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The politicization of TCHC

April 30, 2014

In 2011 Mayor Rob Ford swept into office, swept out Toronto Community Housing’s CEO Keiko Nakamura, and appointed a Board of Directors to “clean house” at TCHC.

In 2014, Rob Ford’s reputation is in tatters, and CEO Gene Jones – a man after the mayor’s own heart – is gone.

Ford has promised to reinstate Jones upon re-election. Others are speculating a new mayor would again “clean house” after October, appointing a new Board, and in turn a new CEO, in his or her own image.

Is this any way to run a housing company?

Toronto Community Housing has become an arena where left- and right-wingers take sides, with the CEO acting as a stand-in for Toronto’s mayor.

Why is this? The reality is housing management is mostly a nuts and bolts operation. Everyone agrees that clean, safe buildings are good and waste is bad. There may be different opinions on the best way to get results, but most solutions don’t fall neatly on one end of the political spectrum or the other.

But you wouldn’t know it to look at this past week’s media coverage of the City of Toronto’s Ombudsman’s report on TCHC’s hiring practices.

I’ve seen right-wing commentators again vilifying former CEO Derek Ballantyne as a “tax and spend” CEO — as if TCHC had any taxation powers!  The facts: Ballantyne cut 70 management positions between 2002 and 2004, presided over green initiatives that yielded massive reductions in utilities spending, and harnessed private investment to rebuild TCHC’s aging housing stock. Is that right-wing? Or left-wing?

In the opposite corner we have left-wing commentators attacking Gene Jones for failing to reduce the social housing waiting list or eliminate TCHC’s capital backlog. In fact, TCHC is one of the very few non-profit organizations still building in Toronto, with over 600 units coming onstream in the Railway Lands and West Donlands. As for the growing capital backlog, that’s the result of a $100M annual operating shortfall that beset TCHC long before Gene Jones took office.

The cost of a politicized TCHC

This political swirl that surrounds TCHC makes for entertaining reading, but it comes at a high price.

As a result of the “house-cleaning” since Jones took office, TCHC’s entire executive was replaced, along with many senior managers.[1] I was working with a partner agency on a one-year pilot with TCHC. In the course of that year, the Chief Operating Officer and the relevant V-P, Director, Manager, and Operating Unit Manager — every senior manager familiar with the project — disappeared.

Think of the loss of expertise and corporate memory, and of the relationships that make partnerships work. Now imagine the costs if the next mayor decided on another purge of the Board and set loose a new CEO to clean house all over again.

Think of the direct staffing costs of managing public perception. TCHC’s Strategic Communications unit employs 14 managers and staff – rather a lot for an organization that has no fundraising responsibilities — and yet I bet they are all still burning the midnight oil.

Think of the costs of jumping whenever a bad news story appears. Remember the two reviews by Justice LeSage, one to respond to Joe Fiorito, the other to SueAnn Levy? Or the $47,500 to Pricewaterhouse Coopers to, it seems, pre-empt the Ombudsman’s Review? Add to that the time of TCHC managers who are pulled off their proper jobs to respond to the latest crisis.

And, most important, think of the direct costs of being part of the municipal political structure. When the City of Toronto made across-the-board cuts to departmental budgets in 2012, TCHC’s operating budget was cut by 10%.

The budgets of every other non-profit or co-op housing provider in Toronto? They’re all protected from unilateral cuts with legislation or agreements that recognize housing in a long-term proposition. Their budgets can’t be raided for the latest City Council priority, or to allow a candidate to make good on a tax freeze.

What if TCHC could step out of the political arena altogether?

That’s the model for Ontario’s 1000+ non-profit and co-op housing providers. Since the mid-1970s they have been providing safe affordable housing, funded by government programs similar to TCHC, without muss or fuss.

It’s also the model adopted in the UK, where 1.3M homes were transferred from the control of municipal governments to private, non-profit housing associations. As I reported in another entry, research showed these transfers led to superior building upgrades, increased tenant involvement, a “less-hierarchical, more inclusive and more customer-focused corporate ethos,” and increased social and economic renewal.

Accountability without the drama

When people think about “non-profitizing” TCHC, they often ask, “But who will protect tenants? And who will ensure TCHC acts in the public interest?”

The answer? The same legislation, regulatory bodies and services that protect everyone else. An eviction dispute? The Landlord and Tenant Board rules on any disputes that cannot be resolved through mediation. A building complaint? The City employs building, public health and fire inspectors to investigate and compel landlords to bring buildings to standard. A crime? Call the cops.

There are also mechanisms to ensure proper use of public funds. Funders of non-profit housing (in TCHC’s case the City of Toronto) receive annual reports signed by the housing provider’s auditor, with powers to step in if problems are not remedied. These are the work-a-day systems that protect taxpayers and tenants alike, away from the political spotlight.

