It was a point of pride. A family and
their neighbors would have a house raising. Or
you could hire a local carpenter who probably
loved it because all the difficult measuring
and cutting was already done for him. He just
had to assemble it. And this wasn't just some
commercial gimmick by Sears, was it? There was
actual government research going into this concept.
Yes, that's a key point. We have to mention the
Forest Products Laboratory. Which sounds like
a secret lair where trees invent things. It was
a division of the U .S. Forest Service. In the
1930s, during the Great Depression, they started
putting extensive research into prefabricated
homes. And what was their motivation? Efficiency.
They were a lab dedicated to wood. And they realized
that traditional home construction wasted a staggering
amount of timber. They wanted to optimize the
resource for the good of the country. So you
have the government and the private sector both
arriving at the same conclusion. Building one
house at a time, cutting every board by hand
on the lawn is just incredibly inefficient. Correct.
even built a demonstration house for the 1935
Madison Home Show to prove their concepts. And
that research really laid the scientific groundwork
for wood -based prefabrication that continued
well into the 1960s. But there was a moment after
World War II where some people thought wood wasn't
the future at all. No. They thought the future
was shiny. Section 3, the post -war metal dreams.
We have to talk about the Lestron House. Because
looking at the photos in the notes, these things
look so cool. They look like classic American
diners turned into houses. That's a very fair
description. The Lustren House is a fascinating
and ultimately tragic story of American industrial
ambition. So set the scene for us. It's 1947.
The GIs are coming home from the war. The baby
boom is starting and there is a massive. desperate
housing shortage. We need homes. We need them
fast. And we have all this incredible industrial
capacity that was just used for building tanks
and planes. And it's now sitting idle. So the
Lester Incorporation says, let's use that capacity
to build houses out of steel. Enameled steel,
to be precise. The entire house. Interior walls,
exterior walls, roof tiles was made of interlocking
enameled steel panels. What does enameled mean
in this context? I'm thinking of jewelry. Think
of a high -quality bathtub or good cookware.
It's steel with a glass or ceramic coating that's
fused to it at a very high temperature. It's
incredibly hard, incredibly durable, and it has
that distinct porcelain -like shine. So you could
literally hose down your living room walls if
they got dirty. You could, and people did. And
here's a fun detail. Because all the interior
walls were steel, you used magnets to hang your
pictures. No nails allowed. That is amazing.
And durable. You said they were durable. Extremely.
In fact, many of the roughly 2 ,000 lustrant
homes built in the late 1940s are still in use
today, over 70 years later. They don't rot. Termites
can't eat them. They're basically tanks. So if
I'm a returning veteran in 1948, this sounds
perfect. It's modern. It's low maintenance. It's
shiny. Why don't we all live in steel houses
today? What went wrong? This is where we get
into the why. It wasn't a product failure. It
was a systemic failure. The Lustron Corporation's
goal was to be the General Motors of housing.
Meaning they wanted to turn them out on a massive
assembly line, just like cars. Exactly. They
got massive startup loans from the Reconstruction
Finance Corporation. a government agency. They
retrofitted a huge warplane factory in Columbus,
Ohio. They had the technology, the factory, the
materials, but they completely underestimated
the resistance. Resistance from who? Homebuyers.
I thought you said they loved them. Not from
homebuyers. Yeah. From the existing construction
industry. You have to understand, local carpenters,
plumbers, electricians, and especially their
unions saw Lestron as an existential threat.
If a house arrives from a factory fully wired
and plumbed, the local trade unions have nothing
to do. It cuts them out of the picture. So they
blocked it. How? In many cities, local building
codes were suddenly updated specifically to ban
steel housing, often under intense pressure from
trade unions. Or in some cases, the union simply
refused to hook up the water and power lines
once the Lustron house arrived on its foundation.
That is incredible. So it wasn't a technology
failure. It was a turf war. A vicious one. And
then there was a distribution problem. Lustren
didn't have a dealership network like GM. They
were trying to ship these massive 12 -ton house
kits across the country, but they couldn't get
the cash flow moving fast enough to pay back
those huge government loans. It's the classic
startup trap. They scaled the factory before
they scaled the sales channel. And the government
got impatient. The RFC called in the loans, foreclosed,
and literally sold the state -of -the -art factory
equipment for pennies on the dollar as scrap
metal. They crushed the dream before it could
really stabilize. Wow. It's a recurring theme
in this deep dive. Great idea, bad cash flow,
angry locals. It comes up again and again. But
Lustron wasn't the only attempt to change the
way we live. We have to talk about Lizarama.
