REVOLVING HOUSING
LOAN FUND
Fonds de crédit renouvelable pour le logement
Acs2007-ccs-cps-0018 CITY WIDE / À
L'ÉCHELLE DE LA VILLE
Councillor Holmes provided a brief
overview of the item, the details of which are reflected in her report. She referred to the letter from the Ottawa
Community Housing (OCH) dated 20 June 2007, in which they express the
difficulties of such a fund because it is problematic to provide loans rather
than a grant. They were concerned that
a refundable loan (which is what staff recommend this be) would be an
encumbrance on the mortgage. In
addition, there is a lot of paperwork involved in the administration of these
funds and she believed it only serves to hinder the process. Further, OCH has 80% of the social housing
in this city and yet there are no commitments from the City to fund them using
this loan fund. She also recognized
that some housing providers are going bankrupt because the City has not funded
them in any sustainable way and Council has to live up to this funding responsibility. It was for these reasons that she believed
half the funds should go to OCH and the rest to the other housing providers.
Mr. Kanellakos clarified that the
department is not asking for mortgages from any of the providers. These are forgivable loans that will not be
required to be paid back as long as they continue to provide the basis
service. In addition, OCH would receive
the money in the form of grants because the City owns them and they are non profit
and the City would not be asking them to go through any kind of mortgage or
signing a loan agreement. He explained
that while OCH is eligible for this money, staff prefer to see all the
applications and allocate based on most urgent need. He recognized that Council is aware of the situation of the
lifecycle maintenance capital budget program, which has been reduced to 40% of
required repairs on an annual basis, adding that budget directions over the
past number of years have decreased the Department’s ability to maintain any
assets, including affordable, social and public housing.
Councillor Cullen asked why this
policy discussion did not take place when this program was being put together
earlier this year, Mr. Kanellakos advised that the revolving loan fund was an
item in the 2007 budget and was brought to the CSEDC in May 2007 at which time
there was discussion about moving it into a reserve fund, pending Council’s
long range financial planning priorities.
He explained that the Department was able to release that portion of the
money to make it available and there was discussion at Committee about the
revolving loan fund, but not the details of the policy, although staff did
advise at the CSEDC meeting in May, that they would be bringing back a program
details and requirements of policy to Committee. Councillor Holmes’ report pre-empted the staff report, and as
such, a summary of their report is incorporated as staff’s comment in the
Councillor’s report.
Councillor Cullen noted the staff
recommendation contained in Councillor Holmes’ refers to allocating based on a
need that is not yet known, whereas the councillor is recommending a 50/50
split between OCH and the remaining housing providers. Mr. Kanellakos confirmed that not all
applications for the funding have been received, but staff would know within
the next week what those requests are.
He added that the intent of the revolving loan fund was that it would be
applicable to all housing providers, not just to OCH. The councillor indicated that the City has complete discretion
with these funds and therefore believed some policy guidance would be in
order. He noted there is a specific
sector that is without reserves or support and the intimation from the staff
comments is that OCH has other resources it can access that other housing
providers do not.
In response, Mr. Kanellakos
explained that the point of that comment in the report was to point out that
approximately $8.1M is transferred each year to OCH and there are leveraging
options which would be under the authority of that Board. Further, staff’s comments in the report on
this was simply to say there are very limited dollars for a huge problem and
they should be allocated based on most urgent need - not for scheduled
maintenance items, but for the most urgent such as roofs and elevators. And, once staff see the list of requests
from all providers, they will make a determination and they believe OCH should
receive the portion of money they deserve based on their identification of the
most urgent need.
When asked if the Committee should
defer this pending receipt of all applications, the Deputy City Manager advised
that based on the submissions received, OCH has submitted a number higher than
their half, but noted that all the other providers have submitted in the range
of that half so staff will have to carry out an assessment of these needs and
make their determination accordingly for the distribution of the limited
funds. He recommended, therefore, that
the Committee make the allocations that meet the most urgent needs without
pre-determining an exact split.
If nothing is done today and staff
do their allocation, Councillor Cullen inquired how that information will be
transmitted to the Committee and Council and to the public. The Deputy City Manager explained that a report
would be brought back in November advising of the allocations.
The Committee received the following
public delegations:
Debbie Barton, Ottawa Social Housing Network explained that they represent the majority of social housing providers in the Ottawa area and while the funding is appreciated, it is a small amount compared to the need. They were pleased the Housing branch consulted with this sector to discuss the allocation of this money and they support much of what is in the councillor’s report. She indicated that although everyone recognizes that OCH is by far the largest social housing landlord in Ottawa, they asked that the allocation be fair and based on a real assessment of need over the whole sector. She reiterated staff comment about the OCH being able to leverage additional funds with the millions they receive each year in capital funding – a financial option that is not available to other housing providers. It is for this reason they could not support the Councillor’s recommendation to allocate a specific amount of money to one housing provider. They believe a more fair and equitable process is one which is based on a more comprehensive needs assessment and priorization, adding that many providers could benefit significantly by a small infusion of funds to address their capital needs.
