WEBVTT 00:00:00.000 --> 00:00:03.520 Welcome back to the Deep Dive. Today, we need 00:00:03.520 --> 00:00:06.240 to talk about the P word. The P word, I'm not 00:00:06.240 --> 00:00:10.759 sure I follow. Prefab. Ah, yes. That is a loaded 00:00:10.759 --> 00:00:12.960 word. It is, isn't it? For most people, if I 00:00:12.960 --> 00:00:15.880 say prefab, you immediately have a specific image 00:00:15.880 --> 00:00:18.780 in your head. And I'm willing to bet my morning 00:00:18.780 --> 00:00:21.280 coffee it's not a flattering one. You're picturing, 00:00:21.280 --> 00:00:23.660 you know, cheap vinyl siding peeling off in the 00:00:23.660 --> 00:00:26.500 sun. Right. Or a temporary classroom that always 00:00:26.500 --> 00:00:28.559 smells a little damp. Exactly. That smell of 00:00:28.559 --> 00:00:30.480 damp carpet. Or let's be honest, you're picturing 00:00:30.480 --> 00:00:32.539 a trailer park. That is the stigma. It's the 00:00:32.539 --> 00:00:34.939 cheap and nasty reputation. Yeah. The word itself 00:00:34.939 --> 00:00:38.820 sort of implies temporary, low quality, and maybe 00:00:38.820 --> 00:00:41.359 even last resort. Right. And the mission for 00:00:41.359 --> 00:00:45.119 this deep dive is to look at the, well, the massive 00:00:45.119 --> 00:00:47.740 stack of research you've brought today and figure 00:00:47.740 --> 00:00:50.979 out why that reputation exists. It's a long and 00:00:50.979 --> 00:00:53.159 complicated story. But more importantly, we're 00:00:53.159 --> 00:00:55.850 going to complete. dismantle that image because 00:00:55.850 --> 00:00:58.409 I went into this expecting a story about I don't 00:00:58.409 --> 00:01:00.969 know industrialization I thought would be starting 00:01:00.969 --> 00:01:03.549 in Victorian London maybe that's a logical assumption 00:01:03.549 --> 00:01:08.150 mass production standardization it all screams 00:01:08.150 --> 00:01:10.329 Industrial Revolution doesn't it yeah the Ford 00:01:10.329 --> 00:01:12.569 Model T era or something like that we tend to 00:01:12.569 --> 00:01:14.849 think of it as a 19th century invention exactly 00:01:14.849 --> 00:01:17.930 but the sources you brought they don't start 00:01:17.930 --> 00:01:20.569 in a factory in Detroit they start on a beach 00:01:20.569 --> 00:01:23.799 on a beach yes In the 12th century, this blew 00:01:23.799 --> 00:01:28.180 my mind. We're talking about the year 1160. Specifically 00:01:28.180 --> 00:01:32.260 between 1160 and 1170. And we're looking at the 00:01:32.260 --> 00:01:34.439 Norman Conquest. Okay, so paint the picture for 00:01:34.439 --> 00:01:36.359 us, because usually when I think of medieval 00:01:36.359 --> 00:01:38.819 warfare, I'm thinking of sieges that take months. 00:01:39.159 --> 00:01:41.920 Right, you surround a castle, set up your trebuchets. 00:01:42.159 --> 00:01:44.260 And you just wait for everyone inside to starve 00:01:44.260 --> 00:01:46.939 or get dysentery. But the Norns didn't have months, 00:01:46.980 --> 00:01:49.379 did they? No, absolutely not. They were invaders 00:01:49.379 --> 00:01:51.969 landing in hostile territory. The account comes 00:01:51.969 --> 00:01:54.109 from a source by the historian Pierre Bouet, 00:01:54.170 --> 00:01:56.950 who did a deep, deep analysis of the Roman du 00:01:56.950 --> 00:01:59.329 Roi. Which is an epic poem, right? An epic poem 00:01:59.329 --> 00:02:02.609 by a poet named Weiss. And the context here is 00:02:02.609 --> 00:02:04.769 just critical. The Normans need a foothold, and 00:02:04.769 --> 00:02:07.560 they need it now. And building a castle is not 00:02:07.560 --> 00:02:11.039 a now kind of project. Not at all. Building a 00:02:11.039 --> 00:02:14.379 stone castle takes, what, five, ten years? Even 00:02:14.379 --> 00:02:17.580 a standard wooden Mott & Bailey fort, which was 00:02:17.580 --> 00:02:20.479 the quick defense of the day, takes weeks to 00:02:20.479 --> 00:02:22.539 fell the trees, strip the bark, shape all the 00:02:22.539 --> 00:02:24.240 timber. And while you're doing all that, you 00:02:24.240 --> 00:02:26.580 are incredibly vulnerable. You're just a bunch 00:02:26.580 --> 00:02:29.080 of guys with axes on a beach while the locals 00:02:29.080 --> 00:02:31.000 are up on the cliffs sharpening their swords. 00:02:31.659 --> 00:02:34.500 Precisely. So Waste describes the Norman ship's 00:02:34.500 --> 00:02:37.669 landing. And out of the holes, the knights aren't 00:02:37.669 --> 00:02:40.110 just dragging raw timber. No. They are dragging 00:02:40.110 --> 00:02:42.990 out beams that have been pre -cut, pre -drilled. 00:02:43.550 --> 00:02:45.849 The text is incredibly specific. It says the 00:02:45.849 --> 00:02:48.669 wood was pierced and planed back in Normandy 00:02:48.669 --> 00:02:51.110 before they ever set sail. Just pause on that 00:02:51.110 --> 00:02:54.509 for a second. In 1160, with no power tools, no 00:02:54.509 --> 00:02:57.349 CAD software, no electricity, they had a workshop 00:02:57.349 --> 00:03:00.569 in Normandy manufacturing a fortress. Yes. They 00:03:00.569 --> 00:03:02.810 were essentially labeling the parts and loading 00:03:02.810 --> 00:03:05.379 them onto a ship like a kit. That's unbelievable. 00:03:05.900 --> 00:03:08.159 It's logistics on an imperial scale. The poem 00:03:08.159 --> 00:03:10.000 even mentions they brought barrels filled with 00:03:10.000 --> 00:03:12.500 wooden dowels pegs, you know. And these pegs 00:03:12.500 --> 00:03:15.439 were pre -trimmed to fit the specific pre -drilled 00:03:15.439 --> 00:03:18.039 holes in the beams. So it is, for all intents 00:03:18.039 --> 00:03:20.900 and purposes, a flat -packed castle. It's 12th 00:03:20.900 --> 00:03:24.080 century Ikea, basically. To exert peg A into 00:03:24.080 --> 00:03:27.099 beam B to subjugate the locals. Pretty much, 00:03:27.280 --> 00:03:30.020 yes. Yeah. But you have to think about the psychological 00:03:30.020 --> 00:03:32.659 impact of that. What do you mean? The text says 00:03:32.659 --> 00:03:35.139 they landed, they dragged these beams to the 00:03:35.139 --> 00:03:38.080 chosen site, and during the night, they erected 00:03:38.080 --> 00:03:40.719 a fortress and dug a moat around it. In one night? 00:03:40.819 --> 00:03:43.759 A whole fortnight. In one single night. Imagine 00:03:43.759 --> 00:03:46.379 you're on the opposing army. You see an empty 00:03:46.379 --> 00:03:49.520 beach at sunset. You go to sleep. You wake up 00:03:49.520 --> 00:03:53.219 at sunrise and there is a fully formed big fortress, 00:03:53.360 --> 00:03:55.979 as the poem calls it, staring right back at you. 00:03:56.080 --> 00:03:57.900 It's not just construction. It's a magic trick. 00:03:57.979 --> 00:04:00.599 It's shock and awe. And that right there is the 00:04:00.599 --> 00:04:02.960 core identity of prefabrication that gets so 00:04:02.960 --> 00:04:06.120 lost in the modern cheap stigma. The Normans 00:04:06.120 --> 00:04:08.340 didn't use prefab because they were poor. They 00:04:08.340 --> 00:04:09.719 didn't use it because they couldn't afford stone. 00:04:09.879 --> 00:04:12.419 They used it because they needed a level of speed 00:04:12.419 --> 00:04:14.879 and precision that on -site construction simply 00:04:14.879 --> 00:04:18.100 could not match. That is such a crucial reframing. 