Sweden builds houses and apartments like Lego sets. Why don’t we?
· Vox
Sweden has given the world many wonderful gifts. Zara Larsson, obviously. Spotify and social democracy. And Ikea, the company that showed us you can furnish your apartment, stylishly and affordably, with the contents of a few flatpack boxes.
Sweden’s talent for mass-producing clever, easy-to-assemble home fixtures also extends to something much bigger than bookshelves and bed frames: building entire houses and apartments. Ikea has become one of the biggest furniture retailers in the US (and perhaps our top purveyor of vegan meatballs). But those factory-built Swedish homes? Americans can’t have them. Yet.
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In factories throughout Sweden, workers assemble modular rooms that will become components of new homes — kitchens and bathrooms, for example, complete with counters, sinks, windows, electric wiring and plumbing, and even dishwashers and washing machines. The modules are then trucked to their final destinations, hoisted up by crane, and arranged into place to form whole single-family or multifamily buildings — like a giant Lego set, as Lindbäcks, one of the country’s top manufacturers of factory-built housing, describes it. One modular development with 114 apartments was assembled on-site from its component parts in about five weeks. (Perhaps it comes as little surprise that Ikea was even a founder of one of Sweden’s prefabricated housing ventures.)
Sweden has earned a reputation as one of the world’s leaders in prefabricated, off-site housing construction. About a year ago, when I asked Joseph Gyourko, one of America’s top housing economists, which underrated housing policy stories he thinks I should write about, he had a ready answer: Look into how Nordic countries have figured out how to efficiently build high-quality homes in factories at far greater rates than the US does. “It’s not trailer parks,” he told me then. “It’s nice housing.”
Estimates vary (in part because “prefabrication” is a fuzzy term to define), but experts on Sweden’s housing industry say a very large share of its homes are built using some form of prefabrication. Susanne Rudenstam, managing director of the Swedish Wood Building Council, told me about 90 percent of the country’s new single-family homes are built with prefabricated timber systems, which is consistent with other estimates. According to Sweden’s national statistics agency, 43 percent of new multifamily apartments are constructed with fully prefabricated structural frames. Another 46 percent are partially prefabricated.
“Why don’t we do this?” Gyourko asked in astonishment. Why, indeed, hasn’t the United States, the land of free markets and capitalist innovation, embraced the Ikea method of home construction?
Modular? Prefab? What’s up with all these confusing terms?
There are a lot of intimidating-looking words for what we’re talking about here — but they’re much simpler than they seem!
Off-site construction is exactly what it sounds like — any building methods that occur in a factory or other site that’s not the construction site where a home will eventually end up. It can be as simple as pre-drilling holes into elevator parts, or as comprehensive as manufacturing an entire family house and shipping it intact on a semitruck.
Industrialized construction (IC), as one report recently defined it, means “a form of construction that utilizes processes and technologies typical of industrial manufacturing.” Think standardization, mechanization, and assembly lines — systems that take advantage of economies of scale. This often refers to off-site construction methods, but can apply to on-site ones, too.
Prefabrication, or prefab, is the practice of manufacturing parts of a building in advance and transporting them to the construction site for assembly — similar to the concept of off-site construction.
Panelized construction: A form of prefabrication in which walls, floors, and ceilings are made in a factory as flat panels, then assembled at the construction site.
Volumetric modular: A form of prefabrication where entire rooms or parts of rooms are built in a factory, with their floors and walls assembled. Fixtures like sinks, toilets, and electric wiring are often included. They’re then transported and assembled at the construction site.
Manufactured home: A specific term used in the US for factory-built homes built under the HUD Code, a national building code run by the federal government. These are sometimes known as “mobile” or “trailer” homes and represent the vast majority of prefabricated housing in the US.
