Latest news with #prefabricatedhomes
Globe and Mail
11 hours ago
- Business
- Globe and Mail
Mattamy Homes founder Peter Gilgan to start prefab housing factory in Ontario
Real estate developer Peter Gilgan plans to start a home-building factory in the Toronto area, the billionaire's second attempt to create a prefabricated homes business as the federal government looks to boost construction of new homes. Mr. Gilgan, whose Mattamy Homes is one of the country's largest home builders, opened a prefab home factory in the late 1990s only to shutter the money-losing venture about a decade later. This time, the climate appears to be more conducive. The technology is available to make prefab homes faster. And all levels of government are under pressure to create affordable housing, with many Canadians shut out of home ownership or struggling to pay rent. 'Now is the time to try this again,' said Peter Hass, general manager of the new venture, called Stelumar Advanced Manufacturing Inc., which expects to produce modular components for about 3,000 housing units a year once its factory opens. The first phase, slated to open in 2026, will focus on making modular parts and components for six-storey condo buildings with one- to three-bedroom units, Mr. Gilgan said in an interview. He expects the factory to help slash construction timelines for such structures to less than six months, down from as much as three years. 'I'm trying take a lot of the things that are very boring, laborious, time consuming, tedious work on the job site, and prebuild, preinstall in the factory in a different way than has ever been done before,' Mr. Gilgan said. That includes finding a different way to fireproof and soundproof components of the home before they leave the factory. Opinion: In a challenging market, a few brave developers push forward Opinion: Canada can't solve its housing crisis without the provinces Although Prime Minister Mark Carney singled out prefab homes as part of the solution to speed up the pace of home building, Mr. Gilgan said Stelumar has been in the works for more than a year. Mattamy will be Stelumar's first customer and Mattamy's parent company, Mattamy Asset Management, is Stelumar's main investor. Mr. Gilgan said Stelumar has already spent tens of millions of dollars to develop new technology for fireproofing and soundproofing, design the six-storey condo buildings and housing units, hire consultants and key personnel. Mr. Hass, a previous employee of affiliate Mattamy Ventures who joined in September, said the company has hired 12 people and expects to employ more than 300 once the factory is operating. Mr. Hass said the factory will cost hundreds of millions of dollars to set up, primarily for equipment made by European suppliers, which will be partly debt-financed. Mr. Hass said Stelumar may bring on other investors and will also look to 'work with the federal government on fundraising. The main benefit would be that we'll be able to accelerate what we plan to build way quicker' if the company can secure public aid. Mr. Gilgan expects Stelumar's output will translate into lower construction costs and home prices. When asked how much the cost would come down for the buyer, he described the amount as 'holy smokes.' Mr. Carney's campaign said that prefab and modular housing could reduce construction times by up to 50 per cent and costs by up to 20 per cent. Mr. Gilgan said: 'I would say he is significantly accurate.' Construction is not the only big expense. The cost of the land, government development charges and taxes also contribute to the price of a home. As well, permits and building approvals can slow the home building process. Mark Carney's bet on prefabricated homes has promise – and big risks There has been little demand for new homes for the past year, with borrowing costs still high and prebuilt homes selling for less than preconstruction homes. Asked if there would be demand for his prefab homes, Mr. Gilgan said his products will meet people's needs. Stelumar homes will be larger than the newly built condos on the market today. For example, a one-bedroom made with its modular parts will be 700-plus square feet, compared to 600 square feet or less for many newly built one-bedroom condos. Setting up Stelumar is personal for Mr. Gilgan. Stelumar – named after three of his children, Stephanie, Luke and Markus (Mattamy is named after two other children, Matt and Amy), was also the name of his first prefab home factory, which made single-family detached homes that were transported whole to construction sites. Mr. Gilgan said the technology wasn't advanced enough and that the operation was unprofitable. Asked if he though the new Stelumar could make money, he replied, 'Absolutely. Having learned from the mistakes that I made 25 years ago, I think I'm pretty well equipped to know what will work.' Mr. Hass said Stelumar is close to selecting a site in the Greater Toronto Area. Stelumar plans to source at least 75 per cent of its materials from Canada, which would help the company get around the higher costs associated with the trade war with the U.S. Mr. Gilgan characterized Stelumar as a personal project to make home ownership more affordable for young adults. 'People want to own a home. We're trying to give them the opportunity to live that dream.'
