Why 3D Printed Homes Might Actually Work
Is the biggest purchase of our lives finally due for disruption?
Have you purchased a tv recently?
Moving to a new apartment last year, my wife and I were due for an upgrade. Our existing TV was one I bought when I first moved to New York City in 2009. Taking a cab across town (pre-Uber), I went to the Manhattan Best Buy to scope out my options (pre-Amazon Prime 2-Day Shipping). After some sweet talk from the salesman, I eventually landed on a 37” Insignia Brand 720p LCD flat screen — ”flat” being a relative term, as the TV was nearly 5 inches thick.
The cost? $659.
I haven’t thought much about TV’s since then. So, it came as quite a shock when I went to purchase our new television on Amazon. After a few hours browsing and scouring reviews, we ultimately went with a 52” Toshiba 1080p LED Smart TV.
The cost? $269 with free 2-day delivery.
I couldn’t believe it. Just 10 years after my NYC TV adventure, I was able to purchase a television that was objectively better in every single metric, yet cost 60% less than what I had paid previously. Sure, I was aware of Moore’s Law — the rule specifying that the capacity of computer components (or more specifically, the number of transistors per chip) doubles every 18–24 months, ultimately making electronics smaller, more powerful, and cheaper to produce — but I had never witnessed such a jarring before and after in my life.
For decades, televisions were the most expensive item one could purchase for their home. A true luxury. Now? They’re an afterthought. Similar to how Ikea and Wayfair have created a vast world of affordable options to furnish a home, Toshiba, Sony and many others have scaled and innovated in a way that have taken televisions from a luxury to a necessity, and have created a society where the average U.S. household has 2.5 televisions!
And sure, while this is great for consumers looking to “Netflix and chill,” it begs a bigger question. One that I just can’t shake — especially as my wife and I begin our search to buy our first home.
If everything inside the home has drastically come down in cost, why are homes themselves still so damn expensive?
The Affordable Housing Crisis
Spend any time at all on CNN, Bloomberg, or The New York Times, and you’ll inevitably come across an article or two talking about the affordable housing crisis. According to a recent Wall Street Journal article, two-thirds of renters in the United States claim they cannot afford to purchase a home. And making matters worse is the rising cost of rent. In fact, Harvard conducted a study of major cities in the U.S., and concluded that nearly 50% of renters are considered “rent-burdened,” meaning they pay in excess of 30% of their income on housing.
The number of rent-burdened citizens in the U.S. in 1960? Just 20%.
Simply put, home prices are rising faster than wages in 80% of U.S. markets. And when you look closely at the numbers, this growth in price is pretty staggering:
Price of U.S. Homes (1970–2020):
Median Price of Home (1970): $23,600 ($157,575 in today’s dollars)
Median Price of Home (2020): $316,000 (a record high!)
Change: 101% increase in cost
Now, this increase in cost hasn’t been without its upsides. Homes have gotten bigger and better over this time span as well, with the median square footage hovering around 2,500 — quite a bit larger than the 1970’s median of 1,500 sq. ft.
But if you do the math on price per sq. ft., it still doesn’t add up:
Price Per Square Foot of U.S. Homes (1970–2020):
Price per Sq. Ft. (1970): $15.77 ($105.30 in today’s dollars)
Price per Sq. Ft. (2020): $126.40
Change: 20% increase in cost
Sure, houses may have gotten bigger and better, but so has the relative price. And if this trend continues, the gap between those who can afford a home and those who are stuck renting will only widen.
How TV’s Went from Every Manor to Every Man
In contrast to the 101% increase in home prices over the last 50 years, televisions have experienced a drastically different arc during the same span of time:
Price of Televisions (1970–2020):
Median Price 21” Console (1970): $500 ($3,338 in today’s dollars)
Median Price 32” Smart TV (2020): $139.99 w/ free delivery
Change: 96% decrease in cost
Television manufacturers have figured out a way to increase quality while simultaneously decreasing cost. It’s Moore’s Law, economies of scale, and the globalization of commerce all working together in harmony to create a better deal for consumers.
So, why can’t we do the same for houses?
The seismic shift in televisions over the last 50 years follows a blueprint similar to nearly every major electronic device. Much like the two other staples of modern life — computers and cell phones — components got better and cheaper year after year, which allowed manufacturers to increase quality while decreasing raw material costs.
But this is just part of the story. The real shift can be explained by these two images:
Sony Television Assembly Line — 1970:
Samsung Television Assembly Line — 2018:
Notice a difference?
In 1970, an assembly line meant an endless stretch of human labor. Today, it’s robots and computers driving the bulk of the work. The production of these devices reached a technological tipping point, where increases in output and decreases in costs were no longer measured in single or double digits year-over-year, but by massive exponential figures.
Of course, human labor is still involved in production, but the degree is significantly less than it was 50 years ago. Not to mention that the expansion of our global economy has meant that much of this manufacturing and labor has been shifted to countries with significantly lower wages.
