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Jul 2018 | The Housing Issue

SOCIAL HOUSING REPAIRS: AN OLD PROBLEM & A NEW HOPE
ROBYN GRAVELLE, HALTON REGION

Social housing stock is in a state of disrepair. Or so we’ve heard. With questionable expenditures in the news, breaking stories of parts of buildings falling off, tenants being displaced because of unsafe conditions, promises from politicians that “change is coming,” and public service announcements pleading for the assistance of upper level government financial support, how can we not think that social housing stock in the province of Ontario is in need of fixing?

 

“Current investment from upper levels of government is both time limited and boxed into eligibility criteria that provides little flexibility to Service Managers and social housing providers alike. Was the housing stock better off before the download? It’s hard to say, but based on the level of decay and disrepair, it is possible that the buildings were not always handed over in perfect shape and without the financial support that is required to sustain the buildings into perpetuity.”

 

When Ontario’s social housing program began in 1964, the Ontario Housing Corporation purchased, commenced operation, and delegated administration of 84,145 units of public housing stock; the first major step in the development of affordable housing to meet the needs of low to moderate income households who had been identified as those who could benefit from government subsidized housing.[i] When the province changed its direction in 2001 and determined that social housing administration was better suited to the municipalities, Ontario transferred this administration and existing financial obligations such as mortgages, repairs, and operating expense of stock to 47 Municipal Service Managers. This threw many municipalities right into the deep end of program administration, and delivered with it a new and vast responsibility of maintaining decaying public housing stock that had been transferred with mortgage assumptions and the need for repairs and upgrades – all without a sustainable or secured source of funding assistance to keep them afloat.[ii] Knowing that snippet of history might shed some light on the past 17 years in terms of the burden of responsibility that has fallen entirely on social housing providers to repair what’s needed and how Ontario came to this state of disrepair and decaying building stock in what seems to be a small amount of time.

 

I. The Need for Capital Investment

 

Social housing providers rely heavily on vast sources of revenue, including external supports such as donations, grants, and funding. But what is the main source of funding for capital and operational expenses? Is it taxpayers’ dollars, government transfers, or Rental revenue? The answer is all of the above. With the latter source using the term “revenue” lightly when the majority of rent collected in social housing programs is geared to income, equating to roughly 30 percent of the household monthly income for eligible persons. The remainder rental stock is a combination of affordable (at or below average market rent for the community) and market rent units, which are a significantly smaller source of stock for generating revenue compared to the population of rent-geared-to-income tenants. Market rent revenue is what providers need to assist in the operations of its business, as these units generate the funding required to invest in further subsidies, capital and operating budgets.[iii] It is because of these tight constraints on budgets, revenue, and funding availability that social housing providers have found themselves in need of significant investment and revenue sources to ensure that stock remains viable and sustainable.

If we look at the physical issues that building stock is facing, we aren’t looking at a pretty picture; decaying infrastructure, rundown conditions, asbestos, lack of energy efficiencies and overall physical (and cosmetic) appearance and functions are of focus. Current investment from upper levels of government is both time limited and boxed into eligibility criteria that provides little flexibility to Service Managers and social housing providers alike. Was the housing stock better off before the download? It’s hard to say, but based on the level of decay and disrepair, it is possible that the buildings were not always handed over in perfect shape and without the financial support that is required to sustain the buildings into perpetuity.  

 

II. Know When to Hold ‘Em & Know When to Fold ‘Em

 

When repairs are out of the question due to budget constraints, social housing providers remain accountable for ensuring the homes remain habitable and safe. In cases where it has been determined that these homes pose a threat to their occupants and workers or where the cost of repairs exceed the benefit of investment, homes and buildings may become condemned or reviewed for divestment. Toronto Community Housing has provided the public with very publicized examples of both scenarios at play.

