Ontario Home Builder - Winter 2024

ONTARIO

Economist Benjamin Tal on the year ahead

What the affordability crisis means for society

A heated exchange from our HVAC experts

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Getting into Hot Water Tanks, tankless or heat pumps?

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REALITY CHECKLIST

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Reality Cheque

What might the affordability crisis mean for society, and can it be fixed?.

CONTENTS WINTER 2024 9 Association News

23 Trending

47 Product Focus

The three-phase plan of OHBA’s Interim CEO, your 2023/24 board of directors and committees, and Doug Tarry shares 10 net-zero lessons.

From a JELD-WEN window to Gauvreau bookkeeping and a Reliance car charger, what’s new for builders?

A look at new products, best practices and the multiple options when it comes to generating hot water.

43 Building Buzz

54 Frame of Mind

An international award for Daniels, substance abuse in the trades, green-building training, Toronto condos through the decades and R-Hauz rebrands.

In revitalizing a former shipyard, this UK project demonstrated how prefab construction can be about much more than mere efficiency.

19 Inside Storey Economist Benjamin Tal gazes into his crystal ball to predict interest rates and housing affordability. ohba.ca

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ON THE COVER As with the rest of the world, AI adoption is occurring rapidly in the residential construction and real estate market.

5 WINTER 2024 | ONTARIO HOME BUILDER

The official publication of the Ontario Home Builders’ Association Winter 2024| Vol. 40 Issue 1

EDITOR Ted McIntyre ted@laureloak.ca ART DIRECTOR Ian Sullivan Cant CONTRIBUTORS Tracy Hanes ADVERTISING Cindy Kaye, ext. 232 cindy@laureloak.ca PUBLISHER Sheryl Humphreys, ext. 245 sheryl@laureloak.ca PRESIDENT Wayne Narciso PUBLISHED BY Laurel Oak Marketing Ltd. laureloak.ca

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MASONRY + LANDSCAPE

PRODUCT COLLECTIONS

Take a photo of our QR code and sign up for digital updates and news!

Ontario Home Builder is published six times per year (Winter, Early Spring, Late Spring, Summer, Fall, Awards).

Discover new inspiration through our distinguished masonry + landscape

All rights reserved. No part of this magazine may be reproduced without the written consent of the publisher. © 2024

product collections.

For address corrections please email info@laureloak.ca or phone: (905) 333-9432.

You’ll find a selection of recommended products carefully curated into the best 5 axes of design.

ONTARIO HOME BUILDER | WINTER 2024 6

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possible arrangements based on our

Single copy price is $6.00 Subscription Rates: Canada $14.95 + HST per year, USA $29.95 USD Order online at https://www.laureloak.ca/subscribe.

CANADIAN PUBLICATION MAIL AGREEMENT NO. 42011539 ISSN No. 1182-1345

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THE BEAUTY OF STONE THE SIMPLICITY OF SIDING

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ASSOCIATION NEWS O H BA n ews , v i ews a n d eve n t s

BLAST FROM THE PAST Former president steps into the void to help steer OHBA

E

BY TE D M C I NT Y R E ven before the Ontario Home Builders’ Association experienced a leadership transition last summer, there were challenges to address.

Structural decisions had to be made, housing policies advocated for, relationships forged. OHBA needed someone to step in on an interim basis who was comfortable in the heat. Very comfortable.

And so the association turned to ohba.ca

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Neil Rodgers, a former OHBA president and long-time member—someone whose loyalty could be tapped and whose résumé checked all the boxes, having previously served as president of development firm Collecdev, executive vice-president of land acquisitions at Tribute Communities, and president of the Urban Development Institute of Ontario, where he was the co-architect of the merger of GTHBA and UDI/ Ontario that formed BILD in 2006.

“Neil was the perfect fit,” says OHBA President Dave Depencier, one of several insiders who asked Rodgers last September if he would consider the Interim CEO role. “Neil is well versed in government relations and has a great reputation in that space. He’s also very familiar with OHBA staff and the inner workings of the association.

He has the motivation and the passion to navigate and guide OHBA through this transition period. And with him being a past president of OHBA, it was just icing on the cake. It’s seriously an honour to work alongside him.”

As a presidential appointee on OHBA’s 2022 Board of Directors, Rodgers was aware of the hurdles facing the association during the transition period, and he couldn’t turn his back. “It was the board member, the past president, the association volunteer in me and someone who’s very passionate about this industry,” he says. “It was important that the industry and the association not lose a beat regarding issues affecting our members. We have some incredible executive committee and board members who also have their own jobs to tend to. But running the dayto-day affairs of the association is a full-time business.

“The early conversations with President Dave were about restoring stability to the organization, from staffing to the financial long-term sustainability of the association and restoring the OHBA’s reputation in the sector. The industry in general has taken some significant hits with the media, the public and elected officials,” Rodgers says. “There are a lot of things that require some time and attention. My job here is to help clean those things up and make the association and this position as attractive as possible for the next CEO.”

THREE-PHASE APPROACH Step one last autumn was to address concerns voiced by BILD concerning its relationship with OHBA whose 9 WINTER 2024 | ONTARIO HOME BUILDER

ASSOCIATION NEWS experience no doubt spoke to BILD leadership. The focus of the conversation was greater collaboration and effectiveness, reducing duplication of services and delivering member value. “Their opinion counts very heavily with people in government at the provincial level. We don’t have a choice in this business but to be highly coordinated and compatible in responding to government legislation with a united policy message.”

Rodgers says the BILD agreement felt “in some ways like a redo” of the merger he helped force nearly two decades ago. “It was an affirmation of why working together is so important.”

Step two for Rodgers and OHBA “is to add bench strength to our policy and government relations team.”

While OHBA has been working with a third-party GR team, Counsel Public Affairs, Rodgers says his association “needs to bring some people in-house.”

Step three of the three-phase plan will require a buy-in—figuratively and literally—from membership. “We need to consider a new modernized fee model,” Rodgers says plainly.

Simply put, OHBA is underfunded by members with respect to advocacy, government relations, research efforts and campaigns. While a critical duty of most industry associations is to influence government to avoid adverse policy and legislation, promote legislation that may enhance member activities, and educate elected officials and the public, OHBA has long operated on a budget that is not commensurate with its contribution to the Ontario economy, Rodgers says.

“We are at a watershed moment in the history of OHBA if we are to step up and advocate with strength to the government,” he says. “For OHBA to communicate its members’ interests on a multitude of policy files, we need more horsepower. So we’re going to spend this winter/spring identifying options for the membership to consider. This will involve very open communication with our board and our members across all our locals, being sensitive to the diversity of our membership base. We have small, medium and large builder-developers, and we have renovators, suppliers and ONTARIO HOME BUILDER | WINTER 2024 10

“We are at a watershed moment in the history of OHBA if we are to step up and advocate with strength to the government.” manufacturers. It cannot be a onesize-fits-all approach.”

If OHBA is going to be in a fair fight when it comes to advocating for its members, it needs to ratchet up its evidence-based approach, Rodgers says. “If all you do is talk to government, but you don’t have information and research that supports your arguments, you’re sometimes not taken seriously. I’m a strong believer in evidence-based research and information.

It helps distinguish fact from fiction. It helps scope the argument and makes you look more informed and intelligent relative to how some of your peers may approach the conversation.”

THE VALUE OF MEMBERSHIP It’s instinctual for many to ask, ‘What have you done for me lately?’ But OHBA has been part of multiple decisions that have saved its members megabucks. “We just identified an issue with municipal utility locates,” Rodgers notes. “With every jobsite, you have to call in the locates and understand where the utilities— sewer, water, cable, natural gas, etc. are. OHBA and other like-minded contractor and builder associations said we cannot live with a regime that would charge for this—it’s not something that has ever been in place.

And we won the day. Legislation was introduced in November that would codify that utility providers cannot charge for locates. That could save a builder-developer thousands—maybe tens of thousands of dollars—a year.

And look at OHBA’s work in keeping construction going during the pandemic. I can’t even calculate what that

would have cost—even for a single day”. These are the kinds of efforts OHBA provides to members regularly.

And if we don’t have the resources to be in that arena or at those tables, that’s a vital missed opportunity for our members. Whatever the fee increase proves to be, it will provide a significant return on investment over the life of your membership in the association.

“And I’ve made it clear to the executive that every additional dollar we can potentially ask for will be devoted to government relations advocacy and research,” Rodgers assures. “This is not about enriching aspects of the organization—this is solely focused on our ability to be a better communicator and advocate for our members at Queens Park.”

As for Rodgers’ personal calendar, he says he’s not looking for a fulltime engagement and hopes to have all three phases completed within a calendar year of when he stepped into the Interim CEO role. “If I were a potential candidate for this job, I’d probably not want it right now,” he says. “I think most people would like to see added stability before they apply. I’ve committed to Dave and the executive to stay until September. I don’t want to cut out on Dave partway through his presidency. We communicate almost daily and we are pretty simpatico in terms of our ideology on approaching issues. But I’ve also said, ‘If you find the right person tomorrow and they’re ready to take this on, don’t let me get in the way. Hire the best. The members and association deserve it.’” OHB ohba.ca

@onhomebuilder

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ASSOCIATION NEWS

CHBA President Sue Wastell and OHBA President Dave Depencier were on hand to celebrate Doug Tarry’s net-zero milestone in St. Thomas.