One framework I like for thinking about these is the concept one- , two-, and three-dimensional prefabrication. One-dimensional prefab means preparing single pieces of a building — beams, lengths of piping — before they’re brought to the construction site. Two-dimensional prefab is essentially the same as panelized construction — preparing walls and floors. And three-dimensional corresponds to volumetric modular — pre-assembling whole rooms.
Now that I’ve been investigating this question, I’ve learned how much more complicated it is than it might seem. The Swedes indeed build homes in ways that make our construction methods — predominantly building homes on-site, one by one, piece by piece — look embarrassingly archaic, as if every washing machine were assembled from different parts inside the consumer’s home. As the US battles an acute housing shortage, Sweden’s success has helped inspire efforts to accelerate factory-built housing here; Oregon, for example, has invested $20 million in modular housing manufacturers.
But several experts I spoke to for this story cautioned that Americans risk learning the wrong lessons from Sweden.
Rather than fixating on the end product, they argue — the futuristic house factories — we have to focus on the less glitzy task of fixing our kludgy building and zoning codes. Doing this would give builders more freedom to innovate and reduce costs, which could lead to a boom in American factory-built housing, or simply to different advances that improve and streamline homebuilding stateside. Stephen Smith, executive director of the nonprofit Center for Building in North America, told me that striving to leap straight to modular construction in the US would be the wrong goal.
“I don’t think the places that succeed with off-site construction do it because they were seeking off-site construction,” he said. “I think it’s the reward from getting all the details right.”
So what can we learn from the Swedes’ dreamy, high-tech housing industry — and what would it take to bring about an American version of that success?
The great global experiment in mass-produced housing
Many comparisons of housing in Sweden and the US begin in the same period: the 1960s, the heyday of government-sponsored mass-building programs around the world. Many countries, including the US, were facing significant housing shortages driven by a postwar baby boom, a rapidly urbanizing population, and, in some cases, the destruction of much of their housing stock during World War II. Japan, today another one of the world’s leaders in prefabricated housing, built 6.7 million homes between 1966 and 1970 — about a quarter of its entire housing stock at the time. The Soviet Union’s command economy famously churned out millions of inexpensive apartment mega-blocks during the same period, many of them assembled in just a few weeks. The secret was panelized construction — a type of prefabrication where the walls and floors are made in a factory and assembled by crane at the construction site.
Sweden’s version of this mass building push, the Million Homes Program, was set up in 1965 to build 100,000 homes per year over a decade. It created incentives for builders to use innovative methods and take on large projects. And it worked, producing over a million homes by 1974 and a kind of laboratory for industrialized construction (IC) methods widely used in Sweden today. Industrialized construction is the umbrella term for building techniques that incorporate some degree of mechanization and standardization, including panelized construction and fully modular rooms; many people in Sweden’s housing industry compare the philosophy to a car assembly line. But Sweden had also been a pioneer in prefabricated housing long before the postwar age of industrialized homebuilding; it experimented with factory-made wooden houses as early as the 1820s, according to a recent paper published in the journal Urban Studies by researchers Tyler Pullen, Jerker Lessing, and Santiago Ossa.
The US, too, experimented with accelerating prefabricated building in this period. In 1969, then-Secretary of the US Department of Housing and Urban Development (HUD), George Romney (the father of Mitt Romney), championed Operation Breakthrough, a program that sought to speed up and lower the costs of housing construction with innovative, factory-based building methods. It ultimately led to the construction of more than 30,000 housing units, but the program itself disbanded in the mid-1970s; a report from the US Government Accountability Office concluded that it program had not demonstrated it could build more affordably than conventional construction methods. Operation Breakthrough “ultimately failed to achieve its original transformative ambition of establishing a healthy IC market” in the US, Pullen and his co-authors wrote.
