Vacancy Management Update Item 7 November 14, 2016 Board of Directors
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1 Page 1 of 8 Vacancy Management Update Item 7 November 14, 2016 Board of Directors Report: To: From: TCHC: Board of Directors Vice President, Asset Management Date: November 3 rd, 2016 PURPOSE: To provide the Board of Directors with requested information related to the types of rentable units that are presently vacant as well as the strategies being implemented to address occupying them. RECOMMENDATIONS: It is recommended that the Board of Directors receive the report for information and discussion. REASONS FOR RECOMMENDATIONS: The information contained within the following report provides the Board with the requisite details necessary to meet its responsibilities as set out in its terms of reference.
2 Page 2 of 8 BACKGROUND: Management has been working to sub-categorize vacancies towards reflecting their status at various stages of the process, including: Vacancy Stage Hold for Internal Transfer Leased On Offer Pending Unit Turnover Description The units that are being held at the local level for the purpose of an internal transfer. The units that have been leased but are awaiting a move-in to occur. The units that have been offered to prospective Tenants for which responses are pending. The units that are undergoing interior repairs to render them ready to lease (following a move out). Vacancy by Unit Size 58% of the vacancies are actively within the leasing process (Unit Turn, On Offer or Leased, pending move-in) while another 5% are being held to accommodate an internal transfer. 61% of vacancy is among Bachelors and 1 Bedrooms which are in relatively low demand on both internal and external waiting lists. 50% of Bachelor vacancies are within the senior s portfolio where the rate of offered units being declined is high.
3 Page 3 of 8 Vacancy by Operating Unit 29% of vacancy is within the Seniors Portfolio where a concentration of bachelor units (60% of the vacant units) are routinely declined in the offer process as non-preferential to seniors. Vacancy in the Scattered Home portfolio (OSS) is driven by poor unit conditions. Each of the vacancies is presently being assessed for capital repair improvement (half of which are already complete). Low rates of Lease and Offer in the Contract managed portfolio are incorrectly reported due to administrative disconnections between IT systems (i.e. Offer, Leasing and Unit Turn rates are higher).
4 Page 4 of 8 Bachelor Units by Development (Abbreviated) 33% of vacancy is among Bachelors (portfolio wide); 60% of which are in the senior s portfolio. 66% of Bachelor vacancies are actively within the leasing process (Leased, On Offer or Unit Turnover). Several outside the senior s portfolio are within buildings with difficult social dynamics related to the concentration of singles (many of whom are seniors living within outside the senior s portfolio).
5 Page 5 of 8 Vacancy Concentrations (Abbreviated) 25% of vacancy is within buildings that are deemed hard-to-rent as they are located in communities with difficult social dynamics, geographical proximity challenges and/or unit condition issues. These units require a significant volume of offers (all of which are open for 5 days) before acceptance. Multiple Offer Example: Lawrence Heights presently has 14 units vacant on Flemington Rd. Community Safety concerns are most frequently cited as the reason an offer was declined. Number of Days an Offer remains open for consideration = 5 Average Number of Offers required to secure a Tenant = 18 Time required to identify an accepting tenant = 90 days Additional time required to occupy vacancy = days (often required to accommodate tenant notice to a current landlord).
6 Page 6 of 8 VACANCY MANAGEMENT STRATEGY UPDATE: Over Housed Wait List Clean Up The Vacancy Management team has completed the audit of the overhoused waitlist to identify where legislative obligations have been met (3 Offers made AND 12 months elapsed) in pursuit of processing the consequential loss of subsidy. The clean-up will motivate over-housed Tenants to reconcile their respective housing situation to avoid arrears accumulation and a permanent loss of subsidy. Further, it will vacate larger units for offer to qualifying families while potentially occupying a number of small units with the vacating residents. In addition, changes to the offer process have been made with a view to condensing the period in which offers remain open. Discussion with the City on other policy and process change alternatives are underway. Management expect the effect of the clean up to begin to occur over the course of Q1-17. A comprehensive review of the organization s internal transfer policy will be conducted in the first half of 2017 and will seek to address areas that add time to the overall process of relocating tenants currently within housing. Market Rent Marketing Strategy Market Rent Units are now advertised on the TCHC public website with a phone and contact channel in Client Care. Management is investigating a third party applications capable of pushing the list of available Market Rent vacancies on a monthly basis to the web s most popular sites (View it, Rent Seeker.ca, torontorentals.com, etc) automatically. Concurrent evaluations of the local advertising signage (placement, quality, etc) is underway with a view to better competing for interest. 3 Redevelopment Relocation Clerks (finished with Allenbury Gardens) have been reallocated since September to concentrate on Market Rent vacancies for the balance of 2016.
7 Page 7 of 8 Capital Repair Deployment Management has identified units that have strategic value to produce market rent revenue and relieve stress RGI rental needs among larger unit size demand (3-4 bedrooms). Buildings with RGI vacancies where there is perceived potential to secure market renting tenants are being switched to market rental units. A corresponding switch from market to RGI is being made elsewhere to maintain the required service level of subsidies. However, the switch is strategically targeting to secure market rental revenue among buildings that are perceived to have a value proposition in the broader rental sector. Capital repairs to the interiors of these specific units will be deployed from the remaining 2016 Unit Turnover capital to bring them to a marketable standard in order to compete with local alternatives in the private sector. Scattered Houses that present a similar value in both the market rent sector and larger sized RGI demand pools are being held with a view to invest capital from the 2017 scattered housing capital ($2M) to improve their relative unit conditions. Most require roofing work, exterior cladding and some interior renovation to render more attractive. As part of the 2017 Vacancy Management Strategy, comprehensive evaluations of the unique improvement needs within the Hard-to-Rent Portfolio will be fully scoped. This is anticipated to catalogue the capital needs gathered in the Annual Unit Inspection (2016), safety improvement opportunities gathered from CPTED Audits and the community partnership potential emerging from vulnerability support needs driven by RSC engagement. These approaches will further inform capital investment, community safety deployment (including cameras and officers) and potential head lease opportunities with social support agency capable of operating at a large scale within buildings with both a density of support need and vacancy to accommodate their respective clients.
8 Page 8 of 8 IMPLICATIONS AND RISKS: Vacancy loss impedes the ability of the organization to optimally re-invest in the capital repair and operations of the agency. Vacancy also peripherally contributes to anti-social behaviour within some communities as well as to present additional cost through the unique maintenance (monitoring) needs of the empty units. In principle, there is reputational risk in failing to surmount the various challenges presented to the organization necessary to shelter social housing applicants effectively from the waitlist. The work effort to develop this level of detailed reporting was significant given the antiquated IT systems. Management is working to develop this quality of report for inclusion in the President s Monthly Report by Q1-17. SIGNATURE: Graham Leah Graham Leah Vice President, Asset Management graham.leah@torontohousing.ca
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