Thinking big and small to solve our housing crisis

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Additional Dwelling Units (ADUs) fill the need for smaller, more affordable housing

To meet market demand and restore affordability, the Canada Mortgage and Housing Corporation (CMHC) projects we need to build an additional 3.5 million homes by 2030.

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And towards that end, the Mark Carney-led government has announced the creation of a new entity known as Build Canada Homes (BCH) along with the ambitious target of constructing 500,000 homes per year over the next decade.

While it remains to be seen whether that goal is even achievable, one has to at least give credit to the fact we’re finally thinking big in support of what is potentially Canada’s most ambitious housing plan since the Second World War.

Back then, the federal government made a concerted effort to provide affordable, liveable homes both for men and women working in the defense industry and post war, for veterans returning home.

And to reduce construction costs and fast-track production, these “Victory Homes” were made from prefabricated walls and roofs, constructed in a factory and then shipped to the final location for assembly.

In what amounts to a back-to-the-future way of thinking, that’s precisely what companies such as CABN (which I wrote about a few weeks ago) and Grand River Modular (GRM) based out of Brantford, Ont.  are trying to do.

And unlike major corporate entities such as U.S.-based Katerra which embraced the modular model but went into bankruptcy after expanding too rapidly, GRM co-owner Gene Meredith is convinced that smaller companies focused on quality control can play a crucial role in addressing our housing crisis.

But in order to fast-track the approval of new homes, a barrier which has plagued builders for decades, there needs to be open collaboration between companies and community members, observes Meredith. “That’s the only way we pulled through the war recovery… so we just need to get back to what has worked in the past.”

Meredith says GRM has managed to “chip away” at past regulatory barriers by designing a modular additional dwelling unit (ADU) that is pre-permitted.

Not unlike the wartime homes, their Minisi model features a single bedroom along with a common area which combines a full kitchen with living area, and a separate three or four-piece bathroom.

Unlike the approach taken back then of creating entirely new subdivisions, the underlying principle behind ADUs is to build on an existing property’s backyard or to create a separate living area within an existing home, thus bypassing the need for site servicing altogether.

In the case of the Minisi, it’s a 30 x 13 foot detached home that costs about $150,000. For owners who are looking for an end to end solution that includes all of the permitting required, it will cost an additional $50-60,000.

That final sticker price “is about half or less than the current housing market rate,” says Meredith. “And now incentives are coming in,” to further undercut those costs… which ties back in with the collaboration between companies and communities that needs to happen as well.

In an effort to catalyze the construction of more ADUs, a growing number of cities have established grant programs. For instance, St. Catharines will provide up to $80,000 to offset construction costs.

One of the biggest barriers to building more ADUs says Meredith is not only NIMBYISM, but awareness. And yet financially he says this type of construction represents a sound investment for current property owners.

Meredith says the number one “no brainer” reason homeowners decide to build an ADU is passive income. “In the Waterloo, Wellington regions you can typically earn $19-20,000 per year,” he says. “And after four or five years the house is paid off.”

Putting an ADU on your property also opens up multi-generational opportunities, whether it’s to create a space for your kids to live in, or to downsize into so that your kids can live in the main house.

By adopting a walk before you run approach, Meredith says his company intentionally started with the one model in order to streamline both the construction and approval process.

And at their existing plant they can produce one home per month. “But we’re gearing up to shift to a larger facility nearby that will get us to a capacity of eight units per week, says Meredith.

“Our next step will be multi-bedroom (ADUs) and then full sized homes,” he adds.

These are goals which underscore the fact that if we’re going to effectively address our housing shortage, we need more small companies like GRM to think big.

Mark Wessel lives in Ridgeway, Ont. and is a passionate advocate for living more sustainably at home
and in the greater community. Visit www.markdouglaswessel.com.