Costco Broke into a Surprising New Market: Modular Housing
strongtowns.org
strongtowns.org
Actual article: https://www.urbanproxima.com/p/the-costco-of-housing-iscostc...
More discussion: https://news.ycombinator.com/item?id=40686048
But it doesn't mean Costco has become a builder, and the conditions resulting in the store being built in this particular way are local to some parts of California.
It's the same with Home Depot. They don't "make" anything, they contract everything out (Home Depot-line tools, i.e. Ryobi, their flooring installations to some of the cheapest local installers, etc.).
It's worth also noting that despite the drama, Costco is not looking to lose money on these. So the apartments will be nice enough to rent. Nimbys tend to forget the discipline of the market, especially in their talking points.
From: https://cleantechnica.com/2024/06/12/one-home-builder-grows-...
Clayton, a leading single-family home builder, recently made big environmental news by deciding to convert nearly all of the 42,000 modern manufactured homes it builds annually to be certified ENERGY STAR and Zero Energy Ready Homes (ZEHR). These certifications mean that its manufactured homes will be much more efficient, save homeowners money on their utility bills (up to 50%) and provide premium energy-efficient appliances that are often considered unaffordable to the average family.
Clayton’s switch to ZERH also means nearly all of its homes now come with a heat pump water heater (HPWH), which likely represents the single largest procurement of HPWHs in the history of the technology. To put it in context, the entire HPWH market in 2022 shipped 141,000 units, and Clayton alone will increase this total by 30%!
And, is this development really so bad? There's a bunch of additional housing created; Costco gets their store built; we have mixed use, where a lot of people aren't going to need to take a car trip to do their shopping.
It depends on how it's managed. If there _happens_ to be enough demand that people will accept it and pay a profitable rate, it might be just fine, but the cart is before the horse on this, so I wouldn't necessarily expect that outcome without other evidence to support it.
No wonder why soviet union buildings looked like a bland block of concrete.
If this is not a cautionary tale on the dangers of regulation, I don't know what is.
Congrats to Costco for finding a trick and getting things done, despite the government.
But it fools most people, and if you're wealthy you're going to move to a newer area before that 15 years is up anyways.
There were many awful things about Khrushchev, but at least the housing policy appears to have been a genuine attempt at improving things for ordinary people. Even though the housing was poor quality and ugly, it was a step up when they were introduced.
That heritage will show inside, though: there's probably not going to be any rooms that are really wide. But modern apartments tend to not have too many of those anyways.
more seriously, it seems mobile homes nowadays come in 14, 16 and 18' widths and 66 to 80' lengths.
It seems shipping containers are 8' wide and usually 20, 40 and 45' long.
I suspect there are ways to make multiples of these dimensions.
I also wonder why you couldn't just take a truck and load it up with a stack of walls that are laid out with a crane.
How you're assuming that there is a difference in how it will "enrich the city and the lives of tenants" based on that render is beyond me.
You decry regulation in the same sentence you wish buildings were beautiful and life-enriching. You wildly overrate the style, comfort, and safety of stuff that gets built in countries without the sorts of regulations that the US has today.
Probably in part because modular construction isn't uncommon with those 5-over-1s, it's not some hack specific to this law; surprisingly enough, most projects can't get away with paying below the local prevailing wage whether or not there is a specific law requiring it, so if modular construction enables a net cost reduction where there is a prevailing cost regulation, it's going to be a net cost reduction for most similar construction without the regulation, too.
Getting housing built is the purpose of the law; modular construction is a common way to build in urban California even where the builder isn't using this law, and still involves local labor (the modules don't assemble themselves) to which the prevailing wage requirement applies.
There's no trick here, they are doing exactly what the state government was trying to get done when it wrote the law bypassing local government power.
Costco seems okay with it. Housing gets built that circumvented the NIMBY's. The development is mixed use with a grocery store in walking distance instead of driving distance. Local labor gets paid an appropriate amount instead of being undercut by illegal labor (a HUGE problem in California). And it's not like current 5 over 1 construction is particularly aesthetic.
Where's the downside?
I suspect Costco, being a "big box/warehouse", is squarely in their crosshairs; combine with any purported anti-union activity and they're quite willing to run an article that deliberately distorts what the housing is going to look like.
That's kind of my point. Modular is mostly a design/aesthetic/quality choice for people who can afford it. You would think that the entire purpose would be affordability vs. onsite with the huge labor savings. But these things are so marked up it ends up being pointless in that regard.
Costco’s inflation-proof $4.99 rotisserie chicken, explained: https://www.vox.com/future-perfect/23207301/costco-rotisseri...
"But there’s another reason the birds have remained so affordable. In 2019, Costco made an unprecedented move to source its chicken at even lower margins: It set up its own feed mill, hatchery, and slaughter plant in Nebraska, and contracted nearby farmers to raise over 100 million birds each year, all under the name Lincoln Premium Poultry (LPP). It could be saving the company up to 35 cents per bird."