Ottawa Citizen: Auditor general investigating city contract to house homeless families, councillor says

Ottawa Citizen


Updated: January 7, 2019

The city’s auditor general is investigating a contract between the city and a Vanier hotel owner under which the city is paying the hotelier $100 per night

to house homeless families in off-site apartments for months on end, says Coun. Mathieu Fleury, who contends the deal was made without political oversight or proper due diligence.

 The arrangement, alleges Fleury, involves questionable procurement and zoning practices, puts already vulnerable families in a precarious living situation, and was established by city staff in the housing services branch who made a mistake, and are now unable to fix it.

And recently, according to an email sent by a city manager and obtained by this newspaper, four families were allegedly moved by the hotelier from a temporary emergency shelter to an unsanctioned location, without the city’s knowledge or approval.

The hotelier, Ahmed Syed, contests this, saying through a spokesperson that “city officials are informed of any change made in the housing of residents” and that the email contained “misinformation.” The situation has since been rectified, his statement says.

Syed owns the Ottawa Inn, located at 215 Montreal Rd.

In 2013, the city established an agreement with the Ottawa Inn to house homeless families in hotel rooms when more traditional accommodations in the city’s emergency shelter system — the Carling Avenue family shelter, the YW/YMCA, the Catholic Centre for Immigrants’ Maison Sophia — reach capacity.

The city has the same kind of arrangement with 13 other hotels and motels across the city, which costs the city, on average, about $3,000 a month per family per hotel room. In 2014, there was, on average, 97 of these families in hotels on any given night. As of Nov. 26, 2018, there were approximately 250 families in the same situation.

The Ottawa Inn’s deal, however, is slightly different.

Manzoor Syed — Ahmed’s son and hotel manager — says that after the hotel began filling up with city clients, his family bought nearby residential properties, renovated them, and offered them to the city to accommodate larger families in need of shelter.

The apartments cost the city roughly $100 per unit, per night — a comparable price to what a room in the hotel would cost. The city’s agreement with the Syeds involves eight addresses, not including the Ottawa Inn.

“It just spread inside the city that … if you have large families, send (them) to Ottawa Inn, they’re going to give us apartments. So then it got to the point where the city workers would call us … And they would say … we need an apartment, we have a large family,” Manzoor said.

“To kind of accommodate their needs, we said OK … if this house comes for sale next door let’s get it and let’s make it nice, we’ll put some families here.”

While Fleury finds the deal between the city and the Ottawa Inn troubling, saying, “This is not a sound public government approach,” he’s at odds with Shelley VanBuskirk, the city’s director of housing services.

She refutes Fleury’s interpretation of the arrangement.

“Housing Services has acted in good faith and has done its due diligence before entering into agreements that improve services for families and reduces costs for the taxpayers,” she said in a statement.

VanBuskirk didn’t answer questions regarding Fleury’s claim of an auditor general investigation, instead referring this newspaper to the auditor general, Ken Hughes.

Hughes says his office does not confirm or deny the existence of investigations.

According to numbers provided by Kristin Baldwin, a junior partner at Flagship Solutions — a lobbying and PR firm hired by the Ottawa Inn — the hotel has 41 off-site units available to house city clients, in addition to 48 rooms at the Ottawa Inn proper. All of these are covered by a letter of understanding between the city and the Ottawa Inn, and approximately 80 per cent were occupied by city clients as of Dec. 19, Baldwin says. (As of Jan. 4, all available city-approved units were occupied by families in the shelter system, according to the city.)

“The Ottawa Inn was approached by the City of Ottawa and was happy to collaborate,” Baldwin says. “Instead of choosing only profit, the Ottawa Inn has offered the city innovative solutions that … are saving hundreds of thousands of dollars for the city — per year. Yes, the Ottawa Inn is also a for-profit corporation. We also note that Mr. Fleury is cashing in his paycheque as a city councillor — people are paid for their services.

