Contents lists available at ScienceDirect Cities journal homepage: www.elsevier.com/locate/cities Toronto's market-oriented subsidised housing PPPs: A risk worth the reward? Aaron A. Moore a,⁎ , Jordana Wright b a Department of Political Science, University of Winnipeg, Canada b Criminology and Sociolegal Studies, University of Toronto, Canada Faced with a growing backlog for the maintenance of existing social housing stock, Dublin and Toronto public housing providers—Dublin City Council (DCC) and Toronto Community Housing Corporation (TCHC), respectively—turned to the market to secure funding for the rehabilitation and replacement of subsidised housing projects. Both entities decided to replace existing low-income subsidised housing communities with new mixed-income communities by way of public- private partnerships with developers, in order to exploit the value of the property the subsidised housing occupied. In Dublin, the introduction of market forces and demand risk to the revitalization of subsidised housing, coupled with the 2007–2008 recession, resulted in the failure of the revitalization program. This failure, in turn, negatively impacted the communities that were to undergo revitalization (Hearne & Redmond, 2014; Hearne, 2011). The aftermath of the failed subsidised housing PPPs in Dublin led Rory Hearne, who documented the affair, to question the appropriateness of such funding models in providing for public goods such as social housing: Their collapse brings into question the viability and appropriateness of such a model for the regeneration of local authority estates, and indeed on a broader level for the delivery of essential public infra- structure and services that deliver social protection. (Hearne, 2011, 170). Hearne's assessment of the use of market forces in the revitalization of subsidised housing raises important questions for Toronto and TCHC. After some initial success, TCHC has deployed market-oriented PPPs across the city in a bid to revitalization its aging subsidised housing stock. However, unlike Dublin, who adopted a traditional BOT (build- operate-transfer) model, 1 TCHC has adopted a unique approach to partnering with the private-sector that allows it to retain responsibility for maintaining and operating subsidised housing in the city while ei- ther sharing the proceeds of condominiums sales or obtaining funding for revitalization through the sale of land. This paper examines whether the unique partnerships TCHC employs in the revitalization of its housing stock addresses the failings of the market-oriented BOT part- nerships in Dublin. We find that TCHC, over the course of a number of projects, has successfully reduced its exposure to demand risk by transferring it to the private-sector. As a result, TCHC is in a much better position to navigate any market decline than DCC. However, TCHC's partnerships provide varying degrees of protection for the communities undergoing revitalization. While TCHC's approach to the displacement of residents in communities and the replacement of existing subsidised housing units will likely prevent the degree of community collapse that occurred in Dublin, any collapse in the housing market would have very real and negative consequences for some of the communities undergoing re- vitalization. 1. PPPs and the revitalization of subsidised housing The practice of employing PPPs 2 —we use the term solely in re- ference to partnership between the public sector and for-profit cor- porations throughout—for the provision of social housing goes back over half a century. For instance, the Johnson Administration en- couraged their use in the U.S. Department of Housing and Devel- opment's (HUD) Turnkey and Turnkey II programs in the 1960s (HUD, 2015; Burstein, 1967). The use of PPPs to provide for the revitalization of existing subsidised housing stock and for the creation of mixed-in- come neighbourhoods is more recent, however. In the United States, HUD first used PPPs as a means to revitalize distressed low-income neighbourhoods through the program HOPE VI. Though the program did not originally enable private-sector involvement in revitalization, HUD introduced such a mechanism to HOPE VI in 1995 when it http://dx.doi.org/10.1016/j.cities.2017.05.010 Received 2 October 2016; Received in revised form 13 April 2017; Accepted 22 May 2017 ⁎ Corresponding author. E-mail addresses: aa.moore@uwinnipeg.ca (A.A. Moore), jordana.wright@utoronto.ca (J. Wright). 1 The terminology for PPPs various by jurisdiction, thus the use of a term such a BOT may vary. For the purposes of this paper, BOT is used to refer to a form of public-private partnership where the private sector partner builds (B) and operates (O) infrastructure for a defined period before transferring (T) the infrastructure back to the public sector. In absence of a source of revenue to generate a profit for the private partner, the public sector will typically pay the private sector for the operation and maintenance of the asset during the period before it is transferred. Often, in BOT projects, the private sector will also finance the construction of the asset. However, as the World Bank's glossary on PPP suggests, the addition of finance to an agreement may make the term concession more appropriate for such partnerships (World Bank, 2016). 2 Public-private partnership is an ambiguous term denoting a wide variety of contractual partnerships between public and private sector entities. In the widest sense, the term can include both for-profit and non-profit private entities (Iglesias, 2009). In practice, what counts as a PPP, and whether the term itself is even used, depends largely on the jurisdiction (Koebel, Steinberg, & Dyck, 1998). Cities 69 (2017) 64–72 0264-2751/ © 2017 Elsevier Ltd. All rights reserved. MARK