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Saturday

Co-op Housing Thesis Submitted May 2019

ONE BAD BOARD AWAY FROM BANKRUPTCY:

HOUSING CO-OPERATIVES, SELF-MANAGEMENT, AND THE  LANDLORD-TENANT RELATIONSHIP              by Josh Hawley


A thesis submitted to the Department of Cultural Studies In conformity with the requirements for the degree of Master of Arts - Queen's University Kingston, Ontario, Canada (May, 2019)


A Partial List of Abbreviations noted as viii in the thesis 

CHF-BC: Co-operative Housing Federation of BC

CHF-C: Co-operative Housing Federation of Canada

CHF-T: Co-operative Housing Federation of Toronto

CMHC: Canada Mortgage Housing Corporation

CMP: Communautè Milton-Parc

LTB: Landlord and Tenant Board

RGI: Rent-Geared-to-Income

RTA: Residential Tenancies Act



Stated below are some notable excerpts from that thesis:


…"There were many good memories over the years in Fairlea Park. But there was a great deal of frustration and trauma. From about 2009, a new property manager took over and ruled the co-op with a iron fist. There were many struggles and my parents eventually took the co-op to the Human Rights Tribunal of Ontario in 2011. The ordeals with the co-op caused serious mental health issues which compounded my dad's continued major medical crises. To this day, my mom still speaks about the PTSD she suffers. My parents finally moved out of the co-op in 2015."... [Page 20]


…"It allowed my family to live in a townhouse at a subsidized rent, even if my parents felt they were often targeted for being on a subsidy. One example was when we were told to downsize after my brother moved out. There is an occupancy bylaw which states the maximum number of rooms has to be equal to or less than the number of people in the family unit, but it only applied to tenants on subsidy. Those paying market rent were never told to downsize, despite being technically over housed for years."... [Page 21]


…"Market-rent-paying tenants looked down on social housing tenants, market-rent-paying co-op members looked down on subsidized members, while homeowners looked down on all of us."... [Page 28]


…"CMHC recognizes the movement as being definitively structured around CHF-C and the reginal federations despite noting that a "number of co-operatives funded under the NHA [National Housing Act] are not affiliated with the Co-operative Housing Federation and operates outside this formal structure" (Ibid). Whatever the co-op's reason for non-affiliation - either they're more autonomous or isolationist - CMHC sees them as separate from the movement."...[Page 49]


…"Since then, CHF-C has become extremely effective as a lobby group, often receiving all-party support (Hawley 2014), and at maintaining its image as the representative voice of not only the movement, but of the hundreds of thousands of residents of co-ops across the country. But with any movement that grows to the size where it becomes removed from the people it claims to represent, let alone with one that was formed from the top, counter voices will struggle to be heard. People inside the sector remain free to draw upon housing co-op discourse and may derive their own meaning and expectations from the movement."... [Page 50]


…"As the Canadian co-op housing federations solidified themselves as a powerful lobby, participation became a form of recognition of poor people rather than a means for working-class emancipation. This is visible in in federation documents over decades that revealed their propensity for large, economy of scale co-ops and professionalization such as Member Participation (1988) Beyond Participation (1990), and The End of Participation (Armstrong & Gazzard 2008)."... [Page 78]


"Chapter 5 Community-Based Research"..."Opening Statement This chapter mirrors the themes of the previous chapter. Under each theme, I will compare and analyze perspectives of eight research participants from seven Milton-Parc housing co-ops and six participants from five Ontario co-ops. This will be supplemented with content analysis from local documents from 1968 to 2018, in particular pertaining to the genesis of these 12 housing co-ops and co-op legislation. This chapter is meant for the widest possible audience and to serve as a reference for co-op housing tenants, so it is written in relatively plain language"... [Page 90]


…"Parity of Participation vs. 'The End of Participation'... [Page 102]

…"Milton-Parc project, research participants acknowledged that participation was the main objective. It was brought up several times that although this redistributive policy is important, it is ultimately a difficult mandate to follow because it impacts the participatory nature of the co-ops. Of note is the fact that all members of the Milton-Parc co-ops must serve on committees. This in complete contrast with the Ontario co-ops, where committees are either non-existent, token, or only involve the participation of a few members. The fact that research participants noted participation as crucial to the co-ops in Milton-Parc explains why the lack of participation was one of their biggest concerns. Lack of participation was noted as a reason for initiating the eviction process."


