Working Paper

Mass Production of Houses in Factories in the United States: The First and Only “Experiment” Was a Tremendous Success

Abstract: We show that the first and only experiment of U.S. mass production of houses, in a factory-built home industry that became known as the Mobile Home industry (and today, as the Manufactured Home industry), was a tremendous success. Mobile Home prices-psf fell by two-thirds from 1955 to 1973, as productivity soared; home quality rose significantly, with Mobile Home building codes receiving ANSI certification in 1963 and National Fire Protection Association co-sponsorship in 1965; as production soared, Mobile Homes accounted for one-third of single-family homes produced in the early 1970s. These feats were achieved as industry leaders developed state-wide building codes for Mobile Homes. This dramatically increased the size of the market for them. Factories invested in specialized machinery to produce simple and standardized products, substituting machinery for labor. Given each factory produced under the same code, industry-induced productivity gains followed, including external effects and directed technical change. Lessons from this industry give insights into critical issues in today's residential construction industry. The poor productivity performance of today's residential construction industry is considered a puzzle. But this poor performance is not new. Our forebears before 1950 wrote extensively about the sector's poor performance, attributing it to the failure to adopt factory-built housing. Our analysis strongly supports this view - for their time and ours. It also supports their view, like that of Levitt & Sons, that factory production is the only way "to produce the homes and apartments needed to house our expanding population and our underprivileged citizens in a comfortable, dignified, decent way," (U.S. Senate 1969).

Keywords: Building code; Affordable housing; Mobile homes; Mass production; Factory-built homes;

JEL Classification: N00; L0; N60;

https://doi.org/10.21034/sr.661

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 2024-09-30

Number: 661