STAFF REPORT

To: Tenant Defense Sub-Committee

From: Commissioner of Community and Neighbourhood Services

Subject:Housing Devolution Issues for Provincial Legislation

Purpose:

To provide a summary of applications received to date from tenant groups with repect to the Tenant Support Grants program of the Defence Fund

 Financial Implications and Impact Statement:

There are no financial implications in 2000. The level of cost and risk to the City in future years will be determined largely by the provincial framework discussed in this report. After housing program devolution, net City housing expenditure will continue at or near the current level of $239 million, but gross expenditure may approach $500 million, including costs recovered from "905" funding partners and the provincial government. The proposed 2000 operating budget includes a request for resources to cover activities leading up to devolution in 2001.

Recommendations:

It is recommended that:

1. Council urge the provincial government to ensure that upcoming legislation and Ontario Regulations governing devolution of social housing program administration reflect the City positions set out in Appendix 1, most of which confirm and clarify positions previously adopted by Council;

(2)Council urge the provincial government to ensure that the following requirements are met in the transition period leading up to devolution of social housing program administration:

(a)that a full due diligence process be undertaken according to a specific provincial-municipal arrangement to be negotiated, including condition surveys to determine capital repair and reserve fund requirements, full financial review, transfer of financial and other records, and full information regarding projects subject to or requiring special scrutiny;

(b)that Ontario Housing Corporation not make major decisions on public housing (such as on sale of properties or contracting out of property management) without the concurrence of the affected municipality (CMSM);

(c)that the Province provide municipalities (CMSMs) with adequate funding for transition costs including but not limited to due diligence, information technology, staff training, and one-time space and equipment costs;

(3)the Province be urged to hold legislative committee hearings on the draft devolution legislation, and to undertake a full consultation with municipalities and with the housing sectors on draft Ontario Regulations proposed under the legislation;

1. the Ministry of Municipal Affairs and Housing be urged to immediately establish a joint planning team with each CMSM, to negotiate the local terms and timeframe for devolution;
2. this report be forwarded to all CMSMs and to the Association of Municipalities of Ontario with a request for endorsement, and be forwarded to the Premier of Ontario, the Minister of Municipal Affairs and Housing, the provincial Minister of Finance, and organizations representing the non-profit and co-operative housing sector; and

(6)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Background:

 The provincial plan for housing devolution, first announced in 1997, has two stages. In the first stage, under the Social Housing Funding Act, 1997, the Province since January 1998 has been invoicing municipalities to recover its costs for funding the provincial share of social housing, which it still administers.

The second stage is the devolution of program administration to municipalities, along with direct responsibility for public housing. Municipalities will assume the funding and other obligations that the Province and CMHC have today under operating agreements with each specific housing provider agency. Program administration involves overall management of the funding system, allocation of funds to particular housing providers, and related functions such as setting operating policies, approving capital repair spending, reviewing providers' budgets, and ensuring compliance with the conditions of the program. Devolution of public housing involves not just funding but also the operation of housing now run by Ontario Housing Corporation through local housing authorities, in our case the Metropolitan Toronto Housing Authority (MTHA). Appendix 2 summarizes the roles of each level of government before and after devolution.

In December 1999, staff reported on federal-provincial housing devolution. Provincial-municipal devolution is the next step, involving both federally-administered and provincially-administered social housing (except co-operatives developed before 1986). The provincial framework will determine how issues identified in regard to federal stock affect municipalities.

The framework for municipal responsibility will be set out in a new statute and regulations. According to provincial sources including a February newsletter, "legislation could be introduced in spring of 2000 with devolution to be substantially completed 18 months after the legislation is passed". The Province has indicated that the target date to implement devolution may vary depending on each municipality's readiness, but may be as early as the second quarter 2001. The devolution-related risks to municipalities, which have been noted in various earlier reports, will also be governed by that framework. It is therefore timely for Toronto and other municipalities to set out clear positions in regard to the legislation.

