Yet Again, Elon Musk Misses the Mark
His new Boring plan presents a solution in search of a problem
Another week, another big idea from Elon Musk’s Twitter feed that has his diehard fans swooning, but people able to engage in critical thought scratching their heads. And no, I’m not talking about his desire to become a modern Willy Wonka, seemingly only to annoy the world’s third-richest man, Warren Buffett; rather, I’m referring to his new scheme to use dirt from the Boring Company’s tunnels to make cheap bricks for affordable housing.
Where to begin?
On the surface, if you know absolutely nothing about the factors contributing to the housing crisis, as I’d imagine is the case for many of Musk’s worshippers, the idea of making a single building material cheaper sounds great. “Wow, thanks Elon!” Too bad things aren’t so simple outside the simulation in Musk’s head.
The shocking truth is that the cost of bricks — this might be hard to believe — isn’t a leading factor (or even a minor one) driving high housing prices. When considering housing in California, where Musk is currently tunneling, the costs of construction labor and land have a far great impact than the price of building supplies, and bricks tend to increase the cost of labor because they take more time to assemble.
Musk’s plan for cheap bricks also seems to ignore the fact that much of the land in Los Angeles has been contaminated with chemicals which would have to be removed before the dirt he plans to use could actually be turned into bricks, further increasing the cost.
The value of land is a major factor in California’s biggest cities. As the chart shows, the value of the physical structure of homes has seen a notable increase from 1985 to 2016, but the value of the land on which houses are built accounts for a much greater shared of the property value in major metro areas where the bulk of demand for affordable housing is located.
The Legislative Analyst’s Office of California reported that construction costs are higher in California than other states, but mainly because labor is more expensive and the state mandates the use of higher-quality building materials. It also found that land is more expensive on California’s coasts and that “under two–thirds of the area surrounding the urban centers on California’s coast is undevelopable due to mountains, hills, ocean, and other water,” compared to less than a quarter in other major US metro areas.
The lack of vacant land increases pressure for densification because building out isn’t really option anymore, especially with people increasingly wanting to live closer to the urban core instead of in far-flung suburbs. However, Musk presents the cheap bricks as a means to build more small houses, which is exactly the wrong way to build affordable units because the value of the land below those houses would make them far too expensive.
The reality is that private developers will build what’s most profitable, which is why San Francisco achieved its housing-production target for people with above-moderate incomes from 2007 to 2014, but fell far short of its targets for moderate- and low-income housing. Some cheap bricks will not solve the housing affordability crisis; that will require a serious commitment to public housing.
Of course, Musk has a history of ignoring facts that are inconvenient to his “big” ideas. The Boring Company was founded on the idea that technology could reduce the cost of tunneling, even though the tunnels aren’t a major factor in a the high cost of underground infrastructure projects and other jurisdictions around the world have already achieved the cost reductions he promised to achieve without his technological fix — which so far seems to amount to cutting out unions. Musk’s overreliance on unproven technology is also becoming a problem at Tesla.
Cheap bricks will not any difference to housing affordability or generating new housing stock address the housing crisis. This set of tweets is yet another plan that Musk hasn’t fully thought out which reveals his preference for suburban development, his ignorance of simple geometry, and how the fawning, uncritical reaction to his every utterance will not serve us well in the long run.
Neoliberalism has robbed us of our ability to imagine a better future and left us yearning for anything better than our dismal present. The reaction to that despair should not be to latch onto every half-baked idea that floods Elon Musk’s Twitter feed — the Silicon Valley equivalent of Kanye West’s ill-informed, narcissistic pronouncements — but rather to critically assess the problems in our society, why the market-based solutions we were sold have failed, and what policies would better address them. And when it comes to affordable housing, we already have a head start.