Collapse of an affordable housing dream
John Lorinc, Toronto, Special to The Globe and Mail, Published October 1, 2026
It was, and may still be, the home-building industry’s version of the chicken-and-egg quandary.
When Leith Moore, an architect and infill developer, in 2021 decided to take a run at constructing modular housing, his firm tapped into a stream of small-scale affordable projects backed by governments or non-profits aiming to build quickly. Their “volumetric” components – rooms, effectively – could be built in a factory, then assembled on site.
Yet after Mr. Moore and his Assembly Corp. partners began scaling up in anticipation of a surge of new factory-built projects promised to flow through Ottawa’s new Build Canada Homes (BCH), as well as the massive planned redevelopment of the former Downsview Airport lands, actual orders simply didn’t come fast enough to sustain their capital investment.
“I feel we were early for what we thought would happen with the federal government and off-site fabrication,” he said in an interview. “That is going to come about a year after when we needed it. There’s a lot of good things happening, but they didn’t happen in time for us.”
A spokesperson for Build Canada Homes – which is the centrepiece of Prime Minister Mark Carney’s effort to drive affordable housing construction using factory-based automation, dubbed “modern methods of construction” (MMC) – said the agency “is focused on creating a predictable pipeline of housing opportunities that can support manufacturers, suppliers and builders.”
“Roughly 50 per cent of the units committed by BCH,” the spokesperson added, “incorporate MMC approaches, including modular, panelized, prefabricated and factory-built housing.”
Assembly Corp., founded in 2018 and formerly known as R-Hauz, sent shock waves through Toronto’s affordable housing circles this summer when it was forced to declare bankruptcy, just months after entering receivership in May. “We’d given [the creditors] a proposal because we thought we could do it more cost-effectively and help wind them up at a lesser cost and faster. But after many lawyers and many meetings, that didn’t really transpire.”
Several of its mass timber or modular projects, for partners such as WoodGreen, the YMCA and the Elizabeth Fry Society, are in limbo.
“The City of Toronto has actively engaged with the non-profit housing providers impacted by these proceedings,” Aviva Levy, housing development office director, said in a statement. “This includes working closely with the court-appointed receiver and non-profits to develop a path forward for completing the projects.”
According to filings posted by receiver GlassRatner, seven nearly finished housing projects with a total of 153 affordable and deeply affordable units and a combined value of almost $70-million have been affected by the bankruptcy. Three involve First Nations. Mr. Moore and several investors, including former Evergreen CEO Geoff Cape, had invested $4-million in equity and debt in the firm since 2001, according to court records. The firm had 26 employees when it applied for creditor protection.
Creditors include numerous general contractors and suppliers, most of whom have registered liens against Assembly’s projects, as well as PaceZero Capital Partners, which had provided Assembly with $5-million in financing.
Besides these projects, the company last year purchased automated fabrication equipment from a Swedish firm and was negotiating a lease with Canada Lands to build a 124,000-square-foot factory next to the 370-acre Downsview site, acquired in 2018 by the real estate arm of PSP Investments, Northcrest. A spokesperson for Northcrest declined to comment.
“We had assigned a lease at Downsview to build a plant there supposedly this year,” said Mr. Leith. “There [are] plans for 63,000 housing units up at Downsview,” Mr. Cape said in an interview with The Globe last year. “If we can secure 5 per cent of that, that’s a billion and a half dollars [of] work that helps us become a viable company.”
Mr. Moore said he couldn’t comment on the state of the automated equipment, which is currently subject to the bankruptcy proceedings.
Both Mr. Cape and Mr. Moore hoped to see more progress in the policy environment, including more financing to sustain the factories where the components for this kind of housing could be mass produced. Mr. Cape last year fronted a lobbying effort by other modular builders while Mr. Moore was hoping for movement as part of a broader reform effort driven by Canada’s wood products sector, which released a 60-page report in the spring.
Among other things, the Canadian Forest Sector Transformation Task Force recommended a range of policies to kick-start the MMC industry, such as accelerating BCH’s procurement activities and promoting the use of Canadian wood in mass timber products.
Task force co-chair Ken Kalesnikoff, principal a B.C.-based producer of factory-based modular components made from wood, says that boosting this market involves a range of policy fixes – among them, making more land available for logging and streamlining the permitting process. U.S. tariffs and procurement restrictions are also cramping the industry. But, he adds, “Build Canada Homes really has to get their act together and get that building started.”
Mr. Moore added that the challenge was finding suppliers interested in selling Assembly the kind of specialized cross-laminated timber products it needed for its modular projects. “The issue has been that there are so few fabricators [so] there is not a lot of incentive for change.”
In the end, Assembly was unable to figure out how to create both a reliable supply chain and an order book with enough business to justify the cost of building the kind of factory required to churn out easy-to-assemble housing. “Just timing,” Mr. Moore said with a sigh. “Everything didn’t work, and so it all came crashing together, with a whole bunch of contractors and liens and financing guys and lack of patience. It was a real lesson.”
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