Building October November 2017 by IQ Business Media

real estate development

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Retrofit Strategies Reporting and Benchmarking

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LIFE AFTER THE BACK COVER…

what’s on BUILDING.ca

READ > Preparing the Housing Industry for Climate Change Gary Martin and Ruth McKay urge builders to turn the market towards more resilient neighbourhoods.

67 05

CONTENTS

FEATURES

11 > Cultivating New Economies /

Land developers as investors in the start-up ecosystem of urban agriculture. By Andrew Sobchak & Laura LeBlanc

18 > The Way Down /

A new report outlines the various routes to take that get to the same goal of reducing greenhouse gas in large buildings. By Mark Bessoudo, Eric Chisholm & Akua Schatz

EXPLORE > Passages Insolites (Unusual Passages) Artists and architects explore the idea of passageways in downtown Québec City.

EXPLORE > One Bucket at a Time 5468796 Architecture with partners from México and the USA weave together thousands of five-gallon painters’ buckets to form two giant waves.

23 > Coming to Code /

Energy regulations for existing buildings are changing. Are you ready? By Dylan Heerema

26> Who’s In? /

Ontario’s mandatory Energy and Water Reporting and Benchmarking (EWRB) for large buildings is on the way. By Kevin Whitaker ABOVE IMAGE:

IN EVERY ISSUE

05 > Editor’s Notes 06 > Market Watch 08 > Legal 28 > Site Visit

tee ign ents

30 > Viewpoint

As evidenced in Vancouver, there has been considerable interest growth in the local food movement, as community and collaborative garden plots and other urban agriculture projects continue to increase on Park, City, and non-City land. (Image courtesy of Michael Ableman)

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Volume 67

05 Number Editor / Peter Sobchak Art Director / Roy Gaiot Assistant Editor / Stefan Novakovic Legal Editor / Jeffrey W. Lem Contributors /

Mark Bessoudo, Eric Chisholm, Dylan Heerema, Richard Joy, Laura LeBlanc, Megan J. Lem, Shannon Moore, Akua Schatz, Andrew Sobchak, Kevin Whitaker

Customer Service / Production Laura Moffatt 416 441 2085 x104 Circulation Manager circulation@building.ca Sales Manager Faria Ahmed 416 441 2085 x106 fahmed@building.ca Vice President & Senior Publisher / Steve Wilson President, iQ Business Media Inc. Alex Papanou 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 Website: 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 $8 for delivery in Canada, $10 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)

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Sticks and Carrots

While we know these things to be true, sometimes it bears repeating: our buildings represent nearly 12 per cent of the country’s overall carbon pollution, and more than a quarter of energy-related greenhouse gas emissions. This is why low-carbon buildings are both a form of climate mitigation and a wealth creation opportunity, and why governments at all levels in Canada are moving toward requiring new homes and buildings to be constructed to low-carbon, ultra-energy-efficient standards by 2030. But Canada still lacks a comprehensive strategy to achieve the significant reductions in carbon pollution from existing buildings that are necessary to meet our country’s climate targets. As the Pembina Institute points out in this issue, a suite of policies can support a transition to a low-carbon building stock, especially ones that involve pan-governmental cooperation in the development of stronger building codes and regulations. They also recommend (in another report) the launch and management of a large-scale loan guarantee program to backstop investments in key building retrofit initiatives, and this I feel is especially important, because from what I am hearing the technological evolution in the construction and maintenance of buildings is not being reflected in traditional ROI business cases – clearly an impediment to any goal of reducing energy consumption in the existing building stock. Which is why I was excited to hear about how the CaGBC, Green Business Certification Inc. (GBCI), and the Advanced Energy Centre at Toronto’s MaRS Discovery District are working together to bring the Investor Confidence Project (ICP) and its Investor Ready Energy Efficiency (IREE) certification to Canada. According to the press release, this global underwriting standard for developing and measuring energy efficiency retrofits is administered by GBCI, and signals to investors that a project has adopted best practices that can help reduce transaction costs and increase savings. The protocols offer investors a consistent roadmap for assessing risk and expected outcomes from deep retrofits. In the Pan-Canadian Framework, the Canadian federal government recognized the role that retrofitting existing buildings will play in reaching Canada’s targeted emissions reductions: a potential of up to 51 per cent in overall building emissions by 2030. Yet “the biggest barrier for the industry and ownership is access to financing,” says Thomas Mueller, president and CEO of the CaGBC and GBCI Canada. IREE-certified projects will provide clarity on the long-term performance of energy efficiency technologies and provide the necessary assurance required to create greater access to competitive financing which will be necessary to achieve retrofits on a large scale. Supported by the Ministry of Energy in Ontario, the Advanced Energy Centre is partnering with CaGBC and GBCI to pilot the ICP methodology for the Canadian market, bringing together a multi-sectoral group that includes owners, government, engineering firms, utilities and financial institutions with the goal of determining how ICP can help facilitate more retrofits in Canada. The property and construction industry is evolving dramatically as building practices respond to climate change and the need to reduce energy consumption. Yet many building owners and investors still rely on more traditional ROI metrics, a reality that must be addressed if we claim to recognize the need to achieve complete decarbonization of the building sector.

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We welcome your feedback. Send your questions and comments to psobchak@building.ca building.ca

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MARKE T The light at the end of the tunnel beckons By Gavrav Mathur

By all accounts, Alberta’s economy is witnessing signs of resurgence and the recession which plagued the province for the last two years is nearing an end. The question is whether this resurgence translates into growth for commercial real estate (CRE) in the region. We at JLL believe that it does and we foresee that, in 2017, the market will see an uptick in investment and leasing activity. The Trudeau government’s announced “supercluster” initiative along with Federal approval of the three pipeline projects (the Trans Mountain Expansion, the Line 3 replacement program and Keystone XL) has boosted spirits in the oil patch. With more than $14.5 billion in public and private spending underway, or to be invested, the Alberta economy will see economic growth in the coming years. Alberta has a lot going for it. The prospect for recovery this year, although modest, is now increasingly likely. Most economic indicators, including retail activity, housing prices and the labour market, are showing signs of stability and gradual improvement. Following two difficult years which saw a plunge in energy investment, a surge in unemployment along with a multitude of factors which caused an economic crash, seeing light at the end of a dark tunnel is welcome news.

Oil prices are showing signs of stability At the beginning of 2017, oil prices began to rebound after news of pipeline developments and production cuts by the OPEC lifted optimism in the market. For the most part, West Texas Intermediate (WTI) oil prices have stayed in the US$50-$53 range. The Western Canada Select (WCS) benchmark recently traded at its highest level since mid-2015 ( US$ 40 per barrel), and more importantly, at more than double the levels that prevailed at the beginning of 2016. The rebound in oil prices have led to a pickup in drilling activity as well, as both Suncor Energy and Cenovus Energy OCTOBER NOVEMBER 2017

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have announced large capital investments, with Suncor announcing a $5.2 billion spending program, and Cenovus investing $1.4 billion in its oil sands projects in 2017. We tracked net office rents in the Calgary CBD and compared them to crude oil prices (both rebased to 100) and noticed a considerable time lag. Even when oil prices were at the lowest due to the supply glut, net rents across Calgary’s office market only began to decrease after a lag of at least two quarters. We understand that reversing the phenomenon will take longer due to the high office vacancy rate which the market is currently experiencing. To counter this, landlords now are propping up rents by providing a slew of incentives to maintain building valuations. As oil stabilizes and capital projects come online, we note that the pace of negative absorption appears to be easing, with demand proving most resilient in higher quality spaces. “In the last 18 months, there have been 12 leasing transactions of greater than 50,000 square feet in Calgary’s downtown market, six of which were greater than 100,000 square feet,” says Brett Miller, CEO of JLL Canada. “Companies took advantage of the tenant market to secure long term space at low rents but these bargain deals will soon dry up.” The industrial market, too, is experiencing renewed optimism since the beginning of 2017. Oil and gas companies that were forced to downsize in the recent recession are actively absorbing vacancy in order to get ahead of the strengthening market. As such, vacancy and asking rents have begun to stabilize and we expect this trend to continue. Case in point, Southeast Calgary experienced 355,000 square feet of net absorption in the first quarter of 2017 and the vacancy rate decreased 40 basis points from 6.5 per cent to 6.1 per cent quarter-over-quarter.

