Building June July 2018

Urban Development / Architecture & Design / Innovation

PM#43096012

BLD JunJul18.indd 1

building.ca June/July 2018 CDN $4.95

Airport Megazone Unfair Tendering Process Hotel Repositioning

Achieving Affordable Home Ownership

2018-06-06 3:03 PM

THE GUST STOPS HERE. Get 2x the bond strength and 209 KM/H / 130 MPH wind resistance.

SEE THE STRIP. TRUST THE GRIP.

Aggressive weather calls for aggressive hold. SureNail Technology® delivers exceptional wind resistance, with 2x the bond strength of standard shingles and 209 KM/H / 130 MPH wind limited warranty performance*. It’s outstanding protection available only on Owens Corning® Duration® Series shingles.

See SureNail Technology® in action at TrustTheGrip.com.

THE PINK PANTHER™ & © 1964-2018 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. © 2018 Owens Corning. All Rights Reserved. SureNail Technology® is not a guarantee of performance in all weather conditions. SureNail Technology® is available only on Owens Corning Duration® Series Shingles. *SureNail Technology® is proprietary with U.S. and foreign protection including U.S. Patent Nos. 6,471,812; 7,836,654; 8,156,704; 8,181,413; 8,240,102; 8,430,983; 8,607,521; 8,623,164; 8,752,351; 8,991,130; 9,121,178; and other patents pending. SureNail Technology® is not a guarantee of performance in all weather conditions.

BLD JunJul18.indd 2

2018-06-06 3:03 PM

FEATURES

19

26

30

33

37

Forget White Picket Fences Canada operates in two different affordability realities, yet focusing only on market adjustments ignores the need for difficult cultural adjustments about what affordable home ownership means.

By Rhys Phillips

The Buried Giant Downtown Toronto may be the development star, but the 905’s airport ‘megazone’ is a quiet yet booming workhorse even more underserviced by transit.

By Stefan Novakovic

Room SERVICE Key project management considerations when repositioning an existing hotel through large-scale renovations.

By Chris Markovic

From Pools to Puddles How restricted bidding environments harm a city’s ability to achieve the best value for tax dollars.

By Brian Dijkema

Faster, Leaner, Modular The pieces to the modular construction puzzle are finally fitting together, thanks to digital twin, 3D printing and other advanced tools.

By Folkert Haag

Departments Building.CA explore Seigneurie-DesAulnaies Visitor Centre Anne Carrier architecture designs a new visitor centre for Seigneurie-des-Aulnaies, a registered Québec cultural heritage site.

read Facilities Management Software Tim Schmitt explores new tools that open up and improve property communications.

05 06 08 11 12 14 41 44 46

Editor’s Notes Market Watch Legal Briefs From the Bullpen Powers That Be In Their Words Site Visit Spec Sheet Viewpoint

e n s

Building.ca

BLD JunJul18.indd 3

3

2018-06-06 3:03 PM

U-CARA

U-DESIGN

U-Cara™, the revolutionary multi-face wall system.

Choose from an extensive collection of fascia panels to design landscape walls, planters and even higher engineered walls. The innovative Sure Track™ backer blocks and EnduraColor™ fascia panels of the U-Cara system, offer unlimited possibilities and the ability to match to Unilock paver colors and textures.

U-Cara. U-Mazing.

One simple platform with unlimited possibilities.

In Quebec, contact Rocvale, 1-800-946-2797, for all your Unilock product information.

Talk to your Unilock Representative.

Unilock.com/ucara | 1-800-UNILOCK

US Pat. 9,453,341

BLD JunJul18.indd 4

2018-06-06 3:03 PM

Volume 68 No. 3

Editor Peter Sobchak Art Director Roy Gaiot Assistant Editor Stefan Novakovic Legal Editor Jeffrey W. Lem Contributors Brian Dijkema, Folkert Haag, Richard Joy, Megan J. Lem, Chris Markovic, Shannon Moore, Ben Myers, Rhys Phillips, Kevin Powers Production Laura Moffatt, 416 441 2085 x104 Press Releases pressroom@building.ca Circulation Manager circulation@building.ca Sales Manager Faria Ahmed, 416 441 2085 x106 fahmed@building.ca Vice President & Senior Publisher Steve Wilson, 416 441 2085 x105 swilson@building.ca President, iQ Business Media Inc. Alex Papanou Design Consultation BLVD Agency

Building magazine is published by iQ Business Media Inc. 101 Duncan Mill Road, Suite 302 Toronto, ON M3B 1Z3 (416) 441 2085 x104 info@building.ca www.building.ca SUBSCRIPTION RATE: Canada: 1 year, $30.95; 2 years, $52.95; 3 years, $64.95 (plus H.S.T.) U.S.: 1 year, $38.95 US Elsewhere: 1 year, $45.95 US. BACK ISSUES: Back copies are available for $10 for delivery in Canada, $15 US for delivery in U.S.A. and $20 US overseas. Please send prepayment to Building, 101 Duncan Mill Road, Suite 302 Toronto, ON M3B 1Z3.

Subscription and back issues inquiries please call (416) 441 2085 x104, e-mail: circulation@building.ca or go to www.building.ca Please send changes of address to Circulation Department, Building magazine or e-mail to addresses@building.ca Building is indexed in the Canadian Magazine Index by Micromedia ProQuest Company, Toronto (www.micromedia. com) and National Archive Publishing Company, Ann Arbor, Michigan (www.napubco.com)

Building is published six times a year. Printed in Canada. The content of this p ­ ublication is the property of Building and cannot be reproduced without permission from the publisher.

Funded by the Government of Canada

H.S.T. #80456 2965 RT0001 ISSN 1185-3654 (Print), ISSN 1923-3361 (Online) Canada Post Sales Agreement #43096012

PLAN FOR AFFORDABILITY

TAKING A STAB at a topic like affordable housing feels a bit like bringing a piece of string to a knife fight. At least it did for me when mapping out the research material and angles of approach for this issue’s cover story. One piece of research, however, stuck out to me as both a shock to previously held planning doctrine yet entirely logical. It turns out that making buildings in neighbourhoods more diverse through mixed residential and commercial developments also makes them too expensive for many people to live in.

A University of Waterloo study of Toronto neighbourhoods found that the increased cost, which was further heightened by the retraction of government support for affordable housing in mixed-use areas, led to the neighbourhoods becoming less diverse.

“Making mixed-use neighbourhoods was done with the best of intentions for our health, happiness and the environment, but as communities become more attractive places to live, demand to live there increases costs,” says Markus Moos, a professor at Waterloo’s School of Planning. “Walking to a nearby fancy coffee shop is nice, but the premium people pay for that luxury means the barista can’t afford to live near their job.

“While mixed-use areas were intended to make things more affordable, factors like a shift to knowledge-based economies reduced social diversity in the absence of policies designed to keep housing affordable.”

The study examined neighbourhoods in Toronto from 1991 to 2006, at a time when mixed-use developments were prescribed following a rethinking of previous planning that led to decades of urban sprawl. It incorporated existing research on mixed-use developments, as well as housing affordability.

“Mixed-use neighbourhoods aren’t inherently misguided. In fact, they do achieve many of their intended outcomes,” says Tara Vinodrai, a professor at Waterloo’s Depart­ ment of Geography and Environmental

Peter Sobchak Editor in Chief We welcome your feedback. Send your questions and comments to psobchak@building.ca

Management. “But, we’re asking who benefits from this? It’s not people in low-income groups or in low wage jobs.

The study, conducted with Waterloo gra­ duate students Nick Revington and Michael Seasons and published in the Journal of the American Planning Association, found that housing affordability improved over time in Toronto’s mixed-use zones, but only for those in the management, business, technical, and health occupations, whose incomes allowed them to pay the rising housing costs. Housing affordability, however, stagnated or worsened for those in social and public service, trades, cultural, sales and service, and manufacturing occupations.

In order to make sure that mixed-use housing does not become affordable only to those best positioned to pay increasing housing costs, the study concludes, among other things, that planners must recognize these issues and advocate for explicit housing affordability policies as an integral component of mixed-use zoning. “What’s needed now is good policy to follow good planning.

This includes inclusionary zoning, density bonuses linked to affordable housing, affordable housing trusts, and other relevant methods,” says Vinodrai.

BUILDING.CA

BLD JunJul18.indd 5

5

2018-06-07 9:07 AM

market watch Spotlight: Hotel Investment

Values, investors and tourists drive nearrecord activity

Canada has some of the strongest commercial real estate fundamentals of any mature market globally. Canadian commercial real estate investment volume of over $43 billion in 2017 shattered the record set just a year earlier and far surpassed initial forecasts. Record pricing unlocked a new supply of marquee properties for sale as owners looked to capitalize on highly coveted assets, particularly in Canada’s urban centres, and according to CBRE’s 2018 Canadian Hotels Outlook report this certainly held true within the hotel sector, with new historic highs set in 2017 for both deal size and per room pricing.

Both top and bottom line hotel performance metrics are trending upwards, with Canadian hotel transaction volume reaching $3.4 billion in 2017 (including M&A activity), below 2016’s $4.1 billion but still reflecting an exceptionally strong level of investment.

When entity-level/M&A activity is excluded, $2.3 billion in single assets/portfolios traded, well-above the decade average of $1.4 billion. Several significant deals occurred, such as the $335 million sale of the Sheraton Centre Toronto, the largest single hotel asset transaction on record in Canada, and the sale of the 156-room Rosewood Hotel Georgia in Vancouver set a new luxury pricing threshold, at $930,000 per room.

Key Hotel Investment Trends Excluding entity-level deals, Central Canada dominated deal volume for the sixth consecutive year, largely driven by $1.1 billion transacting in the GTA alone. With relatively few trades in the prairies, transaction volume in Western Canada accounted for 29.0 per cent of national transaction volume, a similar proportion as the year before.

There continues to be a strong appetite for assets in major markets, however with a significant number of institutional grade assets having traded in recent years,

6

BLD JunJul18.indd 6

availability of product has slowed, contributing in part to 72 per cent of deals occurring in secondary/tertiary markets. Interestingly, while representing only 28 per cent of the deals, primary markets accounted for 76 per cent of the dollar volume.

Private capital dominated at 88 per cent of total transaction volume, comprised of private investors (56 per cent), non-public hotel investment companies (21 per cent) and real estate companies/developers (11 per cent).

Foreign capital was again a significant factor in hotel investment, with Hong Kong-based Leadon Investment Inc.’s $1.1 billion acquisition of bcIMC’s SilverBirch Hotels & Resorts portfolio, consisting of 26 hotels, in Q1 2017. This followed the privatization of InnVest REIT and its 107-hotel portfolio for $2.1 billion by Bluesky Hotels, backed

by Hong Kong capital, just a year earlier.

There was downward pressure throughout the year on Montreal cap rates as investors looked for a desirable urban alternative from competition heavy Toronto and Vancouver.

Despite the perception of higher rates, cap rates on Alberta transactions were relatively low as buyers did not double punish weak market-wide performance with high yield expectations and bought on a per room basis with lower initial yields.

Total overnight travel was up 3.3 per cent in 2017, with the strongest growth posted by overseas travel at 10.4 per cent. National accommodation demand grew 4.1 per cent in response, with RevPAR improving by almost eight per cent. Western Canada’s resource markets continued to struggle, but the rate of decline has slowed, bringing optimism for 2018. That said, recovery will be tempered in markets impacted by new supply, particularly in Calgary and Edmonton, and to a lesser degree Saskatoon and Regina.

In terms of RevPAR , Western Canada posted growth of over six per cent in 2017, while Central and Atlantic Canada both

June/July 2018

2018-06-06 3:03 PM

individual hotel and portfolio sales should reach at least $2.0 billion IN 2018.

improved by nine per cent. The net result from a bottom line performance perspective was an increase of almost 16 per cent in operating income nationally to $14,300 per room in 2017. This growth was led by Quebéc at almost 25 per cent; Atlantic Canada at 20 per cent; Ontario at 19 per cent; and British Columbia at 17 per cent. At $23,600 per available room in net operating income, B.C. still leads the country.

