The city’s largest landlord has begun the process of selling surplus Beach homes worth millions for a fraction of their market value.
On May 12, city council voted to sell 20 properties across the city with a combined market value of $8.6 million for $395,156 to the non-profit Aboriginal housing provider Wigwamen.
The Toronto Community Housing properties include single-family homes on Pape, Malvern and Golfview avenues, and Milverton Boulevard.
That selling price is the remaining mortgages on the homes.
The process is actually cost-effective, says a representative from Toronto Community Housing.
Normally, if the city sells or demolishes any social housing units in its stock, it is mandated to replace them within the same community. In this case, the units were sold to an agency that will maintain the properties as social housing, so the city’s not required to replace the housing.
“This is cost neutral,” explained Councillor Paula Fletcher.
If the city had sold the properties for $8.6 million to a developer, for instance, the city would have spent about the same to build 20 replacement units. According to a city staff report, it would have cost $6.1 million, plus the cost of land for replacement units.
It’s a good deal, said Jeffery Ferrier, spokesperson for the city’s housing agency, because a sale and replacement scenario would have been a money-losing proposition for Toronto Community Housing.
“You can’t just look at the market value. You have to consider costs to replace the units with better housing. The costs of (real estate) commissions, construction, demolition and land would cost more.”
The city will no longer be required to upkeep these houses, which would have cost $1.2 million over the next decade.
Meanwhile, Wigwamen is eligible for federal funds for repairs under an Aboriginal Homelessness Strategy, which Toronto Community Housing couldn’t access.
But there were voices of dissent on the plan, including Toronto-Danforth Councillor Case Ootes, who voted against the decision to sell to Wigwamen.
“I’m not convinced that handing off assets that belong to the city to an agency at less than market value makes sense,” he said. “The agency will provide social housing, but we’ve lost control of the asset.”
Toronto Community Housing is currently looking to sell 27 additional properties including some prime beachfront real estate.
The city-owned housing provider is giving community housing agencies first dibs on the properties up for sale including 3, 5, 7, 9 Hubbard Boulevard that face directly onto Kew Beach. Those four Hubbard properties alone have a combined assessed value of $3.2 million.
Another property on the sale list is 5 Scarborough Road assessed at $920,000.
Other properties on the list include 2, 4 and 6 Wineva Avenue, with a combined value of $2.23 million.
Councillor Ootes would like the city to sell those homes for market value, and use the revenue for rent subsidies.
“I don’t think people in social housing need to live in $800,000 houses or $500,000 houses,” he said. Instead, “Look at the option for a rent subsidy.”
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