apartment

Toronto Community Housing in crisis

From funding gaps to leadership questions: the root causes of TCHC’s turmoil
Tuesday, May 2, 2017
by Erin Ruddy

It has been another tumultuous month for Toronto Community Housing, Canada’s largest social housing provider. The city-run entity with a $9-billion portfolio is once again facing criticism for failing in the upkeep of its 59,000 units—despite a lack of funds, decaying stock, and a wait-list of more than 181,000 people.

Since its inception in 2002, TCHC has faced numerous challenges and scandals, prompting the resignation of four top-level executives amid reports of financial and tenant mismanagement. In the latest wave of turmoil, TCHC announced plans to close 400 homes next year due to a shortage of repair money.

With 600 units already facing closure this year, that will bring the total number of unusable dwellings to 1,000 by the end of 2018. Of course, at a time when affordable housing is at a complete deficit, Toronto citizens greeted this news with a great deal of trepidation.

Last week, Toronto Community Housing also revealed that interim CEO Greg Spearn would be stepping down from his leadership role “for personal reasons.” Spearn, who’d been at the helm since the former CEO Gene Jones resigned in April 2014 following a disparaging ombudsman’s report, has yet to comment on his resignation, but new reports suggest the move wasn’t voluntary.

“Greg has provided stability and growth at a time of immense challenges,” said chair Bud Purves in a statement. “We appreciate his commitment and our entire Board and staff leadership team wish him well on the next phase of his professional career.”

Taking over as interim CEO is Kevin Marshman, who is currently vice-chair of the board. Marshman will be taking a leave of absence from his current role while he fulfills his new duties and the search for a permanent CEO continues.

But with that search, questions swirl around what—if anything—can be done to get things back on track. Greg Suttor, senior researcher at Toronto’s Wellesley Institute is skeptical things can ever improve unless resources are significantly boosted and management issues properly addressed.

“Toronto Community Housing needs more resources,” he says, noting that its operating budget is just over $800 per unit monthly while rent revenue averages just under $450 per unit per month. “On a per-unit monthly basis, this operating budget includes just under $200 in debt service, $250 for property management, and $250 for utilities and property tax. As a big public housing provider it also has large IT, security, and head office costs. But its per-unit operating costs are not padded or excessive by industry standards.”

As Suttor also notes, revenues are low because that is TCHC’s mandate—to provide low rents to low-income tenants—while the specific rent-to-income calculations are prescribed in provincial law. But while the costs continue to inch up every year with inflation, the incomes of low-income tenants generally do not. “They’ve been flat for the past couple of decades,” he says.

In the meantime, TCHC is also spending $250 million per year (around $4,000 per unit) on major repairs. But this level reflects special federal funding in 2016-2018 that won’t be sustained. Ongoing capital funding is needed to ensure that 50-year-old buildings stay in decent condition. “If any landlord was operating on this basis, they’d be in just as much trouble,” Suttor remarks.

Yet, instead of increasing subsidy, the City has been imposing restraint, while the province is contributing nothing apart from one-time federal flow-through funds for repair, and collaboration on refinancing mortgages to free up some TCHC debt service funds to support those repairs. “Ontario is the only province in Canada and the only jurisdiction among the world’s affluent countries, where most social housing rent subsidy is left to the municipal level of government,” he says.

On the management side, Suttor believes that the turbulence of 2011 through 2014 wasn’t so much about the organization itself, but about the destructive political environment generated by former mayor Rob Ford. “By 2014 everyone recognized the dysfunction and disorder that [Ford’s] politics created, but did they remember that the turmoil at TCHC was Rob Ford’s first mud storm?”

To deal with the ugly fallout of that mud storm, Mayor John Tory appointed an independent six-person Housing Task Force in January, 2015. The Task Force, led by Senator Art Eggleton, conducted a one-year study to provide detailed insight and advice on how to get the beleaguered agency back in working order. Overall concerns included: a lack of respect and responsiveness towards tenants; secrecy and a lack of transparency; an inability to aggressively evict drug-dealers; a deficit of $107 million on a Regent Park revitalization that was not even half complete; rent arrears that ballooned to $12.8-million by the end of 2016; an inability to turn around vacant units in a timely manner, resulting in 3,540 vacancies; as well as an increasing repair backlog.

As for management issues today, Suttor says he believes Spearn provided strong leadership during his tenure, but that he’s not surprised the City is looking for a change. “I don’t know the specific reasons why Spearn is departing, but with the City initiating major changes to implement some of the Eggleton TCHC Task Force recommendations, it’s not surprising that there’s a desire for new leadership.”

Leave a Reply

Your email address will not be published. Required fields are marked *