An email to Toronto Community Housing staff from interim CEO Kevin Marshman says the city no longer plans to transfer 5,000 units to the non-profit sector.

The email, sent Friday morning and obtained by the Star, follows a Star story detailing an internal memo from ousted interim CEO Greg Spearn where he outlined concerns about plans to break-up the company.

That memo was sent to city staff in March amid considerations of a plan developing, known as Tenants First, to remake a company that has faced multiple leadership crises and financial hardships throughout its more than two-decade history.

“The Toronto Star published an article on Thursday based on a memo that contains considerations and risks for the draft implementation plan of the Tenants First report,” Marshman wrote in the email to staff. “The March memo was based on information and assumptions that were still preliminary. Since then, discussions on Tenants First have evolved and we understand, for example, that the transfer of 5,000 units to other non-profits is no longer under consideration.”

Spearn’s memo outlined the direction the city was taking on Tenants First — one of the mayor’s signature plans after he formed a task force to tackle the issues plaguing Toronto Community Housing in 2015. That direction, Spearn wrote then, including transferring 5,000 units to other, smaller providers.

Toronto Community Housing is the largest single housing provider in Canada and one of the largest in North America, managing 58,500 units across 2,200 buildings. The Star recently reported that more than half of the developments operated by TCH will be in a critical state of disrepair in the next five years with a $1.73-billion repairs backlog.

The mayor’s task force, led by Sen. Art Eggleton, a former mayor of Toronto, considered the transfer of units in their January 2016 report, though it did not specify how many might benefit TCH’s finances and tenants.

In July, council voted that staff should prepare an implementation plan that, in part, looked at transferring an undetermined number of units to the non-profit sector.

The staff report presented at the time recommended exploring a transfer of up to 5,000 units to other providers

“Importantly, a transfer of a portion of TCHC's existing portfolio via ownership or property management to existing non-profit corporations would help to address the disparity in size and scale between TCHC and the other 240 social housing providers operating in the City of Toronto,” staff wrote. “It would further allow existing providers to scale up many of their advantages, including their capacity to cater to a more localized and defined service need across a variety of unique communities.”

Other non-profit housing providers, Spearn wrote in his memo, currently average about 120 units each, with the largest managing 900 units.

“Consideration should be given to whether existing non-profit entities will actually be able or willing to develop business cases for funding; or be able to project manage large scale capital repair projects,” Spearn wrote.

It’s unclear what’s led to a reversal in the direction on transferring those units, as noted by Marshman.

While the financial benefits of transferring the units remains unaccounted for ahead of future reports, those in the non-profit sector have said their could be strong incentive for tenants’ well-being with specialized non-profits in the city already offering supports for those who have experienced homelessness, mental health and other challenges.

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Spearn wrote the city was also considering a large transfer of all of the seniors-only buildings in TCH’s portfolio — 67 buildings representing 14,000 units. A transfer of as much as 19,000 units had the ability to trigger massive legal and loan fees totaling hundreds of millions of dollars, he wrote, while hurting the ability of what would remain of Toronto Community Housing to fund operations and ongoing repair needs.

The next report on Tenants First is expected to be presented at Tory’s executive committee on June 19.

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