00:04:18.649 --> 00:04:21.670 We usually think of fast as sloppy or cutting 00:04:21.670 --> 00:04:25.329 corners. But here, fast was a military necessity. 00:04:25.610 --> 00:04:29.610 It was a technology of power, of projecting force. 00:04:30.079 --> 00:04:31.920 So we've established nights we're doing this 00:04:31.920 --> 00:04:34.319 in 1160, which means we have a massive timeline 00:04:34.319 --> 00:04:36.399 to cover today. A very long one. We're going 00:04:36.399 --> 00:04:38.740 to go from these Norman conquests all the way 00:04:38.740 --> 00:04:41.860 to Emperor Akbar the Great in India, then jump 00:04:41.860 --> 00:04:44.259 through the mail order boom of the Sears catalog. 00:04:44.600 --> 00:04:46.379 Which is the story in itself. Well, yeah. And 00:04:46.379 --> 00:04:49.120 then to the Cold War, kitchen debate, and finally 00:04:49.120 --> 00:04:52.300 to the laser cut. 3D modeled homes of today. 00:04:52.519 --> 00:04:55.600 It is a broad spectrum. But before we get to 00:04:55.600 --> 00:04:57.399 the rest of the history, we really, really need 00:04:57.399 --> 00:04:59.959 to clean up the vocabulary. Oh, good idea. Because 00:04:59.959 --> 00:05:02.399 as you said at the top, people hear prefab and 00:05:02.399 --> 00:05:05.279 they think one thing, but the industry is actually 00:05:05.279 --> 00:05:08.240 divided into very specific legal and technical 00:05:08.240 --> 00:05:11.079 categories. Right. Let's de -confuse the jargon 00:05:11.079 --> 00:05:13.060 because I spent about an hour just trying to 00:05:13.060 --> 00:05:15.300 parse the difference between modular, manufactured, 00:05:15.579 --> 00:05:18.180 and mobile. They sound interchangeable. They 00:05:18.180 --> 00:05:20.939 do. Are these just marketing? terms or do they 00:05:20.939 --> 00:05:23.139 actually mean something legally? Oh, they are 00:05:23.139 --> 00:05:26.439 distinct legal categories. And confusing them 00:05:26.439 --> 00:05:28.379 is actually dangerous, especially if you're thinking 00:05:28.379 --> 00:05:31.259 of buying one. Prefabricated is just a big, broad 00:05:31.259 --> 00:05:34.120 umbrella term. Just means some or all of it was 00:05:34.120 --> 00:05:37.199 made in a factory. Got it. Made off site. But 00:05:37.199 --> 00:05:39.779 what happens after the factory and which rules 00:05:39.779 --> 00:05:41.980 they follow in the factory determines everything. 00:05:42.339 --> 00:05:44.360 Okay, let's break it down. Let's start with modular 00:05:44.360 --> 00:05:46.980 homes. To me, that sounds like something from 00:05:46.980 --> 00:05:50.139 a sci -fi movie. Or maybe Legos. Legos is a fair 00:05:50.139 --> 00:05:53.480 analogy. It's a good way to think about it. Modular 00:05:53.480 --> 00:05:57.199 homes are created in sections or modules in a 00:05:57.199 --> 00:05:59.220 factory. Like a whole kitchen is one module, 00:05:59.339 --> 00:06:01.459 a bedroom is another. Exactly. Sometimes whole 00:06:01.459 --> 00:06:04.879 halves of the house. Those modules are then transported 00:06:04.879 --> 00:06:07.699 to the building site, lifted by a crane, and 00:06:07.699 --> 00:06:09.939 put together. But here is the crucial distinction, 00:06:10.120 --> 00:06:12.860 and this is the boring but incredibly important 00:06:12.860 --> 00:06:16.399 regulatory part. Modular homes are built to the 00:06:16.399 --> 00:06:19.379 IRC. The International Residential Code. The 00:06:19.379 --> 00:06:21.980 IRC. Okay. And that's the same rulebook a regular 00:06:21.980 --> 00:06:23.980 contractor uses if he's building a house from 00:06:23.980 --> 00:06:27.240 scratch on my lot. Exactly. A modular home is 00:06:27.240 --> 00:06:30.100 built to the exact same structural, safety, and 00:06:30.100 --> 00:06:33.339 energy standards as a stick -built home. It goes 00:06:33.339 --> 00:06:36.079 on a permanent foundation. Once it's assembled 00:06:36.079 --> 00:06:39.399 and finished, legally and physically, There is 00:06:39.399 --> 00:06:42.019 almost no difference. So you couldn't tell the 00:06:42.019 --> 00:06:43.959 difference just by walking through it? You'd 00:06:43.959 --> 00:06:46.079 never know. The bank appraisers usually won't 00:06:46.079 --> 00:06:48.120 know. Your home insurance company won't know. 00:06:48.180 --> 00:06:51.160 It's just a house. So effectively modular describes 00:06:51.160 --> 00:06:54.500 a construction method, not a separate class of 00:06:54.500 --> 00:06:56.660 housing. It's just a house that took a truck 00:06:56.660 --> 00:06:59.519 ride. Perfectly put. Now contrast that with the 00:06:59.519 --> 00:07:02.529 second category. Manufactured homes. This is 00:07:02.529 --> 00:07:04.129 where people get confused. This is the pivot 00:07:04.129 --> 00:07:06.209 point, because manufactured just sounds like 00:07:06.209 --> 00:07:09.550 a synonym for made in a factory. It does, but 00:07:09.550 --> 00:07:11.529 legally it refers to something very specific. 00:07:12.550 --> 00:07:14.810 Manufactured homes are not built to the local 00:07:14.810 --> 00:07:18.689 IRC. They are built to HUD code. HUD, as in the 00:07:18.689 --> 00:07:20.050 Department of Housing and Urban Development. 00:07:20.189 --> 00:07:22.410 The federal government. That's the one. It's 00:07:22.410 --> 00:07:24.370 a federal building code. Why does that matter? 00:07:24.470 --> 00:07:26.949 A code is a code, right? I mean, if the roof 00:07:26.949 --> 00:07:29.029 stays on and the lights turn on, who cares who 00:07:29.029 --> 00:07:32.050 wrote the rulebook? It matters for two huge reasons, 00:07:32.329 --> 00:07:37.370 zoning and finance. The federal HUD code supersedes 00:07:37.370 --> 00:07:40.250 local building codes. Okay. This allows these 00:07:40.250 --> 00:07:43.009 homes to be built on a steel chassis, basically 00:07:43.009 --> 00:07:45.149 a permanent metal frame that's part of the structure. 00:07:45.610 --> 00:07:48.029 They are trucked to the site in one or two big 00:07:48.029 --> 00:07:51.529 pieces, and often that steel frame stays right 00:07:51.529 --> 00:07:54.180 there underneath them. So they are structurally 00:07:54.180 --> 00:07:56.300 distinct. You have a house sitting on a metal 00:07:56.300 --> 00:07:58.759 skeleton, not necessarily a traditional concrete 00:07:58.759 --> 00:08:02.120 foundation. Yes. And because of that steel chassis 00:08:02.120 --> 00:08:04.860 and the fact that they aren't built to the local 00:08:04.860 --> 00:08:08.699 IRC standards, many towns and cities have zoning 00:08:08.699 --> 00:08:12.319 laws that explicitly ban them. You can buy a 00:08:12.319 --> 00:08:14.560 beautiful piece of land in a suburb, but the 00:08:14.560 --> 00:08:16.959 Tang Council can say sorry. No HUD code homes 00:08:16.959 --> 00:08:19.139 allowed here. That feels like a massive trap 00:08:19.139 --> 00:08:21.399 for an uneducated buyer. You buy the land, you 00:08:21.399 --> 00:08:23.279 buy the manufactured home because it's more affordable, 00:08:23.339 --> 00:08:25.199 and then the town basically tells you to get 00:08:25.199 --> 00:08:26.939 lost with your new house. It happens all the 00:08:26.939 --> 00:08:29.740 time. But the wildest category, legally speaking, 00:08:29.939 --> 00:08:32.139 is the third one. Let me guess. Mobile homes. 00:08:32.340 --> 00:08:34.840 Mobile homes. Which I think most people would 00:08:34.840 --> 00:08:38.120 just call trailers. Historically, yes. But here 00:08:38.120 --> 00:08:40.799 is the legal kicker, the part that changes everything. 