Leading the way in sustainable housing

Lessons from affordable housing providers.

A new modular, affordable housing development in the heart of downtown Hamilton, targeting Passive House Certification / Image: Montgomery Sisam Architects

The housing shortage is an acute concern across Canada. Political maneuvers to curb inflation, wild real estate markets and the shortfall in housing construction have done little to redress the gap between supply and the growing demand among families, seniors, vulnerable groups and new Canadians for affordable places to live. The CMHC’s latest report estimates 3.5 million housing units are needed to restore affordability by 2030.

Accordingly, many municipalities are implementing aggressive action plans to create thousands of new affordable housing units over the next decade. These units will span the spectrum of housing needs, including social housing, supportive housing, transitional housing, rental housing, and long-term care.

Of course, even with unprecedented government investment in housing, capital resources to build these units are scarce. Affordable housing developers are working within highly constrained budgets while facing fierce price escalations in the construction industry. It is perhaps surprising, then, given affordable construction and sustainability have historically been at odds, that many of these developers have committed themselves to aggressive sustainability programs. Several, in fact, are leading the pursuit of high-performance housing.

At Montgomery Sisam, we’ve been fortunate to work with CityHousing Hamilton and Peel Region’s Housing Development team, who are among these leaders. As our industry continues to build a business case for sustainable development, many insights can be gleaned from their efforts and the people at the helm. I sat down with Brett Barnes, Manager, Housing Development at the Region of Peel; Sean Botham, Manager of Development for CityHousing Hamilton; and Daniel Ling, Principal and Managing Partner of Montgomery Sisam Architects to better understand why municipal housing developers big and small are investing in sustainability, how they are making the numbers work and what this means for designers.

This is what I learned.

Policy is driving change.

Municipal housing developers like CityHousing Hamilton and the Peel Region’s Housing Development team are critical entities responsible for building safe, affordable housing in communities across the city or region they serve. They oversee the development of billions of dollars’ worth of assets with limited funding. When it comes to sustainability, clear expectations and fixed targets make things easier. For Peel’s Housing Development team, these expectations and targets came from the Region’s aggressive policies around climate action, making sustainability a key driver in the administration of all municipal assets. At CityHousing Hamilton, the Board played an instrumental role in setting the sustainability direction. Now, both entities are actively working to deliver on these agendas in their different building projects. And everyone starts with a shared understanding of where they need to go, refocusing design team efforts on how best to get there.

The Hamilton Passive House Modular Housing development will accommodate 24 studio-style resident units and features a high-performing envelope, along with photo-voltaic panels, all electric heating and cooling systems./ Image: Montgomery Sisam Architects

Investing in sustainability up front means more capital not less.

The biggest driver of sustainable affordable housing besides climate action policies has been and continues to be the CMHC’s co-investment program. Before sustainability was encoded in the CMHC’s funding program, providers could apply for grants to pursue high performance under the guise of ‘innovation.’ However, under the current system, Botham says, “to score at the highest level, which ensures eligibility for enhanced funding and prioritization among applicants, high-performance design and construction approaches are necessary.” This is particularly important, he goes on to tell me, because housing corporations need a significant sum in grants to build, and the higher performance you do, the closer you can get. Of course, understanding what pathways to high performance exist and are feasible early in the design process is important. “This can take time,” says Ling. “We have to look at ways to adapt our workflow to look at different iterations, have these discussions and make informed decisions up front so that we can get the most impact out of our design, both in terms of cost and sustainability.”

Choosing the right pathway to sustainability is important.

Of course, there are many pathways to achieving high performance. For the Peel Region’s Housing Development team, this was certification under the CAGBC’s Zero Carbon Building Standard. For CityHousing Hamilton, it was Passive House Certification. I asked why.

For CityHamilton Housing, Botham says, “The gold standard for a holistic approach to sustainable design is the Living Building Challenge, but as a practical, rigorous pathway to high-performance buildings, Passive House is well established. It is a performance-based certification and provides a reliable way to achieve excellent energy reduction, thermal comfort, and indoor air quality.” Once effective design solutions have been developed, he tells me, they are easy to replicate and deploy, particularly with advances in prefabrication and modular construction.

When it comes to the Peel Region’s Housing Development team, Barnes explained, “we are always striving to do better, and it’s been an evolution since the Region’s been involved in the development of affordable housing. [The Zero Carbon Building Performance Standard] seemed to be most aligned with what we were already doing.” He praised the fact that both the CMHC program and the Region’s policies are performance-based which offer designers a lot of flexibility around how to meet targets. He went on to say the organization is also exploring other programs, like Passive House, with different nonprofit housing developers.

