Social Housing: Issues and Solutions. Roger Maloney Vice-Chair Social Housing Services Corporation August 19,2007

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1 Social Housing: Issues and Solutions Roger Maloney Vice-Chair Social Housing Services Corporation August 19,2007

2 Not-for-profit corporation set up in 2002 by the province to help social housing landlords and municipalities manage housing programs Governed by 15 representatives from Service Managers, housing providers and the Province Ability to levy has never been used as SHSC's goal is to remain self-sustaining based on provision of services

3 Municipal Representatives Michael Harding, Oxford Merv Hughes, Haldimand Norfolk Gary Champagne, Manitoulin-Sudbury Diane Deans, Ottawa Michael Feldman, Toronto Larry O'Connor, Durham Adelina Urbanski, Halton Dick Verrips, Bruce Housing Provider Representatives: Derek Ballantyne, Toronto Pam Cripps, Ottawa Colin Gage, Hamilton Trevor Lester, Simcoe Bob MacDonald, Parry Sound Provincial Representatives: Gordon Chong Roger Maloney ~!Ill!I!I!I!I: Social Housing Services Corporation, 2007 All rights reserved.

4 Natural gas purchasing program Group insurance program Capital reserve investment program Research and good practices Energy Efficiency program ~ mlilll mill m: Social Housing Services Corporation, 2007 All rights reserved.

Decent social housing has vital links to: o Individual well-being o Community health and prosperity o Economic growth o Environmental sustainability All

5 Decent social housing has vital links to: o Individual well-being o Community health and prosperity o Economic growth o Environmental sustainability All 3 levels ofgovernment have a vested interest in supporting social housing a*t luiii lui II: Social Housing Services Corporation, 2007 All rights reserved.

6 Most other countries have federal and provincial or state governments involved in delivery & maintenance of social housing Ontario only jurisdiction with total devolvement to local level Result is a huge risk to municipalities if there is an economic downturn ;..+" II: Social Housing Services Corporation, 2007 All rights reserved.

7 Provincial Objectives are: o Accountable o Transparent o Flexible SHSC discussion paper, Sustaining a New Partnership proposed five principles for sustainability of social housing r+t!!l!!hljmll 1111 II: Social Housing Services Corporation, 2007 All rights reserved.

8 1) Well-funded, well-managed social housing is integral to stable, healthy communities 2) Income redistribution should not be financed by property taxes. Municipalities should have access to revenue streams that are appropriate to, and that adequately support the level of funding needed for social housing. 4&n III: Social Housing Services Corporation, 2007 All rights reserved.

3) On-going capital investment requires flexible approaches to ensure benefits for future generations 4) Social housing is best managed at the local level.

9 3) On-going capital investment requires flexible approaches to ensure benefits for future generations 4) Social housing is best managed at the local level. 5) Municipalities require clear authority where they have the obligation. Providers, who own/operate the asset, must be part of decision-making. ;.+., III1l!iI1l : Social Housing Services Corporation, 2007 All rights reserved.

10 Replacement value of the assets estimated to be about $40 billion A high value municipal asset - socially and fiscally $2 billion goes through the system to house tenants and administer the asset About 700/0 of the municipal portion is to pay for the mortgage payments

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13 Senior governments are walking away from social housing investments created under their watch Operating protocols have to change in keeping with the 'pay for say' principle loday's tenants have less income and need more subsidy New financial tools are needed to fix the housing dilemma ~ II: Social Housing Services Corporation, 2007 All rights reserved.

14 Decline in federal transfer is accelerating o Result is increased municipal exposure particularly for LHCs Federal government needs to return to the table ~ II: Social Housing Services Corporation, 2007 All rights reserved.

Declining Federal Contributions to Social Housing ($000 5) 2000 2003 2006 2009 2012 2015

16 Municipalities pay k of social housing operating loss Province (MMAH) sets regulations for very low rent scales for social housing residents on OW/ODSP o Extra cost to service managers is $175 million/year o $1 Billion since SHRA passed ~ mmlll mill III: Social Housing Services Corporation, 2007 All rights reserved.

Monthly Rent $600 Single person on ODSP Province (80 0 k) Municipality (20%) Maximum Shelter Allowance Tenant Private Housing $342 ~ $427 $173 Social Housing $87 --.

17 Monthly Rent $600 Single person on ODSP Province (80 0 k) Municipality (20%) Maximum Shelter Allowance Tenant Private Housing $342 ~ $427 $173 Social Housing $87 --.m $109 Extra Municipal Cost Total Rent Total Municipal Contribution $600 $85 $491 $600 $513 Note: Municipality pays an extra $428/month ($513 - $85) if... ODSP client lives in social housing, or $5,136/year; 2005 rates IIflllII 1111I II: Social Housing Services Corporation, 2007 All rights reserved.

