With over 20 years’ architectural experience, Altius Architecture is a Toronto-based multidisciplinary architectural firm with a focus on the broader residential market, and a commitment to embracing innovative sustainable design.

Managing Principal Graham Smith is one of the firm’s founding partners, and has helped guide Altius to becoming an industry leader for architect-led design-built projects for individuals seeking private client services for their homes and vacation properties. The company is best known for its high-end sustainable contemporary homes and cottages throughout the Greater Toronto Area and Southern Ontario’s cottage country. Mr Smith spoke recently with The Canadian Business Quarterly about the firm’s unique position in the architectural sector, the issues currently at play in the Canadian housing market, and the firm’s recent shift towards building spec homes.

Architect-led design-build

“Altius is a full-service firm, with architects, interior designers, project managers, and construction managers,” Mr Smith says. “We’ve been working with private clients for over 20 years and have completed over 450 projects throughout the GTA and across cottage country, from the shores of Georgian Bay all the way to the Ottawa Valley.”

The company has developed a particular expertise in building contemporary homes, with a strong focus on sustainable features, energy performance, and an integration of all the modern features clients expect and demand in their homes.

“Having built so many homes for so many clients, we have a profound understanding of what makes or does not make a home work, from a design perspective. It also means that we’ve tried and tested an enormous range of materials, fixtures, finishes, and equipment, so that we can offer our clients an expert opinion about how to build their homes.”

Altius’ unique approach to business means it builds the majority of the homes it designs. This is fairly unusual, as architects would normally take a step back from the building process itself, with a general contractor or constructor taking the lead.

“Altius is leading the trend for architect-led design-build, where the architect and interior designers work alongside the construction manager as an integral part of the building team. What this means is that the construction manager is involved in the project from the inception of the design, and that the designers are involved through the entire construction process.”

This unique setup does away with the traditional divide that sees the design process unfolding without the constructor, and construction unfolding without the architect, greatly increasing the chances of a smoothly-run and successful project.

“I’ve always said to my staff – just because you can draw it, it doesn’t mean that it can be built. It’s impossible to convey all of the architectural or design intent through drawings alone. For the construction manager and the trades onsite, there’s no substitute for having a direct line of communication with those that design the project and those that are building it.”

 

Mr Smith recognizes the benefits of his staff learning about the building process. By being part of the construction team, they can both share knowledge with and learn from the trades. These are invaluable experiences, and constitute a defining feature of the Altius model.

“One of the key benefits of this approach is that construction budgets are being developed and detailed at the initial stages of a project. Normally a project is costed by being sent out for tender once the designs are completed. Under the architect-led design-build approach, the project is largely budgeted before the design is even finished.”

This means that as the project launches into its construction phase, a lot of the uncertainty that usually surrounds a build is removed, with the client having greater accountability and control of the build.

“We’re rare in the industry, because the regulation in Ontario almost discourages architects from being hands-on builders. The architect-led design-build process is much more prevalent in the United States, where they recognize that architects should be the experts, not only on design, but in construction.”

By providing a fully integrated team, Altius offers a one-stop shop for the project, giving full accountability for the client and end project. It is one of the only firms offering this kind of service in the space.

Spec buildings

“As we enter 2020, we’re doing our usual mix of urban homes, cottages, and this year in particular we seem to be doing a lot of boathouses, including a floating boathouse in Georgian Bay,” Mr Smith says. “However, this year does have a few interesting new ventures for Altius.”

One of these new ventures is a large mid-rise condominium project in Whitby, which will be built to the passive house energy efficiency standard, as well as comprising six storeys of wood frame construction, which will be a first for Altius.

 

“While six storey wood frame construction has been permitted since 2015, not many have been built in Canada. This, combined with achieving passive house certification, makes this type of project a game-changer, which I believe will have a real impact on some suburban areas that are trying to achieve higher density and offer some affordable housing options.”

At the opposite end of the spectrum, Altius is embarking on its on first spec projects, which will include two luxury cottages in Muskoka, on Lake Joseph. Much of this decision was driven by the understanding that hiring an architect for a custom home is becoming increasingly unattainable for a large majority of people.

“Altius has always enjoyed working with private clients, and I believe we will always work with private clients to build their dreams. At the same time, we have to recognize that architecture is one of the last industries to offer fully custom services in a world that is increasingly off-the-shelf.”

Mr Smith believes that the vast majority of developer-built homes are poorly designed, and usually badly built. The perfect solution is for architects to step up and start producing and selling a better product.

“In this way, Altius is transitioning from having clients, into potentially having customers,” Mr Smith explains. “It’s a very different way for us to be thinking, but at the same time we’re incredibly capable of delivering products that are currently unavailable to consumers.”

The original idea was to begin by building a community of tiny homes, a project Altius is still pursuing. In the search for suitable properties, however, the two lots on Lake Joseph came up and the firm was unable to turn them down.

“We love building cottages, and the opportunity to do two projects of our own as an end product, as a service, was an opportunity we just had to grab. The first of these two cottages will be on the market this spring, the second in the fall of 2020. Then we hope to have more offerings in 2021.”

The final interesting new project for 2020 is the building of the firm’s new office. Altius has decided to move after 23 years in Toronto’s Liberty Village, and has purchased a building in Roncesvalles, which it is renovating ready for a move in the near future.

“This change of offices was an interesting choice for us. At the end of the day, we determined that it would be less expensive for us to own an office than for us to rent one. And that’s a disturbing economic indicator in Toronto.”

Rents are currently much higher than owner’s costs in the city for office buildings, which is the opposite of the housing market, which is seeing renters get much better value for money than buyers.

