A southern Ontario builder has approached the Town of Fort Frances to get in on an ambitious plan to build more affordable homes in Ontario.
At Monday night’s regular meeting of town council, councillors heard a presentation from Daniel Sega, owner of Segal Construction, a Hamilton-area developer that specializes in Accessory Dwelling Units (ADUs), sometimes referred to as a detached secondary dwelling unit (SDU), in-law units or “granny flats.” Segal said he has been working on an initiative to solve Ontario’s affordable housing shortage by working with municipalities to help lower the initial cost to have a home built and expanding on the use of ADUs to provide more housing.
“Bill 23 came out about two years ago, and they said, ‘let’s build 1.5 million homes by 2031,’ and frankly, I don’t think that’s going so well in 2024,” Segal said.
“One of the nice things that came out in the course of Bill 23 is that the provincial government said what constitutes an affordable purchase price for a detached house in the province. In Fort Frances, that’s $252,000, which frankly is not enough to actually cover the costs of construction of most things. Fort Frances, I believe, is amongst other municipalities where, when they put that number together, I don’t know what they were thinking, because hard costs of just raw materials, Tarion warranties, taxes and everything else, generally amounts to about $310,000 before I even have much to talk about.”
In order to address this shortfall, Segal said his proposal involves dealing with the costs involved to acquire and service land for a home build. If the value of the land was to be separated from the value of the house, he said, then you’re able to start having conversations where a detached house could be bought at or below the $252,000 price point the government provided.
“That was the model I wanted to come to you this evening to discuss,” Segal said.
“I presented this model across the province, and frankly, I think it’s the only way forward to create housing. Attainable housing has only been built twice in Canadian history, in the 1920s to the 1940s during the wartime housing, and then in 70s and 80s… where there’s a lot of tax incentives to build housing, and outside that time, it’s been really hard to make the numbers work, and without federal, provincial and municipal support, I don’t know how much housing is going to get built, probably comparable amounts to the amount of housing that was built over the last 15 years, without an out of the box type, suggestion model.”
Segal suggested new affordable houses could be realized through a municipal housing corporation that could help to subsidize the cost of land and servicing to the land to be able to supply houses at a market value near to the affordable point stated by the government, as well as by addressing the “real cost of construction.”
Segal also provided additional information to council in the form of an email, where he noted his company could help address the lack of entry-level homes in Ontario, and Fort Frances, by helping to build new subdivisions, utilizing municipally purchased land, and partnering with the municipality as an agent of a Municipal Housing Corporation, which he said would allow them to collaborate on project design, secure financing and grants in order to minimize costs and financial risks for the town, oversee construction and facilitate asset transition.
On Segal Construction’s website, the business touts the use of ADUs to address the the government’s call for new homes, calling them “key” to the efforts, as well providing as other benefits to Ontarians.
“ADUs are an affordable type of home to construct because home owners do not need to buy extra land to build them as they already own it,” their website states.
“Additionally, there is no need for major new infrastructure, structured parking, or elevators. ADUs can provide a source of income for homeowners. ADUs are built with cost-effective wood frame construction or SIPs (structural insulated panels), which is significantly less costly than homes in new multifamily infill buildings. ADUs allow extended families to be near one another while maintaining privacy. ADUs can provide as much living space as many newly-built apartments and condominiums, and they’re suited well for couples, small families, friends, young people, and seniors. ADUs give homeowners the flexibility to share independent living areas with family members and others, allowing seniors to age in place as they require more care.”
Segal said similar efforts have seen success in the U.S., specifically naming Muskegan, Michigan and the state of California as having implemented similar initiatives that have built affordable homes in recent years.
