Rocky Sethi is the Chief Operating Officer at Adera Development.
The onset of the pandemic in 2020 exposed weaknesses in global supply chains. More than two years later, supply chain challenges persist in B.C., particularly in the construction industry.
Local builders rely on supply chains that extend around the globe, sourcing from Europe, Asia, Mexico and the U.S. With the roller coaster of container cost pricing and sustained increases in fuel prices, along with the shutdowns resulting from the pandemic, the impacts have been massive.
Shortages of materials are leading to delays, and cost increases are affecting housing starts, reducing the number of homes coming to market. Despite all of the challenges, both locally and globally, now is the time to invest in solutions. At a recent presentation to the Urban Development Institute, CIBC economist Benjamin Tal stated that “businesses must invest to improve productivity, this is the number one protection from inflation.”
Demand outweighing supply and increasing cost
The population of B.C. continues to grow, and migration and record-breaking immigration targets will continue to ensure that demand for housing outweighs supply. “Housing starts have struggled to keep up with population growth,” in some central metropolitan areas, reported the Canadian Mortgage and Housing Corporation in May. B.C. is simultaneously grappling with housing affordability, emerging as the most unaffordable region for housing per 2021 census data.
In Metro Vancouver, more than 85 per cent of new construction in 2021 was multi-family. Home builders are experimenting with both further densification and innovative forms of alternative housing to intensify the use of limited land in urban centres. For instance, across Metro Vancouver and in Victoria there is a recognition of the need to build “missing middle’ housing typologies to address the housing crisis, including stacked townhomes that can better integrate into existing communities and use available land more efficiently, while providing affordable options for home ownership.
While 15 municipalities in Metro Vancouver have adopted housing action plans as a commitment to facilitating housing affordability and diversity, only two have succeeded in delivering on their housing growth targets: the City of Richmond and the City of North Vancouver.
Sustainable solutions for the economy through job creation
In June, 2022, 49.5 per cent of employers in the construction industry anticipated challenges with recruiting skilled employees. Companies in the construction sector need to work harder on recruitment and retention efforts, and there needs to be more attention on the high-paying options available in skilled trades.
The opportunity in our province is creating a sustainable solution to the housing crisis, and one which younger people could gravitate toward. Collectively, we can do more to raise awareness of the growing number of high-paying jobs in the construction sector, but also in sustainable sectors such as forestry and hydroelectricity. The latter sectors rely on B.C’s abundant natural resources and support smaller regional economies through job creation while reducing dependence on global supply chains.
If we take mass timber as an example, the results are clear. For example, Adera Development Corporation recently constructed a townhome development using regionally harvested Western hemlock. This species grows abundantly in the interior wet belt west of the Rocky Mountains and also along the west sides of the Coast Ranges, from sea level to mid-elevation. Hemlock is not as commonly used in construction as other tree species for a number of reasons related to its characteristics. Sawmills have tended to steer clear of the species and traditionally, mills on the coast often find better value in exporting the entire log to the Asian market.
Adapting to use the resources available for housing construction
During the past decade, there have been significant changes in forestry in B.C. Fibre availability has seen immense pressure due to the mountain pine beetle outbreak, wildfires and government policy that has locked up portions of the land base, forcing mills to be more creative with the available wood fibre.
In general, hemlock has been the lesser-preferred option compared to SPF (spruce-pine-fir), which was readily available, lighter, easier to work with and had less movement (twisting, etc.). Duet CityHomes, a 60-home hybrid mass timber project in West Coquitlam, is an example of the successful use of regionally sourced hemlock. Adera worked with its partners at Kalesnikoff to utilize their advanced processes and attention to lumber for this housing project. This led to the creation of strong, durable CLT (cross-laminated timber) panels constructed from this abundant local resource.
Using regionally harvested trees from sustainably managed forests, trees that are then upgraded in local mills, allows for the creation of jobs within B.C. Furthermore, it allows for the manufacturing of more affordably-priced housing within our province, with building materials having shorter distances to travel and avoiding import fees, thus creating a local supply chain loop.
Access to reasonably priced housing is critical to the success of B.C.’s economy for future decades to come. The construction of new homes is one part of the solution to the ongoing crisis, and creating new jobs is of equal importance to sustain the economy and rapidly grow communities within the Lower Mainland and throughout B.C. As interest rates soar and international supply chain pressures persist, now is the time to invest back into our province.