August 26, 1998

To:Community and Neighbourhood Services Committee

From:Commissioner of Community and Neighbourhood Services

Subject:The Future Management of Public Housing

Purpose:

On July 16, 1998, the Community and Neighbourhood Services Committee heard a number of deputations and received communications from Metropolitan Toronto Housing Authority (MTHA) tenants, union representatives and other interested parties regarding issues affecting MTHA. Committee requested that staff review and comment on the communications from The Public Housing Fightback Campaign, the Regent Park Community Health Centre and the Canadian Union of Public Employees Local 767. This report has been prepared in response to that request.

Financial Implications:

No financial implications identified.

Recommendations:

It is recommended that this report be received for information.

Background:

The Metropolitan Toronto Housing Authority (MTHA) is one of the largest public housing providers in North America, managing 29,000 rent-geared-to-income units for the Ontario Housing Corporation. Currently MTHA uses property management companies to manage approximately 20 percent of this portfolio - about 5500 units - and directly manages the remaining units. The units managed by property management companies were contracted out when they were built and have remained in private management since that time. The Metropolitan Toronto Housing Company Limited (MTHCL) manages one project, Glenyan Manor, for MTHA as well, and has done so since the building was constructed.

In October, 1997 the MTHA Board discussed and endorsed a preliminary proposal to expand the number of properties managed by private companies. This proposal was one of a series of MTHA initiatives intended to reduce operating costs. Although the matter was discussed in camera by the MTHA Board, it nevertheless received attention in the media. At that time, Metro Council opposed the initiative, noting that the municipality would begin to pay for the operation of MTHA effective January 1, 1998, and asking the provincial government to "suspend planning for signing contracts for the property management of MTHA units and to make no decision on the matter until after consultation with the new City of Toronto Council in 1998". Metro Council's position was based on a desire for "say for pay" and not the merits of the MTHA decision.

In the intervening period, as per the direction of the MTHA Board, staff further developed the proposal for private property management expansion. They met with representatives of the Ontario Public Service Employees Union (OPSEU) and Canadian Union of Public Employees (CUPE) locals which represent MTHA staff to give notice of the intention to expand private property management services. They held meetings with residents, residents groups, advocacy groups and other stakeholders to share information about the initiative and get comments from the stakeholders. Mail-in responses were also invited. In addition, a limited number of tenants also had the opportunity to directly address members of the MTHA Board.

At its June 1998 meeting, the MTHA Board made the decision to contract out the property management for 4500 units. This is in addition to the 5500 units which have been under private management since they were built. MTHA's impact analysis identified an estimated annual savings of between $2.2 and $3 million and the elimination of more than 100 jobs.

The staff report to the MTHA Board identified and attempted to respond to a number of the resident concerns expressed in the consultations. It emphasized the organization's commitment to the same level of service in directly managed and privately managed buildings and noted that private property managers would have to comply with MTHA policies and standards. The staff report also pointed to resident satisfaction surveys which MTHA conducts periodically and which, they noted, did not reflect a different level of satisfaction between tenants in privately managed buildings and those in directly managed buildings. It should be noted, however, that a MTHA document summarizing comments from consultation sessions held in early May indicated that "all the residents and groups that participated in the deputations opposed private property management".

Position of The Public Housing Fightback Campaign (PHFC):

PHFC submitted its June 1998 report The Future Management of Public Housing to the Committee for consideration. The report provides a case against any further privatization of property management in MTHA. It questions the effectiveness of private property management at MTHA to date, citing that no rigorous evaluation has been done, and the validity of the business case for the expansion. It also challenges the validity of the consultation process which took place between January and June, maintaining that no consultations occurred in buildings currently managed by private property managers. The data gathered from resident satisfaction surveys was also questioned, on the basis of a criticism from the Provincial Auditor, namely that "the response rate for many individual community offices is insufficient to assess results for specific buildings or property managers".

The report expresses the concern that private management will have a negative impact on the quality of life and security of tenure for tenants, and result in a loss of accountability to tenants and the public. The report also suggests that MTHA does not have the mandate to proceed with the expansion of private management now that municipalities are paying the bills, along with the federal government and tenants through their rents.

In order to address these concerns, PHFC recommends:

-that reforms in public housing be made based on a rigorous analysis of a full range of options - public sector management, co-op and non-profit models;

-"say for pay" for tenants through meaningful consultation;

-consideration of the "social case" as well as the "business case" in making any decisions regarding further privatization.