Wall Street Journal
02-06-2025
- Business
- Wall Street Journal
The Rush to Take Modular Homes Mainstream in Disaster-Ravaged Areas
After Jerry Camarillo's childhood home in Altadena, Calif., burned down, he was determined to rebuild the one-story, midcentury ranch house exactly as it was before the Los Angeles wildfires. That all changed with one look at the home's insurance policy, which would cover only a fraction of the $700,000 estimated cost to rebuild. Then he stumbled across Hapi Homes, a company that builds prefabricated homes as pieces in factories and then assembles them on-site. The company said it could build a home for $200,000 less than the cost of traditional construction, and do it in less than half the time. The new home would look and feel the same as it did before the fire, Hapi Homes pledged. Camarillo was sold. 'This makes rebuilding possible,' he said. Companies that use modular construction, 3-D printing or other nontraditional methods have existed for decades on the fringe of home building, often tainted by an association with lower-quality construction and previous missteps. Now, these companies are trying to break into the mainstream by offering a faster and less costly alternative for rebuilding in cities ravaged by natural disasters. Many of the thousands of displaced homeowners in Los Angeles, Hawaii and the Southeast are giving these businesses a look. Victims of hurricanes, wildfires or other disasters can be desperate to rebuild, but their insurance payouts are often well short of what is needed to cover traditional construction costs. 'Homeowners in a moment of crisis want to try something different,' said Jason Ballard, chief executive of ICON, a company that makes 3D-printed homes. ICON uses giant 3-D printers to squeeze layers of concrete into the framing for a house. The company received hundreds of calls about building projects in disaster-prone areas, including from Los Angeles homeowners and developers after this year's fires, Ballard said. Now, the Texas-based company is rearranging its expansion strategy to target disaster-prone markets such as California and Florida. Modular builder Samara is working with billionaire developer Rick Caruso's rebuilding nonprofit, Steadfast LA, to offer dozens of free modular homes to low-income residents who lost their homes in the Los Angeles fires. And the Los Angeles Mayor's office is having conversations with more than a dozen alternative builders to explore nontraditional construction options. 'Disasters are actually going to be the turning point' for the wider adoption of factory-built housing, said Vikas Enti, chief executive of Reframe Systems. 'That's what we're betting on.' Enti's Massachusetts company builds homes in robotic, artificial-intelligence-powered microfactories. It is planning to build a California microfactory 18 months earlier than initially scheduled, he said, and to hire local Los Angeles employees to meet the postwildfire demand. Offsite-factory construction can accelerate the building process because fewer workers are required and materials are often purchased in bulk. The shorter timeline can sharply reduce carrying costs for a project. And in disaster areas, where many builders are competing for construction labor and materials, factory-home manufacturers have an edge because they can access less crowded supply chains in other cities and states. After the 2023 wildfires in Maui, Hawaii, more than 100 modular companies flooded the Hawaiian market. State officials alongside the housing nonprofit HomeAid Hawaii commissioned five modular vendors to help build 450 temporary housing units for displaced residents. None of these modular companies had worked in Hawaii previously. But their emergency entrance into the market has made Hawaii's public officials more open to alternative competitors. 'As a public official, I'm now saying, 'Hey, we do have alternatives to typical construction,' ' said Joseph Campos II, deputy director at Hawaii's Department of Human Services. 'There can be a partnership with traditional construction trades.' That is a stark pivot from the decadeslong reputational problems plaguing the alternative-building industry. Off-site factory home construction has historically been used for lower-budget homes, leaving many people with the preconception that it tends to be of lesser quality. That stigma has been compounded by high-profile failures. 'Large companies have come out with really big promises,' said Michelle Boyd, the chief strategy officer at Terner Labs, a housing research nonprofit affiliated with the University of California, Berkeley. 'And then they go belly-up.' In 2021, the tech construction startup Katerra filed for bankruptcy after raising nearly $3 billion from a host of notable backers such as SoftBank Group. Katerra vowed that it could use manufactured construction to turn home-building into a 30-day, assembly-line process. But the company had yet to figure out the nuts and bolts of that mass production before committing to projects. Some alternative builders are going to great lengths to rehabilitate their image. Hapi Homes, for example, invited Camarillo to tour the company's Utah factory that helped close the sale. 'I had to go see if this was real or just a scam,' he said. Still, the problems of alternative building stretch beyond a bad rap. Expanding these businesses to a national scale is difficult because of the expensive transportation costs that come with shipping entire homes from one place to another. Home builder Williams Rebuild, which intends to build between 120 and 150 homes a year for Los Angeles wildfire victims, is exploring whether building wall panels in a factory could help reduce the materials that need to be stored on-site, said Dan Faina, the company's president. 'If not at major scale, it definitely won't be cheaper' than building homes in bulk on-site, he said. 'I think the adoption rate is going to be substantially less than the excitement that's going behind it.' SoLa Impact, an affordable-housing developer based in Los Angeles, is supporting state legislation to expedite approvals for modular housing. SoLa CEO Martin Muoto said the acute housing shortage exacerbated by the wildfires could boost support. 'Never let a crisis go to waste,' he said. Write to Rebecca Picciotto at and Nicole Friedman at
