I wanted to get a better sense of what the arc of construction automation looks like over time: what things had been tried when? What worked, and what fell by the wayside? To do this, I used AI to trawl through thousands of old issues of digitized construction trade journals going back to the 19th century, looking for any example of a construction task being automated.

My main takeaway is that successful construction automation basically falls into two categories. One is construction-related tasks that can be done off-site in a factory: this includes things like steel fabrication, precast concrete, window and door manufacturing, and so on. The other category is on-site tasks that are, or can be made to be, extremely factory-like: they can be done by a machine moving along a simple path, doing some repetitive motion over and over again. Historically, almost anything outside these two categories hasn’t succeeded.

Method

I started by downloading every back issue of Architectural Forum (950 issues) and House & Home (370 issues) on USModernist, and every back issue of Engineering News-Record (4,300+ issues) available on archive.org. These are trade journals that cover various aspects of the construction industry, including construction practices and methods, and cover the period from the mid-19th century up to the early 1980s. I then had Claude (Opus 5 Max) search through these issues and flag any instance of some construction task being automated. In addition to this, I also had Claude do a more general web search for examples of construction automation, which included things like looking through the archives of the International Association for Automation and Robotics in Construction (IAARC).

The purpose of this wasn’t for data analysis: I wasn’t counting the number of cases by year or by category, or anything like that. This was purely an existence survey so I could see what sorts of things had been tried and were promising enough that they made it into a trade journal.

As usual with a task like this, the results will be a function of what definitions you choose to operationalize the terms in your prompt. By “automation,” I mean something like “a machine does some substantial portion of a task without requiring human direction.” So this is distinct from “mechanization” or “industrialization,” where a machine is used to reduce the labor required to do some task, but that machine might still require continuous direction or direct operation from a human operator. So something like a power tool or a crane wouldn’t count as automation, because in both cases each individual movement/action of the machine is orchestrated by the human as the work is being done. A bricklaying machine that automatically placed individual bricks without a human operator directing it brick by brick, on the other hand, would count as automation.

Like most definitions, this one gets fuzzy around the edges. In practice most automated systems require some degree of human oversight while they’re running, and whether that oversight counts as “directing individual movements” can be something of a judgment call. So I’d consider a road-paving machine that automatically lays down asphalt “automation,” even with a human driver monitoring the machine continuously. But something like a ride-on concrete finishing machine seems much more borderline, since that seems to require a lot more human direction on a second-by-second basis.

Factory methods

If some construction task can be done outside an actual construction site, in a factory or factory-like environment, there’s a very good chance that, like any factory task, it can at least be partly automated.

An early example of this is concrete batch plants. Through most of the 19th century, concrete was mixed manually by workers with shovels, but by the late 19th century concrete mixing started to be done by machine, and during the first half of the 20th century these became more and more automated, with things like automatic cement weighing, automatic water dispensing, and so on. On the Hoover Dam, for instance, concrete batching was “completely automated.”

Steel fabrication is similar. Steel sections are, of course, a factory-produced product and always have been, and it’s not much of a leap to turn raw steel elements into building components at the factory and to partly automate those tasks. Machines to do tasks like automatically drilling holes in steel beams, automatically welding pipe seams, and automatically painting steel sections started to appear in the late 19th century and remain widely used today.

More generally, essentially any building material — steel, brick, concrete block, plywood, drywall, shingles — will be produced in large volumes in a factory and thus various portions of the production process will be automated.

Concrete, as we’ve noted, started out as a site-produced material but eventually had its production moved off-site. We see the same trajectory with other building components. Windows and doors, for instance, used to be fabricated on-site, but those are now produced in off-site factories with many of the assembly operations automated. Floor and roof trusses were similarly originally site-produced components but are now mostly made in off-site factories with varying degrees of automation. A typical truss factory will automate the cutting of the various wood sections and the pressing of the truss plates, and some truss factories have even higher levels of automation.

Precast concrete is another factory-produced building component: large concrete elements like beams, walls, and columns are manufactured in an off-site plant, then trucked to the jobsite and assembled there. Precast manufacturing doesn’t necessarily have a great deal of automation, particularly in the US, but it can be highly automated.

This is, of course, part of the reason there’s been so much historical interest in prefabricated construction: once you move the actual construction process into a factory, you can potentially automate large fractions of it, achieving (it’s hoped) labor and cost savings. While sometimes prefabricated construction is merely conventional, labor-intensive construction done inside a warehouse, other times the process is highly automated. Levitt and Sons built a highly automated prefab plant as part of Operation Breakthrough in the 1970s, and today companies such as Autovol in the US and Gropyus in Germany run partly automated plants.

On-site continuous processes

The other category of successful automation is on-site tasks that can be made factory-like: a simple, repetitive motion, done over and over again as a machine moves along a simple path.

A lot of the examples in this category involve concrete or asphalt. Concrete is a good candidate for this sort of automation because it’s a thick, viscous fluid; it can be squeezed into the shape of some particular container and then maintain that shape when the container is removed. So you have things like automatic concrete slipforming machines, which extrude a layer of concrete as they advance forward. Oriented horizontally, these can be used to make things like curbs, trenches, and sidewalks. Oriented vertically, these can be used to make vertical concrete structures (though I believe vertical operation is somewhat less automated).

We also see this sort of “automatic extrusion machine” for metal. Gutter-making machines are basically portable roll-forming machines: they take in sheet metal from a coil and shape it into gutters. Similar portable machines exist for metal roof deck and metal siding.

You also see this sort of automation used successfully in the construction of horizontal, continuous infrastructure. Roads, for instance, are paved with a series of specialized machines called a paving train. Working together, the machines work in sequence to rip up and roughen the existing surface of the road and then lay down a new layer of asphalt.

Parts of railway construction can similarly be done by a series of automated machines. Maintenance tasks — things like replacing worn-out railroad ties and tamping ballast — in particular seem to be highly automated. Since the rail is already in place, this machinery can be rail-mounted, performing its various specialized tasks as it moves along the track.

Tunneling is similar. Historically tunnels were done by hand, but around the turn of the 20th century tunneling began to be done by self-propelled boring machines.

Everything else

From what I can tell, up through the early 2000s (and even into the 2010s), almost everything that didn’t fall into the two categories (tasks that can be done in an off-site factory, and tasks that can be done in a factory-like way on-site) didn’t succeed.

Automatic bricklaying machines are the classic example of unsuccessful automation here. As I noted in a previous essay, these sorts of machines have been tried over and over again since the early 20th century, and historically none of them succeeded.

Automatic setting of bricks or concrete blocks seems like it would be the perfect construction task to automate: it’s both physically strenuous and extremely repetitive. But in practice, the task isn’t quite simple and repetitive enough to build a machine to easily do it. Spreading a layer of mortar, and then placing a brick on top of it, while ensuring that both the individual brick and overall wall remain straight and level turns out to be hard to do with a uniform, repetitive mechanical motion: in practice the bricks often end up slightly askew, requiring small, individual adjustments to the bricks to make sure that the wall is being built level. Making nice, smooth mortar joints similarly isn’t easy for a machine to do. SAM, the Semi-Automated Mason manufactured by Construction Robotics, required masons to follow behind the robot to finish the joints and occasionally level bricks that were set askew. Fastbrick Robotics’ Hadrian block-laying robot avoided these problems entirely by using a custom adhesive that doesn’t require spreading a layer of mortar.

Brick walls also often aren’t repetitive enough in the sense that they rarely consist of long, uninterrupted runs of uniformly placed brick. Walls are often short, they have window and door openings, they have joints, they have corners and jogs, and various other deviations from uniformity. A simple machine doing a purely repetitive motion, or even a robot with a greater degree of flexibility, can’t easily handle these sorts of deviations, and historically bricklaying machines needed to be manually readjusted by a person whenever they encountered one of these situations. The SAM bricklaying robot really only worked well on very long, uniform stretches of wall; because it couldn’t turn corners or even set bricks at the end of walls, it needed to be set up fresh at every new wall, which took time and effort.

This sort of difficulty is very common with construction automation. Often there’s some repetitive task that can be automated, but it’s not quite repetitive enough to make it worth setting up some machine to do it. If a person has to manually reset a machine every few minutes and move it to a new area, that’s often not any easier than simply having a person do the task. Builders tried automatic welding machines on jobsites as early as the 1930s, for instance, but you don’t see many such machines used today: buildings rarely have long, uninterrupted continuous stretches of welding that would make such a machine worth it.

Similarly, tying rebar — wrapping a thin wire around two pieces of rebar to tie them together — is simple enough to be automated, but historically it hasn’t been quite repetitive enough to field a dedicated machine for it. (In my experience, it’s often not repetitive enough to even give workers power tools that can do this.) Even today the calculus appears pretty unfavorable: Advanced Construction Robotics started offering the TyBOT in 2020, but you only ever see it demonstrated on concrete bridge decks, which have very large expanses of rebar to tie. (It also has a rebar-placing robot, IronBOT, but not only does this also require large expanses of rebar to make sense — its website states that “[s]etup requires planning and coordination due to the IronBOT’s size and capabilities” — but the actual automation is fairly thin, requiring a human to constantly feed it individual bars.)

The lack of sufficient repetition, combined with difficulty in making a construction site “factory-like,” is what doomed Japan’s push to develop construction robots at the end of the 20th century. Starting in the late 1970s, Japan undertook a major effort to develop all manner of construction robots — column-welding robots, fireproofing-installation robots, wall-painting robots, and so on. By the 1990s, over 100 different types of construction robots had been developed. As I noted in a previous essay, while these systems often worked, they generally weren’t particularly productive:

Though the robots could often perform their tasks extremely efficiently, they required a great deal of setup and teardown time, and often encountered difficulties in buildings that hadn’t been specifically designed to accommodate them (such as narrow spaces that the robots couldn’t reach). They also had trouble dealing with the somewhat unpredictable nature of a conventional construction site — their need to work uninterrupted, combined with safety limits on how closely workers could approach, tended to constrain the rest of the construction process. And even when tasks could be completed faster, it often meant that the bottleneck just shifted to some other part of the process…

To try and overcome these issues, Japan’s largest contractors tried to make jobsites as factory-like as possible. They created huge “skyscraper factories,” huge climbing platforms that would build a skyscraper floor by floor with the aid of all manner of construction robots. But this failed to solve the problem:

The long factory setup time made them impractical for smaller buildings, and even on buildings that were large enough, extensive upfront design and coordination was required to design the building for robotic assembly. In some ways, the move from single-task construction robots to fully automated construction sites just shifted where the difficulties occurred — instead of a long setup (and takedown) time for each individual task, now you had one enormous and costly setup over the entire first portion of the project.

Future

Historically, construction automation has been successful on certain types of tasks: tasks that can be moved off-site into a factory, or tasks that are simple and repetitive enough that they can be done in a factory-like manner on-site. Automation outside of these areas generally hasn’t succeeded. Often this is because the task isn’t quite simple and repetitive enough: while you can build a machine to do it, the time and effort it takes to get the machine set up and doing the work, and orienting the jobsite to accommodate it, obviates any advantage you get from the automation.

I think, however, that we’re on the cusp of this changing.

This historical pattern we’ve observed is, in large part, a technological limitation. For most of history machines have had, at best, very narrow information-processing abilities: they were limited in what they could sense about their environment, and the extent to which they could modify their actions based on that information. Often they simply did the exact same motion over and over again regardless of the circumstances. When they could modify their behavior based on environmental feedback, it was in very limited ways. Without robust information-processing abilities, automation is limited to being done in a factory (where you can break apart your task into a series of small tasks, each one done by some particular machine) or to processes that are naturally factory-like.

The history of welding automation provides an example. The earliest welding machines were fixed automation: they performed some specific welding motion — such as welding the seams on pipes — over and over again. Starting in the 1960s, welding began to be done with robots: now instead of needing to build a new machine, you could simply reprogram the robot, feeding it a different sequence of actions to take. But that sequence was still dependent on a human programmer to determine.

Over the next several decades robotic welding gradually accumulated information-processing abilities: by the 1980s a welding robot had a limited ability to determine its position with respect to the weld and modify its actions accordingly. But the scope of this ability was very narrow: a welding robot could do things like measuring the electrical conductivity through the weld to determine its position, but not anything more complex:

They couldn’t compensate for things like a clamp that impeded the path of a robot, or a part that was too dirty to weld properly, or a part that was oriented vertically instead of horizontally, or any of the other thousand things that a manual welder could automatically adjust for.

Thus even automated robotic welding required a fairly repetitive set of tasks to be worth the time and effort it took to set up.

But this technological limitation is changing, and we’re getting machines that have far more robust information-processing capabilities. Modern automation is increasingly capable of being given a set of instructions and figuring out what actions it needs to take, step by step, to achieve them. This is, in large part, due to modern AI technology: if you feed some AI model a huge amount of training data, you can get something that responds effectively in different situations — a self-driving car that navigates a route and a traffic pattern that it’s never observed before, an LLM that answers a question that it’s never seen before, and so on.

This changing constraint is reflected among the emerging set of construction automation startups. There’s a new crop of construction automation startups that are leveraging modern AI technology and are getting traction and raising large amounts of funding. Roughly half of the VC funding for construction robot startups has gone to companies founded post-2022, and most other large funding rounds for construction robotics have been post-2020. (And this doesn’t include the enormous amounts of funding that have gone into more general-purpose, non-construction-specific robots, like Figure.) It’s increasingly becoming possible to automate construction tasks that were previously resistant to it, and I only see this trend continuing.

It’s not clear to me exactly what form this will take: will we see an army of Optimus robots on construction sites capable of a broad array of tasks, or will it be a bunch of special-purpose robots like Dusty and Canvas and Rufus? I suspect that regardless of how it develops, the future of construction automation does not look like the past.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at SpaceX’s turbine blade factory, Fervo’s deal with Google, Delhi’s cheap metro, why recycling is overrated, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing and Cities

Claims that increased immigration raids on residential construction jobsites are straining US homebuilders. “In some markets, homebuilders say the impact has been significant; in others, it has been an existential threat to their ability to continue operating as businesses, complete homes, and repay construction loans.” [HousingWire]

YIMBY in Practice on the different strategies states can use to pre-empt local control over housing construction in the hopes of getting more housing built, and how likely they are to succeed. “The hierarchy is clear. Whatever policy gives the state the most power over housing tends to be the best. Whatever policy gives the local governments the most power tends to be the worst. The trouble is that what’s good policy is not always good politics. State preemption bills are often the most difficult for pro-housing legislators to pass. And in the heat of negotiations, they often end up somewhere in the middle of the spectrum. Preserving local discretion may not be a good idea, but it’s often what is needed to get a bill to pass.” [YIMBY Action]

The Free Press on four decades of attempts to build a gravel road between a remote Alaskan town and an runway 18 miles away, and the environmental activists who keep opposing it. [The FP]

Surprised I hadn’t heard of these before: “Costco doors” are doors that homebuilders put between the garage and the pantry to make unloading groceries easier. [X]

Manufacturing

Not satisfied with the 100% tariffs, an alliance of several major automakers, including GM, Ford, Toyota, Honda, and Hyundai, want congress to ban import of Chinese cars completely. [Reuters] And China is exporting so many cars that it’s straining global supplies of car carrier ships. [Freightwaves]

SpaceX is apparently building a turbine blade factory to help get gas turbine power plants for AI data centers online more quickly. Turbine blades are famously complex, but rockets have a lot of turbomachinery — turbo pumps are used to pump fuel into the motor — so this isn’t a completely wild jump. “According to the outlet’s account of the Morgan Stanley report, the foundry would supply single-crystal nickel superalloy parts to both the turbopumps powering SpaceX’s Raptor engines and to natural gas power turbines.” [QZ]

Energy

The US continues to install a lot of battery storage: between April and June of this year, US grid energy storage capacity increased by about 10%. [Canary Media]

Also on the subject of batteries, consumers are starting to use home battery storage for energy arbitrage: buying power off the grid when it’s cheap, and selling it back when it’s expensive. [Bloomberg]

Enhanced geothermal startup Fervo signs a deal to supply 396 megawatts of power to Google for a potential Utah datacenter. [Fervo] (I haven’t been tracking Fervo since the IPO, and was surprised to see its stock down about 50% since it went public.) [Yahoo]

While US shale oil output was growing steadily for many years, for most major US shale basins production has now flattened out. [X]

Nuclear reactor startup Oklo had a hybrid power project (combining nuclear, fuel cells, ans gas generation) dropped from a PJM interconnection planning process; PJM claims that that the “company never showed the project could ride through a sudden drop in grid voltage.” Oklo has filed a complaint with FERC to get the project reinstated. [Utility Dive]

Read more

This is my third and final essay looking at the 21st Century ROAD to Housing Act, and how it’s likely to affect housing supply. As I’ve noted in my previous two essays, this is a sprawling piece of legislation, with 59 sections spread across 12 different “titles.” So far we’ve looked at Titles I, II, and III, which together contain 24 individual sections. In this post, I’ll look at the remaining nine titles of the package. There are a lot of sections (35!), but many of them don’t apply to housing at all, and as with earlier titles the major potential impacts are concentrated in a small number of sections (chiefly sections 501, 502, 1001, and possibly 504).

Title IV — Accessing the American Dream

This title contains five sections, and while all of them are related to housing in some way, none of them are likely to have a major impact on housing supply.

Section 401 — Creating Incentives for Small-dollar Loan Originators and Section 402 — Small-dollar Mortgage Points and Fees. These two provisions require the Consumer Financial Protection Bureau (CFPB) to study how mortgage loan compensation practices (401) and points and fee thresholds (402) affect the availability of small-dollar mortgages. As we noted when we looked at section 105, small-dollar mortgage availability is a real problem, but all this requires is for the CFPB to study the problem. Conceivably this section could have some impact down the line if these studies inspire further action, but on its own this does nothing except create some reports.

Section 403 — Appraisal Industry Improvement Act. This section loosens various restrictions on appraisers (such as what credentials FHA appraisers need to have), changes some education requirements, and provides some grants for training more appraisers. These changes might help expand the effective size of the appraiser workforce, making it easier or cheaper to get an appraisal (and potentially reducing disparities in home valuation), but it’s not something likely to have any real impact on housing supply.

Section 404 — Helping More Families Save Act. This section modifies the Family Self-Sufficiency (FSS) program, a sort of savings program administered by HUD. When a family is living in HUD-subsidized housing, they pay 30% of their income in rent, with HUD covering the balance. So if rent for an apartment is $1,500 a month, but 30% of a family’s income is $800 a month, HUD will cover the remaining $700.

Normally, if the family’s income increases, they will still pay 30% of their income, so any rise in income also increases rent. With the FSS program, if a family’s income increases, the extra money paid in rent gets put in an account, which then gets returned to the family after several years if they meet certain requirements (such as being employed). This change creates a pilot for a modified version of this program that removes some of these requirements, and makes the program “opt-out” rather than “opt-in.” So this is in essence an experiment to test how a modified version of this savings program might work, but not something that will have any sort of housing supply impact.

Section 405 — Choice in Affordable Housing Act. This section modifies inspection requirements for federally subsidized housing, basically eliminating the inspection required before a family moves into a unit if it has been inspected in the previous 12 months as part of certain other federal housing programs. It also allows new landlords to request advance inspections. This eliminates some of the hoops that need to be jumped through when a family moves into a subsidized unit, but it’s not something that will have any housing supply impact.

Title V — Program Reform

This title contains five sections, all of which modify existing housing programs in some way. Out of Titles IV through XII, this is the only one that has some provisions that might meaningfully increase housing supply.

Section 501 — HOME Investment Partnerships Reauthorization and Reform Act. This section reauthorizes the HOME Investment Partnerships program and makes some tweaks to how it works. HOME is sort of like Community Development Block Grants (CDBG); it’s a big pot of money ($1.25 billion in 2025) that HUD gives to various jurisdictions to use on various projects. The difference is that while CDBG has historically not been used to build new housing (until changes in this bill), HOME has specifically been funding for affordable housing. As I understand it, HOME funding often gets used to bridge the funding gap on LIHTC projects.

The reauthorization is interesting: technically HOME’s authorization expired in 1994, but it has had funds appropriated every year since then anyway, so the actual impact of the reauthorization is not amazingly clear to me.

The biggest tweak in how it works now is the addition of some NEPA exclusions. Infill construction and projects of up to 15 units (up from four units previously) will now be exempt from NEPA review. Other tweaks include allowing HOME money to be used for certain non-housing things (such as sewers or sidewalks near HOME projects), changing the income requirements for subsidized tenants, and so on.

My takeaway is basically the same as the NEPA modifications in section 206 of Title II — a nice bit of streamlining that probably does not move housing supply much:

It doesn’t change the amount of funding for these projects, but it could make some of that funding stretch slightly farther if folks don’t need to take the time and effort to do an environmental review. And it also might just make folks more willing to do these sorts of projects. But the bigger impact is probably just significantly reducing the permitting difficulties for HUD-funded housing projects, making it easier to build them.

Section 502 — Rural Housing Service Reform Act. This section makes a bunch of tweaks to the USDA’s Rural Housing Service program. As we noted previously, the USDA has historically had significant involvement in rural housing construction and since 1950 has funded the “construction, purchase, or repair of over 5.5 million rural housing units.”

The list of changes section 502 makes to this program is long and complex (this section goes on for 10 pages of text in the act), but as far as I can tell the most consequential change is to how some USDA-subsidized rural rental housing is funded. These units were subsidized in two ways. First, the USDA would provide a subsidized loan for the actual construction of the rental property (this is called a Section 514 or Section 515 loan, depending on the type of housing). Second, the USDA would cover the difference between the subsidized rent (typically 30% of a tenant’s income) and the full rent of the unit.

Historically, these two sources of funding were coupled: when the mortgage was paid off, the USDA would stop subsidizing rents. Section 502 of the ROAD to Housing Act makes it possible to decouple these funding streams: once the mortgage ends, the rent subsidy can remain in place. (There has been a pilot program for this since 2024, but it was initially limited to 1000 units.)

There’s a fairly large pool of units that this change will apply to: the USDA has around 400,000 apartment units; 80% of them rely on rent subsidies; and on the order of 137,000 units will have mature mortgages by 2034. So this change will keep a lot of subsidized housing units around.

