The Japanese build on the manufactured housing concept

If anyone believes that ``manufactured housing'' in Japan means miles of robots on high-speed assembly lines, he's wrong. That's not the way it is at all, contends James McKellar of the Massachusetts Institute of Technology Center for Real Estate Development. The Japanese who buy manufactured housing go to a showroom just as though they were planning to buy a new car. Unlike North American builders who place model homes in suburban areas, however, the Japanese companies locate their ``showroom models'' in the heart of urban areas where more people are likely to visit them.

``The Japanese are very good marketers,'' says Professor McKellar, who is also an architect and urban planner. ``They've turned the whole concept of manufactured housing around.''

A Japanese couple intent on buying a home first visits one of the ``housing parks.'' After touring some model homes and deciding which one to buy, the couple sits down with a salesman and begins to customize the house, much as a car buyer in the US customizes his automobile by purchasing some of the options.

The Japanese ``are focusing their technological know-how on the `software,' or sales and distribution, rather than on the `hardware' or building components,'' says McKellar.

The MIT visiting professor says he can visit any building-component manufacturer in the United States ``and see comparable, or better, hardware. Where the Japanese have surpassed us is in their ability to sell, not a product, but a `living environment.' And they've done it with a real difference.''

McKellar spent two months in Japan investigating the Japanese approach to manufactured housing and came away believing that the North American wood-frame house is still the most sophisticated building system in the world today.

What the Japanese have done, according to the professor, is take the sophisticated approach to the organizational aspects of the housing industry.

``It's as if Ford, General Motors, Chrysler, and American Motors decided to go into the housing business,'' he avers. ``Their factories would produce the building components, including furniture and fixtures, and then their franchised dealerships would act as the final outlet.''

Indeed, some of Japan's largest companies are producing manufactured housing, including Misawa, Sekisui Chemical, Sekisui House, National House (Panasonic), and Daiwa, which together account for 95 percent of the manufactured housing market, or 175,000 units a year. This accounts for some 15 percent of the total housing produced in Japan.

Actually, notes McKellar, the auto analogy is useful because the Japanese have taken the front end, or dealership, and used it as the main marketing entity.

``The salesman is the kingpin in the whole operation,'' explains McKellar. ``He functions as the general contractor and oversees the entire process, from helping the buyer select the right house and components to supervising the subcontractors and following up later on maintenance and service.''

Once the choice is made, the salesman sits down at a computer with a company architect and together they adapt the house according to the customer's wishes. Then the furniture and fixtures are chosen. The buyer signs a contract and leaves a deposit. The building components and furnishings are ordered from the factory, shipped to the site, and assembled by the subcontractors.

The whole process takes just a few months from beginning to end. Finally, the customer moves in.

The cost per square foot, according to McKellar, is about the same in Japan as it is for a comparable house in the US, but the quality is impeccable. ``Japanese consumers expect high quality,'' he asserts, ``and they won't buy anything that doesn't meet their expectations.''

Land costs are exorbitantly high in Japan; so high, in fact, that within a 30-mile radius of Tokyo, buyers might pay as much as $300 a square foot. Because of the cost, most single-family housing in Japan is replacement housing on existing plots of land which have been in a family for generations. A $300,000 house might sit directly beside a house that's worth only $50,000.

``Zoning laws as we know them largely don't apply in Japan,'' says McKellar. ``But their building codes are rigorous because of the frequency of earthquakes. This accounts for a large number of houses using steel for structural members rather than wood.''

The average Japanese home buyer is quite different from that in North America. He is largely older, averaging 35 to 39 years of age, and is a much better saver. The Japanese are usually able to put down half of the price of a new house while the mortgage interest rate runs from 5.5 percent with a government-backed loan to 8.2 percent through a bank. Also, he can apply to the company for which he works for a low-cost loan.

Will the ``Japanese system'' eventually extend to the US? ``The question really is,'' says the professor, ``is an American company going to do it or is a Japanese company going to do it?''

The major manufactured housing companies in Japan now spend about $78 million a year in research and development. The Japanese researchers, says McKellar, ask themselves: ``What are the effects of color on children? How do hydroponics fit in with homes of the future? What are some of the specific housing needs of the aging and handicapped?

``They're always showing high levels of concern for their customers and are always developing new products,'' he adds.

Some American companies are starting to move in this direction. The traditional approach to building single-family homes, however, is very strong. ``We're still in the lunch-box/pickup-truck stage,'' says McKellar.

``Architects and planners have always gravitated to the problems of the inner city and neglected the single-family home,'' he concludes. ``Yet it's that very home that has become the core of the American dream and the standard for people's aspirations around the world.''

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