Minutes – Standing Policy Committee on Property and Development – December 6, 2010 REPORTS Minute No. 8

Intermodal Steel Building Units eFile FI-2.1

STANDING COMMITTEE DECISION: The Standing Policy Committee on Property and Development filed the matter.

1

Minutes – Standing Policy Committee on Property and Development – December 6, 2010 DECISION MAKING HISTORY: Moved by Councillor Wyatt, That the matter be filed. Carried STANDING COMMITTEE RECOMMENDATION: On May 4, 2010, the Standing Policy Committee on Property and Development passed the following motion: WHEREAS the City of Winnipeg is committed to affordable housing; AND WHEREAS the City of Winnipeg is committed to innovative housing solutions; AND WHEREAS intermodal steel building units can help lower environmental impact through the recycling of building materials; AND WHEREAS intermodal steel building units are considered an affordable option for those committed to eco-friendly architecture; AND WHEREAS companies have been manufacturing inter-modal steel building units in Alberta for the past three years to help address the housing crisis within the province; AND WHEREAS intermodal steel building units have been used as a cost-effective solution in the United States, Holland, Great Britain and China; AND WHEREAS intermodal steel building units cost up to 40 per cent less compared to traditional lumber or factory made steel structures; THEREFORE BE IT RESOLVED THAT the City of Winnipeg Public Service be requested to report back to the appropriate committee of Council in 120 days with a report including: 1.

initiatives taken by other municipal governments across Canada to encourage the use of intermodal steel building units in the housing market;

2.

the benefits and disadvantages of intermodal steel building units; and

3.

recommendations regarding the viability of:

2

Minutes – Standing Policy Committee on Property and Development – December 6, 2010 DECISION MAKING HISTORY: (continued) STANDING COMMITTEE RECOMMENDATION: (continued) A.

developing City initiatives to encourage the use of intermodal steel building units in the housing market; and

B.

incorporating the use of intermodal steel building units within the City’s Affordable Housing Initiative.

3

ADMINISTRATIVE REPORT Title:

Viability of Developing Affordable Housing in Winnipeg Using InterModal Steel Building Units (ISBUs)

Critical Path:

Standing Policy Committee on Property and Development – Executive Policy Committee – Council

AUTHORIZATION

Author

Department Head

S. Dueck

D. Joshi

CFO n/a

CAO M Ruta Acting CAO

RECOMMENDATIONS 1. 2.

That the report (APPENDIX A) be received as information That the Winnipeg Public Service monitors the progress and results of the City of Vancouver’s Expression of Interest (EOI) process regarding ‘container housing’ and identifies any opportunities that might apply to the City of Winnipeg for future housing development.

REASON FOR THE REPORT The Standing Policy Committee on Property and Development passed the following motion on May 4, 2010: The Standing Policy Committee on Property and Development requested the Winnipeg Public Service to report back to the appropriate committee of Council in 120 days with a report including: 1. Initiatives taken by other municipal governments across Canada to encourage the use of intermodal steel building units in the housing market; 2. The benefits and disadvantages of intermodal steel building units; and 3. Recommendations regarding the viability of: A. Developing City initiatives to encourage the use of intermodal steel building units in the housing market; and 4

B. Incorporating the use of intermodal steel building units within the City’s Affordable Housing Initiative IMPLICATIONS OF THE RECOMMENDATIONS