For most of these units, “keeping them around” means “keeping them subsidized,” not “keeping them in the housing stock.” In the absence of this legislation, for most of these units the owners would probably either refinance the mortgage before it expires (thus keeping the rent subsidies) or convert the units to unsubsidized housing. But some fraction of them might have their mortgage expire, lose their subsidized renters, and then stop being maintained, so this change could potentially keep a chunk of these USDA housing units from falling out of the housing stock.

Section 503 — Incentivizing Local Solutions to Homelessness. This section modifies a federal homelessness program, Emergency Solutions Grants (ESG), which is designed “to assist people with quickly regaining stability in permanent housing after experiencing a housing crisis and/or homelessness.” ESG gives jurisdictions money for various homeless programs/efforts, but has constraints on how much money can be spent on certain things. This change allows someone to request a waiver for some of those constraints, specifically “emergency shelter activities and street outreach.” Nothing here will affect housing supply at all, unless you have a very expansive definition of housing that includes homeless shelter beds.

Section 504 — Reforming Disaster Recovery Act. This section authorizes the CDBG Disaster Recovery program for three years and makes some tweaks to it. The disaster recovery program, as the name suggests, is a chunk of CDBG funding allocated for disaster recovery. Until now this program has operated somewhat unofficially: it’s just been money allocated via the CDBG mechanism that’s specifically earmarked for disaster relief. This change makes tweaks to how the program works, which will do things like allowing funds to get out the door more quickly after disasters and allow for better long-term planning about disaster recovery. The main impact on housing is probably letting damaged or destroyed housing get rebuilt somewhat more quickly than it might otherwise be following a disaster, but it’s hard to estimate what the magnitude of that might be.

Section 505 — New Moving to Work Cohort. This section authorizes a new Moving to Work cohort. Moving to Work is a program created in 1996 that gives public housing authorities more flexibility for things like the way they use federal funding and the way they calculate subsidized rents. It’s designed to “[u]se Federal dollars more efficiently, help residents find employment and become self-sufficient, and increase housing choices for low-income families.” As of 2020, there were 39 agencies in the program. This section authorizes another 25. There’s probably not much impact on housing supply here; this basically just gives more flexibility for the use of existing federal money.

Title VI — Veterans and Housing

This is a short title aimed at various veteran housing issues, none of which are likely to have much impact on housing supply.

Section 601 — Military Service Question. This section adds a disclosure to the standard residential mortgage application form (the Uniform Residential Loan Application) that veterans might be eligible for a VA home loan. This is conceivably a large amount of loans — one VA lender estimated that 58,000 possible VA home loans went “untapped” in 2024 — but it doesn’t really have any impact on housing supply. (Since a VA home loan is effectively a demand subsidy, if anything this would tend to push house prices up.)

Section 602 — Housing Unhoused Disabled Veterans Act. This section modifies HUD’s Veterans Affairs Supportive Housing program, which is a program that provides housing vouchers for veterans. It removes certain disability benefits from the income calculation to determine if someone qualifies for the program.

Section 603 — Veterans Affairs Loan Informed Disclosure (VALID) Act. This section changes mortgage disclosure rules to make it easier to compare VA loans to other types of loans.

Title VII — Oversight and Accountability

This is another short title, containing four sections that mostly modify various reporting requirements. Nothing here is likely to affect housing supply.

Section 701 — Requiring Annual Testimony and Oversight from Housing Regulators. This section requires HUD to testify before Congress annually.

Section 702 — FHA Reporting Requirements on Safety and Soundness. This section requires HUD to provide monthly reports on the FHA insurance fund’s capital ratio.

Section 703 — United States Interagency Council on Homelessness Oversight. This section requires the United States Interagency Council on Homelessness (USICH), whose goal is to “coordinate the federal response to homelessness,” to provide an annual progress report.

Section 704 — Appraisal Modernization Act. The only part of this title that’s not purely about reporting requirements, this section requires lenders for federally backed mortgages to have procedures if a consumer wants a second appraisal or a reconsideration of a previous appraisal. It also requires the GAO to report on the feasibility of a public appraisal database.

Title VIII — Accountability, Coordination, Studies, and Reporting

This is another short title that’s focused on making it easier for various government agencies to coordinate. Nothing in this title will likely affect housing supply at all.

Section 801 — HUD-USDA-VA Interagency Coordination Act. This section directs HUD, the VA, and the USDA to look for ways to coordinate their various housing programs.

Section 802 — Streamlining Rural Housing Act. This section directs HUD and the USDA to coordinate their environmental review processes. Another nice, if very minor, bit of environmental streamlining, but nothing that will move housing supply.

Section 803 — Improving Self-Sufficiency of Families in HUD-Subsidized Housing. This section directs HUD to study work requirements for public housing authorities participating in Moving to Work.

Section 804 — GAO Studies. This section requires the GAO to study various things, such as barriers to affordable housing access, housing units located near EPA “National Priorities List,” and “challenges relating to heirs property.”

Section 805 — Improving Public Housing Agency Accountability. This section basically creates various reporting requirements for certain public housing agencies.

Title IX — Strengthening Community Banks’ Role in Housing

This is a longer title — nine sections — that’s not about housing at all. Every section in this title is about various banking regulations, most of which are about helping out small, regional banks. Since this title doesn’t look at housing at all, I’m skipping it.

Title X — Home-Ownership for Main Street America

This title just has a single section, 1001 — Homes Are for People, Not Corporations, which restricts the purchase of single-family homes by large institutional investors (companies that directly or indirectly own 350 homes or more). This is a policy that’s become very popular on the right and the left, and there’s some evidence that these sorts of institutional purchases might push up home prices.

However, in practice this section probably won’t actually restrict these sorts of purchases all that much. This section includes a number of exceptions that allow an institutional investor to purchase single-family homes, some of which are likely to be relatively easy to comply with. The easiest is probably a carveout that allows these purchases if an investor has a “program to boost homeownership,” the requirements of which are modest:

• The investor needs to report on rental payments to consumer reporting agencies.

• The investor needs to give renters the first right of refusal and a 30-day window before they sell the home.

• The investor may provide “meaningful financial support,” including price concessions, for renters who want to purchase the house from the investor.

This last requirement could potentially be more burdensome, but the word “may” suggests that it will be optional or only required in certain circumstances. Assuming that compliance costs are not that high, this section probably won’t actually influence investor demand, and thus housing supply, in any meaningful way.

(This section previously would have sharply discouraged build-to-rent housing from large investors, but in the final version build-to-rent was added as an exception.)

Title XI — Central Bank Digital Currency

This title has just one provision, which temporarily “prohibits the Federal Reserve from establishing a digital currency.” No housing impact.

Title XII — Miscellaneous

This title is just administrative clarifications: one section here clarifies that no funding is authorized, and another clarifies that if one section of the act is found invalid, it doesn’t invalidate any other sections.

Conclusion

These nine titles contain most of the sections of the legislation (35 of the 59 total), and most of the actual legislative text. But most of the changes it makes seem likely to be either minor, unrelated to housing supply, or both. The sections with the biggest potential impact on housing are probably 501 (HOME Investment Partnerships reauthorization and NEPA exclusions), 502 (USDA rural housing funding), 1001 (ban on institutional investors buying single-family homes), and possibly 504 (CDBG disaster relief changes which might allow funds to get out the door quicker).

Once again, for most of these the question comes down to incentives and how strongly the various sections of the act modify them: for 501, I suspect the NEPA exclusions for HOME aren’t a strong enough incentive to change much about how many of these projects get built, for 1001 I think that the “ban” on institutional investors owning single-family homes has enough exceptions that the incentive for institutional investors to purchase them isn’t weakened all that much. With 502, the incentive seems stronger to me — keeping rent subsidies might plausibly make it worth keeping housing units around that might otherwise not be maintained — but it’s not easy to tell.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at sinking London homes, US magnesium manufacturing, the World Humanoid Robot games, catastrophic flooding in Nepal, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing and Cities

New home sales are down 6.3% year over year. [Calculated Risk] And the median new home price is down to $393,800, the lowest since July 2021. [HousingWire]

As of a few weeks ago there’s a new tallest timber building in the world, for certain definitions of “timber building.” “Designed as the Sydney headquarters for technology company Atlassian, the 180-metre-high office tower topped out earlier this week. With a hybrid structure of timber, steel and concrete it overtakes the 86.6 -metre-high Ascent tower in Milwaukee, USA, by almost 100 metres, to become the world’s tallest hybrid timber tower.” [Dezeen]

Salim Furth at Market Urbanism looks at how various jurisdictions will be affected by the Build Now Act, the ROAD to Housing provision that tethers a portion of CDBG funding to housing growth rates. I noted in my look at ROAD to housing that the way this was calculated was weird, and Furth confirms that as written Build Now has some consequences that aren’t ideal. “The biggest takeaway is that most places are ineligible. The second takeaway should be that the law ought to be amended to better match what proponents say it’s meant to do: provide more federal funding to support places that are growing, even if those are in cheaper parts of the country or experienced a nasty snowstorm 2 years ago.” [Market Urbanism]

London homes are cracking as the ground sinks beneath them, thanks to subsidence caused by recent heat waves. “Insurance claims tied to subsidence — a phenomenon associated with bouts of hot, dry weather that shrink the soil and destabilize the foundations on which buildings stand — hit a record last quarter, according to data provided by the Association of British Insurers.” [Bloomberg]

A good essay on how the financialization of real estate — specifically, the rise of distant owners without any particular interest in making an area beautiful or livable — harms the built environment. “All the qualities that give a place charm or loveliness are ones that are best stewarded by people who live there. Someone who owns the plot from afar, without even visiting, can never understand the subtle details that give it life. And the middleman property developer or manager just will never care.” [New Atlantis] See also my essay on why skyscrapers became glass boxes.

Manufacturing

Following a 50% US tariff on various Canadian goods, Canada responded with tariffs up to 50% on various US aluminum and steel products. [Manufacturing Dive]

John Deere, which manufacturers earthmoving equipment in addition to tractors and farm equipment, has full order books for its construction division for the rest of the year thanks to data center demand. [Manufacturing Dive]

EV manufacturer Polestar, which will now be banned in the US due to recently-created restrictions on Chinese-owned car manufacturers, says that it was blindsided by the decision. “Polestar also said the Commerce Department had signaled it would be allowed to stay in the U.S., just like its corporate cousin, Volvo Cars. Polestar and Volvo share the same Chinese majority owner, Zhejiang Geely Holding Group, and two of their models are built on the same production line in South Carolina, with nearly identical hardware and the same software inside.” [WSJ]

Read more

The SPR has gotten a great deal of attention lately, as the Trump administration has steadily delivered oil (around 120 million barrels as of this writing) from the reserve in response to Iran closing the Strait of Hormuz. Much of this attention has centered on technical factors related to how much oil can safely be released from the reserve: various folks have claimed, for instance, that the minimum safe operating level of the SPR is 300 million barrels of oil (a level that it went below the week of August 7), and below that damage to the storage facility can occur.

It’s not clear if the specific claim about the 300 million barrel level is true, but due to the way the SPR was constructed, it does indeed have limits on how much oil can be removed from it and how many times it can be emptied. Given the ongoing importance of the SPR, it’s worth understanding how it was built and how it works now.

Origins of the Strategic Petroleum Reserve

Almost as soon as oil became strategically important to the US, people began floating the idea of stockpiling it for emergencies. The first strategic stockpiles of petroleum in the US were created for the military: a Naval Petroleum Reserve (NPR) was created in 1912 by setting aside land containing oil deposits in California, and by the 1920s there were four NPR sites across the country.1 During WWII, Secretary of the Interior Harold Ickes advocated stockpiling petroleum “for military and civilian needs,” and was appointed president of the Petroleum Reserves Corporation, a government corporation that tried (but failed) to gain control over Middle East oil fields for emergency reserve purposes. In 1952, President Truman’s Materials Policy Commission proposed maintaining an emergency oil reserve, and President Eisenhower suggested creating one following the disruption of oil imports during the Suez Crisis.

But it wasn’t until the 1973 OAPEC oil embargo that the idea for a petroleum reserve for both civilian and government use stuck. By the early 1970s, the US’s demand for petroleum was increasingly outpacing domestic production, making the country more and more dependent upon imports; between 1963 and 1970 the US’s surplus oil capacity (how much domestic production could be boosted in the event of a crisis) had fallen by 75%, and between 1967 and 1973 US oil imports more than doubled. When OAPEC declared an oil embargo in October 1973, the impact on the US was immediate; gas prices jumped by over 40%, and widespread gasoline shortages occurred.

Even before the embargo, in response to tightening oil supplies and frequent threats from Middle Eastern countries to withhold oil, the Nixon administration commissioned a study on the impact of a major oil supply disruption from the National Petroleum Council. The council’s report, released a few months before the embargo, suggested that a large petroleum reserve could act as a buffer for import shortfalls. It considered several possibilities for storing the oil, including simply leaving known reserves in the ground and aboveground steel tanks, but concluded that the most cost-effective method would be underground storage in caverns hollowed out from large salt deposits known as “salt domes.” A subsequent report by the newly created Federal Energy Administration, formed following the oil embargo (and which later became the Department of Energy), likewise suggested that underground salt dome storage was the most economical way of storing large quantities of petroleum.

This suggestion became a reality in 1975, when Gerald Ford signed the Energy Policy and Conservation Act. Among the bill’s provisions was a mandate to establish a petroleum reserve of up to 1 billion barrels to “diminish the vulnerability of the United States to the effects of a severe energy supply interruption.” Construction on the SPR began in 1977.

Constructing the SPR

When planning the SPR, several options for storing the petroleum were considered, including using large numbers of idle oil tankers. But ultimately it was decided that the best option was what the National Petroleum Council and the Federal Energy Administration had both recommended: storing the oil in large, underground salt caverns.

Salt domes are enormous underground salt structures, potentially miles deep and miles across, formed when geologic forces push underground deposits of rock salt up through the rock above. They were first discovered in the mid-19th century, and began to be surveyed extensively in the early 20th century after oil was discovered near a salt dome at Spindletop in Texas: as the salt pushes up into the rock above, it can create pockets around the dome where oil and gas can accumulate. Because rock salt is largely impermeable to oil or gas, hollowed-out caverns within salt domes were a potentially attractive place to store large amounts of crude oil.

These caverns can be created by a process known as “solution mining”: drilling a well down into the salt dome and pumping water into it. The water dissolves the salt, and the resulting salty brine gets pumped back out, leaving behind a void where the salt had been. Mining rock salt by using water to dissolve it had been practiced in Europe for hundreds of years, but modern solution mining — drilling a well into an underground salt deposit and pumping water into it — first began around the 1860s–1870s in New York.2 By the 1970s, solution mining had become a widely used method for mining salt. Companies like Morton Salt used solution mining to obtain salt for food products, and Dow Chemical used solution mining as a source of chemical feedstocks.

Initially, the underground caverns created by solution mining were simply abandoned. But by the mid-20th century, they had begun to be used for underground storage. In the 1940s Canada first considered solution-mined caverns for underground storage, and beginning in the 1950s it had become a popular method of storing liquefied petroleum gas (LPG) in North America and Europe. By 1976, private firms in the US had created over 900 solution-mined caverns, with a total storage capacity of 300 million barrels. For storing unprecedented amounts of petroleum, solution-mined salt caverns were the obvious choice, and that’s what was chosen to create the Strategic Petroleum Reserve.

The Texas-Louisiana Gulf Coast was chosen as the location for the reserve: not only did the area have numerous salt domes that could be utilized for storage, but it was close to existing oil and gas infrastructure, making it easier to fill the reserve and draw it down when required.

Construction would be split into three phases. In Phase I, several existing salt caverns would be converted into crude oil storage at five sites along the Gulf Coast:

• Four caverns at Bryan Mound, in Texas.

• Five caverns at West Hackberry, in Louisiana.

• Six caverns at Bayou Choctaw, in Louisiana.

• Three caverns at Sulphur Mines, in Louisiana.

In addition to these solution-mined caverns, the SPR would also use a conventionally mined salt mine at Weeks Island in Louisiana. Collectively, the Phase I sites would give the SPR 248 million barrels of capacity. And because the caverns already existed, they could begin to be filled with oil quickly.

In Phase II, 29 new solution-mined caverns would be created at these sites, adding another 290 million barrels of storage capacity. In Phase III, a new site would be added at Big Hill in Texas, which would bring the total storage capacity to 750 million barrels.

Due to political pressure to get oil stored as soon as possible, the construction schedule was compressed, and the first oil entered the SPR in 1977. But the project was soon mired in setbacks. The Federal Energy Administration employees tasked with overseeing the project had little experience in managing large construction projects, and cost control proved difficult. Material and equipment specifications were created before plans were fully complete, creating problems when the selections later proved to be unsuitable. Equipment such as pumps was often chosen because of availability, not because it was best suited for the job, resulting in breakdowns and costly workarounds. Contractors taking advantage of management inexperience engaged in “extensive fraud”; used valves were sold as new, and drill bits were purchased, stolen, and then re-sold back to the government. One contractor was indicted for stealing 18 truckloads of equipment worth $427,000; another was accused of making off with $8 million worth of petroleum bound for Bayou Choctaw and pumping in “hazardous and toxic wastes” instead (though the government denied that this occurred). By the late 1970s, over two dozen SPR fraud cases were being investigated simultaneously.

And while the SPR project was broadly popular, it nevertheless had its share of opponents who tried to slow down the project. The governor of Louisiana, Edwin Edwards, felt the SPR was wasteful government spending and led a “virtual one-man crusade” against the project, using various environmental protection regulations to slow it down until he was sufficiently convinced that it would benefit Louisiana. Among the concessions Edwards was able to extract were slowing down site conversions to minimize the loss of local jobs, and getting the SPR office located in Louisiana instead of the originally planned Houston.

There was also broader environmental opposition. Creating the SPR caverns during Phases II and III would require creating and then disposing of large amounts of brine; while some of this brine could be pumped back underground, the lion’s share of it would be disposed of by pumping it into the Gulf of Mexico. But local fishermen, worried about the potential impact on fish and shrimp populations, objected, ultimately forcing brine disposal pipelines to extend much farther into the Gulf of Mexico than originally planned. Securing the necessary environmental permits required an enormous amount of time and effort in the first few years of the program, and by the end of 1978 the SPR Office had completed 25 NEPA-required environmental impact statements.

There were also numerous technical challenges involved with building the SPR. Phase I of construction involved converting existing solution-mined caverns, but these caverns had not been created for the purposes of petroleum storage: some of them turned out to be unsuitable; others were workable but proved to be incapable of holding as much petroleum as originally projected due to pressure limitations. Collectively, the Phase I caverns ultimately had 87 million barrels less storage capacity than first anticipated.

Technical challenges continued during Phase II, when solution mining of the new caverns began. Historically, most solution-mined caverns had been on the order of 1 million barrels in size; a few had reached the 4 million mark. But most of the Phase II caverns would be 10 million barrels or more, far larger than previous solution-mined caverns. SPR officials learned as much as they could about solution-mining caverns for petroleum storage from studying the West German petroleum reserve, which also used solution-mined caverns and was already in operation, but the much larger scale of the SPR (700 million barrels vs. Germany’s 30 million) meant that they were operating in uncharted territory. When mining began, for instance, it was found that brine could be disposed of underground much less quickly than anticipated, and that leaching took far longer than anticipated, both of which slowed down cavern construction.

Collectively, the technical, political, and managerial challenges encountered when building the SPR drove up costs and pushed back delivery dates. In 1976, the estimated cost of the SPR through Phase II was $766 million; just two years later that had risen to $1.47 billion (~$7.5 billion in 2026 dollars). The original plan called for Phase III to be complete by 1983, with 750 million barrels of crude in the ground. But the actual fill level in 1983 was roughly half that, with many caverns yet to be completed. Between 1980 and 1993, 49 new solution-mined caverns for the SPR were created, bringing its total storage capacity up to 750 million barrels, but the actual fill level would remain at just over 500 million barrels into the 2000s.

Since its completion, the SPR has continued to evolve. The small Sulphur Mines site began decommissioning in 1992, and in 1996 the Weeks Island facility began to be decommissioned when it was realized that groundwater was slowly leaking into it. And over the last 20 years three of the remaining Phase I caverns have been decommissioned, bringing the total number of storage caverns down to 60.

Operating the SPR

At a high level, the way the SPR works is relatively simple. Each cavern in the SPR is filled up with oil, which sits on top of a heavier layer of brine beneath it. To remove oil from a cavern, water is pumped down into it, which forces oil out the top. To fill the cavern back up with oil, oil is pumped in as brine is pumped out. The caverns are thus always completely full of liquid; the only thing that changes is where the oil-brine boundary is.

But this high-level description belies a lot of complexity. We think of physical infrastructure as something relatively static and unchanging, but in the SPR various forces are constantly reshaping the caverns.

One of these forces is cavern creep. The SPR caverns are thousands of feet below ground, and the weight of the ground constantly squeezes the sides of the caverns, compressing and shrinking them over time. As the caverns are squeezed, the liquid inside the caverns is pressurized, and this pressure, in turn, tends to resist further compression of the caverns. But if that pressure is relieved, which occurs during well repair operations known as “workovers,” cavern creep can accelerate. The SPR loses up to 2.4 million barrels (~0.33%) of storage capacity each year due to the effects of cavern creep, depending in part on the number and length of workovers required.

In the other direction, removing oil from the caverns requires water to be pumped into them. And when fresh water is pumped into the caverns, it dissolves some of the salt from the walls of the caverns. Every 100 barrels of water pumped in dissolves around 15 barrels of salt; removing all the oil from an SPR cavern thus increases its size by about 15%.

Because of this, SPR caverns have a finite lifespan. After enough drawdowns, the walls of the cavern become too thin to use it for storage; they can no longer withstand the stresses and may begin to leak oil into surrounding caverns or outside the salt dome itself.

Various factors affect how the walls of a cavern wear and how many drawdowns it has available. Phase II and III caverns designed specifically to store petroleum are tall and thin, like skyscraper-sized cigars, and are spaced far enough apart to allow for significant cavern growth over time. But many of the Phase I caverns, which were originally mined for other purposes, have irregular shapes or thin cavern walls that make it infeasible to use them for multiple drawdowns. These caverns are thus known as “single-cycle drawdown” caverns. There are currently 11 Phase I caverns in use at the SPR and six caverns that have one drawdown or fewer remaining.

