**Title: Canada to Launch Modular Housing Initiative Amid Challenges**

Canada is set to begin a new experiment with factory-built housing next year, following in the footsteps of countries like Sweden and Japan. The federal government has established Build Canada Homes, a new agency aimed at funding the construction of 4,000 modular homes on federal land. This public-private initiative will initially focus on six cities but has the potential to expand to 45,000 homes, according to government announcements.

Despite this ambitious plan, the number of homes is a small fraction of the 4.8 million units that the Canada Mortgage and Housing Corporation estimates will be needed by 2030 to address the housing affordability crisis. The government hopes that modular homes will play a significant role in alleviating this issue.

Canada's modular housing sector is still developing compared to other nations where factory-built homes are becoming increasingly popular. These homes are often praised for being faster to build, more cost-effective, and more sustainable than traditional construction methods. In Sweden, for example, a majority of homes are constructed using prefabricated elements. Japan's modular housing market is projected to exceed $23 billion by 2030, while Singapore has seen the rise of large modular buildings housing nearly 1,000 apartments.

However, experts caution that not all countries have successfully scaled modular housing to meet affordable housing needs. Carlo Carbone, a professor of environmental design at the University of Quebec in Montreal, noted that North America's building culture is heavily tied to onsite construction. He pointed out that Japan's modular housing success is partly due to its history of earthquake risk, which necessitated easily replaceable components. Sweden's industry has been well-established since the 1940s, benefiting from standardized practices across supply chains.

Lesley Herstein, a strategic partnerships manager at Assembly Corps in Toronto, emphasized the importance of learning from successful models in Sweden and Japan. Her company recently acquired equipment from a leading Swedish firm to enhance its modular building capabilities. Herstein noted that countries with thriving modular housing sectors often had significant demand for affordable housing, particularly during periods of population growth.

The Canadian government is committing $25 billion in loans to support the prefabricated housing industry. However, the concept of factory-built homes is not new. Past initiatives, such as the U.S. program Operation Breakthrough in the late 1960s, aimed to improve housing affordability but ultimately failed to scale effectively. More recent startups in the U.S. and U.K. have also struggled, with some filing for bankruptcy due to various challenges, including pandemic-related delays and negative perceptions of modular housing.

Carbone warned that poor design could hinder the success of modular housing in Canada. He stated, "In areas where it has failed, I think it's always linked to this idea of bad design. We have to avoid another era of connotations of cookie-cutter designs that just are similar and boxy and that nobody wants to really live in."

Canada's housing crisis has left many residents seeking affordable living options, often resorting to shared accommodations or long waits for public housing. The new Build Canada Homes agency aims to address these needs, but experts like Randall Bartlett, deputy chief economist at Desjardins, caution that modular homes are not a one-size-fits-all solution. He pointed to New Zealand's KiwiBuild program, which fell short of its ambitious targets, as a cautionary tale.

Bartlett noted that while modular construction can be efficient, it must be executed at a scale that meets demand. He emphasized the importance of quality and market interest in modular builds. The federal government’s initiative aims to assist low-income families, but experts warn against heavy-handed government involvement that could deter private investment.

Canada's vast geography presents unique challenges for modular housing, including the logistics of transporting large units over long distances and navigating interprovincial trade barriers. Despite these hurdles, there are existing prefabricated housing projects across the country, including initiatives in Montreal aimed at providing homes for the homeless and public housing in rural Nunavut.

Brian Doucette, an associate professor at the University of Waterloo, highlighted the potential for a parallel system of housing that meets residential needs rather than just market demands. He stated, "If we can do thousands of these various kinds of non-market and genuinely affordable housing developments or units across the country, then we can have this parallel system of housing that is actually responding to residential needs."