Over the past five decades I have been blessed to work with some pretty brilliant folks, each of whom have freely shared pearls of wisdom with me.
I recall a conversation back in the late 1970s with a gentleman whose company, within 10 years of him founding it, was generating $80 million in annual sales (that’s roughly $352 million in 2023 dollars).
When I asked him what he credited as the principal reason for his company’s success, he thought for a minute.
Then he replied, “Always watching for the gaps that, over time, almost inevitably form between the way things have been done and the new emerging needs of the market – then nimbly providing the correct solution to fill that gap.”
“You see,” he continued, “it’s rare that a mature company will objectively analyze if their goods, services and processes – the things that originally made them successful – remain in sync with the changing requirements of their customers. That is, until somebody like me slips in and eats their breakfast.”
“Complacency provides the opportunity for an entrepreneur to build a business. But, it is also the mousetrap that a successful entrepreneur must guard against falling into by continually monitoring the market and ensuring his company meets all the customers’ current and potential needs,” he concluded.
In my opinion, Canada’s construction and real estate development industry has, to a very great extent, fallen into this mousetrap.
To quote my wife (she’s one of those “brilliant folks,” having led a $30-million Canadian company to over $500 million in less than a decade) and one of her favourite sayings: “If you always do what you’ve always done, you’ll always get what you always got.”
Now, let’s accept that the Canadian Mortgage and Housing Corporation claim (mentioned in last week’s Arch-i-text column: “The resurrection of wartime housing”) that an additional 3.5 million new dwellings – or 388,889 units per year above and beyond what was already planned – will be required in the next decade.
Let’s also assume that the construction industry is already working at capacity finishing the “planned” 205,762 units per year.
Despite this, there is a monumental gap between provision and requirement, and this is a gap that cannot possibly be filled by continuing to adhere to current practices.
In 1941, Joseph Pigott, as the CEO of the federal corporation Wartime Housing Limited, faced a similar challenge in how to quickly and efficiently build housing with a war-induced labour shortage and material supply chain constrictions.
The answer was factory-manufactured panelized construction. In short, working on an automotive assembly line basis in a climate-controlled building, workers produced all of the framing and roof systems for the houses.
For every house, the panel units were bundled and transported to a designated site to be assembled, with the net result being one completed house every 36 hours.
But, once the wartime pressure disappeared, panelized construction was largely abandoned as the industry returned to traditional on-site building methods.
However, the inherent advantages of manufacturing homes in a factory setting ensured some hardy businesses would continue.
Today, aided by fully computerized systems, companies like Bensonwood in New Hampshire and RenggliAG in Switzerland manufacture extraordinarily high-quality, fully complete wall, roof and floor panel systems (including insulation) for building sites across North America and Europe.
The panels are craned into place to finish weathered-in buildings, in days rather than weeks, whether the design is drawn from a manufacturers’ catalogue or an architect’s full custom plans.
And, because dwelling services – such as plumbing and electrical – have been designed into the panel systems, thereby preserving the weather-tight integrity of the building, it also means the labour time associated with the trades is often cut by up to 50 per cent.
For these reasons and others, the construction timeline of a panelized home is significantly shortened from start to finish. Further, the finished quality of the dwelling is measurably superior to one built on-site using conventional methods.
Carrying the factory-built model further are companies such as Quality Homes here in Ontario. In their manufacturing facilities, these companies construct modules that are transported to the customer’s property, craned onto position and locked together like a series of Lego blocks.
Each module is almost completely finished on the factory floor – kitchens, bathrooms, lighting and so on have been installed before transport. A few simple service connections are required on-site together with some relatively minor (in many cases) finish work and the house is ready to move into.
Now, if the customer wishes to have masonry (brick, stone, stucco, etc.) exterior cladding, that must be installed after the building is delivered while exterior cladding suitable to transport is typically installed in the factory.
Here again, the speed of construction is much shorter than conventional methods and the finished quality of the modules is typically superior whether the dwelling design is from their catalogue or fully customized.
Not to put too fine a point on it, Quality Homes guarantees it will complete your home on time, on budget, and to the highest quality standard. It can extend such a guarantee solely because it builds in a factory, with computer-aided systems, using superior materials and quality control at every step in the manufacturing process.
And, keep in mind, unlike conventional construction, a factory can operate 24 hours per day, seven days a week, in any season or type of weather.
As we saw in the Arch-i-text column published Oct. 19, 2023, “Embracing Glendale through a more inspired design,” modules also lend themselves to multi-storey residential developments – in some cases with entire completed dwelling units transported to the site, craned into place and locked together. Again, leaving comparatively minor construction work to be finished on-site.
If the federal government is serious about meeting Canada’s housing crisis with a viable solution, it must take concrete steps. Some of these may include:
- Ensuring “preapproved designs” are compatible with panelized or modular construction.
- Making federal loans and/or grants available to existing companies that manufacture panelized systems or modular units to underwrite the costs of expanding their manufacturing capabilities.
- Guaranteeing minimum projected unit uptake (sold unit revenues) for each manufacturing company that agrees to expand its production capabilities.
- Putting federal incentives in place to encourage real estate development companies to adopt panelized and modular construction methods.
Finally, in real terms, particularly associated with making the new housing “affordable,” governments at every level must give serious consideration to utilizing land that they own (governments and government agencies are the largest land owners in Canada) to develop new housing.
Land lease arrangements – not limited simply to detached/semi-detached/townhouse dwellings, but also for condo, rental and other forms of housing – spring to mind.
As was mentioned in last week’s column, there is just a whole lot more work to do.
Brian Marshall is a NOTL realtor, author and expert consultant on architectural design, restoration and heritage.