Why are there no startups in the real estate construction sector?
Why are there no startups in the real estate construction sector?
It is a highly profitable business and yet there are no startups involved in constructing building, although the secondary works related to construction like B2B market place for construction materials or layout designing softwares startups are there but no startup is primary associated with real estate construction.
If there are any , please let me know!
514 comments
[ 3.0 ms ] story [ 426 ms ] threadSounds like a disaster.
Heh, also it seems tech side doesn't know what a certificate of occupancy is. Or what banks will give loans on. Or what insurance companies will cover.
Yes, part FIVE.
No police or sheriff required. Utilities want absolutely no financial liability because some moron DIYed his electrical and it burned down the neighborhood.
They don't fuck around because utilities do get sued for any actual fault on their part since they are a even bigger, fatter money target than a developer.
There's a town where I live in NY that is on the hook for basically spending millions on pumping the water table yearly because back in the 70s they idiotically approved development of a few neighborhoods when the water table was at a record low due to a drought and the entire area is up against a water table connected lake. No surprise post-drought, all those houses were getting permanently flooded since the area simply cannot sustain houses with basements.
Last news in recent years is the flooding is shifting so they are on the hook to build yet another pump station as long as those original houses still exist.
Also note that this stuff may work for "people who are known" and not newbies - the inspector knows this builder is "good for it" and it's "all just paperwork that gets resolved".
Or go to Wyoming, I hear they basically don't have building permits lol.
I mean, they practically don't have _buildings_ there.
Municipalities generally will approve this as they will get the tax money from the development. (and frankly they shouldn't generally have the power to stop development in their limits - YIMBY and all that)
If you think a house starts at the foundation, you've already missed half the battle. Lot subdivision is a massive amount of work and expense. You have utilizes and roads which in new construction takes around 2 years from concept to finish where I live.
Then when you lay a foundation and plumbing, which again takes a licened plumber to inspect before you put concrete on it. Then some time for concrete to set and dry before you can build on it.
Walls go up fast. Doesn't matter if it's wood, or where I live 3d printed concrete. What takes longer is services in the walls. Again plumbing, power, and possibly gas all requiring inspection. A builder inspector, city inspector, and many times the bank inspector will show up at this point. You still have a rough house that requires another month or two of finish work or more now.
Building off site and moving it in place has not worked well in practice, US new builds are typically huge. And even then moving finish work tends not to go well which requires massive amounts of time and labor to complete.
Edit: There might be startups brought on as subsidiaries to do specific tasks, but I think those are very rare.
It’s not. Margins are thin. Most companies make money though sheer size.
At the end of the day, what you are building is typically a single individual's most valuable possession, and they have every right to nitpick poor build quality (which is endemic). A couple "bad make-up jobs" can end a contractor entirely, and usually quite suddenly (even in the middle of a project).
In my 20 years working residential, it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem. Towards the end of my career ("retired" 2020) I began working primarily on 5000sqft homes thinking that this wealthier clientele might have less difficulties — turns out there's more.
ADVICE: invest in commercial/industrial tradeshops, because residential is "fly by night" in their much shorter existences.
SRC: Retired residential electrician (IBEW-trained).
I guess the only area for potential improvement by a startup is the physical labor, which no one wants to perform. As others mentioned in the comments, there exists stereotype that people in construction are dumb which is linked to the profitability "secret" - finding the cheapest labor. To the point even of importing entire crews from dictatures on another continent.
Otherwise real estate is full of architects, designers, inspectors, controllers, agents, and whatnot. They oftentimes have education and qualifications, access to data not available to you, and a professional network.
I'm stereotyping my own kind, and once thought of myself as "a fairly intelligent person" — but my occupational history would prove otherwise.
I absolutely loved the freedom of running my own shop (typically just myself, one-man one-van) — but after standing up for a few undeserving GC's, one of them sat me down and explained that "he has insurance for a reason, and necessarily must continue using sub-qualified labor to remain competitive [insurance covers his good name, he says]".
And the opportunities for cost-savings have often already been done (simplified design, cookie-cutter, etc).
And every single time the housing market even slows down, tons of builders go bankrupt. Many you've never heard of.
There are a few start-ups about 3D printing houses, but - at least for those that I have seen that actually demonstrated something - they seem to be the "usual" startup led by some brilliant people that never worked in traditional building/construction[1] and propose a new, revolutionary approach that resolve a non-problem (building the walls) and forgets to address all the rest of the building (where the actual problems are), let alone compliance with the various technical norms (very often local, i.e. not even country or state wide).
They can usually print a rudimentary shed in little time, but the same or better shed can be built in less time with prefabricated elements or in a little more time (at a comparable cost) with traditional means.
[1] and know nothing on the complexity of building a house
The biggest obstacle to building houses in my opinion are entirely legislative/political. Towns oppose density and cause suburban sprawl galore which drives up costs of everything. Rich elites have also bought up land en-masse over the country so that even if you want to plop a house on a empty lot in a quaint town, they'll charge you half a million just to acquire the lot.
Zoning is the biggest issue in most cases as you said.
Compared to a handyman just handling it in 2 hours at most with typical wallboard.
But that works better for some things than others.
IMO, there's nothing stopping house-printers from printing components, so that you can only partially replace them. There is also nothing stopping projects from having repairability and some flexibility builtin; in fact, for example printed walls can have holes for every kind of wiring, and let the routing free, in a way that brick walls can't. Also, they don't need to only extrude concrete.
But anyway, none of that will happen any soon. The 3D printing culture is about prototyping, throwing again, prototyping again.
Historically it's not seen much investment, there are definite cultural issues but I see the sector as a sleeping giant that's often overlooked.
Here's a long lists of startups: www.aecplustech.com
Regular Conferences: NXT DEV, AEC Tech run by Thornton Tomasetti, MIPIM NY is a big PropTech event
I work for a construction tech startup (KOPE.ai) which is building a platform to bring the world of construction system manufacturing closer to that of architectural design.
There's a decent talk/demo here but it requires signup: https://nxtdev.build/view-on-demand/
There's no magic construction sauce that will let you scale up to taking over the entire market, so it doesn't attract that sort of investment.
You get related startups for software to manage projects, building codes, etc, but not for doing the actual construction part.
The secret sauce for construction is just finding the cheapest labor you can. There’s not a lot of efficiencies to be had.
And then "sorting out" all the mistakes you can expect from such kwality.
- Hire 5 guys, on the books.
- Those guys each bring 5 guys, off the books. (illegal immigrants)
- Those 5 guys on the books get paid for all 25 guys and distribute it within their team.
It's a bit sad to hear about this sort of thing happening, but it seems all too common in business.
That same person told me about another story-- regarding quality:
- At another job site, the company had a new project manager. The new PM approved moving forward into a new phase of the project without plans (plans didn't arrive by the time contractor arrived). The contractor of that project build something incorrectly (as you'd expect) due to lack of coordination with other contracting teams (i.e. lack of plans). The result: $1-2 mil worth of work needing to get fixed.
Ahhh.... freshly-poured concrete conceals all.
No matter a $250,000 nor $2,500,000 will prevent this in my Southern experience. I know in the South Dakota of my childhood memories, the "illegals" were undocumented Russians (not brown).
A strategy of mergers and acquisitions seems more productive, but good management to actually build something without going bankrupt is still needed.
It seems we stopped doing this in North America when highways took over.
Just buying and selling land isn't development.
Railroad companies control where we build railroads and they are conservative after decades of closing unprofitable lines. This is not the wild west.
This isn't "magic construction sauce" that allowed them to do it. Its massive amounts of money, labour, time effort like every other construction company. You won't disrupt them if you aren't better at their business than they are.
It mostly didn’t work out that way, and it is a key reason a lot of the parks and native land reservations have a bunch of dumb isolated parcels that no one can get to.
It does seem it would make more sense near a city with some existing transit today you could add to. I do know the MTA has used real estate to subsidize a few projects like the Fulton St transit center, but less so for entire new lines.
High-rise apartment complexes go up pretty fast too, when a new station gets built. Coming from the West, it's fascinating to watch: an area that would normally be somewhat insular, suddenly becomes a viable bedroom community for people who work downtown, and then there's a rush to get in on the relatively cheap real estate, and night markets open up for your after-work entertainment, and so on. All within a couple years.
