A place to call home: Help shape more resilient cities

2020 has taken our cities by surprise.

Canadians are demanding productive, private, and personalized spaces to live, work, and play. The health and economic implications brought on by COVID-19 have exacerbated our housing challenges. But the crisis has also forced us outside our comfort zones to find new and unexpected solutions.

How can we create change where we live, change that has impact, change that drives the health and economic vitality we need in our communities?

Now is the time to realize the potential of cities for all people.

#UnexpectedSolutions – a virtual experience for resilient cities

Running now through November 26, 2020, Future Cities Canada: #UnexpectedSolutions features six weeks of free, virtual program showcasing and building the innovative solutions to create the cities we want and need.

Each week, experts from across sectors come together to share their solutions, their discoveries, and their big ideas for more resilient cities.

Join more than 150 speakers from across Canada and around the world as they share their thoughts on the big questions regarding infrastructure, housing and development.

Here are a just a few highlights from the six-week program. All virtual, all free.

Can’t make it? Don’t worry! Each of the following sessions will remain available on-demand the duration of the program.

1) Showcase: Innovative Solutions for Housing Affordability

Discover some of the biggest initiatives that are changing the future of affordable housing across the country.

Moderated by Graeme Stewart (ERA) and featuring Abi Bond (Housing Secretariat, City of Toronto), Faiz Abhuani (Brique par brique) and Matthew Hickey (Two Row Architect).

Join the conversation on November 24 at 11:00 AM.

See our full Spotlight: Housing Innovation program details here. The innovation showcase is funded through the National Housing Strategy (NHS) Demonstration Initiative.

2) Why Universal Design Is the Key to the Accessible City

Our cities are not designed with everyone in mind. All too often, a one-size-fits all approach is taken when designing everything from buildings to signage.

For those with disabilities, this means navigating an urban landscape filled with inaccessible spaces: From condominium lobbies and amenities to public parks and public parking lots. Attend this session to get new perspectives on how an improved accessible design process can benefit all residents.

Featuring: Orit Sarfaty, Chief Program Officer, Evergreen; David Lepofksy, Lawyer; Lezlie Lowe, Author; and Lanrick Bennett Jr. – Managing Director at 8 80 Cities

Catch this session on demand.

3) Smart Cities for People

Designing a smarter city means putting people at the center of solutions.

The push for smart, connected cities requires greater investment not only in technology and infrastructure, but in the confidence of citizens. Join this session to hear key players in the smart city space relay stories of how their work and projects have interacted with the currency of trust.

Featuring: Todd Hofley, Director, Property Relations, Beanfield; Noemi Chanda, Senior Manager, Data Protection and Privacy, Deloitte; Dr. Josipa Petrunic, President and CEO, Canadian Urban Transit Research & Innovation Consortium (CUTRIC); and Melanie Nutter, Principal, Nutter Consulting (Former Director, San Francisco Department of Environment)

Join the conversation on November 24 at 11:00 AM.

4) FeminiCITY

Cities are made of all kinds of people, but they’re not built for all of us.

Looking around at your management team, your engineering and design teams, do the people who build your buildings reflect the people who live in them?

Tune in to FeminiCITY for a discussion of the building of our city spaces for all people.

Featuring: Joy Bailey-Bryant, Vice President and Managing Director, U.S., Lord Cultural Resources; Andrea DelZotto, Executive and Director, Tridel; Leslie Woo, CEO, CivicAction; Latoya Nelson-Kamdang, Head of Moody Nolan Architects; and Orit Sarfaty, Chief Program Officer, Evergreen
Join the conversation on November 19 at 10:00 AM.

5) TD Future Cities Speaker Series: Re-Indigenizing Cities

What does it mean to Re-Indigenize a city?

From honouring Indigenous treaties, land claims and inherent rights to actively decolonizing contemporary city building approaches, it’s a complex and important conversation. Join us for this TD Future Cities Speaker Series for an exploration of how the principles of Indigenous design can change cities around the world, followed by a live Q&A.

Featuring: Wanda Dalla Costa, Institute Professor, The Design School, and Associate Professor, School of Construction, Arizona State University; Jamie Bennett, Executive Director, ArtPlace America; Selina Martinez, Architectural Designer, Indigenous Design Collaborative, Arizona State University.

Join the conversation and live Q&A on November 17 at 10:00 AM.

How to participate?

Catch sessions as they air to participate in interactive chats and Q&As with speakers and other participants, or watch many sessions on-demand after they air.

#UnexpectedSolutions is brought you by:
Lead Funder: Infrastructure Canada
Lead Sponsors: TD Bank Group, McConnell Foundation, Canada Mortgage and Housing Corporation
Convened by: Evergreen

Ontario to shift some locked-in hydro costs

The newly released Ontario budget demonstrates that a relatively modest portion of locked-in hydro costs are attributable to renewable energy contracts signed under the previous government’s Green Energy Act. Nevertheless, commercial and industrial electricity customers have been promised a direct hydro bill reduction for some of those costs beginning in January, as part of $4.8 billion worth of initiatives to help businesses recover from the financial strains of the COVID-19 pandemic.

As outlined in the 2020 budget, the Ontario government plans to transfer about 85 per cent of what it dubs “high cost contracts” for solar, wind and biomass power currently embedded in the global adjustment (GA) — the largely opaque bucket of costs that account for upwards of 85 per cent of the commodity cost of electricity — to general provincial expenditures. This is projected to equate to a 14 to 16 per cent hydro cost saving for commercial electricity customers, taking the rate down to an average of 14.31 cents per kilowatt-hour (kWh).

However, the government’s roughly $433-million annual allocation for the relief measure will cover a much smaller percentage of the total global adjustment, which surpassed $1 billion in every month from January to September this year, and topped $1.2 billion in April, May, June, July and August. Approximately 60 per cent of that cost is for nuclear power.

The budget’s breakdown of historical impacts for the commercial and industrial sectors also highlights discrepancies that can be largely linked to the formula for allocating the global adjustment. Through the Industrial Conservation Initiative, the industrial sector and some larger commercial players have had an opportunity to actively manage their global adjustment costs, while the majority of commercial customers have been relegated to pay it on a per-kilowatt-hour basis.

“The price of electricity for industrial employers increased by 37 per cent from 2008 to 2019, while commercial employers have seen their electricity commodity costs increase by about 118 per cent over the same time period,” the budget document states. “These increases far outpaced the overall rate of consumer price inflation (21.4 per cent) over the same period. That means the increase for commercial employers was about five times higher than the rate of inflation.”