2018 Outlook National commercial real estate momentum is building off 2017’s record breaking year, with a number of significant deals already tabled, including Slate Acquisitions and its pending $1.1-billion purchase of 97 office, retail and industrial properties from Cominar REIT across the GTA , Atlantic and Western Canada. Overall, CBRE is projecting a robust investment year in 2018, with Canada likely to contend for a third consecutive year of record investment volume, with hotel investment following suit.

• Non-traditional hotel deals, including mixeduse hotel component opportunities, site redevelopments and where feasible, land acquisitions, will become more prominent.

• Well-established regional hotel investors that have been active acquirers in recent years will continue their growth trajectories by expanding geographically and becoming national players, as well as from developing more sophisticated management platforms and corporate infrastructure.

• These groups are also expanding and exploring other real estate asset classes, particularly multi-residential and seniors’ housing.

• There is a risk for increased new supply over the next few years if investor capital cannot be recycled into existing hotels.

• Building off a strong 2017, overnight travel in 2018 is anticipated to moderate yet remain quite strong. Overseas travel is expected to lead the pace of growth, forecast at 6.4 per cent. In fact, 2018 has been dubbed

the Canada-China Year of Tourism, based on an initiative between the two governments to boost the two-way flow of tourists. Room demand across the country is forecast to increase 2.4 per cent and RevPAR is anticipated to move upwards by 4.7 per cent, with profitability expected to rise by over eight per cent.

• Despite Bank of Canada interest rate increases, debt remains relatively inexpensive and available with interest rates in the four per cent range in most markets, and sub-four per cent for deals with strong sponsorship, with Alberta being the exception. There are fewer lenders entering Alberta’s hotel space and some interest rates are approaching double what they were 12 to 24 months ago.

2017 Deals in Review deal volume

82%

GT

A

28% 32

65%

%

Entit y

$3.4 B

Primary Market

68%

-E

tit

n

ON

y

7% Atlantic Canada We s t

3% NL

ern C anada

bc

24%

PE B

5%

76%

Ns

B 30% A

64% +S K MB 1%

6% 7% N 2

qc

65%

69%

Secondary Market

dollar volume

Non

Cen t r al C anada

95%

72%

Building.ca

BLD JunJul18.indd 7

7

2018-06-06 3:03 PM

legal briefs The French Fry Story Redux

The Supreme Court Trilogy on tenant insurance rights is upended by the Ontario Court of Appeal.

By Jeffrey W. Lem and Megan J. Lem

Jeffrey W. Lem is Editor-in-Chief of the Real Property Reports and the Director of Titles for the Province of Ontario. The opinions expressed in this article are personal to the author and not attributable or referable to the government of the Province of Ontario.

8

BLD JunJul18.indd 8

Megan J. Lem is a corporate lawyer in the Toronto office of Osler, Hoskin & Harcourt LLP. This article reflects the opinions of the author alone.

Holy cow, it’s the “French Fry Story!” we both remarked as we read the paradigm-shifting Court of Appeal decision in Royal Host GP Inc. v 1842259 Ontario Ltd. There’s a backstory to this. Nearly two decades ago, the senior author of this article decided that it would be cool to make french fries at home using a large, open vat of cooking oil — old school! Fast forward an hour or so, and the junior author of this article, for whom the french fries were intended, asked her father why the french fries were on fire! Needless to say, the Lem family quickly discovered the dangers of open-vat deep-frying, and how fire insurance actually works.

Here’s where the law of insurance comes in. It was obvious that the senior author was negligent in not shutting off the heat source even after those golden fries had been plated and served. As the fire fighters glibly said after the fire was extinguished, “the house didn’t burn itself down!” Fire insurance pays for the fire damage, even if it is clear that the insured had contributed to his or her loss by negligence (the same is not true in the case of deliberate arson, but, luckily for these authors, that was not the case with the Lem family french fry fire).

Think about it, why do businesses take out insurance? It is really to indemnify against the risk of accidents, including accidents that may have been caused by, yes, negligence. Fire insurance covers loss against accidental fires, even those accidental fires started by the negligence of the insured. Much to the relief of the Lem family that fateful afternoon two decades ago, the insurance company does not pay for the fire damage only to then turn around and sue the homeowner for negligent french frying.

Now, think about the typical commercial lease. In almost all commercial tenancies, the landlord takes out the fire insurance,

and each of the tenants contribute to the cost of the premiums in a shared ratio (typically proportionate share based on area, but the formulas all vary slightly). This is both common and common sense.

Having each tenant insure the entire building would be a ridiculous multiple insurance of essentially the same overall risk (imagine your local regional shopping centre or mega-office tower with dozens of tenants each having to insure a building worth hundreds of millions of dollars). It makes total commercial sense for the landlord, as the owner, to take out the fire insurance and for each of the tenants to then contribute proportionately to the premiums.

Now, apply the french fry scenario to a typical commercial tenancy. Imagine, for instance, fire damage to the whole building caused by the negligence of one tenant (a not uncommon scenario). The tenant, having regularly contributed proportionately to the fire insurance premiums as part of its annual additional rent payments, might think that it, like the Lem family, would be immune from being sued by the insurance company, even if its negligence is shown to have been the cause of fire damage.

Not necessarily so, said the Ontario Court of Appeal in the recent Royal Host fire case.

According to the Court of Appeal, the actual insured was the landlord (not the tenant), and once the insurance company had properly paid out the landlord for the fire damage, the insurance company was then free then sue anybody who might have negligently started the fire — in particular, the negligent tenant. Pretty much the same facts as the Lem french fry story (i.e. occupant negligently burns down building), but totally different legal results where the tenant was not the legal insured party and merely a proportionate share contributor to the fire insurance policy premiums.

June/July 2018

2018-06-06 3:03 PM

NO IMMUNITY FROM INSURANCE COMPANIES FOR TENANTS, EVEN IF THEY’VE PAID THE INSURANCE PREMIUMS FOR YEARS. This case turns on its head decades of common understanding in the commercial leasing world about the relationship between the tenant and the insurance company. Since the mid-1970s, there was thought to have been a “general rule,” based on a trilogy of Supreme Court of Canada cases, which stipulates that the tenant gets the benefit of insurance taken

out in this manner as if the tenant was the legal insured. In other words, for the past 40 years or so, it has been generally understood in the industry that, if the landlord takes out the insurance, and the tenants collectively pay for the premiums, then, for all intents and purposes, the tenants become the insured and can’t be sued by the insurance company for fire damage, even

if the tenants negligently caused the fire.

This is no longer the law. More accurately, this was probably never really the law.

According to the Court of Appeal in Royal Host, there has never really been a “general rule” regarding this kind of insurance scheme. Instead, tenant liability has always depended on the exact details in the lease.

If the lease expressly says that the tenant cannot be liable at the hands of the insurance company, then the tenant gets the benefit of the Lem french fry story. If the lease does not provide that necessary exculpatory wording, then the tenant might still be liable for the fire damage they cause, even though they have paid their fair share of the premiums all along.

For those in the commercial leasing space, that means that more lawyers will be spending more time on the insurance and liability sections of commercial leases (oh joy!). The paradigm of the past 40 years or so has just been shattered, and, just to be safe, the Lem family now bakes their french fries!

Energy efficiency starts with design.

That's why Enbridge Gas offers support of up to $120,000 to affordable housing providers for designing efficient buildings.

To get started, visit EnergyEfficientAffordableHousing.ca.

BUILDING.CA

BLD JunJul18.indd 9

9

2018-06-05 1:43 PM

TM

â„¢

FOR ALL FIRE RATED APPLICATIONS UP TO 2 HOURS

APPLICATION: 2 Hour Stairwell WALLS: SuperLite II-XL 120 in GPX Architectural Series Framing DOORS: SuperLite II-XL 90 in GPX Architectural Series Doors

SuperLite II-XL in GPX Architectural Series Meets CAN/ULC S101, S104, S106 up to 2 hours with hose stream and CAN/CGSB Safety Glazing Standard 12.1-2017.

Tint-free and optically clear with the largest tested and listed sizes.

Can be used in interior and exterior storefronts, doors, openings and walls.

Can be customized to protect against blast, bullets, attack, noise, UV and more. Decorative make-ups are also available.

For more information on our complete line of fire rated glass and framing products, visit www.safti.com or call us toll-free at 888.653.3333.

www.safti.com 888.653.3333

BLD JunJul18.indd 10

TM

S AFETY A ND F IRE T ECHNOLOGY I NC.

USA Made

2018-06-06 3:03 PM

from the bullpen Overused and Misunderstood: Affordable Housing in Canada

Unless the tradeoffs for developers are revenue-neutral, real affordable housing will be hard to come by.

By Ben Myers

Ben Myers is president of Bullpen Research & Consulting, a boutique real estate advisory firm that works with land owners, developers, and lenders to better inform them of the current and future macroeconomic and site-specific housing market conditions that can impact their active or proposed development projects.

Follow Bullpen on Twitter at @BullpenConsult or find Ben at www.BullpenConsulting.ca.

A term that gets thrown around liberally when referring to residential housing markets in Toronto and Vancouver is affordable housing, with the common complaint that housing should be more affordable. But what does that mean in today’s context?

A 2015 Ontario Provincial Policy Statement defines housing ownership as affordable if “the purchase price results in annual accommodation costs which do not exceed 30 per cent of gross annual household income for low and moderate income households” or if it “is at least 10 per cent below the average purchase price of a resale unit in the regional market area.”

If we adopt the second definition, 10 per cent below market price in Toronto would be about $720,000, and in Vancouver that would be approximately $975,000. That doesn’t seem very affordable to me. How did we get here?

A number of major factors have driven up house prices in major Canadian cities over the last 10 years: low interest rates; anti-sprawl legislation; increased domestic and foreign investor interest; and a lack of social housing construction being just a few.

In Toronto, the Greenbelt Act and Places to Grow Act have directed growth to areas with greater transit access, but many of those areas have exceeded construction and population targets, straining existing infrastructure. Additionally, the costs associated with higher-density built forms like mid-rise and high-rise development is much greater, because of higher equity requirements, less land leverage, higher construction costs (concrete, underground parking), NIMBY planning disputes that delay approvals, and elevated land costs in most urban areas. More upward price pressures are coming too, as Toronto development charges will nearly double in 2018. Lastly, in expelling the current zoning appeals board in Ontario, the consensus is that supply will decline further. Needless to say, the market is not going to be delivering much housing that is affordable in Ontario and especially Toronto in the near future.

Current Housing Minister Peter Milczyn is now working on policies around inclusionary zoning. This concept or vehicle for delivering affordable housing units can only work if the trade-offs for developers are revenue-neutral, and the cost to deliver these below-market homes is not greater than what the province or the municipality has given the developer in exchange for building them (in the form of faster approvals; higher approved densities; lower fees; or some cash equivalent).

So far, developers have not been pleased with the progress in Ontario so far, and some have suggested that inclusionary zoning could do more harm than good by driving up costs of new development, resulting in “cost-push” price inflation.

Infrastructure Ontario recently entered into a partnership with Dream, Kilmer and Tricon on a 99-year land lease to develop 1,500 rental apartments in the West Don Lands area, of which 30 per cent of the suites will satisfy the Province’s affordability requirement. This is the first initiative that I believe will have any substantial impact on the creation of affordable housing that won’t have unintended consequences elsewhere.

Unfortunately, while several governmental agencies have been working to create new social and affordable housing units, other agencies are undermining those goals by creating (sometimes well-meaning) policies that drive up house prices and rental rates even further. Restrictive zoning, rent control (non-inflation adjusted), and requirements for a certain mix of units or minimum commercial requirements in new buildings all make development less feasible, requiring higher and higher prices to make the sites work financially. As much as it must pain them to do so, if you want more housing of all prices and rental rates, you need to listen to the needs and requirements of developers, and not to people without a working knowledge of the economics of new development and locals with a financial incentive to prevent less housing construction.

Only then will we get more affordable housing in Canada’s major cities.

Building.ca

BLD JunJul18.indd 11

11

2018-06-06 3:03 PM

powers that be Campaigns Matter

If developers want to win the approvals process, they need to treat it the same way politicians treat elections.

By Kevin Powers

Kevin Powers is Managing Principal of Project Advocacy, a Toronto-based public affairs firm that helps project developers facing local opposition.

