Forty years ago it cost $500 to buy a factory-made TV and $10,000 to have a nice house built from scratch on a plot of land, a ratio of 20:1. Today the TV costs $200 and assembling the local tradespeople and lumber will probably set you back $200,000, a ratio of 1000:1. Part of this difference may be ascribed to the TV being built with $1/day Chinese labor.
How about this for a brilliant business idea: clearcut a Canadian forest (they love to cut down trees in British Columbia) and ship the lumber to China, build modular houses there and ship the completed houses back to the U.S. in container ships. Sell them at Walmart (they’ll sell anything Chinese-made at Walmart). The quality won’t be quite as good as the best custom homes in the U.S. but it will be good enough and when things start to get creaky in 20 years you can throw the house out and buy a new one at Walmart or Home Depot.
This is not a totally new idea, of course. Nearly all houses in Scandinavia are factory-built. We have it here in the South with http://www.topsider.com/ and in Quebec with http://www.profab.ca/ but I don’t think anyone has tried it with Chinese labor. It costs less than $2000 to ship a container from China to the U.S. and a prefab house ought to fit in one or two containers. So shipping shouldn’t be a killer.
Chinese-built houses wouldn’t have a huge impact where I’m sitting right now, on top of a $1 million plot of land in Berkeley, but in Maine or the Midwest, why not? Think about all the poor people currently being housed in cities, occupying housing that could be sold to rich yuppies who would pay huge property tax. The City of Cambridge just spent about $1.5 million buying and renovating the house behind my condo so that they could park a poor family there. Why not give the poor family the $1.5 mil in cash and they could buy some land in an uncrowded part of the country ($20,000) and a house at Walmart ($40,000) and live comfortably for the rest of their lives off the interest?
Or consider the vacation house dilemma. Do you really want to spend a year or two dealing with contractors and paying big bucks when you could buy a second house at Walmart for $40,000 and put your money into travel, jet aircraft, etc.?