When City of Hamilton staff agreed to buy 40 tiny homes from a Brantford, Ont., company for a new outdoor shelter site last fall, they thought they were supporting a local, Indigenous-owned business that was one of the few capable of delivering on a short timeline.
What they didn’t know was MicroShelters was a new corporation that would go through an American company to order the tiny homes from China, staff said at a general issues committee meeting Wednesday.
“It was a very quick turnaround” to meet deadlines on the project, said Danielle Blake, the city’s manager of housing-focused street outreach.
Staff had been focused on finding shelters large enough for two people that could be delivered in a short timeframe, Blake told councillors. That’s how they landed on MicroShelters.
“I am not sure we had every detail that we now have in regards to the company or the origin of the units.”
Council approved the outdoor shelter in September with plans to open it by early December. They also gave staff the green light to go with a sole-sourced contract to move the process along more quickly than if they had to examine multiple bids.
But the project was pushed back until January after the city faced delays related to construction and the delivery of the tiny homes.
Half the order arrived this week
At a news conference in December, Grace Mater, general manager of healthy and safe communities, said she didn’t know if MicroShelters had fulfilled any other tiny home contracts in the past before hiring them for Hamilton’s project.
She told CBC Hamilton to ask MicroShelters.
MicroShelters’ co-founder Jeff Cooper told CBC Hamilton “all aspects of its business are proprietary and confidential” and he declined to comment.
On Wednesday, staff said they also weren’t aware the tiny homes appear to be similar to those sold on Chinese online marketplace Alibaba, many of which are listed for up to $1,600 each before shipping, duties and taxes, and without furniture.
The city paid $35,000 for one “double cabin,” which includes two beds but not delivery fees, staff said in an email to Coun. Matt Francis on Dec. 11, provided to CBC Hamilton. The city purchased 40 to house 80 people experiencing homelessness.
The project total is about $7 million, including setting it up and running it for a year, staff have estimated. The Good Shepherd has been contracted to operate the site.
Half the tiny homes were delivered this week with the rest currently in Canada and being transported to the central Hamilton site near the West Harbour GO station, staff said in a communication update Monday. They described the first delivery as a “significant milestone.”
Staff never saw units in person
On Wednesday, Ward 9 councillor Brad Clark said that MicroShelters had only been registered as a corporation weeks before it was selected by the city.
According to Ontario’s business registry, MicroShelters incorporated on Aug. 28.
Clark asked whether staff had seen the units in person. He was told they only saw online images of a site run by an unrelated company in Salt Lake City, Utah.
MicroShelters, which appears to have launched its website last spring, filled it with images and videos of tiny homes from the Utah project, including aerial shots of a dozen or so units being delivered and set up.
MicroShelters has since replaced the high resolution images with other lower quality media showing the homes in what appear to be warehouses.
On Wednesday, Mater appeared to acknowledge that, looking back, staff could have gathered more information on the company and the source of the shelters.
“If we failed to do everything we should have, it should be on me,” she said.
Ward 7 Councillor Esther Pauls, who voted against the project in September, said this is a reminder to councillors and staff of how procurements can go wrong.
“There’s a lot of publicity [about the procurement] that’s very negative,” she said. “We have to be very careful when we do procurement and make sure we’re getting the value for our money.”
