The Vienna Model 2 – Housing for the City of the 21st Century

(Moksalyk, 2012). The Affordable Housing Initiative, a multilateral
agreement between federal, provincial and municipal
governments, with a budget of Can$680 million targeted new
ren tal housing provision and renovation of existing social housing.
The second phase, with a budget of Can$320 million, created
hous ing for low-income households, aboriginals, people with
disabilities, recent immigrants and seniors, resulting in 27,000
new units across Canada (Tsenkova, 2013). The share of nonmarket,
social housing in Canada is 6 percent. Eligibility criteria
for social housing vary according to the funding regime
under which it was developed. Social housing stock developed
since 1986 is targeted to households that meet “core housing
need” requirements, defined by a measure of suitability
(overcrowding), adequateness (need for repairs) and affordability
(over 30 percent of gross income) in addition to an income
threshold test (Tsenkova, 2016). Social rents are set as
fixed propor tions of tenants’ income rather than being property-based.
Rents for social housing range from 25 to 30 percent
of household income and increase to “net cost” or “low end of
the market” for higher income households (Steele, 2007). In
addition to the spectrum of partnerships types, there exists a
range of affordable housing clientele. “Social” housing is just
one typology of affordable non- market housing that is typically
heavily subsidized to enable low-income individuals achieve, or
get close to the 30 percent income ratio (CMHC, 2017).
Provincial governments own a significant share of social
housing. Small-scale social not-for-profit and cooperative housing
providers also exist, largely as a result of idiosyncratic subsidy
arrangements, changing systems of financial support, and
specific target groups such as special needs housing. The majority
of social housing stock is between twenty and fifty years
old and is in need of repairs and modernization. Public housing
tends to be older with higher turnover, which contributes
to higher operation costs (Tsenkova, 2016). The allocation
predominantly to low-income households also places additional
requirements for ongoing social service support and capital
to bridge the revenue / expenditure gap. Most cooperatives and
nonprofit providers have inadequate capital reserves and are
not in a financial position to fulfill upkeep, major maintenance
costs or essential capital replacements (Pearson, 2010).
The downloading of responsibility initiated by the federal
government has created PPP as being a necessary alternative for
addressing the housing crisis and increasing the supply of affordable
rental housing. The following section will define partnerships
and allude to the benefits and risks associated with them.
Defining a Partnership
According to the Canadian Council on Private Public
Partnerships (CCPPP), a PPP is “a cooperative venture between
the public and private sectors, built on the expertise of each
partner, that best meets clearly defined public needs through
appropriate allocation of resources, risks, and rewards” (2017).
Although this can be considered the standard, several other definitions
exist throughout the literature which allude to the complexity
of the partnership (Kernaghan, 1993, Armstrong,
1997, Rodal & Mudler, 1992). The overall sentiment defines
a cooperative pursuit that is predicated on shared, compatible
objectives. In return for the need of shared mutual benefits is a
shared risk and therefore authority on the project. The definitions
tend to outline the idealized form of partnership amongst
private and public entities. Although it is beneficial to understand
and strive for a true form of collaboration, partnerships
can occur in many different forms and can therefore be defined
as such.
Types of Partnerships
Figure 2 situates the variety of partnership types on a continuum,
depicting the transfer of liability and therefore risk from
the public to the private sector (IPSASB, 2008). The spectrum
can be classified into four, non-mutually exclusive categories:
consultative arrangements, contributing partnerships, operational
partnerships, and true collaboration (Boase, 2000). A
project can be defined as any combination of the following operational
elements; Design, Build, Finance, Operate, Maintain,
Own, Transfer, Lease, Develop, Buy (Allan, 1999). The location
of a project on the spectrum is dictated by the nature of
the project in conjunction with which entity is performing any
given task. The following definitions of partnership types have
been adapted from the International Public Sector Accounting
Standards Board’s (IPSASB) consultation paper on concession
arrangements (2008).
1. Service and Management Contracts — Services that
would otherwise be performed by a public sector entity
are contracted out to a private sector entity. Risk
and responsibility for the delivery of the service remains
with the public service entity. Typically, contract
arrangements are short term, renewed only if
the private sector entity involved delivers the service
in accordance with requirements set by the public
sector. Management contracts extend the responsibility
of the private sector to include the management
functions related to the delivery of the service (i.e.,
hiring employees, creating budgets, interacting with
vendors, etc.).
2. Design-Build — Private sector entity assumes full
con struction risk and is responsible for the liability
associated with the construction process. Upon
completion, the public sector entity assumes responsibility
for both the operation and maintenance of
the infrastructure, leaving the private sector with
little to no residual project risks.
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