Methods
How We Rank Factories
This page describes the methodology behind the U.S. Factory Rankings.
Overview
We evaluate each factory across four criteria to produce an Overall Grade (A+ through F). Higher grades indicate better “worker readiness”—the ability of workers to find housing near the plant without long commutes or spillover pressure on surrounding communities.
The Four Criteria
Criterion #1: Nearby Affordability
Question: Can workers find homes they can afford within a reasonable commute?
What it measures: Affordable single-family (SF) and rental housing within 10 miles of the factory.
How affordability is determined:
- Single-family homes are affordable if the estimated home value is at or below the estimated purchase price for a typical factory worker. This purchase price is derived from BLS median wages for the factory’s industry type, combined with an ICE (Intercontinental Exchange) regression model that relates wages to home purchase capacity.
- Rental units are counted toward affordability if the area’s median rent is at or below the estimated affordable rent for a typical factory worker (30% of estimated household income).
Grade thresholds:
| Grade | Requirement |
|---|---|
| A | Affordable homes built 2020–2023 exceed new jobs AND affordable SF homes exceed 50% of new jobs |
| B | Affordable homes built since 2000 exceed new jobs AND affordable SF homes exceed 50% of new jobs |
| C | Total affordable housing stock exceeds new jobs AND affordable SF homes exceed 50% of new jobs |
| D | Total SF + rental housing stock exceeds new jobs AND total SF homes exceed 50% of new jobs |
| F | Insufficient housing stock to meet any threshold |
The 50% single-family requirement ensures workers have sufficient access to homeownership opportunities, not just rental units.
Criterion #2: Metro Opportunity
Question: Can the region build more housing if demand increases?
What it measures: Long-term housing supply potential through three policy pathways from the AEI Housing Playbook.
The three pathways:
- Option 1 – Greenfield (Lot Size Flexibility): New subdivisions with smaller lot sizes that can accommodate more homes per acre. Includes both single-family detached (SFD) and single-family attached (SFA) homes.
- Option 2 – Infill (LTD - Lot Type Diversification): Lot splits, accessory dwelling units (ADUs), and small multiplexes on existing residential land.
- Option 3 – Residential in Commercial: Allowing residential development in commercial and industrial zones near employment centers.
Calculation:
- Annual capacity = Sum of homes per year from all three pathways
- Years to house 10× jobs = (New jobs × 10) ÷ Annual capacity
- Affordable annual homes = New affordable SFD and SFA homes from Option 1 (where estimated prices are at or below the factory worker purchase price)
Grade thresholds:
| Grade | Requirement |
|---|---|
| A | Annual capacity > 10× new jobs AND affordable annual homes ≥ 50% of new jobs |
| B | Annual capacity > 10× new jobs |
| C | 1–5 years to house 10× new jobs |
| D | 5.01–10 years to house 10× new jobs |
| F | More than 10 years to house 10× new jobs |
The 10× multiplier accounts for workers’ households and induced employment growth. For non-metropolitan areas without playbook data, county-level data is used where available.
Criterion #3: Economic Boost
Question: Is the local economy ripe for stimulus?
What it measures: The ratio of median home prices to local household incomes—a measure of housing market pressure (also called price-to-income ratio).
Calculation:
- Price-to-income ratio = County median home price ÷ County median household income
For factories spanning multiple counties, the ratio is calculated as a population-weighted average across all relevant counties.
Lower ratios indicate the local economy has capacity for growth—the market can absorb new demand and new workers will boost the area. Higher ratios suggest the market is already under high housing pressure and new workers may exacerbate affordability problems.
Grade thresholds:
| Grade | Price-to-Income Ratio |
|---|---|
| A | ≤ 3.0 |
| B | > 3.0 to ≤ 4.0 |
| C | > 4.0 to ≤ 5.0 |
| D | > 5.0 to ≤ 6.0 |
| F | > 6.0 |
Criterion #4: Amenity Access
Question: Will workers have convenient access to daily needs?
What it measures: The count of essential amenities within 10 miles of the factory.
Amenity categories:
- Restaurants and bars
- Grocery stores / supermarkets
- Pharmacies and drug stores
- Coffee shops
Grade thresholds:
| Grade | Total Amenities (10-mile radius) |
|---|---|
| A | > 1,000 |
| B | > 500 to ≤ 1,000 |
| C | > 250 to ≤ 500 |
| D | > 100 to ≤ 250 |
| F | ≤ 100 |
Higher amenity counts indicate established communities where workers can meet daily needs without long drives.