OTOH there's massive oversupply in these high-rise complexes, so I'm not sure about the business dynamic for the developers, other than the fact that a lot of money is still desperately seeking a parking space outside the PRC
[0]: https://en.wikipedia.org/wiki/BTS_Skytrain
The construction industry's fundamental constraint is that it manufactures products that are too big to fit in highway lanes. That means they can't be shipped from a centrally-located factory to their final destinations. So they need to be built at the site, which means they need to be built with more labor-intensive methods (since it's too expensive to build a capital-intensive factory for just one unit of output).
Building components that are small enough to fit in highway lanes, on the other hand, are manufactured in centrally-located, capital-intensive factories and shipped to their final destinations, just like cars or electronics. Think: boilers, doors, windows, air handlers, etc.
And, like cars and electronics, these building component products are manufactured by a small number of big companies, rather than a large number of small companies. The equilibrium capital investment and company size is much different when the product is small enough to be manufactured in a central location and shipped.
Aside from customer expectations for customizability in the US (and other countries) I believe regulations also contribute, with prefab homes actually requiring more robust construction than conventionally built homes.
[1] https://builtoffsite.com.au/emag/issue-05/sweden-became-home...
This approach is not quite as efficient as it initially appears:
First, it does nothing for the site construction (grading, excavation, utilities, paving, septic, well, etc.) Those tasks, which make up a decent portion of the project, are done in exactly the same way as in conventional construction.
Second, the modular boxes are either A) the width of shipping containers, which severely constrains the house layout, or B) somewhat wider than shipping containers, which makes them oversized loads that require escort vehicles, highway permits...increasing cost.
Third, you have to hire a crane to set the boxes, and then make all of the connections between the boxes, and install various mechanical and electrical components, complete the finishes, install staircases, etc. This costs quite a bit and still involves the hiring of various local subcontractors, just like in conventional construction.
When you add everything up, modular sometimes saves a little money and often reduces the project timeline (unless there are delays at the factory). But it's not a massive improvement, which is why modular hasn't taken over everything.
Perhaps this is a regional/national thing (I sometimes get the feeling that "prefab" is a condescending term in the US sometimes). For reference, here's a page showing the selection from one of Sweden's main house manufacturers [1]. It's in Swedish, but I just wanted to share the pictures. Also it's hard to say exactly what proportion of a house is pre-built, but I expect the majority of the structural things (walls, floors, roof) to be.
[1]: https://www.eksjohus.se/husmodeller/
https://en.wikipedia.org/wiki/Huf_Haus
According to this random web page, there are quite a few manufacturers:
https://medium.com/blue-future-partners/our-9-favourite-germ...
The biggest innovations to construction are probably to be had in better/faster/easier plumbing and electrical connections, making it faster and more reliable to install all the fixtures. Being able to plumb and install a whole bathroom in a couple of hours instead of most of a day while reducing the odds of needing rework would be a decent boost. We've seen some improvement in this already though with things like PEX and Wago, I imagine even more modular designs can improve this even more. The challenge with this is actually getting adoption and approval for some of this stuff.
It is much more convenient and I highly doubt anybody that can splice a couple of wires sees that ability as a means to keep the competition out. But there are drawbacks and you should be aware of them. When doing high current and tri-phase connections I will use a wire nut, otherwise I use a Wago.
I know that wire nuts can sometimes have a better failure rate when tested at much higher currents than either connector is rated for but this is equivalent of ingredients causing disease when you consume 1000 times more than is typical.
Or look at how romex/NM (doesn't) hold up to mild rodent activity.
I'm not saying that Wagos are in the same category as receptacle backstabs. The point is there are definitely quality/safety reasons to choose one approved method over another.
We had a mouse chew the romex going to the receptacle for our dishwasher (as well as the drain line). He must’ve gotten quite the shock, since the breaker tripped. The wire was charred and had exposed copper.
Motors and other large inductive loads are especially nasty in this respect, which is why there are several 'curves' in use for ground fault interruptors. The most common, the B curve will do a max or 3 to 5x for a short period of time before it kicks in, but a C or D curve can go much, much higher. And then that contact resistance (which wasn't such a huge problem so far) suddenly is a problem. Now you're generating serious Wattage in a small space that has no good way to get rid of the heat. Imagine an elevator motor or a shop lift or or something like that. This sort of application is where I would never use a Wago. But for regular low power stuff in my house I use them all the time, lights, bedroom outlets and so on. But my 17 KW Solar inverter is using crimped on joints and I checked the torque on the screws in the plug to make sure it's all up to spec. Those are not things to mess around with and hope it will hold.
If you want to have some fun take a FLIR across an older exposed installation, it will definitely help to visualize what contact resistance will do.
Prove that. There is no evidence for that if they are used within spec - and if there was, UL and CSA would immediately pull their listings. There is however, plenty of FUD on the internet about Wagos being dangerous, even though plenty of tests have shown this is not true. For example, this test which showed a five-connector Wago running at maximum of rated limit releases about 1W of heat. A little warm, nothing dangerous.
https://www.youtube.com/watch?v=zgjo36-jaFY
https://www.youtube.com/watch?v=OhFwcEcNF2I
Also, you should look into how common electrical fires are in Germany if you really want to prove your case. Wago popularity over there is insane. Wire nuts are viewed as archaic and most homeowners don't even know they exist.
But Wago's really do have higher contact resistance (especially when they age), can have higher temps and I've personally seen more than one case of a molten Wago, including one where the whole metal part had molten its way out of the container, as well as one where the tabs had gone missing and were all locked in the 'open' position (no idea how that came to be).
I do a lot of house renovations, have installed a whole pile of solar gear (including some pretty heavy duty inverters), and have installed a complete machine shop. You're more than welcome to question all of that but I'm not in your pay and I don't need to prove anything, my personal experience is good enough for a forum comment. I use both, for where I think they are most appropriate and that's how I treat all tech: apply it for its strengths and be aware of the weaknesses.
Wagos are hard to fuck up.
That's why wire nuts cause fires and wagos don't. If I had a dollar for every wire nut I've ever fished out of the bottom of an electrical box, I'd be able to buy a nice dinner for the whole family, whereas I'd leave the dollar store empty handed if someone had forced those numptys to use wagos.
> Wagos are hard to fuck up.
This we readily agree on, but I've seen both being fucked up enough to go over the electrical system with a FLIR for any new property purchase. The stuff you find like that you won't believe, including dead rodents, completely burned out junction boxes, arcing so strong that you could smell the ozone meters away from the junction box (essentially a matter of time), wire stripped bare over ridiculously long distances and so on. Other code violations such as using only black 1.5 mm^2 for a whole installation and non in-ground approved cable buried a couple of inches under a driveway.
My advice is to use both, each for their strengths. If you're wiring up an electric motor of any sizeable power I'd definitely do that using the best connection possible, so a crimped on screw terminal if that's a possibility, a wire nut if it isn't and a Wago if there isn't anything else. But I'd check the drop across the Wago before calling it a day, just in case. Start-up currents are pretty nasty. Also: anything behind a type C or D breaker.
Can't agree on this at all. You twist the wires together in the direction the nut threads on, then screw it on. After it's done give each leg a light pull to make sure it's secure.
Where and how are people fucking this up? I could see using the wrong size, leaving stripped wire outside the nut or stuffing way too many wires into one nut, but other than that I'm baffled.
- too small a diameter wire to properly engage the thread
- uneven insulation so only the tops get joined
- not enough twist so only the first couple of threads engage
- stranded wire cut through completely by the threads
- wrong kind of wire
(aluminum! which really needs its particular kind of connectors and is fortunately phased out but you may come across it in older installations).
- too many wires for the size nut (usually 5 is the max, depending on thickness)
- re-using oxidized wire ends because there isn't enough wire length
- wires not twisted at all before applying the nut
- leaving out the wire nut spring (!)
(presumably to make room for more wires...)
- spring upside down
- untwisting the nut and the spring, then untwisting the wires to add another splice
- bending the copper too often (metal fatigue)
- not inspected after twisting it on
- too much insulation stripped
- wire end damaged during insulation stripping
- wires twisted in the wrong direction
And so on... In comparison some of these will apply to Wagos but in general they have fewer ways of doing things wrong and adding another splice is much easier with a Wago. DIY electrical is great, it saves a ton of money. But the kind of stuff you come across can make your hair stand on end. The house I live in came with an electrical installation that was downright dangerous, I live here for 5 years now and I think I've fixed most of it but every now and then a new surprise pops up. Recently: a wall socket stucco'd over but before they stucco'd it over a piece of flex wire (twin strand) was connected through a groove cut into the wall to a brand new in-wall grounded socket of which the ground was left unconnected. Whoever made that (I suspect the previous occupant) is a complete idiot when it comes to electricity.
