#Our Distorted Housing Culture
In our society, the perception of housing is quite negative. Owning a house is seen as a situation where you do not get the right value from the moment of purchase. The land prices skyrocket year by year, and even after investing years of salary, it often results in enormous debt. This perception is particularly entrenched among the general population of South Korea, especially in the case of single-family homes.
This passage reflects a critical view of the housing market, emphasizing the financial burdens and challenges faced by individuals in the context of South Korea's real estate environment.
#Class Ladder and Urban Living Life
Living in a single-family home in the city center is becoming an increasingly distant dream. However, once married and with children, many dream of a life where kids can play in a yard. We aim to transform this kind of housing, which is difficult to sell once bought, into homes that can always be fairly valued and easily sold when needed. There should be a possibility for a fair housing mortgage, and the houses should be easy to sell when moving to another area.
In apartments, the land per household is very little, as they are built high on a small piece of land. Even for a 132.16 square meters apartment, the actual land share is only about 33.06 square meters. This is the background for recent discussions on easing floor area ratios or lack of project feasibility surrounding redevelopment or remodeling in the Gangnam area. People are more accustomed to the concept of land + apartment rather than land + house. Apartments have frequent transactions and many cases of transactions under similar conditions, making it easier to predict price fluctuations. This leads to easy prediction of fair prices and rapid transactions. In Korea, besides buying and selling, there is a unique system called Jeonse, which allows for deferring the sale until market prices are favorable. Additionally, early apartments have made significant gains through reconstruction. There was a time in the mid-90s when prices rose overnight, and residents could move to bigger and better homes without additional costs. However, can such dramatic price increases continue? From 2015 to 2020, apartment prices in Seoul rose by 200%, and as of 2023, apartment prices in Seoul and the Gyeonggi region are undergoing major adjustments.
#The Myth of Speculative Reconstruction Needs to Stop
The time has come to separate the value of the land from that of the house. Buildings emit 30% of their life cycle's greenhouse gases when first built. In 2-3 years of apartment construction, this means significant greenhouse gas emissions in a short period. A building needs remodeling or maintenance every 20 years, but with proper management, houses can remain in good condition for 100-200 years. To create a net-zero urban environment by 2050, large-scale demolitions and new constructions through redevelopment and reconstruction must be minimized, favoring recyclable materials.
Our housing environment is poor due to an inadequate construction system. It's hard to address issues like leaks in new houses, apartments, and villas. Once the 1-3 year warranty period ends, homeowners must resolve problems like flooded parking lots, condensation on inner walls, mold on rooftop walls, leaks from upper-floor bathrooms, warped door frames, or exposed plumbing due to broken bathroom tiles. Solutions are unclear, and procedures and costs are opaque. Problems may or may not get resolved in this murky situation, making buying a house a fearful prospect, with single-family homes without management offices being even harder to buy. Those who have personally experienced defects in single-family homes know how difficult it can be to live in them.
Due to these conditions, we lack a culture of architecture and diverse housing experiences. Recent apartments have become expensive investments offering comfort and convenience like hotels. They become investments that need to be sold and moved to another apartment after 20 years.
#Housing Renaissance
Land Value + House Value = Total Price
We have prepared a way to objectively regain housing value. We plan to develop a simulator to assess house values. We'll break down house construction costs into materials, labor, and management, calculating the appropriate residual value for each item based on actual replacement frequency. We also aim to build the most accurate database by continuously monitoring and providing A/S for houses we create and launch into the market. By calculating a proper residual value for houses and offering solutions to maintain optimal condition, we believe houses can be properly valued. This will make it easier to find new buyers or secure loans against the house.
The benefits of this system include: 1) increased housing transactions, 2) houses always maintained in top condition, 3) fair valuation of house prices, 4) stable mortgage programs, and 5) actual living conditions not being poor like apartments or urban studios, but very comfortable and clean.
#Industrialized Housing
If houses were produced like iPhones or Teslas, we would witness revolutionary changes in the housing industry. Like the iPhone, which maintains significant value even after long use due to its quality and excellent A/S, or Tesla, which repairs and sells refurbished products and guarantees key parts for 10 years, houses too could offer long-term warranties and efficient repair services for major components. If users could easily request repairs and experts could promptly complete them on-site, it would greatly reduce the burden of homeownership.
To provide such services, all houses must be built with consistent design information and standardized parts. Relying on the individual work methods of carpenters like Mr. Kim and Mr. Park, as is currently the case, makes it impossible to offer a 10-year warranty like Tesla. Standardization and consistency are key to ensuring warranties and maintaining quality.
The houses we dream of will adopt a wall module system precisely manufactured in factories. We choose this method for its logistical efficiency. Using wall modules allows for transporting multiple rooms at once, making assembly at the construction site much more efficient and economical than moving completed rooms.
We have also conducted long-term research on modular homes using CLT (Cross Laminated Timber). However, in South Korea, the limited availability of coniferous resources has posed a challenge to the application of CLT. This highlights the importance of using sustainable resources and finding building materials suitable for the local environment. Therefore, we must explore alternative materials and technologies to realize modular housing suitable for South Korea's environment.