In 2015, seven townhomes in the Finch Ardwick housing community were classified uninhabitable as their structural integrity makes them unsafe and the cost of repair would be too great. Though these buildings remain boarded up, decaying, and visible in the community, the reality is that it also costs to tear a building down and this cost may not be within the budget.[iv] Toronto Community Housing has also looked at a new way to generate revenue for capital investment and to literally cut their losses by selling off the public housing stock. This highly controversial move was met with disdain from low-income housing advocates and agencies as it was perceived as a move that would effectively reduce the number of housing units available in the community; however, the Toronto Community Housing stance was quite direct: how useful is a housing unit if it is unsafe, uninhabitable, and the money to fix it just isn’t there? Isn’t it socially irresponsible to leave a condemned building with no hope as opposed to selling it off to someone who may turn it into housing opportunities and more so to generate revenue to repair their viable stock?

 

III. Show Me the Money

 

When an agency of any sort is as closely tied to any level of government, it is expected that there will be more public focus on where the public dollar goes and what the public receives in return. This is no different for social housing providers who have had to make do with what little they have and what they are given through contributions and budgeting. Social housing providers must also be cognizant of alternative and innovative methods of financial assistance, without impacting their mandate to offer affordable housing.

In the early 1990s the importance of co-operative housing projects was addressed and benefits were identified in this model that surpassed the non-profit housing model; the investment of rental revenue back into the maintenance and upkeep of the physical structure by its occupants in a co-op model could result in timely upgrades and a better sense of community through personal investment.[v] It was, however, noted that this model is typically only successful in middle to moderate income populated buildings and communities where the level of rental revenue (keeping in mind we’re referring to rent-geared-to-income mainly in the context of social housing providers) would be sufficient enough to result in meeting targets or producing surpluses.[vi] Though a co-operative housing model may be more cost-efficient and self-sustaining, there is a great need for support from investors, creditors, or government officials, as well as a detailed business plan to establish credibility and viability and the implementation of a board of directors. In addition to the implementation of capital investment planning and management, a co-operative model may also require significant investment in operational budgets to ensure proper planning of balance sheets, risk mitigation, cash flow, and sustainability of operating expenses.

Within the last few years, momentum has grown, and social housing providers have strongly urged both the provincial and federal governments to invest more into social housing entities to support capital investment, building maintenance, operation costs, and (re)-development of infrastructure. In 2017, the Federal government announced its National Housing Strategy, a 10-year, $40-billion plan that earmarks monies for repairs for 240,000 affordable and community homes through the National Housing Co-Investment Fund and Canada Community Housing Initiative (to be cost-matched by the provinces and territories) to preserve the existing supply of community-based housing, which social housing providers are currently planning for to address their capital repair programs. It is with great hope that social housing providers await their allocations and plan for their programs to tackle the ever-increasing age of their housing stock and hope that further and increased investment in social and affordable housing programs may result in cost savings over time and sustainability of the program as a whole.

 

ROBYN GRAVELLE has over 10 years of experience in the public sector and is a Senior Policy Analyst in Infrastructure Planning & Policy at Halton Region. Robyn holds a Master of Public Policy, Administration & Law degree, as well as a Bachelor of Health Studies degree, both from York University. Robyn's passions lie in research and continuous improvement related to social & community services, public works, affordable housing and health equity.

 

[i] Ontario Non-Profit Housing Association (ONPHA). (2015). Timeline: A history of social housing in Ontario.
[ii] Schuk, C. (2009). Overcoming challenges in centralized and decentralized housing models: Ontario and British Columbia compared.
[iii] Suen, F.Y. (2015). Why are high-income earners living in low-income housing? CTV Toronto.
[iv] Spurr, B. (2015). Inside Toronto community housing's uphill battle. The Toronto Star. April 19 2015.
[v] Dreier, P., & Hulchanski, J. D. (1993). The role of non-profit housing in Canada and the United States: Some comparisons. Housing Policy Debate, 4(1), 43-80.
[vi] Dreier, P., & Hulchanski, J. D. (1993). The role of non-profit housing in Canada and the United States: Some comparisons. Housing Policy Debate, 4(1), 43-80.