Vancouver and British Columbia are betting millions on a new strategy to bring modular housing for people in homelessness online faster and cheaper. But Seattle authorities aren’t convinced yet that modular housing can work.

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VANCOUVER, B.C. — When the city outreach workers approached Richard Nuttall with an offer to move indoors, he was living at a makeshift camp near the downtown waterfront.

He could have a brand-new unit in a modular housing project in the Marpole section of South Vancouver, they said. But Nuttall, who’d spent years bouncing around Canada working in the petroleum industry, and about two years sleeping on the streets, wasn’t buying it.

It was March and the weather was freezing, but to Nuttall the building sounded a lot like a shelter, which struck him as an unappealing option.

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“I just told them, ‘No thanks,’ because there’s no incentive to going back in there if you know that you’re going to be back out on the street in three months,” he said. “That’s not enough time to get on your feet.”

The outreach workers persisted, and today Nuttall lives in a tidy, 250-square-foot room overlooking the surrounding residential neighborhood. It’s among 250 prefabricated modular homes built in Vancouver in the past two years — with about 350 more on the way — as part of a campaign to ease its homelessness crisis.

Vancouver’s strategy could be a preview of what’s to come in the Seattle metro region. King County’s $12 million project to assemble modular facilities at three sites, including one in Seattle’s Interbay neighborhood, is inching forward, but only after nearly two years of negotiations with Seattle authorities.

Despite its well-funded housing levy and flexibility to grant necessary permits, Seattle has not committed funding or land to the effort, with some officials skeptical that modular housing is the right approach to filling the city’s widening affordable-housing gap.

Meanwhile, Vancouver has sped forward with its own campaign. The modular units range in size, with the base model costing around $58,000 in U.S. dollars — much lower than the cost of creating a single low-income apartment using more traditional methods. And they come online much more quickly, though with a shorter expected life span.

While the campaign hasn’t been without controversy, outgoing Vancouver Mayor Gregor Robertson said the need to build affordable units faster and cheaper is urgent, and trumped other concerns.

“If we hadn’t taken action, we’d have a much bigger problem akin to what Seattle is grappling with.”

• • •

On the fast track

In 2008, Robertson, then a candidate for mayor, announced an ambitious goal. If elected, he would work to end street homelessness in Vancouver, a city with a population and metro area similar in size to Seattle, by 2015.

That didn’t happen. An overnight count found more than 1,740 homeless people in shelters and on the street in Vancouver in 2015, and the numbers have gotten worse.

A decade after Robertson made the pledge, Vancouver’s challenge largely mirrors Seattle’s. Cheaper single-occupancy hotels disappeared. Opioid abuse became a national crisis. Vacancy rates have plummeted, while rents have spiraled upward.

If we hadn’t taken action, we’d have a much bigger problem akin to what Seattle is grappling with.”

A 2017 report by the Canada Mortgage and Housing Corp. puts the average cost of renting an apartment in Vancouver around $1,500 — less than the average cost of renting in Seattle.

Vancouver, like Seattle, funds affordable housing development. But with rising labor and housing costs, the city hasn’t been able to keep up with the need, said Mukhtar Latif, former director of the Vancouver Affordable Housing Agency and one of the architects of the city’s modular housing strategy.

“Even as the city was building new housing we were still falling behind,” he said.

So the authorities turned to modular housing, an idea Latif said had been floating around for several years. Latif and other advocates of modular housing say its advantage is in its versatility. The buildings can be used as congregate shelters or individual apartments. They’re also mobile. Depending on the design, they can be disassembled and reassembled at a different location.

Vancouver started small, purchasing 40 modular units from a Canadian manufacturer for $3 million in Canadian dollars ($2.3 million U.S.). It chose a vacant lot in the heart of downtown, and a local nonprofit to provide on-site case management and other services.

Traditional housing projects typically take one to three years. But six months after Vancouver sought bids for its pilot project, clients began moving in.

Satisfied with the delivery time and cost, city leaders worked on securing land, relaxing zoning rules and finding funding to expand the campaign.

Vancouver identified publicly owned land and private parcels that could be licensed for city use. City leaders settled on a design and local manufacturer, and agreed to purchase 600 units for about $300 Canadian per square foot (about $230 U.S.).

The Vancouver City Council also tweaked city law to fast-track the permitting process. It enshrined modular housing as an approved use, and in one controversial move gave the city planning director the discretion to relax zoning regulations — allowing the city to use land in several areas of the city not explicitly zoned for residences.

In another critical development, Vancouver and British Columbia created something that has yet to materialize in the Puget Sound region: a joint operating strategy.

Even as the city was building new housing we were still falling behind.”

While Vancouver secures land and handles the permitting process, the provincial government provides funding to buy and operate the facilities. That’s possible in part because the province’s left-leaning New Democrat Party, which voters swept into power in 2017, quickly carved out $291 million for affordable housing, toward a goal of about 2,000 modular units throughout British Columbia.

The overall effort has resulted in six modular facilities in Vancouver, each with dozens of apartment units. And there are five more in the pipeline.