Cavern lifespan is also affected by how a cavern is used. When a cavern is fully emptied, wear on the cavern walls is relatively uniform, but if the cavern is subject to multiple partial drawdowns — removing a bit of oil, then filling it back up, then removing a bit more, etc. — this concentrates wear at the bottom of the cavern, resulting in “undesirable shapes” that can more rapidly reduce cavern lifespan. Conversely, it’s also possible to increase cavern lifespan by strategically emptying caverns in such a way as to wear the cavern into a more desirable shape.

Cavern wear is not simply “water dissolving the salt and the walls get thinner”; the geology of the SPR caverns is complex, and they can wear in complex ways. Changing stresses in the walls can cause “salt falls” (when a chunk of salt falls into the cavern) or open up cracks and fissures, causing leaks. Because of this, Sandia National Labs closely monitors SPR cavern conditions using tools like sonar. Each year it puts out a report estimating how many full drawdowns each cavern still has available. Because it can be hard to predict cavern behavior after repeated drawdowns, the maximum number of drawdowns it simulates is five (thus a cavern with five available drawdowns today might actually have several more than that available).

Limits of the SPR

The limited lifespan of SPR caverns, and the complex wearing forces that they’re subjected to, have led to a lot of speculation and assertion about how much oil can be safely removed from the SPR. Folks often claim, for instance, that the SPR can’t go below 300 million barrels of oil without damaging the caverns. I decided to look closely at what these limits actually are.

One limit on the SPR is that a minimum amount of “roof oil” must be kept in the caverns to prevent water at the top of the cavern from dissolving and damaging the cavern ceiling. As of 2016 this was about 12 million barrels, or around 1.7% of total SPR capacity.

Another limit you will often see mentioned is 70 million barrels: for instance, the DOE told CNBC earlier this year that 70 million barrels was the minimum amount needed to safely operate the SPR. It’s not amazingly clear what’s behind this limit, but this may be simply using the DOE’s definition of a “full drawdown,” which is when 90% of the oil in the SPR has been removed: 70 million barrels is about 10% of the SPR’s total capacity. It’s not clear if there’s an actual, physical limit at 70 million — that may be the level at which the oil-brine interface would be above the oil intake well, for instance — or if that’s simply a defined operational limit.

Above these lower limits, you see various claims about operating levels below which damage to the SPR starts to occur. Earlier this year a JPMorgan energy analyst claimed that 150–160 million barrels “must remain in place to preserve cavern stability and maintain operational flexibility.” Rapidan Energy, founded by former George W. Bush energy advisor Bob McNally, claims that this limit is at 170 million. A professor of petroleum engineering at Texas A&M, Siddharth Misra, claims that the operational limit is between 250 and 300 million barrels, below which “the risk of structural damage increases while the system loses its ability to pump oil at high speeds.” Former Biden energy advisor Amos Hochstein claims that he “know[s] plenty of people who think we can’t get near 300 [million] because physically you will damage the caverns where the oil is stored.”

Some of these claims can be verified. For instance, it’s true that draining the SPR beyond a particular point reduces the speed at which oil can be pumped out of it. Oil can only be pumped so quickly out of an SPR site, so as caverns empty the drawdown rate drops.

Additionally, because of the aging SPR infrastructure as well as the downtime needed for repairing that infrastructure, not all the oil in the SPR is available for drawdown at any given point. For instance, a recent GAO report noted that oil at several SPR sites might be unavailable during warmer months due to vapor pressure. Oil stored in the caverns gradually absorbs methane, and gradually warms up, both of which increase the vapor pressure within the oil. To be safely distributed the vapor pressure in the oil must be below a certain level, which can be achieved at a “degasification” plant. But several years ago the SPR’s degasification plant was dismantled and hasn’t yet been replaced, limiting its ability to distribute crude during warmer times of the year. More generally, the SPR has a huge maintenance backlog and has been described as being held together with “band aids.” A planned large-scale SPR renovation and maintenance program, Life Extension Phase 2, began in 2021 but was scaled back due to high costs.

There have also been various reports noting that the SPR may not have the ability to respond to a severe supply disruption below a level of 250 to 500 million barrels, and that outside of true emergencies it would be prudent to keep it above this level.3

However, no official report by the Department of Energy, the GAO, Sandia National Labs, or any other government agency mentions specific fill levels below which damage to the SPR occurs (other than the small amount of roof oil required). While Sandia puts out an annual report on the number of available drawdowns on a cavern-by-cavern basis, it doesn’t note any SPR-wide fill level limit below which damage occurs. I similarly wasn’t able to find any independent analysis or report pointing to some minimum SPR fill level and explaining specifically what drives it. So it’s not particularly clear to me what the source of claims about very high minimum fill levels is: if it’s from people talking to Sandia/DOE folks in some unofficial capacity, or if they’re inferring limits based on cavern stress data that Sandia provides but doesn’t make explicit, or something else. It’s notable to me that claims about minimum fill levels aren’t particularly consistent, and that different analysts/experts give widely different limits. It’s also notable that these claims often conflate different limits. (The Department of Energy, for its part, has denied the 300 million barrel limit.)

Conclusion

The Strategic Petroleum Reserve is the largest petroleum storage facility in the world and stores vast amounts of crude oil — over 700 million barrels — in underground salt caverns. These caverns behave in complex ways: they grow, shrink, and distort over time due to the various fluid and geologic forces that they’re subjected to, and the caverns have a limited lifespan due to water gradually dissolving the solid salt walls.

Because of these complex forces, and the gradual damage that gradually accumulates across the walls of the caverns, there’s widespread speculation and assertion that the SPR can’t be drained below some particular level without inflicting serious damage on the underground caverns.

It’s hard to know how seriously to take these claims. Many of them are made by experts, such as professors of petroleum engineering and former White House energy advisors. And there are various limits associated with removing oil from the SPR, such as the oil needed to keep water from damaging the roof of the caverns or the drop in withdrawal rates that occurs as the SPR empties. But it’s hard to find any sort of actual published estimate of these limits in a report or official document. This doesn’t mean that these claims are wrong, but it does make me wonder where the claims are coming from.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at Los Angeles’ ADUs, electrical transformer manufacturing, gas turbine power plants, how water in the Colorado River is used, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

No essay this week, but I have a very long piece in American Affairs about why US transit construction costs are so high. You can read it here.

Housing and Cities

Los Angeles built over 10,000 ADUs in 2025, 37% of all housing units built in the county. [Smart Cities Dive]

There were 511 state bills introduced in 2025 across 40 states that pre-empted county land use authority in some way, 27% of which passed. A lot of land use restrictions are downstream of the local nature of land use authority — costs of development tend to be concentrated, and benefits tend to be diffuse, so local authorities are often incentivized to restrict development. State-level pre-emption should in theory help with this. [Smart Cities Dive]

Mexico plans on making it much harder to illicitly develop along the coast, and to tear down any illegal buildings that exist. “For years, wealthy developers have treated environmental fines as simply another line item in their budgets—a minor inconvenience easily absorbed by their profit margins. Tamborrel acknowledged this problem directly: “There are companies that allocate part of their budget to pay these fines and then continue operating; offenders prefer to pay the fine rather than request a permit.” But those days appear to be ending. Profepa has already closed four real estate developments in Puerto Vallarta and promises similar action along all of Mexico’s coastal states.” [Yucatan Magazine]

Claims (with video) that Amazon’s drone delivery service dropped a package in someone’s pool. [X]

The city of Mesa, Arizona is planning to sue several firetruck manufacturers, claiming that they’re colluding to drive up prices. [Mesa Tribune]

Manufacturing

Raytheon gets a $23 billion Navy contract for Tomahawk missiles. [Manufacturing Dive]

The New York Times has a photo essay on the laborious process of electrical transformer manufacturing. It’s not amazingly clear to me why this process isn’t more automated, and whether that would help to get them built faster or if the bottleneck lies elsewhere. [NYT]

1872 is a startup founded by several former SpaceX employees that wants to build highly automated factories for making steel parts. “The company is initially focused on automating the manufacturing of steel skids—rectangular steel frames that can provide a moveable foundation for modular buildings—with the goal of supplying customers who are developing AI data centers or small modular nuclear reactors.” [Ars Technica]

Energy

There are currently 270 GW of natural gas power plants in various stages of development in the US. This is roughly equal to 20% of all current US generation capacity. [X]

FERC approves a Southwest Power Pool (a regional transmission operator) plan to reduce grid congestion by “topology optimization” — responding to congestion by rerouting how power flows through the grid, rather than redispatching power plants. MISO, another regional transmission operator, already has such a program, and estimates that it has saved them almost $100 million so far this year. [Utility Dive]

The DOE cancels three planned National Interest Electric Transmission Corridors, designations designed to make it easier to build transmission projects. The DOE stated that transmission policy “must serve the American people, not special interests or a climate-alarmist agenda.” [Utility Dive]

Read more

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at home price declines, the Strategic Petroleum Reserve, The Boring Company’s $4 billion fundraise, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing and Cities

California is still not building enough housing. “After years of nudging, political trolling and litigating, most cities and counties now have state-approved plans in place. But as the production numbers show, it’s one thing to plan and another to build. Almost nowhere in the state is actually seeing the new construction necessary “to meet the housing needs of all Californians,” as housing regulators have described these targets.” [CalMatters]

Following the severe buckling of a column at an office to residential conversion project in New York, the Department of Buildings inspected 180 jobsites which had a connection to the team working on that project. No hazardous structural issues “posing an imminent danger to public safety” were found. [Construction Dive]

Lennar and DR Horton, the two biggest homebuilders in the US, have been reducing their prices for the last several years. “Lennar has reduced its average selling price from $511k to $377k, a nearly 25% decline (inclusive of incentives). DR Horton has cut from $415k to $366k, a 12% decline. Four years ago, this would have been hard to imagine.” [X] This matches a broader trend of declining home prices overall since 2022. [FRED] Interestingly, the Case-Shiller index hasn’t fallen. [FRED]

A cool map showing how much people in various cities in the US actually walk, compared to what their neighborhood walk score is. [National Walking Atlas]

Manufacturing

As part of his plan to tile the sky with orbital data centers, Elon Musk wants the Terafab project to eventually be able to produce 1000 gigawatts of computing power each year. Per Musk, currently the world produces about 20 gigawatts of computing power each year. [Manufacturing Dive]

The White House released a report accusing China of a “Great Transshipment Scam” — exporting nearly-finished goods to other countries and performing a very small amount of work there to mask their country of origin and get around tariffs. [SCMP]

The Wall Street Journal on how China is increasingly a manufacturer of not just consumer goods but of high-value industrial equipment. “The transformation is threatening the economic moats of advanced-manufacturing economies such as the European Union, Japan and South Korea. Producers of chemicals, machines, batteries and other industrial goods in those economies once depended on Chinese factories as customers, but now China is a formidable competitor abroad and even in their home markets. For the first time in decades, Germany imports more advanced capital goods from China than it exports there.” [WSJ]

Apparently 100,000 of the 383,000 members of the United Auto Workers union are academics, not autoworkers? “The University of California’s academic local alone represents some 48,000 workers—more than the UAW’s total membership at the global automaker Stellantis. Harvard’s graduate students account for another 4,000.” [City Journal]

South Korean shipbuilder Hanwha, which bought a Philadelphia shipyard in 2024, wants to acquire another US shipbuilder, Austal USA. Letting a foreign shipbuilder acquire these operations, and potentially getting them running more efficiently, seems like a pretty good deal for the US. [gCaptain]

Also on the subject of shipbuilding, the White House releases a memo calling for the Pentagon to source ships from foreign suppliers, and to construct or acquire a new Navy shipyard. [Workboat]

Read more

This is the second installment of my look under the hood of the recently passed 21st Century ROAD to Housing Act, looking at what each provision actually does and trying to suss out its actual impact on housing supply. You can read my previous essay on Title I of the Act here. This time I’ll look at Title II, “Building More in America,” and Title III, “Manufactured Housing For America,” which have 13 and 4 individual provisions respectively. Some of the most consequential chunks of this legislation are in these two titles.

The sections in this title mirror the act overall: only a small number of these changes are likely to be of major consequence, and how much they increase housing stock will depend a lot on whether the constraints they modify were actually binding, which is often hard to tell.

Title II — Building More In America

This is the largest title in the act, with 13 sections, each one of which targets housing production or preservation in some way. We’ll look at each section one by one.

Section 201 — Increasing Housing in Opportunity Zones. This section allows HUD to give additional weight when awarding housing grants to projects that will be built in Opportunity Zones: areas that are economically distressed and that have tax incentives available for investing in them.

The likely impact of this section on housing supply is almost definitely zero. It just shifts which housing projects HUD decides to allocate money to. It doesn’t increase the size of the pot of money, or the number of projects that can be funded.

Section 202 — Whole-Home Repairs Act. This section establishes a HUD pilot program for providing grants to homeowners and landlords for home repairs. This is potentially a useful program — some people get funds to make housing repairs that maybe otherwise wouldn’t be able to afford them — modeled on earlier, state-level programs like Pennsylvania’s. But it seems more about increasing housing quality than housing stock: improving energy efficiency, weatherization, safety, general habitability, etc.

That said, there might be a “it’s easier to keep an existing customer than finding a new customer” logic to this. If you want to turn dollars into housing supply, in some cases a dollar probably goes farther repairing an existing home than it does building a new home. Typically homes fall out of the housing stock at a pretty slow rate, but if there’s damage (say, a leak in the roof) that probably greatly accelerates the rate at which it happens. Funding those sorts of repairs is probably pretty useful from a cost/benefit point of view. Depending on how the repair money is distributed, this could potentially be a meaningful amount of homes, though probably not a huge number. I suspect mostly this will be about addressing quality-of-life more than keeping homes from falling out of the housing stock.

Section 203 — Community Investment and Prosperity Act. This section raises the cap of how much banks are allowed to invest in public welfare projects, most of which are Low Income Housing Tax Credit (LIHTC) housing projects. The LIHTC program is a federal housing subsidy program. Each year the federal government awards several billion dollars worth of tax credits to states, who in turn award them to housing developers for completing housing projects rented to low-income families. Roughly 70,000 LIHTC housing units are completed each year.

These projects are typically funded by banks, who take essentially all the project’s equity in exchange for funding it, and get the tax credit attached to it in return. (The tax credit reduces the amount of federal income tax you owe, and thus is most useful for organizations that have a lot of tax that could be reduced.) Banks are limited in how many of these sorts of projects they can invest in at once; this section raises those limits.

I had a hard time understanding the exact mechanics of these sorts of funding requirements, but as I understand it this change is more about preventing these limits from becoming binding in the future than them being constricting right now. So this section is possibly a big counterfactual deal (in the sense that we would get fewer LIHTC units in the future without it), but not one that will boost housing supply over current levels.

Section 204 — Addition of Affordable Housing Construction as an Eligible Activity. This section allows affordable housing projects (including LIHTC housing) to be funded by Community Development Block Grants (CDBG), a pot of money HUD hands out every year for states and other jurisdictions to do various community improvements. CDBG funding is fairly large, $3.3 billion each year, and this lets up to 20% of a jurisdiction’s CDBG funding be used for housing, so it’s a potentially large amount of money for housing projects.

The mechanics of these programs and the actual binding contraints are sufficiently complex that it’s hard for me to gauge whether it will be used all that much in practice, so my error bars here are quite wide.

Section 205 — Better Use of Intergovernmental and Local Development (BUILD) Housing Act. This section basically allows some NEPA environmental reviews for HUD housing projects that previously would have been done by HUD to instead be done by some local supervising entity within the project’s jurisdiction (with HUD still needing to approve the overall environmental review). This could speed up environmental review for these projects — this sort of delegation has sped up environmental review on transportation projects by 15-30% — if the jurisdiction in question has the capability of doing this sort of review. Overall I expect a positive but marginal improvement here that probably doesn’t shift housing supply all that much.

Section 206 — Unlocking Housing Supply Through Streamlined and Modernized Reviews Act. This is another “streamlining environmental review” provision, similar to 105 and 205, and is probably the most important section in the bill so far. This section exempts a bunch of HUD activities from NEPA review (mostly administrative ones), and provides categorical exclusions for a bunch of HUD-financed construction activities: new construction or rehabilitation of multifamily projects of up to 15 units, office to residential conversions, and any infill housing construction project (where “infill” means a project in some municipality on less than five acres of land that has been built on previously).

It doesn’t change the amount of funding for these projects, but it could make some of that funding stretch slightly farther if folks don’t need to take the time and effort to do an environmental review. And it also might just make folks more willing to do these sorts of projects. But the bigger impact is probably just significantly reducing the permitting difficulties for HUD-funded housing projects, making it easier to build them.

Section 207 — Grants for Planning and Implementation Associated with Affordable Housing. This section creates a HUD grant program for jurisdictions to study and implement pro-housing strategies, such as updating zoning codes or modifying housing-related regulations. This probably addresses a real constraint — there are thousands of permitting jurisdictions in the US, and many of them probably can’t easily spare the resources to analyze and modify their zoning regulations — but it would surprise me if it were particularly binding. I suspect jurisdictions that wanted to modify their regulations to be more pro-housing would find a way to do so, though this could conceivably be enough to encourage the marginal jurisdiction to pull the trigger.

These sorts of grant programs have been created before: in 1992 as part of the Housing and Community Development Act, and more recently in the form of PRO Housing Grants (which was first implemented by HUD as something like a planning grant but evolved after congressional pressure to be more like the Innovation Fund, below), but it’s not amazingly clear to me that these have had much of an impact. Overall the likely outcome of this seems fairly minor to me.

Section 208 — Innovation Fund. This section creates a $200 million per year Innovation Fund (which will need to be funded via a separate appropriation), which will be awarded to jurisdictions which show “objective improvement in housing supply growth.” Awards can be up to $10 million. This is a great provision, directly incentivizing the thing we want (increased housing supply). The only question, like with so many provisions in this bill, is how strong this incentive will actually be in practice: how likely is a jurisdiction to try and improve its housing delivery in the hopes of winning one of these grants down the road? I would be surprised if this is enough to make most jurisdictions make major changes to their housing or zoning regulations — the amount at stake is probably just too small, and too uncertain — but, like with Section 207, it might be enough to shift the marginal jurisdiction.

Section 209 — Accelerating Home Building Act. This section allows (but does not require) HUD to award grants to jurisdictions to implement pre-reviewed housing designs, often known as “pattern books.” Instead of coming up with the architectural design for some new housing project themselves, or hiring an architect to do it, the developer can just select one of these pre-reviewed designs. The benefit of this is twofold. One, the developer saves some money on design effort (since the design has already been done), and two, the permitting process becomes smoother, since the design has already been approved by the jurisdiction.

Pre-approved housing designs have been tried in a variety of jurisdictions, and they appear to be something of a mixed bag. In some cases, they’re used enough to make up a single-digit percentage of new housing construction; in other cases, they basically don’t get used at all.

Overall, I’d classify this as another “positive but marginal” section: assuming HUD decides to fund these, it probably means the marginal jurisdiction adopts pre-reviewed designs that otherwise wouldn’t, and in some fraction of those a meaningful (but not substantial) chunk of new housing gets built using them. Money and construction time are saved, which maybe means a few projects pencil out that otherwise wouldn’t, but probably not very many. My prior is that real estate developers want a lot of control over the specifics of their projects — exactly how the buildings are laid out, exactly what the floor plans are, exactly what finishes are used where — which makes me somewhat bearish on pattern books in general.

Section 210 — Revitalizing Empty Structures Into Desirable Environments (RESIDE) Act. This section authorizes (but does not require) HUD to create a grant program for converting existing vacant buildings into housing. There’s no set amount of money for it (it will depend on what’s appropriated), but the text of the law suggests it might be in the $100 million range.

Converting existing buildings into housing is a perennially popular idea that is often blunted by the fact that these sorts of conversions are expensive: it typically costs as much or more to convert an existing building into housing than it is to just build a new building from scratch. So a grant program that can provide money for these conversions might theoretically make more of these projects pencil out.

Other than funding limitations ($100 million does not buy all that many conversion projects), the impact of this is likely limited by the fact that the given vacant building must have been deemed abandoned or unsafe for occupation to be eligible for funding. The typical conversion targets are things like low-occupancy office buildings that are still in use and safe to occupy. But this is specifically aimed at abandoned, derelict buildings. So the universe of potential projects isn’t all that large. And it’s further narrowed by the fact that this section requires the resulting projects to have the majority of their units affordable to low-income households.

Overall I think this could potentially result in a few more conversion projects, but probably a pretty small number of them.

Section 211 — Housing Affordability Act. This section raises the per-unit limits for FHA insurance for multifamily mortgages. As we noted previously, the Federal Housing Administration is basically an insurance agency: it insures mortgages from the borrower defaulting, to incentivize the lender to make loans they otherwise wouldn’t. Most of these loans are for single-family homes, but it also does a few multifamily mortgages (around 17,000 units per year).

As I understand it, FHA insurance basically makes multifamily projects charging lower rents pencil out that otherwise wouldn’t, so it’s useful for building projects targeting lower-income occupants. But FHA insurance has limits on how much it can lend for a specific project, which is calculated based on the cost of the individual units. This section raises those individual unit limits, and so increases the limit on how large an FHA insured multifamily mortgage can be. It also changes the formula for how these limits are calculated.

It’s not amazingly clear to me how much this section will affect housing supply (even understanding how FHA multifamily insurance works at all was a struggle), but I suspect it will be fairly minor. For one, this is just a very small program, and this shift probably won’t change that. For another, the FHA has overall limits on the total amount the FHA can insure, and this doesn’t change those limits. Also, these limits have been repeatedly raised in the past, and don’t seem to have changed the trajectory of multifamily housing construction. This could be another case where this is pre-emptively reducing a constraint that otherwise would have become binding, but it’s hard to know. Overall I don’t expect much from this change.

Section 212 — Rental Assistance Demonstration (RAD) Program. The RAD Program restructures how certain public housing projects are administered, converting them to the Housing Choice Voucher Program, also known as Section 8 Housing. The purpose of this is to fund the maintenance of public housing: for abstruse financial reasons, this conversion basically makes it possible for housing projects to get loans against the value of their future subsidy income streams and use those loans to fund maintenance and repair projects. This section raises the cap on the number of housing units that can be converted by 100,000, from 455,000 to 555,000 units, and also makes the program permanent (it was previously set to expire in 2029).