Net-Zero Lessons 10 from Doug Tarry

Doug Tarry Homes recently celebrated being the first in Canada to build and label 500 Net-Zero / Net-Zero-Ready homes, a significant accomplishment for sustainability in Canadian housing.

Though challenging, it was a rewarding journey. So, what are some of the lessons learned?

3

1 Have a team and a champion, knowledgeable energy advisor and HVAC designer available to the team.

2 Teach staff and trades the ‘why’—why we’re doing this and what we’re trying to achieve. Pay attention to your sales team’s concerns. They need the tools to sell the home—it’s an educational experience for your customers.

NZ does not work as well as an ‘option.’ It’s really challenging to work with two sets of details.

4 Moisture management and airtightness matter a lot. Get good at these two first.

5 Right-sizing mechanicals is difficult but not impossible. Reducing duct leakage and balancing loads requires a team effort.

ONTARIO HOME BUILDER | WINTER 2024 12

6 Low solar glass (SHGC under 0.25) is extremely important.

You cannot manage uncontrolled intermittent heat gains, and it’ll blow up the size of your cooling load.

7 Stop selling air conditioners. Air source heat pumps will not only provide more efficient cooling but also most of your heating. This will help improve performance and reduce the operational carbon footprint.

8 When done correctly, sub-slab insulation can provide your soil gas barrier, better indoor air quality, greater occupant comfort, a dryer basement floor and help reduce total energy loads.

9 Indoor air quality is extremely important. We use Graphenstone paints and specialty coatings for our homes.

They have paints that will absorb carbon, have only trace amounts of VOCs,

and use limestone as the preservative— not formaldehyde like other paints. It’s healthier for your customers, the planet and your workers who are being exposed to toxins without knowing it.

10 Your team must visit the jobsites regularly— your entire team. And be prepared to solve some problems along the way.

ohba.ca

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ASSOCIATION NEWS

2023-2024 OHBA OHBA Board of Directors Committees Dave Depencier

President (Chatham-Kent HBA)

Louie Zagordo

Past President (Sudbury and District HBA)

Mike Memme

First Vice-President (Niagara HBA)

Christina Giannone

Second Vice-President (BILD)

Tom McLaughlin Second Vice-President (Guelph & District HBA)

David Renfroe

Chair, Builders’ / Developers’ Council (Greater Ottawa HBA)

Heather Galloway

Terri Johns

Jon Rumble

Derek Cashmore

Katy Schofield

Chair, Renovator’s Council (Greater Ottawa HBA) Chair, President’s Council (West End HBA)

Chair, North Region Group (Sudbury & District HBA)

Glenn Evans

Bianca Bruzzese Treasurer (West End HBA)

Josh Kardish

Pierre Dufresne

Vince Lapico President’s Appointee (Windsor Essex HBA)

Peter Saturno President’s Appointee (Durham Region HBA)

ONTARIO HOME BUILDER | WINTER 2024 14

Co-Chair, Central Region Group (Waterloo Region HBA)

Steve Barkhouse

Co-Chair, East Region Group (Haliburton County HBA)

Secretary (Greater Ottawa HBA)

Geoff McMurdo

Co-Chair, Southwest Region Group (Perth Huron HBA) Co-Chair, Southwest Region Group (Chatham-Kent HBA) Large Local (BILD)

Brandon Campbell

Large Local (West End HBA)

Patrick Daniels

Large Local (Greater Ottawa HBA)

Co-Chair, East Region Group (Greater Ottawa HBA)

Julian Novick

Richard Lawrence

Jason Burggraaf

Co-Chair, Central Region Group (Niagara HBA)

Large Local (London HBA)

Chair, EOC - Non-Voting (Greater Ottawa HBA)

FINANCE Bianca Bruzzese, Chair

Christina Giannone Dave Depencier Louie Zagordo Mike Memme Tom McLaughlin Neil Rodgers, Interim CEO Sajida Jiwani, COO / CFO

GOVERNANCE David Ionico, Chair

Bianca Bruzzese Christina Giannone Dave Depencier Heather Galloway Mike Memme Neil Rodgers, Interim CEO Sajida Jiwani, COO / CFO

HUMAN RESOURCES Christina Giannone, Chair

Bianca Bruzzese Dave Depencier Josh Kardish Louie Zagordo Mike Memme Tom McLaughlin

ohba.ca

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Thank you for helping us build a greener Ontario — Looking forward to building the future together In a world with climate changes, new building codes and shifting homebuyer preferences, Ontario homebuilders are rising to the challenge. Enbridge Gas applauds your unwavering commitment to skillfully crafting energy‑efficient and sustainable homes better than code.

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INSIDE STOREY O n e - o n - o n e w i t h i n d u st ry exp e r t s

Predicting the 2024 Economy Interest rates will fall, says CIBC expert—but when?

By Ted McIntyre with Benjamin Tal, Deputy Chief Economist, CIBC

FROM PANDEMICS TO political flashpoints the world over, “it’s very difficult to predict the economy in this volatile environment,” admits CIBC Managing Director and Deputy Chief Economist Benjamin Tal. “The consensus a year ago was that inflation would peak at 4% and interest rates would go up to 3.5% to 4.5%. That was an underestimation.”

Still, the highly sought-after Tal took time to gaze into his crystal ball and ohba.ca

@onhomebuilder

share his educated opinion with OHB last month. The news, however, is perhaps not as rosy as we’d hope.

OHB: So where do we stand now on the Canadian economy?

BT: “It slowed under the weight of

high-interest rates—we’re expecting about 0.4% growth for the third quarter—but the U.S. GDP growth was, and remains, surprising, operating at about 4%. They are less affected

by higher interest rates because their mortgages are for 30 years and their level of debt isn’t as high as Canadians, so there’s no urgency to save. They’re still in a spending mode. But that will be the next shoe to drop. At some point, the U.S. will follow the example of the Canadian economy, and that’s when the 10-year rate will go down on both sides of the border.”

Why did it take so long for the higher interest rates to slow inflation?

“When the Bank of Canada was raising rates, we were spending our excess savings from the pandemic— sabotaging the monetary policy. So the Bank of Canada was impotent to deal with the situation because we were spending our savings. But now we feel the pain immediately.”

19 WINTER 2024 | ONTARIO HOME BUILDER

Did the feds push interest rates too far, too fast in the process?

“I personally think the Bank of Canada overshot. Given the sensitivity of the Canadian economy to higher interest rates, they could have stopped at 4.5%.

The last two basis points were overshooting. But you only ever know that for sure in retrospect, and if they were going to overshoot or undershoot, it’s a lot easier to overshoot and cut interest rates than to fight inflation.

“But there’s no question it affected the housing market. You cannot have a 500 basis points increase in interest rates over the course of breakfast without a major impact on the housing market. The lack of supply has protected prices until now. But new listings are showing up, especially in the condo space. Sales are in free fall, down 41% year-over-year and 15% below 2011, the last major market upheaval. The housing industry is facing its biggest test since the 1991 Recession.”

How serious has the impact of high rates been on new-home buyers?

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“Mortgage interest payments have increased 30%. That’s a factor impacting overall inflation. The question is, to what extent should it be part of the inflation story, especially given the fact that interest rate payments are determined by the Bank of Canada’s policy?

“It’s a given that debt delinquency/ default rates will be rising, and that’s why banks are putting money aside.

It’s something we’ve already taken into account (in our forecasts).”

Where do you see interest rates going this year?

“The big reset—the repricing of mortgages when most borrowers have to renew—will be 2025-2026, so we need to see interest rates falling before that. Our prediction is that the Bank of Canada will start cutting rates in May/June of this year and will cut by about 150 basis points over the course of the year, from our current 5% overnight rate to 3.5%. That will be followed by another 50 to 75 basis points during the course of 2025 to get down to 2.75%-3%. That will ease the pressure for some people’s mortgages.”

Will home prices continue to rise?

“We first have to go through the next six months or year, where the ONTARIO HOME BUILDER | WINTER 2024 20

ohba.ca

@onhomebuilder

pressure will still be there because of rising supply and demand remaining weak. But demand will continue to be a major factor moving forward.

However, developers are not building enough. Presales are down. Whatever condo activity you see now is a project that was sold years ago. Developers will not launch many new projects anytime soon. But we have population growth second to none other in the G7. It grew by more than a million (from July 1, 2022, to June 30, 2023).

So a year and a half from now, when interest rates are notably down and demand is back, the supply will not be there. So, it’s safe to assume that two or three years from now, we are going to see major pressure in the housing market, with a significant mismatch between high demand and low supply.”

For stability and predictability, should the Canadian government consider adopting 30-year-term mortgages as they have in the U.S.?

“That’s a debate that’s been going on forever. The way banks finance themselves in Canada is based on five years. That’s the way the system works right now. The 30-year rate in the market is very illiquid—that’s the issue. But yes, we have to look at other ways of lending to increase the threshold, with mortgage term jumps to 10 and even 30 years.