Find him at www.projectadvocacy.ca or email him at kevin.powers@ projectadvocacy.ca

12

BLD JunJul18.indd 12

Like it or not, the public approvals process for real estate development in Canada has tilted sharply in favour of opponents.

Originally designed to generate a balanced consideration of the merits of a proposal and weed out bad projects, today the approvals process is easily and regularly overwhelmed by opponents to development. The fundamental problem is that supporters of development do not participate in the dialogue around the project, while opponents show up and dominate it.

At a recent real estate forum in Vancouver, Greg Moore, mayor of Port Coquitlam, gave a straight take on the current state of affairs. “Never does a large contingent of ‘yes’ come out to public hearings. It’s a public speaking contest for the ‘no’ side,” he told a packed ballroom of developers. “Where are you at public hearings? Where are you when your friends are at public hearings? We as politicians are getting the crap kicked out of us

by NIMBYism. We need the other side to come out.”

But for many developers, years of catching flak in the media and at public hearings has fostered a bunker mentality characterized by feelings of hostility and overwhelming opposition. The idea that a troop of residents would feel strongly enough about a project that they would rush to its defense against the attacks of their neighbours seems like wishful thinking. But it’s not. Just ask a politician.

In politics, it’s said that “campaigns matter,” playing a key role in shaping public opinion and influencing the outcome of a vote. Often long-shot candidates who can “get out the vote” find themselves in office against all expectations. Our current Prime Minister, for example, was running a distant third when the last election began.

If developers want to win back the approvals process, they need to start treating it the same way politicians approach elections.

That means knowing what you stand for and, more importantly, who will stand behind you.

Developers that are able to reach out to those people have the best chance of

snatching victory from the jaws of defeat.

The question is where to start. For many, get-out-the-vote efforts begin with those in their immediate circle: employees and colleagues who live in the area; friends; business associates; the usual suspects. For too many developers, this is also where the campaign ends. But no politician would ever get elected relying on just friends and family.

Instead, developers need to think more broadly about what the project means to the community and who it will benefit. There is low-hanging fruit among industry associations, employees in downstream industries, chambers of commerce and business improvement areas, to name a few.

But efforts can’t end there either.

Developers need to take their message to the broader community, often the richest source of support, despite appearances to the contrary. Studies have shown that the most vocal opponents to projects are often geographically closest, with opposition dwindling as you move outward. To find supporters, developers need to start their search on the opposite end and work their way in.

Door-to-door canvassing is the most triedand-true method, followed by direct mail.

More interesting, though, are innovations in digital geotargeting: technology that can focus on precise geographic areas and deliver tailored content directly to mobile phones and devices with an accuracy of a couple hundred metres. Done in conjunction with the latest online advertising techniques, developers can reach blocs of potential supporters with the efficiency and effectiveness of a political campaign.

A residential tower developer facing opposition from homeowners can now readily reach residents in nearby apartment buildings, who likely don’t feel tall buildings ruin the fabric of the neighbourhood. If countless hours spent going door-to-door on campaigns has taught politicians anything, it’s that no area is homogeneous. Not everyone feels or thinks or votes the same way. There is support in every community if you just spend the time looking for it.

June/July 2018

2018-06-06 3:03 PM

Architectural Products for

Inspired Designs with

endless possibilities.

1.800.604.0343

BLD JunJul18.indd 13

info@longboardproducts.com

longboardproducts.com

2018-06-06 3:03 PM

in their words A Planner’s Values In his 35 years of municipal planning, Gregg Lintern has held various roles and responsibilities in several different community planning districts across the City of Toronto, and has led projects including a plan for the downtown known as “TOcore,” the Port Lands Planning Framework, Mirvish + Gehry, Mirvish Village, Yonge-Dundas Revitalization, Billy Bishop Airport and Regent Park.

As Toronto’s Chief Planner, his stated priorities include transit network expansion, housing affordability, proactive planning and improvements to the Development Review Process, and he discussed several of these at the Toronto Region Board of Trade in his first address since accepting the position.

14

BLD JunJul18.indd 14

A leader thinks about the values that ground them. Toronto is a leader and has been a leader for a long time, and we think about the success of the city over a long period of time and how its actions have actually aligned with its values. And you think about today and the challenges that we are confronted with in Toronto, challenges of success really, and you think about what values are going to sustain us in making the choices, and undertaking the actions that we need to take to face those challenges. So really that in a way is a true test of leadership, and how you transfer those values into action.

Transit Transit is becoming the number one thing that we have to do as a city. Transit and mobility, for me, is the great equalizer. It can overcome the challenges we have in the city around income, separation, spatial segregation and the access to opportunity. It’s really why transit is a public good that needs to be supported by all levels of government.

Really, why that matters is because access brings more opportunities. The equation is a very basic equation, but it’s been borne out in our experience of building the transit system — I would argue a very

undersized transit system — that we have and creating a network will improve access and ultimately improve opportunity for more and more Torontonians. But there are at least two Torontos that we have when we look at the tiers of transit service. There are many people who have challenges from an equity point of view, and in their lived experience on transit describe Toronto as a place of transit deserts. And when you correlate that with income in the City of Toronto, you see the historic pattern that has emerged where economically challenged populations also have the lowest transit scores.

Going forward, that’s an unacceptable way to continue to build the city. We’ve got to apply ourselves to addressing one of the greatest legacies of 20th century post-war planning and decision-making, which was a lack of transit investment. One of the most important things we can do, from an equity perspective, is deliver transit to neighbourhoods and areas that were never really conceived as places that would have transit. But this isn’t just about one mode: it’s about bus, GO Trains, SmartTrack stations, LRTs, subways. Ultimately, it’s about biking, walking and all those other modes, too, because they give you a choice, and hopefully a desire,

it’s great to say those two words in the same sentence, transit “under construction.”

June/July 2018

2018-06-06 3:03 PM

Building.ca

BLD JunJul18.indd 15

15

2018-06-06 3:03 PM

to not use a private automobile, but actually move around the city in another way.

One example that is under construction — it’s great to say those two words in the same sentence, transit “under construction” — is the Eglinton Line which traverses the entire city and several portions are under construction. The Eglinton East Line is a piece coming to council soon. The Eglinton West line, we’re doing some further work with the community there. So this is really the main street for the city and you can see its strategic location across the city.

We are doing a planning study on the Golden Mile out in Scarborough that shows you how this strip can be transformed over time with the insertion of a surface LRT. It is really an improved public realm, with access to different modes and ultimately a much better sense of place, a place where people can prosper, a place where development can take place over a period of time, where we can build complete communities. It really shows you how transformative transit can be. It’s important when you think about the linkage between transit and job growth, why that linkage is so important across the entire city. A lot of jobs happening, not just in the downtown, but across the geography of the 416.

Housing Housing is the other part that we have got to get consensus on, and where we have to focus our efforts on. We have this great debate about supply: do we have enough?

Will we ever have enough? I was part of a discussion yesterday that talked about latent supply, and that we’ve got a serious amount of built housing in the city that isn’t being occupied by people. But what are we doing about creating housing? We’re approving, in the last five years now, 21,000 units a year in the 416. And the industry — and they can take a bow for this — is building on an average 17,000 units a year. 350 mid-rise projects in either the approved or planned process in the last five years, represents 32,000 units. But we still have issues of availability, of affordability and we need, really, I think, a suite of tools, an ecosystem of solutions.

This is about zoning for development. I’ve been talking about this and it’s obviously a move that I’m going to be encouraging

16

council to consider more. We have pre-zoned areas in the city and have had success with that. King Street, St. Clair Avenue, other parts of the city have been earmarked for development, and development can proceed a lot more quickly and easily with less process, provided there’s a good, strong consensus in that local community about what that outcome is going to be about. While pre-zoning is an old idea, I think it’s a very worthy idea, certainly in my experience. We have to preserve what we have. Obviously maintaining our stock of rental housing is a significant goal of the city.

Forty per cent of the growth in the city is happening downtown, but importantly 60 per cent is projected to occur in what I call the “416 settlers.” The capacity of the suburbs, the avenues, the places in between the centres, is enormous. It’s untapped, and with that transit network that I laid out earlier, is a great big answer to helping with housing availability citywide.

Alternately, making sure we build choice.

People need choice throughout their life cycle. They need family housing, seniors’ housing, and housing when they’re single, they need housing when they’ve got a partner, you can think of all the different life choices and life experiences we go through.

We should not think about housing in the abstract without thinking about all the other things that we need to support housing. And a lot of that is around infrastructure: we have to keep it connected; it’s meaningless if it’s not going to be connected.

All of that manifests itself in planning permits, area planning, things that we put together. And this happens at different

scales. Many of you who work in the planning and development sector, you know we spend a lot of our time thinking about the layers, all the things that inform the planning outcomes. And all the different tools, and they kind of line up and they inform each other.

We work in a policy-led environment in the Province of Ontario and we’ve got to conform in a line with the direction that comes from the Province. And that’s about growth and intensification. So, what we spend a lot of time with in the city is just figuring out how it’s going to land on the ground. And these are the tools that help us do that. The new direction, the new planning legislation that’s just coming online now, it’s going to be a new way of doing business, which makes this even more important.

There are always new opportunities in the city. They come up through our own actions, but they come up through the actions of others. It’s a big, complicated place, and really, it’s why those values that I talked about in the beginning are so important. How is transit, for example, going to be used to leverage opportunity? I love this word — opportunity — because it represents the challenge of thinking differently and innovating, working with partners, which we do all the time, and our ability to lead, really, and achieve the potential of these values. We have to remember who we are, what our voice is, understand where we came from, and we have to continue to build a collective understanding of where we want to go.

The preceding was an address given on May 9 at the Toronto Region Board of Trade Downtown Centre, edited for clarity.

I think we’ve got a really solid reputation in the city for figuring this stuff out.

v 1

June/July 2018

Canadian A

BLD JunJul18.indd 16

2018-06-06 3:03 PM

10 Year

Warranty

Sloped glazing just went Modular!

Designed with architects in mind, the Modular Skylights system lets you spend more time designing solutions and less time specifying. Modular Skylights can be combined in a number of rooflight configurations, creating perfect solutions for a wide variety of building types: narrow corridors, internal courts, studios, large circulation spaces and much more.

Key Benefits: • Fiberglass frame • Laminated glass • Up to 3x faster on sloped glazing installations • Prefabricated flashing for 100% water tightness velux.ca/commercial 1 800-888-3589

Canadian Architect Ad - VELUX.indd 1

BLD JunJul18.indd 17

2018-04-25 4:20:57 PM

2018-06-06 3:03 PM

BLD JunJul18.indd 18

2018-06-06 3:03 PM

Forget White Picket Fences

Canada operates in two quite differ ent affor dability r ealities, yet focusing str ategies only on mark et adjustments in our cities ignor es the need for a difficult cultur al adjustment about what affordable home ownership means.By Rhys Phillips Building.ca

BLD JunJul18.indd 19

19

2018-06-06 3:03 PM

The concept of “affordable housing” is considered by most Canadian governments a basic human right.

But the term also obfuscates to whom related policies apply and muddies significant regional differences. Affordable housing is at best an umbrella concept for who can afford housing requiring no more than 30 per cent of family income. At its worst, it replaces the concept of social housing for those most at risk, a policy priority largely abandoned more than two decades ago. As governments retreated from social housing, however, it intensified a broader, largely successful “affordability” strategy for most other Canadians.

While the Federal Government’s 2017 National Housing Strategy marks a return to social housing, broader affordability has come up against Vancouver and Toronto’s emergence as expensive global cities while government responses to a ripening economy may decrease affordability in more stable markets.

The Great Retreat J. David Hulchanski provides a clear history of the rise and retreat of government from social housing. In his 2003 paper, What Factors Shape Canadian Housing Policy, he posits first a well-entrenched “government housing system” marked by a primary sector (home ownership) and a secondary sector (supported housing). In 1972, under Pierre Trudeau’s Cooperative Federalism, the Ministry of State for Urban Affairs (MSUA) was created to facilitate social housing. Provincial hostility to cooperative federalism’s shared funding approach, however, led to MSUA’s abolishment in 1979. But it was the triumph of neo-conservatism in the 1990s, notably

20

BLD JunJul18.indd 20

the Harris government in Ontario and the Chrétien/Martin federal government that marked the great retreat from social housing.

