TCHC budget short $402M next year: report
City staff sound alarm about ‘imminently dire’ situation
City council must find a way to inject $402 million into Toronto Community Housing’s budget next year to keep up with repairs and operating needs, says a new report from city staff.
Along-delayed and much anticipated report on how best to remake the beleaguered housing corporation was released Monday ahead of a meeting of Mayor John Tory’s executive committee next week.
Following on 29 recommendations from a mayor’s task force, the report from staff highlights that the immediate concern is cash — and a lot of it. “Toronto Community Housing Corporation’s financial situation is untenable and will become imminently dire,” says a stark statement from staff tasked with the so-called Tenants First report.
In 2019, an additional $515 million would be required to balance Toronto Community Housing’s budget and keep up with repairs to prevent hundreds of units from being boarded up, staff say.
Various financing methods will be considered, staff wrote, including raiding reserves, ignoring debt payments and the city contributing the cash directly.
That now poses a substantial challenge for council and Tory’s administration, which has looked to freeze budgets across-the-board going into an election year and which has been politically unwilling to raise property taxes above the rate of inflation.
Tory, speaking to the report for the first time, cast doubt on the total dollar figure required for next year, which was reviewed by financial consultants Pricewaterhouse-Coopers Inc.
“I don’t think anybody should take a number from any given report,” Tory said at a news conference Monday.
“The numbers that are presented in this report are numbers that, for example, assume that, next year, 2018, we spend $430 million, I think, on repairs. Toronto Community Housing have told us, up until this point, that the most they can productively and properly spend in a given year is around $250 million, so obviously we have some discussions to take place.” Toronto Community Housing spokesperson Brayden Akers said “$250 million is the most capital funding we could deliver with current staffing levels.”
On Monday, Tory again called on other governments to help while not committing the city to any spending or the possibility of raising a tax levy dedicated to transit and housing.
“We will find ways to make those investments. Some of it can be done through debt and other means will have to be explored,” Tory said.
But Price water house-Coopers said continuing to incur more debt to pay for repairs is an unsustainable plan.
“Servicing the debt comes at a cost to TCHC. A cost which cannot be sustained,” the staff report reads. By 2026, Toronto Community’s Housing operating cash shortfall is expected to be $30 million annually.
Toronto Community Housing is the largest landlord in Canada, at 58,500 units in its portfolio of 2,200 buildings.
It faces a repairs backlog of $2 billion, which if not resolved, staff wrote, could see as many as 6,500 units boarded up by 2026.
To date, Premier Kathleen Wynne’s Liberal provincial government has not contributed a one-third share of the costs, or $864 million, as request- ed by the city.
The federal government under Prime Minister Justin Trudeau has promised to reinvest in social housing, although the funding figure for Toronto has yet to be determined and it’s unclear when that money would start to flow.
“At the end of the day we cannot and should not allow a single unit to close,” said Councillor Joe Cressy, who sits of the board for Toronto Community Housing.
As first reported by the Star, the largest long-term change recommended by city staff — and this was not one of the task force’s recommendations — is to hive off 83 seniors’ buildings from Toronto Community Housing, an agency of the city, and make them more directly accountable to the city. Staff say that model could be in place for 2020.
But the latest staff report notes several unknown costs associated with that strategy and an absence of financial data about those changes.
What a new “Seniors Housing and Services” entity, to govern over seniors’ units, might look like will not be spelled out until a report at the end of the year despite a direction from council to report on “additional funding required to implement each proposed recommendation.”