Building Buzz

house prices may jump higher again and damage affordability once more.”

However, Moshe Lander, a senior economics lecturer at Concordia University, believes “the only thing the Bank can do to help housing affordability is keep interest rates so high that it pushes some Canadian households to default on their mortgages…and other Canadian households into a fire sale as they cash out their remaining equity. The solution to Canada’s ‘unaffordable’ housing situation is looser zoning laws, and that is a municipal issue, not a provincial or federal issue, and certainly not a Bank issue.”

Economics

Interest Rate Hikes Impacting Housing Index

The latest CHBA Housing Marketing Index (HMI), a leading indicator of the current and future health of the residential construction industry, shows the degree that interest rate hikes are having on reducing housing starts for 2023. CHBA’s 2022 Q4 HMI results showed industry sentiment dropped yet agan, reflecting lower sales and buyer traffic that will translate into fewer housing starts.

The HMI, which is on a scale of 0 to 100, was at an all-time low for both single-family builders (26.2) and multi-family builders (26). The HMI peaked in Q1 last year at 89.4 for single-family builders and 88.8 on the multi-family side, and has been declining since. With the HMI being a precursor to what can be expected in terms of starts in about six months, panellists are anticipating 28.5% fewer starts this year compared to last.

Rising interest rates are the primary culprit, CHBA says, having greatly curbed sales and overall traffic of prospective homebuyers, with some delaying purchases and others having difficulty qualifying for mortgages. At a time when more housing is needed, 72% of builders now say they expect to have fewer starts in 2023, and 30% have cancelled projects.

The Bank of Canada’s expectation to pause interest rate hikes in the coming months while it assesses the impact of the cumulative increases is critical for the home building business, CHBA notes. If core inflation has peaked, prospective homebuyers who have been waiting on the sidelines may have the confidence to start looking at home purchases again, helping to get new home construction back on track.

However, headwinds are still present in the market, as some who purchased homes over the past couple of years that are now being completed will have trouble getting financing at closing in the higher interest rate environment.

Legal

Hcra Laying Fines On Unethical Builders

Marking its second year of operations, the Home Construction Regulatory Authority (HCRA) may now impose administrative penalties—similar to a fine—on Ontario home builders or vendors who breach their legal and ethical obligations.

“These penalties are not just a cost of doing business; this is a clear message and reminder to the industry that unethical conduct and violations of the rules will not be tolerated,” says Wendy Moir, the HCRA’s Chief Executive Officer and Registrar.

The recent legislative and regulatory changes to the New Home Construction Licensing Act, 2017 (NHCLA) include allowing the HCRA to use the proceeds of administrative penalties to provide funds to negatively impacted consumers, depending on the circumstances.

Ontario is Canada’s first jurisdiction to provide such funds to consumers harmed by unethical and illegal behaviour of new-home builders and vendors. Penalties can also be imposed on people or companies who operate without a licence, which is illegal.

“These penalties—up to $50,000 per occurrence, depending on the contravention—are a first for the industry and will support an enhanced, fair and safe marketplace,” Moir says.

Ongoing education to facilitate compliance with the requirements under the NHCLA and Code of Ethics regulations will be critical to building an enhanced new home construction marketplace, HCRA notes. To support an informed industry, it has issued several advisories to licensees, reminding them of their conduct expectations and the potential consequences for not following the rules. The HCRA has also enhanced the Ontario Builder Directory to support consumers in their homebuyer journey by providing additional disclosures on builders, including information on condominium contract terminations.

Community Impact

Daniels Making A Local Impact

Want to know how much of a difference developers can make on the communities they build in? The Daniels’ 20212022 Impact Report, a follow-up to its inaugural report last year, is chock-full of statistics that demonstrate the degree in which the Daniels Corporation has affected its communities over the past 38 years, but 2021-2022 specifically.

