Yukon Housing Corporation has built the wrong type of social housing, says a report released yesterday by auditor general Sheila Fraser.
“Many living in social housing units have more bedrooms than they need. At the same time, there is a shortage of one-bedroom units in Whitehorse, and applicants in the victims-of-violence priority group have waited up to 15 months for housing,” Fraser wrote.
For social housing applicants in Whitehorse who aren’t a government priority, waits have stretched on for three years. Between 75 to 113 Yukoners were queued up for social housing when Fraser investigated, between April 2008 and May 2009.
Yet as far as Fraser could tell, the housing corporation had not considered converting multi-bedroom units into smaller, single-bedroom dwellings. “This is important because the majority of applicants on the social housing wait list are single, and they have the longest wait times,” Fraser wrote.
Fraser’s report, which is largely congratulatory of the corporation’s ability to manage its operations, should help change this. At her prompting, the corporation has agreed to rebalance its housing portfolio within 30 months.
Fraser found that “in Dawson City, 44 per cent of the 54 social housing units have more bedrooms than occupants. In 13 cases one person is housed in a three- or four-bedroom unit.
“We also found that this problem was not addressed by the largest recent addition to the Whitehorse housing stock: 50 per cent of the tenants in the 48-unit seniors’ residence converted from the 2007 Canada Winter Games Athletes’ Village are single occupants residing in two-bedroom units.”
The same problem extends to a lesser degree to government staff housing. Fraser found that in Dawson City, 70 per cent of staff housing units had more bedrooms than occupants.
But waits for government workers are far less severe. As of June 2009, eight government employees in the communities outside Whitehorse were waiting for housing.
The good news is that the housing corporation “is generally managing its day-to-day operations well,” said Fraser. The housing stock is in good shape for its age, inspections and repairs appear to be regularly carried out, and clients seem fairly happy.
And Fraser’s pleased that the corporation agreed to all the recommendations contained in her report.
Fraser identifies the corporation’s big problem as a lack of long-range planning. And such planning will become particularly important as the housing corporation gears up to spend $51.3 million in federal stimulus money to replace aging housing units over the next two years.
This summer, the corporation will build a 32-unit affordable housing project for single parents in Riverdale, at an estimated cost of $11 million, and a multi-unit seniors’ building in Watson Lake, estimated to cost $4.2 million.
The corporation currently administers 532 social housing units in Whitehorse and nine communities. It also has 147 staff housing units located in communities.
And it has loaned more than $40.9 million through its home ownership and home repair programs. Of these loans, Fraser’s biggest worry has to do with risky deals the corporation struck with developers seeking large loans.
In one case, the corporation advanced a developer $1.01 million in 2008-09. By September 2009, only 12 per cent of the loan had been repaid. “Repayment depends on sales of units. The developer has been unable to complete and sell enough units to repay the advance,” Fraser’s report states.
“It is unknown when further repayment is likely to be made. Moreover, in case of default, the corporation’s loan takes second place to a bank loan that must be repaid first.”
In another case, in November of 2008, the corporation agreed to buy another four units for $810,000 to help a developer obtain bank financing. “One year later, the corporation has yet to sell any of the four units,” the report states.
In a third case, the corporation loaned $1 million to a developer in October 2008. To allow the developer to complete the project, the corporation agreed to put off payments until five units were sold, and by doing so, “assumed a higher risk of default,” Fraser scolded.
“At the end of our field work, three units in the building had been sold.”
Fraser also warns that it looks as if unscrupulous landlords are gaming the social assistance system. These landlords appear to be inflating the rent of social assistance clients, knowing the maximum amount that will be paid in shelter allowance by the government.
“As a result, tenants receiving social assistance may be charged more than other tenants in similar units in the building,” states the report.
“They need to do the analysis of how much this is occurring and whether this is a problem or not,” Fraser told reporters.
Fraser’s performance audit doesn’t deal with the corporation’s bookkeeping woes, which have prevented her office from completing its audit of the territory’s consolidated finance statements for 2008-09.
Her office is still slogging through Yukon Housing’s financial statements for 2007-08, and has yet to start on the books for 2008-09. It could be months before they’re done. By then, next year’s books will be closed.
“This is very, very late,” she said.
The problems began in 2008, when key financial staff quit the housing corporation, which, to this day, remains without a chief financial officer.
Then, in 2009, the territory severed the corporation from the Department of Community Services, and stripped away further financial support in the process.
An introduction of new accounting methods over the past year created more headaches.
“It sort of became a perfect storm,” said Fraser. “There were a lot of problems.”
Fraser conducts a performance audit on a different Yukon government agency each year. Last year, she examined the Education Department. Next year she looks at the Health Department.
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