=economics =construction =manufacturing
For many americans, housing has become less affordable than it used to be, despite some amount of technological improvement. People have nailguns and collated screwdrivers. There's software for planning designs. Shouldn't things be at least a little bit cheaper?
You may have seen
this
chart of inflation by category.
Housing is very close to the
average inflation rate. The GDP of America has gone up greatly, and average
wages rose significantly - but
median inflation-adjusted wages have been basically flat over the past
50 years, and have recently declined.
There are a few places like NYC
where limitations on construction are the main issue with building more, but
for America as a whole, construction costs are the dominant factor. As NYC
shows, building more housing in an area doesn't necessarily give low prices:
the price of housing is driven by the equilibrium between people
coming and leaving, and that equilibrium is largely driven by construction
costs elsewhere and corporate centralization for the convenience of
management and investors.
What this means is that yes, construction
has gotten somewhat more efficient, enough to outweigh any increased
regulatory costs, but that's been more than counterbalanced by increased
inequality. Technological improvements to construction have been
working against an economic headwind.
This is a pretty
straightforward explanation, but you can probably see why some institutions
wouldn't want to put things that way. Well, for a long time, the standard
explanation for university tuition costs increasing faster than inflation
was just "it's the
Baumol effect" despite costs rising faster than the average wages
of the relevant workers. There's always somebody pissing on you from above,
and always somebody to tell you it's raining.
One response to this is, "We need
more tech improvements in construction, then." You can look at the
Construction Physics blog for some attempts in that direction.
Look back to that inflation chart for a moment. What people trying for a
technological solution would like to do is bring the "housing" line down
closer to the "new cars" line. So, let's look at what car manufacturing
involves for a moment.
The manufacturing process starts with steel
sheet. It's cut with an automated fiber laser, then
stamped into various
things like doors and body pieces. The stamping tools last for millions
of cycles. Those cut and stamped pieces are welded together by welding
robots.
The engine blocks are typically cast aluminum, using
automated lost-foam
casting.
Automakers are down to about 30 hours of labor per car
now. Look at those videos and tell me how you expect construction to be
that automated, that much more efficient than it used to be. Some
improvement is always possible, but you can't realistically match that!
Automakers make over 100k of the same car model in the same place, and
transportation afterwards is easy. You just can't do that with houses, and
the cost-effectiveness of car production is fundamentally related to doing
the same thing 100k+ times to amortize the costs of tooling.
Really,
people have miscalibrated expectations. To many americans, it feels like car
production got somewhat better and housing production got worse, but what
really happened was that car production improved more than most people
understand, and inequality increased faster than construction improved. And
yet, here I am, a fool trying to find technological solutions anyway.
2 people asked me for my comments on Tesla's "Giga Press" usage. Since I'm writing about car manufacturing, I might as well do that here.
The investment cost for die casting was typically estimated at ~25% less than sheet metal stamping + welding robots. That's good, but:
- The
aluminum die casting mold typically lasts for ~150k cycles, vs perhaps 5M
cycles for stamping tools.
- A die casting mold produces one thing, but
welding robots can be used for many car designs.
- Die casting can't
produce very thin walls.
- Large aluminum castings can't be heat-treated
afterwards without significant distortion, and aluminum alloys not using
heat-treatment are weaker.
- Aluminum alloys cost more per strength than
steel.
For die casting to be
economically competitive, you need to make many castings to amortize the
mold cost, but not enough to need to replace the mold, at which point
stamping machines and welding robots would keep going and thus have a cost
advantage. That's a pretty narrow range.
However...
- the chassis
of cars is a relatively small fraction of their cost
- the net increase
in cost isn't very large
- Tesla has been able to charge more for
vehicles than other automakers
So, it doesn't matter very much.
There's actually been more recent progress on steel stamping than aluminum die casting. For example, hot stamping of ultra-high-strength steel alloys.