Can cheaper inputs solve the housing crisis?

One of Brian Potter’s latest Construction Physics installments asks whether cheaper labor or materials can meaningfully cut housing costs: Looking at national average data in the US, he mostly answers no. Construction can’t chase cheap labor the way garment manufacturing did because most work happens on-site; modular builders that ship from low-cost locations (Idaho, even China) typically claim schedule certainty, not hard-cost savings.

From AGF’s perspective, however, it remains a puzzle how HUD Code manufactured homes have achieved huge hard cost savings over site-built homes, while modular construction has not done so. (Potter, too, has cited >50% lower costs per square foot for HUD Code manufactured homes). Some of the cost advantage for traditional HUD Code homes is related to entry-level finishing and materials: more upscale HUD Code CrossMods, built to middle class tastes and finishes, are “only” 20% to 30% cheaper per square foot than site-built homes. If multifamily modular could match the 20% savings of CrossMods, that would be a meaningful improvement. It may be unwise to expect miracles from multifamily modular policy or innovation, particularly in the national average data that covers wide swathes of the US where construction costs are already low, regardless of any code reform or innovation. But I also don’t think it’s crazy to explore whether some mix of code reform and innovation could help bring, say, NYC’s current Type I high-rise hard costs down closer to Chicago’s current Type I high-rise hard costs.