You expect a slowdown in the U.S. economy. Is that good or bad news?

“A slowing U.S. economy will have a negative impact on the Canadian economy due to the strong link between the two. But the minute the U.S. economy starts going down, their 10-year rate will fall, and ours will follow. So bad news can be good news.”

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What in particular might mess with your predictions?

“It’s a long list—the Middle East crisis can get worse, affecting the oil market and therefore inflation and food prices. There’s China and Taiwan. All predictions are based on the status quo. Economically, though, I worry about the inflation and the continued overshooting, which would result in more recession. I’d like to see inflation getting back to 2%. But that last mile is always the most difficult.” OHB ohba.ca

@onhomebuilder

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COMPUTER GENIUS Artificial intelligence is making a dramatic impact on the homebuilding industry.

GLOSSARY

By Tracy Hanes

Artificial Intelligence (AI): Combines computer science and data to enable problem-solving.

Augmented Reality (AR): Known as AR, and popular for gaming and branding,

ONTARIO HOME BUILDER | WINTER 2024 28

it projects virtual pictures and characters through a phone’s camera or video viewer.

Generative Pre-Trained Transformer (GPT):

Generative AI:

A family of AI models built by OpenAI. GPT is a type of deep learning model (modelled after the human brain) to generate human-like stories, conversations, reports and more.

Mimics human creativity to generate text and images, answer queries, create videos, reports, marketing copy, essays and much more.

Virtual Reality (VR):

Large Language Models (LLM):

Also popular with gamers, VR is a computergenerated simulation of an alternative world.

Using computers, sensors, headsets and gloves, it creates an immersive simulation of visuals and imagined places.

A type of AI that mimics human intelligence, can analyze large amounts of data, and can learn the pattern and connections between words and phrases. While GPTs are best known for text generation, LLMs encompass a wider range of applications.

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"H

Image by LALA Studio + DAEDA.

ow is artificial intelligence (AI) being utilized in the building industry?”

It seemed a logical starting point as I typed my question into ChatGPT. Created by San Francisco-based OpenAI, ChatGPT is a free-to-use AI chatbot that has existed since late 2022, has 180.5 million users worldwide, and automates text-based tasks. It uses large amounts of data and computing power to string words together in an understandable way.

The answer ChatGPT provided was long and detailed, but here are the highlights: In the building industry, AI is being used for such things as planning and designing projects, construction management, safety monitoring, material management, energy efficiency and sustainability targets, and quality control—and it can complete most tasks with lightning speed.

A lot of the foundational work for AI has been done in Canada. Toronto has the highest concentration of AI start-ups in the world. Montreal is another hub, where the company Mila - Quebec AI Institute has the largest concentration of university researchers in the “deep learning” field in one place. Mila is a collaboration between Université de Montréal and McGill University, in close cooperation with Polytechnique Montréal and HEC Montréal. Mila and sister institute Amii (based at the University of Alberta) and Vector (based at the University of Toronto) play a central role in the first national AI strategy in the world—the Pan-Canadian Artificial Intelligence Strategy—led by the Canadian Institute for Advanced Research, a global research organization.

As dazzling and disruptive as it is, AI still needs human input—for now, anyway.

So, what’s the human take on AI’s current and future role in the home building industry? “We believe this technology is a game-changer and phenomenal in what it does. I can see the future of architecture while designing with it,” says Kostika Lala, founder and principal architect of Toronto-based LALA Studio, a full-service architecture and design firm.

Lala’s studio has been exploring the possibilities that arise from integrating AI with architecture. “It’s so good and it saves so much time. When CAD (Computer-Assisted Design) came in, it threw the industry upside down, and everyone had to go out and get computers and learn the software. I see a similar phenomenon as a result of this.”

Lala is also co-founder of AI rendering engine Davinte, a Toronto-based start-up looking to integrate its AI capabilities into the mainstream architecture industry. Davinte is working with some of the world’s largest CAD and BIM software firms and hopes to bring its software plugin to users early this year.

The new kid on the block is generative AI, notes Frank Magliocco, Canadian Real Estate Leader for PwC Canada.

“We’re at the front end of the trend. It’s very broad and it’s moving very fast.” Traditional AI is nothing new (think Siri or Alexa). It responds to a particular series of input data. For example, if you play computer chess, the computer predicts its opponents’ moves based on strategies or rules it was programmed with. Generative AI learns from input data to create something new.

In a September webinar, AI and Housing Needs Assessments, Matt Parker, executive vice-president of data and analytics for Calgary-based HelpSeeker Technologies, said that while AI has 29 WINTER 2024 | ONTARIO HOME BUILDER

Running sketches and 3D exports through its AI transformer, Davinte can generate photo-realistic images such as this in a few seconds.

been around since the 2000s, there’s been a recent explosion in its use due to technological improvements that make it more accessible than ever. Technology that used to be difficult to interact with and cost millions of dollars to run has evolved into tools such as ChatGPT that provide free information within seconds.

However, “in terms of disruption, it’s no secret that real estate companies are laggers when it comes to adopting new technology,” says Magliocco.

There are a few exceptions in Ontario’s home-building industry, however. One is the Vaughan-based Plus Group, which is comprised of the companies RN Design, SRN Architects, SaleFish Software, Studio Uno and Coolaid Studios. SaleFish was developed as a platform that leverages tools and software to sell homes more effectively.

It came out of the need in the low-rise industry to deal with selling large sites and allowed salespeople to see in real-time what lots had been sold, what home styles could go on a particular lot, etc. It was adapted for the condo market and evolved into an online sales platform during COVID-19.

ONTARIO HOME BUILDER | WINTER 2024 30

Mike Robinson, chief technology officer at the Plus Group, sees AI as a valuable tool for its companies. “ChatGPT can free up lower-end labour and free people up to do what they were trained to do. When the photocopier came into offices, it freed people from copying to do less mundane work. For example, Robinson suggests GPT can be used to draw up contracts and agreements and ensure they are correctly written, or to compose client emails.

Lala says that while design is a focal point for his studio, it can also be used to achieve objectives such as structural performance, energy efficiency and aesthetic preferences. As well as integrating with Building Information Modeling (BIM) technology, AI can also be mobile and portable to provide ondemand design help.

Lala says it will aid with quality control, creating collaborations and designing better—and more distinctive—buildings. There are a lot of similar-looking buildings in Toronto because they are efficient to construct and the costs are known, Lala explains. Clients are hesitant to take on something

unique if the costs are uncertain.

However, AI technology can specify a project’s cost and other considerations.

“Humans will still create unique designs without GPT, but it can help improve it,” he says. “What I’ve done with OpenAI is take it and build our own technology, our own GPTs. That’s where the fun begins.”

VISUALIZING THE FUTURE

Magliocco says generative AI has many applications, from creating visual property mock-ups of developments before they are built, thus reducing costs, to producing content for marketing materials. One current application is predictive maintenance analysis, which takes data from a building, generates wear patterns, and addresses maintenance issues, such as when elevators need to be repaired.

AI is already being used to plan electrical and plumbing system routing. From a worksite safety standpoint, supervisors are being alerted to current and potential safety issues and construction errors while tracking workers, ohba.ca

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LALA Studios’ prototype applications for garden homes demonstrate the power to generate designs using AI. They also control form, materiality and weather conditions through AI prompt engineering—the process of structuring text that can be interpreted by a generative AI model. The application is still in the beta phase, but the company’s founder Kostika Lala is collaborating with software engineers and ML (machine learning) architects to develop it further.

machinery and objects.

Turner. The technology can handle vast It can also be used for ESG datasets and produce reports without (Environmental, Social and Governance) human error. For example, in a region to simulate potential changes to land of 30 very diverse municipalities, use, such as what happens if sea levels including cities, hamlets and villages, rise—something that’s particularly usethe AI tools can quickly provide multiple ful to the insurance indusassessments within hours, try, says Magliocco. It can fully customized to each be applied to zoning simumunicipality.

“It can be very lations to see the impact Turner gave the examdisruptive, but on property value. Or you ples of Brantford and St. it’s like when we can use it to screen tenant Catharines, two nearby were introduced applications to determine Ontario communities expeto the internet— suitable candidates, anariencing growth. Brantford it’s that level of lyze mortgage applications has a large swath of greenchange.” and decide which ones are field that can be developed at risk of default. into single-family homes, Lala says it could also while St. Catharines is —Frank assist in streamlining the mainly brownfield developMagliocco, approvals process, as AI ment and needs density Canadian Real could analyze basic buildadded. Even though they Estate Leader, ing drawings before they go are in the same jurisdicPwC Canada to municipal planning staff. tion, the two communities HelpSeekers uses AI are very different, and AI to help produce housing can help generate assessassessments. The pluses ments that reflect the have been speed and different approaches they’ll scalability, says company need as they grow, such as co-founder Dr. Alina the required infrastructure. ohba.ca

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Turner cited another housing assessment done using AI for Edwardsburgh/ Cardinal, a township in eastern Ontario south of Ottawa. The community has less than 10,000 people in various hamlets and villages. HelpSeekers had to dig into the neighbourhood level to identify pockets of emerging core housing needs/poverty/social challenges. Turner says the township had never done a housing needs assessment before but can use the report to advocate with the province to get transitional supportive housing capacity in place before the issues become significant challenges.