This will potentially let 100,000 units of public housing fund maintenance projects. Some of those units might otherwise gradually decline to the point of being unoccupiable. So this is another provision that could keep some large chunk of housing units from being removed from the housing stock. And it also can result in the construction of new housing: some chunk of RAD projects involve tearing down an existing public housing project and building a new one, also building some non-public housing units along with it. The Fulton and Elliot-Chelsea redevelopment, for instance, done through New York’s RAD implementation, is replacing 2056 public housing units with 2056 new public housing units, and also adding another 3454 new housing units. So this is potentially a big deal.

Section 213 — BUILD Now Act. This section tethers a chunk of certain high-cost jurisdictions’ CDBG funding to their level of housing growth. If the rate of increase in housing production is lower than the median of these high-cost jurisdictions, you lose a chunk of your CDBG funding (10%), and that money gets reallocated to jurisdictions where housing production rose faster than it did historically.

At a high level, it’s good to have another fairly direct incentive for jurisdictions to try to increase housing production. And the threat of taking away federal funding has been successfully used before, such as when the federal government got states to adopt a national speed limit of 55 and a drinking age of 21 by threatening to take away highway funding. This is one of the first times the federal government has been willing to penalize high-demand places that don’t build housing. But there’s a few issues with this provision. One is that the way that it’s calculated is weird: per the text, a jurisdiction that went from 0.2% growth to 0.25% growth would score higher than a jurisdiction that went from 2% growth to 2.4% growth, even though the latter is a much larger increase in housing supply.

The big question here is whether this loss is enough to incentivize jurisdictions to make jurisdictions change their behavior. 10% isn’t necessarily a huge amount (the average CDBG is only like $2 million, though for the jurisdictions in question it’s probably substantially higher), but there may be loss aversion and a reluctance to lose money that had already been allocated that might be quite motivating in practice. And small funding reductions can be motivating: the threat of highway spending reduction to induce states to adopt a 21 year drinking age was only 5% of federal highway dollars. So this could be potentially quite meaningful, though it’s hard to tell.

—

That covers all of Title II. Next up is Title III, “Manufactured Housing For America.”

Title III — Manufactured Housing For America

This title has four sections, each of which are aimed at making it easier to build manufactured homes — homes built under the national HUD code for manufactured homes instead of local building codes, and formerly known as mobile homes or trailers.

Section 301 — Housing Supply Expansion Act. This section eliminates the requirement that manufactured homes have a permanent steel chassis. It also makes some adjustments around manufactured home energy regulations.

The permanent chassis removal is a pretty big deal: It’s something that manufactured home advocates have been requesting for decades. Historically manufactured homes were required to be built on a steel chassis to maintain the fiction that these were fundamentally portable trailers, but almost all manufactured homes are placed once and then never moved. The steel chassis adds substantial cost (on the order of 5-10% of the total cost of a manufactured home), so removing it could mean a potentiallyarge savings (though the steel chassis also acts as a structural support, so a home without one might require additional structural elements that will eat into this savings).

But I’m moderately skeptical that removing this requirement will increase the number of manufactured home purchases. For one, manufactured homes are already substantially cheaper than conventional construction, so it would be surprising to me if another few percentage points of cost reduction resulted in a big uptick in their adoption. For another, it’s often claimed that the steel chassis is what makes it possible for jurisdictions to discriminate against manufactured homes, but there’s no real reason to think that this is true: It would be trivial for jurisdictions to just restrict HUD-code homes, regardless of whether they had a steel chassis or not. So I don’t think this will make it easier to place these homes than it was previously.

This change could theoretically make it easier to build manufactured housing projects from multiple modules, taking advantage the 2024 change that allows the HUD code to be used for structures of up to four housing units (HUD has specifically noted that the chassis requirement makes it harder to build multistory manufactured housing structures). But I similarly suspect that this wasn’t enough of a constraint to meaningfully alter their uptake for this sort of structure. My prior here is that in the current environment it’s pretty hard to meaningfully increase manufactured home shipments via regulatory changes: folks have been trying various ways of doing that for the last two decades but don’t seem to have had all that much success.

What is true, however, is that jurisdictions often define manufactured homes by referring to their steel chassis, at least somewhere in their regulations. Because of that, implementing this will require states to modify their regulations, so this implementation will take some time: jurisdictions have a year to make the necessary regulatory changes. So it’ll be a while before we see chassis-less manufactured homes rolling down the road. Overall, I expect this change to possibly reduce the price of manufactured homes by a few percentage points, but probably not result in a huge uptick in their use.

Section 302 — Modular Housing Production Act. This section instructs HUD to study FHA construction financing, determine whether there are financing barriers that might be preventing the adoption of modular housing, and to issue a rule addressing the issue if it seems like one is justified.

This is looking at a real problem: construction projects are financed with construction loans, and these loans typically have a “draw schedule”: the funding gets issued a little bit at a time, just enough to complete the next phase of the project. But these draw schedules often don’t work well with modular construction, which requires a lot of funding upfront (before the project even begins) to fabricate the modules. So fixing this would be meaningful.

But there’s a few issues with this section. One is that it doesn’t mandate making any change: All HUD is required to do is study the problem, and there’s no deadline for completing the process. Two is that HUD (which oversees the FHA) already had the authority to modify FHA loan draw schedules for modular projects, and has since 1974. So it’s not clear why this section was actually needed. Three, making it easier to use modules doesn’t really impact supply at all. It just makes it possible for developers to use modules instead of conventional construction. (Theoretically, there could be projects that only make sense with modular, and this could make those projects happen that otherwise wouldn’t, but I suspect the number of these sorts of projects is very near zero.) Fourth, this probably only applies to FHA-insured multifamily projects, which as we’ve noted is a very small housing universe. So while this section is targeting a real problem, I expect the impact of this section to be basically nil, though the resulting HUD report will probably make for interesting reading.

Section 303 — Property Improvement and Manufactured Housing Loan Modernization Act. This section increases FHA-insured loan limits and the allowable duration for manufactured home loans, as well as improvements/renovations to single family homes and manufactured homes. It also allows loans for Accessory Dwelling Units (ADUs) to be FHA insured.

These are changes to a pretty small program — FHA insurance for manufactured home loans was a substantial lending program in the 1980s, but today it’s basically not used at all (there were three such loans in 2021). Property improvement loans are now just a few thousand a year. Possibly these changes increase those numbers somewhat, but probably not by much. And only some fraction of these loans will have an impact on overall housing supply (specifically, property improvement loans which keep a manufactured home or park in operation that would otherwise deteriorate and be unoccupiable, and loans for ADUs that allow ADUs to get built that otherwise wouldn’t). So overall I see a pretty small impact here.

This section also requires HUD to conduct a study on the cost-effectiveness of offsite construction, which I suspect will make for interesting reading but won’t impact housing supply.

Section 304 — Preservation and Reinvestment for Community Enhancement (PRICE) Act. The PRICE program funds maintenance and repair of infrastructure at manufactured home parks — sewers, plumbing or electrical lines, roads, and so on. PRICE grants were first issued in 2024, and this section basically makes the program “official,” instead of needing to be reapproved every year. The first round of PRICE grants was for $225 million, allocated to 17 projects.

This is a potentially useful thing to allocate funding towards, and is another “conservation” section: keeping units in the housing market that might otherwise deteriorate to the point that they’re unoccupiable. To me the bigger question is how much of a difference it makes to be an official, authorized program. So the counterfactual impact of this section, compared to what would occur if the program was just reapproved (or not) on a yearly basis, is plausibly pretty low.

Conclusion

Titles II and III mirrored what we saw in Title I: The biggest potential impacts are concentrated in a small number of sections (the Innovation Fund, the RAD limit increase, the manufactured home chassis rule), but their actual impact will be a function of how much the constraint it targets was actually binding and how strong the incentive is, which in general is difficult to know. And there are a bunch of sections that target real problems (commercial to residential conversions being expensive, construction draws not aligning well with modular building, jurisdictions with overly restrictive housing regulations), but probably don’t have enough juice to make much of a dent in them.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at the Endangered Species Act and housing production, why it’s hard for LEGO to use 3D printing, robotic welding and shipbuilding, modular data centers, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing

A paper by Max Tabarrok finds that the Endangered Species Act reduces housing construction by 10% in places near species’ listed habitats. Across the US, this works out to about a 4% reduction of total US housing stock. “In 1980, for example, 200 plant and animal species were listed as endangered or threatened and in 2025 there were 1,465 such listings. Each listed species has a distinct habitat. Thus, the growing list of protected habitats is a source of detailed variation in the intensity of land use regulation. This paper studies the effect of these regulations on housing construction. In a staggered difference-in-difference framework, exploiting 1,200+ species listings across the U.S. from 1980–2024, I find that the average treated place reduces its annual permit flows by 0.52 permits per thousand 1980 residents after a species listing, about 10% of the average annual flow.” [MTabarrok]

It’s been widely noted that people often pay a premium for access to good school districts. Elizabeth Warren, before she went full slopulist, wrote a book about this, and I noted in my look at build to rent housing that one benefit of build to rent is that it allows people to gain access to school districts that they otherwise couldn’t afford to live in. This cuts both ways though: if a good school near you closes, the value of your house might decline. “More than 1,000 public schools across 700 communities closed last year, according to new data—shuttering a prized neighborhood amenity and potentially putting nearby home values at risk.” [Realtor.com]

Manufacturing

Claims about why it would be hard for Lego to replace injection molding with 3D printing. “Even if you can get bricks that will mate the tolerances for clutch force, color accuracy, part durability, longevity, and more are so unbelievably tight…Polymer manufacturing has hard mode, expert mode, and then there is legendary god mode where LEGO delivers from on high. It is literally the pinnacle of what injection molding is capable of when held to standards like this.” [X]

Earlier this year we noted the risk of a chemical explosion at a California manufacturing facility. That manufacturer made commercial aircraft windows, and as a result there’s apparently now a looming shortage of them. “GKN Aerospace, one of the world’s biggest suppliers of cockpit and passenger windows, halted production in late May at its factory in suburban Los Angeles after an overheating tank raised fears of an explosion and prompted the evacuation of 50,000 nearby residents for several days.” [Reuters]

Automated factory startup Hadrian raises $1.37 billion in funding. [X]

Thanks to the on again, off again war with Iran, the US is apparently running low on long-range precision missiles. [Reuters]

Dylan Matthews argues that Trump’s suspension of the Jones Act (the much-reviled law that requires goods carried between US ports must be done on US-built ships) has created the opportunity to reform it. “But that a waiver actually went through this year, and has continued to be renewed, suggests the law’s critics are winning the intra-administration fight this time around. This makes 2026 perhaps the single most promising moment for meaningful Jones Act reform in decades. Durable reform, though, has to go through Congress, and will have to be bipartisan. It will also have to grapple seriously with what transitioning to a new regime looks like.” [Abundance & Growth]

As I note in my book, the best-quality iron ore in the US was mined out many years ago, and iron ore mined in the US needs to go through a process of “beneficiation,” which produces higher iron percentage pellets that can then be processed in a blast furnace. The US is apparently getting its first new iron pellet plant in almost 50 years, to produce pellets not for blast furnaces but for direct reduction in electric arc furnaces. [Industrial Sage]

Mariana Minerals raises $310 million in funding after restarting a shuttered US copper mine. [PRNewswire]

Read more

A few weeks ago the 21st Century ROAD to Housing Act became law. This is an enormous housing bill that’s been in the works for roughly a year — I first discussed it on Statecraft back in 2025 — and folks are optimistic that it will, per its description, “increase the supply of housing in America.”

But actually understanding what, specifically, the law will do is tricky. Like many large pieces of legislation, this is an amalgamation of many smaller laws: the Act has 59 individual sections, each of which does something different. Some of these sections create new housing programs; some of these sections modify existing government housing programs in complex ways; and others relax or change various housing laws but have complicated implementation details.

And once you’ve parsed what the law will actually do, you still need to predict how the various participants in the housing market will actually respond to the changes. (As we covered last month, the actual effects of laws can diverge significantly from lawmakers’ intentions.) Much of this law is aimed at changing the incentives around housing production — stimulating the production of housing by relaxing various constraints on producing it. But it’s not always obvious how binding the particular constraints that the law targets are, and how much housing we can expect to be unlocked by easing them.

As this is the biggest US housing bill in living memory, aimed at addressing one of the biggest problems in the US, it’s worth looking closely at the law and trying to tease out what the likely effects on housing supply will actually be.

Because there are so many individual sections, each of which requires drilling somewhat deep on a particular government program or aspect of the housing market, I’m not going to try to do this all in one shot. This will be the first in a series of posts (probably 4–5 total), each of which looks at one chunk of the housing bill.

A high-level look

At a high level, we can sort the individual provisions of the ROAD to Housing Act into three categories:

• Provisions that target the construction of new housing, either directly or indirectly.

• Provisions that target the preservation of existing housing.

• Provisions that do something else.

Despite the ostensible overarching goal of the law being increasing housing supply, most provisions of it actually fall into the third category and won’t realistically have any impact on housing supply. Some of these third-category provisions are totally unrelated to housing: there’s one that prevents the Federal Reserve from establishing a digital currency through 2030. Others are about housing, but won’t do anything to actually touch housing supply, such as a provision that provides grants to install temperature sensors in public housing. So while the law is a sprawling mass of changes, the biggest potential effects on housing supply are concentrated in a smaller number of provisions.

Another key aspect of this law is that no funding is allocated for any of its programs. The very last section, 1202, specifically states that “[n]o additional funds are authorized to be appropriated to carry out the requirements of this Act.” That means that any changes that require money to implement will need to get it from a separate congressional appropriation. For instance, section 208 of the Act creates an Innovation Fund of up to $200 million a year to award to jurisdictions that show increases in the housing supply, but the actual money for this fund will need to be awarded separately. This doesn’t mean these changes won’t be implemented, but it does create another barrier that many of the provisions will need to clear before they can have any effect. (For reference, the science half of the 2022 “CHIPS and Science Act” similarly passed with no funding specifically allocated to it, and anywhere from 60 to 90% of its authorized funding was actually appropriated depending on the year.)

The ROAD to Housing Act is broken into 12 “titles,” each one of which contains a bundle of provisions, but the most important changes are concentrated in titles 1, 2, 3, 5, and 10. In this post I’ll just look at Title I, “Opportunities for Housing.”

Title I — Opportunities for Housing

Title I of the ROAD to Housing Act contains seven provisions and is basically a grab bag of new programs and modifications to existing programs.

The headline items in this section are:

102 — Federal Guidelines for Point-Access Block Buildings. This instructs the Department of Housing and Urban Development (HUD) to create federal guidelines for point access blocks, multifamily apartment buildings with a single stairway and no central corridor. It also allows HUD to set up a grant program for jurisdictions that want to evaluate point access blocks.

103 — Exemption on Construction or Modification of Residential Housing on an Infill Site. This provision exempts infill housing constructed as part of the United States Department of Agriculture’s (USDA) Rural Development program from having to undergo an environmental review (such as required by NEPA).

105 — FHA Small-Dollar Mortgages. This allows (but does not require) HUD to create a program to expand access to inexpensive mortgages (less than $100,000) backed by the Federal Housing Administration (FHA).

These are all positive changes. Point access blocks, also known as single-stair buildings, are widely used in Europe, but disallowed by most modern US building codes, and they’re something that urbanists have been advocating for years. The Center for Building in North America, for instance, has devoted a lot of effort to advocating for single-stair buildings at the state level. Eliminating the requirement for a second stairway means that, for certain building sizes, a lot less of a building’s floorplate is devoted to non-rentable stairs and corridors, effectively reducing construction costs by an estimated 6–13%. I once spoke to a developer who was willing to cover the cost of a new fire truck if a jurisdiction would allow the use of single-stair buildings, such was the magnitude of the projected savings.

Expanding access to small-dollar mortgages is also tackling a real problem. The fundamental issue with small-dollar mortgages is a tension between what a mortgage originator earns on a mortgage and what it costs them to originate. A large chunk of origination costs is fixed — it takes a similar amount of effort to process the paperwork whether the mortgage is for $100,000 or $1,000,000. But earnings on a mortgage are a function of how much is being loaned, so profits are much smaller on small mortgages and originators have less incentive to originate them.

Likewise, it’s been noted over and over again how burdensome federal environmental review requirements can be: reducing them for a federal homebuilding program is a real win.

But we should also be realistic about the magnitude of the impact these changes are likely to have.

For section 102, point access blocks, this is a change that’s part of a much larger trend towards legalizing them. As of 2025, 19 states had introduced bills to study or allow point access blocks, and in May of this year the International Code Council voted to adopt provisions that would allow for point access blocks up to four stories tall in the 2027 International Building Code (a model building code adopted in some form by every US state). So even in the absence of this provision in the new federal law, jurisdictions were already moving in this direction. And on its own, section 102 has little in the way of teeth. It just mandates the creation of federal guidelines regarding point access blocks; it doesn’t require any jurisdictions to actually follow them.

Which isn’t to say that there’s no potential impact. A federal set of guidelines could potentially provide enough legitimacy to push jurisdictions to adopt point access blocks that otherwise wouldn’t. If a grant program materializes, that could also accelerate their adoption in certain jurisdictions. And if the generated federal guidelines allow for buildings with a higher number of stories (the provision allows up to six, rather than the four adopted by the IBC), this could theoretically push states to set their height limits higher than they otherwise would. But overall I expect the impact of this provision to be fairly marginal.

For section 103, environmental review of the USDA’s Rural Development infill housing, the impact of this is blunted by two things. One is that much of the program’s housing construction is already subject to a NEPA categorical exclusion; the other is that the program currently builds very little housing, and this section probably won’t change that.

The USDA’s Rural Development agency administers a collection of programs intended to “improve the economy and quality of life in rural parts of the US.” Many of these efforts are devoted to housing: since 1950 the USDA has funded the “construction, purchase, or repair of over 5.5 million rural housing units.” But currently, this program doesn’t build much housing: it’s hard to get clean numbers because the USDA doesn’t break down which loans go to new construction and which go to purchasing existing housing, but it’s probably building less than 5,000 units per year across single-family and multifamily housing, and possibly less than 1,000. Housing built on infill sites specifically (which are sites already served by infrastructure such as electricity, water, and sewer lines), which are the only projects covered by this provision, will be some smaller fraction of this.

What’s more, much of this construction was already effectively exempt from NEPA’s requirement to produce an environmental report. Repairs to existing housing, construction of single-family homes, and small multifamily projects already had a NEPA categorical exclusion, which means they don’t require a more thorough Environmental Assessment or Environmental Impact Statement. And this provision wouldn’t affect any state-level environmental study requirements, such as California’s CEQA. So in practice removing the requirement for an environmental study will only affect a narrow sliver of an already small universe of housing. It’s conceivable that removing a burdensome federal environmental review process might create an uptick in the number of projects that would fall outside the categorical exclusion, such as larger multifamily projects, but this would surprise me: I expect the impact of this change to be pretty minor.

For section 105, small-dollar mortgages, it helps to remember that the FHA is basically an insurance company: it sells mortgage lenders insurance policies against borrowers defaulting, in order to “incentivize lenders to make loans they otherwise would not.” It sells this insurance to a substantial chunk of the market: roughly 11 to 15% of US home purchases have FHA insurance. Because FHA insurance is so widely used, and because it specifically targets folks who might otherwise have difficulty getting a mortgage, a program to expand access to mortgages below $100,000 could potentially be a big deal for low-income homebuyers, enabling them to get mortgages that might otherwise not be worth a lender’s while to make.

The challenge here is that very few new homes built in the US are sold below $100,000. In 2023 there were only 1,000 new homes sold for less than $150,000 in the entire US. So currently, this would theoretically apply to at most a few hundred new conventional homes built each year.

There’s also a larger universe of manufactured homes that this could apply to: roughly 100,000 manufactured homes are sold each year, and nearly 40% of manufactured home mortgages are FHA-insured (though not all manufactured homes have mortgages). But this universe is also narrowed: a small-dollar mortgage program would only apply to homes titled as real property, which is probably about 20% (~20,000) of new manufactured home shipments. And only a fraction of these would actually fall below the $100,000 cutoff: the average price of a new manufactured home, sans land or installation, is already above $120,000. Once you include land and installation (as you would for any manufactured home titled as real property), you’re even farther above $100,000. It’s thus likely more than half of new manufactured homes titled as real property would be beyond the $100,000 cutoff.

Of course, the question for the effect on housing supply is not how many homes are currently built that cost under $100,000, but how many might be built if it were easier for folks to get mortgages for them. It’s conceivable that lendability of small-dollar mortgages is a major binding constraint, and with it relaxed we’d see a major uptick in the construction of smaller, more affordable houses for less than $100,000. (This might be especially true for manufactured homes, given the cost-reducing changes that are being made to manufactured home regulations in Title III of this legislation, which I’ll cover in a future installment in this series.) This doesn’t seem amazingly likely to me, but neither does it seem impossible. And outside of the impact on housing supply, there would probably also be some social benefits from increasing access to mortgages for existing low-priced homes.

A small-dollar mortgage program could also potentially apply to ADU construction, as long as the remaining mortgage on the primary property didn’t push the combined loan over $100,000. I suspect that’s also a pretty small universe of potential homes — if your mortgage balance is substantially less than $100,000 and you’re considering an ADU, you probably have other financing options available (such as a home equity line of credit) — but it’s another possible avenue for a provision like this to work.

Of course, this all depends on a small-dollar mortgage program actually being created, it being structured in such a way that actually incentivizes lenders to make more small-dollar mortgages, and its effectiveness not being eaten away by inflation (since there’s no provision for raising the $100,000 cutoff over time). None of these is guaranteed. But to me there’s a higher plausible upside to this provision than to the other provisions we’ve looked at.

Sections 102, 103, and 105 are what I consider the headline provisions in this section, but there are several other provisions as well.

101 — Reforms to Housing Counseling and Financial Literacy Programs. This section “clarifies the authority of HUD to evaluate housing counseling agencies” and makes some tweaks to how counseling resources are distributed. This will possibly have some impact on reducing foreclosures by giving counseling resources to help people avoid them (though I doubt it), but the effect on new housing supply is basically nothing.