But I'm with you, I'm happy with Wago. When I'm doing the work myself, that's what I use. Though I do use wire nuts for my big wire connections (6 awg). They probably don't even have lever nuts for that size, but I didn't look.
(Asking for myself, because I agree with both of you - I hate having to open my lathe and plaster walls, but I also don't relish the idea of blatant access panels).
Maybe 8"x8" panels with electrical receptacles and data ports integrated so they're also functional...
Basically have a cable run behind there and one of these every so often (especially at junctions).
Usually for networking or audio/video but I’ve run power cables like that too.
https://ariavent.com/products/flush-access-panel-luxe
Quick video showing it in 'action': https://www.youtube.com/shorts/nVo2pxSHCR0
This make plumbing and wiring easier to repair; vermin easier to ensnare; improve safety from wildfires; and force every window to be a nice bay window with seating.
Cue an increase in the number of DIYers and toddlers needing to be rescued after they have somehow managed to fall into the gap e.g. while working / playing in the attic.
Not sure how it would work from an insulation perspective, either.
But it wastes a lot of space & is expensive
If it's worth it to the owner, exterior walls will be framed with 2x6 instead of 2x4 to allow more space for insulation.
Not sure if that’s a Japanese design, or where it came from.
A single story home does make some things simple, but it is still a pain with the insulation. On top of that, all the old plumbing goes through the slab making access difficult.
What plastic can beat that?
This is odd given that in a lot of places, a home owner can run their whole electrical, and the inspection is just a dude plugging shit in to the receptacles.
Also, are most modern water heaters not just a standard plug in? Even my dishwasher, which was a curiously long hold out, doesn’t have direct power any more.
Around here, home owners are not allowed to plumb, not even with inspection. Plumbing permits are only given to plumbers.
https://en.wikipedia.org/wiki/Split-phase_electric_power
Three phase circuits are 120 degrees out of phase.
But completely agreed that three phase 400V seems crazy!
Ok, help from our new common friend:
Yes, your statement is essentially correct. In the United States, residential electrical supply is typically a single-phase, 240-volt system that is "split" into two 120-volt legs. Each of these legs are 180 degrees out of phase with each other, which allows for both 120-volt and 240-volt circuits within the home. This arrangement is often referred to as "split-phase" electricity. It's not technically two-phase because a true two-phase system would have two waves offset by 90 degrees, not 180.
In the US houses get 1 of the 3 phases. That phase is split in half, and so each phase is 180 degrees. This is different from 3 phase power where each phase is 120 degrees. 3 phase is good for a few things, but for a water heater it doesn't matter, and most of the things 3 phase is good for you today will run off of an inverter for speed control which in turn can run off of single phase (3 phase is still better but only because you can use smaller capacitors)
Tankless water heaters are much more common in rental apartments, and Germany has one of the highest quote of people living in rented apartments. And if space is at a premium, of course tankless heaters are preferable. Apartments are also the reason why electric stoves (again, using 400V tri-phase) are so popular in Germany.
More capable options exist if needed, but I have never seen them in a residential setting.
[0] The 30 indicates that it supports a peak wattage of 30.
The kitchen and laundry appliances are sometimes moved with the homeowner or tenant, but not the water heater. Also a plug can make it easier to pull out for cleaning.
On the upside, even a small studio apartment usually has enough space and an extra water hookup for at least a washing machine, so no dealing with other apartment residents or a public laundromat for laundry. Dryers are usually condensing; no need for an outside vent.
Until the last few years, short tenancies were unusual for Germans; in the little building we rented in before we bought our house, the other tenants had been renting there for 20-40 years! Given the terms of our contract, I gathered that they must have had very small, if any, rent increases written into their unrestricted contracts, and the only way to get them out was if the building owner decided to live in one of the units herself.
But I'll grant that appliances are probably moved more often than water heaters are.
What does this mean? Literally replacing all the overhead lights with a ceiling fan w/light attached?
All the overhead lights outside of the kitchen and showers were cheap "boob lights." The kitchen and shower lights are LED pucks that mount flush to a shallow box and kind of look like recessed lights. First we replaced all of the boob lights with wider LED panel lights with a warm color temperature. While doing this I noticed something about the light boxes in the centers of the living room and bedrooms: the boxes were mounted so they are centered over a joist, meaning you can screw a fan directly into the joist. They also had two hot conductors running from the switch box. One was colored red and the other was colored black. The red one was wired from the switch to the light, and the black one was capped at both ends. They were set up to have fans installed without any modification to the box.
Depending on jurisdiction, they can. In Germany, you can train to be an "Elektrofachkraft für festgelegte Tätigkeiten" - i.e. an electrician trains your staff to do a specific task, like hooking up the water heater.
The problem is, plumbers already have more than enough work. They could do that technically but they don't because they want to move to the next job site as fast as they can.
In large buildings things are done different. Architects spend more time designing exactly where the pipes, HVAC, and wires go. Then the trades people work to spec, and they can thus work in any order so long as their parts go where they are told to. This is a lot more effort/cost though, so it isn't worth it for a small house but is critical for something large. A small house turns out to have plenty of space for everyone to design as they go, and thus this is cheaper. For a large building there are a few places where there is barely enough space for everything that must go through that spot so you better ensure upfront there is enough space.
So yeah, you're right, the new methods and parts make for very fast construction but the maintenance and repairability/reusability is trending toward zero.
Just like everything else these days, I guess.
Many Florida residents have their second set of pipes running through their attics.
PEX may not have the lifespan of copper, but it sure is easier to repipe.
Also, have you seen the new (expensive) crimpers that let you crimp not only pex, but copper pipes?
https://www.amazon.com/DEWALT-DCE200M2-Plumbing-Pipe-Press/d...
When/if I remodel my bathrooms I have to have this done due to my existing galvanized steel pipes being horrendously brittle and filled with 70 years of gunk. Ah, the joys of a house built in the 1950s in Florida.
Yes, this is the standard now for an number of reasons:
* because it is far easier to cut damaged sections of PVC on site and assemble replacements than it is to cut metal piping
* PVC is wildly less expensive than the equivalent length of metal piping, because it is used in a huge number of applications
* PVC is non-reactive and does not corrode like metal
and lastly, threaded pipe connections significantly decrease the throughput of a pipeline, reducing available water pressure at the endpoint. It is basic best practice to limit where threaded connections are used so that you can maintain uniform pressure across the whole unit.
Well, cos they didn't get the license. There is nothing really stopping plumber from getting electrician's license.
Don't forget the even earlier: https://en.wikipedia.org/wiki/Lustron_house
Saying that, in the early 20th century there wasn't too much to the electrical and the house probably had basic plumbing for a single bathroom and a kitchen sink plus radiators and a boiler that was probably onsite oil fed. A modern home has far more to consider including insulation, far more electrical and plumbing, HVAC, etc.
I think there’s a massive opportunity in modular bathrooms. I’ve seen them done amazingly badly (think: the plastic cube badly perched in a corner of your Victorian seaside hotel, in which you have to crouch under the shower, while it hoses down the toilet paper), I’ve seen them done so well you wouldn’t have a clue you were in a room delivered in a box. The latter, I’ve only seen in Latvia, by a Latvian company - but I think the concept has legs.
Under this definition of housing US housing isn't speculative either. It's only the land that goes up in value. It's just that earthquakes and tsunamis aren't as frequent and powerful here and the zoning laws are more arcane here. (as well as some other reasons related to the speed of development of these countries). Japan is one of the least afordable places to live in the world. That is in large part the reason why the population is declining. But nobody is speculating on US bathrooms.
>But nobody is speculating on US bathrooms.
I've got two words for you, man: rainhead shower. (Or "in-floor heating" for the Northeast. ...I guess that's 3 words.)
This video shows a full renovation, but if you’re only replacing a broken component then you’re looking at less work https://youtu.be/8E5lH_qppWg
I think generally the point of these is that you’re a lot less affected by skill level of those installing everything, so even really shitty apartments have good infrastructure. Million dollar homes in the US have worse plumbing than stuff I had in starter apartments in Tokyo (not universal but!).
And the boxing up means that your “wet area” is limited (Japan is generally very humid so mold is a constant worry). But I’m not an expert, and everything I’m saying might be totally off base.
This sort of thing: https://taplanes.co.uk/
It's a bit different when the modules are part of a hotel/apartment block that's entirely built using a modular system. That's common enough in city centre hotels and motels where they're a single full-sized room and nobody can tell the difference.