“Even though this is AI-generated, combining the human expertise from us, as experts in the field, with their community expertise, is where the magic really happens,” says Turner.

Currently, Lala is working on garden villa designs using AI. Through large language models (LLM) technology, his firm can design homes and precisely visualize them on-site. The renderings for the villas demonstrate the power to generate designs using AI while controlling form, materials and weather conditions through AI prompt engineering.

31 WINTER 2024 | ONTARIO HOME BUILDER

The application is still in the beta phase, but LALA Studio is collaborating with software engineers and machine learning architects to develop it further.

“Through my experience, I’ve done renderings and dealt with many natural habitats,” Lala says. “Let’s say you want to build a house on top of a mountain or on Mars. It’s very difficult to imagine what it can be like, but this can make it happen. It fills the gap between imagination and reality.”

Lala says AI can also track material availability. “As an industry, we can create a database where all manufacturers and suppliers list their stock and materials. You can allow AI to look through the database. If it says wood is cheap, we’ll go with wood for our garden villa. This is where the power of the technology really starts to take shape and helps us to build better buildings.”

AI can take care of mundane tasks at warp speed. But it can also predict complex problems on a project site or in a plan, then measure their potential impact and suggest options to avoid risk.

SEEING IN BELIEVING

Robinson predicts AR and VR will be “very powerful in the future. It’s very good at conveying design ideas to cusbe able to walk through and see what tomers and clients. We can look at plans different finishes look like. It is possible and visualize them, as we’ve been doing now, says Robinson, but his company this for 35 years. But customers can’t, hasn’t used it much yet for that. and our clients have trouble with it. We Robinson has also played with digital have to do sketches or 3D renderings. twin technology that creates exact repWhat AI is doing is amazing. It can take licas of spaces, such as buildings under sketches, plans and descriptions of the construction. The digital twin intefeeling we want to grates real-time data convey and render it. from a building with “We use AI for its digital representaVaughan-based Plus quick internal visution through BIM and Group is among the alization, but not for 3D modelling softcompanies actively final work for clients ware, sensors, surveyexploring how generative yet,” Robinson adds. ing data, etc. It allows AI can be implemented to “It’s not quite to the a construction team benefit its clients and five quality we like for our to get insight into businesses. One of those clients. But it works every building comwell for internal ponent. For instance, five firms is SaleFish, a discussions and quick they can see if a wall software that started as ideas on different is out a few inches or a sales tool at new-home sketches or to look at if a plumbing stack is launches to instantly possible finishes.” in the wrong place. It update sales, price Robinson says makes collaborations changes, site details, builders spend between team memetc., as well as providing millions on model bers easier and faster, analytics to builders. homes, but that won’t creates more efficient be necessary with virworkflows between tual reality software. contractors/trades, As well as seeing a and reduces issues. home that’s been But as game-changvirtually ing as AI can be, staged, there is still much homebuyapprehension. ers will “I think people ONTARIO HOME BUILDER | WINTER 2024 32

in the market have a lot of fear,” says Robinson. “Is it going to take jobs or disrupt things? At the Plus Group, AI will be a tool like a computer, fax machine or cell phone. It’s going to take our work to the next level.”

Robinson says ChatGPT is impacting marketing in particular. It can do lowerend tasks well and quickly, but full campaigns still need people to fill in the gap, take the framework and add their own flavour to make a product stand out.

“Clients can do ChatGPT. They are paying us to do things they can’t do,” says Robinson. “They are paying for our experience and many years of knowledge. We can layer amazing work on top of the generic stuff ChatGPT does. For instance, we have a fantastic writer, and it reduces the time she has to spend on research. It allows her to shift her time to concentrate on the actual writing to make a better product.”

ONLY AS GOOD AS THE DATA

“It needs human input,” says Lala. “In a best-case scenario, it can handle mundane, routine tasks and scheduling and have them done immediately.” He says it can help with design tasks such as setting up lobbies, entrances and exits and building statistics. “These are very time-intensive tasks that are very important, yet not creative. I want ohba.ca

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people to create more beautiful things.”

“I think it’s going to create new jobs—tech jobs powered by human leads,” Magliocco says. “This technology can go through so much data so quickly, but you need the human touch as well. AI will eliminate jobs we don’t need to do, and people who lose those jobs will move up to where they can be more productive. Right now we have senior architects in the office doing manual tasks on a computer.”

Adoption of the technology is going to happen very fast, says Magliocco. “At PwC, we’re investing $200 million in generative AI and embedding it in all we do. It will have a profound effect on real estate.”

Lala says all big design/architectural firms are adding new departments dedicated to the technology. “The information is based on dataset design, and all buildings are done through data.

The centre of it is data management and sorting and information sorting.”

However, adopting these new technologies must be done carefully and responsibly, Magliocco says. “You have to be systematic and not be chasing a lot of shiny objects.” The key is data quality and availability of data, he says. “If you have bad data, you will get bad information.”

Lala agrees. “The curation will be in the quality of data that the AI models have been trained with. Users will need to research, test and control what AI technology they are using.”

“AI tools are hugely powerful,” Parker notes in the HelpSeekers webinar. “It’s like a huge, powerful car that can go all these places and is convenient, but is still regulated and controlled. That’s similar to AI.” It’s why adopting the technology requires companies to work with professionals to build proper governance, thinking about data quality and how it will be assessed, Magliocca says. That’s one of the services offered by PwC, which works with tech giants such as Amazon web services and Microsoft and their advisors.

“Some companies have data scientists in their shop. It can be very disruptive, but it’s like when we were introduced to the internet—it’s that level of change,” Magliocco says. “You don’t need to be leading the charge, but you have to think about how to use it to disrupt—to give you a competitive edge.” OHB ohba.ca

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REALITY CHECKLIST What is the cost to society if the housing affordability crisis isn’t solved, and how can we fix it?

By Ted McIntyre

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35 WINTER 2024 | ONTARIO HOME BUILDER

TO ADDRESS

the present and future housing crisis, the federal government looked to the past last month. Dusting off a WWII-era housing plan, the intent is to build tens of thousands of quality homes, including multi-unit properties, using standardized, code-compliant plans. Cookiecutter designs? Yes, but their construction would provide the efficiencies that saw some homes—many of which remain—built in as little as 36 hours.

Last summer, Toronto City Council approved two-, three- and four-unit multiplexes across the city to help address the growing housing crisis.

The B.C. government recently committed to densification measures of its own that it believes will reduce housing prices by 7-14% over five years from anticipated costs. To some, the measures seem radical, but we’re running out of options when it comes to

ONTARIO HOME BUILDER | WINTER 2024 36

affordability, and the ramifications if we fail to solve the housing crisis are serious.

Here’s a little context. According to the Bank of Canada, in 1985, the median Toronto family income was approximately $32,000, while the average home price was just below $109,000. That meant a residence cost 3.4 times the median family income. As of December 1, 2023, the median Toronto family income was about $94,217, with the average Toronto home going for $1,187,646, according to the National Bank of Canada. That means the ratio has leapt to 12.6-to-1. On a national level, the end of Q3 2023 marked the worst housing affordability numbers in 41 years and the second-lowest mark ever.

And don’t look for any short-term relief, cautioned a September report from Desjardins. Entitled, How Low Can Prices Go in T.O.?, the report concluded

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that “even in the direst of economic scenarios, we don’t see affordability returning to Canada’s largest city anytime soon.” The most likely scenario, the report suggests, is a mild recession, “with Toronto house prices bottoming out by the end of 2024 “at about 5% below July 2023 levels,” which “would still only result in a return to early2021 levels.”

In the meantime, the cost of living is putting added pressure on homeowners and renters. In September, Equifax Canada noted a continuing uptick in fraud across automotive, credit card and mortgage sectors, spiking delinquencies by 86.9% in Ontario and 33.9% in B.C. year-over-year. In June, the numbers were sufficiently disturbing that the International Monetary Fund warned that Canada was now at the highest mortgage default risk among the world’s advanced economies.

Dubbed “strawberry box” and “Victory” housing, thousands of uniformly designed homes were built across Canada to accommodate WWII workers, and later returning veterans and a growing population into the 1950s and ’60s. The federal government is revisiting the concept to help deal with the current housing crisis.

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SOCIETAL IMPLICATIONS

The view from 10,000 feet shows that the divide between homeowner and renter wealth is widening, leading toward a two-tiered society. While the concept that wealth breeds wealth is hardly revolutionary, a November report from Statistics Canada, Bank of Mom and Dad, highlighted the advantage of parental property ownership.

The report noted that adult children born in the 1990s whose parents were homeowners were more than twice as likely to own a home than those whose parents were not homeowners. That advantage was highest in Ontario and B.C. “This may signal that in housing markets with higher property values, where higher incomes are necessary for ownership, parents’ property ownership or wealth plays a larger role in their adult children’s homeownership outcomes,” said the study.

