crowdsourcing a solution to the UK housing crisis
The UK is facing a housing crisis. There is a severe shortage of affordable homes, and a whole generation is struggling to get onto the property ladder. This has terrible consequences: many suggest the whole crypto gambling mania derives from young peoples' perceived lack of a path to home ownership.
Politicians often talk about getting people on the housing ladder, but traditional solutions have failed to fix the problem. Rent control seems to be rearing its ugly head more and more. Ultimately, only supply and demand can fix the issue.
One of the main obstacles to increasing housing supply is the lack of skilled workers in the construction industry. 88% of UK construction firms have difficulty finding workers with the necessary skills. The construction workforce is ageing, and 40% of construction workers are nearing retirement.
Cuby Technologies is a company that is trying to address this crisis by revolutionising the construction industry. Their innovative solution is Mobile Micro-Factories (MMFs), self-contained factories that can be transported and set up anywhere in the world. These factories manufacture and assemble homes.
Cuby's MMFs rely mostly on unskilled labour, build customisable beautiful houses in 30 days at USD100/sf (the cost in UK is typically USD200-250). A home can be stood up in 30 days with 4 unskilled labourers doing the vast majority of the work, with final checks completed by highly skilled expertise. One MMF can be responsible for building homes in a 150mile radius, convenient for the UK where most of England could be within the radius of a single MMF.
Scaling up MMFs across the UK could massively reduce the cost of housing. Having said that, Cuby's goal of building 275 in the next ten years (across the US, not the UK mind you) will make a tiny dent on the housing issue in the West. With each MMF able to produce 200 homes per year, it would still only build 55,000 per year. For context, the UK has a current deficit of around 4 million homes. And that will only grow in the meantime.
The current political climate in the UK favours deregulation and increased housing construction, so the time for scaling up is perfect.
Capitalism is an efficient machine. In the UK, we should be doing everything we can to destroy the sclerotic planning processes hampering construction and signal to VCs that we will buy any MMF that Cuby can produce to support the company. If Cuby gets to scale, it could have a tangible impact on the UK housing market and we should create Advance Market Commitments that reflect that.
An interesting idea I'm playing around with is crowdfunding the 10million USD needed to purchase an MMF. This way, UK households could have an indirect way of getting on the housing ladder by gaining from the profits made by an MMF-centric construction firm. For example, the construction firm could take on a million of seed funding to pay for operations, sourcing of unskilled labour etc and then crowd-fund the USD10mln required for each additional MMF and take a cut of the profits.