Solving the housing crisis requires fighting monopolies in construction (2020)
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Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#2According to this resource (https://www.newhomesource.com/learn/stick-built-vs-modular-h...):
- Modular home construction is an $11 billion industry, growing at 8.5% per year
- The cost of modular/factory vs. stick built construction is about a 10-20% savings. On a $500k home, that’s going to be less than $25k difference in price. That’s not the problem.
Additionally from this source (https://blog.lotnetwork.com/lot-and-land-loans-financing-you...):
- Banks, which are tied to the Fed, are loathe to provide lot/construction loans. Ironically, this creates supply shortage and makes it necessary to purchase existing homes or from tract home builders that the author is criticizing.
- The size of the cash downpayment can be as much as 50% of the cost of the home.
Bottom line: the cost of housing is a systemic problem, and the Fed along with local government zoning boards are at the root of both the financial and regulatory sides of the problem.
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#3> But the key monopolies involved in blocking small modular homes are the Department of Housing and Urban Development (HUD) and the National Association of Home Builders (NAHB). They have successfully squashed the emergence of these factory houses.
Is factory-built housing common in other countries?
If not, then it would strongly suggest there are other reasons than federal control.
Wikipedia at https://en.wikipedia.org/wiki/Modular_building#Market_accept... says "In the UK and Australia, modular homes have become accepted in some regional areas; however, they are not commonly built in major cities. Modular homes are becoming increasingly common in Japanese urban areas ...", suggesting it isn't all that common world-wide.
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#4I know in the USA it used to be the case you couldn't get a mortgage on a modular home and had to take out a personal loan. Not sure if that changed.
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#5Is there even a shred of evidence that the housing crisis is a result of higher construction costs?
Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#6There is no housing crisis.
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#7I would think ZIRP and backwards zoning commissions would be a bigger problem
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#8I would think ZIRP and backwards zoning commissions would be a bigger problem
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Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#9Is there even a shred of evidence that the housing crisis is a result of higher construction costs? Or is the Fed trying to draw attention away from the catastrophic impact of its zero interest and other policies on the massive increase in asset prices?
There is an entire paper linked here that's exactly what you ask for in your first question.
What about it do you find unconvincing?
Re: Solving the housing crisis requires fighting monopolies in construction (2020)
#10"Housing crisis": the first sentence is U.S. government concerns about great disparities in housing conditions are at least 100 years old.
So, a permanent crisis?
Anyhow: the shortage of housing has a lot to do with zoning restrictions, building codes, NIMBY-ism, credit availability, and lots of other factors, and very little to do with HUD and NAHB. Manufactured homes have a low social status, unfortunately, and forcing municipalities to accept them would be a very hard slog.