Lizarama. This is pure 1960s Mad Men era optimism.
The name alone. Lizarama. It sounds like a ride
at a futuristic theme park. It does. These were
vacation homes designed by Andrew Geller in the
early to mid -1960s, and the sales pitch was
just incredible. You could buy a Lizarama house
on the ninth floor of Macy's department store
in New York City. Wait, what? You could go to
Macy's, buy a toaster, buy some socks, and buy
a house? Essentially, yes. They had a full -scale
model house set up right there in the store.
You'd walk through it, pick your model, and order
one, and it came full. furnished. You're kidding.
Everything. The furniture, the appliances, the
carpets, the drapes, right down to the toothbrushes
in the bathroom. That is the ultimate in consumer
convenience. Honey, could you pick up some milk
in a vacation home on your way back from work?
But the history of this specific design goes
back slightly earlier and it gets very political.
This is the kitchen debate connection. Right.
I've seen the photos of this. Vice President
Richard Nixon and Soviet Premier Nikita Khrushchev.
red -faced, pranking each other in the chest
in a kitchen. That's the one. In 1959, at the
American National Exhibition in Moscow, the U
.S. displayed a model prefab home. It was a precursor
to the Lizarama house. Nixon and Khrushchev stood
in the kitchen of this house and had a spontaneous
heated argument. And what were they arguing about?
The color of the countertops? They were arguing
about ideology. capitalism versus communism.
Nixon was showing off the modern appliances,
the dishwasher, the fancy stove, and arguing
that American capitalism provided a superior
standard of living for the average worker. He
was saying, look, even a regular American factory
worker can afford this prefab house with a dishwasher.
Exactly. And Khrushchev was firing back, arguing
that the Soviet system was superior because it
focused on things that really mattered. not on
useless gadgets. But the subtext was clear for
the whole world to see. The prefab home was the
weapon. It was the weapon. It was the physical
proof of the American dream right there on Soviet
soil. That is just wild. The humble prefab home
was literally the battlefield for the Cold War.
It was a powerful geopolitical symbol. And in
the real world, it had some success. Over 200
Liserama houses were built at a development in
Culloden Point in Montauk, New York. between
1963 and 1965. And again, just to ground this.
This wasn't some tiny fringe movement. I saw
a statistic in the notes that I had to read twice.
By 1958, roughly 10 % of new houses in the U
.S. were prefabricated. That is a significant
market share, one in every 10 new homes. It really
seemed like the future was arriving. So that
was the American experience. You had these dreams
of steel homes. You could buy a house at Macy's.
You had Cold War posturing. But across the ocean,
in Europe, the situation was very, very different.
Completely different context. Let's talk about
the European experience, specifically the U .S.
The context in the U .K. was much more dire.
The U .S. had a housing shortage because of returning
soldiers and the baby boom. The U .K. had a housing
shortage because of the Blitz. Right. German
bombing had destroyed vast swaths of housing,
particularly in London and other industrial cities.
Exactly. Hundreds of thousands of families were
displaced. They didn't need a Lizarama vacation
home. They needed a roof over their heads immediately
to survive the winter. It was a national emergency.
So the government launched a massive prefab program.
A truly massive one. Between 1945 and 1948, more
than 156 ,000 prefabricated homes were built
in the UK. 156 ,000 homes in just three years.
That is an incredible industrial effort. It was.
There were a number of specific types, like the
airy house, which used precast concrete panels.
But the key thing to understand about this whole
program is that these were explicitly intended
as a temporary solution. Temporary. The government
basically said to people, here's a prefab. It
will last about 10 years. By then, the economy
will have recovered and we will have built you
a proper brick house. But temporary is a funny
word when it comes to government projects, isn't
it? It is a very funny word. Many of those temporary
prefabs built for a 10 -year lifespan remained
inhabited for decades. A small number are actually
still in use today in the 21st century. Wow.
Does that speak to the quality or maybe just
the desperation for housing? It's a bit of both,
but it's also about community. People grew to
love these homes. For many, it was a huge step
up. They were detached bungalows with their own
gardens. They had modern indoor plumbing and
heating luxuries that many older bomb -damaged
Victorian terraces didn't have. There's a note
here about a specific estate in Lewisham, southeast
London, the Excalibur Estate. Yes. the Excalibur
Estate. It was Britain's largest remaining prefab
estate, 187 of these homes. It survived all the
way until 2011. 2011, that's more than 60 years
after they were supposed to be torn down. Exactly.
