This section provides an overview of amendments to Ontario Regulation 367/11 under the Housing Services Act, 2011 (HSA) which create a new service agreement framework for community housing projects that are at the end of their mortgages and operating agreements.
This framework aims to address outdated and complex rules by streamlining and creating baseline rules to provide a level of consistency and accountability in how housing need is being met across Ontario.
Overview of changes
The regulation now establishes baseline rules for service agreements between service managers and housing providers whose original obligations to provide social housing have come to an end. These amendments enable service managers and housing providers that have reached the end of their original operating agreement (EOA) / end of mortgage (EOM) to enter into new operating agreements (called “service agreements”) that address local housing needs and conditions.
A service agreement is a contract negotiated between the housing provider and the service manager for the provision of community housing under Part VII.1 of the HSA that stipulates terms regarding operations, administration, and funding arrangements.
The new regulatory framework for service agreements enables service managers and housing providers to negotiate more flexible funding approaches, incentivizes housing providers to stay in the system once their current obligations expire, and allows new housing providers to enter the system.
If a service manager and a housing provider do not want to enter into a service agreement and join the new community housing framework, they must enter into an exit agreement to ensure that existing tenants are not displaced and longstanding public investments in community housing buildings are preserved.
Regulatory requirements that apply to service agreements
The service agreement framework establishes minimum requirements for:
- baseline provisions to continue funding rent-geared-to-income (RGI) units
- setting a minimum term length of 10 years
- selection rules for units where households will be receiving RGI assistance, to align with existing selection and waiting list rules under the HSA
- the inclusion of a process to manage issues of non-compliance and dispute resolution
- participation in mandatory Housing Services Corporation (HSC) programs, with current exemptions continuing
New funding rules and requirements under service agreements
The new service agreement framework includes requirements that RGI units continue to be funded in a sustainable way, bridging the gap between 30% of the household’s income and the unit’s rent. Service managers and housing providers are required to develop joint financial plans, to be reviewed every five years, to help ensure funding provided will sustain the tenants and the subsidized units during the service agreement.
The service agreement framework also allows service managers and housing providers to negotiate additional funding, where necessary, to keep projects in a satisfactory state of repair and provide other types of housing assistance to tenants. Service agreements are to have a minimum term length of 10 years.
Selection rules under service agreements
For units where households will be receiving RGI assistance, the service agreement needs to specify that the housing provider will use the service manager’s selection system under the HSA to select households to occupy the units. Such households must be selected in the same manner as households are selected for Part VII housing projects. Like Part VII housing projects, these households will need to be selected from the centralized waiting list for RGI assistance, and in accordance with existing eligibility, and provincial and local priority rules.
Existing rules that allow housing providers to operate with specific mandates to serve a specified population will continue, and mandates will need to be specified in the service agreement.
New providers joining the community housing framework
Housing projects that are not currently subject to the HSA can enter the new framework if the housing provider enters into a service agreement with the local service manager. Such an arrangement would be subject to the service manager’s assessment of the project’s viability, condition of rental units and finances.
Accessing existing funding programs
Housing providers that participate in the new service agreement framework are eligible to be considered for funding opportunities through programs such as the Canada-Ontario Community Housing Initiative (COCHI) to support delivery of community housing.
If you are a tenant receiving RGI assistance and you have questions or concerns about whether your housing project and/or RGI subsidy is impacted, you can contact your local service manager to find out more information on your particular situation. Find your local service manager.
Date in effect
Service agreement regulations are in effect as of July 1, 2022.