“[Owning the building] gives us the freedom to use a lot of the products and materials that we love as architects, as well as to showcase a lot of the technology and design strategy that we use in our residential projects. Ultimately, the office will become a laboratory for architectural and design ideas. That’s been a really exciting development for Altius.”

Changing times

With its core business so reliant on the housing sector, there is currently an indication that there may be tough times ahead for Altius. The firm certainly saw a decrease in business after the housing market cooled in 2019.

“If people aren’t buying houses,” Mr Smith says, “then they’re not renovating or rebuilding houses. Most often it’s the purchase of a home that triggers a project. So we definitely saw a big slow-down in that respect.”

Mr Smith reserves his concerns, as he believes the market was overheated and that some parts remain so. The hope is that 2020 will see the return to a normal market, which would be a positive development for consumers and the industry as a whole.

“In general, I like the way the market looks right now. We’re seeing trades be more competitive, and more available. Same thing with materials and supplies. We’re not seeing shortages that we were seeing 3, 4, and 5 years ago. I think over the past decade there was a lot of overpricing, and I’m happy to see that practice coming to an end.”

It remains true that the demand for housing is still remarkably strong, demonstrated by current high prices, which appear unsustainable. Mr Smith’s concern is that home and condo buyers are justifying these high prices in the belief that prices will continue to increase at the rate they have for the last decade, which is unlikely to be the case.

“If I have a fear about the business landscape at the moment – I think there is a lot of investment, and particularly investment properties, that may start producing low or negative yields. Despite record-low mortgage rates, people may start to head to the exit. That could potentially create a stampede of selling that we haven’t seen in Canada since the late 80s.”

This outcome would likely be good for homebuyers, who have been sitting on the side-lines, but could cause problems for some homeowners saddled with large mortgages and might create some hard times for the broader market.

“I think in any case Altius is well-positioned in our industry. We discovered this in 2009, although we didn’t see anything like subprime [mortgages] here, we certainly saw a deep recession, and although we’re not diversified in what we do, we’re diversified because of what our clients do – our clients are coming from all walks of life.”

In the housing industry in Southern Ontario itself, there does appear to be a big problem. In the last couple of decades, developers have been running out of land to do traditional subdivision developments, moving instead into the city core and building upwards.

“The project in Whitby – mid-rise condominium-type housing – I think we’re going to be seeing a lot more of that. What’s clear is that efficiency is the keyword for the next decade – efficient space, efficient construction, efficient function, and energy efficiency.”

These needs are being driven mainly by economic factors, as well our changing concept of family, our perceptions of luxury and comfort, and ongoing concerns about the climate crisis and individual health.

“The greatest contribution of design that was bought to housing in the last quarter of the 20th century was the addition of the family room with an eat-in kitchen. This room was added to every North American house, while not asking the basic question of what the living room and the dining room were for.”

Nowadays, consumers can recognize the folly of this addition, but nobody is really sure yet what is needed to replace it. Because builders keep building the same old things, architects need to rise to the occasion and provide solutions through innovation.

“Municipalities are a barrier to innovation, and Toronto is a perfect example of that, with a zoning bylaw that is now ten years in the making, [and] is far worse than anything it replaced. Municipalities have to be open to innovation, but far too often their zoning bylaws favour maintaining the status quo.”

Particularly in the GTA area, due to a huge amount of red tape, it is extremely expensive and time-consuming to get housing projects off the ground. The ultimate outcome of this is skyrocketing prices due to a shortage of housing.

“The Whitby project, by the time it actually gets through to building permits, will have been more than three years in the municipal approvals process. That can’t keep happening. If governments want housing to be built, then they have to make it easier to get housing built. Right now, governments are the obstacle.”

 

Mr Smith admits that the number one lesson he’s learned over the years is that architecture is a very hard business to be in. Years of experimentation and experience is usually enough to teach people what they need going forward.

“I think what’s made Altius a really unique firm is that we were prepared to go out and break out of a mould. So, moving forward, I think what I’ve learned the most is that our very traditional industry needs to stop being traditional.”

Architects are increasingly required to step into the role that is usually played by developers, and start delivering the products that consumers actually need, not just what developers think they need.

“In an industry where you’re heavily regulated by bylaws, by construction financing – there’s not a lot of room to move. I think architects have to step in and bring innovation to an industry that hasn’t changed much in the best part of a century.”

The biggest lesson Mr Smith has learned is that in order to succeed, a firm needs to change. By changing as it has, Altius is becoming increasingly unique in a field where most people are offering the same thing.

“We’ve got a lot of pent-up frustration around the country right now, and governments that have relied on people being fairly apathetic to what’s happening. I’m starting to see demographics, millennials certainly, who are frustrated that the dream of homeownership that they had as kids has just been completely dashed.”

Additionally, the baby boomer generation are not acting in the way the market expected. Instead of downsizing, or moving out of homes that their children would then move into, they have for the most part stayed where they are.

“I think there’s a really interesting socio-economic thing happening in this country now, as well as the advent of home-based business and internet communications. I think we’re going to start seeing big cities potentially stop growing in the way they have been, largely driven by people coming for work and large-scale immigration.”

The result of this is likely to be the resurgence of smaller cities, more industrial towns where white-collar entrepreneurs are starting to see increased benefits of basing operations there. This would also be a game-changer for the housing industry.

“Maybe we don’t need to figure out how to cram all these people into Toronto. Maybe we can start re-inventing what it is to be in housing that’s not in major city centres. I think we’re at a turning point in our industry, largely driven by the unaffordability of the major centres.”

With a commitment to finding innovative and sustainable solutions to Canada’s housing shortage, Altius continues to serve the housing sector well. Find out more about Altius Architecture by visiting https://altius.net.