Rebound in commodity and non-commodity manufacturing As of March 2017, manufacturing shipments rose to $5.8 billion, up two per cent over February 2017. From manufacturing’s lowest point in February 2016, we note the increase in manufacturing shipments in Alberta by 17 per cent. While this may not be enough to get back to pre-recession levels yet, shipments have been steadily increasing in the last 12 months which heralds a positive sign for the industrial market. Within manufacturing sales, refined petroleum products are making a comeback as shipments are up 53 per cent on a yearly basis. Even though the energy side of manufacturing is beginning to pick up and prosper, we note the growing optimism in the agri-food and food processing industry. Along with oil and gas, these sectors are expected to drive growth forward in Alberta. Beverage manufacturing, which includes micro-breweries and distilleries, is also profiting as businesses find new markets and opportunities. The Calgary south-central and northeast industrial submarkets are in recovery mode, albeit at a slower pace than the

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Source: JLL Research, NYMEX

Spotlight: Alberta

We have seen investor demand in Alberta increase significantly. The market perception is that a recovery phase is underway in both the economic and real estate fundamentals. We expect real estate transaction volumes to increase as market liquidity has returned.

—Peter Zorbas, executive VP for Capital Markets, JLL Canada.

southeast, with vacancy and asking rates stabilizing. As asking rates have nearly bottomed out, Calgary is experiencing an increase in overall tenant demand in these areas as the gap between asking rates and deal completion rates shrink. This sense of re-balancing and optimistic recovery across all sub-markets has led to the stabilization of vacancy rates and the first positive net absorption rates recorded since Q2 2016. Investment demand for industrial product in Calgary and Edmonton has increased as a nationwide lack of supply continues. With fewer projects left in the pipeline and with net rents beginning to stabilize, we expect availability to fall over the year. We note the rising interest among institutional investors that are currently looking to secure prime development or redevelopment sites and build customized product, as well as actively seeking core properties to acquire. For example, Calgary saw a spurt of investment activity in the first quarter of 2017, greater than all of the combined transactions in 2016. Slate’s acquisition of the Dream portfolio and HOOPP’s acquisition of a 50 per cent interest in TransCanada Tower provide important benchmarks for valuation.

Major infrastructure spend to come Calgary has ramped up infrastructure spending by approximately 30 per cent over the past year in response to the economic downturn and plans to continue that trend well into 2018. The boost in capital spending is a deliberate move taken by the city to meet its growing infrastructure needs while also stimulating the local economy. Overall, the Alberta government is investing a record $9.2 billion into health fa-

cilities, roads, maintenance, environmental initiatives and other projects under its massive construction, repair and upgrading plan. The recent Budget 2017 forecasts oil at $55 per barrel and bitumen production is set to ramp up to 2.9 million barrels per day. With new pipelines coming online by 2021, we expect the economy to improve even further.

The end of the tunnel Alberta’s fortunes are changing for the better. The province is witnessing an increase in drilling activity and job growth, and Bay Street analysts expect oil to hover in the US$50 to $60 range in the short term, rising to US$65 levels by 2020. Overall, we expect the economic turnaround to be gradual, a departure from Alberta’s typical “boom-bust” pattern of past economic cycles. While the office market may face a prolonged struggle to work through the overhang of past development activity, near-term prospects for the rebound appear brightest in the industrial market. Retailers haven’t given up on Calgary despite the economic slump, as the city still boasts the highest income per capita in the nation. This, taken together with home prices that have displayed resilience, has allowed the sector to withstand the downturn better than other commercial real estate segments. Noting the current investment environment, Gaurav Mathur is private investors are on the lookout for Research Manager, value-add opportunities across the ofCapital Markets at JLL. fice, industrial, retail and multifamily For more information sectors. b visit www.jll.com

Net asking Class A office rents vs. oil prices 160 140 Net rental rate (US$/sf) 120 100

Avg. WCS price (US$/bl) 60 Avg. WTI futures (US$/bl) 40

4Q16

3Q16

2Q16

1Q16

4Q11

3Q15

2Q15

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

20 4Q11

Source: JLL Research, NYMEX

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LEGAL Crash and Burn at the Court of Appeal Ontario surveyors back to square one after Ontario Court of Appeal kills their royalty claims. By Megan J. Lem

Although the historic record is a bit murky on the start of land surveying, the prevailing legend of choice sees Pharaoh Sesostris, circa 1,400 BCE, using survey science to divide parts of Egypt into equal plots to facilitate property taxation. Several millennia later, land surveyors play a critical role in land development and construction throughout the world. Certainly, there is no single development in Canada that is not contingent upon the deposit of a plan of subdivision, a condominium or strata plan, or any number of (and often a great number of) underlying reference plans, and land surveyors have a statutory monopoly on the preparation of all such survey plans. That said, all has not been well in survey land, at least not in Ontario. Indeed, a storm had been brewing between a group of disgruntled Ontario land surveyors and Teranet Inc., the private sector service provider that operates the Ontario land

The Court of Appeal decided that the issue turned entirely on the provisions of the federal Copyright Act, where copyright in documents that are “published by or under the direction or control of Her Majesty or any government department” belongs to the government and not the individual authors. registration system for the provincial government. This long simmering dispute came to a crashing, and seemingly decisive end recently when the Ontario Court of Appeal rendered its verdict in the long-running Keatley v. Teranet case. To understand the dispute and the decision of the court, some preliminary history lessons about land registration are in order. In Ontario, surveyors have been depositing survey plans in the local land registry offices for the past couple hundred years. Once deposited in the land registry office, the general public has always been able to buy copies of these deposited survey plans from the local land registry office for a relatively nominal price, which is paid to the province, not to the surOCTOBER NOVEMBER 2017

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veyor who made the survey plan being purchased. Ontario started outsourcing the operation of the land registration system (well, it is a little more complicated than a simple outsourcing, but for the purposes of court, that is essentially what it was) in the late 1990s. Greatly paraphrased, the surveyors argued that since outsourcing to Teranet, the public has been buying survey plans from Teranet (not the government directly as had previously been the case), and this change in logistics should somehow entitle the surveyors to a piece of the action (really, a royalty or some other fee) on each and every survey plan sold by Teranet. The litigation, which took the form of a hotly contested class-action lawsuit spearheaded by Keatley Surveying Ltd., took over a decade to wind through the courts, with a number of twists and turns, and with presumably commensurately staggering legal fees amassed by both sides. This litigation juggernaut seems to have finally come to an end a few weeks ago with the release of the Ontario Court of Appeal’s decision, resoundingly in favour of Teranet. Although a number of arguments were put forth by the surveyors, the Court of Appeal decided that the issue turned entirely on the provisions of the federal Copyright Act. Under the Copyright Act, copyright in documents (which include survey plans) that are “published by or under the direction or control of Her Majesty or any government department” belongs to the government and not the individual authors (in this case, the surveyors). The Court of Appeal concluded that the province’s stringent survey requirements and standards constituted the requisite “direction” and “control” over publication, and that the government’s outsourcing arrangement with Teranet did not alter the government’s copyright over the survey plans deposited in the land registry offices. The government was free to distribute survey plans from the land registry office, through Teranet, without a royalty or permission of the surveyors.