If it became common I'm sure crews will switch to using a crane for the roof, just because the crane will be there to lift the bathroom in place anyway. However someone needs to start making the factory bathroom first and convince builders to use it.
1) they are heavy, the actual structural design needs to take this weight into account
2) since they have an "own" floor you either have a step to enter them or you need to have a somewhat thicker underfloor on the rest of the house
3) since they have an "own" ceiling, the internal height will be smaller than the rest of the rooms (here in Italy this is not an issue from the techincal norms as rooms are minimum 2.70 m and bathrooms and corridors can be only 2.40)
4) since there is the need of connecting the internal utilities, electricity is the lesser problem, but typically you have two or three (cold and hot + in some cases circulating) running water pipes, two (at least) drain pipes, two or more venting pipes and the radiator (or under floor) heating, you need some additional space on the outside or some (not really pleasing to the eye) boxes on one wall or in the floor (or both)
In practice the only kind of building where they make sense are new multi-storey, multi-apartment buildings and hotels, hospitals, prisons, etc., and even then usually they are not usually much cheaper, they are only much faster and easier to put up, and definitely have an advantage for "luxury" bathrooms where local workmanship capable of a high quality work are not available or cost too much.
An example, this is an Italian builder of such "pods" with experience in international projects:
https://www.eurocomponents.eu/en/portfolio
https://www.eurocomponents.eu/en/modular-bathrooms-for-inter...
I agree overall with your point though.
Usually these pods are lifted by a crane and "inserted" in the building (talking of reinforced concrete buildings) after the structure has been built (before building the outer walls).
Once they are on the floor they are moved manually on carts/wheels attached to the pod structure, so it is much easier if everything is at the same level, the lowered level of the deck (only where the pod goes) would add another complication in the moving/placing.
With the advent of underfloor heating the thickness of the screed is increased anyway (compared to the old buildings) so the "step" is not anymore a problem as it was years ago.
These guys? (If so, then, woah, this is the first time in literally years that Google Search has successfully returned a first-result win.)
There is more than that though, as the floor needs to be designed for where the pipes and wires of the prefab bathroom come out. Not impossible, but not easy either. A lot of modern houses are adjusted on sight for where the pipes have to be as the architect doesn't check if a pipe and beam are designed to go in the same place.. (in large building the architect will check, but not in something small.)
I'd also add Viega to the list, it is well accepted in many places and makes copper soldering unnecessary to join copper pipes in many applications by instead using a crimped fitting that only takes a few seconds to crimp with a power tool, it's a game changer for plumbers working with copper and even carbon steel pipes up to 4 inches in diameter.
https://www.viega.us/en/homepage.html
In retrospect, doing the job myself that way wouldn't have been too bad. The sharkbite connectors seem pretty reliable. I used some when I first bought this place and they've been installed for about 20 years now. I still prefer the traditional sweat joints, but maybe it's just not worth the investment of time?
I wonder if any builders are using this approach - solder in the crawl space and behind drywall, but shark bite in accessible areas.
I think maybe 90% of the benefit could be had by simply having good, efficient design in the first place with the same traditional connections. It is unbelievable how much quicker it is to build when all the plumbing is stacked within a small footprint, rather than running all over the place.
If it is just "mold plastic differently so it can be put together quickly" and doesn't add much cost, it is worth it, but if you prefab walls cost more than raw materials + labour to build something similar... and on top of that are less elastic (just certain width and height etc.).
This is the same problem that plagues electric car startups. Most of these folks don't know what they don't know. Tesla has had great engineering from day one, but almost went under because it couldn't figure out large scale manufacturing and logistics. Problems that old school companies have been solving for a century.
In the end (current time), didn't they (Tesla) find a better way?
I am truly ignorant here, but based on what I have read, Teslas manufacturing process now is much more efficient/better than the standard GM/Ford, etc...
Tesla started from scratch and developed large-scale manufacturing and logistics from first principles. It was hard, but it's put them in a hugely advantageous position today. It turns out old-school manufacturing for ICE vehicles doesn't translate directly to EVs. Yes, Ford (for example) can build EVs, but they're not cost competitive with Tesla, because they're optimized for something else. Tesla produces 100x as many EVs as anybody else.
Now, was Tesla surprised by the difficulty of manufacturing, because they didn't know what they didn't know? Maybe, I have no idea. But in retrospect, it wasn't a mistake to ignore the accumulated wisdom of the car industry. It turns out the old-school companies don't know what they don't know either.
1. Elon thought they were smart enough to build cars with more robots and less humans than other manufactures. When this didn't work out, then swung to the other extreme and were employing far more workers than you would find at comparable plants.
2. Do you remember when Elon was tweeting about a national car hauler shortage, and that Tesla would start building it's own trailers? Tesla was the only manufacture having troubles with deliveries.
3. Have you watched the Sandy Monroe videos where they tear down vehicles? He has compared the build quality to 90's era Kias.
Brian Potter has some articles: https://www.construction-physics.com/p/why-are-there-so-few-...
Does construction ever get cheaper? https://www.construction-physics.com/p/does-construction-eve...
Having said that, it definitely has limitations. There’s a lot more structure in the modules which means more material overall and makes it harder to fit in services. You’re also limited architecturally.
Modular is mature technology and would have taken over the whole industry decades ago if it was actually a lot better.
I think it would have taken over if it was cheaper. But for larger size buildings it isn't and that's what I think stops larger scale adoption. But they are faster to deploy.
There are a lot of people who don't want their friends to know their McMansion was delivered on a bunch of trailers.
That is a common stated goal by HOA officers used when I inquired about building alternative structures in a HOA when looking for land. Also preserving uniformity is a common reason.
I agree that there are underlying motivations, but I'm not sure what they are. It could be driven by some sort of underlying social contract that was established with the HOA or some fear of the neighborhood getting out of hand or diminishing in prestige if someone puts up a Yurt, Geodesic Dome, or a Tiny Home. A common constraint is forbidding habitation within a RV & minimum livable square footage & footprint. Contractors benefit from these rules as a minimum square footage is more expensive to build. It would be interesting to see some research into the underlying rationale of these administrators.
I think manufactured homes would be more palatable if they stick-built certain parts of them. The big one being the roof. Instead of the low overhang, low slope design that works well for transport, ship them as roofless boxes and then do the roof on-site.
Of course, the problem with that is that a manufactured home isn't -that- much cheaper when you're done, so any kind of manual labor to make it prettier will close that gap quickly.
Do you mean a skeleton laid on already poured foundations with water/sewage/electricity drawn, and ready for finishing after this weekend? finishing, carpentry, windows, internal plumbing and electricity takes a lot more to complete than the skeleton itself.
You just "plug in" each room to the central connections.
And therein lies the problem.
The guys that work in construction aren't "dumb". They're most likely way way *waaaay* smarter than you, particularly about construction, but maybe not so much about the computer industry.
Guess what? Construction is absolutely nothing like the computer industry, and nothing the techbros know about it remotely maps onto construction.
You reckon self-driving cars are going to be safer? I have a 1998 Range Rover that barely has *any* software on board, never mind things that will shit a brick because of the next Leftpad Incident.
I'm still super excited about the tech, because I am very clumsy and have no business even trying to drive, and a car is one of the highest modern luxuries out there. Not that I expect to be able to afford it when it comes out....
And it is looking quite shortsighted and unsustainable for software too.
And that’s just one component of a building.
Buildings are not simple things…
Building a bookshelf is SO much harder than software, and that's WITH clamp on guides, power tools, and pocket screws, giving myself every possible advantage. Things like painting, skateboarding, or guitar are an order of magnitude beyond even that, I can't even imagine what it would be like to be able to do those.
Software can easily become kind of a useless toy or hyper niche thing, unless the whole field can be changed to make it work like software does(Like how money and shopping is done, where every process has been changed to work with the software).
Once you change the whole field, stuff gets easy, otherwise, you're just spending all your time translating between paper notes and digital files, which are useless because there's no management system to do anything with the files, so they just sit there till someone has to run to the computer to check them.....
I would not want to live in a house whose builders took an “innovative” approach to dealing with “regulation”. Building codes are often written in blood.
The Titan submersible didn't violate "regulations", though, it violated industry standards. Standards that are updated more often than regulations. In so doing, it it was denied a certification. Since it operated in international waters only, there were no applicable regulations to evade.
Regulatory bodies which are poorly funded may write overly restrictive rules because they don't have the resources to do a more comprehensive assessment. In particular, many HUD rules are split into "single-family houses" and "everything else", with little consideration for small apartment buildings, townhouses and other "missing middle". The requirements for houses are much less strict than for apartments, and construction costs per square foot are correspondingly lower for detached single-family homes.
