London shelter village cuts encampments, but operating costs spark debate

London micro-modular shelter shows early success, but costs draw council scrutiny

A progress report about the Micro-Modular Shelter (MMS) for homeless Londoners highlights the facility’s early successes, but senior city staff still found themselves defending the project’s operating costs during Tuesday’s council meeting.

According to the report, the 60 unit facility (50 single occupancy, 10 double occupancy) that opened on Cheese Factory Road was constructed for $3.3 million, and has an estimated monthly operating cost of $288,000.

However, Coun. Susan Stevenson said some of her constituents used those figures to calculate that the operating cost of each microshelter is $4,800 per month.

“I’m hearing clearly from the public that there’s not enough, transparency around the cost,” she told colleagues on Council. “They want an itemized listing of costs and invoices. Personally, I understand that, and they also want to understand why the cost is $4,800 per month (per unit).”

Last October, council approved spending up to $7 million to construct and operate the facility on Cheesefactory Road until April 2027.

Construction was completed in about 70 days and residents began moving out of encampements and into the micro-modular shelters in February.

Kevin Dickins, Deputy City Manager, Social and Health Development offered a frank response to Stevenson’s questions about cost.

“The cost is the cost,” Dickins said. “We hear it too, that everybody can build these things cheaper-- but nobody was. And that services can be found that are better or different-- but they weren’t available. So we’re in the reality we’re in.”

He added, “I think it’s important for the public to know that in order to move at the pace we moved, under the (Council) direction that we were given, you have to make tradeoffs in terms of what is available and what the cost is.”

Dickins listed some of the primary expenses including the operating contract with Xpera, rented support trailers, maintenance materials, operational supplies, garbage collection, and seasonal costs like snow clearing.

Coun. David Ferreira emphasized that the cost of a single unhoused individual has been estimated at up to $100,000 per year based on their use of healthcare, emergency services, frontline supports, and the justice system.

He argued even at $4,800 a month, a micro-modular shelter is a more cost-effective way to address homelessness.

Mayor Josh Morgan added, “(The MMS) takes pressure off lots of areas that cost residents money, whether they are paying it through their provincial, federal, or municipal taxes.”

Meanwhile, Dickins revealed another milestone has been reached, two residents will soon be the first to move out of the MMS and into appropriate housing.

“There are already a number of individuals willing to leave this site and move into housing,” he said. “We expect two potentially moving out by week’s end.”

Several councillors acknowledged the importance that residents not linger at the facility because flow-through ensures more unhoused Londoners will be given an opportunity to get out of encampments.

“There are certainly people that are already ready to move on,” said Coun. Jerry Pribil. “And I think that was our main purpose of this facility for us not to have the 60-plus individuals there, but to keep rotating them. Get them stabilized, then housed.”

Currently the facility is temporarily housing 68 people (plus 11 dogs and three cats), all of whom were previously living unsheltered.

“Since fall 2025, there has been a notable reduction in both the number of encampments and individuals residing within them,” the report adds. “This decrease is attributed, in part, to the implementation of the micro-modular shelter and broader winter response efforts.”