I think this is bit misleading. Costco contracted with a builder for this particular store. If it works out, maybe they'll go with them for a second store, and then who knows?
But it doesn't mean Costco has become a builder, and the conditions resulting in the store being built in this particular way are local to some parts of California.
Comment is also a bit misleading. Costco contracts all of their products, or for a better on-topic example - their air conditioning installation.
It's the same with Home Depot. They don't "make" anything, they contract everything out (Home Depot-line tools, i.e. Ryobi, their flooring installations to some of the cheapest local installers, etc.).
An excellent unintended consequence of forcing builders into modular housing might be a much more robust modular housing market. Sort of like Tesla starting with higher cost Roadsters and Model S cars until there is scale to compete at volume. It would be terrific to see some productivity gain in construction, which as actually declined since 1987. See the Single-Family graph here: https://www.bls.gov/productivity/highlights/construction-lab...
It's worth also noting that despite the drama, Costco is not looking to lose money on these. So the apartments will be nice enough to rent. Nimbys tend to forget the discipline of the market, especially in their talking points.
Clayton, a leading single-family home builder, recently made big environmental news by deciding to convert nearly all of the 42,000 modern manufactured homes it builds annually to be certified ENERGY STAR and Zero Energy Ready Homes (ZEHR). These certifications mean that its manufactured homes will be much more efficient, save homeowners money on their utility bills (up to 50%) and provide premium energy-efficient appliances that are often considered unaffordable to the average family.
Clayton’s switch to ZERH also means nearly all of its homes now come with a heat pump water heater (HPWH), which likely represents the single largest procurement of HPWHs in the history of the technology. To put it in context, the entire HPWH market in 2022 shipped 141,000 units, and Clayton alone will increase this total by 30%!
So a compliant result that makes none of the involved parties truly happy and produces an outcome that no one would have ever asked for. California is very good at this.
The picture of modular housing isn't at all what this project is going to look like. Yes, prefab does add some constraints but you only produce a building that looks like a stack of shipping containers if that's what you want.
And, is this development really so bad? There's a bunch of additional housing created; Costco gets their store built; we have mixed use, where a lot of people aren't going to need to take a car trip to do their shopping.
It depends on how it's managed. If there _happens_ to be enough demand that people will accept it and pay a profitable rate, it might be just fine, but the cart is before the horse on this, so I wouldn't necessarily expect that outcome without other evidence to support it.
Not sure why whether Costco makes a profit on the housing is the crucial thing; perhaps they don't, and they're just ahead in that they got their store in place sooner.
Buildings that could have been beautiful and enrich the city and the lives of tenants will end up being stack of containers to bypass government imposed minimum wage and endless regulations.
No wonder why soviet union buildings looked like a bland block of concrete.
If this is not a cautionary tale on the dangers of regulation, I don't know what is.
Congrats to Costco for finding a trick and getting things done, despite the government.
That is not what happens in practice. Typically you get stick and stucco construction with flat roofs, picking the cheapest possible labor and construction materials, while putting on drywall and paint to make it look attractive for the 10-15 years it will last until termites and rot set in to the fragile bones.
But it fools most people, and if you're wealthy you're going to move to a newer area before that 15 years is up anyways.
I don't think the renders of the actual planned development look at all like a stack of containers.
That heritage will show inside, though: there's probably not going to be any rooms that are really wide. But modern apartments tend to not have too many of those anyways.
It's a bunch of identical one bedroom apartments, plus shorter studio versions and a corner version with an extra bedroom. The inability to make really wide rooms won't be missed. And the amenity sections do have lots of big rooms. So I don't think it will show.
Soviet Union buildings started looking like bland concrete on purpose when Khrushchev decided housing everyone was more important than Stalin's focus on appearances. The buildings of that era were meant to be temporary, and only remained because their economy failed.
