Calgary Housing Company Annual Report 2017calgaryhousingcompany.org/wp-content/uploads/CHC-Annual-Report... · 6 ANNU 2017 Message from the President Transformation of Calgary Housing

Calgary Housing Company

Annual Report 2017Affordable Homes for Calgarians

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ANNUAL REPORT 2017

Peace, and a Good Place for My KidsTarek moves quickly as he invites you into his home, explaining how much easier it is

to get around now that winter is releasing its grip. It’s the only reference to the Multiple

Sclerosis that keeps him from working.

He is busy offering a refreshment, asking about neighbours he regularly helps out, and

chatting with the Tenant Liaison about plans for summer activities in the community.

“Living here is tremendously important to me,” he says, “we get peace and I can raise my

kids in a good way.” Happy today, he also looks to a brighter future. “We’ve been looking

(at ownership options)… I would really love to have a yard for my kids to play.”

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2017 ANNUAL REPORT

Table of Contents

Message from the Board Chair

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Board of Directors

5

Message from the President

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The Organization

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CHC By the Numbers

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CHC Properties and Programs

11

Progress

Priority 1: Quality Customer Service

12

Priority 2: Sustainability

14

Priority 3: Stakeholders

16

Priority 4: Organizational Excellence

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Major Events of 2017

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Challenges & Opportunities

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Financial Report

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On the Cover“The best thing, my best thing,” says Lori, “is watching my kids in the yard in the morning.”

Three months after applying to CHC, Lori, Ava and Kevin were able to leave the shelter where they had lived since

fleeing an abusive home. Today, they have a safe space where they are building a good life. School is over for the

day... the kids bound in and out with their friends. Ava hugs her mom and she’s off again to join the fun.

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ANNUAL REPORT 2017

Message from the Board Chair

Safe and affordable shelter is foundational to the health and well-being of the individual. The mandate of the Calgary Housing Company (CHC) is for all Calgarians to have a place to call home.

It is important that we acknowledge the place where we build our homes, and give proper recognition and honour to the original peoples of this area. We are all Treaty people, and our common dwelling on these lands gives us a future of opportu-nity.

In 2017, CHC continued the second year of implementing the Strategic Plan and its four priorities: Deliver Quality Service to Clients, Increase Financial Sustainability, Strengthen Relation-ships with Key Stakeholders, and Strive for Organizational Ex-cellence. This report provides an overview of progress towards the Strategic Plan in 2017.

CHC is a people-centric company. The following pages include the stories of tenants and the impact that our work has had on their lives. CHC does more than provide homes—we provide a safe, stable foundation and a community of support for individuals and families to pursue their ambitions. Our work would not be possible without more than 100 partners across community agencies, government offices, and support orga-nizations. There is strength in numbers, and we are grateful to have such a supportive community in Calgary to enable success for all.

During this economic downturn, there is an even greater need for affordable housing. I am proud that in 2017 we were able to add three new City-owned affordable housing properties to CHC’s portfolio and offer 72 new homes. CHC celebrated the regeneration of two properties in Mission and Bankview where investments have extended the lifespan of these buildings.

With the average age of managed assets at 44 years, the Board is focused on addressing funding shortfalls for subsidized housing, accumulated over decades. This includes deferred maintenance due to under funding of past governments while also expanding innovative and sustainable mixed market deliv-ery models.

The future of affordable housing looks brighter than ever with the municipal, provincial, and federal governments all com-mitted to strategies and funding to improve the housing system over the next 10 years. Calgary Housing Company is ready for this new wave of commitment and re-investment in affordable housing in order to better serve our tenants. Thank you to our Board members for your dedication and hard work in 2017.

Councillor Druh FarrellBoard Chair

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2017 ANNUAL REPORT

Board of Directors

Counc. Druh FarrellChair

Counc. Jeremy FarkasCounc. George Chahal

Katie BlackDirector, Calgary Neighbourhoods

Carla MaleCity Treasurer

Peter Cheung Murray TaitLauretta Enders Leslie Tamagi Jeremy Villas

Calgary Housing Company provides safe and affordable housing to meet the needs of low and moderate income people in the Calgary region to create communities where people can realize their full potential.

Partnering to create comprehensive affordable housing solutions through inclusive communities in great neighbourhoods, to enable success for all.

Vision Mission

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ANNUAL REPORT 2017

Message from the PresidentTransformation of Calgary Housing CompanyThrough the strategic plan priorities, CHC is undergoing a transformation focusing on culture, process and organization. By aligning to a service-based model we can shift the focus from ‘what’ we do to ‘why’ – keeping the idea that we made life better through housing at the forefront of our work.

With a customer service excellence focus, our tenant focus in 2017 continued with the involvement of the tenant advisory group – who were key stakeholders in the development of CHC’s first ever tenant satisfaction survey. I am pleased to say that 87% of the tenants surveyed are proud to call a CHC managed prop-erty home. We look forward to using this data to inform our decision-making and programming as part of our commitment to continuous improvement towards quality customer service.

Our staff throughout the organization deliver on our prom-ise to make life better every day for our tenants. CHC is committed to a respectful workplace, staff development and safety. Throughout 2017, several initiatives were undertaken to reinforce these foundational principles and ensure staff are equipped to provide quality customer service every day. These commitments are reflected in the tenant satisfaction survey results showing that 87% of tenants surveyed said they feel like they are treated with respect by Calgary Housing.

Looking to the future of affordable housing, our Sustainability Program is using operational data and financial forecasting to inform decisions and innovations to address the impact of the expiry of Federal and Provincial operating agreements to CHC. Our top organizational risks relate to funding uncertainty, rent revenue, reserve funds, and condition of third-party assets. The sustainability program is one way that we are working to manage those risks for CHC moving forward.

Health and Safety of tenants is a top priority for us at CHC. In 2017, CHC faced an unforeseen challenge with a contrac-tor van that was stolen that contained CHC key information. However, the response from our staff and partners at the City was incredible replacing 12,363 residential and commercial locks in 58 days - the equivalent to rekeying a city the size of Camrose. We not only were we able to respond to the situation thanks to partners including The City of Calgary we have con-tinued the momentum and learning from the experience and have even safer housing as a result.

Positioning Calgary for Investment in Affordable HousingIn 2017 Calgary Housing opened three new affordable housing buildings, adding 72 new units to CHC’s portfolio. CHC was especially excited to be able to provide additional homes for Calgarians with the first new buildings in five years.

On the horizon, there is a lot to be excited about in the housing sector with the release of the National Housing Strategy and

the Provincial Affordable Housing Strategy. This is an un-precedented time where all three orders of government have made strategy and budget commitments to affordable hous-ing. The National Housing Strategy is committing $40 billion over 10 years towards the strategy with $15.9 billion for new housing and repair of existing housing. The Provincial Afford-able Housing Strategy is focused on increasing the supply of affordable housing and maintaining existing stock, as well as supporting the financial sustainability in the housing system.

CHC is well-placed for investments in the maintenance and renewal of our existing housing. CHC has developed a Stra-tegic Asset Management Program and to support long term planning of its assets. This work has involved gathering data through building condition assessments and unit condition assessments to understand the needs for investment and be able to plan over the long term to use funds in the most effi-cient way possible. CHC has also begun energy audits on some buildings and will be looking to further our understanding of where investments can improve energy efficiency and lower operating costs.

The integration of CHC’s operation teams and the Affordable Housing division continues to provide opportunities to work together for better outcomes. We see this in the ability for oper-ational expertise to be incorporated into building design right from the beginning of a project, and to inform how the form and function of a building can improve operational efficiency for CHC and better meet the diverse needs of our tenants.

PartnershipsA home is much more than bricks and mortar, it is a safe place to hang up your hat and truly live. Calgary Housing Company continues to work with 100’s of dedicated partner agencies to provide coordinated services that meet tenant needs and sup-port strong communities. Together we are committed towards supporting tenants achieve their goals. This year we partnered with Habitat for Humanity towards supporting tenants achieve homeownership goals. This partnership has supported 40 CHC families exploring homeownership opportunities through Habitat. We also participated in Bridging the Gap with the Cal-gary Homeless Foundation and helped transition nine clients from supportive housing programs into independent afford-able rental housing at CHC.