“We are concerned by the activities of Councillor Mathieu Fleury who seems to be turning against a local business for political purposes. His recent involvement has changed things at the city.”

On the face of it, the arrangement between Syed and the city works like this:

He makes these large, multi-room off-site apartments with kitchens available to the city at a comparable price to what a room costs at his hotel. While searching for permanent accommodation, large families sometimes stay in the apartments for six to 12 months, the city says. The apartments allow families more space to live and the city says the deal saves them money.

As Elizabeth Farrell, then manager of homelessness and shelters with the city’s housing services branch wrote in an email, obtained by this newspaper, to other city staff in 2016: “Large families usually require two motel rooms at an average of $220/night — when they stay at Tabor Avenue it costs us $100/night,” she wrote, referring to one of the Ottawa Inn’s properties. “We estimate that this arrangement with the Ottawa Inn has saved Housing Services $800K in 2015.”

The city did not respond to a question about the total amount it has spent housing clients in the Ottawa Inn’s off-site apartments.

However, based on the numbers provided by Baldwin, the off-site apartments would have cost the city thousands of dollars in December alone.

And this concerns Fleury.

“What’s the authority they have to do that and why wasn’t a memo sent to council?

“Politically, we didn’t approve that.”

The city spends hundreds of millions of dollars annually on social services, many of which are contracted out, he says.

“We’re talking about one contract right now. If we don’t have the diligence around that, what else is … in there? My concern is there are a lot of people making money off the city in that sector. Is council aware of where we’re spending these dollars?”

VanBuskirk says the city uses the Syed-owned apartments as “emergency accommodations for families experiencing homelessness as we do not have the capacity within our hotel/motel stock to absorb these families given the increase in demand.

“Without access to temporary accommodations, our communities would have families at risk sleeping in cars, churches, bus stations.”

She also says that city staff have the delegated authority to enter into agreements with hotels and motels to provide emergency accommodations for homeless families “in a timely and efficient fashion.”

Janice Burelle, general manager of community and social services, backs her up. “Legal’s been involved, we’ve looked at all of the aspects, we’ve had public health involved, and it’s within our operational authority to move forward with this type of approach in the best interests of the families and taxpayers.

“Alternatively, families do not have solutions; we would be turning people away.”

But Fleury draws a line between procuring hotel rooms and procuring residential apartments for use as temporary shelter, and takes issue with the city’s choice to enter into such a relationship with the Ottawa Inn.

“Why do we prioritize them in the sector?” he asks. “If the city were to go public and say, ‘Private landlords in Ottawa, we’re looking for three bedrooms, we’re willing to pay $3,300 a month, we’ll do that for one year,’ I would challenge you that we would find better accommodations.”

And, Fleury says, these off-site properties fall under residential zoning and, unlike a hotel, a shelter is not among their permitted uses. If families are going to stay in these residential units, he argues, they ought to be doing so under a lease, with all the associated protection that would offer tenants, rather than as emergency shelter clients. The city has a rent supplement program available for private landlords who want to help those who need it, he points out, and it costs the city much less per unit.

Fleury isn’t alone in this position. Somerset ward Coun. Catherine McKenney, council’s newly appointed liaison for housing and homelessness, has been briefed by Fleury on the deal between the city and the Ottawa Inn.

“Two things that concern me greatly about what I’ve since learned is that one, we’ve got families living in off-site units that do not have the protection that other tenants have under the landlord-tenant act, and that’s wrong, and second, we have got a serious, even private, affordable housing crunch in this city and we’re allowing property owners to use their units as shelter. They’re not going to be available to move families into at a reasonable price,” she said.

“It’s almost causing the situation to get worse, and it is rather alarming.”

VanBuskirk, meanwhile, maintains that the off-site apartments are not in violation of any zoning bylaws.

She says each family living in one has access to a case manager, a housing search and stabilization worker, and round-the-clock support from staff at the city’s Carling Avenue family shelter.

“These supports ensure any issues with the accommodations, the owner or neighbours are immediately escalated and addressed by housing services staff.”