The social housing to be devolved totals 95,600 units, about 20 percent of all rental housing in the City. About 73,600 (77 percent) are rent-geared-to-income (RGI) units for low-income households. Almost half the total (and 68 percent of RGI units) is in older "public housing" targeted entirely to low-income tenants. The rest is "non-profit housing" built since 1975 and having a mix of RGI and market rent tenants. Publicly-owned buildings comprise 61 percent of all units: 28,400 Toronto Housing Company and 29,400 MTHA. About 37,800 units (37 percent) are owned by some 280 non-profit and co-operative housing organizations. In addition, there are 2,800 "rent supplement" units in buildings owned by about 120 private landlords.

Provincial communications on devolution refer not to "municipalities" but to the 47 CMSM's (Consolidated Municipal Service Managers) it has designated to carry out housing program administration and other functions. Toronto constitutes a CMSM as does each regional municipality and as do many counties. In certain other areas, the CMSM comprises more than one upper-tier government. In Northern Ontario special CMSMs called District Social Services Administration Boards (DSAABs) have been created for the purpose.

Comments:

A. Recent Developments:

Over the past six months, the Ministry of Municipal Affairs and Housing has entered a period of active planning for housing program devolution. Limited provincial consultation has taken place with the municipal sector on the overall framework. Collaboration between the City and the MMAH regional office on transition and implementation has been accelerating.

The main vehicles for overall provincial/municipal process and consultations have been the Municipal Reference Group, a process to develop a framework for "Integrated Financial Testing and Access to Ontario Works, Child Care and Social Housing", consultations via the AMO Social Housing Committee, and communications via the Ontario Regions Social Housing Group.

The Ministry is using the Municipal Reference as an advisory group for municipal devolution. Originally established in 1999 as confidential third-party advisory group for federal-Ontario devolution negotiations, it continues operating on a confidential basis even though municipalities are now direct stakeholders. Members are not able to share the information outside the group or to seek input on it. Toronto, with one-third of the province's social housing, is represented on the group by Councillor Feldman and Commissioner Shirley Hoy or her designate.

The process to develop a framework for "Integrated Financial Testing and Access to Ontario Works, Child Care and Social Housing" has been led by the Ministry of Community and Social Services. This involved public consultations during fall 1999, leading soon to a report expected on the provincial proposals. It is expected to have significant implications for social housing.

The AMO Social Housing Task Force has been a vehicle for limited consultations. Deloitte Consulting was hired in September 1999 for a three-phase study to develop the devolution framework and "local implementation framework". The Ministry and Deloitte Consulting consulted with stakeholders in fall 1999 through an AMO Social Housing Task Force meeting and through meetings with housing authorities and with municipal housing staff in each area of the province, including Toronto. Little specific information was available at that stage on provincial proposals. AMO sent a staff response, with Toronto input, setting out "CMSM/DSAAB Requirements for a Successful Devolution Program", and later prepared a set of 10 principles which was reviewed with the Minister.

Key messages the Ministry understood from the consultation included: municipalities want to "know the rules" of the framework; implementation must be flexible to suit local needs; transition funding is needed; decisions are needed on ownership of public housing; and, there must be time to set in place local structures and systems.

The Ontario Regions Social Housing Group, consisting of senior municipal housing officials, was established by the Regional CAOs of Ontario in 1999 and reports to them. It has become a key forum for information exchange between municipalities and to some extent with provincial officials. Toronto staff are active participants. This group has also served as source of expertise on housing issues for AMO, which is the municipal sector voice recognized by the Province.

The AMO Social Housing Task Force was consulted on a Ministry study on the "new subsidy model" (program reform, discussed below). Other studies include ones on a non-profit reserve funds, non-profit financing (process for mortgage renewals), cost-benchmarking for non-profit housing, OHC capital requirements, and others, any of which may influence the framework for municipal housing program administration. Limited input has been sought from the Ontario Regions Social Housing Group. Key substantive issues are discussed in part C of this report.