00:08:41.840 --> 00:08:45.259 In many jurisdictions, a mobile home... or a 00:08:45.259 --> 00:08:48.480 tiny home on wheels, for that matter, isn't real 00:08:48.480 --> 00:08:51.159 estate. It's not real estate. What is it, then? 00:08:51.399 --> 00:08:54.299 It's personal property. Wait, explain that distinction, 00:08:54.480 --> 00:08:57.559 because that sounds like boring legalese, but 00:08:57.559 --> 00:08:59.740 I have a feeling it's not. It's the most important 00:08:59.740 --> 00:09:02.279 distinction of all. If you buy a house, you get 00:09:02.279 --> 00:09:05.720 a deed. It's attached to the land. It appreciates 00:09:05.720 --> 00:09:08.200 in value, usually. Sure. If you buy a mobile 00:09:08.200 --> 00:09:11.460 home or a trailer, you often get a title from 00:09:11.460 --> 00:09:14.350 the DMV. The Department of Motor Vehicles. The 00:09:14.350 --> 00:09:16.769 same people who renew my driver's license are 00:09:16.769 --> 00:09:19.169 deciding if my house is up to code. Because if 00:09:19.169 --> 00:09:21.269 it's on wheels, the law sees it as a vehicle. 00:09:21.570 --> 00:09:25.690 A very heavy, very slow, non -aerodynamic vehicle. 00:09:25.909 --> 00:09:27.250 That changes everything. That means you can't 00:09:27.250 --> 00:09:28.870 get a mortgage, right? I mean, you can't get 00:09:28.870 --> 00:09:31.350 a 30 -year fixed rate on a Honda Civic. Bingo. 00:09:31.490 --> 00:09:33.809 You can't get one on a mobile home either. You 00:09:33.809 --> 00:09:36.149 get what's called a chattel loan, which is basically 00:09:36.149 --> 00:09:38.230 a personal property loan. And I'm guessing the 00:09:38.230 --> 00:09:40.779 terms aren't as good. Much higher interest rates, 00:09:40.799 --> 00:09:43.759 much shorter terms. And this is one of the main 00:09:43.759 --> 00:09:46.120 reasons the stigma of poverty attaches to mobile 00:09:46.120 --> 00:09:49.559 homes. The financing structure itself is predatory 00:09:49.559 --> 00:09:52.799 compared to standard real estate. You pay more 00:09:52.799 --> 00:09:55.399 to borrow money for an asset that depreciates 00:09:55.399 --> 00:09:59.220 in value, just like a car. That is a huge aha 00:09:59.220 --> 00:10:02.000 moment. The stigma isn't just about the vinyl 00:10:02.000 --> 00:10:04.679 siding. It's baked into the financial system. 00:10:04.720 --> 00:10:06.779 Exactly. It's a structural trap. Okay. There 00:10:06.779 --> 00:10:09.179 was a fourth term in the notes that seemed like 00:10:09.179 --> 00:10:12.769 a hybrid of sorts. Panelized homes? Is that just 00:10:12.769 --> 00:10:15.370 another word for modular? No, it's different. 00:10:15.450 --> 00:10:17.090 It's kind of the Goldilocks solution. Sometimes 00:10:17.090 --> 00:10:19.529 they call them system -built homes. Imagine you 00:10:19.529 --> 00:10:21.590 want to build a house, but you don't want to 00:10:21.590 --> 00:10:24.029 build every single wall frame by hand on the 00:10:24.029 --> 00:10:26.889 site in the rain, cutting every two by four one 00:10:26.889 --> 00:10:30.149 at a time. Which sounds miserable and slow and 00:10:30.149 --> 00:10:33.110 wasteful. It is. So with panelized homes, the 00:10:33.110 --> 00:10:35.210 structural components, the wall panels, the roof 00:10:35.210 --> 00:10:37.649 trusses, the floor systems, are made with high 00:10:37.649 --> 00:10:40.370 precision in a factory. They use automated saws 00:10:40.370 --> 00:10:42.529 and laser cutters on large wooden sheets. Which 00:10:42.529 --> 00:10:45.250 I assume saves a ton of material waste. Massive 00:10:45.250 --> 00:10:48.889 amounts. In a factory, a computer program figures 00:10:48.889 --> 00:10:51.029 out how to get the most parts from every single 00:10:51.029 --> 00:10:54.470 sheet of plywood. On a job site, a carpenter 00:10:54.470 --> 00:10:56.950 cuts a board, throws the off -cut in a dumpster, 00:10:57.009 --> 00:11:00.029 and grabs another board. Got it. Panelized homes 00:11:00.029 --> 00:11:02.730 take those flat panels, stack them on a truck. 00:11:03.529 --> 00:11:05.769 flat packing, really, just like the Norman Castle, 00:11:06.009 --> 00:11:08.509 deliver them to the site, and a crew assembles 00:11:08.509 --> 00:11:10.750 them piecemeal with a crane. So it's the halfway 00:11:10.750 --> 00:11:12.850 point. You get the factory precision and efficiency 00:11:12.850 --> 00:11:16.169 for the tricky structural parts, but you still 00:11:16.169 --> 00:11:18.190 have the flexibility of assembling it on site, 00:11:18.269 --> 00:11:20.769 which might get around some zoning issues. Exactly. 00:11:20.769 --> 00:11:23.269 It combines the efficiency of prefab with the 00:11:23.269 --> 00:11:25.950 look, feel, and legal status of a site -built 00:11:25.950 --> 00:11:28.000 home. Okay, I feel much better equipped now. 00:11:28.379 --> 00:11:31.320 I know the difference between a DMV title and 00:11:31.320 --> 00:11:34.139 a mortgage deed, which feels like important life 00:11:34.139 --> 00:11:36.639 knowledge. It really is. So let's jump back into 00:11:36.639 --> 00:11:38.620 the time machine. We left the Normans in the 00:11:38.620 --> 00:11:40.759 12th century with their instant fortress. Where 00:11:40.759 --> 00:11:42.799 does the story go next? We move forward a bit 00:11:42.799 --> 00:11:46.100 to the 16th century and we head east to India. 00:11:46.220 --> 00:11:48.779 Okay. Specifically to the Mughal Empire. The 00:11:48.779 --> 00:11:51.779 Mughals were known for just incredible architecture. 00:11:52.440 --> 00:11:54.960 The Taj Mahal, obviously. I can't say I knew 00:11:54.960 --> 00:11:56.820 they were into prefab. Well, we're looking at 00:11:56.820 --> 00:11:59.039 the reign of Emperor Akbar the Great, and we 00:11:59.039 --> 00:12:02.120 have these fascinating reports from 1579 by a 00:12:02.120 --> 00:12:05.080 chronicler named Arif Kondahari. He describes 00:12:05.080 --> 00:12:08.039 how the emperor utilized movable structures. 00:12:08.500 --> 00:12:10.360 Movable structures? You mean like elaborate tents? 00:12:10.720 --> 00:12:14.179 Much more substantial than tents. Imagine two 00:12:14.179 --> 00:12:17.019 -story wooden palaces that could be disassembled, 00:12:17.019 --> 00:12:20.399 moved, and reassembled. A mobile palace. Why? 00:12:20.879 --> 00:12:23.019 The Mughal court was peripatetic. It moved around 00:12:23.019 --> 00:12:25.100 a lot. Right, because for an empire that big, 00:12:25.179 --> 00:12:27.120 the emperor has to be seen. You have to go on 00:12:27.120 --> 00:12:29.720 tour, visit the provinces. Exactly. And when 00:12:29.720 --> 00:12:31.919 the emperor goes on tour, he can't sleep in a 00:12:31.919 --> 00:12:34.259 ditch. He needs a palace that reflects his divine 00:12:34.259 --> 00:12:36.539 status. But he also needs to be able to pack 00:12:36.539 --> 00:12:38.919 it up and move it to the next province next month. 