Will selling 675 houses make a difference?

On page 6 of its February 9^th State of Good Repair Plan, Toronto Community Housing describes a “Facility Condition Index” (FCI) that rates the average state of repair in its buildings. A good rating is less than 5%: buildings are clean and functional, and equipment failures are limited and manageable. A critical rating is over 20%: buildings will show obvious deterioration, with frequent equipment failures and occasional building shut-downs.

Selling 675 houses will not keep TCHC’s buildings out of the critical zone.

As this chart shows,[1] TCHC’s buildings will be deeply in the critical zone if TCHC stops investing in capital repairs altogether (a scenario that no-one suggests) or relies solely on its current allocation (the blue line).

Selling TCHC houses (the red line) only delays entry into the critical zone. By 2015, TCHC’s buildings are following the same trajectory as if the sales had never happened. By 2021 and every year thereafter, TCHC’s buildings will be in a critical state.

What would happen if TCHC transferred its houses to a new non-profit corporation, and used the money it would save — the $6.4 M it says it loses every year on its stand-alone portfolio, and the $12.1 M it has budgeted to relocate displaced tenants in market units — to pay for capital repairs? By 2021 it would be in a similar position as if it sold its entire stock this year (the green line).

The conclusion: 1) Why lose 675 homes — the most integrated and spacious homes TCHC owns — for so little gain? 2) The only TRUE solution to TCHC’s capital repair woes is an operating solution — more funding, or lower costs, every year.