Privatize social housing for profit: KPMG

Financial report says without decisive action, costs will continue to climb


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KPMG’s recent financial report recommends Families Minister Scott Fielding overhaul social housing in Manitoba, turning the soaring demand over to private and community “high performers” who can deliver value for money.

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This article was published 06/10/2017 (1817 days ago), so information in it may no longer be current.

KPMG’s recent financial report recommends Families Minister Scott Fielding overhaul social housing in Manitoba, turning the soaring demand over to private and community “high performers” who can deliver value for money.

Qualifying for Rent Assist should be tightened up, and the most vulnerable Manitobans would receive vouchers to help them get housing from private landlords, the reports says. The government should also issue social-impact bonds, which could be cashed when investors meet goals set by the province.

The more than 300 organizations involved in social housing would be significantly reduced by such moves and the Progressive Conservative government could raise more than $14 million by selling some of its rental properties to the private sector, the consultant says in the 75-page report commissioned by the province.

WAYNE GLOWACKI / WINNIPEG FREE PRESS Gilbert Park housing development. A recent KPMG report recommends the provincial government overhaul social housing in Manitoba, turning it over to “high performers” who can deliver value for money.

Without decisive action, warns KPMG, social housing costs will climb by $10 million a year and Rent Assist $7.5 million annually, with all signs indicating the caseload will keep growing.

Manitoba Housing and all the various government departments that have a hand in social housing should be consolidated, the report recommends. There would be staff reductions among civil servants, says KPMG, which concludes not only do some government employees not have the skills necessary for the proposed new system but some of them will openly resist change.

The recommendations are fraught with risk, KPMG cautions: it will take years to achieve a transformation, the market may not have the capacity or desire to respond and the province may end up subsidizing costs for providing social housing.

Using the identical language it used in its report on recommended changes to post-secondary education, KPMG said: “A robust change management and communications strategy will be needed” to deal with public perception the provincial government is reducing social housing stock and making it less affordable.

KPMG told Fielding: “Housing programs and services have historically been planned and delivered in a relatively disjointed manner, residing in separate organizations with different leadership styles and priorities, and varying degrees of collaboration.”

Social housing stock is old, in need of major repairs and often inaccessible for tenants with disabilities. There are more than 300 “small, community-based organizations operating independently, giving rise to disjointed services, duplications and inefficiencies, and limited opportunities for economies of scale and service innovation.”

The province hasn’t factored future caseload increases into budget projections — even next year’s budget could face costs significantly higher than projected, KPMG says.

“Options presented promote a system-wide view, integrated service delivery, greater use of partnerships and collaboration and performance-based outcomes and payments,” according to the report. “The rapidly escalating cost of the Rent Assist program is not sustainable, and bending the cost curve requires changes in policy.”

KPMG says Manitoba offers higher subsidies than other provinces, yet rental housing is more affordable than elsewhere in Canada.

WAYNE GLOWACKI / WINNIPEG FREE PRESS The Manitoba Fiscal Performance Review volumes.

“If the status quo is maintained, costs to meet increasing demand will continue to rise, putting further pressure on the fiscal sustainability of the current social housing model. A significant change in the model will be required to meet these demands,” it advised Fielding.

According to the report, as of May 31, there were 2,050 families, 689 seniors, 966 single, non-elderly and special-needs clients on the waiting list.

The largest waiting list is for Winnipeg, with 2,513 people on it.

KPMG says it found no evidence the former NDP government conducted any kind of a comprehensive needs analysis.

“Policy changes should be considered to increase revenue and a significant change in the provision of social housing is required to address escalating costs,” the report said. “Government-owned properties would be sold to private or community-based landlords. Depending on the asset and/or community, (successful sales) may require consideration of incentives for sale of assets.”

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