104 — Database of Publicly Owned Land. This requires any jurisdiction that receives a federal Community Development Block Grant (CDBG) from HUD to maintain a publicly accessible database that identifies all undeveloped parcels of land owned by the jurisdiction.

This is, presumably, to make it easier for developers to find publicly owned parcels of land that might be suitable for development. And this affects a lot of jurisdictions — over 1,200 cities, states, and counties in the US get CDBGs from HUD. But it strikes me as unlikely that finding these parcels of land is a major bottleneck to the development process. GIS-based parcel ownership lookup tools, for instance, are already pretty common. There’s also the problem that this provision excludes a lot of potentially useful publicly owned parcels, because they’d be publicly owned by a government entity other than whoever is receiving the block grant. School districts, for instance, are technically their own special-purpose governments that own things in their own name. So an empty parcel of land owned by a school district wouldn’t necessarily be included in an undeveloped land database administered by the state or county.

It’s possible that the mere act of creating this database causes jurisdictions to look more closely at their land resources and decide to sell some of them for housing development, but that strikes me as not amazingly likely. Overall it’s hard to see this having much, if any, impact on housing supply.

106 — Temperature Sensor Pilot Program. This section requires HUD to create a pilot program to provide grants to housing agencies to install temperature sensors, to ensure public housing doesn’t get too hot or too cold. A positive development, but not one that affects housing supply at all.

107 — Housing Supply Frameworks. This section requires HUD to publish best practices for state and local zoning “to support the production of adequate housing.” This includes things like reducing or eliminating parking minimums, increasing allowed floor area ratios (FAR) to allow for bigger buildings on sites, encouraging transit-oriented development, and so on.

These are all things that urbanists like, but it’s hard to see much upside from publishing a list of best practices when information on these sorts of best practices is already widely available. I have heard, however, that the hope is that a “ROAD 2.0” housing act could include incentives for zoning best practices adoption, and for that it’s helpful if there’s already a set of federal recommendations. So the main impact of this provision might be a function of future legislation. On its own, though I doubt this will have much impact.

Conclusion

Overall the content of Title I in the 21st Century ROAD to Housing Act is fairly representative of what’s in the law. There are a few provisions that are aimed at very real problems in the housing sector — legalizing single-stair buildings, reducing the burden of environmental review, and improving the incentives for lenders to offer small-dollar mortgages — the effects of which will depend on how much that particular constraint was actually binding, and how people respond to the changed incentives. Along with these is a collection of other provisions that make various positive changes regarding housing (new resources, new or improved programs) but that probably won’t affect housing supply at all.

The next post in this series will look at Title II, a long section with lots of relevant housing supply provisions in it. And for more on what jurisdictions can do to take advantage of the various provisions and the federal dollars that will flow from them, my colleagues at IFP wrote a useful explainer.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, industrial technology. This week we look at pepper-spray drones, China’s chip Manhattan Project, Commonwealth Fusion’s fundraise, and a proposed Dulles Airport renovation. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing and Cities

It’s been a while since we checked in on 3D printed building company Icon. It seems like they’ve completed printing of 10 barracks buildings for Fort Bliss, and the first two of the buildings are now completed and occupied. [Army]

Some schools are buying pepper spray-equipped drones to deploy against active shooters. “At least nine schools — three in Florida, five in Georgia and one in Colorado — will have storage boxes that house the plastic, nonlethal aircraft made by Austin-based Mithril Defense. The drones, which can be activated by teachers, are capable of reaching a shooter within 15 seconds. The aircraft are designed to distract their targets by flashing strobes, blaring sirens, spraying them with pepper gel, or ramming into them at 60 mph.” [Washington Post]

The Wall Street Journal on the decline of kids in big cities. “The number of children under 18 living in big U.S. cities is down 6% in the past decade, the Journal found, compared with a 1% decline nationwide. The drop is especially stark among families with little kids: The number of children under age 5 in big cities fell 15%, compared with a drop of 7% nationwide. Even cities that are gaining population are losing children.” [WSJ]

Manufacturing

The Financial Times on how things are turning around at Boeing, and how far the company has to go. “According to aviation research firm Leeham Co, Boeing’s commercial airliner division alone has lost more than $46bn since 2019. It estimates that, left with little pricing power after years of delayed and cancelled aircraft deliveries, the company lost an average of $2.8mn on each of the 314 planes it has delivered this year.” [FT]

Tesla is allegedly considering spinning off its China operation into a separate business, potentially to allow the company to merge with SpaceX. [WSJ]

Inside China’s “chip Manhattan Project” to catch up to the US in chipmaking technology. “Ding dusted off the same all-out approach China had used to produce its first atomic bombs, hydrogen bombs and satellites in the 1960s during a rift with the Soviet Union. He set up a committee that drew from the country’s best companies and labs to form specialized teams and directed them to master the different elements of the chip supply chain.” [WSJ]

Related, a Chinese company is now mass producing deep ultraviolet semiconductor lithography (DUV) machines. DUV is the technology that preceded EUV. [Tom’s Hardware]

Tesla says it plans to open source the designs for the discontinued Model S and Model X. [Electrek]

The US Senate is working on a bill that would ban automakers that have more than 15% Chinese ownership from selling cars in the US. This would include Mercedes Benz. [Car and Driver] And this week the US also banned the import of new models of Chinese robots and power inverters. [Reuters] And Starlink gets an exemption from the recent ban of foreign-made routers. [Ars Technica]

Related, this week China banned export of critical minerals that could be used for military purposes to 14 European companies. “As a result, the companies may struggle to buy many of the critical minerals they need to make products like rare-earth magnets and semiconductors, which are essential for cars, offshore wind turbines, robots, drones and other advanced manufacturing applications.” [NYT]

Both Ford and GM are competing to be the supplier for a new tactical pickup truck for the Army. [WSJ]

Energy

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Solid-state batteries have several potential advantages over the lithium-ion batteries with liquid electrolyte we use now. For one, replacing the liquid electrolyte with a solid should allow for lighter batteries, requiring less mass per unit of energy delivered. And because the liquid electrolyte currently used in batteries is flammable, replacing it with a solid could make batteries safer and less susceptible to fire.

I wanted to better understand why, exactly, solid-state batteries have these advantages compared to conventional lithium-ion batteries, and how they fit into the broader arc of lithium battery improvements.

Battery basics

Batteries supply energy by way of chemical reactions. And chemical reactions, regardless of the chemicals involved, all release or absorb energy using the same mechanism: an electron or electrons move from one potential energy well to another. In a chemical reaction that gives off energy (an exothermic reaction), electrons move from a higher potential well to a lower potential well, giving off energy in the process.

“Potential well” is fairly abstract, so I find it useful to consider an analogy with gravity. Say a ball is in a shallow groove at the top of a tall hill, and there’s another shallow groove at the bottom. The ball is being tugged downward by gravity, which gives it potential energy, a function of how much mass the ball has and how high it is above the bottom of the hill. By itself, the ball at the top of the hill won’t move, but if you give it a little push to nudge it out of its groove, it will roll downhill, releasing its potential energy in the process. This potential energy is converted to kinetic energy (the velocity of the ball), which in turn converts to thermal energy from friction, slowing the ball down until it stops in the lower groove.

Chemical reactions work in a somewhat similar way. But instead of gravity, the potential energy comes from electromagnetism: the positively charged nuclei tugging on the negatively charged electrons. In an exothermic reaction, atoms start in some particular “groove,” their electrons in some particular arrangement. But if you give the atoms a little kick (say, by heating them up so their collisions become more energetic), you can knock them out of their groove, letting them “roll downhill” into a lower-energy configuration, converting their electric potential energy in the process. Some of that potential energy (half, in fact) will go to increasing the electrons’ velocities; the rest will be released as vibration (heat), or as a photon.

So, for instance, say you start with one methane molecule (one carbon and four hydrogens, CH4) and two oxygen molecules (each with two oxygen atoms, O2). These molecules start with their electrons in a particular configuration, the oxygen atoms bonded with each other and the hydrogen atoms bonded with the carbon. At room temperature, O2 and CH4 largely won’t react with each other: each is sitting in its own potential well that takes energy to climb out of. But give them a kick by adding heat, and they can “fall downhill,” going through a series of reactions and ending up in a lower-energy configuration — the hydrogen and carbon atoms each bond with oxygen, forming H2O and CO2. The resulting electron configurations are in lower potential energy wells, with much of the difference being released as heat.

Lithium-ion batteries work by using, unsurprisingly, chemical reactions with lithium. When a lithium-ion battery discharges, lithium ions and their electrons “fall downhill,” moving from one configuration at the anode (inserted between sheets of graphite, known as “intercalation”) into a different, lower-energy configuration at the cathode (intercalated in another material, such as lithium iron phosphate, LiFePO4). The battery is structured to capture energy from this reaction. Lithium ions can pass from the anode into the electrolyte, but electrons can’t: they must go around, through a metallic conductor that connects the anode and the cathode. This flow of electrons is the electrical current that batteries generate. (When a battery is charging, the reverse happens: a voltage placed on the conductor forces electrons back uphill into the anode, with lithium ions flowing back through the electrolyte to keep the charge balanced.)1

Lithium is a favored choice for a battery because an electron leaving lithium has farther to fall than an electron leaving any other metal when coupled with the appropriate reactant. Lithium is also a very light atom (an atomic mass of around 7), which, combined with the large “drop,” means that lithium reactions yield a high amount of energy. Per unit mass, lithium reactions release roughly as much energy as burning gasoline.

But if this is true, why are lithium-ion batteries so much less energy dense than gasoline?

One big reason is the oxidizer. The chemical reactions we rely on for energy typically require some downhill destination for electrons to end up at, which is known as an oxidizer. When burning gasoline, the oxidizer is oxygen in the surrounding air: inside a gasoline engine, fuel and air are mixed together and then ignited, triggering the chemical reaction — an explosion — that powers the engine. Gasoline-powered cars, in other words, don’t need to carry their oxidizer with them, because there’s always one available in the surroundings.

Lithium-ion batteries, on the other hand, aren’t so fortunate. They need to carry their electron destination with them, in the form of the cathode. This adds a lot of extra mass compared to what a gasoline-powered car needs to carry. If a car needed to carry its own oxidizer with it, it would need about 3.5 kilograms of oxygen for every 1 kilogram of gasoline.

More generally, it just requires a lot of material scaffolding to structure the lithium reaction in a way that lets you extract energy from it in the form of electric current. At the anode, each lithium ion requires an additional six atoms of carbon, forming graphite sheets that the lithium ions can nestle into. A similar intercalation structure is required at the cathode. On top of this is the extra mass for the electrolyte, the separator, the current collectors, and so on. As of 2019, every gram of reacting lithium in a battery required about 70 grams of supporting material (though this number has probably fallen somewhat since then).

Without this material scaffolding, the reaction can still take place, but in a non-useful way. If something creates a direct path between the cathode and the anode, the reaction will run nearly instantly, creating a lot of heat and triggering other chemical reactions that will destroy the battery, but no useful electric current. Modern battery design, in fact, takes a lot of effort to prevent these runaway reactions from taking place.

The benefit of all this material scaffolding, of course, is that you can use the same chemicals for the reaction over and over again. The intercalating electrodes on modern lithium-ion batteries in particular are very good at this; because the electrode structure is maintained when the battery charges/discharges, lithium-ion batteries can be used for very large numbers of cycles while maintaining most of their capacity. When you burn gasoline, on the other hand, you’re discharging the products of the reaction continuously (which, of course, is the whole reason we want to switch away from fossil fuels in the first place, to stop the discharged CO2 from building up in the atmosphere). You could, theoretically, dispose of the lithium-ion battery’s scaffolding by having some sort of lithium-based internal combustion engine, but this would work terribly and be outrageously expensive to run (though some people are interested in using oxygen in the air as a battery oxidizer with lithium-air batteries).

The promise of solid-state batteries

The major potential benefit of solid-state batteries is a substantial reduction in this material scaffolding.

A pernicious issue with current lithium-ion batteries is dendrites. As we’ve noted, at the anode, lithium ions are nestled between sheets of graphite. But the anode holds the lithium ions very loosely, only slightly better than metallic lithium does. This is useful, because ions can easily migrate into the electrolyte, thus letting the battery work, but it’s a double-edged sword: under the right conditions, the lithium ions that are supposed to enter the anode during charging might instead acquire an electron at the surface of the anode, forming tree-shaped structures of metallic lithium called dendrites, instead of nestling between the sheets of graphite. If a dendrite pierces the separator between the anode and the cathode, it creates a direct path between the two, letting that runaway reaction that batteries are designed to prevent take place. (This doesn’t immediately react all the lithium in the battery — as electric current flows through the dendrite, the dendrite heats up, eventually melting and breaking the path — but the heat from the brief reaction can be enough to trigger other chemical reactions, resulting in thermal runaway and destroying the battery.) A great deal of battery development effort is devoted to preventing these dendrites from forming.

If, however, the liquid electrolyte were replaced with some sort of solid material, these dendrites might stop being a problem.2 With a strong, solid electrolyte, dendrites wouldn’t (in theory) be able to make their way through it, though with current solid electrolytes dendrites still seem to find their way through. And if the risk of dendrites were eliminated, you could switch to a different anode, dispensing with the graphite intercalating structure entirely, using an anode of pure lithium metal.3 And because the solid material would eliminate the flammable electrolyte, the resulting battery might be safer as well.

Solid-state batteries probably aren’t imminent — the chairman of CATL ranks them as 4 out of 9 on the technological readiness scale, and has indicated that commercial viability “has yet to be established.” But the expectation that they could be “[p]otentially safer, more energy dense, and perhaps eventually cheaper than today’s batteries” is pushing manufacturers around the world to try and make them happen.

Thanks to Austin Vernon for reading a draft of this. All errors are my own.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at China’s EV subsidies, the future of aeroderivative gas turbines, a US-Saudi nuclear deal, defective roadway guardrails, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing and Cities

The CEO of DR Horton, largest homebuilder in the US, thinks that the 21st Century ROAD to Housing Act won’t have much impact on housing supply or demand in the short term. [X]

The Financial Times on why socialists should embrace luxury apartments. “Above all, high-end developments unlock long housing chains. As higher-income households move into newly built units, they free up older properties, raising supply and slashing prices for middle- and lower-end housing through a process known as filtering. Numerous international studies underscore this positive ripple effect.” A good sentiment, though stating it to the readers of the Financial Times is probably preaching to the choir. [FT]

Last week we noted that Saronic, which had been slated to be a major tenant for California Forever’s shipbuilding facility, had instead opted to locate their operations in Texas. Someone claimed on Twitter that California was, in fact, never really in consideration, and that overtures to California Forever were entirely to secure better terms in Texas. [X]

The fraction of housing markets in the US where prices are rising vs falling over time, via ResiClub. [X]

US cities which used to have at least 100,000 people but no longer do. [Reddit]

Manufacturing

TSMC is accelerating its investment in Arizona fabs due to enormous AI demand. [CNBC] And TSMC plans to raise prices by up to 10% starting in 2027. [Yahoo Finance]

As China’s EV industry gets more mature, China is beginning to roll back subsidies for the sector. “Starting Sept. 1, lithium-ion batteries will be subject to a 2% consumption tax, which will double to 4% a year later, according to a Friday announcement by the Ministry of Finance.” [X]

Energy

The National Historic Preservation Act (NHPA) requires considering whether a new project will impact the view of some existing historic property. Thus the more land area a project extends over, or the taller it is, the more potential view impacts, and the greater the NHPA review burden. This is bad news for clean energy projects like wind and solar, which have a much “viewprint” than oil and gas projects. “We examined nearly 100 recent energy projects and found a striking discrepancy: compared to fossil energy projects, clean energy and transmission projects have review areas about 10 times larger and are more than 8 times as likely to receive an “adverse effect” finding — triggering additional process, delay, and mitigation obligations.” [IFP]

Tim Latimer, CEO of geothermal startup Fervo Energy, on what the geothermal industry can learn from SpaceX. Basically, instead of trying to develop an ambitious technology in one shot, start with a simpler, less ambitious version of it, and advance via learning by doing. “...much like the Starship example, starting with the end state and trying to solve all the various technology challenges all in one go would be incredibly challenging. So Fervo has opted to take a learning by doing path that parallels SpaceX. Project Red was our first pilot. Rather than try to drill a super hot or super deep concept right out of the gate, we completed a project in a category called “near-field Enhanced Geothermal Systems” (NF-EGS). This meant going to a location that was adjacent to a producing geothermal site, so the geothermal gradient was higher, even though the permeability in the part of the field we had selected did not support prior development with conventional technology.” [LinkedIn]

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Last time in our series on the nature of the construction productivity problem, we looked at economies of scale, finding that capturing economies of scale in homebuilding is difficult. Economies of scale primarily operate on the difference between the costs of the material inputs to some process and the cost of the final product. With housing construction, this ratio is already pretty low, not much higher than what we see in high-volume manufacturing industries that already maximize these kinds of cost advantages, such as the auto industry.

There is, however, another possible route for reducing construction costs: reducing the costs of the inputs directly, either by using cheaper inputs (less expensive materials or labor) or by using fewer inputs. To use a baking analogy, capturing economies of scale is like improving the efficiency of baking cakes by making them in a high-volume, industrial bakery instead of your home kitchen. Reducing the input costs is more like changing the recipe of that cake to require cheaper/fewer ingredients.

For housing construction, we can broadly categorize the inputs to construction as either materials or labor. (There are also equipment/machinery costs, but these are a very small fraction of housing construction costs.) Reducing the cost of labor inputs is difficult, for the simple fact that conventional construction is done on-site, limiting the ability to use cheaper pools of labor. Reducing the cost of material inputs appears somewhat more viable in theory (at least for some materials), but a variety of barriers make actually doing so difficult in practice.

Finding cheaper construction labor is hard

Historically, manufacturers have reduced their labor costs by moving their operations to places where labor is cheaper. As I note in “The Origins of Efficiency”:

Garment manufacturing, for example, has proven resistant to automation and remains a labor-intensive industry. As a result, garment manufacturing operations tend to continuously relocate to sources of low-cost labor (which are often, not unrelatedly, places with poor working conditions). By the late 19th century, New York City had become one of the largest garment manufacturing centers in the world, such that in 1890 New York made 44 percent of the ready to wear clothes produced in the US. But by the 1920s, the industry had begun to move where labor was cheaper — first from Manhattan to Brooklyn and New Jersey, then to New England, then, as the interstate highway system developed, to the South, and, finally, overseas. Similarly, Nike began importing footwear from Japan in the 1960s, then began manufacturing its own shoes in Japan in the 1970s. As labor costs in Japan rose, Nike shifted production operations to Taiwan and Korea, then China, then Vietnam and Indonesia. There have been similar shifts in other labor-intensive industries, such as shipbuilding (which moved from the UK to Japan, then to South Korea, then to China), as well as toy manufacturing (which moved from the US to Japan, then to Hong Kong, then to China).

This strategy, however, is difficult to pursue in construction, for the obvious reason that conventional construction is done on-site and can’t be relocated to where labor happens to be inexpensive.

A relocation strategy does become available if your construction is prefabricated, but this introduces new complications, notably the high costs of transporting prefabricated building components. As we’ve previously noted, most prefabricated construction is produced in distributed, relatively small-volume factories located to minimize transportation distance. (A common limit, noted by several manufactured home producers, is 500 miles, about the maximum that a truck can drive in a single day.)

There are labor cost differentials in the US, and modular builders do indeed locate their operations to take advantage of them. If we use RSMeans City Cost Index values for “installation costs” as a proxy for construction labor costs, there’s a roughly 2x cost difference between the 10th percentile city and the 90th percentile city.1 Modular builder Autovol fabricates its modules in Nampa, Idaho, and ships them hundreds of miles (far beyond the typical 500-mile limit) to Los Angeles and the Bay Area, where labor costs are far higher. Stack Modular builds its modules in China and then transports them to West Coast building projects using bulk carriers. Volumetric Building Companies has similarly noted that modular construction works best when a large labor cost differential exists between the factory location and the site location. But the added capital and transportation costs of modular construction dull this benefit. Autovol does boast that its construction costs are lower than conventional construction in the high-cost California metros that it builds in. But Stack Modular, despite using low-cost Chinese labor, only makes the more modest, more common claim of the benefits of prefabrication, that it provides “cost certainty” and “reduced schedule” rather than lowering hard costs. Volumetric Building Companies similarly notes that the cost savings of prefabricated construction, when they exist, are typically modest (5–10%), and often don’t appear at all.

This constraint of being unable to relocate to a source of low-cost labor is shared by the agriculture industry, which likely explains why construction and agriculture are the two industries with the largest shares of (presumably lower-cost) undocumented labor.

Another strategy for using cheaper labor is to rework your production methods to allow the use of less skilled, and thus less expensive, labor. This was a major advantage of Henry Ford’s mass-production methods; the special-purpose machine tools Ford developed typically did not require a skilled machinist to operate. (Ford called the devices he used to streamline production “farmer’s tools,” because they would allow a farmer to produce parts as well as a trained mechanic.) But doing this requires some combination of sufficient economies of scale to amortize the equipment costs (which we’ve previously established as difficult) and changing the construction technology employed. We’ll look at the potential of this latter option in a future essay.

Lowering material costs is hard

The other strategy for reducing input costs is to lower material costs, either by using less expensive materials or using fewer materials.

Finding a way to use fewer construction materials, often for the perceived environmental benefits rather than cost savings, is a common strategy for would-be developers of new building systems. One of the supposed benefits of concrete 3D printing, for instance, is that it allows for much more materially efficient construction by placing concrete only where it’s needed.

The problem with this strategy, however, is that most existing construction is likely fairly close to the “material efficiency” frontier. As I noted in a previous essay on reducing the material necessary for building, the entire job of structural engineers is already to minimize the size of the structure needed to support a given load:

Structural elements are designed to be as materially efficient as possible, and have been for many decades. Wood trusses (made up of conventional lumber stitched together with steel plates) and wood I-joists (made up of engineered lumber top and bottom chords with a center “web” of oriented strand board, or OSB) are standard for residential construction in the US. Steel W-sections and steel joists (basically trusses) are standard for commercial construction. For even lighter steel construction, there is light gauge steel framing, which consists of very thin sheets of steel bent into structurally efficient shapes. There are also things like insulated metal panels, which are in some ways the platonic ideal of an efficient structural element: a thin sheet of steel on the top and bottom, separated by a layer of insulation. (The wood version of insulated metal panels, SIPS, never quite caught on in the US, though not for lack of trying.)