These examples reinforce CHC’s commitment to communities where people can realize their full potential – after all, we are a company for people, and we take pride in providing homes for Calgarians.

Sarah Woodgate President

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2017 ANNUAL REPORT

Organization

GM, Community ServicesKurt Hanson

City ManagerJe� Fielding

Corporate Finance & Risk O�cerJana Tchinkova

Infrastructure & AssetsJohn Veenstra

Housing Services (Acting)Greg Wilkes

Client Services (Acting)Aminda Galappaththi

A�ordable HousingTeresa Goldstein

Strategic Services (Acting) Maureen Swanson

Calgary Housing CompanyBoard of Directors

Director, Calgary HousingSarah Woodgate, Director

Calgary Housing CompanySarah Woodgate, President

Shareholder(as represented by �e City of Calgary Council)

�e City of CalgaryCouncil

I believe that our job is both about housing people and about building community. I am proud of how we have done this through the connections, relationships and partnerships we’ve built with the community, our tenants and our partner organizations.

I am excited and proud this year about what we heard from the people we serve. It was a resounding recognition of CHC’s dedica-tion and passion for helping people �nd a home.

Our biggest challenge is to continuously improve. What we do is important. Our work has a huge impact on people’s lives. We can’t settle for anything less than our best.

In 2017 progress continued to be made to improve the lives of the tenants in CHC managed properties and the communities in which they live. �is has been done through the identi�cation, prioritization and delivery of capital investments targeting the most needed requirements to best utilize the limited resources available.

Strategic Services works to support the transformation of CHC through process, policy, technology and communication. I look forward to building on the great work that CHC does as we continue to focus on delivering quality service to our clients and striving for organizational excellence.

We are particularly excited about the partnerships being established through �e Home Program in 2017 and 2018. Striving towards a transformed housing system in Calgary, where collaboration drives better outcomes for our residents.

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ANNUAL REPORT 2017

CHC By the Numbers

CHC Tenants

1,083Seniors

13,957Adults

6,681Children6-17

2,552Pre-SchoolChildren

24,273Housing Tenants

0

500

1000

1500

2000

2500

3000

3500

4000

Hou

seho

lds

3,7743,435 3,346 3,395

3,763 3,860 3,828

2011 2012 2013 2014 2015 2016 2017

CHC WaitlistAverage number of households with active applications for Social and A�ordable housing programs. �ough it iso�en referenced as an indicator of demand, there is concernthat it does not accurately re�ect overall demand becausemany applicants on the list rank very low on priority scoringand will likely never qualify for housing. As directed byProvincial legislation, applicants are assessed and housed based on need, not on a �rst-come, �rst-served basis.

Primary Income Source�e chart below shows the primary income source for all tenants who had leases with Calgary Housing Companyduring 2017. Households may have had other sources ofincome, however this chart shows where the majority ofincome came from. Note that for almost 40% of tenants,the primary source was working income.

No Income / Child Tax Credit 18.1%

Social Assistance 13.4%

AISH 9.1%

Pension 6.4%

Other 5.0%Employment Insurance 3.3%

Education Financing 3.3%

Self Employment 3.1%

Workers' Compensation 0.2%

Working Income 38.2%

Unit Type Distribution Vs. Applicant Need

Applicant Need

Distribution ofUnits in CurrentPortfolios

�e graphs below illustrate the types of units CHC has inits portfolios versus the unit types needed by applicantson the waitlist.

1 Bedroom: 39.9%

2 Bedroom: 32.9%

3 bedroom: 19.3%

4+ Bed- room: 7.9%

2 Bedroom: 35.6%

1 Bedroom: 22.7%

3 Bedroom: 37.9%

4+ Bedroom: 3.8%

Totals may not equal 100% due to rounding.

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2017 ANNUAL REPORT

• Access Calgary• Access Mental Health• AHS (Alberta Health Services)• AISH (Assured Income for the Severely Handi-

capped)• Alberta Works• Alexandra Centre Society (The Alex)• Aspen Family Services• Attainable Homes• BowWest Community Resource Centre• Calgary Alpha House• Calgary Catholic Immigration Society• Calgary Counseling Centre• Calgary Distress Centre• Calgary Drop-In Centre• Calgary Foodbank• Calgary Homeless Foundation• Calgary Police Service (CPS)• Calgary Women’s Emergency Shelter• Canadian Mental Health Association• Care Connect• CARYA Society of Calgary• Child Welfare• Children’s Cottage• Community Housing Affordability Collective • Community LAMDA Society• CUPS (Calgary Urban Project Society) • Deer Park United Church• Edgemont Community Association• Fair Entry - Fee Assistance Program• Families Matter

• Feed-a-Need• Habitat for Humanity• Heart of the North East• Home Care• Home Front• Hull Services Patch Program• Kerby Centre• MASST (Multi Agency School Support Team)• Mobile Response Team (MRT)• Momentum• Mustard Seed• Neighbourlink Calgary

• North Central Community Resource Centre• Salvation Army• Samaritan Club of Calgary• Sheldon M. Chumir Health Centre• Sheriff King• Silvera for Seniors• South Calgary Community Resource Centre• St. Vincent De Paul• West Central Resource Centre• WINS (Women In Need Society)• YWCA

Supporting almost 25,000 residents in CHC-managed properties, our Tenant Liaison team helps solve problems and connect tenants with resources. CHC partners with more than 100 community agencies, government offices and other support organizations, a partial list of these partners includes:

Open Rental Market25.1% (20.9%)

Home Ownership6.5% (5.4%)

Unable to A�ord10.9% (12.4%)

Anti-Social Behaviour5.2% (3.6%)

Leaving Calgary11.6% (15.0%)

Deceased2.5% (1.5%)

Extended HealthCare 1.1% (1.6%)

Transfer17.3% (13.0%)

Unknown / No Data19.7% (26.6%)

2016

2017 Neutral Outcome: 52% Neg.: 16%Positive: 32%

Neutral Outcome: 60% Neg.: 20%Positive: 20%

Reasons to VacatePercentage of tenants vacating for a given reason each month. 2016 data is shown in parentheses. 2017 saw a downward trend in both Negative and Neutral outcomes and an increase in Positive outcomes by 12%. In Neutral, “Leaving Calgary” dropped from 15.0% in 2016 to 11.6% in 2017. Both Positive categories increased.

Client Contacts

54,507

4,542/month

Calls taken by CHC Customer Service sta�

20,934Visits to calgaryhousingcompany.org

14,755Unique Visitors

2,326*Visits/month

76% Calgary3.2% Edmonton3.1% Vancouver1.3% Toronto1.0% Airdrie

38,231

3,186/month

Visits to CHC district o�ces

*CHC’s new external website launched on April 1, 2017

2017 saw the launch of CHC’s external website - a new channel for tenants and applicants to get information. Visitsto CHC o�ces was down slightly from 39,476 in 2016. Callsto customer service increased by about 3,000.

Tenant Support

Basic Needs 11.0%

Children 6.8%

Education - Adult 0.9%Employment 0.8%

Financial Support 5.9%

Mental Health Issues 13.9%

Physical Health 4.1%

Safety and Legal 7.1%

Other 4.9%

Tenancy Concerns 44.6%

Tenant SupportCHC’s Tenant Liaison team responded to an average of 176 support requests each month in 2017. �e majority of requests dealt with tenancy matters such as rental arrears, concerns with neighbours, rent reductions, etc. Other support requests ranged from basic needs issues like food bank referrals to assistance with mental health matters.

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ANNUAL REPORT 2017

“A place for my kids...”Ojulo’s world revolves around his five children. His relationship with their mother is

complex - but he provides support and has shared custody. He works hard as a welder to

afford his home and it is clear he thinks the effort is worth it.

He tells of the amazing support he has had from other agencies and from Calgary Hous-

ing Company. Without CHC, he says he wouldn’t be able to have a home suitable for his

children.

A room for the girls. A room for the boys. A place for Ojulo and his kids.

A home for a family.

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2017 ANNUAL REPORT

Social HousingSocial housing programs support low-income Calgarians to stay in safe, accessible and affordable housing. It typically supports those who pay more than 30% of their income for housing and/or are at risk of losing their housing. This program provides the deepest level of subsidy for our tenants.

