The Toronto Star recently reported that Toronto Community Housing (TCHC) will be selling off 706 homes in their portfolio, majority of them single family homes. Out of 706 homes, 631 house tenants that pay rent geared to income and the rest are market rent. Currently these homes cost $10 million more to operate than they raise in revenues. Also with demand on the rise for affordable housing and a $650 million repair bill for current homes owned by TCHC, it not only makes economical sense, but will provide better living conditions for the current tenants. As the CEO, Len Koroneos, of TCHC said, "it's my responsibility to stand up for all 164,000 tenants, many of them living in poor quality housing, and do everything I possibly can to improve the quality of their housing and their quality of life." Not only will these sales generate revenue of $300 million which is much needed, but also free up more than $12 million per year for repairs which can be used on the remaining homes/buildings which will not be placed for sale.
Tenant's leases would be honoured until the end of their term and TCHC will provide assistance in making this transition as smooth as possible for them as well as pay for moving costs. Fellow Realtors and potential buyers shouldn't get too excited yet as the plan still has to be approved by the Toronto City Council. If the City Council approves it, then it would also require approval from the Government of Ontario, meaning, still awhile away from seeing these properties pop up on the Toronto MLS system.
If this does actually happen, what will this mean for the Toronto Real Estate market? Will it be flooded with a lot of inventory for buyers/investors to choose from, meaning driving prices down? Well, not necessarily, so don't get too excited. These homes will be sold at fair market value, which range anywhere from $200,250 to over $1 million. TCHC has homes scattered all over the city including middle to upper income neighbourhoods and believe me, they know what they are worth! Also, to avoid flooding the market and driving prices downwards, the TCHC proposes a plan to offer homes for sale using a phased approach that will take place over several years. The first to go will be 70 vacant homes and you can start seeing for sale signs as early as next June if all goes according to plan. These 70 homes are on streets such as Crawford St, Davisville Ave, Milverton Blvd and Logan Ave, all family oriented neighbourhoods.
What's my opinion? I think this plan is good for all involved, including tenants, and current home owners living on the streets where these homes are located. From the several TCHC reports I have read, these homes are in very poor state of repair, even unlivable, which not only causes sub-standard quality of life for the tenants living there but also attaches a stigma to the neighbourhood where they are located. The TCHC will be able to move these 164,000 tenants into homes/building that are more stable and have better living conditions, these tenants will not be left to figure it out themselves. Buyers/flippers/investors will not only snatch up these properties, but will bring them up to par with renovations, improving the neighbourhood and encouraging other owners to do the same with their properties.
For now, I'm play the waiting game to see what happens with the Toronto City Council. In the meantime, while I wait ever so patiently, I want to know what's your opinion?
I don't think tchc knows how to manage money. They simply are not being effective enough, I am sure if they were to manage to sell off these homes they would some how misspend the funds.
ReplyDeleteA few years back they were given 1 billion I believe, where did it all go? I think they should stop future projects like regent park and start repairing the exsisting buildings. The last thing they should be doing is selling off their investments, and that's what these homes are, investments. They could have managed to rent some of these homes to small businesses, corporate use, office space, day cares, bed and breakfest, motels, to generate enough cash flow coming back to TCHC?