Chatham-Kent and Lambton County Seek Flexibility in Future Federal Housing Funding
Officials in Chatham-Kent and Lambton County are advocating for more flexible federal funding programs for housing construction, following challenges experienced with a previous initiative that led to escalating project costs.
Modular Construction Challenges
Both municipalities initially pursued modular construction for affordable housing projects to qualify for federal grants. However, they later terminated their contracts with the initial contractor due to delays and failure to meet program guidelines.
Ray Harper, the director of municipal housing and property development for the Municipality of Chatham-Kent, stated that recovering from a failed modular project can be more expensive than traditional "stick-frame" construction due to the proprietary nature of the units.
"A modular project such as ours where the units are created in the factory — they're proprietary in nature," Harper said. "So if the project goes south … then it can be challenging to find another contractor that is experienced in that particular type of construction, the design, the components used."
Cost Overruns and Project Details
The Chatham-Kent council approved up to $9,255,329 in additional expenses to complete a 27-unit affordable housing complex on McNaughton Avenue. The exact cost to taxpayers is still being determined as the municipality seeks reimbursement from a surety.
Taxpayers in Lambton County face a $1.7 million cost for a project at 993 Maxwell Street in Sarnia, with cost overruns totaling $4.2 million due to issues with the original contractor.
Federal Response and Future Programs
The concerns raised come as Ottawa announced a new federal housing agency aimed at overseeing affordable housing programs and boosting construction. The "Build Canada Homes" initiative will focus on cost-efficient and modern construction methods like factory-built, modular, and mass timber.
The Chatham-Kent project was funded in 2021 by the Rapid Housing Initiative, which supported modular multi-unit rental construction, conversions of non-residential buildings, and rehabilitation of existing buildings.
Melisa Johnson, Lambton County's manager of housing services, stated that they pursued a modular development in hopes of receiving funding from the same program. While the grant application was denied, the project was too far along to change course.
Industry Perspectives and Municipal Concerns
Chatham-Kent CAO Michael Duben noted that several municipalities across Canada experienced similar challenges with this funding program.
While officials believe the modular industry has matured since 2021, making it easier to find reliable builders, Johnson argues that government programs should not mandate specific construction types.
Marcio Fernandes of the Ai Group Ltd. in Windsor-Essex said that transitioning between modular home contractors should be feasible if blueprints are readily available.
"That should all be disclosed in the blueprints, so that's all available to the customer," said Marcio Fernandes of the Ai Group Ltd. "We have to provide everything — the build, the schematics, the weight loads, the static load calculations — everything was provided, prepared, available."
Harper echoed this sentiment, suggesting programs should prioritize projects that offer the best value, regardless of construction method.
Federal Response
CBC reached out to the federal minister of housing and infrastructure for comment on future programs and risk mitigation for municipalities using modern construction methods. Renée Proctor, the press secretary to Housing Minister Gregor Robertson, said the minister consulted with various partners before the "Build Canada Homes" announcement and more information will be shared in the coming months.
Build Canada Homes aims to offer "flexible financial incentives, attract private capital, facilitate large portfolio projects and support modern manufacturers," advancing modern construction through bulk procurement and long-term financing.
Proctor also clarified that the Rapid Housing Initiative was designed to quickly provide housing for vulnerable populations.