The following delegations provided specific examples of the challenges they face:
Selene
Cummerford, Gloucester Non-profit Housing Corporation
· when they started replacing siding on two of their buildings, they found significant dry-rot, mold and water penetration; because of the extensive and unexpected damage, they must now complete the work on all the buildings in the property
· this initial expenditure of $36,000/building has escalated to over $200,000 per building
· the forecast for depletion of their reserve funds is 2014, but the funds is not expected to that long; when it does deplete, they can only hope there are funds available and an appropriate process to access them
· of big concern to them is the ability of smaller groups to prepare and supervise such large maintenance items.
Janis
Lacroix, Barrhaven Non-profit Housing Corporation
· the units they manage require a great deal of maintenance and the benchmarks for those costs were set and started to climb, leaving quite a gap between the money available and the work needing to be done
· their capital reserve fund is presently $357,000 to which they contribute $25,000 per year
· over the past few years it has become necessary to replace carpets, appliances, bathroom walls and counter tops, leaving a net increase in the reserve funds of approximately $5000 rather than the $25,000
· this year, they are having to look at replacing two major items – roofs and windows at a combined estimated cost of $300,000
· because they are a small non profit, they do not have the time nor the expertise to assess the condition, create the required scopes of work, assess the bids and supervise the actual work; as a result, they have had to hire consultants to do that at an additional cost of $5000 per item; their reserves are now left with less than $60,000 and there are further expenses to be incurred for replacing entrance doors, regrading walkways, et cetera
· all providers should have an equal opportunity to access the available funds on a needs-priority basis.
Lynn
Carson, Nepean Housing
· they currently have reserve funds and will not be applying for funding under the Revolving Fund at this time; however, they are not going to be able to continue to maintain at the standard for much longer without more money or innovative ideas
· they too were pleased that staff consulted with the housing network on the Revolving Loan Fund and supported the staff recommendation in the report
· she recognized that the matter of urgent repairs and the capital reserve shortfalls is a huge concern to both Council and social housing providers and they want to work with the City on solutions.
Ron Larkin, Chief Executive Officer,
Ottawa Community Housing focused on the urgency of their situation and expressed concern about
the suggestion that there are other solutions available to OCH. He reminded Committee members that the total
funding from the senior levels of government ($12M) is nowhere near the total
required to address the issue of capital repairs for housing providers
($600M). He indicated that when the
revolving loan fund was first suggested, OCH took issue with it, but to be
mindful of the other applications being put forward, they decided to limit
their request for funds to three applications for a total request of $9M. He explained that the urgency of obtaining
monies to deal with that is very critical.
He impressed upon the Committee the urgency of making a decision and
getting money into their hands so they can deal with these pressing capital
problems, adding the OCH would settle for a lesser amount now, if it meant
getting a decision to move forward.
Catherine Gardner encouraged the Committee to focus
their priorities for funding of capital improvements on items such as
elevators, which, when out of service for any period of time, trap those in
wheelchairs in their homes, preventing them from getting out to get food or
other items, or prevent them from getting to their homes at all. They may even be denied access to their
employment or medical care as a result of not being able to get out of their
building or the fact that some medical people will not travel up the
stairs. She suggested that people who
rely on elevators to get to and from their apartments should be treated as
displaced tenants and treated accordingly when they are unable to get to and
from their homes.
Councillor Feltmate noted that one
of the criticisms of the program has been that it is a lengthy and bureaucratic
process and she wondered why immediate repairs to address issues of mold or a
broken elevator, for example, are not simply dealt with instead of having
housing providers requesting $1500 in accessible funds to begin the
process. Mr. Mawby explained that
the necessary level of detail required by staff goes well beyond that and referred
to the technical expertise required to get that level of information. He did not believe it was too bureaucratic
and suggested that what staff is trying to do is get the best intelligence it
can on the real estate of the housing stock in the community so they can make
more informed long-term decisions, rather than constantly reacting when a
crisis occurs. He went on to state that
the conversations staff have had with the Social Housing Network also point to
the need to build that capacity in the housing system and if the City wants
those smaller providers to continue to provide housing, they also have to build
the capacity to manage their stock.
In response to additional questions
posed by the councillor, the Director advised that the Building Condition
Assessment Program used consultants/experts in the field to provide the
information to providers; in the case of a repair to an elevator for example,
the information has to come from an elevator company who can provide guidance
on the best course of action. He went
on to state that the $1500 will allow the housing providers to get the
professional expertise and when all that information is received by staff as
part of the application, they will assess it and will use in-house expertise to
help understand where the priorities are and think about some options.