If you live in a detached SFH built after 1970, it's arguable that you already live in a structure where the builders took an "innovative" approach to dealing with regulations, because it was built to the lower house standards and not the stricter apartment standards. And if it was built before the 1970s, the regulations were probably very lax.
Nonetheless, I think the solution must be to reexamine the regulations, rather than evade them. But this "written in blood" is a thought-terminating cliche that prevents progress.
Not everyone is so rich. People should have the choice about whether or not they want an unnecessarily expensive house. Regulations assume one size fits all and that everyone wants the same thing This isn't true. and trying to outlaw poverty doesn't work, it just makes things worse.
I wouldn't want to live in a house that was unnecessarily complicated to point of doubling it's cost just because of endless regulations forced vast increases in costs. You should see one of the links shared above: it talks a great deal about what's driving the increased costs in housing and it's all to do with increased building complexity, much driven by regulation.
Similarly, the 2021 IRC now requires a surge protective device at the service entrance. This doesn't protect anyone's life, and may protect your TV or cable modem if you live in a lightning-prone area. Its cost-effectiveness decreases in areas that don't get lightning strikes.
I think it's OK for the government to establish a floor on the quality of things, as long as they do it with the understanding that nothing happens for free, everything is a tradeoff, and better things cost more. So it's generally preferable when the legal floor is mostly focused on safety (where the tradeoff to something cheaper could be someone's life or limb), but more questionable when it's for things that don't relate to safety, where it would be better to let the individual make the tradeoff for themselves.
Regulations don't assume one size fit all, rather they tell you the minimum standard you must meet to participate in this, at least in our society.
If you think egress requirements and insulation requirements are too restrictive for you, then you don't belong in an industry that builds where you live and work.
Regulation is just an enabler of laziness.
Should you look at the fragmented composition of participating professions, fragmented nature of players and organizations involved, the fragmented and fluid supply chain, all combined with the long realization phase and complicated responsibility (legal) relationships of the actors perhaps? Generic contracting is more like a conductor role for the numerous groups involved, be it joined or independent ventures, than a subject of startup 'disruption'. Management, including financial.
Sub tasks will see some unicorns, but not much though, mostly in software area. The opensystemslab.io comes to mind as one construction adjacent one concerning the structral components mostly, but with systematic vision and novel mentality.
It's still a small % of houses built, but it's very cost effective and getting better (and more common)
european companies will build prefab exterior enclosure to retrofit old construction without displacing residents https://www.sciencedirect.com/science/article/abs/pii/S03787...
New construction:
Integrated Project Delivery - AI could solve the problem of aligning stakeholders possibly
Applying scrum/lean to construction -
BIM - there is a lot of data in a building and BIM standards are putting everything into one file,
digital twins: lidar and cameras and ai are all getting better where high accuracy scans can create as built digital twins while referencing BIM file to build it.
lifecycle analysis and building automation: precooling and preheating spaces, I believe we should have better rubric for valuing existing properties eg a window is an asset and a liability (many owners do not account for replacement costs leading to buildings in disrepair)
skilled labor - mixed reality education: if there is a digital twin then worker could use augmented reality to see preferred methods to make that happen while being credentialed and upskilling (crazy brick facades become possible)
Hadrian robot competitors: crane placing concrete blocks autonomously
Have humans in the loop to clear the land and drive construction materials to the site, but build the rest with robots that can work through the night and faster than any human, constructing the same template again and again in different lots?
Sure, bureaucracy is a major bottleneck, but it's not like human construction finished within a month...
Edit: I imagine though, that in locations where building is regulated under the international residential code. There has been less investment, it only in the last few years added an appendix for mud/cob construction... So you can add regulatory cost on top of the actual robotics involved.
I'm not saying it's a simple problem to solve, nor one whose solution I have fully mapped out in my head. Just that it's a problem whose solution strikes me as being within the realm of feasibility.
This is why I believe the future of construction is portable 3d printing. Imagine a 3D printer which fits on a truck, yet can be assembled in an hour and can print something the size of a large house from fiber-embedded cement. The printer would have nozzles for paint, foam, tar, electrical wire and PET plastic. It would also have a scoop to remove soil.
A team would drive the truck to the worksite, assemble the printer, start it going, and come back in 2-3 days when it was done. The printer would dig foundations, lay a fiber-cement foundation, damp proofing tar layer, build double skinned walls with foam between, paint the inside and out, install wiring and pipes, and build a foam, cement and tar roof. The house would have premade cupboards, bathtub, washbasin, etc.
Humans would come back to fit carpets, electrical outlets+fusebox, appliances, windows, vacuum formed liners in the bath/washbasins, etc.
I would go for the printer being far less weight by making the whole thing a cable truss and winch structure. That should cut the hardware cost in half or better, like the way a travelling circus tent can be assembled entirely without a crane, yet packs into a tiny box. The downside is you can no longer assume a rigid structure, so you need cameras and alignment marks for precise positioning - but you probably needed them anyway. You also can't make any accelerations above 1G, but that should be fine for housebuilding.
And obviously, their design only makes the walls, but I would want to do foundations, roof, insulation, plumbing and electricals all with the same machine.
You lost me there. I’m guessing you’ve never had to deal with rocky New England soil and non-flat grades. I’m sure many other regions have their own challenges, such as water tables and custom insulation requirements.
Even a tiny creature like an ant can dig holes in tough soil. A machine can too as long as it has feedback (ie. it can see the rocks and keep digging around and bashing till it comes lose.)
> non-flat grades
Well you dig it till it is the same shape as the plan...
> water tables
Either lay the concrete underwater (most concrete can be laid underwater) or dewater with a pump on the end of the actuator arm.
All of these problems just lead to increased build time. Obviously your machine is quite expensive - so if it takes 2 extra days of machine time to build a house on a steep grade in rocks, then thats gonna cost more, and at some point might make it not worth it.
> Well you dig it till it is the same shape as the plan...
That’s not how it works. Either the surrounding property needs to be regraded, in which case you’d still be forced to use excavation equipment, or you’re making an even more complex machine to be able to support building things like walk out basements on a custom grade. In the case of basements there’s simply a lot of volume of material that would need to be either removed out of a lot or just moved within the lot. Again, still needs excavation equipment to do that. The same excavation equipment that can dig out a foundation within hours and is perfectly adept at dealing with boulders.
A machine to handle other parts of the job such as foundation pouring might be viable. I’m just saying that a magical machine that can do it all if left alone for a few days is wishful thinking.
I predict that that won't matter eventually though, because over time, the cost of human labor goes up and the cost of materials goes down (relatively). That means anything that reduces the labor cost to build a house will always eventually happen, even if more materials are needed (unless another technique reduces the labor further first).
As a whole, yes. But there are a number of companies that are building segments (walls) in a factory and then shipping those to be craned-in like Lego® blocks. Some factory tour videos:
* https://www.youtube.com/watch?v=r-RTlbv84T8
* https://www.youtube.com/watch?v=aeHkVeJO6PE
* https://www.youtube.com/watch?v=QX3QZVG-18E
I like ti watch these houses go up: the walls & roof trusses are all laminate and come in to the job site in segments. It's takes a crew of 2–4 (depending on the size of the house) about 4 days to assemble the exterior.
The interior is about 50% 'modular', and the rest is traditionally framed. It's pretty insane.
Slightly OT, but I feel like this is a general trend and definitely not limited to construction. There are many companies and founders aiming to 'disrupt' an industry, and a starting out with what only can be defined as arrogance. Seeing some of the startup companies in the sector i'm familiar with trying to explain how the world works to some of the most experienced and established players has been hilarious and infuriating at the same time. At this point, I finally understood where the derogatory meaning of 'techbro' comes from.
The main thing that concerns me is that people still believe technology (primarily software) is the solution to any problem we encounter. Yes, technology solved many problems in the past, but it also created a lot and failed in spectacular ways. If you need a solution to an acute problem, waiting for a technology to hopefully be developed isn't the right call. However, more and more people, governments and companies are buying into that idea. I can't fail to notice many people who where technology skeptic years ago now turned towards a "I don't want to change my behavior, technology will find a problem that solves the issues I cause with it". Autonomous cars are my prime topic that comes to mind, but many other things also come to mind.
But then I realized this is the natural push/pull of conservatism against progress. Incumbents get old and conservative. New companies crop up and try to do things differently. Sometimes the new ideas are stupid, and incumbents are right--the tried and true really is best.