Even heavy, cheap materials like concrete are used in materially efficient ways. For concrete floors, a common construction method is to pour concrete over a ribbed metal deck. The ribs give the steel the strength to support the concrete while it’s wet (eliminating the need for additional shoring), and give the whole assembly greater depth, increasing bending resistance and placing the steel at the outer edge where it’s most useful. There are also things like hollowcore slabs (concrete slabs manufactured with voids in the middle), and concrete blocks (which are hollow in the middle, though many of the voids will have reinforcement placed in them and be grouted solid).

When structural material use isn’t minimized, it’s often because further reductions trade off against something else, such as higher labor costs, deeper and more expensive floor depths, or increased construction complexity. There are many structural systems, such as castellated beams (beams with the centers cut out), advanced framing (house framing designed to minimize the use of dimensional lumber), or concrete void slabs (concrete floors cast around hollow plastic spheres), that are rarely used because they require more labor, have more complexity (and thus carry more risk), or have some other undesirable tradeoff.

Another barrier that can prevent the reduction in building materials is code requirements. Requirements for electrical wiring, for instance, were set assuming the use of relatively power-hungry incandescent lighting. With the rise of LED lighting, there’s an opportunity to reduce wiring requirements for lighting by using low-voltage DC wiring; some startups have been founded to try and tackle this, but the use of lower-voltage wiring has been limited by building code restrictions.

If using fewer building materials isn’t an obviously winning path, what about using less expensive building materials? Here there do appear to be somewhat more opportunities, at least theoretically, though capturing them is far from straightforward.

Many building materials, to be sure, are poor candidates for either cost reduction or replacement with a cheaper substitute. The largest single line item when constructing a new house, for instance, is the structural framing, which, with labor and materials, makes up around 20% of the cost of a new house. But dimensional lumber is already exceptionally inexpensive: in dollars-per-cubic-foot terms, it’s among the least expensive materials that civilization produces.

If we look at the gross margins of dimensional lumber producers, they’re not particularly high: Boise Cascade had a gross margin of 16.5% in 2025, when Weyerhaeuser had a gross margin of 14.8%. It’s thus not straightforward to either drive down the cost of wood framing or substitute it with a cheaper material.2

Similarly, there’s historically been a great deal of interest in finding an alternative to drywall, but virtually every alternative is significantly more expensive:

Despite its drawbacks, installing drywall is incredibly inexpensive. My 2022 Construction Estimator gives a cost of installing + finishing drywall at about $1.50 per square foot. RSMeans gives similar. Most of these alternative materials are much more expensive, even before taking into account the labor or extra backing materials they might require. MDF panels seem to be ~$1.50 for the material alone. PVC panels seem to be in the realm of $3.50 per square foot for just material. Fibo is closer to $10 per square foot, Corian around $50 per square foot, and Dekton up to $100 (though this is for the countertops, walls might be cheaper).

Other materials, however, seem like they have more opportunity for cost reduction, though these reductions aren’t necessarily enormously large or easy to capture. Concrete, for instance, is not particularly expensive (typically costing ~$6 per cubic foot), but if you look at the gross margins of concrete material suppliers, they’re often surprisingly high. Vulcan Materials, which makes aggregate, had a gross margin of 27% in 2025. Martin Marietta had 31% that year, and Cemex had 32%. These are high enough that you could imagine a modest decline in the cost of concrete in a more competitive concrete industry.

But it’s hard to get that increased competition, in large part because it has become extremely difficult to permit a new aggregate quarry. In some parts of Washington, it can take 7 to 10 years and upwards of $1 million to permit a new quarry, and the prospect is so risky that producers are often unwilling to even try. In California, Granite Construction spent 7 years trying to open a quarry, including writing an 8,500-page environmental impact report, only for the permit to be denied. For cement, the story is similar: St. Lawrence Cement spent 7 years trying to build a new cement plant in New York before giving up in 2005. There hasn’t been a new greenfield cement plant built in the US in 15 years. Without the ability to build new quarries or cement plants, we can’t expect prices to come down.

There also seems to be room for lower material prices for steel: prices for American steel are substantially higher than for European or Chinese steel. But this also isn’t straightforward to address. Tariffs and transportation costs whittle away the cost savings of importing foreign steel, and starting a new, more efficient American steel producer doesn’t seem like an obvious win, given the already-low gross margins of US steel producers even with the tariffs (12% for Nucor, 15% for Commercial Metals Co., and negative for Cleveland-Cliffs in 2025).

Similarly, many other building product suppliers have high enough margins that major cost reductions seem like they should theoretically be possible. James Hardie Industries, which manufactures fiber cement siding, had a gross margin of nearly 36% in 2025. Owens Corning, which produces insulation, roofing, and doors, had 28%. Armstrong World Industries, a manufacturer of ceiling and architectural products, had 40%. Simpson, a manufacturer of structural connectors, had a gross margin of 46%.

But as with the other materials we looked at, there are barriers to the increased competition that might drive down these costs. For many of these products, it would often be risky for engineers, architects, or building designers to specify an alternative. These products have typically gone through extensive semi-official testing, documented in things like ICC or IAPMO code reports, which give designers a third-party verification of what level of performance they can expect from the product. Products are often backed with warranties, and the companies typically put a great deal of effort into making it easy for designers to specify their products, through things like well-designed catalogs, free design software, and free engineering assistance. (Simpson’s connector catalog, for instance, is so well put together that it was actually used as a textbook in a course I had on wood design in college.)

Building professionals, as I’ve noted previously, are rationally risk-averse: the upside from specifying a slightly cheaper product is relatively minor compared to the huge downside risk of a building product that doesn’t work as expected. When a building product doesn’t work as advertised — polybutylene piping in the 1980s, EIFS cladding in the 1990s — engineers, architects, and builders are invariably drawn into the resulting lawsuits. This makes it hard to compete with existing manufacturers of many products: most engineers are reluctant to specify specify some no-name brand of connector over Simpson connectors, when a connector failure could cause a catastrophic failure in an earthquake or hurricane.

The construction startup Katerra (where I used to work) found this out the hard way. When it was first founded, it was a supply chain and logistics company. It would source low-cost materials from China and elsewhere and offer them more cheaply than competitors to builders in the US. But this plan didn’t work, because architects and builders weren’t willing to specify Katerra’s products, and Katerra pivoted to prefab construction, using factory methods and sourcing its own materials in the hopes of outcompeting other builders.

We also see the same sort of tradeoff problem at work with material substitutions as we did with material reductions. Often it’s possible to replace an expensive material with a cheaper one, but this incurs a tradeoff that people are often unwilling to make, particularly if the product is an interior finish. Fiberglass bath enclosures, for instance, are both less expensive and higher performance (i.e., less likely to leak) than ceramic tile, but tile is almost always preferred for aesthetic reasons. Similar aesthetic preferences exist for things like solid vs. hollow doors, granite vs. Formica countertops, fiber cement or brick vs. vinyl siding, drywall vs. vinyl-on-gypsum panels with visible seams, and so on. Cheaper finish materials often feel cheaper, either because they’re thinner and feel less solid or simply because we can tell the difference between them and more expensive materials.

Conclusion

Overall, prospects for lowering construction costs by way of finding a cheaper “recipe” — cheaper or fewer ingredients like materials or labor — are something of a mixed bag. For labor, the possibilities of cost reduction seem small, given construction’s on-site nature and the difficulties associated with off-site, prefabricated construction in low-labor-cost locations. For building materials, the possibilities are somewhat greater. While using more materially efficient designs likely has relatively little in the way of opportunity, many building materials seem like they could theoretically be made less expensively (either in the US or overseas). But a variety of barriers — the difficulty of permitting new production facilities, tariffs keeping out low-cost foreign supplies, the risk aversion of architects, engineers, and building designers — make achieving this less than straightforward.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure and industrial technology. This week we look at a setback for California Forever, a $500 million artillery shell plant not producing any shells, the difficulty of recycling EV batteries, manufacturing wire harnesses, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housekeeping items this week:

• Origins of Efficiency is apparently one of the most purchased books by startup founders, according to Brex (a credit card aimed at startups).

Housing and Cities

We’ve previously seen homeowners in the Bay Area asking for OpenAI or Anthropic stock when they sell their house, but apparently you also see landlords asking for equity share as part of the leasing agreement. (I’ve seen some claims this is fake, but Byrne Hobart noted that this sort of deal took place with Paypal.) [X]

A setback for California Forever, which is trying to build a new California city northeast of the Bay Area. Part of the plan involved a huge new shipyard, but one of the tenants for that shipyard, automated vessel startup Saronic, is now setting up shop in Texas instead. [SF Chronicle]

California Forever’s bid to recruit a major industrial tenant for a planned waterfront shipbuilding facility in Solano County has slipped away, a significant blow to the ambitious but heavily scrutinized billionaire-backed plan to build an entire new city on thousands of acres of farmland.

Defense startup Saronic Technologies, which designs and builds autonomous water crafts, has chosen Texas — where the company has been considering the Port of Brownsville — over Solano County for its $3.2 billion Port Alpha automated shipyard, according to multiple sources familiar with the negotiations.

In my essay about build to rent housing, I noted that one developer I spoke to said that one benefit of rental housing was giving access to good school districts to people who couldn’t otherwise afford to live there. A recent paper in Real Estate Economics suggest this is actually a pretty significant benefit (though I haven’t read this paper closely). [Wiley]

Using a unique data set of linked student-housing-unit records from North Carolina and a fixed effects research design, we document an association between increases in the supply of single-family rental units (SFRs) and the likelihood that economically disadvantaged children attend higher performing schools. Drawing on exogenous variation in the allocation of SFRs across neighborhoods, we find that children in renter households were more likely to experience improvements in school quality when relocating to areas with an ample supply of SFRs zoned for high-performing schools. Using a shift-share identification strategy with school-level data, we also provide evidence supporting the generalizability of our results to other markets throughout the United States.

The Wall Street Journal on how Baby Boomers, unlike their parents, aren’t necessarily downsizing to smaller homes when they retire. [WSJ]

Manufacturing

A cool video of automated carbon fiber manufacturing. [X] And a cool video of Tesla ripping out the Model X/Model S production line. [X]

The New York Times on the enormous setbacks in US EV manufacturing. Manufacturers pivoted away from them so quickly that in one case Chevy cancelled production of an EV between when they gave a review model to a publication and when that review came out. “In purely financial terms, the combined cost of this industry about-face remains nothing short of staggering: This year, Stellantis alone was forced to write down $26 billion in E.V.-related losses. (Ford reported a slightly less ghastly $19 billion loss.) But somehow, it’s the long-term repercussions that look worse. “The way I’d put it,” the auto journalist Martin Padgett told me recently, “is that we pulled a U-turn while the rest of the world was pushing forward.” [NYT]

Related, things look pretty bleak for US EV manufacturer Lucid Motors. “Lucid Group on Tuesday denied as “completely false” a blog ‌post saying it was considering a potential take-private transaction or a Chapter 11 bankruptcy filing, after the electric-vehicle maker’s shares tumbled more than 50% in what would be their steepest one-day decline [BP: though they ended the day down 16%, not 50%]. Lucid said it had sufficient ​liquidity to fund operations well into the next year, and had not formed a special board committee to ​explore the reported scenarios. It also said restructuring adviser AlixPartners was assisting the company on improving ⁠execution and operations, and was not recommending bankruptcy.” [Reuters]

A $500 million plant for producing 155mm artillery shells has yet to produce any, despite coming online more than two years ago. The culprit seems to be the fact that General Dynamics tried to repurpose the original shell manufacturing equipment, designed for a different type of artillery shell, rather than spin up an entirely new production line. [The War Zone]

Read more

None of these effects of NEPA, however, were envisioned when the law was written. NEPA was seen primarily as an (aspirational) statement of US environmental policy, which was to “encourage productive and enjoyable harmony between man and his environment, to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man; [and] to enrich the understanding of the ecological systems and natural resources important to the Nation.” The provision that requires environmental impact statements was added last minute as a way to try to give some teeth to these high-minded but somewhat abstract ideals, and received virtually no attention at the time. As Alec Stapp and I noted:

[The provision] was not covered in any major media publication. In Congress, it received “neither debate, nor opposition, nor affirmative endorsement.” Caldwell would later state that “most [members] had never really understood the bill and only agreed to it because it was from Jackson; it was about the environment which was a very ‘hot’ issue at the time; and it was almost Christmas and they wanted to get home.”

Not until several months after NEPA was passed did environmental groups realize what a potent weapon they’d been handed.

It’s not hard to find other examples of laws whose effect was far different than what the authors anticipated. The 401(k) retirement account, now used by tens of millions of Americans as the primary vehicle for retirement savings, was originally considered an insignificant provision of the 1978 Revenue Act. Per a Bloomberg piece about the Act:

…The initial provision was estimated to have a “negligible effect upon budget receipts.” Now, defined contribution plans are the fifth-biggest tax break for individuals, with an estimated revenue loss to the government of $61.4 billion in fiscal 2014.

“There was absolutely no discussion in ’78 that if you do this, the world is going to change,” said Daniel Halperin, then a senior Treasury official and now a Harvard Law School professor.

The tale of Richard Stanger [a primary author of the Act], who said he hadn’t been interviewed previously about his role, is also a story about accidental actors at historic moments. As Stanger himself says, if anyone had known how important 401(k) would become, the Joint Committee on Taxation never would have let him, a 28-year-old junior lawyer, write it.

In the other direction, laws aimed at stimulating the construction of housing in California have proven much less effective than predicted:

One California law was supposed to flip defunct strip malls across California into apartment-lined corridors. Another was designed to turn under-used church parking lots into fonts of new affordable housing. A third would, according to supporters and opponents alike, “end single-family zoning as we know it.”

Fast-forward to 2025 and this spate of recent California laws, and others like it intended to supercharge the construction of desperately needed housing, have had “limited to no impact on the state’s housing supply.”

That damning conclusion comes from a surprising source: A new report by YIMBY Law, a pro-development nonprofit that would very much like to see these laws work.

I wanted to better understand how common this was: how often do laws do more or less what they’re designed to do? How often do their effects diverge widely, either by having unanticipated effects or by failing to do what the authors predicted? So I used AI to analyze the effects of several hundred federal laws passed over the last 50 years.

Overall, I found that federal laws mostly do what they’re expected to do. But a substantial fraction of them — around 11% — diverge significantly, having either much smaller or much larger effects than originally predicted.

Method

To do this analysis, I first chose five random federal laws passed each year from 1976 to 2023, filtering out any laws that were less than 10 pages in length, which were mostly insignificant things like post office renamings. This yielded 240 laws total, but for one law the AI was unable to find any information, so the actual analysis was done on 239 laws. For each law, I had an AI model — Claude Opus 4.8 Max Thinking — estimate the expected effect of the law, its actual effect, and assign a score to the divergence. Divergence scores ranged from -10 to 10: positive numbers indicate the law had a larger effect than anticipated (such as the 401(k) provision in the 1978 Revenue Act or NEPA), while negative numbers indicate the law had a smaller effect than anticipated.

Scoring Rubric:

• 0 — actual impact matched expectations essentially exactly.

• ±1–2 — minor: broadly as expected; small deviations on secondary dimensions that didn’t change the essential outcome.

• ±3–4 — moderate: clearly noticeable gaps on one or more dimensions, but the core purpose was still substantially realized (or missed only in a limited way).

• ±5–6 — substantial: the primary expected outcome was materially exceeded (+) or unmet (−), or a significant unanticipated effect emerged.

• ±7–8 — major: the central goal greatly overshot (+) or largely failed / went unimplemented (−), or effects were largely of a different kind than intended (+).

• ±9–10 — extreme: actual impact bore little resemblance to expectations — dominated by unintended, larger-than-anticipated, or opposite effects (+), or near-total failure / non-implementation (−).

There were a few complications in deciding how the effect of laws should be evaluated. One is deciding when a law should get credit for having an effect. Often the largest effect of a law only happens when subsequent laws extend, modify, or build on the original law. For instance, an unanticipated effect of the 1978 Psychotropic Substances Act was the introduction of civil asset forfeiture for drug proceeds. This mechanism became a cornerstone of US drug enforcement, but much of this later expansion was due to the 1984 Comprehensive Crime Control Act. For these cases, I instructed the AI to give some credit to the original law if it was built on by other laws, but to temper it based on how much subsequent laws actually did the heavy lifting. (For the Psychotropic Substances Act, the AI assigned it a score of +4, a moderate unanticipated effect, since the later bill did most of the work.)

Another complication was trying to determine what the expected effect of a law was at the time it was passed. For this, I instructed the AI to only use contemporaneous sources, such as the bill text itself, the presidential signing statement, a CBO score, press coverage at the time, etc. But this is inherently a fraught exercise: it’s often not obvious, for instance, to what extent the goal of some law is aspirational that the authors don’t expect to necessarily happen. For instance, the Indoor Radon Abatement Act of 1988 states in the bill text a national long-term goal that “indoor air in a building be as free of radon as the ambient outdoor air.” This is almost certainly an aspirational goal that the authors did not expect the bill to actually achieve, but making these judgments requires a process of guessing and using context clues that is likely to be error-prone. (The AI scored this law as a -2, a minor shortfall compared to what was expected; the various anti-radon programs the law created stuck around, but indoor radon exposure did not improve, in part because the programs were almost all voluntary.)

This exercise is similar to a previous post where I used AI to try and estimate how early various inventions could have been invented, but this turned out to be far more difficult and annoying, mostly because of the research required. For the previous exercise on inventions, I simply relied on the AI’s knowledge of various inventions to make the judgments. But for this present effort about laws I needed the AI to thoroughly research each law: I couldn’t expect the AI to know, word-for-word, every esoteric law passed in the last 50 years, or the complete history of the downstream effects of that legislation. I ended up needing to do a fair amount of trial and error to get Claude to do a sufficiently thorough job evaluating the expected and actual effects. I kept having to modify the prompt to force increasing levels of thoroughness in the search, and even in the final version I settled on I was occasionally finding effects that the AI evaluation had missed. Because of this, I expect there to be errors in various evaluations, and I would regard these results as preliminary.

You can see the full prompt I used, and the resulting evaluations, here.

Results

The graph below shows the divergence scores of the 239 evaluated laws.

The results form something like a bell curve with a slight positive skew. Ninety-five of the 239 laws (40%) had a score from -1 to 1: either they behaved exactly as expected or had very slightly larger or smaller effects than predicted. Forty-nine had a score from -2 to -4 (20%), and 68 (28%) had a score from 2 to 4, a moderate divergence. Only around 11% of laws had a “substantial divergence,” a score of plus or minus 5 or more. Most federal laws, it seems, do more or less what they’re expected to do.

(The graph above shows scores bundled together, but if you look at frequencies of individual score values, you don’t get a smooth bell shape. Instead you get a dip, with many fewer scores at -1 and +1. This is likely an artifact of the scoring rubric, which probably pushed scores either into 0 or out to plus or minus 2, but it’s another reason why we should treat these results with a grain of salt.)

Some examples of laws that Claude scored as having a much higher effect than predicted:

“An act to amend title XIII of the Federal Aviation Act of 1958 to expand the types of risks which the Secretary of Transportation may insure or reinsure, and for other purposes”, score +5: This mundane-sounding law is described by its title as mainly about airline insurance, but one of its provisions deregulated airline cargo service, the first step in deregulation of the airline industry more broadly. This deregulation was expected to increase competition and efficiency in the air cargo market, but its effect went beyond that. With air cargo flights deregulated, companies like FedEx, which were previously confined to using very small aircraft, could now use large jets on any route they wanted, setting the stage for the entirely new “air express cargo” industry.

The Sarbanes-Oxley Act of 2002, score +5: This law, passed in the wake of business collapses like Enron and WorldCom, was aimed at restoring investor confidence by increasing financial auditing oversight, and creating stiffer penalties for compliance failures. The additional oversight was achieved, but at a cost: compliance costs were 30 to 50 times higher than expected. Another positive divergence came from the fact that one of its clauses, which penalizes “obstruction of an official proceeding,” was later used in an unexpected way: criminally charging hundreds of January 6 defendants (though this was later struck down by the Supreme Court).

The Trade Facilitation and Trade Enforcement Act (TFTEA) of 2015, score +7: This law was billed as a customs modernization and trade enforcement act: giving more resources to enforce trade agreements, streamlining various trade and customs regulations, etc. At the signing ceremony, President Obama described it as “making sure other countries are playing by the rules.” But one of the provisions of the law changed the “de minimis exemption” — the value below which imported goods were not subject to tariffs — from $200 to $800. This change is credited as a driver of the explosion of Chinese imports from companies like Shein/Temu over the next several years, until it was reversed by the second Trump administration.

And here are some examples of laws that had a much smaller effect than predicted:

The Alaska Natural Gas Transportation Act of 1976, score -7: This act was expected to create a huge 4,800-mile pipeline, the “largest privately financed energy project ever undertaken,” that would transport natural gas from Alaska to the lower 48 states. The pipeline, however, was never completed, due to a combination of rising costs and the later Natural Gas Policy Act and Fuel Use Act creating a gas supply glut, obviating the economic justification for the pipeline.

The Alabama-Coosa-Tallapoosa River Basin Compact of 1997, score -5: This law was intended to create a commission that would develop a plan to share the water of the Alabama-Coosa-Tallapoosa River Basin between Alabama and Georgia. But while the commission was formed, Alabama and Georgia never agreed on an allocation formula, resulting in continuous litigation between the two states over water distribution.

The Enhanced Partnership with Pakistan Act of 2009, score -5: This act was expected to foster a closer relationship and increase goodwill with Pakistan, by providing billions of dollars’ worth of funding for schools, roads, and other infrastructure projects. This didn’t occur: opinion of the US in Pakistan continued to fall following things like President Obama visiting India but skipping Pakistan in 2010 and the US’s raid on Bin Laden’s Pakistan compound in 2011. By 2012, 74% of Pakistanis viewed the US as an enemy.

Other than the fraction of laws with significant divergence, there are a few other notable patterns in the data. If we look at divergence over time, we don’t see much change: recent laws seem roughly as predictable as older laws.

