The Yukon News recently ran two stories about the Hearth — a government building project providing 67 housing units for up to 82 individuals from Whitehorse's official count of 154 homeless. The stories expose unfathomable delays (years), cost-overruns (about $26 million — 250 per cent), and government’s inconsistent explanations for these issues.
I want to add some analysis. Before I start — I am not anti-homeless or anti-welfare programs. I think such programs, well thought-out and delivered, are necessary. Also, I am not against government per se. It too is necessary. However, most politicians and their appointees are incompetent managers, self-serving, and rent seeking (look it up if you’re not sure of the meaning).
I need to clarify ‘incompetent.’ Surely, politicians and their appointees are highly competent at: exhibiting an appealing and responsible demeanor; using politically correct and empathetic speech; finding zero fault within their political party; glossing over, denying and obfuscating their failures, omissions and peccadilloes; and appealing to people, with strongly held and narrow interests, for votes and donations.
Politicians are incompetent at: best practices; designing systems, procedures, and controls; cost benefit analysis and financial acumen; performance measurement and evaluation; project management; continuous improvement; and openness.
Examples from this housing project fiasco:
1) Yukon Party press releases and project manager Kate Mechan issue wildly different schedule information (April 2026 vs January-February 2027). From a project management and control perspective, multiple spokesmen providing such divergent information is itself incompetent.
2) Project leader (Mechan) explains the hike from $16 million to $42.1 million is due to unforeseen building code regulations, as well as increased cost of construction after peak COVID-19. Ok, COVID-19 certainly caused delays. Inflation has certainly increased costs. But, the building had already been bought for $10 million when the $16 million estimate was made. So, additional costs of COVID-19 and inflation apply to only the $6 million dollar estimate to complete the project.
Let’s make the absurdly generous allowance that COVID-19/inflation doubled costs. That adds $6 million to the original estimate for a new total of $22 million. The $42 million minus $22 million, leaves $20 for the politicians to explain.
3) Mechan says "unforeseen building code regulations" and "the structural components of the building needed to be replaced in order for people to be safe in the future.” In other words, they did not evaluate the building for suitability, look at their own regulations, or have the building inspected. Mechan, still in office, is incompetent of managing a large building acquisition and renovation project. She may be a fit property manager, but clearly she assumed, or was assigned, authority and responsibility far above her capability. Competent management does not operate like this.
4) Ranj Pillai explains: “building issues related to fire code and zoning were not identified because the assessment only gives a general indication of the building without an invasive inspection. Structural problems and building code issues were not within the scope of this assessment.”
Did Pillai and Mechan buy their own homes without inspections? They ignored their own building inspection and zoning departments. Doesn't Yukon have a work plan, or at least checklist, for property acquisition? Pillai says nothing about improving/implementing such aids. Who gave the building modification cost estimate of $6 million and did not point out its unsuitability for intended use? This is grossly incompetent management in all respects, at all levels.
5) Worthy goals do not justify unwise spending. The $42.1 million divided by 67 units is an average cost of $628,358/unit — up from an original estimate of $239,000/unit with no evidence of reconsideration — or moderation. All this money provides housing for just 53 per cent of those recognized homeless. The plan is not flexible as the number of homeless changes. There is no projection of the long-term effects of this plan on homelessness, by which to judge and adjust. Pure management incompetence.
Did Pillai and Mechan even look at operation costs or the cost benefits of their plan? Conservatively invested, $42.1 million, at say five per cent would yield $2.1 million — annually. Divide that by 82 beneficiaries yields $25,670 per year spent on housing each of the possibly 82 people. That’s over $2,139 per month per person. Add to that, maintenance, insurance, and operating costs I estimate to be about $1,100 per month per person (you may think that high, but on a $42-million building and no DIY homeowner work, it is in the ballpark) so the housing cost is about $3,200/month per person for housing — only housing — no counselling/training/childcare/food/medicine/clothing/etc. to help these people become independent is included.
That housing cost seems a lot of money to spend; and with no flexibility. The cost per person rises rapidly if the number of people served drops. As it stands, this expenditure serves only about half the people in need. What about the other half? And finally, again the question, “How are we to judge the success of this plan — and how will over/under achieving the goal of ending homelessness affect future spending”?
Voters of all stripes should expect answers to such questions to be routine. Lacking such competency in public servants, we should seek new office holders from within or outside the party of our individual choice.
Jim Baker
Faro, YT