The Ministry has not provided specific public information on the framework that is now in advanced stages of development. It is understood that a submission or submissions have been made by the Ministry to Cabinet, and that the drafting of devolution legislation is imminent. No public consultation is expected before legislation is introduced. The Province has not yet indicated what input will be possible on the legislation and regulations.

At the local level, City housing staff are now having regular monthly meetings with counterparts from the MMAH regional office, to discuss transition issues. Ministry staff are also available to assist the City's Social Housing Interdepartmental Work Group that has now been established.

The City-Ministry process to date falls short of what is required: a joint planning team to negotiate the terms and timeframe for devolution in Toronto (with parallel teams in each CMSM).

Housing providers are a major stakeholder in devolution. These are independent agencies which own and operate one-third of social housing in the City. City staff are now working with local providers' representatives to establish a formal, regular consultation process with the Toronto Non-profit Providers' Network and the Co-operative Housing Federation of Toronto (CHFT).

Devolution will also involve changes in housing operations in publicly-owned housing which is now operated by both Toronto Housing Company and the provincial MTHA. Devolution is expected to lead to some rationalization. Housing Company and MTHA management have initiated discussions on areas of collaboration. Proposals will be brought to the boards of directors of the two organizations and from there to Council. The provincial devolution framework will soon shape and accelerate the Housing Company/MTHA process.

B. Process for the Legislation and Regulations

Municipal positions on the devolution legislation and regulations should be clearly voiced. If the bill is introduced in the legislature this spring, with little prior consultation, there may be limited opportunity to influence the legislation in advance. But the legislation could be introduced later, and it may well be framed in broad terms, with most of the specifics set out in the Ontario Regulations made under it. This would provide a secondary opportunity for municipal input on the draft regulations, should the government be prepared to hear such input.

Toronto and other municipalities should urge the government to hold legislative committee hearings on the bill. This would provide an opportunity for municipal and housing sector concerns to be voiced, for oversights to be set right, and for differences in approach to be aired before the legislation is adopted. In the event that the Government, through its majority in the legislature, chooses not to hold hearings on the bill, it will be important to urge consultation on draft Regulations under the legislation. This is a fairly normal process for complex legislation, which was followed, for example, on the Tenant Protection Act.

C. Issues for the Devolution Legislation and Regulations:

Previous reports have identified key municipal concerns and positions in regard to devolution. This section summarizes these in a way that addresses what is required in the upcoming legislation and regulations.

 (1) Limit Overall Municipal Financial Risks

Since housing devolution was first announced, municipalities have expressed concerns over the inequity of putting social programs (geared-to-income assistance) on the property tax base and the risk of rising housing subsidy costs. The risks accelerate as federal subsidy flowing into the system via the Province declines over time. These issues are acute for Toronto because its social housing is weighted toward more geared-to-income units and fewer market units, and toward older projects involving relatively more federal subsidy.

The Province should cap municipal financial risk. There are precedents in other programs: for example, from the late 1980's until 1995, the Province paid 90 percent of social assistance costs (instead of 80 percent) in areas where over four percent of the population was on assistance. Capping risk would be in harmony with the provincial position that Local Services Realignment will be revenue-neutral for municipalities. The Province has vastly more fiscal resources than municipalities and a corresponding obligation to limit municipal exposure to level involved in the original LSR fiscal exchange, subject to adjustments for growth in tax base.

Such an approach can fit with the necessary provincial post-devolution role, which will necessarily involve flowing subsidy originating from the federal government, and protecting its own interests in province-wide standards and mortgage insurance indemnification (see below).

The devolution legislation will need to address the municipal-provincial risk relating to "contingent liability". This refers to the Province's indemnification of CMHC for mortgage insurance costs relating to social housing mortgages: if a default occurs, CMHC will recover its costs from the Province. The Province can be expected to ensure that it is not put at risk by the way a given municipality manages subsidy flows or by poor maintenance of the housing asset.