Position of the Regent Park Community Health Centre (RPCHC):

In its communication to the Community and Neighbourhood Services Committee, the RPCHC included a deputation made to the Board of Directors of MTHA on May 5, 1998 and requested that the City of Toronto consider the recommendations contained in it.

In the deputation RPCHC commends MTHA for its desire to improve service delivery to tenants and encourages efforts to explore alternative management models to achieve such a goal. Nevertheless, the organization indicates that it does not believe that "a movement to private property management from direct management serves tenants or community needs". The following more specific recommendations are contained in the deputation:

-more meaningful involvement for tenants;

-the establishment of a Task Force, made up of tenants, MTHA staff and other relevant stakeholders, to improve direct management;

-referendums in communities where management change is proposed to ensure that tenants understand and are supportive of any change;

-comprehensive monitoring of any private management firms which may be selected, to ensure tenant satisfaction;

-criteria for the selection of private managers to include not-for profit organizations only, those experienced in working with diverse communities, those experienced in mediating disputes without proceeding directly to an evictions process;

-working in partnership with the City of Toronto;

-working with the Ontario Housing Corporation (OHC) to investigate creative means of managing an aging stock.

Position of CUPE Local 767:

The brief provided by CUPE Local 767 asks the Committee to "support action to postpone the MTHA decision to expand their Private Management Partnerships, until more complete and specific information regarding the actual service comparisons can be made available...". More specifically, Local 767 requests that Councillor Chong, a City of Toronto Councillor on the MTHA Board, make a motion to reconsider the decision on private property management at MTHA's next Board meeting.

As described in their communication, this request is based on the belief that the cost difference between private and direct management results from a reduced service to residents in privately managed buildings because:

-private managers can neglect buildings and rely on capital budget to make major improvements as housing stock deteriorates;

-a double standard exists with respect to work order tracking systems - private managers have not been required to use the MTHA system;

-directly managed sites benefit from a centralized mobile maintenance service which, though ensuring a high quality response to tenants, is costly.

Also, the CUPE brief cautions that the private management approach will place a strong barrier between tenants and decision makers at MTHA and that MTHA may choose to contract out the management for the buildings which are in the best condition, allowing those who bid to do so with the knowledge that day to day maintenance needs will be greatly reduced.

The CUPE brief advocates for the eventual integration of MTHA with the City's housing companies when devolution is finally complete. For this reason, it is recommended that major decisions to reshape the organization are best left until provincial intentions are clear.

Comments:

Despite the provincial download of financial responsibility for social housing to municipalities, cities have not yet been granted any administrative responsibility for the programs they are financing. This lack of "say for pay" puts the municipality in an unfortunate position - seen by the public as accountable for social housing, yet with no authority to ensure that municipal issues are addressed and municipal positions respected. This will continue as long as one level of government is paying while another level of government is managing. The "say for pay" position has been maintained by Council in all discussions and reports related to social housing devolution.

In a separate report to the Committee, staff has provided details of a recently released Discussion Paper on Social Housing Reform. This discussion paper, prepared by the Social Housing Committee (SHC), proposes a number of reforms to the current system, reforms which the Minister of Municipal Affairs and Housing promised to make prior to transferring responsibility for social housing administration to municipalities. Only when the reform process is complete and administrative responsibility transferred, will the City's role with respect to MTHA be clear.

As noted at the Committee meeting of July 16, 1998, municipalities across the province have been asked to nominate representatives to sit on the Boards of their local housing authorities, specifically to ensure that municipal views are considered by these local housing authorities in the period preceding the transfer of administrative responsibility. The appointment of municipal representatives to the MTHA Board, in contrast, was made by the Minister of Municipal Affairs and Housing, without consultation with the City. This has essentially left the City of Toronto representative accountable to the Minister who appointed him, rather than to the City. The Committee, at its last meeting, recommended that Council advise the Minister that Toronto will be nominating its own two representatives to sit on the MTHA Board, and that the matter be referred to the Striking Committee for consideration.

The issue of contracting out services is one which the City's own housing companies will need to consider. To date, budget constraints have been addressed without contracting out core property management services. However, in view of the considerable attention which has been focused on this issue, and anticipated additional fiscal constraint, it will be crucial to examine closely this issue and develop sound data upon which to make decisions regarding any alternate service delivery models. The municipal housing companies have begun an analysis of the relative costs and benefits of in-house and contracted-out property management services, to ensure that the necessary data is available.

Contact Name:

Joanne Campbell, General Manager

Shelter, Housing and Support Division

Telephone: 392-7885

Commissioner

Community and Neighbourhood Services