• • •

•

•

•

• • • •

Shipping containers or Inter-Modal Steel Building Units (ISBUs) have been adapted for housing use in Europe and other parts of the world. No urban multiple family development of size has been initiated in North America todate. Policy regarding ISBU and modular housing needs be clear regarding if the housing is intended to be temporary (portable) or permanent and if it is to be used as temporary or permanent housing. The former relates to the structure; the latter to the occupant. o Housing used as temporary housing is typically within a permanent structure, used by individuals making transitions from one housing state to another. o There is currently little need in Winnipeg for temporary housing structures. o There is an identified need in Winnipeg for permanent structures to provide both temporary and permanent affordable housing. o Assuming that ISBUs are being considered as permanent structures, one assumes that the primary impetus for investigation is one of cost effectiveness and a secondary consideration would be for environmental benefits. There is no clear economic advantage to ISBU modular housing in Winnipeg, since conventional modular housing would serve the same purpose for approximately the same cost, and conventional construction would cost the same or potentially even less for equivalent construction. If ISBUs represented a viable modular ‘building envelope’ in Manitoba, it would be likely that Manitoba’s modular home builders would already be directly engaging with this concept. The City of Vancouver is preparing to formally request Expressions of Interest for housing development using modular housing, and they could potentially receive proposals from developers using ISBU modules. This process could identify opportunities that might apply to the City of Winnipeg for future housing development. Environmental considerations regarding use of ISBUs in Winnipeg are less pressing given that, unlike Vancouver, which is challenged with the disposal of thousands of unused containers, Winnipeg has few surplus containers. Costs and energy consumption to ship surplus containers from Vancouver would adversely affect the financial and environmental cost-benefit equations. Used ISBUs would need to be certified for shipping history given the potential health issues / considerations that may arise from containers that might be contaminated if previously used to ship toxic materials. ISBU modular construction represents potential challenges from a zoning and building code perspective. The probability of code compliance would be challenging and potentially expensive, especially with used shipping containers. Until these issues are addressed, the risk of undertaking ISBU modular construction will remain high. Products exist that are pre-fabricated and pre-furnished and can be shipped from location to location. These units would be more appropriate for temporary housing that requires minimal time and effort to establish (work camps, etc).

5

HISTORY •

6

There is no City history of note on this issue.

FINANCIAL IMPACT

Financial Impact Statement

Date:

October 28, 2010

Project Name: Viability of Developing Affordable Housing in Winnipeg Using Inter-Modal Steel Building Units (ISBUs) COMMENTS: The recommendations contained in this report are that APPENDIX A be received as information and that the Winnipeg Public Service monitors the progress and results of the City of Vancouver’s Expression of Interest (EOI) process regarding ‘container housing’ and identifies any opportunities that might apply to the City of Winnipeg for future housing development. There are no financial implications associated with these recommendations.

"Original Signed By" Mike McGinn, CA Manager of Finance

7

CONSULTATION In preparing this report there was consultation with:

SUBMITTED BY Department: Planning, Property and Development Division: Housing Development Division Prepared by: Dave Dessens Date: November 9, 2010 File No. O:\Reports Directive\Housing Development\RIS ISBU Housing.doc

8

APPENDIX A

History of ISBU-Based Housing1 Background An Inter-Modal Steel Building Unit (ISBU) is the name given to an intermodal shipping container that is used for building construction or storage. The most common containers are constructed of steel and manufactured in 20 and 40 foot lengths, although other lengths are also available. Container interior width is 7 feet 8 inches, and heights range from 7 feet 10 inches for standard boxes to 8 feet 10 inches for “high cubes”. Sizes may vary by manufacturer. Since the early 2000s, Shipping Containers have become popular in some parts of the world for use as home, storage, prefab, and business construction. The most common residential use appears to be temporary modular housing (i.e. work camps, etc.) that can be moved as needed. In some limited cases, more permanent residential structures have been built partially or entirely from ISBU modules. ISBU modules can be developed from used shipping containers, and this is perhaps more common when units are customized for a specific development (such as a single-family home). In other cases, ISBU modules are manufactured specifically for use as housing, and are shipped to location for assembly. These “purpose-built” units are more commonly built from new containers that are specifically designed and manufactured as housing units, and essentially represent a form of modular housing that can be stacked for multiple storey developments. Construction in Europe and Elsewhere Urban Space Management Ltd. (USM) is a British management organization with more than 30 years experience in urban regeneration initiatives. In 2000, USM established a system called “Container City” (http://www.containercity.com), which uses shipping containers linked together to provide high strength, prefabricated steel modules that can be combined to create a wide variety of building shapes. USM has used this system to develop a wide range of projects including studio space, retail space, youth centres, live/work space, office space, artist studios, general practice, office space, classrooms and a nursery.