TD Economics Managing Director Francis Fong was one of the authors of Digging Beneath the Surface: Is Housing Perpetuating a Wealth Divide in Canada?

“One of the points we tried to tease out in that report was that throughout history, there was this pathway for a nonhomeowner to keep up with the homeowner in terms of net wealth gains—if they saved diligently and were financially literate and invested assets. But now, the barrier a non-owner needs to climb to get into the housing market is much higher because rent takes up a much more significant proportion of disposable income, and housing prices have been more resilient than anticipated. And the gap now is worse than a year ago when we published the report!

“We are already seeing implications of what that wealth divide looks like in terms of declining civic engagement, declining faith in institutions, and feelings that our economic system isn’t working for the benefit of everyone,” Fong says. “There are many benefitting from the current system—wealth is actually building. But its distribution is creating a system where a lot of younger folks have been left behind and are finding it increasingly difficult to accumulate wealth and access homeownership.”

Housing affordability also plays a vital role in population growth.

Shockingly, there were 20,000 fewer children under age 15 in the GTA in 2021 than in 2016, noted MacLean’s magazine in “The End of Homeownership.”

And it’s not merely an exodus of young parents to more affordable outskirts.

“One of the most widely cited studies on the relationship between homeownership and fertility comes from the U.S. National Bureau of Economic Research, which found in 2012 that a 10% increase in housing prices led to modestly higher birth rates—but only for homeowners, who enjoyed a bump in their net worth. Birth rates fell among renters. In 2011, 44% of Canadians 25 to 29 were homeowners; by 2021, that had declined to 36.5%. In B.C. and Ontario, our most expensive provinces, the data shows that people wait longer than elsewhere to have children.”

Apart from the economic burden of supporting an aging population, “pricing out the middle class in our cities is going to cause all kinds of other issues,” suggests Dr. Mike Moffatt, senior director at the Smart Prosperity Institute and an assistant professor at the Ivey Business School. “Look at San Francisco’s Bay Area as an example. We’ve seen an out-migration to places like Texas and elsewhere because of the combination of housing demand due to the tech sector and some restrictive rules on building more supply. We’re seeing some of that in the GTA—increasing migration out of Ontario as young workers move to places like Alberta or New Brunswick in search of housing that they can afford. The rich stay where they are because they can afford to, and the lowest-income folks usually have to stay because they don’t have the means to move elsewhere. The middle class tends to be the most mobile. But when they move, you lose all the nurses and personal support workers you need to make a community work. You’re seeing Bay Area schools offering workforce housing where if you become a teacher, you’ll have a home as part of your job, so long as you remain in that job. Their inability to staff middle-class jobs should be a warning sign for us.

“And you also see an increase in crime due to a lack of affordability— people do what they need to do to get by,” Moffatt says. “That’s not to stigmatize anyone; this is what happens when cities are only affordable to the top 5%.

You see a loss of social cohesion.”

37 WINTER 2024 | ONTARIO HOME BUILDER

0.25

12%

0.25

New housing price index

10%

0.25

Housing affordability index

8%

0.25

6%

0.25

4%

0.25

2%

0.25

0%

0.25

-2%

0.25

1990

1995

2000

2005

2010

2015

2020

-4%

House Prices and Affordability Real house price

CONSTRUCTION THE FIXES 300

Toronto* Canada France Germany

WAGE GROWTH IN 2022 250 200

COMPARED TO ALL 150 INDUSTRIES

index, 2005 = 100

10%

100 50 2005

0%

4.6%

9.4%

ALL INDUSTRIES

CONSTRUCTION

SOURCE: STATISTICS CANADA, RBC ECONOMICS

ONTARIO HOME BUILDER | WINTER 2024 38

Vancouver US But there’s also a need for the right UK kind of housing to address the looming demand. “There have been 83 Australia

purpose-built rental projects totalling 20,288 units built in the past 20 years in Toronto, according to research firm Urbanation. This compares to 968 condominium projects totalling 234,535 units built over the same period,” the Toronto Star reported last month. Just as problematic, investors now own more than 50% of Toronto’s new condos, including 80% of the pre-construction sales—”and experts say they’re driving 2010 2015 up housing prices.”

That level of control is dangerous, as panicking investors can crash a market by unloading large numbers of residences, whereas most homeowners would typically cling to that asset during a downturn. Measures to penalize or discourage investment ownership, such as higher taxes on investment income, would lessen that vulnerability.

“On new leases, we’re seeing rents are up about 32% across Canada in the last 30 months,” Moffatt says. “Some of that is as a Covid rebound, but a lot of it is this high level of demand from population growth. The government needs to bring some rationality back to the international student market by building

more on-campus rental housing. That will lower the rate of return for investors, and they’ll start to move away from those markets, and we can get those single-family homes bought by families once again. If enrollments keep going up and up, I don’t see rents and home prices doing anything but skyrocketing.

“Overall, we do a pretty good job in this country of building one-bedroom apartments, but it’s more family-sized units that we need—three bedroomsplus—and that could be in various forms: single detached, row housing, etc.,” Moffatt notes. “But if the zoning is not there, that won’t happen.”

2020 Moffatt admits the Ford government’s 10-year target of 1.5 million new homes is probably unrealistic, beginning with a “roughly flat Bay Street forecast” for 2024, with housing plus or minus 5%.

“We’ve never built more than 850,000 in any 10-year span.”

But the revamped wartime housing measure—something Moffatt personally proposed to the federal cabinet last summer—is a great way to address the challenge. “It worked very well,” Moffatt says. “And at the end of the 1960s, we had the first wave of Baby Boomers leave their parents’ homes and move into apartments. And we had immigration increases back then too. We also had several policies to get apartment ohba.ca

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SOURCE: BANK OF CANADA

The end of Q3 marked Canada’s second-worst housing affordability mark ever.

Real house price

300

Toronto* Canada France Germany

250

Vancouver US UK Australia

index, 2005 = 100

200 150 100 50 2005

2010

2015

2020

*Adjusted based on provincial housing consumption deflators Sources: Federal Reserve Bank of Dallas, Statistics Canada, Ontario Ministry of Finance, and Desjardins Economic Studies

SOURCE: DESJARDINS

How Toronto Compares in World Affordability buildings built nationwide. I think we can do it again.”

Part of the issue is the dearth of prime real estate. A new study from Malone Given Parsons Ltd., commissioned by OHBA and BILD, indicates that there needs to be more land within municipal official plans in the Greater Golden Horseshoe and GTA to meet mid- and long-term population growth. Greenbelt lands must be opened to accommodate—not merely from a sheer space standpoint but for the impact it could have on lowering land costs for builders.

However, the biggest challenge might be the shortage of skilled trades workers—something the federal government no doubt needs to scrutinize in its immigration screening efforts. “The irony is that immigrating trades workers are moving to places beyond the GTA where they can afford to live but are not needed most,” Moffatt observes. “So I think a big thing for builders and developers will be figuring out how to be more productive—building high-quality homes by new methods while using less labour.”

Ontario has enacted some measures to encourage more young people to take up trades, but much more needs to be done—and quickly. The ‘silver tsunami’ of retiring trades plus increased demand means that the shortage of ohba.ca

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skilled construction workers “will get far worse,” warns Manny Neves, podcast host of The Construction Life. “My solution is that anyone retiring from the trades should ask for a government grant to educate the next generation of trades because they have that knowledge and will enjoy sharing it.”

Certainly the apprenticeship ratio needs to be increased to three apprentices per journeyman to bring it online with much of the developed world (Ontario currently has a one-to-one ratio.) As part of its $100 million investment over the next three years to speed up the recruitment and training of skilled tradespeople, Nova Scotia recently upped its ratio from 2:1 to 3:1.

THE COST TO BUILD

Speeding up the approvals process remains a critical step to incentivize builders to build cheaper and more homes. Perhaps re-evaluating proposed immigration numbers needs to be considered if most experts acknowledge it will be all but impossible to house them all.

Ironically, what’s missing in many discussions of housing affordability, though, is the actual product cost. “I

Investors now own more than 50% of Toronto’s new condos and have played a part in driving up prices.

39 WINTER 2024 | ONTARIO HOME BUILDER

The loss of middle-class workers from Toronto—leaving for more affordable housing—contributed to an alarming drop in the city’s population of youth aged 15 and under between 2016 and 2021.

remember going into city hall in 1999, and the building permit for a block of six townhouses was $3,000 total, and the development charges were zero,” relates Huron Creek Developments V.P. and OHBA Past President Rick Martins. “Today, the development charges would be about $53,000 per unit for that same townhouse, and building permit fees are about $2,000 per unit. And look at the cost of land!

We were buying lots at $1,500 a front foot in Kitchener then, but now they’re $15,000 a front foot.”

Add labour and materials to the equation, and you’ll have to look a very long way up to see the new bottom line, says Martins. “A house that cost me $99,000 to build in 1999 costs me $749,990 today.”

Another OHBA past president, Burlington-based condo developer Vince Molinaro, says his numbers are similar.

