We fill our homes and garages with things made on assembly lines: appliances, cars, and electronics are barely touched by human hands before they get to the store. But our homes themselves are a different story. Homebuilding is still overwhelmingly done with trades building by hand, out of wood and nails, using on-site construction methods that have not gotten remarkably more productive since the 1950s. Firms have tried different methods to mass-produce homes the way we mass-produce cars, including Canada’s Mattamy Homes, whose Stelumar division in the 1990s and early 2000s built homes in Milton. This week, Mattamy announced it’s reviving the Stelumar brand for a second attempt at mass-produced, modularized home construction, starting with six-storey midrise apartments aimed at young families. Mattamy CEO Peter Gilgan spoke with TVO Today about why he’s taking a second crack at this idea — and why he’s confident it will work.
A rendering of a completed six-storey apartment building. (Courtesy Mattamy Homes)
John Michael McGrath: Mattamy tried this 20 years ago, and it didn’t work, or it didn’t endure. Why?
Peter Gilgan: Three reasons. One, it was reliant upon continuous approvals by a very specific municipality because the factory was static, and the travel distance of the product was about a maximum of a half a kilometre. So, you couldn't move the product anywhere except into the next phase of this particular development in Milton. And if you didn't get an approval, which was extremely difficult in those days, the factory had nothing to do.
Today we’re talking about modular homes that are built in pieces, if you will: big modules and assembled on site. And the transport distance is literally hundreds of miles. You have much greater flexibility.
(Courtesy Mattamy Homes)
Number two: Technology has come a long way in the last 25 years. Things like machine-readable drawings. In those days, all the drawings for all the homes had to be redrawn by technicians. I had 40 computer engineers redrawing every detail of every house so a machine could read it, so that it could build the component in the factory. That's no longer the case.
Lastly, the product in that factory had a huge amount of variability. So, your home that you had ordered, this was a factory-produced entire home, and it went out the door measuring as much as 40 feet by 40 feet — this great big thing came out the door and went down a road that we had to close for a few hours. But these homes had a massive amount of variability to each one. So it was, let's just say infinite variability in the first factory led to infinitely chaotic production flow.
McGrath: There's a reason Henry Ford used to say: You can have any colour you want so long as it's black. Right?
Gilgan: Exactly. So this plant is more along the lines of — to pick up on the car analogy — how Honda builds cars. For every model of Honda there's a good, better, and best finish to it. But it's basically the same vehicle. And Honda sells a lot of cars. And they're very reliable. And that's what we're producing.
This is about meeting affordability and livability. There are hundreds of thousands, if not millions, of couples out there looking for a home that they can afford that they would be proud to own. It's not there today for them. We hope and expect that this product is going to address that. Our core customer on this first phase of the factory is young couples, young families who are looking to have a great place to flourish.
(Courtesy Mattamy Homes)
McGrath: You mentioned being able to start from machine-readable plans. Are there other ways technology has made this more viable?
Peter Gilgan: Artificial intelligence in terms of optimisation of material usage, being able to predict what materials we're going to need, when we're going to need them, and in what quantities to order to get optimal pricing. So, for example, knowing that a certain item is going to be used a lot far enough in advance, and you teach a machine to do an algorithm that says, “We can afford to store this much material, we can afford to buy this much material, and save 18 per cent if we buy it in a larger shipment lot.” You know, there's no point in buying a lot of Christmas lights on December 26.
Doing that intelligently and automatically in all your procurement, all your production flow. Analyzing and optimizing the production flow in the factory is huge. These homes will be shipped out to perhaps as many as eight, ten, 12, sites at a time. Creating the most efficiency for the overall benefit of the system, both on the job site and in the factory — those kinds of things being done automatically. We expect huge efficiency gains.
McGrath: Many companies have tried various forms of prefabrication, and there are a lot of ideas on how to do it. The homes you're envisioning, will they be entirely modularized? Or partially assembled on-site?
Gilgan: In our first phase, we're focusing on building modules that will become components in six-storey apartment-style dwellings with wood framing. Each building will consist of about 150 modules that will be shipped out virtually finished inside. Typically, a unit will be comprised of three modules, and there's a joining strip where they meet up. That joining bond or location will be trimmed out, if you will, on-site.
Basically, the two modules will come together and there'd be a big wooden archway installed on site after they join together. It'll look like I'm travelling from this room into that room. So that part would be completely done in the factory, except for the joining strip.
The modules will be designed so that all of the mechanical stuff, the electrical stuff, the plumbing stuff, all comes out into the hallway, where it all connects. So, there'll be on-site construction for the corridors. As for the exterior, to save time and money, we'll look for materials that can be applied in the factory. But that won't always be the case. If the material is applied in the factory, you can well imagine it saves somebody from going up a crane to put cladding on the outside of a building. So, we're saying 80 per cent of the construction value overall will come out of the factory.
(Courtesy Mattamy Homes)
McGrath: Both Ontario and Canada have said they want to support exactly this kind of construction. But right now, today, with the policies that are in place as you and I are talking, is this idea viable?
Gilgan: The policies that currently exist?
McGrath: Yes.
Gilgan: Would I be investing close to half a billion dollars if I didn't think so?
McGrath: I mean, that's a fair question, but I don't have to tell you that the housing market in Ontario right now is kind of bleak.
Gilgan: You know what? When others are running for the door, you run for the fire. That's been my business model since day one. Do you believe in the future of the country? Do you believe in the viability of Canada as a nation? Do you believe that there's a huge shortage of housing generally that needs to be addressed? Do you believe that the population wants to have a decent place to live and can't find it today?
If you believe those fundamentals, then what we're witnessing is a cycle. They come and they go. And you know this factory won't be producing homes for 18 months. Right? We will work with whatever market we have. Everybody is putting everything they've got into making this not only work, more than work. Shoot the lights out of people's expectations. Really.
(Courtesy Mattamy Homes)
McGrath: I don’t want to belabour the point but you mentioned this failing last time in part because of not getting timely permits, and I covered the release of BILD’s municipal benchmarking report last fall and it hasn’t exactly gotten easier to get permits across the GTA, and where I live in Toronto the policy has supported six-storey midrise in theory but not always in practice.
Gilgan: Start with our ambition. If you don't start with ambition, you'll never get anywhere. Our North Star would say: from initial planning to turn over of keys — get there in 12 months as opposed to seven years. We've met a number of times with very senior and very cooperative — underlining the word cooperative — City of Toronto staff on how we can achieve that. One big thing is that because these buildings will be repeatable, the approvals will be a one-and-done for the building code portion of it.
Municipalities are coming to realize that time is money in a real way. They're also coming to realize that their citizens need housing, and only the whole team can make it happen. So by looking at ways to streamline the entire process and working phenomenally – I want to emphasize — phenomenally collaboratively with senior city staff, we can see some light at the end of this tunnel.
This interview has been edited for length and clarity
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