1

http://www.intermodal-design.com/About.html (Photo used with permission)

9

The USM’s earliest residential development was Container City I, which was completed in London in 2001. This development originally produced 12 work/studios in a 3-storey building, and was later expanded to add three live/work apartments in a fourth floor. In 2002, the company added 22 studio units in a 5storey building called Container City II. Since that time, USM has undertaken a number of projects in and around London and the UK, and is planning a retail/residential development in New York (the American project has not been confirmed). Tempohousing (http://www.tempohousing.com/) is another prolific developer of modular housing that is based in The Netherlands, and has undertaken housing development using ISBU modules in a number of countries around the world. These projects include development of hotels, student housing and transitional housing. In some cases, development includes traditional construction of the main floor, with upper floors being developed using ISBU modules. In other cases, the entire housing development has been established using ISBU modules as a temporary structure that will be replaced by a permanent structure within a period of years. The Tempohousing website describes several projects that are either complete or underway. One of their first projects was a 1,000 unit student dormitory in Amsterdam that provides self-contained units with separate balconies. This development was intended to be moved after five years, but that relocation has been postponed until 2016. Likewise, Tempohousing constructed a 250 unit student housing development in Diemen, which borders Amsterdam. This project was started in December 2007 and completed in April 2008. Also in Amsterdam, Tempohousing constructed a three storey mixed-use development for the Salvation Army. The main floor was built using conventional concrete construction, on which two storeys of housing units were built using ISBU modules. The project was commissioned for use in September 2008. Temphousing development is not limited to the Netherlands. They also built a 168 room hotel in Yenagoa, Nigeria. As with the Salvation Army project, the main floor of the hotel was built using conventional concrete construction, and four storeys of prefabricated

10

rooms were built above the concrete main floor. Buildings constructed from modular units can be completed quickly, which is a distinct advantage in emergency situations. As an example, Tempohousing shipped 70 prefabricated hotel rooms to Haiti in July 2010, and these modules will be used to construct a new hotel in Port-au-Prince to replace one that collapsed in the recent earthquake that devastated the country. The 70 units will be the first wing of a larger development, and were shipped completed and intact with all furnishings. The completed hotel is expected to be ready in October/November 2010. It is assumed that both Container City and Tempohousing projects were designed by professionals and complied with the applicable codes. Construction in North America Multiple-family ISBU housing projects have been proposed in several cities in North America, but to date no urban development has been initiated. Primary impediments have been zoning concerns and building code questions regarding structure and fire separation between units. Even so, several single-family detached homes have been built both in Canada and the United States. Other jurisdictions in Canada are currently exploring use of modular housing including that based on ISBU modules. Vancouver in particular appears interested in the concept. On July 22, 2010, the City of Vancouver passed a motion that, “Council direct the City Manager to undertake an expression of interest (EOI) to ascertain the range of possibilities and partnerships available to pursue an initiative involving modular housing options, using city and private resources as an enabler, to address unmet housing need while sufficient permanent housing stock is being built.” The intent of this motion is to explore opportunities to develop temporary housing using all forms of modular housing, including that from ISBU modules. Vancouver City administration expects to issue the EOI by year-end, with a Request for Proposals being issued in spring 2011. Inquiries were made to authorities in Victoria, B.C., Surry, B.C., Calgary and Edmonton, Alberta (as well as to Alberta Municipal Affairs). It was confirmed that no multiple-family developments have been built in any of these jurisdictions using ISBU modules. Benefits of ISBU-Based Housing Construction Timeframe As demonstrated by the Tempohousing developments, modular construction can be completed in a very short timeframe compared to conventional construction methods. Modular units are completed off-site and shipped intact to the site for assembly. This characteristic of modular construction offsets development challenges in Winnipeg created by winter construction. It also provides opportunity to address critical housing needs if the site and infrastructure (hydro, sewer and water) are readily available. These units can later be relocated as local housing needs shift. Flexibility to Relocate Housing constructed from ISBU modules is often intended as temporary housing while more permanent structures are being developed. These modules can then be moved to another location, reassembled, and established as housing in a new location. Alternatively, ISBU