00:12:39.100 --> 00:12:42.460 So prefabrication became a tool of imperial administration 00:12:42.460 --> 00:12:45.559 and pageantry. It's an interesting theme, isn't 00:12:45.559 --> 00:12:49.379 it? How prefab today implies cheap housing. But 00:12:49.379 --> 00:12:51.720 historically, for both the Normans and the Mughals, 00:12:51.759 --> 00:12:54.539 it implied something totally different. It implied 00:12:54.539 --> 00:12:57.580 the racket projection of power. That is a very 00:12:57.580 --> 00:13:00.179 astute observation. It started as a technology 00:13:00.179 --> 00:13:02.620 of dominance. It only became a technology of 00:13:02.620 --> 00:13:05.039 mass housing much, much later. Speaking of mass 00:13:05.039 --> 00:13:07.299 housing, let's jump to the early 20th century, 00:13:07.500 --> 00:13:10.000 the United States. This is the era of the catalog. 00:13:10.340 --> 00:13:13.539 The famous Sears catalog homes. I love this concept. 00:13:13.580 --> 00:13:17.490 I think it is so romantic. In a weird capitalist 00:13:17.490 --> 00:13:21.389 way, between roughly 1902 and 1910, you could 00:13:21.389 --> 00:13:23.990 literally open a catalog, pick out a house like 00:13:23.990 --> 00:13:26.110 you'd pick out a shirt, send a check. And they 00:13:26.110 --> 00:13:28.009 would mail you a house. A whole house. It was 00:13:28.009 --> 00:13:30.730 the ultimate mail order kit. And we aren't talking 00:13:30.730 --> 00:13:33.129 about a garden shed here. These were substantial 00:13:33.129 --> 00:13:36.830 multi -story family homes, beautiful craftsmen 00:13:36.830 --> 00:13:39.549 bungalows, big colonials, Dutch colonials. So 00:13:39.549 --> 00:13:41.730 what showed up at your door? A really big box. 00:13:41.950 --> 00:13:44.230 It would arrive by rail, usually. A whole box 00:13:44.230 --> 00:13:46.179 car. And then it would be trucked to your lot, 00:13:46.320 --> 00:13:48.740 and it would arrive in thousands and thousands 00:13:48.740 --> 00:13:51.679 of pieces. Thousands. We're talking 10 ,000 to 00:13:51.679 --> 00:13:55.039 30 ,000 individual parts. Every piece of lumber, 00:13:55.220 --> 00:13:57.700 every bundle of shingles, all the nails, the 00:13:57.700 --> 00:14:00.899 windows, the doors, the paint, the varnish, and 00:14:00.899 --> 00:14:03.500 a very, very thick instruction manual. Step one, 00:14:03.659 --> 00:14:07.159 build foundation. See page two. Basically. Yeah. 00:14:07.299 --> 00:14:10.700 And every single piece of lumber was numbered. 00:14:10.980 --> 00:14:14.779 So you'd pick up a board stamped A42. And look 00:14:14.779 --> 00:14:17.139 at the blueprint to see where piece A42 was supposed 00:14:17.139 --> 00:14:19.460 to go. It really was giant Legos for adults. 00:14:19.700 --> 00:14:21.659 But did people actually build these themselves? 00:14:22.200 --> 00:14:24.679 Many did. It was a point of pride. A family and 00:14:24.679 --> 00:14:26.779 their neighbors would have a house raising. Or 00:14:26.779 --> 00:14:28.580 you could hire a local carpenter who probably 00:14:28.580 --> 00:14:30.179 loved it because all the difficult measuring 00:14:30.179 --> 00:14:31.899 and cutting was already done for him. He just 00:14:31.899 --> 00:14:34.159 had to assemble it. And this wasn't just some 00:14:34.159 --> 00:14:36.519 commercial gimmick by Sears, was it? There was 00:14:36.519 --> 00:14:39.360 actual government research going into this concept. 00:14:39.679 --> 00:14:42.360 Yes, that's a key point. We have to mention the 00:14:42.360 --> 00:14:44.419 Forest Products Laboratory. Which sounds like 00:14:44.419 --> 00:14:47.200 a secret lair where trees invent things. It was 00:14:47.200 --> 00:14:49.899 a division of the U .S. Forest Service. In the 00:14:49.899 --> 00:14:52.539 1930s, during the Great Depression, they started 00:14:52.539 --> 00:14:55.000 putting extensive research into prefabricated 00:14:55.000 --> 00:14:57.600 homes. And what was their motivation? Efficiency. 00:14:57.940 --> 00:15:00.899 They were a lab dedicated to wood. And they realized 00:15:00.899 --> 00:15:04.659 that traditional home construction wasted a staggering 00:15:04.659 --> 00:15:07.039 amount of timber. They wanted to optimize the 00:15:07.039 --> 00:15:09.080 resource for the good of the country. So you 00:15:09.080 --> 00:15:11.039 have the government and the private sector both 00:15:11.039 --> 00:15:13.860 arriving at the same conclusion. Building one 00:15:13.860 --> 00:15:16.559 house at a time, cutting every board by hand 00:15:16.559 --> 00:15:19.059 on the lawn is just incredibly inefficient. Correct. 00:15:21.259 --> 00:15:24.279 even built a demonstration house for the 1935 00:15:24.279 --> 00:15:27.559 Madison Home Show to prove their concepts. And 00:15:27.559 --> 00:15:30.139 that research really laid the scientific groundwork 00:15:30.139 --> 00:15:32.639 for wood -based prefabrication that continued 00:15:32.639 --> 00:15:35.340 well into the 1960s. But there was a moment after 00:15:35.340 --> 00:15:37.820 World War II where some people thought wood wasn't 00:15:37.820 --> 00:15:39.799 the future at all. No. They thought the future 00:15:39.799 --> 00:15:43.220 was shiny. Section 3, the post -war metal dreams. 00:15:43.580 --> 00:15:45.960 We have to talk about the Lestron House. Because 00:15:45.960 --> 00:15:47.299 looking at the photos in the notes, these things 00:15:47.299 --> 00:15:49.340 look so cool. They look like classic American 00:15:49.340 --> 00:15:52.240 diners turned into houses. That's a very fair 00:15:52.240 --> 00:15:55.840 description. The Lustren House is a fascinating 00:15:55.840 --> 00:15:58.860 and ultimately tragic story of American industrial 00:15:58.860 --> 00:16:01.399 ambition. So set the scene for us. It's 1947. 00:16:01.899 --> 00:16:04.700 The GIs are coming home from the war. The baby 00:16:04.700 --> 00:16:08.340 boom is starting and there is a massive. desperate 00:16:08.340 --> 00:16:10.840 housing shortage. We need homes. We need them 00:16:10.840 --> 00:16:13.539 fast. And we have all this incredible industrial 00:16:13.539 --> 00:16:15.919 capacity that was just used for building tanks 00:16:15.919 --> 00:16:19.460 and planes. And it's now sitting idle. So the 00:16:19.460 --> 00:16:22.580 Lester Incorporation says, let's use that capacity 00:16:22.580 --> 00:16:25.500 to build houses out of steel. Enameled steel, 00:16:25.600 --> 00:16:28.659 to be precise. The entire house. Interior walls, 00:16:28.860 --> 00:16:31.840 exterior walls, roof tiles was made of interlocking 00:16:31.840 --> 00:16:34.539 enameled steel panels. What does enameled mean 00:16:34.539 --> 00:16:36.720 in this context? I'm thinking of jewelry. Think 00:16:36.720 --> 00:16:39.220 of a high -quality bathtub or good cookware. 00:16:39.460 --> 00:16:42.700 It's steel with a glass or ceramic coating that's 00:16:42.700 --> 00:16:44.960 fused to it at a very high temperature. It's 00:16:44.960 --> 00:16:47.259 incredibly hard, incredibly durable, and it has 00:16:47.259 --> 00:16:49.659 that distinct porcelain -like shine. So you could 00:16:49.659 --> 00:16:51.840 literally hose down your living room walls if 00:16:51.840 --> 00:16:54.279 they got dirty. You could, and people did. And 00:16:54.279 --> 00:16:56.820 here's a fun detail. Because all the interior 00:16:56.820 --> 00:16:59.440 walls were steel, you used magnets to hang your 00:16:59.440 --> 00:17:01.980 pictures. No nails allowed. That is amazing. 00:17:02.100 --> 00:17:04.819 And durable. You said they were durable. Extremely. 