The article discusses how Costco is entering the modular housing market in response to California’s complex building regulations. By leveraging recent reforms and specific legislation (AB2011) that allows for alternate review processes, Costco aims to construct around 400,000 square feet of housing while saving on labor costs by using prefab units. It highlights the broader implications of land use regulations and how they shape urban development, particularly contributing to the chronic undersupply of housing in American cities. The text emphasizes the interconnectedness of regulations and their impact on the physical landscape of cities.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Costco enters modular housing market | From traditional housing to modular solutions | Increased adoption of modular housing styles | Demand for affordable housing solutions |
| Regulatory reforms accelerate development | Bypassing lengthy public review processes | Streamlined project approvals become standard | Advocacy by YIMBYs for faster housing solutions |
| Labor cost savings through prefabrication | From on-site labor to off-site manufacturing | More businesses opt for modular construction | Economic need to manage construction costs |
| Urban regulations shape housing forms | From restrictive regulations to adaptable designs | Diverse housing shapes emerge in urban areas | Preference for innovative housing solutions |
| Modular designs become common in cities | From conventional to container-like architecture | Aesthetic shift in urban housing landscapes | Urbanization and demographic pressures |