• Rent Geared to Income• Income must be below Core

Needs Income Threshold• Minimum Monthly Rent:

$120

Affordable HousingThe Affordable Housing program provides rental options for Calgar-ians who are able to afford slightly more for rent but who still require rental assistance.

• Programs include both Rent Geared to Income and Fixed Rents

• Income limits apply• Minimum Monthly Rent:

$350

Low End of MarketNear Market units are provided to Calgarians who are close to being able to afford current private market rent levels.

• Rent approx. 10% below Market

• Income must be below Maximum Income Limit (MIL) for eligibility

Rent Supplement The rent supplement program provides rental assistance to Calgarians through a subsidy that allows them to be housed in the open market. CHC partners with a number of private and not-for-profit landlords in allocating potential homes to Calgarians through this program. One example of this type of program is a partnership with the Brenda Strafford Society to support wom-en and children fleeing domestic violence.

2017 program information::• 2,214: Average number of

households receiving sup-plements each month

• $733: Average rent supple-ment received per house-hold

• $19.5M: Total rent supple-ment funds distributed

CalHome (Calgary Housing Company) OwnedProvincial Fixed Subsidy 11 Properties 592 Units Provincial Interest Subsidy

CalHome Owned 29 Properties 1,138 Units No Subsidy

Public Non-Profit 10 Properties 207 Units Province Funds Operating Deficits

City-OwnedCity of Calgary Partnership 26 Properties 1,128 Units Operating Surplus returned to City

Corporate Properties Residential 9 Properties 246 Units Operating Surplus returned to City

City-Owned Community Housing 20 Properties 1,059 Units Shared funding of Operating Deficits Provincial (90%) City (10%)

Provincially-OwnedProvincially-Owned Community Housing 100 Properties 2,704 Units Province Funds Operating Deficits

Portfolios, Properties & Programs

Programs

Portfolios & PropertiesIn 2017, there was a change in the Calgary Housing Company portfolio structure. The Federal Fixed (AFF) and Provincial Fixed (BPF) portfolios were amalgamated as a result of a change at the federal level where now all fixed mortgage subsidy is managed

through the Province. As such CHC no longer has a Federal Fixed portfolio. With the merger of the AFF and the BPF port-folios, CHC has gone from nine to seven portfolios.

This change is significant because, as oper-ating agreements expire, the portfolios will continue to be amalgamated until there will be only one CHC portfolio - Cal-home-owned, and one City portfolio - City Partnership.

Calgary Housing Company provides four different programs designed to meet the needs of low- and mod-erate-income Calgarians in need of affordable housing. In addition, we work with a number of partners and collaboratively with organizations across Calgary on wide ranging issues from child care to recreation access to poverty reduction to help achieve positive housing outcomes and overall well-being.

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ANNUAL REPORT 2017

Priority 1: Deliver Quality Customer Service

Strategic Priorities

Objective 1Take a client-centric approach to service delivery.

Objective 2Build a positive working relationship among staff and tenants.

Objective 3Foster opportunities that contribute to well-being and indepen-dence for individual clients as well as community well-being.

It says it above: Calgary Housing Company’s number one priority is to deliver quality customer service. In 2017 a wide range of customer service initiatives were undertaken including improvements to internal processes, new communications tools and, perhaps most importantly, the launch of the Tenant Advisory Group to ensure tenant perspectives and priorities are heard and considered. Highlights from 2017 include:

• In order to increase client-focus, incorporate tenant perspectives and provide an opportunity for tenant participation, the Tenant Ad-visory Group (TAG) was created in 2017. After a period of promo-tion and attracting interested tenants, the TAG met for the first time in March. Members gather regularly to discuss and provide feedback and advice on issues and service gaps within CHC properties such as improving safety at CHC properties; opportunities for tenant and community events; policies and procedures at CHC properties; and other opportunities to improve the tenant experience.

• A variety of initiatives promoting home ownership and seniors housing were undertaken thorugh 2017. More than 90 tenant house-holds moved on to home ownership during the year.

• A new CHC website was launched as part of the communication strategy to enhance available information for tenants and applications.

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2017 ANNUAL REPORT

Very dissatisfied Somewhat dissatisfied Neutral Somewhat Satisfied Very Satisfied

Satisfaction with most recent contact with CHC.

Satisfaction with service provided by CHC.

Are you proud to callyour unit home?

77% Satis�ed

Areas for Improvement

Pride in HomeAreas of Positive Response

83% Satis�ed

86% Satis�ed

79% Satis�ed

57% Satis�ed

60% Satis�ed

Being treated with respect and being listened to.

Hours available to contact someone at CHC.

Overall condition of your building.

Overall condition of your home.

0 10 20 30 40 50 60 70 80 90 100

5% 15% 31% 46%

5% 7% 24% 59%

6% 20% 66%

6% 11% 25% 54%

Yes87%

No11%

0 10 20 30 40 50 60 70 80 90 100

6% 12% 26% 28% 29%

6% 11% 24% 29% 31%

Select Results from 2017 Tenant Satisfaction Survey

• CHC initiated, supported or participated in a wide range of community-building activities throughout the year including: Wildflower Art, BBQ’s, basketball education, power play, Cedar Court community hub, Pineridge engagement through the Home Program, and This is My Neighbourhood.

• CHC worked with The City and the Government of Alberta to open a child care centre at Lumino South, a City-owned affordable housing property in Manchester. Thornhill Child Care Society operates the centre, serving 84 children including CHC tenants and families from the surrounding area. Provincial fund-ing caps fees at $25 per day. A celebration and grand opening was held in October.

• Eighteen CHC tenants graduated from the RentSmart Pro-gram, an initiative that provides education and support to both landlords and tenants with the goal of creating and maintaining successful tenancies for individuals and families.

• Bridging the Gap, a joint partnership program with the Calgary Homeless Foundation was piloted in 2017 and resulted in the transition of nine clients from supportive housing programs to independent affordable rental housing at CHC.

• In July, Carya Society signed on to partner with CHC on the redevelopment of the community space in East Village Place. This followed community consultation on the space after CHC’s acquisition of the 163-unit residential property in 2016.

• A partnership was launched with Habitat for Humanity Southern Alberta to raise awareness about Habitat’s programs and specific opportunities for CHC-tenant families ready to transition into homeownership.

• CHC tenants participated in The Foundations for Home Community Development Program (or The Home Program) created by The City’s Affordable Housing Team with Community Services, service providers, housing providers, and other groups. The Home Program includes a unique series of projects designed to support affordable housing residents and make lives better.

“We wish to express our heartfelt gratitude to you for a pleasant stay we’ve had in our beautiful unit for the past 10 years. We moved to Canada as refugees with two small children, zero English and zero money in our pockets. It was very frustrating and difficult to start a completely fresh new life in a new cold country. But you guys kept us warm, always responding promptly to problems at the house and adjusting the rent to our income and we can’t thank you enough.”

- Thank-you card from a CHC tenant

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1: Neighbour Day fun at a CHC property. 2: A staff member from Thornhill Child Care reads to youngsters at the Grand Opening celebration of the Lumino Daycare in October.

Total less than 100% due to some participants leaving response blank.

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ANNUAL REPORT 2017

Priority 2: Increase Financial Sustainability including the Optimization of Assets


Objective 1Develop and implement an asset management program.

Objective 2Implement initiatives to increase financial sustainability.

Effective financial management is critical for Calgary Housing Company to continue to provide homes for Calgarians in need of assistance. Given the challenges of aging infrastructure, uncertain funding, and the operational demands of a large and complex system, the sustainability of CHC’s operations is a primary focus. Central to this effort is the execution of a coordinated asset man-agement program. Key developments in 2017 included:

• The Sustainability Project, launched in 2016, remains a prior-ity to move CHC to a more sustainable organization provid-ing quality homes for our tenants. Program achievements in 2017 included:

- Building Condition Assessments and process- Vacancy Task Force- Development of Financial Pro Formas- Portfolio Review Committee

• A capital budget of approximately $22.1M was planned for 2017 with 96% of the budgeted spend completed by year end. The budget represented 300 projects ranging from unit upgrades to the complete regeneration of several properties. (See more on regeneration projects on Page 21)

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2017 ANNUAL REPORT

“Thank you so much for your kind help. It has really been life changing for my son and I - to help us break the vicious cycle of poverty and homelessness we’ve been in since the oilfield shut down.”