The report outlines the builder’s commitment to creating vibrant, inclusive and sustainable communities that include social and economic infrastructure. The 2021/2022 section highlights the release of 33 accessible homes for sale or lease through the Daniels Accessibility Designed Program, with $197,000 being invested to support initiatives that accelerate accessibility.

Daniels also spent $903,000 in social procurement, including $638,000 in local art, built 284 new urban agriculture plots in its communities and engaged 400 new residents in garden programming. It also committed $5 million to the Daniels Partnership for Affordable Homeownership program.

The report also outlines major efforts toward sustainability, as well as collaboration with several not-for-profit, institutional, private and public sector partners to create pathways to affordable housing and economic and social development opportunities. This resulted in 34 mother-led families successfully moving into affordable homes at Evolv Rentals in Regent Park—made possible through a partnership with Sun Life, Woodgreen Community Services and the City of Toronto. Daniels also provided 41 youths with paid training and job placements in the past two years, and $158,000 was generated for the local economy through youth employment initiatives.

Anniversaries

Formica Celebrates 110th Anniversary

and notable Formica Laminate interiors since it opened in 1913.

It was originally founded as an industrial laminates company, but quickly pivoted to decorative laminate surfaces used in homes, restaurants and a wide range of other commercial settings. Its pop culture appearances have included the Brady Bunch kitchen.

Acquisitions

Westlake Acquires Palight Trimboard

Westlake Royal Building Products USA Inc. has completed the purchase of the Palight Trimboard business from Palram Americas, Inc. Based in Pennsylvania, Palram is a manufacturer of extruded thermoplastic sheets, panel systems and finished products. With the acquisition, Westlake Royal will expand its portfolio of brands offered under Westlake Royal Trim & Mouldings Solutions, which provides the finishing touch for the interior and exterior of a home.

“This strategic acquisition will add another high-quality brand of PVC trimboard to our growing portfolio of building products,” said Scott Szwejbka, V.P. and G.M. of Westlake Royal Building Products.

Appointments

DÖRKEN NAMES NEW PRESIDENT/ CEO AND V.P. OF MARKETING

revenue generation,” according to the company, which produces high-performance air and moisture barriers for commercial and residential construction sold under the Delta brand name.

Jablonka brings a wealth of experience to the role, with almost 25 years of dedication at Dörken Systems. A hands-on leader with an engineering and business background, he is highly knowledgeable in manufacturing, marketing, product management, applied building science, and advanced building products and technologies.

For the past six years as V.P. Operations & Marketing, his core focus was on developing and implementing new production technologies through the rapid expansion of Dörken Systems’ North American operations, which nearly doubled during that time.

Knobloch, meanwhile, will lead the sales, customer service and marketing team in North America, with the objective to profitably grow the business.

Knobloch joins Dörken with 15 years of sales experience in the building materials industry, starting his career with James Hardie Building Products. For the past 10 years, he managed multiple sales territories for TAMKO Building Products LLC, focusing on residential and commercial roofing products.

Appointments

Windsor Architect Named New Oaa President

Formica is celebrating its 110th anniversary this year. The company, whose Canadian HQ is in Saint-Jeansur-Richelieu, Quebec, is a leader in the design, manufacture and distribution of innovative surfacing products.

To commemorate the milestone, the company is releasing a calendar and book featuring classic patterns

Dörken Systems has featured two major appointments. Marcus Jablonka has been appointed President and CEO, while Brandon Knobloch has been welcomed as the company’s new V.P. of Sales & Marketing.

“In his new role, Jablonka will lead and bring fresh perspectives to the company’s strategy, as well as plans for sustainable growth and profitable

Settimo Vilardi has been named President of the Council of the Ontario Association of Architects (OAA), the regulating body for the province’s architecture profession. The Windsorbased architect was acclaimed to the one-year position at the first OAA Council meeting of 2023.

“I’m excited to see projects and initiatives I have been a part of reach their successful conclusion,” says Vilardi, previously the chair of the Windsor Region Society of Architects. Vilardi