by NATE BERG
A burgeoning U.S. prefab market has much to learn from Japan.
In the Brooklyn Navy Yard, a massive post-military industrial compound of warehouses converted into creative offices and bespoke manufacturing operations, there is a factory that builds houses. It’s a long, cavernous 100,000-square-foot warehouse with a string of workstations for welding together steel-trussed wall panels, threading them with electrical wiring and plumbing, and finishing them off with drywall and window sashes. Stacks of plywood and steel beams fill large racks next to industrial-sized spools of plastic conduit. It’s a construction site gone linear.
Not long ago this factory was used to fabricate the 930 steel-frame modules that were stacked and interconnected to create 461 Dean, a 32-story, 363-unit residential building that opened in 2016 adjacent to the Barclays Center arena in Brooklyn. It’s considered the world’s tallest building built through modular construction, a form of off-site construction that uses nearly finished sections of rooms and units that are built in a factory and snapped together at the construction site. Originally, 461 Dean was supposed to be one of 15 modular buildings in the 22-acre Pacific Park megaproject, but conflict between the developer, Forest City Ratner, and its construction partner, Skanska, stretched construction time to more than four years, wiping out the savings in cost and time and pushing the developer to fall back on conventional construction for the rest of the project. Immediately after construction on the building was finished, Forest City Ratner sold the factory and all its associated technology.
They didn’t have to look far for a buyer. Roger Krulak was an executive at the company who led the Brooklyn project, and he thought the factory-based building approach could still work. The key was bringing the process under one roof—break down the lines between design, development, and construction, and the delays they saw on 461 Dean would disappear. “Complete inefficiency. That’s what’s wrong with construction,” says Krulak, a 25-year veteran of the industry, as he walks the factory floor.
Krulak became familiar with prefabrication while studying management in Japan in the 1990s, when he toured factories of some of the country’s major prefab homebuilders. Seeing how their systematized factory methods made construction faster, more resource-efficient, and potentially cheaper than conventional building, he knew he wanted to try to replicate Japan’s success back in the U.S. His company, Full Stack Modular, is now operational and focusing on 10- to 45-story buildings, with current projects ranging from a hotel to a mid-rise housing project in Brooklyn to an 11-story building in Manhattan. “We are trying to do it differently and we think we have the model to do it differently,” he says.
Differently for the U.S., at least. This approach to construction is becoming almost mainstream in many parts of the world—from Sweden to Germany to Australia. But the world leader in prefabricated housing is undoubtedly Japan. More than 15 percent of the nearly 1 million new homes and apartments built there last year were made inside factories, either as stackable modular blocks or panelized walls and floors pieced together on empty lots. Millions of buildings now standing in Japan were prefabricated, and several Japanese companies regularly produce more than 10,000 new prefab homes every year. “They’re leap years ahead of where we’re at today,” Krulak says.
In the U.S., only a small number of homes are prefabricated (not counting mobile, or “manufactured,” homes). Annually, only about 2 percent of new single-family homes are constructed through modular means, according to the U.S. Census. Even so, off-site construction has long been seen as the grand solution for the mass production of affordable homes. Everyone from Frank Lloyd Wright to Buckminster Fuller has tried to make a go of industrialized housing in the U.S., particularly after World War II, with startups using mothballed aircraft factories for production. Though a few, like the Lustron Corporation, managed to produce a couple thousand prefab homes here and there, none of these ventures achieved their goal of revolutionizing the production of housing.
Krulak thinks prefab’s time may have finally come in the U.S. With advanced robotics, automation, and digital building information technologies—and increasing concern nationwide about the affordability of urban housing—factory-built housing once again seems poised for wider adoption. And a growing number of companies, from small homebuilders to major hoteliers, are betting that prefab is the future. To understand what that future may look like, you have to go to Japan.
Half of a dining room creeps slowly along a conveyor on a factory floor, with holes where its windows will soon be installed and bundles of electrical wire waiting to be connected with the room’s other half. That chunk is following closely behind on the assembly line, along with a few dozen segments of houses—bathrooms, bedrooms, sections of living rooms—each a box of walls, ceilings, and floors inside a steel frame, as if a typical house had been sawed into precise geometrical forms.
“Right now, you’re looking at units for the homes of two or three different customers,” says Toshiya Nomura, a factory boss for Sekisui Heim, the house-building segment of the Sekisui Chemical Company, a Japanese conglomerate that’s one of the largest prefabricated-home manufacturers in the world. We’re standing on a catwalk looking down on the assembly line at Sekisui Heim’s factory in the city of Hasuda, about 25 miles north of Tokyo, where the house parts glide through a series of workstations of robots spot-welding metal beams and rotating wall panels, workers nailing together staircases and slotting in sliding glass doors. In the same light blue uniform worn by the nearly 500 workers clanging away below, Nomura explains through an interpreter that this factory is one of eight the company operates across Japan and that it has the capacity to produce about 150 of these box-like modules per day, the equivalent of about 10 homes. Overall, the company produces about 14,000 houses and apartments per year.
Sekisui Heim, along with about a dozen other major manufacturers, now produces about one of every six new homes built in Japan annually. Prefabricated housing is common in Japan, from multi-unit apartments in Tokyo to modest bungalows in far-out villages to expansive luxury homes in the suburbs. The industry emerged partly by happenstance in the aftermath of the destruction of World War II. In the early 1950s, when Japan was still under Allied occupation and the Korean War was raging, the U.S. military’s demand for steel caused a boom in Japanese industry. After that conflict ended, the companies running those factories began looking for new markets. With the need for housing acute—Japan faced a shortfall of 4.2 million homes in the postwar years—and the population growing, and with the government offering incentives for housing construction, some began building homes. “The growth of the prefabricated housing industry mostly had to do with timing,” says Shuichi Matsumura, a professor of architecture at the University of Tokyo and an expert on prefabricated housing.
What followed was a boom in homebuilding—both among prefab manufacturing companies and the far more plentiful independent carpenters and builders—growing from about 688,000 new housing starts in 1963 to more than 1.9 million a decade later. Since then, Japan has had an unusually high rate of new homebuilding, much of which can be attributed to the fact that Japanese homes depreciate quickly, losing all of their value within 20 to 30 years. When property changes hands, valueless homes are typically torn down and built anew. This scrap-and-build approach has a few interrelated causes: the short lives of low-quality postwar construction; the challenges of renovating to meet building code revisions meant to address Japan's seismic activity; a feedback loop of poor maintenance resulting from the lack of a resale market. The result is that Japan builds approximately the same amount of new housing each year as the U.S., a country with three times the population.
Prefab home builders, like car manufacturers, have taken advantage of this scrap-and-build mentality, continually producing new models of homes with added features and updated safety standards. (A television ad for Sekisui Heim shows an elephant standing safely on top of one of its steel-frame modules. Another shows a frame being dropped from a crane.) According to Matsumura’s research, prefab buildings made up about 7 percent of new homes in the early 1970s. By 2016, they accounted for more than 15 percent.
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