The goal, I surmise, is to keep learning and aiming higher. The same is true for architects. “It’s our professional responsibility to take what we learn from project to project, especially when there is no clear policy or target in place,” says Ling. “This is part of making sustainability cost effective and accessible to everyone.”

The sustainability premium is actually minimal.

In today’s climate, Barnes and Botham agree, the so-called ‘sustainability premium’ associated with these pathways is minimal. Peel Region’s first net zero carbon project, Chelsea Gardens, designed by Montgomery Sisam, is working comfortably within a 10 per cent increase in its budget to move from CMHC base requirements to net zero energy. At CityHamilton Housing, the premium is nearly non-existent. With careful and informed design, the cost of moving to high performance was incremental, and grants covered this. Regular rigorous costing also allows these organizations to maintain some control over incidental costs, if any, through the design process.

So, what then are the biggest drivers of capital cost inflation?

Time. “[On] the capital side of things, the length of time it takes for us just to get through the municipal planning processes, that’s where we lose a lot of time and that’s where a lot of turmoil can happen in the market,” Barnes notes. “One of the things we are trying to do is work with the municipalities to get [site] planning ready so that when there is capital available, we can then go right to the market, get our designers in place and start working. It’s never going to be 100 per cent but a little bit better.” Another driver, Botham says, is “the capability of your architect to cleverly deliver both high-quality and high-performance within budget.”

As public business entities, both CityHousing Hamilton and Peel Region are beholden to certain procurement policies that aren’t as flexible as their private and even non-profit counterparts. These policies have limited flexibility to respond to the market. Both organizations are introducing alternative approaches to traditional procurement to find better alignment. Ling reiterates the challenges of the current market: “Market conditions right now are really in conflict with the affordable housing crisis. A lot of work needs to happen in parallel with the design process to manage budget and schedule like engaging trades early, sourcing available materials, ordering items with excessive lead times, and getting more accurate costing. And because this isn’t always possible under every delivery model, designs must be robust and agile enough to absorb value engineering without compromising quality or sustainability.”

Chelsea Gardens is a highly-sustainable, 20-storey multi-unit residential building that will bring 200 new affordable rental units to Brampton. / Image: Montgomery Sisam Architects

In the end, energy savings aren’t the only priority.

Affordable housing projects operate on very thin margins and sustainable design has proven to provide cost savings during operations. But energy savings aren’t the major driver of these savings: a building’s fuel source is. So, while City Councils may be moved by prospective energy savings and reductions in fossil fuel consumption, the appeal of deep energy reduction among operators is really the prospect of fuel switching. Less natural gas consumption means less cost fluctuation on account of carbon pricing.

Fully electric is the goal.

CityHousing Hamilton is exceeding this objective. Not only are all new developments implementing fully electric systems, Botham says, “we actually have solar on all our new buildings, and we are trying to make it as close to building integrated as possible and I can foresee when that will be a standard, that it’s not just a panel on a roof but part if your cladding system.”

For Peel Region, this goal isn’t within reach yet. Barnes explains, “we find that, as in many urban areas, the electrical capacity is not always at the level that is needed to take us that far, but we are working at it.” At Chelsea Gardens, the solution is a geo-exchange system for heating and cooling with a little bit of natural gas for the emergency back-up generator. “With the geo-exchange system there’s a certain level of consistency that [operators] will know,” says Barnes.

Naturally, one positive change begets another. “It’s all about creating win-win opportunities,” Ling says.

Of course, quality control is critical to operational performance. Barnes suggests commissioning is one potential area of improvement and something Peel Region’s Housing Development team is actively working to enhance. As yet, there is no third-party agency overseeing consultant work or conducting audits at the end to ensure systems are performing as they should. He says, “We’ve tried to implement some of these processes that are being used in the condo sector […] And I think it does produce a better product in the end. No question.” How much oversight is right, he isn’t sure yet but from an owner’s perspective it certainly offers more comfort.

Peel Housing Corporation is committed to sustainable development and Chelsea Gardens is intended to be a new benchmark building, targeting a Zero Carbon Design seeking certification under the CAGBC’s Zero Carbon Building Standard Version 3. / Image: Montgomery Sisam Architects

A final thought.

As we continue to invest in and build more housing, it is important to consider the life cycle of these buildings and the long-term impacts of unsustainable development. The work of many developers, like CityHousing Hamilton and Peel Region’s Housing Development team, demonstrates that not only is building highly sustainable housing feasible, but it also delivers a return on investment. And as the market continues to shift, it affords us knowledge we can use to inform future projects across all development models, regardless of their performance mandate.


Alexandra Boissonneault is an Associate, Research and Communications at Montgomery Sisam Architects and a PhD Candidate at Toronto Metropolitan University. Her work and research focus on buildings in use.

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