For Your Review, some excerpts about the non-profit co-op housing sector in Canada
Toronto Star
May 20, 1995
By Kevin Donovan, Staff Reporter
"Housing millions down the drain"...
"First in a series A Toronto Star team is probing abuses in non-profit housing, a program that will cost Ontario taxpayers $1 billion a year. Future stories will look at the players, the problems, and solutions."...
"Let's look at the numbers for the whole program from 1986 to 1995. It cost $8.95 billion to build 86,354 units. Roll those numbers around in your mouth. As a taxpayer, you will want to know if you got good value for your money."
"At the lucrative trough of non-profit housing, many have come to feast."---"Along the way, millions of dollars have been misspent, overspent or waisted down the giant money pit."
"Consultants accounted for about $300 million in fees over the ten years."
"Architects racked up about 550 million in fees. Sometimes there were design flaws."
"Lawyers accounted for about $50 million in fees, using a conservative ministry of housing estimate."
"No single story tells the entire tale of waste and malfeasance."---"Listen to what some people connected to non-profit housing have to say."---"Richard Allen, the most recent NDP housing minister is running a tighter ship than the last government: The board of directors of a group - often people who had never balanced a cheque book or built a garden shed - are suddenly thrust into having to organize the building of, for example, a $25 million, 200 unit building."---"Donna Hamilton, a consultant who worked on many non-profit housing projects in Barrie and Toronto: People have gotten away with financial murder...they have wasted millions and millions of dollars."...
"Keith Ward, a senior housing bureaucrat in Peel Region, in a letter last year to Ontario's housing ministry warning that unscrupulous people would make a killing at taxpayers' expense: We have already begun to hear news of wheeling and dealing...bribe offers...requests for kick-backs."
"A ministry of housing official: There isn't a police force in the world big enough to investigate all the rot in non-profit housing."---"Andrew Ross, founding president of the Lakeshore Village artist Co-op, who believes the good of non-profit housing will be destroyed by the waste in the system."
"Bill Morris, president of the Co-op Housing Association of Ontario."..."Co-ops have the highest average unit price. Co-op association leader Morris says that's because they build more family units than regular non-profits."---"Co-ops have another built-in cost. Morris' group receives 1 per cent of the total capital cost of each project. Since 1986, that amounts to about $22.5 million, used for developing more co-ops, educational programs, bailing out co-ops in financial trouble and association salaries."---"In Niagara Falls, where you can purchase a 10-year old, three-bedroom townhouse for $40,000, and a new one for $80,000, the Skyline Co-op built 60 townhouses for $106,094 a unit."
"At the Marigold co-op in Whitby, substandard elevators and smoke detectors were installed. It cost thousands of dollars more to do the job right."---"At the union-built Harmony-King Co-op in Oshawa, $20,000 has disappeared and the ministry is investigating a "double-billing" situation involving the former board president who hired his brother as property manager."
"Across the province, co-op and non-profit boards are screaming for more money. Many are increasing the size of their mortgages, which will translate into higher taxpayer-funded subsidies."---The government's theory is falling apart. They are becoming more expensive to run, says housing consultant Donna Hamilton."
"In Oshawa, the Consideration Co-Op is close to bankruptcy and has sued the ministry of housing over reductions of about half a million dollars in its annual subsidy. The ministry is threatening an audit. Co-op members are taking turns sleeping on a mattress in the boardroom, standing guard over the books."---"The original mortgage was 12.5 million for this 99-unit building. A second mortgage of $425,000 was later tacked on to cover expenses, including $40,000 more consultant, Lantana. Until recently, the co-op had $750,000 in the bank. But the ministry has told them an administration error caused a $543,809 overpayment in subsidies. The ministry started taking it back. But a good chunk had been spent on board approved "wish list" including window coverings for solarium's, a chain-link fence, equipment for members' use, including a big screen TV and CD player. Other money went to hire a director's spouse as a part-time cleaner. She became the highest paid employee."
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Comments:
In Ken's view, as at 2022, many of the same problems still exist within the non-profit co-op housing sector in Canada since this article was published back in 1995.
The article helps to explain why very few non-profit co-op housing units have been built in Canada since 1995. Some of the following links support Ken's views:
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