There’s a bit of a housing crisis in the West right now. A combination of planning regulation and migration is putting pressure on the housing stock in many cities, pushing prices up to unsustainable levels. The price of houses doesn’t seem to have any bearing any longer to how much they actually cost to make. Instead, they’re a function of their proximity to good schools and places of work and distance from crime hotspots.
With so much distortion in the housing market, some companies are looking at ways to shake up the industry and make homes more affordable. Just because homes have traditionally been built on-site by human hands doesn’t mean that it always has to be that way. In fact, technology is now offering some homebuilders a cheaper alternative which is potentially a real solution to the housing crisis.
Last year the government missed its target of building 200,000 homes. The fact that it missed its target should come as no surprise: the government has a vested interest in keeping supply in the housing market short in order to make voters feel as if they are getting wealthier. The real surprise hit when it emerged by just how much the government had fallen short: by more than 50,000 homes.
Now a fleet of enterprising companies has said that enough is enough. They’re proposing adapting the factory model to churn out houses instead of cars, and they argued that the factory-made houses will be cheaper and better than the one constructed by regular means.
James Lidgate is the head of housing at a company that wants to build homes in factories. His firm is currently building a $55 million facility near Leeds which will begin producing houses and delivering them to market at a lower cost than is currently feasible in the regular market. His company hopes to build more than 3,000 homes a year on a kind of production line system, borrowed from the likes of Henry Ford.
Factory-built housing might be associated with things like mobile homes and cheap construction, but it comes with some pretty significant advantages. One of the main advantages is the fact that, because they’re constructed in a controlled environment, they suffer fewer defects. We’ve already seen the advantages of this with leak proof shower pods – pods made to precise specifications in factory conditions for hotels and restaurants. Now, though, entire houses are benefiting from the same level of quality control.
There is still some skepticism in the industry surrounding manufactured homes. Many in the industry doubt whether it will be possible to scale factory-produced housing using current technology. Major house builders have experimented with factory production on a small scale, but they appear to be unwilling to move ahead with larger projects.
The main fear doesn’t seem to be with the technology itself, but rather consumer acceptance. Home manufacturers essentially have a marketing challenge on their hands – one that will not be easy for them to win. With that said, it looks like house prices might finally be about to come down.