Will Prefab Ever Catch On?
Philip Kennicott writes in The Washington Post:
The architect who masters prefabricated housing — how to make homes that are well designed, mass-produced, affordable, and easy to build — may well go down in history as the last architect.
But as architects continue to come out with new prefab designs (Ikea even rolled out its own line), prefab continues to be more of a niche market than the thing that could put architects out of business.
We asked Allison Arieff, editor at large of Sunset magazine, author of The New York Times‘s By Design blog, and co-author of the books Prefab and Trailer Travel; and James Trulove, author of, most recently, New Sustainable Homes and Twenty-Five Apartments and Lofts Under 2,500 Square Feet, and co-author of Prefab Now, whether prefab will ever make it big, and what would happen if it did.
Q: Where do prefab houses stand in the U.S. real estate market?
Arieff: First, let’s distinguish between what I think you’re referring to — which is modern, architect-designed prefab — and standard-issue prefab, which slightly outpaces site-built housing in the United States.
Modern prefab has become extremely popular in the last five years, though the media interest in it exceeds the actual number of modern prefab homes built. Only 3 percent to 5 percent of homes in the U.S. are designed by an architect, so considerably fewer are architect-designed prefab. It’s a niche market.
Trulove: In general, prefab houses represent a very small segment of the housing market, although the popularity of such housing is clearly on the increase. My sense is that the appeal of prefab housing is strongest among younger generations who see prefab as not only very hip, but as perhaps more affordable as well. It is only recently that prefab housing emerged onto the real-estate radar after languishing for two or three decades after a burst of interest in the 1960’s and 1970’s.
Q: What, if anything, is the housing crisis doing to prefab?
Arieff: The crisis has had a devastating impact on all housing sectors. I know one builder, for example, who laid off 66 of 68 employees. I believe there is an opportunity for prefab, however, because of what it can offer in the way of product differentiation.
Ask any builder and he’ll tell you he’s offering something different than his competitors. But a drive through the country tells a different story; there is an astonishing sameness to every subdivision out there. Not everyone wants a pseudo-Tudor with a three-car garage. Modern prefab is offering an attainable alternative, and that will give it a competitive advantage when things swing back.
Trulove: If anything, the current housing crisis will serve to lessen prefab’s appeal for two reasons. First, declining housing prices make all types of housing more competitive. Prefab is generally considered more affordable; although this may be somewhat of a myth because the ancillary costs — such as site preparation, transportation costs of prefab components to the site, options provided by the architect, and local contractor costs — can add substantially to the initial package.
But with existing housing prices down substantially, new prefab construction can actually be more expensive. Second, for prefab houses to be truly cost effective, they must be factory assembled in large quantities; this is unlikely in the current real estate market.
Q: What would push prefab beyond a niche market?
Arieff: A major commitment. Prefab has, time after time, been affected by what you could call “the curse of the prototype” — an amazing design is constructed once, maybe twice, but never again. In large part, this is because the economies of scale that make prefab so attractive can never be realized in these quantities.
If a major developer committed to building a significant number of these homes, those cost efficiencies would be realized. I don’t think modern prefab will ever constitute a majority of housing; in terms of market share, I do think it can be the Apple rather than the Microsoft.
Trulove: A substantial boom in demand created either through a natural disaster, where a large quantity of housing is destroyed (and assuming the occupants are spared), or through normal markets, where the cost of prefab housing becomes genuinely less expensive.
Q: If prefab did catch on, what would the economic implications be?
Arieff: The way houses are built today is tremendously inefficient; building waste accounts for at least half of our nation’s landfills. Prefab can reduce waste, shorten construction times, and also reduce the amount of time you’d have to carry a construction loan. I don’t see many negative economic implications.
And really, it’s almost impossible to have a discussion on the economics of housing without tying it to energy costs: prefab homes can have “no energy” systems built into them — meaning there are little or no utility costs, there’s lower water usage, etc.
Trulove: It’s hard to see how a prefab boom would be of such a magnitude as to have major economic implications.
Q: What does prefab do for the environment?
Arieff: It has the potential to do quite a lot. Green-prefab architect Michelle Kaufmann, for example, recently introduced a white paper highlighting the need for a universal sustainability-labeling standard (much like F.D.A. labels on food) that would empower homebuyers to make smarter, more sustainable homebuying decisions.
I think homebuyers are looking for this sort of information, and they will be expecting things like nontoxic paint and materials to be standard in new construction. Again, it’s a way that modern prefab can differentiate itself from other homebuilders who are doing woefully little in this area.
Trulove: Unquestionably, prefab construction eliminates a great deal of the material waste associated with on-site construction. Prefab construction is often associated with the use of recycled materials, and factory assembly can result in structures that are more tightly constructed, resulting in homes that are far more energy efficient.
On the downside, depending on where the prefab factory is located relative to the construction site, the energy costs associated with the transportation of the components can be very costly.
Q: What could prefab do for storm-prone areas?
Arieff: In the minds of many, prefab is associated with the mobile homes that are decimated in a tornado. But that sort of shoddy construction is not what we’re talking about here. A prefab home should fare no differently in a storm than a stick-built one.
Trulove: Not much; there are still storms!