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National Post: Pitching an end to city's slumlord role

Chris Selley, National Post

Senator Art Eggleton delivered his long-awaited task force report on Toronto Community Housing to Mayor John Tory on Tuesday at city hall. Details to follow, but first let's stare this disgraceful situation in the face: The municipal government is essentially a slumlord.

Toronto Community Housing (TCH) has many happy tenants and vibrant communities, but also some of the shoddiest apartment buildings in the 416. The complaints from their tenants are legion and harrowing, from infestations to flooding to crime. TCH's capital repair backlog amounts to nearly onethird of its $9-billion property portfolio. What's worse, since TCH is by far the single biggest source of subsidized housing in the city - indeed it's by far the city's biggest landlord - there are tens of thousands of people on a waiting list who would give their eye teeth to live in those buildings. In most cases, the subsidy lives in the unit, not in their bank accounts.

Slumlords tend to turn a profit, mind you. "The 10-year capital financial plan agreed to by council in 2013 assumed that (TCH) would generate an annual surplus of $50 million to put toward capital repairs," the task force report notes. But TCH's 2016 operating budget forecasts a $30-million loss. And for a variety of factors, the report predicts, by 2026 its annual shortfall could be "more than $200 million."

"Because of Toronto Community Housing's structure and history, the organization is unsustainable financially and socially," Ana Bailao, city council's housing advocate, said Tuesday.

Well, thank goodness. Who would want to sustain it? It's not that TCH is wholly incompetent or disreputable. It has been nearly seven whole months since the last spending scandal escaped its Rosedale headquarters. The Regent Park revitalization is a worthy model for future affordable housing developments in this city, and fits nicely into the task force's vision. But it is long past time to start fresh.

So, the vision: TCH becomes an independent community-based non-profit housing corporation, just like 240 others operating relatively uncontroversially in this city. The report suggests NewHome as a rebrand. This new entity would be off the city's books, and thus no longer beholden to the city's debt ceiling, which is 15 per cent of property tax revenue. Debt-to-equity ratios in the real estate business are typically much higher, and TCH has much against which to borrow.

So empowered, NewHome would set about building all kinds of the affordable housing this city needs - "better buildings and more of them," per the report. With the province's approval, these new developments would feature a 70/30 split of subsidized and market-rate tenants (it's currently 90/10). The 30 would, in essence, pay for the 70, and everyone would live happily ever after.

So far, so good. This basic business model works for other agencies - all of them a fraction of TCH's size, mind you. The report suggests reviewing TCH's operations in search of buildings that could be better owned or managed by other housing agencies, and tenants who could be better served by those agencies or by truly portable subsidies, redeemable (in theory) with any landlord. And the report argues tenants would be much better served if employees with decisionmaking authority actually showed up in their buildings instead of holing up at headquarters. The report will be before executive committee today. Tory says he expects the city manager to report on its findings by spring. And if Toronto is to continue mandating a behemoth landlord to house a significant chunk of this city's population, then it's full of good ideas - even if some are alarmingly basic.

I have serious qualms about that behemoth, both philosophical and practical: Eggleton spoke of the need for a "customer-service culture," but until subsidized tenants have the right to vote with their feet, that will be very difficult to instil. Nothing in this report helps eliminate that disgraceful $2.6-billion repair backlog, and many of the task force recommendations rely on provincial and federal largesse both immediately and in perpetuity. Tory insists he's confident "help is on the way," especially from the feds, but sunny ways won't last forever.

All the more reason, perhaps, to ensure Toronto's social housing agency is far more sustainable than it is today. Given its track record, it will be some feat turning it into anything like (Tory's words) an "excellent landlord" - but then, many tenants would no doubt be thrilled with half-decent.