00:17:04.819 --> 00:17:07.579 In fact, many of the roughly 2 ,000 lustrant 00:17:07.579 --> 00:17:09.700 homes built in the late 1940s are still in use 00:17:09.700 --> 00:17:13.420 today, over 70 years later. They don't rot. Termites 00:17:13.420 --> 00:17:15.960 can't eat them. They're basically tanks. So if 00:17:15.960 --> 00:17:18.480 I'm a returning veteran in 1948, this sounds 00:17:18.480 --> 00:17:21.700 perfect. It's modern. It's low maintenance. It's 00:17:21.700 --> 00:17:24.319 shiny. Why don't we all live in steel houses 00:17:24.319 --> 00:17:26.700 today? What went wrong? This is where we get 00:17:26.700 --> 00:17:29.920 into the why. It wasn't a product failure. It 00:17:29.920 --> 00:17:33.000 was a systemic failure. The Lustron Corporation's 00:17:33.000 --> 00:17:35.119 goal was to be the General Motors of housing. 00:17:35.400 --> 00:17:37.559 Meaning they wanted to turn them out on a massive 00:17:37.559 --> 00:17:40.440 assembly line, just like cars. Exactly. They 00:17:40.440 --> 00:17:42.460 got massive startup loans from the Reconstruction 00:17:42.460 --> 00:17:45.460 Finance Corporation. a government agency. They 00:17:45.460 --> 00:17:48.140 retrofitted a huge warplane factory in Columbus, 00:17:48.259 --> 00:17:50.680 Ohio. They had the technology, the factory, the 00:17:50.680 --> 00:17:53.220 materials, but they completely underestimated 00:17:53.220 --> 00:17:55.660 the resistance. Resistance from who? Homebuyers. 00:17:55.759 --> 00:17:57.140 I thought you said they loved them. Not from 00:17:57.140 --> 00:17:58.880 homebuyers. Yeah. From the existing construction 00:17:58.880 --> 00:18:01.740 industry. You have to understand, local carpenters, 00:18:01.759 --> 00:18:03.480 plumbers, electricians, and especially their 00:18:03.480 --> 00:18:05.920 unions saw Lestron as an existential threat. 00:18:06.079 --> 00:18:08.619 If a house arrives from a factory fully wired 00:18:08.619 --> 00:18:10.960 and plumbed, the local trade unions have nothing 00:18:10.960 --> 00:18:14.180 to do. It cuts them out of the picture. So they 00:18:14.180 --> 00:18:17.240 blocked it. How? In many cities, local building 00:18:17.240 --> 00:18:19.680 codes were suddenly updated specifically to ban 00:18:19.680 --> 00:18:22.859 steel housing, often under intense pressure from 00:18:22.859 --> 00:18:26.700 trade unions. Or in some cases, the union simply 00:18:26.700 --> 00:18:29.279 refused to hook up the water and power lines 00:18:29.279 --> 00:18:31.660 once the Lustron house arrived on its foundation. 00:18:32.170 --> 00:18:34.289 That is incredible. So it wasn't a technology 00:18:34.289 --> 00:18:38.009 failure. It was a turf war. A vicious one. And 00:18:38.009 --> 00:18:40.230 then there was a distribution problem. Lustren 00:18:40.230 --> 00:18:42.809 didn't have a dealership network like GM. They 00:18:42.809 --> 00:18:45.470 were trying to ship these massive 12 -ton house 00:18:45.470 --> 00:18:47.849 kits across the country, but they couldn't get 00:18:47.849 --> 00:18:49.670 the cash flow moving fast enough to pay back 00:18:49.670 --> 00:18:52.049 those huge government loans. It's the classic 00:18:52.049 --> 00:18:54.269 startup trap. They scaled the factory before 00:18:54.269 --> 00:18:56.309 they scaled the sales channel. And the government 00:18:56.309 --> 00:19:00.579 got impatient. The RFC called in the loans, foreclosed, 00:19:00.619 --> 00:19:03.299 and literally sold the state -of -the -art factory 00:19:03.299 --> 00:19:05.220 equipment for pennies on the dollar as scrap 00:19:05.220 --> 00:19:07.480 metal. They crushed the dream before it could 00:19:07.480 --> 00:19:09.859 really stabilize. Wow. It's a recurring theme 00:19:09.859 --> 00:19:12.940 in this deep dive. Great idea, bad cash flow, 00:19:13.119 --> 00:19:16.920 angry locals. It comes up again and again. But 00:19:16.920 --> 00:19:19.180 Lustron wasn't the only attempt to change the 00:19:19.180 --> 00:19:22.000 way we live. We have to talk about Lizarama. 00:19:22.559 --> 00:19:26.839 Lizarama. This is pure 1960s Mad Men era optimism. 00:19:27.140 --> 00:19:31.140 The name alone. Lizarama. It sounds like a ride 00:19:31.140 --> 00:19:34.099 at a futuristic theme park. It does. These were 00:19:34.099 --> 00:19:36.500 vacation homes designed by Andrew Geller in the 00:19:36.500 --> 00:19:39.559 early to mid -1960s, and the sales pitch was 00:19:39.559 --> 00:19:42.140 just incredible. You could buy a Lizarama house 00:19:42.140 --> 00:19:44.599 on the ninth floor of Macy's department store 00:19:44.599 --> 00:19:46.920 in New York City. Wait, what? You could go to 00:19:46.920 --> 00:19:50.099 Macy's, buy a toaster, buy some socks, and buy 00:19:50.099 --> 00:19:52.819 a house? Essentially, yes. They had a full -scale 00:19:52.819 --> 00:19:54.880 model house set up right there in the store. 00:19:54.940 --> 00:19:56.880 You'd walk through it, pick your model, and order 00:19:56.880 --> 00:19:59.279 one, and it came full. furnished. You're kidding. 00:19:59.519 --> 00:20:01.519 Everything. The furniture, the appliances, the 00:20:01.519 --> 00:20:04.279 carpets, the drapes, right down to the toothbrushes 00:20:04.279 --> 00:20:06.619 in the bathroom. That is the ultimate in consumer 00:20:06.619 --> 00:20:09.420 convenience. Honey, could you pick up some milk 00:20:09.420 --> 00:20:11.400 in a vacation home on your way back from work? 00:20:11.680 --> 00:20:13.640 But the history of this specific design goes 00:20:13.640 --> 00:20:15.880 back slightly earlier and it gets very political. 00:20:16.220 --> 00:20:18.640 This is the kitchen debate connection. Right. 00:20:18.799 --> 00:20:21.359 I've seen the photos of this. Vice President 00:20:21.359 --> 00:20:24.099 Richard Nixon and Soviet Premier Nikita Khrushchev. 00:20:24.589 --> 00:20:27.009 red -faced, pranking each other in the chest 00:20:27.009 --> 00:20:30.670 in a kitchen. That's the one. In 1959, at the 00:20:30.670 --> 00:20:33.190 American National Exhibition in Moscow, the U 00:20:33.190 --> 00:20:37.150 .S. displayed a model prefab home. It was a precursor 00:20:37.150 --> 00:20:40.490 to the Lizarama house. Nixon and Khrushchev stood 00:20:40.490 --> 00:20:42.950 in the kitchen of this house and had a spontaneous 00:20:42.950 --> 00:20:45.710 heated argument. And what were they arguing about? 00:20:45.809 --> 00:20:47.690 The color of the countertops? They were arguing 00:20:47.690 --> 00:20:50.990 about ideology. capitalism versus communism. 00:20:51.269 --> 00:20:53.210 Nixon was showing off the modern appliances, 00:20:53.369 --> 00:20:55.890 the dishwasher, the fancy stove, and arguing 00:20:55.890 --> 00:20:57.910 that American capitalism provided a superior 00:20:57.910 --> 00:21:00.549 standard of living for the average worker. He 00:21:00.549 --> 00:21:02.869 was saying, look, even a regular American factory 00:21:02.869 --> 00:21:05.569 worker can afford this prefab house with a dishwasher. 00:21:05.930 --> 00:21:08.910 Exactly. And Khrushchev was firing back, arguing 00:21:08.910 --> 00:21:10.890 that the Soviet system was superior because it 00:21:10.890 --> 00:21:12.940 focused on things that really mattered. not on 00:21:12.940 --> 00:21:16.099 useless gadgets. But the subtext was clear for 00:21:16.099 --> 00:21:18.180 the whole world to see. The prefab home was the 00:21:18.180 --> 00:21:19.940 weapon. It was the weapon. It was the physical 00:21:19.940 --> 00:21:21.880 proof of the American dream right there on Soviet 00:21:21.880 --> 00:21:25.680 soil. That is just wild. The humble prefab home 00:21:25.680 --> 00:21:29.180 was literally the battlefield for the Cold War. 00:21:29.339 --> 00:21:31.799 It was a powerful geopolitical symbol. And in 00:21:31.799 --> 00:21:35.359 the real world, it had some success. Over 200 00:21:35.359 --> 00:21:37.920 Liserama houses were built at a development in 00:21:37.920 --> 00:21:40.630 Culloden Point in Montauk, New York. between 00:21:40.630 --> 00:21:44.170 1963 and 1965. And again, just to ground this. 00:21:44.799 --> 00:21:47.420 This wasn't some tiny fringe movement. I saw 00:21:47.420 --> 00:21:49.380 a statistic in the notes that I had to read twice. 