11

modular housing can be assembled as a permanent structure on a permanent foundation. This flexibility creates a wide range of opportunities to address housing needs. Re-Use of Excess Containers According to the British Columbian online magazine “The Tyee” (http://www.TheTyee.ca), more than two million “twenty foot equivalent units (TEUs)” flow through Port Metro Vancouver every year (containers come in varying sizes and are measured as TEUs, so that a 40 foot container equals two TEUs). Most of these containers originate in China, Japan and Korea and are reused as shipping containers; however, approximately 100,000 containers are left behind as surplus. These surplus containers can be recycled, but a typical 40 foot container requires approximately 8,000 kilowatt-hours of energy to melt and remanufacture.2 A more environmentally-friendly solution is to use the existing steel box for an alternative use without significant alteration of its existing form. While surplus containers are prevalent in port cities such as Vancouver, Winnipeg does not suffer from this problem. Through discussions with CN and Canadian Pacific Railway, it was determined that only small numbers of surplus containers (usually less than ten at a time) become available occasionally in Winnipeg, and those containers are auctioned off only after they are no longer usable as shipping containers. Containers can be purchased through auctions from other jurisdictions, but those containers must then be shipped to Winnipeg at the purchaser’s expense. Challenges to Developing ISBU-Based Housing Potential Contaminants Construction from used containers offers environmental benefits, but creates concerns regarding potential contamination of units from past contents. As stated by one manufacturer of purpose-built units, “I am biased against used containers. I was in the shipping business. These containers go all over the world. You don’t know what kind of freight they carry. And then you expect people to live in them?”3 This disadvantage is minimized if containers are surplus after a single use, as is the case of surplus units accumulating in port cities such as Vancouver. These containers are generally in very good condition and the history of contents is readily available. These units are not typically available in Manitoba and would need to be purchased in Vancouver and shipped to Winnipeg at the purchaser’s expense. Zoning and Land Use An inter-modal shipping container in and of itself does not constitute a structure, and is not allowed as stand-alone building unless it is modified to comply with applicable building codes. Once the unit has been modified to comply with code as a structure, normal zoning and land use restrictions would apply, including a requirement for zoning as RMF (Residential MultipleFamily) if the structure was used as a multiple-family residential development. Building Code Compliance A structure based on ISBU units would be subject to regulation under the Manitoba Building Code as would any other residential structure, and these requirements would apply to structural 2 3

Paulsen, Monte. “Green and affordable homes, out of the box.” The Tyee, April 12, 2010. Paulsen, Monte. “Homeless housing for less.” The Tyee, April 14, 2010.

12

sufficiency, foundation design, insulation, fire rating criteria and sound transmission. Examination for compliance and the involvement of design professionals would be necessary in each of these areas as described. Examination and confirmation of code compliance would have a cost implication in each case. Structural Sufficiency There is no structural data that will substantiate that the shipping container will support Winnipeg snow or wind loads. The services of a professional engineer will be required to determine the structural adequacy of the ISBU to support the snow and winds loads for Winnipeg. The containers are subject to an ISO standards and the analysis would have to be based on these standards. If there are varying types, each will have to be assessed and registered as compliant. Dwelling units are commonly provided with windows and doors as such openings must be cut into the ISBU. The engineer will have to establish that, if openings are cut into the ISBU, the structural integrity of the ISBU is maintained. If the location of openings is limited, then those limitations must be established and fully documented. Foundation The ISBU will require a foundation that is designed by a professional engineer that is registered in Manitoba. The foundation design will have to indicate the design details to support the vertical loads associated with both snow and dead loads. The foundation must also include anchorage details to hold down the ISBU for uplift and overturning due to wind loads. Insulation All exterior elements of a residential dwelling unit are required to have insulation. The insulation levels are as follows: i. Roof – RSI 8.8 (R-50) as of December 1, 2010 ii. Walls – RSI 3.5 (R-20) iii. Floor (above unheated spaces) – RSI 4.0 (R-28) The insulation levels of an ISBU are minimal as such insulation will be required to be added to the ISBU to achieve code compliance. Fire Rating Criteria A residential occupancy, that contains not more than one dwelling unit, requires the exterior wall(s) to have a 45-minute fire-resistance rating if the wall(s) is located less than 1.2 meters (4 feet) to the property line. If 2 or more ISBUs are placed side-by-side or stacked, a wall/floor having a ¾-hr fire separation is required between the units OR 1-hr, if the ISBUs contain 2 or more storeys. Sound Transmission If 2 or more ISBU are places side-by-side or stacked, an assembly having a sound transmission class rating of 50 shall be provided between each unit. Cost Analysis Determining capital costs for developing housing from ISBU modules is challenging, especially if estimating cost for development from used containers. As indicated in the previous section, this type of construction will require analysis of structure, foundation, fire separation and insulation

