| This kind of capture the point tbh > For many sectors of construction, difficulty in achieving economies of scale could be attributed to the fact that only a small number of buildings of a particular type get built in the US each year. There were, for instance, only 10 skyscrapers taller than 200 meters built in the US in 2025 But so on production productivity generally, relating to that In New Zealand Auckland they did a board upzoning in 2016, it was the largest metro governed under the same planning regieme, they allowed many dwelling types by right, and increased planning controls. Economist Matt Maltman did some research on construction productivity during this period https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5386023 His research (which showed productivity did increased) this is consistent with the idea the point above being productivity gains comes from the ability to repeat the same process over and over which was possible Auckland after they uniformly upzoned the city, after which most lots had higher zoned capacity than its existing built capacity (almost certainly with homogeneous allowed heights and floor space), allowing for this process of repeatedly building the same type of unit over and over. Matt has written more about construction productivity here in https://inflectionpoints.work/articles/best-practice-for-sup... Anyways if you'll note that the number of firms providing homes also increased, meaning the process of repeating construction over and over isn't isolated to a few firms. While the size of the industry almost certainly grew, the same number of builders likely were working more and more of similar buildings, and they are repeating similar processes over and over consuming similar inputs over and over. - Those different housing projects due to some level of homogeneity will encounter similar hurdles where which creates a sufficiently large incentive and market for someone to sell solutions tailored to those problems which likely improves productivity (compliance is likely a big one). - There was likely a greater rate of interaction of different people in these industries interacting with one another allowing for a greater distribution of construction related ideas, some more efficient than others. Think when you have a new coworker who introduces a new tool and suddenly every starts using, this process is able to happen more frequently. - Likewise some of those inputs likely had an opportunity to efficient. Inputs from industries with fewer players would have been greater incentivised to sell as many units as possible and find ways to reduce their costs. If they performed price 2nd/3rd discrimination previously due to that market being insufficiently large relative others, they have an incentive to act otherwise. |