California Can Succeed at Modular Housing Where Private Companies Failed by Providing Scale and Regulatory Support
Source: https://www.nytimes.com/by/the-ezra-klein-show. "Opinion | Tom Steyer’s Plan to Fix Modular Housing - The New York Times." May 12, 2026. www.nytimes.com
The Gist
Tom Steyer argues that modular housing can cut construction costs by 20% or more, but previous companies failed because they didn't have enough customers. California should step in to provide big orders and change regulations to make this technology finally work.
Conclusion
California state government can make modular housing successful and significantly reduce housing costs by providing guaranteed orders and changing building codes, where private companies have failed due to lack of scale and revenue
Premises
- Modular housing technology can reduce construction costs by at least 20% compared to traditional methods by manufacturing components off-site like cars
- Previous modular housing companies failed primarily because they lacked sufficient revenues and orders to achieve economies of scale
- The State of California has the power to change building codes and provide large-scale orders that private companies cannot generate on their own
- There are 40,000 permitted and zoned housing units in San Francisco alone that aren't being built because traditional construction costs make them unaffordable
- Manufacturing companies need consistent revenue streams and large orders to succeed, which only government-scale intervention can provide
Assumptions
- Government intervention can succeed where private markets have failed in modular housing
- The primary barrier to modular housing success is scale and consistent demand rather than fundamental technological limitations
- California's housing crisis is severe enough to justify significant state intervention in construction markets
- Building codes are a significant barrier that state government can effectively address
- Cost reduction estimates from modular housing companies are accurate and achievable with proper scale