September 23, 1999

To:Community Services Committee

From:Commissioner of Community and Neighbourhood Services

Subject:Mandate and Budget Allocation for Mayor's Homeless Initiative Reserve Fund

 Purpose:

This report proposes a program mandate for the Mayor's Homeless Initiative Reserve Fund. It also proposes a first allocation to the Fund, based on underspending in social housing subsidy.

Funding Sources, Financial Implications and Impact Statement:

The funding source for the transfer into the new Mayor's Homeless Initiative Reserve Fund is the savings generated through lower social housing mortgage payments in 1999, compared to the provision for such payments within the Provincial Housing Download area of the approved 1999 operating budget for the Shelter, Housing and Support Division.

The Finance Department concurs with the recommendations for funding this reserve in 1999.

Recommendations:

It is recommended that:

(1)(a)The Chief Financial Officer and Treasurer be authorized to create a Mayor's Homeless Initiative Reserve Fund, in accordance with recommendation no. 16 in the approved 1999 Operating Budget for the Shelter, Housing and Support Program;

(b)Council approve an initial amount of up to $5 million to be transferred to the Mayor's Homeless Initiative Reserve Fund in 1999, from the 1999 provincial Housing Download savings within the Shelter, Housing and Support Division's 1999 Operating Budget, contingent on the realization of such savings;

(c)The Commissioner of Community and Neighbourhood Services report to Council for approval of any further transfers into the Mayor's Homeless Initiative Reserve Fund that the Commissioner deems necessary;

(2)The following mandate be approved for the Mayor's Homeless Initiative Reserve Fund:

(i)to help stabilize the housing of homeless people or those in identified high-risk groups, by providing one-time capital support to suitable projects that have short timeframes to completion;

(ii)to combine with federal capital funding, in the event that federal housing or homelessness capital funding announced within the timeframe of fiscal 1999/2000 requires a City contribution;

(iii)the Commissioner of Community and Neighbourhood Services report to Council on all expenditures from the Mayor's Homeless initiative Reserve Fund on a regular periodic basis;

(iv)such funding to be administered by the Commissioner of Community and Neighbourhood Services, in consultation with the Chief Financial Officer and Treasurer, in accordance with the Process for Project Development and Funding Approval set out in this report, including Council approval being required for each specific allocation from the fund in excess of $25,000.00;

(3)The Commissioner of Community and Neighbourhood Services and the Chief Financial Officer and Treasurer report back at the appropriate time with updated information on 1999 underspending in the Provincial Housing Download;

(4)The appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

 Council Reference/Background/History:

Council's approval of the 1999 operating budget for the Shelter, Housing and Support Division included adoption of the following motion, intended to ensure that savings arising in the Provincial Housing Download (the City share of pooled GTA social housing subsidy costs) be redirected to housing and homeless needs in the face of mounting problems in those areas: "Any savings from the Mortgage Renewal Portfolio (beyond the existing budget) be transferred to a Mayor's Homeless Initiative Reserve Fund, for 1999 only, the use of this fund to be reported on and be subject to City Council approval."

Council at its meeting of July 27-30, 1999, requested that staff report back by October on funds that could be made available as a result of underspending in the Provincial Housing Download.

Council also in July adopted a report identifying the Mayor's Homeless Initiative Reserve Fund as a likely source of City funds for the proposed "Add-a-Suite" incentive program. The program would assist home-owners to install or upgrade second suites, and was endorsed in principle by Council with a proviso restricting it to owner-occupied residences. Council directed that federal and provincial funding be sought first.

As the City is still awaiting a response on federal funding, this report proposes that the Mayor's Homeless Initiative Reserve Fund be used for immediate responses directly related to homelessness.

Proposed Mandate for the Mayor's Homeless Initiative Reserve Fund:

The intended purpose of the Mayor's Homeless Initiative Reserve Fund was to redirect housing spending back toward purposes that would alleviate the crisis of affordable housing and homelessness. The uses for the money should provide some quick results.

The Add-a-Suite proposal is now on a delayed timeline for two reasons. Firstly, it is linked to the by-law amendments permitting second suites as-of-right, on which an Ontario Municipal Board hearing is not expected until winter or spring 2000. Secondly, the City is still awaiting a response from the federal or provincial governments to letters seeking funding, sent by the Mayor following the July Council motions. There have been indications that there may be some short-term response from the federal government on homelessness within the 1999/2000 fiscal year. Added RRAP funding, possibly including eligibility of "add-a-suite" type of work, may be a possibility. Any such response is not likely until later in the fall or winter.

It is therefore necessary to identify some near-term priorities for the Fund.

The proposed mandate of the Mayor's Homeless Initiative Reserve Fund is to provide some immediate responses to the needs of homeless people in the city, as follows:

(ii)Priority will be given to projects which help homeless people move toward stable housing, with a focus on people who are hostel users or street homeless or are in high-risk groups as identified by the Mayor's Homelessness Action Task Force;

1. Process for Project Development and Funding Approval:

(i)Priority will be given to projects sponsored by community-based agencies and have short timeframes to completion, preferably between now and the end of the first quarter 2000;

(ii)The Shelter, Housing and Support Division will work with agencies in targeted sectors serving homeless and at-risk groups to formulate or invite suitable proposals;

(iii)Staff will report back seeking Council approval for each specific allocation from the fund in excess of $25,000.00.