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The Court of Appeal distinguished the Canadian Copyright Act from analogous provisions in the equivalent Australian Copyright Act since Australian surveyors had been successful not too long ago in a similar lawsuit on similar arguments. The Court of Appeal concluded that, while the Canadian and Australian legislation were comparable to one another, there were key technical differences that would lead a Canadian court to a different conclusion. Although purely an Ontario decision (surveyors from other parts of Canada were not class action participants in Keatley v. Teranet), the issue would have had repercussions throughout the country since survey plans are ubiquitous in the nation’s land registry offices, and many provinces operate (or are considering operating) their land registry offices with some variation of a service provider. Furthermore, although this was always a case about survey plans, a different decision by the Court of Appeal may very well have opened-up a veritable Pandora’s Box as it relates to other documents deposited in the province’s land registry offices. Survey plans constitute only a small fraction of the documents that can be found in (and purchased from) the land registry offices and, as the Court of Appeal concluded, “no part of that fee has ever been payable to the

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.

land surveyor who prepared the plan of survey, or to the authors of any other documents registered or deposited on title.” Who knows what other copyright royalty claims may have emerged had the Court of Appeal gone the other way in Keatley v. Teranet. Ten years of litigation later, and the surveyors were left with nothing. Of course, as is often the case with these high-stakes, all-or-nothing lawsuits, the plaintiffs might never say “never,” and there is always the possibility of an appeal to the Supreme Court of Canada, but until that appeal is launched (which is not an automatic privilege and will require permission from the Supreme Court), the Court of Appeal decision seems very much the finale of this long-running drama, and to many (well, other than to surveyors) “no doubt, the universe is unfolding as it should.” b

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Cultivating New Economies

By Andrew Sobchak & Laura LeBlanc

Land developers as investors in the start-up ecosystem of urban agriculture.

By Andrew Sobchak & Laura LeBlanc

ike Layton doesn’t usually make apple sauce midday on a Friday. On September 15, though, the Ward 19 Councillor for Toronto’s Trinity-Spadina was leading a canning demonstration using Toronto-grown fruit for a dozen people at the Scadding Court Community Centre. The demonstration was part of the GrowTO Market festivities, where you could also tour the on-site aquaponics farm and container greenhouse, learn about vermicomposting and vertical gardening and, of course, buy local produce. A few feet away Councillors McMahon and Mihevic, by decree of Mayor John Tory, officially proclaimed the day as Toronto’s first Urban Agriculture Day. The celebration is fitting acknowledgement but likely long overdue for a movement about to radically change the city. The start-up world of urban agriculture in Canada has been simmering for some time and is approaching a boiling point of popularity and profitability. Partnerships along with business and financial models are all being vetted in advance of this expected lucrative tranbuilding.ca

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sition. The move forward is energized by innovative technologies and, occasionally, suitable planning policy. But to grow food requires space. And city space is at an all-time premium in Canada as renewable energy, public art, stormwater management and other interests vie for room. That’s why city builders as owners and regulators are carefully considering how best to invest their limited resources into urban agriculture.

The Rise of the Carrot City

tronomy and coinage of the term “foodie.” Initially focused on food consumption alone, projects in the now-broad spectrum also focus on food processing and food production in homage to the “makers” — the brewers, the bakers, the picklers and the urban farmers — vaunted in this decade. In their 2017 report Cultivating Development: Trends and Opportunities at the Intersection of Food and Real Estate, the Urban Land Institute (ULI) suggests six categories now define food-centered land development. Of all the variations, food production-focused projects have the greatest overall potential. They can improve employment, mitigate climate change and reduce dependencies on fossil fuels. Recently they have also demonstrated emerging capacities for profit and a triple bottom line. “There are more and more investors looking at how they can jump into this industry,” adds Nasr. “How far that will go remains to be seen, but people are looking at it in the business sense.”

Like most start-up industries, urban agriculture at this moment is messy, chaotic, sprinkled with compelling measures of failure, potential and success. It also has a legacy, one which Joe Nasr suggests North America forgot about for a while. “There is a long history of [people farming in cities], for centuries and millennia, all over the world,” says Nasr, a Toronto based consultant and associate of Ryerson University’s Centre for Food Security. “So in a way it is nothing new, but in this particular model — the social entrepreneurship approach — it’s new in this configuration.” Standing just west of the officers’ barracks, on the grass Nasr, also a member of the Toronto Food Policy Council, berm protecting the north flank of Toronto’s Fort York Nawhich was instrumental in the promotion of the city’s tional Historic Site, offers a unique view of the city skyline. Urban Agriculture Day, has been tracking forms of urban Across the train tracks stand the dim and derelict confines agriculture for eight years as part of his of the circa-1914 abattoir at 2 Tecumseth Street. A bygone era being overwhelmed by the future, it seems to struggle against a column of Carrot City initiative. Carrot City, which modern condos marching west out of the city centre. “examines how design at all scales can In 2014, the last tenant, Quality Meat Packers — after enduring years of doorenable the production of food in the city,” takes the form of a website, book and front animal-rights protests and complaints from new neighbours — moved international travelling exhibit, most operations 180 kilometers west into the rural heart of Ontario. The property recently featuring Canadian projects on was then purchased by Toronto-based TAS in 2016 with a bold vision for the futheir Fall 2016 tour. ture. The self-described “developers of mixed-use buildings, and entrepreneurs The rise of the Carrot City is an endfor the public good” are proposing Toronto’s largest and most diverse food-cenpiece of sorts to the food-centered land tered development project yet. development trend which began in the The plan calls for two residential towers, commercial rooftop greenhouses, 1980s, coincident with the rise of gascommunity gardens and underground aquaponics. In addition to developing food security research partnerships with post-secondary institutions and community organizations, TAS is also exploring food business incubation opportunities. The entire development is about one million square feet. But before considering urban agriculture at this scale, TAS tested small, first engaging in 2013 with a purely experimental rooftop box farm. “It wasn’t part of a marketing or PR exercise,” says Celia Smith, the company’s chief operating officer and former president of Artscape. “We wanted to explore a viable partnership with a community organization. We wanted to grow food for people.” TAS, a certified B Corporation, had invited CultivateTO, a non-profit organization operating a community shared agriculture program at the time, to install 72 EarthBoxes on the rooftop of their two-storey commercial building at 7 Labatt Avenue in the city’s Regent Park neighbourhood. The farm yielded 400 pounds of produce in the first year, which was all sold at local farmers markets or donated to local food charities. In the years that followed, more Earthboxes were added, TAS incorporated rooftop gardening features in two condo projects and installed a garden at their own mid-town headquarters. “There is an aspiration to get out of the small-scale pilot project model, and we’re interested in getting to the scale where it is a viable commercial entity,”

From Pilot to Profit

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Past, present & projected neighbourhood food assets in Vancouver to 2020

5500

5000 # of food assets

Source: City of Vancouver Greenest City 2020 Action Plan Pt. 2

6000

4500

4000

3500

3000 2010

2012

2014

2016

2018

2020

Urban argriculture & community kitchens # of neighbourhood food assets # of neighbourhood food assets (projected)

Source: Cultivating Development: Trends and Opportunities at the Intersection of Food and Real Estate. ULI, 2017

2020 target

says Smith. The Tecumseth Street plan, currently in pre-approval stage, is claiming to deliver on that aspiration. Smith acknowledges past experimentation bolstered TAS’s confidence to jump from pilot phase to profitable project, but, she admits, the emergence of commercial success stories in New York, New Jersey and Montréal emboldened the effort, too. Companies like Newark’s AeroFarms, leaders in indoor vertical and soil-free farming, and Montréal’s Lufa Farms, who pioneered commercial rooftop farming in 2011, both employ patented turn-key solutions which make scaling urban agriculture easier. In March 2017, Lufa Farms opened their third rooftop greenhouse farm, a 65,000-sq.-ft. facility in Montréal’s Anjou borough which more than doubled their existing production capacity. The buzz around Lufa Farms has been so intense, trend-hound Prime Minister Justin Trudeau even stopped in at Anjou for an inspection. Despite these market innovations, Smith doesn’t envision TAS as farmers. “I wouldn’t expect the best outcome to be developers getting in the business of growing food,” she says, emphasizing the critical nature of healthy, cross-sector partnerships. “Developers should be in the business of facilitating, and building the groundwork and opportunity for this, and in some cases fostering it and championing it.”