- Thank you note from a Tenant

• For the first time in over five years, new properties were opened adding 72 units of affordable housing at three properties developed by The City of Calgary. (See more on Page 21)

• In August, CHC provided an outline of Asset Management services that could be provided to the Province through an operating agreement.

• A unit standard guideline including specifications specific to the components within a unit has been established. These specifications are being applied in unit repair and renovations across the CHC-managed portfolios.

• CHC received $3.3M in lifecycle maintenance funding from The City to address high-priority requirements resulting from age-related deterioration and a widening funding gap. CHC upgraded 170 City-Owned Community Housing units.

• A Vacancy Task Force was established in May to address the increasing vacancy and revenue loss. Accomplish-ments include: development of building prospectus’ for all

Low End of Market properties; dedicated advertising bud-get and tactics (CHC website advertising, signs, referral program) developed; and weekly monitoring of vacancy revenue loss.

• CHC increased revenue by leasing commercial space on select CHC-owned or managed properties. This includes the leasing of space to a subsidized daycare provider at Lu-mino and entering into a letter of intent with a non-profit services provider for the leasing of the hub space at East Village Place.

• A joint committee between Administration and the Audit and Risk Management Committee members was estab-lished to create an investment policy to define the parame-ters on allowable investments.

• CHC prepared and brought forward a notice of motion to Council which approved the cancellation of the 2017 municipal portion of property taxes on CHC properties and on the leased space for CHC’s corporate office. Advo-cacy efforts continue for tax exemption through the City Charter negotiations.

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1: The Mission property following redevelopment. 2: A youngster at the new daycare opened at CHC’s Lumino property. 3: The redeveloped Bankview property. 4: The Killarney property with redevelopment in process. 5: MLA for Calgary Buffalo, and Minister of Justice and Solicitor General Kathleen Ganley, Project Manager Richard Green, CHC President Sarah Woodgate, and Mayor Naheed Nenshi at the Mission redevelopment celebration.

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ANNUAL REPORT 2017

Priority 3: Strengthen Relationships with Key Stakeholders


Objective 1Work with government and stakeholders to increase awareness and support for a more sustainable affordable housing delivery model to better serve clients.

Objective 2Enhance working relationships within The City and Province to create synergies and to clarify Calgary Housing Company’s role and governance.

Partnerships, collaboration, and connections in the community are critical for CHC to fulfill its mandate. CHC works with more than one hundred City partners, community agencies and pro-grams on the delivery of services, community efforts to combat poverty, initiatives for special needs populations, and effective solutions to house those in need. Highlights from our key rela-tionships in 2017 included:

• In November, 2017 CHC welcomed the release of the Federal Government’s National Housing Strategy and the govern-ment’s announcement of $40B in funding over the next 10 years.

• CHC began its particiipation in the implementation of 2016’s Provincial Affordable Housing Strategy with representation on both the Policy and Legislation Working Group and the Research and Data Working Group. CHC also meets quar-terly with the Province to focus on issues and opportunities related to housing.

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2017 ANNUAL REPORT

• Calgary Housing contributed to the Community Housing Affordability Collective’s (CHAC) work to establish and advocate with a common voice for housing affordability on behalf of Calgary’s housing sector. CHAC’s work in 2017 included advocacy and influence for several major housing initiatives, including: the Federal Government’s National Housing Strategy, the Provincial Affordable Housing Strategy, the non-market Real Estate Strategy, the Community Organization Property Tax Exemption Regulation (COPTER) and many other initiatives.

• The new Alberta Social Housing Accommodation Regula-tions came into effect on January 1, 2018. To facilitate this change, the revisions were assessed and various internal changes were implemented.

• CHC’s role in development was clarified to focus on housing operations while the City of Calgary Affordable Housing team focuses on new development.

• CHC worked with City partners including Mayor Nenshi to seek a more appropriate budget from the Province in order to properly maintain Provincial and City-Owned properties.

• CHC was a sponsor of the 2017 Opening Doors confer-ence held in conjunction with National Housing Day.

“Not only because people deserve and need a safe and decent place to live, but because investments in affordable housing are investments in more vibrant neighbourhoods, they’re investments in peo-ple being able to participate in the community more and they’re investments in reducing our needs for emergency services…. So all of those things put together mean that affordable housing is one of the best investments any city can make.”

- Mayor Naheed Nenshi

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1: CHC President Sarah Woodgate, MLA for Calgary Northwest Sandra Jensen, Mayor Naheed Nenshi and Councilor Gian-Carlo Carra at the opening of the new Bridgeland property. 2: Natasha Cole and Duane Gillissie of the SoRCE resource centre provided tours to CHC staff in October as CHC explored a pilot partnership with the agency. 3: Mural at the Lumino property in the community of Manchester. 4: Strategic Business Analyst Meaghan Bell along with Laura Dickson, Director of Families from Habitat for Humanity and Jayda Wiebe from Habitat.

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ANNUAL REPORT 2017

Priority 4: Strive for Organizational Excellence


Objective 1Increase organizational efficiency and effectiveness.

Objective 2Develop Calgary Housing Company as a leading affordable hous-ing provider.

Objective 3Build a positive organizational culture that engages employees.

Continuous improvement - clearly defined, targeted and actively managed. These are the principles behind CHC’s ongoing efforts to drive organizational excellence. Organizational improvements translate directly into a better customer experience. Staff devel-opment and engagement enhances capability, performance, and morale improving our ability to deliver service to applicants and tenants. Highlights from 2017:

• CHC Property Manager Pirjo Lorenson was named Property Manager of the Year by the Calgary Residential Rental Asso-ciation at the annual CRRA Awards Gala on June 8, 2017. Lo-renson, a CHC employee for more than 35 years, exemplifies the character, competence, commitment, and collaboration that define the corporate culture at CHC and The City.

• Tenant Liaison Raymond Njiku was one of 30 Calgary service providers nominated for a Hope Award. The awards were handed out June 1 by Aspen Family & Community Network to celebrate partner agencies funders, donors, volunteers and others who ‘unlock potential and transform the lives’ of the individuals they support.

1 2

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2017 ANNUAL REPORT

• CHC’s enterprise resource planning (ERP) software (JD Edwards) is being replaced. A Request for Proposal (RFP) was created, posted and evaluated. Technical requirements and process improvements have been collected.

• Continuous improvement remained a focus with progress including:

- Over 100 processes assessed and improvement op-portunities identified

- Procure-to-Pay and Policies were developed and implemented

- Tender Review Committee was established

• CHC’s ongoing commitment to staff development contin-ued with creation of Professional Development Guide-lines as well as various activities including staff pursuing accreditation in:

- Chartered Institute of Housing (CIH) - Certified Property Manager (CPM) - Accredited Residential Manager (ARM)- Payroll Compliance Practitioner (PCP)

• After approving the implementation of the COSO 2013 internal controls framework in 2016, CHC performed an assessment of internal controls based on the principles of the framework. The assessment has allowed CHC to iden-tify and understand areas of strength and opportunities for improvement.

• The City of Calgary’s new Code of Conduct was rolled out to all staff.

• All managers and coordinators received Results Based Accountability training, The City’s performance measure methodology. New measures continue to be developed. Two examples are procurement cycle times and major project progress.

• There was a continued focus on developing a safety culture at CHC with improvements made in several areas includ-ing training courses for contractor management staff, a standardized safety orientation process for new employees, and the Working Alone Policy and SafetyLine Application procedure that was developed and shared with all staff.

“We manage a lot of complexity at CHC, so our work to improve processes can have a big impact on how clients are served. Our work on Records Management this year will help us serve clients faster and more efficiently as we implement new processes. For example, people re-applying for housing won’t have to wait as long while records are retrieved… that was one of my drives, to find efficiencies in these processes and make a difference for the people we help.”

- Monica MacDougall, Coordinator of Administrative Services

4

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1: Property Manager of the Year Pirjo Lorenson. 2: CHC staff travelled to Edmonton to volunteer at a Habitat for Humanity project. 3: Safety Champion, Maintenance Administrator Crystal Stirton. 4: CHC staff joined by family and friends to participate in 2017 Pride Parade. 5: Tenant Liaison Raymond Njiku with Anna Chpilevaia of Aspen Family and Community Network - Anna was one of the people who nominated Ray for his award.