That means that even were all development proposals expedited and trades miraculously became plentiful, the physical cost of building a home would still exclude an excessive number of people from the housing market. But given that 31% of all new housing costs are taxes, according to the Canadian Centre for Economic Analysis, that’s a prominent place to begin cost-cutting measures. In an October Twitter/X thread, Republic Development President and CEO Matt Young examined a hypothetical but typical high-rise condo in an average mid-market location, measuring 250,000 square feet with 321 units. His firm examined the pro forma in the current tax and interest rate environment and ONTARIO HOME BUILDER | WINTER 2024 40

compared the average unit size (roughly 600 sq. ft.) to the same unit in a tax- and government-charge-free environment.

The collective charges added up to $57.5 million—24% of the total budget.

“We next looked at the impacts of those taxes on people looking to buy a home,” Young continued. “In the status quo scenario, approximately 3.6% of households in all of Toronto can technically afford to buy an average 600 sq. ft. condo ($860k incl. closing)! You need $233,000 in annual household income to qualify for the requisite mortgage. No wonder we are in a crisis! But when you remove the taxes, the story changes a lot.

There are roughly $210,000 in taxes and government-related charges per unit, so without those, it comes down to $650,000 all in, which now 22% of Toronto households can afford. I’m not saying that is affordable for everyone, but it does take a huge amount of pressure off people and resets the crisis in a meaningful way; 600% more families can now afford that cost, and it trickles throughout the spectrum of housing options. For example, a studio, the most affordable ownership product available, would be attainable by 47% of households in Toronto. For a young couple, small as it may be, that means a sense of housing security.”

“The government is starting to address this with rental housing by removing the HST,” Young says, “but this really should apply to all housing and should go farther, looking at reducing development charges, land

transfer taxes and other fees.”

On top of the enormous bank account of development charges possessed by Toronto—estimated at $2.6 billion in 2021—increasing property taxes would help replace development charges in financing municipal infrastructure costs, says Young. “Toronto has one of the lowest property tax rates of any municipality in the country and by far the lowest in Ontario. In addition, the assessments are so outdated that my home, which I purchased nearly 10 years ago, is still assessed lower than what I paid. For too long our government had had a perspective that growth should pay for growth and, as a result, have piled on taxes into the construction of housing while reducing the property taxes that existing housing should pay, effectively leaving first-time homebuyers and new immigrants to shoulder the burden. I don’t think Toronto needs to raise the mill rate, but they need to bring assessments up to date, allowing them to remove much of the municipallevel taxes from new construction. The provincial and federal governments should follow suit and remove the HST for all housing, not just rental. Those two moves would significantly improve affordability overnight.”

The prohibitive costs of land and code compliance remain two sizeable impediments, and both will factor into the viability of the feds’ proposed WWIIstyled housing initiative. But it is more than the government’s responsibility to solve this monumental challenge, Moffatt reminds: “It’s everyone’s.”” OHB ohba.ca

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Invest in your team’s future.

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The OHBA Job Ready Program is filling the labour gap by matching eager job seekers with entry-level jobs in the residential construction industry.

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BUILDING BUZZ N ews a n d m ove s f r o m t h e i n d u s t ry

S U S TA I N A B I L I T Y

Built Green Steps Up to Encourage Pro Renovations

Daniels Partners for World Economic Forum Award THE DANIELS CORPORATION and the Toronto Community Housing Corporation (TCHC) shared the PublicPrivate Collaboration Award at the November World Economic Forum’s 2023 Urban Transformation Summit for the first three phases of the Regent Park revitalization. The award acknowledges successful private-public partnerships that establish a benchmark for excellence in urban development.

A once-stigmatized social housing community, Regent Park, which spans 69 acres in Toronto’s Downtown East, has been transformed into an inclusive, mixed-income, mixed-use neighbourhood, serving as a world-leading example of cities collaborating with local communities and other stakeholders to improve lives and create more resilient economies.

Daniels embraced a “whole of community” approach to the ohba.ca

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development, collaborating closely with TCHC and residents to bring the vision for an inclusive and thriving neighbourhood to life.

“Looking to the future of Toronto, one of our most pressing tasks is building thousands of new affordable housing units so that everyone can find a place to call home,” observed Toronto Mayor Olivia Chow. “The collaboration between The Daniels Corporation and Toronto Community Housing is a great example of what strong partnership can create, and the results are visible in Regent Park.”

What sets Regent Park’s metamorphosis apart is its grassroots foundation, a stark contrast to many innercity revitalization efforts. Rather than being imposed from the top down, Regent Park evolved from the ground up, with local voices taking centre stage from the very beginning.

Built Green Canada has partnered with Blue House Energy to launch a Whole-House Energy Retrofit online training course.

“As part of our mission to progress industry, we offer learning opportunities that enable incremental improvements to energy performance and comprehensive sustainable building practices,” says Built Green Canada CEO Jenifer Christenson, whose non-profit organization offers a full suite of affordable, third-party certification programs for the residential building sector, including renovations and restorations. “Given most of Canada’s housing stock is existing homes, we need to identify ways to encourage renovations, and one such way is education.”

The Whole-House Energy Retrofit course, which aligns with Built Green’s recently released Renovation Program, builds on industry knowledge, providing the bigger picture of an “envelope-first” approach. It encompasses the basement to attic, assessing energy usage and building envelope, air leakage and drafts, insulation levels, heating/cooling problems, and how to identify and address dampness and mould or mildew.

Participants will gain an understanding of what a whole-house energy retrofit is, what it’s meant to achieve, what one needs to know when working in the industry, and what to look out for when installing energy efficiency measures in homes—including avoiding unintended consequences of tightening the building envelope.

“Professional development is expensive, and if you’re a small renovator or a builder, you don’t make money unless you’re on the tools—and so, selfdirected, on-demand training bridges that gap,” says Blue House Energy CEO Shawna Henderson. “Micro-businesses, those with less than four people on payroll, make up over 70% of the industry.”

The curriculum aligns with Natural Resources Canada’s EnerGuide for 43 WINTER 2024 | ONTARIO HOME BUILDER

Building Buzz Houses and dovetails with Built Green’s Renovation programs. For further information, contact Karen Podolski at kpodolski@builtgreencanada.ca or (855) 485-0920.

BUSINESS

Trio of Key Appointees for Great Gulf Great Gulf Group has bolstered its senior leadership ranks with three key hires. Jay Wong has joined the company in the newly created position of President, Resorts and Leisure; Corinne Pruzanski has stepped into the role of Chief Legal Officer (CLO); and Kristopher Wojtecki has become Chief Operating Officer (COO).

Jay Wong

Corinne Pruzanski

Kristopher Wojtecki Wong will lead the expansion of Great Gulf’s Resorts and Leisure portfolio through innovative resort developments and exciting new operational concepts. A seasoned hospitality leader, he joins Great Gulf from Exclusive Resorts, a membersonly luxury travel club. Earlier this year, Great Gulf announced plans to develop a ground-breaking masterplanned ski village and luxury resort community in Killington, Vermont.

The project will span over 1,000 acres and bolster the current portfolio, which includes Taboo Resort on Lake Muskoka and two new developments in Collingwood.

ONTARIO HOME BUILDER | WINTER 2024 44

As CLO, Pruzanski arrives as an accomplished general counsel and senior executive in the commercial real estate industry in Canada, the U.S. and Europe. She was General Counsel for Canadian Apartment Properties REIT for more than a decade.

Wojtecki will take on the new position of Great Gulf COO to lead growth strategy. His responsibilities include capital formation, portfolio management, and further elevating the company’s culture and stature. He previously had an extensive tenure at the Public Sector Pension Investment Board, culminating in his role as managing director of real estate investments.

H E A LT H A N D SA F E T Y

Addressing Substance Use in the Trades The Canadian Centre for Occupational Health and Safety (CCOHS) has launched a suite of free resources in partnership with the Canadian Apprenticeship Forum (CAF-FCA) to help employers in Canada create awareness about substance use and reduce stigma.

The online Substance Use in the Trades courses—Being Aware, Harm Reduction and Supporting Your Wellbeing—aim to help raise awareness about the impacts of stigma and the importance of a safe and supportive workplace. The courses explore how workplaces can take a harm-reduction approach to substance use, what to do if there are concerns about substance use in the workplace, as well as strategies to improve everyone’s overall well-being.

The Substance Use at Work Info Sheets provide an overview of substance use in the trades, from addressing stigma to the responsibilities of employers in reducing impairment, to strategies for supporting tradespeople. More information about impairment can be found at ccohs.ca/topics/wellness/impairment.

In 2023, the CAF-FCA, a collaborative network that connects the Canadian apprenticeship community, commissioned a research study called Understanding Substance Use Among Apprentices in the Skilled Trades. The purpose of the study was to better understand the lived experiences of

apprentices and tradespeople. Some of the study’s key findings were used to create these free resources.

H I S T O RY

Toronto Condos Through the Decades

A new book, authored by Toronto-based Fusioncorp Developments Inc. CEO and Co-Founder Nick Ainis, with Charlie M. Wordsworth, has come to the market.

Building Toronto’s Skyline — Toronto Condominiums Through the Decades traces the evolution of the city’s iconic residential towers, from its humble beginnings in the late 19th century to today’s modern high-rise buildings.