"Finally, and of crucial importance, a research participant from one of the Ontario co-ops identified a publication released by the Co-op Housing Federation of Canada in 2008 called The End of Participation. It argues that members should be concerned with advancing abstract notions such as the "ethical contract' with the co-op" "rather than doing everyday chores and taking on work that should be done by paid professionals" (Armstrong & Gazzard 2008a). One of the authors," [Page 103]


"Thom Armstrong, the executive director of CHF-BC, is also the executive director of COHO Management Services Society, "Canada's largest and most successful co-operative management company" according to the company's LinkedIn page. Armstrong is also the author of a CHF-T guidebook published in 2000 titled Conflict of Interest. This book, nowhere to be found except through Library and Archives Canada, focuses on conflict of interest among members: "Directors must put the interests of the co-op before their personal interests. They are the trustees of the co-op."


"Further research uncovered that the federations had been challenging the concept of participation for at least 20 years prior to The End of Participation. In a clear but often disregarded example of conflict of interest, a piece on member participation ion the newsletter Federation Findings: A Co-op Management Memo from 1988 broaches the debate over compulsory participation by stating that CoAction, the association of staff, "asked the Federation to remove from its sample by-laws all reference to penalties for non-participation." The document goes on to justify non-participation based on the development of large, centralized purpose-built housing co-ops initiated by the federations themselves: "while members' work may have created significant savings in some of the early, small, "rehab" co-ops, this is no longer true for the large co-ops which we have today. The large savings come from government subsidies to all units, and from the non-profit aspect of the co-ops. Any savings from members' participation are quite small." These facts speak to the deep frustration with perceived conflicts of interest of federations expressed by research participants from Ontario." [Page 104]


"This 1988 document also features a cartoon of co-op members queueing in front of a punched card machine, surrounded by surveillance cameras and devious-looking spy characters (one is peering out of a sewer). The caption reads: "I have a feeling we're being watched." The suggestion is that policing of compulsory participation breeds resentment and infighting: "Complaints are made at members' meetings. The co-op is divided be-tween "them" (lazy) and "us" (the good guys). Members start threatening other members with sanctions. So the requirement for participation divides and destroys the community rather than uniting it."


"Ironically, surveillance of members, policing, and threats of eviction being used as compliance were focused on heavily by research participants from Ontario, where co-ops have little to no participation and are managed by paid staff."


"Although Milton-Parc research participants acknowledged that there are some "lazy" members, and the formation of cliques and interpersonal conflicts emerging over issues around participation, they did not once bring up the option of abolishing compulsory participation. Rather, levels of participation were discussed in terms of how often to meet and what types of decisions should be made to the general assemblies."... [Page 105]


"Vicki: Myself and another director asked a question, "What is CHF doing for us and how much are we spending beyond the 21,000 dollars that we fork out every year?" That's half to CHF-T, and half to CHF-C. We started asking questions and all of a sudden, they had a form about the benefits of being with CHF. They brought out somebody from CHF and all our CHF promoters stood up in line and talked about how good of an organization it was. They really took our challenge very seriously and they were very threatened by it. It was interesting. It's all coming down to money. The CHF supporters [in my co-op] are maybe a lose group of ten but there's more of a real clique of about five. These people are all invested or have been paid by or gotten money from CHF."


"Sharon: Let me interject here. Even though you pay membership to CHF, you still have to pay for any training that is offered up. Whatever you need, they have a bank of people they can refer to co-ops. Like contractors, lawyers. You put two and two together, there's collusion in some way. There's payback."...


"Sharon: Assets and influence. They donate to campaigns of politicians. They're a lobby group. This is influencing. People need to be educated, and they would prefer to educate co-ops to keep them in the dark. They want them educated their way. They don't want co-ops to be on their own or listening to other people. Because then it undermines the lies that they set in place, It's as simple as that."


"The co-operatives operate independently. You never see the co-ops coming together on something. It's all under the auspices of CHF et al. because they don't want that. It's like dissension in the ranks. If this solider finds out that this soldier's having this experience, "Oh, I am too." And then we tell this soldier, "Oh yeah, I'm having it too." And then all of a sudden, everybody's on the same page. And CHF doesn't want that. The whole thing is a sham, it's a money-making endeavour."


"Vicki: Now there are a number of people in the co-op who understand pretty much what we're talking about here. They understand there is something going on. But a lot of them are subsidized units, so they keep mum. I'll get a lot of verbal support in the hallway. But when it comes to actually sitting there making a vote in the meeting, you'll see the hands go up in favour of CHF because they're afraid..."


"Sharon: They're being watched".

"Vicki: Yeah. They're being watched."