Other times, the incumbents have become so bureaucratic, slow, and out of touch with what matters (customers), that a new company can come in, do things dramatically better, and burn an old competitor down.
Macro-wise, I think we should be glad for this. It's very hard to tell what will and won't work at the beginning. VCs get paid a lot of money for trying to guess this and even they can't get it right. I myself have been surprised many, many times when an idea I thought was incredibly stupid, turned out to have legs.
One way to change your mind on this, write down your predictions about what companies/approaches/techniques will/won't work 10 years from now. If you do this say, once/year, and you're honest, you'll see how hilariously bad you, and more or less everyone else actually is, at predicting the future and knowing what will and won't work. Sometimes you really do just have to try it, and see what happens.
I work in aerospace and whenever a post is related to aerospace here I expect to see several “why don’t they just <do x which they already do or do y which is easy to discredit>..” comments as if nobody else was smart enough to think of it. I favorite these comments for some reason. Not surprised to see the same thing happens in other fields.
Humble people don't say to themselves "I think I can do this better, so I'm going to disrupt the industry."
The first lesson to learn is that construction doesn't happen behind a laptop or on a phone. From your user's perspective, time spent fiddling with your app is time not spent on real work. So naturally you focus on selling to the "office workers" who spend more time on planning and administration. The problem with that segment is that the tools they already have are good enough. Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. The fact that your tool was specifically designed for their use case, or has an AR feature that allows them to walk the site virtually, or whatever -- it's cool, and you can get a few sales that way, but it's not going to result in better project economics, so it's not going to revolutionize anything.
I worked with a GC who bragged about tripling the budget of a highschool build. If you are doing large projects the only way you're going to win is to be way off on bid day and to be good friends with the people who figure out the financing.
Hence if you go the other way and include severe penalties you’ll only get significantly padded estimates because the contractor now has to bear significantly more risk.
The buyer has an advantage in that they can negotiate the vendor down through competitive bidding techniques, and by doing so transfer the fault for insufficient delivery entirely on to the bidder instead sharing the fault themselves. If I work two contractors against one another to drive one into the position where they are now no longer safely comfortable they can deliver the product they promise for the agreed upon price, (however I am now safely in my own comfort zone knowing that I've got the lowest possible price extracted from them), well if they fail to deliver what is requested it's now their fault for promising they can do it, not mine for pressuring them into a risky position.
If its just an estimate, you underbid everyone else, win the contract, start building, run out of money past the point of no return, then get more funding.
a) What it says about lowest unique bid auctions [1] and reverse auctions [2] with multiple bidders and multiple auctioneers. That the auctioneers will often (?) take the lowest bid, even if it represents "unrealistic" based on the criteria of the auction (this seems especially relevant in contract procurement).
Especially though, that even in a market, with relatively "transparent" information (concrete costs this much, lumber costs this much, ect...) there's still not much consumer transparency on what "reasonable" prices for construction represent. And consumers or "auctioneers" are likely to just take the lowest number, like a lowest unique bid auction. Whether its lack of information, strong preference for lowest price, can't be bothered to check reasonableness, purposeful cost obfuscation, or some other issue.
b) That people often fall for sunk cost issues. Especially on big purchases. Gov't might drop $100k contract without much notice. Except a $10B contract? Just keep throwing good money after bad. Consumer might switch soap brands on a tiny price fluctuation. Except a $1M house? Just keep throwing good money after bad.
Australia's had a rash of collapses lately, and it's felt this way.[3] 2000 companies in two years, and reading along, lots of companies that basically said "Give us another $200k as a payment right now." ("Even though we know we won't be able to finish your house, because our financials are horrible.") Except buyers felt like they had to, because they already committed to an expensive project.
[1] https://en.wikipedia.org/wiki/Unique_bid_auction [2] https://en.wikipedia.org/wiki/Reverse_auction [3] https://www.9news.com.au/national/building-construction-comp...
In this case, it's not necessarily sunk cost. There are switching costs associated with bringing in a new contractor, so it is likely cheapest to continue with the current one, even if they didn't bid it right initially.
Getting it right up front matters a lot less for most software than it does something like a product where you invested a bunch of money in tool and die, stood up an assembly line, have warehouses full of product to deal with of you release a new version that obsoletes them, and so on.
If software is incomplete or wrong or bad, the real costs are mostly just labor to fix it. If physical products are bad, the very act of doing the fix has costs beyond the labor of the design work.
(I’m certainly not endorsing sloppy planning in software, fwiw, this is just how the incentives play out much of the time)
Most jobs take bids and so many people hire the lowest bidder. Because of this, a lot of contractors price their bids as a best case scenario... Or they bid an exactly what was asked and nickel and dime for everything extra.
As for people talking about "why is the software industry like that?" I have great personal anecdote that to me explains why. Years ago I was tasked with a small team (~5 people) on a software project. We all got together and spent a good solid 3 days on planning and estimation, and our estimate was something like 5 months. Sales team freaked out, they said they needed it next quarter, so we had 3 months. So we looked at our original estimates and tried to find ways where we could cut scope, and came back with a "well, if we cut out literally anything remotely non-critical, and pray a little, I guess we can say 3 months." When all was said and done, the project took nearly exactly 5 months, just with a ton more stress and worse quality.
So these days, I'm more wise to the ways of the world. If someone says "we need you to find a way to cut the schedule by 25%", I basically say "OK, we can cut scope, but in my experience it always takes the time of the original estimate anyway." So then when things eventually go over budget, I don't stress at all - I leave work at a normal time, and just say to myself "everyone knew how long this was going to take, we just wanted to pretend it wouldn't take that long."
A big reason software is chronically over budget is that people simply want to pretend it will take a shorter time than it actually does, but they also know there is some real value to everyone engaging in that "mass pretending" in the first place.
Yes, the whole planning estimation and slippage stress thing is just a form of mental abuse / gaslighting.
When in the heck did corporate America stop having men/women in the adult sense? I work in software/finance and it's disgusting the number of people who know better but don't have the backbone to stand their ground. People are too afraid of the mysterious ways of "blowback" by corporate whiners and politicians.
Why Construction Projects Always Go Over Budget https://youtu.be/dOe_6vuaR_s
Same as with software really.
The external factors are also a thing, material shortages or finding something unplanned that needs fixing (for renovations)
Cold, rain, or even local kids playing with not-yet-dry concrete can cause all sorts of issues.
Shortages of steel or wood, or a small accident that breaks something, can often set work back weeks. When I did welding I remember waiting around for for hours for more rebar to show up -- and you bet your ass we billed for that.
On one job some goober fell through an unfinished staircase due to it being mostly (but not totally) completed; it halted work and were down a skilled worker. IIRC dude cracked a few ribs and had shoulder problems, not sure if he got workers comp or disability -- but should have.
One a different gig someone kicked over all of the porta-pottys and turned on all of the outdoor faucets, creating a huge mess of poo and mud. Later on that job site someone stole a lot of copper, and I think at least 2 pallets of cinderblocks, as well as a non-trivial amount of fence.
Meanwhile, I've got an IT job now, and when it's cold and rainy I can sit at home and jam out lines of code as long as my wifi and HVAC mostly works.
CAD software, and now the various BIM tools, make it more likely rather than less likely to go into cost/timeline overruns.
Way back in the olden times, drawing plans was extremely labor intensive. Draftsmen using pencil and pen are many, many times slower than drawing on the computer. Because of this strict and unforgiving hard limit, a lot more time was spent in the planning stage. Architect and owner would work for a long time to get all of the details and requirements together before anybody touched a sheet of mylar. Any changes needed to be minor, because erasing and redrawing was expensive and difficult.
Because of the manual drafting restriction, details depended very much on using knowledgeable and experienced tradesmen. This also applied to specifications. Specifications were a lot more general, and were heavily reused between projects, because retyping 200 pages on an IBM Selectric is also time consuming and expensive.
This selects for a high level of competency across the board.
Now, because it's so easy to make massive changes at the last minute, everybody is pushing things down the road. "We'll catch it in addendums," is the rule, not the exception. And one of the biggest problems is the interface between architect and owner. The owner has ALWAYS been slow to get their people together and make decisions. So you end up with a project out to bid, and they're just now making calls on AV equipment and the like.
And the professionals, the architects and engineers, tend to put more on the drawings, and more in the specs. And because of this, a lot will get missed, or overlooked, or ignored. The general contractor sprays their sub-contractors with the drawings and specs, and the attending billion addendums, and so things get lost.
