Michael Lewis
Special to Ontario Construction News
Toronto housing officials say they have implemented 15 of 20 recommendations from the city’s auditor general who found a rush to build modular housing to alleviate homelessness during the Covid-19 pandemic resulted in project costs $33 million over budget.
In a report presented to city council’s meeting last week, municipal real estate agency CreateTO, along with the Housing Secretariat and Corporate Real Estate Management divisions say they have self-assessed fifteen recommendations as “fully implemented.”
The report says Toronto has “improved financial and project controls and enhanced due diligence measures … through the clear articulation of roles and responsibilities,” adding that remaining recommendations are on track for completion before the end of 2025.
The outstanding responses relate to monitoring expenditures, utilizing shared financial data, maintaining standard file documentation and retention, and considering lessons learned from previous modular housing projects.
None of the status updates have been verified by the Office of Toronto Auditor General Tara Anderson.
The moves to better manage project management and costs come in the wake of the AG’s June 2023 audit of the initiative to build 275 units of modular housing, a type of prefabricated, permanent structure constructed in a factory and then transported and assembled onsite. The audit aimed to assess whether modular supportive housing provided value for money.
In April 2020, as an urgent response to the housing need for people experiencing homelessness, particularly during the pandemic, city council directed staff to launch the Modular Housing Initiative to create modular homes at a projected price of $190,000 per unit. The initiative was comprised of two phases and was to cost $47.5 million, though the price tag soon ballooned to more than $85 million. By July 2023, the city had completed 159 units at three locations.
In addition to the capital funding, the city also provided $12.76 million in financial incentives such as relief from development charges, planning application fees, building permit fees.
The audit found that some project planning and due diligence work on project sites was not completed until after the budget was prepared, with site preparation costs not considered when staff developed the budget leading to costly change orders during construction. Due to the tight schedule, phase one procurement was approved as non-competitive while the second phase used a competitive process.
“City staff informed us that to achieve the aggressive timeline required by the federal funding provider, they had to make decisions quickly and fast-track the projects as much as possible, which gave them less time for due diligence and project planning,’ the audit report says.
The audit found that various stakeholders did not always have a clear understanding of roles and responsibilities and that budgets were divided across many accounts making it difficult to track and monitor costs. It also found that staff did not give regular reports about detailed budget increases.
In a related item also considered at the council meeting, Ward 1 Toronto Centre Coun. Chris Moise proposed that micro-shelters should be rapidly procured and installed in underutilized city-owned parking lots and land across the city.
“In this absence, micro-shelter type structures are being placed illegally in our parks without important safety and oversight considerations, further frustrating efforts to clear these spaces for use by the broader public.
“I am very concerned about our cyclical strategy where we wind down our temporary winter locations in the spring and people have nowhere else to go, so they encamp in our parks,” Coun. Moise said in letter requesting an update on micro housing planning. “We cannot go into another summer without a plan. No plan means our parks become the plan.” As of mid-March, according to Gordon Tanner, general manager Toronto Shelter and Support Services, the city had 283 homeless encampments.
Ryan Donais whose non-profit organization, Tiny Tiny Homes built several tiny mobile homes in Toronto as temporary shelters, received a cease-and-desist order from the city in February saying the structures violate municipal rules, although Mayor Olivia Chow has said the shelters will not be removed.
In a response to Coun. Moise’s inquiry, Tanner said Shelter and Support Services has determined that a micro-shelter pilot site be developed as a municipally operated shelter program where short-term emergency accommodation and associated support services are provided.
But while a cost-benefit analysis of a micro-shelter program versus a larger, traditional emergency shelter has been reviewed, “a suitable and available location for a micro shelter pilot has not yet been identified,” Tanner said. The city has explored vacant lots as potential temporary locations for micro-shelters but found that even at the largest lot the site could only accommodate 20 micro-shelter units.
The opportunity cost for this site would be a purpose-built mixed adult shelter program providing up to 80 spaces, Tanner said.
Many micro-shelter communities are developed on at least one acre of land, for every 50 micro-shelter units, but city-owned lots in Toronto that are larger have already been identified as better suited for permanent, supportive or affordable housing use, he said.
Utilizing sites earmarked for supportive housing development for an interim micro shelter pilot could also interfere with pre-construction activity and delay progress, Tanner added.
“Based on these limitations, a micro shelter pilot has not been recommended at any potential sites identified to date,” Tanner said. “CreateTO continues to explore locations to accommodate a potential micro-shelter program and will provide additional details to council as part of the TSSS Annual Infrastructure Report in July 2025.”
