London city councillors voted Monday to follow a staff recommendation to replace the boards of two city housing agencies in a bid to fix problems that led to both agencies being slammed in a recent report.

In a close 7-6 vote, council sitting in a special meeting of the strategic priorities and planning committee, voted to replace the boards of both the London & Middlesex Community Housing Corporation (LMCH) and the Housing Development Corporation (HDC) with a single city staffer.

The staff member will oversee both organizations for an 18-month period.

Both LMCH, which manages the city's stock of public housing and HDC, which partners with outside groups to ensure new affordable housing units are built, were heavily criticized in a recent audit by auditing firm KPMG.

LMCH was slammed for months-long delays getting vacant suites ready for new tenants. HDC was called out for not providing enough new affordable housing units.

The vote followed a three-hour meeting, with some councillors expressing discomfort at dismantling boards they say did their best in difficult circumstances.

Coun. Stephen Turner, who voted against disbanding them, said both agencies will need bigger budgets to fulfil their mandates.

"We haven't funded them anywhere close to the area that they need to be funded at," he said. "If we're going to be able to fix this, there's going to be dollar figure associated with that and it's going to have a significant impact on our operating budget for years to come."

'We're losing the battle' Lewis says

However Coun. Shawn Lewis, who voted to follow the staff recommendation and replace the boards with a city hall staff member, said it's a case of taking a step back to move forward.

"It's a bit of retreat into command and control, I don't disagree with that, but in this case it's a retreat because we're losing the battle. The wait lists are getting longer, the repair expenses are getting more costly. All we're talking about is an interim ship here in terms of the governance structure to start turning the ship around and steering it in the right direction."

LMHC CEO Josh Browne said his organization has made real progress in addressing the vacancy problem and other issues but said it's an organization undermined by a "deeply flawed business model."

He repeated something he's told council before: That LMHC will require more money to meet the needs of a growing city with massive housing needs. As the London heads into a new three-year budget process, Browne said LMHC will be asking for $71.4 million in capital costs over the four-year span covered by the next budget (a 17 per cent increase) and $69.6 million in operating costs (eight times the current allotment).

'Our constraints are real'

"Our constraints are real and have real impact on our operations including vacancy rates and turnaround time," he said. "The path forward does not paint a pretty picture but it is a real picture that requires real investment if we want new outcomes."

He said if the budget boost doesn't come, LMCH won't be able to meet tenants' needs, regardless of any changes to the governance structure.

As for HDC, Coun. Phil Squire said the organization suffers from a communication problem, and has to do a better job of explaining their worth to council.

"Otherwise you shouldn't exist," he said.

Monday's vote by the committee will be up for a final vote at Tuesday night's council meeting.

How they voted

Here's how last night's vote broke down.

Those voting to dissolve the boards and replace them with a city staffer were:

Mayor Ed Holder, Councillors Lewis, Salih, Morgan, Van Meerbergen, Peloza and Hillier

Those voting against:

Helmer, Cassidy, Squire, Hopkins, Turner, Kayabaga.

Two councillors were absent: Steve Lehman and Michael Van Holst, who is on a leave of absence to run in the federal riding of London-Fanshawe.