According to Tim Sales and Josh Brandon, the Canada Mortgage and Housing Corporation’s (CMHC) public housing crashed from a high of 10,000-16,000 units annually in the 1980s to just 603 in 2012.

Affordable housing strategies, on the other hand, prospered. Hulchanski documents how multiple, middle-class housing initiatives through CMHC, such as the First Home Loan Insurance Program (1992) blossomed, while Patricia Meredith and James Darroch detail in the Globe & Mail just how powerful the federal government’s early-2000s affordability strategy benefited the Canadian middle class while supporting economic stability. However, according to Jeff Everson of the Canadian Urban Institute (CUI) and author of Scaling Up Affordable Housing in the GTA, “We in Canada have taken to not speaking of social housing anymore, instead calling it ‘affordable.’ It blurs the distinction between social housing, which is largely supported by government funds, and affordable housing, which can be supported not at all or can be supported by a variety of subsidies.”

The Missing and Not So Missing Middle Class Despite the 2008 recession, a decade of very low mortgage rates improved housing affordability for most middle income earners, notwithstanding Toronto and Vancouver. In an important speech last February, It Takes a Village to Build a City: Housing as a Shared Responsibility, CMHC’s president and CEO, Evan Siddall, documented their emergence

as top-25 global cities with sophisticated tech hub economies focused in their cores, generating severe affordable housing crises.

As a result, two solitudes of affordability emerged. Toronto and Vancouver, where the annual average family income-to-average-residence price ratios range from eight to 11, are in a different league than most other Canadian cities with ratios as low as two to three for at least nine cities (four is traditional affordability).

A 2015 Huffington Post article, Here’s The Income You Need To Buy An Average House Across Canada, found not only appropriate income-to-price ratios for many cites, but required incomes were considerably lower than in 2006 when interest rates were higher.

If we separate out Canada’s two global cities, overall affordability — but not social housing — appears alive and well. But wait; in today’s economy, things change rapidly.

House prices are actually now declining, particularly in Vancouver and Toronto. Good news for affordability until we consider the reasons. Higher interest rates and introduction of more stringent mortgage risk tests means “the harsh reality is that the new rules will reduce homebuyers’ purchasing power substantially,” writes Sonia Bell and Wayne Karl on the Huffington Post blog, This reflects the recent Canadian Real Estate Association’s (CREA) assessment as summarized by the Globe’s Janet McFarland: “The federal government’s new mortgage stress-test rule has destabilized weaker housing markets by making it harder for buyers to afford new homes.” Too bad, says Rob Carrick, the Globe’s personal finance columnist. “If some aspiring home buyers have

June/July 2018

2018-06-06 3:03 PM

For Vancouver, A correction is probably closer to 50 per cent

Building.ca

BLD JunJul18.indd 21

21

2018-06-06 3:03 PM

22

BLD JunJul18.indd 22

frvbv

$950,000 $850,000 $750,000 $650,000 $550,000 $450,000 $350,000 $250,000

town house / row unit

two story sf

appartment unit

2018

2017

2016

2015

2014

2013

2012

2011

one story sf

Source: CREA

Composite

2010

2009

2008

2007

$150,000 2006

* Aggregate of Vancouver Island, Victoria, Greater Vancouver, Fraser Valley, Calgary, Edmonton, Regina, Saskatoon, Guelph, OakvilleMilton, Barrie & district, Greater Toronto, Ottawa, Greater Montéal and Greater Moncton

average annual housing starts

Vancouver

Toronto

Vancouver

Condo apartments

Construction financing for affordable ownership project

2014-2016

Toronto

Vancouver

Toronto

Vancouver

Toronto

Single-detached

5% 15%

80%

Source: CMHC

2004-2006

20,000 15,000 10,000 5,000

cash defferal from builder + HOAP loan + cash from HOA fund

construction loan Source: CUI

Outliers: Vancouver and Toronto Siddall believes the reason for housing unaffordability in these cities is straightforward: “high prices always effect the intersection of strong demand and limited supply.” The CMHC’s own study under Deputy Chief Economist Aled ab Iorwerth found the three standard demand factors of higher incomes, positive population growth and low mortgage rates explained 75 per cent of price increases in Vancouver, while only 40 per cent in Toronto.

Other contributing factors include increased income inequality, foreign investment, speculation, increases in high “big city” income jobs and an inevitably intoxicating mix of optimism and FOMO (fear of missing out).

But Iorwerth says that in Toronto and Vancouver, “what we are seeing is that the supply response in terms of new construction has not been as great as we would have thought. So for a proportionate price increase in say Calgary, Edmonton and Montréal there has been a stronger supply response in those cities. The message we are giving in the report is that there has to be an effort to supply more homes in the market.”

This analysis feeds both sides of the debate raging over whom and what are to blame for unaffordable housing in Vancouver and Toronto.

Governments have focused on “foreign buyers” and B.C. has also targeted condo flipping, tax evasion, vacant homes and insider pre-sale dealings. On the industry side, the CMHC’s supply-side focus is pure music. Land scarcity, goes its argument, is to blame in general, and this scarcity is created by governments. Squeezing greenbelts or deregulating growth boundaries are, however, less the issue. Faster approvals and a continuous, five-year supply of shovel-ready land is what’s required.

But how does this explain reports in the GTA of thousands of approved and often pre-sold units being cancelled by developers?

The answer, says the industry, is the increasing level of risk given proposed increases — sometimes a doubling — of property development levies, a trend documented in two separate Globe articles by McFarland and

MLS® HPI B enchmark price*

2005

to be turned away to protect the solidity of the real estate market, then so be it.” The new stress rules and probably even higher interest rates may challenge long-term housing affordability. How significant and for how long remains unclear.

June/July 2018

2018-06-06 3:03 PM

Summary of government charges New development scenario

Redevelopment scenario

low

med

high

low

med

high

$100,900

$80,400

$62,800

$58,500

$57,900

$56,300

Greater Vancouver

$86,700

$48,500

$23,200

$105,800

$63,300

$31,400

Greater Montréal

$18,100

$12,800

$7,100

$18,500

12,900

$7,100

Greater Toronto

$40

$45

$70

$23

$32

$63

Greater Vancouver

$35

$27

$26

$42

$25

$35

$7

$7

$8

$7

$7

$8

Density AVERAGE CHARGES per unit Greater Toronto

AVERAGE CHARGES per square foot

Greater Montréal

Source: CMHC

AVERAGE CHARGES AS % OF SALES PRICE Greater Toronto

7.4%

9.6%

11.1%

4.2%

6.9%

10%

Greater Vancouver

3.6%

4.9%

3.5%

4%

5.4%

4.5%

3%

3.1%

2.6%

3.1%

3.2%

2.6%

Greater Montréal

Shane Dingman. With no hint of irony, the latter reports how the Building Industry and Land Development (BILD) association accuses governments of using development charges to gouge new buyers to hold down property taxes for existing owners, ignoring the burgeoning costs of their financially dysfunctional urban growth model of the last four decades. Montréal, says Iorwerth, has in part escaped rapid cost increases because of faster approval processes, lower development fees and more commitment to rental options.

The Affordability Horse has Left the Barn To mix animal metaphors, the elephant in the room for Vancouver and Toronto is the improbability of finding a way back to traditional affordable housing. Both B.C. and Ontario have introduced affordable housing strategies and the Federal government has returned with its 10-year, $40-billion National Housing Strategy. While all make claims of responding to the “missing middle,” their primary implications are to stabilize already exceptionally high prices and to provide much-needed social housing.

The mix of foreign buyers taxes, which also psychologically dampens FOMO, rate increases and stress tests among other meas-

ures, have stabilized and even produced modest reductions in average prices. But a 10 per cent reduction hardly means a return to affordability. In April, Barrie McKenna quoted economist David Rosenberg as estimating it would take a 40 per cent price decline to return Toronto to something close to normal. For Vancouver, that correction is probably closer to 50 per cent, a result that might well bring down the Canadian economy.

However nowhere is there a clarion call to “Make Affordable Housing Great Again,” at least not in the sense of realizing the Canadian middle class dream of a detached house. In that blunt but elegant speech last February, Siddall makes it very clear that being a global city means a very different housing reality.

Increasing housing supply means “pulling our cities toward denser living and a lower supply of single-detached housing,” as well as “the de-stigmatization of renting. Rent or own, it is still a home.” Gone are the days of driving from Toronto’s core and planting roots once a house becomes affordable.

Likewise, CMHC’s vice president for Affordable Housing, Debbie Stewart, says that although the National Housing Strategy focuses on groups at risk, support of rental accommodation through the Rental Construction Finance Initiative “will provide low cost loans for

development of more rental housing that will be affordable to people with middle class incomes.” Even Everson’s CUI affordability strategy proposes only a modest goal of annually moving 2,000 cream-of-middle-class renters into ownership.

In a pithy May 14 editorial, the Globe’s editorial board spelled out the same reality.

While “69 per cent of aspiring Toronto homeowners wanted a house with three bedrooms or more,” they wrote, “the truth is that owning a big house in the city the size of Toronto or Vancouver is a weird anomaly in our world.” Connor Falls, Pacific Region Director for BTY, says it is an adjustment that young professionals have made in places like London where even renting is an accepted long term option. While politicians are still unlikely to inform their voters this is the new reality, plans such as Vancouver’s Cambie Corridor Plan are built on this imperative toward “right-sizing” housing.

Yet such a cultural shift is not necessarily a guarantee of new affordability. Improved planning approval times, lower developmental charges, better transit, and rapid access to surplus land notwithstanding, providing denser, more vertical housing may not necessarily produce affordable units. The concentration of innovation hubs in tight downtown locations,

Building.ca

BLD JunJul18.indd 23

23

2018-06-06 3:03 PM

as signalled by Amazon’s recent announcement to create 3,000 jobs on Vancouver’s core peninsula, only stimulate further land cost increases and push up significantly the cost of construction. Similarly in Toronto, residential developer Brad Lamb told the Globe that over the past five years approved land has skyrocketed from $50 a square foot to $250.

Economic strategies must therefore ensure new “innovation hubs” emerge in surrounding communities such as B.C.’s New Westminster, Richmond City and Surrey who are all currently working at intensive creative urbanism.

Cities like Hamilton are beginning to show signs of becoming an alternative hub (with Nokia and Amazon showing recent interest there), but other outlying municipalities must develop vibrant urban cores able to attract their own creative industry hubs and workers.

Rent or own, The Lumon railing system gives you the opportunity to design it is still a building facade that fills the interior with natural light. a home.

Touching the Surface The above analysis suggests that Canada operates in two quite different affordability realities, although both suffer from an historic neglect of social housing. For Vancouver and Toronto, a difficult cultural shift is underway, if not already accepted. For other cities, the federal government must tread carefully to avoid too much restraint. Yet there is also a need within both types of cities for a more holistic approach that ensures NGOs, the public, governments and industry operate collaboratively to produce an effective urban model, perhaps using the triple helix approach utilized by many European cities to build successful innovation centres. It might begin by producing an evidence-based detailed profile of baseline data on a city’s affordability gaps, such as Mississauga has produced. Its comprehensive Affordable Housing Program: Housing Gap Assessment Report identifies in detail the 30,000 households in the city facing a housing supply or affordability gap. At most risk is those households with incomes below $55,493 but includes, to a lesser extent, some households earning up to $99,875. With this solid data base, the report provides a comprehensive outline of the targeted strategy necessary to deal with the problem of affordability.

Collaborative models might result in bolder public/private initiatives more common in Europe. For example, the public purchase of Bombardier’s 371-acre Downsview site, recently acquired by the Public Service Pension Investment Board (at Lamb’s cherished $50.56

24

BLD JunJul18.indd 24

per square foot), could have been executed as a first step to creating a new, more affordable uptown hub, as Vancouver is doing with its Oakridge Mall redevelopment. Not just an urban plan initiative, such a project would require identifying and mobilizing the core for a dynamic innovative economy hub connected by efficient rapid transit. Falls and Neil Murray, BTY’s Senior Cost Consultant, note that such dispersed hubs are emerging with planned developments like Burnaby’s Metrotown and Vancouver’s Brentwood, River District and Oakridge, “which are certainly more affordable than the downtown.” It should be noted, however, that Metrotown was approved over strong objections from affordable housing advocates because of plans to demolish existing low-rise rental units.