Plus, nowadays, J. Random Guy with a truck and good patter is now a licensed plumbing sub-contractor, who gets the job because he underbid. So he is now deeply incentivized to interpret the drawings and specs in a way that what should have been caught in the bidding phase is now considered a change order, which the owner has to pay for.
TL;DR: the ability to work fast in the design phase does not necessarily translate to better results in the construction phase.
(This works for software as well. We're still using software that was hand-chiseled into clay hard drives by the Great Beards Of Yore, while software that was programmed with amazing syntax-highlighting IDEs with built-in AI is riddled with obscure bugs.)
The kind of artistic result achieved with true "do everything in triplicate" drafting and capturing one good performance, has fallen by the wayside when everything changes at the last moment. Movie budgets have become dominated with post-production, even when they make the effort to record in-camera scenes and effects.
And what I've noticed about illustration is the rise of a cargo cult of "the blind leading the blind" online akin to programmers who have only learned Bob Martin, driven by young people want to learn drawing digital-first, for some legitimate reasons, but also because of the gadgetry and because they want to cling to the undo button and use layers. But it's the same thing: most of the knowledge of drawing, like with every other trade, is tacit, motor-skills heavy and needs to be trained into muscle memory. Being very bad at getting the line you want and mashing undo to force your way through just means every project is frustrating.
And once you do cross that threshold and train it, having the undo and layers are nice additions, but predispose you to not do as much planning. Thus, much of digital illustration tends to have a formulaic quality to it: the artist could configure things all sorts of ways, but the overwhelming tendency is to drive towards excessive detail and excessive rendering, because the medium is an enabler for that and doesn't require you to think it through.
You make a budget but then one of suppliers drops out, so you find a new one that can do the job on such short notice but you pay the price for that. Also You always make the budget as tight as possible so that it is very attractive, but there are clauses so you know you can go over budget in certain ways.
We can recognize all these problems with budgets - that sales is incentivized to sell under budget, and submit change orders or project renewals later to get more money. Yet why does this happen? Can a private company really compel a government to change a contract? If the government really wanted to, they could take steps to limit the budgets, sue, nationalize a business, etc... This brings concerns that a government could wield it's power to exploit private companies, but I don't think people would be that opposed to the idea of a government trying to save taxpayer money.
The core of the issue is actually cultural. In business circles, closing a sale is considered a "skill". Lying, cheating, bribery - these are all culturally laundered as a method of sales tactics, and businesses laud salesman that can close above all else. I would argue that this is a cornerstone of business culture, at least in the US.
I think this is the core of why bids are so far off, and even a core issue with the world economics. A large portion of business occurs in the "enterprise" space behind closed doors, and the sales process is very obfuscated. It is the opposite of a free transparent market. These deals occur behind closed doors, net salesman a bundle in commission, and fall apart when they have to be implemented.
Do they usually? I don't know, but curious.
My only experience with the construction industry was the construction of my house and those of a few friends where I was able to follow along.
The cost was exactly as estimated a year+ earlier and the timeline was pretty much spot on except for weather-induced delays (can't blame them for mother nature).
The people I've seen complain about cost/delay are also those who changed their minds in the middle about details, so of course it caused delays and cost.
But putting aside the various incentives and psychological reasons why people tend to underestimate, I think there is a mathematical reason too.
Most complex processes with a large number of varied tasks tend to follow a log-normal distribution or something similar. And a property of this law is that when you go faster than expected, you don't go faster by much, but if you are late, you are late by a lot.
So, imagine the guy who does the estimate is completely unbiased and competent and tells you how long it usually takes (the mode), then there is more than a 50% chance that it will take longer (the median is greater than the mode), and on average, it will be even worse (the average is greater than the median).
For example, you don't know what's in the old wall (but you have a pretty good idea of the amount and odds but you don't mention that) and so you don't include it (because the other guy won't and you have to stay competitive). Instead of including in proportion to the odds. You then later go to the client with "uh oh, we need to fix that. It happens. What are you gonna do?" And the client accepts it. This is mind boggling. If that's not the signs of a thoroughly broken industry, I don't know what is.
Before someone mentions that it's the same for software, not it's not always like that. With experience we got very good at estimating each in a series of comparable projects. It's very possible to fail to estimate large one-off projects. It's very possible to get it right with series. And house building is a very repetitive business. They are all different, but only so different and they are all built of human-sized rooms.
Compare that to auto manufacturing. Ford knows exactly what an F150 costs. They can then price for known profit within a range.
Site prep has unknown unknowns, as each site is different. Maybe there's an unexpected geologic condition, maybe the utilities won't connect without a fight, maybe the jurisdiction issues a building moratorium at the last minute. Most construction jobs won't get guaranteed pricing on materials, so any delay can change those prices, and then the client may prefer to change materials and then you may need different labor, etc.
Remodelling is full of even more unknown unknowns. Residential construction doesn't tend to have as-built drawings, and the design drawings, if available, may not have much connection to the structure as built. When you open up the walls and find surprises, that's going to increase costs.
The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together. You have to cross multiple organizational boundaries between owner, builder, contractor, and subcontractor of which very few people have a bottom up understanding. Mostly the people with the incentive to put everyone on a single platform (owner / builder) think very low of the tradespeople, which is why tradespeople are beginning to make more money than the accountants and PMs.
Why is the US based tradesperson superior to the Mexican? Why must we address his prosperity more than theirs? To “protect” the Mexican from making cash?
And remember that when construction is expensive, people have to pay for it. Maybe if you already have saved enough for your house, that’s fine for you, but if not? It absolutely makes it harder for young people (not in tech) to afford homes. And on the national scale we have a massive backlog in housing and can expect it will take decades before housing gets better.
US labor is neither morally superior nor economically sounder for the US or world economy. It is the specific laborer himself who benefits.
A better question to ask is why is the value of the Mexican’s labor so much higher once they step foot into the United States for the same exact work and exact same skill level.
Another question you can ask is why can’t I as an American move to Norway and partake in their healthcare system and sovereign wealth fund? Or why can’t I move to Switzerland and work as a barista?
Once you can answer the second question, you have your answer to the first.
The concept of the US style planned development (fraccionamiento, very loosely the MX counterpart) where basic service infrastructure is laid down first, and construction happens afterward, is very much the exception there, and most work is done ad hoc using whatever tooling happens to be available in the nearest small town.
Also Mexican construction is almost entirely cement and cinder block standards due to relatively little native timber, and those things are all hauled around the site manually with occasional wheelbarrow assistance. None of this tilt up, balloon frame stick built business we have here.
Bottom line being that the typical Mexican construction laborer is going to be much more well-rounded, flexible, and industrious then the typical American construction worker, and as such is worth far more to an American crew, where these traits stand out, than to a Mexican crew where they are the norm.
It would be good if Mexico could improve and avoid these problems. Until it does so, trapping the Mexican laborer in Mexico to earn his wage, when he could go elsewhere, is like making a farmer farm in the desert.
It is not a natural-resource ownership allocation problem like you allude to with Norway.
This is false in the general sense but also you can just ignore the natural resource ownership allocation problem and still use Norway as an example, or a different country (the Netherlands? New Zealand? Japan?).
The answer someone has to provide is why an everyday American barista can't wake up and move to Switzerland, Norway, etc.
> Trapping the American laborer in America to earn their wage, when they could go elsewhere, is like making a farmer farm in the desert.
We don’t need to be stuck in a rut of malaise like Japan. We could prosper instead.
Or are only construction jobs being opened up like that?
If you were a roofer would you rather make 20K in Mexico us 50K in the US?
I don't know, but I doubt it is clear cut answer.
The insane US health care costs alone would eat up much of that if you're unlucky. I'd guess a young healthy single guy should take the 50K in the US but as soon as there is a family to support, 20K in Mexico may go farther.
The other possibility might be that it's not that simple.
When I was playing around with startup ideas, not employed by any large corporation, your so-called free healthcare was costing me well over $3K/month in the US (not including out of pocket expenses, of course).
Why is the US based computer scientist superior to the mexican? Why must we address his prosperity more than theirs? To "protect" the programmer from making cash?
And remember, development is expensive, people have to pay for it. Maybe if you already have enough saved for your application, that's fine for you, but if not? It absolutely makes it harder for young people to create businesses. And on the national scale we can use more mexican app developers.
US developers are neither morally superior nor economically sounder for the US or world economy. It is the specific laborer themselves who benefits.
PS Your argument is that the country you live in shouldn't value the citizens of that country over some other country's citizens - its basically the end of the social contract and of society in general. Its a bad idea but I guess if it saves you $15/h on a construction worker its now moral in your eyes?