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ANNUAL REPORT 2017

Major Events

In late February, a van belonging to a locksmith contractor was stolen. The van con-tained keymaking equipment and information that could have been used to create keys for CHC-managed properties throughout the City.

Upon discovery of the situation an emergency response was initiated to ensure the safety and security of all CHC tenants with rapid rekeying of critical locks, increased security and monitoring, and a variety of tenant awareness initiatives. These steps were achieved with significant help from City colleagues at Calgary Emergency Management Agency (CEMA), Fire, Calgary Police Service (CPS), Calgary Community Standards, Calgary Neighbourhoods, 311, Law, Customer Service and Communications and others.

Following the immediate critical response, it was determined that all locks — residen-tial and non-residential — would have to be rekeyed in order to ensure tenant security. Within 30 days, more than 10,700 residential locks at 6,698 homes were rekeyed. An additional 1,663 non-residential locks (mechanical rooms, resource rooms, offices, etc.) were completed in another 28 days.

While the rekey effort was underway, key management processes and policies were reviewed and an interim policy was developed for distribution and tracking of keys. Fur-ther policies and procedures to ensure tenant safety and security are in development. A new, modern, computerized master-key system has been put in place. This system is in alignment with Corporate Security’s processes and addresses a number of issues raised by the original security incident and the challenges of the rekeying effort.

• Contractor van with equipment and information stolen poten-tially compromising the security of virtually all CHC tenants

• Immediate response in collab-oration with City partners to inform tenants and take critical steps to ensure security

• 12,000+ locks rekeyed – 30 days for residential, 28 days addition-al for non-residential

• Processes and policies evaluated and changed or under review

• New computerized master-key system in place

Security Event - Key Contractor Van Stolen

The health and safety of our tenants is the top priority for Calgary Hous-ing Company. A challenge to this focus is the long-term underfunding of maintenance and infrastructure for Provincially-funded properties managed by CHC. The majority of these properties are 25-40 years old and they have now developed a backlog of necessary maintenance.

In 2017, the reality of this substantial maintenance deficit became apparent as health and safety inspections led to closure orders from Alberta Health Services at one property. At the same time, CHC was forced to shutter properties as they became

vacant because operating funds were not available to address the signifi-cant maintenance requirements that occur at unit turnover.

Fortunately, the Province came forward with emergency funding to address some of the units put on hold as well as the needs at the Ramsay property that had received the closure orders.

The overall maintenance deficit for Provincially-owned properties is estimated to be over $75M. CHC has been in continuing discussions with the Province to develop long-term solutions to this challenge.

Unit Closures

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2017 ANNUAL REPORT

New Properties added

Existing properties Regenerated

2017 was an exciting year for affordable housing in Calgary as three new properties were opened, adding 72 new homes to be managed by Calgary Housing Company. Developed by The City of Calgary, these were the first new units added to the City-owned inventory managed by CHC in more than five years.

Crescent Heights – An event was held May 17 to announce that con-struction is complete on Calgary’s newest affordable housing develop-ment in Crescent Heights. The three-story, 16-unit multi-residential property is certified silver by Built Green Canada and features four studio units, four one-bedroom units, four two-bedroom units and four three-bedroom units. Two units are barrier free, and one is built to accommodate the visually impaired.

Bridgeland – On July 19, Calgary Housing celebrated the official opening of an affordable housing development in the community of Bridgeland. The second City affordable housing development to open this year, the 24 residence stacked-townhome development features four studio, eight one-bedroom, four two-bedroom and eight three-bedroom family homes. Three homes are barrier free, and one is built to accommodate the visually impaired.

Kingsland – A dedication and community celebration was held on September 9 for a new affordable housing development in the com-munity of Kingsland, the third new City of Calgary affordable housing development to open this year. Named Clarke Court in honour of Ann Clarke, long-serving member of the Kingsland Community Association, this new development will provide affordable homes to 32 individuals and families.

In addition to new builds, in 2017 CHC also celebrated the regenera-tion of existing properties to extend their usable life and enhance the properties for tenants and the community.

Mission – On July 28, CHC celebrated the regeneration of a 27-unit affordable housing property in the Southwest community of Mission. Mission 1 is a provincially owned property that provides homes to Calgarians with onsite support services, through LAMDA, for people with severe & persistent mental illness. Built in 1993, this three-story, 30-unit building provides housing to social-housing tenants. Over $1M was invested for exterior envelope redevelopment. This will not only extend the life expectancy over the next 25+ years but has also achieved increased energy efficiency and common room upgrades.

Bankview – A celebration was held May 26 for the redevelopment of a 26-unit affordable housing property in the Southwest community of Bankview. Originally constructed in 1983, the Bankview property re-cently underwent interior and exterior renovations that will extend its usable life by at least 25-30 years. The redevelopment of the Bankview property cost approximately $1.5M with $750,000 provided by the Municipal Sustainability Fund – a joint municipal-provincial arrange-ment. Additional funding was provided from CHC’s capital program.

Crescent Heights

Bridgeland

Kingsland

Mission

Bankview

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ANNUAL REPORT 2017

Affordable DaycareAn exciting day in October at the grand opening of a new daycare integrated into

CHC’s Lumino property. The daycare, operated by CHC partner Thornhill Child Care

Centre, provides 84 spaces of childcare with some available for as little as $25/day as

a result of Provincial funding.

Sara and her son Jayce are among the clients at the daycare - Sara spoke at the grand

opening, sharing how she was now able to pursue employment that would not have

been possible without the affordable daycare.

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2017 ANNUAL REPORT

Challenges & Opportunities

Meaningful Tenant EngagementCHC has had a longstanding focus on providing quality service to our tenants both in the core delivery of housing as well as the range of support services that surround housing.

In 2017, progress was made on several initiatives built on the idea that tenant perspectives should play a significant role in determining priorities for tenant service. The Tenant Advisory Group (TAG) initiative and the first ever Tenant Satisfaction Sur-vey are primary examples of this approach.

The opportunity for CHC will be to ensure that such engage-ment continues and informs decision making and continuous improvement for all facets of service delivery including the evaluation of existing practices, services, and supports.

Efficiencies & Opportunities for Sustainability In recent years, CHC has had to aggressively pursue efficiencies and opportunities in response to difficult economic circumstanc-es and challenges such as deteriorating building conditions and reduced government investment. This focus on sustainability has influenced the organization’s culture and strategic focus and made sustainability a priority.

CHC must continue to build on this focus and ensure opera-tional efficiency while maximizing value for our clients. It is also critical that CHC pursues opportunities such as applications for property tax exemptions and work plans that prioritize initiatives such as a responsive leasing strategy, to ensure revenue-generat-ing Low End of Market units are managed effectively.

Seek New Partnership OpportuntiesCHC has focused extensively on developing and maintaining partnerships with agencies to support both stability in housing and positive movement through the housing continuum. In 2017, CHC continued to build on this strategic focus through partnerships including the Opportunities for Home Ownership Program, a focused initiative with Habitat for Humanity, and placement of individuals moving from supportive to indepen-dent housing through the Bridging the Gap Program.

In 2018, CHC will continue to seek new opportunities for part-nership that add value for our tenants by supporting positive outcomes for them in the community.

Opportunities Risks/Challenges

Funding UncertaintyCalgary Housing Company’s funding uncertainty risk continues to trend high since last year. This risk is primarily affecting the provincially-funded social housing portfolios that CHC is oper-ating on behalf of The City and the Province. CHC is faced with higher operating costs, lower rent revenues and flatlined Provin-cial operating subsidy that has created a significant funding gap leading to unit closures.

CHC has requested an increase in operating funding of $10 million and capital funding of $6.1 million from the Province for 2018, to address these risks and prevent further unit holds of provincially funded housing. A long term sustainable delivery model is also under discussion.

Rent Revenue RiskCHC’s rent revenue risk has increased due to the economic downturn and the impact it has had on residential vacancy rates. As well, CHC is receiving lower rent rates from rent-geared-to-income (RGI) tenants in the social housing portfolios due to fall-ing incomes and as a result of changes to Provincial regulations that prioritize lower income households which pay less rent.

Reserve Fund RiskReserve fund risk is also trending high due to ageing housing stock and not generating sufficient surplus to fund reserves and invest in required upgrades.

