I can’t figure out what to do with Elon Musk. One day he’s a visionary hero, the next he’s Jeff Bezos with hair. A few weeks ago I saw flyers in Oakland about an Elon Musk protest; nothing specific, just protesting his general Elon Muskiness. Is this the same guy everyone was cheering a few years ago, the irreverent entrepreneur who doesn’t care if anyone steals his code?
I don’t pay close enough attention to Elon Musk, obviously, to understand his evolving relationship with the activist class, but he did do something recently that caught my eye. You’ve probably heard that he moved to Texas and put his Hillsborough mansion on the market ($35 million, if you’re interested in purchasing a 16,000 square-foot estate with a wacky past), but did you know that his new home is a studio-sized “tiny house” built on an assembly line?
To me, that’s the interesting part of the story; not that Elon Musk, billionaire has announced to the world that he’s “selling almost all physical possessions” and chosen to live the life of a millennial couple on a failed HGTV show. Those are the uninteresting parts. The interesting part is that his new house was built on an assembly line.
The home came from a company called Boxabl whose aim, along with a few peers like Juno, APT and Generate, is to revolutionize home building by creating prefabricated homes that, when complete, can be towed behind a standard pickup truck and then unfold onsite until they become a house. Boxabl’s 400 square-foot “casita” costs $50,000 out the door, minus the Elon Musk upgrade package.
Prefabricated homes certainly aren’t something new. One hundred years ago you could order a home in the Sears catalog. It would show up in a box, just add nails. And we’ve seen cedar homes by Lindahl and others that are assembled on-site, and “manufactured homes” being towed precariously behind semis on the highway.
So big deal; what’s the revolution?
Boxabl wants to become the Henry Ford of housing, building modular, stackable and transportable homes on an assembly line like a car. Elon’s casita is small, but the concept is scalable, up to and including multi-story apartment buildings. The finished product folds up into a box no more than 100 inches wide, for easy transport, and Boxabl claims it can finish a home in six hours. Turnaround for boxes already inventoried, they say, can be as little as one day.
No sugarcoating needed: This is a potential revolution, especially in terms of affordable housing, the Casper mattress of homebuilding, a can’t miss. It’s inexpensive, it’s easy and it’s cool. Your house arrives and unfolds. It’s going to work, right?
Maybe. There are cautionary tales.
But each sordid tale seems to focus on ancillary factors. Nobody thinks prefab homes are a bad idea.
There’s the story of Pulte homes, a traditional home builder that built a 109,000 square-foot factory in northern Virginia to build components for 1,800 homes per year, to be assembled on-site. The problem was timing; Pulte built the plant in 2007. In 2008, the recession arrived, the housing market collapsed and the Pulte plant was quietly shut down.
Then there’s the spectacular flameout of Katerra, which declared bankruptcy in June after burning through almost $2 billion of investors’ money in just six years. Press coverage, which is plentiful, finds plenty of reasons for Katerra’s demise, mostly orbiting around hubris and over-expansion and a general misunderstanding of how to go about executing its business plan.
“Rather than adapting to the industry,” says a story in Architectural Digest, “Katerra would attempt to replace or buy the obstacle in its way.” Short on lumber, Katerra built a huge factory in Washington State, the story goes on to say, essentially swatting a fly with an Uzi. Nowhere does it say that Katerra was a bad idea.
Because it’s not a bad idea. It’s a good idea, but it comes with some questions. Can Boxabl work on a massive scale? Can homes built on an assembly line adapt to often quirky local building codes? With construction being cyclical, what happens if Boxabl ends up with a backlog of homes during the down months? Homes, after all, are not cars.
But what if part of Boxabl’s strategy is to convince cities to buy casitas en masse, 1906 earthquake shack-style, and use them as low-income housing? Seems like a no-brainer in a city where tents reportedly cost $61,000 per year…
It’s definitely not that simple, but why not look into it?
Anyway, I’m rooting for Boxabl. With home ownership in San Francisco looking further away than ever for so many, people maybe a home that unfolds is the answer to a lot of questions.
Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.