Off-site Construction Research Centre

Canada stands at a pivotal moment in its housing story. As billions in new subsidies flow into the market under programs like Build Canada Homes, one fundamental question remains: how will this money actually change the cost dynamics of building housing?

If Canada doesn’t rethink and restructure how housing gets produced, financed, and delivered, not just subsidized, there’s a risk of repeating the same mistakes seen elsewhere, particularly in California, where well-intentioned funding drove costs higher instead of creating more homes.

Helix believes that solving the housing crisis demands a systems approach, and the creation of a new housing delivery system. One that integrates product innovation, regulatory reform, financing, and AI-powered orchestration to unlock a new era of housing abundance, which Aaron shared with us as part of our monthly webinar series, Transforming Construction.

Accepting the reality: The economics don’t work

Housing development in many markets across North America are at a standstill.

In places like Seattle, virtually no new multifamily housing is being permitted because projects simply can’t be financed. The math no longer works.

In 2010, price-to-income ratios were around 4–5X; today they’re 10–14X. In Toronto, a working-class family’s housing burden that once sat at 21% of income is now 64%.

Without cost reduction or system reform, new housing will not be built — no matter how pure the intentions and ambitious the targets.

The subsidy trap: Lessons from California

California invested more than $25 billion in subsidies over the last decade, aiming to tackle affordability and homelessness. The result? Costs skyrocketed by nearly 70%.

The average cost to build an affordable housing unit in Los Angeles during the period when the Triple H bond program was active reached $600,000 per door, which is higher than market-rate housing.

In contrast, innovative developers are delivering affordable units in L.A. for under $300,000 a door, and without government subsidy. Their success is rooted in relentless cost discipline, systems integration, and innovation, not public subsidy.

This is the critical takeaway: subsidizing today’s broken system only reinforces stagnation. To make progress, public dollars must incentivize new delivery systems, not underwrite old ones.

The productivity gap: Housing’s hidden cost driver

Economist William Baumol called it “the cost disease”: sectors with low productivity growth (like construction) inevitably become more expensive relative to sectors with high productivity growth (like manufacturing).

Between 1970 and today, manufacturing productivity grew 900%, while construction productivity fell by 30%.

This gap explains much of housing’s cost crisis and points to its biggest opportunity. If manufacturing can achieve massive productivity gains, why not housing?

Four pillars of a new system

Helix’s framework for returning to housing abundance is built on four components:

1. Product innovation: Develop housing components and systems that can be manufactured efficiently, standardized, and replicated, from modular designs to mass timber to AI-informed layouts.
2. Systems orchestration: (Powered by AI) Connect the currently fragmented ecosystem between developers, builders, manufacturers, regulators, and financers, into an integrated digital workflow that enables transparency and speed.
3. Regulatory reform: Align policies with innovation. Streamlined approvals, pre-approved designs, and performance-based standards make it easier to build with new technologies.
4. Market commitment: Long-term purchase and production agreements (“offtake” or market commitment agreements) between governments, builders, and manufacturers stabilize demand, lower risk, and enable continuous production.

These four pillars mirror the transformation frameworks that revolutionized other industries. from container shipping to solar power to electric vehicles, all of which achieved cost reductions of 70–90% through similar integration.

Artificial intelligence as the missing link

Artificial intelligence isn’t just a buzzword when it comes to housing; it’s the solution that can unite and orchestrate the housing delivery system.

AI can orchestrate the flow of information between land acquisition, design, permitting, financing, manufacturing, and construction, dramatically reducing waste, rework, and inefficiency.

Yet while sectors like healthcare are set to see 22X growth in AI investment, housing lags behind at 3–6X.

Without targeted AI investment, the housing sector risks missing its moment of transformation.

From subsidy to systems thinking – investing in a new model

Other industries start with a clear question: how do we transform the production system?

Housing, by contrast, tends to ask: how do we subsidize today’s costs?

If we shift our thinking, and our public investment, toward systems transformation, we can realistically target a 35% reduction in housing costs within a decade.

This isn’t theoretical. The mechanisms already exist:

• Proven modular and prefab technologies
• Standardized design systems
• Digital permitting pathways
• AI-enabled workflow orchestration
• Market commitment agreements to stabilize demand

What’s missing is alignment and the political will to support creative destruction, not protect outdated models.

A path to housing abundance

Housing abundance isn’t a fantasy. It’s a systems challenge.

By integrating innovation across production, regulation, and finance, and by investing in systems transformation instead of subsidy, Canada can break free from the cycle of scarcity.

The opportunity ahead is clear:

• Design for manufacturing
• Scale production infrastructure
• Connect systems through AI
• Commit to long-term market agreements

Together, these steps can achieve a new era of housing delivery that’s faster, cheaper, and more equitable, and create not just homes, but a resilient housing delivery system capable of building for generations to come.

Did you miss the webinar?

Watch the presentation to learn more about how a systems approach can pave the way for housing abundance.

Interesting in learning more about off-site construction? Join us on the third Thursday of every month for in-depth discussions with industry leaders.

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