Why This Audit Matters
The Toronto Community Housing Corporation (TCHC) is Canada’s largest social housing provider for low- and moderate-income households.
Federal funding, which makes up more than half of the funding for TCHC’s annual building repair capital budget, ends after 2027. Without renewed federal funding, the state of good repair (SOGR) backlog will grow and building conditions will worsen.
With an extensive SOGR backlog, it is vital that building repair capital funds are effectively prioritized to meet the most critical needs and ensure buildings for this vulnerable tenant population are safe and in fair to good condition. Effective capital planning can also help to ensure TCHC receives enough funding from the City and other levels of government to adequately address its 10-year Capital Plan.
By The Numbers
- TCHC is responsible for the SOGR of over 1,300 buildings with over 57,000 units, including nearly 14,000 units in 83 buildings operated by Toronto Seniors Housing Corporation
- TCHC budgeted and spent over $2.3B on its Building Repair Capital program from 2018-2024.
- TCHC’s 2025-2034 Capital Plan identified $2.3B for SOGR. TCHC’s database identified $4.6B in SOGR needs requiring action from 2025-2034. Without further funding commitments, the backlog will grow.
- TCHC reported portfolio-wide average facility condition index (FCI) improved from 15.6% in 2019 to 11.8% in 2024 – but is forecasting it to rise again to 19.6% by 2035.
- More than half of TCHC developments were in “poor” or “critical” condition in 2024.
- Almost $415M in SOGR backlog needs in poor/severe condition at end of 2024, with an additional $179M coming due within 10 years.
- 40% of SOGR needs identified in the 2019 rolling list of potential projects to be started by 2024, had not yet begun. Management advised that, within the limited budget, needs are regularly reprioritized as new / urgent needs emerge and building conditions change.
What We Found
A. Enhance Tracking and Reporting on State of Good Repair (SOGR) Needs and Funding Required in 10-Year Capital Plan to Ensure Needs are Accurate and Support Funding Requests
- Based on TCHC’s SOGR database, there is not enough funding to address TCHC’s entire SOGR backlog and upcoming needs due over the next 10 years.
- TCHC uses its SOGR database to report the accumulated SOGR backlog for its 10-year Capital Plan. However, TCHC’s overall SOGR needs are informed by additional inputs, including its rolling list of potential planned capital projects, which is not directly integrated with the SOGR database.
- Therefore, although it would appear from the accumulated backlog in TCHC’s SOGR database that there is enough funding committed to address the assets in poor or severe condition or where an urgent, high, or medium need for action is identified, that may not be the case.
- To clearly demonstrate how TCHC’s SOGR backlog/needs will be addressed through the 10-year Capital Plan, and what will not be addressed or is unfunded, TCHC should better track and document needs from its SOGR database through to its rolling list of planned capital projects and 10-year Capital Plan, which are not integrated.
- Building repair capital project costs sometimes vary significantly from initial cost estimates to address the SOGR backlog/needs. Because estimates are not updated in the SOGR database as project design, planning, and delivery progress, it is difficult to assess how cost escalations and scope changes affect the portion of the SOGR backlog that can be addressed within the 10-year Capital Plan.
- TCHC is developing a new capital planning prioritization framework. Providing greater visibility into TCHC’s prioritization approach would help better explain how projects are advanced or deferred under funding constraints. TCHC is also developing performance measures on how effectively it manages the SOGR backlog, in addition to the overall portfolio-wide average facility condition index (FCI) measures TCHC currently reports.
B. Improve Prioritization Process of SOGR Backlog and Spending Priorities
- Where critical needs remain delayed or unaddressed, conditions may continue to deteriorate, and asset failures can occur which can be more expensive to address as emergency work, than as planned capital renewal. As building conditions change, TCHC regularly reprioritizes SOGR projects; however, we found reasons for reprioritizing or deferring urgent or high priority SOGR needs and prioritizing other projects are not well documented.
- Limitations in documentation and tracking, lack of formal methodology and prioritization criteria, system changes, and staffing transitions impacted TCHC’s ability to explain reprioritization decisions.
- TCHC should improve tracking and reporting of how SOGR backlog and needs are prioritized and addressed, including documenting professional judgements and decisions by staff on the ground.
C. Continue Improving Data Quality Supporting SOGR Capital Planning
TCHC capital planning and prioritization depends on its SOGR data being accurate, complete, and up to date. Therefore, it is important for TCHC to ensure building condition assessments (BCAs) are completed regularly, that data fields in the SOGR database are properly updated, and that information is reviewed for consistency and reliability.
How Recommendations Will Benefit The City
Implementing the 10 recommendations in this report will strengthen and further improve TCHC’s capital planning process and capital project spending prioritization, while helping to ensure funds are used effectively.