While many of the issues presented are about evolving an affordable housing model that looks forward and not to the past, there are other areas that require reassessment. “Canada is probably five to 10 years behind other global cities in terms of how we build our product and our housing,” says Murray, citing BTY’s successful sourcing of affordable modular housing in China that is then shipped to the U.K. and assembled. “We have also seen a significant shift toward timber construction because it has become more affordable.” But, Falls cautions, there are not the people to deliver the new emphasis on mass timber design so prices fluctuates. “There are only three timber providers in Canada and [it will take time] until that changes and the codes are changed and people become comfortable that these buildings are safe for high-rises.”

Architect and planer John van Nostrand also believes new approaches are required.

His JvN/d development firm is working on two projects in Hamilton premised, he says, on a new kind of participatory housing model that incorporates both economic and technological components. “On our first two buildings,” he says, “it looks like we can deliver ownership without government subsidies for people earning from $25,000 to $100,000 per annum.” A process of “co-financing” augments down payments and thus also reduces monthly mortgage costs. Cohousing units are also an option.

In terms of technical innovation, the firm does not use shear wall construction which, Nostrand argues, only defines from the start the structure of ownership. “What we are doing is actually building an ‘office structure’ of columns and slabs returning Le Corbusier’s original model.

People then buy the area they need and create while we build the walls for them.” Expanding a unit is possible in the future without a jackhammer. One can purchase a fully completed unit or one that only meets basic occupancy requirements permitting later finishing as resources permit.

Capacity for Change Social and affordable housing imperatives are taking place in a rapidly evolving socio-economic dynamic that has changed significantly the nature of some cities, while at the same time, the prevailing culture of what constitutes appropriate home ownership is no longer tenable. While other Canadian cities have been more successful in sustaining traditional affordable home ownership, over time they too will have to make adjustments. Creating a capacity to innovate better and faster through industry sector and public collaboration will be imperative.

June/July 2018

2018-06-06 3:03 PM

Download FREE design tools for Revit and AutoCAD!

lumon.ca/design

Minimalist balcony railings and balcony glazing systems Design balcony systems that: • • • • •

increase natural light reduce noise by 50% lower energy usage by up to 18.3% provide a better connection to the outdoors look attractive in multiple styles and applications

www.lumon.ca 1 877 707 7427 linkedin.com/company/LumonCanadaInc./ instagram.com/LumonCanada youtube.com/LumonEu

Balcony Railings | Retractable Balcony Glazing | Sunrooms | Privacy Blinds BLD JunJul18.indd 25

2018-06-06 3:03 PM

The Buried Giant Downtown Toronto may be the development star, but the 905’s airport ‘megazone’ is a quiet yet booming workhorse even more underserviced by transit. By Stefan Novakovic

“Employers will go where the talent is.” With that succinct phrase, George Spezza explained a move worth millions of dollars and 400 jobs: Tim Hortons is coming downtown. After 50 years in Oakville, Ont., the iconic chain recently announced a move to the heart of Toronto’s Financial District, jockeying for position at the locus of Canada’s largest employment zone and economic engine.

It fits a pattern. Speaking to the Toronto Star, Spezza, the City of Toronto’s Director of Business Growth Services in Economic Development and Culture, explained the move as symptomatic of a “huge concentration of younger talent in downtown area.” Experiencing record low vacancies amidst rapid office construction, downtown fosters a growing share of the nation’s jobs in skilled, high-paying fields. Already contributing 51 per cent of Toronto’s GDP and 33 per cent of the city’s jobs on just three per cent of its land area, downtown employs some 500,000 people, a number estimated to almost double by 2041.

That fits a pattern, too. Inequality is on the rise, with the unequal distribution of wealth

26

BLD JunJul18.indd 26

increasingly expressed through spatial inequality. As a case in point, a recent study by Rutgers University calculates Manhattan’s land area to be worth as much as Canada’s entire US$1.74 trillion GDP. Frenzied real estate speculation may be responsible for part of that staggering sum, but the growing concentration of knowledge-based jobs in the CBDs of global cities like New York, London, Los Angeles, and Toronto reveals a more fundamental economic reality. In Toronto, the Tim Hortons relocation follows recent moves by Coca-Cola, Ebay, and Google, with professional services firms like Deloitte, PwC, and KPMG similarly consolidating more regional operations in the core.

Boasting ample cultural amenities and a walkable, reasonably transit-friendly urban core, downtown Toronto bears hallmarks of 21st century economic success, exemplifying the “quality of place” extolled as a key factor in attracting the urban talent pool chased

by Tim Hortons, et al. But the GTA also boasts the country’s second largest employment zone, and its success tells a very different kind of story.

Secondary Cities in First Place?

Beating out the CBDs of Vancouver, Montréal, and Calgary, the lands surrounding Pearson International Airport were identified in the Neptis Foundation’s 2015 Planning for Prosperity study as Canada’s second largest employment zone. Yet while quietly providing over 300,000 jobs, the airport “megazone” — which includes parts of Mississauga and Brampton, and a sliver of Toronto — doesn’t look much like the downtown of a major city.

At first blush, the area’s success runs contrary to the predominant narrative of 21st century urbanization and economic clustering.

Offering neither palpable density nor higher-order transit, expanses of surface parking belie a vibrant economic hub. In 2018, views from the airport are still met by tangles of elevated expressways and smatterings of lowslung warehouse typologies, punctuated only intermittently by pockets of commercial density. So what gives?

For starters, the population. Downtown Toronto’s booming skyline epitomizes the rise of one of North America’s fastest-grow-

June/July 2018

2018-06-06 3:03 PM

ing regions, but a growing majority of the GTA’s population is found in surrounding 905 municipalities like Vaughan, Mississauga, Whitby, and Brampton. 2016 census data records a population of 2,731,571 in the City of Toronto, or 43 per cent of the GTA’s 6,417,516 residents, and well under a third of the Golden Horseshoe’s population of nearly 10 million.

Though tropes of city-dwelling millennials may have supplanted late 20th century narratives of white flight and urban decay, it is suburbs that continue to drive growth. And the gap is getting wider.

For much of the past decade, Toronto led North America in the volume of high-rise construction, surpassing even New York City according to Emporis’ 2012-2014 data. Density skyrockets in parts of the city, but the continued predominance of single-family zoning leaves most of Toronto’s land area out of that equation. Rising housing costs also put living in Toronto out of reach for many. Toronto continues to grow overall, yet census data shows either stagnation or decline of population across approximately 70 per cent of

the city’s land area, with the paucity of attainable family housing reflected in the Toronto District School Board’s declining enrolment.

By contrast, affordability problems across the 905 have yet to reach Toronto levels and the somewhat more even patterns of intensification facilitates greater population growth.

Economic prosperity isn’t a mere corollary of population, however, and the clustering of employment around Pearson is also rooted in more complex economic factors.

The ‘Aerotropolis’ When analyzing the workforce, economists divide jobs into categories of local “population-related” employment and transferable “core” employment. Demand for some jobs is driven by proximity to population: services like grocery stores, doctor’s offices and banks are community necessities and contingent on serving the people living there.

Transferable core employment isn’t: corporate offices of financial services, tech companies, and consulting firms don’t serve the surrounding population.

Welcoming just over 47 million passengers in 2017, Pearson International Airport is by far the country’s largest aviation hub, with the facility poised to break the 50 million barrier to become Canada’s first global mega hub.

Source: Toronto Pearson

Building.ca

BLD JunJul18.indd 27

27

2018-06-06 3:03 PM

As in downtown Toronto, the overwhelming majority of jobs that surround Pearson aren’t butchers and bakers. In fact, 82 per cent of jobs in the airport megazone constitute core employment, according to the Neptis Foundation.

The local economy is largely shaped by knowledge-intensive occupations, featuring clusters of professional services broadly similar to those in downtown Toronto. Professionals working near the airport aren’t just there because they live nearby; it’s because their employers have chosen to locate there. But why did they?

At a theoretical level, John Kasarda and Greg Lindsay’s “aerotropolis” model of economic development offers an answer. Outlined in a 2011 book of the same name, the theory posits that airports serve as catalysts of 21st century prosperity. Much as the seaport, railroad, and automobile transformed mobility and the ‘spatial fix’ of cities in the 18th, 19th, and 20th centuries respectively, Kasarda and Lindsay argue that the global connections provided by major international airports now drive the global economy. As urban theorist Richard Florida wrote in CityLab, “Airports play a substantial role in the economic growth and development of cities and regions. In today’s knowledge economy, far and away, the most precious cargo they move is people.”

More tangibly, Amazon’s Request for Proposals to governments and economic developments for HQ2 hinted at the economic importance of airports. A prominent requirement for bids was the proximity of a major international airport, with a strong preference for direct flights to New York, San Francisco, Seattle, and Washington D.C. In assessing the 20 HQ2 finalists — including Toronto — CityLab cited Atlanta and Austin’s airports as the primary draws and drawbacks to the respective bids, underlining the value of connectivity.

At Pearson, the economic impacts are impressive. The airport itself directly employs 49,000 people, while handling a record 47.1 million passengers in 2017, according to the Greater Toronto Airport Authority (GTAA).

Taking into account indirect economic spillovers, the airport’s impact is even more astounding. As Florida recently explained, “Toronto Pearson generates more than $40 billion annually, which equates to about 15 per cent of the GTA’s total economic output.”

Towards Transit-Oriented Growth If Pearson’s waxing economic importance

28

BLD JunJul18.indd 28

percentage of passengers use of public transit at various international airports Shanghai Pudong

60%

London Heathrow

36%

Toronto pearson

10%

frankfurt

33%

amsterdam schiphol

40%

signals a bright future, its immediate surroundings reflect the past. Situated at the confluence of five major highways, including Highway 401, the continent’s busiest, the airport is at the heart of one of the most congested urban regions in North America.

According to Neptis, 22 per cent of all work trips in the Greater Toronto and Hamilton Area (GTHA) are made to the airport megazone, with employees coming from both the 416 and the 905. However, with no higher-order transit available, the overwhelming majority of those trips happen by car. It only takes a few minutes of sitting in 401 traffic to see the inefficiency of that.

Speaking at a recent Urban Land Institute ( ULI ) panel discussion, Neptis executive director Marcy Burchfield noted that “about 90 per cent of trips are made by car” to the airport zone and the much smaller — but rapidly growing — employment zones in Vaughan and Mark ham. Citing 2011’s Transportation Tomorrow study, McKinsey’s David Munroe added that the bulk of daily commuters from the western GTHA (including Peel, Halton, and Hamilton) do not stream into downtown Toronto. The nearer airport zone is the significantly bigger draw, while a considerable number of commuters continue along the GTA’s ‘northern arc’ to Vaughan and Markham. Given the scope of employment at the airport zone, the volume of commuters, and the economic costs of congestion, the case for higher-order transit is relatively straightforward.

Looking to the future, the GTAA has gradually advanced plans to bring a transit hub to Pearson airport. In 2016, the agency released the Pearson Connects: A Multi-Modal Platform for Prosperity report, co-published with leading planning firm Urban Strategies. Warning that “traffic congestions is reaching critical levels,” the report makes the case for a multimodal transit hub, integrating various regional services — including the recently completed Union Pearson Express (UPX) — into a facility notionally dubbed ‘Union Station West.’

Considering the growing employment and population, the airport is a logical place for such a hub, which could effectively knit together a range of modes and services into a more efficient network, while solving the ‘last mile problem’ for thousands of commuters.

Compared to other major international airports like Amsterdam Schipol, Hong Kong International, and London Heathrow, Pearson lags embarrassingly in terms of transit mode share for passengers, and the same is true for the airport zone’s employees. Only eight per cent of Pearson’s passengers arrived by transit in 2016, compared to 39 per cent in Amsterdam and 63 per cent in Hong Kong.