18 Family of 3 on OW Monthly Rent $900 Private Housin9. Social Housing Province (80 A» $457 Municipality (20 A» $114 Maximum Shelter Allowance $571 Tenant $329 Extra Municipal Cost Total Rent $900 Total Municipal Contribution $114 $181 ~ $226 $674 $900 $719 Note: Municipality pays an extra $605/month ($719 - $114) if OW client lives in social housing or $7,260/year; 2005 rates. Social Housing Services Corporation, 2007 All rights reserved.

19 Capital reserves under-funded at devolution due to: o Inadequate formulae o Moratorium and restraint programs MMAH funded study: o $23m/year shortfall (non-profits only) o over $200m since 1998 Aging infrastructure Energy retrofits needed

Allow non-profits to refinance Broaden OSIFA loan program to non-profits Pass on mortgage renewal process to SHSC (like insurance and investments) Fix rent scales on a

20 Allow non-profits to refinance Broaden OSIFA loan program to non-profits Pass on mortgage renewal process to SHSC (like insurance and investments) Fix rent scales on a go-forward basis Provide capital infusion to reserve funds Embark on shared capital works program for housing with federal and provincial governments Consider uploading the co-ops

21 Housing best delivered at local level - but property tax can't support all of the costs Study solutions provided by SHSC independent research SHSC principles align with AMO principles SHSC discussion paper o Capital Ideas: How to Extend the Health and Safety of Social Housing at

22 Minisler of Municipal Affairs and Housing 177 Bay Street. 1r Floor TDlonlo ON M5G 2E5 Te! {416) F;lX (416) !~~~~~ Lll1a~.qov.on.c:a Ministre des Affaires municipales et du Logement 777, rue Bay, 1r etage Toronto ON M5G 2E5 Tel. (416) Telee (416) ifffl.~ Ontario OJ 351R7 Scptcmbcr 6,2007 The Honourable :\1onte Solberg Minister ofhuman Resources and Social Development Place <lu Portage, Phase IV, 14th Floor l4() Promenade du POrlage Gatim:au QC KIA 0.J9 rp(,."itfk-i-c-.... Dear MiJ~beTK I am writing to you about two important issues regarding housing in Ontario. One is the need to maintain and redevelop the existing stock ofsocial housing, and the second is the need to work together on a Iong teilti plan to provide affordable housing. Bcf()fe I go into the details ofthe issue, we might first reflect on our joint successes The existing Canada-Ontario Affordable Housing Program (AHP) Agreement will create or repair \wcr 20,000 housing units for low-income families and individuals across Ontario, Initial data shows that. for each dollar ofpublic investment in affordable housing, the private sector has invested an additional three dollars. These investments have significant multiplier e1tects, cspecialjy in their impact on employment, since the housing sector is the highest valuc..added sector in the Ontario economy. The success ofthe AHP can be seen in that demand forjust one ofthe programs, rental and supportive housing, exceeded supply by over 6,000 units. Unfortunately, the demand for these units is only the tip ofthe demand for affordable and subsidized housing. A recent survey shows that there are over 120,000 individuals and families on the waiting list fijr subsidized housing. rhe CUTTent stock ofsocial housing is aging. The average age ofnon-profit and co-op housing is IXyears and the age ofpublic housing is closer to 37 years. At these ages, even well..maintained housing would require life-cycle capital repairs, such as new roofs, mechanical systems and ekvators.. In some cases, redevelopment would be a better response than repairs as this would give municipalities the opportunity to provide better community bascd planning. This could include changing the mix ofexisting projects from all rent geared-to-income units to a mix of market and subsidized units, adding new buildings or units to existing projects and relocating puhlic housing units throughout the region instead ofconcentrating public housing in one area.. J2

23 - 2 - I he Honourable Monte Solberg Ihe Social Housing Agreement (SHA) has been seen as a barrier to improving these housing options. We need to address, at a minimum, issues about contingent liability and the requirement to maintain the number ofrent geared -to-income units in each project. These issues need to be dealt \vith so that projects can borrow against equity to finance capital repairs, expand non-profit housing, introduce market units and sell existing projects to finance new projects. All of the social housing units will al\\ays require subsidy. Costs continue to rise, but since incomes do not rise as quickly, rent geared-to-income means an increasing gap between revenue and expenditures.. It is essential that, for the long tenn, federal funding should continue.. This is :.1 request to stop the decline in federal funding as operating agreements on these projects end.. We need to continue to support social housing and \-ve need to build on OUT successes under the Canada Ontario Affordable Housing Program. Not only is housing part ofthe social safety net, with improved social and health outcomes, it is a strong support for the economy. Low-wage support workers cannot afford market units and cannot afford the cost oflong commutes. They need low.. cost housing ncar employment centres.. A new, national approach by the federal government is required.. We need to address these issues. [look f()fward to your response...-'.- Subscribe to ["PDA re, the ministr)"s electronic Jlc\Hletter, at yous it ]';OtlVFI LES, II.' bulletin elcdronique du ministere, a

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