Condition of Third-Party AssetsThe condition of third party assets is a risk that affects mainly the heavily subsidized portfolios, such as social housing. In the fall of 2017, nearly 10 per cent (245 units) of the provincial-ly-owned social housing units were on hold because sufficient operating funds were not available to prepare units for occu-pancy and ensure that the units met the minimum housing and health standards. CHC is working towards sustainability planning, building condition assessments and asset management for the City-owned housing portfolio in preparation of the ex-piry of federal provincial operating agreements. However, these programs are not yet in place for the provincially owned social housing units.

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ANNUAL REPORT 2017

A step toward the futureFelicia has a plan. She and her husband are working to build a future that, they hope,

will include owning a home where their daughter Belle and her brother Dante will

grow up.

Their CHC home has provided stability and an affordable place that is helping them

to overcome some of the roadblocks to their future.

“Calgary Housing was our chance to get out of the cycle that ran over and over and

over,” she says. Today, they are building their financial plan along with a nest egg and

considering the Attainable Homes program as the next step to a brighter future.

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2017 ANNUAL REPORT

Financial Statements

Calhome Properties Ltd. Operating as ‘Calgary Housing Company’ December 31, 2017

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ANNUAL REPORT 2017

Deloitte LLP 700, 850 - 2 Street SW Calgary, AB T2P 0R8 Canada Tel: (403) 267-1700 Fax: (403) 213-5791 www.deloitte.ca

Page | 2

INDEPENDENT AUDITOR'S REPORT

To the Directors of Calhome Properties Ltd.,

We have audited the accompanying financial statements of Calhome Properties Ltd., which comprise the statement of financial position as at December 31, 2017, and the statements of operations, changes in net debt and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Calhome Properties Ltd. as at December 31, 2017, and the results of its operations, changes in its net debt and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

(To be signed Deloitte LLP)

Chartered Professional Accountants March 23, 2018 Calgary, Canada

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2017 ANNUAL REPORT

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ANNUAL REPORT 2017

Calhome Properties Ltd. Operating as ‘Calgary Housing Company’

Page | 4

STATEMENT OF OPERATIONS (Expressed in Thousands of Dollars)

For the year ended December 31, 2017

BUDGET 2017 2016 REVENUE Rent revenue $ 50,654 $ 47,951 $ 48,040 Government transfers Shared cost agreements 13,806 13,893 13,938 Restricted funds (Note 11) 9,225 6,439 5,589 Debt interest rebate 311 237 239 Rent supplement funding 19,200 19,435 18,817 Interest income 344 456 318 Insurance recoveries (Note 12) - 423 893 Miscellaneous 1,262 1,393 1,190

94,802 90,227 89,024

EXPENSES Administration 3,261 3,052 2,662 Salaries and benefits 20,381 18,781 17,115 Amortization of tangible capital assets 3,453 3,030 3,086 Debt servicing 469 454 518 Maintenance 20,024 19,650 16,022 Property operations 9,773 8,406 8,752 Rent supplement 18,171 18,603 18,250 Taxes and leases 3,444 1,975 3,278 Utilities 11,500 10,689 9,500 Insurance (Note 12) - 293 402 Restricted expenses - 249 153

90,476 85,182 79,738

EXCESS OF REVENUE OVER EXPENSES 4,326 5,045 9,286 BEFORE OTHER ITEMS

OTHER ITEMS Return to the City of Calgary (242) (339) (2,054) City of Calgary surplus retained (Note 11) (410) (570) - Loss on asset disposal - (346) (55)

(652) (1,255) (2,109)

SURPLUS $ 3,674 $ 3,790 $ 7,177

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2017 ANNUAL REPORT


Page | 5

STATEMENT OF CASH FLOWS (Expressed in Thousands of Dollars)


2017 2016

NET INFLOW/(OUTFLOW) OF CASH RELATED TO FOLLOWING ACTIVITIES:

OPERATING ACTIVITIES Surplus $ 3,790 $ 7,177 Non-cash items: Amortization of tangible capital assets 3,030 3,086 Loss on asset disposal 346 55 Non-cash restricted revenue - (3,850) Change in non-cash working capital (Note 14) 2,869 7,519

10,035 13,987

CAPITAL ACTIVITIES Addition of tangible capital assets (918) (12,998) Proceeds on disposal of tangible capital assets 45 - Proceeds on disposal of assets held for sale - 750

(873) (12,248)

FINANCING AND INVESTING ACTIVITIES Issuance of long term debt - 5,784 Repayment of long term debt (3,875) (4,514)

(3,875) 1,270

NET INCREASE IN CASH DURING THE YEAR 5,287

3,009

CASH, BEGINNING OF YEAR 28,896 25,887

CASH, END OF YEAR (Note 3) $ 34,183 $ 28,896

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ANNUAL REPORT 2017


Page | 6

STATEMENT OF CHANGE IN NET DEBT (Expressed in Thousands of Dollars)

For the year ended December 31, 2017 BUDGET 2017 2016

ANNUAL SURPLUS $ 3,674 $ 3,790 $ 7,177

TANGIBLE CAPITAL ASSETS Additions (6,803) (918) (12,998) Loss on asset disposal - 346 55 Proceeds on disposal of tangible capital assets - 45 - Amortization of tangible capital assets 3,453 3,030 3,086 Non-cash restricted revenue - - (3,850)

(3,350) 2,503 (13,707)

OTHERS Decrease in prepaid expenses - (12) (8)

- (12) (8)

INCREASE/(DECREASE) IN NET DEBT 324 6,281 (6,538)

NET DEBT, BEGINNING BALANCE 2,663 9,750 3,212

NET DEBT, ENDING BALANCE $ 2,339 $ 3,469 $ 9,750

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2017 ANNUAL REPORT


NOTES TO FINANCIAL STATEMENTS (Expressed in thousands of Dollars)


Page | 7

1. NATURE OF THE BUSINESS Calhome Properties Ltd. [the "Company"], a private not-for-profit corporation, is wholly-owned by the City of Calgary [the "City"] and was incorporated June 16, 1978 under the Business Corporations Act of The Province of Alberta. As at April 1, 2001, the Company assumed the trade name of Calgary Housing Company [“CHC”]. The Company delivers safe and affordable housing solutions to Calgarians under agreements with The City and The Province of Alberta [the "Province"], which provide subsidies for certain properties. Since its inception, the Company has assumed ownership and/or management of Portfolios under different agreements. The following is a brief description of the portfolios: CHC Provincial Fixed Subsidy Portfolio This portfolio consists of 592 units [2016 – 901] owned and managed by the Company. The Province subsidizes the interest payments on the mortgages of these properties so that the effective rate of interest to the Company is 2% per annum. In the event the maximum federal assistance received (debt interest rebate) exceeds the actual required, the excess federal assistance received shall be refundable to CMHC. The net surplus and/or losses are the responsibility of the Company. During 2017, the Federal Fixed Subsidy portfolio (previously subsidized by CMHC), merged with the Provincial Fixed Subsidy portfolio as a result of a reorganization where the subsidy for both portfolios is received by the Province. The 2016 figures were reclassified to reflect this transfer in order to provide an appropriate basis for comparative purposes. In addition, due to the expiry of fixed subsidy agreements during 2017, 311 units were moved from this portfolio to the Calhome Owned portfolio. CHC Public Non-Profit Portfolio This portfolio consists of 207 units [2016 – 210] owned by the Company. The Provincial government subsidizes any operating deficits with the exception of the Lincoln Park Fanning Centre which receives a subsidy in an amount required to reduce debt financing costs to 2% per annum.

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Page | 8

Calhome Owned Portfolio This portfolio is comprised of 1,138 units [2016 – 824] owned by the Company with no direct subsidy from any governmental agency. Corporate Properties Residential Units Portfolio This portfolio consists of 246 units [2016 – 354] owned by the City of Calgary. The Company manages these housing units on behalf of The City. This portfolio receives no subsidy and the net operating results are the responsibility of The City. City of Calgary Partnership Portfolio This portfolio consists of 1,128 units [2016 – 1,085] owned by the City of Calgary. The Company manages a variety of affordable housing units on behalf of The City. The Company is authorized to maintain a replacement reserve for this portfolio. This portfolio receives no subsidy. Historically, the portfolio has returned surpluses to The City and deficits have been funded by The City. City Owned Community Housing Portfolio This portfolio consists of 1,059 units [2016 – 1,048] owned by The City and managed by the Company. Any operating surpluses or losses are refunded or subsidized 90%, and 10% respectively by provincial and municipal governments under joint agreement. Provincially Owned Community Housing Portfolio This portfolio consists of 2,704 units [2016 – 2,721] owned by the Province of Alberta. The Company assumed the management of this portfolio in 2001. The Province subsidizes 100% of the deficits of this portfolio. Rent Supplement Portfolio

This portfolio is a provincial government program, administered by the Company, to provide rental subsidies paid to the private landlords and tenants. The Company receives reimbursement of administration fees incurred for this program at the rate of $31 per unit per month.