Growing People in Parking Lots

Six Categories of Food-Centered Land Development 1. Agrihoods: Single-family, multifamily, or mixeduse communities built with a working farm as a focus; 2. Food-centric residential developments: Single-family or multifamily developments built around community gardens or restaurants, with a strong food identity; 3. Next-generation urban markets: Food halls that are employing innovative food sourcing concepts to encourage food entrepreneurship, grow community, and support other components of mixed-use developments; 4. Food-centered retail and mixed-use development: Mixed-use and retail projects with restaurants and food stores as central development components; 5. Food hubs and culinary incubators: Regional processing and distribution centers that give food-based entrepreneurs access to commercial kitchen space, connect them to retail and institutional customers, or both; and

Michael Ableman, an organic farming and urban agriculture pioneer, has been 6. Innovations and innovators: Policies, approaches, and investors that are promoting sustainability, healthy engaging with developers Concord Pacific for five years on the False Creek lo- food access, and economic development. cation of his Vancouver-based Sole Food Street Farms. The largest urban farm of its kind in North America, Sole Food supplies 25 tonnes of artisan-quality produce to the city’s top restaurants and markets. The False Creek location is just one of four paved lots in Vancouver where Sole Food has brought bona fide farming to the city. But what makes Ableman’s operation even more remarkable are the employment opportunities he offers to the city’s most at-risk, downbuilding.ca

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town populations. Many staff manage addiction and mental health issues while training as urban agriculturalists under Ableman’s tutelage. Called the “farmily,” nearly half of Sole Food’s annual earned income, which reaches $750,000, is spent on programs to meet their needs. While growing row crops and orchard fruits, Ableman says, “we are really growing people.” Ableman’s ambitious outreach is supported by an equivalently robust business plan which utilizes vacant urban land for temporary farming operations. In 2008, he co-founded Sole Food Street Farms with Seann Dory and formed partnerships with landowners to mutually capitalize on the unused potential of idle prime real estate. As for their Main Street and Terminal Avenue Urban Orchard, Sole Food has leased the land from the City of Vancouver for $1 per year as part of the Greenest City 2020 campaign. “There are two challenges [for urban agriculture] in any city,” Ableman says. “The native soils are too contaminated, and the value of the land is too high.” As a solution to both, he incorporated mobility into his operating plan and developed planter boxes which could be easily transported. “They are stackable, nestable and are made of a highdensity plastic with forklift tabs,” he says, noting crops are readily moved when a short term lease is up. After five years at their False Creek location (two years longer than originally expected), Sole Food will move their 2,000-box farm this October as Concord Pacific readies the property and former Expo ‘86 site for other, undisclosed development. At a projected cost of $125,000, Ableman says the move was always a part of the budget and the project’s financial viability calculations. The mobility and flexibility of street farms like Sole Food, Ableman says, are particularly attractive to landowners, but there are other benefits depending on the jurisdiction. In his 2016 book Street Farm: Growing Food, Jobs, and Hope on the Urban Frontier, Ableman highlights “ideas to provide incentives [to developers] to include essential food production in communities.” One of these — tax incentives — has been offered by the City of Vancouver to the landowners where Sole Food operates. Ableman says he is encouraged to see people from all sectors realizing that food sources are as important as tennis courts or swimming pools. “It needs to be a part of how we live,” he says. “We can’t just keep having food delivered to us like baby birds in a nest.”

A Terrace-To-Table Ethic

Jonathan Westeinde, CEO of Toronto-based Windmill Developments agrees with Ableman. “Being able to grow your own food where you live has always been how humans lived. It’s a recent North American phenomenon to identify food growth as something that takes place outside of the city centre.” The 10-storey condominium Windmill and collaborators Curated Properties are building at the foot of DoverOCTOBER NOVEMBER 2017

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THIS PAGE: The BC Place location is the largest of Sole Food Street Farms’ four sites in Vancouver, totalling two acres and tended to mostly by residents of the Downtown Eastside.

Photos courtesy of Michael Ableman

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Photos by

The Plant is a mixed-used condo designed according to the same One Planet Living principles guiding Windmill’s Zibi project in Ottawa, with an extra emphasis on residential, urban agriculture.

ABOVE:

Source: Street Farm: Growing Food, Jobs, and Hope on the Urban Frontier, Michael Ableman, 2016

PARKING SPACE PROFITS

1 parking space can yield 500 lbs of produce at a market value of $1,500 C oncord Pacific’s undeveloped holdings at False Creek = 9 acres or 1,350 parking spaces, which could yield 650,000 lbs of produce or $2 million

court Road in Toronto doesn’t tackle food production on a commercial scale like Ableman’s Sole Food Street Farms or TAS’s Tecumseth Street project. However it does strengthen the connection between residents and their food, a vital part of urban agriculture philosophy. The Plant, a mixed-use building with 78 residential units and a flexible commercial space which can accommodate up to 10 retail, office or studio tenants, will be located on the original site of the much-feted Dufflet Bakery and will include “micro-gardening and food awareness” as central to the concept. Amenity spaces will include a communal roof with 18 custom-designed, five-foot-long micro-gardening plots, an indoor south-facing plant nursery for nurturing seedlings, and an industrial kitchen and lounge suitable for communal food preparation and consumption, taking inspiration from the Dufflet ancestry. The units themselves abandon the typical “shoebox” orientation of ‘narrow and deep’ for ‘wide and shallow’ to maximize light exposure for growing and reinstall large eat-in kitchens as a focal point in the home. Larger pantries, aeroponic growing towers for the terrace and a kitchen table which extends to the island to promote large gatherings are all optional, while a mobile herb garden-cum-compost sidecar accompanies each kitchen. The Plant is being marketed as a project which “fits with the foodie culture that has come to define Queen West.” Westeinde and team are trying to perfect a ‘terrace-to-table’ ethic even before occupancy in late 2019: The Plant’s presentation centre has been designed as a food-focused community space with a commercial kitchen for local chefs to host parties and a milk-crate community garden in the parking lot. When asked how food-centered amenities may have improved the salability of units in TAS’s recent Kingston & Co or The Duke residential projects, Celia Smith building.ca

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Creekside Mills site plan Berry field Farmer’s market Fruit tree orchard A Cottage lots Foot path

Picnic area Nut tree orchard

Frost Creek

Cutting garden Community common & club house Fruit tree orchard B Community garden

said, “it might be hard to separate those,” suggesting a fundamentally hot Toronto real estate market might have obscured any food-focused analysis. A few weeks after release in May 2017, all 78 of the one-to-four bedroom residential units in The Plant sold out, ranging from $500,000 to $1.4 million and from 750 square feet to 1,500 square feet in area. The retail and office units were released in September.

The Village Revisited

The connections to food that The Plant and other food-centered condominiums create are in a vertical context, whereas “agrihoods” are creating them in a decompressed, horizontal one. Formerly ‘conservation communities,’ agrihoods centre surburban-, exurban-, or estate-style neighbourhoods around an existing or purpose-built farm or orchard. Think golf course developments of the 1980s, but replace greens with greens. In the United States, agrihoods have transitioned from fringe to the front line of popularity with ULI now tracking over 200 projects ranging in size from under 100 units to over a thousand. 20 years ago, agrihoods numbered less than 10; now, premium lots are being sold for more than $2 million. The refocus of consumers on food lends part of the explanation, but agrihoods also cultivate community in a way suburbia never could, bringing back a village scale and focus lost with endless sprawl. Despite the popularity of agrihoods in the U.S., though, Canada is still waiting on its first large-scale operation. Creekside Mills at Cultus Lake outside Chilliwack, British Columbia, with 129 single-family lots centered around gardens and orchards, is the closest domestic example. Positioned as a subdivision with farmscaping and “recreational agriculture,” Creekside Mills sold out the 44 lots of their first phase in 2015 and are currently selling lots in their second of four phases. 100 kilometres west and slated for construction in 2018 is Tsawwassen’s Southlands development, which will be Canada’s first intentional agrihood. The 950-lot and 500-acre project south of Vancouver will include a 50-acre working farm, market square and bakery. Produce from the farm will also be sold or processed on-site while its hops will be distributed to local breweries. The operational models which agrihoods employ are as diverse as the communities themselves. For larger operations like Southlands, an on-site manager is typically hired to coordinate day-to-day farm activities, but allot-

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A Future with Food

Environmental zone

OCTOBER NOVEMBER 2017

ments can also be made available for residents to tend with hands-on training from expert staff. Monthly residential dues cover the cost of the collective farming ventures, and operate similarly as club fees in other nonfood-based gated communities. Walkable agricultural urbanism with integrated retail, restaurants and market spaces could make agrihoods even more popular than luxury golf courses were in their heyday.