(2) Reduce Capital Repair Liability

Potential capital repair liability has long been identified as a municipal concern in devolution. Unlike private rental housing, social housing cannot fund capital repairs from retained earnings (it is non-profit) or rent increases (because the objective is low rents). Major capital repairs are funded from current operating revenues (rents and subsidies) in the case of public housing, and from reserve funds in the case of non-profit housing. Reserve funds are now funded from revenues at $400 per unit annually in the provincially administered programs.

The devolution framework must address two main concerns associated with capital repair needs. The first is ample condition surveys as part of the due diligence process, to identify foreseeable or expected future repair costs. The second is adequate funds to meet these anticipated costs.

To date, the Province has set aside $30 million from the one-time payment received from CMHC upon signing the November 1999 devolution agreement, to assist municipalities with future repair costs. This amounts to only $570 per unit. Also, in 1997 the Province made $172 million in special reserve fund payments to housing providers, as well as enhancing OHC capital funding; but this was to compensate for under-funding during 1992 to 1996 as a fiscal constraint.

Efforts are underway to determine the magnitude of potential cost. A 1999 Peel Region study of capital needs found that annual capital reserve contributions for post-1978 non-profits should be increased by $330 per unit (an 83 percent increase) to meet future capital needs. A similar study by Halton Region also found that annual capital contributions were inadequate. If the assumptions used in the Peel study were found to apply in Toronto, the additional cost could exceed $11 million a year - not counting any additional costs for Toronto's 42,000 units of older public housing. Work is now underway by City staff to determine the adequacy of reserve funding.

The Province has also initiated a study of reserve funds as part of its devolution planning. It will look at methodologies to determine needs, at the magnitude of need, and at other options for funding capital repairs, such as from rental revenue and on-going subsidies. Another study will examine capital repair issues for the public housing stock, where there are no capital reserves.

The Province should be required to cover the potential shortfall in reserve funds and provide adequate funds for future public housing capital needs. It is in the municipal interest to use a reserve fund approach, rather than options that might raise future municipal subsidy.

Given the intended timeframe for devolution, it appears unlikely that due diligence could involve condition surveys on all social housing. A large provincial transition fund could be established at the outset, from which CMSMs could draw based on the results of condition surveys to be undertaken. Alternatively, the Province could allocate capital funds among CMSMs on a needs-based formula, informed by the various studies that have been completed or are under way.

(3)Flow all Federal Housing Funds

The CMHC-Ontario housing devolution agreement signed in November 1999 transferred to Ontario the federal role in administering housing programs, and turned federal funding (which used to go to particular programs and projects) into an annual block transfer to Ontario. The Province is broadly accountable to CMHC for its use of the funds, and indemnifies CMHC for any costs arising from CMHC mortgage insurance for devolved social housing.

The Province will now devolve the federal program administration role to municipalities. The 40 percent of total subsidy that originates with CMHC will flow, via the Province, into the municipally-administered housing system. Municipalities will be accountable to the Province.

The devolution legislation must emphasize provincial responsibility to flow these funds and assume overall risk. It is reasonable for the Province to exercise some control over the system - if it retains some liability for its indemnification of CMHC, and if it provides assurances that it will continue to flow the federal 40 percent of subsidy. Provincial control must be subject to strict limits. The legislation and regulations must prevent any withholding of federal subsidy except for clear and specific municipal breaches of provincial standards.

Toronto has a strong interest in federal housing subsidy to Ontario, as 38 percent of it flows to projects within City boundaries. The devolution framework must ensure that CMSMs, which are relatively more dependent on federal subsidy, are guaranteed the level of federal/provincial housing funding that would have flowed under operating agreements before devolution.

(4)Set Reasonable Province-wide Standards

Province-wide standards for social housing are required, but must be reasonable. Provincial standards of this sort can prevent any danger that a given municipality might abandon its social housing obligations, effectively exporting the responsibility to its neighbours.

