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00:04In the far north of Sweden, the marvels of modern manufacturing are on full display.
00:09This looks more like a factory than a housing site.
00:17I hope so. Otherwise, we would have been failing.
00:20Here at Lindbeck's, 500 miles north of Stockholm, houses aren't built piece by piece.
00:26They roll off an assembly line.
00:28The company produces roughly 40 units a week, a rarity in an industry known for drawn-out timelines.
00:35In Sweden, nearly half of single-family homes and about 20% of all residential buildings are built this way.
00:42International visitors, when they come to talk to you, what do they say about their own situation?
00:48What brings them here?
00:49They say the price is too high.
00:52It's too costly to buy a home, to rent an apartment.
00:56And they come to us to see if our way of doing it is the solution or part of the
01:02solution.
01:03Housing affordability.
01:05It's a growing concern that unites Americans on both sides of the aisle.
01:08America will not become a nation of renters.
01:11We're not going to do that.
01:13You don't have to be in Congress to understand how badly we need to bring down the cost of housing.
01:20And people on both sides of the Atlantic.
01:23This is more than a housing crisis.
01:26This is a social crisis.
01:29Apollo's Housing Affordability Index shows that buying a home in the United States hasn't been this difficult since the 1980s.
01:36Over the past decade alone, home prices have doubled.
01:39And those who can afford to buy are significantly older.
01:42In 2010, the median age of all U.S. homebuyers was 39.
01:47Today, it's 59.
01:49The median age of a first-time homebuyer has also climbed to 40.
01:53It's a dynamic that Beata Karanchi, chief economist at TD Bank Group, has spent much of her career analyzing.
02:00Housing.
02:01A huge preoccupation.
02:04How important is it?
02:06It's important on a couple of levels.
02:07It's a large share of the economy in terms of workers it employs, in terms of output.
02:12So it's a large contributor.
02:14And then it's important because it's probably the most important thing people think about when they think about affordability.
02:19Lifestyle, ability to pay for rent, or home ownership.
02:23So I know what myself, when I'm out speaking with our clients, I think it's like the second or third
02:27question that comes up.
02:28It's about whether their children will be able to afford a home and what that outlook looks like.
02:33When it comes to housing affordability, the issue comes down to a familiar equation.
02:38Supply versus demand.
02:40Purchasing power on one side, production constraints on the other.
02:43You have pointed to astonishing lack of productivity in the construction sector.
02:49What's going on there?
02:51It's beyond lack of productivity.
02:52It's regressing.
02:54What we find is it's contracting.
02:57So to build a home, it actually takes more resources today than it would have taken 10 years ago.
03:04And so that's the disturbing aspect.
03:06Some of that is being related to the regulatory environment, the difference in standards and fees and permitting.
03:13So there's definitely a factor there.
03:15And the other factors that are being attributed to is in the residential sector.
03:19It's largely a small company game, which means they often have 50 employees or less.
03:26And from that perspective, they're going to be slower to adopt innovation.
03:29And there's a very high reliance on doing things the same old way, manual processes.
03:35One innovation that could help break that pattern is what Linbex is doing in Sweden, building homes in factories instead
03:42of on site.
03:42And while modular housing production does exist in the United States, it still makes up only about 3% of
03:49new single-family home construction.
03:51So to what extent is modular housing, prefab housing, a solution to productivity challenges in the housing sector?
03:58Yeah, it's been cited as having some clear advantages and potentially lowering the cost of housing by 20 to 30%.
04:08That productivity advantage shows up most clearly in multifamily housing.
04:12Linbex specialty.
04:14It's pretty much like if you go to automotive industry.
04:17You see machinery, you see people, you see processes, and you see computers and robotics and material and so on.
04:24So we produce housing very like other organizations produces cars.
04:30We do it indoors, year-round, eight hours per day.
04:34If I'm a potential client of yours, what are the financial benefits of buying a home from you rather than
04:41having someone build my building on site?
04:44The first thing is cost for money.
04:46With our process, you pay very late in the process.
04:50So the interest cost is lower.
04:53Traditional build, you pay for the foundation, you pay for the structure, you pay for the roof and blah, blah,
04:58blah.
04:58So you end up with having quite high cost for the interest.
05:04And you pay very late with our method.
05:06The second thing is the engagement as a customer in the process.
05:10You don't need to supervise a car manufacturing.
05:13You don't need to supervise a housing done in the factory.
05:16For all the cost advantages that come with manufactured housing, it has also met with resistance.
05:22Something I myself encountered when advocating for its use while serving in the Canadian government.
05:27One of the policies the Prime Minister campaigned on was building modular housing.
05:32That is a way to get more homes built faster.
05:37I've had people heckling me in the House of Commons in Canada saying, oh, you want everyone to live in
05:42a trailer park.
05:43Is there sort of a stigma about prefab housing?
05:47I think so.
05:48And there's some factors.