00:21:49.900 --> 00:21:53.380 By 1958, roughly 10 % of new houses in the U 00:21:53.380 --> 00:21:56.059 .S. were prefabricated. That is a significant 00:21:56.059 --> 00:21:58.700 market share, one in every 10 new homes. It really 00:21:58.700 --> 00:22:00.440 seemed like the future was arriving. So that 00:22:00.440 --> 00:22:02.640 was the American experience. You had these dreams 00:22:02.640 --> 00:22:05.180 of steel homes. You could buy a house at Macy's. 00:22:05.220 --> 00:22:07.799 You had Cold War posturing. But across the ocean, 00:22:07.940 --> 00:22:09.980 in Europe, the situation was very, very different. 00:22:10.180 --> 00:22:11.839 Completely different context. Let's talk about 00:22:11.839 --> 00:22:14.400 the European experience, specifically the U .S. 00:22:14.319 --> 00:22:16.460 The context in the U .K. was much more dire. 00:22:16.660 --> 00:22:18.900 The U .S. had a housing shortage because of returning 00:22:18.900 --> 00:22:21.519 soldiers and the baby boom. The U .K. had a housing 00:22:21.519 --> 00:22:23.779 shortage because of the Blitz. Right. German 00:22:23.779 --> 00:22:26.359 bombing had destroyed vast swaths of housing, 00:22:26.539 --> 00:22:28.960 particularly in London and other industrial cities. 00:22:29.200 --> 00:22:31.480 Exactly. Hundreds of thousands of families were 00:22:31.480 --> 00:22:33.759 displaced. They didn't need a Lizarama vacation 00:22:33.759 --> 00:22:36.599 home. They needed a roof over their heads immediately 00:22:36.599 --> 00:22:39.460 to survive the winter. It was a national emergency. 00:22:39.500 --> 00:22:43.079 So the government launched a massive prefab program. 00:22:43.529 --> 00:22:47.329 A truly massive one. Between 1945 and 1948, more 00:22:47.329 --> 00:22:50.769 than 156 ,000 prefabricated homes were built 00:22:50.769 --> 00:22:54.390 in the UK. 156 ,000 homes in just three years. 00:22:54.650 --> 00:22:58.039 That is an incredible industrial effort. It was. 00:22:58.200 --> 00:23:00.599 There were a number of specific types, like the 00:23:00.599 --> 00:23:03.380 airy house, which used precast concrete panels. 00:23:03.559 --> 00:23:05.559 But the key thing to understand about this whole 00:23:05.559 --> 00:23:08.059 program is that these were explicitly intended 00:23:08.059 --> 00:23:10.579 as a temporary solution. Temporary. The government 00:23:10.579 --> 00:23:13.339 basically said to people, here's a prefab. It 00:23:13.339 --> 00:23:15.619 will last about 10 years. By then, the economy 00:23:15.619 --> 00:23:17.599 will have recovered and we will have built you 00:23:17.599 --> 00:23:20.339 a proper brick house. But temporary is a funny 00:23:20.339 --> 00:23:22.079 word when it comes to government projects, isn't 00:23:22.079 --> 00:23:25.119 it? It is a very funny word. Many of those temporary 00:23:25.119 --> 00:23:28.279 prefabs built for a 10 -year lifespan remained 00:23:28.279 --> 00:23:31.619 inhabited for decades. A small number are actually 00:23:31.619 --> 00:23:34.400 still in use today in the 21st century. Wow. 00:23:34.839 --> 00:23:37.220 Does that speak to the quality or maybe just 00:23:37.220 --> 00:23:39.759 the desperation for housing? It's a bit of both, 00:23:39.819 --> 00:23:42.140 but it's also about community. People grew to 00:23:42.140 --> 00:23:44.980 love these homes. For many, it was a huge step 00:23:44.980 --> 00:23:47.470 up. They were detached bungalows with their own 00:23:47.470 --> 00:23:50.329 gardens. They had modern indoor plumbing and 00:23:50.329 --> 00:23:52.970 heating luxuries that many older bomb -damaged 00:23:52.970 --> 00:23:55.369 Victorian terraces didn't have. There's a note 00:23:55.369 --> 00:23:57.869 here about a specific estate in Lewisham, southeast 00:23:57.869 --> 00:24:01.789 London, the Excalibur Estate. Yes. the Excalibur 00:24:01.789 --> 00:24:04.450 Estate. It was Britain's largest remaining prefab 00:24:04.450 --> 00:24:08.230 estate, 187 of these homes. It survived all the 00:24:08.230 --> 00:24:12.089 way until 2011. 2011, that's more than 60 years 00:24:12.089 --> 00:24:14.130 after they were supposed to be torn down. Exactly. 00:24:14.410 --> 00:24:16.230 And when the local council finally announced 00:24:16.230 --> 00:24:18.809 plans to redevelop the site, the residents fought 00:24:18.809 --> 00:24:21.190 it tooth and nail. They loved their prefabs. 00:24:21.390 --> 00:24:24.250 Eventually, a compromise was reached, and six 00:24:24.250 --> 00:24:26.109 of the historic homes were officially listed 00:24:26.109 --> 00:24:29.119 as heritage sites. They went from temporary crisis 00:24:29.119 --> 00:24:32.339 shack to historical heritage building. That is 00:24:32.339 --> 00:24:34.420 a fascinating arc. It shows that good enough 00:24:34.420 --> 00:24:36.740 housing, if it provides community and dignity 00:24:36.740 --> 00:24:39.819 and a garden, often becomes beloved housing over 00:24:39.819 --> 00:24:42.839 time. Now, obviously, the UK didn't stop with 00:24:42.839 --> 00:24:45.819 post -war bungalows. In the last decade or so, 00:24:45.960 --> 00:24:48.559 there has been a big new push for what they call 00:24:48.559 --> 00:24:51.599 MMC. Modern methods of construction. It sounds 00:24:51.599 --> 00:24:54.440 very official and, well, modern. It's the government's 00:24:54.440 --> 00:24:57.339 rebranding of prefab, essentially. Yeah. In the 00:24:57.339 --> 00:25:00.019 2010s, the UK government really started backing 00:25:00.019 --> 00:25:02.279 this as a way to solve the country's modern housing 00:25:02.279 --> 00:25:05.859 crisis. You had these high -tech, venture capital 00:25:05.859 --> 00:25:08.299 -backed companies popping up. Like who? Companies 00:25:08.299 --> 00:25:11.259 like Ilk Homes. LNG Modular, that's legal in 00:25:11.259 --> 00:25:14.740 general, the insurance giant. And Homes by Urban 00:25:14.740 --> 00:25:17.700 Splash. And the promises were incredible. I saw 00:25:17.700 --> 00:25:19.839 a claim from Ilk Homes that their factory in 00:25:19.839 --> 00:25:22.000 Narrowsboro could erect a two or three bedroom 00:25:22.000 --> 00:25:25.700 home on site in 36 hours. 36 hours. You go to 00:25:25.700 --> 00:25:27.740 work on Monday morning, you come back on Tuesday 00:25:27.740 --> 00:25:29.839 evening, and there's a house standing where there 00:25:29.839 --> 00:25:32.240 used to be a concrete slab. That sounds like 00:25:32.240 --> 00:25:33.839 the solution to everything. We have a housing 00:25:33.839 --> 00:25:36.099 crisis, they have a 36 hour house. Right. But, 00:25:36.200 --> 00:25:39.000 I sense a but coming. The but? is the recent 00:25:39.000 --> 00:25:42.460 crash the spectacular trash between 2022 and 00:25:42.460 --> 00:25:45.700 2023 the whole industry just imploded ill combs 00:25:45.700 --> 00:25:50.099 lng modular homes by urban splash they all failed 00:25:50.099 --> 00:25:53.339 or closed their factories ill combs went into 00:25:53.339 --> 00:25:56.359 administration in the summer of 2023 but why 00:25:56.359 --> 00:25:59.920 if they could build homes in 36 hours and everyone 00:25:59.920 --> 00:26:03.140 agrees we need more homes where's the disconnect 00:26:03.140 --> 00:26:05.730 it's complicated But a House of Lords committee 00:26:05.730 --> 00:26:09.849 report from January 2024 was absolutely scathing. 