Providing sustainable services
Consider this problem: You are a social housing landlord. 49% of your revenue comes from government subsidies and 46% comes from rent, with the rest coming from commercial sources like parking and billboards. Your revenue base is relatively fixed, but your operating costs are increasing because of the age of your buildings. You need new revenue urgently to fix buildings across your portfolio and to maintain a good level of service for your tenants.
What do you do?
Below: Toronto Community Housing's 2010 revenue and expenses
There are two different challenges at stake when it comes to maintaining and increasing Toronto Community Housing's revenue:
- Making sure that all of our units are filled as consistently as possible so that we do not lose rental revenue
- Finding new ways to generate revenue
For a landlord, filling vacancies quickly is essential. In 2011, we lost $6.2 million because of vacant units - $4.1 million from empty RGI units and $2.1 million from empty market units.
Why do units stay vacant?
- There are some units that can't be rented because we can't afford the cost of their capital repairs or refurbishment.
- There is a mismatch between unit supply and demand. Toronto Community Housing's portfolio contains more bachelor units and fewer multi-bedroom family units than are needed. About 10% of the bachelors, 1,430 units, turn over each year.
- Some Toronto Community Housing buildings are located in areas of the city that are less desirable for renting because of location, provision of services and amenities, access to transit and/or perceptions of the community.
New revenue sources
Commercial revenue has increased consistently for the past 5 years. Commercial tenants pay market rent and invest money into their spaces, helping to improve the value of our properties. They also help create mixed-use communities and provide amenities for tenants. All of the revenue generated by commercial activities is invested directly into our communities.
Toronto Community Housing has also been able to fund the construction of new social housing units using money from the sale of market condominiums through public-private partnerships like the Regent Park revitalization.
What this means
Lack of revenue makes it difficult for Toronto Community Housing to fulfill the mandate outlined in its shareholder direction of providing affordable housing, connecting tenants to services and opportunities, and working to build healthy communities. As federal and provincial government funding for social housing continues to decline, Toronto Community Housing must explore new ways of raising the revenue necessary to maintain its buildings and provide a good living environment for its tenants.
Toronto Community Housing is not the only social housing provider facing these challenges. New York City Housing Authority has established an Office of Public-Private Partnerships specifically for this purpose. Public-private partnerships are only one part of the diverse revenue stream needed to sustain social housing moving forward.
What we've done so far
Filled vacancies more effectively:
- Toronto Community Housing established an internal rental task force to tackle hard-to-fill vacancies in buildings across the city. So far, the task force has made 1,694 formal offers of subsidized housing, removing 3,660 people from various subsidized housing waiting lists. Vacancy losses are declining but are still above target. Learn more in our Q4 2011 performance reports.
- Toronto Community Housing has reduced the turn-around time for vacant units by identifying delays in the unit preparation process and working with staff to resolve these issues and standardize procedures. Staff also audited administrative processes to figure out areas where Toronto Community Housing can reduce revenue loss due to errors in rent calculation, omission of service and/or rent charges, inappropriate adjustments/credits to accounts and other errors.
Found new revenue sources:
- New commercial opportunities, like retail rental space in Regent Park and the Railway Lands, are producing more revenue. Other commercial revenue sources include parking, billboard rental and roof-top antennas. However,commercial revenue still makes up only about 5% of Toronto Community Housing's total revenue.
Built public-private partnerships:
- Toronto Community Housing is currently working on four revitalization projects in partnership with private development companies - Regent Park,Lawrence Heights, Allenbury Gardens and Leslie Nymark.One project - Don Mount Court / Rivertowne - is already complete. Learn more about revitalization here.
Key things to keep in mind
- Toronto Community Housing sees about 4,000 units vacated during the year. That is a turn over rate of about 7% annually.
- We have over 14,000 bachelor units in our portfolio. They have the shortest waiting lists for any type of unit because our supply is outstripping demand for them
What do you recommend?
- What are some new ways of generating revenue that we haven't explored? How would they work?
- How can we make sure that Toronto's social housing stock meets the needs of Torontonians? For example, are there ideas from other cities that we should explore?
- Describe the role you think public-private partnerships should play in sustaining social housing in Toronto.
- What would a sustainable, long-term public funding model for social housing look like? Keep in mind the relationship between the federal, provincial and municipal governments and its effect on the funding available for social housing.
- Ideas into Action: Key steps toward improving Ontario's Social Housing System, Housing Services Corporation
- Courage Under Fire: Addressing the Challenges and Opportunities of a Post-Operating Agreement World in Social Housing, June 2011, Housing Services Corporation.
- The Role of Public-Private Partnerships in Funding Social Housing in Canada, by Alexandra Moskalyk, Housing Services Corporation.
- Case Studies of Social (Purpose) Enterprise in the Ontario Non-Profit Housing Sector,by the Ontario Non-Profit Housing Association (ONPHA), April 2010
- Office of Public-Private Partnerships, New York City Housing Authority (NYCHA).
Send your ideas and solutions by e-mail (email@example.com), drop them off in person, or mail them to: CMP Consultation Feedback, 931 Yonge Street, 7th floor, Toronto, Ontario,M4W 2H2