The Economics of Deconstruction

In todays economy in the United States there are constantly new opportunities for business to arise and take advantage of. Demands are volatile and supply must meet demand. New markets are constantly being created and destroyed. Being a student of business and trade, I tend to think about these new markets opening and closing for potential entrepreneurial ideas for starting a business of my own.

Another name that has arisen once again between readings and class discussion is that of Urban Ore and their work in the market of deconstruction. Prior to this class I had no idea such a demand and thus such companies existed, A very eco-friendly alternative to demolition,. Again, I went to the internet to find out a bit more about deconstruction and the economics behind it.

MacBride explains Urban Ore to be a firm in California that generates $1.5 millions in revenue through its retail store. This revenue comes from the salvaging of materials stripped away from deconstruction, creating value from scrap that would otherwise be devalued by demolition and eventually sent to a landfill. Therefore, depending on particular circumstances, deconstruction could prove to be an economic and environmentally efficient alternative to demolition. “Urban Ore acts as a retail clearinghouse for recyclable and reusable materials and benefits the community by decreasing waste generation while creating high-paying jobs.” (MacBride 135). 85% of Urban Ore’s materials are received locally, as noted by MacBride. This small scale, local-environment oriented company that does not support a logistically expensive and long distance model.

An article I came across called The Economics of Deconstruction by Nina Patel notes that labor is the most difficult aspect of deconstruction to estimate and factor in to the question of – is deconstruction more efficient than demolition in this case? Although even intangible things that may be overlooked by economics are sometimes incorporated into this equation as Michael Shuster of Wildwood Joinery & Design explains how the sentiment between the homeowner and the home comes into play. Sometimes homeowners will not stand to see the house they built be demolished crudely. Another aspect incorporated into the is it worth it equation is that of rising landfill costs compared to the value of the materials resold to either recycling plants or other consumers.

Coming from the suburbs of Detroit, Michigan. I can safely say that there is absolutely a demand for both demolition and deconstruction in the city as well as the satellite neighborhoods that surround it. The blight and abandoned buildings are excessive as the population of the city has dwindled from about 2 million in the 1920’s to now below 800,000. The abandoned buildings provided breeding grounds for trouble within the city as they are used for all sorts of illegal activity. Using the entrepreneurial mindset, I am curious to see how the demand for deconstruction compares to the demand for demolition within Detroit.