Though the program didn’t make prefabrication a normal and widespread part of American homebuilding, it did achieve something very important. It helped pave the way for a uniform national building code for manufactured homes, the paper notes, which are factory-built houses that make up about 10 percent of single-family home construction in the US today. (Outside that separately regulated market, around 3 percent of US single-family homes and 3 percent of multifamily buildings are built with modular or panelized prefabrication.) These represent the vast majority of the US factory-based housing industry, and they also happen to be some of the most affordable housing in the country. Many Americans know manufactured homes by the stigmatizing and somewhat misleading terms “mobile” or “trailer” homes. But our manufactured housing industry actually offers a promising path to scaling higher-quality, prefabricated homes more widely across the US.
In Sweden, industrialized construction does not carry the same baggage. Many of its prefabricated apartment buildings have the sleek, ultramodern aesthetic that Americans associate with Scandinavian furniture stores, while others resemble more traditional architecture, with colorful siding and details like charming mansard-style roofs. They tend to look strikingly different from the boxy buildings that dominate contemporary multifamily housing in the US — proof that mass-produced housing doesn’t have to look, well, mass-produced.
The secret to Sweden’s housing factories isn’t the factories
The most decisive factor behind Sweden’s advanced off-site construction industry is probably not its midcentury housing incubator, however. Every expert I spoke to stressed the importance of building codes — the set of regulations that govern how buildings must be designed and constructed to ensure that they’re safe to occupy.
American building codes have been heavily criticized by housing abundance advocates, who argue that a dysfunctional rulemaking process has piled on unnecessary requirements — especially for apartment buildings — that drive up construction costs in the US without meaningfully improving safety. (I previously covered these issues at length here.) Our codes tend to be prescriptive, meaning that they specify the precise materials and tools that must be used to meet safety standards. In some cases, it’s not at all clear that those rules do much to make dwellings safer. (Perhaps the most notorious of these is the requirement in most of the US that apartment buildings greater than a few stories tall have two staircases.)
The difference in Sweden is that, like other European countries, it has embraced a “performance-based” building code, meaning that its rules mandate certain safety outcomes, like walls that must be fire-resistant for an hour, or that buildings be able to withstand heavy winds. Developers can then figure out their own way of meeting those requirements. That doesn’t mean it’s a free-for-all — builders still have to prove that their designs comply. This gives them room to innovate, which has encouraged an R&D culture in Sweden’s housing industry.
Performance-based regulation has enabled the Swedes, with their centuries-old tradition of timber construction, to do things with wood that Americans would never believe. Like this beautiful development in Stockholm of 10-to-13-story apartment buildings built with prefabricated wooden panels and clad in cedar shingles. That project, called Cederhusen, was designed with extensive fire-safety protections to meet Sweden’s standards. But it would be unlikely to be approved in the US for many reasons, including restrictions on combustible materials on the exterior of tall buildings, Edward Palka, an architect, US building code expert, and director of AKA Urban, told me in an email. (US codes do have alternative performance-based paths, but they can be so cumbersome and expensive that most builders don’t use them.)
Performance-based fire safety tests may not be infallible, however, and are likely to continue to evolve. In 2025, another new building with a wooden exterior was destroyed in a fire (no one was injured). A subsequent investigation found that its fire protections were insufficient, which has prompted debate about the adequacy of Sweden’s fire safety testing for wooden facades.
The US also has a fragmented patchwork of different building codes across different states and cities. “We have 20,000-plus individual jurisdictions, with exactly as many slightly unique building codes or zoning codes,” Pullen, a researcher for UC Berkeley’s Terner Center for Housing Innovation, told me. That makes it harder for factory-based homebuilders to sell the same standardized designs across the country, undermining the economies of scale that make prefabricated construction worthwhile. Sweden’s more nationally consistent building code, conversely, may have helped make off-site homebuilding more viable.
And there are more deeply embedded issues throughout American codes that bias them against prefabrication, according to a forthcoming report by Edward Palka for the Center for Building in North America, which advocates for building code reform in the US. Palka writes:
While the code is ostensibly method-neutral and only concerned with specific materials and their properties, the language was developed with traditional construction methods in mind, creating unintended barriers for innovative approaches…Requirements that make perfect sense for stick-built construction often become nonsensical, redundant, or impossibly burdensome when applied to volumetric modules or panelized systems.
