I doubt anyone in the construction and design industries has experienced a time when cost reduction was not a current topic. No matter what the cost baseline, a general upward bias persists over time.
In the housing realm, the attempts at cost reduction focus on things like new product forms that promise to do the same or better for less money, or the search for the building team that is fast, talented and inexpensive, or factory built housing. Some cost reduction is possible, but in the US houses do much more than provide shelter. Homes confer status, indicate social group affiliation, and contain in their furnishings and art objects clues to how we want to see the world and ourselves. Houses, as they become homes, exhibit a high level of symbolism. Derived from our culture, existing symbolic definitions of the home bias our selection of form, size, materials and spaces. Cultural preferences change relatively slowly, and the average 40–50 year life of residential structures creates a visual persistence of form that tends to reinforce existing biases. This creates inertia.
What housing ideals do we as a culture embrace in the US? We like our separate houses. In fact, we love choice and the prospect of having things customized. With this, how can we reduce housing costs in general? Choosing smaller houses is the most powerful lever, followed by long-life durability. If we as a culture could be persuaded to “want” factory produced housing with these characteristics, and we could ditch our bias for single family homes and prefer multifamily residences, a path is revealed. Redefining any symbol, particularly that of the American “home” is difficult—and who is going first?
Multifamily dwellings allow the leverage of repetition and that gives automation a shot at significant cost reduction. As variation is wrung out of products, the potential for cost reduction mounts. In this case, where the building product fits the tools of manufacturing, choice and variation get pushed back and large savings can accrue. Multifamily housing benefits dramatically from factory production. In spite of that, considerable talent in design and production has been expended over many years on the high-design, single-family part of the problem, but sadly, most efforts have ultimately been realized as merely custom homes built inside a parent building. Houses are not useful to dwellers without plots of land to rest on, and the number of potential owners who have the means and luck to procure land is always very small. Ratios of land to structure value are very high in urban areas, which makes the financial challenge daunting for the urban homeowner. Heavily capitalized, highly-regarded companies such as Skanska and DR Horton are able to provide turnkey housing in a move-in state, and selling the idea of factory-built housing to these companies, not the enthusiast public, is the way forward for factory production. For these companies, the industry is a marketplace, and they will adjust their operations accordingly if they are convinced factory-built housing is in their financial interests. They remain agnostic to delivery methods and choose based on overall return.
Cultural preferences will work against people’s selection of more modest factory housing, and the specter of the ‘57 Nashua trailer house lurks in the background. Factory housing does not generally provide the correct ground for transmitting favorable and useful symbolic material when compared to the incumbent housing stock.
As it stands, the building industry has numerous solutions available to construct dwellings very cheaply that most of us don’t want to live in. When the process is modified to get closer to what we do want, the advantages are diluted. The cost difference becomes so small that it is difficult to confidently attribute the savings to factory building and create any dependable measurement. This coupled with cultural predilections brings enough risk into the equation to steer most people back to conventional methods. In the end, we can affect construction cost at a detail level and make some gains in value engineering, hope inflation goes our way, redesign and many other tweaks. Embedded cultural preferences remain at the center of the question and are beyond our reach.