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The Indwell McQuesten Lofts project in Hamilton has been certified to PHIUS standards.George Qua-Enoo/George-Qua-Enoo

Graham Cubitt, the head of projects and development for Indwell, a Hamilton non-profit housing agency, cites two reasons behind the organization’s determined push to develop hundreds of passive house-certified apartments. Constructing highly energy efficient buildings, he says, is “right and necessary.” More practically, it is a hedge against future energy costs.

“The decision affirms that the future is likely to include some form of price on pollution,” he said late last month, shortly after the release of the Supreme Court’s carbon price ruling. “By choosing the passive house approach, we should be dramatically reducing not only our emissions but also exposure to the increased financial costs of using fossil fuels.”

Passive house design relies on a combination of thick insulation, tightly sealed building envelopes, high-efficiency HVAC systems, solar orientation and triple pane windows to minimize heat loss, thereby drastically reducing operating costs and fossil fuel consumption. Prevalent in Northern Europe but increasingly common in parts of the United States and British Columbia, passive house dwellings can slash energy use and carbon emissions by 50 per cent to 90 per cent, with the associated long-term savings on utility bills.

The big question, however, is whether those long-term savings exceed higher upfront construction costs – the so-called “green premium.”

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The project contains 50 apartments, with a Hamilton Public Library neighbourhood branch on the ground floor.George Qua-Enoo/George-Qua-Enoo

Indwell, a charity, reckons the math works. Armed with 20-year to 50-year funding agreements, the organization is now building several such apartment projects across Southern Ontario, with a combined 469 units in the pipeline. About 200 apartments have been completed in the past two years. Mr. Cubitt says the cost per square-foot, a standard measure for the development sector, has ranged from $219, for a passive house retrofit project, up to $295.

The most recent, a four-storey Hamilton building with 50 apartments and a library branch on the ground floor, came in at $270, Mr. Cubitt says. That figure is just slightly above the estimated cost range for low-rise apartment buildings in the Greater Toronto Area ($195 to $265), according to figures cited in The Altus Group’s 2021 cost guide.

Mr. Cubitt’s team was able to manage costs by sourcing readily available materials and, for the latest project, was able to procure highly insulated, certified windows in Ontario whereas the same glazing previously had to be imported from Poland. (B.C.-based passive house builders are also tapping into a growing domestic supply chain.)

But in high-cost markets such as Toronto, where there’s intense competition for skilled labour and materials, the balance between upfront outlays and long-term savings is more elusive than in regional cities such as Hamilton or London, Ont., where Indwell operates.

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Indwell is now building several such apartment projects across Southern Ontario, with a combined 469 units in the pipeline.George Qua-Enoo/George-Qua-Enoo

Toronto Community Housing, in partnership with Tridel, is also trying to develop a pair of affordable passive house-grade townhouse projects as part of the agency’s larger Alexandra Park revitalization. The two complexes, with a total of 16 three- to five-bedroom units, will be located on Grange Avenue, between Augusta and Denison avenues. The Globe and Mail has been following the project, the first of its kind in the city, for the past year.

Two years ago, the agency decided to test drive this particular approach because, by about 2026, Toronto’s green building standard will require all municipally-developed structures to hit low or zero-emission targets as part of the city’s climate change strategy.

After vetting by TCH’s design review panel, a presentation to community residents and an exhaustive “validation report” by architect Diamond Schmitt, the development team is finally grappling with the capital cost, which, TCH architect Michael Lam estimates, has come in about 20-per-cent to 25-per-cent higher than what TCH would normally spend on a comparable project. It’s energy consumption, by contrast, would be as low as a quarter to a fifth of what a comparable townhouse would use.

No one at TCH has yet determined whether the two will even out over time. “This project is quite different from what we’d normally do,” TCH senior development manager Tyler Baker says. “We knew the upfront [cost] estimate but we didn’t have a lot to base it on.”

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The Indwell McQuesten Lofts project in Hamilton. Passive house projects depend on skilled tradespeople with specialized training.George Qua-Enoo/George-Qua-Enoo

To gain certification, such projects tend to use passive house approved components – windows, HVAC systems, even ventless appliances, not all of which are readily available here. But as Boyd Dyer, TCH’s director of smart building and energy management, points out, the cost of materials isn’t the largest headache. Rather, he says, “It’s the construction technique.”

Because the key to achieving the promised energy savings is minimizing the number of gaps, holes and so-called “thermal bridges” in the building envelope, passive house projects depend on skilled tradespeople with specialized training in performing what are normally considered to be as highly routine tasks, such as installing windows or attaching insulation panels. The pool of contractors with those skills is still limited.

The “architectural expression” presents another type of financial challenge. As part of its overall outlook on revitalization, TCH doesn’t want to use showcase architecture on affordable housing units. That was a mistake made by earlier generations of public housing agencies that sought out cutting- edge architecture that inadvertently ended up stigmatizing low-income residents.

Because passive house buildings tend to have smaller, inset windows and a boxier look, TCH’s design team has been trying to figure out how to achieve the desired energy savings while using conventional façade materials, like the brick used elsewhere in Alexandra Park.

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Passive house buildings tend to have smaller, inset windows and a boxier look.Graham Cubitt/Graham Cubitt

Finally, there’s what Mr. Dyer refers to as the “social engineering” aspect. Ensuring that such buildings achieve energy consumption reductions over the long-term, he says, “requires people to live differently” – i.e., not playing with thermostats, keeping windows closed when the heating or A/C is on, and learning to manage the European-style washer-dryers that take longer because they don’t use vents that perforate exterior walls and contribute to energy loss.

While TCH’s project team continues to massage the budget for this modest but groundbreaking venture, they’re trying to learn as much as they can from organizations, like Indwell and several British housing agencies, which have figured out how to make numbers balance out.

“The Indwell guys are my heroes,” Mr. Lam says. “These guys have really kind of shown that this type of work is not only possible, but it’s the right thing to do, and it’s a great thing to do.”

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