This year, plans for the multi-modal hub took a major step forward when the GTAA announced a partnership with regional transit authority Metrolinx to cooperate on enhancing transit. Meanwhile, the Wynne government has promised high-speed rail service to Kitchener and London via Pearson, environmental assessments for electrification

June/July 2018

2018-06-06 3:03 PM

F in c h

LRT

Humber College

Brampton

Toronto

The international centre Woodbine

up express Weston

Pearson Hub

Eg l in

Brampton City Centre

t o n LRT

MT Dennis Renforth Shoppers World Airport Corporate Centre r Bloo

Danf

orth

L in e

kipling

io

Tr

ar

an

nt

sw

ro

ay

Hu mi

ss

iss

au

ga

LRT

Mississauga

of the Kitchener Line, and a bypass for freight trains in Brampton. For its part, the GTAA also released an updated 20-year Master Plan, identifying an Airport Road site for the new transit hub.

Geography Matters Given Pearson’s economic dynamism, will the airport eventually rival downtown Toronto as Canada’s largest economic driver? Probably not. Even if the economic relationship between downtown and the airport zone has competitive elements, the two are fundamentally symbiotic. A vibrant downtown requires a major airport, just as a major airport is predicated on proximity to a large urban centre. While the airport zone has proven a massive employment hub, downtown

mississauga City Centre

Toronto possesses a rich urban fabric that remains the much bigger draw. In simple terms, it’s why Canada’s largest companies are also willing to pay the country’s highest commercial rents.

Yet for all the stark differences between Canada’s two biggest employment zones, they jointly illustrate the lingering power of geography in the 21st century. After all, why would airports matter if being there didn’t? Despite the rise of remote work and the internet’s promise to ‘flatten’ the world, the economic power of clustering has not only prevailed but intensified. Geography, like wealth, has become more stratified. Channelled by the jet engine and the fibre optic cable, the future still beckons with greater global connectivity and access. If only for a lucky few.

Existing rapid trans line Funded/Under construction RTC 192 Rocket Go UP Express Proposed RTC Other proposed lines

The proposed transit hub would consolidate a variety of regional modes and transit services, including a possible western extension of the TTC ’s Eglinton LRT.

Building.ca

BLD JunJul18.indd 29

29

2018-06-06 3:03 PM

Room Service Key project management considerations when repositioning an existing hotel through largescale renovations. By Chris Markovic

The Canadian real estate industry has experienced a robust hotel and hospitality market renaissance over the past decade. As a result, there has been a corresponding increase in demand on the part of investors — from large institutional equity firms to independent operators — looking to purchase aging or under-performing hotel properties.

According to the 2017 Canadian Hotel Investment Report by Colliers International Hotels, Canadian hotel deals reached a near-record $4.1 billion in transaction volume in 2016 — a year-over-year increase of almost 70 per cent — while price per room metrics topped $99,000. Case in point: Toronto’s 1,372-room Sheraton Centre sold last year for a record $335 million to Brookfield Asset Management, Inc.; further uptown the flagship Four Seasons Toronto was acquired for a whopping $860,0 0 0 per room; and in Vancouver, the historic Rosewood Hotel Georgia recently sold for $930,000 per room.

In Montréal, hotel investment in new development projects, redevelopment and major capital projects is advancing rapidly. The 950-room Fairmont the Queen Elizabeth re-opened in summer 2017 after an extensive $150-million renovation, and the new $400 million Four Seasons Montréal will feature 166 rooms and 18 residences, both properties offering the heightened level of customer experience expected from these storied brands.

“Market fundamentals are incredibly strong across the Canadian hotel market,” said Brad Henderson, CEO of Dundee 360

30

BLD JunJul18.indd 30

Real Estate Corporation, “Factors such as the low Canadian dollar, high occupancy rates and the influx of well-capitalized foreign investors have helped drive sales price increases across the hotel category.” But as Henderson notes, investors looking to acquire and make capital and positioning improvements to existing hotel assets need to be aware of the many potential pitfalls that could impact the bottom-line performance of their property.

Continued Operations during Renovations Refurbishment of any property can be challenging, far more so when that hotel remains operational during a capital improvement program. Guest and staff safety is an obvious priority, but there are many other challenges that affect a project’s continued operation. Typical challenges can include disruption to back-ofhouse operations, room decommissioning and related inventory controls, potential impact on revenues realized, client impact and restricted access to deliveries. Despite the issue at hand, daily communication and updates to all long-term, mid-term and short-term schedules relating to the property’s revitalization are required between all stakeholders to minimize the risk of impact on operations and the guest experience.

During recent upgrades to Fairmont Le Château Frontenac’s main electrical system, the power to the entire property was shut down for a period of eight hours, including

emergency back-up power — a first for this iconic hotel. The entire shutdown process was initiated twice over two evenings to complete new wiring connections. Thanks to strong communication, effective planning and coordination between all stakeholder parties — including various operations departments such as security — the process was completed successfully with minimal impact. In fact, many hotel guests were quick to point out that the outage had absolutely no impact on the enjoyment of their stay.

Shared Assets with Adjoining Properties As with most urban projects, a hotel may share common element spaces with adjacent facilities, where there is low tolerance to disruption, making it crucial that there is early and regular communications and comprehensive planning with adjacent properties or facilities. Strong communication can often highlight an opportunity to tackle a mutual longstanding concern that has been overlooked for years due to the cost or complexity of addressing it in a mutually beneficial way.

In the case of Le Château Frontenac, a street that runs through the property is owned and maintained by Québec City. This street passes over the hotel’s basement space that it uses for back-of-house operations and various mechanical systems. When major structural repairs to a beam in the basement space were necessary and required the roadway to be excavated, a coordinated effort

June/July 2018

2018-06-06 3:03 PM

The $150-million renovation of the Fairmont The Queen Elizabeth in Montréal was executed for Ivanhoé Cambridge by an architectural consortium of Sid Lee Architecture | Architecture49, with general contractor Pomerleau.

Photo by Stéphane Brugger

between all stakeholders through clear communications allowed for the resolution of the issue, as it coincided with the city’s plans for the rebuilding of that particular portion of the roadway.

Original Phasing of an Existing Asset and Managing Code Compliance When dealing with a historic property such as Le Château Frontenac, it is important to remember that building practices experienced a tremendous evolution between the late-18th and mid-20th centuries. Wall types and thickness, changes in wall composition — particularly when the property was built in phases — make it virtually impossible to issue standard details and renovation instructions. For example, asbestos testing and results can vary from one phase of a building to the next, making tender results increasingly important when submitting bid results and carrying a contingency.

Building code compliance must be given careful consideration and will affect both budget and scheduling. For instance, existing

plumbing details and other design elements might contradict what is allowed in the current building code. It is therefore crucial to ensure that a code compliance report is produced at the onset of the project. All of these aspects must be weighted carefully before the issuance of any fixed price contract. The hotel’s continuous operation and budgets can be seriously jeopardized when these considerations are not taken into account.

Hotels have strict processes and schedules for shipments, transfer consignments or waste, and these fixed schedules rarely change. From the loading dock and storage/consolidation areas to the service elevators, each FF&E (furniture, fixtures and equipment) delivery/ installation zone has its own set of challenges.

FF&E deliveries must be integrated into these processes to negate the risk of negative impact the day-to-day operations of the hotel.

A Proactive Approach Delivers Results The range and breadth of barriers to success when making capital improvements to existing hotel assets, as well as re-positioning those

properties, can at first seem daunting. But a strategic approach can mitigate many of these threats and help enhance the asset’s future value and profitability. “The key is to be proactive in planning and to ensure that all stakeholders clearly understand the scope of the challenge,” says Henderson. “Property owners should remember that large-scale renovations are highly lucrative when effectively managed, which means adhering to project delivery timelines and budgets. It takes the right team to execute a major hotel renovation, but when it’s done well, the results can be transformative.”

Chris Markovic is vice president of marketing and business development at Dundee 360 Corporation, which has offices in Toronto and Montréal. www.dundee360.com

Building.ca

BLD JunJul18.indd 31

31

2018-06-06 3:03 PM

Building Barriers.

Enhancing Performance.

Metl-Span insulated metal panels (IMPs) feature a joint system that provides double protection against leakage, and rigid, continuous insulation preserves R-value over the life of the building.

With impermeable faces and completely encapsulated insulation, the panels provide a weathertight membrane to enhance the performance of the building, allowing occupants to live, work and play safely inside.

Learn how you can increase R-values by as much as 40 percent at MetlSpan.com/performance

PERFORMANCE REDEFINED

CanadianArchitect_Performance-BuildingBarriers_10.5x12.375_fc.indd 1

BLD JunJul18.indd 32

5/11/18 4:28 PM

2018-06-06 3:03 PM

From Pools to Puddles How restricted bidding environments harm a city’s ability to achieve the best value for tax dollars. By Brian Dijkema

Whether it’s “Steeltown” (Hamilton),

Brian Dijkema leads the Work & Economics Program at Cardus. Prior to joining Cardus, Brian worked in labour relations in Canada, and has also done work on international human rights, with a focus on labour, economic, and social rights in Latin America and China. www.cardus.ca

“Cowtown” (Calgary), “Haligonia” (Halifax), or the Slurpee Capital of Canada (Winnipeg), Canadian cities are each unique. If you see a Mennonite horse and buggy beside shiny new tech buildings, you just know you are in Waterloo, Ont. A city’s identity and character are distinct.

But beneath that uniqueness lies a common need: infrastructure. This includes things like wastewater treatment plants, bus shelters, roads, libraries, and pedestrian malls.

Public infrastructure is supposed to serve everyone in the city. Just as you do not get to choose whether you pay taxes, so the city does not get to choose whether your tap will spill clean, fresh water. Then why is it that the bidding for construction of new public infrastructure is not open to the public? Why is it blocked from the folks who pay for it?

In too many Canadian communities, the construction of municipal projects is limited to a privileged few, which is patently unjust and undemocratic, hurts the public purse, and harms the construction industry.

While the water works are not allowed to limit clean water to a select group of residents, public construction projects are limited to a select group of bidders. Increasingly Ontario’s cities, and other jurisdictions like Manitoba and potentially British Columbia, are restricting which contractors and companies can bid on infrastructure construction projects.

But the restrictions aren’t based on contractors’ qualifications. Rather, they are based on

which labour union a contractors’ employees belong to. Cities cannot choose to stop sending you fresh water because you joined one union over another, but they are now being forced (or, arguably worse, voluntarily choosing) to stop you from building the plants that supply that water.

In Ontario, for instance, a bit of labour law that was intended to ensure that private companies couldn’t shirk their union obligations is now being used to shut vast swathes of the construction industry out of doing public work. Workplaces that are organized by specified unions in the industrial, commercial, and institutional (ICI) sector of the province’s construction industry must automatically abide by collective agreements that apply province-wide. Moreover, those agreements contain clauses that forbid employers from contracting or subcontracting work to firms who are not affiliated with that particular union. To take a real-life example of this injustice, two workers in the Region of Waterloo signed membership cards with the Carpenters’ Union and certified the region in July 2014. As a result, the Region can now only accept bids from firms affiliated with that union. Workers that exercise their right to choose to affiliate with different unions, or no union, are legally denied the ability to build up their own cities.

Manitoba’s situation is similar: for many years the province has built its hydroelectric projects under project labour agreements

Building.ca

33

11/18 4:28 PM

BLD JunJul18.indd 33

2018-06-06 3:03 PM

There is no compelling public-interest case for closed tendering.

(PLAs) that require workers and firms working on these public projects to operate under the collective agreements of particular unions.

Contractors who will not are simply out of luck. In British Columbia, while bidding remains open for the moment, the provincial government has hinted at adopting PLAs for its public projects. That would, again, shut out legitimate, hard-working construction contractors for no reason other than union affiliation. That would place union affiliation over and above other factors, such as the price of a company’s bid and its track record on delivering quality results.

The Hamilton, Ont.-based think tank Cardus has argued for a long time that these arrangements with specific unions are fundamentally unjust. They end up causing governments to penalize workers who have exercised their Charter right to freely associate with one union over another, or no union at all. Therefore, employers and contractors — who are legally forbidden by law from influencing their workers to join or not join any union—are held hostage. They might want their firm to work in Waterloo, for example, but to do so their workers have to join the Carpenter’s union.

Not affiliated with that union? Then you cannot bid on the city’s work.

