Deputy mayor defends $111,000 average annual cost to operate each bed in London’s homeless hubs

There was no sense of sticker shock when Deputy Mayor Shawn Lewis read the results of a Request for Proposals (RFP) seeking agencies to operate the first low barrier hubs to serve Londoners experiencing homelessness.

City staff are recommending council approve three hubs that will open 44 beds this December and eventually increase to 73 beds at five locations in May 2024.

The first full year for the complete compliment of 73 beds will be year two, when the total operating cost of all three hubs will be $8,158,362.

While each of the locations would have different operating budgets, the average annual cost is almost $111,759 per bed.

“An emergency room bed is half-a-million dollars a year, so in comparison, this is about a fifth of the cost,” said Lewis.

On Wednesday, Coun. Susan Stevenson said she'd like to know if there are other ways to spend that same amount of money to help a greater number of people.

“I want to leave no stone unturned on this. Let's be creative, innovative, and figure out how we can,” Stevenson told CTV News.

Citing the 600 high-needs individuals currently living unsheltered, Stevenson described the hubs plan for 44 new beds in December and 29 more in May 2024 as “underwhelming.”

“We aren't buying shelter beds. We are providing a suite of services for the highest acuity individuals in our community,” explained Lewis.

While emergency shelters usually offer communal living conditions with limited services, the hubs will provide people with individualized spaces and wrap-around services aimed at first stabilizing and then transitioning them into supportive housing.

“[A] tremendous benefit for our community,” is how Mayor Josh Morgan described the anticipated impact of the hubs.

On Wednesday, the mayor asserted that the benefits of the hub system will far exceed what traditional shelter beds can offer clients and the wider community.

“We know that the types of individuals who will go in these hubs consume massive amounts of resources in the hospital system, land ambulance, police contacts, and impacts on businesses,” Morgan added.

The Whole of Community Response to Homelessness is a council-endorsed plan to eventually open 600 supportive housing units and up to 15 hubs.

The goal is to open the first 100 housing units and up to five hubs in December.

The results of an RFP to find Lead Agencies and locations for the first hubs was released on September 20.

City staff recommend three hubs with services spread across five locations:

The proposed lead agencies and locations are:

1. Atlohsa Family Healing Services (Indigenous hub)

• 550 Wellington Rd. — opening: December 2023 — 18 transitional beds, 10 respite beds — capital cost to build: $1,303,750 — annual operating cost: $2,118,146

550 Wellington Rd. is a building on the campus of the Parkwood Institute utilized by the city’s winter response to homelessness in previous years.

 

2. Youth Opportunities Unlimited (youth hub)

• A. 329 Richmond St. — opening: December 2023 — 6 respite beds — capital cost to build: $1,064,367

• B. 800 Commissioners Rd. E. — opening: May 2024 — 9 transitional beds — capital cost to build: $2,059,183 — annual operating cost: $1,317,500 (year one), $1,983,800 (year two)

800 Commissioners Rd. E. is on the Victoria campus of the London Health Sciences Centre

 

3. Canadian Mental Health Association Thames Valley Addiction and Mental Health Services (women and female-identifying hub)

• A. 556 Dundas St. — opening: December 2023 — 10 respite beds — capital cost to build: $40,500 — annual operating cost: $1,425,562
• B. 705 Fanshawe Park Rd. W. — opening: May 2024 (pending rezoning) — 20 transitional beds — capital cost to build: $497,800 — annual operating cost: $2,630,854

556 Dundas St. is home to My Sister’s Place, and 705 Fanshawe Park Rd. W. West is the location of the Lighthouse Inn.

Lewis assures taxpayers that the operating costs for the first three hubs will come from existing and available sources.

“In terms of the concern for property taxes, I can happily share with the residents of London that this is not coming out of new city funding initiatives at this time,” he said.

On September 25, the Strategic Priorities and Policy Committee will consider approving the first three Lead Agencies and hub locations.

Council will make a final decision October 5.