With the new relief measure, Ontario electricity prices are expected to drop below average rates in the United States. Currently, Ontario’s average commercial rate of 17.02 cents/kWh is well above the U.S. 14.38 cents/kWh average. Meanwhile, industrial customers currently pay an average of 9.42 cents/kWh versus the U.S. average of 9 cents/kWh, but Ontario’s average industrial rate is projected to fall to 8.05 cents/kWh with the relief measure.

“Although this was an issue before COVID-19, the pandemic has made fixing this problem an urgent priority that must be addressed if Ontario is going to compete successfully to attract new investments, as governments around the world plan for a recovery from the global recession,” the budget document reiterates.

The budget also confirms emergency hydro bill assistance for businesses forced to shut down to comply with COVID-19-related public health protocol. As indicated last month, $300 million will be available to help “eligible businesses” with property taxes and energy bills.

Ontario budget prioritizes educational spaces

The Ontario government is allocating substantial funds to build new, modern schools and renew existing schools across the province. An investment of $13 billion in capital grants over 10 years was outlined in the government’s budget tabled on Thursday.

As part of this investment, the province will also provide $1.4 billion for the 2020–2021 school year for facility repair and renewal, which continues to meet the recommended funding level by the Auditor General of Ontario to preserve the condition of Ontario’s school facilities.

The budget also brings an additional investment of $50 million in one-time funding to support improved ventilation, air quality and HVAC system effectiveness in schools.

Child care spaces are another commitment, as the government plans to create up to 30,000 new child care spaces in the next five years. In 2019–2020, the total number of licensed child care spaces grew by more than 16,000, representing an increase of almost four per cent compared to the prior year.

BCCA welcomes Mike Fawcett as new board chair

The British Columbia Construction Association (BCCA) has announced the election of Mike Fawcett to the role of board chair for the 2020-2023 term, effective immediately.

“We welcome Mike to the chair’s role and look forward to his contributions as an experienced, long-time Board Member” says Chris Atchison, president of the BCCA. “It is a challenging time and Mike is a highly respected voice of reason for our industry. He will be a huge asset to the work.”

Based in Prince George B.C., Fawcett is a geotechnical product manager at Brock White Construction Materials, where he has worked for more than 16 years. He is a Canadian Certified Inspector of Sediment and Erosion Control (CAN-CISEC) and a Certified Erosion & Sediment Control Lead (CESCL-BC). He holds a Masters in Project Management from the University of Northern British Columbia.

Fawcett has served on the board of directors at the Northern Regional Construction Association for 12 years, and on the BCCA board for more than 10 years. He previously served on the board of the Prince George Construction Association for 11 years. This depth of experience and community service means Fawcett is well versed in the role industry organizations play, and understands the issues in front of the construction employers they serve.

In his new position as BCCA board chair, Fawcett continues the work of out-going chair Angela McKerlich of CapriCMW Insurance Services Ltd., advocating on behalf of B.C.’s industrial, commercial, and institutional construction employers on important topics such as prompt payment, the B.C. Community Benefits Agreement, skilled worker shortages, and achieving the highest standards when it comes to public sector procurement policies and procedures.

Unique to this time, Fawcett will work closely with the BCCA board, staff, and partners to ensure the construction industry remains safe and productive as it continues to provide essential services during the COVID-19 pandemic.

A focus during his tenure will be to work with the leadership of the four Regional Construction Associations to ensure strong benefit to membership while serving the industry at large. Under Fawcett’s leadership, BCCA will introduce a new three-year strategic plan which will take the organization to 2023.

“B.C.’s construction sector is stepping up to lead the way through, out of, and beyond COVID-19, both in terms of safety and economic stability,” notes Fawcett. “It’s difficult to overstate the role this sector plays in our province. Due to our size, what happens in construction by extension also happens in our communities. The work of the associations is instrumental in ensuring that our governments understand the impact of the actions they take.”

Selling price of a Toronto condo sets record in Q3

The average condo selling price was up by 8.3 per cent year-over-year in the third quarter to $633,484. The average selling price in the City of Toronto, at $680,963, was up by a similar rate over the same period, reports realtors across the Greater Toronto Area.

“While condo buyers certainly benefitted from more choice in the third quarter compared to the past few years, there was still enough competition between buyers to support average selling prices substantially above last year’s levels,” said Jason Mercer, Toronto Regional Real Estate Board chief market analyst. “It is important to note that one quarter does not make a trend, either on the demand or supply sides of the market. How the relationship unfolds between condo sales and listings over the next three to six months will dictate the longer-term direction for selling prices.”

Condo sales totalled 7,072, up 10.5 per cent from Q3 2019. The number of new listings in Q3 2020 amounted to 17,613, an 84.6 per cent increase over Q3 2019. Active listings at the end of Q3 were more than double that reported the same time last year.

“The condominium apartment segment experienced the second best third quarter on record in terms of sales and the best third quarter on record in terms of the average selling price,” said TRREB’s President Lisa Patel. “However, while the pace of year-over-year condo sales and price growth remained strong, it was lower than that reported for low-rise home types. The condo market became much better supplied as many investors moved to sell their units, due in part to softer rental market conditions and a short-term rental market that was impacted by stricter regulations and the COVID-19-related drop in tourism.”

Keystone Condos breaks ground in Mississauga

Kaneff Group of Companies is starting to build its Keystone condo development on the Cooksville Creek Ravine in Mississauga.

The two-tower project will rise 20 and 23 storeys respectively, with an integrated podium connecting them, with views of a private natural setting, rooftop patio and a swimming pool.

The exterior and interior amenities are designed to complement the sophisticated and versatile lifestyle of homeowners.

Residents of the 406 suites will have direct access to a network of tree-lined pathways, and will close to Square One Shopping Centre, Sheridan College and local gathering spots.

Other amenities of Keystone include a kids zone designed with creativity in mind, with bursts of colour, an arts and crafts area, reading pods, interactive tables and an integrated outdoor play area.

A wellness area features fitness equipment, a complete yoga studio, and space for personal training. Large windows invite an abundance of natural light while providing views of the adjacent ravine.

The main floor entrance and lobby features natural rich oak, variations of marble, and textured accents while offering a lounge area for residents.The open-air rooftop terrace brings greenery, views of the city and ample seating.

