Manufacturing Homes Like Cars To Fix Housing Crisis?

The US, like many advanced economies, is facing a daunting housing shortage.

I recently listened to an episode of Invest Like The Best podcast that featured Alexis Rivas who is taking a swing at cracking this issue.

You can listen here

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The issue: Amid a profound housing shortage in the US — to the tune of five million homes — Cover, a Los Angeles-based startup, is rethinking the traditional homebuilding model by borrowing techniques from car manufacturing.

Why it matters: The current construction model is plagued by high costs, regulatory hurdles, and an ageing workforce. Cover's approach could potentially make homebuilding quicker, cheaper, and more flexible, addressing both the supply shortage and the industry's labour crunch.

How it works: Picture homes built like LEGOs. Cover produces standardised, prefabricated panels — walls, floors, roofs — integrated with necessary utilities. These panels are manufactured in a factory setting, allowing for precision, automation, and speed, then assembled on-site in just about a month.

The big picture: This innovation is akin to assembly lines in the automotive world, where robots and a handful of technicians can construct a vehicle in mere hours. If successful, Cover could usher in an era of "mass customization" in homebuilding, providing tailored homes at a fraction of the current cost and construction time.

Yes, but: The traditional construction industry has been slow to innovate, and regulatory barriers remain significant. Plus, convincing homebuyers, lenders, and municipalities to trust this new process will be crucial hurdles for Cover to overcome.

What they're saying: Alexis Rivas, Co-Founder and CEO, sees a future where homes adapt to us, not the other way around. “Homes can be expanded or contracted — just like adding or removing LEGO blocks — as families' needs change,” he explains.

What we're watching: Cover is currently focused on refining their process and scaling operations within Los Angeles. But with a broader vision that promises not just to build homes, but to transform how we think about living spaces, the potential impact on urban and suburban development, affordability, and the environment could be significant. The company envisions a future where their method becomes the new norm, not just an alternative.

Bottom line: Cover is staking its claim as a pioneer in solving the housing crisis with a method that could disrupt the construction industry as profoundly as the assembly line once reinvented manufacturing.

In Australia: Our design of secondary homes and granny flats could use a reboot.

This episode of the Invest Like The Best podcast is worth a listen.