1️⃣ Why are Modular Construction and the Special Act Important?
Recently, the construction industry has faced various challenges, including rising labor costs, a shortage of skilled workers, and issues like inter-floor noise or defective construction. 'Modular construction' has emerged as the solution. It is a method where housing modules are prefabricated in a factory and then transported to the site for assembly, much like stacking Lego blocks. The government is rushing to enact the 'Special Act on Modular Construction' to dramatically increase the speed of housing supply through this method. This marks the beginning of an innovation in residential culture that goes beyond simple technological adoption.
What is Modular Construction?
Simply put, it is a process where building components are manufactured using the same designs and materials in off-site factory conditions, then delivered and assembled on-site. The primary goal is to shorten project completion times while achieving high-quality results.
The Singapore Housing & Development Board (HDB) has been a pioneer in modular construction. Approximately 70% of building components (by volume) in all HDB residential projects are prefabricated. Currently, HDB is focusing on developing more complex and integrated components, such as concrete Prefabricated Bathroom Units (PBU), with plans to apply PBUs to all possible housing starting from 2019.
Globally, developed countries have applied Building Information Modeling (BIM) to transform the construction value chain and improve workflows. Many nations, including Singapore, have adopted modular construction approaches to meet increasing housing demand and improve overall productivity. With the help of BIM, the construction industry has shifted toward mass production and modular methods to satisfy market needs.
2️⃣ Paradigm Shift in Housing Supply: OSC
In technical terms, modular construction is known as 'OSC (Off-Site Construction).' While traditional construction was site-centric, it is now shifting toward a factory-centric production system, much like the manufacturing industry. The reasons for this change are clear:
- Innovation in Time Savings: Thanks to factory manufacturing unaffected by weather, construction periods can be shortened by more than 30% compared to traditional methods, enabling rapid housing supply.
- Uniform Construction Quality: Since skilled labor manufactures components in a controlled environment (factory), it is easier to manage quality aspects like insulation and airtightness, reducing defect rates.
- Enhanced Sustainability: It dramatically reduces construction waste, and modules can be disassembled and reused, making it a construction method that aligns with the era of carbon neutrality.
Why Modular Construction?
Using the modular method, a significant portion of the structure is manufactured away from the worksite. Assembly sites can exist almost anywhere, from neighboring towns to other countries. In land-scarce Singapore, most building structures are manufactured in Johor Bahru, Malaysia, and transported to project sites.
Given the current shortage of skilled labor, economic pressures, and rising material and labor costs, modular construction is an attractive way to make the industry smarter, more sustainable, and more efficient.
Modular Construction is a Smarter Way to Build.
Work environments become safer. Off-site, factory-based conditions make it easier to meet and monitor safety requirements. It addresses labor shortages. Today, skilled labor is scarce, and in developed countries like Singapore or Korea, labor costs can be very high. This makes it difficult for contractors to complete projects on time and within budget. However, modular construction, which benefits from machine automation, increases productivity while minimizing the need for skilled workers. This leads to labor savings and potential manufacturing cost reductions of 15-25%.
BIM improves design and planning. Information technologies like BIM help in developing prefabricated components. They also facilitate collaboration and communication among project participants and improve the overall construction workflow through machine automation.
Robin Village Development (RVD) is a leading provider of prefabricated components in Singapore. Most recently, they successfully implemented a smart BIM-based solution for the factory drawing stage of the fabrication process. This cloud-based solution, specifically designed to improve communication with project participants, resulted in a productivity increase of up to 36% for RVD.
Smart, Sustainable 'Modular' Construction
It is a sustainable construction method. It reduces energy use. As global interest in the environment grows, the construction industry must adopt eco-friendly approaches. Because modular construction is similar to assembly-line manufacturing, the energy efficiency of the manufacturing process is higher than traditional methods. It reduces material waste. Modular construction aims to control the amount of waste and maximize recycling within the factory. Furthermore, by integrating Just-in-Time (JIT) inventory management, it can meet demand while minimizing or eliminating inventory.
It is an efficient construction method. It saves time and money. Simultaneous on-site and off-site construction can save 25-50% in time and up to 25% of a typical construction budget. When planned correctly, the benefits are substantial. It minimizes weather delays. Korea has experienced unprecedented weather conditions. Extreme weather, such as heavy rain or snow, leads to site delays, which can significantly impact project profitability. Modular construction is not directly affected by the weather because manufacturing occurs in a controlled environment, allowing work to continue.
