Newly-launched Toronto company Happi Builds says it can address the housing and climate change crises facing Canada by supplying prefabricated, green homes that can be nestled in a backyard.

Publicly launched May 29, Happi is led by CEO Matt Soloway, who was the CEO and president of LUXE Travel Company and the co-founder and CEO of Tamakwa Experiences.

The company will start as the exclusive supplier of prefabricated accessory dwelling units (ADUs) – a separate dwelling that can be installed on a main residence’s property – from Toronto-based R-Hauz Solutions Inc.

“Housing is a huge crisis in Toronto,” Soloway said in an interview with SustainableBiz. “I think these backyard housing (will) become a huge part of the solution, and then climate-friendly building is really something that hits home for a lot of people.”

The founding of Happi Builds

Happi started with co-founders Soloway and David Goodman in 2021, but took off when its now-director Jamie James, who is also the managing partner of Greensoil Proptech Ventures, got in touch with the team.

James sought a public entity to invest in earlier-stage climate technologies, and when he started talking to the Happi team, found modular housing as an opportunity.

Soloway was drawn to ADUs when he began exploring backyard housing in California two years ago, where a bylaw allows 60,000 permanent ADUs to address housing supply and affordability. Soloway’s time in California convinced him the value of ADUs can also be carried over to Canada.

“. . . we spent the last year just talking to different suppliers and manufacturers and deciding that based on what we had seen in California, we didn’t think the answer would be another manufacturer but rather, to go and partner with the best climate-friendly manufacturers that were building and really trying to bring this product into Toronto,” Soloway said.

In a bold prediction (which he admits may be wrong), Soloway expects traditional home building to subside in favour of prefabrication. Combined with a law that will be extended across Ontario’s municipalities to allow ADUs (also called garden suites), he believes his company could play an important role in this potential change.

The business model centres around a service fee for distributing, selling and marketing the ADUs for different suppliers, so manufacturers and builders do not have to work directly with property owners.

The R-Hauz partnership

R-Hauz is a prefabricated home designer and builder co-founded by Leith Moore, president of Waverley Projects Inc.; Michael Barker, president of Hope Beckwith Group Ltd.; and George Carras, president of RealStrategies Inc.

It offers a two-storey model called R-Suite, and is piloting a six-storey mass timber townhome named R-Town in Toronto.

In an email, Moore detailed the sustainability features of R-Hauz’s ADUs.

Its mass timber build locks in carbon which reduces embodied carbon, while prefabrication reduces waste and construction time. The highly insulated slab-on-grade foundations eliminates most of the concrete typically needed for a foundation, reducing most of the need for the carbon-intensive material.

They can run core functions off electrical systems, with cold climate heat pumps, thermal performance and hybrid water heaters to increase energy efficiency.

Passive House-inspired design emphasizes reducing energy consumption for heating and cooling, thus reducing operational carbon emissions. “The panelized walls and roof are approximately 70 per cent higher performing than code minimums, and windows are either double to triple glazed,” Moore states.

The roof can be equipped with solar panels, and the ADUs have grey water recycling and LED lighting.

A Happi news release says an R-Hauz ADU can be installed in 12 to 16 weeks.

How the ADUs can be used

The ADUs are designed for long-term use, such as housing for seniors or young adults who return to their parents because they cannot afford a home. Privacy can still be maintained and the ADU concept is not much more different from homeowners who rent out their basements, Soloway said.

Soloway expects around half of the ADUs to be used as secondary housing for family, and the other half to be rental units.

As a rule of thumb, Soloway expects ADU rental units at the lower end to be priced at approximately $300 to $400 per square foot, while the higher-end models will cost approximately $400 to $500 per square foot.

A Toronto bylaw allows for backyard ADUs to reach 645 square feet per floor to a maximum of two floors, meaning a backyard home can be as much as 1,290 square feet.

Where Happi plans to go next

Soloway says Happi plans to offer more than one ADU product line. Happi is working with other designers and architects to build different models on the R-Hauz system.

Soloway envision offering property owners other styles, which means letting the “market dictate what we’re missing.” That could mean offering more affordable, or even pricier, models.

He identified Toronto as a great market for Happi, and the company says 500,000 properties qualify for ADUs within the city.

With more municipalities in Ontario like Mississauga, Brampton and York, and even cottage country soon to adopt the bylaw allowing ADU construction, there is more space to grow.