“If every development considered the food needs of its residents and is able to produce a portion of those needs on site, wouldn’t that be brilliant? And, then by extension, if projects at scale were able to consider the food needs of their local community and not only deliver high-quality, locally grown food, but also offer employment on a local scale, that would be brilliant,” says Smith. “If we are considering locally grown food as a priority, along with all the other priorities, you can imagine the city would look quite different.” Joe Nasr likens urban agriculture in Canada to any start-up ecosystem: industry leads the way and regulation follows. “Ironically,” he says, “it is the emergence of industry that highlights some of the problems we didn’t realize were problems.” But as progressive municipal policy and cross-sector partnerships come online, the future and pace of food-centered land development will ultimately be determined by the rate of investment. As urban agriculture continues to transition from pilot phase to profit, an intriguing triple bottom line for city builders emerges. In the late afternoon of September 15, after a series of hectic but rewarding Urban Agriculture Day events in Toronto, Nasr offers a quiet admission: “I aim for urban agriculture to [one day] be banal,” he says, “to be an activity that is normal and integrated into everyday things, but not as anything special.” Until then, he celebrates the return of food to the city. b

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O t a t

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Photos courtesy of Knightsbridge

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THE WAY DOWN

A new report outlines the various routes to take that get to the same goal of reducing greenhouse gas in large buildings

OCTOBER NOVEMBER 2017

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RETAIL

RESIDENTIAL

AT IO

5.3

3.0

Source: WSP Natural carbon raodmap model

OTH

Details Developed by WSP for CaGBC, this report advances recommendations made in CaGBC’s 2016 Building Solutions to Climate Change report by analyzing how the type, size and age of large buildings, along with energy sources and the carbon intensity of regional electrical grids in Canada, can affect energy efficiency and carbon emissions. The report helps to identify which buildings would most benefit from carbon reduction actions, what actions are needed for each building type based on the regional grid carbon intensities, and what pathways are available from a policy and program perspective to accelerate the uptake of retrofits across Canada. Provincially-specific retrofit pathways are recommended that include a combination of recommissioning[i], deep retrofits[ii], renewable energy[iii], and fuel switching actions[iv].

13.8

TH AL

The Canada Green Building Council (CaGBC) has given the real estate industry a detailed enchiridion for reducing greenhouse gas (GHG) emissions from large buildings across the country, and in so doing has demonstrated the critical role that existing buildings play in advancing Canada’s low carbon future. The report, titled A Roadmap for Retrofits in Canada, demonstrates how targeted strategic investments in existing buildings represent a significant opportunity for substantial carbon reductions across the country. It shows how each region can contribute to meeting Canada’s climate change goals through a targeted approach to building retrofits and clean energy. Furthermore, the report provides government and industry with recommendations for increasing the uptake of building retrofits and introduces carbon as a key indicator of building performance. The report identifies four actions that could enable large buildings in Canada to achieve up to a 51 per cent reduction in carbon emissions by 2030 compared to 2005: • Recommission buildings that have yet to achieve high performance status by optimizing existing building systems for improved control and operational performance; • Undertake deep retrofits in buildings to high-performance standards such as LEED, focusing on energy reduction and ensuring that key building systems such as lighting, HVAC and envelopes are upgraded; • Incorporate solar or other on-site renewable energy systems in buildings; • Work with jurisdictions and the private sector to switch to low-carbon fuel sources in buildings.

7.6

T By Mark Bessoudo, Eric Chisholm and Akua Schatz

2016 large building carbon emissions by building type (millions of tons)

3.0

2.7

*Includes: warehouses, universities & colleges, shopping malls, entertaiment/sports facilities

[i] Recommissioning: optimizing the performance and operation of an existing building’s system. Following investigation, the measures implemented can include equipment maintenance, adjustments to controls, and minor equipment retrofits. This includes things like upgrading lighting, improving indoor air quality and replacing boilers. [ii] Deep retrofits: involves major system and equipment replacement or upgrade. Typically pursued during building renewal events such as envelope and major equipment replacement, new ownership or occupancy, and green building certification. It can include HVAC changes, window replacement, and other envelope and system upgrades. [iii] Renewable energy: while many forms of on-site renewable energy exist, including solar thermal, biomass, wind and micro-hydro, solar photovoltaic (PV) electricity generation is most commonly used in existing buildings. [iv] Fuel switching actions: switching natural gas and other carbon-intensive heating furnaces, boilers and distributed equipment to low carbon sources like high-efficiency electricitybased systems such as heat pumps.

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Commercial solar PV system (200KW) cost ($CAD/W)

12.6

$7.01 $6.50

9.4 $4.48

Electricity

$3.63

Source: WSP Natural carbon roadmap model

Natural gas

3.0 3.1

2.6

$2.96

$2.85

Q1 2015

Q1 2016

2.1 1.0 0.9

$3.62

0.5 0.1 NL

Among its key findings, the Roadmap concludes that: Achieving a 30 per cent (and potentially 51 per cent) building emissions reduction by 2030 is achievable by focusing on a targeted number of buildings that have the greatest potential to reduce carbon.

Q4 2009

Q4 2010

Q4 2011

Q4 2012

Q4 2013

wick and Newfoundland. In these regions, significant effort should be put into increasing the adoption of highly efficient heat pump technology. This will reduce emissions by 1.6 MT CO2e, or 25 per cent of the reduction activity needed.

Buildings including office buildings, shopping malls, universities, and arenas constructed between 1960 and 1979 across all provinces represent the age class with the largest opportunity for total carbon emissions reductions.

In provinces with carbon intense electricity grids, specifically Alberta, Saskatchewan, New Brunswick and Nova Scotia, 30 per cent of buildings will need to use renewable energy in order to meet the target. This will reduce emissions by 0.9 MT CO2e, representing 13 per cent of the reduction activity needed.

Alberta and Ontario currently emit the most carbon and therefore have the greatest potential for reducing emissions. This is due to the carbon intensity of Alberta’s electricity grid and the number of large buildings in Ontario.

The report notes how no one single action will reach our carbon emission reduction targets; rather, a combination of actions is required for Canadian large buildings to achieve our climate commitments.

All provinces will need to prioritize recommissioning for large buildings (between 25,000 and 200,000 square feet) and deep retrofits for older buildings (over 35 years old) in order to meet the target. These two actions will reduce emissions by a collective total of 4.1 MT CO2e, providing 62 per cent of the reduction activity needed.

A Shift in Focus from Energy to Carbon The report also emphasizes the importance of using carbon as a key indicator in evaluating building performance. While energy is often used as a proxy for carbon performance, because energy data is more readily available and relates directly to costs, evaluating a building’s energy performance alone fails to consider how carbon emissions vary between electricity grids across the country and between fuels used on site. What this means is that building owners, managers, tenants, service providers, and policymakers need to adopt

Fuel switching must be completed in 20 per cent of buildings over 35 years old across Canada. Currently, fuel switching is particularly attractive in provinces with clean electricity grids such as British Columbia, Manitoba, Québec, New BrunsOCTOBER NOVEMBER 2017

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Source: U.S. Solar Photovoltaic System cost benchmark - National Renewable Energy Laboratory

Total GHG emissions by province 2016 (MTCO2 E)

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Source: U.S. Solar Photovoltaic System cost benchmark - National Renewable Energy Laboratory

A single action will not reach carbon emission reduction targets. Rather, a combination of actions is required for Canadian large buildings to achieve climate commitments. a subtle yet important shift from exclusively addressing “energy use intensity” and “energy performance” to a view that also prioritizes “total carbon footprint” and “carbon performance.” If building performance is to be assessed based on carbon, fuel switching (electrification) will play an increasingly important role. This means making a switch from building systems that use natural gas or other carbon-intensive fuel to those that use high-efficiency electricity-based systems or low-carbon fuels like renewable biomass and low carbon district heating/cooling systems. The report notes that in order for the switch to electrification to provide carbon benefits, it needs to take place only in regions where the electricity grid’s carbon intensity is below 530 gCO2e/kWh (assuming a conservative air source heat pump efficiency (COP) of 2.5). Electricity grids in every province in Canada are forecasted to operate below this threshold by 2027. Therefore, regions that today have carbon-intensive electricity grids (Alberta, Saskatchewan, Nova Scotia) will soon realize a carbon benefit from electrification. Recommendations The report makes a variety of bold recommendations for federal, provincial and regional government. Canada’s future retrofit code should include a carbon metric along with energy thresholds.

