Yes, I’m in Idaho, but I’m still checking new listings on MLS multiple times per day!

On Tuesday morning, I found this listing for a home owned by the Toronto Community Housing Corporation…

Goddam hippies.

How nice of you to “demand” decent housing.

I’ll try not to let my political, economic, financial, religious, and societal views hijack this post, but when I see people protesting like this, it makes my stomach turn.

You know, when I quickly glanced at “TCHC,” guess what I thought it said?

THC

Perhaps that’s why all these hippies are out protesting the sale of run-down houses by the Toronto Community Housing Corporation: they think there’s marijuana involved!

A few months back, we debated both on this blog and across the GTA about what “should” be done with the scores of dilapidated houses owned by the TCHC.  There are hundreds and hundreds of uninhabitable dwellings in Toronto, owned by the TCHC, that need millions of dollars in repairs.

The lefties believe that these houses should be repaired and that the city’s poor and unfortunate have a right to inhabit these homes.

The righties believe that these homes should be sold and the sale proceeds should go towards building new, more economic and cost-effective multi-unit dwellings that can house many more people than a typical 5-bedroom home currently in the TCHC’s arsenal.

The extreme righties believe that the sale proceeds should not be re-injected into the city’s housing problem, but rather be used to pay off the $774 Million debt, and/or be put towards other, “better” uses.

I’m part of the right, but I wouldn’t go that far…

A house came onto the market this morning in The Beaches for $729,000, and it is owned by the Toronto Community Housing Corporation.

I’m going to closely monitor this listing and the subsequent sale to see just how our city handles this opportunity.

I can’t divulge the address, but I will say the following…

This house is on a prime Beaches street, and is a 5-bedroom, 1-bathroom house over 2 1/2 storeys.  I find it ironic, or somewhat fitting, that this home has five bedrooms and only one bathroom…

The MLS listing notes the following:

House Has Been Vacant For A Number Of Years And Needs A Full Renovation

Well that’s fine with me!

As a tax-paying Toronto resident, I’m okay with the fact that the city has decided to sell a house “that has been vacant for a number of years,” rather than continue to let it rot, when the potential sale proceeds could be used elsewhere!

There is a set offer date for this home – August 22nd, 2011.

So what is this home “worth?”

Well it all depends on how the market responds.  A house is “worth what somebody is willing to pay for it,” right?

Listed at $729,000, I think we can agree that this house needs an injection of $60,000 to make it liveable, but upwards of $250,000 for a renovation that a typical Beaches buyer would be looking for.

Looking over the recent comparable sales, it’s very difficult to pin-point an exact value for this home.

Try this one on for size – another 5-bedroom, 1-bathroom, detached 2 1/2 storey home sold in February for $690,000, asking $599,000.

This house was around the corner from the subject property, and was on a much, much shorter lot with no parking.

Adjusting for location, property size, parking, and condition, you could argue that there is a $100,000 difference, and thus the TCHC house is under-priced at $729,000.

As I said: the market will decide what the home is worth.

Listings are scarce in The Beaches right now, and I think it’s a prime time to sell a fixer-upper or even a “gut-reno” if you want to call a spade a spade.

As for the “price ceiling” for a finished home on this lot, I think you’re looking at upwards of $1,200,000 depending on how you finish it.

A home on the same street as the subject property sold for just under $1,100,000 back in April, and it was much further north – almost at Kingston Road.  I know that many sellers and listing agents will market properties north of Kingston Road as “Upper Beaches,” but in reality, they’re not.  In reality, homes just south of Kingston are “Upper Beaches,” and that’s where this comparable property was located.

It too was a 5-bedroom home on a detached, 2 1/2 storey lot of comparable width and depth, but it was in much better shape than the subject property.  It wasn’t a brand-new, 2011, gut-reno, but it was in terrific shape.

This home sold for $1,075,000 and was in an inferior location, had a slightly smaller lot depth, and wasn’t in A++ shape.

If you were to renovate the TCHC house to the tune of, say, $300,000, perhaps it could be valued at over $1,250,000.

There is profit in this home for whoever takes on the job, and I’m sure that there will be buyers lined up on offer night.

So here is the burning question: why doesn’t the TCHC renovate the house and pocket the $150,000 profit?

The lefties believe that these houses shouldn’t be sold in the first place, and rather they should be fixed up and needy families should move in…….to prime real estate in top-notch neighbourhoods, surrounded by affluent residents who work hard, pay taxes, and take on mortgage risk…..but I digress…

So perhaps the Lefties or even the fiscally-astute Righties might argue that if the TCHC is going to sell this house for, say, $780,000, and they can put $300,000 into the home and sell it for $1,250,000, then perhaps they should do so and increase their sale proceeds by a net of $170,000 in this case.

Well, that’s a valid point, but I make two arguments to the contrary:

1) The TCHC is not a contractor, renovator, or builder.  They are not in the business of flipping houses.

2) There is risk and uncertainty involved in this potential venture, and it could end badly for a corporation that is already under immense public pressure.  Imagine if it backfired and they lost money?  Imagine if the renovation contract was awarded to a friend of a friend of somebody at TCHC?

In my opinion, the TCHC is doing exactly what it should be doing: divesting itself of a small portion of its real estate holdings that only serve to cost them money and get in the way of their mandate of providing public housing to as many people as possible.

And I think that so far, they’re doing a terrific job.  They’ve even listed the property with debateably the top Realtor in The Beaches.

More to the point, they are divesting their holdings slowly.

I jokingly used the term “firesale” in the subject line of this blog, but they’re not flooding the market with properties.  They could have taken the easy approach and listed ALL of their Beaches holdings at the same point, but they’re not.

Instead, they’re content to list one-at-a-time, and let the market respond to each successive fixer-upper.

Smart business for a corporation that has been crucified in the media in the last year.

I’ll be sure to monitor this sale closely, and I’ll update this blog once the sale is firm…