And when the local council finally announced
plans to redevelop the site, the residents fought
it tooth and nail. They loved their prefabs.
Eventually, a compromise was reached, and six
of the historic homes were officially listed
as heritage sites. They went from temporary crisis
shack to historical heritage building. That is
a fascinating arc. It shows that good enough
housing, if it provides community and dignity
and a garden, often becomes beloved housing over
time. Now, obviously, the UK didn't stop with
post -war bungalows. In the last decade or so,
there has been a big new push for what they call
MMC. Modern methods of construction. It sounds
very official and, well, modern. It's the government's
rebranding of prefab, essentially. Yeah. In the
2010s, the UK government really started backing
this as a way to solve the country's modern housing
crisis. You had these high -tech, venture capital
-backed companies popping up. Like who? Companies
like Ilk Homes. LNG Modular, that's legal in
general, the insurance giant. And Homes by Urban
Splash. And the promises were incredible. I saw
a claim from Ilk Homes that their factory in
Narrowsboro could erect a two or three bedroom
home on site in 36 hours. 36 hours. You go to
work on Monday morning, you come back on Tuesday
evening, and there's a house standing where there
used to be a concrete slab. That sounds like
the solution to everything. We have a housing
crisis, they have a 36 hour house. Right. But,
I sense a but coming. The but? is the recent
crash the spectacular trash between 2022 and
2023 the whole industry just imploded ill combs
lng modular homes by urban splash they all failed
or closed their factories ill combs went into
administration in the summer of 2023 but why
if they could build homes in 36 hours and everyone
agrees we need more homes where's the disconnect
it's complicated But a House of Lords committee
report from January 2024 was absolutely scathing.
They basically said the UK government had a start
-stop approach and wasted millions of pounds
on a failed push. And what was their main critique?
They said the government didn't have a coherent
long -term strategy. And this brings us right
back to the Lustron problem from the 1940s. The
software versus the hardware problem. Exactly.
You can have a state -of -the -art factory that
could spit out 500 houses a month. But if the
local planning department, the zoning board,
takes two years to approve the permit for the
land you want to build on, where do you put the
houses? They just pile up in the factory yard.
They pile up. You can't run a high -speed, high
-volume factory if the output pipe is clogged
by bureaucracy. It's like buying a Ferrari to
drive in permanent rush hour traffic. The engine
capacity is totally irrelevant. So the UK government
invested heavily in the Ferrari, the factories,
but did nothing to clear the traffic, which is
the planning loss. Precisely. And without a consistent
pipeline of orders, the factories burned through
their cash and went bust. Just to touch on the
rest of Europe briefly before I move on, was
this happening elsewhere? Was prefab a big deal
in France or Germany? Oh, yes. In France in the
1940s, the famous designer Jean Prouvé designed
the Maison Tropicale. which was a beautiful aluminum
prefab designed for use in France's African colonies.
And Germany. In Germany, right after the war,
a company called Self -Ready House GmbH built
5 ,000 prefabs specifically for the U .S. occupying
forces. And today, Germany has a very healthy
prefab market. Is there a Europe -wide standard
for this now? A pan -EU building code for modular
homes? Surprisingly, no. There is no single pan
-EU housing standard. Regulation is still done
at the national level. The homes have to comply
with EU euro codes for structural safety, of
course, but the specific modular regulations
are country by country. Which probably makes
it harder to scale a business across borders.
You can't just make one euro house and sell it
everywhere. It adds a lot of friction to the
process, yes. Okay, let's move to section five,
the modern industry and technology. We've talked
a lot about the failures and the history, but
clearly the technology isn't standing still.
What is happening right now that is different
from the steel panels of the 1950s? The single
biggest shift is digital. 3D digital modeling.
It's often called BIM building information modeling.
So you build the entire house inside a computer
before you cut a single piece of wood. Exactly,
to the millimeter. In modern modular construction,
everything is pre -planned using sophisticated
software. This creates a digital twin in the
house. You can check for clashes like a pipe
hitting a beam and fix it in the model instead
of on the job site. And what kind of real -world
efficiency does that get us? The stats are pretty
consistent. The data suggests modular construction
is up to 50 % faster than conventional construction.
Half the time. That's huge. And it can require
up to 50 % less materials. That's the sustainability
angle. If you are cutting wood on a muddy job
site, you make mistakes, you drop things, materials
get wet and ruined. In a controlled factory environment,
the laser cuts it once perfectly with minimal
waste. Precisely. And the global market reflects
that potential, even with the recent failures.