"Sharon: The co-op sector, unless the corruption within it is removed, it will only continue to get worse. Or, people smarten within a co-op and step up to the plate and demand. The trouble is, people who are on RGIs are afraid to speak up because they're afraid they'll lose it. What they're doing and apparently what's happening here too, because they don't do anything and they're told, "Well, you're volunteers, you shouldn't have to break your ass by working too much because you're a volunteer." This is CHF, this is what goes on behind the scenes. What they do is they let the staff take care of everything. Well, the staff are in the back pockets of CHF. What they systematically try to do is pat the boards of directors on the head and say, "There, there. That's OK, we'll handle it." It's a way of getting rid of what was put in place to make a co-op run correctly, just sending them in the corner and then the staff will take care of it all."


"[The property manager] was here at that time too. She caused so much harm for everybody that spoke up or questioned really questionable activities that were going on here. And what did CHF do? They constantly supported [her]. She is a sick fuck. Pardon my language. This woman should be in a mental institution or behind bars. I'm serious. She is a sociopath, a psychopath is more what's like it."

[Page 110, 111, 112, and 113]


"Also touched on is the view some members hold that co-op housing is "above" social housing. This perception mirrors CMHC's housing continuum, where social housing is a stepping stone to regular non-profit housing, which itself is a stepping stone to market rental on the way to owner-occupancy."


"Mental health was referenced as a major source of contention in both the Milton-Parc and Ontario co-ops. However, it should be noted that mental health was used in two completely different ways: problematically as an instrument of division among working the class, and critically as a reflection of class conflict where capitalist individuals exhibit abusive behaviour. The more common and divisive perception was that people who receive government social assistance are difficult to get along with because of mental health problems. This perception presented itself as a very real and dangerous obstacle to developing a united class awareness."


"The other reference to mental health was in regard to staff and co-op members in a positions of power. In two completely unrelated instances from Milton-Parc co-op and Toronto, research participants referred to an individual from their co-ops in a position of power and authority as a "sociopath" and "psychopath"." I argue this represents a latent or inexplicit class awareness, as it made clear these individuals sought to profit from the housing co-op and its residents. While the federations were seen as directly profiting from co-ops, the sheer proximity to your home of having a capitalist neighbour or property manager exploit and abuse you and your neighbours, especially in a "co-operative" setting, leads to the attribution of mental health as explanation for their behaviour.


"This reshaping of the working-class subjectively in housing co-ops is most obvious in Ontario, where members are explicitly not considered tenants, which impacts evictions, and members pay 'housing charges," not rent." [Page 116 and 117]


"Ken: City Park Co-op has just under 800 units. When the Social Housing Act came, now when somebody's number comes up on Housing Connections [City of Toronto's social housing waiting list], at City Park, you have to take that person. We immediately got drug dealers, which were absolutely noticeable. We got a whole bunch of absolute trash. The City forced us to have 50 per cent rent-geared-to-income. When a vacancy came up, Housing Connections would put somebody in."


"The problem is there are a bunch of rich people living here [in City Park] who do not get involved at all. I love the Alfa Romeo that's in the basement. There's a number of people who are wealthy. Lawyers, doctors, stuff like that. You never see them at meetings, period. Then our brain trust is minimal. There's been so many fights in the past. We've had some people who are severely mentally disabled on the board because there was nobody else running. Their priority is karaoke night."


"Co-ops will never work. One, if you have a property management company that you're happy with, the Social Housing Act, every two years you have to put it out to tender. We had somebody who was palatable, but we had to put it out to tender after to years. Another issue is consultants and contractors. I don't think any consultants or any contractors worth their salt will come and bid and work at the co-op. All these boards look to this co-op federation. "Oh, they know everything."


"Sharon: This is where there's a two-pronged problem. Talking about aging in place and that sort of thing. The other thing that nobody's addressing s those who have mental health problems and disabilities, they push them into co-op housing. People who have mental disabilities cause problems for the residents. It creates fear because some of these people are dangerous."...


"You get boards of directors, for the most part, that are uneducated, don't have the skillset or the work experience. They don't understand that the staff works for the co-op. There was a mess of things that had to be done because of the staff that was making over a quarter of a million dollars a year in salaries. There were three or four [staff here]. That's a lot of money for doing nothing."  [Page 122, 123 and 124]


"Clarke: The movement is probably sick from the...it's become more of a club, I would think. I think it's probably a club that's made up of people had good intentions in the beginning but then they say that people don't really give a damn. All they basically want is to be left alone and pay a cheaper rent. And what's the difference between Fairlea Park and a non-profit?"


"Josh: What is the difference at this point?"