While respecting provincial standards, municipalities need the powers, as principal funders and local service system managers, to adapt the programs in ways that suit local needs. For example, some municipalities will want to move actively toward income integration in public housing, while others will not. Putting surplus funds into private rent supplement may be cost-effective in a high-vacancy market but not in a low-vacancy market. The access (application and eligibility) system suitable to a large urban municipality will differ from what is needed in a CMSM comprising smaller centres and rural areas. Some municipalities and not others will want to closely integrate social housing administration with that of other social programs. Inflexible provincial standards must not apply to social housing where net provincial funding is zero - in contrast to programs such as Ontario Works for which the majority of funding is provincial.

(5)Transfer Public Housing Ownership and Governance

Toronto and many other municipalities have argued that, as they are required to pay the former provincial share of funding for public housing, they, and not the Province, should own the asset and have control of corporate governance. This reflects the principle of "say for pay". Municipalities (CMSMs) that want ownership of public housing must be provided this option under the legislation. Further, there should be flexibility for each CMSM to determine what governance structure should be chosen for the housing authority, including the relationship to existing municipal housing corporations.

The legislation must also set out a clear framework with respect to the rights of employees in public housing, as the portfolio is transferred to CMSM administration. Part D of this report comments on provincial decision-making in the transition period, including major OHC decisions such as selling stock and contracting to private management.

(6)Pursue Program Reform to Streamline Administration

Housing program reform was recommended in 1998 by the Social Housing Committee appointed by and reporting to the Minister of Municipal Affairs and Housing. It was endorsed by the City of Toronto, several other municipalities, and with provisos by AMO. The central idea is to streamline program administration by putting housing providers on a business-like basis. Cost-efficiency in housing programs could then be driven by built-in incentives rather than by administrative processes, as is the case today.

As noted in section A, the Province has commissioned a detailed study on the new financial model, with consultations via AMO. Municipalities need to know the specific data from this on projected costs and benefits in each CMSM under probable conditions. On that basis, CMSMs and the housing sector can make a more informed decision. The devolution legislation should provide the option of implementing the new financial model, and in any event should provide for consolidation of the five or so main different existing funding arrangements for social housing.

(7)Ensure Powers to Carry out Obligations and Enforce Rights under Operating Agreements

Each social housing project or provider is governed by an operating agreement which sets out the terms and conditions of funding. It covers issues such as non-profit status, good management and maintenance; security of the mortgage, rules for eligibility and geared-to-income rents, audit and reporting; approval of budgets and flow of subsidies; and, remedies for breach of the agreement. Provincial rights and obligations under the agreement flow from ministerial powers under the Municipal Affairs and Housing Act and the Housing Development Act.

The devolution legislation will in some way legally grant to municipalities the provincial rights and obligations as funder, pursuant to the operating agreements. The Province has broad powers as the "Crown" under common law and under existing statutes, whereas municipalities have only those powers that are specifically provided to them by legislation. Preparing the legislation should involve a thorough legal review of what powers are needed to discharge the municipalities' new roles, and whether specific new municipal statutory powers must be created. The devolution legislation must not simply delineate municipal responsibilities through regulations and program rules set at the discretion of the Minister or Cabinet. The legislation and regulations must set a sufficiently detailed framework for municipalities to carry out obligations and enforce their rights as funder. For example, municipalities must be empowered to exercise the powers now available to the Province in the event of a breach of the agreement, or to adjust schedules that set out market rents, low-income targeting provisions, and so on.

Municipalities and housing providers should also be able to amend operating agreements by mutual consent, as long as provincial standards are met. Providers will want assurances that ministerial or municipal program rules cannot bring about a de facto change which was not agreed to. Rules on changes to parties' rights and obligations under operating agreements, must be clear and must reflect a negotiated consensus.

(8)Make Clear Arrangements for Inter-municipal Cost Sharing including GTA Pooling

The majority of devolved social housing in Ontario will involve inter-municipal funding arrangements. Half of Ontario's social housing is in the Greater Toronto Area, subject to pooling. Several CMSM's serve more than one upper-tier municipality or separated city. In Northern Ontario, DSAABs each serve several municipalities.

