But suppose we have a country of aging housing. Could prefabrication techniques result in lower costs when replacing existing buildings without a land transfer?
2. Single family home construction in the US is highly prefabricated. You can go into any Home Depot and get lumber, fasteners, fixtures, appliances, and anything else you need to build a house. All of it movable and installable without much mechanization beyond a truck (and Home Depot will rent you one of those).
3. Tearing down existing houses for replacement only makes economic sense in two cases. The first is when the value of the land justifies more expensive construction (e.g. MacMansions). The second is when redevelopment is not for the market (e.g. Habitat for Humanity).
4. It is a mistake to look at construction as inefficient. Construction is just one component of real-estate markets.
5. We have very efficient prefabricated housing. It tends to look like mobile homes.
6. Wealth preservation is the primary function of the real-estate industry. Buying and selling for profit is the low end. The real money in real-estate resides in income producing property not single family houses.
Interesting you chose “MacMansions” as the example instead of increased density. In my (very) urban area they tear down single family homes and replace them with 6-9 town homes.
Building a six pack is driven by the same basic economic condition, the existing building is economically obsolescent.
