The diversification of social housing provision, as can be seen in so many places across the globe, is great for providing a better range of services to social tenants. However, a more fragmented market often means that many providers lack the support or bargaining power that they need to keep service quality high and costs down.

In this analysis from our social housing series, we look into how the Ontario provincial government has taken steps to overcome this issue by establishing and mandating a collective social housing provider organisation.

Facts and figures on the Ontario social housing market

Approximately 187,000 social houses exist across Ontario – about 3.4% of the total housing stock. One of the largest waitlists of any province at 3.4% of the population – 185,000 households – as many as the total social housing stock. However, the auditor’s office has found significant problems with the waitlist, for example:

  • applications are considered only on income, not assets;
  • priority is based on time on the waitlist, not on assessed need (except for victims of abuse),
  • some applicants on the waitlist are no longer residing in Ontario but maintain high places on the waitlist1.

A systemic lack of affordable housing construction since the mid-1990s has driven increasing pressure on low-end of the market. Social housing units are operated by housing providers, which are not-for-profit organisations, co-ops, private landlords, or municipal corporations.

Housing Services Corporation

In 2002, the Ontario provincial government set up the Social Housing Services Corporation after it devolved responsibility of its social housing stock to local municipalities. It was mandated through legislation to provide Ontario housing providers and service managers with collectivised benefits such as bulk purchasing and capacity building.

In 2011, nearly 10 years after the establishment of the Social Housing Services Corporation, the Ontario provincial government passed the Housing Services Act 2011, giving service managers more flexibility to manage their services locally. This reform saw the Social Housing Services Corporation change to the Housing Services Corporation (HSC) and now operates on a more voluntary basis, resembling more of a collective purchasing or membership entity.

Funding

The HSC2 is non-profit and does not receive funding from the provincial government. It has a range of revenue sources, in particular through charging administration fees for its bulk purchasing programmes, with its gas programme being the largest generator of income. It reinvests its revenues with the goal of reducing costs for social housing landlords and improving their self-sufficiency and capacity.

The HSC supports social landlords in the following five areas.

Energy services – using the power of collective purchasing to reduce costs to social tenants and landlords and providing the following services:

  • Natural gas group purchasing: Province-wide gas purchasing program for social housing providers offering predictable prices, flexibility on exposure to spot market prices and options to drive savings through better energy management.
  • Utility Management: allowing housing providers to track utility use, manage energy consumption, and save money.
  • Resident and staff engagement: educating staff and tenants on energy use and savings opportunities.

Insurance and risk management – group insurance programme, tailored to the social housing market. Also includes education on risk management, liability, and loss prevention.

HSC guarantees coverage to all housing providers, some of whom are not to be able to obtain insurance elsewhere due to a history of claims.

Asset management and renewal – supporting decision-making to maximise housing investments and ensure the sustainability of housing stock by providing:

  • Sector-wide research on best practices on a variety of housing-related subjects including Ontario’s Special Priority Policy; the end of operating agreements; social housing waitlists; resident satisfaction; housing finance; and housing and homelessness.
  • Asset management support services via HSC’s Technical Services team, who provide advice and guidance on capital project planning, project management, and effective asset management approaches and techniques.
  • End of Operating Agreements services that include individualised portfolio analysis; advice and support on transition plans; capital financing modelling and strategic asset mapping and planning for redevelopment.

Information and Technological Services – supporting social landlords to provide better services for their tenants and make the best use of resources by providing the following tools:

  • Asset Planner: a web-based capital planning tool that helps housing providers and Service Managers better understand the physical condition of their buildings and to make informed decisions about capital expenditures.
  • Performance Indicators Systems: developed and managed performance indicators systems for housing providers and Service Managers.
  • HSC InSite: an online property management solution for non-profit providers and property managers that offers integrated tools to help staff quickly perform daily tasks seamlessly.

Community and Business Partnerships – making connections between social housing providers and specialist expertise that providers might not have the capacity to pursue on their own. Current notable partnerships include:

  • Social Housing Investment Program: offering housing providers access to professional money management and information resources and tools to support strategic capital reserve investing.
  • Chartered Institute of Housing (CIH) Canada: strengthening Canada’s national housing sector by offering accreditation programs and membership services to housing professionals.

Gap in the UK market

The UK market has some major similarities with the Ontario model:

  • A wide diversity of state and non-state providers with geographic markets.
  • A large and growing waitlist fuelled (at least partially) by a lack of new affordable housing stock.
  • Similar state of development and provision of social care.

As of December 2018, there were 1,680 registered social housing providers in the UK3. 198 Local Authorities, 1,435 not for profit, and 47 private.

The returns from group movement in purchasing are well known. For example, NHS Business Services Authority and NHS Supply Chain delivered £300 million cash-releasing savings in 20184.

For the UK market, there would be considerable returns for providers as Homes England look at the Ontario-model, focussing specifically on great group movement on:

  • group energy purchasing agreements,
  • insurance, and
  • developing a hub of best practice for capital programmes.

This would free up providers to do what they are best at, focussing on understanding and supporting their customers.

JAMES SWAFFIELD | CLIENT DIRECTOR

James leads our Government and Public Services team at Gate One. He has experience across advisory and delivery – working across providers and commissioners – with a focus on strategy, policy and service development.

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