In Sweden, meanwhile, the environment for housing innovation seems to be an emergent property of its regulatory system — the cumulative result of many rules and practices, rather than any one or two policies that can be singled out. Inside Swedish home factories, “it really feels both like a production space and a laboratory,” Ivan Rupnik, an architecture professor at Northeastern University who has studied Sweden’s prefabricated home sector, told me. It may also help that Sweden is a higher-trust society than the US; maybe regulators there are less likely to obstruct builders using innovative construction methods.
If all that sounds like tedious minutiae, what it enables in Sweden’s home factories is anything but boring.
At Podcomp, a company in Piteå, in Sweden’s far north, that makes modular bathrooms for some of the country’s largest prefabricated homebuilders, a tireless robotic arm lays tiles — one every three seconds. Podcomp’s factory can complete roughly 25 bathroom pods in the span of two eight-to-nine-hour shifts, Ulf Johansson, the company’s business manager, told me.
“It goes faster,” Johansson said. “You don’t need the plumber, the electrician guy, the tiling guy.”
The time savings is, of course, crucial — both because it reduces costs, and because the US and other countries facing a housing shortage need to build a lot of housing quickly. Studies have found widely varying time savings from prefabrication, though the available research generally suggests it can shave significant time off construction schedules. And workers can spend their days in more comfortable, climate-controlled environments instead of enduring extreme heat and cold (the latter a particular concern in Sweden, and the former in the US).
Alan Gibson, the principal at Go Logic, a US company makes high-end homes with panelized construction, told me the business is modeled on the Swedish industry. “They are able to produce homes of similar quality to ours using significantly less labor,” he wrote in an email. But because these methods have never become the norm in the US, the industry hasn’t gained much of a foothold. “It’s a chicken and egg situation, but it’s slowly changing as people understand the value of prefabricated component building,” he wrote.
Can we bring it here?
After ingesting all this reporting, a basic question still kept nagging at me. Why did the American regulatory environment become so seemingly inhospitable to innovation in the housing sector? Aren’t we the country that perfected the assembly line, the land of inventors and entrepreneurs?
Stephen Smith, of the Center for Building in North America, gave me the most satisfying answer I’ve been able to find: “I think it is because of our abundant wealth and resources,” he said. “It’s let us get a bit fat and lazy and inefficient. We can afford a lot of inefficiencies that other countries cannot.” He reminded me that the zenith of modular housing construction was, after all, in postwar Europe, as it was struggling to recover from such intense devastation.
Now that the US is mired in a housing crisis, it’s no surprise that there’s renewed interest in prefabrication. American policymakers, researchers, and housing industry professionals have gone on trips — what Smith archly called “the junket to Sweden” — to tour Swedish housing factories and learn from the prevailing industrialized construction methods there. Sweden certainly offers invaluable proof that radically different ways of building housing are possible — but expecting to replicate its factories here would be kind of like visiting Amsterdam, marveling at all the cyclists there, and concluding that the secret is to import lots of Dutch bicycles to the US. A few sources pointed me to the Silicon Valley startup Katerra as a cautionary tale. Founded in 2015 with ambitions to revolutionize US construction through prefabrication, it raised over $2 billion and invested massively in factories and acquisitions before proving it could build profitably. By 2021, it was bankrupt.
Instead, Smith stressed, Americans who are interested in fixing our housing market have to concern themselves with reforming the zillions of boring, technical rules that make our buildings inefficient. He pointed me to a few examples: According to a 2024 report by the Center for Building, some labor union agreements in the US forbid elevator manufacturers from drilling certain holes into elevator parts at the factory — a rudimentary form of prefabrication — and instead require that they be drilled at the construction site, which is out of step with the rest of the world. US plumbing codes require complicated layouts with a lot of piping, which makes it harder to build with prefabricated housing. New York City heavily restricts plastic piping, and also makes it very hard to use tower cranes, a key tool for lifting prefabricated housing modules into place.