Effect on Cities While such arrangements are unjust for employers and workers not affiliated with the favoured union, they are also harmful

34

BLD JunJul18.indd 34

for cities and the construction industry.

Restricted bidding environments harm a city’s ability to achieve the best value for tax dollars. Cardus recently published a study of the effects of closed tendering on the Region of Waterloo. In the paper, No Longer the Best, the data tell a story of a once highly competitive public construction market — where contractors fought tooth and nail to win public jobs — that is now drifting toward limited competition and mediocrity.

One of the starkest findings was the decline in the number of firms bidding in the closed regime. In the period from 2009-2014 the Region received, on average, about eight bids per project tendered. When competition was shut down in 2014, the Region received an average of less than four bids per project.

Anyone working in the industry knows what this means: less competition for city contracts means more opportunity to pad bids and inflate prices. An earlier Cardus study on this issue noted that construction prices with eight bidders were predicted to be 25 per cent lower than if there were just two bidders.

Moreover, studies within Canada, the U.K., and the OECD have shown that fair and open competitive bidding for municipal projects leads to cost savings of 20 to 30 per cent.

This should worry municipal leaders and civil servants who are obligated to ensure that they get best value for taxpayers’ dollars.

Canadian municipal, provincial, and federal governments have all committed to build-

ing infrastructure necessary to facilitate economic growth, and improve the lives of citizens.

The public interest lies in finding ways to get more infrastructure for fewer dollars. Yet, the restricted tendering of projects in Manitoba, parts of Ontario, and potentially in B.C. is one of the best ways to get less infrastructure for more dollars.

But there’s more than just infrastructure at play here. What often goes missing in these conversations is the way that our public infrastructure helps those who need it most.

Increasing the costs of building libraries, pools, arenas, hydro projects, or water treatment plants means that you get less infrastructure, which disproportionately hurts the poor. Take the City of Toronto, for example, which does not have free and open competitive bidding for its construction projects.

Toronto’s community housing stock is facing capital repair backlogs worth billions of dollars. The increased costs the city pays for that work mean it can afford fewer repairs, a clearly negative impact on those who live in social housing. Likewise for libraries and pools. If Toronto is spending more on one thing, it has less to spend on another.

Effect on Industry While the harm to the public purse from restricted tendering is quite clear, why should the industry as a whole care? Simply put, restricted tendering undermines the health of the construction industry.

Possibly one of the best case studies, again, is the Region of Waterloo. Cardus data show that when the Region had free and open competitive bidding on its construction projects between 2009 and 2014, it received bids from 91 unique firms. This indicates an industry where competition is alive and well. And it also signifies an environment conducive to innovation and the development of specialties in certain types of construction, which allows firms to differentiate themselves from their competitors. If the open period was marked by significant diversity of firms — a thriving construction ecosystem — the closed regime is virtually drained of competition. In the period between 2014 and 2017, with the Region restricting bids to contractors whose workers were affiliated with one specific union, there were bids from only 15 unique firms. In other words, the bidding pool was drained of 84 per cent of its competitors, leaving Waterloo

June/July 2018

2018-06-06 3:03 PM

Region with a bidding environment that resembles a puddle more than a pool.

There are labour force considerations too.

The construction industry in Canada is facing major challenges in attracting a new generation of workers. BuildForce, an industry council that gathers labour market information, noted that the construction industry in Canada will see 21 per cent of its workforce retiring this decade. A healthier, more competitive construction industry is more attractive to young people thinking about making their living in the trades. This, along with continual challenges in productivity, should have the industry seeking to diversify in ways that encourage innovation and growth, both things the industry has lacked. It is hard to see why we should be content with allowing

governments in Ontario, Manitoba, and B.C. — all of which are major purchasers of construction who shape the industry as a whole — to perpetuate a system which stifles diversity and innovation.

When we think of our cities and our provinces, we all imagine places that are vibrant, diverse, and full of life and vigour. Living in the background of these scenes of business, culture, and city life are the streets we walk on, the lights in the offices, and all the other bits of infrastructure that enable our shared lives together. Our pursuit of vibrant cities should start from the ground up, with a vibrant and competitive construction industry. It is more just. It is better for the public purse.

And it is better for the construction industry as a whole.

Downtown Waterloo, Ont. as seen from the sixth level of the Uptown Parkade.

Photography

by Andre Recnik

Building.ca

BLD JunJul18.indd 35

35

2018-06-06 3:03 PM

PIONEER STEEL BUILDINGS Residential • Commercial • Industrial

Pioneer Steel has been manufacturing steel buildings in Canada since 1980.

Our premium quality, preengineered steel buildings have been in use for a wide range of industrial, commercial, residential, agricultural and recreational applications.

Pioneer’s clear span, no trusses, no beams, no posts designs are today’s leading edge steel building solution.

You’ll get 100% usable space that’s affordable, eco-friendly, easy to install, maintenance-free, weather and stormresistant and, above all, long-lasting.

PIONEERSTEEL.CA

855-212-3005 Steel Buildings since 1980

Exclusively from PCL Graphics Ltd.

Change the way you look through glass and more!

With the Lumitone® line, you can customize density, opacity and overall look of your designs in regards to covering clear surfaces. Application includes films on glass or direct printing on acrylics and polycarbonates. Whites, gradients, tints and colour options available. sales@lumitone.ca

BLD JunJul18.indd 36

1-800-268-7744

www.lumitone.ca

2018-06-06 3:03 PM

Faster, Leaner, Modular The pieces to the modular construction puzzle are finally fitting together, thanks to digital twin, 3D printing and other advanced tools By Folkert Haag

Folkert Haag is the global lead for building materials industries at SAP, and is part of the solution management team of the mill products and mining industry unit.

In September of 2017, with a homelessness crisis looming in the city of Vancouver and throughout British Columbia, Premier John Horgan announced a plan to construct 2,000 modular housing units across the province over the next two years, at a cost of $291 million.

Within five months, tenants from Vancouver began to occupy the first of these “microsuites,” which come with bathroom, kitchen, bed and living space. The plan calls for them to live there on an interim basis, until a permanent solution is in place, at which point the 250- to 350-sq.-ft. microsuites can be dismantled, transported in pieces and reassembled at other sites where they are needed.

As aggressive as the B.C. plan for alleviat-

ing homelessness is, the quick turnaround from project announcement to move-in was possible because the modular housing manufacturer, Horizon North, its suppliers and other project participants could design, manufacture, deliver and assemble the units on a condensed schedule that would have been unthinkable before digital technologies made modular housing practical. The advent of technologies such as building information modeling (BIM) via a “digital twin” and distributed manufacturing using 3D printing are paving the way for new business models and building approaches such as modular construction to reach the mainstream, and for modular projects like those in B.C. to rise in record time.

Building.ca

BLD JunJul18.indd 37

37

2018-06-06 3:03 PM

Modular construction is a technique in which commercial and residential structures are manufactured mostly off-site under controlled factory conditions, in sections or modules, and then transported in pieces to their intended site, where they are constructed into a single integrated building.

Modular structures use the same materials and are designed to the same codes and standards as conventionally built facilities, making them virtually indistinguishable from structures built using traditional construction methods.

There are, however, key practical and economic distinctions that give modular construction an edge over traditional construction in certain environments and applications.

Product Quality In traditional construction approaches, factors such as weather conditions and the quality of onsite labour may diminish the overall quality of the finished product. Because the bulk of components for modular construction are produced in a controlled factory environment, they are much less susceptible quality risks. The factory environment also gives manufacturers opportunities to improve product consistency and overall process efficiency by automating certain production steps. What’s more, automation and the indoor construction environment may reduce the risk of accidents and related worker safety liabilities.

Cost and Timeline Certainty Roughly 60 to 90 per cent of construction for a modular building occurs inside the factory, according to the Modular Building Institute (MBI). That helps avoid delays due to weather, trade/contractor/labour availability, accident damage, theft and other risks, which keeps costs and timelines on track.

Manufacturing the modules to exact factory specifications also eliminates delays that are common in conventional builds, while potentially speeding the design, survey and compliance elements of a project.

Factory construction also shortens timelines.

Modules can be constructed in a plant at the same time as site preparation and foundation work are occurring onsite. This reduces overall project time by an average of 30 to 50 per cent, according to MBI.

Collaboration and Visibility throughout the Supply Chain A new generation of digital construction project management platforms allow multiple participants access to a single version of “the truth” for a given project, where they are able to gain visibility into the individual project tasks for which they are responsible, and how they impact or may be impacted by the schedules and tasks of others. Such a platform can link the relevant parties — material suppliers, developer, contractors, even participating government agencies and officials — so not only can they share and view the specs for individual components, they also can use a digital supply chain management solution equipped with sensors to track materials, supply needs and the progress of various interdependent parts and components

in real time during the manufacturing process. They then can use this information to inform and adjust production and construction workflow.

Project participants can plug into that same digital platform to access a cross-company masterplan and schedule, providing a framework for ensuring all parties are aware of critical milestones. Transparent sharing of cost and budget data makes it possible for project participants to work within the overall risk-management for the project, with the assurance that budgets can be inspected and approved by all parties. Issues and changes are identified, tracked, solved and well documented.

One structure that these collaborative tools make obsolete is the silo. Using a cloud-based, collaborative digital supply chain management platform allows the parties in a modular construction project to collect and share data from points along the supply chain and at the construction site. That’s in stark contrast to the highly siloed approach common to traditional construction projects.

Manufacturing Insight Manufacturers involved in modular construction have access to a concept known as “digital twin” that can shed valuable new light on the production process. Recently identified

by Gartner as one of the top 10 tech trends in their 2018 Technology Trends report, digital twinning is the pairing of the virtual and physical worlds in which data from sensors, computers and equipment connected to the

Design & engineering

Permits & approvals

Site development & foundations

Install & site restoration

ti m e savi ngs

Plant construction site-build construction schedule

Design & engineering

38

BLD JunJul18.indd 38

Permits & approvals

Site development & foundations

Building construction

Site restoration

Courtesy of Modular Building Institute

modular construction schedule

June/July 2018

2018-06-06 3:03 PM

175 years, the house is but one example of how large-scale 3D printing is poised to move into the construction mainstream.

Internet of Things are used to build a virtual model of a process, product or service.

Data produced by a digital twin can help inform manufacturers of potential production and quality issues before they occur, while also helping them to uncover potential efficiency gains in the production process. In the context of modular construction, a digital twin can be used in BIM to develop design specs for an entire building, for individual modules and for the components of a module. Important data then can be attached to each element, giving parties insight into production schedules, quality-control metrics and other information to keeping the manufacturing side of a modular project on schedule.

Response to Customer Demands Manufacturers in the modular space need the ability to design and build products to meet the needs of, and respond to input from, their

customers. Manufacturers can gain this customized and collaborative manufacturing capability using some of the aforementioned digital tools. They can also gain it with technology such as 3D printing. When connected via a digital manufacturing platform, an OEM, a customer, a 3D printing service provider, a material provider and other parties can collaborate in the production of a part for a modular housing project.

Modular construction represents fertile ground for distributed manufacturing using 3D printing, allowing manufacturing and supply networks to take advantage of cost-effective local production, customization and rapid delivery. Builders are already doing so, as illustrated by a recent project involving Russia-based Apis Cor (company slogan: “We print buildings”), where the basic components of a 400-sq.-ft. house were printed in about a day, using only one machine. Built to last

Just-in-time Production, Delivery and Deployment Manufacturers involved in a modular construction project can use digital tools to gather data that lets them know exactly how much they need to produce of a given component or module, and when a site is ready to take delivery of that component or module in preparation for onsite construction. These same tools can inform manufacturers of exactly which materials they need for production, how much of it they need, and where they can source it most cost-effectively. This helps suppliers throughout the chain manage stock levels, transportation and distribution requirements more efficiently.

This lean approach to manufacturing also enables companies to respond when there’s a pressing need for modular construction products, such as to provide temporary housing to people impacted by a natural disaster, for example. Modules can be transported to a site where they are needed, then quickly and easily assembled.

And let’s not overlook the broader reputational ramifications. Instead of people cursing developers, builders and construction companies for the long-term disruptions their projects tend to cause, people will react much more favorably when projects of the type that once took years to complete now take a matter of weeks.