What about differences between small/minor laws and large/major laws? If we graph a law’s divergence score against the number of pages in the law, we see a small positive correlation: large laws with many pages are somewhat more likely to have a larger-than-expected effect than laws with fewer pages.

One possible explanation here is a sort of bundling effect: major laws, like the recent 21st Century ROAD to Housing Act, are often amalgamations of many smaller laws. Because the distribution of divergences is somewhat positively skewed, when you bundle many laws together, the chance that at least one of them has a large positive effect might rise.

Another notable pattern is that different types of laws have somewhat different probabilities of a major divergence. Appropriations bills, for instance, which are often (but not always!) routine allocations of money, have a lower variance than bills that create substantially new programs. Both types of bills have the same average divergence score, but the probability of a large or small divergence is much greater with the latter than the former.

Why do laws diverge from what’s expected?

At a high level, the reasons that laws have greater or smaller effects than expected can be divided into two categories: operators of the legal machinery behaving differently than expected, and the broader world, including those who the law was designed to affect, behaving differently than expected.

On the “legal operator side,” this includes everyone who has a role in authoring, enforcing, or interpreting laws. Courts, for instance, will often interpret laws in ways that the original authors didn’t anticipate. These interpretations can greatly extend a law’s scope and influence, such as the courts’ broad interpretation of what’s required to comply with NEPA’s “detailed statement” provision. Or they can reduce a law’s scope and influence, such as by determining that provisions of a law are unconstitutional. This happened with the 1989 Ethics Reform Act, which barred all federal government employees from being compensated for giving speeches, attending events, or writing articles. In 1995 the Supreme Court ruled that this requirement violated the First Amendment, and it only survives in application to senior government officials and Members of Congress.

Likewise, prosecutors or other government agencies might behave in ways other than what was expected. They might use a law for unexpected purposes: the DNA Fingerprinting Act of 2005, which authorizes collecting DNA from federal detainees, was part of a Department of Justice Authorization bill that was primarily focused on addressing violence against women. But the act was later used by ICE to collect DNA from immigration detainees. Alternatively, they might decline to use new legal machinery introduced. An example of the latter is the 2012 STOCK Act, which on paper made it illegal for members of Congress and their staff to trade stocks based on their congressional knowledge. As of 2025, there have been zero prosecutions under this law despite suggestive evidence that congressional insider trading does occur.

This category also includes Congress itself. Future Congresses may increase the effect of some law, such as by making a temporary program permanent or otherwise expanding its scope. For instance, the 1979 Recreational Boating Safety and Facilities Improvement Act contained a provision that created a trust fund, capped at $30 million fund, to clear a Forest Service tree replanting backlog. In 2021, the REPLANT Act took this fund and massively enlarged it, using it as a vehicle for a program to plant 1.2 billion trees in national forests. On the other hand, future Congresses might reduce the effect of some law: the 1976 Parole Reorganization Act, for instance, was intended to streamline and strengthen the federal parole system, but the 1984 Sentencing Reform Act abolished federal parole, making the previous law almost entirely moot.

You see the same sorts of divergences in the world at large. The 2006 Credit Rating Agency Reform Act tried to foster increased competition in the credit ratings agency market, but even though several new ratings agencies appeared, the market remained dominated by S&P, Moody’s, and Fitch, which collectively control 95% of the market. The Air Cargo Deregulation Act failed to predict how carriers like FedEx would respond to the freedom to fly on any route with any aircraft. TFTEA failed to predict how low-price Chinese fashion companies like Shein could take advantage of the “de minimis” change to ship directly to US consumers.

And of course, unforeseen behavior of legal operators and the broader world may interact. The Alaska Natural Gas Transportation Act failed to result in a new natural gas pipeline in part due to the market’s response to new natural gas regulations passed by Congress.

Conclusion

I think of laws as sort of akin to technology. With the invention of a new technology, you create some new capability, often for the purposes of achieving some particular goal. But once that capability is out there in the world, people will find all sorts of ways to take advantage of it. Marconi envisioned radio as literally “wireless telegraphy,” a way to send and receive messages from ships at sea, but he didn’t envision the rise of broadcast radio. Vacuum tubes were first used to amplify long-distance telephone signals, and only later became components for televisions and the earliest digital computers. Teflon was first used to make pump seals in uranium separation plants for the Manhattan Project, and only later found use in non-stick cookware.

Laws often work the same way. A law will create or modify some capability — an organization, a program, a rule that must be followed — aimed at accomplishing some particular thing. But once that capability is out there in the world, people might take advantage of it in different ways, finding uses for it that the creators of that capability never expected. A modest environmental reporting requirement becomes the foundation of modern environmental litigation; a minor change in employer retirement contributions becomes a retirement account used by tens of millions of Americans; a financial reporting law gets used to charge rioters.

Conversely, just because you introduce some new capability doesn’t mean it’ll actually be useful, or that anyone wants it. Some technologies, like 3D TV, or smell-o-vision, don’t pan out, and the patent archives are full of ideas for inventions that no one had any use for. Similarly, just because you create a new legal capability doesn’t mean it will end up useful in the way you envisioned. Changing the rules for designating a “nationally recognized” credit rating agency, as the 2006 Credit Rating Agency Reform Act did, did nothing to disrupt the market share of the existing agency oligopoly.

It is, of course, notoriously hard to predict the long-term effects of new technologies. With laws, it seems like predictions are substantially easier. But divergences still exist.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure, and industrial technology. This week we look at adults living with their parents, Samsung’s profits, Native American data centers, Puerto Rico’s electricity grid, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housekeeping items:

• No essay this week, but I’m working on a more involved piece about the predictability of legislation that should be out next week.

• The Origins of Efficiency was chosen as one of McKinsey’s 2026 Book Recommendations.

Housing and cities

The 21st Century Road to Housing Act becomes law after Trump declines to veto it. [NPR]

49% of adults under 30 in the US are now living with a parent, according to a recent Federal Reserve Survey. “...young people say that living at home in 2026 doesn’t carry the stigma it once did because of how unaffordable life has become. About 55% of young adults who moved back home said it was out of financial necessity, according to a spring survey by financial services firm Thrivent.” [WSJ]

Seattle has more empty downtown office space than any other major US city. [Seattle Times]

How the enormous success of TSMC has spurred development in the surrounding city of Hsinchu. “While the rest of Taiwan and much of East Asia are grappling with a sharp population decline, so many children have been born in Hsinchu in recent years that the schools cannot keep up. Public high schools in the area now admit only students with sufficiently high test scores, a practice that Ms. Lo and a group of mothers have protested. Those who do not make the cut must commute to another school district.” [NYT]

There was concern earlier this week that a New York highrise being renovated might collapse, after several columns began to severely buckle. Thankfully it looks like it’s been stabilized for now. “The massive renovation project at 219-235 E. 42nd Street — a conversion of the former Pfizer headquarters into about 1,600 apartments — was scrutinized Tuesday as construction workers had to be safely evacuated after the building began swaying. Damage to structural columns at the 21st floor is visible to the naked eye. Several nearby buildings were also evacuated as a precaution.” [CNN]

Last year New York City added more apartments — 38,682 units — than it has since 1965. This is still a pretty small number of units for a city New York’s size, to be honest: Austin added over 30,000 apartments in 2024. [WSJ]

CBRE released its 2026 look at US company headquarters relocations. California continues to lose headquarters, Texas continues to gain them. [CBRE]

Are rising insurance costs driving Americans to relocate from flood-prone areas? “High-flood-risk US counties — those classified in the top 10% for their share of homes that are very vulnerable to flooding — lost a net 63,357 domestic residents from mid-2024 to mid-2025, nearly double the outflow recorded over the previous 12-month period, according to an analysis released Wednesday by real estate brokerage Redfin. In 2024, flood-prone counties collectively posted a net population loss for the first time in five years.” [Bloomberg]

Manufacturing

Atomic Semi, the semiconductor startup famously started by Sam Zeloof after building microchips in his parents garage, rebrands as “Fab2.” “Fab2 designs and builds every tool in its fabs in-house, from pumps, valves, and gas lines to lithography and the vacuum chambers that house it. The company assembles those components into machines, the machines into complete fabs, and then aims to mass-produce the fabs themselves. It pairs the hardware with Studio, an in-browser, collaborative EDA tool for layout, schematic, and simulation work, previously branded as Atomic Studio.” [Tom’s Hardware]

The Economist on whether China got its hands on ASML’s EUV machines. “Impossible, says ASML. Europe’s most valuable company has told American officials that it knows the exact location of all 340 EUV machines it has produced, including 26 decommissioned ones. None is in China, it says. What is more, only ASML can transport the highly sensitive machines, which it monitors online, and components that it ships are handled by ASML engineers in customers’ fabs. “ASML has never shipped an EUV machine to China, nor have we shipped to China any component, module or equipment specially designed to be used in an EUV machine,” the company says.” [The Economist]

Thanks to the huge jump in the price of memory due to the AI boom, Samsung’s profits in its chip division for 2026 will be more than the previous 40 years combined. [Toms Hardware]

An interview with some of China’s first cohort of “practical PhDs,” graduate students who develop a product instead of writing a thesis. [Nature]

After losing more than $1 billion of them to Iran, the US wants a cheaper reaper drone. [Ars Technica]

Read more

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure and industrial technology. This week we look at households without homeowners insurance, crackdowns on AI chip smuggling, Japan’s two electrical frequencies, Meta’s AI compute business, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber!

Housing

Someone making the (somewhat dubious) point that fixed-rate mortgages have many similar impacts as rent control. The biggest difference, obviously, is that fixed-rate mortgages don’t disincentivize creating new housing supply the way that rent control does, but it’s interesting to see the similarities. “A homeowner with a 3 percent mortgage is, in practice, protected from the market in much the same way as a tenant in a rent-stabilized apartment. Both receive a valuable incumbent benefit. Both face a large penalty for moving. Both may remain in housing that no longer fits their needs because leaving would mean surrendering that benefit. And both systems impose costs on outsiders: prospective tenants in one case, prospective buyers in the other.” [Substack]

Apparently one in seven homeowners in the US don’t have homeowners insurance? [Insurance Dimes]

Manufacturing

It looks like we’re starting to see more crackdowns on smuggling AI chips into China from Taiwan. “Taiwan government agencies raided the offices of Super Micro Computer and several of its local affiliates, deepening an investigation into the alleged smuggling of Nvidia chips into China using the company’s servers.” [Japan Times]

Ford rehired a few hundred quality inspectors that it had tried to replace with AI. [BBC]

Sony will stop making physical discs for playstation games in 2028. [IGN]

The US Bureau of Industry and Security (BIS) denied Polestar, a brand spinoff of Volvo which is owned by Chinese company Geely, an authorization to sell cars in the US starting in 2027. Volvo, which is also owned by Geely, isn’t yet affected for some reason. “Polestar clearly didn’t see this situation coming. The automaker announced a reboot plan in February, which would’ve seen a slew of new product coming to the U.S. as the company grew the lineup. Global production of the Polestar 3 was moved from Chengdu, China, to Volvo’s Ridgeville, South Carolina, plant specifically to avoid the Trump Administration’s tariffs. The Polestar 3 currently rolls off the South Carolina assembly line alongside its platform mate, the Volvo EX90.” [The Drive]

China is building a factory to produce, among other things, personalized cancer vaccines. “The facility will house cell therapy research laboratories together with a production line of the company’s flagship product, LK101, a personalised cancer vaccine that analyses each patient’s tumour DNA to pinpoint the specific genetic mutations driving the disease. With AI, the company said the procedure could be completed in a day.” [SCMP]

Car companies are apparently switching to aluminum wiring due to the high costs of copper. [Reuters]

South Korea plans to spend $1 trillion on memory chip fabs and humanoid robots. “The most costly of the megaprojects involves a commitment by Samsung and SK Hynix of $585 billion to build new chip fabrication plants in the southwest provinces of South Korea, along with boosting semiconductor fab construction in the Seoul capital region, according to Reuters. The government’s goal is to double South Korea’s production of dynamic random-access memory (DRAM) within five years.” [Ars Technica]

Meanwhile, the Wall Street Journal on the delays to a Micron memory chip fab that was supposed to start construction two years ago, but has been held back by, among other things, bats. “Mr. Schumer has described Micron’s site as “open fields,” but it includes hundreds of acres of wetlands and forestland that are nesting areas for endangered bats. This makes permitting and building more complicated. Trees can only be chopped down when bats aren’t nesting—i.e., from November to March. To obtain federal and state permits, Micron committed to spend $1 million to protect the bats and install 10 “bat houses.” The manufacturer also agreed to provide on-site child-care for workers and enter into project labor agreements with unions in return for $6 billion in federal largesse.” [WSJ]

Read more

Every spring, as sure as the seasons, and for generations unknown, screwworms began their annual march northward from their overwintering sanctuaries in Mexico and South Texas. Pushed by an unknown force as inexorable as gravity, screwworms moved north — ever moving, ever spreading, ever multiplying, ever destroying. No army ever advanced any more surely or methodically. No army was ever more destructive. Attacking, killing, maiming, and destroying, screwworms literally ate their way north. Reaching upper South Texas, they fanned east and west - all the while moving north - dotting the countryside with the dead carcasses of hapless wildlife, cattle, sheep, and goats, filling the “wormy” pens of farmers and ranchers. - C.G. Scruggs, The Origin of the Screwworm Control Problem

Screwworms completely dominated our life. - T.A. Kincaid Jr., Texas rancher, quoted in The Peaceful Atom and the Deadly Fly

On June 3 of this year, a flesh-eating parasite, the screwworm, was found in a three-week-old calf near the Texas town of La Pryor. Since then, dozens more cases have been discovered in Texas and New Mexico. Outside of a screwworm outbreak in the Florida Keys in 2016 (which was contained), this marks the first screwworm infestation in the US since the 1980s.

Until now, the US has been free of screwworm not due to luck, but because of a decades-long program to eradicate the parasite by breeding it out of existence. By dropping millions of sterile male screwworm flies in an infested area, agricultural agencies can overwhelm the native, fertile male screwworms. Female screwworm flies, who only mate once in their life, will mostly mate with sterile males, producing no living offspring. Drop sterile flies for long enough, and eventually there will be no viable offspring at all, and the pest will be eliminated.

Over the course of several decades, this “sterile male technique” was used by the USDA to eliminate screwworm from the US, Mexico, and Central America. Since the early 2000s a joint US-Panamanian organization, COPEG, has maintained a “screwworm barrier” at the Darien Gap between Colombia and Panama. Every week, millions of sterile male screwworm flies are dropped over the gap, preventing the screwworms from spreading north from South America (where it remains endemic).

Sometime around 2023, the barrier at Panama failed, and for the last several years screwworm has been marching north. It’s now reached the US. Efforts are underway to eliminate screwworm from North and Central America once again, but it will likely be years before they succeed.

The screwworm eradication program was so effective at eliminating the parasite that we’ve collectively forgotten what an enormous problem it used to be. It’s worth understanding the costs inflicted by screwworm prior to its elimination, how a program emerged for eliminating it, and how control was allowed to lapse.

History of screwworm

New World Screwworm (scientific name Cochliomyia hominivorax) is a species of fly native to the Western Hemisphere. While the larvae (maggots) of most flies feed on dead or decaying tissue, screwworm is unique in that its larvae feed on living tissue. The grisly cycle begins when a screwworm fly lays its eggs on the open wound of an animal. The eggs soon hatch into wriggling white worms, which can grow up to two-thirds of an inch long. These worms burrow into the flesh as they eat their way into the animal, making the wound even worse and attracting even more flies to lay their eggs. After a few days of eating, the worms transform into shell-covered pupae, falling out of the animal and emerging as fully grown flies about a week later. Untreated, a screwworm infestation in an animal is typically fatal.

Since at least the early 19th century, and likely much earlier, screwworm was a miserable fact of life for raising livestock in the Southwestern US. The screwworm fly would find and lay her eggs on even the smallest open wound, and animals had to be inspected for worms constantly. One author notes that “[p]eople would not leave home for more than a day for fear of finding their animals had been eaten alive while they were away. Anyone who didn’t check their animals at least every two days — or have someone do it for them — knew that they would pay a heavy toll in damaged or dead animals.” When worms were inevitably found, they had to be dealt with, typically by applying various insect-killing chemicals, though occasionally by manually removing the worms, a task described as “disgusting and sickening.” Often animals couldn’t be saved — an infection in a horse, for instance, was described in the late 19th century as “typically fatal.” The amount of time and effort required was such that ranchers employed ranchhands whose entire jobs were inspecting animals for screwworm.

Despite efforts to prevent infection, such as by covering animals’ open wounds with tar, screwworm infestations occurred by the millions — in cattle, sheep, goats, horses, and occasionally humans (the first documented screwworm infection in a person in the US dates to the 1830s). One history of the scourge noted that by the early 20th century, infestations had reached “such a disastrous level that it was becoming unprofitable to raise livestock. Producers were forced to hire more and more cowboys to check and treat animals.” A 1935 USDA survey found more than 1.2 million infections and 180,000 dead livestock in Texas alone, with actual totals likely being far higher. A year earlier the USDA estimated that screwworm had killed 1.3 million animals across the Southeast. Some estimates suggested that in the 1930s and 40s, 60% to 80% of white tail deer in Texas were killed by screwworm infections.1

By the 1930s, the situation appeared grim. Screwworms had, by then, found their way into Florida, a climate warm enough that they could survive in the southern portion of the state year-round, spreading up through the southeast during the spring. Prospects for dealing with the pest appeared bleak:

Even with the best efforts of scientists and the use of the latest insecticides, repellents, and liver-baited traps, US livestock producers were losing the war. After more than one hundred years of struggle, the screwworm had spread out of control — and there was no solution in sight. - History of the Mexico-United States Screwworm Eradication Program

Studying the enemy

The toll inflicted by screwworm inspired vigorous efforts to try and combat it. In 1929 the USDA began a screwworm research program at Menard, Texas. This program initially focused on developing better chemical treatments for infections, and would ultimately generate the research that would banish the screwworm from the US.

The first breakthrough occurred thanks to USDA entomologist Emory Cushing. At the time the primary methods to battle screwworm were insecticides to treat infections and traps to capture the flies. After several years of research at Menard, Cushing became convinced that these measures wouldn’t be enough. Believing that something was missing from “the screwworm puzzle,” Cushing applied for a grant to study entomology at the University of Liverpool with Walter Scott Patton, a world expert on flies. Working under Patton, Cushing closely studied the internal structure of different flies, determining for the first time that the screwworm was a unique species with a unique lifecycle. Prior to this, the screwworm fly had often been confused with other, similar flies whose larvae fed on decaying, rather than living, flesh. The identification of screwworm as a distinct species, one whose larvae ate only living flesh, was critical: previous eradication efforts had included using traps baited with carrion to attract flies, but Cushing’s work showed that these efforts were useless. Following Cushing’s discovery, research efforts shifted focus to understanding the screwworm specifically.

In 1931, shortly before Cushing left for England another entomologist, Edward Knipling, joined the USDA. Initially posted at the Menard laboratory in Texas, Knipling was moved to a series of other labs, before eventually arriving at a newly formed lab in Valdosta, Georgia, established in 1934 to help combat the worsening screwworm problem in the Southeast. By then, thanks to Cushing’s research, it had become clear that the screwworm was a unique species, and Knipling and other USDA researchers began studying it more closely to understand and characterize its lifecycle and behavior. This meant watching the flies closely; at one point, Knipling spent every waking hour for a week straight doing nothing but watching screwworms all day. From “The Peaceful Atom and the Deadly Fly:”

He placed a wounded goat in the open. From daylight till dark for a week he watched the goat. Upon seeing a female screwworm fly deposit eggs on the wound in the goat, Knipling would mark her with fingernail polish. He would then watch the marked female and plotted all her activities for the rest of the week if she remained in the area. Day after day, fly after fly, Knipling observed. What time were flies most active? How many eggs were laid? Dozens of questions were asked. Knipling and his fellow workers tried to pry into the very basic life functions of the screwworm.

These studies revealed two important facts about the screwworm. One was that compared to other flies, the number of screwworms in a given area was surprisingly low: later studies eventually put the figure at around 100 flies per square mile. The other was that screwworms would not infect dead animals, only living ones.

In 1935 another young entomologist, Raymond Bushland, joined the USDA and was soon tasked with studying the effects of pesticides on screwworms. This required a steady supply of fresh screwworms, which could only be created by deliberately wounding caged animals allowing them to be infected. Bushland spent his days extracting screwworm pupae from the carcasses of dead rabbits, a task so repulsive that Bushland spent every morning of the first few weeks on the job vomiting.

Desperate to find a way to grow screwworms that didn’t require live animals, Bushland was, after months of work, eventually able to create an artificial growth medium consisting of “hamburger, blood, water, and a little formaldehyde to delay putrefaction.” The disgusting mixture made it much easier to grow screwworms, and before long Bushland was harvesting them by the thousands.

In 1937, Knipling, who had continued to move between various USDA locations, arrived at Bushland’s lab in Texas. Knipling was astounded at the huge number of flies that could be grown in the lab, compared to the relatively small number of flies that seemed to exist in the wild, and he began to ponder whether there might be some way to take advantage of the fact. Bushland’s screwworm husbandry operation also allowed Knipling to confirm a hunch he had from his own observations of the screwworm in the wild: the female screwworm fly only mated once in her life.

As Bushland and Knipling discussed their various observations and discoveries, the outlines of a plan began to emerge. What if you could overwhelm the wild population of screwworm by dumping huge numbers of sterile male flies into an area where cold temperatures had already reduced the number of wild flies? If sterile males greatly outnumbered wild males, most females would mate with sterile males, producing no viable offspring and greatly reducing the size of the next generation. Keep dumping sterile male flies, and eventually the population would simply breed itself out of existence.

It seemed like it would potentially work, but nothing like it had ever been tried before. And it wasn’t obvious how you could produce huge numbers of sterile male flies. After getting ridiculed by their entomologist colleagues — “who ever heard of castrating flies?” — Knipling and Bushland kept the idea to themselves. But the seed had been planted.