An even more foundational problem, Smith added, is not building codes but zoning codes — the rules that dictate, in exacting detail, what kind of things can be built where. Zoning is the reason that apartment buildings are illegal on most residential land in the US, and it’s also common for affluent neighborhoods to require large lot sizes, making it economically impractical to build smaller, cheaper homes. If these affordable housing types can’t be built in the first place, it hardly matters what the building codes say.
“None of these things are really what people have in mind when they imagine policy for ‘prefab’ or ‘modular’ — they’re imagining one neat trick” that would bring it to the US, Smith told me in an email. But “the reason we have never succeeded in prefab is that we’ve never sweated the details.”
If the US addresses these barriers, it might eventually lead to significantly greater off-site construction. Or it might lead our housing industry to devise better, more affordable building methods in other ways — and that would be fine. “You don’t want to prejudge the outcome, but you want to create a favorable environment” for innovation, Smith said.
Prefabrication isn’t a silver bullet for affordability, and Sweden hasn’t necessarily cracked the code on cheap construction. Its building industry has faced stagnating productivity in the last few decades, just like other wealthy countries. And it faces a significant housing shortage of its own. Construction expert Brian Potter, a senior fellow at the Institute for Progress, has thrown cold water on the idea that imitating Sweden will fix America’s housing troubles, arguing that there’s little evidence widespread prefabrication has meaningfully lowered Swedish construction costs.
As it happens, the US does already have a substantial factory-based housing industry of its own — manufactured homes. Unlike all other homes in the country, these are regulated under a nationally consistent, already performance-based federal code, known as the HUD Code. (Meaning that when a developer builds under this code, it’s exempt from having to comply with local building codes, though it’s not exempt from zoning requirements.) The affordability of these homes offers perhaps the strongest evidence in the US of the cost savings that come with prefabrication and a uniform building code.
Contrary to the stereotypes still widely held about them, they can be quite nice and almost indistinguishable from conventional single-family homes. But they still face significant barriers to cultural acceptance, as well as widespread discrimination in zoning codes that make them illegal to place in many residential neighborhoods. And it’s harder to get a mortgage for them.
Recent changes to federal law, however, might help manufactured homes shed that stigma and expand the market for prefabricated housing in the US.
The recent federal ROAD to Housing Act removed a longstanding requirement that manufactured houses be built on a permanent steel chassis — the trailer-like frames that are used to transport them from the factory to the building site. That had been the most conspicuous physical feature setting them apart from conventional homes. “Removing the chassis means that this can be treated as more normal housing, and it will be more difficult to discriminate against it,” Amy Egerter, a senior research associate at the Terner Center, told me. It’ll also allow for more flexible designs.
Back in 2024, the HUD Code was also updated to allow manufactured duplexes, triplexes, and fourplexes for the first time — not just single-family homes. The chassis’s removal will make it easier to vertically stack these units, Egerter said. Meanwhile, HUD is now exploring expanding the code to buildings of five or more units — potentially a very big deal for manufactured housing in America. Perhaps, Egerter suggested, a developer will soon be able to choose to build a six-unit prefab apartment building under the HUD Code, and bypass the headache of the local building code patchwork altogether.
The US undoubtedly needs to modernize the chaotic labyrinth of building rules that regulate the vast majority of our houses and apartments, outside the HUD Code. In the meantime, one route to more affordable, more industrialized construction in the US might run through this unshowy, uniquely American manufactured homes industry. We may not need to import the future of housing from Sweden, the way we do with its modular shelves and sofas. But we can learn from the conditions that made its success possible, and perhaps unleash the potential of a form of housing Americans have looked down on for so long.
This story was supported by a grant from Arnold Ventures. Vox had full discretion over the content of this reporting.