On hand for the private groundbreaking event were Mayor Bonnie Crombie, former Mayor Hazel McCallion, and Councillor John Kovac.

Keystone is currently 80 per cent sold out.

ASHRAE unveils energy performance role model

ASHRAE’s new global headquarters is a 20th century building remade to deliver high-level 21st century energy performance. The 110-member staff has spent the past month settling into the newly renovated and retrofitted 42-year-old office building, intended to physically embody the global society’s mandate to advance human well-being through sustainable technology in the built environment.

The extensive overhaul to transform the three-storey, 66,700-square-foot structure into a net-zero energy building commenced in January 2020. It reflects a deliberate decision of ASHRAE’s executive and broader membership to create a tangible example of what can be achieved in existing buildings, particularly those that date back to the era of low energy costs.

“Although new construction of net-zero energy buildings make a lot of headlines, reuse of existing structures is a basic tenet of sustainability,” affirms Ginger Scoggins, chair of the ASHRAE committee struck to monitor the project. “The energy performance of existing buildings must be addressed to substantially impact the 40 per cent of primary energy consumed by buildings.”

The new headquarters has a modelled energy use intensity of 17,000 British thermal units (BTU) per square foot per year or less than 0.005 kilowatt-hours per square foot per year (kWh/ft²/yr). It is slated to achieve net-zero energy status once the solar photovoltaic system is installed in early 2021.

Some of the other notable sustainable and energy-saving features include:

Radiant ceiling panel system, used for heating and cooling;
Dedicated outdoor air system for outdoor air ventilation with enthalpy heat recovery;
Overhead fresh air distribution system augmented with reversible ceiling fans in the open office areas and displacement distribution in the learning centre;
Six water source-heat pumps (WSHPs) four on basement level and two on upper level atrium that will be used to condition these spaces;
Demand Control Ventilation (DCV) for high-occupancy spaces in the meeting and learning centre;
Fabric duct for air distribution in office areas, reducing diffuser count and duct branches;
On-site electric vehicle charging stations available for guests and staff;
18 new skylights and reconfigured window/wall ratio.

Building occupants enjoy the benefits of 30 per cent more outside air than the minimum ventilation rate set in ASHRAE standard 62.1, Ventilation for Acceptable Indoor Air Quality. Given the ongoing spectre of COVID-19, building operators will also look to the guidance of ASHRAE’s epidemic task force and implement recommended measures for commercial office buildings as needed.

The Society’s theme for 2020-21, the ASHRAE Digital Lighthouse and Industry 4.0 — as chosen by this year’s president, Charles Gulledge — is in evidence in the headquarters’ digitally connected technology including, remote monitoring and analysis, online dashboards and advanced BAS (building automation system) integration with other systems. An advanced conferencing system enables Gulledge’s envisioned “digital lighthouse” teaching resource.

“ASHRAE’s first-of-its-kind headquarters building was designed as a living showcase of what’s possible through technology integration to increase efficiency, protect people and property, and enhance the occupant experience,” he says.

The 11-acre site in the Atlanta suburb of Peachtree Corners offers easy access to a nearby lake, greenspace and walking trails along with urban amenities like restaurants and public transit. It was acquired and transformed with the help of USD $10.2 million raised from corporate and stakeholder donations.

“It is this support that not only shows our donors’ alignment with ASHRAE’s sustainability goals, but helps us to address the challenges of designing and operating buildings in a technology-driven environment,” observes ASHRAE immediate past president, Darryl Boyce, who also serves on the building committee. “ASHRAE’s new global headquarters is an example of an effective built environment that fully considers the importance of effective operations by installing the systems and equipment in a manner that facilitates operation and maintenance.”

CFCRA partners with ISSA to help companies achieve cleaning accreditation

The Canadian Flooring, Cleaning & Restoration Association (CFCRA) and the Global Biorisk Advisory Council® (GBAC), a Division of ISSA, the worldwide cleaning industry association, have established a formal partnership to help facilities meet the highest levels of cleanliness and safety to minimize risk from coronavirus and other infectious agents.

As part of the agreement, CFCRA will act as a strategic partner for two GBAC programs that will help facility managers and cleaning staff in the wake of the COVID-19 pandemic:

GBAC STAR™ Facility Accreditation Program, which helps public and commercial facilities establish and maintain a cleaning, disinfection, and infectious disease prevention program to minimize risks associated with infectious agents and biohazards.
GBAC Fundamentals Online Course: Cleaning & Disinfection Principles, an e-learning course that trains cleaning professionals on infection and contamination control measures for infectious disease prevention.

“We are pleased to partner with ISSA and GBAC on these programs that will empower our members to incorporate best practices around cleaning and disinfection,” Lee Senter, President of the CFCRA, said. “By pursuing GBAC accreditation and training, our customers will have the opportunity to establish themselves as industry leaders in ensuring clean, safe, and healthy environments that instill confidence among building visitors, staff, and other key constituents.”

GBAC STAR provides third-party validation that facilities have the proper cleaning protocols, disinfection techniques, and work practices to meet a higher level of cleanliness and safety. Launched in early May, the performance-based accreditation program has garnered commitments from the hotel and hospitality industry, convention centers, stadiums, and venues, as well as leaders in the aviation industry.

The GBAC Fundamentals Online Course: Cleaning & Disinfection Principles training covers a variety of cleaning and disinfection topics with a special emphasis on SARS-CoV-2, the virus responsible for COVID-19. Participants in the two- to three-hour course learn infection and contamination control measures for infectious disease outbreak situations. Those who complete the course will receive a Certificate of Completion from GBAC and can use the term “GBAC-Trained Technician” to distinguish themselves.

“We are grateful for CFCRA’s partnership and commitment to GBAC STAR,” said GBAC Executive Director Patty Olinger. “Together, we will help facilities implement strict protocols for biorisk situations that foster clean, safe, and healthy environments now and in the future.”

Edmonton selects team for Valley Line West LRT

The City of Edmonton has selected Marigold Infrastructure Partners to design, build and partially finance the 14-kilometre Valley Line West LRT project.

The consortium includes Colas, Parsons, Standard General, Francl Architecture, Fast & Epp and Stantec.

Marigold Infrastructure Partners and the city will now enter into final discussions, with the contract expected to be finalized by the end of 2020. Construction is scheduled to begin in 2021 and is anticipated to take about five to six years to complete.

