NOTE: timeframes for the review have been extended.
About the Company Rent and Affordability Benchmark Review
The CEHL Board established an Advisory Group to undertake a Company Rent and Affordability Benchmark Review This review will examine the current and possible alternative company rent models and affordability benchmarks and result in a recommendation of a company rent model and affordability benchmark that best balances and reflects the Program principles and the needs of the co-ops. Read more about the review.
Recognition of Labour
The Company Rent and Affordability Benchmark Advisory Group (CRABAG) have provided more information to co-ops about how extra funds from, ‘the value of labour’ are being retained within the Program are being managed.
Background
In the review of the household rent model (in 2018), it was decided that ‘the value of labour’ provided by the co‐ops should remain within the Program, rather than be paid as rent reductions to individual households.
CRABAG was established by the Board to review the financial relationship between CEHL and co‐ops. This includes giving co‐ops more flexibility in what tasks they do, and which services they pay CEHL to provide.
Initially CRABAG was to make its recommendations in November 2019 but the complexity of the work has meant that an extension until November 2020 has been granted.
What does this mean?
This means some of the extra funds are being held by CEHL for a longer period than expected.
What happens to the extra revenue?
The additional revenue is being received by not only CEHL but co‐ops as well. This is via the 55% of Company Rent paid to CEHL and 45% kept by the CERC co‐op.
CEHL has used the additional amount and added it to the Third Schedule maintenance budget for 2019/20 and 2020/21.
CEHL will be able to complete more Third Schedule works due to the increased budget.
Your co‐op will be able to answer how they are using their additional funds.
Once the CRABAG recommendation is reviewed by the CEHL Board, a decision will be made around how the additional funds are used.
How does this impact my co-op?
Your co‐op may already be retaining additional revenue or may receive additional Third Schedule works during this period due to the increased budget. CEHL will continue to follow its Third Schedule plans for each co‐op.
When will the decision be made?
The current timeframe is for the CRABAG to provide their recommendations to the CEHL Board by the end of November 2020. This will allow the Board to review in December 2020.