Hidden costs of circular economy in offsite housing projects

Studies suggest that offsite construction can enhance sustainability performance by incorporating circular economy (CE) practices in housing delivery. However, it is understood that CE adoption for offsite housing projects (OHPs) could create an additional cost layer to housing delivery, even though its implications remain unclear. This paper provides awareness of CE cost activities, also known as circular cost drivers, with potential cost impacts on integrating CE strategies in OHP deliveries. It employs a qualitative approach to gathering OHP stakeholder opinions on circular-related cost drivers through a focus group discussion. From an OHP lifecycle and ecosystem perspective, the study identified seven strategic approaches (refuse, rethink, reduce, reuse, repair, recycle, and remanufacture) critical for adopting CE strategies into OHPs. Based on these identified approaches, the study gathered circularity cost implications from participants. This was analyzed thematically, revealing thirty-four circularity cost drivers. These drivers were manually grouped under direct and indirect “circularity costs.” The study emphasizes the potential additional costs of executing circular OHPs to the overall project cost compared to conventional OHPs, which should be considered by clients, Offsite Housebuilders, and the project team. The interrelations between these circularity cost drivers can be further explored with respect to each CE strategy to aid effective cost and financial management of circular OHP profitability. The paper provides further insights to support policy developers in promoting the uptake of real-world CE projects with environmental benefits at reduced cost-related uncertainties.