00:26:09.950 --> 00:26:12.130 They basically said the UK government had a start 00:26:12.130 --> 00:26:14.509 -stop approach and wasted millions of pounds 00:26:14.509 --> 00:26:16.730 on a failed push. And what was their main critique? 00:26:17.029 --> 00:26:18.750 They said the government didn't have a coherent 00:26:18.750 --> 00:26:21.910 long -term strategy. And this brings us right 00:26:21.910 --> 00:26:24.509 back to the Lustron problem from the 1940s. The 00:26:24.509 --> 00:26:26.569 software versus the hardware problem. Exactly. 00:26:27.019 --> 00:26:28.880 You can have a state -of -the -art factory that 00:26:28.880 --> 00:26:31.519 could spit out 500 houses a month. But if the 00:26:31.519 --> 00:26:33.259 local planning department, the zoning board, 00:26:33.420 --> 00:26:35.359 takes two years to approve the permit for the 00:26:35.359 --> 00:26:37.279 land you want to build on, where do you put the 00:26:37.279 --> 00:26:39.380 houses? They just pile up in the factory yard. 00:26:39.519 --> 00:26:41.700 They pile up. You can't run a high -speed, high 00:26:41.700 --> 00:26:44.299 -volume factory if the output pipe is clogged 00:26:44.299 --> 00:26:47.240 by bureaucracy. It's like buying a Ferrari to 00:26:47.240 --> 00:26:50.339 drive in permanent rush hour traffic. The engine 00:26:50.339 --> 00:26:53.029 capacity is totally irrelevant. So the UK government 00:26:53.029 --> 00:26:55.690 invested heavily in the Ferrari, the factories, 00:26:55.910 --> 00:26:58.230 but did nothing to clear the traffic, which is 00:26:58.230 --> 00:27:01.069 the planning loss. Precisely. And without a consistent 00:27:01.069 --> 00:27:03.509 pipeline of orders, the factories burned through 00:27:03.509 --> 00:27:05.410 their cash and went bust. Just to touch on the 00:27:05.410 --> 00:27:08.069 rest of Europe briefly before I move on, was 00:27:08.069 --> 00:27:10.950 this happening elsewhere? Was prefab a big deal 00:27:10.950 --> 00:27:14.029 in France or Germany? Oh, yes. In France in the 00:27:14.029 --> 00:27:17.410 1940s, the famous designer Jean Prouvé designed 00:27:17.410 --> 00:27:20.299 the Maison Tropicale. which was a beautiful aluminum 00:27:20.299 --> 00:27:23.519 prefab designed for use in France's African colonies. 00:27:23.740 --> 00:27:25.859 And Germany. In Germany, right after the war, 00:27:26.039 --> 00:27:28.980 a company called Self -Ready House GmbH built 00:27:28.980 --> 00:27:32.400 5 ,000 prefabs specifically for the U .S. occupying 00:27:32.400 --> 00:27:35.400 forces. And today, Germany has a very healthy 00:27:35.400 --> 00:27:37.940 prefab market. Is there a Europe -wide standard 00:27:37.940 --> 00:27:40.859 for this now? A pan -EU building code for modular 00:27:40.859 --> 00:27:44.079 homes? Surprisingly, no. There is no single pan 00:27:44.079 --> 00:27:46.640 -EU housing standard. Regulation is still done 00:27:46.640 --> 00:27:48.680 at the national level. The homes have to comply 00:27:48.680 --> 00:27:51.039 with EU euro codes for structural safety, of 00:27:51.039 --> 00:27:53.180 course, but the specific modular regulations 00:27:53.180 --> 00:27:55.740 are country by country. Which probably makes 00:27:55.740 --> 00:27:57.579 it harder to scale a business across borders. 00:27:57.819 --> 00:28:00.019 You can't just make one euro house and sell it 00:28:00.019 --> 00:28:01.579 everywhere. It adds a lot of friction to the 00:28:01.579 --> 00:28:03.940 process, yes. Okay, let's move to section five, 00:28:04.180 --> 00:28:07.640 the modern industry and technology. We've talked 00:28:07.640 --> 00:28:09.720 a lot about the failures and the history, but 00:28:09.720 --> 00:28:11.579 clearly the technology isn't standing still. 00:28:11.700 --> 00:28:13.900 What is happening right now that is different 00:28:13.900 --> 00:28:16.700 from the steel panels of the 1950s? The single 00:28:16.700 --> 00:28:20.660 biggest shift is digital. 3D digital modeling. 00:28:21.240 --> 00:28:24.160 It's often called BIM building information modeling. 00:28:24.480 --> 00:28:27.039 So you build the entire house inside a computer 00:28:27.039 --> 00:28:29.619 before you cut a single piece of wood. Exactly, 00:28:29.759 --> 00:28:32.720 to the millimeter. In modern modular construction, 00:28:33.119 --> 00:28:35.400 everything is pre -planned using sophisticated 00:28:35.400 --> 00:28:38.390 software. This creates a digital twin in the 00:28:38.390 --> 00:28:40.690 house. You can check for clashes like a pipe 00:28:40.690 --> 00:28:43.130 hitting a beam and fix it in the model instead 00:28:43.130 --> 00:28:45.529 of on the job site. And what kind of real -world 00:28:45.529 --> 00:28:47.890 efficiency does that get us? The stats are pretty 00:28:47.890 --> 00:28:50.579 consistent. The data suggests modular construction 00:28:50.579 --> 00:28:53.240 is up to 50 % faster than conventional construction. 00:28:53.480 --> 00:28:56.059 Half the time. That's huge. And it can require 00:28:56.059 --> 00:28:59.039 up to 50 % less materials. That's the sustainability 00:28:59.039 --> 00:29:01.519 angle. If you are cutting wood on a muddy job 00:29:01.519 --> 00:29:04.119 site, you make mistakes, you drop things, materials 00:29:04.119 --> 00:29:07.279 get wet and ruined. In a controlled factory environment, 00:29:07.579 --> 00:29:10.839 the laser cuts it once perfectly with minimal 00:29:10.839 --> 00:29:13.700 waste. Precisely. And the global market reflects 00:29:13.700 --> 00:29:15.960 that potential, even with the recent failures. 00:29:16.240 --> 00:29:18.980 The global modular construction market is expected 00:29:18.980 --> 00:29:23.680 to reach USD 271 billion by 2028. That is a lot 00:29:23.680 --> 00:29:26.359 of zeros. It is a massive global industry. I 00:29:26.359 --> 00:29:29.319 want to zoom in on a specific region you mentioned 00:29:29.319 --> 00:29:31.099 in the source material, which I found fascinating. 00:29:31.500 --> 00:29:35.240 Bali. Ah, yes, the intersection of Asia and Australia. 00:29:35.720 --> 00:29:37.980 Bali is famous for those beautiful intricate 00:29:37.980 --> 00:29:40.680 wooden villas. I had no idea that was a massive 00:29:40.680 --> 00:29:43.700 prefab export industry. It is huge. They're known 00:29:43.700 --> 00:29:45.779 for their artistic design and practical value. 00:29:46.220 --> 00:29:50.259 In 2010, the island of Bali exported 98 ,417 00:29:50.259 --> 00:29:53.619 prefabricated houses. Nearly 100 ,000 houses 00:29:53.619 --> 00:29:55.900 in one year from one island. That's incredible. 