Odd Lots Why It's Still So Expensive to Build Homes in America
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Oct 27, 2025 
Brian Potter, an engineer and author of *The Origins of Efficiency*, dives deep into the reasons why building homes remains prohibitively expensive in America. He discusses the stagnation of housing productivity since the 1970s and the failed ambition of prefab housing startups like Katerra. Potter explains the complexities of modular construction, emphasizing how customization and varied regulations drive costs up. He also considers the potential for future automation in construction to mitigate these challenges, offering a glimpse of hope for more efficient homebuilding.
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Housing Productivity Has Stalled
- Housing productivity has not improved much compared with other manufactured goods over decades.
- Homes remain costly because construction processes lack the typical efficiency gains seen in other industries.
Katerra's Rise And Fall
- Brian Potter joined Katerra, a well-funded prefab startup, hoping to industrialize housing.
- The company burned through billions of VC dollars and went bankrupt after failing to deliver on mass production promises.
Fragmentation Limits Standardization
- U.S. housing is highly fragmented by thousands of permitting jurisdictions and local site differences.
- Regional climate, soils, and codes make standardizing a single house design nationally very difficult.
