CHBA’s Sector Transition Strategy Focuses on Productivity, Factory-Built Solutions

CHBA’s Sector Transition Strategy has continued to gain steam among policymakers and the media since its release. The Strategy, which was released in tandem with a press conference on Parliament Hill that garnered over 200 media mentions and over 210 million views/reads, focuses on the types of support needed to increase productivity through a move to more factory-built construction. With labour challenges predicted to increase in the coming years, provided the economic environment allows for more homes to be purchased/built, the industry must look at methods of building homes differently if Canada is to double housing starts and build the 5.8 million homes we need to bridge the supply gap and improve affordability. The Strategy outlines what the risks are that are currently preventing more investment in factory construction, and what can be done to mitigate them to facilitate a mass move towards more factory-built homes, which, among other benefits, allow for faster construction with fewer delays, and will require less of a ramp up in labour. And best of all, recommendations from the Strategy found their way into the Federal budget, with more to come.

Federal Budget Includes Measures Encouraging Innovation in Housing

The 2024 housing-focused federal budget contains several key CHBA recommendations, including ones included in CHBA’s Sector Transition Strategy. In a huge win for members, the move to 30-year amortizations for first-time buyers of new construction homes will enable more buyers to access mortgages, and in turn spur increased construction. Another major win was the inclusion of the government’s plan to engage with industry and other experts to co-develop a Canadian industrial strategy for homebuilding – a direct result of CHBA’s Strategy, which provides a roadmap for the government to support increased productivity and enable a fundamental shift in how most homes in the country are currently built. Budget 2024 also includes $50 million for Next Generation Manufacturing Canada (NGen)—one of Canada’s Global Innovation Clusters—to launch a new Homebuilding Technology and Innovation Fund. Related to this, the National Research Council is also being tasked with finding ways to reduce duplication between factory inspections of modular home components and on-site building inspections, and support efforts to address regulator barriers to help scale up factory-built housing—exact recommendations of CHBA. In addition, to scale-up more innovative housing solutions, the budget contains a further $50 million to support local innovative housing solutions across the country, such as designing and upscaling of modular homes, the use of 3D printing, mass timber construction, and panelized construction. All of these announcements relate to components and recommendations from CHBA’s Sector Transition Strategy. CHBA welcomes these first steps, and looks forward to working with government directly and through consultations to move these recommendations to fruition. Read CHBA’s at-a-glance summary of the Budget’s housing measures, with commentary, here.

Interest in Modular Housing Increasing, but Uptake Remains Low and Needs Support

CHBA’s most recent Housing Market Index (HMI) survey asked single- and multi-family builders questions about factory-built construction methods. The questions were last asked in Q1 2023, giving CHBA data to compare the interest and uptake over time. Relative to 2023, panelized components remained the most prevalent factory construction method among builders at 26%. The 2% that reported using modular construction and 3% that used pre-engineered package methods in 2023 rose to 5% and 7% with the sample, respectively. While about two-thirds have familiarity with factory-built methods and the productivity benefits, and 57% are familiar with the benefits for addressing climate change factors, and both the use and medium-term consideration for modular housing improved relative to 2023, total uptake remains low. With increased government focus on derisking this technology, as recommended in CHBA’s Sector Transition Strategy, adoption could accelerate over the years ahead.

National Housing Conference an Opportunity to Spread Awareness of Modular Solutions

The Canada Mortgage and Housing Corporation (CMHC) National Housing Conference took place this spring and brought together government, industry, and other stakeholders to explore innovations across the housing production cycle, from planning to financing to construction and operations. Keith Herring, CHBA’s Director of Modular Construction, spoke on a panel about “changing the way we build,” sharing details of CHBA’s Sector Transition Strategy, and explaining how a shift to more modular construction methods would impact productivity and homebuilding. Alex Miller, CHBA’s 1st Vice-President and modular builder from Saskatoon, spoke on a panel about new approaches to building culturally appropriate Indigenous housing. CHBA CEO Kevin Lee moderated a panel about the transformational changes that data, digital, and AI-based tools are making to improve the housing system and outcomes in Canada. All of these are helping to grow the awareness of barriers and opportunities to help industry increase productivity through factory-built solutions.

CHBA Receives Funding from IRAP to Advance Modular

The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) provides advice, connections, and funding to help Canadian small and medium-sized businesses increase their innovation capacity and take ideas to market. CHBA has received IRAP funding primarily to assess the current capacity of existing Canadian modular housing and inform on the potential capacity with government-funded investments. This analysis supports CHBA’s Sector Transition Strategy. To date, CHBA has visited ten factories, gathering preliminary information and assessing opportunities for further data collection that will assist CHBA in quantifying the required investments for Canadian factories to reach their full productivity potential. In addition, CHBA is moving forward with a project to test results of in-factory air-tightness testing versus in-place test results to inform a code change request that could allow in-factory air-tightness testing to be the standard in single modular units. If you would like to participate in the study or future projects, please contact Keith Herring, CHBA’s Director, Modular & Construction Systems.