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Page | 9

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company are prepared in accordance with public sector accounting standards (“PSAS”) for local government organizations as established by the Public Sector Accounting Board of the Chartered Professional Accountants Canada. Basis of Accounting The financial statements are prepared using the accrual basis of accounting. The accrual basis of accounting records revenue as it is earned and measurable. Expenses are recognized as they are incurred and measurable based upon receipt of goods and services and/or the legal obligation to pay. Revenue Rents charged to tenants are based on market or below-market rents outlined in the agreements with The Province and The City and are recorded on an accrual basis. Rental revenue includes rents and other sundry revenues. Government transfers, contributions and other amounts are received from third parties pursuant to legislation, regulation or agreement and may only be used for certain programs, in the completion of specific work, or for the purchase of tangible capital assets. Revenue is recognized in the period when the related expenses are incurred, services performed or the tangible capital assets are acquired. Government transfers and earnings thereon restricted by agreement or legislation are accounted for as deferred grants until used for the purpose specified. Non-Financial Assets Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They generally have useful lives extending beyond the current year. Non-financial assets include tangible capital assets and prepaid expenses. The change in non-financial assets during the year, together with the excess of revenues over expenditures, provides the information presented in the Statement of Change in Net Debt for the year.

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Page | 10

2. SIGNIFICANT ACCOUNTING POLICIES (Continued) [i] Tangible Capital Assets Tangible capital assets are recorded at historical cost, which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. The cost, less residual value, of the tangible capital assets is amortized on a straight-line basis over the estimated useful life as follows:

Assets under construction are not amortized until the asset is available for productive use. [ii] Contributions of Tangible Capital Assets Tangible capital assets received as contribution are recorded at fair value at the date of receipt in restricted revenue. Revenue producing properties are periodically reviewed for impairment. If it is determined that impairment exists, the carrying value of the revenue producing properties is reduced to their estimated fair value, as determined by the third party appraisals. Restricted Replacement Reserve The Replacement Reserve is funded by a charge against accumulated surplus. The Province, The City and CHC determine an annual provision for the Replacement Reserve for certain properties. Disposition of the reserve, other than for replacement costs, is subject to the approval or direction of the Province, The City and CHC administration (Notes 3 and 10).

YEARSLand -Buildings 50-75Building Betterments 5-75Leasehold Improvements 5-10Systems 5Furniture 20Vehicles 10

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Page | 11

2. SIGNIFICANT ACCOUNTING POLICIES (Continued) General and Administration General and administration expenditures are allocated to properties using a hybrid approach encompassing direct allocation and ratio allocation. Expenditures directly related to certain properties are directly allocated to those properties. Expenditures relating to multiple properties are allocated based on the ratio of the number of units in each property to the total number of units managed by the Company. Use of Estimates The financial statements are prepared in accordance with PSAS, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the statement of financial position date and the reported amounts of revenue and expenses during the year. Significant estimates include the provision for asset impairment, useful lives of tangible capital assets, accrued liabilities and allowance for doubtful accounts. Actual results could differ from those estimates. Goods and Services Tax The Company has been granted the status of a municipality for purposes of the Goods and Services Tax and receives the municipal rebate on all the Goods and Services Tax paid. Future Accounting Pronouncements [i] Standards effective beginning on or after April 1, 2017 Assets Assets (“PS 3210”) provides guidance for applying the definition of assets and establishes general disclosure standards for assets. Disclosure information about the major categories of assets that are not recognized is required. When an asset is not recognized because a reasonable estimate cannot be made, the reason(s) for this should be disclosed.

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Page | 12

2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Contingent Assets Contingent Assets (“PS 3320”) defines and establishes disclosure on contingent assets. Disclosure of information about contingent assets is required when the occurrence of the confirming future event is likely. Contractual Rights Contractual Rights (“PS 3380”) defines and establishes disclosure standards on contractual rights. Disclosure of the nature, extent, and timing of any contractual rights is required. Related Party Transactions Related Party Transactions (“PS 2200”) defines a related party and establishes disclosures required for related party transactions. Disclosure of information about related party transactions and the relationship underlying them is required when they have occurred at a value different from that which would have been arrived at if the parties were unrelated, and they have, or could have, a material financial effect on the financial statements. Inter-entity Transactions Inter-entity Transactions (“PS 3420”) specifically addresses the reporting of transactions between entities controlled by the government’s reporting entity from both a provider and recipient perspective. Disclosure of this information is required whether or not the transaction is given accounting recognition. [ii] Standards effective beginning on or after April 1, 2018 Restructuring Transactions Restructuring Transactions (“PS 3430”) establishes how to record assets, liabilities, revenues, and expenses related to restructuring transactions as well as disclosure requirements for the recipient and transferor.

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Page | 13

3. CASH The Company holds bank accounts in conjunction with The City to maximize interest earned on the cash balances. The cash held at The City is available for use in the Company's operations. Included in cash is as follows:

4. RENT SUPPLEMENT ADVANCE The Rent Supplement Portfolio operates on the basis of the Province reimbursing the Company for the rental subsidies paid to private landlords and tenants, and an administration fee. All payments to landlords and tenants are reported as expenses and all rent supplement payments received by the Company from the Province are reported as rent supplement revenue. The Province provided the Company with a $4,255 operational cash advance in 2012. This advance would be used to pay rental subsidies to private landlords and tenants in the event that the Province decides to discontinue the rent supplement program.

2017 2016$ $

RestrictedTenants' security deposits 1,067 1,089 Rent supplement fund advance (Note 4) 4,255 4,255 Restricted replacement reserve 6,583 6,279 Deferred capital contributions (Note 10) 5,409 5,409 Restricted funding 10,405 8,480

27,719 25,512

Unrestricted 6,464 3,384 34,183 28,896

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Page | 14

5. MORTGAGES PAYABLE

Mortgages in the amount of $2,684 [2016 - $3,615] are for the fixed subsidy properties. These mortgages have interest rates, before the senior government interest subsidy, between 0.94% and 6.45% per annum [2016 – between 1.46% and 6.45% per annum]. The effective interest rate of the fixed subsidy mortgages to the Company after subsidy payments is averaged 2% per annum over the mortgage term to renewal. The remaining mortgages are in the amount of $9,917 [2016 - $12,861]. The interest rate of these mortgages varies from 1.04% to 4.52% per annum [2016 – between 0.94% and 4.52% per annum]. The mortgages payable schedule is as follows:

Related land and buildings have been pledged as collateral for mortgages payable. The net book value of land and buildings pledged amounts to $69,552 [2016 - $75,166] as at December 31, 2017.

Year $2018 2,5432019 1,3882020 1,0342021 1,023Thereafter 6,613

12,601

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2017 ANNUAL REPORT




Page | 15

6. EMPLOYEE BENEFIT OBLIGATION

The Company does not pay honoraria to its Board members. The employee benefit obligation program is administered by employees of The City, and it represents employees’ vacation and overtime deferred to the future years. As of December 31, 2017, the balance of the employee benefit obligation was $2,041 [2016 - $1,813]. The City employees are members of the Local Authorities Pension Plan (“LAPP”). LAPP is a multi-employer benefit plan. This plan is governed by the Public Sector Pension Plans Act. The LAPP reported a deficiency (extrapolation results of the actuarial valuation) of $0.64 billion in 2016 [2015 - $0.92 billion]. The LAPP requires members and employers to make contributions to the pension plan. Yearly maximum pensionable earning (“YMPE”) contribution rates are shared between members, and the rates for the current period are as follows:

2017 Members' Rate up to YMPE 10.39% Members' Rate over YMPE 14.84% Employers' Rate up to YMPE 11.39% Employers' Rate over YMPE 15.84% The current service contributions by the Company, as reflected in ‘Administration’ and ‘Property Operations’ to the LAPP, were $1,956 [2016 - $1,766]. The current service contributions by the employees allocated to the LAPP were $1,937 [2016 - $1,748].