Grading Scale Summary
Each criterion receives a letter grade:
- A = Excellent capacity
- B = Good capacity
- C = Moderate capacity
- D = Limited capacity
- F = Severely constrained
Overall Grade Calculation
The Overall Grade is calculated as a weighted average of all four criteria grades, converted to a GPA-style score (A=4, B=3, C=2, D=1, F=0) and back to a letter grade. The overall grade can include a “+” modifier (A+, B+, C+) for factories near the top of each grade band.
Criteria weights:
| Criterion | Weight |
|---|---|
| #1 Nearby Affordability | 1/3 (33.3%) |
| #2 Metro Opportunity | 2/9 (22.2%) |
| #3 Economic Boost | 2/9 (22.2%) |
| #4 Amenity Access | 2/9 (22.2%) |
The Nearby Affordability criterion (#1) receives higher weight because the availability of affordable housing within commuting distance is the most direct measure of worker readiness. The remaining three criteria are weighted equally.
Thresholds for overall grade:
| Overall Grade | Weighted Average | Additional Condition |
|---|---|---|
| A+ | ≥ 3.5 | No F grades |
| A | > 3.2 to < 3.5 | No F grades |
| B+ | > 2.9 to ≤ 3.2 | No F grades |
| B | > 2.5 to ≤ 2.9 | No F grades |
| C+ | > 2.4 to ≤ 2.5 | — |
| C | > 1.9 to ≤ 2.4 | — |
| D | > 1.0 to ≤ 1.9 | — |
| F | ≤ 1.0 | — |
Special rule: Any F grade on an individual criterion prevents a factory from receiving an overall grade of A+, A, B+, or B. Factories with one or more F grades are capped at C+ or below, regardless of their weighted average.
“What-If” Potential Grade
In addition to the current grade, each factory receives a Potential Grade that shows what the grade could become if local policymakers adopted AEI Housing Playbook recommendations. This scenario analysis modifies two criteria:
Modified Criterion #1 (Potential Nearby Affordability): Adds one year of affordable new homes from the Playbook to the current housing stock before grading.
Modified Criterion #3 (Potential Economic Boost): Evaluates how quickly Playbook options could resolve the metro area’s housing shortage:
| Potential Grade | Requirement |
|---|---|
| A | Shortage resolved in 1 year |
| B | Shortage resolved in 2 years |
| C | Shortage resolved in 3 years |
| D | Shortage resolved in 5 years |
| F | Shortage not resolved within 5 years |
The Potential Grade uses the same weighted average and F-grade rules as the current grade. If the current grade already exceeds the potential grade, the current grade is retained.
State Grades
In addition to individual factory grades, we calculate aggregate grades for each state that has one or more factories in the analysis. State grades summarize housing market conditions across all factory locations within the state.
How State Grades Differ from Factory Grades
State grades use five criteria instead of four. The first four criteria are aggregated from factory-level grades, and a fifth criterion measures the state’s concentration of manufacturing investment.
Aggregation method:
- Criteria #1–4: Each factory’s letter grade is converted to a numeric score (A=4, B=3, C=2, D=1, F=0), averaged across all factories in the state, and rounded to the nearest integer to produce a state-level grade.
- Numeric variables: Housing counts, job totals, and amenity counts are summed across factories. Wages, price ratios, and rent thresholds are averaged.
- Metro-level data: To avoid double-counting metros that contain multiple factories, playbook capacity and shortage data are counted only once per metro area within each state.
Criterion #5: Factory Concentration
Question: How much manufacturing investment is concentrated in this state?
What it measures: The number of factories in the analysis located within the state.
Grade thresholds:
States are ranked by factory count and divided into quartiles:
| Grade | Factory Count Quartile |
|---|---|
| A | Top quartile (most factories) |
| B | Second quartile |
| C | Third quartile |
| D | Bottom quartile (fewest factories) |
Higher factory counts indicate states with significant manufacturing investment, where housing market conditions affect more workers.
