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TCHC house sales: A window opens

February 14, 2012

Oh happy day!

Last Friday Mayor Ford opened the window to a real solution for TCHC’s deteriorating buildings. He recognized the importance and complexity of the issues by devoting a special Executive Committee meeting on February 17th entirely to TCHC’s proposed house sale, and is said to be “receptive” to Affordable Housing Committee Chair Ana Bailão’s proposal for a comprehensive strategy for TCHC’s buildings.

This is good news for TCHC tenants, and good news for Toronto.

As TCHC’s February 9th State of Good Repair Plan confirms, the real issue is not the sale of 675 houses. It’s the future of TCHC.

TCHC says it needs an extra $150 Million every year from 2013 to 2017 to bring its buildings from “fair” to “good” condition, and $90 Million every year thereafter.

Selling 675 stand-alone houses would raise $222 Million – enough only to patch over TCHC’s annual shortfall for a short while.[1] The rest of the money TCHC needs, the report says, would have to come from the federal and provincial government.

As the City Manager and many members of Council pointed out during the City’s budget discussions, you can’t fix a structural operating deficit – structural in every sense of the word – with one-time money.

Selling the houses will rob Toronto of 675 affordable homes. But it will make no material difference to the future of the rest of TCHC’s buildings.  Without extra government funding, TCHC’s stock will still end up in “critical” condition, even if all 675 houses were sold tomorrow. With government funding, TCHC’s stock will be in “fair” condition even if it does not sell a single house. It’s the government funding, not house sales, that makes the difference.

Getting to the heart of the problem

The real problem is this: any organization with an annual and perpetual $90 Million shortfall is not a going concern.

To get at the heart of this problem, we need the big players at the table: the federal and provincial governments, the financial sector and housing experts.We need to explore how the US, UK and other countries with aging stock tackled their building problems, and learn from their successes and mistakes.

While this “big picture” discussion is going on, we can’t forget the houses. TCHC reports they are spending $6.4 Million/year more on these houses than they take in, but the houses continue to fall into disrepair. Over two dozen housing providers are successfully managing similar houses. Let’s tap their expertise.

Crunching the numbers

I’m all for big picture thinking, but there is nothing like data to sift ideology from reality; pie-in-the-sky from practical solutions.

For example, I keep hearing that TCHC is not getting good value for its scarce maintenance dollars, paying too much and getting bad work. Is it true? Let’s compare TCHC’s spending and results with other private and non-profit landlords and see what we can learn.

We need to test solutions too. As faithful readers know, I’m an advocate of “non-profitization” for some TCHC houses, and affordable home ownership for others. But it’s the house-by-house analysis of building condition, funding program, debts, rents, subsidies and operating costs that will tell us whether my ideas or any others will work.

Engaging tenants

It’s always good to have tenant reps at the table to keep everyone else honest. But that’s not what I mean by tenant engagement. We need an ongoing system that taps the initiative and talents of every tenant, not just the few who sit on committees.

Over the past few months I’ve found tenant after tenant with good ideas for their own home. I also know from experience that houses succeed only when the people who live in them have a stake in them. Habitat for Humanity creates that stake through ownership. Co-ops do it by giving residents real decision-making power. In the UK, the Housing Minister is talking about giving cash for social housing tenants to fix their own houses. The approach doesn’t matter, as long as tenants have a genuine investment in their homes.

Eyes on the prize

My hope for a City Council Task Force is not just that it will rescue 675 homes. It’s not even about rescuing TCHC from a chronic operating shortfall. It’s about remembering why we have social housing in the first place:

  • To provide homes for the next generation – our own children, and the newcomers who will keep our city thriving
  • To preserve mixed income neighbourhoods, and halt the growing divide between rich and poor
  • To offer a path out of poverty – and stop people from falling into poverty in the first place.

Fresh hope

Last October I left the TCHC Board room in despair. I foresaw the sacrifice of some  of Toronto’s most spacious, well-located and versatile properties, 2000 people dislocated, and yet no lasting remedy to TCHC’s real problems.

It may be too early to feel celebratory. But on February 17th, I will walk into City Hall Executive Meeting with a hopeful heart.

[1] The actual impact of the house sales is difficult to discern from the materials prepared for the Executive Committee. According to the City Manager’s report, the money from house sales will run out in 2015; TCHC’s State of Good Repair Plan says it will contribute $44 – $46 Million for five years towards annual needs ranging from $119 to $315 Million; according to some media reports TCHC plans to sell about 60 – 70 houses per year, presumably raising an average $22 Million over 10 years. TCHC’s original plan to invest the proceeds from the house sale seems to have been jettisoned entirely.

TCHC has not prepared a graph or any information showing what would happen if TCHC raised government funding but did not sell its houses. The graph presented here aims to fill that gap, drawing on the data available in the State of Good Repair Plan.

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