“We’d like to thank each of our proponent teams for participating in our procurement. We’re confident our rigorous competitive process has culminated in the selection of a strong team to deliver the Valley Line West LRT at good value for Edmontonians,” said Brad Smid, Valley Line director.

The $2.6-billion Valley Line West project has funding commitments from the Province of Alberta and Government of Canada. It is the second phase of the Valley Line, a 27-kilometre low-floor urban style LRT line that will provide seamless connection between Mill Woods and Lewis Farms once complete. The first phase of the project, Valley Line Southeast, is currently under construction.

“Marigold Infrastructure Partners is very excited to work with the City of Edmonton on the Valley Line West LRT. As partners of MIP, Colas—whose subsidiary Standard General has delivered projects in Edmonton since 1969, and Parsons—building on their decades-long legacy of delivering P3 projects in Alberta, are proud to help the City build Edmonton and meet its long-term strategic goals for the city,” said Xavier Fenaux, with Colas Canada.

As the City of Edmonton plans its recovery from the COVID-19 pandemic, the Valley Line West LRT construction project will play a key role in contributing to that recovery in the city and region.

An economic assessment of the project estimates that construction will generate $760 million in wages in Alberta and another $209 million throughout the country. It is expected to generate 8,800 jobs in the province and 2,700 across Canada.

How has COVID-19 changed the apartment market?

The Canadian Apartment Investment Conference is an annual event that attracts the who’s who of the multi-unit residential property industry. This year, because of COVID-19, all breakout sessions were held virtually and featured a number of expert speakers, including First National’s own Jeremy Wedgbury, Senior Vice President, Commercial Mortgages. On the eve of the conference, we asked Jeremy to share his views on the state of the apartment market and the outlook for construction activity.

Jeremy, we’re now heading into the final stretch of 2020, a year that has been disrupted by COVID-19. As a lender, how has First National performed?

Incredibly well. Our entire team moved to work-from-home in March and we haven’t looked back. Commercial mortgage originations amounted to $4.7 billion through June 30th – 27% more than a year ago – with contributions coming from all markets with particular strength in Ontario, Quebec and B.C. Our total commercial book now stands at just over $33 billion, making us by far Canada’s largest multi-unit residential lender. First National’s focus on the multi-unit market has made all the difference.

How is that performance even possible in this environment?

Demand for apartment financing has been driven by a couple of factors. Many owners made the decision to borrow at historically low interest rates to increase their liquidity as a risk management strategy and to prepare for the possibility of great assets becoming available for purchase. That drove refinancing business volumes. As well, developers moved forward unabated with their apartment construction projects and consequently we’re experiencing significant demand for construction financing which we are very committed to addressing. As the map shows, we’ve financed construction projects in just about every city in Canada so far this year.

Are you surprised by the continuation of apartment construction?

Not at all. Our clients are bullish about the future of the apartment sector and I’d say I’m of the same mindset. The reality is, and has been for some time, that there are far too few apartment units in our major cities and the result has been chronically low vacancy rates and almost super-charged rental inflation. As a result, developers see that there is a long-term opportunity to create more supply to satisfy sizeable demand and they are not being thrown off by pandemic conditions. In fact, a number of our clients finished up their construction projects earlier this year and moved immediately to purchase more land for their next venture. Beyond favourable demand-supply characteristics, developers like the fact that with apartments, they continue to own the land and building which is not the case with condo projects, and capex requirements for apartments are usually minimal for the first 10 years after the building opens.

The demand you are talking about is being created, in part, by people coming into Canada.

Correct and with border restrictions, the number of newcomers has declined compared to historical averages and logic would dictate that this has affected demand. However, most experts view this as a temporary phenomenon. Successive federal governments have repeatedly committed to immigration as a source of economic growth and prosperity and Canada remains a sought-after destination for those seeking a better life, and international students seeking access to our educational system. Border restrictions will be lifted eventually and when they are, we will experience a return to more normal demand dynamics.

Is the supply-demand imbalance big enough to absorb these impacts without a major disruption to the apartment market?

In my view, yes. In most major centres in Canada, demand has been running far ahead of supply for so long it would take years to reach a more balanced position even if immigration stayed low. If you are committing to a new apartment building project today, you are looking beyond the present knowing that your units will not come to market for two years or more. That time lag means developers are building for a future market and a different and hopefully better phase of the economic cycle. The bet, and I think it’s a good one, is that there will still be strong demand for new units two years from now.

There is no question that the pandemic and the resulting economic downturn has caused challenges. Is the apartment sector immune?

No sector is immune but so far, I would say multi-unit has shown its usual resiliency with strong cashflow characteristics continuing. That said, there is no question that government wage subsidies have provided an important assist in supporting a high degree of rent collection and that stable flow of cash for owners. These subsidies are coming to an end this fall so it remains to be seen what will happen with November 1st rent collections. The hope is that the re-opening of the economy will lead to a reduction in unemployment which would help those tenants affected continue to pay their rent on time and in full. But as they say hope is not a strategy, so I know many of our clients have been preparing for potential challenges which is one reason we saw significant refinancing activity earlier in the year.

What’s going on with rental rates?

Rents have been holding up in just about every market. A notable exception is the luxury apartment segment in a couple of cities. In those centres, we’ve seen luxury rents decline 10% to 15% per square foot which is a not-so-surprising correction given the rampant inflation in the high-end space in the past few years. The three groups that were driving demand for those units were millennials who were sharing accommodation, seniors who were downsizing and international students. I would think that these groups have probably taken a step back because of the economy, and in the case of international students, border restrictions. As a result, that part of the market may suffer a bit in the short term. But remember that house prices have held up remarkably well which provides seniors with an incentive to take home equity off the table to fund retirement.

What about rental rate inflation?

I would say it has moderated significantly after rising 15% or 20% over the past few years. Frankly, rents were getting to the point of unaffordability in certain markets so slower increases were probably inevitable. Going forward over the next year, I would not plan a building project on the assumption of a rise in rental rates. Having realistic proformas and conservative underwriting in this environment is a necessity, particularly in the luxury apartment space.

You mentioned luxury units. Has COVID-19 changed the features or amenities that are being planned in new apartment construction projects?

Developers are mulling over a number of different approaches. For example, consideration is being given to housing work-from-home suites within apartments that are planned in places like downtown Toronto, Vancouver and Montreal. Attention is also being paid to how in-building gyms might be constructed to enable physical distancing. This is all very new and we’re keeping an eye on it to see how it might play out.