State Grade Weights
State grades use a different weighting scheme than factory grades to accommodate the fifth criterion:
| Criterion | Weight |
|---|---|
| #1 Nearby Affordability | 1/3 (33.3%) |
| #2 Metro Opportunity | 1/6 (16.7%) |
| #3 Economic Boost | 1/6 (16.7%) |
| #4 Amenity Access | 1/6 (16.7%) |
| #5 Factory Concentration | 1/6 (16.7%) |
The Nearby Affordability criterion (#1) retains its higher weight, while the remaining four criteria share the remaining two-thirds equally.
State Overall Grade Thresholds
State overall grades use the same thresholds as factory grades:
| Overall Grade | Weighted Average | Additional Condition |
|---|---|---|
| A+ | ≥ 3.5 | No F grades |
| A | > 3.2 to < 3.5 | No F grades |
| B+ | > 2.9 to ≤ 3.2 | No F grades |
| B | > 2.5 to ≤ 2.9 | No F grades |
| C+ | > 2.4 to ≤ 2.5 | — |
| C | > 1.9 to ≤ 2.4 | — |
| D | > 1.0 to ≤ 1.9 | — |
| F | ≤ 1.0 | — |
The same F-grade cap rule applies: any F grade on an individual criterion prevents the state from receiving an overall grade higher than C+.
State “What-If” Potential Grade
States also receive a Potential Grade using the same methodology as factory potential grades. The modified criteria (#1 Potential and #3 Potential) are aggregated from factory-level potential grades, then combined with criteria #2, #4, and #5 using the state weighting scheme.
Factory Collection
We performed a non-random selection of articles from 2022 to 2025 announcing new factories across the U.S. This involved both a broad internet search and a targeted, systematic search of IndustrySelect’s monthly list of new U.S. manufacturing announcements from September to December 2025.
IndustrySelect is a data provider that identifies manufacturing facilities using a thorough, human research-led verification process, including consistent phone calls, emails, postal checks, and industry monitoring. For more information about their data collection process, visit their website.
Our selection may not be comprehensive of all new factories announced during this period. We continue to update this data as we discover previously or newly announced factories.
Data Sources
| Data Type | Source | Year |
|---|---|---|
| Housing values | First American property records with Automated Valuation Models (AVM) | December 2024 |
| Census data | American Community Survey (ACS) 5-Year estimates; ACS 1-Year for counties where available | 2023 (5-Year), 2024 (1-Year) |
| Wage data | Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics, MSA-level | 2023 |
| Amenity data | SafeGraph Points of Interest database | Current |
| Employment data | LEHD Origin-Destination Employment Statistics (LODES) | Most recent year available |
| Playbook data | AEI Housing Playbook alternative distributions and greenfield subdivisions | Current |
Geographic Definitions
- Nearby (10-mile radius): A circular buffer centered on the factory location, using the US National Atlas Equal Area projection (EPSG:2163) for accurate distance calculations. This captures housing that is realistically commutable for shift workers.
- Metro: The Core-Based Statistical Area (CBSA) containing the factory, representing the broader regional housing market. For factories in non-metropolitan areas, county-level data is used instead.
- Overlapping factories: Some factories have overlapping geographic buffers. To prevent double-counting, housing availability is divided by the number of overlapping factories when calculating the Nearby Affordability criterion. For example, if two factories share the same 10-mile buffer (e.g., Amkor & TSMC in Phoenix), each factory is credited with half the available housing stock when determining its grade.
Affordability Calculation
A home is considered “affordable” if its estimated value is at or below the estimated purchase price for a typical factory worker. This threshold is derived from:
- Industry-specific wages: BLS median wages for occupations relevant to the factory’s industry type (aircraft, auto, electrical, food, computer, general manufacturing, metal, or pharmaceutical).
- Wage-to-purchase-price model: ICE (Intercontinental Exchange) regression coefficients that relate median wages to estimated home purchase capacity, calibrated by metro area.
- Household income estimation: A separate regression model estimates total household income from worker wages.
- Affordable rent: Calculated as 30% of estimated monthly household income, following standard affordability guidelines.
For unionized factories (e.g., SK Battery Park, GM Samsung, Stellantis), median wages use reported wages for the plant workers or are adjusted based on BLS Current Population Survey data to reflect union wage premiums.
Questions?
For methodology questions, please contact the AEI Housing Center at aei.org/housing.