There were many awful things about Khrushchev, but at least the housing policy appears to have been a genuine attempt at improving things for ordinary people. Even though the housing was poor quality and ugly, it was a step up when they were introduced.
The rendering of the Costco plan looks no worse than the typical 5-on-1 that gets built all over LA and would have been built with traditional methods.
How you're assuming that there is a difference in how it will "enrich the city and the lives of tenants" based on that render is beyond me.
You decry regulation in the same sentence you wish buildings were beautiful and life-enriching. You wildly overrate the style, comfort, and safety of stuff that gets built in countries without the sorts of regulations that the US has today.
> The rendering of the Costco plan looks no worse than the typical 5-on-1 that gets built all over LA
Probably in part because modular construction isn't uncommon with those 5-over-1s, it's not some hack specific to this law; surprisingly enough, most projects can't get away with paying below the local prevailing wage whether or not there is a specific law requiring it, so if modular construction enables a net cost reduction where there is a prevailing cost regulation, it's going to be a net cost reduction for most similar construction without the regulation, too.
> Congrats to Costco for finding a trick and getting things done, despite the government.
Getting housing built is the purpose of the law; modular construction is a common way to build in urban California even where the builder isn't using this law, and still involves local labor (the modules don't assemble themselves) to which the prevailing wage requirement applies.
There's no trick here, they are doing exactly what the state government was trying to get done when it wrote the law bypassing local government power.
Also, prefab units are not a new thing. They're common in Japan and I remember my dad mentioning the low-rise apartment he bought in the early 90s (not in Japan) being prefabbed by a Japanese company
Actually it seems to make most people quite happy?
Costco seems okay with it. Housing gets built that circumvented the NIMBY's. The development is mixed use with a grocery store in walking distance instead of driving distance. Local labor gets paid an appropriate amount instead of being undercut by illegal labor (a HUGE problem in California). And it's not like current 5 over 1 construction is particularly aesthetic.
I find it interesting that this is on strongtowns, in that this kind of mixed use is in the exact realm of what they promote.
I suspect Costco, being a "big box/warehouse", is squarely in their crosshairs; combine with any purported anti-union activity and they're quite willing to run an article that deliberately distorts what the housing is going to look like.
Tell me more. I was only aware of california being good at rent seeking the technology hub created there by the federal government and people chasing nice weather.
I'd be perfectly fine with modular homes if they were any cheaper than traditional construction, but they're not. It really makes no sense at all for anyone other than remote/rural builds.
What about the part where factory-constructed housing is more consistent and higher quality than site-constructed? If I ever build custom, I'd love to use prefab panels, at least.
>What about the part where factory-constructed housing is more consistent and higher quality than site-constructed? If I ever build custom, I'd love to use prefab panels, at least.
That's kind of my point. Modular is mostly a design/aesthetic/quality choice for people who can afford it. You would think that the entire purpose would be affordability vs. onsite with the huge labor savings. But these things are so marked up it ends up being pointless in that regard.
Hm I wonder why they’re so marked up, any idea? Maybe because the transportation is less efficient because the panels/modules pack less densely than a pile of 2x4s and sheathing?
Lets hope Costco actually gets into the home building business and offers dozen packs of homes with a Super Premium Membership, $1000/year. Like they do with Chicken.
"But there’s another reason the birds have remained so affordable. In 2019, Costco made an unprecedented move to source its chicken at even lower margins: It set up its own feed mill, hatchery, and slaughter plant in Nebraska, and contracted nearby farmers to raise over 100 million birds each year, all under the name Lincoln Premium Poultry (LPP). It could be saving the company up to 35 cents per bird."
I've worked in the trades off and on since the 90's and modular construction has always been superior to stick built in terms of build quality. Why this style of construction gets lumped in with manufactured housing (trailers) is an enduring mystery to me.
Actual article: https://www.urbanproxima.com/p/the-costco-of-housing-iscostc...
More discussion: https://news.ycombinator.com/item?id=40686048