The construction industry's linear "take-make-dispose" model generates massive waste and contributes significantly to greenhouse gas emissions. Transitioning to a circular economy (CE), characterized by a "make-use-reuse" approach, is crucial for reducing the environmental impact of the built environment. The significant volume of construction and demolition waste (C&D waste) globally underscores the urgency of this transition. While policies and technologies are emerging to promote circularity, a detailed understanding of market potential, stakeholder perceptions, and willingness to pay for CE practices remains lacking. This research addresses this gap by quantifying willingness-to-pay and perceived cost premiums within the building sector to support the case for circularity.

Existing literature highlights various barriers to circular economy adoption in construction, categorized as cultural, regulatory, financial, and sectoral. Studies have reported cost premiums associated with circular practices, ranging from deconstruction cost premiums of 17-25% to varying impacts across different circular scenarios in residential homes. While some studies have identified economic benefits for recyclers and C&D waste generators, a comprehensive quantification of willingness-to-pay and the financial value of circularity across diverse stakeholders is needed. This study aims to fill this gap by assessing perceptions and willingness-to-pay across three key stakeholder groups: real estate developers, design and construction professionals, and material suppliers.

This study employed a mixed-methods approach, combining exploratory interviews with industry experts and a quantitative survey. The survey, developed iteratively through pilot testing and feedback, was distributed to a diverse range of stakeholders through existing networks and professional contacts. The survey included questions on stakeholder demographics, perceptions of circularity, perceived barriers and enablers, and willingness-to-pay for circular practices. The survey used a mix of multiple choice, text, drag-and-drop, and slider questions, tailored to the specific roles of the three stakeholder groups. Non-probability sampling techniques, including purposive and snowball sampling, were used due to the challenges of obtaining a large sample size. The data reliability and consistency were checked using Cronbach's alpha coefficient (CAC). A CAC value of 0.877 for the general questions across all stakeholders and 0.812 for design-specific questions indicated acceptable internal consistency and reliability. The survey was disseminated via Qualtrics, resulting in 58 partial responses and 42 responses containing the majority of survey questions. The authors note the limitations of using non-probability sampling and a relatively small sample size for some analyses, impacting the generalizability of findings.

The survey results reveal that 83% of respondents were familiar with the concept of circularity. While 47.5% of respondents had already incorporated circular practices, perceived barriers included higher costs (12.5%), lack of standardized structural assessment methods (15.9%), client disinterest (15.9%), supply uncertainty (11.4%), and complex logistics (12.5%). Respondents perceived a significant cost premium (average 66.4%, median 101.5%) for deconstruction compared to demolition, with material suppliers perceiving the highest premium (average 105.5%, median 101.5%). However, there was significant willingness-to-pay for circular practices, particularly among real estate developers (average 9.6% premium for a 52.9% embodied carbon reduction) and material suppliers (average 54.2% premium for reused materials). The primary drivers for adopting circular practices were client requirements (19%), net-zero goals (20.7%), and regulatory demands (19%). The design phase was identified as the biggest enabler for reuse, while current demolition and landfill practices were considered major bottlenecks. Despite perceived barriers, a majority of respondents (526 of 58) expressed willingness to adopt circular practices, even with increased costs and time.

The findings highlight a significant gap between the perceived cost premiums of circular practices and the willingness-to-pay among stakeholders. While perceived costs remain a substantial barrier, the strong willingness-to-pay, particularly for embodied carbon reduction, suggests that appropriate incentives and policies could significantly accelerate CE adoption. The identification of the design phase as a key enabler underscores the need for design practices that prioritize disassembly and material reuse. The study also points to the need for standardized assessment methods to reduce uncertainty and risk associated with the use of reused materials. The varied responses based on stakeholder type and geographic market suggest further research exploring these differences to develop targeted interventions.

This study provides valuable insights into stakeholders' perceptions and willingness-to-pay for CE practices in construction. The findings demonstrate that while significant barriers exist, a substantial willingness-to-pay coupled with the potential for effective incentives could drive broader adoption of circular construction practices. Future research should focus on developing and evaluating such incentives, addressing the identified barriers, and exploring the role of consumer demand in shaping the market for circular construction.

The study's limitations include the use of non-probability sampling and a relatively small sample size, potentially affecting the generalizability of findings. The reliance on self-reported data may also introduce bias. Further research with larger, more diverse samples and a more nuanced combination of qualitative and quantitative data would be beneficial. The study also did not extensively explore consumer demand or the feasibility of workforce training in new construction techniques.