Senator Art Eggleton, Chair, Mayor's Task Force on Toronto Community Housing on the release of the Task Force Final Report, January 26, 2016 – 10 a.m., Toronto City Hall.
Good morning everyone and thank you for coming.
Mayor Tory, I am pleased to present to you the Final Report of the Mayor's Task Force on Toronto Community Housing.
In January of last year, you appointed the Task Force to offer advice on how to "strengthen and support the delivery of housing to its residents, now and in the future". We were to focus on four major areas:
- Operations and service delivery;
- Partnerships and innovation;
- Capital revitalization and new development; and
The volunteer Task Force members attacked this massive project with an open mind and a seriousness of purpose. The Task Force held 44 formal meetings, and dozens of meetings with TCHC employees and their union representatives, stakeholders, housing experts from many jurisdictions within Canada and other countries, and officials of the City, the Province and the Federal governments. We heard from over 1,000 tenants and community members through a series of public meetings and site visits to over 70 TCHC and non-profit buildings and communities. We received hundreds of emails, letters, faxes and phone calls from people across Toronto who are concerned about the present state and the future of TCHC. We interacted with TCHC executives and front-line employees on a regular basis, and made well over one hundred information requests of the Corporation.
In the first half of 2015, we focused on operational and service issues. In that phase, we heard from hundreds of TCHC residents. While many were happy with their homes and positive about the service they received from TCHC staff, we heard from others who were dissatisfied with a range of issues. Concerns focused on a number of key areas:
- Many residents do not feel safe in their homes. Some TCHC properties experience high levels of criminal activity, drug dealing, gang related violence, and social disorder;
- Residents expressed concern about the state of building maintenance, cleanliness and infestations
- Others raised issues of poor communications from TCHC and slow response to tenants' concerns; and
- Many spoke to operational and management structures that are bureaucratic and unresponsive to tenants' needs.
The Task Force recognizes that most TCHC employees work hard trying to provide a good living environment for the over 110,000 people who live in the buildings. Many of TCHC's problems are a result of structure, history and inadequate resources. We recognize also that Interim CEO Greg Spearn and his executive team, and Chair Bud Purves and his Board, have been working hard to make improvements to TCHC's operations. But we do not believe the employees are being given the structure, training and tools to do this well enough. TCHC needs to develop more of a customer service culture and the practical tools to serve the residents better.
We presented you, Mr. Mayor, with our Interim Report on July 15th of 2015. This report called on TCHC to up its game on these operational issues by responding with Action Plans on the key concerns, and TCHC has responded with several reports. The Task Force believes that improvements have been made on some of these operational items but there is still a lot of work to be done, and the effort must continue.
There were costs associated with some of the operational improvements, so Council will have to decide how to respond to TCHC's request for supplementary funding in 2016.
This brings us to today's Final Report. In this report we focus on the overarching issues of finance, structure, partnerships and governance.
First and foremost, we must report Mr. Mayor that the present funding model under which TCHC is operating is unsustainable. The company suffers financially and many tenants struggle socially. TCHC does not have the revenues it needs to manage and maintain good quality homes. The Corporation is faced with a $2.6 billion capital repair backlog – this has been widely-reported and is well-known. The City, the Province and the Federal Government need to step up to the plate and address this poor state of repair, which is the result of decades of underinvestment. What is not as well known is that in addition to this capital problem, there is a serious shortfall in operating funding. Starting in 2016 TCHC is projecting an operating deficit, possibly growing to over $200 million by 2026.
Let me be clear on this – even if the $2.6 billion capital problem disappeared tomorrow – the Corporation would start to fall behind in needed operating funding the day after tomorrow. TCHC needs long-term financial and social sustainability.
So, what are the major recommendations in today's report?
First – We want to see TCHC transition into a community-based non-profit corporation. It needs to be more autonomous and accountable with a Board made up of citizen directors who would have the skills and expertise to lead and fulfill the Board’s fiduciary responsibilities. The new organization would be regulated by the City as Service Manager under Ontario’s Housing Services Act, just as Toronto’s 240 existing non-profit housing providers are now. We propose that this new corporation should be “off the City’s books” with increased powers to borrow money to keep its buildings in good condition. And a mandate to build more of them.
