When Hamilton city staff agreed to buy 40 tiny houses 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 meeting a short timeline.
What they didn’t know was that MicroShelters was a new corporation that would go through an American company to order the tiny houses from China, staff said at a general issues committee meeting Wednesday.
“It was a very quick turnaround” to meet the project’s deadlines, said Danielle Blake, city manager of housing-focused street outreach.
Staff had focused on finding shelters large enough for two people that could be delivered in a short period of time, Blake told councilors. That’s how they came to MicroShelters.
“I’m not sure we had all the details we have now regarding the company or the origin of the units.”
The council approved the outdoor shelter in September and plans to open it in early December. They also gave staff the green light to opt for a contract with a single supplier to move the process forward more quickly than if they had to examine multiple bids.
But the project was delayed until January after the city faced delays related to construction and delivery of the tiny homes.
This week half of the order arrived.
At a news conference in December, Grace Mater, general manager of healthy and safe communities, said she did not know if MicroShelters had fulfilled other tiny house contracts in the past before hiring them for the Hamilton project.
He told CBC Hamilton to ask MicroShelters.
MicroShelters co-founder Jeff Cooper told CBC Hamilton that “all aspects of their business are proprietary and confidential” and declined to comment.
On Wednesday, staff said they were also unaware that the tiny houses appear to be similar to those sold on Chinese online marketplace Alibaba, many of which They are listed for up to $1,600 each before shipping, duties and taxes, and without furniture.
The city paid $35,000 for a “double cabin,” which includes two beds but not shipping costs, staff said in an email to the county. Matt Francis on December 11, provided to CBC Hamilton. The city purchased 40 to house 80 homeless people.
The total project is about $7 million, including installation and operation for one year, staff have estimated. Good Shepherd has been contracted to operate the site.
Half of the tiny homes were delivered this week and the remainder are currently in Canada and being transported to the central Hamilton site near the West Harbor GO station, staff said in a communications update Monday. They described the first installment as a “major milestone.”
Staff never saw the units in person
On Wednesday, District 9 Councilman Brad Clark said MicroShelters had only registered as a corporation weeks before the city selected it.
According to the Ontario Business Registry, MicroShelters was incorporated on August 28.
Clark asked if staff had seen the units in person. They told him they only saw images online from 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 about a dozen units being delivered and installed.
MicroShelters has since replaced the high-resolution images with lower-quality media showing the homes in what appear to be warehouses.
On Wednesday, Mater seemed to acknowledge that, looking back, staff could have gathered more information about the company and the origin of the shelters.
“If we couldn’t do everything we should, the blame should be mine,” he said.
Ward 7 Councilwoman Esther Pauls, who voted against the project in September, said this is a reminder to councilors and staff of how procurement can go wrong.
“There is a lot of advertising [about the procurement] “That’s very negative,” he said. “We have to be very careful when we make acquisitions and make sure we get our money’s worth.”