Inter-municipal accountability is a key requirement, and it will have a different face when municipalities start receiving invoices from each other rather than from the Province. Municipalities issuing invoices need assurances about payment, while those receiving them need assurances that costs are reasonable. Social housing is different from Ontario Works where the same inter-municipal CMSM relationships exist, because far more discretion and local cost variability exists in housing than in provincially-prescribed rules for Ontario Works.

In the GTA, the City of Toronto will recover approximately 30 percent of gross housing subsidy costs from the "905" Regions. Conversely, half of each extra housing dollar spent or saved in the "905" regions accrues as a cost or saving to the City of Toronto. There is a mutual interest in setting up a system that ensures accountability which also has built-in incentives to efficiency. GTA housing officials in 1999 developed options for pooling with a view to such incentives; these have been reported to the GTA treasurers group. So far, there has been no GTA consensus reached on how to handle pooling after program devolution, and no consultation by the Province.

Pooled GTA housing subsidy requires a system of joint governance, one which minimizes the inter-municipal procedures required for accountability. The legislation must set out a specific framework, based on negotiations needed now between the GTA Regions and the Province.

(9)Give Municipalities Needed Powers for New Housing Supply

Senior governments are not just devolving responsibility to administer programs. They are shifting overall responsibility for responding to housing needs. Although municipalities have opposed this, municipalities have the lead role in the medium term, as long as senior governments are inactive. Many Ontario municipalities recognize that the worsening trends in waiting lists, foodbank use, and homelessness require a response in creating affordable housing.

Municipalities need additional powers to effectively meet these needs. Effective municipal efforts to create new housing need to piggy-back on private sector expertise, efficiency, and access to capital. To do this requires an ability to enter agreements with private firms, in ways the City Solicitor has advised may be contrary to the Municipal Act bonusing provisions. Municipalities need stronger powers to enforce housing affordability that they require as a condition of development approvals under Official Plan provisions. The devolution legislation is the place to ensure that municipalities have such powers.

D. Transition Issues

Municipal requirements in housing devolution pertain to not only the ongoing framework to be set out in legislation and regulations, but also to transition issues. The key transition issues are due diligence, decision-making in Ontario Housing Corporation, transition funding, and flexible local timing to implement devolved program administration.

Provincial devolution must involve a full process of due diligence. This has several aspects, and must go beyond the relatively cursory due diligence being carried out for federal devolution.

(a)There must be condition surveys of a wide and representative range of housing projects in each CMSM (or all projects where the total stock is not large), as the basis for identifying future capital repair and reserve fund requirements;

(b)There must be a full financial review - to ensure that records at the level of the individual provider roll up reliably to the global numbers being used for budget and other purposes; to ensure that municipalities have adequate recent historical records for each provider, to use in making funding decisions; etcetera.

(c)there must be full transfer of information on any projects that are undergoing or require special scrutiny due to special problems that have arisen;

Transition costs for Toronto are only partly known at this time. The proposed 2000 operating budget for Shelter, Housing and Support provides for some increase in housing staff to prepare for implementation in 2001, as well as $240,000 for consultant work that will be needed, for example, on IT, due diligence, etc. This is parallel to budget proposals in other major regional municipalities. Some costs might be shared with the Province and/or other municipalities. Substantial additional transition costs could be incurred, depending on the provincial framework and how much work will be carried out at the provincial versus municipal level in areas such as IT, training, or due diligence. For example, conditions surveys could easily cost $3,000 to $5,000 per building. The scope, and therefore, costs of a major IT project could vary considerably, but it might be in the range of $250,000 to $1 million. Transition costs for other City divisions and departments have not yet been confirmed.

As devolution of the Ontario Housing Corporation approaches, municipalities must be given a stronger role in decision-making. Nevertheless, the government is still directing that OHC make major decisions without municipal input, such as on sale of stock and contracting out of property management. In this transition period, no major decisions should be taken in such matters without the concurrence of the municipality concerned.

