In housing supply, cutting the time it takes to build matters as much as deciding policy. Redevelopment and rebuilding projects in Seoul take an average of 13 years from designation of a maintenance district to completion. Speed is also at the heart of the government's housing fast-track supply plan announced in August this year. The plan aims to shorten the period from a land announcement to groundbreaking to 37 months and to supply an additional 230,000 homes or more in the greater Seoul area. But no matter how much permitting and land development are accelerated, the time it actually takes to put up a building after groundbreaking changes little. What is needed, in the end, is a way to cut the final stretch of the housing supply timeline. That is why modular construction deserves attention.
Modular construction builds much of a home in a factory in advance and assembles it on site. Because foundation work and module fabrication can proceed at the same time, the construction period can be shortened. It can cut a typical construction schedule by 20% to 30%, reducing a two-year build to about 18 months. Because production takes place in a factory, the method is relatively less exposed to weather and on-site labor shortages, and quality is easier to keep consistent. It was with that potential in mind that the government included innovation of the supply system through modular methods as a policy task this time, and decided to expand public housing orders to about 5,000 units a year by 2030.
Even so, modular construction is not spreading as quickly as hoped. The biggest hurdle is cost. Construction costs run about 30% higher than on-site building, and the modular housing supplied so far has centered on studio-type and low-rise units, limiting its spread to the mid-size and larger homes the public wants. Certification systems and procurement procedures, designed on the assumption of on-site construction, also fail to adequately reflect the characteristics of modular building. With order volumes small, it is hard to bring unit prices down; and with prices high, volumes do not grow. It is a vicious cycle. Singapore and the United Kingdom are aggressively expanding design for manufacture and assembly, known as DfMA, and modular construction. In Korea, modular buildings of 22 and 25 stories are being pursued, confirming the technical feasibility. The task now is to turn that technology into industrial competitiveness. Three things are needed to do so.
First, the special act on supporting the expansion of modular construction, now pending in the National Assembly, should be passed quickly. Revising individual standards one at a time will not produce speed. Quality certification, improvements to the procurement system and financial support — the institutional foundations needed to energize the industry — must be put in place as a single framework.
Second, national research and development is needed on next-generation core modular technologies. What is required now is research on building more cheaply, higher and wider. Technology development should span the full cycle, from design to manufacturing automation, with targets of cutting construction costs 25% from existing modular methods, delivering mid-size and larger units of 84 square meters or more in net (exclusive-use) floor area, and reaching 30 stories or higher.
Third, the predictability of public order volumes must improve. For companies to invest in factories and automated equipment, stable demand has to come first. Presenting annual order plans in advance would bring economies of scale forward and lower construction costs as well.
A housing supply decision may take a day, but building takes years. Now that the government has made speed the core of its policy, preparations to cut the time after groundbreaking should begin alongside it. When law and technology move together, modular construction can change the pace of housing supply.