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The Progressive Economics Forum

Toronto Community Housing Corporation

I have an opinion piece in today’s Toronto Star regarding the recent controversy surrounding the Toronto Community Housing Corporation (TCHC).  In the way of background:

-TCHC is Canada’s largest provider of social housing, and Toronto’s largest landlord.

-There have been two recent reports by the City of Toronto’s auditor–one looks at staff expenses at TCHC, and another looks at TCHC’s procurement practices. 

-The report looking at staff expenses draws attention to “a culture at the TCHC” which has allowed inappropriate expenses totalling approximately $200,000 a year.  Though TCHC’s expense policy itself has been deemed appropriate, the auditor has concluded that it was not being followed.  In one case, eight staff members held their divisional planning meeting at a Toronto spa.  At a cost of over $1,900, they were treated to a “three-course lunch, pedicures, manicures and water therapy.” In 2008, TCHC held a staff Christmas party at a banquet hall at a cost of over $53,000; it included a chocolate fountain.  What’s more, many staff expenses were approved without supporting documentation.

-Likewise, the report on procurement finds that TCHC’s policies and procedures on procurement were not always followed.  If TCHC were to improve the way it awards contracts, the auditor estimates that TCHC could save as much as $10 million a year. 

-Since the release of the two reports, TCHC’s entire board of directors has been replaced (there is now a temporary, one-person board).  There have also been multiple firings, including TCHC’s two most recent CEOs.

-Toronto’s Mayor, meanwhile, has made no secret of the fact that he is quite open to seeing TCHC privatized, and that he would rather see low-income households housed in the private market (with the assistance of rent supplements) than by a non-profit entity.

In my opinion piece, I make two arguments against the privatization of TCHC.  First, I argue that, over the long term, non-profit landlords (such as TCHC) keep rent lower than private landlords.  Second, I argue that rent supplements–on a large scale–have an inflationary impact on the rent of unsubsidized units.

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Comments

Comment from Andrew Jackson
Time: April 13, 2011, 6:50 am

Nick – I wonder if one could also plausibly argue that social housing reduces demand for low rent private rental housing, and thus brings down rents even fro those who do not get into the directly subidized units.

Comment from Purple Library Guy
Time: April 13, 2011, 1:10 pm

Sounds like a management culture problem to me, not a staff problem.

Funny how, whenever an organization is doing something right, even if it’s mainly due to hard work done in the trenches, it’s always because of “leadership” from upper management. And whenever there are problems, even if they are exclusively among the people at the top making procurement decisions and messing with expense accounts, it’s a “culture” problem among the “staff”.

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