Sustainability Modular construction is a lean process. Because modules are manufactured to exacting specifications, there’s less waste. Modular construction also creates new opportunities to use recycled materials. Then there are the community environmental benefits. Because the bulk of fabrication occurs remotely, actual construction becomes significantly less disruptive in terms of noise, emissions from construction equipment, and traffic flow around a site. Those benefits have prompted policymakers in places like Singapore to require that contractors incorporate modular elements prepared offsite into their project bids.

It’s another example of how modular construction, driven by digital solutions, is bringing the abstract concept of Industry 4.0 to life around the world. In this case, the whole certainly is greater than the sum of its parts.

Building.ca

BLD JunJul18.indd 39

39

2018-06-06 3:03 PM

THREE DIMENSIONAL News

Features

CanadianArchitect.com

Insight

Building.ca

CanadianInteriors.com

Canadian Architect, Building magazine and Canadian Interiors are published by iQ Business Media Inc. Subscribe to the weekly e-Newsletter of each publication: http://bit.ly/iqenews

BLD JunJul18.indd 40

2018-06-06 3:03 PM

site visit In Focus

Marking one of the first completed housing developments in Vancouver’s Cambie Corridor, Aperture by Arno Matis Architecture brings community living into focus through innovative and nature-oriented design.

By Shannon Moore

THIS PAGE Stratigraphic architectural themes echo the area’s mid-century modern architectural vocabulary. Cantilever decks and strong horizontal lines create a sense of lightness and lower the mas­sing profile.

Photography

by Michael Elkan Photography

When Vancouver’s Cambie Corridor became a major transit artery in 2009, a 30-year densification plan emerged. Community facilities, childcare spaces, parks and recreation, and more than 15,000 new homes were scheduled to transform the area into an affordable and desirable place to live.

Aperture by Arno Matis Architecture marks one of the first housing developments completed in the area, and sets the stage for imagination and innovation in the projects pegged to follow. Occupying a full city block in a single-family-transitioning-to-urban neighbourhood, the 98,000-sq.-ft. project blends six-storey multi-units with two-storey private villas. Water gardens, communal rooftop terraces, cantilevered decks, and landscaped courtyards dissect the various

spaces, encouraging social interaction and a connection with nature in this rapidly developing urban space.

Further strengthening this sense of connection is the project’s unique building skin and carefully designed façade. On the south side of the complex, windows are deep to provide shade, while units to the north are shallow to allow for increased natural light.

Inspired by a camera’s aperture, these façades help to heat and cool the units, resulting in thoughtful and progressive passive design. What’s more, each aperture is framed with mahogany veneer assembled between two layers of glass. This assembly process — the first of its kind — reduces solar gain and increases thermal resistance.

It also allows the wood to be preserved in its

Building.ca

BLD JunJul18.indd 41

41

2018-06-06 3:03 PM

THIS SPREAD The building’s campus-like massing creates interstitial social spaces within a traditionally introverted, singlefamily neighbourhood, and includes landscaped courtyards, mid-block water fountain and seating. For young buyers, smaller units were introduced to improve affordability.

A fully-communal roof space on each building increases the community feel and includes urban agriculture, a children’s play place and BBQ areas where all can share rooftop views.

42

BLD JunJul18.indd 42

June/July 2018

2018-06-06 3:03 PM

natural state by eliminating the need for stain, treatment, and maintenance.

“When the sun moves across the building’s façade, the wood really comes alive,” says Arno Matis, design principal and founder of Arno Matis Architecture. “Suddenly, you can see its depth, and from panel to panel, the variation in the grain comes through.”

Despite initial resistance and uncertainty from developers and decision-makers in the area, Aperture aims to inspire similar form in other Cambie Corridor projects. “There was some apprehension at first. The planners struggled with what we were doing and didn’t fully understand where we headed with the project; but I’ve been living here for almost a year now, and every day I get a renewed sense of excitement and content,” says Matis, who now owns a unit in the complex. “The project proves that there’s a market for innovation, and I hope to inspire other designers and developers to take similar risks. There’s always value in trying something new.”

Building.ca

BLD JunJul18.indd 43

43

2018-06-06 3:03 PM

spec sheet Product Round-up New & noteworthy for building specification.

ID311 Safety Guard Rail | Iido Industry Co. Safety Kage | Knaack This industry-first unit is a one-stop-shop ventilated cabinet that offers ample secure storage space for fall protection storage, emergency storage and PPE organization, and comes in a bold green colour for quick recognisability. The exterior of the unit’s double doors includes spaces for a fire extinguisher, an eye wash station and a first aid kit. Inside the cabinet, the left side of the unit is comprised of three shelves to store hard hats, vests and gloves, and the top shelf contains cubby holes for smaller safety items such as dust masks and ear plugs. www.knaack.com

44

BLD JunJul18.indd 44

IKO | new commercial roofing blog

Made of an elastic material, if a vehicle comes into contact with it the rail immediately bounces back into its original position, ensuring that neither the vehicle nor the guard rail will be damaged. The brackets that connect posts and crossbars prevent the guard rail from shattering. www.iido.kr

iCOMM Connectivity Platform | A. O. Smith This new connectivity app available on iOSand Android-ready mobile devices connects all Cyclone MXi models, which now come standard with onboard WiFi, making remote interacting with Cyclone water heaters easy and free. Once connected, users can interact with one or multiple heaters on the app, adjusting temperature and differential, viewing status and fault history, and setting custom alerts. www.hotwater.com

Contractors looking for best practices, profiles and case studies about interesting low slope roofs, now have a new resource as they look for information and inspiration. IKO, a leader in products and systems for roofing, building envelope, insulation and waterproofing, has launched a new commercial roofing blog. Visit the blog to learn more about IKO’s commercial roofing portfolio, tips for prioritizing your commercial roof workload, and more. www.iko.com/comm/ blog/

June/July 2018

2018-06-06 3:03 PM

Box Spotter | Ekin AI Surveillance Camera | Kogniz

Laser Distance Meters | Extech The DT-M series of three pro-grade laser distance meters make it easier and safer to measure distances, compute area and volume, measure angles, and stake out distances between objects.

Now, users can quickly take measurements over 300 feet with one-button, point-and-shoot convenience. Useful functions include Min/Max readings and indirect height measurements using Pythagorean calculations (standard height, height in two segments, and partial height) from two or three other measurements. www.extech.com

This California-based technology company’s first product, AICam, is an artificial intelligence surveillance camera that identifies people and threats in real-time, using video-based facial recognition and object detection through a combination of advanced camera processing and cloud services, allowing units to be added ondemand without additional hardware or infrastructure, so multiple cameras can work in unison to provide crosslocation people identification and recognition. www.kogniz.com

While most police tech products involve a complicated installation process, this portable automatic license plate recognition and speed enforcement system got recognized not only for its sleek design technology but also for its simple installation method by receiving a Red Dot Award for product design. The Box Spotter can be mounted to a pole or tripod and provide instant high-resolution images, 24/7 video surveillance and detailed analysis and reporting. www.ekin.com

Posi-Track Loader | ASV Holdings

Nexiez-S | Mitsubishi Electric Corporation A Red Dot Award winner, this slow-moving compact lift for low-rise buildings counteracts claustrophobia with the help of lighting reflected by the walls and doors.

The control panel was given a minimalist design with horizontal and vertical lines to ensure it will fit into most styles of architecture. www.mitsubishielectric. com

The RT-40 provides a productive alternative to walk-behind and stand-on mini skid-steer loaders, making it ideal for the rental market, homeowners or contractors working in tight spaces for anything from urban snow clearing to landscaping. Built for power and performance, the 1.8-litre, turbocharged 37.5-horsepower Kubota diesel engine produces 84.5 foot-pounds of torque.

The ASV unit’s cab provides rollover and falling object protection, safeguarding the operator from outside elements, and eliminates the fatigue that comes with standing. www.asvi.com

Building.ca

BLD JunJul18.indd 45

45

2018-06-06 3:03 PM

view point Walk With Joy

ULI Toronto’s Executive Director writes an open letter to the future Ontario provincial government.

By Richard Joy

Richard Joy is Executive Director of ULI Toronto. Previously, he served as Vicepresident, Policy and Government Relations at the Toronto Board of Trade, and was the Director of Municipal Affairs and Ontario (Provincial Affairs) at Global Public Affairs.

Follow him on Twitter @RichardJoyTO or email at Richard.Joy@uli.org

46

BLD JunJul18.indd 46

I write this letter days ahead of the Ontario provincial election. I don’t know who will receive this letter, other than it is likely a new premier with either a majority or minority government.

First off, congratulations! They say the people are always right. I hope you prove them so. Four years ago, in the wake of the provincial and municipal elections, I noted in a blog that the province was entering the longest election-free period ever for the two orders of government that most directly impact our region.

The political stability offered was a once-ina-lifetime opportunity for leadership boldness on key issues to propel our region forward.

Four years ago, it was clear that we needed to dramatically increase transit operating funding. Huge gaps in service levels were beginning to be filled by alternative means, including private shuttles and the ride-sharing industry. Today, the province has still not heeded cries from municipalities to restore support for transit operations since they were removed 20 years ago. Inexplicably, transit service levels have stalled in this most recent provincial term. We must now join with all other global jurisdictions and institute statelevel transit operating funding.

In 2014, the drum beats demanding road pricing were booming across almost every academic institute, think tank, and transit advocacy group, from right to left. Not surprisingly, in 2016 Toronto Mayor John Tory did do something bold: he advanced a proposal to toll the Don Valley Parkway and the Gardiner Expressway. But all three provincial parties blocked this proposal then. A new government has an opportunity to revisit this mistake now.

Road tolls not only spoke to a need to better manage our limited road infrastructure, they pointed to another languishing public policy challenge: the lack of dedicated funding for transit infrastructure expansion. Provincial finances are stretched to historic levels with rising demands on health and education. In 2014 the accumulated advice from two provincially appointed studies and myriad thirdparty reports all demanded dedicated taxation for regional transit. Please follow this advice.

Ahead of two major regional plan reviews (the Growth Plan and Metrolinx) the word of the day at the start of the last parliament was: alignment. The mismatch between transit planning and actual commercial and residential urban densities (realized or envisioned) was a growing crisis. And yet these reviews proceeded independent of each other, while new GO stations and subway lines advanced in a near vacuum of land use planning.

Now is the time to introduce needed policy rigor to ensure new infrastructure supports adequate densities, and that properties that increase in value because of these public investments also help pay for them.

Housing affordability was a raging issue four year ago, and it is boiling over all-themore today. But whereas the focus on affordability was mostly concentrated on the low income and the dearth of available units or subsidies resulting in then 16 (now 20) years of housing downloads to municipalities, today the issue is also on middle income or market affordability.

Notwithstanding the supply-supply-supply mantra of many industry voices, we need a holistic review of the forces that are driving housing costs up, including inclusionary zoning, “missing middle” incentives to make midrise density more affordable, and even gentler density opportunities associated with opening up the “yellow belt” within low-density neighbourhoods with such opportunities as laneway housing and strata severances to allow for separate ownership of traditional homes as seen in Montréal and Vancouver.

With your election, we once again find ourselves at the beginning of a new opportunity for bold actions on these key regional transportation, housing and development challenges that have languished for far too long.

These are not new challenges, but they have all become more acute.

As you know, boldness is something best acted on early in a term of office. So now is the time to seize the moment and act on the leadership opportunities that the last government allowed to slip by.

I look forward to your reply.

June/July 2018

2018-06-06 3:03 PM

IKO_Comm_ad_CA_1017.indd 1 BLD JunJul18.indd 47

2017-10-30 11:14 AM 2018-06-06 3:03 PM

Everything you need, in one place.

Procore’s easy-to-use platform connects your team, applications, and devices in one customizable, centralized hub. From tendering to closeout, collaborate in real time, on any device, so you can focus on growing your business—not just managing your project.

Standardize communication and centralize your documentation with our best-in-class PM solution.

All the tools to help you baseline, identify trends, and improve your quality and safety processes.

procore.com

Building_June-July_Fullpage_9.25x11.25.indd 1 BLD JunJul18.indd 48

1.866.477.6267

6/5/18 2:18 PM 2018-06-07 9:14 AM