"Clarke: For this co-op, I can't see any difference." [Page 126 and 127]


"Implications of the Self-Management of Capital: Evictions in Housing Co-ops"

Evictions in the Milton-Parc co-ops, at least in the seven represented in this research, are extremely rare. Eviction proceedings were generally seen as very unpleasant nd undesirable from a social, interpersonal standpoint, although research participants considered the process necessary as a final measure to deal with difficult members in order to maintain a healthy co-op. Evictions, and by extension displacement, are seen as necessary to the management of the co-ops."


"The eviction process was also considered rather arduous and cumbersome, as co-op tenants in Quebec have access to the provincial rental housing administrative tribunal, the Règie du lodgement, for issues pertaining to their occupancy (CMHC, n.d.)."


"The process to evict involves suspending an individual's membership. Once a member is suspended, they must pay the market rent. The difference between market and member rent in the Milton-Parc co-ops used to be quite normal, as thus a suspension would not have a great impact on the member. However, one of the participants from the Milton-Parc co-ops had explicitly raised market to three times the member rent to facilitate the eviction process. it would now be difficult for any resident who's had their membership suspended to pay the market rent. While rent arrears is the most common reason for pondering evictions in these co-ops, lack of participation was also brought up, providing further evidence on the importance of participation in the Milton-Parc co-ops. However, it must again be emphasized that evictions are still extremely rare or have never occurred in the Milton-Parc co-ops."


"There was a stark contrast between the Milton-Parc co-ops and the Ontario co-ops, where the actual number of evicted residents was unknown by the research participants. All participants had been aware of neighbours who had been targeted with eviction. Two of the Participants from my old co-op, Fairlea Park, brought up several neighbours who were currently facing eviction. One participant from Toronto had faced eviction and managed to win."


"The use of evictions in the Ontario co-ops was identified as a "compliance tool" to deal with "trouble" members, especially for those on subsidy. Trouble members could be those who are in arrears, who don't comply with this or that bylaw, who don't get along with other members, or who are seen as a threat or rabble-rouser by the management. Evictions are used as a way to solve problems among members, as evicting members in Ontario is a relatively straightforward process. This is facilitated by the fact that co-op members are not considered tenants under Ontario law, but rather members of "a social club, where membership is by application and acceptance in accordance with criteria set out in the club's by-laws or regulations" (McBride v. Comfort Living Housing Co-op Inc. 1992, quoted in Schlemmer 2009, 50) as well as a 2014 legislative amendment that opened up the Landlord and Tenant Board solely to co-op boards and staff to make the eviction of members more efficient."


"Tenants on subsidy are particularly vulnerable to the threat of eviction through a straightforward process: The board or staff can suspend an individual's membership for allegedly violating a bylaw, which will then force that person to pay the market rent."


"Once that person is unable to pay full rent because of their insufficient income, they will go into arrears, at which point the co-op can begin eviction."


"The position that the case of evictions facilitates their use as a compliance tool is supported when compared to evictions in the Milton-Parc co-ops, where due to the cumbersome nature of the process, solving problems internally between members is the best option. Evictions are not "worth it" because they make "more trouble." [Pages 127, 128, and 129]


"Sharon: You know what happened when I went too far one time querying? I was told my legitimate business expenses, constantly used by Revenue Canada and that I've been doing in this co-op for ten years, all of a sudden, they weren't being allowed. Not allowing my business expenses put me up over into market [rent]. I would have lost my RGI [rent-geared-to-income]."..."But I outsmarted them and that pissed them off even more because I [previously] outsmarted them with the eviction. All of this stuff shows you what they will do to people who speak up or speak out and ask the kind of questions that should be asked, that the government is not doing."


"Bottom line with co-ops: because the government subsidizes with RGIs, people are made to get this feeling through their boards and staff that they have to go along with CHF because CHF is their saviours. If they see that there's anything wrong and speak out, there's the fear and the very real threat of eviction used as a compliance tool. With Bill 14, where boards and staff can take people to the Landlord and Tenant Board now for eviction, even though resident-members can't take boards or staff to the Landlord and Tenant Board for any number of corrupt ways of doing business. A) that's not equality before the law, therefore that law needs to be challenged. But B) it's being used as a compliance tool to make people just shut up and step in line. If you don't like what's going on, then even politicians will say this, "well then, move" And it's not that easy to do and that's a disgusting display of just not bothering doing their job. That's the whole crux right there."...


"I tried everything I could with the co-op and got nowhere, and this is the problem with the co-op sector, federal or provincial. When you can't get anywhere with your own co-op and it's corrupt, there's no place for resident-members to go. I've said this to [my MP] Adam Vaughn and others. Either make the landlord and Tenant Appeal Board accommodate resident-members of co-ops if your going to allow boards and staff to use them to evict. Have some kind of a board that has representation from resident-members from the government. CHF shouldn't be involved in this because they're not supposed to govern anything. You have to have a cross-section. You have five people, let's say, but from each sector. There's a board that people can go to complain. Another solution is, wherever there's a board member, boards for all these co-ops, there should be an outside, objective, third person or two, actually two would be better, that sit on those boards."


