1/ I spent the last week talking in depth with an expert on prefab modular home building in CA. Here’s what I learned and why I think it’s going to be huge
2/ Watch the video on this webpage to understand what I’m talking about: connect-homes.com/video/
3/ #1 overall reason for prefab: massively reduced risk on multiple fronts. Biggest risk is geological/soil on construction site. Prefab only requires few fixed points at edges of modules, not underneath every interior load-bearing wall, which is less risky
4/ Second big risk is logistics/coordination. Every custom home is like designing, building, and running a new factory every single time, for one unit, with a different crew
5/ With prefab in a real factory, you have the same team working together to improve/optimize the process. Every single person is present on site, not driving between different sites through unfamiliar neighborhoods. So much less room for error/delay
6/ This also reduces third risk, which is quality. Assembly line has exponentially higher quality standards than a one-time custom build. Every general contractor has to guarantee their work for 10 yrs, so this is very important
7/ Correction: same quality standards, but takes exponentially far LESS resources to meet same standards in a factory vs on site
8/ Fourth risk is cost. Plans are fixed from the start, no expensive change orders from subcontractors, design work is spread out over many units, all the kinks get worked out through process
9/ Prefab maximizes pre-construction, due diligence, and value engineering, and you get continuous returns from every improvement
10/ Fifth risk is schedule. You’re building in a controlled environment. No weather delays, staff unavailability, material shortages, procurement, fabrication, purchasing delays
11/ Another major benefit is sustainability. Every nail, 2x4, and sheet of drywall required to complete construction is known and pre-ordered. MUCH less waste
12/ He says at least 5x less waste to build prefab. Materials ordered can be customized to the exact specifications you need, instead of adapting it on site which produces waste
13/ It’s also much easier to attain low or net zero grid energy demand (see Passivhaus standard). They become more affordable when you have economies of scale
14/ Doing this with normal custom homes gets extraordinarily expensive because every sub has to know how to work with advanced technology
15/ Now for downsides. Currently almost as expensive as a custom home. He says it’s because industry is in extreme infancy. Even top players are trying to figure out basics of manufacturing, marketing, business model
16/ But they’re advancing quickly with massive investment. Silicon Valley investors are starting to move in. See Amazon investment of $6.7M in Plant Prefab google.com/amp/s/www.curb…
17/ Another con is the homeowner has a minimal role in the design process, which is only semi-customized. But this is high end of the market. Prefab will start at low end
18/ And think about this: prefab manufacturers are competing across the country. Instead of only choosing from among a few local contractors, you can have it shipped from afar
19/ Other main players are Devele, Connect Homes, Plant Prefab, Blue Homes
20/ Here’s a good article about ppl choosing prefab homes to streamline the construction process after CA fires. Tradl stick homes have a 4 year lead time now with so much demand nytimes.com/2018/03/05/sty…
21/ This new generation completely blows away the aesthetic concerns of previous manufactured homes 
22/ Here another good article describing move to multi-family prefab, where it should really shine putting apartments together like Legos nytimes.com/2018/06/07/bus…
23/ Apparently construction is one of the least efficient US industries, with no productivity increase since WWII. Fragmented jobs done by subcontractors offloading risk to each other leads to high variability, risk, delay, cost
24/ Australia and Europe have well established prefab industries but US is behind because of cheap, plentiful land that made stick houses affordable
25/ As far as I can tell, what’s changed is huge demand for more housing, scarce supply of contractors and subs, increasingly complex regulations, leading to insane prices that are driving innovation to cheapen construction
26/ But the problem is that it won’t actually be cheaper until it scales. Which is why current focus is on more profitable semi-customized single family homes, and Silicon Valley is moving in to support multi-family construction
