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Region housing projects in trouble

No additional funds for projects in difficulty

Dave Flaherty/The Oshawa Express

One in every ten of Durham Region’s social housing units is having financial difficulty, according to a recently released report, a figure that hasn’t changed over 2016.

A joint report, scripted by commissioner of finance Jim Clapp and commissioner of social services Hugh Drouin, was presented at the latest Durham Region Committee of the Whole (COW) meeting indicating the seven of the region’s 44 social housing projects were reported to be in difficulty as of April 30, 2017. This represents 554 of the total 5,098 social housing units in the region, a rate of 10.9 per cent, the same figure reported in the previous year’s update.

In an email to The Oshawa Express, John Connolly, director of housing services for Durham Region says to protect the interests of the corporation and the privacy of those residing at the properties, the region would not specifically name which projects are in difficulty.

By definition in the Housing Services Act (HSA), a housing project is in difficulty when one of the following occurs:

– The mortgage is in default

– The mortgage is likely to be in default within 12 months of the end of the current fiscal year

– The housing provider is likely to fail to meet a substantial financial obligation within 12 months of the current fiscal year

– The housing provider has failed to comply with a substantial obligation under the HSA, and the failure is deemed to be material

Connolly told The Express that when a social housing project’s mortgage goes into default, the region will ensure the mortgage is paid and then recover the costs from the housing project manager over time.

The region provides funding to the 44 housing projects through monthly subsidies, equalling approximately $33 million a year.

The amount of these subsidies is based upon a funding model set out in the HSA.

Connolly said ‘in difficulty’ projects do not receive any additional funding beyond regular monthly subsidies.

According to the report, projects in difficulty are classified as either Tier 1 or Tier 2.

Tier 1 difficulty is assigned to projects with significant unresolved problems, regardless of the risk to the mortgage.

Issues leading to a Tier 1 designation may relate to finance, governance, technical and other matters that require close monitoring to avoid financial insolvency, mortgage default or other triggering events as described in the HSA. Tier 2 designations are given to social housing providers that have ‘unresolved issues, but have demonstrated satisfactory performance in addressing problems and require monitoring only.’

Connolly says the potential actions taken by the region “depend on the nature of the issue(s) the housing provider is facing.”

“Depending on the seriousness of the matter, regional staff may respond by monitoring more regularly, right up to assisting a housing provider with an action plan,” Connolly says.

When asked how Durham Region’s numbers compare to other municipalities, Connolly says “statistics will vary among municipalities, as local policies, rules and other considerations are applied when classifying projects as those ‘in difficulty’. Any direct comparison would depend on the number and type of projects in that municipality.”

A regional process for the identification and management of social housing projects in difficulty has been in place since 2003.