The book looks at the early low-rise apartments built to provide affordable housing for working-class families in the city’s rapidly growing urban areas. It explores the rise of modern high-rise condos, which began in the mid-20th century as developers experimented with new materials and construction techniques.

Through detailed research and engaging storytelling, Ainis brings to life the people and events that shaped the city’s skyline. Along the way, the book delves into the social, cultural and economic forces that have influenced the development of condos in Toronto and looks at how these buildings have come to define the city’s identity.

BUSINESS

Ryan Assumes V.P. Post at OS&B OS&B has appointed Kristy Ryan as Vice-President of Sales and Marketing.

In her new role, Ryan will oversee OS&B’s Canadian Sales and Marketing teams, spearheading strategic initiatives to boost market penetration and drive revenue growth. Kristy joined ohba.ca

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OS&B in 2019 and has maintained several positions within the company, most recently as the national sales manager for Canada.

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R-Hauz Services Inc., a leader in prefabricated wood construction in Ontario since 2017, has changed its name to Assembly Corp. to better reflect its identity and expanding range of capabilities. C “Assembly is scaling now, and the M new brand reflects our mission to bring Y together the best minds, technology and disciplines to provide beautiful CM and sustainable housing at a rate faster MY than ever before,” says CEO Geoff Cape, whose firm has completed six projects, CY with 12 more slated for this year.

CMY Through its pre-manufactured K modular approach, Assembly creates sustainable timber housing units that are engineered offsite and assembled onsite, allowing for faster, more efficient construction. The company leads the way in the design, engineering and building of pre-manufactured laneway suites, residential mid-rises and affordable housing projects for non-profit developers. OHB ohba.ca

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45 WINTER 2024 | ONTARIO HOME BUILDER

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PRODUCT FOCUS I D E AS FO R B U I LD E R S A N D R E N OVATO R S

Radiant’s Quattro, its first boiler technology in a condensing hybrid format, adds some stylish flare while combining the efficiency of tankless with the convenience of 40 gallons of storage.

Getting into Hot Water

From tanks to tankless to heat pumps or a combination thereof, there are options aplenty to consider in the water-heating market

By Ted McIntyre

Evolving building code requirements and consumer demands for more energy-efficient homes have resulted in rethinking how we power homes and appliances, including traditional forms of domestic water heating. One thing we know for sure is that “the impact of electrification will dictate the design and direction for many gas-fired products in the coming months,” advises Navien Water Heater Product Manager Chia Lin. Cost, of course, is always front of mind for builders, as well as ohba.ca

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purchasers—never more so than today.

That’s what makes the tried-andtrue tank water heaters so attractive to many. “Not only are they reliable and easy to install; they also have an affordable upfront cost, with the average industry cost for a 40- to 50-gallon tank at about $900,” reports Enercare.

Once the tank has been emptied, though, homeowners must wait for their water heater to produce more hot water, which can take a while due to the tank’s size. “Further, keeping a tank

full of hot water at all times can lead to significant energy waste, resulting in about 35-40% less energy savings than a tankless water heater (which heats water on demand using gas or electric coils). It’s also important to note that tank water heaters typically have a shorter lifespan (10-15 years) compared to tankless options (20+ years).”

Beyond those extra five to 10 years, tankless water heaters offer significantly greater energy efficiency while taking up much less space. (“Every application is different, but typically one can expect a savings of roughly 16 sq. ft. when utilizing a tankless vs. tank setup,” says Lin.) Moneywise, tankless homeowners “can expect up to $1,800 worth of energy savings throughout the equipment’s lifetime, plus the savings from not having to keep a large tank full of hot water on site,” Enercare notes. Further, the reduced risk of leaking or exploding saves headaches for property managers.

But then there’s the upfront cost factor, with typical tankless products and installation running for around 47 WINTER 2024 | ONTARIO HOME BUILDER

Product Focus Guest Plumbing & HVAC is high on Navien’s’ NPE201S2 tankless water heater.

Its advanced systems recover extra heat from flue gases that would be lost in non-condensing systems, increasing energy efficiency and reducing greenhouse gas emissions.

$3,000—about triple the price of a tank water heater. And from a retrofit standpoint, replacing with a tankless model could require changes to accommodate the unit, including upgrading a home’s electrical system to support an electric unit or running a dedicated gas line to a gas-powered unit. Depending on the unit type, additional equipment, such as new exhaust vents or pipes, may need to be installed.

Installers should also check with their tankless manufacturer on the water quality requirements for the system. According to e-tankless.com, “Hard water minerals (primarily calcium and magnesium) rob your water heater of its energy efficiency by building up on its heating elements and heat exchanger surfaces. They effectively provide a layer of insulation between the heating surface and the water, thereby reducing heat transfer and putting extra stress on the heating element.” For this reason and others, “many water heater manufacturers require or recommend the treatment of hard water for the customer’s warranty coverage to remain valid.”

Still, Guest Plumbing in Ancaster believes that transitioning from traditional tank-style water heaters to tankless is a no-brainer for most industries.

“Builders and renovators understand the importance of reliable hot water for homeowners,” Guest notes. “Tankless water heaters ensure an uninterrupted ONTARIO HOME BUILDER | WINTER 2024 48

hot water supply, allowing for extended showers and simultaneous use without the fear of depletion. This feature adds a level of convenience that aligns with modern living standards. And investing in tankless options means fewer replacements over the lifespan of a building, reducing maintenance costs and enhancing client satisfaction. Further, their wall-mounted installation provides a sleek and efficient solution. The absence of a footprint simplifies reno projects and allows for more flexibility in design.”

But size matters, says Lin. “Customers are concerned about having enough hot water and energy savings.

That translates to properly sizing a tankless water heater and looking at units rated with a high UEF (uniform energy factor). The sizing of tankless water heaters differs from that of tanks, as flow rate or GPM (gallons per minute) and temperature rise are crucial versus first-hour ratings (the number of gallons of hot water the heater can supply per hour, starting with a tank full of hot water). The tankless system for the home must be sized according to the number of fixtures in the home.”

Units with higher UEF ratings are more efficient and will provide greater energy cost savings. For example, most of Navien’s condensing tankless water heaters are rated 0.95 UEF or higher.

That includes its new NPE-2 series high-efficiency condensing tankless

water heaters, which are offered in four Standard (NPE-S2) models of up to 199,900 BTU/h and three Advanced (NPE-A2) models up to 199,900 BTU/h and efficiencies up to 0.96 UEF. The NPE-A2 models also feature exclusive ComfortFlow technology, “which includes a built-in recirculation pump, buffer tank and recirculation programming in a tankless water heater,” Lin notes. “Only Navien offers a choice between an internal and external recirculation setting. And with ComfortFlow, the minimum activation flow rate can be as low as 0.01 GPM, whereas other tankless products may need around 0.5 GPM to activate. This means your low-flow lavatories will still activate a Navien unit (with ComfortFlow) and provide hot water for brushing teeth, shaving and any low-flow usages.

“In addition, the built-in buffer tank helps minimize issues with low-flow rates and cold-water sandwiches,” says Lin regarding a phenomenon common to many tankless water heaters, where you receive an initial warm gush of water, then a small amount of cold water, followed by hot water again after turning on the heater.

BOILING POINTS

Combi boilers offer another alternative.

Providing hot water and central heating in the same system, “these powerful ohba.ca

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2023 PRESIDENTS’

GALA

OHBA thanks Training Ontario for sponsoring the Educational Programming for the 2023 OHBA Conference.

OHBA thanks Panasonic and Reliance for co-sponsoring the 2023 OHBA Presidents’ Gala, celebrating 2023–2024 OHBA President, Dave Depencier.

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49 WINTER 2024 | ONTARIO HOME BUILDER

Product Focus Popular options from Reliance include Rheem’s Hybrid Gen 5 Builder 50-gallon model (left), which provides ample hot water for households of three to five.

Reliance is also a fan of the highefficiency boilers, combi boilers and tankless water heaters from Canadian-manufactured and Concord-based Glow Brand (below).

Radiant operates in more than 40 countries, with a comprehensive product line-up offering versatility to suit specific applications. Radiant touts an exclusive heat exchanger designed, innovated and produced by the company. ​It also features the latest printed circuit board technology, providing full diagnostics a ​ nd high DHW (domestic hot water) flow rates w ​ ith extremely low-pressure drops—all in a compact wall-hung design​.

COMBINATION DEALS

compact heating systems provide multiple benefits for home builders,” notes June Thomson, president and CEO of Elevate Home and Commercial Services. “They boast a streamlined design that significantly reduces architectural impact, eliminating the need for multiple gas and venting systems while optimizing valuable space within a structure. Radiant combi boilers (exclusive to Elevate) offer the added versatility of adjustable outputs to match load requirements accurately, even with models rated under 100,000 BTU/h. This flexibility also allows for strategic placement of exhaust terminations, reducing the constraints of venting clearances. This combination ONTARIO HOME BUILDER | WINTER 2024 50

of space utilization, energy efficiency and use of a single appliance for both domestic water and central heating brings simplified installations, cost savings and overall convenience to any construction project.”

