Disposition of "Property Houses"
Owned by the City of Toronto
The Community and Neighbourhood Services Committee recommends that:
(1)the 60 "property houses" in the former City of Toronto be retained by the
amalgamated Toronto Housing Company;
(2)in the interim, a moratorium be placed on the sale of any properties owned by the
City of Toronto that could be used for shelter, and that no residential dwellings in any
part of the new City of Toronto be sold or demolished until the "Housing First Policy"
has been considered by Council and a determination made on the appropriateness of the
housing stock for social housing;
(3)the report dated June 11, 1998, addressed to the Corporate Services Committee,
from the Commissioner of Corporate Services be resubmitted to that Committee for its
November 9, 1998, meeting; and
(4)the Commissioners of Community and Neighbourhood Services and Corporate
Services be requested to report to the Corporate Services Committee on November 9,
1998, if possible, on a process for disposing of any other surplus properties, such a
process to recognize the priority of addressing the critical homeless problem in the City
of Toronto.
The Community and Neighbourhood Services Committee further reports having
received the following report (September 24, 1998) from the Chair, Board of Directors of
The City of Toronto Non-Profit Housing Corporation and The Metropolitan Toronto
Housing Company Limited:
Purpose:
This report is written to inform the Community and Neighbourhood Services Committee of
two studies which have been commissioned to review costs and practices related to
maintenance and property management services.
Background:
Cityhome and the Metropolitan Toronto Housing Company Limited (MTHCL) will legally
amalgamate to form a new housing company on January 1, 1999. As of April of this year,
Cityhome and MTHCL began sharing a cross-appointed nine-member Board of Directors. In
May, the Board of Directors adopted a report which outlined a vision and structure for the
new housing company. The proposed "decentralized service" vision for the new company
suggests an organizational model with several local management units managing residential
portfolios and a central administrative body. This model suits the requirements of a large scale
social housing provider - it allows for meeting local customer needs while effectively
delivering high quality services at affordable cost. Key to implementation of the model is the
need to determine the current cost of services delivered by the housing companies, and the
cost and impact of alternative delivery options for property management services.
In early August, Derek Ballantyne was named Chief Operating Officer of the new housing
company. He assumed his position on September 15, 1998.
Comments:
As part of the process to develop the structure of the new housing company, the Board of
Directors and the City Administration have commissioned three major studies to be completed
with the assistance of consultants.
These are:
(1) Amalgamation Organization Design and Restructuring of Services:
An amalgamation structure study to decide the organization structure of the new company.
(2) Review of Property Management Services:
A bench marking study to evaluate more broadly the cost and effectiveness of property
management at Cityhome and MTHCL and to compare costs, effectiveness and delivery
models with the private sector.
(3) Review of Technical Services and Maintenance Operations:
A study to evaluate technical services and maintenance operations at Cityhome and MTHCL,
compare them to private sector maintenance costs and delivery models and recommend a
maintenance structure and service delivery model for the new Housing Company.
The Organizational Design and the Property Management studies are fully funded by the
Amalgamation Office, the review of Maintenance and Technical Services Operations has been
fully funded by the Housing Company.
A brief summary of the three studies follows:
(1)Amalgamation Organization Design and Restructuring of Services:
The purpose of this study is to achieve a detailed organizational design of the new housing
company consistent with the vision adopted by the Board of Directors earlier this year. In
addition, the consultants will investigate alternative delivery models as required by the City of
Toronto's Chief Administrative Officer and City Council.
Phase 1-development of organizational design (by October 26, 1998); and
-service delivery design options for the organization and assistance in its implementation;
Phase 2-determination of accountability and relationship between the City and the new
housing company - Memorandum of Understanding with Shelter and Housing Support
Services Division (by November 23, 1998).
(2)Review of Property Management Services:
The purpose of the study is to review the property management operations of MTHCL and
Cityhome and to make recommendations as required for the organizational and operational
aspects of the property management function in the new company:
-undertake a detailed evaluation of the property management function as currently performed
and to make recommendations with regard to the most cost-effective manner of providing
these services in a combined operation;
-undertake a detailed comparison between Cityhome and MTHCL in relation to each other
and also in relation to private sector property management benchmarks. The study will
provide a set of comprehensive recommendations outlining the areas where improvement is
needed and will also provide detailed and specific recommendations for improvement, with
regard to the most cost-effective manner of providing these services, while considering
effectiveness and value criteria; and
-the study will also provide a survey/assessment tool for periodic monitoring after the
completion of this assignment to track user satisfaction (building staff, tenants, and other
staff).
The evaluation of property management services will include:
-identification of Property Management Services;
-assessment of the Cost of Property Management Services;
-examination of the current ways market units are rented to prospective tenants;
-commentary on the property management support services currently performed at the
District level;
-a study of management and administration of building staff;
-identification of labour issues;
-analysis of the management of the commercial portfolios; and
-analysis of the private sector per-unit costs derived above into the "manageable cost study"
format for overall expenditures excluding mortgage payments and utility costs, according to
the methodology used in the 1995 Price Waterhouse "Large Provider Manageable Cost
Study".
(3) Review of Technical Services and Maintenance Operations:
The purpose of the review is to make a detailed inventory and evaluation of the maintenance
and technical services functions currently performed in each organization, including a
comparison between Cityhome and MTHCL in relation to each other and also in relation to
private sector maintenance management benchmarks. The review will also develop
cost-effective service delivery design options for maintenance and technical services.
The review will include:
-assessment of general operational approach;
-assessment of the Recurring Maintenance System;
-assessment of the Preventative Maintenance System;
-review of grounds maintenance function;
-assessment of the provision of technical services and capital work project management;
-assessment of the goods and services procurement process;
-assessment of after hours emergency calls system;
-assessment of the current maintenance information systems; and
-establishment of private sector property management benchmarks for maintenance and
technical services.
Conclusion:
It is important to note the context in which these studies are being undertaken. Cityhome and
MTHCL face significant cost pressures. There is a pressing need to determine the most
effective approach to delivering property management and maintenance services, including
options to contract services to third parties. The studies underway will assist in developing a
proper understanding of the current cost structures, and the comparative value of services
within the private sector.
It is important that the studies provide the Housing Company with an identification of the
main cost drivers for these services and a better knowledge of comparable "apples to apples"
private sector costs. Cost comparisons with the private sector are complex, as there is a need
to factor in the nature of the social housing business, which differs significantly with private
sector property management. The information generated by these studies will help us to
design the most appropriate organizational structure that we can to respond to this new
economic and local environment and it will assist us in bringing our operating costs down and
provide an accountability framework for property management functions.
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The following persons gave a presentation to the Community and Neighbourhood Services
Committee on the three studies referred to in the foregoing report:
-Ms. Joanne Campbell, General Manager, Shelter, Housing and Support Division,
Community and Neighbourhood Services Department;
-Dr. John Metson, Chair, Interim Board of Directors of the City of Toronto Non-Profit
Housing Corporation and The Metropolitan Toronto Housing Company Limited; and
-Mr. Derek Ballantyne, Chief Operating Officer, Toronto Housing Company.