Have apartment cap rates been affected by the economic downturn?

The answer so far is not really. The latest figures I’ve seen for apartment cap rates is they remain low across the country. CBRE’s Q2 report indicated multi-family high-rise A class apartment cap rates were unchanged at 3.79%. There has been some minor upward movement in high-rise B-class and low-rise A and B but these assets still command highly attractive valuations. Many people thought cap rates just had to go up all things considered, and they still might but the counterbalance has been low interest rates. If a developer builds to a 4% cap rate and is able to achieve a sub 2% interest rate that provides really good leverage.

It would appear that no one is expecting interest rates to rise. Are borrowers still interested in your Early Rate Lock program?

I would agree there is little talk now about interest rates rising, which was a major point of conversation last year at this time. However, I would say that developers appreciate knowing that the program still exists and understanding how early they can lock their interest rates on a term loan in future.

What about construction costs?

Costs started going up materially about three years ago and inflation was very acute in areas such as window systems and concrete forming. At times, we saw inflation of 20% and even as high as 40%. From what we can see in the market now, and based on information we glean from cost consultants, costs are not rising at this rate but they also aren’t going down. There was a theory a few months ago that as condo construction reduced, construction costs would as well. That has not been the case. Experienced developers are not waiting for cost reductions that may never come; they are proceeding with projects now on the understanding that they won’t get cheaper to build in the future.

You said earlier that First National was very committed to financing apartment construction projects. What does that commitment look like?

Several years ago when we established our construction program, we sought to develop dedicated expertise that developers could tap into from the very earliest stages of their projects. Our goal was to be an informed advisor able to take our broad access to market precedents and trends and share deep insights that would be valuable to developers as they were considering project specifications, creating budgets, navigating local municipal planning requirements and securing financing. We hired a number of specialists with relevant experience and we really dug deep to understand construction financing incentives available through CMHC. As a result, First National became recognized as an important source of capital but also knowledge such that today, we are one of the top apartment construction lenders in Canada.

How do you approach a client who is looking for a construction loan – what do you offer?

We offer choice. We do a financial analysis of the project, review the proformas and we then use our expertise and experience to present the best product option, whether it’s conventional construction, Market CMHC, affordable CMHC or CMHC’s direct-to-borrower RCFI or Rental Construction Financing Initiative program. The variety of solutions we bring to the table differentiates us compared to many other lenders who tend to have a narrow and sometimes single product focus. We then use our expertise to secure the right financing for the project. In the case of insured loan programs, First National has made it a priority to understand all of CMHC’s requirements and product offers so that we can consistently make applications that achieve our borrowers’ objectives.

You mentioned CMHC. Is insured financing a significant part of your construction business?

Absolutely. We were a first mover in evaluating and securing insured apartment construction loans for our clients and for most if not all projects CMHC programs are worth reviewing as they are very compelling from a cost-benefit perspective. For one, the allowable loan to cost is higher than for conventional borrowing and for another, borrowers are guaranteed that they will secure an insured term loan upon construction project completion without waiting for lease-up. That is a critical advantage over conventional loans when you consider that lease up could take a year or two. Perhaps there isn’t that much uncertainty in the world about interest rates right now, but knowing that there is a secure source of long-term financing at the end of a construction project – in other words a baked-in exit strategy – is a huge benefit to developers in reducing one cause of stress. We recently won a $50 million construction deal with a client that had a variety of conventional product offers on the table but chose to go with a CMHC financing through First National because of the term component.

You mentioned a “direct-to-borrower” option from CMHC. Why would you recommend it if you are not providing the capital?

Because we want to support our clients regardless of the source of the funds. RCFI is an exceptional program with a 50-year amortization and below-market interest rates that are too compelling to ignore. Consequently, we’ve built a strong advisory practice for this program. We use our knowledge to help clients navigate RCFI’s eligibility requirements, which are extensive and assessed on a prioritization scoring system that considers a host of factors. In the event a client finds they do not meet RCFI’s requirements, we can quickly pivot to another type of financing including CMHC Market or affordable Flex. I should note that these alternatives are also attractive. In fact, Flex allows a higher loan to cost, in some cases up to 95%. By comparison, CMHC’s Market program is based on 75% of cost during construction but can be 100% of cost on take out so it too serves as an important solution for First National’s clients.

Is conventional construction financing still available in this environment?

There has been a reduction in conventional funds availability because of the pandemic but the short answer to the question is yes. We do have funds on our balance sheet for conventional and bridge financing and we also partner with other investors who share our appetite. Unlike other lenders, First National is willing and able to present a variety of financing options to borrowers which I know they appreciate. Generally we like to maintain a balance between insured and conventional business but the activity this year has been more skewed to insured and that’s also due to what I said before: the ability to move directly from an insured construction loan to a term loan. It’s a critical advantage for borrowers.

Overall, how difficult is it for apartment developers to secure construction financing today?

I think lenders are getting more comfortable with apartment financing, but underwriting requirements vary greatly. Part of the problem is that many lenders still aren’t comfortable with their exit strategy in an apartment deal the way they are when they underwrite a condo construction project. They also see uncertainty when it comes to achieving planned rental rates. First National understands the sector, which is why securing financing with us is much easier particularly for developers with a demonstrated track record. But overall, I would say this is a liquid market for those seeking debt.

What advice do you have for a developer planning an apartment construction project this year?

Start planning early and seek assistance from experts to ensure your expectations for rental rates and construction costs are realistic and attuned to current market conditions, which are pretty dynamic. First National is definitely qualified to help in this regard. I would also say that constructing apartments is a complex business. As a rule, we limit our financing to experienced developers. For those with less experience, my advice would be to partner, and we can certainly help with introductions in those cases.

Final thoughts?

First National is first in apartment construction financing in Canada because we understand construction, we know apartments, we are an always reliable source of funds and our expertise adds value. We certainly accept that there will be short-run challenges because of COVID-19 but these will not change our commitment to the industry.

Should you wish to consult First National on financing your next apartment construction project, our Commercial Financing team is just a phone call or email away.

Long-term care home projects put on fast track

Surplus provincial land will be fast-tracked for long-term care home projects in three suburban cities of the Greater Toronto Area. The Ontario government has released a bid package, via CBRE brokerage services, offering three land parcels tied to requirements for a total of 896 new long-term care beds.