Now, compare this with the shift in home construction:
Bricklayers — 1970:
Bricklayers — 2018:
Not much has changed, has it?
Unlike televisions, which have undergone major advancements in both the materials used and the way they are manufactured, most homes are still being built the same way they were 50 years ago: wood, stone, metal, and lots and lots of manual labor.
While computers and technology may have revolutionized the way architects design homes, manufacturers create the raw materials, and engineers test structural integrity, for a home to come together, it generally requires a bunch of men and women swinging hammers for weeks, months, or even years on end. And until the home construction industry finds a way to change this, the cost of homes will continue to rise.
But that change may be coming sooner than we think…
3D Printing: The Technological Tipping Point for Homes?
Several years ago, the first mass market consumer 3D printers hit the shelves, and most of us immediately relegated them in our minds to a fun gimmick. A toy. Something your nephew uses to print his own action figures at home.
While fun to watch them work on the local TV news tech segment, most have written off 3D printers as something with no real commercial value. Which is why it may come as a surprise to hear that these devices are actually being used to build some pretty incredible things, including:
3D printed heart valves created by scientists at Harvard
3D printed rocket components being used in space by NASA
3D printed bones being developed by the military
Oh, and did I mention 3D printed homes?
In 2018, ICON, an Austin-based startup, received the first-ever permit to print a home. And print they did, creating a 350 square foot home in just 48 hours. Total cost? $10,000.
ICON has already unveiled their newest 3D printer, the Vulcan II, which can print a 500 square foot structure in less than a day for under $4,000! And this is not some one-off prototype printer either — the company is already taking orders for the Vulcan II, with delivery to come in late 2020.
Needless to say, if this technology catches on, it could be the revolution that will do for homes what the technological tipping point has already done for televisions.
Why 3D-Printed Homes Will Change Everything
According to the National Association of Home Builders, the cost of raw materials and labor to build the average single-family home is $237,760. At an average of 2,500 square feet, this comes out to $95.10 per square foot to construct a traditional home (before factoring in the cost of land).
Let’s compare with the homes being printed by ICON’s Vulcan II 3D Printer:
Home Construction Price Per Square Foot:
Price per Sq. Ft. (Traditional Build): $95.10
Price per Sq. Ft. (3D Printing): $8.00 ($4,000/500 sq. ft.)
Change: 92% decrease in cost
For those keeping track, this 92% reduction in cost is nearly the same drastic change seen in televisions when they went through their technological tipping point.
Can you imagine how the world will change if the cost of home ownership plummeted by 92%?
Even if land prices continue to rise (which, considering the growing remote workforce and families moving away from city centers, might not be the case long term), how many lives would change if a plot of land and a brand-new house cost well under $100,000? Can you imagine the shift in home ownership percentage? The amount of people struggling to pay rent who would now be eligible to actually own a place of their own?
The shift would be absolutely staggering.
Of course, there are those that will be quite vocal against the trend. I don’t want a cookie cutter home! 3D printed houses are too small! Who wants this ugly beige box?
All understandable objections. But history has proven time and time again that these types of objections can be overcome.
Look at automobiles. At first, they were a custom-built luxury machines made exclusively for the wealthy (much like the first televisions and many traditional single-family homes). Then, Henry Ford came along — and through a technological tipping point — created a way to bring the machine to the masses.
Sure, many folks probably wished their Model T didn’t look the same as every other Model T on the road. But guess what? Savvy entrepreneurs (such as the Dodge brothers) shared this same thought, and used it as market validation to create a new line of cars with different options and styles. And within a few short decades, there were dozens of automobile manufacturers creating hundreds of different models each and every year…not to mention the whole industry of automobile parts and customization, which allowed owners to take their “cookie cutter” car and truly make it their own.
Sure, right now 3D printed homes might not feel like the castle of your dreams. But give it time, and this industry will develop the healthy competition and innovation that will allow each consumer to find the model that’s right for them…and at a fraction of what they used to pay for homes.
The New American Dream
That is the heart and soul of the American Dream, homeownership, the idea of being able to buy a house and start to build your family. -Wendell Pierce
The dream of owning a home is engrained in the American ethos. Unfortunately, the economic shifts over the last half a century have robbed two-thirds of citizens from this dream. The reasons are complicated, of course, but maybe they don’t to be.
Instead of focusing all our attention on wages and interest rates and other socioeconomic factors related to homeownership, what if we focused just a little bit more on the price of building the home itself? The cement, wood and metal that keeps us warm, safe, and ultimately, fulfilled.
The blueprint for success already exists. We’ve seen it with complicated machines such as automobiles, and complicated technology, such as televisions, computers, and cell phones. All that’s to left to do is adopt it to a new industry.
A country where everyone who wants a home can afford one. Now that’s an American Dream…