I am not suggesting that Fiona Crean’s report was politically motivated. She rightly points out that her job is to investigate complaints. But she is an actor in the political realm, using language – “abject failure,” “run amok” — that lends itself to public outrage and a political response, rather than a quiet resolution to the issues.

It was the same with the City’s Auditor General in 2011. A wayward independent non-profit might receive a long, stern management letter from its auditors. But I can’t imagine an auditor even mentioning staff merit bonuses valued at $16 each, just because they came in the form of chocolates from Holt Renfrew.

It’s not the politics. It’s not the person.

I do not believe TCHC’s problems can by solved by political wrangling, or by changing the people in charge. In the past five years, TCHC has had three Boards of Directors (including Case Ootes’ stint as a one-man board) and five CEOs: the visionary Derek Ballantyne; the administrator Keiko Nakamura; the accountant Len Koroneos; the populist Gene Jones; and now VP and Chief Development Officer Greg Spearn.

You could hardly find a more diverse set of leaders. And yet many of TCHC’s core problems have remained.

I believe these problems will not be resolved until we undo the decisions that led to TCHC’s creation – another purely political decision — including the decision to amalgamate into a single municipally-governed corporation. But that’s the topic of another blog.

[1] According to a Globe and Mail article, City of Toronto Ombudsman Fiona Crean reported a 67 per cent turnover rate among staff, resulting in $1.6M in severance costs. The Ombudsman’s report itself listed 88 departures, 96 hires, and 76 reclassifications or promotions.

 

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13 Comments leave one →
  1. April 30, 2014 2:27 pm

    An excellent, concise summation of the whole mind-boggling story, Ms. Connelly!

  2. April 30, 2014 3:21 pm

    Joy, you should be running TCHC, after the next “house cleaning” (but I still say TCHC is too big to succeed – the management model is unsustainable and too expensive).

  3. April 30, 2014 3:34 pm

    Extremely helpful and informed assessment. Thanks, Joy.

  4. jannie permalink
    April 30, 2014 4:04 pm

    how do we get to the desired outcome of cutting TCHC free from the political quagmire it is buried in? Is there anyone or any group that could spearhead change? Or are we stuck with the status quo and creating the same mess over and over again.?

  5. Murphy permalink
    April 30, 2014 4:07 pm

    Thank you for your clear and insightful analysis, Joy. No one factor has caused the TCHC’s problems and no one CEO or Mayor will solve them. The City’s excellent 10 year capital investment plan, spearheaded, developed and approved thanks to the efforts of many people (City and TCHC staff at all levels and many political champions) is the best news for TCHC residents in a long time. $840M for the first 3 years of the 10 year plan. The leadership at TCHC (Board and staff) need to work hard to restore confidence in their management in order to have a hope of bringing in the Province and Feds for their $840M each for the next 6 years.
    Thanks for your thoughtful blog.

  6. April 30, 2014 4:28 pm

    The UK transfer of assets and responsibilities to the charitable sector has its up’s and down’s too. BBC 4 had a program with a great review of the COS role in service delivery, you can find them here http://www.bbc.co.uk/programmes/b007rly3 and here
    http://www.bbc.co.uk/programmes/b03cmnzs

  7. April 30, 2014 6:10 pm

    This article should have the widest possible circulation. Other comments sum it up: clear, insightful, altogether excellent. Disconnecting TCHC from municipal government control would allow for stability that is sorely needed. Might you have in mind a model, a structure, that could allow for smooth devolution and streamline future practice? I’d vote for you to be on the team that points toward the future….Rosemary

  8. homelessguide permalink
    April 30, 2014 8:19 pm

    Well said Joy! You’re right. TCHC will ever remain a problem for as long as its too big for politicians to either ignore or make political hay of it.

  9. May 2, 2014 9:30 pm

    I’ve been thinking about your comments in this essay since I read it a few days ago. It is a provocative piece. But, isn’t the problem you identify systemic to democracy. Every election sees personnel changes in the civil service and related commissions, corps, etc. Every change from one party to another sees more drastic changes to governance. But, you are right, it would be nice to get the politicians and patronage out of TCHC.

  10. May 4, 2014 10:27 pm

    Joy,
    I enjoyed reading your thoughts about the path forward for TCHC. I share your concerns and desire to rethink the approach. Change starts with people like you starting these conversations in our community. I am fighting for change by representing those who want a fresh start at City Hall.

    Dave
    http://www.votedaveandre.com

Trackbacks

  1. TCHC: Big, bold . . . and BETTER | Opening the Window
  2. Previewing the TCHC Task Force Report | politics | Torontoist
  3. Previewing the TCHC Task Force Report | News4Security

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