13

against sound transmission. These costs would be in addition to the actual cost of construction for converting ISBU modules into housing. Regarding conversion costs, ISBU modules would require modification for windows and doors, wiring, plumbing and thermal insulation. Interior framing and finish would be necessary, in addition to sound insulation and fire barrier additions between units. Cost comparison to conventional forms of construction is also dependent on the height of the structure, which will determine type of construction and requirements for elevators in the building. National building code allows for wood frame construction (if the building is sprinklered throughout) to a height of four storeys, after which the structure must be noncombustible (i.e. concrete and steel). As well, an elevator is required for buildings over 18 metres in height, which again adds to the cost of taller buildings. Although costs for conventional construction vary widely according design and quality of finish, wood frame buildings generally cost $125 to $150 per square foot, while steel frame buildings generally cost $175 to $200 per square foot. These amounts would include the building foundation and other capital construction costs. Accurate cost estimates for construction using ISBU modules would best be achieved through a request for expressions of interest, as is being conducted in Vancouver. Barring availability of details related to a specific project, potential ISBU developers have estimated general costs per square foot for this type of development, which would then be adjustable according to projectspecific requirements. These estimates have ranged from $100 per square foot for low-income or affordable low-rise housing (under four storeys) to as much as $200 per square foot for upper end high-rise development. These costs are consistent with those quoted by C-Bourne Structures Western Canada Ltd. (http://www.cbourne.ca), which distributes purpose-built units manufactured in China. Modular units supplied by this distributor can be configured using 20-foot or 40-foot long units at approximately $100 per square foot, excluding foundation and utility connections. This type of housing would be comparable in cost and concept to other forms of modular housing, noting that standard modular housing is not constrained to size of ISBU modules. Conventional modular housing is manufactured in southern Manitoba and is readily available to the Winnipeg market. C-Bourne also provides fully self-contained and fully furnished 320 square foot units for approximately $130 per square foot (again, exclusive of foundation or utility connection costs). Units can also be leased from the company for $350 per month per unit, with an option for the lessee to acquire units after seven years for a nominal fee. These units would be more appropriate for temporary housing that requires minimal time and effort to establish (work camps, etc). Conclusions Housing constructed from ISBU modules offers several advantages, including fast on-site construction, flexibility as a temporary or permanent structure, and potential environmental considerations if modules are developed from used shipping containers. The temporary nature of development does not negate the need for proper zoning or land use consideration, and these factors would require attention regarding any proposed development. Environmental benefits to using used shipping containers mainly provide an alternative to shedding and melting metal in the recycling process. Housing is one alternative for reusing

14

containers, and they can also be used for storage or nonresidential construction. Used containers are not readily available in Winnipeg, and would necessitate purchase and relocation from locations such as Vancouver or Toronto. Environmental benefits would therefore accrue to source locations rather than to Winnipeg. There is no clear economic advantage to ISBU modular housing, since conventional modular housing would serve the same purpose for approximately the same cost, and conventional construction would cost the same or potentially even less for equivalent construction. The probability of meeting code compliance would be challenging and potentially expensive, especially if units are built from used shipping containers, and these questions increase the risk of undertaking ISBU modular construction until they are addressed. The City of Vancouver is preparing to formally request Expressions of Interest for housing development using modular housing, and they could potentially receive proposals from developers using ISBU modules. It is recommended that the Winnipeg Public Service monitor the progress and results of the Vancouver process to identify any opportunities that might apply to the City of Winnipeg for future housing development.

15