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Mayor Rob Ford called it a sad day and in that, if in nothing else, he was right. The departure of Eugene Jones as chief executive of Toronto Community Housing Corporation throws cold water on hopes for reform at North America's second biggest public-housing provider.

With years of experience at U.S. housing agencies, he came in as the new broom, armed with a mandate to deliver change at an organization that had lost its last CEO and its whole board in an expenses controversy. Outspoken and refreshingly unbureaucratic, he won over many of his tenants by knocking on their doors, Ford style, and touring their estates in person to investigate complaints.

Now he is gone, forced out by a scathing report on dodgy management practices at TCHC. The mayor says Mr. Jones is a victim of a "politicking" city Ombudsman, Fiona Crean. It is she, not he, who should resign, he insists.

This is the usual nonsense. Ms. Crean launched her investigation only after people came to her with reports of rising disorder at TCHC as Mr. Jones fired people left and right. Her probe uncovered a rat's nest of questionable hirings, promotions and pay raises that violated not just the corporation's rules but the principles of fairness and transparency.

The result – wasted taxpayers' money, cozy arrangements behind closed doors – was just the sort of thing Mr. Ford would have condemned when he was a crusading city councillor. But Mr. Jones was his man, trotted out regularly to prove the mayor had "cleaned up the mess" at TCHC and improved the lives of tens of thousands of (voting) tenants. It is one of the "promises made, promises kept" boasts that he is making in his bid for re-election. So, with typical class, he barged into TCHC headquarters on Friday to defend Mr. Jones, turning the announcement of the CEO's departure into another Ford circus. He even said he would try to rehire Mr. Jones if he wins in October – yet another reason not to re-elect him.

Instead of being cleaned up and launched on the path of change, the housing organization finds itself in leaderless disarray for the second time in the Ford years. Deputy Mayor Norm Kelly concedes it might be months from now, after a new city council takes charge, that the TCHC is put on a new course.

The whole sorry mess serves to show how badly the organization needs strong leadership and fresh thinking. At the least, the board needs to be strengthened and reorganized to provide better oversight. It should have acted long ago to put a brake on the things that were going on under Mr. Jones's stewardship.

Looking into the future, the city should examine the whole framework of public housing in Toronto. Banged together out of several different housing groups at amalgamation in 1998, TCHC may simply be too big to manage. It has 58,000 households and 164,000 tenants, with as many again on the waiting list to get in. Should the city government really be landlord to such a host? It might be best to break the whole thing up, handing at least parts of it to co-operatives or private operators.

How to pay for it all is an ongoing struggle. The agency faces an enormous repairs backlog and needs $2.6-billion to fix up its properties over the next decade. With cash-strapped federal and provincial governments reluctant to provide the huge sums that are needed, it is not clear where the agency will find that kind of money. City council did not even have the stomach to sell off a big collection of stand-alone properties to raise funds.

Not all is bleak. The revitalization of east downtown's Regent Park is proceeding and its formula of mixing private and public housing is being copied in Alexandra Park and elsewhere. But the exit of Mr. Jones, who carried such a weight of hope on his shoulders, is a discouraging setback.

A sad day indeed.