Like Sweden, Japan and the US before it, Canada will begin experimenting with a large-scale factory built next year – and will have many lessons to learn from countries where the industry has already matured.
Build Canada Homes, the federal government's newly launched construction agency, aims to finance the construction of 4,000 modular homes on federal lands across the country starting next year. The public-private project, currently limited to six cities, could eventually scale up to build 45,000 homes, according to an Ottawa announcement.
That's just a slice of the 4.8 million homes Canada Mortgage and Housing Corporation says must be built Restoring housing affordability in this country by 2030, but the federal government hopes prefabricated housing will play a critical role in easing the housing crisis.
Canada's modular housing industry is relatively nascent compared to other countries around the world, where factory-built homes touted as fast, cost-effective and more sustainable than traditional construction methods are increasingly eating up market share.
Most housing in Sweden is built from prefabricated elements. Japan's own prefab industry expected According to market research, by 2030 to be worth more than 23 billion US dollars. And densely populated Singapore Houses to huge modular buildings of almost 1000 apartments.
Yet for every success story, another country has failed to scale modular housing to meet affordable housing needs, say experts and housing economists who spoke to CBC News. Canada, with its own unique set of housing challenges, has much to learn from the achievements and mistakes of its peers.
Lessons from around the world
“The building culture in Canada, and I would say in North America, is largely about site-based construction… and we're still very much associated with that,” said Carlo Carbone, a professor of environmental design at the University of Quebec at Montreal who has done extensive research on welded housing.
By contrast, Japan has a long history of modular housing, which is partly due to the country's high earthquake risk, with parts designed to be easily replaced, he said. And Sweden's prefabricated housing industry has been around since the 1940s, and the sector is now highly standardized and coordinated across supply chains.
Ontario's housing crisis has been an ongoing problem for years, and some experts say modular housing could play a critical role in solving the problem. Prefabricated buildings are built in factories and assembled on site. CBC's Ali Chiasson has more.
When it comes to design and execution, the two countries serve as something of a north star for prefab builders around the world, including Canada.
“We looked to Sweden both for their technology and their automation, their construction methods, and other countries like Japan that are quite advanced,” said Leslie Herstein, manager of strategic partnerships at Assembly Corps, a Toronto company that designs and builds prefabricated buildings.
The Assembly recently purchased equipment from Swedish firm Lindbäcks, a world leader in modular building, and has enlisted the company's help as it sets up a new factory in Toronto.
Exploring how and why other countries with successful modular housing industries built their sector, Hertein said most had a strong demand for affordable housing,” or housing that was needed to support a population growth spurt such as Sweden's post-war baby boom.
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“Federal Government [is] Recognizing that there is this level of need and that something needs to be put in place for this housing to be built to the extent that we are talking about,” she said.
However, for every success story, there is another case where a national modular housing strategy failed to take off. The United States developed a program in the late 1960s called Operation Breakthrough, a brainchild of the Department of Housing and Urban Development that ultimately failed.
The program was designed to improve Housing affordability for low-income families in the post-war population and demonstrate the cost of prefabricated housing. But it failed to scale. Some of the projects struggled with costs and did not produce housing that was actually affordable.
Just recently, start-up companies that promised to revolutionize the housing industry in the US and UK markets filed for bankruptcy, citing a wide range of reasons – from pandemic-related delays to over-regulation to negative associations with this particular style of housing.
“In the areas where it has failed, I think it's always due to this idea of bad design. And we have to avoid another era of connotations of cookie designs that are just similar and boxy and no one really wants to live,” Carbone said.
“This is not some kind of panacea”
Meanwhile, New Zealand's Kiwibuild program, launched in 2018 to respond to demand from first-time homebuyers, fell far short of its building targets and missed many of its deadlines, with only 2,300 units of an estimated 100,000 units built by the end of 2024. The program ended in October.
“I think what Kiwibuild is saying is that this is not some kind of panacea – modular homes – to solve all our housing affordability problems,” said Randall Bartlett, deputy chief economist at Desjardins.
Bartlett added that modular home construction can be more efficient and is used in some aspects of home construction.
But in the case of New Zealand, the program “never managed to build housing anywhere near the scale of the ambitious targets they set for themselves – in fact, part of the original ambitious targets.” There were problems with the quality of housing, and there wasn't necessarily demand for modular builds, he said.
The subdivisions emerging from Canada's construction homes will help low-income families in need of affordable housing.
“You just have to be careful not to have a government [be] Too tight,” said BMO chief economist Douglas Porter, warning that it could discourage new investment in the housing sector.
Indeed, the Canadian modular housing industry will face its own unique set of challenges. The size of the country will make it more difficult to transport large units over long distances, and interprovincial trade barriers – reducing them – are work in progress – will contribute to time and cost.
The Montreal site Cotes-des-Neiges-NOTRE-DAME-DE-GRECORE includes 27 rooms with 24-hour support services. The project aims to provide vulnerable people with a stepping stone to permanent housing.
“Many parts of what build Canada [Homes] is already trying to do in various examples across the country,” said Brian Doucette, an assistant professor in the school of planning at the University of Waterloo.
There are existing prefabricated housing projects across Canada, from Recent Project in Montreal, which aims to provide housing for the homeless population, for the recently completed public housing A project for families in rural Nunavut. But some initiatives too came across a report at the local level.
“If we can make thousands of these different types of non-market and truly affordable housing complexes or subdivisions across the country, then we can have this parallel housing system that actually responds to housing needs—not just what the market deems most profitable to build,” Doucette said.