00:29:56.140 --> 00:29:58.180 It is, but it also shows the volatility of the 00:29:58.180 --> 00:30:00.680 market because in 2011, the very next year, that 00:30:00.680 --> 00:30:03.980 number plunged to 5 ,007. Whoa, from almost 99 00:30:03.980 --> 00:30:07.339 ,000 down to 5 ,000. That's a total crash. What 00:30:07.339 --> 00:30:10.140 happened? The global economic slowdown. The financial 00:30:10.140 --> 00:30:13.029 crisis. Since these were largely luxury export 00:30:13.029 --> 00:30:15.269 items, vacation homes for people in Australia 00:30:15.269 --> 00:30:17.829 and Europe when the global economy sneezed, the 00:30:17.829 --> 00:30:20.690 Balinese prefab industry caught a terrible cold. 00:30:20.849 --> 00:30:23.950 It shows how sensitive this industry is to broader 00:30:23.950 --> 00:30:26.589 economic forces. Much more so than local construction, 00:30:26.730 --> 00:30:29.180 which is a bit more stable. That brings us all 00:30:29.180 --> 00:30:31.380 the way back to the U .S. We talked about the 00:30:31.380 --> 00:30:34.500 1950s having a 10 % market share for prefabs. 00:30:34.579 --> 00:30:36.859 Where are we now with all this new technology? 00:30:37.140 --> 00:30:39.660 This brings us to the most surprising and, frankly, 00:30:39.740 --> 00:30:42.000 depressing number in this entire stack of research. 00:30:42.220 --> 00:30:44.839 Okay. We have lasers. We have 3D digital modeling. 00:30:44.940 --> 00:30:47.359 We have data showing 50 % better efficiency. 00:30:47.880 --> 00:30:51.960 And yet, as of 2020, the market share of non 00:30:51.960 --> 00:30:54.420 -site -built single -family homes, so that's 00:30:54.420 --> 00:30:56.960 modular and panelized combined, was only 3%. 00:30:56.960 --> 00:31:00.500 Wait, wait, 3%. We went from 10 % in 1958 down 00:31:00.500 --> 00:31:03.599 to 3 % in 2020. We went backwards, significantly 00:31:03.599 --> 00:31:06.140 backwards. That is a stunning paradox. Usually, 00:31:06.279 --> 00:31:08.859 technology makes things cheaper, better, and 00:31:08.859 --> 00:31:11.339 more ubiquitous over time. We don't have fewer 00:31:11.339 --> 00:31:15.140 flat -screen TVs. Why on earth do we have fewer 00:31:15.140 --> 00:31:17.779 factory -built homes? Because, as we saw with 00:31:17.779 --> 00:31:20.519 the UK example and the Lustron example, we keep 00:31:20.519 --> 00:31:22.680 trying to solve a systemic problem with a technological 00:31:22.680 --> 00:31:25.980 widget. The barriers are rarely engineering ones. 00:31:26.220 --> 00:31:28.660 The houses themselves are fine. The houses work. 00:31:29.019 --> 00:31:32.319 The Norman castles stood. The Lustron homes are 00:31:32.319 --> 00:31:35.119 still standing 70 years later. The technology 00:31:35.119 --> 00:31:38.079 delivers on its promise. So what are the barriers, 00:31:38.140 --> 00:31:41.170 then, if it's not the tech? They are financial 00:31:41.170 --> 00:31:43.529 like Lustron's government loans being called 00:31:43.529 --> 00:31:46.910 in too early. They are regulatory like the local 00:31:46.910 --> 00:31:50.049 zoning laws that ban HUD homes or take years 00:31:50.049 --> 00:31:52.589 to approve permits. And they are perceptual. 00:31:52.650 --> 00:31:55.829 This stubborn stigma that prefab equals cheap. 00:31:56.049 --> 00:31:57.690 It's almost like the house is the easy part. 00:31:57.869 --> 00:31:59.789 It's the entire system around the house that's 00:31:59.789 --> 00:32:02.349 broken. That's it exactly. Until we solve the 00:32:02.349 --> 00:32:04.410 financing and the regulation and the zoning to 00:32:04.410 --> 00:32:06.369 match the speed and efficiency of the manufacturing, 00:32:06.710 --> 00:32:09.690 we will be stuck at that 3 % market share forever. 00:32:10.009 --> 00:32:12.210 So let's unpack this. We've been on quite a journey 00:32:12.210 --> 00:32:14.170 today. Indeed we have, from the 12th century 00:32:14.170 --> 00:32:17.049 to the 21st. We started with Norman knights in 00:32:17.049 --> 00:32:20.369 1160 building a fortress in a single night. We 00:32:20.369 --> 00:32:23.089 saw Emperor Akbar moving entire palaces around 00:32:23.089 --> 00:32:27.109 India. We saw the Sears catalog democratizing 00:32:27.109 --> 00:32:29.549 homeownership, letting people build their own 00:32:29.549 --> 00:32:32.349 American dream from a kit. Then we saw the shiny 00:32:32.349 --> 00:32:35.470 steel dreams of Lustron and the high stakes Cold 00:32:35.470 --> 00:32:38.529 War politics of the Lizarama House. And the massive 00:32:38.529 --> 00:32:41.630 post -war reconstruction in the UK, which gave 00:32:41.630 --> 00:32:43.849 way to the recent struggles of the modern tech 00:32:43.849 --> 00:32:47.349 driven companies that promised so much. I want 00:32:47.349 --> 00:32:48.769 to leave our listeners with a final thought, 00:32:48.869 --> 00:32:51.569 something to chew on. We started with those Norman 00:32:51.569 --> 00:32:54.470 invaders. They figured out how to flat pack a 00:32:54.470 --> 00:32:58.019 fortress 850 years ago because they had to. It 00:32:58.019 --> 00:32:59.980 was a matter of life or death. They needed immediate 00:32:59.980 --> 00:33:02.099 deployment. Necessity is the mother of invention, 00:33:02.319 --> 00:33:05.400 as they say. Exactly. And today we have housing 00:33:05.400 --> 00:33:07.599 crises all over the developed world. We have 00:33:07.599 --> 00:33:09.400 homelessness. We have crushing affordability 00:33:09.400 --> 00:33:11.440 issues. It's a different kind of war, but it's 00:33:11.440 --> 00:33:14.619 still a crisis. And yet we struggle to scale 00:33:14.619 --> 00:33:17.799 this obvious solution. It makes me wonder. The 00:33:17.799 --> 00:33:20.799 Normans used prefabs because they were, in a 00:33:20.799 --> 00:33:24.140 sense, temporary fortifications. The U .K. used 00:33:24.140 --> 00:33:27.579 them as temporary relief after the war. Maybe 00:33:27.579 --> 00:33:30.319 that temporary nature, that speed, that agility, 00:33:30.559 --> 00:33:33.960 the ability to deploy them instantly, move them, 00:33:34.119 --> 00:33:37.079 adapt them, maybe that's actually their greatest 00:33:37.079 --> 00:33:39.200 permanent strength. What do you mean by that? 00:33:39.500 --> 00:33:41.680 I mean, maybe we should stop trying so hard to 00:33:41.680 --> 00:33:44.039 make them just like traditional houses. Maybe 00:33:44.039 --> 00:33:46.460 we should embrace the fact that they are different. 00:33:46.539 --> 00:33:49.220 If we stop apologizing for them being prefats 00:33:49.220 --> 00:33:51.200 and start celebrating the unique agility they 00:33:51.200 --> 00:33:54.019 offer, maybe we might finally break that 3 % 00:33:54.019 --> 00:33:56.480 ceiling. I think you're onto something. If we 00:33:56.480 --> 00:33:58.599 stop trying to disguise them as something they're 00:33:58.599 --> 00:34:01.220 not, broken mortar, and start valuing them for 00:34:01.220 --> 00:34:03.900 what they are, fast, efficient, adaptable, sustainable, 00:34:04.200 --> 00:34:07.359 we might actually see a renaissance. Exactly. 00:34:07.359 --> 00:34:09.219 If it was good enough for a medieval knight in 00:34:09.219 --> 00:34:11.519 a hurry, it's probably good enough for us. I 00:34:11.519 --> 00:34:14.199 would agree with that. Thank you all for listening 00:34:14.199 --> 00:34:16.539 to this deep dive. We hope you look at that mobile 00:34:16.539 --> 00:34:18.820 home or that modular unit a little differently 00:34:18.820 --> 00:34:21.059 next time you drive past one. It's a piece of 00:34:21.059 --> 00:34:24.719 history, hiding in plain sight. It sure is. See 00:34:24.719 --> 00:34:25.380 you next time.