Energy Star-rated and with an industry-best 96% AFUE (Annual Fuel Utilization Efficiency), Radiant combi boilers employ a closed hydronic fluid system—independent of the domestic water heating channels—to offer an efficient, reliable, safe system. “This not only simplifies maintenance but also provides enhanced comfort and prevents cross-contamination of drinking water by isolating potable water from the hydronic water,” Thomson says.

Meanwhile, Enercare is stoked about the new IBC SFC 99-1 combi boiler. The only fully condensing combi boiler on the market, it includes several state-ofthe-art features, and its total of just five moving parts (fan, pump, bypass valve, gas valve and damper) is unparalleled in the industry. The equipment is easy to install, maintain and service, with no need for a three-way valve or secondary DHW plate heat exchanger, and it will accept a 0-10 VDC (volts of direct current) signal. The design was specifically improved to be user-friendly, highlighted by a high-tech electronic control and a new illuminated touchscreen control display panel.

With a high-efficiency ECM variable speed pump, the SFC 99-1 includes two independent copper waterways embedded in a cast aluminum block, with a built-in bypass valve to prevent temperature fluctuations and an advanced modulating temperature control to keep water and environmental temperatures steady.

“With its technology and seamless integration, the IBC combination boiler has proven to be a game-changer for Enercare’s builder partners,” says Enercare V.P. of Builder Sales Nolan Leiska. “It has enabled them to construct homes that are not only energy efficient but that also redefine sustainability.”

Discounting the availability of geothermal or solar power, the most energy-efficient option of all is an Energy Star-certified heat pump water heater, which “is up to four times more efficient and uses up to 70% less energy, on average, than a standard electrical water heater,” according to Natural Resources Canada. ohba.ca

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Getting the Job Done Right!

OHBA thanks Federated Insurance for sponsoring the 2023 OHBA Awards of Distinction.

16783 Thorndale Rd. Thorndale, Ontario, N0M 2P0 Tel: 519-461-1180 Toll free: 1-800-265-7086 Fax: 519-461-0903 www.trscomponents.ca Since 1974, TRS has offered builders a single source supply network of wall panels, roof trusses, floor panels. Our supply and install expertise will make your next job faster, easier and more efficient.

7 Oaks Tree Care & Urban Forestry Consultants Inc.

Expert tree services for better builds.

Offering 40+ years of Arboricultural Consulting services for land development clients.

Tree Preservation Plans Arborist Reports and Tree Inventories Monetary Valuations of Trees

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2021-11-02 10:18 PM

Product Focus

Enercare’s offerings include the IBC 99-1 SFC (Superflow Combi) boiler (left). Elevate Home & Commercial Services features the Radiant R2K 24 condensing wall-hung combi/ tankless boiler.

For the uninitiated, “heat pump water heater (HPWH) technology does not generate heat directly. It moves heat from one place to another. Heat is taken from the air in the basement or utility room (or sometimes from outside) and transferred to a tank of water,” NRCan explains. “Some HPWHs can be added to a conventional electric storage tank water heater.”

“We’re finding that pretty much every custom home is going with heat pumps. And our retrofits, with the government rebate, have skyrocketed—we’re selling a lot more heat pumps than air conditioners,” says Mike Martino, founder of 37-year-old Martino HVAC and winner of the 2022 BILD Contractor of the Year award.

While consumers are still in the introductory stage regarding heat pumps, it’s an easy upsell for builders—not just from an environmental standpoint but a financial one too, suggests Martino. That’s especially the case when combining systems, which assures homeowner comfort in all seasons while also addressing demands for increased efficiency and lower GHGs. “We are using combo systems where an air handler is connected to ONTARIO HOME BUILDER | WINTER 2024 52

a water-to-air heat exchanger supplied with hot water,” Martino says.

“Depending on the size of the home, ranging from something as small as a two-bedroom stacked townhouse to homes over 5,000 square feet, combo systems can be designed to cater to all these needs using a range of equipment options such as hot water tanks, tankless on-demand systems and even dedicated boilers. We found that, on average, combo systems save up to 40% annually on natural gas costs.

So builders have to understand that you get a payback within three to four years on the cost difference. Within eight or nine years, that heat pump will have paid for itself. Then it starts to pay a dividend to the homeowner.”

And keep in mind that the cost gap will gradually diminish in the coming years, Martino points out. “While economies of scale currently exist in the traditional furnaces/hot water tank market, with more specialized equipment like cold-climate heat pumps and hydronic combo systems comparatively only supported by a few manufacturers in small production numbers, these trends are changing with advancing regulatory requirements on

GHG reduction.”

For builders who already include air conditioning as standard on a project, the added cost of installing a heat pump instead of an AC unit can easily “be justified to the homeowner through energy savings enabled by switching fuel to take advantage of time-of-use electricity rates,” notes Martino, who is a big fan of Daikin and Goodman models. “At times during the day when electricity is discounted, a heat pump can provide supplemental heat to offset natural gas usage, thus reducing carbon emissions.

“But because of all this new technology, it’s critical that the systems be properly commissioned (set up and started up) and maintained so that they’re running at peak efficiency, Martino emphasizes. “TSSA (Technical Standards and Safety Authority) and Enbridge announced as much in November, adding that it’s vital that homeowners have the use and safety of these systems explained.”

Regardless of the product decision, builders want to be comfortable with their suppliers, and Reliance Home Comfort, one of the largest rental water heater and HVAC companies in Canada, has been racking up accolades. That includes praise from Doug Tarry of Doug Tarry Homes and Geoff McMurdo of Kitchener-Waterloo-based Activa, who commended Reliance for its net-zero-friendly product offerings and service excellence in a recent promotional video.

“The service and delivery components are very important—always on time.

And if it’s out of our control, we’ll make it up to you,” says Reliance Director of Builder Markets Shannon Bertuzzi, whose company offers a dedicated builder team. “The builders love that the service element is taken off their plates.”

Reliance’s own suppliers are just as, well, reliable, says Bertuzzi, who cites Canadian-made Glow Brand among their high-quality water heater producers. “During the pandemic, they were the only manufacturer to deliver products, as everything is made here—no supply chain issues waiting for parts or being locked in shipping yards.”

A reliable flow is critical, Bertuzzi says—particularly when it comes to hot water. OHB ohba.ca

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Frame of Mind

Homes by Machine Affordability is just one bonus of prefab construction As builders search for ways to lower costs while maintaining quality, digital and fabrication advances have renewed interest in factory-built housing.

Today’s prefabricated homes have shed the stigma that regarded them as technically inferior to conventionally constructed units. In Japan, for example, one-third of all newly built homes are made in a factory.

The rising prefab trend can be attributed to their financial, environmental, structural and time-saving advantages.

Further, constructing houses in a factory negates problems such as vandalism, material storage and weather delays. Factories also require fewer skilled workers, reducing labour costs.

And since the construction of an average house produces 2.5 tons of waste—25% of which is dimensional lumber, and an additional 15% being manufactured wood products—there are also the cost savings that come from improved efficiencies.

Prefabricated panel systems offer superior quality based on three interrelated characteristics: craftsmanship, technical performance and durability.

The system’s craftsmanship governs its potential for consistent performance ONTARIO HOME BUILDER | WINTER 2024 54

levels from one application to another.

How might such projects look?

The FAB House, designed by TDO Architecture and architect George Clarke, is a 10-unit townhouse project in North Fields, UK. It was commissioned by joint venture developers Urban Splash and Places for People in a master plan to revitalize Smith’s Dock (a former shipyard) into an urban neighbourhood to include two rows of five townhouse units.

The townhouses adopt an open floor plan for the living spaces on the first floor. The entryway adjoins the kitchen, which leads to the dining area and then to a large living area at the back of the house.

Exposed ceiling joists are especially noticeable, with raised ceiling heights of 9.5 feet contributing to the home’s spacious feel. The materiality of the timber joists adds character to the space while also becoming part of a cohesive material scheme along with the birch-faced plywood staircase.

The stairwell is lit by a large skylight running lengthwise while floor-toceiling windows can be found in the reception space and the primary bedroom. The large amount of natural light

makes rooms appear larger, especially on the second floor, where the space is divided into two main bedrooms and one kids’ bedroom.

For the exterior, TDO Architecture references the site’s industrial heritage through the materiality of the facades by using a dark grey Equitone panel cladding combined with shrouds of COR-TEN steel.

The modules of the FAB House were fabricated in an off-site facility in collaboration with manufacturer SIG to minimize the effect of site conditions and maximize productivity. Each unit measures 5m wide and 11m deep, per size restrictions for transportation of the modules.

The cladding system design features a central alignment to facilitate assembly for the contractors, who would only need to align two instead of four claddings. The central alignment is also present in windows and doors. The cladding conceals a zone for services connected externally on site.

The FAB House marks an innovative development into the application of prefabrication for affordable housing on a larger scale—specifically, how it can be used to increase efficiency in production but maintain the spatial and living qualities of a more traditionally designed home. OHB AVI FRIEDMAN IS AN ARCHITECT, PROFESSOR, AUTHOR AND SOCIAL OBSERVER. AVI.FRIEDMAN@MCGILL.CA

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