Purchasers must agree to develop and operate long-term care homes for a minimum of 30 years and meet all applicable licensing requirements. The sites will come with an attached Minister’s Zoning Order (MZO) to permit long-term care uses on a 16-acre site in Oakville and an 11-acre site in Vaughan. The MZO for a 40-acre site in Aurora, which is already zoned for institutional uses including long-term care, will allow for residential development in addition to the stipulation for a 128-bed long-term care facility.

Prospective development proponents are invited to submit bids that include applications for a project-specific construction funding subsidy — an operating grant of up to $23.78 per bed per day for 25 years — and a development grant to cover a portion of eligible project costs, also based on a per-bed formula. “Investors and non-profit organizations may also be eligible for favourable loan programs,” the bid package notes.

None of the sites is located more than four kilometres from a hospital, with the Oakville parcel notably just a few blocks from Oakville Trafalgar Memorial Hospital. In addition, the bid package highlights steady population growth in the three cities and the “demonstrated demand” for long-term care spaces, which is in keeping with a province-wide waiting list of more than 38,000 applicants as of March 2020.

Since the MZOs do not prohibit other land uses that the existing municipal zoning already allows, the bid package notes that the sites also provide developers with opportunities for “complementary mixed-use where appropriate”. Along with fast-track development approvals and financial incentives, additional flexibility is hinted.

“To ensure development can be expedited on the sites, consideration will be given to all possible implementation options to enable certainty and quick development timelines,” it states.

“We are delivering on our commitment to transition our seniors from waitlists to modern long-term care homes, providing a warm and safe environment with the quality of care they deserve,” says Dr. Merrilee Fullerton, Ontario’s Minister of Long-Term Care.

Finding opportunity in a crisis

The Chinese word for crisis is composed of two characters signifying “danger” and “opportunity”. We are all acutely aware of the dangers that COVID-19 presents, but let’s also focus on the opportunities that can benefit our collective future.

Twenty years ago, I was on the board of the International Interior Design Association (IIDA) when we hit an unexpected financial snag. It was serious enough that we had to curtail all programming and events while we sorted out the mess and rebuilt IIDA’s brand and purpose. While the circumstances were dire at the time, in retrospect, they provided an opportunity for IIDA to re-invent itself. All organizations need to periodically refresh their mandate but proposing to make changes or cuts to the status quo is usually a tough sell. No one wants to give up anything, which is why change takes a long time.

However, a sudden crisis offers no choice but to view the organization as an empty vessel and then start to add back events, activities, and programs, evaluating each one in terms of its real value to the organization’s core business. IIDA emerged from this crisis stronger and more stable than ever and has not looked back.

Similarly, how we make design and project decisions in a crisis has changed. With a sharper focus on what’s important and what’s not, designers and principals are finding that it’s easier to strip away incidental issues and make better and more streamlined decisions. When you remove the unnecessary details from a situation, the core needs and values of clients and your business become crystal clear.

WORKING REMOTELY
Another benefit of working remotely and in collaboration is greater meeting efficiency. When your day is a series of Zoom or Team meetings, being well prepared is essential. Without the physical dimension of communication, interaction must be clear, specific and respectful. While initially, virtual meetings and discussions were awkward, now we begin to see bonding, camaraderie and unity among team members, many of whom have never met in person. The ongoing crisis has taught us to cherish the people in our lives, and that also translates to the way we treat each other at work.

Many design and architectural firms with multiple locations have, in the past, embraced the concept of project teams across offices, with varying success. When assembling a project team, it’s easy to select folks by default with whom you have existing professional and personal rapport. The pandemic has created an opportunity for project directors to assemble teams based on the best skill sets, blind to geographic location. We now see teams composed of folks who may never have met in person, working seamlessly in mutual respect for their contributions to the project.

“The mindset that geography is not a barrier will translate to better hiring practices,” says Claudia Johnson, of the Addison Group, a national staffing agency in Chicago. “Remote work gives employers the ability to expand their candidate pools and discover talent that once may have never entered their hiring pipelines. As more companies embrace the practice of recruiting, filling and onboarding a job role completely remotely, employers will be empowered to hire the right person for the role, regardless of where they’re located, enabling smarter and better hires. Plus, relocation and housing barriers will no longer be a factor when discovering and hiring talent.”

PERSONAL TIME
Lastly, we are presented with an opportunity on a personal level. Pre-COVID, we have allowed our lives to become governed by multiple demands, reacting to the needs of others and trying to manage deadlines, social obligations, and family activities. It seemed that every hour of the day was booked, or double-booked as we raced from meeting to meeting, juggling conference calls and business travel. We have accepted being ‘too busy’ as the norm.

Then, suddenly, our world shut down. No running to meetings, no dinner parties to organize and execute, no vacations to plan and no leaving the house. The pandemic has given us an unexpected gift – the gift of time. Time to spend with children that don’t include car-pooling to hockey practice or rushing to ballet classes. Time to re-discover the joy of cooking and eating meals with family members. Time to garden, to connect virtually with friends old and new, time to read, time to reflect, to think, to breathe and to identify the things that are truly important in our lives. Would this have happened pre-COVID? Would we have been able to carve out time from our very busy schedules, while everyone else was running at top speed? Not likely.

POST-COVID
So, what will post-COVID look like? We know that what we thought of as ‘normal’ is gone, probably for good. Instead of letting busy-ness and urgency consume our lives again, let’s rebuild an external life with intention, not reflex. Having discovered our priorities, our ‘core business’, let’s make them the building blocks of a new and meaningful existence – a truly curated life, which will strengthen the skills we bring to our clients and customers.

This pandemic is challenging many of our assumptions, as designers. How we design public institutions will change dramatically in the future. Hospitals, airports, theatres, schools, restaurants, workplaces, and any other environments that bring people together will be subjected to new and restrictive functional programs, ones which place health, safety and wellness as an urgent priority. Designers will rise to these challenges, demonstrating the power of community and hopeful resilience in a time of great upheaval. We will move forward, applying our skills of creation and innovation to support a new and different world. It’s not only what we do – it’s who we are.

Carol Jones is a principal at Kasian Architecture Interior Design and Planning. She is serving as past president of Interior Designers of Canada.

Surrey school invests in COVID prevention renos

The Surrey independent school Glarea Elevated Learning has invested more than $500,000 in installing a new ventilation system to its facility, highlighting the importance of student health during the pandemic.

