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Quarterly: Spring 2020 - City of Toronto

Improving Outcomes: Addressing Toronto’s Affordable Housing Needs


By City of Toronto's Auditor General Office

Toronto is a successful and prosperous city, and yet many low-to-moderate income Torontonians have increasingly limited access to safe, stable and affordable housing.

In 2017, the Auditor General for the City of Toronto launched a series of audits in areas that fall along the housing continuum. This article highlights the results of the first three audits, completed in 2019, and actions taken since.

One of the audits reviewed redevelopment and revitalization activities of the Toronto Community Housing Corporation (TCHC), a wholly-owned subsidiary of the City. TCHC is the largest social housing provider in Canada and the second largest in North America, providing housing to about 110,000 low- and moderate-income tenants in approximately 59,000 housing units. About 89 percent of TCHC tenants receive housing assistance, otherwise known as rent-geared-to-income1 (RGI). The rest pay affordable or market rent rates.

Moving Forward Together: Opportunities to Address Broader City Priorities in TCHC Revitalizations

TCHC revitalization initiatives are a significant undertaking – they offer the chance to plan and build a community starting from the ground up. They also provide an important city-building opportunity by improving the quality of life of TCHC residents while physically transforming former public housing neighbourhoods into mixed-income, mixed-use communities.

TCHC’s revitalization program aims to leverage the value of its lands in order to replace aging buildings and keep the building capital repair backlog from increasing. TCHC uses the proceeds generated from the sale of lands, as well as through private sector development partnerships, to replace, renovate, or repair the existing social housing stock in specific communities.

Through revitalization projects, TCHC also aims to boost the local economy by offering employment, training and scholarship opportunities for tenants; attracting investment in the form of new or improved amenities like parks and community facilities; and, creating opportunities for affordable home ownership.

Aligning Revitalization and City-Building Objectives

We found that it has been a challenge for TCHC to balance multiple priorities within funding constraints. Successfully addressing multiple city-building objectives through site redevelopment, such as increasing the supply of affordable housing, requires the City to coordinate key priorities, raise the visibility of the funding issues and ensure there is a plan to achieve overall desired outcomes. To do this, a broader, more integrated approach for the City as a whole – not for TCHC alone – is needed.

Our audit highlighted that to maximize broader city-wide outcomes that can be achieved as part of developing TCHC sites, the City needs to ensure that all necessary programs, services, and financial strategies are coordinated. This will better support TCHC’s revitalization projects through to their completion and enable the City to take advantage of opportunities to address other housing supply challenges.

After our report was issued, the revitalization plan for another development site was announced. This development project will replace the existing 120 TCHC units, add 350 condominium units, 180 market rent apartments, and create 100 affordable rental apartments. These new affordable rental units were not included in earlier plans for the site and will help improve revitalization outcomes in alignment with strategic city-building objectives.

Outcome-Focused Strategies Allow Measuring Achievements

In recommending revitalization priorities and establishing funding strategies, we highlighted that TCHC and the City should work together to create a formal development strategy. They should also establish ways to measure the outcome-focused goals to be set out in the strategy.

Furthermore, we recommended that TCHC should report on the outcomes achieved through the revitalizations on a phase-by-phase basis, increasing the timeliness in which information is provided to its Board and to City Council in order to both support management and to hold management accountable for results.

Our report identified some examples of outcomes that the City and TCHC may want to measure.

TCHC may want to measure the extent of:

  • reduced capital repair backlog;
  • reduced operating costs;
  • increased tenant employment, training, and scholarship opportunities;
  • increased accessibility within buildings;
  • increased tenant satisfaction or tenant engagement index; and
  • increased community safety.

The City may want to measure the extent of:

  • increased accommodation of City priorities;
  • increased consideration of City programs and services that can be incorporated into revitalization plans;
  • increased planning and development fee income;
  • increased parkland dedications or cash-in-lieu of parkland;
  • increased annual property tax revenue; and
  • increased funding from other levels of government for affordable housing.

We also noted that long-term social impacts and city-building benefits may be non-quantifiable but are equally important and should be evaluated. Creating a formal development strategy with specific measurable goals will help TCHC and the City to evaluate the complex outcomes of future revitalization projects for the City as a whole in terms of both financial and non-financial impacts (outputs / outcomes) and whether the strategy is achieving its intended outcomes.

The next two audits focused on the City of Toronto's social housing waiting list for RGI assistance and how the City ensures that only eligible households benefit from RGI assistance.

Opening Doors to Stable Housing: An Effective Waiting List and Reduced Vacancy Rates Will Help More People Access Housing

The demand for RGI assistance significantly exceeds the supply and only a small percentage of waiting families gain access to subsidized housing each year. There are more than 100,000 households reported to be on the City’s social housing wait list, some of whom have been waiting more than 10 years for assistance. The audit focused on improvements to help more families to access housing subsidies. We found the wait list had significant data integrity issues, which slowed down the process of matching applicants with available housing units. Because of this slow process, an average of 1,400 social housing units were sitting vacant in 2018, at a cost of $7 million.

In response to the audit, the City is improving how it manages the social housing waiting list by updating key data and developing strategies to efficiently house priority applicants, such as survivors of abuse or human trafficking, and people experiencing homelessness.

Safeguarding Rent-Geared-to-Income Assistance: Ensuring Only Eligible People Benefit

As an extension to our audit of the City's social housing waiting list, we looked at the administration of RGI and the verification of each household's ongoing eligibility for RGI assistance while living in social housing. We found a number of indicators that may impact certain households’ eligibility for RGI assistance. The audit recommended that the City take greater responsibility to identify and address indicators of ineligibility to help prevent providing assistance to ineligible households, and assist more waiting and eligible people to access stable housing.

Since our audit, management reports that it has been working to improve the eligibility verification process so that social housing units can be better used to provide homes for eligible households waiting for RGI assistance.

The recommendations made through these audits will bring value by helping the City improve access for more eligible people who are waiting for stable housing.

Notes

1 Rent-geared-to-income (RGI) assistance is provided to low income tenants at rates tied to tenants’ incomes. RGI is rent paid for subsidized housing. In most cases, RGI is set to be 30 percent of gross monthly household income, before taxes and deductions.

About the Author

The City of Toronto’s Auditor General’s Office is responsible for assisting City Council in holding itself and City administrators accountable for the quality of stewardship over public funds and for the achievement of value for money in City operations. The Office's work has been featured in several industry publications and has been recognized by leaders in the performance audit and fraud industry. To learn more about the Auditor General's Office, please visit toronto.ca/audit or @TorontoAuditor.