These are the benefits we see of moving to this non-profit housing corporation:
- Developing a customer service culture where tenants are the primary stakeholder;
- Giving tenants a stronger voice in the governance system;
- Continued public accountability and greater clarity of the relationship between the City and the Board; and
- The potential to increase TCHC’s borrowing capacity for renovations and new development by removing it from the City’s debt ceiling limits.
The report recommends two models that could be used to implement this new structure. The first we call "Manage Now, Own Incrementally". Under this model the City creates a new independent community-based non-profit housing corporation (we call it NewHome for purposes of the report) to manage by lease or management agreement existing TCHC’s properties. TCHC would become a development and asset renewal company that would transfer title of viable redeveloped and renovated properties to NewHome or other non-profit housing providers.
The second model we call "Reform First, Then Transfer". This option would see TCHC divided into three distinct divisions: operations, development and corporate services – each run by a General Manager. This would allow for a greater separation of the distinct functions. A small head office team would coordinate the overall corporation.
The Task Force recommends that the new company's Board be reduced in size from 13 to 7-9 citizen members. We believe that City Councillors can be most effective with their input at the Tenant Advisory Committee level.
Second – We want to see more income mixing in the portfolio bringing about better social integration and more revenue to fix the financial situation. We want to see rent geared to income targets move to a more mixed portfolio of 70% RGI renters, and 30% market or low end of market. The current mix of 90% RGI to 10% market is not sustainable, nor is it the norm in non-profit housing across the country. We believe this mix of people of different income levels will lead to stronger communities and neighbourhoods.
Let me be very clear on this recommendation – the Task Force is not proposing that there should be any reduction in subsidies. 52,600 households are subsidized now and they should be kept at current levels, but they don't all have to reside in the homes of current portfolio.
Third – We want to see Better Buildings and More of Them. The portfolio must be revitalized – funded by intensification on some sites and by creating market rental and affordable ownership housing. Support will be needed from all three levels of government through a range of new and existing funding tools, such as capital grants or loans, debt guarantees, donations or preferential sale terms of surplus or underdeveloped publicly owned land.
We recommend a review process to determine whether some buildings might better move to other non-profit organizations that currently lease or operate them, or have specialized expertise to better manage some of these buildings. A review would also be conducted to renovate, demolish, replace or sell properties.
Federal and provincial funding will be vital to this process and, I must say, we are encouraged by positive signals being given by both governments.
Fourth – The newly formed community-based non-profit housing corporation should move to a decentralized organizational structure. We want to see more localized decision-making at the Operating Unit level, with closer contact between managers, front-line workers and tenants. To align with this decentralized management, we recommend the establishment of Tenant Advisory Committees, made up primarily of tenants of course but joined by City and community resource entities, and the local City Councillor.
We see a new company with fewer levels of management at corporate headquarters, and more decision-makers out in the field.
We also call for a more effective approach in dealing with vulnerable tenants – many of whom live with mental health and addiction problems, and issues associated with aging. Many of these tenants are doing well, but others need support services. TCHC doesn't have the mandate or the funding to properly serve this population. These health, mental health, addiction and related services need to be provided by agencies mainly funded by the Province through the Local Health Integration Networks. The needs here go beyond what a social housing landlord can be expected to provide. A social housing landlord's role should be to link people to service providers.
Fifth – We call for a reform of Ontario’s current rent geared to income (RGI) system, to allow low-income renters more choice and portability in housing location and simplifying the administrative processes. This streamlining of housing assistance can align with the delivery of social assistance and child care subsidies creating a single window access administrative system.
Mayor Tory, we present our report to you today in the belief that the significant changes recommended in it can put this housing portfolio back on its feet socially and economically. We believe our recommendations will:
- Help develop a client service oriented culture
- Increase the speed of responsiveness to tenants
- Promote tenant self-determination
- Give more choices, and less bureaucracy
- Lead to more localized decision making, and empower on site staff
- Foster better communications with tenants; and
- Get tenants more involved in local operations.
This marks the end of our Task Force mandate but it is hopefully the beginning of a new way forward in meeting the needs of social and affordable housing, and its residents, in Toronto.