In Toronto, housing prices and homelessness are at all-time highs.
Pauline Lierman, vice president of market research at Canadian housing research consulting group Zonda Urban, said that pricing in the market is up more than 10% across the geographic target area. For example, in the City of Toronto, small, 260-square-foot condo units are priced at $360,000, and a 500-square-foot one-bedroom condo is more than $550,000. These represent the least expensive entry-level new housing in the City.
The city typically has averaged a rental vacancy rate of less than 2%, so the supply is really tight, and demand continues to be strong with a revolving influx of international students at the many universities, along with new jobs. So, the lack of supply is pushing buyers and renters out, causing a leapfrog effect to smaller cities and towns in Southern Ontario according to Lierman.
Those who would have previously landed in the urban area, now have to look outside of the city to find the right size and the right price point, causing a proliferation of leap frogging. This just exacerbates the issue, putting pressure on other markets and driving up pricing across the board. Price growth in some southern Ontario cities, like London, have risen more than 20% during the past 18 months.
Toronto is not alone. Many other cities in the US and Canada are experiencing similar housing issues—incredible demand challenged by policy, regulation, lack of supply and many other factors. However, leaders at the City of Toronto decided to take action by hiring Montgomery Sisam Architects to combat the city’s crisis with its modular housing design and process.
Daniel Ling is principal at the architecture firm and said that the concept is proving itself very effective from a speed perspective.
“It all started as a reaction to the pandemic back in 2020 when there was lockdown,” Ling said. “Toronto had a housing issue around the homeless. Shelters were at capacity before the pandemic. We had people living in tents in parks, in tent cities, and people camping for months. The government really needed to initiate the process to get homeless off the street.”
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Montgomery Sisam was hired to do the work in May 2020 and was able to deliver a 50-unit project by the end of December 2020, along with a second project of the same size just days after that. The firm partnered with NRB Modular Solutions, the largest modular builder in Canada, that was able to put the modules out from start to finish in three weeks.
“The intent is not really to cut cost, but to cut down on time,” said Ling. “The city chose modular because of the urgency to get people off the street.”
Heba Ahmed serves as the director of projects for the East at NRB and said that despite the tight labor market in Ontario, the company is able to optimize labor in manufacturing.
“By building in house in the controlled environment we can avoid inefficiencies,” Ahmed said. “The assembly line helps build at a faster pace. So, we aren’t reducing workforce, but we can create efficiencies of 30 to 40% by having all subs under one roof. With regular shifts working 40 hours a day, we can produce about six buildings a year.”
The modular units are all 300 square feet and are pricing out at $150,000 per unit, much less than the city’s averages. The projects have communal amenities, including office space, a kitchen and dining room, meeting space, and on-site services provided by the city to help the residents achieve and maintain housing stability.
The projects use a modular wood fabrication process, and no steel at all, so they are low carbon, and also designed to be all electric.
As part of the all-electric design, the projects do not have a centralized air system. A packaged terminal air conditioner, or PTAC, is mounted to the perimeter of each unit and has its own control. Another critical part of the strategy is the design of the building envelope, including the R-values, the air tightness, and the windows.
“The challenge with design sometimes is way too much glass,” Ling said. “We looked at how to minimize the amount of glass. Each room has a generous window, but that’s it.”
Ling reports that the first two all-electric buildings have been operating for 10 months now without issues, but the team continues to monitor and will have better metrics after a complete year.
The City has engaged the firm on an extension of the first two buildings with six more sites, where they will have the opportunity to incorporate learnings from earlier projects in order to improve the living experience, better integrate into the communities, and advance the sustainability performance.
These next six projects are in varied locations, requiring more design work to make them site specific. Montgomery Sisam is taking on the challenge, and at the same time, finding ways to integrate into the urban fabric and connect these compact sites with about 50 new homes each to the amenities of the city.
Ling contributes a lot of the improvements to the fact that more of the project is moving offsite.
“The intent is to do as much offsite as possible,” he said. “All finishes are done in the shop. The cladding and windows are installed in the shop. The only parts done onsite are the foundation and piecing it together, like the trims and joinery and certain aspects of mechanicals that connect.”
The timing of each project is very precise, unlike typical onsite work. From the time the first module gets delivered to the project site, it only takes two and a half weeks for all 50 modules to be stacked. After that, the only part of the process left is the trim and joinery.
Ahmed says that the site work depends on the site and the complexities.
“It can take about 8 to 10 weeks, which shrinks the overall project durations by 50 to 60% with offsite versus onsite,” she said. “We can be building modules while we are preparing the sites.”
The focus on sustainability is also improved by the offsite process because the quality control in the shop is better than onsite. In the second phase of the modular housing projects, the new design was able to achieve an R37 value for the roof and R25 for the wall, and the triple-glazed windows have a U value of 0.24.
Ahmed says that NRB Modular Solutions is paying attention to the sustainability elements of modular as well.
“Going modular there is less trucking and hauling material in and out of the site, which saves a lot in terms of carbon footprint,” she said. “Being all under one roof also contributes to sustainability. All the equipment is electric. Plus, we optimize with multisensory LED lighting to hit sustainability targets. We also have a recycling program and can manage the programs well in the indoor controlled environment versus onsite activities.”
What the Future Holds
Ling is excited about improving the process project by project and what that can mean for the future.
“We are exploring how to improve the use and energy efficiency of a cost effective PTAC system,” he said. “We’re also using solar on another project. We are discovering how to move the system into passive house and being all electric is part of that solution. It also requires a much tighter envelope design. We perform air tightness tests on each unit before it leaves the shop and then again onsite.”
At the moment, NRB Modular Solutions is also working on a micro-home pilot project for homeless and another supportive housing project.
“Modular is the future because the industry is trying to do more in more compressed timelines,” said Ahmed. “There are always misconceptions on quality, but modular actually improves the performance of the builds. We are building to the same standards and abiding to the same design codes and outputs. We are doing a lot of work and innovation in the modular space that will lend itself well to the demands of the industry.”
While not yet cutting costs, the process definitely deserves credit for the difficult combination of speed and quality that are being delivered, making this a more attractive option for more than just the City’s needs.