Factory Houses Face New Technology

Factory-built houses got a big but unsuccessful boost in the late 1960s, when George Romney was Secretary of Housing and Urban Development. But the actual building of complete houses in large sections inside factories and then moving them to lots for quick assembly flopped.

Builders and home buyers seemed to agree that building on the site on the stick-by-stick theory or using some small components was better than trying to complete 90% of a house in a factory and then transporting it to a site for final finishing.

However, reports of the death of modular housing were, like Mark Twain said years ago, a bit exaggerated. We’ve been building and selling a fair number of factory-built houses over the years. In 1986, a housing industry source noted that about 80,000 houses were built in factories by about 100 U.S. firms.

In one new manufactured housing plant in Pennsylvania, a firm called Techno-Craft has followed the lead of modular builders in Japan and Sweden to become computerized in producing major house components in factories.

Washington-area builder Robert Libson said his booming home building operations are still essentially “stick-built,” but he noted that U.S. builders are becoming more and more aware of the threat of foreign home builders.

“We lost a lot to the Japanese in automobile and electronic manufacturing,” he said, “and I’d hate to see us give up the traditional American field of home building to plants that some Japanese or Swedish builders might build here.” He said that he read recently that nearly a dozen Swedish firms export their modular houses to the United States.

Urban Land magazine recently reported that there is increasing speculation that Japanese home builders are exploring joint-venture possibilities with some large U.S. home builders--a move that would parallel the way American auto makers are now working with, as well as competing with, foreign car builders.

Academics Norman G. Miller and Judith A. Kautz noted in Urban Land, “The Japanese housing industry operates in a quite different environment than does the U.S. housing industry.” They wrote that Japan has a more stable financing system, more streamlined and less-inhibiting political and regulatory process, more emphasis on innovations in materials and more research to make manufacturing processes more efficient.

In addition, the Japanese housing market benefits from higher density. But on the downside, builders in Japan face higher land costs, need for more fireproofing and resistance to earthquakes, and a higher cost for wood.

U.S. home buyers who complain about less than solid construction of quantity-built homes here should know that traditional Japanese houses are made of wood, bamboo, earth and paper. Partitions, according to Miller and Kautz, are mostly sliding doors made of paper and wood. While Japanese houses are resistant to earthquakes and offer flexibility in room partitioning, those dwellings “incinerate very rapidly.” More than 700,000 houses in Tokyo burned to the ground after an earthquake in 1923.

Faced with a housing shortage after World War II, Japan founded the Japan Housing Corp., which subsequently endorsed mass production “now applied to almost every conceivable aspect of housing production.” Mortgage rates in Japan are kept stable under 9% “to allow greater efficiency in housing production by dampening the type of cyclical patterns in U.S. housing production.”