Located in the Excellent Ice facility, the K to 5 school opened in September 2020 and will grow with the students yearly up to Grade 12. The school’s four classrooms and “flex” space occupy the second-floor former restaurant/bar and viewing areas at the three-sheet arena, opened in 1999 by Surrey-based Lark Group.

With construction having already started prior to the coronavirus outbreak, Glarea added more structural improvements for COVID prevention, by customizing an indoor air quality design with BluTree Indoor Climate Systems. Working in conjunction with the Lark Group and Excellent Ice, the group created the ultimate climate and comfort-controlled learning environment for Glarea — which includes ventilation in every corner of every room.

This system also includes real time monitoring and adjustment, air purification with filter and UV light, constant fresh air movement and monitoring, advanced high efficiency heating, cooling, and humidity control, and O2 levels monitoring and control. This climate system will have a direct impact on increased performance and achievement, and to make sure that Educational Continuity is in place for a safe and clean learning environment.

In addition to the climate system, about $75,000 was allocated for other modifications to the facility design after consulting with the Fraser Health Authority to specifically address ways to reduce risk in terms of contagion — including motion-activated sinks, hospital standard cleaning, body temperature monitoring system, and increased hand sanitizing stations.

Currently, the renovations for the new facility at Excellent Ice in Surrey has totalled $4.7 million in Phase 1. Once Phase 3 is completed in 2022, with room to accommodate up to Grade 7, more than $13.6M will have been invested into the facility and the community.

UBC SALA relaunches Margolese design prize

The University of British Columbia’s School of Architecture and Landscape Architecture (SALA) announced it is relaunching its Margolese National Design for Living Prize.

The $50,000 award — an estate gift to UBC by the late Leonard Herbert Margolese — is open to any Canadian making a profound impact on the built environment.

In 2018, SALA paused the prize to review its terms and significance. With the relaunch, SALA hopes to attract nominations from a broader array of disciplines.

“Society is facing urgent and interconnected global emergencies. Now, more than ever, it is becoming clear that designers are empowering people to lead safer, more independent, accessible and meaningful lives. With the Margolese Prize, we intend to inspire practitioners and students everywhere by honouring Canadians who are shaping our future cities and landscapes,” said SALA director Ronald Kellet.

Eligible areas of focus include but are not limited to:

Affordable housing and social infrastructure
Community design and public space
Ecological design and biodiversity
Climate change and resilience
Human health and well-being
Food security and water quality
Social equity and environmental justice
Mobility and transportation
Disaster and pandemic relief
Universal design and accessibility.

The nominations should demonstrate tangible and far-reaching impact and benefit, reflect the power of design to enhance social, cultural or economic well-being, and inspire others or lead to replicated similar initiatives.

Nominations for the prize will open from February through March 2021, with shortlisted candidates notified and asked to submit applications, which will be due in June 2021. Winners are announced in September 2021 with an award ceremony and presentation in October.

Nominations must include the name, email and phone number of the nominator, name of the candidate, and up to 500 words describing the candidate’s contribution to the built environment.

Previous Vancouver prize winners include the late architect Bing Thom in 2013 and landscape architect Cornelia Hahn Oberlander in 2015. The prize was awarded six times from 2012 to 2017.

Why benchmarking small buildings still matters

Ontario introduced its Energy and Water Reporting and Benchmarking (EWRB) regulation in 2017, becoming the first province to make information on building utility consumption more accessible.

In the beginning, EWRB only targeted buildings more than 250,000 square feet with an eye to include smaller buildings more than 50,000 square feet. Since COVID-19 struck, the reporting deadline was extended to October 1, 2020 for large buildings and with buildings between 50,000-100,000 square feet not needing to report until 2023. However, the roughly 10,000 Ontario buildings in this lowest bracket should consider reporting voluntarily as early as possible, especially at a time when stimulus money is expected to flow toward green recovery.

The provincial government had originally proposed exempting this tier of buildings altogether (and still might), thinking the change would lower compliance costs on businesses by about $300 per building annually. But this number dips well below the utility costs savings that the program could actually achieve. Data from other North American jurisdictions shows the average building in this size class would save between $1000 and $1500 per building after only one year of benchmarking.

It is a move that runs counter to the industry’s own need for data transparency. Buildings contribute up to 17 per cent of Canada’s greenhouse gas (GHG) emissions and up to half in large cities like Toronto. EWRB is an environmental regulation, but it is also good economic policy. While building codes and standards help regulate efficiency in new buildings, existing buildings have been operating with little oversight and, in fact, no insight at all into how energy and water was being used in our cities. This not only makes regulation impossible and utility planning difficult; it costs building owners a lot of money.

Utility benchmarking—the practice of comparing performance against a standard or peer group—is the best indicator of when a building is underperforming and wasting money. Making building performance data widely available provides valuable intelligence to condo corporations.

Missed Opportunities of Benchmarking

There is a learning curve for both condo corporations required to report and the utilities providing the data. But it will be better to start learning now, rather than in several years when it becomes mandatory and the data becomes public. The information generated can provide condo boards with the ability to track utility consumption over time and flag opportunities for improved energy and water efficiency sooner rather than later.

With the potential for stimulus funds directed at shovel-worthy building projects, including energy retrofits, this intelligence can help ensure that smaller building owners don’t lose ground competitively. Large building portfolios have a strategic advantage when it comes to deploying energy efficiency programs. They typically have more resources and access to capital and are already benchmarking and seeing the benefit to the bottom line. Individually owned buildings like condos are already less likely to participate in voluntary programs like Leadership in Energy and Environmental Design (LEED), Race to Reduce, BOMA BEST, and Utility DSM and CDM programs. With four years of voluntary reporting for smaller buildings, it is likely Ontario will see much lower compliance rates and lower uptake of conservation opportunities. These buildings will fall even further behind.

One critical issue still to be addressed is that those condo corporations that do choose to participate on a voluntary basis will be hindered because utilities won’t be required to provide individual unit meter data for the purpose of benchmarking, which they must do for buildings in the mandatory group. This will leave some buildings with separate meters at the mercy of the local utilities willingness to comply.

Cities across Canada are declaring climate emergencies. The federal government wants the country to become carbon neutral in 30 years. Buildings are expected to lead the way, and those buildings with good data are far less likely to be caught unprepared when the market or regulation demands lower emissions.

As Ontario—and indeed, all of Canada—looks ahead to this critical decade of climate action, there is no reason that buildings under 100,000 square feet should wait to participate in the EWRB and reaping the benefits inherent in data transparency.