Absolute drivel.
Rent is low in construction as it is not tied to a particular location; you store the machines and tools anywhere.
Increasing the supply of labor will just ensure that the providers of capital get to keep more of the profit.
See, throwing a lot of nonsequiters together does not make a convincing argument that you know anything about what you’re talking about!
Ditto for most of the kitchen labor in big cities. Anthony Bourdain wrote about it extensively in the book that made him famous.
Both are the reason the middle class was able to eke it out for so long. Now the hacks aren't working and the money printer kept going brrrrrrrrrrrr and the average person can't afford jack.
Also yes, I assume most of American buildings in the next 20-30 years will be built by foreign contractors using foreign labor.
Exactly this. What you describe is basically the same as every ERP and CRM problem. In the end most of them all somewhat converged to SAP or SAP equivalent.
It takes a very specific and special sets of skills to align and understand both, if not all parties interest.
Hmm. The government takes place in an office, doesn’t it?
Do you think a law could make construction faster and cheaper? A regulation? Change in policy? Non enforcement of existing policies? So no votes required? I don’t know, some of that could be extremely impactful and it could happen extremely quickly. Non enforcement of all sorts of regulations can happen in a stroke of a pen. Then, think of the impact of immigration policy on construction labor. Think of all the levels of government that could impact this, local state federal. With no votes whatsoever, no campaigning, none of that slowness.
I don’t know. You worked in this for 5 years. How could your takeaway be that construction doesn’t happen behind a laptop? Like I get the spirit of what you’re saying, poopooing AR whatevers, but I am just a layperson, and it’s just common sense that if the policy were “there’s no minimum wage” or “there’s no limit on immigration,” both of which can and do occur without legislation due to nonenforcement, dude, construction would get a lot cheaper and faster. And maybe that’s not software in your limited sense, but gig economy companies essentially achieved part of those specific policies I’m describing for all sorts of things. So c’mon, of course what happens in the office in every sense has the biggest impact on construction.
It seems like there are at least two problems software could solve here.
The first is that right now it takes effort for tradespeople to find work. They have to advertise or form relationships with general contractors etc. But then they have the incentive to draw out the work, because it's easier to extract more hours from this job than to do this job quickly and then have to find another one. Make it easier to match buyers and sellers so as soon as you finish a job you've got another one lined up and that incentive disappears, and maybe even goes the other way, because if you were the lowest bidder on a job you thought would take three days and you can get it done in two days, you still get paid what you bid. Which gives the general contractor more slack in the event of some other construction delays.
The second is efficiency. A lot of jobs are small and the major cost is travel time to the site. If you could get many contractors into the same system, you could do some optimizations there, by assigning jobs to whoever is nearest and minimizing the transportation costs, or letting contractors automatically adjust their bids based on their proximity. Which the contractors should like, because it reduces the travel time they don't get paid for.
SAM, one robot, a dozen engineers in the race to revolutionize the way we build (https://www.audible.com/pd/1797102168)
It does not really support your hypothesis, instead giving a bunch of examples of inertia, which collectively make it extremely difficult to demonstrate a return on investment
The elaborate on your idea, there are a couple startups that do work in "real estate" if you can even call it that, they ship ready-made prefab aimed at people looking for separate mancave/home office from the actual home.[1] Those are things you can ship in highways and load in with a crane. But that's about it. These startups had their boom during COVID but you don't hear much about them now.
[1] https://www.dwell.com/article/prefab-home-office-accessory-d...
This is all done using computer-controlled manufacturing equipment, much of which is imported from Europe, where they are much more advanced on this front than in the U.S. One of the advantages of having computer controlled nail guns and vaccuum operated "wall flippers" is that the construction tolerances are far tighter than if you have humans nailing in the shingles, sometimes while on a ladder 15 feet above the ground.
The downside, of course, is that they only today have their one factory in New Hampshire, and while the walls can be shipped trucks on highways, if you want to build a large, luxury pre-fab home in Arizona, the trucks have to travel a long way, and that adds to the cost. This hasn't stopped some of their customers, though. Take a look at their web site for some example houses that they have built --- it's a far cry from what most people think of when they hear about "pre-manufactured houses". These are not trailer park homes!
There are modular homes that are shipped on highways, usually in sections.
https://techcrunch.com/2018/11/20/autodesk-agrees-to-buy-pla...
First HN post: https://news.ycombinator.com/item?id=3659159
Only difference is we deal in 3D rather than pdfs, and we're open source for too many reasons to type on a mobile phone, but happy to elaborate if needed.
[0] https://github.com/specklesystems/
I think what is fascinating about this space is that the tech is there for full 3d models, machine control, and BIM smart design.
It's all just so expensive, only the huge companies get deep into all of it. As a PLS, we've been delivering site topos for decades with full 3d surfaces, only to deliver those to the engineers and after design they print out a plan set.
I don't know anything about construction, but generally speaking founding a startup in a historically profitable industry means that there's a lot of room for competitors to counter if you try to disrupt the industry (eg they can afford to invest and improve, they're just not bothering because they don't need to), and it's hard to win on price because competitors aren't particularly cost conscious as they don't need to be.
If you want an easier time when you found a startup look for an industry with potential to grow. Then you can focus on growing the market rather than trying to compete for customers. Customer acquisition is far harder, and far more expensive, if you're trying to take market share from other businesses. The smart move is to go where no one has gone yet.
Isn’t conventional wisdom creating a business for an existing item line on a budget statement?
You cannot make permits, taxes, and land prices to go down. Interest can be "tamed" if you build quick and sell quick. And most material prices are driven by transport.
Before you jump into the sector remember a great technology for construction was drywall (Pladur, Knauf, etc): it lowered time (and costs) to build inner walls.
Anything electronic, like automated window blinds... etc is not interesting for the sector: prices are high, cost to deploy are also high. It won't get mass adoption unless customers want to pay 2x-10x more for a house.
The standard SV "ignore the laws until too big to fail" Uber/Airbnb is just not going to fly. You've never seen enforcement until you've seen the building inspectors crawl up someone's back unpermitted retaining wall (going so far as to take the sheriffs to order a backhoe to knock things down).
Don't forget labor. Any tools that can significantly reduce labor will at least get someone to listen to the pitch.
This said density regulations tend to be the problematic ones.
The problem is not just the regulations, but that these regulations differ a lot from place to place. This makes an economy of scale nigh impossible.
It is very capital and labor intensive, and the margins aren't all that great [0]. It involves an asset class that has a slow-moving market. It also is very labor intensive with lots of local competition all over. Finally, financial instruments for investing in real estate construction already exist without venture funds.
Software is a completely different beast. You mention CAD and other secondary software, but finance is also a place where software is used extensively. The latter is so prevalent I was able to use a smaller language (Clojure) at two banking companies, one a startup and one established. The margins of software and the size of the markets for it attract VC money.
I do think there are places outside software for startups here, but it will be startups that are further up the value chain from the actual builders.
[0]: 17% now, 8% in 2021 - https://www.angi.com/articles/construction-overhead-profit.h...
- Dusty Robotics? They make a robot that prints wall, piping etc layouts on floors.
- Canvas, who make a robot for drywalling
I'm pretty sure there have to be more, but probably not many doing construction themselves since that doesn't scale well for a typical startup. But tools and software surrounding construction, there's companies for that.
https://structuralsteeltech.com
GNSS can technically get down to mm accuracy but that typically requires static sites with lots of data.
[0] https://en.m.wikipedia.org/wiki/Real-time_kinematic_position...
Imagine the disruption if every second skyscraper would be leaning Millennium Tower of San Francisco.
Real-estate is capital intensive. The aggregate real-estate value in a small city is billions of dollars.
Real-estate timelines are long. Think thirty year mortgages.
Scarcity of desirable locations. Manhattan Kansas apartments are not fungible with big apple Manhattan apartments.
At scale real-estate is primarily used as a vehicle for wealth retention not wealth growth. If you have a few billion dollars, your problem isn’t scraping up a nickel for a hamburger. It’s finding someplace to store all that money (it won’t fit in your mattress).
So the real-estate market is bivalent. The low end ranges from people just trying to get by to people trying to make money.
The high end is real wealth with no incentive to sell in ordinary circumstances…what to do with a few billion in cash? is a real problem.
And again, a few billion can move a local market, but not a regional one.
I'm not sure this one applies. The bank holds the thirty-year debt, the builder gets the money immediately.
The builder typically is paid via bank loan. The loan is originated only under the bank’s expectation the resulting improvements are mortgageable.