CTV News
01-06-2025
- Business
- CTV News
‘What we can offer is speed': Modular housing business owner on tackling supply
Inside Ironwood Manufactured Homes' factory in Woodstock, N.B., workers pump out a house a week. Owner Mark Gaddas points to a home that's three days into construction. The drywall is being installed, which he says typically wouldn't happen in on-site construction until the house is weather-tight. It's one advantage to building indoors. 'That's one of the reasons why we can speed things up over time,' he said. Founded in 2018, Ironwood is a few months away from moving into a new factory that's ten times its current size. There, they will be able to build more houses and add efficiencies, such as automation. Provincial and federal governments invested a combined $2.5 million in repayable loans to help. Modular Housing (Sarah Plowman, CTV News) 'We strictly build custom modular houses right now. The new facility will give us the capacity to get into multi-residential,' said Gaddas, noting workers could build hotels, universities and dormitories. 'We'll have anywhere from ten to fifteen houses under construction at all times.' Factory-built housing makes up a small percentage of Canada's housing market, but Prime Minister Mark Carney has said prefabricated and modular housing are the future. He has pledged $25 billion in financing to prefabricated home builders as his government aims to double the pace of Canada's home construction. Carney has also pledged to order housing units from manufacturers in bulk to create sustained demand. 'It's not the silver bullet to the housing crisis,' said Gaddas. 'It's part of the solution. It isn't the ultimate solution. What we can offer is speed.' At the University of New Brunswick's Off-site Construction Research Centre, Director of Innovation and Operations Brandon Searle notes how off-site construction has been around for more than a century and often increases in popularity following or during a crisis. He believes prefabricated and modular housing are a piece of the housing crisis puzzle. 'I'd say they're a large piece,' Searle said. Searle explained this kind of construction isn't necessarily cheaper than traditional homes, but builds happen faster, with fewer workers and less waste. Costs are also more certain, since a lot of decisions happen before construction starts. The industry faces barriers to scale up, Searle notes, such as high capital investment costs, disjointed policies across jurisdictions and the need for demand that businesses can count on. Modular Housing (Sarah Plowman / CTV News) 'Creating that sustainable demand is a role that the government can play, but also incentivizing them to invest in innovation and automation,' he said. Securing financing or insurance can also be a challenge, and it's something the research centre is looking into to figure out what needs to change and what role Ottawa can play in underwriting projects. Kevin Lee, CEO of the Canadian Home Builders' Association, notes the main reason not many of its members build prefabricated and modular homes is because the traditional house construction industry is already efficient as is and is made of mostly small crews. 'That really has to do a lot with the boom-and-bust nature of the housing industry,' Lee said. 'The system kind of operates like a factory but instead of the house moving down the assembly line, the workers move through the house, but do the same repetitive activities, house to house.' Lee says it's more labour intensive but requires less overhead costs. Policy changes are needed for factory-built housing to become more widespread, including consistent rules around the planning and approval process, he adds. 'At the municipal level, you cannot build the same house city, to city, to city, because every city has different bylaws, zoning requirements, interpretations of the exact same provincial building code, which vary city to city, and sometimes within the city, which makes doing anything at scale incredibly difficult,' Lee said. Borrowing best practices Ironwood's new factory will add automation, including a saw to cut lumber and possibly a machine that, with the push of a button, installs nails or screws. To borrow best practices, Ironwood is looking to European countries, such as Sweden, where modular housing reshaped the homebuilding industry. 'The automation that they have is much further ahead than where we are,' said Gaddas, adding there's one manufacturer in Sweden with 'a zero-labour line.' 'You have robots essentially building all the compartments of the houses that we're talking about.' Mathieu Laberge, Chief Economist and Senior Vice-President at the Canada Mortgage and Housing Corporation, said while this kind of housing is marginal in Canada, 90 per cent of homes in Sweden are made with some off-site component. It didn't happen overnight. Laberge explained that in the 1960s, Sweden decided it was the technology of the future and the government began funding projects to create a baseline demand. 'Now, they don't need any more government support, because it's a self standing industry. And that's the point we're at in Canada,' Laberge said. Laberge and Gaddas point out there's a lot of misconceptions around modular housing, like assuming it's one-size-fits-all and that these houses can't be customized. 'That's not true,' said Laberge. 'They're good-looking, they're high-quality, well-insulated, weather-appropriate for Canada. And so, these are all misconceptions that we need to overturn.'