The global modular construction market is expected
to reach USD 271 billion by 2028. That is a lot
of zeros. It is a massive global industry. I
want to zoom in on a specific region you mentioned
in the source material, which I found fascinating.
Bali. Ah, yes, the intersection of Asia and Australia.
Bali is famous for those beautiful intricate
wooden villas. I had no idea that was a massive
prefab export industry. It is huge. They're known
for their artistic design and practical value.
In 2010, the island of Bali exported 98 ,417
prefabricated houses. Nearly 100 ,000 houses
in one year from one island. That's incredible.
It is, but it also shows the volatility of the
market because in 2011, the very next year, that
number plunged to 5 ,007. Whoa, from almost 99
,000 down to 5 ,000. That's a total crash. What
happened? The global economic slowdown. The financial
crisis. Since these were largely luxury export
items, vacation homes for people in Australia
and Europe when the global economy sneezed, the
Balinese prefab industry caught a terrible cold.
It shows how sensitive this industry is to broader
economic forces. Much more so than local construction,
which is a bit more stable. That brings us all
the way back to the U .S. We talked about the
1950s having a 10 % market share for prefabs.
Where are we now with all this new technology?
This brings us to the most surprising and, frankly,
depressing number in this entire stack of research.
Okay. We have lasers. We have 3D digital modeling.
We have data showing 50 % better efficiency.
And yet, as of 2020, the market share of non
-site -built single -family homes, so that's
modular and panelized combined, was only 3%.
Wait, wait, 3%. We went from 10 % in 1958 down
to 3 % in 2020. We went backwards, significantly
backwards. That is a stunning paradox. Usually,
technology makes things cheaper, better, and
more ubiquitous over time. We don't have fewer
flat -screen TVs. Why on earth do we have fewer
factory -built homes? Because, as we saw with
the UK example and the Lustron example, we keep
trying to solve a systemic problem with a technological
widget. The barriers are rarely engineering ones.
The houses themselves are fine. The houses work.
The Norman castles stood. The Lustron homes are
still standing 70 years later. The technology
delivers on its promise. So what are the barriers,
then, if it's not the tech? They are financial
like Lustron's government loans being called
in too early. They are regulatory like the local
zoning laws that ban HUD homes or take years
to approve permits. And they are perceptual.
This stubborn stigma that prefab equals cheap.
It's almost like the house is the easy part.
It's the entire system around the house that's
broken. That's it exactly. Until we solve the
financing and the regulation and the zoning to
match the speed and efficiency of the manufacturing,
we will be stuck at that 3 % market share forever.
So let's unpack this. We've been on quite a journey
today. Indeed we have, from the 12th century
to the 21st. We started with Norman knights in
1160 building a fortress in a single night. We
saw Emperor Akbar moving entire palaces around
India. We saw the Sears catalog democratizing
homeownership, letting people build their own
American dream from a kit. Then we saw the shiny
steel dreams of Lustron and the high stakes Cold
War politics of the Lizarama House. And the massive
post -war reconstruction in the UK, which gave
way to the recent struggles of the modern tech
driven companies that promised so much. I want
to leave our listeners with a final thought,
something to chew on. We started with those Norman
invaders. They figured out how to flat pack a
fortress 850 years ago because they had to. It
was a matter of life or death. They needed immediate
deployment. Necessity is the mother of invention,
as they say. Exactly. And today we have housing
crises all over the developed world. We have
homelessness. We have crushing affordability
issues. It's a different kind of war, but it's
still a crisis. And yet we struggle to scale
this obvious solution. It makes me wonder. The
Normans used prefabs because they were, in a
sense, temporary fortifications. The U .K. used
them as temporary relief after the war. Maybe
that temporary nature, that speed, that agility,
the ability to deploy them instantly, move them,
adapt them, maybe that's actually their greatest
permanent strength. What do you mean by that?
I mean, maybe we should stop trying so hard to
make them just like traditional houses. Maybe
we should embrace the fact that they are different.
If we stop apologizing for them being prefats
and start celebrating the unique agility they
offer, maybe we might finally break that 3 %
ceiling. I think you're onto something. If we
stop trying to disguise them as something they're
not, broken mortar, and start valuing them for
what they are, fast, efficient, adaptable, sustainable,
we might actually see a renaissance. Exactly.
If it was good enough for a medieval knight in
a hurry, it's probably good enough for us. I
would agree with that. Thank you all for listening
to this deep dive. We hope you look at that mobile
home or that modular unit a little differently
next time you drive past one. It's a piece of
history, hiding in plain sight. It sure is. See
you next time.