Agenda

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The City Manager and General Manager, Shelter, Support and Housing Administration, recommend that:

1.         City Council, in its capacity as Shareholder, approve pursuant to section 6.3.1(b) of the Shareholder Direction, the sale by Toronto Community Housing Corporation (TCH) of the 675 properties containing 740 units, listed in Appendix A, on condition that:

a.         prior to the sale of any properties, TCH provide a plan, satisfactory to the General Manager, Shelter, Support and Housing Administration, and the Deputy City Manager and Chief Financial Officer, for the administration and use of the proceeds of any sales of stand-alone units,  net of reasonable transaction costs, in the state of good repair of existing social housing units, consistent with its Real Estate Investment Strategy –  Housing Works;

b.         prior to the sale of any properties, TCH provide a plan, satisfactory to the General Manager, Shelter, Support & Housing Administration, for maintaining TCH's mandated service level standards, which includes the replacement of 664 rent-geared-to-income (RGI) units and rent supplement units within the existing TCH portfolio with units that will accommodate similar sized households;

c.         the reallocation of the RGI and rent supplement units in 1.b. be funded from within TCH's existing operating subsidy;

d.         prior to the sale of any occupied properties, TCH provide a Tenant Relocation and Assistance Implementation Plan, satisfactory to the General Manager, Shelter, Support and Housing Administration, such plan to include at least the following:

i.          the process for consultation and communication with tenants;

ii.         options and process for selection of units for relocation;

iii.        notice periods;

iv.        assistance with moving;

v.         accommodation of special needs including unit accessibility; and

vi.        access to community services;

and subject to:

e.         TCH and/or the prospective purchasers obtaining the various necessary planning approvals and legislative, municipal and corporate consents (including consent of mortgagors, if necessary); and

f.          approval from the Ministry of Municipal Affairs and Housing and/or Canada Mortgage and Housing Corporation if necessary;

2.         City Council not consider  the sale of the 18 TCH houses listed in Appendix C, that are under legal agreements with supportive housing agencies and refer consideration of the possible sale of these properties back to TCH for further analysis and consultation with the agencies and their clients;

3.         City Council not consider the sale of the 168 properties listed in Appendix D  and refer consideration of the possible sale of these properties back to TCH for further analysis to determine the feasibility or benefit of selling these properties;

4.         City Council authorize the General Manager, Shelter, Support and Housing Administration to amend the TCH Operating Agreement as necessary as a result of the sale of properties pursuant to the adoption of recommendations in this report and to execute such other agreements, notices, consents and ancillary documentation deemed appropriate in connection with the sale of the properties on terms and conditions satisfactory to the General Manager, Shelter, Support and Housing Administration and in a form satisfactory to the City Solicitor;

5.         City Council direct TCH to report annually, through TCH's Annual Report to Council, on the status of the sale of the properties and on any tenant and community impacts resulting from the sales;

6.         City Council require that as a condition of the agreement of purchase and sale for the property at 201 Crawford Street (Ward 19) and for the properties designated under Part V of the Ontario Heritage Act (OHA), the Purchasers shall be required to enter into Heritage Easement Agreements with the City under Section 37 of the OHA to the satisfaction of the Manager, Heritage Preservation Services; and

7.         consistent with Council's 10 year affordable housing plan, Housing Opportunities Toronto, Council reiterate, in the strongest terms possible, its urgent request to the federal and provincial governments to provide ongoing and sustainable funding to ensure the social housing stock achieves and maintains a state of good repair.

Over the past several years, Council has been made aware of the significant and growing repair needs in the City's social housing portfolio and, in particular, the backlog of needed repairs in the Toronto Community Housing (TCH) stock of social housing.  In response, Council has requested on numerous occasions that the provincial government upload the full costs of social housing and that the federal and provincial governments provide ongoing, sustainable funding for social housing repairs.  The costs of social housing have not been uploaded and at the present time, there is no ongoing, sustainable program for repairs.  As a result, the funding challenge in Toronto’s social housing continues to deepen. This report, therefore, recommends the sale of stand-alone dwellings to generate revenue to help fund repairs of the multi-unit buildings in TCH's portfolio.

TCH's proposal to sell stand-alone properties is part of its strategy to address state of good repair needs in its entire portfolio. The TCH Board has resolved that, as a condition of approval of sale, proceeds from the sales will be dedicated to a "State of Good Repair" fund for capital repairs to TCH's multi-residential stock.

In reviewing TCH's proposal and the impact on tenants, communities and TCH's financial situation, consideration has been given to the City's roles and responsibilities as sole shareholder of TCH and consolidated service manager under the Housing Services Act, 2011 (HSA), as well as Council positions on affordable housing including the Housing Opportunities Toronto ten year plan, Official Plan housing policy and rental housing protection and heritage preservation requirements.

To date Council has approved TCH's requests for consent to the sale of 47 stand alone properties – 20 at below market value to another social housing provider and 27 on the open market. TCH is now seeking approval to sell another 872 stand-alone properties. These properties contain 1,534 housing units.

Included in the 872 stand-alone properties TCH is requesting approval to sell are 168 properties that have yet to be approved by the TCH Board.  Staff are recommending that Council not consider their sale and refer consideration of the possible sale of these properties back to TCH for further analysis.

The 704 properties approved for sale by TCH's Board of Directors include 11 properties which have previously been approved for sale by both TCH and Council. These properties do not need to be considered by Council again.

Also included in the 704 properties approved for sale by TCH's Board of Directors are 18 supportive housing properties.  Through referral and head lease agreement with TCH, supportive housing agencies are able to provide special needs clients support and affordable housing in a communal setting.  Staff recommend that these properties (with 81 units in total) not be approved for sale at this time and that TCH proceed with further analysis and consultation with these supportive housing agencies and their clients.

Therefore, this report recommends that Council approve the sale of 675 TCH houses containing 740 units, as listed in Appendix A, subject to a set of conditions aimed at supporting tenants and satisfying statutory and regulatory requirements.  The following chart summarizes the disposition of the properties: 

Based on TCH estimates, these 675 properties have a combined market value of at least $222 million that can be put towards the approximately $650 million needed for capital repairs. It is understood that TCH intends to take a phased approach over a number of years to the sale of these 675 properties and develop a business case for the sale of each property.  TCH will not evict tenants or withdraw rent-geared-to-income (RGI) subsidy to qualified residents as a result of Council's approval of the sales and will make reasonable efforts to relocate households to suitable alternative accommodation.

Should Council approve the sale of the 675 TCH properties, 644 of them will still need the consent of the Minister of Municipal Affairs and Housing and/or Canada Mortgage and Housing Corporation (CMHC).

Consideration by Council of the sale of any other TCH stand-alone properties may be given at a later date after TCH has concluded its analysis of the feasibility and benefits of such sales.

The City Manager recommends that:

1.         The report to the City Manager from the Chief Executive Officer of Toronto Community Housing entitled Report on Toronto Community Housing’s State of Good Repair Plan be considered with Executive Committee’s consideration of the City staff report entitled Securing Funding to Repair Toronto Community Housing's Multi-Residential Portfolio: Sale of Toronto Community Housing Stand-Alone Units.

2.         Council request the federal and provincial governments to jointly provide annual capital repair funding averaging $150 million from 2013 to 2017 and $90 million a year from 2018 thereafter so that the Toronto Community Housing portfolio can achieve and maintain a good state of repair.