Government organizations are undertaking prefabricated construction projects to deliver affordable housing units

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Globally, many government organizations are facing a severe housing crisis. The number of housing units needed has continued to grow but not the number of people needed to build those houses. This, coupled with other factors such as high input costs and longer construction periods involved in traditional construction practices, have added to the affordable housing shortage in the global market.

To overcome the crisis and provide more houses to their citizens in a short period, many government organizations have undertaken prefabricated construction projects in their respective regions in the recent past.

• In Australia, the Queensland government is running a pilot project wherein 52 homes, consisting of two or three bedrooms, will be delivered throughout the state in 2023. These prefabricated housing units are part of the government’s initiative to reduce the housing shortage faced in the region.

While the housing advocates have welcomed the initiative from the state government, they have also argued that the volume of prefabricated houses is nowhere near enough for tackling the social housing waitlist, which has more than 46,000 people. However, ConsTrack360 expects more such programs to be announced by the state government from the short to medium-term perspective, as the state government had announced funneling an additional A$1 billion into social and affordable homes over the next five years.

Alongside Australia, local government institutions in Canada have also undertaken prefabricated construction projects to provide housing units.

• In November 2022, Toronto City Mayor announced the opening of 59 modular homes. These prefabricated homes are part of the rapid response initiative launched by Toronto City during the height of the global pandemic outbreak. As part of the initiative, the city officials planned to deliver 3,000 affordable and supportive housing opportunities in less than two years. Of the 3,000 units, the Housing and Homelessness Recovery Response Plan aimed to deliver 2,000 supportive homes and 1,000 prefabricated homes in 2021 and 2022. 

In 2022, the City Council requested the Canadian government and the Province of Ontario to support the 24-Month Plan Housing Recovery and Resilience Plan in 2023 and 2024, which aims to provide 4,000 additional affordable housing units by the end of 2024. With more than 8,000 people experiencing homelessness in Toronto, the City Council is foreseeing prefabricated units as a potential solution to deliver homes at a faster pace. ConsTrack360 expects these initiatives to gain further momentum across the country from the short to medium-term perspective.

Hong Kong, which is also facing a severe shortage of affordable units, has announced an investment of US$3.36 billion towards the development of prefabricated homes in the region. As part of the program, Hong Kong aims to build 30,000 units over the next five years. The initiative aims to reduce the construction time and deliver the units to its citizens in four and a half years, from the current six years.

In the United Kingdom too, ConsTrack360 expects the government bodies to undertake such housing programs and initiatives to boost the supply of affordable housing units in the country. With the government failing to deliver on the promise of 300,000 units a year through traditional construction practices, the shift towards prefabricated construction can support the government in increasing the supply of affordable homes.

Along with these initiatives, central governments around the world are also using prefabricated housing units to provide shelter to citizens affected by natural disasters. For instance,

• With the Joshimath crisis, which has displaced many families in India, the Union government approved the construction of temporary structures in the form of prefabricated houses. NTPC and Hindustan Construction Company Limited (HCC), have been asked to develop 2,000 prefabricated houses each in the area. In January 2023, the Central Building Research Institute (CBRI) stated that the construction of prefabricated shelters has begun in the region.
• Turkey, which faced a severe earthquake in February 2023, is also planning to adopt prefabricated construction practices to meet the housing demand of its earthquake-hit victims. In March 2023, the government is expected to start the construction of 30,000 homes in the earthquake zone, which is also projected to include prefabricated houses in the region.

As more and more government organizations look at prefabricated construction practices as the potential solution to boost the supply of housing units and reduce the shortage in their region, investment in the sector is projected to grow significantly over the next five years. This will keep driving the industry growth in the global market from the short to medium-term perspective.