Modular State (sorry, Province) of the Art
We continuously follow new concepts/trends across North America and Europe as it relates to improving housing supply. Ideas such as subsidies for commercial to residential conversion, incentivizing expanding the missing middle and government-led development models. We’ve got another one for you today – and it’s right in our own backyard.
In August, St. Catharines, Ontario (population of approximately 140,000), introduced a plan to subsidize the construction of Accessory Dwelling Units (ADUs) as part of its broader housing initiative supported by the Housing Accelerator Fund (HAF). These subsidies include grants of up to $40,000 for interior ADUs and up to $80,000 for exterior ADUs, such as detached units in backyards. Nothing to sneeze at. The goal is to obviously encourage higher density living and fast track the creation of 700 new housing units.
For us, the timing couldn’t be better as we have been working with an innovative ADU design/build company, Axe Buildings, and the founder lives in St. Catharines. We were first attracted to Axe because it embraced engineering-led design principles and years of in-field experience to cut at least 40% out of the cost to build an ADU (while simultaneously improving quality and energy efficiency). Yes, we can do more with less!
What this new subsidy means for Axe buyers in terms of dollars and cents is that a 1-bedroom ADU can be built and installed completely for net $85K. Assuming rents of $1,800, that math goes around handsomely.
Naturally given those numbers, the founder wasted no time eating his own cooking. Here’s the timeline:
• Delivery and site work: 3-5 days
• The install: A total of 4 hours
Please see a video of Axe’s first build on their website: here.
Please note that these are the first builds for Axe. Future designs will look more like this:
These early projects can be completed - from placing an order, through construction, to being able to rent out - in less than 90 days. This is mostly depending on shipping and permitting. Once Axe has established stock, and if a building permit has been secured, that drops to as little as 14 days, depending on shipping. Pretty incredible results.
Axe is being supported by Drew & Jonathan Scott of Property Brothers fame (latest collab shown here) and we think there’s national potential for the company to scale and scale fast. Now, ADUs are not a panacea and the significant subsidy offered in St.Catharines is not likely sustainable, but it will be interesting to follow the impact and directly measure the cost per unit impact that a subsidy of this nature can have. With Axe, the rental economics stand on their own and that’s a great place to start from.
We’ve seen a massive upswell in initiatives designed to simplify the process for homeowners by allowing multiple ADUs on the same property and ensuring quicker permit approvals through digitized systems. This is part of a larger city goal to accelerate housing development and encourage higher-density living, with a target to fast-track over 700 housing units in the next few years (EngageSTC)(CMHC). These measures are expected to play a critical role in expanding affordable housing options while making better use of existing residential spaces.
See if your home/property is suitable for an ADU using innovative tools such as Resimate and Rehousing and then reach out to Axe to get on the waiting list.