Making the real estate industry more efficient


Creating The “Assembly Line” For Housing


From 1989- 2009 labor productivity in the American construction industry fell by 22%! This figure, cited in the attached article from “The Economist”, came as quite a surprise. In an economy where new ideas and advancements in technology have resulted in a 45% increase in productivity for the rest of the economy during the same time period, how could an industry so vital to the fulfilment of the American Dream and the powering of the American economy actually become less efficient? And how will a less efficient industry meet the needs of a growing population and their demand for housing?

While there are undoubtedly a number of legitimate answers to the former question, The Economist’s article focuses its attention on what is being done to address the latter. From prefabricated houses built in Germany, to a house in a box from Sweden and aluminum modular homes from a company in India, there is one underlying theme to answer this question — the construction of housing, both in the US and the world at large, needs an idea akin to Henry Ford’s assembly line. That is, a method through which quality housing can be mass-produced, thereby reducing the cost and making housing affordable to a larger segment of the population. (The article also talks about land use and where to put all this quality, mass-produced housing, which we will not comment on here, though feel free to share your comments if you’re so inclined.)

Mass produced housing is not a new idea and has experienced repeated set-backs over the past 50 years; a fact that this article does acknowledge. However, if today’s companies can generate quality, mass-produced housing, then this time around it may be different. What are your thoughts on mass-produced house – is it necessary to meet the demands of a growing population or are we likely to see the same result realized in past attempts?

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