And the city limits the use of these apartments, she says, “to ensure that affordable housing stock is not removed from the private rental market as the region is currently experiencing an increase in rents and a low vacancy rate.”

As Burelle puts it, “We wish we wouldn’t have to do these overflow mechanisms. We wish that there was fewer people homeless in the City of Ottawa. However, we’re responding to the demand that we’re seeing currently in our community.”

It’s unclear what, exactly, the investigation Fleury says the auditor general is undertaking will look at.

What is known, though, is that Fleury brought the details of the arrangement between the city and the Ottawa Inn to the auditor general’s attention more than a year ago.

He says he confronted housing services staff about the deal in the summer of 2017.

He says they “recognized what I was saying,” and committed to moving city clients out of Syed’s apartments.

Months later, it hadn’t happened, and that’s when Fleury says he went to the auditor general.

He says the pressure on the city’s family shelter system has backed housing staff into a corner, leaving them unable to walk back from a mistake as there’s nowhere else to put the families living in these off-site apartments at a comparable price.

And, indeed, the family shelter system is under pressure.

Between 2014 and 2017, the number of families in Ottawa experiencing chronic homelessness jumped 171 per cent. The number of families using an overnight emergency shelter, including hotels, increased by more than 12 per cent, while the average length of stay for a family jumped from 105 to 123 days, a 32-per-cent increase.

If the city can curb those numbers, the need for off-site accommodations would lessen, VanBuskirk says.

But the city would still maintain a relationship with Syed, she says.

VanBuskirk says the city, in the future, would offer rent supplement agreements, “to preserve these units as affordable housing for low- and middle-income households.”

This commitment comes despite alleged prior issues with Syed, in which families were allegedly moved from the Ottawa Inn to a non-approved location.

In an email obtained by this newspaper, written by Marion Connolly, program manager at the city’s community and family shelters branch, to Ahmed Syed on Oct. 12, she writes that she’s learned that Syed has “recently relocated” four families staying at the Ottawa Inn to a location “that is not part of the approved establishments.

“Regardless of your reasons for doing so, this is unacceptable and the City will be reviewing its options to address the situation.”

Syed’s statement to this newspaper, as previously mentioned, says city officials are informed of any changes made in the housing of residents and that the email contained misinformation.

Burelle agrees this unauthorized move occurred, and notes that while she can’t go into specifics to maintain confidentiality, “Mr. Syed was acting, in his opinion, in the best interests of those families.”

Families were only in the unapproved establishment for a number of days, according to the city. As for what was done to address the situation, Burelle says “we intervened immediately, had a conversation with (Syed), and the four families were moved out.” The city emphasized that a move of this sort was to be discussed with them in advance, she says.

The city also paid Syed for the nights the client spent in these rooms. “The services were rendered and received.”

At one point, the city also approved the housing of families in some of Syed’s off-site apartments that were not among the eight addresses covered by the formal agreement between the city and the Ottawa Inn.

Syed was renovating some units covered by their agreement, and the city worked with him to temporarily relocate the families living there, says VanBuskirk. “We had actually gone and viewed and vetted those particular units,” she says.

At one point, there were 12 families living in residential units owned by Syed for which there was no formal agreement with the city in place.

“We weren’t going to go and sign a new agreement with Mr. Syed for this very short-term use,” says VanBuskirk.

Burelle notes that the families were provided the same resources as those in apartments for which there was a contractual agreement, namely access to round-the-clock support from city staff at the Carling shelter, case managers, and the like.

“We felt that with the ongoing monitoring and the preventions that we do now, that everything was in perfect order.”

If Coun. Fleury thinks otherwise, of this or any other aspect of the city’s relationship with the Ottawa Inn, he can raise the issue at committee and with council, Burelle says.

“If they want to change direction or put different requirements on us or whatever it is they want to do, that’s up to them.”

Fleury, for his part, says, “I think the auditor general investigating will validate the concerns.”

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