05:50Prefab, you need wood frames, for example.
05:52And so some people will be, oh, the quality of the construction isn't as good.
05:57Or I want to put my personal stamp on it, which you can in prefab, especially with 3D printing and
06:03other factors in terms of technology.
06:05It's not like it was 10, 15 years ago.
06:07So part of it is the stigma, and part of it is making sure you have the right skills to
06:14do this, right, to make these design changes and to do it in an economical way so that people don't
06:20feel like it's all a cookie-cutter factor coming through, right?
06:24So, you know, it's breaking through that mentality of what prefab meant.
06:30It's not just buyer resistance that can be a challenge for manufactured housing.
06:34It's also the need for steady demand in an industry that is notoriously cyclical.
06:38We try to maneuver to have a backlog that is about one year.
06:43We can be one year ahead of what's happening.
06:46And one year is, for us, it's a good time to have the backlog that long.
06:51But you need to take in consideration customers who have to wait for one year before we can hand over
06:58the next project.
06:59And if we see the market going down, we need to address other kind of products so we can fill
07:05the production flow with projects.
07:08And then there's the issue of regulation, something not unique to North America when it comes to home building.
07:14Elisabeth Svanteson is finance minister of Sweden.
07:17Everywhere you go, certainly in the Western industrialized world, housing, especially the ability of young people to afford a home,
07:26is a pressing political issue.
07:29It's something you and I talked about as finance ministers.
07:31Yeah.
07:32How big an issue is it here in Sweden?
07:34It's a big issue, especially in bigger cities.
07:37Many young people feel they don't really can afford to move quite early.
07:41But it's difficult to afford it because the prices have risen so, so much.
07:46One of the largest problems in the housing market is it is over-regulated.
07:52So rules added, rules added, new rules all the time.
07:55And that makes it difficult and very expensive to build.
07:58Tell me a little bit about what you've done on cutting red tape.
08:01Many rules have been added and probably good purpose for every rule.
08:06But all the rules make it very expensive to build.
08:10So that's why we are really trying to do, like, now you can build, like, a Swedish house, a small
08:15house.
08:16It's not so regulated at all.
08:18It's small, but you can live one or two in the house.
08:21So you can come in.
08:22So you can have your own home.
08:23And governments aren't alone in grappling with how to build more and build faster.
08:28Wall Street is, too.
08:29It's increasingly seeing affordable housing as both a need and an opportunity.
08:34J.P. Morgan plays a really big role in affordable housing.
08:37It is part of our mission.
08:39Just to give you some statistics, I think in 2025, we lent and invested $10 billion towards the new construction
08:47or preservation of about 60,000 units nationwide.
08:50Sharmie Saban leads Community Development Banking at J.P. Morgan, overseeing investments aimed at scaling affordable housing solutions.
08:58And increasingly, that includes modular construction.
09:02Time is money when it comes to construction.
09:05It costs money to build.
09:07It costs money to carry a loan.
09:09And if there's ways to make it shorter, you're going to save money.
09:13And when something is cheaper to build, it's going to be more affordable for the person that is ultimately renting
09:18or going to own the building.
09:20I mean, with modular housing, for example, units are built in weeks.
09:24They're put online in months.
09:25I think when you're doing ground-up bricks and mortar, it takes months or years to get a building online,
09:31depending on where you are.
09:32But the cost of building or manufacturing housing is only one part of what goes into making a home affordable
09:38or not.
09:39They're all linked.
09:41The cost is one piece.
09:42The interest rates are one piece.
09:44The regulations, the local zoning codes, if you're allowed to build multifamily here versus just single family, all of that
09:52leads to the constraints.
09:54I think what is great right now is that there is a lot more focus on this at the federal
09:59level and at the state level.
10:01I know they're looking more closely at how to ease some of those supply constraints and look at it more
10:06streamlining of building, creating a national building code, building a code for modular housing to help chip away again at
10:13some of these challenges that make it harder to bring units online.
10:17Modular construction could reshape parts of the industry, but even its most vocal advocates caution against viewing it as a
10:24silver bullet.
10:25So, 10 years from now, 20 years from now, do you think most homes are going to be built in
10:32factories?
10:32No.
10:34Should they be?
10:35No.
10:36I don't think so.
10:39Maybe 50 to go 100 percent, I think we would lose so much of the building organization skills.
10:48And I think we need to see in different products, different way of producing things.
10:56We need the challenge to be better.
10:59If everybody would do the same, where would the challenge be then?
11:03Modular construction may never fully replace building houses one at a time on site, traditional building.
11:10But few major industries have changed so little over the past half century.
11:14While manufacturing, logistics, even farming have reaped enormous productivity gains from automation and technology, home building largely hasn't.
11:23In a moment defined by shortages and a lack of affordability, the debate may be less about finding a perfect
11:29solution and more about whether an industry under this much pressure can afford to keep building the way it always
11:35has.
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