"Any shenanigans would be stopped right at the get go. Because they would be seen. It's called oversight. What we need to do is clean out the Agency [for Co-operative Housing], Social housing and co-operatives are under the same umbrella at the City. It's corrupt as hell. It needs to be cleaned out badly. But the City's not interested in doing any of that. They just want to glad-hand everybody, and CHF is in their back pockets." [Pages 132, 133, 134, and 135]


"Chapter 6 Conclusion"

…"In this final chapter, I refer to residents of housing co-ops as tenants. This thesis has shown how co-ops are used as a capitalist tactic to reshape tenants into "members" while clearly reproducing the landlord-tenant relationship, which is fundamentally a class relationship. This chapter is meant to be of direct use to tenants in housing co-ops. It applies mostly to tenants from Ontario but it can be useful to tenants from housing co-ops across the country. The lessons learned should be useful to all tenants in co-ops as well as co-op professionals. Ten recommendations are for tenants in co-ops who want to organize to fight against pressures from their co-op, as well as to show that the mandate of sector professionals is in opposition to the interests of co-op tenants."


"6.1 Lessons Learned"

"The following is a list of ten lessons summarized from the research" [Page 141]

"1. The co-operative housing federations are a lobby and their members are the co-op corporations and other federations, not individual tenants. The lobby is primarily concerned with sustaining the sector and the paid positions it creates. This has created opposing interests between tenants and sector professionals and contributed to a climate of distrust and conflict of interest";...


"3. The way in which the state has framed housing co-ops through their use of language, legislation, and legal precedents has also influenced how residents of co-ops see themselves. This has contributed to the perception that co-ops are not a reproduction of the regular landlord-tenant relationship, but a "private social club";...


"5. Co-op tenants in Ontario feel strongly that the abuse is rampant in housing co-ops and they have nowhere to turn to fight their boards and staff. While co-op tenants do not actually control the means of producing their own housing, they don't necessarily see that abuse as rooted in exploitation nor do they see their boards and staff as their landlord. This is a result of having been treated differently than regular tenants for a long time by the courts (ruling that housing co-ops are "private clubs"), the state (not opening up the Landlord and Tenant Board to co-op tenants), and the co-op movement itself (language such as "member" and "housing charge");"...


"8. From their inception, the federations, supported by state housing agencies such as CMHC, have developed housing co-ops according to capitalist principals of economy of scale, economic efficiency, and paid professional management. According to these institutions, the bigger the co-op, the more economically viable it is;"...


"6.2 Recommendations"

"The following is a list of ten recommendations derived from the research. These recommendations have emerged by articulating tenants' concerns as ultimately a class struggle, as the landlord-tenant relationship is clearly reproduced in contemporary housing co-ops. Co-ops are not a "post-landlord" housing alternative. They should be considered landlords like any other. These recommendations have also come about by examining archival materials from housing co-op federations. These have revealed that from the beginning, the interests of the sector have been in opposition to the interests of the tenants who live in co-ops."


"1. Residents of housing co-ops should not be considered "members of a private club." Members should be considered tenants, "membership agreements" should be called leases, and money paid for housing should be considered rent, not a "housing charge";"


"2. Co-op tenants should have the same access as other tenants to their provincial rental housing dispute resolution agency;"


"3. Co-op tenants should view their co-op as a landlord, whether self-managed or run by staff. This means viewing the board of directors, no matter who is currently sitting on it, as the landlord which exploits tenants for rent and personal profit;"...


"6. The co-op housing lobby should not develop co-ops. The development of these co-ops is guided by the economy of scale and capitalist evaluative criteria of economic and managerial efficiency. These co-ops have not developed through the struggle of working-class tenants to control the means of producing their own housing;"


"7. Tenants who are able to seize their housing from their landlord and wish to form housing co-ops should form co-ops no larger than around 40 units;"


"8. Co-ops larger than around 40 units should be converted to regular non-profit housing. As participation in these co-ops is virtually non-existent, this would act in the interest of unifying working-class tenants by clearly identifying their landlord;"


"9. Co-op tenants should refuse all division among their neighbours along the lines of gender, race, nationality, language, sexual orientation, spiritual-religious affiliation, level of poverty, receipt of social assistance, level of education, and ability;"... [Pages 141, 142, 143, 144, 145, and 146]





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Ken Hummel, Administrator, CHIE





















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