Z Modular, a part of Zekelman Industries, is closing its factory on Manitou Drive in Kitchener. The main reasons are the tough Canadian housing market and too many government regulations.
all photos – Z Modular
Barry Zekelman, the executive chairman and CEO, explained, “Even with our team’s hard work to cut costs, it’s not sustainable to run Z Modular in Canada. High land costs, overregulation, and lack of project financing support are major issues.”
Z Modular will continue operations in the United States, with facilities in Arizona, Texas, and Alabama.
Several factors contributed to the decision to close:
- The permitting and entitlement process is slow and inefficient, making land too expensive for affordable housing.
- Developers face the tough choice of paying too much for land or enduring long waits for permits.
- Financing modular construction in Canada is difficult and expensive.
- Under the Rental Construction Financing Initiative, financing must be approved by the Canada Mortgage and Housing Corporation (CMHC).
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Zekelman noted that, despite their efforts, getting approval from CMHC for their first modular construction project took over a year, and they didn’t receive it until the project was almost finished.
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