A focus on energy alone will not yield the results necessary to meet our carbon targets and transition to a low-carbon economy. Carbon must be factored into the policy development for government levers that would trigger upgrades in building performance, including the retrofit code. Develop regional roadmaps for publicly-funded retrofits.

Each province should develop a roadmap for retrofits to target areas where investments can yield the highest economic and environmental benefits, taking into account building size, age, choice of energy sources, regional electricity grid, and building type. The Low Carbon Economy Fund and future funding programs should seek to deploy roadmaps to yield the highest impact for carbon reductions in commercial building retrofits.

Prioritize investments in retrofit projects that can scale.

Investments should target opportunities to scale interventions in building performance, such as university and college campuses, hospitals and military bases, where several buildings share the same owner and management company. A campus approach to retrofits may open the door for additional opportunities to increase building performance, such as waste heat recovery and neighbourhood renewable energy systems. Support mandatory energy benchmarking program adoption.

Access to data helps markets compare performance and assign value to efficient buildings, which motivates competition and improvement. In Canada, available building performance data has notable gaps. For example, in developing this report, the activity type of over one third of Canadian building assets could not be classified. Federal and provincial governments must enact and support energy benchmarking policies that will provide a foundational body of data to help owners, organizations and governments develop building performance improvement policies and programs that prioritize action on carbon. Increase investor confidence in Canada’s retrofit economy.

In Canada, the retrofit ecosystem is stunted by limited access to financing, low investor confidence in performance outcomes, and high transaction costs. With no standardized measure for certifying the ROI from a building retrofit or evaluating project risks, securitization is difficult for Canadian banks and financiers. Canada can demonstrate leadership by adopting the Investor Confidence Project (ICP) to unleash investment and support the existing building retrofit market. The ICP is a standardized framework for risk assessment and verification of building retrofits that provides commercial investors and building owners with confidence in project engineering, performance outcomes, and financial returns. A Roadmap for Retrofits in Canada will be followed by a third

CaGBC report, to be published in Spring 2018. It will provide

policy options that would overcome barriers that hinder the implementation of retrofit projects and identify the financing mechanisms necessary to stimulate the retrofit economy. b

Mark Bessoudo is a consultant, and Eric Chisholm is a Lead, with WSP’s Sustainability & Energy team based in Toronto. Akua Schatz is Director of Advocacy and Development at CaGBC. Visit www.cagbc.org for the full report. building.ca

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Coming to Code

Energy regulations for existing buildings are changing. Are you ready?

By Dylan Heerema

In order for Canada to achieve its climate targets and mid-century decarbonization goals, emissions from existing buildings must be significantly reduced and construction practices must rapidly evolve to reach net-zero ready standards for new buildings. Current policy direction among all levels of government in Canada assumes a shift toward net-zero energy ready construction for new buildings by around 2030. For example, the Pan-Canadian Framework on Clean Growth and Climate Change calls for the adoption of a net-zero energy ready model building code by 2030. The provinces of Ontario and British Columbia have committed to adopting similar requirements by 2030 and 2032, respectively, and the City of Vancouver is requiring new construction to be zero carbon emissions by 2030. Shifting new construction to net-zero ready by around 2030 will lead to a significant reduction in emissions from new buildings, but will not be sufficient to achieve deep emissions reductions in the building stock as a whole. In B.C., for example, it is estimated that this will result in less than a third of the reductions needed in the building sector by 2050. Therefore, the federal government will need to work with the provinces to create and implement a comprehensive strategy for existing buildings. Setting a vision for a decarbonized building sector by 2050 offers a clear, achievable guiding principle and a consistent approach for sub-national governments to follow. A vision for Canadaâ&#x20AC;&#x2122;s building stock that delivers on climate commitments is one that sees an evolution to ultra-energy-efficient construction, deep energy retrofits and switching to low-carbon fuel sources. While supporting measures such as financing, incentives, energy labelling and voluntary programs are critical measures for market transformation, deep emissions reductions in the building stock by mid-century are not likely to be possible without an ambitious and clear pathway set through codes and regulations. Responding to this need, The Pan-Canadian Framework has committed to the development of a national model code for existing buildings by 2022.

Roles and jurisdiction of different levels of government FEDERAL GOVERNMENT

DEVELOPS MODEL CODE (NECB) DEVELOPS TECHNICAL TOOLS SUPPORTS IMPLEMENTATION AND TRAINING

PROVINCIAL GOVERNMENT ADOPTS AND/OR MODIFIES MODEL CODES SETS CODES AND REGULATIONS

LOCAL GOVERNMENT/ MUNICIPALITIES DECIDES WHETHER TO AND HOW TO ENFORCE CODE

Model regulations for existing buildings

Provincial and municipal building energy codes in Canada typically make reference to one or more external standards, with modifications as necessary to meet the unique needs and goals of each jurisdiction. The most commonly referenced

MAY SET BYLAWS/REQUIREMENTS IN ADDITION TO PROVINCIAL CODE

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Necessary conditions and systemic interventions for deep emissions reductions CONSUMER AWARENESS

INTEGRATED DELIVERY

28 24 ENERGY DISCLOSURE

SIMPLIFIED ACCESS INDUSTRY CAPACITY

VALUATION OF NON-ENERGY BENEFITS

RETROFITS AT SCALE

DEMAND AGGREGATION INNOVATIVE FINANCING MACHANISMS

BUSINESS CASE CARBON PRICING RETROFIT CODES PUBLIC FINANCING

DEEP EMISSIONS REDUCTIONS

ELECTRIFICATION STRATEGY

whole-building standard in Canada is the National Energy Code for Buildings (NECB), published by the National Research Council and intended as a model code, meaning that it is intended to be adopted by authorities having jurisdiction (AHJs), but has no legal authority in its own right. MODEL CODE DEVELOPMENT PROCESS

The development of model codes in Canada, including the NECB, is undertaken by the Canadian Commission on Building and Fire Codes ( CCBFC), a committee established by the National Research Council. Model codes developed by the CCBFC are modified as necessary by provinces, territories, and other AHJs, and become enforceable building codes in those jurisdictions. There is typically a delay of several years between the release of a new version of the model code, and the adoption of those revisions by AHJs. The development of code requirements for existing buildings will be a complex task that will cut across the mandate of several of CCBFC’s Standing Committees. An existing building energy code will need to consider a “whole-building,” holistic approach to energy efficiency and carbon reductions, and should be developed with the expertise of a broad group of stakeholders. TRIGGERS

Retrofit requirements could be triggered at time of renovation, time of sale, or based on performance; there are advantages and disadvantages to each method. A time of renovation approach offers the advantage of leveraging work already being done, and reducing the incremental OCTOBER NOVEMBER 2017

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cost of compliance. However, time of renovation requirements may encourage building owners to defer capital investment, or to conduct upgrades without permits. Triggering enforcement of energy code compliance based on the relative performance of a building is often referred to as a Building Energy Performance Standard (BEPS), and requires pre-existing information on the energy performance of the building stock (benchmarking). BEPS promises smart regulations that achieve significant carbon reductions by targeting the worst performing buildings first. This is also, in a sense, the main weakness of the approach; buildings might underperform because owners lack the means or the knowledge to invest in these buildings. Requirements triggered at time of sale would tie code compliance to a transfer of ownership. Such an event provides a clear opportunity to require compliance, just as time of listing is used in some jurisdictions to require energy use labelling and disclosure. However, unlike energy labelling, energy code compliance may require substantial alterations, placing a financial burden on the buyer that would need to become part of the overall valuation of the property. COMPLIANCE

Traditional building codes are prescriptive; that is, they define the minimum standard that each building component must meet. An example would be a requirement that a wall assembly meet a certain R-value. While prescriptive codes have the advantage of being relatively easy to implement and enforce, they do not incorporate models of how the entire building performs as a system, and therefore do not always prescribe the most efficient, cost-effective or flexible solutions.