Travel across metro Vancouver, from Gastown to Marpole, and you’ll see them. Squat, white and otherwise unremarkable, the buildings are made up of units that resemble a typical studio apartment. Amenities vary, but some come furnished with twin beds, and feature bathrooms and small kitchens.

Residents live independently, though they’re required to follow some rules. Overnight visitors aren’t allowed at Nuttall’s building, and staffers conduct monthly checks to make sure the rooms are being maintained.

Rents are deeply subsidized. Each client pays around $375 Canadian per month, less than $300 in U.S. dollars. As of late August, there were no vacancies.

• • •

Evolving strategy

On one day in late summer, under a canopy of wildfire smoke, regulars at a greenbelt park on the edge of Chinatown presided over sidewalk peddler’s markets, hustling secondhand clothing and other goods to pedestrians as the day passed.

As afternoon turned to evening, some huddled in clusters near the outer wall of the Dunsmuir Viaduct. It’s a popular spot to shelter overnight among those who have used up their allotted days in local emergency shelters or run out of hotel money.

In downtown Vancouver, it’s a familiar scene. But city authorities said they hope to reduce street homelessness by placing the modular homes in areas with high numbers of unsheltered people, and then prioritizing people for placement in the facilities.

It’s unclear if the strategy has had a direct effect on street homelessness. Vancouver’s point-in-time count of homelessness tallied 659 unsheltered people in 2018 — up nearly 23 percent from the previous year — compared with nearly 4,500 in Seattle.

Vancouver’s plan is not without detractors. After city officials announced a proposal to site a modular facility in residential neighborhood in Marpole, the building where Richard Nuttall now lives, activists staged a sit-in to block it.

They later sued the city, claiming the council overreached by giving the permitting director too much discretion on affordable housing proposals, and that residents weren’t given enough time to weigh in on the project.

Chris Qui, spokeswoman for Caring Citizens of Vancouver Society, said the group doesn’t oppose building affordable housing for the homeless. “But in a democratic society the people should have a say. This should be a public process, and it wasn’t,” she said.

The province’s supreme court ruled that Vancouver officials did not violate city law, and dismissed the suit. The group has appealed the verdict to Canada’s supreme court.

Asked about the controversy and lingering concerns over whether the city would be better served investing in more permanent construction methods, Mayor Robertson said the strategy will improve as the technology does.

The permits for the modular projects last for five years, and Vancouver anticipates the units may be moved as the city continues to boom.

“We’re talking about housing that’s designed to be mobile, so, no, it’s not going to be as durable as traditional stick-and-mortar options,” he said. “But it’s a false choice to say we need to do either or. Right now we need both.”

• • •

Little traction here

As budget season looms, Seattle is facing a familiar question: With resources limited, what is the most effective way to move people out of homelessness?

Shelters and sanctioned camps are at capacity, and officials agree that the need for an interim housing option for people moving off the streets is severe.

Seattle Mayor Jenny Durkan has committed to expanding shelter beds and tiny-house villages, which cost about $2,300 to build. In the long term, the city continues to fund affordable housing projects for low-income residents, but the process is neither speedy nor cheap. It can take years for units come online, and each one can cost as much as $250,000 per unit.

But if Seattle were to try to replicate Vancouver’s modular housing strategy, it would have one less hurdle to overcome than its neighbor to the north.

Seattle city law already allows the permitting department to waive zoning where the code does not explicitly allow for residences — but only if the proposed buildings are temporary. Seattle uses that authority to site tiny-home villages and shelter beds.

Despite that, proposals to “scale up” modular housing in Seattle and King County have failed to get traction.

In 2017, a group including Seattle City Councilwoman Sally Bagshaw and King County Assessor John Wilson began discussing a proposal to construct a permanent multi-unit modular facility at an empty site in Seattle’s Interbay neighborhood.

Emails obtained by The Seattle Times indicate discussions were slowed by concerns over zoning, legal issues and turnover in the Seattle mayor’s office, though the project is now moving ahead.

Seattle housing director Steve Walker said the city will be watching the progress of the Interbay pilot closely, but acknowledged that for a variety of reasons there’s still skepticism about modular housing.

The city’s $290 million housing levy, approved by voters in 2016, can only be used to develop housing with a shelf-life of at least 50 years. Modular facilities, Walker said, aren’t yet proven to last that long.

“I think that would be a bit disingenuous to use the money for something that the voters didn’t necessarily approve the levy for,” he said.

King County Executive Dow Constantine takes a more hopeful view. For the region to fully embrace modular housing, local authorities need to see that it works, he said.

“It’s a tool, and if we’re able to show how it’s working, I think that could take the fear and uncertainty from other jurisdictions,” he said.

If the county is successful, it could make for more stories like Nuttall’s.

He spent years chasing jobs across Canada, earning at times thousands each month, until the work dried up and he was squeezed by Vancouver’s housing prices.

Sitting in his room, Nuttall says he’s grateful to live in a structured environment. The rules have helped him break bad habits.

“You live on the streets, and you go in shelter and you go out, it just takes a toll on you,” he said. “I can’t go back to that.”