When asked how the City is
responding to building the capacity within the smaller providers to allow them
to have the expertise so the City does not have to be constantly making these
priorities as monies become available, Mr. Mawby confirmed that staff have had
discussions about this with the Social Housing Network and indicated that the
co-op housing association (CHASEO) has been grappling with this question as
well and is trying to build that capacity with their providers and there is a
need to work with them. Staff recognize
there are things they can do in terms of training work shops to help providers
know what is necessary. Councillor
Feltmate did not think this was the answer; she believed that what was needed
was people with particular technical expertise that can be available to the
networks to tap into. One of the things
that should be coming out of this, she suggested, is some kind of report back
as to how the City is going to build that kind of capacity. Mr. Mawby indicated that could be a
direction to staff to examine that.
Councillor Bédard asked when the
City will know it will start distributing money to the urgent needs staff will
be identifying. Mr. Mawby explained
they have received applications from 23 housing providers totalling over $15M
and many of those applications have sufficient information they can start
flowing the funds within the next couple of weeks because there are those in a
real crisis situation and staff are very aware of the depth of some of those
needs. He confirmed that money would be
flowing before the end of the month, with the fund exhausted by the end of
November. If all the funds are going to
be dispersed by then, the Councillor asked why the report is before the
Committee. Mr. Mawby explained that the
challenge is deciding which providers get what since the total requested is
more than the total monies available.
Prioritization will be based on some of the issues raised today, and the
financial capacity of providers to deal with those needs with their current
reserves. Some of the providers are
bankrupt in terms of their capital capacity so they will get priority.
In light of this timeline and when
pressed by the councillor with respect to the relevance of this report, the
Deputy City Manager advised that the only issue is the predetermination of the
allocation of the money. He reiterated
the fact that staff consulted with the housing providers and followed best
practices in terms of talking to the Social Housing Network and bringing back
the details. He explained that there
has to be some assessment of each application to determine which one needs what
more. The only decision before
committee therefore, is whether or not it supports preallocating the money.
Councillor Holmes asked what
constraints Council has put on the budget for housing. Mr. Kanellakos indicated that there is a
submission from OCH for $2M for their base budget; there is capital program
requirements that are urgent and the budget directions they have now and based
on the three tax scenarios and based on his assessment of what he will be
submitting, will not address any of those.
He would be putting forward suggestions to reduce those funding sources
in an effort to make his funding envelope and that will be given to Council for
budget consideration. He mentioned that
the 3.4% tax increase scenario will put the Department in the position where
it’s capital funding envelope will not be enhanced and will in fact will have
to be diminshed, i.e., what capital projects can be afforded and which ones
have to come off because they put pressure on the operating budget.
Councillor Holmes referred to a briefing note on the Social Housing Urgent Repairs Loan Fund dated 17 September in which it states that: “a loan fund agreement will be registered on title to ensure that the investment is used to maintain the availability of social housing over the long term.” However, she noted that staff recently said they were not going to register them on title and they will not be liens. Mr. Kanellakos advised that the official staff position is contained in the comments section of the report.
Councillor Bédard proposed that the staff recommendation on page 37 of the agenda be approved and that the funds be allocated by the end of November 2007. He explained that given the timelines involved for the actual dispursement of the monies, he felt the process has been started and is nearing completion and the Committee should proceed accordingly.
Moved by D. Holmes
That the
information report on the allocation of the forgivable loan fund be on the
agenda of the Community and Protective Services Committee on 15 November.
CARRIED
Chair Deans suggested the Committee accept this substitute recommendation to that which is in the agenda, because the end result will probably see a 50/50 split of the limited funds between OCH and the other housing providers. She believed it was important that funds should be allocated based on greatest need. In addition, she was concerned about the perception of making a recommendation in favour of the OCH when four members of this Committee also sit on the OCH Board. She believed that taking the staff approach and ensuring that money gets rolled out to all of the housing providers based on the greatest need, is the best approach and one the Committee should support.
Councillor Cullen did not support the Bédard Motion, stating that the City has an obligation to ensure there are sufficient resources going in to meet it’s own obligations because the City’s OCH is held to a higher standard. While he recognized the needs of other housing providers, he recognized the City has to deal with this difficult situation particularly with the public housing stock which gets extra attention paid to it because it is owned by the City.
Moved by G. Bédard
That staff recommendations on page 37 of the agenda be approved and
that the funds be allocated by the end of November 2007.
LOST
YEAS (4): M. Bellemare, G. Bédard, S. Qadri, D. Deans
NAYS (5) : A. Cullen, R. Chiarelli, D. Holmes, P. Feltmate, C. Leadman
Moved by D. Holmes
That the
Community and Protective Services Committee recommend to Council:
1. That $4.9 million
proposed revolving loan fund in the 2007 budget become a granting fund to be
used by housing groups other than Ottawa Community Housing and,
2. That the $7.1 million
new federal funds also be a granting fund and be divided to allocate $6 million
for Ottawa Community Housing and $1.1 million for other housing groups.
CARRIED
YEAS (5) : A. Cullen, R. Chiarelli, D. Holmes, P. Feltmate, C. Leadman
NAYS (4): M.
Bellemare, G. Bédard, S. Qadri, D. Deans