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Performance-based codes differ from prescriptive codes in that they do not mandate the use of certain materials, assemblies or methods, but rather define the desired overall performance level of the building. Performance-based codes are rising in popularity as computer-aided energy modelling becomes more widespread. Performance-based codes can be more complex to implement and verify due to the need for energy modelling, and sometimes for post-construction verification tests (e.g., a blower door test for airtightness). However, they offer the advantage of greater flexibility and efficient use of materials, sometimes leading to significant cost savings when compared to prescriptive pathways. ENFORCEMENT

Although many provincial building codes technically apply during alteration of buildings, enforcement of codes is often not observed for retrofit projects, leading to unpermitted, informal, or otherwise “underground” activity. Building owners may also choose to defer planned investments in their buildings due to a fear of triggering extensive requirements under the building code. The current lack of enforcement by AHJs in both new construction and retrofits is partially due to a systemic lack of adequate resourcing for those jurisdictions. Therefore, a national retrofit strategy must begin to address the funding and capacity-building needs of cash-strapped municipalities that have limited capacity to enforce codes. Adequate support must also be given to the building industry in the form of training and the sharing of best practices. Only with this support will ultra-energy-efficient construction become entrenched within the industry as the “new normal,” thus making compliance with more stringent codes feasible and acceptable.

Other components of a retrofit strategy

Although the development of codes by federal and provincial governments is a critical step in ensuring that the building sector meets decarbonization goals, codes are only one part of a holistic strategy. A comprehensive retrofit strategy for Canada is one that encourages market transformation and offers consumers and industry the tools and support needed to make regulations successful. The Pan-Canadian Framework commits to improving energy efficiency standards for appliances and equipment. Several building components that might be covered under appliance and equipment standards (e.g. windows, boilers, heat pumps and light fixtures) have a large impact on the overall energy performance of a building. Strengthening the stringency and coverage of equipment standards may ease the administrative burden of code enforcement by ensuring that key components are already mandated to be highly efficient under separate regulations.

Benchmarking, labelling and disclosure policies are foundational tools in enabling an energy code for existing buildings. Voluntary programs have existed for a number of years, and have allowed industry capacity to develop. However, to advance market transformation and collect data for regulatory design, the reporting and disclosure of energy information must become mandatory. Although previous federal incentive programs such as the ecoENERGY Retrofit program have been successful, maintaining the level of effort required to decarbonize Canada’s buildings stock by mid-century will require a sustained effort and long-lasting programs. There are multiple ways in which publicly raised capital could be used to accelerate retrofits, including the use of a centralized public financing authority (e.g., the Canada Infrastructure Bank or the proposed Ontario Climate Change Solutions Deployment Corporation), focused on energy efficiency and building renewal. The use of public funds to leverage private capital allows for a much larger and more sustained effort. Innovative repayment and credit enhancement mechanisms aim to encourage longer-term financing, increased loan security and lower interest rates. Repayment mechanisms include local improvement charges (LICs), utility on-bill financing (pay-as you-save), energy service agreements, equipment leases and soft loans. Credit enhancements include loan loss reserves, loan guarantees and interest rate buy-downs. Providing these services can help to cover some of the initial capital outlay required to upgrade a building or bring it into compliance, while ensuring that more stringent building regulations are not regressive, and that all home and building owners have access to low-cost financing for the purpose of energy upgrades. Developing and implementing code requirements for existing buildings will require much effort and collaboration across a wide range of industry stakeholders. These requirements must be ambitious and present a clear pathway to deep emissions reductions in Canada’s building stock by mid-century. At the same time, they must be fair and enforceable, and supported by programs to minimize financial and administrative burdens on building owners and municipalities. A model code itself has no authority unless adopted by a sub-national jurisdiction, therefore policymakers at all levels of government must collaborate in order for these requirements to be successful. Code requirements for existing buildings are only one part of a holistic strategy for transforming Canada’s built environment. Code development at the federal level must fit into an overall Dylan Heerema is an strategy for existing buildings, one that analyst with the Buildings addresses equipment performance and Urban Solutions standards, financing, training and caProgram at the Pembina pacity building, and the valuation of Institute, a Canadian non-energy benefits. b clean energy think-tank.

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Ontario’s Mandatory Energy and Water Reporting and Benchmarking (EWRB) for Large Buildings is on the way.

provide building owners a tool that influences changes that help the environment, promote efficiency, and grow revenue. The government plans to publish a portion of the EWRB information on Ontario’s open data website, making it easy for prospective tenants to compare how building owners are managing their utilities. The hope is that market forces will incentivize everyone to perform more energy efficiently. Although future changes are not concrete at this point, officials may be moving towards implementing further incentive programs or mandatory efficiency standards. Given the changes to rent control and the removal of above guideline increase for utilities, owners are already running a much tighter ship. Perhaps acknowledging the current lack of awareness for Bill 135, and the onerous task of developing and implementing a compliance program, the government has pushed back the roll out by one year from the originally proposed timeline. In the revised Reporting Schedule, note that each reporting date is when the reporting is due for utility data from the previous year, not simply a date to begin recording and reporting consumption. Additionally, reporting will require whole building data. This means that a multi-residential building greater than 100,000

WHO’S IN? The hydro policy on everyone’s mind may be the Fair Hydro Plan’s temporary rate relief, but there are some lesser-known regulations set to substantially impact the way Ontario’s building owners manage their utility usage. The provincial government’s passage of Bill 135 has introduced mandatory Energy and Water Reporting & Benchmarking (EWRB) for large buildings. These regulations require building owners to regularly report certain building and consumption data to Energy Star’s Portfolio Manager; effectively, it’s a way to quantify each building’s energy and water performance. Ideally, energy and water reporting will OCTOBER NOVEMBER 2017

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square feet will need to ensure it is tracking consumption during 2018 in order to report that 2018 consumption by July of 2019. In addition to utility consumption, there is a lot of other standard building data that owners will need to ensure they have available to include in the reporting. Portfolio Manager uses over 130 metrics to analyze and score buildings. This includes detailed information for things like gross floor area, parking garage square footage and times lit, pool square footage and type as well as some heating information. It’s crucial to record meticulously as this information will help determine the score assignments, and allow for more accurate benchmarking comparisons. Another important requirement is to verify data for buildings larger than 100,000 square feet. A certified professional on the owner’s staff or an independent organization can do the verification, which is due in the first year, and then every five years after that. In the years in between, those affected landlords will report without this check. Naturally, there are some EWRB program exemptions. Multi-residential buildings below 50 per cent occupancy do not have to comply. As well, owners dealing

Source: Altus Group

By Kevin Whitaker

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with financial difficulties could get a pass. If owners believe they should qualify for an exemption, they need to confirm it with the appropriate officials. Energy Star Portfolio Manager is the compliance platform used in every EWRB jurisdiction in North America, and the Ministry of Energy has selected this same program for use in Ontario. Portfolio Manager is an online platform, housed by the Environmental Protection Agency (EPA), that measures, tracks, and benchmarks energy and water consumption. It also indicates greenhouse gas emissions associated with the energy tracked. Buildings can be compared against other buildings and assigned an efficiency score from 1 to 100. This score takes into account various factors, including weather normalization, unit density, bedroom density, square footage, and more. By far, the most common way large owners ensure their compliance with similar regulations in other jurisdictions is

party experts who assist in compliance. Fortunately, right now there is still time for property teams to choose a compliance strategy and get it going effectively. If owners in other provinces are breathing a sigh of relief, they need to bear in mind that other Canadian jurisdictions are running similar pilot programs, including high priority ones in British Columbia and Edmonton. Other Canadian jurisdictions will be judging Ontario’s trailblazing experience to find out if program execution is easy or a hassle, and what lessons can be learned. More such laws are likely to pass across Canada in the coming years. Globally speaking, Canada is just catching up to other progressive jurisdictions that have implemented EWRB requirements to enhance environmental responsibility. Already in the United States, at least nine major cities and one state are on board. These jurisdictions believe that the health and other benefits of a cleaner environment and bet-

