Housing Industry Reform: Networking the Construction Companies

ABSTRACT

The problems with cost and functionality with Japanese houses is deeply tied to the structural problems of the entire housing industry. The lack of transparency in the estimates, the multi-tiered system of contracting, the inefficiency in process management as well as in procurement and distribution are the main ones. Two other important issues in the industry are the unprofitable operations of struggling small-medium companies and the high dependency on imported timber despite the richness of domestic forestry resources. It was during the postwar period, when housing development boomed and slipshod contracting practices were the norm, that these problems took root.

In recent years, however, facing the need to survive in what is now a more rigid market environment for the industry as a whole, construction companies from each region of the country are developing new models for housing supply. Two prime examples are Aqura Net and Kagoshima Kenchiku Ichiba, companies that are increasing the transparency in the pricing and contract structure, and attempting to provide highly functional houses and at low costs by networking small-medium construction companies and streamlining the industrial process.

One effective way to help support this innovative business model is to construct a database that records each house's functions as well as the complete history of its maintenance and repairs. To further promote this function indication system, it is necessary to consider strategies like preferential loan conditions, or a housing tax deduction for people who use the system.