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Page | 16

7. TANGIBLE CAPITAL ASSETS

8. SHARE CAPITAL The Company is authorized to issue 100 shares with no par value for a maximum consideration of one dollar per share. The shares can be issued only to The City, its agent or successor and are not otherwise transferable. As at December 31, 2017 and 2016, one share was issued.

January 1, 2017 Opening Balance Additions

Disposals / Transfers

December 31, 2017 Closing Balance

Cost $ $ $ $Land 27,957 - - 27,957 Buildings 96,721 - - 96,721 Building Betterments 30,270 1,517 (352) 31,435 Systems 2,273 - - 2,273 Leasehold Improvements 854 - (224) 630 Vehicles 280 150 (40) 390 Furniture 347 - - 347 Work in Progress 1,477 918 (1,667) 728

160,179 2,585 (2,283) 160,481

January 1, 2017 Opening Balance Additions

Disposals / Transfers

December 31, 2017 Closing Balance

Accumulated Amortization $ $ $ $Buildings 49,273 1,887 - 51,160 Building Betterments 5,927 1,004 (100) 6,831 Systems 2,194 31 2,225 Leasehold Improvements 288 66 (115) 239 Vehicles 50 38 (10) 78 Furniture 266 4 - 270

57,998 3,030 (225) 60,803 Net Book Value 102,181 (445) (2,058) 99,678

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9. FINANCIAL INSTRUMENTS Financial instruments consist of cash, rent and other receivables, payable to and receivable from senior government, accounts payable and accrued liabilities, unearned revenue, deferred grants, rent supplement advance, tenants’ security deposits, mortgages payable and employee benefit obligation. The carrying value of these financial instruments approximates their fair value. The estimated fair value approximates the amount for which the financial instruments could currently be exchanged in an arm's length transaction between willing parties who are under no compulsion to act. Certain financial instruments lack an available trading market, therefore fair value amounts should not be interpreted as being necessarily realizable in an immediate settlement of the instrument. Interest Rate Risk Interest rate risk reflects the sensitivity of the Company's financial results and condition to movements in interest rates. Interest rate risk is limited for fixed subsidy properties as the effective interest rate after application of senior government interest subsidies is 2% per annum. Interest rate risk for the remaining mortgages is managed through the staggering of mortgage renewals and is locked in for longer terms through Alberta Capital Finance Authority. Credit Risk The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and receivables. Cash is placed with major financial institutions in conjunction with The City. Concentrations of credit risk with respect to receivables are limited due to the large number of tenants and their dispersion across geographic areas within the City of Calgary.

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10. ACCUMULATED SURPLUS

Accumulated surplus consists of restricted and unrestricted amounts and equity in tangible capital assets as follows:

The operating reserve represents 50% of operating surplus accumulated in 1999 and future years of the Calhome Owned Portfolio to be used to offset operating losses in future years.

Deferred capital contribution represents the restricted capital contributions received from the third parties for a specified purpose, which will be recognized as a revenue or as an increase in equity in tangible capital assets when the related expenditures are incurred.

2017 2016$ $

Accumulated deficit (3,263) (5,377) Restricted replacement reserve 6,583 6,279 Operating Reserve 536 536 Deferred capital contribution 5,409 5,409 Equity in tangible capital assets * 87,077 85,705

96,342 92,552

2017 2016* Equity in Tangible Capital Assets $ $Tangible Capital Assets (Note 7) 160,481 160,179 Accumulated Amortization (Note 7) (60,803) (57,998) Long-term debt (Note 5) (12,601) (16,476)

87,077 85,705

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11. RESTRICTED FUNDS AND RESTRICTED EXPENSES

The Company has received restricted grants from The City and the Province to be used for specific purposes. These funds are recognized as restricted revenue in the period they are used for the purpose specified. In 2017, the Company utilized $6,439 [2016 - $5,589] of restricted grants and recorded the related restricted revenue. The restricted grants provided by the Province have been restricted for capital spending, non-recurring maintenance, carbon monoxide detector installation, energy audits, suite renovations, feasibility study for two new projects, and the woman fleeing violence program. The grants received from the City of Calgary have been restricted for performing suite renovations, building condition assessments, non-recurring maintenance, carbon monoxide detector installation, tree maintenance and new system implementation. In 2017, The Company received approval from the City to retain $570 of the City Partnership surplus in order to address tree maintenance, suite renovations and a fire pump replacement in that portfolio in 2018. 12. INSURANCE RECOVERIES AND INSURANCE EXPENSES

Insurance recoveries represent insurance claims made during the year. Insurance recoveries are recognized as revenue when received, or when reimbursement for the insurance claim has been confirmed by the insurer. Insurance expenses are the costs incurred to pay third party contractors during the year, related to insurance claims. The insurance claims are made by the Company to recover current year insurance expenses, but may be processed during the current year or in the later years.

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13. LEASE COMMITMENTS The Company has commitments for its leased premises and land leases. The approximate future minimum annual lease payments for the next five years are as follows:

Land Office Space Total Year $ $ $ 2018 98 526 624 2019 98 497 595 2020 98 489 587 2021 98 489 587 2022 98 489 587 490 2,490 2,980

In 2017, the Company entered into a new lease agreement for corporate office space. 14. CHANGES IN NON-CASH WORKING CAPITAL

2017 2016$ $

Receivables (1,080) 375 Accounts payable and accrued liabilities 2,616 (681) Unearned revenue (23) (504) Deferred funding 1,925 7,759 Payable to senior government (763) 391 Tenants' security deposits (22) 97 Employee benefit obligation 228 90 Prepaid expenses (12) (8) Increase / (decrease) in non-cash working capital 2,869 7,519

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15. RECLASSIFICATON OF PRIOR YEAR BALANCES Certain comparative figures have been reclassified to adjust the presentation and classification of balances in the prior year’s financial statement presentation to conform to current year presentation. These reclassifications are due to the following:

1. Nine properties were transferred from the Federal Fixed Subsidy portfolio to the Calhome Owned portfolio.

2. Federal Fixed Subsidy portfolio and Provincial Fixed Subsidy portfolio were merged into the Provincial Fixed Subsidy portfolio.

3. The salaries and benefits line item on the Statement of Operations is new in 2017. Salaries and benefits were previously recorded partly under administration, and partly under property operations.

4. Administration and salaries and benefits costs for the rent supplement program have been reclassified under the administration and salaries and benefits lines, previously classified under the rent supplement line.

5. The Company performed a unit reconciliation in 2017 to refine and properly classify the number of physical units in all portfolios. This project will continue in 2018 and future years with the purpose of further solidifying commercial unit counts and reconciling to land titles.

16. APPROVAL OF FINANCIAL STATEMENTS The Board and Management have approved these financial statements.

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“So many helping hands...”Catherine is going to make it.

Twelve years ago, she fled an abusive marriage with her two small sons and little else. She has

struggled with anxiety and poverty and fear - but she and her boys are together, they are safe, and

today they can see a much brighter future. Catherine will soon complete a nursing degree, she has a

great job lined up, and she knows that her now-teenaged sons are doing well.

If anyone has ever earned her way, it is Catherine. But she takes little credit, instead looking to

those who were there to help.

“I wouldn’t be here without all the hands reaching out to help me.”

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2017 ANNUAL REPORT

Corporate OfficeRocky Mountain PlazaSuite 800, 615 Macleod Trail SECalgary, AB T2G 4T8

East District OfficeMarlborough Mall Professional Building320, 433 Marlborough Way NECalgary, AB T2A 5H5

South District OfficeGlenmore & Centre Shopping Centre#18, 6624 Centre St. SECalgary, AB T2H 0C6

West District OfficeBraithwaite Boyle Centre1701 Centre St. NWCalgary, AB T2E 8A4

All Locations(587) 390-1200

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Calgary Housing Company Annual Report 2017calgaryhousingcompany.org/wp-content/uploads/CHC-Annual-Report... · 6 ANNU 2017 Message from the President Transformation of Calgary Housing