Phased mandatory reporting timeline

Commercial and industrial buildings

Multi-unit residential buildings

By July 1, 2018 (information for 2017 calendar year)

250,000 sq. ft. and larger

Not required to report in this year

By July 1, 2019 (information for 2018 calendar year)

100,000 sq. ft. and larger

By July 1, 2020 (information for 2019 calendar year)

50,000 sq. ft. and larger

by utilizing a trusted utility expense management partner. Experienced, independent experts can make sure the owner’s utility data gets where it needs to go, by the time it needs to get there, and in the format required for successful compliance. Utility expense management services typically already have utility data for the services they are providing owners, so it is a small step for them to provide that data to the required compliance platform, such as Energy Star’s Portfolio Manager, upon the owner’s consent. They are also better equipped to handle the bureaucracy of the various utility providers to obtain the necessary data. Building owners who wait until the last minute to create and implement a solid compliance plan may find themselves at a disadvantage and left to figure out a slapdash compliance process. Realistically, requests to the local utility providers may need to be made months in advance of the due date. Also, proactive landlords may book up all the third

ter long-term utility management are enough in the public interest to require EWRB. If there’s a bright side to all this extra work and transparency for landlords, it’s that digging deeper into utility data allows them to see the big picture. Once landlords see a detailed utility analysis, they tend to find ways to cut costs merely by having information that was previously unavailable. Furthermore, any effort to reduce the burden on the energy grid and lower costs for local utility providers could be good news for ratepayers and taxpayers. Also, by collecting information about utility usage by industry type, Ontario Kevin Whitaker is will be better equipped to make proDirector, Utility Expense active, versus reactive, energ y deciManagement at Wyse sions. Such planned decisions tend Meter Solutions Inc. For to provide better solutions for a lower more information visit cost than reactive solutions. b www.wysemeter.com building.ca

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S I T E

Frit and Form COUNTERCLOCKWISE FROM TOP LEFT:

The pavilion

building was designed to reflect a Pacific Northwest context and UBCâ&#x20AC;&#x2122;s campus in particular. Local woods animate the interior and provide material warmth in a cold grey climate. Visitorsâ&#x20AC;&#x2122; experiences are organized on an east-west axis linking views to the campus and Elm trees. With a goal to achieve LEED Gold certification, the Centre also features recycled materials, charging stations for electric vehicles, and construction waste management plans.

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KPMB Architects designs a form-filled, frit-clad building for alumni at UBC 29

Photos by Nic Lehoux

By Shannon Moore

The new Robert H. Lee Alumni Centre at the University of British Columbia (UBC) enlivens the campus through its sleek façade, warm interior, and rich local references. Designed by KPMB Architects in joint venture with HCMA Architecture + Design, the $12.8-million, 41,700-sq.-ft. building welcomes current students, faculty, and university alumni alike. At grade, the Centre is clad in a highly transparent, ceramic white frit that responds to Vancouver’s wavering climate. “When the weather changes from rain to shine, the exterior takes on a new animation,” says Shirley Blumberg, founding partner at KPMB. “I wanted the skin of the building to be kinetic and sensitive to changing light.” The service block that anchors the northeast quadrant of the building is similarly dressed in white shouldice concrete block, in reference to the extensive use of white brick strewn across UBC’s modern campus. As visitors approach the building, the frit and glass exterior dissolves away and the warmth of the interior shines through. Here, local wood decorates prominent surfaces, such as the stairs (Douglas fir) and ceiling (rough sawn cedar). On the first floor, a café, library, conference room, and reception area populate the space; while banquets and large events are held on the second floor. Alumni offices, meeting rooms, and a lounge occupy the third and fourth floors, offering 360 degree views of the surrounding campus. Lastly, a basement level features lab space for entrepreneurial students. Central to the interior is a staircase that bridges the different levels and moves in conversation with a nearby tree. “One of the few surviving Elm trees in British Columbia resides on the campus, so we protected it and integrated it into the design,” says Blumberg. “As you climb the stairs, you physically oscillate between the campus and the tree.” Vancouver is located on Musqueam territory, and thus careful attention was paid to include references to First Nations history in the design. Project architect Bruno Weber met with representatives to learn more about their traditions, and infused the building with colours, materials, and inscriptions significant to the land. “We wanted to engender the Centre with a sensitivity and reference to the Musqueam tradition,” says Blumberg. When the representatives toured the completed building, they noticed their history materialized in the staircase. “They said the form of the staircase captured the origin story of the two-headed serpent, from the way it morphs and intertwines,” she says. Though this reference wasn’t planned, KPMB was inspired to have organically captured the story in their completed design. b building.ca

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V I E W Year-to-date (Jan to Aug.) new home supply & sales by product type (GGH, excl. GTA) New Supply

Walk With Joy

10,000 9,000

ULI Toronto’s Executive Director sees densities increasing in leapfrog communities. By Richard Joy

Sales

11,000

8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000

If there was a stinging criticism of the provincially imposed greenbelt, designed to curb the Greater Toronto Area’s (GTA ) urban sprawl, it was the concern that homebuyers would be determined to pursue the dream of low density, detached homes and would leapfrog over the two-million acres of protected land to the “promise land” of exurbia. Headline stories of desperate families sleeping in their cars for days in mid-winter to get a slice of cul-de-sac nirvana became proof points of failed land use policies forcing higher densities in the GTA . Home buyers want their wide lots, and all that progressive land use policies were doing was pushing sprawl even farther out and car dependence further up. In other words, a public policy backfire. New data from the Altus Group suggests that these fears may be overstated. Altus Group reveals that conventional, suburban detached homes sales in the non-GTA Greater Golden Horseshoe (GGH) comprised just 36 per cent of new sales between January and August, as compared to 52 per cent in 2015 and 48 per cent in 2016. All nine of the largest cities in the outer edge of the region are showing an increase in medium and high-density land acquisitions in 2017 over 2016. 58 per cent of the new housing products brought to market in the GGH were townhouses and condos. That’s up from 48 per cent and 54 per cent for the same period in 2015 and 2016 respectively, reports Phong Ngo, Director of New Homes Research at Altus Group. No doubt this shift reflects the reality of the land economics as our buoyant real estate market ripples outward. But it would be impossible to ignore that the plans for exOCTOBER NOVEMBER 2017

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2016

2017

2015

2016

Link

Semi-detached

Detached

Loft

Stacked

Apartment

2017 Townhouse

panded transit service to such locales as Barrie and Kitchener-Waterloo are now exerting influence. The emergence of improved transit, even if some years away from operational reality, can have a significant impact on these outer ring housing markets. If the market trusts that this infrastructure will be built, it often reacts quite nimbly. In other words, a public policy success. Positive as these recent data indicators are, it will be important to track the total balance of sales and supply in these outer ring municipalities against that of the urban GTA. Altus Group data also Richard Joy is Executive shows that while the rate of growth in Director of ULI Toronto. the non-GTA municipalities was lower Previously, he served as than the GTA this year versus 2016, the Vice-president, Policy and rate of growth in 2016 was higher than Government Relations at the previous. Facilitating higher perthe Toronto Board of centage growth beyond the greenbelt, Trade, and was the no matter the density, would not be a Director of Municipal policy outcome worth celebrating. Affairs and Ontario However, if we are indeed turning (Provincial Affairs) at the corner away from post-war sprawl Global Public Affairs. as the dominant housing typology in Follow him on Twitter the most distant reaches of our urban @RichardJoyTO or email region, the skeptics will have been at Richard.Joy@uli.org proven wrong. New home buyers in all corners of our region seem to be settling into a new dream. If lasting, it represents a surprising and encouraging trajectory for the development of our region. b

Source: Altus Group

2015

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