3️⃣ Key Details of the Special Act and Expected Effects
Encouraging Private Participation Through Incentives
The core of the Special Act is the relaxation of Floor Area Ratio (FAR), building coverage ratio, and height limits. Modular methods had a disadvantage where thick walls could reduce actual usable space, but legal incentives preserve business viability, encouraging participation from private construction companies.
Improving Procurement Systems and Deregulation
The act encourages priority procurement of modular housing for public works and introduces an 'Integrated Deliberation' system to simplify complex permit procedures. This will act as a catalyst to help form initial markets and accelerate technological development.
Key to Solving the Housing Shortage
Modular methods will be actively used for facilities that require mass supply in a short period, such as small housing for 1-2 person households, dormitories, and schools. This is expected to provide practical help in resolving rental shortages and residential instability.
4️⃣ Modular Housing Utilization and Investment Points
- Identify Policy Beneficiary Areas: Pay attention to subscription information for areas designated as modular pilot complexes within the 3rd New Cities or public housing districts, as they are likely to offer faster move-ins and pleasant environments.
- Consider for Single-Family Homes: If you plan to build a second home or a detached house in the suburbs, actively consider the modular method, which offers short construction periods and predictable costs.
- Verify Manufacturer Expertise: Quality in modular housing varies greatly depending on the manufacturer's technology. It is important to select an excellent company that possesses technologies for seismic design, insulation performance, and inter-floor noise reduction.
2️⃣ Understanding Core Insights at a Glance
The Special Act on Modular Construction signifies more than just the enactment of a law; it means the 'manufacturing-ization' of the construction industry. This section highlights core contexts that readers might miss.
Simultaneous Achievement of 'Speed' and 'Quality'
In the past, 'prefabricated housing' carried a prejudice of low quality, but current modular construction is manufactured with high-precision machinery, resulting in a smaller margin of error than site-poured concrete. This contributes to reducing chronic defects like leaks or condensation.
Benefit of Faster Move-in
Since foundation work and module production proceed simultaneously, the overall construction period is dramatically reduced. This shortens the waiting time for move-ins, providing an effect of reducing housing costs (such as rent).
Explosive Growth in Domestic and International Markets
Developed countries like the UK and Singapore are already fostering modular construction as a core national strategy. The enactment of the domestic Special Act will serve as an opportunity to secure the competitiveness of domestic construction companies for overseas expansion in line with these global trends.
Approaching from an Investment Perspective
Modular-related stocks, Real Estate Investment Trusts (REITs), or new subscription complexes where the modular method is applied can be high-value investment opportunities for the future.
5️⃣ Frequently Asked Questions (FAQ)
💡 Practical Tip
Visit modular 'Happy Houses' or promotional halls provided by LH (Korea Land and Housing Corporation) or SH (Seoul Housing & Communities Corporation). Experiencing the finish quality of actual living spaces and noise insulation performance firsthand will greatly help in dispelling vague prejudices.
⚠️ Important Reminder
When building a modular home privately, the road width (at least 4m or more) must be secured for large trailers and cranes to enter. Always check the access road conditions before signing a site contract.
6️⃣ Closing Message
The enactment of the Special Act on Modular Construction is more than just changing construction methods; it is an important first step toward solving our society's housing supply issues and moving toward eco-friendly future cities. Houses that are fast, sturdy, and environmentally conscious are no longer a story of the distant future.
As the saying goes, "A house is not a place to buy (Buying), but a place to live (Living)." We hope that technological advancements will make our lives more pleasant and safe. If you keep an eye on changing residential trends, you will be able to discover new opportunities for homeownership.
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- The Special Act on Modular Construction aims to speed up housing supply through incentives such as the relaxation of Floor Area Ratio.
- Factory-based manufacturing (OSC) has effects on shortening construction periods, improving quality, and reducing carbon emissions.
- Safety standards for seismic design and fire resistance are identical to general apartments, and it is advantageous for reducing inter-floor noise.
- When building privately, securing access roads for large vehicles is essential, so prior verification is necessary.
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