Jeff Ranson is GTA regional director at the Canada Green Building Council. He supports green building market transformation in southern Ontario, consulting for numerous private and public sector organizations around capacity building and strategic planning for sustainable development and climate change mitigation.

Next Steps

The Canada Green Building Council (CaGBC) has provided recommendations for the Ontario government’s consideration:

Continued roll-out of EWRB to buildings under 100,000 square feet. To minimize the cost of implementation, the government could consider a one-year delay for the third phase of EWRB to allow for further program refinement or delay until reaching a specific threshold, such as when 75 per cent of buildings over 100,000 square feet are reporting.
Invest in capacity building and training for smaller buildings. Minor investments in training could unlock huge economic opportunity and potential energy cost savings, while helping support the development of skills training needed for Ontario’s construction workforce to take advantage of the low-carbon economy.
Ensure the availability of whole-building utility data (including unit meters) to any building owners who wish to voluntarily participate in EWRB.

Ontario allocates roughly $1 billion for COVID-19 resilience projects

The Ontario government is providing up to $1.05 billion in combined federal-provincial funding through the new COVID-19 Resilience infrastructure stream to build or renovate health and safety related projects in long-term care, education and municipalities.

The funding is part of the federal government’s Investing in Canada Infrastructure Program and reinforces the commitment of both the federal and provincial governments to protect the health and well-being of individuals and families during the pandemic.

Eligible projects under the COVID-19 Resilience stream will fall under four main categories:

Community, recreation, health and education renovations (e.g. retrofits, repairs or upgrades to long-term care homes, publicly funded schools and co-located childcare centre facilities, recreation centres or shelters);
COVID-19 response infrastructure (e.g. heating, ventilation, air-conditioning, new builds or renovations to enable physical distancing);
Active transportation (e.g. parks, trails); and
Disaster mitigation, adaptation, or remediation (e.g. flood mitigation).

“Ontario recognizes the flexibility the new COVID-19 Resilience stream will provide to communities and organizations,” said Minister of Infrastructure Laurie Scott. “We’re making it possible for communities to get shovel-ready projects underway sooner so they can kick-start their local economies.”

The COVID-19 Resilience stream will deliver up to $700 million for education-related projects to be nominated and administered by the Ministry of Education, an allocation-based program that will deliver $250 million to municipalities to address critical local infrastructure needs, including $6.5 million that will be directed toward Indigenous and on-reserve education, through the Ministry of Infrastructure in collaboration with the Ministries of Education and Indigenous Affairs, and up to $100 million for long-term care projects to be identified and administered by the Ministry of Long-Term Care.

Eligible projects must begin by September 30, 2021 and be completed by December 31, 2021. Additional details about the COVID-19 Resilience stream and intake opening dates will be available in the days and weeks ahead.

Examining ergonomic impacts to sanitation staff

As more companies open their doors, allowing staff back to work, and with many students attending school in-person, it is important to recognize that our health and safety may compromise the wellbeing of sanitation staff.

Increased cleaning frequencies, heavy waste removal due to the use of more disposable commodities (i.e. masks, gloves, sanitation containers, etc.) and potentially heavy and/or old equipment mean the bodies of these essential workers are taking a beating. To keep them safe at work, ergonomic impacts and strategies should be under the microscope to minimize WSIB claims due to physical injury.

The following are some considerations to help ensure facilities are cleaned to expected standards without a negative backlash on the workforce:

Staffing and scheduling

Before COVID-19, most cleaning schedules had a rotation that occurred on a weekly, monthly and annual time frame to ensure all surfaces, equipment and amenities were properly cleaned without negatively impacting physical demands of the employees and, thus, injury rates. With COVID-19, those standards have increased, in some cases dramatically for the protection of staff and public alike.

In many cases, independent high-touch surfaces are being cleaned as frequently as each use, central high-touch surfaces are cleaned twice per day and low-touch surfaces are cleaned daily. Cleaning staff might experience significantly higher levels of awkward postures with the increased repetition they are required to adopt.

Many organizations have taken steps to increase their staffing to ensure that the impacts of higher repetition and manual handling required to maintain the new COVID-19 sanitation standards does not also cause an increase of injuries for their workers.

That being said, it is important to ensure that the scheduling of tasks/duties is given a thorough review in an attempt to rotate muscle groups and similar activities to provide active muscular rest breaks throughout an employee’s shift. For instance, surface cleaning rotating with waste removal allows the impact to upper limbs during surface cleaning to rest while lower limbs and back are activated in the rotation of more manual work.

Equipment

If it hasn’t been done already, and many organizations are doing a fabulous job of this, now is the time to review and audit the equipment being provided. Old, heavy and worn equipment, such as sanitation carts, mops, vacuums and even spray bottles, can be a huge source of additional force, stress and strain for a worker. Look to replace these pieces with lightweight, expandable/adjustable and automated options that will require less effort to use and allow employees to work safely but efficiently.

Training and technique

Everyone develops bad habits, but when work demands increase, poor work habits need to go. Providing regular training on ergonomic principles related to cleaning duties can be a reset for many long-term employees and a way to set the tone for healthy habits for new workers. Interactive training sessions disseminate core ergonomic awareness and allow staff members to share principles for working smarter not harder.

Self-assessments

Helpful daily reminders, especially while trying to retrain the mind and body on new or r work methods, is also highly important for ensuring sustainable habits.

Developing self-assessment checklists that become mental reminders of key ergonomic principles addressing poor postures and reducing repetition and forces can be a highly effective follow up to any training or procedural practices that are in place.

Protecting sanitation workers from injury is not only a social responsibility but an operational imperative. If facilities are unable to meet the stringent sanitation requirements because staff members are unable to work due to work-related musculoskeletal disorders, then moving forward and staying open may become a challenge.

Reviewing the aforementioned areas can lead to great strides in lowering injury potential, even when work demands increase, and can offer a foundation for an impressive ergonomics and health and safety program for the future.

Alexandra Stinson R.Kin., CCPE is a Certified Professional Ergonomist and Co-Owner of PROergonomics. With over 20 years’ experience across North America, she excels in solving diverse ergonomic challenges, lowering injury claims and developing sustainable ergonomics programs, policies and training programs. PROergonomics prides itself on a professional experience that is focused on a proactive, preventative ergonomics model that helps organizations move past a reactive claims driven approach.