Projects eligible as "immediate priorities" would include transitional housing for high-risk groups. Transitional housing is useful for homeless people whose problems go beyond simple lack of money and housing, and who cannot move right away into permanent housing. An example is described in the appendix to this report. More briefly, examples include "second stage" housing for abused women, where they can live for an interim period with higher support and higher security; transitional housing for homeless youth where they can acquire a tenancy record and get back into school or employment; or transitional housing where long-term homeless people can relearn the skills of keeping a home and unlearn the habits of the street.

The proposed mandate is distinct from, and complements, other City funding mechanisms. The existing Homeless Initiatives Fund is directed at services in areas such as homeless prevention, food, health and day programs for homeless people, and staff to help homeless people find housing. The existing Capital Revolving Fund for affordable housing will provide capital support to permanent affordable housing. By contrast, the Mayor's Homeless Initiative Reserve Fund will provide capital assistance to projects that assist homeless or at-risk people to move toward stable housing.

The short time frame means that projects are likely to be ones already in the planning stages. Projects will be sponsored by agencies in the community, not by the City. The City has been approached by a number of groups with proposals or ideas.

Allocation of Underspending to the Fund:

  Savings continue to arise in social housing subsidy. Overall, approximately 45 percent of GTA social housing costs are for amortization of mortgages. Renewal (rollover) of mortgages for various projects continues to bring the benefit of current lower interest rates, reducing the subsidy required.

Staff of the Finance Department and the Shelter, Housing and Support Division have reviewed underspending in the Provincial Housing Download area. The province this spring released a forecast of $241.9 million as the City's share of costs, or $7.4 million under the approved 1999 City operating budget of $249.3 million. This included a cushion for some rise in interest rates. Provincial staff are unable to provide an updated projection as of September, but informal contacts with provincial staff suggest that the earlier forecast is on track. This conclusion is also supported by the pattern of year-to-date (January-July) billings which, assuming no further reductions from 1998 billing levels in the remainder of 1999, would result in over $8 million underspending.

Based on this projected 1999 underspending of $7.4 million, it is reasonable to allocate $5 million to the Mayor's Homeless Initiative Reserve Fund at this time. Such an allocation reflects a cautious approach to underspending, and provides an allowance for unanticipated costs during the remainder of the year. This report recommends accordingly. Staff will report back as further information becomes available.

Conclusion:

The Mayor's Homeless Initiative Reserve Fund was established by Council to redirect savings in social housing subsidy toward alleviating the crisis of affordable housing and homelessness. This report proposes that the Fund be used for immediate responses directly related to homelessness. The City is still awaiting a federal response on funding for the Add-a-Suite program earlier proposed.

The recommended mandate for the Fund is to provide one-time capital to projects helping people move toward stable housing, focusing on homeless people and those in identified high-risk groups. This is distinct from the mandates of the Homeless Initiatives Fund (services, not capital) and Capital Revolving Fund for Affordable Housing (permanent housing). Priority will go to projects that can be funded by the end of first quarter 2000. One likely target is transitional housing, for people whose problems go beyond money and who cannot move directly into permanent housing.

The Mayor's Homeless Initiative Reserve Fund may also be used to cost-share or stack onto any federal housing or homelessness capital funding that may be announced within the timeframe of fiscal 1999/2000, in the event that such City contributions are required.

Funding will be administered by the Commissioner of Community and Neighbourhood Services, in consultation with the Mayor's Office and Chief Financial Officer and Treasurer. Staff will report back seeking Council approval for each specific allocation from the fund in excess of $25,000.00, and on overall spending from the fund.

Based on a review of underspending in the Provincial Housing Download area, $5 million can be transferred to the Fund at this time. Staff will report further on projected additional underspending once firmer information is available.

The Mayor's Office and the Finance Department concur with the recommendations of this report.

Contact Name:

Joanne Campbell

Tel: (416) 392-7885

Fax: (416) 392-0548

     Commissioner of Community and Neighbourhood Services

Appendix

Features of Transitional Housing, Citing the Example of a Project for Aboriginal Youth

• The project serves a particular client group, in this case Aboriginal Youth. It would be operated by a community-based agency with experience and a solid track record providing services to that target group.

• The facility has higher levels of staffing than an ordinary housing project, reflecting the fact that the project is helping deal with much more than the housing needs of residents/clients. The facility is often smaller than an ordinary housing project, in order to foster closer relations among residents or with staff. In some cases, the project might involve collective living rather than separate apartments.

• Residents are referred from the hostel system and stay in the transitional housing for typically 12 to 18 months. Workers at the hostel and the transitional housing facility are acquainted with each other and suitable applicants can be selected.

• Residency is tied to participation in programs described here, to deal with non-housing issues that contributed to the person's homelessness.

• Emphasis is placed on completing high school and/or enrolling in an employment training program.

• Residents have ready access to a variety of other programs. These could include peer support, alcohol/drug programs, personal counselling, crisis intervention, etc. These can enable the person to deal with incidents or problems that would otherwise land them on the street again, and make sure they leave the streets permanently, not just temporarily. Programs may be operated by the sponsor agency, or through links that are established with other agencies.

• Living at a transitional housing project gives people who have been on the street for some time a period to develop the habits of paying rent (or room and board) regularly, getting along with neighbours in a stable housing situation, and just keeping a home (shopping, cleaning, etc.). Unlearning the skills and habits of the street may be necessary to do this.

• Setting up the transitional housing facility and the associated programs provides an opportunity to line up funding for the support service programs. In the case of Aboriginal youth, federal funding through HRDC (Human Resources Development Canada) and Indian Affairs would be leading potential sources.