LH to Order 18,000 Modular Homes Over Five Years, Tie Payments to Factory Production

LH President Lee Seonghun Holds Roundtable with Six Modular Housing Companies

Korea Land and Housing Corporation (LH) said on November 4 that it would increase the volume of its orders to boost the housing modular construction industry and speed up housing supply. The plan follows a request made by President Lee Jae-myung last month at a move-in site in a third-generation new town.

LH President Lee Seonghun met the previous day with representatives of six leading domestic modular construction manufacturers for a roundtable discussion on future procurement plans and measures to improve the system. Modular housing is built by manufacturing major structural components and interior and exterior materials in modular units at a factory, then assembling and installing them on-site. Its key advantage is speed. However, many have pointed out that the unit cost of producing each module remains high because the number of sites using the method is still limited. If large-scale orders are confirmed in advance, manufacturers are expected to be able to achieve economies of scale.

LH President Lee Seonghun (center) and representatives of modular construction companies pose for a commemorative photo at LH's Seoul Regional Headquarters on the 3rd. They discussed modular construction procurement plans for the next five years and ways to improve related systems. Photo courtesy of LH.

LH decided to order 2,200 homes this year, 3,500 homes plus additional units next year and the year after, 4,000 homes plus additional units in 2029, and 4,500 homes plus additional units in 2030. The total planned volume over the five years is 17,700 homes. The orders will focus on third-generation new towns in the Seoul metropolitan area and are worth approximately KRW 4.8 trillion.

The roundtable also addressed measures to improve the system. To encourage private-sector technology development and investment in automated equipment, LH decided to introduce a technology development period. It will issue an early order at the end of this year for Block A1 in Songu 2, Pocheon, giving the selected contractor time for research and development and preparation for automated mass production between contractor selection and the start of construction. Previously, progress payments for modular housing were made after the modules were incorporated into the construction site. LH will change this to make payments in line with progress in factory production, recognizing that substantial upfront investment is unavoidable in the early stages of market development.

LH decided to set unit-price reduction targets by the scale and year of modular housing projects and introduce a volume-unit price linkage system that allocates orders based on cost-saving performance. The roundtable also discussed procurement and quality standards tailored to the characteristics of modular housing, as well as measures to ease regulations. Drawing on technologies validated at demonstration complexes, including Block 5-1 in Sejong (12 stories, 450 homes) and Block A4 in Chowpyeong, Uiwang (22 stories, 381 homes), LH plans to refine its quality management system. Its plan is to move from an order-based mass-production system using standardized designs to a system in which units are produced in advance and then assembled on-site.

“Modular housing is a key solution that can simultaneously address the aging construction workforce, shortages of skilled workers, safety accidents and quality issues, while dramatically accelerating the nation’s housing supply,” LH President Lee Seonghun said. “By using large-scale orders as a catalyst, we will encourage bold private-sector investment in facilities and improve price competitiveness. We will also build a K-modular housing ecosystem and complete a major transformation of the housing industry for the future.”

This content was produced with the assistance of AI translation services.