The plan to eliminate screwworm

For the next decade, a combination of professional skepticism, lack of obvious sterilization method, and the exigencies of World War 2 prevented much further work on screwworm eradication. At points during the Second World War Knipling continued to toy with models of screwworm population dynamics, and in 1947 he tasked Bushland with investigating chemical methods of sterilizing insects. But no method appeared promising. Without a way of mass-sterilizing the male flies, Knipling and Bushland’s idea was nothing but a pipe dream.

The final piece of the puzzle to eliminate screwworm wouldn’t fall into place until 1950. That year, Knipling read a journal article by Nobel Prize-winning scientist Hermann Muller. Muller had been awarded the prize for his groundbreaking work in genetics, discovering that mutations could be introduced into living things by exposing fruit flies to radiation. Muller’s 1950 article was a warning against the dangers of nuclear war, cautioning that the resulting radioactive fallout could create “a world of sterile human beings.”2 Knipling contacted Muller and asked him if radiation could be used to create large numbers of sterile male screwworms. Muller responded: “I know nothing of screwworms but your theory is sound.”

Invigorated by the Nobel Prize-winner’s vote of confidence, Knipling and Bushland set to work to see if they could use radiation to sterilize screwworms. With no research funds, Bushland dedicated his nights and weekends to the project, finding creative ways to make progress. Muller had done his radiation research using X-rays, but when a local hospital wanted $200 per test to use an X-ray machine, Bushland leveraged his Army connections to use the X-ray machine at a nearby Army hospital for free. The results were promising. Wanting to try an even more powerful radiation source, Bushland was able to convince Oak Ridge National Lab to lend him a sample of highly radioactive cobalt-60, capable of generating gamma rays. Meanwhile, Knipling was eventually able to secure $20,000 in research funds from the Atomic Energy Commission, who were interested in radiation’s effect on fly sterility.

The tests were a success: with a high enough dose of radiation, males were completely sterilized. They survived and would still mate with females, and the females would lay eggs, but the male chromosomes had become so riddled with mutations that the eggs didn’t hatch.

With a method of industrialized screwworm sterilization in hand, the only thing left to do was to try the idea and see if it worked. A USDA team in Florida began working out ways to distribute huge numbers of sterile screwworm flies.

They first tried simply scattering sterilized screwworm pupae on the ground, but this didn’t work: ants and other insects quickly devoured them. Dropping live flies seemed like it would work better, but it would have to be done in an isolated location to see if elimination was really possible — otherwise the area would be continuously reinfested by screwworms from outside the test area. After looking at several possible locations, the team eventually settled on Sanibel Island, a small island near Fort Myers on Florida’s Gulf Coast. After a few months of dropping boxes of flies onto the island from a small plane, the number of wild screwworms dropped to virtually nothing. While they couldn’t be eliminated completely — likely because wild flies continued to migrate from the mainland — the results were highly encouraging.

Buoyed by their success, the team began looking for an even larger stage for their next test. By chance, as they were searching, Knipling received a letter from a Dutch agricultural officer recently stationed on the Dutch Caribbean island of Curaçao, off the coast of Venezuela. The island was overrun with screwworm, and the officer wondered if Knipling had any suggestions for dealing with it. The location seemed perfect, and Curaçao soon became the location of the next test.

The Curaçao test began in the summer of 1954. A screwworm production facility, complete with a cobalt-60 gamma-ray source, was set up in Orlando. Sterilized screwworms were flown into Curaçao, then dropped from a small plane in a carefully planned pattern across the island. For the first few weeks, results were poor, with 85% of screwworm offspring still viable. But when the density of dropped sterile flies was raised from 100 to 400 flies per square mile, results quickly improved. Within 14 weeks, no viable offspring could be detected. In November 1954, Curaçao was declared free of screwworm.

Pushing the enemy back

With the success in Curaçao, the USDA was ready to try eliminating screwworms in the US mainland. In 1955 a new, larger screwworm factory was constructed on the outskirts of Orlando, capable of producing two million sterilized flies a week. This new insectary would use a new strain of fly, bred specifically to outcompete wild flies. (The new flies, which had been selected for their high mating frequency, were nicknamed “the sexual athletes”.) Thanks to lobbying from the Florida Cattlemen’s Association, whose members were collectively losing $20 million per year due to screwworm infestations, the Florida legislature allocated $3 million to the eradication program, a figure which was matched by the federal government.

In April of 1958, while screwworms were still confined to the southern half of the state due to an unusually cold winter, USDA planes began dropping sterile screwworm flies over Florida. Flies were first dropped across a 100-mile-wide swath cutting through the center of the state, effectively creating a “barrier” that flies in the southern half of the state wouldn’t be able to penetrate. Inspection stations were set up to prevent the movement of any infected livestock into northern Florida and Georgia, and by July no screwworm cases were being reported north of the quarantine line. The USDA then pushed into south Florida, aided by an even larger screwworm factory in the city of Sebring capable of producing 50 million flies a week, and by September reported screwworm infections in the southeast had dropped to virtually nothing. Over the next several months, the occasional outbreak occurred, but these were dealt with by carpet-bombing the area with ever-higher concentrations of sterile flies. By February of 1959 screwworm cases in the Southeast had dropped to zero.

By the early 1960s screwworms were inflicting more than $100 million worth of damage in the southwest annually. Impressed by the success of the Florida program, ranchers in Texas and the Southwest began clamoring for similar efforts. But Texas would prove to be a much tougher nut to crack than Florida. Unlike Florida, which was surrounded on three sides by water, Texas had no natural barriers preventing screwworm transmission across the 1,000+ mile border that the state shared with Mexico, where screwworms survived year-round. In October of 1959, the USDA issued an official statement that screwworm eradication in the US Southwest did not appear feasible.

But despite the USDA’s official stance, Knipling, Bushland, and a few others in the USDA realized that a strategy used in the Florida eradication program might work in Texas and the Southwest. Florida’s eradication effort began by creating a 100-mile-wide screwworm barrier across the center of the state. This barrier, once in place, had virtually halted the spread of screwworms into the northern half of the state. What if the same thing were done in the Southwest? Create a 100-mile-wide barrier across the entire US-Mexican border. The challenges were many: this barrier would stretch far longer than the one that had been created in Florida and, unlike in Florida, this barrier would have to be continuously maintained. It would also require eliminating screwworm everywhere north of the barrier, a potentially massive undertaking. But not only could this plan eliminate screwworm from the Southwestern US, it could prevent re-infestation of the Southeast, a constant threat that was warded off by an involved, expensive livestock inspection operation.

For the next several years, the official position of the USDA remained that a Southwestern elimination program wasn’t feasible. But eventually the USDA changed its policy, thanks to the efforts of the Southwest Animal Health Research Foundation (SWAHRF), an organization formed by a small group of Texas livestock producers. SWAHRF broke the logjam by raising millions of dollars in voluntary donations from Texas ranchers for screwworm eradication. The show of grassroots enthusiasm convinced the Texas Legislature to allocate money to a Southwest eradication program, which in turn helped convince the federal government to support it. Credit also goes to newly elected Vice President Lyndon Johnson, who owned a ranch, was familiar with the scourge of screwworm, and pulled strings to kickstart the program.

The Southwest eradication program began in February of 1962, when winter temperatures had pushed the screwworm down into Mexico. USDA aircraft began dropping sterile flies across the US-Mexico border to create the North-South barrier. But the effort failed, and before long Texas had been reinfested. There simply weren’t enough flies: sterilized flies were being produced at a small insectary near Kerrville, Texas, at a rate of 20 million per week, but creating an effective barrier would require more than ten times that rate of production.

By spring 1962, construction had begun on the biggest screwworm factory yet, at an abandoned Air Force base near Mission, Texas. Eventually capable of producing more than 200 million screwworm flies a week, the Mission factory was a grotesque marvel of insect-producing efficiency. Operating 24 hours a day, 365 days a year, it was, in essence, a 76,000-square-foot artificial wound. Trays full of meat, blood, and water, each one heated to the exact right temperature to stimulate screwworm growth, moved through the facility on a monorail system timed to the lifecycle of the screwworm. Eggs would be placed in on the trays, hatch into larvae, and collectively feed on the bloody nutrient sludge, creating a “seething mass that is difficult to believe unless you’ve seen and smelled it.” After several days of growth, the larvae would wriggle out of the feed and fall into a water-filled trough, which gently carried them into sawdust-filled trays where they would pupate. The pupae would then be collected into canisters, which in turn were loaded into large casks containing highly radioactive cobalt-60. The irradiated, sterilized pupae were then packed into cartons, loaded into refrigerated trucks, and sent to distribution centers, where they would eventually hatch, be loaded onto planes, and dropped by the millions.

By June of 1962 the Mission factory was fully online, and flies began to be dropped in July. However, the program soon made an unfortunate discovery. It had previously been believed that the maximum range of the screwworm fly was around 35 miles traveled per week. Because the fly only lived for a few weeks, a 100-mile barrier was believed to be sufficient to prevent the passage of migrating flies. However, recent research had shown that in some cases a screwworm could fly much farther — up to 180 miles in a week. Consequently, the barrier would have to be much wider as well: 400 miles. Left with no choice, the USDA ramped up fly production at the Mission factory as fast as possible to support a widened barrier, and an agreement with Mexico was worked out to allow USDA planes to fly hundreds of miles into Mexican airspace to drop sterilized screwworm flies.

The expanded barrier worked. By 1963, the rate of screwworm cases in the US had fallen by 90%. In 1964, they fell even more, and by 1965 the states of Texas, New Mexico, Oklahoma, and Louisiana were declared screwworm free. California and Arizona soon followed, and by 1966 screwworm had been eliminated from the entire US.

From Mexico to Panama

But the national elimination of screwworm from the mainland United States was hard-won and not easy to maintain. It required continuously dropping millions of sterile male flies across the US-Mexico border to create a screwworm barrier. And no barrier is perfect. Over the next several years screwworm infections continued to crop up in the US, as worms from Mexico found their way into the US. 1972 was particularly bad, when US cases (which had fallen as low as 170 in 1970) surged to more than 95,000 that year.

The solution? Push the US barrier even farther south, down to the Isthmus of Tehuantepec in southern Mexico. Not only would this reduce the likelihood of Mexican screwworms reaching the US, it would eliminate screwworm from most of Mexico. And a barrier at Tehuantepec, which was only 118 miles across at its narrowest point, would be far easier to maintain than the nearly 2000 mile barrier across the entire US-Mexican border.

In 1972, the US and Mexico signed a Screwworm Eradication Agreement, creating a joint commission to oversee the elimination of screwworm from northern Mexico. A new screwworm insectary, which would eventually produce more than 400 million sterilized flies per week, was built near Tuxtla Gutiérrez in southern Mexico. The factory began producing flies in 1976, and the first flies were dropped on Baja, Mexico that September. Progress was initially slow, but after a program reorganization (which included more livestock inspectors and a new strategy for quickly deploying experts to areas where outbreaks occurred) results improved. By late 1979 the Baja peninsula was free of screwworms, and by 1980 many Northern Mexican states followed. Starting in 1981, the program established a “critical line” across the width of Mexico, marshalling all possible resources to squash any infections that appeared north of it. Over the next several years the critical line was steadily pushed downward, until it reached the Isthmus of Tehuantepec in 1984, one year ahead of schedule.

But establishing a final barrier across the Isthmus of Tehuantepec left something to be desired. Mexican livestock producers below the barrier, who continued to deal with screwworm, complained that the government was favoring northern producers, and hundreds of thousands of livestock that passed from the south to livestock markets in the north, requiring tedious inspection and creating a constant risk of reinfestation. And while the Tehuantepec barrier was much smaller than the US-Mexico one, it still required dropping 150 million sterile flies a week, every week.

Fortunately, an even better location for a barrier existed: the Darien Gap, on the border of Colombia and Panama. At this narrow stretch of land, the barrier would need to be just 60 miles wide. And the densely forested, difficult-to-navigate terrain, which had no roads crossing it, would further hinder the passage of any infected livestock. Pushing the barrier all the way to Panama would also have the benefit of eliminating screwworm not just from the rest of Mexico, but all of Central America as well.

Eradication in Central America posed new challenges: the favorable climate conditions for the screwworm meant that far more flies would need to be dropped per square mile, and new international agreements would need to be signed with each country involved to allow the USDA to fly over their airspace and drop millions of insects. But the benefits would be substantial, and the decision was made to extend the program.

In 1986 the US-Mexico commission signed an agreement with Guatemala, and began dropping flies over the country in 1988. That same year an agreement with Belize was signed, which was followed by agreements with El Salvador, Honduras, and Nicaragua in 1991, Costa Rica in 1993, and Panama in 1994. As sterile fly dispersal began across the new territories, screwworm infections in each country quickly fell. In 2006, a new screwworm factory was built in Panama to replace the aging Mexican factory (which had been operating continuously since 1976), opening on the same day that the country was declared screwworm free.

For the next decade and a half, the barrier at Panama held. Administered by a joint US-Panamanian organization called COPEG, the program continued to drop millions of flies a week across the Darien Gap, and employed inspectors to monitor livestock in the surrounding area. When the occasional infestation flared up — in Aruba in 2011, the Florida Keys in 2016 — flies kept in reserve were quickly dispatched, dropped in huge numbers to quash any spread.

The barrier falls

At some point in the last few years, screwworms broke through this barrier.

In 2021, screwworm cases were confirmed within the Darien Gap area in Panama, and Panama was added to the list of countries where screwworm is confirmed by the USDA’s Animal and Plant Health Inspection Service (APHIS). Initially, this didn’t appear concerning: since 2001, Panama has had occasional small screwworm outbreaks in the Darien Gap area. But in 2022, screwworm was detected in Panama beyond the barrier at the Darien Gap. Though initially this was just a few cases, the infestation quickly spread: in 2023 there were 6,500 screwworm cases in Panama, and cases were detected in nearby Costa Rica. By 2024 screwworm had spread to every Central American country, as well as Mexico; there were 18,000 detected cases in Panama, 8,600 in Costa Rica, and 3,300 in Nicaragua. In 2025, total cases in Mexico rose to over 12,000, and as of this writing have exceeded 30,000.

It’s not 100% clear what caused the breach, and most sources point to a confluence of different factors. The disruption caused by COVID-19 seems to be partly to blame: during the pandemic livestock inspectors were forced to stay home, vehicles broke down and couldn’t be repaired due to a lack of replacement parts, and power outages in the screwworm plant killed millions of sterilized flies.

Another issue seems to be large-scale movement of both people and livestock. Starting in 2021, the number of migrants passing through the Darien Gap skyrocketed. Illegal cattle trafficking also likely played a role. Ranchers throughout Central America will illegally graze cattle on protected forests, often as part of a larger money-laundering operation for narcotics cartels. These cattle are then illicitly moved north to livestock markets in Mexico. It’s been estimated that hundreds of thousands of cattle are trafficked through Central America each year, and the speed at which screwworms have spread through the region suggests they’re moving by truck, being carried by infected cattle.

Also contributing are the changing circumstances in the Darien Gap itself. When the barrier was established the Darien Gap was a wild, untamed rainforest. Today that forest is increasingly being cut down and replaced with grassland for cattle to graze on, making it much easier for a screwworm infection to spread through the area. Amplifying this risk is the fact that many ranchers are absentee owners, people who treat the ranch as something of a vacation property without closely monitoring its operations.

The USDA didn’t simply sit back in response to this spate of outbreaks in Central America. APHIS drew on hundreds of millions of dollars in emergency funding in 2023 and 2024, and began dropping sterile flies in infected countries. Cattle imports from infected countries ceased, (though they later reopened in a limited fashion with increased inspection protocols). Fly production at the Panama facility was ramped up from 20 million flies a week to more than 100 million. But these efforts were nowhere near enough to stop the spread. The facility at Panama could produce enough flies to maintain a dense, narrow barrier of sterilized flies at the Darien Gap, but not to fight an infestation which had spread widely throughout Central America; at the peak of Central American operations in the 1980s and 1990s, over 400 million flies were being produced weekly.

New screwworm facilities are coming online — in 2026 the USDA broke ground on a facility at Moore Air Force Base in Texas meant to produce 300 million flies a week, and is converting an existing fruit fly insectary in Mexico to produce screwworms. And earlier this year APHIS announced a $100 million “Grand Challenge” for projects related to screwworm eradication or treatment. (Some anti-screwworm efforts may have been hindered by DOGE, which cut APHIS staff, screwworm monitoring programs, and may have delayed funding for the Mexico facility, but it’s hard to be confident about this, and the administration has unsurprisingly rejected these claims.)

Overall, the reemergence of screwworm seems like it’s being taken quite seriously, and if this level of investment is maintained it seems likely we’ll be able to re-eradicate it from the US and Central America. But this will probably take “close to a decade of sustained work:” bringing new production facilities online, and dropping millions of sterile flies over the infected areas week after week, month after month, year after year as the pest is gradually pushed back.

Conclusion

Overall, the screwworm program seems like a classic case of something becoming a victim of its own success: a problem got solved so thoroughly that we forget how big of a problem it was, and we gradually undermine the conditions that made the solution possible. Prior to the push of screwworms all the way south to Panama there were a series of other screwworm eliminations that only partly solved the problem: eliminating it in Florida and the Southeast didn’t do anything for the livestock in the Southwest, and required an involved inspection regime to keep screwworm entering from the rest of the country. Pushing the pest population down to Mexico required continuously dropping hundreds of millions of flies over an enormous, 400-mile-wide barrier that was frequently breached. The barrier at Tehuantepec left much of Mexico still exposed to screwworm, and was expensive to maintain.

The barrier at Panama, by contrast, worked amazingly well and cost only $15 million per year to operate. As a result of this success, other screwworm facilities were shut down (the Tuxtla factory closed in 2012, against the protests of COPEG), and production at Panama gradually declined to the level needed to maintain the barrier and not much else. Barrier conditions in the Darien Gap were allowed to deteriorate, the dense rainforest replaced with grassland occupied by ranchers paying insufficient attention to their herds. What had once been very thorough cattle inspection processes were allowed to lapse: one article notes that in Panama ranchers, veterinarians, and trade organizations became less diligent about inspecting cattle prior to shipping them, and that “a carbon copy of all these issues happened in every country all the way to Mexico.” And when it was clear that screwworms had breached the barrier, responses were sometimes delayed by political disputes — Mexico apparently initially made it very difficult for USDA screwworm flights to operate until the US Agricultural Secretary called to force the issue.

Unfortunately, it looks like we’re going to re-learn how much of a problem screwworm was the hard way.

Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure and industrial technology. This week we look at Trump refusing to sign a housing bill, the high cost of US-made doors, slow trucking, why we stopped making new land, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.

Housing

The ROAD to Housing Act has now overwhelmingly passed both chambers of congress (358-32 in the House and 85-5 in the Senate). [NBC News] But in a last minute twist, Trump has said that he won’t sign the bill until another piece of legislation, the SAVE America Act, passes first. “Hours after his own aides praised the bill and promised the president would sign it, Mr. Trump instead canceled a scheduled event at the Capitol. Eschewing an opportunity for rare bipartisan accord, the president opted to turn the bill into political leverage, aiming to force Congress — and members of his own party — to bow to unrelated demands over voting restrictions and the war with Iran.” [NYT] Not exactly clear how this will play out, since (theoretically) there’s sufficient votes to overcome a presidential veto.

Claims from the WSJ that the cost of homeownership is rising faster than overall inflation, though the sourcing here seems a little thin to me. [WSJ]

The National Institute of Standards and Technology (NIST) has released technical findings on the causes of the collapse of a condo building in Surfside, Florida in 2021. Apparently the failure was in large part due to failing to conform to building codes when the structure was built (due to both design and construction errors), which carved away what should have been a substantial safety margin in the loading applied to the building. [NIST]

One issue I worry about with stagnant construction productivity is that without being able to drive down costs by way of technical improvements, builders in a competitive market might be more incentivized to cut costs at the expense of quality. We’ve previously noted that the largest US homebuilders seem to have a rapidly rising rate of construction defects, and that trend seems to be continuing. “D.R. Horton and Lennar, the two biggest builders in the U.S. by total volume, have experienced the biggest surges in potential legal costs. Lennar’s self-insurance reserve, earmarked for liabilities that insurance won’t cover, rose 21% in fiscal 2025 to $336.9 million, according to the company’s annual financial statement. D.R. Horton’s reserves for legal claims, which include expectations for future claims, rose 57% to $1.1 billion from the end of fiscal 2022 to the end of fiscal 2025.” [WSJ]

A provision in the 2021 bipartisan infrastructure package requires that any infrastructure funded with federal dollars use US-produced construction materials. “Infrastructure” includes homebuilding, so any homes built or funded by the Department of Housing and Urban Development are hit with this requirement, which can dramatically drive up the construction cost of these homes. “Outfitting a 40-unit building with standard imported door sets runs about $67,000. The only American-made equivalent is a hospital-grade product built to keep germs off surfaces in an operating room, and it is priced like one: $546,000. More than eight times the cost, to open and close the same doors…On the Davenport job, the only compliant elevator the team could find cost about $75,000 more than the standard unit. The switchgear and the HVAC told the same story: the American product existed, but only at a premium.” [Substack]

Works in Progress on how smashing NIMBYs created modern capitalism. [Works in Progress] And Works in Progress on how Europe’s housing problems are worse than America’s. [Works in Progress]

Manufacturing

The Mexican government wants to build a locally produced, inexpensive EV. [Gizmodo]

An open letter against California’s AB2047, which requires 3D printers to have detection algorithms to prevent the manufacture of firearms. “AB2047 requires every 3D printer sold in California to run a DOJ state-certified “detection algorithm” - a technology that can not reliably exist. If passed, it would pull a tool used in thousands of schools, libraries, labs, and small businesses out from under our communities.” [3D Printing Nerd]

US EV manufacturer Lucid lays off 18% of its workforce, right on the heels of a 12% layoff earlier this year. [CNBC]

On the other end of the spectrum, Chinese EV sales in Europe seem to be surging. “Leapmotor’s sales surged ​465.1% ⁠in May, while Chery and BYD jumped 244.1% and 136.6%, respectively. Among other manufacturers, Geely and SAIC recorded increases of 12.6% and 13.9%.” [Reuters]

How Slate got the price of its EV truck down to $25,000. [Heatmap] Others have pointed out that despite the hype, this isn’t that much cheaper than an entry level Ford Maverick. [Ford]

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