Transition funding is needed to cover costs such as condition surveys as part of due diligence, information technology, staff training, consultations with the local housing sector, one-time space and equipment costs, and so forth. The municipal sector should be provided an opportunity to respond to provincial proposals in how this funding might be made available.

Conclusions:

Legislation is expected to be tabled this spring, setting out the framework for devolution to municipalities of the current provincial responsibility for administering housing programs and funding. This legislation will also set out the framework for transferring public housing (OHC) to municipalities. Implementation is expected during 2001, with some local flexibility on timing.

The Province and municipalities including the City are now in a stage of active preparation for the transfer of responsibilities. There has been little formal and public consultation with the municipal sector on the framework for devolution that will shortly emerge full-grown in legislation. Municipal positions on key devolution issues should therefore be clearly voiced. The Province should hold legislative hearings on the bill and should consult on the draft regulations.

Nine key municipal interests are identified in regard to the framework for housing devolution:

(1)Limit overall municipal fiscal risks;

(2)Reduce capital repair liability;

(3)Flow all federal housing funds;

(4)Set reasonable province-wide standards;

(5)Transfer public housing ownership and governance;

(6)Pursue program reform to streamline administration;

(7)Ensure powers to carry out obligations and enforce rights under operating agreements;

(8)Make clear arrangements for inter-municipal cost sharing including GTA Pooling; and

(9)Give municipalities needed powers for new housing supply.

In the transition period leading up to devolution, the Province should ensure that a full due diligence process be undertaken, that major OHC decisions on public housing be made only with the concurrence of the affected municipality, and that adequate transition funding be provided to municipalities.

This report has been prepared in consultation with the City Solicitor and other departments represented on the Social Housing Interdepartmental Work Group.

 Contact:

Derek Ballantyne, Acting General Manager, Shelter Housing & Support Division

Phone: 392-7885; Fax: 392-0548

E-mail: dballant@torontohousing.com

     Shirley Hoy

Commissioner of Community and Neighbourhood Services

List of Attachments:

Appendix 1 - Recommended Municipal Positions to be Reflected in Upcoming Housing Devolution Legislation and Ontario Regulations

Appendix 2 - Government Roles Before and After Devolution

 Appendix 1

Recommended Municipal Positions to be Reflected in Upcoming Housing Devolution Legislation and Ontario Regulations

(a)that the Province assume future subsidy risks and contingent liability for mortgage default, and (in accordance with the principle of revenue neutrality) set a limit to the level of housing subsidy costs per unit of assessment base that any municipality (CMSM) must cover, and commit to cover any additional subsidy, within reasonable cost benchmarks;

(b)that the Province, in advance of devolution, provide adequate funding of non-profit reserve funds and sufficient capital funds for public housing, to cover expected future capital repair requirements;

(c)that all federal social housing funds received by the Province of Ontario each year be transferred to municipalities, and that the Province be entitled to withhold such funds only for clear and significant breaches of reasonable provincial standards;

(d)that reasonable province-wide standards be established, with adequate local flexibility in administration;

(e)that each municipality (Consolidated Municipal Service Manager - CMSM) be given the option of assuming ownership of public housing now owned by Ontario Housing Corporation, and creating a public housing governance structure suited to local needs;

(f)that there be provision for consolidation of the various social housing programs, and for program reform involving the proposed new financial model, to achieve incentives for efficiency and business-like operation by housing providers;

(g)that municipalities (CMSMs) be given full and clear powers to carry out obligations and enforce their rights as funder in place of the Province and/or Canada Mortgage and Housing Corporation, under existing operating agreements with each housing provider;

(h)that there be clear provisions for inter-municipal accountability and obligation to pay social housing costs, applying to pooled GTA costs, District Social Services Administration Boards, and CMSMs covering more than one upper-tier municipality, including a simple but adequate governance mechanism for GTA pooling; and

(i)that municipalities (CMSMs) be given enhanced powers to provide and

encourage additional affordable housing, consistent with municipalities' current lead responsibility for housing and homelessness.

  Appendix 2

Government Roles Before and After Devolution